Cigarette producers, faced with pressure from state attorneys general and public health groups, have dropped their demand for complete legal protection as a condition in the tobacco settlement talks, said people involved in the negotiations.
The change in the industry’s posture comes amid a swirl of activity involving the most contentious and complicated issue in the talks: How much legal protection, if any, should cigarette manufacturers receive in exchange for concessions on public health issues?
The tobacco industry had agreed to create a $300 billion fund to settle all smoking-related claims brought by individuals and states in exchange for complete legal protection. State attorneys general rejected that demand for blanket immunity and put forward suggestions that would allow smokers to file suits but limit the amount of money they could win.
Though agreement has not been reached on what such a system might look like, cigarette producers have dropped their insistence on blanket immunity as a condition for talks to move forward, said people involved in them.
‘They have accepted that they cannot have a complete bar” to lawsuits, said one of those people.
A new round of the landmark negotiations is set to begin Monday in Dallas, and state attorneys general are expected to present a new liability proposal then.
Though the industry concession keeps the negotiations alive, the issue of cigarette company liability involves thorny practical and legal questions. In the past, large funds were created to compensate the victims of dangerous products like asbestos and the Dalkon Shield, an intrauterine device that caused sterility. But those products, unlike cigarettes, were either banned or taken off the market. Negotiators in the tobacco talks must deal not with current smoking-related claims, but ones that will occur in the future.
Spokesmen for Philip Morris Cos. and the RJR Nabisco Corp. have declined to comment on any aspect of the negotiations. Richard Blumenthal, the Connecticut attorney general, also declined to comment on any recent talks but said, “My personal belief is that the industry will accept something short of blanket immunity.”
For cigarette companies, a principal goal of the talks is to ensure that the number of claims filed against them will be financially predictable. State attorneys general have insisted on maintaining an individual’s right to sue. But in a negotiation session last month, some state regulators suggested a number of steps that could deter lawsuits or reduce the financial impact. Those included limits on damage awards and a bar on punitive damages, people familiar with the talks said.