May 25, 1997 in City

Tobacco Suits Hinge On Nicotine Regulations Liability, Monetary Issues Also Remain Unresolved

Tim Klass Associated Press

A sweeping nationwide settlement of tobacco-related lawsuits may hinge on provisions covering federal regulation of products that contain nicotine as a drug, a key negotiator said Saturday.

Liability and monetary issues also remain unresolved, Washington state Attorney General Christine O. Gregoire said in a telephone interview.

The two sides have about a month and a half to negotiate a final agreement before the first of more than two dozen state lawsuits goes to trial, she added.

Gregoire, one of five attorneys general involved in negotiations with industry representatives, said the big breakthrough was setting a goal of cutting teenage smoking by 60 percent within the next decade.

“We have made huge progress,” she said. “The single most important issue on the table for us is the youth smoking and public health piece.”

She also said the industry agreed to run a stark warning covering at least one-fourth of a cigarette package with messages like, “Tobacco smoke can kill you,” “Tobacco smoke harms your children,” “Tobacco smoke causes fatal lung disease” and “Tobacco smoke causes fatal lung disease in nonsmokers.”

Citing government estimates that smoking causes $50 billion a year in medical costs, Gregoire said more than money would be needed to resolve the litigation.

“There isn’t enough money,” she said. “How could anybody reimburse for costs are estimated to be as much as $50 billion a year?”

Gregoire and attorneys general Michael Moore of Mississippi and Bob Butterworth of Florida have been negotiating with the tobacco industry for eight weeks on behalf of 29 attorneys general nationwide. Joining them in the past two weeks of talks in New York were Grant Woods of Arizona and Richard Blumenthal of Connecticut.

She said she took the lead on youth and public health, Blumenthal on liability issues and Butterworth on financial terms.

Last month, a federal judge in North Carolina ruled that the Food and Drug Administration could regulate tobacco because it contains nicotine, a highly addictive substance, but barred the government from restricting tobacco ads.

Both sides have appealed. Gregoire said the attorneys general will continue to insist on FDA regulation and an ad ban when talks resume this week in New York.

“It could be a deal-breaker. Both sides could walk away from this issue,” she said.

Gregoire denied published reports that the proposed settlement would restrict lawsuits by current smokers and people claiming illness from secondhand smoke.

According to those reports, smokers would have to try to quit by 2005 or lose their right to sue, and it would be virtually impossible for future smokers to be compensated for lung cancer or other ailments linked to tobacco.

“None of that has been agreed to. Now you’re talking about liability, and we haven’t agreed to anything on liability at all,’ she said. “That’s all to be discussed this coming week, once we’re done with the public health piece.”

With the first cases set for trial starting July 7 in Mississippi and the following month in Florida, Gregoire dismissed the likelihood of delays to allow more time to reach agreement.

“We don’t want to do that,” she said. “We’re either going to have a settlement or we’re going to trial.”

The attorneys general won’t accept any deal with “blanket immunity” from individual liability suits, but jury reluctance to award damages to those who disregard existing warning labels on cigarettes is hard to overcome, Gregoire said.

“There’s only been one consumer that’s even prevailed (a $750,000 award last year), and that consumer has yet to take home a penny,” she said. “There’s nothing we can do to help them out, frankly.”

xxxx SETTLEMENT GUIDELINES INCLUDE COMPLIANCE PENALTIES, ‘STINGS’ Here are some settlement terms negotiated by representatives for 29 state attorneys general and the tobacco industry, as outlined by Washington state Attorney General Christine O. Gregoire: Teenage smoking will be cut by 30 percent in five years, 50 percent in seven years and 60 percent in 10 years. For each percentage point missed, tobacco companies would have to pay $80 million or as much as $1.5 billion a year. Compliance would be determined by surveys conducted by the University of Michigan. The states would have to meet goals of 85 percent compliance in preventing cigarette and other tobacco sales to minors, facing penalties for each percentage point they fall short. Compliance would be determined by results from “sting” operations. For example, if underage shoppers deployed by law enforcement agencies succeeded in buying cigarettes 25 percent of the time over the course of a year, the compliance rate is 75 percent and the state would be owed for 10 percentage points. Tobacco companies would pay $500 million a year for anti-smoking advertising and end all marketing to teenagers. Each pack would carry a more stringent warning, similar to those used in Canada: black on white or white on black lettering and covering at least one-fourth of the pack. Canadian warnings currently include: “Tobacco smoke can kill you,” “Tobacco smoke harms your children,” “Tobacco smoke causes fatal lung disease” and “Tobacco smoke causes fatal lung disease in nonsmokers.” The industry would accept a federal ban on cigarette billboards and “character” advertising like Joe Camel and the Marlboro Man. Internet, video, movie and other “glamour” advertising would also be banned. That includes payments for use of cigarettes and other tobacco products in films, television shows and other entertainment. Tobacco could be sold only from behind a counter, and vending machines would be banned except in places where minors are barred. Retailers would have to pay licensing fees and would be fined for sales to minors.

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