Mississippi Cuts Into Tobacco Pie Reaches $3.6 Billion Settlement With Industry
Mississippi, the state that first took the tobacco industry to court, cut its own $3.6 billion deal with the industry Thursday, thereby guaranteeing itself a share of the proposed national tobacco settlement.
Cigarette makers including R.J. Reynolds and Philip Morris will pay the money to settle the pioneering lawsuit that the state filed in 1994 to recoup the costs of smoking-related illnesses. The lawsuit been scheduled to go to trial next week.
Mississippi will get its money even if the historic $368 billion national tobacco settlement fails to win approval on Capitol Hill.
Mississippi was the first state to take cigarette makers to court, and now becomes the first to win an upfront share of last month’s historic deal involving 40 state lawsuits. The state will receive $170 million immediately.
“When we came up with this idea way down south in Mississippi, not many people gave us a chance,” Attorney General Mike Moore said.
Tobacco industry spokesman Lance Morgan noted that Mississippi’s deal will be superseded by the national agreement if it is enacted by Congress and signed by President Clinton.
Moore said he figured Mississippi’s share of the national settlement should be about 1.7 percent, based on the state’s percentage of the U.S. population and its number of Medicaid recipients.
Approval of the national settlement is far from a sure thing. Some members of Congress, the president and top health authorities have expressed serious concerns about the national deal. Among other things, it limits federal control of nicotine and smokers’ ability to sue, and allows tobacco companies to claim all of the payments as tax deductions.
While some states have delayed trial of their tobacco lawsuits until the Congress and the White House have a chance to review the national agreement, Moore refused to do so.
When Moore filed Mississippi’s lawsuit in 1994, it mushroomed into a nationwide effort to hold tobacco companies accountable for smoking-related health costs.
Moore said Mississippi’s lawsuit did more than just recover money; it helped reveal the truth about the tobacco industry. Other states began to take notice after attorneys handling Mississippi’s case took the deposition of former Brown & Williamson Tobacco Corp. executive Jeffrey Wigand, who provided what Moore said was “devastating insider information.”
He said that because of the state’s efforts there will be “no more lying about whether cigarettes cause cancer or whether they purposely marketed to our children.”
There was no word on how the agreement will affect other states’ lawsuits. Florida’s $2.7 billion case is scheduled for trial Aug. 1. Texas’ trial is slated for September.
Florida Attorney General Bob Butterworth also has talked with tobacco companies about settling his own case.
The original Mississippi lawsuit named 13 tobacco manufacturers along with wholesalers, trade associations and a public relations company. One company, Liggett Group, settled earlier. The remaining defendants include tobacco giants Brown & Williamson, R.J. Reynolds, Philip Morris and Lorillard Tobacco.
Tobacco stocks were moderately higher Thursday as the overall market gained on the latest economic figures. Philip Morris, which also makes Post cereals, was getting some additional support following news of rising cereal prices.