Rulings Cloud But Don’t Snuff Tobacco Lawsuit Refusal Of Common-Law Complaint, Medicaid Liability Please Industry But Don’t Worry State

Washington state’s multimillion-dollar lawsuit against the tobacco industry is still on track, despite some setbacks in King County Superior Court, the attorney general’s office said Tuesday.

Judge George A. Finkle agreed with the industry’s request to dismiss some elements of the suit, including the state’s common-law complaint that the industry failed to divulge internal research that showed smoking to be a health hazard.

The state doesn’t have legal standing to allege physical harm and collect damages, as individual smokers could assert, the court said.

Finkle also dismissed one of the state’s theories about how to hold the industry financially responsible for millions in Medicaid payments for tobacco-related health problems.

Lawyers for the two sides had starkly different takes on the judge’s written opinion, which was signed last Friday, received by the two sides on Monday and first announced on Tuesday by the industry.

The industry declared the ruling a major victory - and said it was a big setback for the state. Spokesmen said the judge had “dismissed most of the claims brought by the state seeking reimbursement for Medicaid costs incurred for treatment of alleged smoking-related illnesses.”

Gregory Little, counsel for Philip Morris, said he was delighted with the decision. The state’s remaining claims are “factually and legally flawed,” he said in a statement.

But John Hough, senior assistant attorney general, said the judge ruled only on “ancillary” motions and didn’t touch the main stem of the state’s lawsuit. He said the industry was vastly overstating its gains in the latest decision.

“We don’t view it as a substantial setback at all,” he said. “The heart of our case remains and we’re proceeding on it.”

The state’s main case is based on alleged violation of the state’s Consumer Protection Act and anti-trust laws and the state’s position that it can recoup some of the health care costs that can be pinned on smoking, Hough said. The state still hopes to get injunctions to halt advertising and sales practices aimed at minors, he said.

“The judge was not ruling on the state’s damage claims under the anti-trust act,” he said. “He did hold that the state is not entitled to damages under the Consumer Protection Act.”

The state still hopes to prevail at trial, currently set for September 1998, or to get an even better settlement from national-level talks now under way, Hough said.

“If there is an agreement, we would get much more than we could get in the way of a court remedy,” he said. “But if the negotiations fall through, we have been proceeding with this case.”

Washington is one of more than 30 states suing the industry. The first case, in Mississippi, goes to trial this month.

The state plans to seek between reimbursement of between $10 billion and $30 billion in health-care costs associated with tobacco use. The Centers for Disease Control says the state spends about $750 million a year on such extra health care costs, Hough said.