County to sue for share of tobacco money
The Milwaukee County Board voted Thursday to sue the state and the tobacco industry for a share of $5.9 billion in tobacco settlement money and to commit $250,000 toward legal fees for the unprecedented effort.
Supervisor Thomas Bailey, an attorney himself, called the action a "lawyer's relief bill." He and several other skeptical supervisors failed to dissuade their colleagues, though, from risking thousands of county dollars in the quest for millions of the state's money. The vote was 20-5.
The lawsuit will seek a share of the $5.9 billion that the tobacco industry will pay the state over the next 25 years as part of a settlement the two sides reached in November 1998.
County officials believe the state should share a portion of that money to reimburse local taxpayers who paid to provide health care for indigent people suffering from tobacco-related illnesses.
Counties throughout the state have been demanding their share of the $5.9 billion since the settlement was announced. To date, the governor and the state Legislature have ignored the counties' request for a share of the money.
More than two dozen other counties are expected to sue the state and tobacco industry as well in a separate effort organized by the Wisconsin Counties Association. A spokesman for the association said Thursday that more than 20 county boards statewide already had voted to join the combined effort.
Counties that sign on as plaintiffs will have to pay an amount equal to half their annual dues to the county association. Any proceeds from a lawsuit, an agreement with the state or a settlement with the tobacco industry would be divided among the participating counties.
Milwaukee County will pursue its own legal action, represented by two local firms, Davis & Kuelthau and Cook & Franke.
The $250,000 the board approved Thursday will cover the initial legal fees, with the final payment contingent on how much money the county receives through its legal action and how far the case proceeds. The three law firms that sued the tobacco industry on behalf of the state split $75 million; the county's payment to its two firms would be capped at $28 million.
Bailey said the county was embarking on an expensive legal battle that it could not win.
Since counties are essentially creations of the state, the state would have immunity from a lawsuit brought by the county, Bailey said. In addition, the state's settlement clears the tobacco industry from any other claims brought by other government bodies in the state.
"We're not going to get any more money," Bailey said. "It's just not worth fighting this enormous war that you're going to buy into."
Supervisors Lori Lutzka, Richard Nyklewicz, Linda Ryan and Terrance Herron joined Bailey in voting against the lawsuit. Herron based his vote in part on the lack of minority representation among the law firms being hired to handle the county's case.
The vast majority of supervisors voted to take on the state and its claim of immunity, and the tobacco industry's vast legal resources.
Supervisor Lynn DeBruin said it was time for the county to test the question of the state's immunity from a lawsuit.
"We've always heard that, but it has not been tested in court," DeBruin said.
Howard Eisenberg, the dean of the Marquette University Law School, said the state's claim of immunity would present a difficult challenge for the county. But the specifics of the settlement between the tobacco industry and the state could open a legal avenue for the county to pursue, he said.
"If they have good lawyers, there are ways to make an argument at least that sovereign immunity doesn't apply," Eisenberg said.
In addition, the county will focus the lawsuit against the tobacco industry, making claims similar to those that resulted in the state's $5.9 billion settlement. Under the terms of that settlement, any damages awarded to the county from the tobacco industry would be subtracted from the $5.9 billion going to the state.
Supervisors who favored the lawsuit said it was simply a matter of fighting for what the county and its taxpayers deserved.
"Unless we fight for something, the state isn't going to hand us any money," Supervisor James Schmitt said. "It seems if we don't sue for a piece of the pie, we'll be left holding the bag."
County Executive F. Thomas Ament also pushed the board to go ahead with a lawsuit, and even spent time lobbying in the County Board offices as the supervisors took a lunch break.
"I think it's fairly obvious from the comments from the governor's office and the state attorney general's office that in order to collect some money you need to sue," Ament said after the board vote.
In other action Thursday, the board voted, 17-6, to seek room and board fees from inmates who served time in the County Jail and House of Correction.
The county will seek proposals from collection agencies and hire one to go after the payments from former prisoners. Those determined to be indigent, or unable to pay, will be exempt from the fees.
County Supervisor T. Anthony Zielinski worked for 18 months to get the measure approved by the board. He argued that the fees would serve as a deterrent to crime and reduce the burden on law-abiding citizens who have to pay to keep criminals behind bars.
Supervisor Lee Holloway opposed the measure, saying it would add another burden to people and families with low incomes. The fees would "take away their ability to provide food and shelter and clothing for their families," Holloway said.