In Shift, U.S. Opens Effort to Settle Tobacco Lawsuit
WASHINGTON, June 19 - The Bush administration took the first step today toward seeking settlement of the multibillion-dollar civil lawsuit against the tobacco industry. Attorney General John Ashcroft notified lawmakers that he had named a team of lawyers
Attorney General John Ashcroft has decided to assemble a team in an effort to settle the Justice Department lawsuit against the tobacco industry, his spokeswoman said June 19, 2001.The decision represents a shift from the policy of the Clinton administration, which had vigorously supported the suit. President Bill Clinton announced the decision to file the legal action against the tobacco industry in his 1999 State of the Union message, and since then it has ranked among the Justice Department's top civil litigation priorities.
Filed in September 1999, the lawsuit seeks to recover more than $20 billion in federal health care costs of Medicare patients, veterans and federal employees along with an undetermined amount for what the Justice Department alleged were fraudulently obtained profits from the sale of tobacco products.
Antismoking activists attacked today's decision. "The administration is seeking yet another way to let the tobacco industry off the hook for decades of deception and wrongdoing," said a statement by Matthew L. Myers, president of the Campaign for Tobacco-Free Kids.
"It is especially worrisome," Mr. Myers added, "that administration officials are weakening the hand of their negotiating team by stating ahead of time that they believe they would lose in court."
Tobacco companies reacted with scant enthusiasm, and several company spokesmen repeated their position that the suit was groundless.
President Bush has expressed reservations about the suit on several occasions. In April, Mr. Bush said in answer to a question about the suit, "I do worry about a litigious society," adding, "At some point you know enough is enough."
As attorney general, Mr. Ashcroft has never directly criticized the lawsuit and at times has said he would take no action to kill it even though the Justice Department sought no increase in spending on the lawsuit in the coming year's budget. But as a Republican senator from Missouri, Mr. Ashcroft opposed the suit.
In 1998, he was one of the senators most responsible for blocking anti- smoking legislation that would have stiffened federal regulations on tobacco and raised cigarette prices.
He was the only Commerce Committee member to vote against the bill in the committee. The panel approved it, 19 to 1. The bill then died because of Republican opposition on the Senate floor. In one debate, Mr. Ashcroft said the bill was "nothing more than an excuse to raise taxes and expand government."
Today, Philip Morris Inc., one of the defendants in the lawsuit, issued a statement which said, "Philip Morris has not been approached about settlement of the Department of Justice lawsuit, nor have we approached anyone else about settlement of this lawsuit. We are not aware of any settlement discussions. We continue to believe the case is without merit."
One Democratic senator, Richard J. Durbin of Illinois, said the Justice Department had ignored basic legal strategies in its new approach. "First, by not seeking full funding for the lawsuit from Congress, the department is not preparing to go to trial," he said. "Second, by downplaying its own chances of winning, the department is inviting the tobacco companies to be less than forthcoming during negotiations."
But Justice Department officials said the settlement effort did not mean the department would drop the suit. They said Mr. Ashcroft acted on a request from Stuart Schiffer, the head of the agency's civil division, to name a three-lawyer settlement group that will work alongside the litigation unit, which will continue on the case.
But other officials said they suspected Mr. Ashcroft might not be serious about aggressively pressing the lawsuit. They said that the litigation unit had not been consulted about the decision in advance and that its lawyers were not told of the decision until late this afternoon, after lawmakers were informed.
Mr. Ashcroft's effort to settle the case was based in part on a belief that the government might lose the lawsuit if the case went to trial, a view that has gained credence within the Justice Department after government lawyers suffered a serious setback last year.
A federal district judge in the District of Columbia, Gladys Kessler, dismissed a portion of the case that would have allowed the government to recover some smoking-related health care costs.
The defendants in the suit besides Philip Morris are Brown & Williamson, a division of B.A.T. Industries P.L.C.; the R.J. Reynolds Tobacco Company; Lorillard Tobacco Company, a division of Loews Corporation; the Liggett Group, a division of the Brooke Group, and two now-defunct trade groups, the Council for Tobacco Research U.S.A. Inc. and the Tobacco Institute Inc.
After today's decision, antismoking groups accused the Bush administration of repaying the tobacco industry for its campaign contributions. According to statistics compiled by antismoking organizations, tobacco companies donated more than $8 million during the last election, more than 80 percent of it to Republican candidates.
The federal civil lawsuit followed a settlement that a number of state governments reached with cigarette makers in 1998. The companies agreed to pay the states more than $240 billion over 25 years, a figure that was based on how much the states had paid for health insurance.
The federal suit relies heavily on documents unearthed during litigation over state claims, accusing the tobacco industry of wrongly asserting that nicotine was not addictive, and falsely denying that the companies were intentionally marketing their products to children.
The filing of the civil suit ended the Justice Department's lengthy criminal investigation into the tobacco industry, which had focused on issues like whether the tobacco companies misled Congress and federal regulatory agencies about the industry's knowledge of the addictive properties of tobacco.
But cigarette companies have repeatedly denied that they misled the federal government about their knowledge of the health hazards of smoking or that they manipulated nicotine levels.