States Uneasy After Tobacco Ruling
MIAMI (AP) -- In the aftermath of the record $145 billion award against five tobacco companies, state officials across the country believe the verdict will not affect money they are counting on from a national settlement to pay for anti-smoking campaigns
But they are taking precautions in case the industry goes bankrupt, threatening their ability to collect approximately $250 billion over the next two decades.
``The consensus we reached was that any verdict up to $200 billion in our estimation would not have an adverse impact on the companies complying with our agreement,'' said Washington state Attorney General Christine Gregoire, lead negotiator in the 1998 states' settlement.
Attorneys for the five tobacco companies found liable Friday after a two-year trial said the huge punitive damages award would kill the industry.
The legal sparring is far from over.
A final order is needed to move a case to appeal. But the signing of the final judgment will be delayed while the tobacco industry pursues its argument that the trial isn't over until the individual claims of up to 700,000 sick Florida smokers are decided.
In court Monday, smokers' attorney Susan Rosenblatt argued that post-verdict issues, including an industry request to reduce the dollar amount as excessive, shouldn't delay entry of a final order.
Circuit Judge Robert Kaye said he hoped to sign the order this week, but lead tobacco attorney Dan Webb said he wasn't yet prepared to offer motions addressing the legal issues involved.
Meanwhile, the National Association of Attorneys General has hired a California law firm specializing in bankruptcy to represent them in case the tobacco companies declare bankruptcy, Gregoire said.
Colorado Treasurer Mike Coffman fought unsuccessfully last session for ``selling'' the state's $2.9 billion settlement share for $1.2 billion or less to pay for programs already established.
But lawmakers opposed that plan in favor of annual payments, saying there was no risk that the tobacco industry would go bankrupt.
``I did my best to convince the Legislature there are real risks with this settlement agreement and they shouldn't gamble on the tobacco industry,'' Coffman said Monday. ``This is just one risk out of many.''
Ken Lane, spokesman for Colorado Attorney General Ken Salazar, said programs funded in anticipation of getting tobacco money for the next 20 years are not in immediate danger because the $145 billion award likely won't stand.
In Louisiana, Treasurer John Kennedy fears the Florida decision could affect annual payments on the state's $4.6 billion settlement share. He wants to build security for the programs the settlement money is financing by selling bonds.
Ann Donlan, a spokeswoman for Massachusetts Attorney General Tom Reilly, said ``the fear is about the health of children and people who smoke. The focus isn't on money.''
The multibillion-dollar settlement between the states and cigarette makers to recover health costs for treating sick smokers is the focus of a new TV advertising campaign launched Monday by Philip Morris Inc.
The ads try to ``explain to people what we've agreed to do with the states and how that affects the way we do business and why it really is change as opposed to just words,'' said William Ohlemeyer, associate general counsel with the industry-leading cigarette maker.
Anti-smoking activist John Banzhaf of Action on Smoking and Health reacted to the commercials with disdain. ``This sounds very much to me like jury tampering. They want to be ready for the next jury,'' he said.