Tobacco Settlement with States Hit by More Challenges
NEW YORK (Reuters) - Smokers' lawsuits seeking a share of the over $240 billion settlement between states and the cigarette makers are rising with the latest challenge targeting Tennessee's transfer of a large chunk of its money to tobacco farmers.
There are now more than 20 of these suits filed around the country hoping to win a portion of the settlement that Big Tobacco is paying states as reimbursement for Medicaid funds they spent on sick smokers.
Although several state and federal trial courts have dismissed smokers' suits challenging the settlement between the states and the tobacco industry, plaintiffs lawyers said on Thursday they had just learned an Iowa state court refused to throw out their suit. They also hoping to win positive rulings with appeals courts as they begin to decide the cases.
Just such a decision is expected shortly as the Seventh Circuit Court of Appeals in Chicago will soon issue a ruling in a class action case filed on behalf of Medicaid recipients in Wisconsin. The suit had been dismissed by a federal court in Madison on sovereign immunity grounds.
The key argument by plaintiffs in the Wisconsin suit and other cases is that they claim federal law entitles them to any money remaining from the settlement that exceeds state costs spent to treat their smoking-related illnesses.
None of the 46 states that signed the 1998 accord plan to give any of the money back to individual smokers. According to a report earlier this month by the National Conference of State Legislatures, most states are using their money for health care services and smoking prevention. However some states are also using the money for a variety of programs including law enforcement, flood control and even aiding tobacco farmers.
State attorneys general maintain that smokers' challenges to the settlement will fail and that the accord will remain intact.
However, John Cabaniss, the plaintiffs lawyer in the Wisconsin case, said that trial level courts that have dismissed suits have done so on sovereign immunity grounds and have not considered the smokers' key argument. Cabaniss is also involved in similar litigation pending in California, Montana, New Mexico, Colorado and Iowa.
``This is like saying the states can take federal money and disregard federal law,'' he said. ``I'm disappointed the courts are not dealing with the merits. Lower courts are taking the easy way out.''
Plaintiffs lawyers learned late Thursday that an Iowa court has refused to dismiss a suit filed by Cabaniss and other lawyers challenging the settlement. The defendants had asked that the suit be thrown out on sovereign immunity and other grounds.
A California state court issued a similar decision earlier this year.
About a dozen more of these cases have been filed by a network of lawyers who have brought their cases against state officials who administer Medicaid funds. The suits by this group have been filed in Georgia, Hawaii, Kansas, Kentucky, Maryland, North Carolina, Pennsylvania, South Carolina, Rhode Island, Tennessee, Vermont and West Virginia.
``We've got a bunch more in the works,'' said Antonio Ponvert, a lawyer with Bridgeport, Connecticut's Koskoff, Koskoff and Bieder, a leading law firm in the network. He said the group expects to bring 25-30 cases.
``Courts should compel the states to follow federal law and to disburse a portion of the tobacco recovery to the indigent and sick people on whose backs the states climbed to recover the tobacco money in the first place,'' Ponvert said.
Most recently, a separate suit was filed earlier this month in state court in Nashville by the Knoxville lawyer J.D. Lee, who has been filing smokers suits against the tobacco industry since the 1950s, and his son David.
Not only does this suit allege that smokers are entitled to remaining settlement funds, but it argues that the state is instead using a large portion of this money to aid tobacco farmers.
The suit was filed on July 10, several days after Tennessee received $202.9 million representing its first installment from the tobacco settlement. The state is to receive a total of $4.8 billion over the next 25 years.
Before the state legislature adjourned last month it agreed that half of its settlement money would go to health and education programs but the other half would go to the ''agriculture community.'' Although the latter is to be used to help ease the transition by farmers from tobacco into other crops, anti-smoking advocates have claimed the farmers should not receive any funds because their crops made people ill.
David Lee said defendants in the case include the trust fund set up to administer the settlement as well as the major tobacco companies.
``The tobacco companies are part of the conspiracy to keep our clients from getting their money,'' he alleged.