Tobacco Industry, Florida Settle Suit: Firms Agree to Pay $11.3 Billion, Fees

By Goldreich, Samuel | The Washington Times (Washington, DC), August 26, 1997 | Go to article overview

Tobacco Industry, Florida Settle Suit: Firms Agree to Pay $11.3 Billion, Fees


Goldreich, Samuel, The Washington Times (Washington, DC)


Florida dropped its health-liability lawsuit against the tobacco industry yesterday in return for payments of $11.3 billion over 25 years and a promise to pay all attorney fees associated with the case.

The deal also requires the tobacco companies to replace billboards near schools with anti-smoking messages and acknowledge that cigarettes kill, Florida Gov. Lawton Chiles said.

"The tobacco industry has conceded defeat, and we have a settlement of historic proportions," he said.

The Florida deal, coming a month after Mississippi dropped a similar suit, reflects how ongoing talks are fine-tuning a national settlement that would ban class-action suits against tobacco companies and limit their liability in return for the industry paying at least $368.5 billion over the next 25 years.

"We had a plan to get some extra concessions from the industry and it looks like it worked out," said Mississippi Attorney General Michael Moore, the lead negotiator among 40 attorneys general who signed the nationwide deal with the tobacco companies in June.

The industry will take down all public billboards and public transit and stadium advertising in Florida and pay for a $200 million anti-smoking pilot program. The anti-smoking program and advertising restrictions will be extended to Mississippi, which settled its suit for $3.4 billion.

The Florida agreement also provided a way for tobacco companies to satisfy demands that they renounce the 1993 congressional testimony of industry executives who said they didn't believe smoking is addictive, causes cancer or kills.

"In our lawsuit, we wanted industry executives to cough up the truth," Mr. Chiles said. "In depositions for our case, they have admitted, for the first time, that smoking might have killed hundreds of thousands of our people, our family, our friends, our neighbors."

RJR Nabisco chief executive Steven Goldstone said in a deposition Friday that he believed "smoking plays a part in causing lung cancer." The day before, Geoffrey Bible, chief of Philip Morris Cos., said in a deposition that smoking might have caused as many as 100,000 deaths.

The nationwide settlement calls for similar statements, but tobacco executives aren't likely to come to Congress "down on their knees and apologize," Mr. Moore said.

The payments to Florida and Mississippi would be folded into the nationwide deal struck between the nation's five largest tobacco companies and 40 state attorneys general in June. The agreement must be approved by Congress and signed by President Clinton.

Mr. Moore also reported progress in talks with tobacco representatives to strengthen the regulatory authority of the Food and Drug Administration over tobacco, a major concern of settlement critics. The deal would create several hoops the agency would have to pass through to ban or limit nicotine or mandate safer cigarettes.

"I believe we're pretty closeto some stronger language that would respond to the criticism of public health groups, but, frankly, the president needs to step in to make this happen," Mr. Moore said.

He added that Mr. Clinton would have to intercede to impose stiffer penalties on the industry if targets to reduce underage smoking are not met. The agreement would limit the penalties to $2 billion a year.

The industry also has agreed to pay private attorneys' fees associated with the state lawsuits and private actions, which could add billions of dollars to the deal. Many states, including Maryland, hired outside lawyers on a 25 percent contingent-fee basis.

Maryland Attorney General J. Joseph Curran praised the Florida deal, saying that documents the industry has agreed to release under the settlement strengthen the cases of other states. …

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