CALIFORNIA: ANNOUNCES SETTLEMENT WITH LIGGETT GROUP
California, along with 16 cities and counties in the state,This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
reached a "landmark" agreement yesterday with the Liggett Group
Inc., giving government officials "access to crucial internal
documents that will be vital in suits against" other tobacco
companies. SAN FRANCISCO CHRONICLE reports that the agreement is
similar "to the breakthrough pact reached two weeks ago between
Liggett" and the 22 states suing the tobacco industry to recoup
Medicaid funds spent treating smoking-related illnesses (see AHL
3/21) (Chiang, 4/4). State costs for treating Medicaid
recipients for smoking-related illnesses are estimated at more
than $600 million a year (Vanzi/Weinstein, LOS ANGELES TIMES,
4/4). CHRONICLE notes, however, that unlike the other states
that have settled, California has not filed suit against the
industry, and state Attorney General Dan Lungren (R) "said it is
not clear whether it ever will." However, the state can use the
"internal documents should it ever decide to sue the tobacco
companies."
DONE DEAL: Under the agreement announced yesterday, Liggett
will admit that cigarettes are addictive and that the company has
marketed its products to children. In addition, California may
receive the same benefits as the other 22 states without having
to file a lawsuit. And "most important, Liggett will relinquish
a treasure trove of potentially incriminating documents that the
state and local governments will rely on in city and county
lawsuits now pending against" other tobacco companies. The
agreement does not require Liggett to make payments to local
governments; however, the state "will share in the agreement
reached with the 22 states in which Liggett is required to pay
25% of its pretax profits over the next 25 years." Gov. Pete
Wilson (R) "hailed the state's settlement with Liggett." He
said, "My administration will work with the attorney general's
office to ensure that any documents and information obtained in
the agreement that will be used to strengthen our campaign to
educate Californians on the negative effects of smoking" (4/4).
PREEMPTIVE ACTION: Marc Kasowitz, an attorney for Liggett
said, "They haven't filed suit yet, but they might. It's a state
with the largest Medicaid population in the country, 20% of the
entire Medicaid population. We're taking action before they file
suit to resolve potential claims" (WALL STREET JOURNAL, 4/4).
STATE OF AFFAIRS: CHRONICLE reports that Lungren has not
filed suit against the tobacco industry, "claiming that a 1987
law precluded the state from suing." He said, however, that he
hopes the state Legislature will overturn the law "so that the
state can join in the lawsuits now pending." According to the
CHRONICLE, two bills are currently pending in the state
Legislature that would "allow certain suits against the tobacco
industry" (4/4). LOS ANGELES TIMES reports, however, that
critics of Lungren "said the move was primarily an attempt to
reduce the heat" that the attorney general has been receiving for
not suing the tobacco companies (Vanzi/Weinstein, 4/4).