TOBACCO LAWSUITS: Ruling Goes Against State’s Medi-Cal Suit
Sacramento County Superior Court Judge John Lewis last week "tentatively decided to throw out major parts" of the state's $1.3 billion case against tobacco companies, the Sacramento Bee reports. Lewis' ruling, issued Tuesday, barred the state from seeking "punitive damages in its lawsuit." Further, the judge said "he was inclined to prevent the state from pursuing a claim to recover Medi-Cal funds spent to treat smoking-related illnesses between 1995 and 1997 because the tobacco industry was immunized from such claims during that period." In addition, the ruling said the state may not be able to "pursue a separate claim that the industry abused the attorney-client privilege to avoid paying penalties for alleged unfair business practices." Lewis asked the two sides to submit "written briefs" to address the issues before he gives a final ruling sometime after May.
At issue is a 1987 California statute that "grant[ed] tobacco and other 'inherently unsafe' consumer products immunity from product liability lawsuits." Last year, the state Legislature passed a law clarifying the intent of the 1987 law, "saying it had not intended ... to prevent governmental entities from pursuing product liability lawsuits related to tobacco." Lewis ruled, however, that the "state's theory that the new law merely clarified the original 1987 statute was 'not persuasive'" and that to "retroactively" remove liability would violate the Constitution.
Even if Lewis' ruling holds, Thomas Greene, an assistant state attorney general, said "the state could still obtain large damages on two other claims in the lawsuit: that the industry conspired to avoid making safer cigarettes, and that it withheld from the public complete information about the risks of smoking." Greene said, "The real money in this case is in (those) antitrust and consumer protection counts." However, Philip Morris attorney James Speyer said, "I don't think it's any secret that the Medi-Cal recoupment claim is the heart of the state's case. And if the tentative ruling is confirmed, effectively there will be no more Medi-Cal recoupment claim, and obviously that would be a very significant ruling" (Bernstein, 3/21).