TOBACCO SETTLEMENT: Should Smokers Receive a Cut?
Just as payments begin to trickle in from the $206 billion settlement 46 states received from cigarette manufacturers, lawyers from eight states -- Georgia, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont and West Virginia -- are preparing to file class-action lawsuits today claiming that some smokers are entitled to a portion of that money. The New York Times reports the lawyers maintain that "any settlement to the states above the amount they paid through Medicaid for treatment of smoking-related diseases should go to Medicaid recipients who suffered from those illnesses." Not one of the 46 states sharing the settlement had planned to distribute any of the winnings to smokers and instead have begun using the money for smoking-related programs and non-health initiatives like tax cuts or construction. Lawyers from California, Florida, Montana, Texas and Wisconsin had filed similar suits, but with "conflicting results," as a judge in Wisconsin ruled in favor of the state, while a judge in California tentatively ruled that the smoker might be entitled to some money.
However, the lawyers maintain that "the big questions of law posed by the suits ... will be resolved by the appellate courts." G. Kendrick Macdowell, a Washington lawyer who is coordinating the new rush of cases, said, "This is the latest chapter in the tobacco wars, and it is over the forgotten class in those wars. These are cases about the least fortunate and most vulnerable in our society who exhausted their savings to become eligible for Medicaid, who assigned their claims to recover expenses to the states and who are entitled to a portion of recovery under federal law." The plaintiff's case rests on a federal Medicaid law which "requires the states to pursue any third parties who are responsible for injuries that require medical expenses." But the plaintiffs "will have to clear high hurdles to prevail," as the states "are generally protected from most kinds of federal lawsuits for money damages by the 11th Amendment." The states also have argued that the settlement was not intended to reimburse smokers for their Medicaid expenses, but to resolve claims of antitrust, consumer fraud and racketeering violations by the cigarette companies. James Tierney, a former attorney general for Maine, said, "There's lots of evidence that the settlement was not for Medicaid reimbursement. The attorneys general sued the tobacco companies as lawbreakers: this was a law enforcement action, not a reimbursement settlement" (Labaton, 1/26).