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TOBACCO PACT DRAWS CRITICISM

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WASHINGTON-The proposed settlement between tobacco companies and state attorneys general is beginning to wobble under the weight of opposition from health advocates, trial lawyers and politicians.

The proposal, which requires Congress' approval, calls for tobacco companies to pay more than $360 billion to settle lawsuits by 40 states while giving the industry some immunity from future legal action.

Among other things, the proposal would limit punitive damages that could be assessed against cigarette makers and calls for regulation of the industry by the Food and Drug Administration (BI, June 23).

Sharp criticism of the proposal from several directions-as well as last week's release of a report challenging the pact by former Surgeon General C. Everett Koop and former FDA Commissioner David Kessler-suggest that the proposal likely will be changed before Congress approves it.

"I'm just worried that too much tinkering and the whole deal blows up," Mississippi Attorney General Mike Moore said in a televised interview last week.

President Clinton stated his opposition to the portion of the proposal that restricts the Food and Drug Administration's ability to regulate the industry if the regulations encourage a black market for cigarettes. Such a restriction on the FDA is "totally unreasonable," the president told reporters in Madrid, Spain, last week.

A joint statement by tobacco companies said that the risk of a black market for higher nicotine-content cigarettes "should be a legitimate concern to all Americans for a variety of reasons."

The settlement proposal has drawn fire from legislators led by Sen. Frank Lautenberg, D-N.J., and Rep. Henry Waxman, D-Calif. Sen. Lautenberg is authoring legislation that would alter the settlement to include proposals made by the Koop-Kessler report, which public health groups helped prepare.

The report recommends, among other things, that smoking be banned completely in workplaces and outdoor gathering places such as stadiums. The settlement proposal, however, would exempt restaurants, bars and casinos.

The settlement proposal calls for tobacco companies to pay $50 billion in punitive damages over 25 years and establish a fund of up to $5 billion a year to be used partly for payment of future punitive awards.

Restrictions on future lawsuits and limits on punitive damages drew a broadside from the Assn. of Trial Lawyers of America.

"It's unclear who, if anybody, could bring legal action in the future and which cases are preserved," said a spokesman for ATLA.

Tobacco companies should not have been allowed to negotiate the amount of punitive damages while essentially admitting "outrageous wrongdoing," the spokesman added.

"Every detail of the proposed settlement must be thoroughly scrutinized and evaluated," Richard D. Hailey, ATLA's president-elect, said in a statement. "What it does for consumers and the public health, what limitations it places on Americans' legal rights, and what punishment it metes out to the deadly industry that has killed millions of Americans and cost our economy trillions of dollars."

ATLA's opposition to the settlement proposal that some of its members helped craft does not present a conflict, the spokesman said. "They are doing what they are supposed to be doing: representing the interests of their clients," he added, while the association is doing its job of defending the civil justice system.

If the settlement falls through completely, Mississippi won't be out in the cold. That state settled its claims against the industry in a separate agreement earlier this month (BI, July 7).

Florida is negotiating a settlement of its lawsuit, which is scheduled to go to trial next month.

Meanwhile, both houses of the California legislature have passed a bill permitting people to sue the tobacco industry. The law, if enacted, would repeal part of a 1987 law prohibiting suits by individuals against tobacco manufacturers.

California Gov. Pete Wilson has not said whether he will sign the measure.

Last month, California amended the 1987 law and permitted the state to sue tobacco manufacturers. After the bill became law, the state Attorney General joined most other states in suing the tobacco industry.