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WASHINGTON-The chairman of the Senate Judiciary Committee wants to move quickly on the proposed $368.5 billion global tobacco settlement, though testimony last week revealed that considerable disagreement remains.
Sen. Orrin Hatch, R-Utah, said last week that when Congress returns from its August recess, lawmakers will have to consider two questions regarding the settlement proposal: First, if Congress does nothing, is there an acceptable alternative to the proposal? And, second, can lawmakers afford to "fritter away" the opportunity to reduce smoking by youths that the proposal provides?
Sen. Hatch's assessment came after a pair of Senate hearings last week, one in the Judiciary Committee, the other in the Senate Commerce Committee.
At both hearings, senators heard an intellectual tug of war between witnesses who insisted the settlement must undergo significant changes or be scuttled and those who insisted with equal conviction that any significant changes would scuttle the settlement.
The proposal already has been attacked for allegedly relieving cigarette makers of liability without adequately punishing them (BI, July 21).
A group of state attorneys general and tobacco manufacturers hammered out the proposed settlement as a means to settle state suits seeking to recover the costs of Medicaid payments that covered tobacco-related ailments (BI, June 23).
As it now reads, the proposal would require tobacco manufacturers to pay $368.5 billion over the next 25 years to settle the suits brought by 40 states and Puerto Rico. Sixty billion dollars would be considered punitive damages. In return, the states would drop all their suits against the tobacco companies, class-action suits against the cigarette makers would be banned, and punitive damages for past misdeeds would be prohibited. Individuals, though, could continue to sue for damages.
The proposed limits on litigation drew criticism from a somewhat unusual source.
Robert Falise is chairman and managing trustee of the Fairfax, Va.-based Manville Personal Injury Settlement Trust, which was created by Johns Manville Corp. to compensate individuals who suffered injury from exposure to asbestos. He criticized the settlement because it would not allow the trust or other asbestos litigants to obtain compensation from tobacco companies for lung ailments exacerbated by tobacco use.
Mr. Falise said that while the risk of lung cancer among asbestos workers in general was five times that of workers in other industries, the risk for workers who also smoked was about 53 times higher.
He said asbestos makers were paying in part for injuries for which the tobacco companies should be held liable. He suggested that a separate fund be carved out of the proposed settlement to compensate asbestos victims, though he would not specify how much of the settlement should go into the fund.
Mr. Falise's suggestion drew a scornful response from Mississippi Attorney General Mike Moore, who had spearheaded the negotiations.
During an impromptu press briefing during a break in the hearing, Mr. Moore noted that the asbestos makers had never sued the tobacco companies for any compensation. Now that there's a potential pot of hundreds of billions of dollars from the cigarette makers, though, "everybody wants a piece," he said.
Under questioning by Sen. Mike DeWine, R-Ohio, Mr. Falise agreed that to the best of his knowledge, no asbestos trust or manufacturer had ever sued tobacco companies.
That was confirmed after the hearing by Larry Fitzpatrick, president of the Princeton, N.J.-based Center for Dispute Resolution, an unrelated asbestos compensation facility.
Nevertheless, Mr. Falise said the asbestos trust remains concerned about the limits on cigarette makers' liability contained in the proposal.
Earlier, Sen. Frank Lautenberg, D-N.J., cited the tort limitations provided by the proposal and told the Judiciary Committee that "Congress should demand equally far-reaching public health concessions from the tobacco industry if we are to even consider such restrictions on the rights of people to sue for their injuries."
Sen. Lautenberg also noted that he had introduced legislation that would specifically "prevent the tobacco industry from getting backdoor relief" through comprehensive product liability reform legislation introduced earlier this year in the Senate.
"The American people still hold a wild card in their deck-the wild card of civil liability. We should not discard it unless we know we will win the game in favor of our citizens' health and the well-being of all future generations," he said.
A few minutes later, Dr. Lonnie R. Bristow, a San Pablo, Calif., physician who is immediate past president of the American Medical Assn., called on the senators to approve the proposal.
While saying Congress and the White House need to "carefully evaluate" some concerns raised about the agreement-particularly regarding the Food and Drug Administration's oversight power and penalties imposed on tobacco companies for not reducing youth smoking-Dr. Bristow said the settlement has "public health opportunities that potentially dwarf the impact of even the polio vaccine."
"Stay focused on the goals of prevention and treatment. Do not allow this opportunity to be consumed by those who may prefer vengeance to saving lives or who value process over outcome," Dr. Bristow said.
Fewer than 24 hours after his testimony, the AMA gave its conditional support to the proposed settlement, provided the FDA and youth smoking provisions are modified, giving the FDA more power and more severe penalties if the industry fails to meet youth smoking reduction goals.
Mississippi's Mr. Moore said last Thursday that he had reopened negotiations with the tobacco companies regarding those matters.
Dr. Bristow's position was not, however, shared by two other prominent medical authorities who testified before the Commerce Committee the same day.
Both former Surgeon General C. Everett Koop and former FDA Administrator David Kessler said the settlement should be rejected unless it first undergoes significant changes. Both doctors had served on the congressionally created Advisory Committee on Tobacco Policy and Public Health, which recently issued its own report.
Among the changes the doctors demanded were banning smoking in all public places, giving the FDA more money to regulate tobacco products and setting specific standards that would determine how much youth smoking should decline each year and penalize tobacco companies if the standards aren't met.
"You can accept this industry blueprint and tinker with it, improving it here and there but leaving its framework intact. That will make some difference, but it will keep the industry booming and profitable at the expense of the nation's health. If that is the best you can do, do it, but the American people want more, and history will not look kindly at your timidness," said Drs. Koop and Kessler.
The two doctors' testimony drew an angry response from Sen. Wendell Ford, D-Ky. The two want to "improve" the settlement in such a way as to make adoption of the terms impossible, he charged. The demands of Drs. Koop and Kessler amount to "nothing more than a backdoor prohibition," said Sen. Ford, adding that such "extreme views" would undo the "delicate balance" that led to the agreement.
Other possible areas of contention emerged during the Commerce Committee hearing.
Both Sens. Ford and Bill Frist, R-Tenn., said tobacco farmers must be treated fairly. Sen. Frist, the only medical doctor in the Senate, emphasized that tobacco farmers had not been included in the negotiations and "should not be forgotten now."
"One other group, a group that appeared to be well-represented at that negotiating table, should not be forgotten, either," Sen. Frist said. "Let us not forget what this deal will mean for our friends at the bar. They are anticipating a harvest, too, and the numbers reach into the billions. No one knows just how much of that sum will end up in barristers' pockets, but I do hope my colleagues will look at this bottom line to exercise careful caution on the matter of legal fees," he said.
In other tobacco-related developments last week:
A Palm Beach County, Fla., circuit court judge ruled that cigarette makers cannot use the fact that the public has known about the dangers of smoking for decades as a defense against the state of Florida's multibillion-dollar lawsuit seeking recovery of tobacco-related Medicaid expenses. The trial is expected to begin next month.
Meanwhile, four more union health funds have sued tobacco manufacturers and a public relations agency that worked for them to recover money the funds paid to treat smokers' illnesses. The suit, filed in New York state court, alleges the tobacco companies, trade associations and public relations firm conspired to hide the hazards of smoking from the public.