Business Interest Groups Wary of U.S. Tobacco Suit

The Washington Post
Thursday, 9/23/99, Page A01
by Lorraine Adams and David A. Vise
[continued from Index page back]

[Provided by Tobacco Daily News Summaries]
The United States Justice Department filed a multi-billion dollar civil lawsuit against the tobacco industry yesterday in an effort to recoup money spent on health care for smoking-related illnesses. The lawsuit will also seek to force the industry to finance smoking education and cessation programs. In addition, the Justice Department announced that there are no "pending criminal division investigations" of the tobacco industry, signaling the end of the long-standing criminal investigation.

The federal government spends approximately $20 billion a year to treat smoking-related diseases, and statutes of limitations will permit the government to go back three years to recover costs under the Medical Care Recovery Act and six years under the Medicare law governing health payments for the elderly. The suit also included a civil RICO (Racketeer Influenced, Corrupt Organizations Act) charge, which has no statute of limitations, and will allow the government to seek a portion of any "ill-gotten" tobacco industry profits since 1954, when tobacco executives met in New York to discuss a public relations campaign countering scientific evidence about the dangers of smoking.

The 131-page complaint charges the five largest cigarette companies and their public relations and research associations with engaging in a 45-year conspiracy to mislead, defraud and conceal from the American public and the federal government the deadly and addictive effects of smoking. The case has been assigned to US District Court Judge Gladys Kessler. Kessler was appointed to the Federal bench by President Clinton in 1994 and has a reputation for encouraging out-of-court settlements.

At the press conference announcing the lawsuit, Attorney General Janet Reno said, "As millions of cigarette smokers have gone to the hospital for lung cancer and emphysema, the American taxpayer has footed the bill. Today, we're asking the tobacco companies to pay their fair share." President Clinton said the Federal government had to file this lawsuit because the tobacco industry refused to resolve this problem legislatively. "We did our best to work with [the tobacco industry] and with the Congress to resolve many of these matters legislatively, and they declined." Greg Little, associate general counsel of Philip Morris said his company would "not succumb to politically correct extortion. We will not settle this lawsuit. We're right on the law. We're right on the facts. We will prevail in this lawsuit."

Additional Sources:
New York Times, (9/23/99) "Tobacco Industry Accused of Fraud in Lawsuit by U.S.", MARC LACEY
[Full Text:]

Los Angeles Times, (9/23/99) "Tobacco Industry Says Suit Is Government Hypocrisy", ALISSA J. RUBIN, MYRON LEVIN, HENRY WEINSTEIN / Times Staff Writers
[Full Text:]

USA TODAY, (9/23/99) "US Sues Cigarette Makers For 'Fraud'", Wendy Koch, p. A1

USA TODAY, (9/23/99) "Government Says Cover-Up Lasted 45 Years", Wendy Koch and Kevin Johnson, p. A1

WALL STREET JOURNAL, (9/23/99) "US Sues Tobacco Makers In Massive Case", David Cloud and Gordon Fairclough, p. A3

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