SETTLEMENT Talks News on the Web
Archive, May, 1997
Note: These articles wink in and out of existence with the frequency of sub-atomic particles. Many links will be dead. In that case, these pages can be approached as bibliographies, both noting the event, and showing where you might look for further information.
- 05/01/97 GEORGIA Asks Tobacco Cos for SETTLEMENT Share Reuters
- "In the event of a settlement of the current tobacco litigation with the litigating states, the state of Georgia expects to receive no less favorable treatment in resolving any simular claims that may be available to Georgia against the tobacco companies"
- Why should the administration be weighing in now to help shape such a proposal, and what are Mr. Lindsey's credentials for doing so? This isn't a political question. . . The point should not be to broker and announce a deal. The administration should go about the business of regulation. . . . The liability issue seems to us to be one the White House shouldn't be mucking around in -- not at this stage, at any rate. A killer industry suddenly decides it wants protection. Why help provide it?
- The talks are now the best way to secure a ban on marketing that hooks new generations of smokers. Any national outcome of the settlement would need congressional approval, and it is there that the true peril to public health will likely emerge, given big tobacco's billions in campaign contributions. Cigarette foes would be better off staying united and aiming their fire there.
- But key obstacles threaten to derail the settlement talks, including the issue of imposing politically acceptable limits on future suits by sick smokers
- 05/03/97 Health Groups to Monitor Talks CNNfn
- Some warn against being lured into "Dragon's Lair."
- "The industry shouldn't be allowed to pick and choose how it is regulated," Hubert Humphrey III wrote fellow attorneys general.
- Unfortunately, these negotiations--and the public debate--are dominated by three groups that do not necessarily have society's best interests at heart . . . the wrong parties are at the table. The industry, the AGs, and the plaintiffs' lawyers share a strong financial interest in striking a deal that focuses on compensating Big Tobacco's victims rather than regulating it in the future. . . . it is far more important to take immediate steps to raise cigarette taxes, curb tobacco advertising, and accelerate the campaign to ban smoking in public places.
- 05/02/97 Table: What We Should Do About Tobacco
- 05/02/97 Table: The Power of Taxes
- Philip Morris Cos. is lobbying to have Brooke Group Ltd.'s Liggett tobacco unit included in any industrywide settlement of smokers' lawsuits, a move that threatens its cash-strapped rival . . .
- [Some] say that keeping supporters in the dark about such a momentous policy shift is the kind of move that gives lawmakers pause when their votes are needed in the future. "It may come back to haunt them," says Rep. Howard Coble, another North Carolina Republican.
- "[T]here has not been enough progress to cheer or applaud or celebrate. But at least there's enough to keep us going and keep us at the table . . . Liability is front and center."
- 05/07/97 Liability Stumbles Talks AP Washington Post
- 05/07/97 Progress Reported on Liability; MOORE: "One of the Best Days in 6 Weeks" Reuters
- 05/07/97 Tobacco Seeks Legal Shield CNNfn
- 05/07/97 Right to Sue Crucial in Talks Reuters
- The attorneys general said they are trying to find a solution that would give tobacco companies some certainty about the amounts they would have to pay in damages without depriving plaintiffs of their right to sue. . . . However, the attorneys general are united in their stance that they will not agree to a settlement that would give the industry total protection from lawsuits.
- Individuals involved in public health and tobacco control have raised thoughtful concerns about the ongoing discussions with the tobacco industry and our involvement in them. We share these concerns. We have weighed them carefully, consulted within the tobacco control community, and have decided to continue with the discussions. Our goal is not an agreement at any cost, but rather to seek the best possible outcome, from a public health perspective, if any agreement is ever reached.
- Heart, Lung, and Cancer Societies Quit To 'Maintain Objectivity'; Antismoking Organizations Were Frozen Out From the Beginning.
Contrary to press reports that "public health" or "antismoking" organizations are participating in settlement talks with the tobacco industry, the major national health organizations have all quit "so that we can maintain our objectivity and properly play our role as advocates for the public ... " . . . While Dr. Lonnie Bristow, President of the American Medical Association (AMA), has now joined the talks, the AMA is organized primarily to represent the interests of doctors rather than the general public health, and has a checkered history in terms of its position on the smoking issue. . . Thus . . . those now at the negotiating table can hardly claim to represent the antismoking or public health community.
- [A]ggressive new proposal . . . would set stiff barriers for smokers seeking compensation from the industry, capping claims at $250,000 and barring punitive damages . . . The plan, which the tobacco industry put forth late Monday when talks resumed in Dallas, was considerably more hard-line than some in the antitobacco camp had expected. It met with early opposition from tobacco foes and some participants threatened to walk away from the bargaining table. With talks continuing Wednesday, the plan is likely to be rejected, several people involved in the talks said.
- "There's been no agreement yet" on legal immunity proposals, said Dr. Lonnie Bristow of the American Medical Association, who joined the talks to ensure public health experts have a voice in any deal. "It is certainly a continuing possibility that it may not be feasible" to settle with cigarette makers, Bristow cautioned, although he characterized the talks overall as "productive."
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A sweeping tobacco settlement appears closer to reality, as negotiators yesterday floated a larger lump-sum payment by cigarette makers - $375 billion over 25 years, up from an initial figure of $300 billion - and a new plan for financial penalties if youth smoking rates do not go down. Those proposals come as tobacco companies are conceding ground on virtually every point of contention, trying to make the potential settlement so attractive it will be difficult to pass up, according to sources familiar with the negotiations.
- [S]tate attorneys-general offered a plan on Monday that would give full legal rights to smokers suing tobacco companies but would limit the amount of money the industry would have to pay out annually
- All members groups attending the meeting enthusiastically endorsed a set of core public health principles that should be applied to any discussions and agreements among the lawsuit parties. . . At this meeting, Mike Moore, Attorney General for the State of Mississippi, invited ACS and other groups to provide two to three health experts to sit in on negotiations and provide direct information on the health policy principles and tobacco control strategies.
- Top public-health advocates are bringing in a second representative to the tobacco industry's settlement talks, a move widely seen as an effort to consolidate support for the talks within the fractious antitobacco community. In a meeting Friday at a Chicago airport hotel, officials from the top public-health groups selected Lonnie Bristow, the influential past president of the American Medical Association, to join the talks. Dr. Bristow joins Matthew Myers, a lawyer and longtime public-health advocate who has been involved in the negotiations since their onset.
- The principles call for, among other things, the U.S. Food and Drug Administration to have authority to regulate tobacco sales, manufacturing and advertising and to have the right to impose new standards in the future. (NI TOB)
- What is now clearly missing from our movement is the moral character that we thought defined us and separated us from the tobacco industry. . . In the final analysis -- it is the public health movement itself that will suffer the greatest setback from the willingness of the attorneys general, private attorneys and the National Center for Tobacco-Free Kids to negotiate a global settlement. This may be the most profound injustice of all.
- "The tobacco industry cannot pay for the damage it's done," said Drew Ranier, an attorney working for Louisiana in its lawsuit to recover medical costs for treating smokers. Even after years of fighting lawsuits, tobacco companies have yet to file major insurance claims. To do so would give the insurers a stake in the litigation - and the right to press for terms that might not favor the cigarette manufacturers. Ranier said the policies written decades ago for tobacco companies are emerging as a key part of settlement talks, and Louisiana Attorney General Richard Ieyoub heads a group studying the issue.
- Tobacco companies are settling the largest health lawsuit in history. "They say they are truly sorry they targeted kids," says Argus Hamilton. "Facing a $300-billion payout, they wish they had targeted lawyers instead."
- Leading Antismoking Activists Tell How They Are Being Frozen Out of Talks and How They Have to `Crash' Strategy Sessions to Plan `United' Front
- Tobacco-company representatives involved in settlement talks with state attorneys general are briefing members of the U.S. Congress, signaling that the industry believes that an agreement may be near. Participants in the talks have set a goal of reaching a settlement -- and translating that agreement into legislation -- either just before or just after the August congressional recess. The goal is to complete passage of a bill before Congress' scheduled year-end adjournment. "We will be briefing leaders, and others we think will have a genuine interest in this issue," said Berl Bernhard, an attorney with Verner, Liipfert, Bernhard, McPherson and Hand
- Attorney General of Mississippi Mike Moore has invited an officer of the American College of Chest Physicians (ACCP), John E. Studdard, M.D., FCCP, to join the . . . settlement talks.
- Julia Carol, Henry Waxman, and I "crashed" the meeting in Chicago two weeks ago to discuss the global settlement.. . . People calling for unity should take note of the fact that, at least now, it is simply impossible. There are two strongly held views. One camp, led by the Center for Tobacco Free Kids, is strongly committed to the negotiations and is doing everything it can to rally the public health community behind its participation. The other camp, led by the American Lung Association (and supported by much of the media) holds that supporting a "global settlement" though these negotiations is a mistake.
- If there is a deal and it is sent to Congress for approval and then to the White House, some observers say, a lack of unified support from the public health community could make President Clinton reluctant to give it his signature. "This won't fly unless there's universal support, and everyone knows that," said John Banzhaf, a longtime tobacco opponent and director of Action on Smoking and Health. Banzhaf said a "very deep schism has developed" between smaller, more aggressive anti-smoking groups and the more established health organizations. Several longtime antitobacco activists . . . point to other times in the last 30 years when the industry has appeared to have made big concessions but has ended up on top.
- Attorneys general in the tobacco settlement talks think they've found a new way to pressure cigarette-makers by going after billions of dollars in long-forgotten insurance policies. The states' law officers will meet today in Washington to figure out how to bring insurers into the talks, Louisiana Attorney General Richard Ieyoub said yesterday. . . . "If the coverage is significant then it becomes an important asset which would play a significant role in the negotiations."
- 05/15/97 Insurance New Target Reuters
- Though the tobacco settlement negotiations have been out of the headlines recently, there's a lot going on begin the scenes . . .[T]hose involved in the massive negotiations told CNBC that informal face-to-face negotiations continue among some participants. And there have been many telephone discussion between the parties.
- Philip Morris' silence about news this week that a retired research director sought legal immunity from the U.S. Justice Department disconcerted some Wall Street tobacco-watchers. "I've always wondered what makes (Philip Morris Chairman) Geoffrey Bible not desperate, but race against the clock," said Gary Black, a leading analyst of tobacco companies.
- As one who cannot speak due to smoking-induced throat cancer, I resent these attorneys general who presume to negotiate an all-encompassing settlement. They do not represent me or the interests of anyone else who has directly suffered physical harm from cigarettes. Since when can the settlement terms of one party's lawsuit automatically dismiss any possibility of another party suing the same guilty party?
- U.S. Senate Majority Leader Trent Lott said yesterday that a settlement widely endorsed by all sides in the tobacco talks will "have a lot of momentum" and likely would sail through Congress. "The key component is, do they have an agreement that everyone can sign off on," Lott said in an interview after a speech to the National Association of Realtors. "If they do, it should be relatively easy."
- 05/20/97 KESSLER: 30 Years Too Late for Tobacco Immunity Reuters
- "You don't trade public health for immunity. If there was a time for immunity it was 30 years ago when the first questions were raised about their product - not after the industry set out on the course they set out on. It's 30 years too late," [ex FDA Chief David Kessler] said.
- The American Lung Association has called for attorneys general to restrict negotiations with cigarette makers for a global legal settlement to money only, saying the 29 states do not have the authority to end the war on tobacco. . . The reason: Any broader deal would need congressional approval, and "any time tobacco gets into Congress, they either win or there are loopholes they can drive trucks through," said a spokeswoman, Diane Maple.
- U.S. cigarette makers and industry opponents resolved the crucial issue of limiting the amount smokers could collect from tobacco companies in lawsuits to as much as $4 billion a year, paving the way for a possible landmark agreement in the next two weeks, six participants in the talks said. The two sides agreed that any of the $4 billion not paid to smokers who win lawsuits would go toward efforts to curb smoking, including anti-smoking classes, the participants said. . . "They think they can do this in a back room, but they can't," said Attorney General Hubert Humphrey III of Minnesota. "No one can settle my lawsuit except for me."
- I think it is almost surrealistic that Business Week has taken a position opposed to the current settlement when key health groups have not.
- How are the landmark tobacco negotiations going? Terrible or terrific. It all depends on whom you ask. A core group of negotiators representing the industry and its adversaries made progress last week on some of the most contentious issues, such as the industry's demand for protection from lawsuits, according to sources familiar with the talks. But they remained far apart on other potential deal-breakers, including the extent of federal regulation of tobacco.
- "We believe a deal between the tobacco industry, plaintiffs' bar, attorneys general, and public health officials will be be announced within the next two to three weeks." . . . Black cited several possible factors: settlement talks went past midnight on Tuesday; tight precautions to guard against leaks; and sources indicating that Philip Morris Companies Inc stopped buying back stock about a month ago.
- Strapped for money, manpower or expertise, states have periodically hired private lawyers to pursue claims on the public's behalf, but never have the stakes -- in money or public policy -- been so great . . . In the fight against the tobacco industry, private lawyers have assumed a role of extraordinary influence, extending well beyond their representation of the states in court. With a small group of negotiators meeting in New York City over the past 10 days to settle those claims and others, the lawyers now sit in key positions at the bargaining table where the nation's policies on cigarette smoking may be crafted for decades to come.
- 05/22/97 FLORIDA Smokers Seek Say in Talks USA Today
- Smokers in Florida demanded a voice in talks between states and the tobacco industry, saying that in any settlement "we're the ones who will be paying." Jackie Miller, president of the Florida Smokers Rights Association, said she had written to attorneys general involved in the case, requesting a seat at the talks.
- Attorneys conducting "peace talks" with cigarette makers have asked a small group of doctors to analyze whether proposed nicotine-control strategies could curb addiction while ensuring cigarettes continue selling for the next 25 years.
- "The insurance industry is not part of the settlement negotiations and any suggestion that we should become involved will be vociferously opposed by the industry," said a spokesman for the American Insurance Association. He added that any deal by tobacco companies to reach agreement with the state and individual litigants would need congressional approval, and that insurance companies had already decided to resist that, too.
- "I think it's like an inching toward the realization that there's some potential (for losses)," an industry source said.
- "The talks are about the future. The focus has been on children and public health and how to reduce smoking ... Very little time has been spent on civil liability. The story is faulty ... not only faulty in focus but faulty in substance," he said. . . "We'll know if we're going to resolve this thing in the next two weeks, is what I believe. If we don't, I've got to come home and get ready for trial."
- Fearing that a sweeping settlement with tobacco companies will probably favor the industry, nine anti-smoking leaders in Congress announced creation of a public health task force to advise lawmakers on the essential components of an acceptable deal with the $50-billion industry.
- [T]he settlement plan would sharply restrict the ability of current smokers to bring lawsuits -- and make it virtually impossible for future smokers to be compensated for the most common tobacco-related illnesses such as lung cancer, people involved in the talks say. Individuals claiming diseases related to second-hand smoke would face severe restrictions, too
- 05/23/97 SETTLEMENT: Tobacco May Ease Fight Against Nicotine Controls Washington Post
- [T]he companies "moved off flatly saying no" to any regulation of nicotine but still insisted that the Food and Drug Administration be prohibited from banning cigarettes or the nicotine in them, one source said. . . two sources in the anti-smoking camp said the group had all but resolved several difficult issues involving the scope of protection the industry would get from lawsuits. Under the plan, the industry would annually provide from $3.5 billion to $4.5 billion to create a fund, which would be used to pay individuals who sued cigarette companies. . . However, class action lawsuits . . would be prohibited against the industry, and punitive damages . . largely would be eliminated. Also, many individuals would have to go through a smoking-cessation program to be eligible to file suit. The companies have also agreed in principle that there would be penalties for failing to meet targets for underage smoking reduction . . .
- "Everyone's reporting on the settlement talks as if there is some kind of consensus, but that's because they bring in the few who would support a settlement," Banzhaf said.
- But the bottom line in the tobacco-control advocates' struggle with the tobacco industry is not about money for litigants. It is about the way the tobacco industry does business and how its products are perceived. It is about the kids who have become addicted to tobacco and who will die prematurely. It is about the 46 million adult smokers, half of whom will die of a tobacco-related illness unless they stop smoking by age 35, draining the economy by $100 billion annually. It is about changing how money and power undermine the public health, so that another generation does not have to lose millions of its mothers and fathers, brothers and sisters needlessly. It is about our children and our future.
- Tobacco companies have agreed to reduce the number of cigarettes they sell to teenagers by 60 percent in the next decade or face "billions and billions of dollars" in penalties under terms of a "global" legal settlement currently being negotiated by industry, government and private lawyers. . . "Once the public health people understand all the incredible concessions we have achieved, I think they will realize how substantial this deal is for the health of America over the next several decades. . . We have already gained more concessions and done more to reduce future smoking by teenagers than any lawsuit could ever do. . . But there are a lot of naysayers who want to kill any deal simply because they are so committed to the fight."
- [B]ottom line for any global settlement: No blanket immunity should be given to the tobacco industry for past, present or future transgressions. Under no circumstances would the American Lung Association support any agreement that in any way curbs the FDA's authority to protect our citizens from the deadly impact of tobacco use. The American Lung Association will continue to monitor the tobacco discussions. To the extent that there are legitimate opportunities for the public health community to review the options, we will be there. Our goal is to ensure that Big Tobacco pays, and pays dearly, for the damage it does to millions of American each year. That fact is not negotiable.
- "The stocks will go through the roof" on a settlement, said Gary Black, an analyst at Sanford C. Bernstein & Co. He said he thinks that tobacco shares could rise as much as 50 percent.
- Mean and feared. Many of the lawyers trying these cases aren't the sort of folks you're likely to see at the next church social. . . In general, the public health community seems willing to countenance some of the more unseemly aspects of the state litigation so long as the tobacco industry experiences maximum pain. Elizabeth Whelan, president of the American Council on Science and Health, says, "The system works with unholy alliances like this. A feeding frenzy by the plaintiff's bar will force the tobacco industry to be more responsible."
- Lawmakers seem to be treading gingerly around the combustible mixture of growing anti-tobacco sentiment and the cash-rich influence of the industry's lobbyists, said Bill Hogan of the Center for Public Integrity, a Washington-based public policy think tank. "Congress would prefer not to deal with these vexing issues because it puts the public's perception of [the tobacco industry as] a threat to its children and people's health against the money of a loyal campaign contributor," Hogan said. "This is the worst kind of political issue that could ever land on a congressman's desk."
- "We have made huge progress," said attorney general Christine O. Gregoire in a telephone interview Saturday. "The single most important issue on the table for us is the youth smoking and public health piece."
- Marshall Blonsky mentioned the other day that an ad agency once offered him $25,000 for two weeks' work on a tobacco account. [Blonsky] is an expert on semiotics, the study of signs, symbols, and other forms of communication. . . The idea was to find psychological space for a new brand. . .
- Cigarette packs and their ads bristle with "visual rhetoric"--a term used by playwright Anna Deavere Smith to express the idea that words are not nearly as persuasive these days as images. . .
- [Alan Brody] argues that the cigarette companies have long understood that their real role in America is to address--and exploit--the psychological struggles of teenagers. He thinks the companies have shaped smoking as a powerful adult initiation ritual in a society that doesn't have one and taken the side of the young against the adult message of "Just say no." Brody wants to set aside some of the money from the proposed tobacco settlement to address coming-of-age problems and to match some of the tobacco industry's spending on psychological research.
- [Ex-Maine Senator George] Mitchell, 63, is part of the Washington firm of Verner, Liipfert, Bernhard, McPherson and Hand, which recently signed a lucrative contract with cigarette makers. . . Recruiting Mitchell was a coup for the tobacco firms, instantly lending credibility to the idea of a settlement . . [T]obacco firms also have signed up former Republican National Committee chairman Haley Barbour and former Senate majority leader Bob Dole, a longtime ally of the industry, to work primarily with Republicans. Mitchell, of course, would be expected to ease the concerns of on-the-fence Democrats . . . Hugh Rodham, Hillary Rodham Clinton's brother, is close to the trial lawyers involved in the settlement and has been consulting with the White House.
- Under a deal hammered out between the American tobacco industry and the country's powerful anti-cigarette lobby, the chain-smoking cowboy could be consigned to oblivion as early as next month. . . The industry has agreed to make far-reaching changes in the way in which it sells its products. This includes an end to all "character" advertising, which is thought to convey the message to teenagers that smoking is "cool". "Characters" are defined as people--real or symbolic--as well as animated cartoon creations. Marlboro Man, tobacco's top salesman, falls foul of the prohibition, as does "Joe Camel" . . .
- In what may be the most serious threat yet to a tobacco peace deal, a small but growing core of state attorneys wants legal protection for cigarette makers taken off the negotiating table, according to a survey by The Associated Press. Congress is about to throw the talks a bigger curve: Two bills to be introduced in the House and Senate next week would set stronger restrictions on secondhand smoke and teen smoking than the proposed settlement. And cigarette makers are quietly signaling that if at least one major health group doesn't switch sides and support the deal, "this thing dies," said a source familiar with the tobacco camp.
- The government's move to ban Joe Camel, alleging that the character targets children, could lead to a fallout in the tobacco peace talks, removing what cigarette makers considered one of their biggest concessions in a proposed settlement. But Mississippi Attorney General Mike Moore says his potential deal is even more important now because he is attempting to force tobacco firms to get rid of advertising symbols that appeal to teens. And Moore says he should know within eight or nine days if he is making enough progress in the negotiations to continue toward a peace deal--or give up and prepare for the July 7 opening statements in Mississippi's groundbreaking lawsuit against the tobacco industry.
- Doctors, public health officials and antismoking activists got their first look at a major draft accord on tobacco yesterday at a meeting in suburban Chicago, and peppered the deal with criticism. The rough reception was indicative of the tough road that the proposed deal faces as it moves through the gantlet of public debate, starting with the public health community and ultimately Congress. The settlement proposal is fragile to begin with . . .
- "If there was going to be consensus building, it didn't happen today," said Paul Billings, deputy director of government relations for the American Lung Association, which has staunchly opposed any deal. "The tenor of every comment [is that] people are real skeptical."
- Many of the 150 or so attending the one-day session sponsored by the American Medical Association expressed emotions ranging from skepticism to downright disbelief that any deal with the tobacco industry is possible. And they are concerned that the deal may have to be approved by Congress, as is currently contemplated, thus diluting its terms. "The industry's record of deceit and lethal behavior makes it highly likely that any agreement will be full of loopholes and that the intent of the agreement will be ignored by the tobacco industry," said Dr. Dave Cundiff of Louisville, Kentucky, a board member of the American Association of Public Health Physicians. Added John Garrison, the president of the American Lung Association: "The health community must be united against a bailout for the tobacco industry."
- Much of Wednesday's meeting was taken up by a debate between Mississippi Attorney General Mike Moore, chief negotiator for the states, and representatives of Minnesota Attorney General Hubert H. Humphrey III, the leading critic of the settlement negotiations.
- Bristow said Moore asked, "Why now?" Bristow answers, "Now, because each and every day another 3,000 children smoke their first cigarettes. To simply wait for the outcome of the various laswuits seems perhaps a little overly farsighted."
- State attorneys general trying to recoup smoking-related health costs have pledged to wrap up multi-billion-dollar settlement talks with the tobacco industry in the next two weeks, a report said. However, the group of attorneys general is growing less unified as more time passes. The cigarette companies are pressing for immunity from future lawsuits but some of the top prosecutors are reluctant to grant it. Attorneys general from Iowa, Maryland and Wisconsin publicly stated they may oppose any agreement that limits an individual's right to sue tobacco companies for liability . . .
- TOBACCO NEGOTIATORS have pledged to wrap up a settlement agreement in the next two weeks, but opposition to the deal is escalating. Three of the 29 attorneys general who have sued the tobacco industry to recoup the costs of treating smoking-related illnesses Wednesday publicly expressed strong misgivings about the proposed settlement plan.
- And many analysts and anti-smoking crusaders say they doubt the advertising restrictions now under discussion would substantially disrupt tobacco sales. In other countries such as Britain that have limited cigarette ads, tobacco firms simply launched new ad campaigns that passed muster, and industry officials say their sales haven't suffered. "This industry never considers ending advertising, only using a different style," said Richard Pollay, a tobacco advertising expert at the University of British Columbia. "It thinks way into the future. . . . I've seen the industry run circles around rules restricting advertising."
- "If they can produce a safer product, and the FDA tests it and it is safer, they ought to be able to market that product without as many restrictions," says Washington state Attorney General Christine Gregoire, one of the principal negotiators in the settlement talks.
- The goal should be "to try to reduce the number of people who smoke, and the number of people addicted, not how much money should be received,"Kessler said in an interview. In Chicago Wednesday, Mississippi Attorney General Mike Moore said that the industry and state attorneys general had agreed on the public health issues, but that limiting industry liability was still a stumbling block to a final deal. Kessler said he is not satisfied that the talks will get at the root of the tobacco problem, what he called children being seduced into picking up the habit.
- seek backing (By Anthony Flint, Globe Staff, 05/28/97)Negotiators for a landmark tobacco settlement, emerging from weeks of private talks, plan to take a draft of the pact on the road starting today, in an effort to generate public support for the deal.
- Property-casualty insurers have steadfastly maintained that policies sold to cigarette makers over the past three decades have included stiff product-liability exclusions that preclude claims for any damage awards paid to smokers. But the attorneys general don't believe the matter is so clear-cut. Instead, they "are now considering the issue of insurance" to determine if the industry should play a role in any settlement that may ultimately be reached, said Richard Ieyoub.
- 05/28/97 Reuters Coverage of WSJ story
- A list of tentative agreements between the tobacco industry and state attorneys who are suing cigarette-makers, as it will be presented to public health officials meeting in Chicago Wednesday. But no point is final until the entire agreement is completed:
- But there's a risk, as in all such negotiations, that their terms will take on an unexamined force of their own. The risk is doubled if the talks are being held under an artificial deadline. You know why the cigarette companies would like to cut a quick deal. Why would anyone else?
- "Certainly there is no compelling reason to have this settled this week," Norma Broin, lead plaintiff in the suit, told a news conference. . .
"We are quite frankly suspicious that a plan is in the works to prevent our national class action on behalf of 60,000 flight attendants to go to trial on Monday," Stanley Rosenblatt, an attorney for the class, told the news conference. "It's no coincidence...that the so-called global settlement negotiations are becoming intense and that these people are meeting every day," he said.
- Among cases that plaintiff lawyers say could go forward, even if the tobacco industry settles claims with 29 states, is a $5 billion claim set to go to trial June 2. . . Some 1,000 anti-tobacco lawsuits are now in U.S. courts.
- Significant progress has been made in negotiations between tobacco companies and state governments, and a detailed proposal to settle lawsuits against the tobacco industry could be fleshed out in two to three weeks, Florida's attorney general said Tuesday.
- Instead of joining the 2-month-old negotiations, which could settle his own lawsuit, Humphrey in recent weeks has stepped away from the table. He participated for two days of talks in mid-April, but refused to attend later negotiating sessions. . . Humphrey has publicly criticized negotiators for rushing to the table without properly planning for the negotiations and for being willing to sacrifice public health goals . . . He is rallying public health groups, including the American Lung Association, to take a hard line against Big Tobacco at the negotiating table. If the strategy works, anti-tobacco forces may land a deal more to their liking -- or the talks could collapse and attorneys general will land back in court with their lawsuits. But Humphrey's stand poses a big question: Is he spurning the bargaining table just as the tobacco industry appears willing to accept new restrictions on its business practices and to pay $300 billion in damages?
- as a crucial round of the talks begins this week in New York City, a central question still hangs over the negotiations, one whose resolution will probably determine their success or failure: Where should the lines be drawn between punishing the tobacco industry for its past sins, compensating the injured and giving cigarette makers incentives to act with more restraint in the future? "It is inevitable that there has to be a careful balance between social justice for past wrongs and taking action for progress in the future," said Matthew Myers, a lawyer with the Coalition for Tobacco-Free Kids and a participant in the talks.
- SPEAKERS AT THE FORUM, which is sponsored by the American Medical Association and other health groups, will include Attorney General Mike Moore of Mississippi, who has taken the lead in the 30-member group of state officials suing the industry, and Minnesota's Hubert H. Humphrey III, the attorney general who has taken the strongest stance against reaching a deal with the industry. Matthew L. Myers of the National Center for Tobacco-Free Kids, an unofficial representative of the public-health community for the negotiations, will also speak.
- Stick with it or jump ship? That is the question for a growing number of politicians, lawyers, and public health advocates, who are all trying to decide whether a settlement with tobacco companies has been fatally damaged by divisions and dissent - even as the final details in the pact are being committed to writing.
- Earlier this week, the two sides were close enough that they pledged to deal wih the final details and wrap up an agreement by next week. That changed Wednesday when anti-tobacco negotiators failed to win over such health groups as the American Lung Association and American Cancer Society, which could sway President Clinton and Congress on any agreement.
- Landmark tobacco negotiations are headed for a showdown next week, with frustrated cigarette companies now calling on state attorneys general to provide them with a firm settlement proposal just as state officials have stiffened their position on legal protection for the industry. The tougher stances on both sides pose a threat to the talks as they reach a critical point, according to people close to them.
- Negotiations between the tobacco industry and its adversaries recessed this week on a fragile note after attorneys general warned that they would not agree to any of the limitations on lawsuits sought by cigarette makers, according to sources on both sides.
- Connecticut's attorney general [Richard Blumenthal] said Friday that any legal protection for cigarette-makers should be taken off the table. The talks adjourned for the weekend on a critical note: Anti-tobacco attorneys privately warned cigarette-makers that insistence on the liability proposals probably would doom any settlement, said people familiar with the negotiations. Displeased, the tobacco firms could offer no immediate compromise, the sources said.
- 05/30/97 Health Groups Wade into SETTLEMENT Talks Bloomberg/Winston-Salem Journal
- Tobacco-industry opponents are backing off an agreement to shield cigarette-makers from punitive-damage awards after public-health groups criticized concessions made in settlement talks, three participants in the negotiations said.
- "I don't think the prospects [of a deal] look too good if we don't get some real movement by the end of the week--and certainly as of June 10, I think everybody goes home," said one negotiator who spoke on condition of anonymity. Another source close to the negotiations said that "a mood of pessimism" had set in this week.
- With fierce criticism from public health officials ringing in their ears, negotiators for a tobacco settlement reconvened in New York yesterday to iron out details on several provisions, including the regulation of nicotine and the future liability of tobac
- the potential American public health gains from any agreement would be overwhelmed by the ongoing efforts by the tobacco companies to hook hundreds of millions of youngsters in Asia, South America, Africa, Russia and Eastern Europe. . . Excluding international tobacco control from the settlement negotiations reflects a critical strategic error by those public health advocates participating in the negotiations. Rather than trading exemptions, benefits, shields and limits on liability for industry concessions, those at the negotiating table should be focused on making demands of Big Tobacco. Globalizing the demands increases the momentum against this industry and deprives it of an effective escape from the terms of a geographically limited agreement.
- The disagreement both reflects philosophic differences over how harshly to treat the beleaguered tobacco industry and negotiators' own political -- and highly volatile -- calculations about the potential risks of settling with Big Tobacco.
- In talks in New York City late last week, a core group of negotiators representing state attorneys general told industry representatives that they were withdrawing several proposals intended to protect the industry from lawsuits and damage awards. Those included a bar on punitive damages, requirements that smokers complete smoking-cessation classes before they could sue and sharp restrictions on the right of future smokers to sue.
- What the tobacco companies want can come only from a Congress and president willing to pass and sign legislation ensuring that, despite regulation by the Food and Drug Administration, it will continue to be lawful to sell cigarettes containing enough nicotine to be addictive. . . It may well be best to take the money and run on the view that Congress will never outlaw nicotine and no force on earth will ever diminish an adolescent's taste for adopting the worst of adults' habits. If history teaches us anything, it is that any agreement will be good for the cigarette companies, which are likely to cry "uncle" all the way to the bank.
- Reports on these negotiations already indicate the manufacturers' efforts to limit future lawsuits to cases of fraud or negligent misrepresentation, not product liability. Insurers have long excluded product liability for tobacco, but they may find themselves defending and indemnifying tobacco companies for other liabilities that survive the current global settlement negotiations.
- White House spokesman Barry Toiv said the deputy White House legal counsel, Bruce Lindsey, met with Moore and planned to talk to other parties in the talks during the day.
- Phil Carlton, an N.C. lawyer representing tobacco companies, assured growers' representatives at a Raleigh meeting that farmers won't be forgotten as settlement talks resume. Carlton said after the meeting that the growers' primary concern -- to maintain the federally administered program that stabilizes tobacco prices and sets growers' quotas -- hasn't come up in the talks yet. But he predicted that the farmers' price-support program will be discussed in upcoming weeks and said it has strong support from all sides.
- Although Health Secretary Donna Shalala promised Monday "a full- scale, strict scrutiny (and) public health review" of any settlement, White House press secretary Mike McCurry said today her statement reflected no change in the administration position.
- "There is going to be a full-scale, strict scrutiny, a public health review, of anything they come up with," said Donna Shalala, the secretary of Health and Human Services, adding that "we didn't ask for this" potential settlement.
- The tobacco-talk negotiators must be singularly ill informed or playing games to agree to such an impossible dream.
- With settlement talks set to resume next week between the industry and the 33 state attorneys general who have filed lawsuits, representatives of leading U.S. medical and public health groups voiced concerns that the industry will get, and Congress could approve, too much immunity from future lawsuits or too generous limits on their financial liability. At a meeting of the newly-constituted Advisory Committee on Tobacco Policy and Public Health, formed at the request of some Congressional critics of the tobacco industry, is co-chaired by former U.S. Surgeon General Dr. C. Everett Koop and former Food and Drug Administration head Dr. David Kessler.
- But we should try to phase out tobacco use over the next several decades. There are three ways to do this: Prevent young people from smoking, help adults break their habits and manufacture the products so that they are not addictive. Tomorrow, the Advisory Committee on Tobacco Policy and Public Health, a independent panel of public health advocates, will meet to figure out how to reach these goals.
- Addressing the newly appointed Advisory Panel on Tobacco Policy and Public Health, American Cancer Society Chief Executive Officer John R. Seffrin, Ph.D. asked the members to step forward in time 20 years and envision a society that would look back and consider our current dealings with the tobacco industry barbaric. "How did we permit, even encourage 35 million Americans to smoke? How could we have permitted almost 1/2 million annual excess preventable deaths to occur? Why did we not as a society stand trembling with rage as our children ages 1O, 11 and 12 began to smoke?
- Anti-tobacco forces are expected to present a final settlement proposal to cigarette makers next week that would require the industry to pay billions of dollars a year for health claims indefinitely but wouldn't restrict individuals' rights to sue for damages. . . The new proposal is also being designed to appease settlement critics, who have objected to various suggestions for granting the industry protection from future lawsuits. Yet the offer would still give the tobacco industry the future financial predictability it has been demanding, according to people involved in the negotiations. The latest version, which in still being drafted, would also assign total regulatory control over tobacco to the federal government. By giving all such responsibility to the U.S. Food and Drug Administration, negotiators would be able to sidestep the entire issue of nicotine levels in cigarettes - a topic that recently spurred dissent from some health advocates.
- Tobacco foes are close to writing a compromise solution to the crucial
cigarette-company demand of shielding the industry from punitive damages
in tobacco lawsuits, according to several people close to the talks
- "A magic moment comes, and if you don't get it, it's gone," said Senate Majority Leader Trent Lott of Mississippi. "I think they're on the edge of losing it just because they've let it drag on too long."
- The tobacco industry is very effective at controlling how Congress votes on tobacco issues. It has successfully killed or watered down almost every bill introduced to reduce the harm caused by tobacco since the first Surgeon General's Report in 1964. Any settlement that requires congressional approval may be open to amendments and changes from politicians who are taking millions of dollars from the tobacco industry and are already being lobbied by their representatives. . .These negotiations must focus on how tobacco damages the health of our children and the general community. We should not be blinded by the money. The bottom line is the health of our children and our communities.
- Dick Morris surfaced again Tuesday, phoning Joe Califano Jr . to talk up a proposed settlement between Big Tobacco and several states that have filed lawsuits seeking to recover health costs. "He said he was an anti-smoker, but was doing some polling for Richard Scruggs,'
- Relying on tobacco company attorneys and plaintiffs' lawyers to do the public's business behind closed doors in smoke-filled rooms is not a success story. It is tragic confirmation of the failure of our elected representatives to deal with the number one public health enemy of their time and a deadly symptom of how tobacco's campaign contributions are distorting the constitutional roles of our legislative and judicial branches and corrupting so many of our elected representatives.
- 06/06/97 New MOORE SETTLEMENT Plan Presented Thursday Night to Tobacco Cos, Gov't Barry Meier, NY Times
- Negotiators for state attorneys general and anti-smoking groups presented a revised settlement proposal Thursday night to cigarette companies under which they would pay out some $400 billion over 25 years, said people familiar with the proposal. The plan, which has also been given to some government officials in Washington, calls on industry to pay about $100 billion more than an earlier settlement plan over the period, said people familiar with the proposal.
- The latest tobacco settlement proposal would let the Food and Drug Administration regulate nicotine as long as it didn't ban it as an addictive drug for 10 years. Another provision under consideration would deposit as much as $7 billion a year in tobacco money into a federal fund to care for uninsured children, a move that may score valuable political points but would leave states with less money from their tobacco lawsuits than they had anticipated, according to a source familiar with the proposal. Mississippi Attorney General Michael Moore, the lead tobacco peace negotiator, is pushing the new provisions on Capitol Hill this week.
- A ban on smoking in enclosed public spaces, payments to farmers to find alternative crops, worldwide regulation of industry marketing practices and elimination of cigarette vending machines were among the most common goals suggested at the first meeting of the Advisory Committee on Tobacco Policy and Public Health.
- State attorneys general from across the country will meet in Dallas next week in an attempt to complete a proposal to present to tobacco companies, likely rejecting industry demands for a ban on punitive damages and restrictions on individual lawsuits.
- Their determination to set the tobacco-policy agenda is likely to raise significant hurdles for codifying a global tobacco-industry settlement. At a meeting here Thursday, committee members asserted that they won't be rushed into rubber-stamping any agreement, despite looming trial dates in a number of key tobacco cases and an increasingly cluttered congressional schedule. And several members raised new issues that haven't been addressed
- In the quest for a history-making tobacco settlement, all eyes are focused on public health. Politicians, lawyers and even the cigarette makers say the only group that could kill a potential deal between anti-smoking advocates and Big Tobacco is the public health community. And public health officials themselves are divided over what exactly they want in their war against cigarettes.
- In a breakthrough in the tobacco settlement talks, negotiators have agreed that the federal government can eliminate nicotine from cigarettes in the future, but only if it's technically possible and would not spur a huge black market in cigarettes with the old-fashioned nicotine kick. The compromise on nicotine leaves two major issues that need to be ironed out in a settlement between the industry and its opponents: the total amount of money that tobacco companies must pay, and the scope of limits on future ligitation against the tobacco industry.
- 06/06/97 Is a Deal with the Tobacco Industry in the Interest of Public Health? by Dr. W
- If [the tobacco industry] chooses to compromise or settle with the specific parties involved, so be it. But congressional negotiation of a deal that would allow the tobacco industry to continue marketing an inherently dangerous product without taking responsibility for the consequences of its use and without disclosing the details of the health risks of smoking is clearly not in the interest of American public health.
- An automobile in the hands of an unbelted teenager is far more deadly than a Marlboro. Those who hate smoking ought to consider how much they've accomplished through suasion, and how much they could lose pursuing their own regulatory panacea. . . The cigarette talks have come down to a question of taxes and a distribution of the spoils of smoking. Lobbyists for the antismoking cause ought to take a hike and save their credibility for another day.
- WASHINGTON (AP) -- The pending tobacco settlement could save lives, the American Cancer Society said Monday, but the group added it won't endorse a deal without reading the fine print to make sure it has adequate safeguards. . . "But the devil is in the details," she warned, "... and we don't know that until we see the safeguards." Nevertheless, proponents of the deal were encouraged by the response from the public health community, whose support is considered vital for the settlement to be approved by Congress.
- ACS emphasized that it is not endorsing any settlement agreement language until it has the opportunity for an extensive review of all elements. However, the settlement talks appear to have produced substantive elements with the potential for controlling tobacco industry activities and creating an environment that protects future generations from tobacco-related disease. . . "The time is right to take these talks to the next level by opening them up to public and congressional scrutiny and review," Seffrin said.
- Moore and others have been pressing hard for a quick conclusion. But some public health groups and other attorneys general suing the cigarette industry have been arguing for a slower approach. They contend that the deadline imposed by Moore and Lott is an artificial one.
- Mississippi Attorney General Mike Moore told Reuters he had instead returned to Washington with other negotiators in the hope of finding resolutions to major sticking points, including the tobacco industry's demand that it be protected from punitive damages. Moore said the states' top legal officers have refused to agree to a proposal that would deny individuals a right to pursue such damages, which are awarded to punish or deter certain activities. "We told them we won't give it up, and they say they want it," he said in a telephone interview.
- Tentative terms of settlement between the tobacco industry and state attorneys general. No point final until settlement is completed
- The lead peacemakers are telling Congress to expect a deal with tobacco companies this week. But they're admitting they will have to get their own side to compromise and offer cigarette makers controversial last-minute protections against legal liability. And Mississippi Attorney General Michael Moore, leading the anti-tobacco side, is pushing ahead without the crucial support of the public health establishment. The states suing tobacco companies are so fractured that
Moore postponed plans to show them a final deal on Tuesday.
- "Congress is a lot more responsive to the tobacco industry than the American people are, because the money talks," said Larry Makinson of the Center for Responsive Politics, which tracks special interest giving. The industry has made sure a wide range of members rely on its funds, he said. . . But the industry's grip may be loosening, even for members who accept tobacco funds - because public scrutiny is intensifying. "Members are very skittish about actually standing up for the tobacco industry," a Waxman aide said.
- Amid reports -- yet again -- that a tobacco settlement could come next week, state attorneys general began promoting the plan as a way to care for uninsured children and restore state coffers. But the White House and tobacco analysts said that logjams still exist, and the talks remain on hold until early next week.
- The source told Reuters the negotiators were "very upbeat" following a two-hour telephone conference call in which they updated top state officials on progress in the talks. . . the negotiators were optimistic that they could soon reach an agreement about language on nicotine control.
- Spokesman Mike McCurry said it was his understanding after talking with Bruce Lindsey, White House liaison to the talks, that negotiators have still "got a lot of work to do."
- Martin Broughton, chief executive of Brown & Williamson's British parent, B.A.T Industries PLC, is scheduled to arrive in Washington on Friday to deal with the impasse.
- B.A.T. Industries, parent company of Brown & Williamson Tobacco Co., balked at a proposal that could allow the Food and Drug Administration gradually to reduce nicotine to nonaddictive levels after 10 or 12 years, according to sources. However, Philip Morris Cos. and R.J. Reynolds, the nation's two largest cigarette makers, have been willing to negotiate on the issue and have moved off their long-standing opposition to any such regulation, according to sources involved in the talks.
- The objections by B.A.T., a British conglomerate that is the world's second largest tobacco company, reflected its concerns that nicotine regulations adopted by the Federal Government could serve as a model for other countries where it sells cigarettes, several people close to the negotiations said.
- "Under no circumstances will I even look at an agreement that tobacco farmers haven't helped write," Ford said in a statement. "It means a high-priced lawyer with no knowledge of tobacco has more influence over the future of tobacco than a farmer with 200 years of tradition behind him."
- Tobacco talks were back on hold Tuesday after negotiators made little progress in completing an agreement that would end the nation's war on tobacco. A lead negotiator, Mississippi Attorney General Michael Moore, emerged briefly to say he remained "optimistic a comprehensive tobacco plan can be achieved." Still, contrary to Moore's earlier predictions to Congress, a settlement now appears unlikely this week.
- Negotiators said that while the larger meeting ended, smaller groups would remain in Washington to work on separate issues. They said another meeting with the industry representatives could be set next week. Steven Parrish, Philip Morris Cos Inc. (MO) senior vice president of corporate affairs, said the scheduling of another large meeting would rest on whether progress was made among the smaller groups.
- "There was a cover-up here the likes of which are comparable perhaps only with the Holocaust in Europe ... that allowed this industry to get away with murder," said Alan Blum, a professor at the Baylor College of Medicine and founder of the 2,000-member Doctors Ought to Care, or Doc.
- Moore said he was at the bargaining table until 2 a.m. Tuesday, and that talks were going "slow towards the end". Washington State Attorney General Christine Gregoire also told Reuters the talks had grown difficult, as some tobacco industry members were concerned about language covering future Food and Drug Administration regulations.
- the American Cancer Society, the American Heart Association and the Campaign for Tobacco Free Kids held a news briefing explaining why a settlement could do more to reduce smoking and help pay for injuries than any litigation. "We have a moral imperative to look at a settlement if one comes forward," said John Seffrin, chief executive officer of the American Cancer Society. . . Seffrin is a member of the Advisory Committee on Tobacco Policy and Public Health, an independent panel of public health advocates formed to monitor tobacco talks. The committee is chaired by former Surgeon General C. Everett Koop and former Food and Drug Administration head David Kessler. Not all groups represented on the committee, which is scheduled to meet next week, support the concept of a settlement now.
- Tobacco negotiators today for the first time publicly disclosed many details of the big settlement they are trying to reach with tobacco firms, including tougher warning labels on cigarette packs and a cap on damages. But the negotiators said two major sticking points remain: the extent of immunity for tobacco firms and how much the government would regulate nicotine.
- Amid indications historic agreement is near, California jumps on board
- Sources close to the talks said they expect 10% of the settlement funds will go to the federal Department of Health and Human Services for a massive nationwide anti-smoking campaign. . . What is unresolved is how the remaining 90% would be allocated.
- The optimists are again predicting a multibillion-dollar tobacco settlement next week, even as the White House and tobacco analysts warn that logjams still exist.
- . . . in bold type and colors: cigarettes are addictive; tobacco smoke can harm your children; cigarettes cause fatal lung disease; cigarettes cause cancer; cigarettes cause strokes and heart disease; smoking during pregnancy can harm your baby; smoking can kill you; tobacco smoke causes fatal lung disease in nonsmokers; and quitting now greatly reduces serious risk to your health.
- A negotiated settlement of legal claims against the tobacco industry could win New York State an initial windfall of $300 million to $600 million, Attorney General Dennis Vacco said yesterday. He said that a big chunk of that money, and of New York's share of additional annual payments by the industry, would likely be slated to pay for insuring the state's 620,000 uninsured youngsters.
- Some would have us try to ban tobacco or force the industry into bankruptcy, but that would cause a contraband market to spring up overnight . . If we proceed with our cases individually, we lose the collective strength we now possess to obtain the fundamental changes being discussed at the table today.
- Many public-health advocates are furious with the National Center for Tobacco-Free Kids for participating in talks with the tobacco industry. But William D. Novelli, the center's president, is crowing about the concessions he says the industry is now willing to make. "This is big stuff," he says. "We couldn't achieve all this in the near term through other means."
- A Business Week/Harris Opinion poll released Friday showed the American public nearly evenly divided on whether tobacco companies should be given immunity from future legal claims as part of a settlement. The poll found that 49 percent of respondents opposed tobacco companies getting immunity, even if the companies agreed to restrictions on sales and advertising and also agreed to pay smokers for existing claims. But 45 percent of the 1,001 people polled said the companies should be given immunity, Business Week said in a news release. . . . The poll also found that 71 percent of respondents think the tobacco companies lied about the health risks of smoking cigarettes, while 23 percent said they thought the companies told the truth. . . . Asked specifically if they thought the companies had lied concerning the addictive nature of tobacco, 77 percent of those polled said the companies lied, while 15 percent said they told the truth.
- Under the plan being pushed by private attorneys, smoker-benefit programs altogether would get as much money as the industry would be forced to pay out in legal damages -- estimated at up to $4 billion a year -- says a draft obtained by The Associated Press. Tobacco talks resume Monday in Washington,
- With the tobacco-settlement talks moving closer to an agreement, public-health groups, cigarette makers and plaintiffs' lawyers are beginning to mount a campaign to sell it to lawmakers and the public.
- "These talks occur not in a utopia," Myers said, "but in a world where we have to take into account the political environment and what is achievable."
- Each of the nation's smokers could get up to $600 worth of stop-smoking classes - and double that for pregnant teens - out of the multibillion-dollar deal that anti-tobacco forces are trying to negotiate with the tobacco industry.
- Yet even as negotiators went public to try to win backing for a deal, the two most crucial elements remained unresolved: legal liability and nicotine control.
- "Sales in the U.S. for all types of this kind of therapy could double within two years if smokers are given free access to treatment," said James Keeney, a drug industry analyst for the Boston firm of Rodman & Renshaw.
- It now appears that there are only two primary issues to be worked out in the negotiations ‹ whether tobacco companies will have to pay punitive damages and money. One of the negotiators told CNBC that the contentious issues of regulating nicotine and obtaining tobacco company research have been resolved in the bargaining. Under a term sheet of what the parties call "the comprehensive plan," the tobacco companies will disclose to the FDA all the internal laboratory research related to health, toxicity and addiction. A negotiator also says the tobacco companies will reveal certain marketing documents, which could include information about marketing to children. However, highly sought-after documents that are protected by attorney-client privilege will not be part of the agreement.
- According to sources close to the talks, most of the major issues have been resolved, and an agreement could be announced this week. In preparation for the next stage, taking a deal to Congress, negotiators have launched a campaign to woo public health groups, lawmakers, the White House and the news media. Still, as the prospect for a successful deal brings members of each team closer together, pressure-cooker tensions threaten to drive them apart -- foreshadowing the difficulties any deal might face on Capitol Hill and elsewhere.
- "Coming to terms is going to look like first-grade math compared to converting everything into a foolproof bill, and then trying to protect the terms and conditions from being mangled by the congressional sausage-maker," said Massachusetts Attorney General Scott Harshbarger . . . As a sign of how difficult the next stage of the process is likely to be, Harshbarger - who has been at the bargaining table with the tobacco firms for the last several weeks - said he reserves the right to walk away from the deal if it gets changed too much in Washington.
- But the lawyers at the Boston law firm of Brown Rudnick Freed & Gesmer apparently like a challenge. Working behind the scenes, they have been the architects of several key provisions in the sweeping national tobacco settlement that may emerge next week. Through the weeks of negotiating, the tobacco firms have been poker-faced and wily. That's where Brown Rudnick has stepped in, providing key research on what the tobacco companies can afford, what concessions they can agree to and still stay in business, and whether they're capable of offering much more. "There certainly has been some drama," said Thomas Sobel, one of nine lawyers from the Brown Rudnick team working on the case.
- Newly installed Virginia Attorney General Richard Cullen said even though the state is not participating in the settlement talks, "Virginia's going to insist that we be treated fairly in whatever funds are paid out." Even tobacco farmers may get a piece of the payoff. . . "The more fair and balanced the final (settlement) is, the more likely it'll get passed" by Congress, he said.
- In a seven-hour meeting at the New York headquarters of Philip Morris Cos., BAT Chief Executive Martin Broughton agreed to support the proposed multibillion-dollar settlement, the source said
- Tobacco companies would open up their long-secret files on cigarette design and drug dependency under the tobacco settlement that may emerge next week, providing government officials the road map they need to regulate the product in the future. The draft accord also calls for the dissolution of the Council on Tobacco Research and the Tobacco Institute, which has provided the only information on tobacco that the industry has given the public. Any new trade association would be closely scrutinized by government officials. But the tobacco firms are seeking language in the accord that will limit the disclosure of many documents, such as those that contain so-called "privileged" communications between lawyers and tobacco executives. One major concern: that governments in foreign countries will use the documents to clamp down on tobacco sales abroad.
- A negotiator also says the tobacco companies will reveal certain marketing documents, which could include information about marketing to children. However, highly sought-after documents that are protected by attorney-client privilege will not be part of the agreement. Another tough issue is also on the negotiating table: FDA regulation of nicotine.
- 06/06/97 Is a Deal with the Tobacco Industry in the Interest of Public Health? by Dr. W
- If [the tobacco industry] chooses to compromise or settle with the specific parties involved, so be it. But congressional negotiation of a deal that would allow the tobacco industry to continue marketing an inherently dangerous product without taking responsibility for the consequences of its use and without disclosing the details of the health risks of smoking is clearly not in the interest of American public health.
- Florida warns it is unlikely Congress could ratify the deal in time to stop its lawsuit against the industry from beginning trial in August. "We're not going to sign an agreement and give up our lawsuit and have that agreement blow up" in Congress, Gov. Lawton Chiles said from Tallahassee.
- Tobacco negotiators arrived at the White House on Monday for talks with Bruce Lindsey, a senior adviser to President Bill Clinton, but White House Spokesman Mike McCurry suggested that no deal was imminent.
- Leaders on both sides of the tobacco settlement negotiations said Sunday that they expect to shake hands on a preliminary agreement in the next few days and give it to President Clinton for his review before week's end. . . One key issue involves limiting punitive damages in individual smoker lawsuits - whether damages should be capped and if so, how.
- The negotiations have evolved to the point where the potential agreement, which some participants say could come this week, will be a "global" settlement that would cover everything from the placement of tobacco products in stores to the industry's overall financial responsibility for paying future health claims to the federal government's control over nicotine levels in cigarettes.
- But it now appears that any pact could be incomplete, and some negotiators suggested the deadlock could even derail the talks -- scheduled to resume Monday in Washington. But more recently, some people involved in the talks say, the White House has told negotiators that if they can resolve every other aspect of the proposed settlement, the administration would be willing to review a deal and then advise both sides on what it is prepared to accept on the contentious issue of punitive damages. Furthermore, these people say that Mr. Lindsey already has privately signaled the industry that the White House is prepared to back its position.
- "Nobody would have guessed six months ago or a year ago that Philip Morris or RJR would be sitting at the table saying, `Yes, we'll admit nicotine is addictive. Yes, we'll stop Joe Camel and the Marlboro Man. Yes, we'll get rid of outdoor advertising.' No billboards, no vending machines, no Winston sports racing tieup. None of those things will exist after there is congressional approval of the settlement agreement. So it's an historic time."
- U.S. tobacco companies have agreed to stop paying to get cigarettes in movies as the industry negotiates to settle hundreds of suits and pay billions of dollars to treat sick smokers. . . "If this had happened in the 1940s, it would have saved Humphrey Bogart's life," analyst Art Rockwell of Yeager Capital Markets said of the Casablanca star, a heavy smoker who died of lung cancer.
- But the question of attorneys' fees in what promises to be a colossal financial deal has been hovering in the background of the talks for months. The subject is considered so volatile that the two sides have agreed to delay a decision on fees until Congress has approved a comprehensive settlement. Whatever the fee arrangement, it is likely to make a lot of millionaires. If the attorneys get just 1 percent of the total value of the proposed settlement of about $375 billion over 25 years -- a fraction of standard contingency fees, which typically begin at 30 percent -- they ultimately would share nearly $4 billion."This is likely to be the largest single windfall to plaintiffs' attorneys in U.S. history," said Graham Kelder, managing attorney of the Tobacco Products Litigation Project in Boston.
- So, supervisors, what are you waiting for? Join Rep. Henry Waxman, D-Los Angeles, in his courageous stand against this horrible compromise. Put San Francisco on record against it. Remember, this industry is powerful. Plenty of politicians take tobacco money. If that were not true, this compromise never would have gotten this far. It is a sweet-sounding but ultimately tobacco friendly compromise. Just say no.
- "An American settlement that excludes the rest of the world or attempts to give the tobacco companies global immunity is unethical and will be ineffective from the public health perspective," said Dr Judith Mackay, director of the Hong Kong-based Asian Consultancy on Tobacco Control.
- Tobacco negotiators hit a major impasse Tuesday over how much legal protection to offer cigarette makers and how strictly the government will regulate nicotine. "The tobacco industry must be punished for past misconduct, must maintain their liability for the future ... and nicotine has to be regulated by the FDA," said Mississippi Attorney General Michael Moore. "They will give us what we want, or we will go to trial."
- State attorneys general threatened Tuesday to withdraw from talks with cigarette companies on a landmark legal settlement unless their demands for greater regulation of tobacco were met. . . "Enough is enough. There's only so long you can beat a dead horse," said Washington state Attorney General Christine Gregoire.
- Mike Moore, a lead negotiator and the attorney general of Mississippi, laid down a hardline for the industry in talking to reporters at the White House after negotiators from both sides updated White House officials on their progress.
- American College of Chest Physicians (ACCP) and The CHEST Foundation, the philanthropic arm of the ACCP, strongly support the latest draft of the negotiated tobacco litigation settlement terms released by the State Attorneys General last week.
- The White House on Tuesday refused to help resolve issues delaying a tobacco settlement, saying it was up to the parties to reach a deal in their multi-billion dollar legal battle.
- As negotiators reconvened in Washington for what they consider a make-or-break week of meetings, both sides privately asked the Clinton administration yesterday to signal its position on what would be among the deal's most controversial elements -- a provision protecting tobacco companies from punitive damages in lawsuits brought by smokers. However, the sources said, the administration insisted it could not weigh in on the issue until officials could study a final package in its entirety. The White House might be willing to accept limits on punitive damages, sources said, but only if it decides that concessions by the industry make that worthwhile.
- But in a telephone interview Monday, an administration official, who spoke on condition of anonymity, indicated that the White House might be willing to play a more active role if negotiators were not able to produce a completed plan. "We are prepared to evaluate a settlement proposal if it does not include punitive damages," the official said.
- Instead, over the course of the seven-hour session, which featured two private meetings of the three CEOs, Mr. Broughton stiffened the resolve of his U.S. rivals. While he softened his position on the issue of FDA regulation of nicotine, he helped convince Philip Morris and RJR that the industry can't cave in on the punitive-damages issue, according to negotiators at the talks.Thus in one dramatic trans-Atlantic visit Mr. Broughton -- who runs a sprawling global empire in cigarettes and financial services but isn't a visible player on the American business stage -- is suddenly a big force in the tobacco talks. . . [H]e brings to the table the steely pragmatism of an accountant and a disdain for the American public's view of cigarettes.
- [N]egotiators . . . spent much of the day bickering among themselves about how much, if any, protection cigarette makers should get from punitive damages. While negotiators say they still hope to reach a settlement this week, they say achieving a consensus on punitive damages "will be a bear of a task."
- Tobacco-industry negotiators and their opponents reached an agreement yesterday that would allow the federal government under certain conditions to reduce the levels of nicotine in cigarettes, said Steve Berman, an attorney representing seven states. [Negotiators] said they expected a long night of talks.
- The biggest sticking point still appears to be the industry's demand for a ban on paying punitive damages to any sick smoker who happens to win a lawsuit. So far the states have refused, but Florida Attorney General Bob Butterworth suggested Monday that "punitive damages in certain cases may have to be limited." He would not elaborate.
- "We can't help but see some negative impact from this," said Roger Beahm, the president of Coyne Beahm Inc., and advertising firm in Colfax. Although the firm has diversified in the past few years, 50 percent of its work is still for the tobacco industry, he said.
- Tobacco-related claims could cost the U.S. insurance industry more than $250 billion, a potentially worse blow than the one delivered by asbestos in the late 1980s, an insurance trade group said on Wednesday. "It's going to be huge," Richard Hodyl, insurance services counsel with the National Association of Independent Insurers told Reuters in a telephone interview. "This is going to be a big deal. It's here and it's now," he added. But others in the insurance industry said it was far too early to estimate the potential liability for insurers.
- Moore told reporters that negotiators for the states would keep working through the night and into Thursday, adding, "Maybe we will have something for you by tomorrow afternoon."
- But the two main sticking points, Food and Drug Administration control of nicotine and whether the industry is exempt from paying punitive damages, were not yet resolved, he said. "Each side is exploring ways to solve that," Scruggs said. Privately, other negotiators predicted a breakthrough was close, saying the industry appeared to be offering some flexibility as the offers and counteroffers went back and forth all day.
- "The talks are at their most contentious and their most difficult," another negotiator, Washington state Attorney General Christine Gregoire told reporters.
- State attorneys general say they are ready to walk away from tobacco negotiations if the industry refused to be regulated by the Food and Drug Administration and punished for past wrongdoing
- "It's come down to two little things," said Florida Attorney General Robert Butterworth. "They don't want to be punished and they don't want to be regulated."
- After a day of brinkmanship, tobacco industry lawyers and their legal adversaries remained in a standoff last night but continued to talk - prompting some to predict that a settlement may be unveiled today.
- After the news conference, Moore went to the White House for a meeting with Bruce Lindsey, deputy counsel to the president, to seek some sort of blessing from the Clinton administration for a proposed settlement. Moore and plaintiffs lawyer Richard Scruggs delivered a concrete proposal to resolve the punitive damages issue, including more money from the industry to address public health concerns, said one official. It was unclear last night, however, whether the proposal would win administration support.
- The two sides were meeting at a hotel in Washington yesterday and expected another late-night session in an attempt to produce a compromise. One issue is whether to define the types of smokers who can seek punitive damages, disqualifying some people based on past smoking behavior, people in the talks said.
- Bible has taken the lead in talks in which the industry would pay hundreds of billions of dollars and submit to strict regulation in exchange for legal peace with its enemies. . . "He's the key factor," said PaineWebber Inc. analyst Emanuel Goldman.
- There is an implicit bargain: pay more for cigarettes now and there will be funds to help look after you if you become ill later . . The tobacco companies now have an interest in the health and general lifestyles of their customers. If their customers smoke only moderately, go to the gym every day, eat up their greens and generally lead blame-free lives, they will presumably be healthier in old age and therefore be less of a charge on the health- care authorities. As the marketing gurus would put it, the tobacco companies are not just selling a product; they are entering into a relation- ship with their customers.
- [I] hope that by the end of this press conference you will understand why the American Lung Association is vehemently opposed to the proposed settlement with the tobacco industry.
- "We have made tremendous progress today ... We got more concessions from the industry today, . . `We are very optimistic that we can resolve this matter very, very soon . . . I had a very positive meeting at the White House today, and I am happy with the help that the White House has given us."
- "Sometimes the most difficult details don't arise until the last minute in negotiations, when somebody has to say yea or nay," said Connecticut Attorney General Richard Blumenthal. "We have made tremendous progress today," said lead negotiator Michael Moore, Mississippi's attorney general. Negotiators would continue working late into the night and into Friday, he said.
- Wall Street analysts are prepared to shave their earnings estimates for major tobacco companies considerably if a deal is struck between the cigarette makers and their opponents.Annual estimates for the No. 1 cigarette company, Philip Morris Cos. (MO), could be cut by 25 cents to 40 cents a share, analysts said. Meanwhile, as much as $1.00 a share could be taken off projections for RJR Nabisco Holdings Corp
- Because the settlement is being structured as a flat payment per year for a set amount of years, the economic impact of the payment will diminish over time due to inflation. This means that as the actual economic cost of the settlement deflated over time, Philip Morris earnings would gain an addition "kick" from the point after the settlement was imposed, helping to increase the perceived growth rate from settlement day one. With a price increase to cover most of the settlement, Philip Morris' dividend and stock buybacks could remain pretty much intact, although near-term earnings might be depleted. In the first few years of the settlement, Philip Morris has ways it could offset potential earnings depletion until earnings growth covers the difference between a price increase and the settlement cost.
- Philip Morris Cos Inc (MO) topped the New York Stock Exchange's most actives list, rising 2-3/8 to year high of 47-7/8 by midafternoon. RJR Nabisco Holdings Corp (RN) jumped 1-1/4 to 35-3/4.
- Spreads on RJR Nabisco (RN) debt tightened 10-25 basis points while spreads on Philip Morris Cos Inc (MO) debt tightened five to eight basis points, traders said.
- investors continued to use options, particularly in Philip Morris Cos Inc (MO), to speculate on a deal, options traders said Thursday. In afternoon activity, Philip Morris options were the most active group at the American Stock Exchange, led by the January 1999 46-5/8 call, which traded 7,780 contracts.
- Forget about grabbing a pack of Camels from a vending machine, and brace for ominous black warnings that "Smoking can kill you." The settlement being negotiated in tense talks between anti-smoking forces and the tobacco industry would make radical changes in the way cigarettes are sold and regulated in the United States.
- According to Norwood Wilner, whose client Grady Carter won the highest verdict in history against the cigarette industry last August, the proposed settlement between tobacco interests and attorneys general will be a boon to injured smokers throughout the country. "The agreement recognizes the right to claim compensation for smoke- related injuries," says Wilner, who is preparing for an August, 1997 trial against R.J. Reynolds in Jacksonville.
- Tobacco industry analyst Mary Aaronson told ABC's "Good Morning America" that the situation surrounding the talks apparently has changed over night. Aaronson said that Wednesday night she was told that the talks were as close as they were three weeks ago. But she said "20 minutes ago" she was told an agreement would come today.
- I want these parties to come to me and say, 'This is where we are. We've done all we can do, here's where we are,' " Mr. Clinton said in an Oval Office interview with The Wall Street Journal. "And I want them to do the very best they can first."
- The breakthrough came with a compromise on punitive damages that the tobacco companies and their legal adversaries agreed to yesterday. That compromise calls for a ban on punitive damages for lawsuits based on the industry's past conduct, in return for a lump-sum "fine" of up to $50 billion . . Punitive damages would be allowed for any lawsuits on the industry's future conduct. Those who successfully sue the industry in the future would collect from a $4 billion annual fund set aside for awards.
- "I really don't think walking away from something this important is in the best interest of the country," Mr. Moore said. "We gave an inch; they gave a lot."
- Without entering the lawsuit, the state hopes to receive some compensation for health care costs caused by tobacco use. The state has not received a response to a letter sent to the chairmen of tobacco giants RJR Nabisco and Philip Morris asking to be included in the settlement. The letter sent in April was signed by state Attorney General Don Stenberg and Gov. Ben Nelson. It said Nebraska does not want to clutter the courts with unnecessary lawsuits, but it does want to be part of the settlement agreement.
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