Federal Judge Upholds Trust Fund Suits Against Tobacco Industry
Federal Judge Upholds Trust Fund Suits Against Tobacco Industry
On Friday, September 11, 1998, United States District Court Judge James Gwin refused to dismiss a potential class action suit filed against Philip Morris, RJR Nabisco, Brown & Williamson Tobacco Company and other tobacco industry defendants in federal court for the Northern District of Ohio. The case concerns trust funds that are jointly managed by unions and employers to provide health care for union workers and their families. The Trust Funds filed suit seeking to recover costs paid out for smoking related injuries. The Court’s ruling allows the case to proceed towards trial which is set for February 22, 1999. This will be the first trial for any such Trust Fund in the country.
The Plaintiff Trust Funds claim the Tobacco Industry engaged in a decades-long conspiracy to cover up the health effects of smoking, manipulate nicotine levels to keep smokers addicted and target teenagers, blue collar workers and African Americans. The suit also alleges the Tobacco Industry had the means of manufacturing safer and less addictive tobacco products but conspired not to do so. The Trust Funds say these actions constitute violations of federal and state anti-trust and Racketeering Influenced Corrupt Organization Act (RICO) laws. The Court issued a forty-five page scholarly opinion, citing to authorities not previously noted by other courts, and stated: "If [the claims] are proven, one can scarcely imagine conduct more harmful…There are no more direct victims of the alleged conspiracy who have standing to bring claims under the anti-trust laws." Opinion and Order at pp. 24, 38
"This is a big victory for working men and women of Ohio and their families. We have spent decades contributing our hard-earned dollars into a medical fund that is intended to protect us. It should not be the responsibility of these funds to pay for the medical burden that the tobacco industry has created," said Michael Murphy, a Union Trustee for Local 47 Welfare Fund.
"A victory in February could force tobacco companies to disgorge their profits and compensate the trust funds for illnesses attributable to smoking. The tobacco industry has spent a lot of time and money to thwart our efforts and the efforts of other funds around the country -- this is the first step towards making things right," said John Porada, Management Trustee for the Iron Workers Local 17.
Similar cases have been filed by Union Trust Funds around the country. The Court’s decision in the Northern District of Ohio will give impetus to other cases brought by employer/union health and welfare trust funds that are now pending in major states including Washington, New York, West Virginia, Michigan, New Jersey, and California.
The plaintiffs include Iron Workers Local Union No. 17 Insurance Fund, IBEW Local No. 38 Health and Welfare Fund, Ohio Laborers’ District Council-Ohio Contractors’ Association Insurance Fund, Dealers-Unions Insurance Fund, Local 47 Welfare Fund No. 1, and Toledo Electrical Welfare Fund.
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