Judge OKs Settlement of Tobacco Lawsuits

SAN DIEGO —  Saying it was “fair and just” and would “redound to the benefit of all citizens of California,” a San Diego Superior Court judge Wednesday approved a consent decree that settles five state and local lawsuits against the tobacco industry.

The settlements--part of a $206-billion nationwide deal announced last month--will pour $25 billion into state and local governments’ coffers and impose significant restrictions on the cigarette companies’ marketing and advertising practices.

Judge Ronald S. Prager approved the gargantuan settlement--the largest in California history--after a 90-minute hearing. The decision makes California the 19th state to formally approve the settlement. So far no judge has rejected a state’s participation in the deal, which involves 46 states.

The only state where any serious legal problem has emerged is New York, where several state legislators and the attorney general-elect have criticized the deal, and New York City Mayor Rudolph Giuliani has asserted that the city is getting shortchanged in the allocation of that state’s $25-billion share. New York officials said Wednesday, however, that they thought the state’s issues would be resolved soon.

No such problems have arisen in California. Indeed, Wednesday’s hearing was a remarkably placid conclusion to a long and sometimes bitter legal battle.

Despite the fact that the settlement has been criticized by numerous public health advocates, none of them showed up to voice any objections. Nor did state Sens. John Burton (D-San Francisco) and Adam Schiff (D-Burbank), who had written the judge a letter raising questions about several aspects of the deal.

At one point, Prager asked whether Gov.-elect Gray Davis, who is a plaintiff in one of the five suits resolved Wednesday, approved the settlement. “He’s not voicing any objections,” said San Diego lawyer David Casey, one of Davis’ attorneys.

The only discord came from an announcement by San Diego attorney Patrick J. Coughlin, lead counsel for the city of San Francisco. Coughlin said four public health organizations--the American Cancer Society, the American Heart Assn., the American Pediatric Assn. and the California Medical Assn.--that had been co-plaintiffs in the city’s case would not formally join the settlement. Instead, the groups moved to dismiss their claims, in order to remain free to criticize the settlement.

“The settlement is a far cry from what we envisioned, and withdrawing from the lawsuit before the settlement is finalized is one way we can demonstrate how strenuously we object,” said Dr. Thomas D. Fogel, president of the cancer society’s California division.

“We cannot be a party to any settlement that allows the tobacco industry to continue its illegal, predatory marketing efforts targeting kids,” Fogel said. The settlement provides that the industry can be penalized if a state can prove that a “primary purpose” of its advertising is to lure minors into smoking. Critics of the deal say that would be very difficult to prove.

Some critics have complained that California and other states should have held out for more money--a contention dismissed by Sue Ellen Wooldridge, one of two special assistant attorneys general who played a key role in negotiating the 140-page settlement. “That’s like criticizing Mark McGwire for not hitting 200 home runs,” she said.

As previously disclosed, half of the state’s share of the money will go to localities throughout California, with Los Angeles County getting $3.3 billion and the city of Los Angeles garnering $312 million over the next 25 years. Orange County stands to get $835 million over the same period, San Diego County $865 million and Ventura County $230 million. Those amounts could fall if cigarette sales decline substantially, which might occur because of price hikes and anti-smoking advertising campaigns that are part of the settlement.

The deal usually has been described in terms of the payout over the next 25 years. In theory, however, the settlement runs in perpetuity. Because of that, if the tobacco industry remains profitable well into the next century, California and its localities could continue to share about $1 billion a year indefinitely.

In addition to the huge pot of money, the deal restricts tobacco marketing through a ban on tobacco billboards and stadium and transit signs. It also requires cigarette makers to spend about $325 million per year to fund a new foundation to do research on smoking cessation and provides grants to the states for anti-smoking ads and education programs.

The cigarette companies will have to give up the use of cartoon characters in advertising, but they can still use human figures such as the Marlboro Man.

In addition, because he signed the settlement, Prager will retain continuing jurisdiction over the settlement, meaning that the judge could be asked in the future to take action against the companies if they violate any terms of the deal.

By its nature, because the suits were settled by the states, not the federal government, the deal could not do certain things--such as federal regulation of the $50-billion-a-year industry, said Coughlin, who filed the first major case against the cigarette industry in California six years ago. “It’s time for Congress to act” to give the Food and Drug Administration authority to regulate cigarette companies, he said. Legislation that would have done just that failed in Congress earlier this year.

The cigarette companies still face many lawsuits filed by individuals and several major recovery suits filed by union health and welfare funds, the first of which is scheduled to go to trial in Ohio in February.

Philip Morris lawyer Stephen J. Krigbaum said categorically in an interview after the hearing that the industry would not settle that case.