States may walk out of tobacco talks

'Enough is enough' attorney general says

WASHINGTON (CNN) -- States threatened to walk out on settlement negotiations with tobacco companies Tuesday as a stalemate persisted over the issues of federal regulation of nicotine and individuals' rights to sue cigarette companies.

The national talks, begun in April, resumed Monday amid hopes that a settlement might be reached this week. The meetings involve tobacco industry representatives and state attorneys general, representing 37 states suing the industry to recoup costs of treating tobacco-related diseases.

"They'll either give us what we want, or we'll go to trial, period," Mississippi Attorney General Mike Moore, the lead negotiator for the states, told reporters.

The talks were to continue Wednesday, said Moore, "and hopefully we can resolve this matter."

The states want to make sure the companies will be held liable for punitive damages for past behavior, and that they can be also held accountable in future. They also want the Food and Drug Administration to be able to regulate nicotine as a drug, Moore said.

The tobacco industry wants to limit future liability and opposes FDA regulation. The cost of paying states for past health care costs treating tobacco-related illnesses, and for future lawsuits, could exceed $300 billion.

Moore described the FDA regulation of tobacco as the most contentious issue. "We are not willing to give in on that. When we're finished the Food and Drug Administration will regulate nicotine as a drug or there will be no resolution whatsoever."

The industry has expressed concerns that the FDA might have the power to, in effect, ban nicotine if the settlement is signed. A federal judge has ruled that the FDA can regulate access to and labeling of cigarettes, but that has been appealed by the tobacco industry.

An industry source close to the talks agreed that a settlement could be days away. But signs of weariness with the drawn-out process were growing.

"Enough is enough. There is only so long you can beat a dead horse," said Washington state Attorney General Christine Gregoire.

Correspondent Brian Cabell and Reuters contributed to this report.

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