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| S P E C I A L | Tobacco Under Attack |
What do state tobacco deals mean for national settlement?
August 25, 1997
Web posted at: 10:18 p.m. EDT (0218 GMT)(CNN) -- Florida's announcement Monday that it had settled its claims against the tobacco industry -- even though a nationwide settlement had just been reached -- raises several questions. Among them: Why did the state settle? And how will its settlement affect the national deal, which has yet to be approved by Congress?
A look at the steps leading to Monday's announcement may provide the answer.
Tobacco Implications: CNN's Tom Watkins reports
2 min. 15 sec. VXtreme video
Mississippi was the first state to file charges against the industry, suing to recover the cost of treating Medicaid recipients with smoking-related illnesses. About 40 states followed -- and filed -- suit, including Florida in 1995.
This spring, besieged by hundreds of billions of dollars in potential liability, the tobacco companies came to the table. A fragile coalition of health interests, class-action lawyers and state attorneys general coalesced long enough to cut a tentative deal in June.
Under the so-called national settlement plan, the tobacco industry would pay more than $368 billion over 25 years and accept restrictions on advertising and sales.
"The Marlboro man will be riding into the sunset on Joe Camel," Bob Butterworth, Florida's attorney general, said at the time.
In exchange, the industry would win protection from class-action suits.
"The real advantages of a national agreement are they put in place everything we can think of to reduce teen smoking."
— John Coale, tobacco negotiator
None of the parties wanted to take the chance that a state trial could hurt a national plan's odds of passage. So when Mississippi's case came to trial last month, tobacco settled, agreeing to pay that state $3.6 billion over 25 years.
Florida's settlement is for $11.3 billion. On a per-smoker basis, Florida got less money than Mississippi.
"But more than the money, and the reason we really decided to settle," said Florida Gov. Lawton Chiles, "was they agreed to take down the billboards and ... quit targeting kids."
Mississippi's deal says if another state does better, they would get the same, and so Florida's restrictions on ads and sales will be shared by Mississippi.
A national accord, if approved by Congress, could change what both states get. Butterworth says the provisions would supersede Florida's settlement "to some extent," but the state would still retain the money already paid, as well as certain restrictions, such as the one on billboards.
'It means they've got to hurry up'
If no national agreement is reached, both states will keep what they have won. Why, then, shouldn't other states cut their own deals with big tobacco instead of signing on to a national accord?
"The real advantages of a national agreement are they put in place everything we can think of to reduce teen smoking," said John Coale, a Washington attorney who helped negotiate the national agreement.
On Monday, Texas said it would proceed with its suit despite the Florida settlement. And in Philadelphia, a U.S. district judge set a trial date for another class-action case representing more than 2 million smokers. Settlement discussions for both are already under way.
"This is a big deal," Coale said. "It means they've got to hurry up" with ratification of the national settlement.
The tobacco industry agreed.
"The comprehensive settlement represents the best opportunity to achieve immediate and meaningful resolution of outstanding issues regarding tobacco, including a reduction in the use of tobacco products by minors and the preservation of adults' rights to use tobacco," five major tobacco companies said in the statement.
The Clinton administration said Florida's deal should not affect progress on that settlement.
"We don't think it should have any impact on our review," said White House spokesman Barry Toiv.
Correspondent Tom Watkins, The Associated Press and Reuters contributed to this report.
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