Settlement reached in Minnesota tobacco case
May 8, 1998
Web posted at: 2:18 p.m. EDT (1818 GMT)
ST. PAUL, Minnesota (CNN) -- The tobacco industry has agreed to a settlement with the state of Minnesota, a judge announced Friday. A source told CNN the industry will pay the state of Minnesota and Blue Cross and Blue Shield of Minnesota $6 billion over 25 years to recover costs from smoking-related illnesses plus punitive damages.
The deal, which means the industry will dodge a jury verdict
in the 78-day trial, was reached at 7 a.m. (8 a.m. EDT) after
attorneys agreed to reduce their demands for fees in the
case, according to the source, who was involved in the talks.
The key was a concession by Michael Ciresi, lead attorney for
the state, to drop his own fee demand from 25 percent to 7
percent of the state's share of the settlement, the source
Participants had agreed on the basic money figure, except for
the attorneys' fees, before the talks broke off Wednesday,
sources told CNN.
Hopper explains how the money will be paid to the plaintiffs ( 183K/17 sec. AIFF or WAV sound)
Attorney Robert Hopper, who helped negotiate last year's
national settlement with the tobacco industry, told CNN he
understood as of Thursday that the attorneys' fees were the remaining points to be settled.
"My understanding as of yesterday ... was that the attorneys'
fees (issue) was still a major sticking point, as to whether they would be paid outside of the scope of the settlement," Hopper told CNN on Thursday.
Hopper said the issue of how to deal with future lawsuits
brought by counties and cities was also one of the final
issues to be negotiated.
Industry to make intial payment of $600 million
Both CNN's source and Hopper said the industry would make an
initial lump payment of $600 million.
Friday morning, Judge Kenneth Fitzpatrick recessed court to
1:30 p.m. (2:30 p.m. EDT) to allow the parties to finalize
the settlement, which Fitzpatrick must approve.
As Ciresi went into court Friday morning he confirmed that
settlement talks had resumed. The talks had broken off
sometime between Wednesday evening and Thursday morning. The
negotiations resumed Thursday while attorneys for the
defendants gave their closing arguments to the jury.
Tobacco attorneys finished their closing arguments on
Thursday. Plaintiffs' attorneys were scheduled to give their
closing arguments Friday, provided no settlement was
On Thursday, the defense attorneys told the jury, which
includes three smokers, that the tobacco industry may have
made mistakes -- but it owed nothing to the state or to the
"There's no proof that anything these companies did caused
Minnesota any damage," said Robert Weber, the attorney for
the R.J. Reynolds Tobacco Co.
Instead, Weber said, the plaintiffs were using bad damage
models and a wave of anti-tobacco sentiment to force the
industry to hand over an award.
"You're a tobacco company, and you're unpopular, so you write
me a check for $1.7 billion," Weber said.
On Friday, Weber told reporters he wasn't happy that a
settlement had been reached. Weber said he'd spent nearly
four months in court and felt the jury would have reached a
verdict that favored the tobacco industry.
The Minnesota case is the nation's first trial of the tobacco industry brought by a state attorney general. Several states have sued the companies, but previous cases have been settled out of court.
Correspondent Tony Clark contributed to this report.