Pubdate:  Wed, 10 Sep 1997

Source: Reuter

Big Tobacco takes a stand in Texas

 By Kieran Murray TEXARKANA, Texas (Reuter)  The nation's largest
tobacco companies said Monday they will fight Texas' $14 billion
lawsuit against the industry, setting the stage for the first trial
of a state lawsuit against cigarette makers later this month. The
tobacco companies, which settled earlier cases in Florida and
Mississippi, said it will take a stand against Texas and other states
that have sued the industry unless Congress ratifies a $368.5 billion
nationwide settlement. ``We are going to trial, no question,''
tobacco attorney Dan Webb said in an interview. ``Under no
circumstances will this case be settled outside of the global
resolution.'' Senior executives of the nation's five largest tobacco
companies told U.S. District Judge David Folsom they would not agree
to an outofcourt settlement in Texas. Texas Attorney General Dan
Morales said he expects the case to go to trial Sept. 29 despite the
industry's record of 11thhour settlements. ``This forum is going to
provide a unique opportunity ... to hold this industry accountable
for the last 40 years of their illegal activities,'' Morales said.
Texas accused the industry of racketeering, fraud, conspiracy and
deceptive business practices for allegedly manipulating nicotine
levels in cigarettes and targeting children in tobacco advertising.
The state is seeking an estimated $14 billion in damages for costs of
treating Medicaid patients for tobaccorelated illnesses, a dollar
figure that has moved steadily upward as the case moved closer to
trial. Texas has aggressively pursued its case against the industry,
hiring a team of highpowered trial attorneys and compiling two
truckloads of industry documents and depositions as possible evidence
in the case. The tobacco companies in the Texas case argued that the
state signaled its tacit approval of cigarettes and smokeless tobacco
by accepting billions of dollars in taxes from the industry over the
years. But Morales said that argument would go up in smoke at trial.
``We simply do not buy the assertion that someone who simply pays
their taxes is exempt from having to abide by the law ... and have
license to addict our kids,'' he said. While Texas squares off
against the tobacco industry in federal court, President Clinton is
mulling his stance on the proposed nationwide settlement which must
be approved by Congress. In addition to the monetary damages, the
industry agreed to curb advertising and pay up to $2 billion in fines
if youth smoking doesn't decline. In return, tobacco companies would
be given immunity from future lawsuits and limits on federal
regulation of nicotine as a drug. The tobacco industry averted
earlier trials with an $11.3 billion settlement in Florida and $3.36
billion settlement in Mississippi, but will not settle the balance of
41 state cases absent ratification of the settlement, Webb said.
``Either we get the global resolution or we will go to trial on each
of the separate lawsuits,'' he said.