Smokers' suits aided little by Liggett settlement Terms are lean, harsh for other plaintiffs


The public's applause over the calculated capitulation last week by the Liggett Group, one of the nation's largest cigarette makers, has overshadowed a sobering fact: Thousands of smokers who have pursued the company in court for years stand to receive little under a proposed legal settlement also announced last week.

Liggett received wide publicity last week when it struck a deal to resolve claims by 22 state attorneys general. But less widely noticed was that the company and a group of plaintiffs' lawyers also won preliminary approval from a state court judge in Mobile, Ala., for a companion plan to settle all present and future suits by smokers, their survivors, cities, counties and insurers.

The terms of that plan, which caught other lawyers with cases involving Liggett by surprise, are both financially lean and legally harsh. Smokers, their survivors and others would share with the attorneys general in 25 percent of Liggett's pretax income, which the company would put into a settlement fund every year for the next 25 years.

Based on Liggett's 1995 income, its payment that year would have been some $575,000, papers filed with the Alabama court indicate. There are potentially thousands or perhaps tens of thousands of claimants.

In an unusual legal move, the plan would not allow those who oppose the terms to opt out and pursue their own lawsuits. In contrast, most class-action lawsuits allow plaintiffs to drop out of a settlement. In addition, plan participants would not receive specific details about the allocation of settlement money until after the pact is finally approved, court papers indicate.

For their part, state attorneys general have said the real value of any settlement with Liggett to the public would not be financial. Rather, they point to the company's unprecedented acknowledgment in the settlement of the state cases that tobacco is addictive.

Pub Date: 3/24/97

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