State readies bill key to tobacco fight Measure would make case easier against cigarette makers

$13 billion suit at stake

Legislation would undo restrictive ruling handed down in May

January 30, 1998|By Thomas W. Waldron and William F. Zorzi Jr. | Thomas W. Waldron and William F. Zorzi Jr.,SUN STAFF

Setting the stage for a bruising State House battle with the tobacco industry, the Maryland attorney general's office is preparing legislation that would make it easier for the state to pursue its $13 billion lawsuit against cigarette manufacturers.

The bill, which is expected to be introduced in the General Assembly next week, seeks to undo the effects of an adverse pretrial decision handed down by a judge last spring.

State Attorney General J. Joseph Curran Jr. said the ruling hurt the state's case and forced him to seek a key change in the law in the midst of the lawsuit.

"It will greatly improve our case," Curran said of the legislation. "I will be lobbying this bill as hard as I can."

Like more than three dozen other states, Maryland has sued cigarette companies to recover billions of dollars the state-funded Medicaid program has spent to care for ailing smokers. The trial is scheduled for next January.

In a ruling in May, a Baltimore Circuit Court judge agreed with the cigarette companies' reading of Maryland law and threw out nine of the state lawsuit's 13 counts against the industry.

The decision by Judge Roger W. Brown essentially halted the state's efforts to collect damages under common-law concepts such as fraud or restitution.

Brown's decision left intact claims under state consumer protection and antitrust laws alleging that the cigarette companies conspired to deceive the public about the health risks of smoking.

But the ruling meant that the state, to pursue the broader common-law claims against the cigarette companies, "would have to sue individually for each Medicaid recipient," said Richard A. Daynard, a law professor at Northeastern University in Boston who is advising Maryland on its lawsuit.

"It's quite a burden," Daynard said. "It basically can't be done."

Tobacco lobbyists in Annapolis declined yesterday to comment on the legislation, saying they had not seen it.

But they are sure to launch an aggressive attack on the measure once it is introduced.

It is not clear if the Medicaid legislation being drafted by Curran would play a role in a separate court challenge being launched by Baltimore attorney Peter G. Angelos on behalf of Marylanders who suffer from smoking-related illnesses.

A Baltimore judge ruled this week that Angelos may proceed with that case as a class action and not take the suits one at a time.

Some lawmakers said yesterday that the legislation's chances for approval could be hurt by the involvement of Angelos in the state's lawsuit. His firm is handling the Medicaid litigation on the state's behalf and it stands to collect one-fourth of any award.

The 25 percent fee was negotiated between Angelos and the attorney general's office when Angelos was selected to handle the lawsuit in 1996.

Under that formula, Angelos' share could top $1 billion, a prospect that has disturbed some legislators.

Any bill that would make it easier for the state to prevail in court would also likely mean a larger fee for Angelos, said one key lawmaker.

"It's impossible to divorce the attorney general's interests from Peter Angelos' interests," the legislator said.

On the subject of Angelos' fee, Curran said yesterday that he is aware of legislators' concerns and said: "Under no circumstances will we be paying 25 percent." He added that Angelos "understands" this.

But Curran said he is focusing on winning the case, not the fees.

"Before we go dividing the spoils, let's make sure we get the spoils," he said.

Angelos, who also owns the Baltimore Orioles and who made a fortune handling thousands of court cases involving asbestos, declined to comment last night.

A national settlement was reached last summer between 40 states and the tobacco industry, but it was heavily criticized by anti-smoking advocates and is considered all but dead in Congress.

Four states have settled with the tobacco industry. Minnesota's case is now in trial.

Pub Date: 1/30/98

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