State weighs tobacco deal Maryland officials must decide whether to join settlement

$200 billion over 25 years

Terms to be unveiled Friday

deadline to sign on is Nov. 20

November 11, 1998|By Scott Shane | Scott Shane,SUN STAFF

Maryland officials will have until Nov. 20 to decide whether to sign on to a tobacco settlement negotiated by eight other states or take a chance on going to trial in April, Attorney General J. Joseph Curran Jr. said last night.

The settlement announcement, scheduled for noon Friday, is likely to set off a rushed weeklong debate among state officials and public health experts on the merits of the deal, negotiated largely in secret.

According to several sources, the proposed settlement would ban cigarette billboards, prohibit cigarette brand names on other merchandise, restrict other advertising and set up a $1.45 billion foundation to pay for anti-smoking campaigns and health research.

In addition, it is expected to pay the states as much as $200 billion over 25 years, depending on the number of states that sign up, to compensate for tax money spent to treat smoking-related illnesses in poor patients insured by Medicaid.

But Curran cautioned that the draft settlement is "more than 100 pages of fine print and legalese" that was still being revised yesterday.

"The devil is in the details, and we've got to make sure we understand all the ramifications," he said.

He said that once he has the final document, he will consult with Gov. Parris N. Glendening, state legislative leaders and public health experts before deciding whether to settle.

"We're well prepared to go to trial," he said. "The question is, would we do better if we settle now?"

The proposed settlement was negotiated by the attorneys general of Washington, whose case is in trial, New York, Colorado, California, North Carolina, North Dakota, Oklahoma and Pennsylvania.

Those states and many others among the 37 with pending tobacco lawsuits -- as well as some that have not filed lawsuits -- are expected to hurry to sign on to the proposed deal.

Four states -- Mississippi, Florida, Texas and Minnesota -- have settled with the industry, either on the eve of trial or after trials had begun.

But Maryland, which would reap about $4 billion over 25 years if it accepts the settlement, is considered by legal experts to have a relatively strong case, which could make the decision a close call.

Curran has not participated in the talks, but his deputy, Carmen M. Shepard, has monitored them closely and was in New York yesterday to be briefed.

Tobacco critics were skeptical yesterday regarding what they had heard about the proposed deal.

"I'd urge Maryland to think long and hard before accepting this settlement," said Richard A. Daynard, a Boston law professor and key strategist of national anti-tobacco litigation who has been an adviser on Maryland's lawsuit.

"This deal sounds extraordinarily weak. The effort is clearly to stampede the states into unreflecting acquiescence. A lot of states with good hands are being asked to throw in their cards."

Dr. Albert L. Blumberg, a Towson radiation oncologist and president of the anti-tobacco coalition Smoke Free Maryland, said he, too, is wary of the industry's motives.

"Empty presents"

"The tobacco industry is famous for giving concessions that turn out to be empty presents," Blumberg said.

"We have reservations about the entire process and the settlement because we haven't had a chance to see it."

Blumberg said his group views Minnesota's settlement in May as "the gold standard" that Maryland should strive to equal or better, and he expressed skepticism that the deal to be announced Friday would accomplish that.

A source familiar with the negotiations confirmed that in monetary terms, the deal would fall short of Minnesota's settlement.

But the source said that other provisions, including marketing restrictions, would go beyond what Minnesota won, banning cartoon characters in advertising and limiting the size and number of cigarette posters on stores and gas stations.

Role of Angelos

Maryland's case was filed by Curran in 1996 and has been prepared by the law firm of Orioles majority owner Peter G. Angelos, who earned a fortune suing asbestos companies and is experienced at pursuing complex litigation against corporate giants.

Angelos has borne all expenses of the lawsuit and is expected to receive 12.5 percent of any money recovered, a fee cut in half by the General Assembly this year from the 25 percent in Angelos' original contract.

The state's case, weakened by an unfavorable court ruling, was restored to strength by special legislation passed by the General Assembly that permits the state to make its case using statistics rather than presenting Medicaid patients one by one.

A team of more than a dozen lawyers in Angelos' office, with guidance from Curran's staff, has been amassing thousands of tobacco industry documents and deposing witnesses.

Legislation collapsed

The current round of tobacco negotiations began last summer after the collapse of national tobacco legislation in Congress.

The national bill, sponsored by Arizona Republican Sen. John McCain, grew out of a tentative deal negotiated by a group of attorneys general in June 1997.

Because no public health representatives were included in the latest talks, tobacco opponents have suspected that states with relatively weak cases would agree to a deal favorable to the industry.

At the same time, the failure of Congress to pass tobacco legislation and a number of legal victories by the tobacco industry have given all states a stronger incentive to settle.

Whether or not Maryland agrees to a tobacco settlement, anti-smoking activists said yesterday that they will continue their campaign to raise the state's cigarette tax by $1.50 a pack to discourage young people from smoking.

Any settlement is "meant to be about recouping past damages from tobacco," Blumberg said.

"The tax increase is designed to reduce youth smoking in the future. They're separate issues."

Pub Date: 11/11/98

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