Curran weighs tobacco gamble Md. attorney general to press for better deal before deadline to sign

State would get $4.2 billion

November 17, 1998|By Scott Shane | Scott Shane,SUN STAFF Sun staff writer JoAnna Daemmrich contributed to this article.

After hearing health advocates sharply criticize the proposed tobacco settlement unveiled yesterday, Maryland Attorney General J. Joseph Curran Jr. said he will continue to press to improve the deal before Friday's deadline to sign.

"We are continuing to talk to industry representatives about Maryland-specific issues," Curran said last night. He declined to elaborate but said Maryland is continuing to work closely with other states that are skeptical about the deal.

Curran said he asked representatives of major health groups to continue to analyze the settlement, a complex legal document of more than 200 pages, and would consult them again before deciding whether to sign or gamble on taking the state's tobacco lawsuit to trial in April.

The tobacco deal, announced at a news conference in Washington by six of the eight state attorneys general who negotiated it, would be the largest civil settlement in U.S. history and would make significant changes in cigarette marketing. It will take effect only if enough states agree to it, but with New York, California and a dozen other states already on board last night, it appeared likely that the settlement would fly.

Tobacco billboards and ads on buses and taxis would be banned, as would tobacco brand names on clothing and other merchandise. Cartoon characters like Joe Camel would be prohibited, but human figures such as the Marlboro Man would be permitted in ads. About $2 billion would be made available for anti-smoking campaigns and research on combating tobacco. The settlement would also pay the states $206 billion over 25 years, of which Maryland's share would be about $4.2 billion. Maryland would also have a good chance of receiving a delayed bonus of as much as $1 billion, to be paid starting in 2008, in recognition of the state's relatively strong case and extensive legal preparations.

But tobacco opponents, already furious that the industry was giving states only five days to accept or reject the settlement, had little good to say about it.

"At first blush, the only substance is the ban on billboards," said ,, Dr. Albert L. Blumberg, president of Smoke Free Maryland, a coalition of anti-smoking groups, who was among those who met with Curran for two hours. "The rest is all loopholes."

Blumberg, a radiation oncologist at Greater Baltimore Medical Center, said Curran is in a difficult position. "The reality is that the state is being offered a lot of money" and there is no guarantee that taking the case to a jury would produce greater benefit for public health, he said.

But Blumberg said a quick review of the settlement language yesterday discovered some "land mines," such as a restriction on future lawsuits by state and local governments over secondhand smoke.

"I'm worried about doing irreparable harm with a document that's going to affect public health in Maryland for 30 years," Blumberg said.

'Fairly weak on public health'

Eric Gally, a lobbyist for the American Cancer Society and the American Heart Association who also met with Curran, praised the attorney general for working to toughen the agreement. But he added: "From our perspective, the settlement appears to be fairly weak on public health."

Gally and others emphasized that even if Maryland settles the lawsuit, the battle against smoking and its costs will go on. Industry analysts say cigarette makers will probably increase the price of a pack by about 35 cents to pay for the deal. By comparison, anti-smoking activists are pushing for a $1.50-a-pack increase in the Maryland cigarette tax to discourage youth smoking.

Public health advocates say the settlement appears to be loaded with subtle protections for the industry. For instance, while the deal would pay for anti-smoking campaigns, it would not permit them to "vilify" tobacco companies. Recent research shows that some of the anti-smoking advertising most effective with teens are those that attack cigarette makers and ridicule their brand names and marketing symbols.

A choice for Angelos

The tobacco deal would create a curious choice for Peter G. Angelos, the Orioles owner and asbestos litigator whose law firm has done most of the legal work on the state's case.

Angelos contracted in 1996 to finance and handle the case in return for 25 percent of any recovery. This year, after settlement became a possibility, the General Assembly cut that fee in half, and Curran said yesterday that Angelos would be entitled to 12.5 percent of each year's payment -- a total of about $500 million over 25 years from Maryland's payout.

But the settlement allows private lawyers hired by the states to ask to be paid from a separate fund created by the tobacco industry -- as long as they are willing to submit their fees to arbitration. That means Angelos could save the state hundreds of millions of dollars by seeking payment from the fund, and he could ask for the equivalent of the 25 percent in his original contract. But he would risk receiving considerably less than 12.5 percent.

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