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Archive for Wednesday, June 20, 2001

Feds seek settlement of tobacco lawsuit

June 20, 2001

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— Justice Department lawyers, faced with dimming prospects for their massive suit against cigarette makers, have decided to seek a settlement that would eliminate a major legal threat to the embattled industry, officials disclosed Tuesday.

But tobacco industry executives said they aren't interested in settling what they consider a meritless case.

And anti-tobacco activists weren't happy about the Justice Department's new strategy either, accusing Atty. Gen. John Ashcroft of trying to negotiate his way out of a lawsuit that he never liked in order to bail out the tobacco industry. The decision is the latest sign of tobacco's improving fortunes since the Bush administration took over from President Clinton, who launched the suit and bashed the industry at every turn.

Any settlement would be a fraction of the $246 billion that the states extracted from the tobacco industry in a landmark 1998 pact, observers said. But they added that if Ashcroft is serious about gaining concessions from the industry, a settlement could produce reforms of the way tobacco is regulated and marketed.

Ashcroft, acting on a staff recommendation, is appointing a team of Justice Department lawyers to begin negotiating with the tobacco industry. The team met for the first time Tuesday with other Justice Department attorneys who have been litigating the case, officials said.

The prospect of a settlement was driven by the government's shaky showing in court since it brought its lawsuit in 1999 at the direction of then-President Clinton, officials maintained.

But critics pointed to the Bush administration's decision to severely limit funds to support the litigation.

A federal judge last year threw out a key portion of the government's case against the tobacco industry, ruling that the government waited too long to try to recover hundreds of billions of dollars spent on health-care costs for ill smokers.

However, U.S. District Judge Gladys Kessler refused to dismiss racketeering charges for billions of dollars in damages.

Last week, the Justice Department asked Kessler to reconsider the ruling, and a decision on that request is expected by the end of the summer.

Barring a settlement, the case is expected to go to trial in 2003. Tobacco companies said Tuesday that they want to see the case tried in court.

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