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Minnesota Joins Campaign Against Tobacco Companies

August 20, 1994|From Reuters

NEW YORK — The attack on the tobacco industry by states trying to recoup taxpayers' health care costs is escalating, with Minnesota joining the fray and several more suits expected this month and next.

Minnesota this week became the second state to file suit, following Mississippi's lead in May. West Virginia has also said it will sue, and Florida and Massachusetts have passed legislation allowing them to sue tobacco companies for reimbursement of Medicaid costs.

Ronald Motley, a Charleston, S.C., lawyer well known for his representation of asbestos victims, who is advising some states in the tobacco litigation, said another suit is expected within the next 10 days.

"There will be several more states filing in August and September," he said.

Though the tobacco industry is among the most profitable, some legal experts think the state suits, along with several large class actions brought by individuals, pose a significant financial threat.

Some predict that, if the companies begin to lose any of these cases, they could be forced to seek bankruptcy protection in the same way that Manville Corp. did in 1982 after a flood of asbestos injury suits.

Tobacco companies say that is nonsense. Yet the momentum is growing.

The Mississippi case, filed May 23, marked the first time that a state government sought compensation for funds allocated to Medicaid, indigent care at state hospitals and insurance on state workers and state retirees because of smoking-related illnesses.

Minnesota, a state that has been aggressive in environmental legislation, added a new twist by alleging antitrust and consumer protection law violations in its suit.

Minnesota Atty. Gen. Hubert Humphrey III said the state also will weigh criminal action against tobacco companies if developments in its anti-smoking suit warranted such action.

The case is also unique because Blue Cross and Blue Shield, the state's largest insurer, is also a plaintiff in the action.

The tobacco industry continues to say it will win the suits because it has been victorious in almost every other lawsuit and has never paid a penny in damages.

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