BY Assoicated Press and The Cincinnati Enquirer
NEW YORK - Big Tobacco would pay $206 billion to settle the remaining state claims over the costs of treating sick smokers under an agreement reached Saturday with negotiators for eight states, the Washington state attorney general said.
The settlement proposal, which would salvage parts of a broader tobacco agreement that died in Congress earlier this year, would also place new limits on how tobacco makers market their products.
Negotiators for the nation's four biggest tobacco companies and eight state attorneys general completed their review of the agreement Saturday afternoon. They were shipping copies of the documents to state attorneys general across the country for their approval.
"We have finished," said Attorney General Christine M. Gregoire of Washington state, who led the states' team during more than five months of negotiations. "We have done the best we can do here."
A formal announcement of details of the agreement was expected Monday.
Tobacco spokesman Scott Williams said the industry would have no comment until after the announcement.
If enough states embrace the plan, it would be the biggest U.S. civil settlement ever.
Ohio's take from the settlement could reach $9 billion, officials say. Several groups are positioning themselves to benefit from the windfall - from those pushing school repairs to smoking-prevention programs. (NOV. 12 STORY)
The industry payments, which would be made through 2025, would reimburse the states for expenses under the Medicaid program for treating smoking-related illnesses and help finance programs and research to discourage smoking, especially by young people. In exchange, the settlement would lift a huge legal and financial threat that has been hanging over tobacco makers.
Fred Olson, a spokesman for Ms. Gregoire, said state payments would range from $23.9 billion for New York and California to about $466 million for Wyoming.
Although the settlement would not require it, it is expected that tobacco prices would be increased to pay for the deal.
State officials have until Friday to agree to the deal or take their chances fighting the industry alone in court.
Chris Davey, spokesman for Ohio Attorney General Betty Montgomery, said Ms. Montgomery will review the settlement with public health officials and state leaders before deciding whether to accept the deal or to press on with Ohio's lawsuit against the tobacco companies. A trial has been scheduled for January 2000 in Franklin County Common Pleas Court.
"We are waiting to see if the final questions have been answered," Mr. Davey said Saturday night. "We have people in New York City now meeting with negotiators and we have seen some optimism."
About three dozen states have filed suits, and the others also could qualify under the proposal. Four states - Mississippi, Florida, Texas and Minnesota - have already settled for about $40 billion, an amount that isn't reflected in the proposal.
The four major tobacco companies agreeing to the settlement are Philip Morris Cos., R.J. Reynolds Tobacco, Brown & Williamson Tobacco and Lorillard Tobacco.
The negotiating states in addition to Washington were California, New York, North Carolina, Colorado, Oklahoma, North Dakota and Pennsylvania.
Cincinnati attorney Stanley Chesley, who represents plaintiffs in a private class-action suit against the tobacco companies, has been following the negotiation with the states. He is optimistic for his own clients.
Mr. Chesley helped negotiate the settlement that died in Congress. He said the money for the states is nearly the same. The difference is that Saturday's deal abandons key provisions limiting tobacco advertising and marketing, and it does not include the private class-action lawsuits, Mr. Chesley said.
Now that there appears to be a pact with the states, he is optimistic that over the next few months the tobacco companies will focus negotiations on the private lawsuits.
The tobacco industry has not indicated how much support from the states will be required for it to proceed with the settlement, Ms. Gregoire said. She said she has "yet to hear anybody who plans not to sign it."
The tobacco industry would commit $1.7 billion for educating people about the dangers of smoking and discouraging youngsters from starting.
A separate deal was also struck Saturday with U.S. Tobacco Co., the leading maker of chewing tobacco, Ms. Gregoire said.
Under that deal, U.S. Tobacco would pay about $100 million over 10 years for educational programs about the dangers of tobacco in exchange for state claims settlements. Total payments could rise to $400 million if other smokeless tobacco makers were to join that settlement.
Under both settlement proposals, tobacco companies would be prohibited from advertising on billboards and buses, using cartoon characters in ads and putting tobacco brand names on caps, bags and other merchandise.
Phillip Pina contributed to this report.
