Reprinted from The Washington Times , 5am -- April 30, 1998
Largest health insurer sues tobacco industry
By Eric Fisher
THE WASHINGTON TIMES
B
lue Cross and Blue Shield, the nation's largest network of health insurers, took the tobacco industry to court yesterday in a coordinated, nationwide drive to recover the costs of treating smoking-related illnesses.
The group of 37 insurers gave no specific figure for the amount of damages sought but said it would be many billions of dollars.
The Coalition for Tobacco Responsibility, representing 25 million Blue Cross and Blue Shield policyholders in at least 35 states, said it had filed suits in federal courts in New York, Chicago and Seattle.
"There is a claim out there that needs to be paid," said Jeff Valentine, spokesman for Blue Cross and Blue Shield of Maryland. Both Blue Cross and Blue Shield of Maryland and Blue Cross and Blue Shield of the National Capital Area are part of the lawsuits.
The lawsuits accuse the tobacco companies of conspiracy, fraud, misrepresentation, violation of federal racketeering and antitrust laws, and other misdeeds. The lawsuits say the industry concealed the addictive nature of smoking and manipulated nicotine levels to make cigarettes more addictive.
Twelve companies and industry groups, including Philip Morris, R.J. Reynolds and Lorillard, were named as defendants in at least one of the suits that were filed in the three cities.
"Millions of participants in our plans -- whether or not they smoke -- have suffered because the tobacco companies continue to produce and vigorously market an addictive product," Dr. Michael McGarvey, chief medical officer of Blue Cross and Blue Shield of New Jersey, said at a news conference yesterday.
Blue Cross and Blue Shield provides health care coverage for one in four Americans, or 68.7 million people, in all 50 states. It is the 19th-largest employer in the United States.
The new lawsuits dramatically escalate the troubles of the tobacco companies, which are under attack by the federal government, the states and public health advocates.
Tobacco companies had hoped to end most of the litigation against them in a proposed settlement they negotiated with states last June. But this month they abandoned efforts to get that agreement approved by Congress and instead vowed to defend themselves in court.
Historically, the tobacco industry has fared well in court, but many legal experts predict that will gradually change. The public --from which jurors are drawn -- has grown more skeptical of the industry, and tens of thousands of documents have come to light that could hurt the cigarette makers.
Anti-tobacco advocates welcomed the lawsuits and said the lawsuits would put more pressure on Congress to enact new tobacco control legislation.
"That [pressure] will only increase, as I wouldn't be surprised if we start seeing lawsuits from other insurers as well," said Kathryn Vose of the Campaign for Tobacco-Free Kids.
Sen. John Kerry, Massachusetts Democrat and a member of the Senate Commerce, Science and Transportation Committee, said he was not surprised by the suits.
"I think it's a sign of what happens if you don't have a comprehensive global solution. It's what a lot of people have warned about," he said. "There are going to be countless numbers of suits and increased level of exposure for the tobacco companies, because of the increased amount of information now on the table."
A statement from R.J. Reynolds said Blue Cross and Blue Shield's intended lawsuit represents an effort to get on board "the tobacco gravy train."
The company cited a similar suit dismissed last week by the Supreme Court of Iowa, which said the state couldn't recover damages from defendants because injuries were derivative and remote and that failure to apply the remoteness aspect would open the floodgates of litigation.
President Clinton has taken a hard line against Big Tobacco, exhorting the industry to stop marketing to young people and warning that legislation will come with or without industry participation.
For their part, the tobacco companies have threatened to declare bankruptcy in the face of possible price increases and what they say is inadequate protection from future litigation.
Dr. McGarvey scoffed at the notion: "Addiction is an enormously profitable business. I don't think any of us are the least bit worried about the tobacco industry going bankrupt."
Before yesterday, only the Minnesota branch of Blue Cross and Blue Shield had filed a lawsuit against cigarette makers. That case is about to go to a jury in St. Paul.
Among the states represented in the new coalition were Blue Cross and Blue Shield of Michigan with 4.4 million members, Illinois with 2.9 million, California and Florida with more than 2 million, New Jersey with 2 million, and Texas with 1.8 million.
The lawsuits charge that the tobacco industry concealed the addictive nature of smoking, manipulated nicotine levels to make cigarettes more addictive, and conducted research and marketing campaigns targeting teen-agers and children.
According to a Treasury Department report, tobacco-related illnesses cost the economy $60 billion a year in direct health care costs.
Also named as defendants were Brown & Williamson Tobacco Corp., BAT Industries PLC, British American Tobacco Co. Ltd., Liggett & Myers Inc., United States Tobacco Co., the Tobacco Institute Inc., the Council for Tobacco Research-U.S.A. Inc., the Smokeless Tobacco Research Council Inc., and Hill and Knowlton Inc.
- This article is based in part on wire service reports.
Copyright 1998 News World Communications, Inc.
Reprinted with permission of
The Washington Times.
To subscribe to the Washington Times National Weekly Edition, click this icon or call 800-363-9118.
