The Associated Press
PHILADELPHIA — The 1998 national tobacco settlement was supposed to end government-sponsored litigation against Big Tobacco. But some local officials, unhappy with the way states are spending the settlement money, are looking to the courts for help.
At least two counties — one in Pennsylvania and another in Michigan — are pursuing lawsuits against the tobacco giants, arguing that they haven’t received their fair share of the $206 billion settlement.
“Most of the money was supposed to go to help people. And now we’re building bridges with it,” said Larry Levin, an attorney representing Carbon County, Pa., in a suit against the tobacco industry.
Levin’s firm is trying to organize a class-action lawsuit of Pennsylvania counties. So far, only Carbon County has signed on.
The rural county in eastern Pennsylvania says it is entitled to millions of dollars from the state’s share of the tobacco settlement to treat sick smokers. The county has been promised $136,000 per year for anti-smoking programs.
The dispute has led to an unusual alliance between the tobacco industry and the state of Pennsylvania, which plans to withhold Carbon County’s share of the settlement if it goes ahead with litigation.
“The tobacco companies have paid to settle these claims,” said Sean Connolly, spokesman for state Attorney General Mike Fisher. “It would be unfair to have them pay over and over and over.”
Under the terms of the national settlement, eight major tobacco companies agreed to pay 46 states for smoking-related health costs. Most states have used at least some of the money for programs unrelated to smoking and for closing budget gaps, leaving anti-smoking forces up in arms.
A report released last month by the Campaign for Tobacco-Free Kids said that only five states are funding anti-smoking programs at the level recommended by the federal government. In Pennsylvania, lawmakers have earmarked just under $30 million per year for anti-smoking programs, out of an initial settlement share of $927 million.
“The problem the counties are raising is indicative of what’s happening around the country,” said William V. Corr, executive vice president of the campaign. “People who want to address the tobacco toll aren’t getting substantial resources.”
In the Detroit area, Wayne County, Mich., has been pursuing a lawsuit against the tobacco industry for the past three years. The suit hit a stumbling block last month, when the Michigan Supreme Court said the county was bound by the national settlement and not permitted to sue. But a federal judge has asked the high court to revisit the case.
The national settlement insulated the tobacco industry from lawsuits by counties, cities and other political subdivisions. The settlement says that if a local government wins a judgment, the money will be deducted from the state’s share.
Worried about that possibility, the Pennsylvania General Assembly last summer passed a law that punishes any local government that pursues legal action against tobacco companies. A county or city filing such a suit would not get any money from the tobacco settlement. Private hospitals, social service agencies and other groups entitled to tobacco money would also be penalized.
“The General Assembly will not allow counties to double-dip,” Connolly said. “They can’t have it both ways, suing on their own behalf and still benefitting from the state’s settlement.”
The law came into play last year when Lackawanna County in northeastern Pennsylvania sued seven major tobacco companies and two Pennsylvania cigarette distributors. The county claimed it was entitled to reimbursement for the cost of treating sick smokers at the county-run nursing home and prison.
The county withdrew its lawsuit in October, a few months after the Legislature acted.
“The state government just put the squeeze on the counties and forced local governments out of participation in lawsuits,” Lackawanna County Solicitor Joseph O’Brien said. “The state people wanted the ability to decide where the money went rather than let local government do it.”
Bill Godshall, executive director of SmokeFree Pennsylvania, said anti-smoking forces sued three years ago to prevent the attorney general from signing the national settlement agreement in the first place. But the lawsuit was tossed out and subsequent appeals failed.
“I don’t think (Carbon County’s) lawsuit has one chance of success,” Godshall said. “That train left the station three years ago.”