THE SMOKE SETTLES
AUGUST 25, 1997
Florida has become the second state to win an out-of-court settlement with the tobacco industry. After this Newsmaker interview with Florida Governor Lawton Chiles, two tobacco analysts discuss the agreement.
MARGARET WARNER: Florida was one of the first states to file suit against the tobacco companies three years ago, seeking to recover the costs of treating smoking-related illness. Today it became the second state to win an out-of-court settlement with the industry totaling $11.3 billion. Today's deal is separate from a proposed $368 billion national settlement reached in June between the industry and 40 state attorneys general. The national settlement is under review by the President and Congress.
A RealAudio version of this NewsHour segment is available.
August 25, 1997:
Two tobacco policy experts discuss Florida settlement.
July 11, 1997:
Congressman Henry Waxman and Connecticut Attorney General Richard Blumenthal discuss the agreement reached between tobacco manufacturers and states attorneys general in an Online Forum.
June 20, 1997:
A panel discussion on tobacco the agreement .
May 20, 1997:
Research strongly suggests that second-hand smoke is a possible cause of heart disease.
April 18, 1997:
Experts debate the future of the tobacco industry.
April 18, 1997:
A background report on the tobacco industry's decision to settle.
March 20, 1997:
Smoking cigarettes is addictive and can cause cancer, admits the Liggett Group.
February 28, 1997:
A report about selling cigarettes to teens and new government rules to prevent under-age smoking.
February 10, 1997:
FDA Commissioner David Kessler discusses his contentious term as commissioner of the Food and Drug Administration.
August 23, 1996:
Brennan Dawson, of the Tobacco Institute, and FDA Commissioner David Kessler debate new restrictions on tobacco sales.
July 5, 1996:
Mark Shields and Kate O'Beirne explore Sen. Bob Dole's comments that tobacco may not be addictive.
Browse the Online NewsHour's coverage of health issues.
The five companies involved in today's deal--Philip Morris, RJ Reynolds, Brown & Williamson, Lorillard, and U.S. Tobacco--released a statement saying, in part, "Today's settlement with the State of Florida addresses the financial issues in Florida and is a concrete demonstration that the industry is prepared to cooperate with government and the public health authorities to emphasize that it does not want kids to smoke. The settlement, however, cannot affect the comprehensive array of public health provisions contained in the proposed national settlement, which addresses all of the issues involving the regulation and sale of and liability for tobacco."
We invited the tobacco companies to send a representative tonight but they declined. With us now from Tallahassee is Florida Governor Lawton Chiles. Welcome, Governor. What did the state of Florida and its taxpayers get from this settlement?
Protection for the young, reparations for the sick.
GOV. LAWTON CHILES, (D) Florida: (Tallahassee) Well, actually, we got three things, I think. First, we got protection for our children. Every billboard within a thousand feet of schools will come down immediately--every tobacco billboard--every billboard in the state of Florida that has any tobacco advertising will be down within six months. And there will be no tobacco advertising at any ball park or football or baseball, or in any public transit facilities.
The other thing we got from the tobacco companies was their promise of assistance in rules and regulations. That would prohibit vending machines in any place in which young people could be involved and other rules and regulations in regard to smoking. And there are $200 million specifically earmarked for programs that Florida will put on in anti-smoking campaigns that we will be able to put on for our young people. So, first we got the protection of our young people.
Second, we wanted reimbursement to our taxpayers for the hundreds of millions of dollars that they have spent as a result of the damage of tobacco products. That over the life of the agreement will be about 13.3 billion dollars and about a billion dollars will come to Florida in the next year as a part of that program.
And, third, we wanted an admission, in effect, of the culpability and a disclosure of some--of documents and things in which the tobacco companies have done. I think you've noted, as everybody has in the last two weeks, the depositions that have been taken in our case in which the two chief executives of the leading manufacturers of cigarettes have admitted that tobacco has caused hundreds of thousands of deaths and that they have been less than forthright in disclosing harmful information or information they knew about their product. So I think that literally we have the three points in our case and that was the basis of our settlement.
MARGARET WARNER: Do you expect these stipulations, these agreements to actually reduce the percentage of people in Florida who smoke, or the number of new teenage smokers?
GOV. LAWTON CHILES: Absolutely. And I don't want to tell you that we know that we have a perfect program now for teaching young people to stop smoking, but we have the funds, and we're going to try to put together a state of the art, and we're going to ask young people to come together with us and help us design that program. So the first time this will not be adults telling young people why they shouldn't smoke, but we're going to ask young people to participate with us in that.
MARGARET WARNER: Now, you are--you mentioned some of the advertising restrictions, but I gather in other ways the companies will still be able to advertise, for instance, displays in grocery stores, or convenience stores, newspapers, and magazines.
GOV. LAWTON CHILES: Well, I think that there might be things they can do, but they have pretty well spelled out that they will do nothing to target young people in those ads. And I would tell you that the court has retained jurisdiction in this case over the powers of the injunctive powers of this act. So if we feel like they are slipping away from their deal with us, that they're targeting young people, we have the right to go before our judge and say, judge, we think this is wrong, we think you could and should order something to do about this.
MARGARET WARNER: Now, on the financial settlement, first, let me just clear up something. Is it $11.3 billion or $13.3 (billion)--the amount the tobacco companies are going to pay?
GOV. LAWTON CHILES: It's eleven--
MARGARET WARNER: --point three billion. Okay. I must have misunderstood you. How does that compare to the cost that Florida taxpayers have already incurred to treat smoking-related illness in Medicaid patients and others?
GOV. LAWTON CHILES: Well, we were estimating that our damages had been roughly in the high 300's to over 400 million dollars per year, so you know, the damages were building up. Actually, we got to the point where literally our settlement we think gave us more money than we would have been able to prove in court.
MARGARET WARNER: What does this do, do you think, the fact that you've got this state deal, do you still feel this national settlement is a good idea and needed?
"Closure for the entire nation."
GOV. LAWTON CHILES: I think it is a good idea because I think that's the way to get closure for the entire nation. At the same time, Florida did not want to trust on the fact--because our lawsuit was there; we were about through picking our jury; this was our shot at the lawsuit, so we didn't want to just trust that there were would be a national settlement. So our settlement will be valid whether there is a national settlement or not. Do I think there should be a national settlement? I think it would be good for the country. I think the president and the other health advocates have to hammer out the additional things that they want in that national settlement. My personal feeling is that there will be a national settlement because it is in the best interest of the country.
MARGARET WARNER: And does the State of Florida still get--I mean, would your deal still stay totally intact, even if there were a national settlement, or are there parts of it that would give way?
GOV. LAWTON CHILES: No, no. It would stay intact, but the one thing is we have based a percentage of the money that we're receiving over all the years is based on Florida having about 5.5 percent of the Medicaid population. Now, depending on how that is figured in the congressional act, our numbers could go down a little bit; they could go up. If they go down, we will take a little less money in the out years. If they go up, we would get more money in the out years. But in no way would we not have the major part of the settlement.
MARGARET WARNER: And now there are things in the proposed national settlement that you aren't able to get, aren't there?
GOV. LAWTON CHILES: That's right.
MARGARET WARNER: Such as--
GOV. LAWTON CHILES: Some of the other relief in regard to imposing things on the tobacco companies, and we think that would be good.
A national settlement: letting the industry off the hook?
MARGARET WARNER: Now, the attorney general of Minnesota, Skip Humphrey, is saying the best way to proceed is just the way you have, state by state, that you're going to get more out of the tobacco companies; that more is going to be revealed about what they've known about the dangers of tobacco through these--through depositions--through the release of documents, and that a national settlement lets them off the hook. What do you feel about that?
GOV. LAWTON CHILES: Well, I think every state has to make their choice on that. I'm not in this to argue what any other attorney general might think. This was a very, very good settlement for Florida. I happen to think that based on this settlement, based on the admissions that the companies that are now making, that with some kind of changes a national settlement would give us some additional things, and probably would be a better way to go. How long would it take for every state to be able to settle? Remember, there are only three or four states that have actually filed suit, or more than that--and there are a number--that are ready for trial. So I think you could be looking for this process to take many years if you had every state having to sue.
MARGARET WARNER: All right. Thank you very much, Governor.