November 16, 1998
| SPOKESPERSON: It's time to stop the legal
ELIZABETH FARNSWORTH: After five months of negotiations, attorneys general for eight states and the nation's four largest tobacco companies announced a proposed $206 billion deal today. It's aimed at reimbursing state governments for costs of treating sick smokers.
DENNIS VACCO, Attorney General, New York State: This document represents far and away the best deal, the best plan that we could have accomplished. And it is far more comprehensive than anything that has been achieved through litigation or legislation involving our nation's tobacco control policy in over 40 years.
ELIZABETH FARNSWORTH: Today's deal provides payments to states over 25 years. New York, for example, would get roughly $25 billion and Wyoming $487 million, bans most outdoor advertising, such as billboards, and limits sports stadium advertisements. The deal bans targeting youth in advertising, promotions, or marketing, including cartoon characters, bans merchandise with tobacco product logos, protects companies from state but not smokers' lawsuits. The agreement announced today does not deal with the authority of the Food & Drug Administration to regulate nicotine as a drug.
SPOKESMAN: I'm very pleased to convene this morning's executive session to market up comprehensive bipartisan tobacco legislation.
ELIZABETH FARNSWORTH: That was one element of a much broader tobacco deal reached last year, which needed congressional approval. That legislation died in the Senate earlier this year. At that point, eight of the states in the original settlement began negotiating with the tobacco industry again. Four other states settled their suits against the industry as the cases were about to go to court. In recent months the industry has won several major cases against plaintiffs seeking damages. It also has won a decision in federal appeals court denying the FDA's authority to regulate nicotine. Ultimately, the new deal could cover costs for smoking-related illnesses in 46 states. They have until the end of the week to decide to accept or reject the accord.
ELIZABETH FARNSWORTH: And with us now Washington State Attorney General Christine Gregoire, who led the team that negotiated the proposed settlement, and John Garrison, executive director of the American Lung Association. Tobacco industry representatives declined an invitation to join us.
ELIZABETH FARNSWORTH: Attorney General Gregoire, why is this a good settlement?
CHRISTINE GREGOIRE, Attorney General, Washington State: Well, I think the issue here is how much could we get in a courtroom in America? I'm in my eighth week of trial back in Washington State, and I know that I've got much greater than what I can get in that trial, not only financially but, most importantly, what money can't buy, the public health gains that we've been able to achieve in this settlement cannot be achieved in a court in any state in this country. So what we've offered is every state to participate. The largest financial settlement in the history of the world and the most restrictive curtailment of the conduct of an industry in any lawsuit in America - it's time that we got out of litigation, on to making progress in America today, and call on Congress to do their job where they left off and didn't accomplish it this last year.
ELIZABETH FARNSWORTH: When you say the public health gains, beyond what we mentioned in the setup, what public health gains are you talking about?
CHRISTINE GREGOIRE: Well, the thing I think is probably the single most important aspect of the settlement is it creates a foundation nationally, the purpose of which is to tell us what's the most effective cessation program for children and women and people of color and men, what's the most effective advertising and counter-advertising campaign, and it also has a $300 million a year for five years comprehensive, sustained, counter-advertising program so that we can get into the home of every American with the truth about the addictiveness and the health impacts of the use of tobacco.
ELIZABETH FARNSWORTH: And, Ms. Gregoire, how do you compare this to last year's settlement?
CHRISTINE GREGOIRE: Well, in many respects, it's better. For example, the states would have received about $196 billion in the June 20th proposal. But what this has with four states already having settled is approximately $250 billion to the states. Secondly, last year's proposal had some restrictions, no punitive damages, no class actions, restrictions on private lawsuits. None of that has been given to the industry in this settlement. And where we left off in litigation we've left to legislation. June 20 was legislation. This is settlement of lawsuits. But now we've called on Congress to finish where we left off, give full FDA authority, and make sure that what we've done is simply step one of a multi-step process.
ELIZABETH FARNSWORTH: John Garrison, how do you view this settlement? (network difficulty) I'm not hearing you.
JOHN GARRISON, American Lung Association: The American Lung Association -
ELIZABETH FARNSWORTH: I'm sorry. I don't believe we're hearing you. Keep talking for one second. If we can't fix it, I'll go back to the attorney general.
JOHN GARRISON: The American Lung Association is very concerned with what we think should be rejected. There are lots of problems with this settlement. The major problem is that it preempts local government lawsuits. And I'm afraid that the rhetoric doesn't match the reality. We don't think that local government lawsuits should be preempted. What we would have preferred much more is something like what happened in Minnesota, that Skip Humphrey got there. There was significant dollars, far more dollars than this particular settlement would agree, all kinds of public health provisions. But very importantly, it did not in any way diminish local government opportunities to bring about their own lawsuits. So that is a major problem with this. This is not a good first step. This is a step backwards.
ELIZABETH FARNSWORTH: Attorney General Gregoire, how does this deal with the local lawsuits?
CHRISTINE GREGOIRE: Well, let's remember what Minnesota did. This not only has every public health aspect of Minnesota but far greater public health gains of those contained there. My applause to Minnesota for what they accomplished there. We built on that. And we've doubled what is provided in Minnesota in the public health arena. What this settlement does, as in any settlement, is it settled government lawsuits. And so the citizens, for example, of the State of New York will enjoy a return of approximately $25 billion over 25 years for both local and state governments. That's what these lawsuits were intended to settle, and that's what we've provided today.
ELIZABETH FARNSWORTH: John Garrison, what about - yes, go ahead.
JOHN GARRISON: But if New York had settled at the same level that Minnesota settled, they would have had $40 billion, and, as I indicated, Minnesota did not give up any local government - any local government legal protections. The local governments can sue under the Minnesota findings. They cannot under this one, and that is a major disadvantage.
ELIZABETH FARNSWORTH: So, Mr. Garrison, what is your analysis of what happened here, that the cigarette companies are more powerful now than they were a year ago or six months ago, when the other settlements were made?
JOHN GARRISON: The tobacco industry is very happy about this settlement. I don't think there's any doubt about that. They now have a lot of stable situations in the state, including local governments. They know where they are in that regard. The public health provisions are not as strong as some of us would have hoped. They can still go the vending machine route. They can go the Internet route. They can do a lot of things. They can still put small billboards up. So there are a lot of problems with this. And, as I say, the rhetoric doesn't match the reality.
ELIZABETH FARNSWORTH: And, Mr. Garrison, what would be wrong with what the attorney general said, seeing this as one step and then other steps could be taken by Congress later?
JOHN GARRISON: Well, the major problem is that this does preempt local government lawsuits. If that were out of there, it would be a tremendous improvement. We don't think that there's as much money as there should be. We don't think the public health provisions are as strong as they should be. But the item that is really troubling the American Lung Association is the fact that local governments cannot bring their own lawsuits.
ELIZABETH FARNSWORTH: Ms. Gregoire, respond to that and then tell us how the provisions of this agreement will be enforced: For example, if a company does put up billboards that they shouldn't, or does something else.
CHRISTINE GREGOIRE: Well, the advantage that we have with regard to that is that we're going to enter in a consent decree in every state in this country. So rather than having to file a lawsuit, as we did here, and line up with every other lawsuit and wait for our turn to have it heard over years, if they violate - let's say they put up a billboard and it's particularly a billboard of Joe Camel, I can go into my court in Washington State, I can get it enjoined within 24 hours, I can ask the judge to impose a penalty, and if they continue to violate, even a criminal penalty for that conduct. But let's talk about where we go in terms of how we can fund it. We have set up a $54 million fund available to attorneys general to ensure that they can enforce this entire settlement and they can enforce compliance with state laws with every tobacco manufacturer. Those moneys are key to our being able to bring about change in this country, consistent with our proposal.
ELIZABETH FARNSWORTH: Mr. Garrison, on the enforcement provisions and what are you recommending to the states who have not signed on so far? There are 38 states out there that have to make a decision. What are you recommending?
JOHN GARRISON: We are recommending to the states that they not settle, that they not sign on, that they not settle at this time. We think that this agreement, which is very complex, should undergo public scrutiny. We think there should be at least 30 days of public scrutiny. The tobacco industry has a history of being very deceptive and very manipulative. And we need to make sure that there aren't any loopholes there. We just don't trust the tobacco industry, and we hope the states will not sign on, and that they will carefully review the - all parts of this agreement.
ELIZABETH FARNSWORTH: Ms. Gregoire, why have the states been given only until Friday to make their decision?
CHRISTINE GREGOIRE: What we did is we provided a - it's called a term sheet to all of our attorneys general in July. And we've had conference calls with them throughout the negotiations. They've been major players in these negotiations. Thirty days ago we provided them with a copy of the agreement and had one on one discussions with attorneys general. And now we're simply asking them to finish their review and make a decision by Friday. This isn't legislation like June 20, where it goes out for public comment and public review. This is settlement of lawsuits, and the issue for every attorney general will be very basic. Can I achieve greater than what I have achieved in this settlement, which is guaranteed, or do I risk going into court for years of litigation, years of appeal, and the status quo, where billboards are all over our highways, our children are walking billboards? We need change now. We need a step forward now for every state, whether they've filed or not, whether they've lost their lawsuit or not. This is available to every American, not only financially but in the public health arena.
ELIZABETH FARNSWORTH: And very briefly, Ms. Gregoire, how many states must sign on for this to take hold?
CHRISTINE GREGOIRE: We're going to meet this coming weekend. We want to guarantee this industry has full board approval, and they will accept the responsibilities that have been provided in the settlement. And at that point we'll indicate how many states that we have signed on. I'm optimistic that every state asking themselves how much they can gain in court will say that this is good for Washington State, it's good for my citizens.
ELIZABETH FARNSWORTH: Thank you both very much. Sorry. That's all the time we have.