BALTIMORE – Maryland officials agreed Friday to drop a lawsuit against cigarette makers in exchange for $4.4 billion and some restrictions on tobacco advertising.
“This deal is good for the state of Maryland,” said state Attorney General J. Joseph Curran. “No one – not Congress, not the public health advocates – have delivered more than this settlement.”
But health groups said the industry had not given enough.
“We don’t view this as a public health measure unless it convinces our leaders to finish the job,” said Dr. Albert L. Blumberg, president of Smoke Free Maryland, a coalition of health groups.
Under the deal, the nation’s four big cigarette makers would pay the state $54 million almost immediately and dole out more than $4 billion over 25 years.
The companies also would restrict outdoor advertising and promotional clothing and stop using cartoon characters to promote smoking.
The deal is expected to be part of the largest U.S. civil settlement ever, a $206 billion package accepted by 46 states to help cover costs of treating sick smokers.
The money is all but guaranteed. The tobacco companies had said they would sign the settlement if a “sufficient” number of states agreed to sign. All 46 states agreed to settle by the Friday deadline, said Scott Williams, spokesman for BSMG Worldwide, the public relations firm representing the four companies.
The companies – Brown and Williamson Tobacco Corp., Lorillard Tobacco Co., Philip Morris Inc. and R.J. Reynolds Tobacco Co. – could still opt out of the deal if judges in too many of the settling states don’t approve it.
In return for the settlement, Maryland forfeits its right to sue the industry over past and future Medicaid expenses attributable to smoking.
Health advocates said they would continue to press for provisions not in the deal, such as federal regulation of nicotine and a higher state cigarette tax, which they say would discourage smoking.
“This is just the beginning,” said Eric Gally, a lobbyist for the American Heart Association.
Health advocates are most upset about the industry’s youth smoking provisions. Though the cigarette makers would pay $1.5 billion for an anti-smoking campaign, that money couldn’t be used to “attack” or “vilify” the industry. Advocates say that robs the state of its most effective means of reducing teen smoking.
“Proving to teens that tobacco companies are manipulating them is the best way to stop them from smoking,” Gally said.
Critics blasted other advertising restrictions as piecemeal.
Under the deal, the four companies could no longer advertise on billboards, but businesses selling cigarettes over-the-counter could display 14-square-foot tobacco posters. The companies agreed to stop selling apparel emblazoned with cigarette logos, but they could still sell clothing at events they sponsor.
Despite a provision banning the companies from sponsoring sporting events and concerts, Brown and Williamson won an exemption for a Kool Jazz Festival tour. Another clause exempts R.J. Reynolds’ Winston Cup car racing series.
The agreement also stops the companies from using cartoon characters to promote smoking, but R.J. Reynolds has already retired its most famous toon, Joe Camel.
“You have the tobacco companies agreeing to things they say they already do,” Gally said.
State legislators acknowledged the complaints but called the settlement too good to pass up.
“You’re not likely to get significantly better public health terms if the suit was to go to trial,” said state Del. Samuel I. Rosenberg, D-Baltimore, who chairs a House of Delegates health subcommittee.
“We have a great case, but it’s a little risky to be hanging out there all by yourself after the other attorney generals have signed on,” said Sen. Paula C. Hollinger, D-Pikesville, who chairs a Senate health subcommittee.
Four states – Florida, Minnesota, Mississippi and Texas – had previously settled with the industry for a combined $40 billion.
Maryland’s $4.4 billion is intended to compensate the state for its $100 million yearly Medicaid bill for treating sick smokers.
Maryland will get $145 million the first year of the annual payments, in 2000. The state’s award peaks at $190 million in 2003 and falls to $181 million the year the payments end, in 2025.
The companies also agreed to publish most of the documents entered in lawsuits. And they will roll $8 billion into an account that will be divided among the states making the biggest contributions to tobacco litigation. Maryland, the eighth state to sue the industry, would get some of this money, Curran said Friday.
The state filed a $13 billion claim against the companies in May 1996, saying cigarette makers had targeted young minorities to replace dying smokers. The trial was to begin in April.
Maryland was considered to have a strong case against the industry because a recent state law lets attorneys buttress their arguments with scientific data about the harmful health effects of tobacco, instead of having to evaluate every individual smoker for illness.