Action on Smoking and Health A National Legal-Action Antismoking Organization Entirely Supported by Tax-Deductible Contributions    Search  | Info About  | ash.org | To Join |  Email Page To Comment or Read Other Members' Comments, Click Here

Excerpts from: Justice Dept. Drops Tobacco Talks for Now
 
By ERIC LICHTBLAU LOS ANGELES TIMES [09/06/01]

Lawsuit: The agency is sharply attacked by Senate Democrats, who say it
is attempting to abandon the litigation.
 

WASHINGTON -- The Bush administration and cigarette makers stand so far apart in efforts to settle a multibillion-dollar
lawsuit against the tobacco industry that the Justice Department has shelved further negotiations for now, a senior department
official disclosed Wednesday.

With the talks seemingly deadlocked, the department now plans to seek significantly expanded funding to pay for the lawyers
and resources needed to pursue the landmark litigation, Stuart Schiffer, an acting assistant attorney general, told a Senate panel.

Schiffer's remarks were meant to answer sharp attacks from Democrats on Capitol Hill who charge that Bush administration
officials are looking for a way to abandon a lawsuit that they never liked. The suit was initiated in 1999 by then-President
Clinton. But the Bush administration's pledge to pursue the lawsuit did little to convince skeptics.

"The Department of Justice's management of this case seems unprofessional at best. At worst, they are killing this lawsuit and
don't have the political courage to admit it publicly," said Sen. Richard Durbin (D-Ill.), who led Wednesday's Senate Judiciary
Committee hearing.

Durbin noted that Atty. Gen. John Ashcroft, who opposed litigation against the tobacco industry while serving in the Senate,
declined an invitation to appear before the judiciary panel, citing scheduling conflicts.

"If he's been converted to support this lawsuit, it would be nice to hear it from him directly," Durbin said in an interview.

Durbin also said Ashcroft's aides "have been bad-mouthing this lawsuit through back channels for months. That doesn't build my
confidence that they're committed to this lawsuit."

But Schiffer said the case has been well handled by competent, career litigators who are committed to the case.

The federal government's lawsuit against the tobacco industry has stood on shaky legal and political ground ever since Clinton
directed the Justice Department to find a way to bring one of the biggest civil suits in the department's history.

A coalition of states extracted a $246-billion settlement from the tobacco industry over allegations that cigarette makers had
engaged in fraudulent and dangerous marketing practices for decades. But the federal lawsuit has faced a more difficult path: A
U.S. District Court judge threw out key portions of the suit last year, ruling that the government waited too long to try to collect
health care costs spent on ill smokers.

The ruling left intact the government's claim that the tobacco industry had engaged in a 45-year pattern of racketeering, and that
portion of the lawsuit is scheduled to go to trial in 2003.

Ashcroft decided in June to initiate settlement discussions with the tobacco industry, saying Justice Department aides had
advised him that the court rulings had hurt the government's chances of winning the case at trial.

Critics charged that Ashcroft's decision would undercut the government's position and force his lawyers to negotiate from a
position of weakness. But such complaints may prove moot.

Schiffer, acting head of the Justice Department's civil division, told the Senate panel that negotiators have met once about a
possible settlement, but the discussions proved so fruitless that they have decided not to schedule any further meetings. Schiffer
would not discuss specifics of the negotiations but said the two sides were "quite far apart."

One sticking point, according to a source close to the negotiations who asked not to be identified, was the Justice Department's
insistence that any settlement include further marketing restrictions on tobacco products. Industry lawyers maintained that the
types of restrictions sought are already in place, either as a result of the states' 1998 settlement or through voluntary reforms by
cigarette makers.

Peggy Roberts, a spokeswoman for Philip Morris Cos., the nation's biggest cigarette maker, said the company was troubled to
learn of Schiffer's comments.

"We're very disappointed that this administration has chosen to pursue this purely political lawsuit that was initiated by the
former administration. We don't think the lawsuit has any merits, and frankly, we think it ought to be dropped," she said.

Funding for the lawsuit has proved controversial because Ashcroft has sought only $1.8 million in next year's budget to finance
the litigation. More than $23 million is allotted for the case in the current budget.

But Schiffer said Wednesday the department now plans to seek $44 million for the suit. Much of that money would come from
other federal departments that have a stake in the lawsuit, such as the Defense Department and the Department of Health and
Human Services, he said.

"If I didn't think we had a strong case, I wouldn't be proceeding," Schiffer said. "The case is going forward."