Regence BlueCross BlueShield of Utah joined 37 other BlueCross health insurers nationwide Wednesday in suing several major tobacco companies, alleging they are guilty of conspiracy, fraud, misrepresentation and violation of federal anti-racketeering and antitrust laws. The suits were filed in federal courts in Seattle, Chicago and New York on behalf of the Coalition for Tobacco Responsibility a group of Blue-Cross Blue-Shield plans in some 30 states.Thomas J. Hartford III, general counsel for Regence Utah, said the amount of damages will have to be determined when and if the litigation goes to trial.
"Millions of participants in our plans - whether they smoke or not - have suffered because the tobacco companies continue to produce and vigorously market an addictive product," said Jed H. Pitcher, Regence of Utah chairman, president and chief executive officer.
"We care about our members' health," said Pitcher, noting that tobacco products have forced health care costs for both smokers and non-smokers to rise significantly in recent years.
"These suits are our effort to begin to improve public health by changing the behavior of the tobacco industry."
Except for the antitrust and racketeering claims, the lawsuits filed Wednesday are similar to Medicaid suits brought by various state attorneys general and the current $1.77 billion suit by the state of Minnesota and BlueCross and BlueShield of Minnesota.
Hartford said the breakdown of an agreement between the states and the industry allows this new lawsuit to go forward. That action would have placed caps on the amounts that future litigants could claim against the industry.
Is this latest action a further attempt to put the tobacco industry out of business? Not a chance, Hartford said.
"That may happen, but the amounts we're talking about in these actions are insignificant compared to the tobacco companies' profits."
Although the tobacco industry has been the target of much litigation in recent years, Hartford pointed out that it has so far lost only one individual smoker case.
And even if it eventually loses this lawsuit, Hartford said the companies would pay little of the judgment themselves. "They'd just raise the price of cigarettes to pay for it."
Bischoff said any money that Regence of Utah might be awarded in a future judgment would be used to create programs to prevent children from taking up smoking and aid those who have to quit.
Pitcher said BlueCross and BlueShield health plans are carrying a large share of the burden resulting from smoking-related illnesses. He said there is "compelling new evidence" concerning the tobacco industry's "deliberate attempts to addict Americans to a dangerous product, and to market these products to children to create replacement smokers."
The Treasury Department estimates that tobacco-related illnesses cost the U.S. economy $60 billion a year in direct health care costs, a burden borne by everyone whether they smoke or not.
"Tobacco companies must be held accountable for the damage they have inflicted on the health of this nation," Pitcher said. "Damage that will continue for a generation."
Bischoff said Regence Utah has not done a study to determine how much smoking-related illnesses have been paid out by the local plans, but that may be required when the lawsuit goes into the "discovery" phase and attorneys for the tobacco industry begin asking for evidence of harm.Millions of participants in our plans - whether they smoke or not - have suffered because the tobacco companies continue to produce and vigorously market an addictive product.
Jed H. Pitcher
Regence of Utah chairman
The BlueCross coalition lawsuits allege that the industry conspired to suppress less harmful cigarettes and to hide the health risks of smoking. They also claim the industry concealed the addictive nature of smoking, manipulated nicotine levels to increase the addiction potential, and conducted marketing campaigns to target teenagers and younger children.
The suits are based on federal antitrust and Racketeer Influenced and Corrupt Organizations (RICO) statutes, state consumer protection laws and various common laws. The RICO and antitrust claims are among the largest of their type ever filed, Bischoff said.
Congress is considering legislation that would limit the accountability of tobacco companies. The coalition supports the public health aspects of the legislation but says the protections against massive claims given the industry needs further study.
Regence BlueCross BlueShield of Utah is the state's largest health insurer with some 624,000 members. It is a member of The Regence Group, an affiliation of non-profit BlueCross plans in Utah, Washington, Idaho and Oregon.