The tobacco industry's $6 billion settlement with Minnesota shows the companies can afford to pay more than they admit, bolstering the chances for tobacco legislation costing them about $500 billion, lawmakers said.
"They've been saying a settlement in this range would bankrupt them," said Sen. Kent Conrad of North Dakota, author of one of the Democratic bills. "It's hard to make the argument now that it's not somehow appropriate.""These are the articles of surrender," he added.
Utah's lawsuit against the industry is scheduled for a June hearing in federal district court in Salt Lake City. The tobacco companies are asking a judge to dismiss the state's case, just as they asked for the dismissal of suits filed by Mississippi, Florida, Texas and Minnesota. In each case, the states' suits were upheld. All four states eventually reached out-of-court settlements totaling almost $36 billion.
The $6 billion deal reached Friday with Minnesota is $1.3 billion more than the industry promised to pay that state in the settlement it reached in June with 40 states suing it. That settlement would have cost $368 billion and hinged on congressional approval. Many members of Congress are now trying to push the price up.
In a statement, President Clinton said, "This action provides still further momentum to our effort to pass bipartisan, comprehensive tobacco legislation this year."
Utah, the 18th state to file suit against big tobacco, could be among the first 10 states to go to trial - probably in early 1999.
Attorney General Jan Graham said she does not expect Utah's case to be dismissed in June or defeated in court next year.
"We think our case is very strong," she said Friday. "If the congressional reform doesn't pass this year, probably by Memorial Day we hear, we're just planning on going to trial and winning our case."
The author of Congress' leading tobacco bill, which would cost the industry $516 billion, said the Minnesota settlement cuts the industry's credibility and puts more pressure on it to participate in the bill's voluntary restrictions on marketing to children.
"The fact that tobacco companies chose to settle with the state rather than risk the fate of a jury's decision . . . brightens the outlook for a comprehensive Senate bill," said Commerce Committee Chairman John McCain, R-Ariz.
McCain's bill, Congress' only tobacco measure to have passed a committee, has been rejected by the industry because, companies say, the $516 billion price tag would drive them to bankruptcy.
Graham said regardless of whether individual states settle, win or lose their lawsuits with tobacco companies, children cannot be adequately protected until Congress passes a comprehensive measure that goes into effect right away.
"The most important thing is that we have immediate ceasing of tobacco companies advertising and marketing to children, which of course is actively under way," she said. "That's the whole goal of the lawsuit I filed.
"My understanding is (states that settle) are getting a lot of money and may be getting some billboard restrictions in their states, but national marketing and advertising is everywhere and can't be restricted by states. . . . We care about kids in all states, not just our own state, so that's still the goal and the number one priority."
Tobacco industry spokesman Scott Williams argued that the Minnesota settlement had not set a precedent for what Congress or the states can expect to be paid by tobacco companies.
In the absence of national tobacco policy that settles state suits, states will each take their own chances in court, he said in an interview.
"Some states may receive nothing," Williams said. He said the industry still has no intention of reversing course and endorsing legislation it believes will drive it out of business and spawn a black market in cigarettes.
The Minnesota settlement shifts the tobacco wars back to Washington, where the Senate is due to debate the issue May 18.
"This settlement demonstrates the tobacco industry's vulnerability to the truth about their actions and products," said Sen. Tom Harkin, D-Iowa, co-author of another tobacco bill. "It only adds to the pressure for Congress to pass comprehensive tobacco settlement legislation."
Some veterans of the tobacco wars said the deal may actually ease pressure on the industry.
Two lawyers who negotiated the $368 billion settlement with the industry in June noted that no new state suit is to come to court before the fall, erasing the prospect of additional bad publicity for the industry generated, for example, by court-ordered release of damaging documents.
"If they don't have to face a trial, there's nothing urgent about getting a national settlement done," said Mississippi attorney Dick Scruggs. "It takes the heat off them."
Mississippi Attorney General Mike Moore agreed but saw a glimmer of hope for the industry to stop fighting the bills if the Senate softens the impact of its legislation on the floor.
"Whenever the industry agrees to pay money, they're still in the ballgame," Moore said. "They're still interested in resolution of all the litigation in the country. This could be the last of the settlements."