Big Tobacco Ready to Deal

One day after an overture by the Bush administrations attorney general, some Big tobacco companies said they would be willing to meet with the Justice Department to consider ending the government's multibillion-dollar lawsuit against them, The New York Times reported.

Philip Morris Cos. Inc., the largest tobacco company, said it would assess the Justice Department's conditions for dropping the suit, but gave few indications that it would agree to any significant concessions.

Others said they were not prepared to concede anything. "We do not believe this lawsuit has any legitimate basis, and we are continuing to prepare our defense," said R.J. Reynolds Tobacco Holdings Inc., the nation's second-biggest cigarette maker. "We have no intention of settling this suit." Still, the company said it would join in the talks and "listen to what the Department of Justice may have to say."

Not all the tobacco producers are so hostile to the notion of settling. But for an industry that has been rife with conflict of late, particularly over the question of federal regulation of cigarettes, the companies' responses were unusually similar, demonstrating a belief that they could prevail in court without compromising.

AG John Ashcroft said earlier this week that he was assembling a legal team to work out an out-of-court settlement with the major tobacco companies while the suit brought by the Clinton administration crawls forward. Ashcroft has not indicated what it would take to end the suit.

One topic likely to be discussed is potential federal oversight of tobacco, a matter that Philip Morris has pursued through Congress, because it would allow the company to sell so-called safer cigarettes with the approval of the Food and Drug Administration (FDA).

It is unclear how settlement discussions could forward that goal. The Supreme Court has ruled that such action requires legislation, and Congress has remained deeply divided over the issue since 1998, the last time it considered empowering the FDA with tobacco oversight. That effort failed and Congress has since been reluctant to take up the matter.

Other cigarette companies are staunchly opposed to legislation, as Philip Morris, the maker of Marlboros, conceives it. Lorillard, for example, has accused Philip Morris of trying to limit cigarette marketing because its brands are now so dominant that it is unlikely to be affected by an absence of advertising.

Lorillard officials, who describe Philip Morris attempt at legislation as the Marlboro Monopoly Act, say they will take part in the negotiations with the Justice Department but intend to keep a tight focus.

The defendants in the suit, besides Philip Morris and R. J. Reynolds, are Brown & Williamson, a division of British American Tobacco Plc; Lorillard, a division of the Loews Corp.; and the Liggett Group, a division of the Brooke Group. B&W said it had not yet decided whether to join the talks.
This ad will auto-close in 10 seconds