Florida wins billions in deal with tobacco firms

Florida yesterday became the second state to reach a settlement with the United States' big tobacco companies over liability for smoking-related illnesses, winning a total payment of $11.3bn (pounds 7.1bn). Florida had sued the tobacco companies for $12.3bn to defray the costs of treating state- assisted patients for lung cancer and respiratory diseases associated with smoking. The money will be payable over 25 years.

The settlement, which was announced as jury selection was already underway in the case, was several times larger than the $3.4bn agreement reached between the companies and the state of Mississippi last month. Florida's governor, Lawton Chiles, hailed it as a triumph, saying that it entailed "the largest monetary concessions the industry has ever paid and the toughest prohibitions ever imposed on advertising and marketing to children".

Florida and Mississippi will now be excluded from the so-called "tobacco pact", an overall national settlement reached in June between the same group of tobacco companies and the attorneys-general of 22 states. Their separate arrangement means that the two states will start receiving payments earlier, will know exactly how much they are getting and will not have to compete with the others for a slice of the overall settlement.

The out-of-court agreement in Florida disappointed some because it meant the issue would not be fought out in court. However, it became almost inevitable after Geoffrey Bible, the chief executive officer of Philip Morris, the biggest US tobacco company, accepted during pre-trial questioning last week that tobacco could cause fatal illness. Asked if he accepted that 100,000 people might have died as a result of smoking, he said, "maybe", and added that if it were proved cigarettes caused cancer, he would suspend the company's cigarette production.

Mr Bible's testimony, and the Florida settlement, suggest that the tobacco companies still have their backs against the wall, despite June's tobacco pact between 22 states and the companies, which include Philip Morros, RJR Nabisco and US Tobacco. Under that agreement, the companies agreed to a total payment of $368.5bn to be distributed among the states over 25 years, a new, stronger warning on cigarette packets and stricter regulation of tobacco advertising. In return, the companies received immunity from future class-action lawsuits.

That settlement, however, is not final. In particular, it has yet to receive the approval of the White House and Bill Clinton, a crusading anti-smoker, has indicated that he believes the financial settlement ought to be higher. The President was particularly displeased to find that a new tax on cigarettes contained in the just-passed Budget bill and designed to fund health coverage for millions of uninsured children, could be set against the agreed compensation payments. This would considerably reduce the cost of the settlement to the companies.

Until this year, the tobacco companies had resisted accepting liability for smoking-related illnesses. In March, however, their united front was shattered when the Liggett Group, one of the smaller US producers, conceded that smoking was addictive and could cause cancer and agreed to settle. While continuing to insist that they were not liable, the other companies soon followed suit.

While what is often termed "big tobacco" in the US is fighting unprecedented social and political opprobrium, the political background is complicated by the fact that the US is a major tobacco producer as well as consumer. Several states, especially in the south, depend on the tobacco industry for jobs and revenue, and the companies have been impressive contributors to political campaigns of both major parties.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Tradewind Recruitment: Phase Co-ordinator for Foundation and Key Stage 1

Negotiable: Tradewind Recruitment: Phase Co-ordinator for Foundation and Key S...

Tradewind Recruitment: SEN Teacher

Negotiable: Tradewind Recruitment: SEN Teacher We have a fantastic special n...

Tradewind Recruitment: History Teacher

Negotiable: Tradewind Recruitment: My client is an 11-18 all ability co-educat...

Tradewind Recruitment: Year 6 Teacher

£100 - £150 per day: Tradewind Recruitment: Year 6 Teacher Birmingham Jan 2015...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee