Medica, HealthPartners file suit against tobacco companies

  • Article by: GLENN HOWATT , Star Tribune
  • Updated: March 11, 1998 - 10:00 PM

Two of the state's largest health plans said Wednesday that they will jointly sue the tobacco industry in another effort to recover health care costs related to tobacco use.

The suit, which is expected to be filed this week by Medica and HealthPartners, claims that the industry committed fraud and violated antitrust statutes by misleading the public about its knowledge of the link between smoking and disease. Those allegations are parallel to the claims made by the state of Minnesota and Blue Cross and Blue Shield of Minnesota in the case now at trial in St. Paul.

Together the three nonprofit health care companies insure 3.5 million Minnesotans, the vast majority of the population.

But Medica, which is owned by Allina Health System, and HealthPartners have an advantage that didn't exist when the state-Blue Cross lawsuit was filed in 1994: There's now more evidence, including millions of tobacco-company documents, in the public record.

"The documents really make for a very compelling case and strengthen our resolve to hold tobacco companies accountable," said Andrea Walsh, senior vice president of public affairs at HealthPartners. Tobacco litigation experts predict that other insurance companies may follow those in Minnesota, which so far are the only insurers trying to recoup costs from the tobacco industry through the courts.

"If you are on the board of an insurance company or are a shareholder, you will look at how well Blue Cross appears to be doing, and you're going to ask your lawyers, 'Where the heck are we?' " said Richard Daynard, a law professor at Northeastern University in Boston and chairman of the Tobacco Products Liability Project.

Peggy Carter, a spokeswoman for the R.J. Reynolds Tobacco Co., said she could not comment on the new suit because she hadn't seen it. But "if their suit is mirroring [the Blue Cross suit], then they will have no more claim than the existing ones," she said, adding that so far no one in Minnesota has heard the entire case.

"They have only had the opportunity to hear from the plaintiffs' case," she said. ". . . But our court system says you cannot issue a verdict until you've heard both sides."

A changing landscape  

Blue Cross and the office of Minnesota Attorney General Hubert Humphrey III took credit Wednesday for paving the way for other lawsuits.

"Our case will be a model to show how health plans can attack big tobacco," said Karl Oestreich, a spokesman for Blue Cross. "Four years ago a lot of people thought we were crazy to do what we were doing. This shows that the landscape has changed so much."

Eric Johnson of the attorney general's office said, "The work we've done clearly makes it easier for other plaintiffs.

Michael Ciresi, lead attorney in the tobacco trial now underway, said he was not surprised that the other health companies sued. "I expect we will see more insurance companies following suit," he said.

If so, it will help frame the debate on whether Congress should agree to a national tobacco settlement, said Ted Grindal, a lobbyist for the Smoke Free Coalition.

Some will argue that with health insurance companies lining up to recoup costs, the tobacco industry will need a settlement, while others will insist that the suits should go forward through the court system.

"Everyone who has a cause of action will make their best claim," Grindal said. As for Medica and HealthPartners, "I wish they would have done it sooner," he said.

The new suits  

Medica and HealthPartners served a suit Wednesday against nine tobacco companies, three trade groups and a public-relations firm.

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