After 10 years, smoke clears on state's tobacco lawsuit

  • Article by: DAVID PHELPS , Star Tribune
  • Updated: January 26, 2008 - 11:32 PM

Smoking is down in Minnesota, but is the $6.1 billion settlement the main reason?

Ten years later, the state's case against the tobacco industry is widely recognized as the most far-reaching case against private industry in Minnesota history.

The $6.1 billion settlement that came four months after the case began in a similarly bitter January 1998 in St. Paul has since been used to help thousands of Minnesota adults quit smoking, to persuade middle school and high school students to not start smoking, and has helped lay the groundwork for a statewide smoking ban and bailed the state out of a budget deficit.

"When you talk to people, there's a different attitude now about smoking. Smoking is more the exception than the rule," said former Attorney General Hubert Humphrey III, whose office began pursuing the tobacco industry in 1994. "That wouldn't have happened at nearly the pace it did without the settlement."

The lawsuit officially was known as "State of Minnesota vs. Philip Morris." In reality it was the public health community vs. the entire tobacco industry. While all previous lawsuits against Big Tobacco had been brought by individual smokers, the Minnesota case was filed on behalf of institutions that paid for treating smoking-related ailments.

The multibillion-dollar settlement will even be honored in the state's sesquicentennial celebration as one of the 150 most important people, places and events in Minnesota history. But it has not been without hitches in the 10 years since Humphrey told the tobacco industry that Minnesota was drawing "a line in the snow" to prove the industry's responsibility for causing smoking-related illnesses.

• Blue Cross was tied up with lawsuits and administrative proceedings for six years before it could start distributing and spending its $469 million portion of the settlement.

• The Minnesota Partnership for Action Against Tobacco (MPAAT), which was created in the settlement with a $202 million endowment, was hauled to court by Humphrey's attorney general successor, Mike Hatch, over its grantmaking practices.

• And the state diverted more than $1 billion from health and antismoking programs into the general fund to help Gov. Tim Pawlenty and the Legislature balance the budget in 2003.

"The whole driving force behind this litigation was public health," said Roberta Walburn, one of the central trial attorneys from the Minneapolis firm Robins, Kaplan, Miller & Ciresi that was hired by Humphrey to represent the state. "The settlement would have had a bigger impact if it had been used for public health instead of balancing the budget."

Between 1999 and 2003, the state received $1.2 billion from the settlement. It currently receives about $170 million to $185 million a year for the foreseeable future, based on a complex formula that involves sales volume and profitability of tobacco companies.

The first payments to the state were placed in endowments at the Minnesota Department of Health to fight youth smoking and for medical education at the University of Minnesota.

With its endowment, the Health Department created a campaign called "Target Market" that included edgy advertising and special events for teens, using a don't-smoke message. The budget for Target Market was $24 million a year -- until Pawlenty and the Legislature took the money for the general fund in 2003.

From 1998 to 2004, during which Target Market was in effect, smoking among high school seniors in the state declined from 42 percent to 26.6 percent. In the three subsequent years, smoking prevalence among 12th-graders dropped to 23 percent.

"We were very proud of the results we produced," said Jan Malcolm, the health commissioner on whose watch Target Market was created. "We knew we had a hit on our hands, with the engagement of the kids. They knew about Target Market and they knew what the message was."

Today, the Health Department spends $3.3 million a year on all tobacco prevention programs.

According to the state Health Department, the current smoking rate among Minnesota adults is 18 percent, down from 20 percent in 1999.

MPAAT, which changed its name last year to ClearWay Minnesota to give it a more positive image, has spent $21.4 million over eight years helping Minnesotans quit smoking. After a controversial start focusing its efforts on often-divisive community smoking bans, ClearWay's QuitPlan cessation program has counseled and treated more than 50,000 people, with about 10,000 of them quitting smoking as of 2006.

The organization even has a marketing relationship with the Minneapolis Fire Department, with QuitPlan information on the back of its firetrucks.

"We're running on all cylinders," said Kirby Erickson, chairman of the ClearWay board of directors. "We will continue to work with anybody who asks for help. We will continue to put information out in the community. We'll continue to advertise QuitPlan and talk about the harm of tobacco. We don't think smoking levels are as low as they can be."

Blue Cross has offered telephone counseling to 36,000 of its members since 2000, with 7,000 successfully quitting smoking. Since the statewide smoking ban went into effect in October, Blue Cross has seen a 300 percent jump in requests for quit-smoking medications and a 43 percent increase in calls to its telephone "quitline."

"There isn't a magic bullet here," said Dr. Marcus Manly, a Blue Cross vice president who oversees the organization's programs for preventable diseases. "Attitudes in the workplace and the community all have an effect on behavior. Smoking rates continue to go down in this state."

The next phase of Blue Cross' plan is to address smoking, obesity and a lack of physical activity as contributing factors to health care costs.

But not everyone is convinced that the work of ClearWay and Blue Cross is solely, or even largely, responsible for the decline in smoking among Minnesotans.

"You can debate where the money went, you can debate whether the settlement had an impact on smoking rates or if it was a general societal trend," said Jonathan Redgrave, a lawyer who helped represent tobacco giant R.J. Reynolds in the Minnesota lawsuit when he was with the Minneapolis firm of Gray Plant Mooty. "The [tobacco] companies moved on. They're still in business today. Societal trends as far as tolerance for smoking -- was that really influenced by the lawsuit? I don't know."

Business and health advocates agree that among the most significant post-settlement actions that affected smoking rates was last year's statewide smoking ban and the 2005 increase in the cigarette tax, from 48 cents a pack to $1.48. Per-pack sales dropped 19 percent in the two years after the tax was increased, according to the state Department of Revenue.

Wholesalers "saw cigarette sales declines of up to 30 percent after the health impact fee was imposed in 2005," said Thomas Briant, executive director of the Minnesota Wholesale Marketers Association and a critic of some of ClearWay's programs. "The sales decline continued into 2006 and 2007."

The legacy of the 1998 trial continues far beyond Minnesota's state lines. The documents unearthed during the discovery phase of the lawsuit -- documents that showed that the tobacco companies knew about the harmful effects of smoking but nonetheless aggressively marketed their products -- have been widely distributed and used to develop tobacco-control policies by governments and groups, including the World Health Organization.

Even restaurants in France, where smoking was a way of life, are now smoke-free.

"The industry has been discredited. The public knows the danger of the product. Would that have eventually come out without the lawsuit? Maybe," Humphrey said. "Smoking is the most preventable disease factor in the world, but we have a long way to go."

David Phelps • 612-673-7269

  • related content

  • Where the tobacco funds are

    Saturday January 26, 2008

    Blue Cross and Blue Shield of Minnesota received $469 million in the settlement. This is the company's plan for spending it:

  • SETTLEMENT

    $6.1 billion

    RECEIVED TO DATE

    $2.7 billion

    ANNUAL PAYMENTS

    $170 million- $185 million
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