Preempting Local Government
PROPOSED TOBACCO DEAL: ISSUES
Preemption of local governments' ability to regulate tobacco companies
behavior has long been a priority of the tobacco companies. The proposed
multi-state settlement attempts to bar certain kinds of civil suits brought
by "political subdivisions," although it is unclear whether the
state attorneys general have the authority to settle such claims. The Minnesota
settlement does not preempt any local government civil suits, including
suits to recover health care costs and civil suits to enforce local laws
against the tobacco companies.
The proposed multi-state settlement says that, to the extent a state
attorney general has such authority, local governments cannot bring the
following types of claims against tobacco defendants (including manufacturers,
their agents and attorneys, distributors and retailers):
"for past conduct, all civil claims (including those seeking damages,
civil penalties, or any other relief) that are in any way related to the
use, sale, distribution, manufacture, development, marketing or health
effects of, exposure to, and research or statements about tobacco products
(except for claims for outstanding liability under existing licensing fee
laws or existing tax laws)"
for future conduct, the proposed settlement releases "only those
monetary Claims directly or indirectly based on, arising out of or in any
way related to, in whole or in part, the use of or exposure to Tobacco
Products . . ." including all future claims for reimbursement of health
care costs associated with the use of or exposure to tobacco products.
If an Attorney General does not have the authority to release local
government claims and a local government and wins a judgment or settlement
against a tobacco defendant, the amount of the recovery will be taken out
of the state's settlement share.
The proposed state settlement should not prohibit local lawmakers from
maintaining or bringing their own suits to recover tobacco-caused health
care costs, nor should it limit the ability of local governments to implement
and enforce stronger tobacco control laws in the future.
QUESTIONS AND CONCERNS
Why does the multi-state settlement propose to limit the ability of
local governments to sue the tobacco companies for their health care expenditures
related to tobacco?
Does the Attorney General have the authority to restrict these types
of civil cases by local governments?
According to the agreement, if an AG does not have the authority to
release local government claims, and a local government sues and wins money
from the tobacco companies, the amount of the local government's recovery
will be taken out of the state's settlement share.
If local suits can't be preempted and some local governments suit is
successful, how much could this reduce the state's share? Could the state
end up with nothing?
Isn't the state's settlement already only a fraction of the state's
tobacco-related Medicaid costs? Doesn't a provision requiring that any
local recoveries against tobacco companies be taken from the state share
of the settlement protect tobacco companies and require state taxpayers
to further subsidize the tobacco companies' liabilities?
Would the multi-state settlement interfere with the ability of local
governments to seek civil penalties to enforce local ordinances actions
against tobacco defendants, including tobacco manufacturers and retailers
-- for example, local advertising restrictions or local consumer protection
laws? What are the "monetary Claims" that can be brought against
tobacco defendants in the future, and what future claims cannot be brought,
by state and local governments?
For more information, contact Robert Weissman, Essential Action, 202-387-8030.