Unions Thwarted vs. Tobacco

The Supreme Court Monday refused to let union health funds in Pennsylvania, Oregon and New York sue the tobacco industry, thwarting their efforts to recover the cost of smoking-related illnesses.

The court, without comment, turned away the health funds' arguments that they should be allowed to sue cigarette makers under federal racketeering and antitrust laws.

This is a defeat for unions but not necessarily for their members, says CBS News Consultant Andrew Cohen, because under the lower court rulings, which the Supreme Court Monday let stand, individual smokers still may bring their own actions against Big Tobacco.

The lawsuits were patterned after similar claims by state governments. Those led to settlements in which the tobacco industry will pay the states $246 billion for health-care costs. The Justice Department also sued the tobacco industry in September.

Seven union health funds in Pennsylvania and six each in Oregon and New York sued. They accused the tobacco industry of defrauding them into paying to treat health-plan participants' smoking-related illnesses.

In the cases acted on Monday, cigarette makers and related industry organizations were accused of withholding accurate information about smoking's health effects that might have led the health funds to aggressively discourage their members from smoking.

In throwing out the Pennsylvania funds' lawsuit, the 3rd U.S. Circuit Court of Appeals said the states could sue either because state laws granted them that right, or because of the "political power of governmental bodies" that the union health plans do not have.

The unions had argued that they - like individual states - could bring actions on behalf of their members under certain laws that in some circumstances permit the recovery of triple-damage awards, which Cohen calls a big club in the fight against tobacco.

The health plans' lawyers said the lower court rulings mean the entire health-care industry is barred from suing the tobacco industry under antitrust law and the racketeering law, which allows triple damages. Individual plan members cannot sue under those laws, the appeals noted.

"There is a clear national interest in holding tobacco companies accountable for the public health devastation they have wreaked," said lawyers for the Pennsylvania union health plans.

The tobacco companies' lawyers urged the court to reject the appeals. They said individual smokers can sue under other laws besides the antitrust and racketeering statutes.

"This effectively ends, I think, union lawsuits against tobacco but it probably won't affect the many individual tobacco lawsuits around the country or federal and state governmental efforts to go after the industry," said Cohen.

The cases are:

  • Steamfitters Local Union No. 420 Welfare Fund vs. Philip Morris, 99-545;
  • Oregon Laborers-Employers Health & Welfare Fund vs. Philip Morris, 99-642; and
  • Laborers Local 17 Healh and Benefit Fund vs. Philip Morris, 99-791.

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