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Health insurers sue Big Tobacco

The nation's largest network of health insurers sued the tobacco industry Wednesday, seeking to recoup billions they spent to treat people sickened by smoking.

The Coalition for Tobacco Responsibility, representing 25-million Blue Cross and Blue Shield insurance policyholders in at least 35 states, including Florida, said the suits had been filed in federal courts in New York, Chicago and Seattle.

The health plans may seek as much as $10-billion in damages for every year the insurers paid to treat smoking-related illnesses.

"Millions of participants in our plans _ whether or not they smoke _ have suffered because the tobacco companies continue to produce and vigorously market an addictive product," Dr. Michael McGarvey, chief medical officer of Blue Cross and Blue Shield of New Jersey, said at a news conference.

"These suits are our effort to begin to improve public health by changing the behavior of the tobacco industry," McGarvey said.

The lawsuits could make the tobacco settlement offered by Sen. John McCain, R-Ariz., which includes a $6.5-billion annual cap on damages but was roundly criticized by the industry as not doing enough to protect its financial interests, a bit more enticing.

Senate leaders announced Wednesday that the bill would be introduced on the Senate floor during the week of May 18. Several senators warned that the Blue Cross-Blue Shield lawsuits were only the beginning if Congress does not act.

"If this effort fails there will be a flood tide of state litigation against the industry," said Sen. Bob Graham, D-Fla. "What will happen is that we will enter into a new era of aggressive litigation in the courts."

Graham said that in the absence of a tobacco bill, the federal government likely would sue the tobacco industry to recoup Medicare costs and veterans' benefits.

Wednesday's lawsuits allege conspiracy, fraud, misrepresentation and violation of federal racketeering and antitrust laws.

Two leading tobacco companies said they expected federal courts to dismiss the suits. RJR Nabisco Holdings Corp. and Brown & Williamson, a unit of Britain's B.A.T Industries Plc, said in separate statements that the courts had previously thrown out similar suits.

RJR Nabisco called the suits "simply the latest example of groups lining up to get on board what they perceive to be the tobacco gravy train."

Blue Cross and Blue Shield provides health care coverage for one in four Americans, or 68.7-million people, in all 50 states. It is the 19th-largest employer in the United States.

The new lawsuits dramatically escalate the troubles of the tobacco companies, which are under attack from the federal government, states and public health advocates.

Tobacco companies had hoped to end most of the litigation against them in a proposed settlement they negotiated with states last June. But this month they abandoned efforts to get that agreement approved by Congress and instead vowed to defend themselves in court.

Historically, the tobacco industry has fared well in court, but many legal experts predict that will gradually change. The public _ from which jurors are drawn _ has grown more skeptical of the industry, and tens of thousands of documents have come to light that could hurt the cigarettemakers.

Before Wednesday, only the Minnesota branch of Blue Cross and Blue Shield had filed a lawsuit against cigarettemakers. That case is about to go to a jury in St. Paul.

Minnesota Blue Cross chief executive Andy Czajkowski congratulated the coalition "for seeking to hold the tobacco industry accountable for its illegal conduct and lies."

"The documents revealed as evidence in our trial show the tobacco industry's deception and manipulation of the public. These documents have paved the way for others to follow suit," he said in a statement.

The most novel aspect of the Blue Cross-Blue Shield lawsuit is the charge that the industry violated the Racketeer Influenced and Corrupt Organizations law, which typically is used against organized crime but also has been used against everything from striking labor unions to abortion protesters.

"We believe that the conduct of the industry meets every test of the court on RICO," said Paul Bschorr, a lawyer representing Blue Cross.

Anti-smoking advocates welcomed the new lawsuits, saying they would increase pressure on Congress to refuse the tobacco companies protection from litigation.

"Members of Congress would not want to be accused of limiting the right of health insurers to recover on behalf of their patients, especially during a election year," said John Banzhaf of Action on Smoking and Health.

The American Lung Association said the tobacco industry was desperate for special protections from liability.

"Their greatest fear is being compelled by the justice system to take responsibility," the group said in statement.

Among the groups represented in the coalition were Blue Cross and Blue Shield of Michigan with 4.4-million members, Illinois with 2.9-million, California and Florida with more than 2-million, New Jersey with 2-million and Texas with 1.8-million.

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