Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release -- Monday, November 23, 1998.
Contact Bob Brammer - 515-281-6699

Statement of Attorney General Tom Miller

Tobacco Settlement Final. Iowa's Share: $1.7 Billion. Health Measures are Most Important.

Following is a statement from Attorney General Tom Miller marking final, formal approval settling the State's lawsuit against the tobacco industry. Miller was joined in the State Capitol observance by Governor Terry Branstad, Governor-Elect Tom Vilsack, John Forsyth, President and CEO of Wellmark Blue Cross & Blue Shield of Iowa, and tobacco-control and public health advocates. (See additional background following Miller's statement.)

Miller's Statement:

Almost exactly two years ago, on November 27, 1996, I stood on these steps to announce a historic lawsuit by the State of Iowa against the tobacco companies and their research associations. The suit alleged that the defendants violated Iowa's Consumer Fraud Act by "repeatedly and systematically misleading the public" about the health dangers of smoking, and failing to disclose the addictive qualities of nicotine. The suit sought restitution and civil penalties on the consumer fraud count.

Our suit also asked the Court to order the defendants to pay the State millions of dollars in restitution for costs the State paid to provide health care and other services to citizens and employees as a result of tobacco-related diseases, illnesses and injuries. We alleged these huge costs resulted from "the defendants' wrongful conduct and unlawful activities."

It was a daunting undertaking - at that time, no one had successfully sued the tobacco industry - and since then the litigation has been as arduous and difficult as we expected.

Now, I am pleased to announce that final actions are being taken today to successfully settle Iowa's lawsuit. In the last hour, the State Executive Council approved the settlement for Iowa, and today the tobacco companies are formally approving the settlement as well, since all 46 remaining states agreed to it by last Friday. This finally is a done deal.

What are the main terms of the settlement - and where do we go from here?

Part of the settlement is money: $206 billion nationwide through the year 2025. Iowa's share is $1,703,839,985.56. The payments will be adjusted for inflation and sales volume, and will continue in perpetuity after the year 2025, as long as the tobacco companies survive.

Our lawsuit sought payments from the companies - both Medicaid reimbursement and civil penalties for violating the Consumer Fraud Act. The payments provided by this settlement meet and exceed those objectives.

The remainder of the settlement deals mainly with public health measures -- terms that will change how the tobacco companies do business -- under the framework of an enforceable court order. The settlement:

Prohibits the tobacco companies from almost all outdoor advertising, including billboards and transit advertising.

Bans any tobacco brand-name merchandise - "trinkets and trash," we have called them.

Bans the use of "Joe Camel" and any other cartoons in tobacco advertising.

Requires the companies to pay $250 million over ten years for a foundation to reduce youth use of tobacco products, and for studying ways to prevent tobacco-related diseases.

Provides $1.45 billion for a national public education fund.

Prohibits any targeting of children in tobacco advertising.

Bans payments to promote tobacco products in movies, television shows, videos, video games, and live or recorded music performances.

Disbands the Tobacco Institute and other such organizations.

I strongly supported all these measures and pushed hard to be sure they were included in the agreement. They change the rules of the game - especially when it comes to reducing use of tobacco by young people. These provisions address the consumer fraud, misrepresentation, and deception allegations of our lawsuit.

These public health measures do change the rules of the game and make it more fair, but they are no magic solution to preventing smoking, addiction, and tobacco-related illness and disease.

In a word: this settlement marks the end of a chapter, not the end of the story. We still have our work cut out for us.

Congress still must act, for example, to ensure full FDA regulatory authority and meaningful warnings on cigarette packages. The Iowa Legislature must act, and local authorities and citizens must act on many fronts to reduce the number of young people becoming addicted to tobacco products.

We do not underestimate the creativity of the tobacco industry, the addictiveness of nicotine, or the vulnerability of young people to peer pressure and other forces that lead them to use tobacco products.

I believe that the funds provided in this agreement should go primarily for various health purposes, ranging from specific education efforts to prevent tobacco use and addiction, to providing smoking cessation programs and health care for uninsured children in our state.

I am most committed to counter-marketing programs aimed at convincing our young people to avoid using tobacco products in the first place.

So, there is very much work before us. I pledge to our tireless allies in the tobacco- control movement, and to all Iowans, that I will continue this struggle for Iowa's health, Iowa's youth, and Iowa's future.

I want to extend my deep appreciation to people who have brought us to this day, and whom I join in commitment to continue this mission.

Governor Branstad: You have been a stalwart ally and advocate, not only in the State's lawsuit, but in many other steps you've taken personally and as the State's Chief Executive.

Governor-Elect Vilsack: You built a very strong reputation in the Senate as a tobacco-control advocate, and I am exceedingly pleased that you bring that experience and commitment to your service as Governor. I look forward to working with you in this cause.

I thank the outside counsel who with Executive Council approval joined us to tackle the huge case. Your thousands of hours of thoughtful and hard work were indispensable in bringing us to this settlement. The five law firms who participated in this undertaking are: Dickinson, Mackaman, Tyler & Hagen, P.C., Des Moines; Ralph Walker Law Firm, P.C., Des Moines; Simmons, Perrine, Albright & Ellwood PLC, Cedar Rapids; Hawkins & Norris, Des Moines; and Ness, Motley, Loadholt, Richardson & Poole, Charleston, SC.

I thank members of our own Department for their professional and dogged work on the case: Deputy Attorney General Gordon Allen and the many others who have contributed to the effort.

I thank the Iowa health-related organizations who stepped forward to contribute to the litigation expenses: Wellmark Blue Cross & Blue Shield of Iowa, which has contributed $50,000 a year; the Iowa Medical Society; Iowa Hospitals and Health Systems; Mercy Hospital Medical System; and Iowa Health System.

Finally, I express our deep gratitude to Tobacco-Free Iowa and the organizations who make up this creative, dedicated and effective campaign - the American Heart Association, the American Lung Association, the American Cancer Society, the Iowa Medical Society, the Iowa Trial Lawyers Association, the State Department of Public Health and other organizations -- and all the volunteers who work with your organizations. I am honored to stand with you, and I pledge to keep up this fight, for we still have a long way to go.

Following is additional background on the lawsuit and settlement::

Miller filed Iowa's lawsuit on November 27, 1996, after months of preparation. The case has been in pre-trial litigation since then, and trial was expected sometime in 1999 or perhaps 2000. Earlier this year, Congress crafted but failed to enact a comprehensive settlement to the situation. During the last year, four states settled their suits (Mississippi, Florida, Texas, and Minnesota.) Over the last five months, eight states led direct negotiations with the tobacco industry on behalf of states and territories that had not already reached settlements. Iowa Attorney General Tom Miller was in very close communication with the negotiators and attended the negotiations in New York City on several occasions.

Miller led the "public health caucus" of a dozen states whose attorneys general placed highest priority on including strong measures to reduce the use of tobacco by young people and reduce other high costs of tobacco-related illness and death. He organized innumerable conference calls and coordinated what sometimes was called the "dissident" or "hard-line" caucus of states that focused most strongly on public health elements of any agreement. The lead negotiating states invited Miller to take part in unveiling the proposed agreement on Monday, November 16. He announced then that Iowa would be party to the comprehensive settlement.

During the week of November 16, the remaining states considered whether or not to join the agreement. In the end, by Friday, November 20, all 46 remaining states and territories announced that they would be part of the comprehensive settlement. Since this obviously was a "critical mass" of states, the tobacco industry promptly announced its companies would ratify the proposed agreement; the companies were scheduled to take final formal action over the weekend and Monday. In Iowa, the State Executive Council formally acted to approve the settlement on Monday morning.

During the next several weeks, Miller will move to dismiss the State's case in Polk County District Court, entering the settlement agreement for Court approval and final order. The settlement thus will have the force of Court order as is typical of other lawsuits resolved by formal settlement and judgment entered by the Court.

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