Union health plans lose round with cigarette makers
By Laurie Asseo, Associated Press, 01/10/00
WASHINGTON - The Supreme Court today 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.
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. Today's court action will not affect that case.
In other cases today the court:
-Allowed an insurance company to provide less health care coverage for AIDS-related illnesses than for other conditions under the same policy. The court turned down an appeal in which two HIV-positive men argued that the limit on AIDS coverage violates a federal ban on discrimination against the disabled.
-Upheld a government program requiring dairy farmers to contribute to the popular "Got Milk?" advertising campaign. Some farmers had contended the government didn't have the authority to force them to finance the generic ads boosting their industry.
-Declined to revive a Pennsylvania law requiring that some sex offenders be designated "sexually violent predators" subject to lifetime registration and public notice of their address unless they can prove the designation is not deserved. The law had been struck down by the Pennsylvania Supreme Court.
-Refused to free Microsoft from possibly having to pay thousands of former temporary employees who were not allowed to join the company's lucrative stock-purchase program. Eight people who once worked for the computer software company sued in 1992, saying they and thousands more "permatemps" illegally had been shut out of an employee stock purchase plan that allows employees to buy Microsoft stock at a discount.
In the tobacco case, 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 today, 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.
But three federal appeals courts ruled this year that the health funds could not sue because they essentially were seeking payment for harms suffered by their members, who could file lawsuits on their own.
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 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.
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 Health and Benefit Fund vs. Philip Morris, 99-791.
