Tobacco Companies Seek To Stop Suit

TALLAHASSEE, Fla. (Reuter) - The nation's largest tobacco companies Monday asked the Florida Supreme Court to prevent the state from going forward with a lawsuit that could cost the industry up to $4.5 billion for smoking related illnesses.

Philip Morris Cos. Inc. and R.J. Reynolds Tobacco Co. filed papers asking the high court to prohibit the suit under the Medicaid Third-Party Liability Act that they claim is unconstitutional.

The Medicaid Third-Party Liability Act, which was passed last April, makes it easier for health officials to sue tobacco manufacturers for Medicaid costs incurred from smoking-related illnesses.

Minnesota and Mississippi already have filed suits against the tobacco industry seeking to recoup taxpayers' health-care costs, and Massachusetts also has the legislation to do so.

State officials are expected to file the lawsuit Tuesday in a West Palm Beach Circuit Court to recover medical costs and possible punitive damages.

Last year, the state paid about $1.4 billion in Medicaid payments for illnesses related to smoking, the Florida Agency for Health Care Administration estimates. Under the act, the state can seek triple damages.

The tobacco industry, which is already challenging the constitutionality of the law and the agency, is hoping the court will stop or at least put on hold the proceedings.

``Our action today is an extraordinary step we did not want to make,'' said Steven Parrish, Philip Morris senior vice president and general counsel said in a statement. ``But, after the State decided to go ahead with its suit, we are left with no choice.''

The tobacco companies claim that the Health Care Administration, a unit of the Florida Department of Business and Professional Regulation, is acting illegally as an independent entity.

``The Florida Constitution requires that all executive functions be exercised either by the executive department or by an agency under the control and supervision of an executive department,'' said Parrish. ``The Florida Agency for Health Care Administration is neither.''

Transmitted: 95-02-21 06:44:42 EST