ALA and Next Generation Write
Judge in California
The ALA and the Next Generation
Alliance (which includes ALA, ACS, AHA, ANR, CMA, and others) has written
the judge in California asking for a hearing on the deal.
- November 24, 1998
- Honorable Ronald S. Prager
- San Diego Superior Court
- Department 46
- 330 West Broadway
- San Diego, CA 92101
RE: Tobacco Cases I Coordination Proceeding Special Title (Rule 1550
(b)). Judicial Council Coordination Proceeding No. 4041
Dear Judge Prager,
I represent the American Lung Association of California ("Lung
Association") and the Next Generation Tobacco Control Alliance ("Tobacco
Control Alliance"). I am informed that the parties to coordinated
tobacco litigation are about to present the Court a proposed settlement
and consent decree.
I. INTEREST OF LUNG ASSOCIATION AND TOBACCO CONTROL ALLIANCE IN THE
Both my clients have a deep interest in tobacco control policy in California,
and in reducing the use of tobacco products and the attendant public and
private health care costs.
The Lung Association is a nonprofit corporation founded in 1907. Its
mission is the prevention and control of lung disease. The Lung Association
was a proponent of Proposition 99 (also known as the Tobacco Tax Initiative),
which was adopted by the voters at the 1988 statewide general election
and which imposed an additional 25-cent-per-pack tax on cigarettes. The
Lung Association attempts to influence public policy on tobacco control
issues through lobbying and through a wide range of educational activities.
The Tobacco Control Alliance is a statewide coalition and Public Health
Institute program designed to reduce the use of tobacco in California.
The Tobacco Control Alliance is governed by a broad-based steering committee
that includes the state's preeminent tobacco control and research organizations,
major healthcare and medical associations, minority healthcare coalitions
and networks, voluntary organiztions, and representatives from the managed
care and entertainment industries.
II. NEED FOR A FAIRNESS HEARING
We have reviewed the November 20, 1998, letter to the Court from Senators
John Burton and Adam Schiff. That letter asks the Court to conduct a fairness
hearing, and we agree with that letter. We will simply note here additional
reasons why a fairness hearing is essential in this coordinated proceeding.
First, the scope of the rights released pursuant to the proposed settlement
is breathtaking and unprecedented. It appears that the proposed settlement
attempts to settle every conceivable claim that the State of California
could assert against the tobacco industry defendants now or in the future,
as well as many claims that could be asserted by others. We are not aware
that such a wide ranging settlement has ever been proposed, much less approved.
The downstream consequences of the settlement are numerous, complicated,
and at this point perhaps unforeseen. For this reason alone a fairness
hearing is essential.
Second, the proposed settlement purports to settle claims of the public
against the tobacco companies. Specifically, in the second, third, and
fourth causes of action, the California Attoney General seeks relief in
a representative capacity on behalf of the People of the State of California.
(First Amended Complaint PP 70, 75, 81). Because the proposed settlement
seeks to settle significant public claims, those affected should be given
an opportunity to comment.
Third, without casting aspersions on the parties to the existing litigation,
it cannot be overlooked that the proposed settlement would pay large sums
of money to the public entity plaintiffs and to their attorneys. (Nationwide,
the amount available for attorneys' fees apparently exceeds $1.35 billion.
See MSA XVII(c); Exh. O 7(b).) Such large sums of money have the potential
to cloud the judgement of normally somber people. A fairness hearing is
necessary to allow an evaluation by interested parties and counsel who
will not benefit financially from the settlement.
Fourth, even in the normal run of litigation, court approval of a consent
decree is not automatic. Before approving a consent decree, the court must
satisfy itself that the agreement is a "just" one. Although the
court cannot change the terms on which the parties have agreed, it can
reject the agreement if it is contrary to public policy or contains any
erronous rule of law. (California State Auto Assn. Inter-Ins. Bureau v.
Superior Court (1990) 50 Cal. 3d 658, 993.) Indeed, the proposed consent
decree in this action asks the Court to make a finding that the settlement
"is in the best interests of the State of California." Approval
of this extraordinary settlement requires a careful inquiry as to whether
it is contrary to public policy.
For the reasons set forth above, the Lung Association and the Tobacco
Control Alliance respectfully request that this Court Conduct a fairness
hearing before deciding whether or not to approve the proposed settlement
and consent decree in the coordinated tobacco litigation.
Very truly yours,
- George Waters
- Olson, Hagel, Leidigh, Waters, & Fishburn
- Sacramento, CA