08/30/2006

Associated Press

A federal judge has dismissed a lawsuit by a group trying to force tobacco companies, including three based in North Carolina, to pay at least $60 billion spent by Medicare on smoking-related illnesses.

United Seniors Association Inc., a Virginia-based lobbying group for senior citizens, sued the companies last year, claiming they intentionally hid cigarettes' addictive properties and should be held liable for Medicare's expenditures since August 1999 to treat illnesses attributable to smoking.

The lawsuit named as defendants Richmond, Va.-based Philip Morris USA, R.J. Reynolds Tobacco Co., based in Winston-Salem, N.C., Brown & Williamson Tobacco Corp., both individually and as the successors to the American Tobacco Co., Lorillard Tobacco Co., based in Greensboro, N.C., and Liggett Group Inc., based in Mebane, N.C.

In a hearing in June, the companies asked U.S. District Judge Richard G. Stearns to dismiss the lawsuit, saying they had not been found liable for the medical bills and United Seniors had no standing to bring the lawsuit.

United Seniors had claimed that under the Medicare as Secondary Payer law, they could seek to recover government losses on behalf of taxpayers.

In his order filed Monday, Stearns said the case was a reprise of claims brought by the federal government in the 1990s against tobacco companies.

"These efforts by the government came largely to naught, with most courts rejecting the government's various theories of tobacco company liability," he wrote.

Stearns also pointed to a similar case in Florida, in which an appeals court said the plaintiff must prove a defendant's responsibility to pay Medicare costs before trying to recover them under the Medicare as Secondary Payer law.

Stearns' decision confirms that these types of lawsuits lack merit, Martin L. Holton III, deputy general counsel for litigation at R.J. Reynolds, said in a statement.

After-hours calls made to Philip Morris and United Seniors Association were not immediately returned Tuesday night.