Lawyers say settlement talks with two tobacco companies broke down

NEW YORK - Negotiations by two tobacco companies to reach a nationwide settlement that would protect them against punitive damage claims have broken off, lawyers involved in the talks said.

Lorillard Tobacco and Liggett Group have been in separate talks to settle numerous class-action cases pending before U.S. District Judge Jack B. Weinstein in Brooklyn. The cases were brought on behalf of sick smokers as well as by health insurers and union health funds seeking reimbursement for the smokers' medical treatment.

''We just couldn't come to terms,'' John Coale, a lawyer from Washington who represents some smokers who have sued the industry, said Friday.

He said the talks with both tobacco makers ended a few days ago.

On Thursday, Ronald S. Milstein, general counsel for Lorillard, said the negotiations were suspended because of differences over major issues he would not specify.

Lorillard is the nation's fourth-biggest cigarette maker. Its brands include Newport and Kent. Liggett ranks fifth with brands such as Eve. They collectively account for about 10 percent of the U.S. market.

Industry leader Philip Morris and No. 2 tobacco company R.J. Reynolds Tobacco had refused to enter the settlement talks, expressing doubts about whether a settlement would survive on appeal.

Milstein said Lorillard had been in talks with the plaintiffs' group for a couple of months.

Lorillard was discussing the possibility of paying $7.5 billion over 30 to 40 years into a public health fund in exchange for being shielded from punitive damage claims.

Under that plan, individuals with claims against the industry would be able to seek compensatory damages from Lorillard but could not seek punitive damages, Milstein said.

Liggett would have paid $500 million into the fund and received similar protection against punitive damage claims.

Milstein said one factor driving the talks was the record-setting $145 billion punitive damage award in Florida against Lorillard and the four other major cigarette makers. Earlier this week, the trial judge upheld the verdict, reached in July. The case is being appealed.


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