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Negligence Litigation Success

Three Texas Workers' Health Funds Sue Tobacco Industry Action Modeled on Suits by Attorney General

Beaumont, Texas, Oct. 31 -- Three private sector labor-management (Taft-Hartley) health care funds, representing more than 7,000 Texas blue collar workers, and their families, today filed a class action suit against eight major tobacco companies seeking to recover money spent treating workers for tobacco-related diseases.

The class action suit has the same defendants and is closely patterned after suits filed by some 41 state attorneys general against the tobacco industry, including those settled earlier in Mississippi. Like those suits, the damages being sought by the Texas funds could total billions of dollars.

Because today's filing is a class action suit it will, if successful, benefit more than 80,000 other workers and their families who participate in the other 40 Texas Taft-Hartley funds. Those benefits would include limiting the spiraling costs of health insurance, bigger pay checks for participating workers as well as the institution of smoking cessation and prevention programs for blue collar workers throughout the state. The suit was filed in Federal Court.

The suit was filed despite certain terms of the proposed "global" tobacco settlement agreement. Language in that proposed pact would extinguish the right of private sector workers' health funds, including those in Texas, to launch class action suits. The proposed agreement failed to pass muster with Congress and the White House, and its authors have been sent back to the drawing board by President Clinton.

The suit states that evidence shows the tobacco industry intentionally targeted blue collar workers with special advertising and promotional campaigns, with devastating success. United States Public Health Service statistics show that the percentage of blue collar workers who smoke is roughly double that of the national average.

The plaintiff funds are: the Texas Carpenters Health and Benefit Fund, IBEW-NECA, the North Texas Laborers' Health Fund and Welfare Fund, and the Southwestern Health and Benefit Fund.

There are 2,500 such funds in the 50 states, Puerto Rico and the District of Columbia. They represent 33 million Americans: workers, retirees and their families. For most of these funds spend around 10% of the medical bills they pay come from tobacco-related diseases such as cancer, emphysema and heart disease.

The monies to operate the funds are collectively bargained which means that dollar spent treating smoking-related diseases are dollars that would otherwise have gone into a workers' pay check or fringe benefit package.

Brian McQuade, Chairman of the Coalition for Workers' Health Care Funds said, "These funds are the last line of defense against ruinous health care costs for the participants. The time has come for the tobacco industry to reimburse them for the literally billions of dollars they have spent treating tobacco-related illnesses."

Creation of the workers' health funds was authorized by the passage of the 1947 Taft Hartley Act. They cover workers in industries characterized by transient and intermittent work patterns. Most of these workers are employed in small businesses often in the construction, building, trucking, maritime, service and clothing industries.

Many of these workers would not have on-the-job healthcare coverage without these funds, and would be dependent on government-financed health care programs. Under their union health plans, workers can move from job to job and state to state, befitting the nature of their employment, without losing medical coverage.

"Our workers, more than any other class of Americans, have been targeted by the tobacco industry," said McQuade. "If there is any segment of American society that has been victimized by the tobacco industry and which has paid the price of that victimization from its own pocketbook, it is the men and women who rely on these labor-management funds," he said.

The companies named in the suit are: Philip Morris, Inc.; R.J. Reynolds Tobacco Company; Brown & Williamson Tobacco Corporation; B.A.T. Industries P.L.C.; Lorillard Tobacco Company; Liggett & Myers, Inc.; The American Tobacco Company; and the United States Tobacco Company. Also named as defendants are: The Tobacco Institute; The Council for Tobacco Research-U.S.A., Inc.; Smokeless Tobacco Council, Inc.; and Hill & Knowlton, Inc.