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Just weeks after a mistrial in a billion-dollar case against Big Tobacco, another billion-dollar case goes to trial in the same Brooklyn, N.Y., courtroom today. Lawyers for 21 Blue Cross and Blue Shield health care plans will try to convince a Brooklyn federal jury that the tobacco industry should reimburse them for money paid to treat sick smokers. Blue Cross and Blue Shield of New Jersey Inc. v. Philip Morris Inc., No. 98-3267 (E.D.N.Y.). The suit, presided over by U.S. District Judge Jack B. Weinstein, claims the industry conspired to hide the addictiveness of nicotine and the health risks of smoking, resulting in added costs to one of the plans, Empire Blue Cross and Blue Shield of New York. Last year, Weinstein held that he would try Empire’s claims before those of the other “Blues” plans. Like the earlier case, on behalf of an asbestos trust fund, the Blue Cross case is one of a dozen big, complex tobacco cases before Weinstein, a widely respected activist judge. He has been trying to use the cases as a base for engineering a nationwide judicial resolution of tobacco liability. But tobacco lawyers have complained that Weinstein is trying to strong-arm them into a global settlement, refusing to dismiss Blue Cross and other cases that are all but identical to ones that have been rejected across the country. BROOKLYN BLUES At the trial, which is expected to last eight weeks, Blue Cross will attempt to tell the story of what it claims is the industry’s decades-long conspiracy to mislead Americans about the effects of smoking. This deception, it claims, required Blue Cross to pay for treating “a lot more people than we would have seen if they’d told the truth,” said Vincent R. Fitzpatrick Jr. of New York’s Dewey Ballantine, counsel for Blue Cross. The case will be tried under RICO — the federal racketeering statute — New York’s consumer protection laws and common-law fraud. Blue Cross intends to use statistics to prove reliance on alleged industry deceptions, causation and injury. Among the witnesses will be Julius Richmond, a former surgeon general of the United States. Fitzpatrick said potential damages are $965 million under RICO (which is subject to trebling under the statute) or $870 million plus possible punitive damages on the state-law claim. For their part, defense lawyers have complained bitterly about Weinstein’s refusal to dismiss Blue Cross and some of the other tobacco cases in his courtroom. “He has not followed clearly binding 2nd Circuit precedent,” said Steven B. Rissman, an in-house lawyer at Philip Morris. The case has a lot going against it. Ruling in September that the case should go to trial, Weinstein nevertheless wrote that he was “skeptical of plaintiffs’ ability to fully support their allegations.” The case was one of three similar actions brought on behalf of different groups of Blue Cross/Blue Shield plans, filed in Brooklyn, Chicago and Seattle federal courts in 1998. In 1999, the 7th U.S. Circuit Court of Appeals dismissed the Chicago suit, Arkansas Blue Cross & Blue Shield v. Philip Morris Inc., 1999 U.S. App. Lexis 33549 (Dec. 16, 1999). In February, the 9th Circuit dismissed the Seattle case, Regence BlueCross BlueShield of Oregon v. Philip Morris Inc., 2001 U.S. App. Lexis 3246 (9th Cir. Feb. 28, 2001). (Blue Cross has asked for a rehearing by the full court.) FINAL RESOLUTION? All six circuit courts of appeal that have considered so-called third-party payer cases, which include the Blue Cross cases, have rejected them. Weinstein is considering a nationwide class action that could, in theory, resolve nearly all outstanding claims for injury against the tobacco industry. In Re: Simon (II) Litigation, No. 00-5532 (E.D.N.Y.). The proposed class action would include all claims for compensatory damages, except for plaintiffs who affirmatively opt out. Claims for punitive damages would be considered on a mandatory class basis, meaning that no one may opt out. The goal of such a litigation leviathan would be to resolve Big Tobacco’s liability once and for all, a goal Weinstein articulated a year ago, when, pressing for global settlement talks, he said, “the time for bringing a close to tobacco litigation is nigh.” The question is whether the judge can fit all of these claims into a single package in the face of recent Supreme Court precedent limiting the use of class actions to resolve mass personal injury claims. In the earlier tobacco trial in front of Weinstein, a trust fund set up to pay asbestos-related claims against the bankrupt Johns Manville Corp. sued the tobacco industry, seeking contribution for money paid out to smokers. Falise v. American Tobacco Co., No. 99-7392 (E.D.N.Y.). Weinstein was forced to declare a mistrial on Jan. 25, when the jury deadlocked. A retrial is expected sometime after the Blue Cross trial.

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