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STATEMENT OF ATTORNEY GENERAL THURBERT BAKER REGARDING GEORGIA'S TOBACCO LITIGATION

PRESS ADVISORY

STATEMENT OF ATTORNEY GENERAL THURBERT BAKER REGARDING GEORGIA'S TOBACCO LITIGATION

November 20, 1998

Good morning and thank you all for being here.

As you may know, a team of eight state attorneys general has been negotiating, on behalf of all of the states, a possible national settlement of the states' pending tobacco litigation. A detailed proposed settlement between the states and the tobacco industry was made available for review to attorneys general throughout the country on Monday of this week. Under the terms of the proposal, each state must decide by no later than noon today whether or not to join in the proposed agreement. Needless to say, we have spent countless lawyer hours this week reviewing this 200 page document. We have also met with, and fully briefed, the client-agencies who are the plaintiffs in our case (the Governor's Office of Consumer Affairs and the Department of Medical Assistance), the Governor and Governor-elect, the legislative leadership, and representatives from Georgia's public health community.

After full consideration of the pros and cons of the proposed settlement agreement, including weighing the benefits and disadvantages of pursuing our own litigation, I have concluded that it is in the best interest of the State of Georgia to join in the settlement.

This settlement represents the largest civil settlement in history, and is certainly the largest civil recovery that the State of Georgia has ever participated in. But more important than the money are the public health provisions of the agreement that I hope in the coming years will lead to a change for the better in the health of all of our citizens, especially our children. The payments calculated in the agreement will total approximately $206 billion nationally, and Georgia's share over the next twenty-five years is calculated to be $4.8 billion. The long-term health benefits that may be achieved, however, are incalculable.

Before I take just a few moments to highlight some of the terms of the agreement, let me first tell you what the agreement does not do. § It does not require the approval of Congress, nor does it require any Congressional action to implement it. § It does not grant immunity from civil liability to the tobacco industry, and it does not affect the right of any individual or class of individuals to sue. § It does not, nor could it, limit or affect the authority of the FDA in any way. § Finally, Congress may still act on these issues in any way it sees fit and fashion additional appropriate national remedies.

I would emphasize that this is the possible settlement of a lawsuit. It is contingent upon a sufficient number of states joining in the agreement. This settlement, if finalized, will be filed with the court as a consent decree. It will become effective upon approval by the trial court, and it will have the contempt power of the court behind it for enforcement.

Now let me tell you what the consent decree will do: § Prohibits tobacco advertising, promotions, and marketing which target our youth § Bans the use of cartoon characters in advertising and promotion § Restricts brand name sponsorship § Each company limited to one sponsorship per year § Prohibits sponsorships of team sports or events with significant youth audiences § Bans outdoor advertising, including transit advertising § Billboards and ads must be removed within 150 days § Bans payments to promote smoking in movies, television, and videos § Bans sale of merchandise with product brand names (caps, T-shirts) § Bans gifts without proof of age § Prohibits authorizing third parties to use or advertise tobacco brand name § Bans non-tobacco brand names § Sets minimum pack size at 20 § Requires corporate commitment to reduce youth smoking § Disbands tobacco trade associations but preserves their records § Restricts industry lobbying against tobacco control laws § Requires industry to dismiss all claims against participating states § Opens public access to tobacco documents that have been under protective orders § Creates a user-friendly web site for these documents funded by industry § Prohibits the suppression of research into smoking and health, including health hazards related thereto § Requires the industry to pay $1.45 billion over five years into a National Public Education Fund § Requires the industry to pay $250 million over next ten years to fund a charitable foundation to reduce teen smoking and substance abuse § Provides $150,000 a year to the National Association of Attorneys General to coordinate enforcement activities § Provides $50 million to assist states in bringing actions to enforce the consent decrees § Tobacco companies will make initial payments over a 5-year period between 1998 and 2003 which nationally total $12.75 billion - Georgia's total of this amount will approach $800 million § Annual payments to Georgia over the remaining 20-year period will approximate $4 billion

As you can see from this overview, the settlement agreement is wide-ranging and comprehensive. Our analysis of this proposal was based in large part on what we could realistically hope to achieve under Georgia law through our pending lawsuit, and what is being offered in the proposed settlement. Quite frankly, there are many things that this agreement accomplishes, particularly in the public health arena, that we could not achieve through our lawsuit in Georgia. But I must emphasize that this is just a start. It does not address every conceivable problem and there remains much work to be done. I believe that with the cooperation of our political leaders and the public health sector, we can continue to make strides in creating a healthier Georgia.

I also want to emphasize that the tobacco farmers of this state have not been forgotten during these negotiations. They represent many hard working families who have labored for years in tilling the soil and growing a product that has been and remains a legal agricultural product. During the course of these negotiations, I and the other attorneys general from tobacco growing states have demanded assurances - a commitment from the industry - that it will not fund this settlement on the backs of the tobacco growers. As a result, the proposal requires the industry to meet with the political leadership of this state within 30 days to detail the steps they will take to protect the tobacco farmers. My current understanding is that the industry has agreed to set aside a separate pot of money, to be paid to growers over the next 10 years, to make active farmers and quota holders who might suffer lost profits as a result of an overall reduction in tobacco sales whole.

In the final analysis, after weighing the relative strengths of Georgia's lawsuit and evaluating what we could hope to achieve through that litigation, and after considering thoughtfully the input I have received from all interested parties, there is no doubt in my mind that it is in the best interests of this state that Georgia join this settlement. I filed this lawsuit only three months after being named Attorney General to insure that this State's interests were protected and that Georgia had a place at the table. We should know by Monday of next week whether sufficient states have joined the settlement and whether the industry has accepted it. If the agreement is finalized, I believe we will have accomplished much for Georgia. If no final settlement is reached, we will aggressively move forward with our litigation against the tobacco industry.

Thank you for coming.

I will try to answer any questions you may have.