Company Press Release

Florida Judge Bars Evidence State Knew of Tobacco Risks; Rules State Need Not Prove Essential Elements of Its Case

WEST PALM BEACH, Fla., July 31 /PRNewswire/ -- The following statement was issued today by Philip Morris:

In rulings that directly contradict over 100 years of judicial precedent and the Florida Supreme Court, a trial judge in West Palm Beach on Wednesday barred tobacco companies from challenging key portions of the state's case of reimbursement of Medicaid payments made on behalf of smokers.

The extraordinary rulings appear to prevent the tobacco companies from challenging the state's assertion that it did not know the health risks of smoking. These rulings are contrary to an earlier ruling of the Florida Supreme Court.

And, the trial court ruled that the companies may not use testimony from individual Medicaid recipients to challenge the states claim that its statistical Medicaid damage model is free from problems of fraud, misdiagnosis and unnecessary treatments. Just last year, the Florida Supreme Court ruled that the companies have a constitutional right to challenge individual Medicaid payments.

``The state has apparently succeeded in making it nearly impossible for the tobacco industry to get a fair and impartial trial in Florida's unprecedented bid to collect millions of dollars in damages as a result of the state- approved sale of cigarettes, and the legal use of those products by state citizens,'' said Gregory G. Little, senior assistant general counsel for Philip Morris.

The trial court will not allow the jury to hear the following critical facts:

• Florida smokers were fully aware of the risks associated with cigarette use and thus could not have been misled by any alleged fraud or concealment by the companies;
• The state of Florida itself manufactured and sold cigarettes with full knowledge of the health risks involved to its customers;
• The state of Florida collects more than $600 million each year in tobacco excise and sales taxes and that the cost of state Medicaid payments is partially offset by Federal funds;
• The state of Florida licenses the sale of cigarettes and has failed to enforce state laws regulating the use of tobacco by minors;
• The state of Florida has regulated cigarettes more leniently than alcohol or gambling; and
• The state engaged in a regulatory scheme designed to ensure that the tobacco industry would be forced to pay for Medicaid costs that are the state's responsibility.

``The basic tenet of the American judicial system is that when you're accused of doing something wrong, you have the right to defend yourself,'' said Little. ``This court has had numerous opportunities to provide the tobacco industry the same rights that anybody has when it comes to defending a lawsuit, yet it continues to strip the tobacco industry of its constitutional right to a fair trial.

``Fortunately, Palm Beach County jurors will bring their own knowledge into this case; they'll use their own common sense in analyzing the evidence; and they'll draw on their own concept of fair play in deciding the state's claims that it was deceived are ridiculous,'' he added.