Cigarette makers seek trial delay

Tobacco companies appeal judge's order

By CLAY ROBISON Copyright 1997 Houston Chronicle Austin Bureau

AUSTIN Tobacco companies Tuesday asked an appellate court to overturn a
federal judge's order that, they contend, will unfairly tilt Texas'
antitobacco trial in the state's favor.

They also asked for a delay in the trial, for which jury selection is
scheduled to resume in Texarkana next week, to give the appellate court
time to consider their petition.

Ron Dusek, a spokesman for Attorney General Dan Morales, criticized
cigarette makers for what he called a "delaying tactic."

"This is obviously an act of desperation," Dusek said.

Dan Webb, the tobacco industry's lead lawyer, said his clients, in a
petition to the 5th U.S. Circuit Court of Appeals in New Orleans, were
seeking to address "legal defects" in the state's case.

"We're trying to save the taxpayers hundreds of thousands of dollars. It
may very well be there will be no need for a trial," Webb said.

But if the 5th Circuit doesn't intervene, he added, "We're prepared to go
to trial."

The 5th Circuit could delay the trial to review the defendants' petition,
or it could ignore the petition.

Tobacco companies are challenging a Sept. 29 order in which U.S. District
Judge David Folsom divided the upcoming trial into three phases, beginning
with the state's charges that tobacco companies have violated federal
antiracketeering laws.

The defendants called the trial plan "plainly unlawful."

Under the order, the state would have to prove either the racketeering
charges in the first phase or other "wrongful conduct" claims against the
tobacco industry in the second phase before the jury could decide how much
to award in damages.

The state is seeking as much as $14 billion in damages for Medicaid costs
associated with smoking.

Folsom said separate phases "will allow jurors to better understand" the
complex case.

But tobacco companies say the division of the trial would weaken their
defense, including their attack on the validity of the state's estimate of
health costs related to smoking.

"Phases I and II of the court's trial plan both deal with virtually
identical allegations of bad conduct relating to different claims," the
companies argued in their petition to the 5th Circuit. "Thus, the court's
plan will severely tilt the playing field."

The defendants argued that Folsom's decision to let the state use
statistics to prove health care damages rather than requiring the state to
produce individual Medicaid recipients who had allegedly suffered injury
from smoking violated recent rulings of the 5th Circuit.

"The state charges that cigarettes manufactured by some (defendants) caused
illness to thousands of Texas Medicaid recipients, which in turn resulted
in billions of dollars of unnecessary Medicaid payments," the tobacco
petition said.

"Yet, under the district court's orders and `trial plan,' the jury will
hear no proof at any stage about whether any Texas Medicaid recipient
actually smoked or actually got sick or whether any illness was actually
caused by smoking."