Legislature(1997 - 1998)

04/14/1997 03:37 PM Senate HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                   JOINT MEETING                                               
        SENATE HEALTH, EDUCATION AND SOCIAL                                    
             SERVICES STANDING COMMITTEE                                       
         HOUSE HEALTH, EDUCATION AND SOCIAL                                    
            SERVICES STANDING COMMITTEE                                        
                   April 14, 1997                                              
                     3:37 p.m.                                                 
                                                                               
                                                                               
SENATE MEMBERS PRESENT                                                         
                                                                               
Senator Gary Wilken, Chairman                                                  
Senator Loren Leman, Vice Chairman                                             
Senator Johnny Ellis                                                           
                                                                               
SENATE MEMBERS ABSENT                                                          
                                                                               
Senator Lyda Green                                                             
Senator Jerry Ward                                                             
                                                                               
HOUSE MEMBERS PRESENT                                                          
                                                                               
Representative Con Bunde, Chairman                                             
Representative Joe Green, Vice Chairman                                        
Representative Brian Porter                                                    
Representative Fred Dyson                                                      
Representative J. Allen Kemplen                                                
                                                                               
HOUSE MEMBERS ABSENT                                                           
                                                                               
Representative Al Vezey                                                        
Representative Tom Brice                                                       
                                                                               
OTHER HOUSE MEMBERS PRESENT                                                    
                                                                               
Representative Pete Kelly                                                      
                                                                               
COMMITTEE CALENDAR                                                             
                                                                               
DISCUSSION OF TOBACCO TAXATION, ENFORCEMENT AND LITIGATION,                    
INCLUDING THE LIGGETT TOBACCO GROUP SETTLEMENT PRESENTATIONS:                  
                                                                               
     ATTORNEY GENERAL GRANT WOODS OF ARIZONA                                   
     ATTORNEY GENERAL BRUCE BOTELHO                                            
     COMMISSIONER KAREN PERDUE, DEPARTMENT OF HEALTH & SOCIAL                  
     SERVICES                                                                  
                                                                               
(* First public hearing)                                                       
                                                                               
PREVIOUS ACTION                                                                
                                                                               
No previous action to record.                                                  
                                                                               
WITNESS REGISTER                                                               
                                                                               
KAREN PERDUE, Commissioner                                                     
Department of Health and Social Services                                       
P.O. Box 110601                                                                
Juneau, Alaska 99811                                                           
Telephone:  (907) 465-3030                                                     
POSITION STATEMENT:  Discussed tobacco use and public health.                  
                                                                               
GRANT WOODS, Attorney General                                                  
State of Arizona                                                               
1275 West Washington                                                           
Phoenix, Arizona 85007                                                         
Telephone:  (602) 542-5025                                                     
POSITION STATEMENT:  Discussed anti-tobacco tools for decreasing               
                     use and the Liggett tobacco settlement.                   
                                                                               
BRUCE BOTELHO, Attorney General                                                
Department of Law                                                              
P.O. Box 110300                                                                
Juneau, Alaska 99811                                                           
Telephone:  (907) 465-2133                                                     
POSITION STATEMENT:  Discussed status of tobacco litigation in                 
                     Alaska.                                                   
                                                                               
ACTION NARRATIVE                                                               
                                                                               
TAPE 97-30, SIDE A                                                             
Number 0001                                                                    
                                                                               
CHAIRMAN GARY WILKEN called the joint meeting of the Senate/House              
Health, Education and Social Services Standing Committees to order             
at 3:37 p.m.  Members present at the call to order were Senators               
Wilken, Leman and Ellis and Representatives Bunde, Green, Porter               
and Kemplen. Senators absent were Green and Ward; and                          
Representatives Vezey and Brice.  Representative Dyson arrived at              
3:51 p.m.                                                                      
                                                                               
DISCUSSION OF TOBACCO TAXATION, ENFORCEMENT AND LITIGATION,                    
INCLUDING THE LIGGETT TOBACCO GROUP SETTLEMENT PRESENTATIONS                   
                                                                               
Number 0008                                                                    
                                                                               
CHAIRMAN WILKEN announced the committees would hear discussion on              
tobacco taxation, enforcement and litigation, including the Liggett            
tobacco group settlement presentations.  Chairman Wilken turned the            
gavel over to Chairman Bunde.                                                  
                                                                               
Number 0022                                                                    
                                                                               
KAREN PERDUE, Commissioner, Department of Health and Social                    
Services, stated that this meeting is part of the multi-prong                  
process to reduce tobacco use in Alaska.  She stated that tobacco              
tax, education, enforcement and litigation are the four-prongs of              
the department's agenda.  She reminded the committee that the                  
Alaska Medicaid Program is a fundamental health care program that              
the state makes a commitment to each year.  She continued that the             
legislature is approving $350 million worth of funds for the                   
Medicaid program.  The amount of funds that have been paid by                  
Alaskans for the health care of injured smokers is in excess of                
$100 million over a 13 year period.  She explained that the cost to            
the Alaskan public to deal with the injuries of smoking and tobacco            
use are great and is one of the reasons for the ligation.  She                 
added that the ligation targets the issue of prevention of tobacco             
use for Alaskan youths.                                                        
                                                                               
                                                                               
Number  0050                                                                   
                                                                               
CHAIRMAN BUNDE introduced Attorney General Grant Woods and stated              
that he was first elected in 1990, as Arizona's Attorney General               
and  re-elected in 1994 with 80 percent of the vote.  He presides              
over a staff of 850 employees including 300 attorneys and is the               
chief counsel and law enforcement officer for the state of Arizona.            
Attorney General Woods was named "Attorney General of the Year" in             
1995.  Chairman Bunde thanked Attorney General Woods for coming                
before the committees to help Alaskans put in place an economic                
barrier to stop youths from starting to smoke, as well as to                   
recapture the high costs that tobacco has brought to the state.                
                                                                               
Number 0098                                                                    
                                                                               
GRANT WOODS, Attorney General, State of Arizona, stated that he has            
been attorney general for seven years.  He declared that this issue            
is the most important issue that he has been involved with, because            
it is an important social problem that everyone in the country is              
sharing.  He continued that tobacco has been part of the country               
since the beginning, however, years ago people did not understand              
the negative health problems associated with tobacco.  He stated               
that the tobacco industry discovered the negative effects of                   
tobacco prior to letting the public know which is a part of the                
basis for some of the lawsuits around the country.  He stated that             
there are five companies that are producing a product that, with               
its intended use, will shorten its consumers lives and/or kill                 
them.  He asserted that it is a unique characteristic, as they are             
other products that may cause harm, but only through abuse, not                
with the intended usage.  He stated that tobacco has no positive               
health effects and if used as intended it is almost assured that               
negative health consequences will occur.                                       
                                                                               
Number 0132                                                                    
                                                                               
ATTORNEY GENERAL WOODS continued that the economic problems                    
associated with tobacco are severe.  Alaska is on the higher end of            
suffering health related problems for its citizens because of                  
tobacco and consequently, a good portion of those citizens are                 
going to require medical assistance.  He stated that the tax payers            
are the ones paying rather than the tobacco user or the tobacco                
companies.                                                                     
                                                                               
Number 0165                                                                    
                                                                               
ATTORNEY GENERAL WOODS stated that the solutions are in                        
Commissioner Perdue's four-prong approach.  He referred to                     
education and stated that he has been in negotiations with the                 
Liggett Company, the fifth largest producer of tobacco products in             
the United States.  He declared that the company's largest concern             
is counter marketing, as they are aware that education of the                  
negative effects of tobacco use of youths, can change their                    
behavior.  He asserted that there will always be some kids who will            
smoke and use drugs, but a large percent of youths can be prevented            
from smoking just through education.  He stated that two facts need            
to be kept in mind; 440,000 Americans die every year from smoking              
related illnesses and that if children do not smoke by the time                
they turn 20, then they will probably not smoke for the rest of                
their lives.  He stated that 90 percent of the people that smoke,              
started smoking as teen-agers.  He stated that it is difficult for             
children to understand all the problems related to smoking.  In                
addition to the fact that the tobacco companies spend $6 billion a             
year in the United States in advertising, a good portion of it                 
aimed at teen-agers.  He asserted that the reason being that the               
companies lose 440,000 customers a year and need to pick up the                
teen-age market, mainly because the companies will not get people              
to start smoking after the teen-age years.  He stated the goal is              
to educate children better by hopefully using funds from the                   
tobacco industry and through a tobacco tax.  He was hopeful that               
the FDA would also eliminate tobacco advertising towards children.             
He declared that 3,000 children today in the United States will                
smoke for the first time and at least 1,000 will die due to                    
smoking.                                                                       
                                                                               
Number 0228                                                                    
                                                                               
ATTORNEY GENERAL WOODS urged, as a republican fiscal conservative,             
that the committee pass the tobacco tax because it is a public                 
health situation.  He believed that the people who smoke, as well              
as the tobacco companies, ought to be funding the efforts to deal              
with the problem that they are creating.                                       
                                                                               
Number 0252                                                                    
                                                                               
ATTORNEY GENERAL WOODS stated that an economist of Phillip Morris,             
has stated that if the tobacco tax was raised to $1 a pack across              
the country, the result will be a 45 percent reduction of smoking              
in the United States.  He stated that if this holds true, the                  
health care costs would plummet in this country and in this state.             
He stated that with this tax, the statistics indicate that teen-agers will quit
that other economists have come up with different numbers but                  
stated that the bottom line is that the tobacco tax will have an               
impact on consumption.                                                         
                                                                               
Number 0271                                                                    
                                                                               
CHAIRMAN BUNDE asked for the record, that it is Phillip Morris' top            
management stating that if the taxes on tobacco are increased,                 
usage will go down and $1 increase would reduce usage by 45                    
percent, more among youths.                                                    
                                                                               
Number 0275                                                                    
                                                                               
ATTORNEY GENERAL WOODS replied that it is correct.  He stated that             
if you look at all the economists' results, even the tobacco                   
institute itself, they indicate that an increase in tax will cause             
the usage to go down, especially among youths.  He affirmed that it            
is a regressive tax but the health benefits would be skewed as                 
well, poor people will have more health benefits because they will             
quit in larger numbers than wealthier people.  He stated that from             
a state leader's perspective, that is not so bad because those are             
the people whose medical bills they are paying.                                
                                                                               
Number  0292                                                                   
                                                                               
ATTORNEY GENERAL WOODS stated that one argument is the tax will                
cause the creation of a black market.  He stated that in talking               
with 21 other attorneys general, whose states have raised the                  
tobacco tax, have not seen this result.  However, it is possible               
but as of yet it has not been a problem.  He explained that in                 
Arizona there is a large Native American community, and they have              
not seen a large black market problem on the reservations.  He                 
stated that Arizona has not seen a rise in organized crime related             
to an underground movement to sell cigarettes at a cheaper price.              
                                                                               
Number 0311                                                                    
                                                                               
ATTORNEY GENERAL WOODS addressed the issue of enforcement as a tool            
to stop teen-age smoking.  He stated that logically it makes sense             
but practically it does not.  The reality is that every law                    
enforcement budget in the United States is strained and teen-age               
smoking is an important problem but does not rate with the more                
serious crimes.  He asserted that it is impossible to put teen-age             
smoking at a high enough priority where enforcement will actually              
take place.  He gave the example of the city of Phoenix, as there              
has been one enforcement action in the 1990s.                                  
                                                                               
Number 0330                                                                    
                                                                               
ATTORNEY GENERAL WOODS addressed the issue of litigation.  He                  
stated that he hoped the state was offended that the tobacco                   
industry sued them for thinking about suing the tobacco industry.              
He advised that the tobacco industry does this, because they think             
that they can pick on smaller states and intimidate them from                  
taking the industry on.  He continued that the days the tobacco                
industry wins in the court room, are over.  The reasons being that             
the truth is out as a result of the Liggett Tobacco Company's                  
agreement to turn state's evidence on the other four United States             
tobacco companies.  He advised that now it is not just attorneys               
general,  public health officials or every doctor in the United                
States, stating that cigarettes cause heart disease, emphysema and             
cancer and that nicotine is addictive; but a tobacco company.  He              
stated that Liggett has agreed that they have manipulated that                 
level of nicotine in cigarettes to make it difficult for consumers             
to quit.  The company has agreed to cooperate and will now be on               
the plaintiffs' table in the lawsuit against the four remaining                
tobacco companies.  He explained that in the 1960s before there was            
a warning, as to the medical consequences of smoking cigarettes,               
the tobacco companies knew that their product caused the above                 
mentioned illnesses and/or death.  He continued that the companies             
knew that nicotine was addictive and that there was a possibility              
that they could come up with a safer cigarette but did not inform              
the American public, nor did they produce a safer cigarette.  He               
stated that he believes they conspired together to make sure no                
company did that because it would destroy tobacco's market place.              
                                                                               
Number 0350                                                                    
                                                                               
ATTORNEY GENERAL WOODS stated that the reality is that a number of             
deaths from tobacco use did not need to occur if the tobacco                   
companies did the responsible thing and disclosed what they knew.              
He informed the committee that Mississippi is going to trial in                
July, Florida in August and Texas in September.  As of last night              
the total number of states that will be going into trial is 22.  He            
stated that the states are asking for $1 billion to $5 billion in              
damages.  He predicted that the states will win the lawsuits and               
then the tobacco companies will be in financial trouble.                       
                                                                               
Number 0400                                                                    
                                                                               
ATTORNEY GENERAL WOODS advised that Alaska move aggressively                   
forward to prevent harm to Alaska's youth.  Education is very                  
important to inform youths of the reality of tobacco.  He                      
reiterated that the tax will require the smoker to pay for the                 
problems caused by the product as well as offset the incidence of              
the problem.  He urged support of enforcement efforts and community            
unity in this effort.  He stated that Joe Camel is everywhere and              
is as recognizable to the average six-year-old as Mickey Mouse,                
which is wrong.  He emphasized that lives are at stake and it is               
the lives of the Alaskan teen-agers who are currently making the               
decision about a product that could ultimately kill them.                      
                                                                               
Number 0431                                                                    
                                                                               
BRUCE BOTELHO, Attorney General, Department of Law, thanked the                
committees for this hearing and its active role on this issue.  He             
also thanked Attorney General Woods for his efforts in Alaska, as              
an instrumental person in improving the department's management                
practices.  He reiterated the statement that this is a serious                 
social issue that requires a multi-faceted attack in order to bring            
it under control.  He explained that the tobacco industry has                  
chosen to sue Alaska, to prevent Alaska from joining with other                
states against the tobacco companies.  He informed the committee               
that a motion has been filed to dismiss the case.  He stated that              
he is confident that there will be action on that in the near                  
future, as it is pending before Judge Sedgewick in Anchorage.                  
                                                                               
Number 0457                                                                    
                                                                               
ATTORNEY GENERAL BOTELHO explained that the department has filed,              
with the Governor's approval, a 150 page compliant against 12 of               
the largest tobacco companies doing business in this state and in              
the United States.  He stated that the case has been filed in the              
Alaska Superior Court and assigned to Judge Larry Weeks, presiding             
judge for the first judicial district.  He stated that the                     
complaint outlines the conspiracy, dating back to 1953, by an                  
industry that knew of the health hazards and the risk of tobacco               
use, but went out of its way to suppress any scientific research,              
which would demonstrate its harm to the public.  He stated that                
this has enabled the tobacco industry to not develop safer tobacco             
products.  He stated that this conspiracy shows that the tobacco               
industry has manipulated the nicotine content in its products as a             
way to hook and maintain its users as addicts.  He referred to                 
research done by the industry itself, comparing the addictive                  
quality of nicotine to cocaine.  He reiterated that the tobacco                
industry targets youths in their campaigns, as 90 percent of six-year-olds iden
Botelho brought in a copy of Rolling Stone magazine to show a Camel            
advertisement that enabled users to save money on Ticket Master                
tickets with "Camel cash".                                                     
                                                                               
Number 0477                                                                    
                                                                               
ATTORNEY GENERAL BOTELHO stated that with the information available            
now on the effects of tobacco use combined with the Liggett                    
settlement, would prove irresponsible for Alaska not to join in.               
Especially, with the opportunity for Alaska to recover public                  
monies that have been expended for the public's health and to help             
remove marketing to youths.  He informed the committee that he                 
intends to put out a request for proposals to private law firms so             
that this matter will be dealt with on a contingency fee basis, the            
consequence being to make sure there is no impact on the general               
fund budget.  This is an arrangement that has been worked out in               
most states.                                                                   
                                                                               
Number 0519                                                                    
                                                                               
ATTORNEY GENERAL BOTELHO thanked Assistant Attorney General Dee                
Schwartz and Assistant Attorney General Doug Gardner for their time            
and work on this complaint.                                                    
                                                                               
Number 0526                                                                    
                                                                               
CHAIRMAN BUNDE asked what Arizona is seeking in monetary damages               
and what would Alaska be looking for.                                          
                                                                               
ATTORNEY GENERAL WOODS replied that they are still working on their            
damages model.  He advised to look at the state's population and               
Medicaid claims.  He stated that Arizona has sued the tobacco                  
companies for contributing to the delinquency of minors.  If it is             
illegal to sell tobacco to minors and it is proven that they are               
advertising to minors to commit an illegal act, they should be                 
liable.  He stated that the trial date is for October of 1998.  He             
assessed that Alaska probably could not get a trial date before                
1999.  He stated that the population of Arizona is about 3 to 4                
million people.  He stated that in addition to himself, two others             
from his office and two outside lawyers are working on the issue.              
The tobacco industry has hired eleven Arizona law firms, every                 
lobbyist in town and a public relations firm.  He stated that it               
was prudent that Alaska waited for the facts to be developed before            
getting involved.  He commended Alaska's participation.                        
                                                                               
Number 0554                                                                    
                                                                               
ATTORNEY GENERAL BOTELHO stated that Alaska is perceiving in terms             
of Medicaid coverage, over the last fifteen years, to be around                
$150 million and is also considering additional counts, such as                
contributing to the delinquency of minors and several accounts                 
pertaining to consumer protection and anti-trust statutes.                     
                                                                               
Number 0558                                                                    
                                                                               
CHAIRMAN BUNDE stated that the manufacturer is being sued and asked            
what the possibilities are of suing the distributor.                           
                                                                               
Number 0561                                                                    
                                                                               
ATTORNEY GENERAL BOTELHO replied that it is a potential outcome but            
at this point it makes sense to focus collectively on the                      
manufacturers themselves.  He stated that Alaska is not in a                   
position financially to venture too far off the primary target.                
                                                                               
Number 0572                                                                    
                                                                               
ATTORNEY GENERAL WOODS stated that there are a lot of possibilities            
as the evidence unfolds, but in that case it would have to be a                
provable existence of knowledge in regards to the harmful effects              
and he stated that he was unsure if that exists.  He suggested the             
avenue of looking at the lawyers involved, as to their knowledge of            
the crimes that were being committed and if so they should be sued             
as well.  He specified that Oklahoma has been the only state that              
has sued the lawyers.  He referred back to the Liggett case and                
stated that they have not seen the most sensitive document because             
the company has asserted it attorney client privileges.  He stated             
that the various judges are currently deciding whether those                   
documents are privileged or not.  They will not be privileged if               
the documents show evidence of crime or fraud.                                 
                                                                               
TAPE 97-30, SIDE B                                                             
Number 0001                                                                    
                                                                               
ATTORNEY GENERAL WOODS stated that from Arizona's perspective if               
the documents prove that lawyers perpetrated the fraud, they should            
be sued as well.                                                               
                                                                               
Number 0012                                                                    
                                                                               
SENATOR LOREN LEMAN asked how much the tobacco tax was increased to            
in Arizona and when was it implemented.  He asked what the results             
have been.                                                                     
                                                                               
ATTORNEY GENERAL WOODS replied that the tax was decided by                     
referendum two years ago to be about 20 cents.  He stated that the             
statistics relating to the results are not in yet.  He stated that             
a vote of the people enabled the income from the tax to be directed            
to specific areas.  He stated that the tobacco industry has fought             
every step of the way to avoid having the money spent on counter               
marketing.                                                                     
                                                                               
Number 0026                                                                    
                                                                               
SENATOR LEMAN asked if he has the support of the legislature and               
other branches in Arizona and pointed out that Attorney General                
Woods was elected into his position.                                           
                                                                               
Number 0033                                                                    
                                                                               
ATTORNEY GENERAL WOODS responded that it depends on who you were to            
ask.  The legislature has not been involved in it, therefor it is              
varied to the individual.  He stated that his guess would be that              
the majority of the legislators support the lawsuit.  He informed              
the committee that the governor has multiple views on the subject,             
as he originally supported and requested the lawsuit but then                  
backed off the Medicaid plan and asked him not to pursue it.  He               
continued that the governor's last position is that they should be             
able to win the case on the consumer fraud and anti-trust claims               
and that the Medicaid plan is not needed.  Attorney General Woods              
explained that the governor and the Mississippi attorney general               
are the only ones who take that view.  He stated that the                      
republican governors that support the lawsuits are Tommy Thompson,             
Rudy Giuliani, Christy Whitman and the Kansas governor.  He                    
stressed that support has crossed party lines.                                 
                                                                               
Number 0045                                                                    
                                                                               
SENATOR LEMAN asked Attorney General Botelho if he will be                     
requesting punitive damages in this litigation.                                
                                                                               
Number  0050                                                                   
                                                                               
ATTORNEY GENERAL BOTELHO replied that they will be seeking treble              
damages under the anti-trust provision, a specific provision within            
that section of the act.                                                       
                                                                               
SENATOR LEMAN asked if there was anything in HB 58 that is                     
currently drafted that would negatively impact this litigation.                
                                                                               
ATTORNEY GENERAL BOTELHO replied the only issue that may be present            
is if we were required to prove, in regards to Medicaid, on a                  
person by person basis and that would be an issue of the statute of            
repose, as to how far back we could reach.  He advised that he does            
not see that as an issue because they are not restricted in terms              
of consumer protection and anti-trust recoveries, however, it would            
come into play under the negligence claim if it was to become an               
issue.                                                                         
                                                                               
Number 0057                                                                    
                                                                               
SENATOR LEMAN responded that he did not think he concurred with him            
on the statute of repose and deferred to Representative Porter to              
respond to that.  He asked were he could get a copy of the filing              
and if a summary of it is available.                                           
                                                                               
Number 0061                                                                    
                                                                               
ATTORNEY GENERAL BOTELHO replied that a copy would be available to             
the committee and there is a press release that summarizes the                 
case, very briefly.  He encouraged the committee to read the first             
10 to 15 pages of the complaint, as it gives a good overview of the            
issue.                                                                         
                                                                               
Number 0066                                                                    
                                                                               
SENATOR WILKEN thanked Attorney General Botelho for his efforts and            
hoped that the legislature will support him in the effort.  He                 
said to Attorney General Woods, "I take great comfort in you                   
talking about being a republican and you too have identified the               
fact that all of us support the choices of other people when they              
make the choices to smoke.  As an elected republican, ran on the               
issue of a tobacco tax and am very comfortable because I, like you,            
have identified that cost and I do not think I should participate              
in those choices.  So I thank you for reminding us and the public              
that indeed it does cross party lines."  He asked how he addressed             
the issue to children in Arizona.                                              
                                                                               
Number 0075                                                                    
                                                                               
ATTORNEY GENERAL WOODS replied that they have contracted a small               
public relations company and it appears their efforts are having an            
impact on teen-agers.  He continued that a lot of money has been               
spent on advertising, targeted to teen-agers, about the negative               
aspects of smoking.  He stated that hopefully merchandizing by                 
tobacco companies will soon be banned.  He stated that Arizona has             
a counter merchandizing campaign in effect and is successfully                 
selling it, redirecting the money into more anti-tobacco efforts.              
The key is having the advertising efforts on the teen-agers' level.            
He explained the "ash-kicker" which is a mobile home that is taken             
to various schools, that the students go through to see exhibits,              
such as a smokers lung's, heart and brain.  He stated that no                  
matter who the teen-ager is, no one walks out of there thinking                
they want their lungs to look like that.  He identified California             
as having positive results, in that their anti-smoking campaign has            
brought down the rate of teen-age smoking significantly.  Governor             
Wilson has just reinstated the campaign as it was suspended by the             
powers that be.  He advised that Alaska needs to actively have a               
counter market campaign because it does work.                                  
                                                                               
Number 0117                                                                    
                                                                               
SENATOR WILKEN asked if in Arizona the program is run out of the               
Department of Education or out of the Department of Health and                 
Social Services.                                                               
                                                                               
ATTORNEY GENERAL WOODS replied that it is out of the Department of             
Health Services.                                                               
                                                                               
Number 0119                                                                    
                                                                               
REPRESENTATIVE JOE GREEN asked, with 23 states having filed                    
lawsuits, if Alaska could take advantage of some of the briefs that            
have been filed.  He also asked if there is any thought that the               
remaining states, with the exception of North Carolina, will file              
litigation.                                                                    
                                                                               
Number 0123                                                                    
                                                                               
ATTORNEY GENERAL WOODS stated that the first state to sue was                  
Mississippi and it was quite a battle but he agreed that North                 
Carolina and Virginia would probably not be candidates for this.               
He stated that everyone is working together, anything in the                   
participating states will be shared with Alaska's attorney general.            
He stated that what happens in the first three lawsuits is going to            
be quite significant.  If the states lost it would not fare well,              
if the tobacco companies lost he was unsure as to what would                   
happen.  He asserted that appeals would be unlikely because if the             
judgements are in the amount of $10 billion, he raised the question            
of how would they would be able to bond the appeal.  He asserted               
that the tobacco industry does not have that kind of money.  He                
stated that there is a possibility of a movement towards                       
settlement.  He continued that if there was another way to solve               
this issue, without suing, he would be open to it but as it stands             
there is not and now it is a matter of the outcome of the first                
three lawsuits.                                                                
                                                                               
Number 0164                                                                    
                                                                               
REPRESENTATIVE GREEN asked if the litigation includes in the                   
damages, the court costs and if these costs would cause the tobacco            
companies to have to raise the price of their products.                        
                                                                               
Number 0171                                                                    
                                                                               
ATTORNEY GENERAL WOODS replied that domestic tobacco is important              
to them but their future is non-domestic tobacco.  He stated that              
they are doing very well in the rest of the world.  He stated that             
the situation in China is unbelievable.  He stated, however, he did            
believe that losing the lawsuits would cause them to have to find              
revenue.                                                                       
                                                                               
Number 0184                                                                    
                                                                               
ATTORNEY GENERAL BOTELHO stated that Alaska operates uniquely under            
the "English Rule", which entitles parties to both their costs and             
reasonable attorney fees.  He informed that part of the recovery               
that they will be seeking is the cost of the attorney fees.                    
                                                                               
Number 0190                                                                    
                                                                               
REPRESENTATIVE GREEN asked "You think those will be elevated to the            
supreme court or will we hear them or will these all be decided                
among the courts?"                                                             
                                                                               
Number 0191                                                                    
                                                                               
ATTORNEY GENERAL BOTELHO replied that there will be a lot of motion            
practice as there is right now and a lot of attempts to test the               
limits of the law, both before and after trial.                                
                                                                               
Number 0195                                                                    
                                                                               
REPRESENTATIVE BRIAN PORTER stated that Attorney General Botelho               
and himself have been discussing tort reform for some time and are             
continuing to do so.  He pointed out that the statute of repose has            
an exemption that deals with anyone who is committing fraud or                 
deceit and another exception that deals with anyone who is trying              
to hide facts.  He stated even if that statute was not in existence            
product liability is exempted anyway.  He stated that there is a               
new expanded proposal for punitive damages that seems to fit this              
bill perfectly.                                                                
                                                                               
REPRESENTATIVE PORTER stated that he has just finished reading                 
Runaway Jury and referred to the extra judicial activity that has              
been occurring on both sides.  He asked if Attorney General Woods              
has encountered any of those activities in his preparation or in               
previous trials.                                                               
                                                                               
Number  0223                                                                   
                                                                               
ATTORNEY GENERAL WOODS responded that he read the book, after the              
fact, but in Arizona he has not encountered anything relating to               
that.  He continued that the case is on the front line, in national            
news, and to do some of those things in the face of tremendous                 
scrutiny would be difficult.  He is concerned that any resolution              
of the lawsuits would have to go through congress where the tobacco            
companies have done very well in the past.  The leverage is that               
there could not be a resolution without the concurrence of the                 
suing attorneys general.  He stated that he would not concur with              
anything that does not fundamentally change the way the tobacco                
companies do business.                                                         
                                                                               
Number  0233                                                                   
                                                                               
CHAIRMAN BUNDE acknowledged the presence of Representative Pete                
Kelly.  He stated that there has been a poll in Alaska by a                    
respected pollster, that indicates 64 to 73 percent of the people              
support the tobacco tax depending on the form and the details of               
the form that the tax takes.  He asked Attorney General Woods what             
kinds of polls in Arizona have been performed.                                 
                                                                               
Number 0238                                                                    
                                                                               
ATTORNEY GENERAL WOODS stated that he can not remember all the                 
details but the tax passed and that is indicative of support of the            
tax, despite the industry's expensive campaign against it.  He                 
stated that they did see some "runaway jury" tactics in that                   
effort.  He stated that he thinks the public understands that the              
tobacco companies have not been straight forward and the users and             
the companies should be paying, not the average tax payer.  He                 
reiterated the effectiveness of their advertising campaigns to                 
youths.  He stated that selling the product to adults after the                
risks are identified is one thing, but selling it to youths has got            
to stop.                                                                       
                                                                               
Number 0268                                                                    
                                                                               
REPRESENTATIVE GREEN asked if there was a media or Hollywood                   
approach to suppress smoking on screen.                                        
                                                                               
Number  0284                                                                   
                                                                               
ATTORNEY GENERAL WOODS responded that there have been approaches               
but it ultimately has to be that the tobacco companies agree to                
stop that.  He stated that they have denied it happens, but product            
placement is a big deal and cigarette smoking in movies is being               
seen.                                                                          
                                                                               
Number 0301                                                                    
                                                                               
CHAIRMAN BUNDE thanked and applauded the efforts.  He stated that              
if there is any justice then the tobacco industry will not only be             
faced with a "runaway jury", but perhaps a "runaway legislature".              
                                                                               
ADJOURNMENT                                                                    
                                                                               
Number 0305                                                                    
                                                                               
CHAIRMAN BUNDE adjourned the joint meeting of the Senate/House                 
Health, Education and Social Services committees at 4:52 p.m.                  
                                                                               
                                                                               

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