http://www.phillynews.com/inquirer/99/Dec/22/front_page/TOBA22.htm
 

  Pa. expects $266 million soon from tobacco deal The state Supreme Court
    refused to review a cancer specialist's appeal that had delayed the first
                                           payment.
 
 

   Canada sues R.J. Reynolds Tobacco, alleges smuggling plot _The suit charges it set up a network of smugglers and offshore
companies to flood Canada with cheap smokes.

                                          By Ralph Vigoda
                                    INQUIRER STAFF WRITER

The last hurdle in Pennsylvania's settlement with the tobacco industry has been knocked down, and the state could receive a
check for roughly $266 million in the next few weeks.

The money represents the first part of the $11.3 billion that Pennsylvania is expected to receive over the next 25 years.

The billions will be put into the state's general fund while Gov. Ridge and legislators work out a spending plan. No specifics have
been released, but Ridge has said the money will be used to "make Pennsylvanians healthier."

Part of the money could have come in November, but Pennsylvania's share was held up while an appeal of the settlement,
initiated by Elkins Park cancer specialist Robert Sklaroff, worked its way through the courts.

On Friday, however, the state Supreme Court, in a one-sentence ruling, denied Sklaroff's petition to review a pair of lower-court
decisions that determined he had no legal standing for his objections.

With no other appeals outstanding, the funds should start coming in.

"We're hopeful that in the next few weeks, the whole process could be completed," said Sean Connolly, a spokesman for
Attorney General Mike Fisher. The second payment of $123.5 million is due Dec. 31, and Connolly said the scheduled first
payment of $142 million from November is likely to be tacked on.

Sklaroff said yesterday that he was surprised by the Supreme Court's ruling.

"I was hoping they would at least give me a chance to air the arguments," he said.

Another windfall of about $50 million is being split by two law firms that worked on the state's behalf: Buchanan Ingersoll of
Pittsburgh and Duane, Morris & Heckscher of Philadelphia. That money was negotiated and paid by the tobacco industry as a
separate item.

Fisher was one of eight state attorneys general who announced the master settlement in November 1998, in which the tobacco
industry agreed to pay $206 billion to 46 states; four states worked out private agreements. The settlement imposed bans on
certain types of tobacco advertising, such as billboards, and forced the companies to stop targeting children.

As part of the deal, though, no payments could be made until the settlement was approved by a majority of states, a threshold
that was reached last month. However, in some states, including New Jersey, the money remains in escrow while appeals
continue to be heard.

In Pennsylvania, several activists, including Sklaroff, protested the deal and sought to intervene in Philadelphia Common Pleas
Court. They complained that language in the final documents barred their rights to sue tobacco companies, and feared an "offset"
provision in the deal could subtract any money they won from the money the companies pay the state. In other words, should an
individual successfully sue the industry, any award could be deducted from the state's total.

Judge John W. Herron approved the settlement for Pennsylvania in January, and later denied the motion by Sklaroff and others.
Sklaroff, on his own, appealed and reappealed to Commonwealth Court, which turned him down both times, leaving it in the
hands of the state Supreme Court.

"It's unbelievable that the key problems I've been pushing, having to do with the immunity and offset clauses, have never been
reviewed by the court," he said yesterday. "I don't think they want the actual master's settlement to be reviewed."

Sklaroff said he did not believe the industry had kept its word, pointing to a recent cigarette advertisement he saw in a weekly
newspaper that he felt was directed at teens. He said he was considering his options, including asking the Supreme Court to
reconsider its decision. That, he concedes, is a long shot.

He could appeal to the U.S. Supreme Court, although he would need help for that.

"I've carried this thing very, very, very far. Some people say too far," he said. "But everyone's been holding my coat, and now it's
time for those who say they like what I'm doing to come out of the woodwork."

Meanwhile, Fisher has made several recommendations on how to spend the money, including increasing cancer research and
smoking-cessation programs.

"He has also recommended creating a separate fund to hold the tobacco recovery so it's not mixed in with other items in the
general fund," Connolly said. "If we can isolate it, we can ensure it's spent on health- related initiatives."

© 1998 Philadelphia Newspapers Inc.