globalink-testimony-appropriations-house-3-16-2000

ORAL TESTIMONY

CITY COUNCIL OF PHILADELPHIA
COMMITTEE ON PUBLIC HEALTH AND HUMAN SERVICES

HEARING REGARDING THE MASTER SETTLEMENT AGREEMENT

May 24, 2000
[11:00 AM]

By Robert B. Sklaroff, MD
Suite #130
50 East Township Line Road
Elkins Park, PA 19027-2253
(215) 663-8200
FAX: (215) 663-8388
rsklaroff@home.com
http://members.home.net/rsklaroff/homepage.html

I am Robert B. Sklaroff, MD, a Philadelphia physician and taxpayer. I speak on behalf of the FPD, the Federation of Physicians and Dentists, a constituent organization of the National Association of Hospital and Healthcare Employees. NUHHCE is a part of the American Federation of State, County and Municipal Employees, AFSCME, which is—in turn—a member of the AFL-CIO. NUHHCE has, in particular become involved with ensuring monies generated through the Master Settlement Agreement with the tobacco industry are properly appropriated. Speaking for the FPD, I ask that you ensure these funds are provided to Medicaid recipients and that they are focused on tobacco control. These two goals provided the foundation for the litigation that led to the availability of this money, and they are the proper recipients thereof, for the benefit of the public health.

I testified last year to this effect to the State House, Senate and Administration. Recently, I updated my views before the House Appropriations Committee. Each of these actions was based upon these two principles, but I minced no words when critiquing what others were attempting to do. Specifically, in 1999, I explained why hospitals and insurers should not be empowered to launder these funds; in 2000, I explained why cancer centers and venture capitalists should not be empowered to divert these funds into “black holes.”

During this testimony, I will update my analysis of the situation, both fiscal and legal. Issues related to disbursement of funds will be summarized from the county perspective, and my three legal cases related to the MSA will be presented from the city’s perspective. The policies related to fiscal matters are directly related to those which were adopted last year during the NUHHCE Convention, and the legal roots of my proposal are drawn from appended documentation that—I hope—will prompt you to support my pending lawsuits.

The theme of my state-level presentation has become a mantra among those in the tobacco control movement; the monies should be spent pursuant to the “Best Practices” structure that was recommended by the Centers for Disease Control and Prevention. Thus, ensuring they are channeled through local health departments will maximize the capacity for local programs with particular strengths to be sufficiently funded. Indeed, the dual-purposes of these hearings are: (1)—analyzing the gubernatorial proposal and (2)—exploring how it should be implemented in Philadelphia. Having served twice as Secretary of the Coalition for a Tobacco Free Pennsylvania (and now a board member), I’m convinced it is correct in its ongoing lobbying effort to seek devoting 25% of these funds to tobacco control. Having worked locally with Dr. Tsou for more than a decade, I’m convinced he will budget these funds wisely, collaborating with experienced local entities and people to ensure public policy is validated, implemented and monitored.

I will only ask that you maintain a healthy skepticism if/when local cancer centers seek your approval of their efforts to obtain unrestricted use of these monies, as was requested by leaders of the University of Pittsburgh Medical Center (its Dean and the head of its Cancer Center) at the two House Appropriations Committee Hearings cited previously.

Illustrative of this concern will be quotations from the transcript of the remarks delivered by Dr. Ronald Herberman. I respect his work and that of the institutions he represents, but I dispute how he disclaims—overtly and covertly—the potency of tobacco control. On page 68, he was quoted as having said, “Research performed at our institutions and many others have documented that people who stopped smoking five, ten, 15 or even 20 years ago are still at significantly increased risk of developing cancer.” To the contrary, most epidemiologists have concluded that the excess risk of developing the worse tumor, lung cancer, diminishes almost to baseline within 10-15 years following cessation. Thus, one must not be negative or defeatist when encouraging people stop smoking.

On page 70, he was quoted as having advised that the Commonwealth pursue grants through the Legacy Foundation rather than funding any tobacco counter-advertising, and he expounded on this recommendation during post-hearing discussions with the media. That it is anticipated the Legacy Foundation will seek matching funds from the states and that constraints thereupon—exerted through the tobacco industry—have already limited its efficacy, these are concerns that illustrate why state government has a role in planning such programs. And the efficacy of such programs in California, Massachusetts, Florida and Oregon illustrates why his denial of their potential impact is quite disheartening.

Other examples of his desire to divert these funds to the cancer centers—to be converted to non-restricted grants—abound, but the most striking comments in the remainder of his remarks had to do with his emphasis on research at the expense of grass roots programs. On page 86, he said, “Although there have been a few programs that have been shown to be effective, the large majority of them, in my opinion and those of a number of our people in our institute who are experts in behavioral control of different types of diseases and behaviors, is that a lot of this effort is a waste. It doesn’t work very well.” And on page 79, he said, “We don’t believe that the state of the art, the current billboards or media campaigns and so forth, are nearly close enough to address some of the problems.”
Obviously, it is the task of government to fund programs that work, rather than to decide to fund no programs because some of them don’t work. Academicians and practitioners agree that prevention is preferable to treating diseases that cause disability and death.

Therefore, I will now focus upon the legal issues that you must confront, now that the tobacco industry has released monies through the MSA. You need not be concerned with the fact that I have sued Philip Morris Incorporated for having financed the billboards sponsored by Wawa Food Markets. You need only know that I sued the attorney general for having allowed this pattern of behavior to occur, plus having allowed youth marketing to be unchallenged in Pennsylvania. The latter was identified last year and dutifully reported by myself to General Fisher, but he has remained inert, even as a California colleague is now pursuing R. J. Reynolds for comparable mail-order activities, and even as the National Association of Attorneys General is now pursuing the tobacco industry for having expanding advertising in magazines read by youths. Both of these behaviors were predicted by myself and Messrs. Barg and Godshall, from whom you have heard, through an essay we jointly-composed that was published 1-1/2 years ago in both the Inquirer and the Pittsburgh Post-Gazette. That the attorney general’s colleagues are now belatedly discovering the disingenuous behavior of Big Tobacco is somewhat reassuring, but that he has forced me to prod him to enjoin such reprehensible conduct is quite sad.

I would certainly welcome whatever support the City of Philadelphia might lend to these ongoing projects, as they sit before the Superior Court and Commonwealth Court. Yet, pivotal at this time—with a finite time-frame—is the necessity for city government to be aware of its final opportunity to weigh-in with regard to the pendancy of the MSA before the United States Supreme Court. My Writ of Certiorari was recently docketed, and now less than 30 (thirty) days are left before amicus curiae briefs can no longer be filed.

Available upon request—from both myself and others in government—are copies of the CDC Guidelines and the transcripts of quoted remarks. Appended here—and validated elsewhere—are all key documents related to the legal issues that I will now summarize. Please consult my Web-Site for further information regarding my filings; the complete text of each document—including my Supreme Court Writ of Certiorari and addendum—has been uploaded, and I would be more than happy to remit word-processed print-outs, were such to be requested. I have discussed these issues with former-Mayor Rendell, but he chose not to implement any formal legal action during the latter months of his tenure.

Appended are the 1998 op-ed piece published both in the Inquirer and the Post-Gazette, my analysis published in the journal of the Philadelphia County Medical Society, and my op-ed piece published this past weekend in both the Wilkes Barre Times-Leader and the Allentown Morning Call. Also, appended are a letter sent by former-Mayor Rendell to Attorney General Fisher in December 1998, an amicus curiae brief filed on behalf of the City of Philadelphia with the Court of Common Pleas in January 1999, and a letter I wrote to former-Mayor Rendell in August 1999. The essays elucidate what transpired, and the legal documents illustrate the background for the City of Philadelphia’s posture.

My goal is to transform my understanding thereof, into affirmative action. . .ASAP.
The letter from former-Mayor Rendell to Attorney General Fisher requested clarification of some of the terms of the MSA because “several provisions appear in the draft version that the City Law Department has reviewed that could impact significantly on the rights and interests of local government and their citizens.” It continues:

Foremost among the City’s concerns is the extent to which the Agreement purports to extinguish the rights of local governments to assert claims for monetary and injunctive relief against the tobacco industry defendants. As you know, under well-settled Pennsylvania law, the Commonwealth cannot extinguish the legal rights of Pennsylvania local governments to seek redress for harms and losses caused by tobacco products without formal legislative action. In addition, the draft Agreement purports to release the tobacco industry defendants from liability for damages for future conduct, acts or omissions related to the use of or exposure to tobacco products. If the Agreement binds local governments to any degree, it is problematic to the City that [the] Agreement could be interpreted as insulating the tobacco industry from liability for future misconduct. The City of Philadelphia has a keen interest in retaining its traditional common law and statutory rights of action against potential tobacco industry defendants for tobacco-related losses and expenses incurred by the City. [emphasis in the original]

The amicus curiae filing provided the structure for the letter that I wrote last August. Mr. Rendell and I held brief exchanges on the day we delivered testimony before three Administration Cabinet officials [Ms. Diane Koken (Insurance), Ms. Feather Houstoun (Welfare) and Mr. Gary Gurian (Health)] and on the evening he spoke at the first anniversary celebration of Tenet’s purchase of the hospital-group from AHERF. Also, conversations have been held with his personal staff and with the City Solicitor’s Office. I will update the situation by following the same outline as was employed in both memos.

1. The participation of the City of Philadelphia as amicus curiae herein is proper in this Court.

This was undisputed then, and I feel it is undisputed now (despite the fact that Allegheny County did not sustain its appeal through the appellate courts). The questions presciently raised in the initial (1998) letter remain core concerns, both locally and nationally.

2. Intervention by the City pursuant to Pa.R.C.P. 2326 et seq. is improper and unnecessary.

The basis for this conclusion was that the City felt the defendants were obligated “to file a petition for interpleader to bring the City of Philadelphia into the case as a party. The defendants’ failure to file such a petition, coupled with the excerpts of the MSA set forth below, and the applicable law, conclusively establishes that the City’s claims against the defendants are not being compromised by the actions of the Attorney General in releasing only those claims which are within the purview of his limited authority.”
This tortured logic assumed that the tobacco industry would be obliged to involve the City in the process of disbursing these funds if the tobacco industry was to be able to stop any future lawsuit by the City by citing retroactively that it had been bound by the MSA. Indeed, applying a reductio ad absurdum argument to a projection that never transpired, such a filing would have to have been written to encompass all governmental subunits. Regardless, inasmuch as this never occurred, the City is obligated to reassess its posture.

Stated more simply, the absence of an “interpleader” filing does not bind the tobacco industry to any such interpretation of the MSA. Indeed, the tobacco industry has invoked the MSA to block at least one lawsuit (mine) despite the absence of its having previously filed an “interpleader” to have invited anti-tobacco activists such as myself to become involved in a Court-sponsored decision-making process regarding the disbursement of MSA-generated monies. Similarly, the City cannot assume that the absence of a prior “interpleader” filing will protect it against a tobacco industry effort to block future suits.

3. The City of Philadelphia is not a “Releasing Party” as defined by the MSA.

This point has yet to be stipulated by the Attorney General, and the absence of any such clarification is central to the instant appeal to the United States Supreme Court.

A. The Attorney General does not have authority to release claims on behalf of the City.

The Attorney General has verbally reassured the Court that this is the case, but he also asserted he would vigorously enforce the MSA, which he most-definitely has not done. Furthermore, absent a stipulation, future Attorneys General could decide otherwise, particularly because the Offset Clause in the MSA would prompt the Commonwealth to assert its self-interest by precluding diversion of allocated payments to private litigants.

The amicus curiae brief quoted the enabling statute as follows: “(e) Limitations in civil litigations.—The Attorney General shall not agree to the entry of a consent decree in any actions against the Commonwealth or any agency without the approval of the Governor and notice to the General Assembly through the offices of the Secretary of the Senate and Chief Clerk of the House of Representatives.” It then quoted the key rule as mandating: “(b) An action shall be brought by or against a political subdivision in its name.” It then launches into another set of tortured logic, thusly: “In order to prosecute an action to affect a political subdivision, such an action must be filed ‘in its name.’ It also follows that the Attorney General, in an action in which only the Commonwealth is a party, cannot impair any rights the City of Philadelphia may have against the ‘Released Parties’ since such actions must name the said political subdivisions. The statute that grants powers to the Attorney General specifically limits his power in “civil cases” or for the ‘collection of debts’ to those matters which are brought by the specifically enumerated entities set forth in the statute (either the Commonwealth of one of its agencies). The Attorney General is therefore not authorized to bring actions on behalf of ‘political subdivisions,’ and thus lacks the legal authority to release claims by political subdivisions.” Thus does the City assume it is not bound by the MSA.
B. The MSA has already contemplated the position of the City of Philadelphia.

It is assumed that the Attorney General lacks the ability to immunize the tobacco industry against being vulnerable to future litigation. That this view has not been sustained by the tobacco industry (nor should it have any reason to do so) bespeaks the inability to assume that it is correct. Therefore, the City should want to seek a contemporaneous stipulation that ensures the City will be able to seek redress, were the tobacco industry to misbehave.

4. The Court should require the parties hereto to clarify their position on the scope of the release.

This has been the heart of my litigation during its entire lifetime, but the settling parties have constantly avoided issuing any necessary stipulation. The urgent need to do so is illustrated by the following well-articulated averment: “While the City takes the position herein that although the parties’ answers to this [immunity] question in this case will have no impact upon the rights of the City, the City nevertheless urges this Court, in the interest of the public good, to require the parties to set forth on the record their position at this time. As stated by counsel for the Hospitals at oral argument, the preclusive effect of the MSA is essentially a matter of contractual interpretation, and surely this Court is empowered to demand that the parties to the Agreement clarify their respective interpretations for the record. While it is, perhaps, unrealistic to expect that the parties will stipulate to an unequivocal answer to this question or, indeed, that they will even agree on an answer, they can at least be required to identify the sections of the MSA, and the applicable law, which they believe to be controlling. This Court, which presently has jurisdiction over the parties to the Agreement, is in a unique position to lay to rest, or at least to clarify, an important issue of concern to numerous potential anti-tobacco litigants throughout Pennsylvania.”

Therefore, in summary, I would advise that the City implement the CDC’s Guidelines when disbursing MSA-generated monies. And I would ask that the City urgently file an amicus curiae brief with the United States Supreme Court to ensure the Court, at the very least, “require the parties hereto to clarify their position on the scope of the release.” Naturally, such clarification is needed also with regard to other clauses (e.g., offset), but neither can be achieved without intervention on the level of the U.S. Supreme Court. My appeal is the last and only remaining challenge to the MSA’s non-severable clauses, and the City will lose its opportunity to file such a document within one more month. Thus, if the City contemplates it will ever wish to sue the tobacco industry, it will want prospectively to acquire empowerment to do so, and the only legal mechanism through which this can occur is via issuance of a clarification of the MSA by the settling parties.

I thank you for your attention, and would be happy to elucidate these issues at any time. Appended, also, is a copy of my Writ of Certiorari; it is also available on my Web-Site, along with hyperlinks to all Opinions and Orders related thereto.