Smokers sue over ‘health impact fee’

"MN Courts"

01/24/2006

Suit seeks return of 75 cents a pack

BY DAVID HAWLEY
Pioneer Press

Smokers who plunked down an extra 75 cents a pack for cigarettes in the months before a Ramsey County judge ruled the state’s “health impact fee” illegal ought to get their money back, according to the argument of a class-action lawsuit filed in Minneapolis on Monday.

Two Minneapolis law firms filed the suit on behalf of three Minnesota smokers and “all others similarly situated.”
Among the defendants named in the suit are the three big tobacco companies — R.J. Reynolds, Philip Morris and Lorillard — and the nine cigarette wholesalers that successfully challenged the fee in court last year.

The fee was ruled illegal Dec. 20 by Ramsey County District Judge Michael Fetsch, who said it violated a multibillion-dollar 1998 settlement between the state and the tobacco industry. As a result of the ruling, the state faces a possible requirement to repay about $100 million that had been collected between August and December.

The lawsuit filed Monday asks the court to establish a trust and a method of distributing the money to smokers instead of sending the money to the tobacco businesses.

“They’ve already collected that money from consumers and now they shouldn’t get a second windfall from the state,” said attorney Marshall H. Tanick. His firm, Mansfield, Tanick & Cohen, joined with the firm of Heins Mills & Olson in filing the lawsuit.

Attorneys for the defendants could not be reached for comment.

Tanick said the idea of refunding money to smokers is consistent with other consumer class-action lawsuits.

“The courts deal with these kind of situations frequently, such as when they order utility rates to be rolled back or when illegal taxes are collected,” Tanick said. “It may not be perfect, but we feel the tobacco companies and wholesalers shouldn’t get a windfall.”

In April, the Minnesota Supreme Court will consider an appeal by state attorneys, who asked the justices to reverse Fetsch’s ruling. State attorneys have also asked the Ramsey County judge to put his decision on hold so the state can continue to collect the cigarette fee while the appeal is proceeding.