Nevada battles claims against tobacco fund

Friday, Jan. 5, 2001 | 10:34 a.m.

CARSON CITY -- Nevada has joined 27 other states in filing a legal brief to block an appeal by a group of Vermont recipients of Medicaid who claim they are entitled to part of the settlement from the tobacco funds. A similar suit has been filed in Nevada but no decision has been made.

A Vermont court dismissed the claim, but the Medicaid recipients, who claim they are entitled to some of the money from the agreement between the states and the tobacco industry, have appealed.

"The states paid all the medical expenses of these individuals who are now asking for part of the tobacco settlement," Nevada Attorney General Frankie Sue Del Papa said.

She said she is working with other attorneys general to make sure the states decide how to spend the money.

Del Papa said she is supporting Vermont because it would assure that Nevada makes the decisions on where the money goes.

In Nevada, about 40 percent of the tobacco fund is allocated to the Millennium Scholarship program and the rest is going to health care projects.

Del Papa said 21 states have been sued by groups of Medicaid recipients, but the actions have been dismissed in 13 of them.

Nevada has filed a motion in U.S. District Court in Reno to dismiss the suit by Medicaid patients in this state. U.S. District Judge Howard McKibben is considering a motion but has not ruled.

Del Papa also said Nevada has become the first state to obtain a judgment against a cigarette manufacturer that was not part of the master tobacco settlement.

District Judge Jerry Polaha of Reno entered the judgment against NTD Inc. of Las Vegas. He imposed a civil penalty of $64,687 and ordered the firm to deposit $21,562 into an escrow account.

Del Papa said cigarette manufacturers are either required to sign the master agreement or pay one penny per cigarette sold within the state into an escrow account. The money in the account remains the property of the cigarette company. But it could be used to pay any health care related judgments in future suits against the company.

Del Papa said one purpose of the law is to ensure that cigarette companies declining to sign the master agreement do not gain a competitive advantage by being able to offer lower cost cigarettes to the public.