The trustee of a trust fund for sick Florida smokers is prepared to settle some claims by the federal government for $18 million, freeing up the rest of the $580 million fund for smokers and their attorneys.
“We have reached an agreement in principle with the Department of Justice in full settlement of all claims for reimbursement of Medicare and Veterans Administration benefits received by beneficiaries” of the fund, according to fund trustee Miles McGrane.
When it comes to how the settlement money would be paid, McGrane offered two scenarios — a quick and easy method dividing the total by about 45,000 authorized claimants for a charge of $400 each or a belabored process of running their Social Security numbers through Medicare and VA databases to check for individual benefit payments.
Some claimants who have not received benefits under the two federal programs do not believe the settlement should be divided equally, but some sick, aging and widowed claimants think recipients should take the money and run.
The Engle Trust Fund is named for the lead plaintiff in a Miami class action that produced the fund.
Each claimant could expect to receive at least $4,000 in a second distribution of checks.
About $405 million already has gone out in checks of more than $9,000 to each claimant.
Many smoker attorneys believe the federal government’s right to a share of the fund is an either-or situation — either Medicare or the IRS can claim money but not both.
Smokers sued the nation’s five largest cigarette makers in 1994.
A Miami jury produced a record-breaking $145 billion punitive damage award, which was thrown out by the Florida Supreme Court.
To get the case to the state’s high court, three tobacco companies created the trust fund in 2001 to avoid a challenge to a new state law drastically lowering their appellate bond obligations.
The tobacco companies also agreed they would have no claim on the fund no matter what happened in the class action.
The reversal of the award and class certification left Miller to determine how to distribute the trust fund.
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