Trust fund for smoking claims reaches settlement with U.S.

BY PATRICK DANNER

The trustee of a $580 million trust fund created to compensate Florida smokers or their survivors for smoking-related illnesses has reached a settlement over claims made against the fund by the federal government.

Miles A. McGrane III, the Miami trustee for the Engle Trust Fund, filed court papers Wednesday saying the fund has agreed to pay $18 million to the Justice Deparment to settle claims for reimbursement of Medicare and Veterans Administration benefits received by beneficiaries of the fund. The settlement still requires approval of a Miami-Dade Circuit Court judge.

If the court approves the settlement, it must decide how the $18 million will be paid. The first option would be to take money ''off the top'' of the fund, which would mean that each of the 45,000 members of the fund would pay about $400 each. The other option would be to identify those smokers who received Medicare or VA benefits pay and allocate payments to the Justice Department.

Members of the fund so far received $9,000 each and are slated to receive a second check of at least $4,000.

The trust fund was created out of a class-action lawsuit brought 14 years ago against five tobacco companies by Miami Beach pediatrician Howard Engle.

A Miami-Dade jury in 2003 awarded smokers a record $145 billion, a verdict later overturned but not before the tobacco companies agreed to put up $700 million to benefit smokers even if plaintiffs lost the case. The fund grew to about $800 million with interest, but about $218 million was awarded to attorneys who spearheaded the case.