Tobacco companies on 15 June 2006 asked a federal judge in Boston to dismiss a lawsuit filed against them by the United Seniors Association claiming that the companies intentionally concealed the addictive nature of cigarettes and seeking to recover US$ 60 billion spent by Medicare on smoking-related illnesses.

The suit, which was filed in August 2005, is based on a recently strengthened provision of Medicare law that allows a plaintiff to sue on behalf of Medicare when the program pays medical expenses that another party was legally obligated to cover. The suit – which names Philip Morris USA, Lorillard Tobacco, the Liggett Group, and RJ Reynolds Tobacco and two of its subsidiaries as defendants – draws a link between nicotine addiction and smoking-related diseases such as lung cancer and emphysema. According to the suit, "The Medicare beneficiaries who have suffered from or are suffering from diseases attributable to smoking the defendants' cigarettes did not consent to being exposed to the addictive properties of the defendants' cigarettes." It argues that tobacco companies hid the addictive nature of their products and sought to enhance their addictiveness. The suit seeks to recover at least US$ 60 billion spent by Medicare on smoking-related illnesses, such as emphysema and lung cancer, since 1999.

The tobacco companies argue that United Seniors does not have legal grounds to sue because it is seeking to recover alleged losses by the federal government and is not claiming any injury of its own. In arguments, attorney Murray Garnick, who represents Philip Morris, said, "We're being treated like a liability insurer and there's been no finding of liability." He said similar claims in three other lawsuits have been dismissed by federal courts in other states. Charlie Jarvis, chair and CEO of United Seniors, said the Medicare provision – known as the Secondary Payer law – allows private citizens to recover government losses on behalf of taxpayers. "The statute provides for citizens to come in … and demand of wrongdoers that they pay the taxpayers for the abuse they have caused on the taxpayers' financially," Jarvis said.  (pi)