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Company Press Release

Court Dismisses Class Action Lawsuits Against Blue Cross Over Tobacco Settlement Proceeds

Blue Cross Preparing Plan of Action to Submit to Commerce Department

ST. PAUL, Minn., Sept. 14 /PRNewswire/ -- Blue Cross and Blue Shield of Minnesota announced today it has prevailed in district court in defending against class-action lawsuits filed against its tobacco settlement proceeds and moves closer to its goal of using the proceeds to improve the health of Blue Cross members and all Minnesotans.

Dakota County District Judge Edward Lynch has issued an order dismissing class-action lawsuits brought by 17 different law firms that claimed Blue Cross' settlement proceeds should be paid directly to Blue Cross medical policy subscribers. The lawsuits were filed shortly after Blue Cross announced its historic settlement with tobacco companies on May 8 of this year. Blue Cross was the first, and until 1998 the only, private-sector health plan in the country to sue the tobacco companies and is the only private-sector health plan to have recovered damages it claimed for treatment costs of smoking-related illness.

``The judge's order to dismiss confirms our belief that the lawsuits were without merit,'' said Andy Czajkowski, Blue Cross and Blue Shield of Minnesota CEO. ``The court's decision allows us to concentrate our efforts on a plan of action to demonstrate how Blue Cross intends to invest the proceeds to benefit our members and all Minnesotans.''

Blue Cross intends to use the $469 million from the tobacco settlement to help fulfill its unique charter, ``to promote a wider, more economical and timely availability of ... health services for the people of Minnesota.''

``Our intention is to use the tobacco settlement proceeds to reduce tobacco use and other health risks among Blue Cross members,'' Czajkowski said. ``These health improvement programs will benefit not only our members, but all Minnesotans, by improving the quality of their health, and their lives. By investing in health, Blue Cross will create a legacy from the tobacco proceeds that will benefit our members and the public today, and for generations to come.''

Blue Cross will submit its tobacco settlement proceeds plan of action to the Commerce Commissioner, who will review the plan under the general regulatory jurisdiction the Commerce Department has over health plans in Minnesota.

Blue Cross and Blue Shield of Minnesota covers more than 1.8 million members through its health plans or plans administered by its affiliated companies. Blue Cross is Minnesota's oldest and largest health plan and began operations in 1933. Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association, headquartered in Chicago.

SOURCE: Blue Cross and Blue Shield of Minnesota