SAN FRANCISCO (AP) _ A lawsuit by California counties accusing tobacco companies of fraud can go to trial, a federal judge ruled Wednesday.

Judge D. Lowell Jensen denied a dismissal motion. The suit is the first in the nation by local governments against tobacco companies to proceed to trial, San Francisco City Attorney Louise Renne said.

``I'm obviously pleased,'' said Renne, whose city-county government was joined in the lawsuit by 12 other counties. ``Local government is the first line of defense against the health effects of smoking.''

Dan Collins, a Los Angeles attorney who represents Philip Morris, Inc., noted that the judge dismissed some claims.

``He has narrowed the case and made clear that they are going to face a daunting task to prove their case,'' Collins said.

The lawsuit accuses tobacco companies and trade councils of deliberately hiding the fact that smoking is addictive. It also says the companies manipulated nicotine levels.

The result, Renne's spokesman Marc Slavin said, is $200 million in annual smoking-related costs incurred by California counties. Most of the cost arises in treating indigents at city hospitals and health insurance for public employees.

``They refused to disclose the information they had about the addictive nature of their product,'' Slavin said. ``If we had known what they knew when they knew it, we might have taken preventive actions.''

The defendants include Philip Morris, R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Co., B.A.T. Industries, Lorillard Tobacco Co., the Council for Tobacco Research USA Inc. and the Tobacco Institute.