Settle the Federal Tobacco Lawsuit

July 18, 2001 • Commentary

The federal government’s war on tobacco seems to be going nowhere. First came Attorney General Ashcroft’s unexpected announcement that the Justice Department is considering a settlement of its litigation against the cigarette giants. Then, U.S. officials interceded on behalf of domestic tobacco companies to challenge discriminatory and protectionist foreign trade restrictions, despite emotional appeals and dubious scientific claims oozing from the World Health Organization.

If there was any doubt whether President Bush would squander tax dollars on the Justice Department’s suit, it was dispelled by the May 23 ruling from the U.S. Court of Appeals for the D.C. Circuit. A unanimous court — joining seven other appellate courts that have considered these issues — threw out tort and racketeering (RICO) claims by foreign governments and union health funds against cigarette makers. In the similar Justice Department suit, federal judge Gladys Kessler had dismissed all allegations except RICO. Now that the higher court has spoken, she’ll reject the rest of Justice’s case.

Nowadays, the use of RICO is a standard bullying tactic by plaintiffs’ attorneys, even though the act was supposed to be invoked against organized crime. This time, however, the Justice Department had to deal with an embarrassing admission, tucked away in the final sentence of the press release that announced its lawsuit: “There are no pending Criminal Division investigations of the tobacco industry.”

Two dozen prosecutors and FBI agents had conducted a five‐​year, multimillion‐​dollar inquiry — dissecting documents and listening to whistle‐​blowers and company scientists. The outcome: not one indictment of a tobacco company or executive.

Still, Attorney General Janet Reno contrived multibillion‐​dollar civil RICO charges against the industry — the same charges for which grand juries could not find probable cause.

Naturally, the Justice Department suit was cynically promoted as a way to protect our health. Evoking that same concern, the Clinton administration was an early and eager supporter of the World Health Organization’s Framework Convention on Tobacco Control. The WHO called for a laundry list of tobacco restrictions, many of which would undermine the sovereignty of its member states and impact U.S. domestic priorities, not only in the health arena, but also in tax, employment, agriculture, trade and legal policy.

Never mind that cigarette companies and tobacco growers were effectively excluded from the WHO negotiations. Never mind that regulation of commerce in a perfectly legal product would be controlled by an arm of the United Nations — the same body that considers the United States unfit to serve on its Human Rights Commission with the likes of Sudan, China and Libya. And never mind that the WHO has a history of misleading the public about the risks of second‐​hand smoke.

“Passive Smoking Does Cause Lung Cancer, Do Not Let Them Fool You.” That was the deceptive headline of a March 1998 press release from the WHO. Researchers examined lung cancer patients in seven European countries and found “no association between childhood exposure to environmental tobacco smoke and lung cancer risk.” For non‐​smoking adult workers and non‐​smoking spouses of smokers, the study concluded that “neither increased risk was statistically significant.” Contrast those conclusions with the blatant propaganda in the WHO’s press release.

In its draft treaty, the WHO proposed an end to duty‐​free sales, advertising restrictions, product content regulations, educational programs about the risks of cigarettes, a ban on public smoking, and much more. Tell that to Japan, where the largest tobacco shareholder is the government, or to China, where the state cigarette monopoly generates roughly 10 percent of the country’s tax revenues. The WHO would also “coordinate taxes for tobacco products at internationally determined minimum tax rates.” Northwestern University professor Michael Evans estimates that the retail price of cigarettes in the United States would soar to $8.10 per pack.

If that didn’t drive consumers to the black market, the WHO would ratchet up the price another few notches by employing bizarre tort theories — crafted by U.S. trial lawyers — that would impose retroactive liability, regardless of fault, on a single unpopular industry. That’s what we can expect from global governance — repetition on a worldwide scale of contemptible government‐​sponsored litigation designed to extort billions of dollars from manufacturers of a product that consumers elect to purchase despite the known risks.

Bravo if President Bush and Attorney General Ashcroft prefer the rule of law. They need to resist blandishments from international bureaucrats duped by billionaire trial lawyers, who would willingly recycle a fat part of their legal fees to support the administration’s political opponents.

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