I’ve posted earlier stories about as part of a Justice Department RICO (a federal racketeering law usually used against organized crime) lawsuit, Big Tobacco was ordered some time ago to come up with “corrective statements,” ie, full-age newspaper ads admitting that tobacco companies have lied and covered up about the dangers of smoking.
Well, those full-page ads have yet to show up, partly because Big Tobacco is wrangling big time with the courts about what it has to say in its “corrective” ads. This has actually been dragged out now for SEVEN years. (And that’s SEVEN years after all the appeals over the original order were exhausted). The final order was issued in May 2015, and still no ads.
The wording of the ads has been directed by federal court judge Gladys Kessler (District of Columbia). The ads are supposed to hit on five major points:
* The adverse health effects of smoking;
* The addictiveness of smoking and nicotine;
* The lack of any significant health benefit from smoking “low tar” or “light” cigarettes;
* The manufacturers’ manipulation of cigarette design to ensure optimum nicotine delivery;
* The dangers of exposure to secondhand smoke.
But the tobacco companies appealed. Apparently, the fifth total appeal filed by Big Tobacco in this case. Big Tobacco continues to try and weasel its way out of these corrective ads and Kessler is getting fed up:
“That is ridiculous — a waste of precious time, energy, and money for all concerned — and a loss of information for the public,” writes Kessler [PDF]. “The Court has no intention of following that path, although it is obvious that Defendants are, once again, attempting to stall any final outcome to this long-standing litigation.”
In her order, Kessler notes that the revision offered by the government and its allied public health groups should suffice, as it simply shortens the disputed preamble to “A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement…”
“The newly crafted preambles do not in any way send a message to the public that Defendants deceived them in the past,” explains the judge, “nor that Defendants are being punished for their previous conduct.”
Apparently, one of the things the tobacco companies are asking for is having their corporate names removed from the corrective statement (By the way, they are ALTRIA, RJ REYNOLDS and BRITISH-AMERICAN TOBACCO)
ALTRIA, RJ REYNOLDS, BRITISH-AMERICAN TOBACCO. First Amendment, bitches!
They’re also fighting over ticky-tack language issues, such as not wanting the word “ordered” in the ad, and wanting that word replaced with “determined.”
From the Consumerist story:
A lawyer for one of the firms representing the public health groups involved in the case tells theNational Law Journal that everyone is onto the tobacco companies’ tactics.
“I think it’s safe to say that [Kessler] believes that the defendants are trying to delay the issuance of the corrective statements and that’s certainly the concern that my clients have had for many, many years,” he explains, “that the defendants have done and continue to do whatever they can to delay the day of reckoning.”
An interesting story about a report put out by California State University, San Francisco (co-authored by anti-tobacco advocate Stanton Glantz) warning that legalized marijuana could become the next “Big Tobacco” because it would create a massive, wealthy and politically powerful economic behemoth.
Here is a copy of the 66-page report. , In reading the Sacramento Bee article about it, Glantz and the report are arguing that with legalized pot and the billions of revenue it would create would also create a very powerful marijuana lobby. A lobby that would likely throw its weight around politically and could ultimately become a subsidiary of the tobacco industry, possibly to the detriment of public health policy.
From the article:
“Evidence from tobacco and alcohol control demonstrates that without a strong public health framework, a wealthy and politically powerful marijuana industry will develop and use its political clout to manipulate regulatory frameworks and thwart public health efforts to reduce use and profits,” the report states.
Glantz, in an interview added:
“The goal (should be) to legalize it so that nobody gets thrown in jail, but create a legal product that nobody wants,” he said.
He worries that a new marijuana industry would spend large sums of money to curry favor with lawmakers.
“I think a corporate takeover of the market … is very, very hard to stop,” he said, adding, “They are already a potent lobbyist in California.”
I’m not necessarily agreeing with the report, and honestly, I found parts of it a bit alarmist. But, the concerns about marijuana monopolies and Big Tobacco involvement in the industry are valid. I have posted other articles about Big Tobacco eyeing the legalization of pot very carefully, with the very real potential of today’s tobacco companies swooping in and taking over the legalized pot industry. Keep in mind, this has already pretty much happened with e-cigarettes. RJ Reynolds bought out the No. 1 e-cigarette brand — Blu E-cigarettes, which controls about 40 percent of the E-cigarette market — and there are a number of other e-cig brands owned by tobacco companies. Big Tobacco isn’t in competition with e-cigs, not anymore. When in doubt, buy ’em out.
Tobacco is a dying product, especially in the West, while both e-cigarettes and marijuana are booming. Pot is likely to boom even more as it’s legalized in more states and Canada. If California legalizes pot in November, that state alone probably represents over 10 percent of the pot market in the U.S. Now tack onto that Washington, Oregon, Alaska, Colorado and perhaps a few other states (legalization seems likely in Nevada, soon), plus another 35 million people in Canada if Trudeau goes through with his promise to legalize pot nationwide. I just have to imagine the people at RJ Reynolds, British American Tobacco and Philip Morris are absolutely drooling over the prospects of getting into that market. That’s over 90 million people in North America living under legalized pot laws as early as 2017.
One of the things I like about one of the California pot legalization measures is that it would allow people to legally grow up to six plants. I haven’t taken the time to research how many plants a person could legally grow in Washington, Oregon or Colorado, but I think it’s important that if pot is legalized that people still be allowed to grow a small amount of their own pot, so it doesn’t quickly and completely become a corporate-run industry. You want to keep RJ Reynolds and Philip Morris or some other monopoly out of the pot business? Let people grow their own pot, and take other steps to prohibit any corporation from getting more than a certain market share and make sure it stays in the hands of small businesspeople.
And there is a paranoid X-Files side of me that is convinced there are people within Big Tobacco that have thought about, dreamed about, maybe even started doing the work on … how to add nicotine to marijuana. Seriously, think about it. Marijuana with arguably the most addictive substance on the planet added. It would be like Spice in “Dune.”
The report states that pot should be regulated much like tobacco. Instead, the California proposal calls for regulations similar to alcohol. From the article:
One of the (measure’s) proponents, Donald Lyman, a retired physician and a former state public health official, said the notion that marijuana must be regulated exactly like tobacco “represents an awkward minority opinion not widely shared within the public health community.”
I have to agree with Lyman here. For one, there’s some actual medical benefits to pot. I think the medical benefits of pot gets overstated by some pot proponents, but there’s legitimate medical uses as a painkiller and to control seizures. There is NO legitimate medical use for tobacco. While it can become habit-forming for some people, marijuana also is not physically addictive anything like tobacco, nor is there any evidence that marijuana causes lung cancer or even COPD. You simply can’t treat pot and tobacco like the same product. Probably the most similar product to pot would be beer or wine (and yes, there are rumours that not only is Big Tobacco drooling over legalized pot, the beer industry has interest in getting into the pot business as well).
One of the California measures would prohibit monopolies and large-scale pot licences for five years. Co-author of the report Rachel Barry, says five years isn’t enough. From the article:
“I am thinking more in 20 years what the industry will evolve into, not five years,” Barry said. “And that’s something we should be doing with the regulations.”
One marijuana legalization proponent sees some validity in some of the report’s concerns, but said that most of these issues are being dealt with in the language of the California measures.
From the article:
Abdi Soltani, executive director of the ACLU of Northern California and a member of the (Calif. Lt. Gov. Gavin) Newsom commission’s steering committee, said he agrees with some of the concerns raised in the report but ultimately believes the initiative protects the public.
“My middle school child will not walk into a corner store where tobacco and alcohol are marketed and see marijuana for sale,” Soltani said.
A very compelling read from Think Progress about how the gun industry watched regulators and the legal justice system cratered Big Tobacco, prompting the gun industry to take steps to make sure the same thing couldn’t happen to it.
Big Tobacco, while still vastly wealthy, is not nearly the political powerhouse that it was 25 years ago. The adult smoking rate has dropped from 42 percent to 17 percent in the U.S. over the past 50 years, smoking advertising has been seriously curtailed and few workplaces allow smoking anymore. Two things helped destroy Big Tobacco’s political influence — regulations and lawsuits. Big Tobacco fought, which minimal success (some, but not much), smoking bans, first on airplanes (a battle the industry ultimately lost) and then in restaurants and then in bars. Now, more than 30 states have total smoking bans, another handful of states have smoking bans in restaurants and even in those states without smoking bans, most major cities have banned smoking in bars and restaurants.
In the courtrooms, Big Tobacco really got spanked. The industry won lawsuit after lawsuit for years until through the discovery process in many of these lawsuits, internal industry documents were released showing that Big Tobacco absolutely knew since the 1950s that cigarettes caused cancer and were physically addictive and showed that for decades, the industry has been trying to market to teenagers.
Because of the release of these documents, Big Tobacco actually started losing lawsuits. A bunch of state’s attorneys general filed suit because of the costs of smoking to their Medicaid programs, and rather than fight these lawsuits and potentially lose, Big Tobacco agreed to the $280 billion Master Settlement agreement in 1998. Today, the tobacco industry continues to get nailed with lawsuits, a lot of them in Florida, costing them millions in legal fees and eventual settlements (though the industry is well-known for dragging these settlements out for years through appeals, people have received multi-million jury settlements.).
The gun industry sat back and watched and took action to make sure the same thing couldn’t happen to it. The gun industry was facing similar types of class-action lawsuits which eventually crippled Big Tobacco politically.
From the Think Progress article:
Lisa Graves, executive director of the Center for Media and Democracy, told ThinkProgress that the NRA was “very afraid of the parallel between gun litigation and tobacco litigation, so it preempted that.” Through the American Legislative Exchange Council (ALEC) — the secretive free-market lobbying group that brings together conservative politicians and major corporate interests including the tobacco and gun lobbies — it pushed a “Defense of Free Market and Public Safety Resolution” to hurt Smith & Wesson’s ability to sell to law enforcement.
“ALEC helped to try to punish the one component of the industry that agreed to these measures,” Graves recalled, discouraging local police “from buying guns from Smith & Wesson — for daring to go along with safety [measures] designed to keep kids safe.”
When the NRA’s preferred candidate, George W. Bush, was inaugurated in January 2001, his new HUD secretary Mel Martinez quickly ended the department’s involvement in the lawsuits (the NRA strongly endorsed him three years later in his campaign for U.S. Senate in Florida). ALEC and the NRA worked at the same time to successfully encourage many states to prohibit local lawsuits against the gun and ammo industries.
Next, the NRA and its Congressional allies set about eliminating the threat of state or local action, once and for all. In 2005, Bush signed the Protection of Lawful Commerce in Arms Act, which effectively shielded the gun industry from legal liability when their products are used in criminal and unlawful activities.
So, the gun industry made sure to get legislation passed to make sure something like the 1998 Master Settlement Agreement or the Engle case in Florida could ever happen to it.
From the article:
A decade later, the law has been used to stop virtually all efforts to hold gun companies liable in court.
“I think that, had the really powerful litigation run its course, we would have had the same success on guns” as on tobacco, Graves said. “That tobacco litigation was historic… They were able to make some substantial progress and change the future — having information out there, showing how evilly the tobacco companies were behaving. So there was an effort to stop that for guns, which have huge number of deaths and injuries. We haven’t seen the same progress as you would have had these been allowed to go forward. ”
But the industry didn’t stop there. The gun industry also through legislation clamped down on research into gun violence. It was scientific research done by the Centers for Disease Control that helped break Big Tobacco’s power.
From the article:
Thanks to a 1996 law, pushed by the NRA and one of its life members, then-Rep. Jay Dickey (R-AR), the federal government does not do the same kind of in-depth research on gun violence and its prevention. The “Dickey Amendment” stipulated that no funds “made available for injury prevention and control at the Centers for Disease Control and Prevention may be used to advocate or promote gun control.” A 2012 appropriations law put similar restrictions on NIH funding for that year.
Though the NRA claims this was not its intent, the effect of the amendment was not simply that the CDC did not advocate for gun control, it stopped the Centers from doing almost any research on gun violence. And, according to a 2011 New York Times story, before the few remaining firearm-related studies funded by the CDC get published, the NRA gets a heads up “as a courtesy.”
Ted Alcorn, research director at Everytown for Gun Safety, told ThinkProgress in an email that his organization’s research has found that “after the gun lobby’s attacks on the Centers for Disease Control in the mid-1990s, the agency’s funding for public health research on gun violence fell more than 95 percent and publications in the field dried up.” Though groups like Everytown have worked to fill the gap, the lack of federal research has made progress on gun safety even more challenging.
The article also points out that while most doctors will talk to patients about their smoking, laws are being passed (Florida) prohibiting doctors from asking patients if they have a gun in the house. And it points out that while the majority of states and vast majority of cities have smoking bans, more and more states are passing laws allowing the open carrying of guns. Really, there’s never been a better time than now to be a gun owner in the U.S.
Thanks, unfortunately, to the lessons learned by the gun industry while watching the gutting of the tobacco industry’s political power.
I wrote about this a few weeks ago, but here is another article on the same subject from USA Today — the fear that Big Tobacco will take over the legal marijuana business.
Most legal marijuana businesses in Colorado, Washington and Oregon are small mom-and-pop operations. And they are heavily regulated as states are being careful how legal pot is being sold and distributed.
However, it’s already obvious that it must be terribly tempting for Big Tobacco to jump into the burgeoning multi-billion-dollar industry. Its current product — tobacco — is seeing diminishing revenues, at least in the West, thanks to higher taxes, drastically lower smoking rates (from close to 30 percent about 20 years ago to about 18 percent today), the popularity of e-cigs, smoking bans and lots of other factors.
Hah, OK, this quote from the USA Today article cracked me up:
“I think there’s a ton of paranoia that they’re buying up warehouses and signing secret deals,” said Chris Walsh, the editor of Marijuana Business Daily, an industry publication.
However, noted anti-smoking crusader Stanton Glantz recently co-authored a paper that the tobacco industry has had an interest in the marijuana market since the 1970s. And USA Today was nice enough to provide a link to the paper.
According to the paper, published in Milbank Quarterly:
“In many ways, the marijuana market of 2014 resembles the tobacco market before 1880, before cigarettes were mass produced using mechanization and marketed using national brands and modern mass media. Legalizing marijuana opens the market to major corporations, including tobacco companies, which have the financial resources, product design technology to optimize puff-by-puff delivery of a psychoactive drug (nicotine), marketing muscle, and political clout to transform the marijuana market.”
Both Altria and RJ Reynolds deny they are looking to get involved in the marijuana business, but we we know the tobacco industry’s track record for honesty, right? Hah! ——>
The head of a company that makes hydroponic equipment for marijuana growing agrees that it appears inevitable that Big Tobacco, and possibly the alcohol industry, will try to muscle in on marijuana as more states legalize it.
“We’re a mass-produced society, from the food we eat to the television we watch,” said President and CEO Derek Peterson of Terra Tech, “ultimately, big alcohol or big tobacco is going to come into this space. I just can’t imagine that won’t happen.”
And with the tobacco industry’s involvement, look for many of the same tricks tobacco used to market cigarettes to kids to market marijuana to underaged users. (Yeah, I know, like marijuana really needs to be marketed to teenagers, but you get my drift. E-cig companies have been incredibly — and I mean incredibly — brazen in marketing e-cigs to kids, look for Joe “Rasta” Camel to make a comeback if Big Tobacco gets involved in pot.).
I’m glad someone did an article on this (NBC News) because frankly, this is something I’ve been wondering about myself for the past couple of years.
With a total of four states now with legal marijuana (Colorado, Washington, Oregon and Alaska), might the day come when pot sales will be controlled by huge corporations, perhaps even a single massive mega-corporation?
Boy, there are dollars to be made there. Billions upon billions of them. Too much profit to keep Big Business out for long. It’s legal now for about 18 million people in the U.S. — and I guarantee that number will continue to escalate, maybe a LOT and maybe soon. California might be next in line to legalize pot.
According to NBC:
“My concern is the Marlboro-ization or Budweiser-ization of marijuana,” said Ethan Nadelmann, executive director of the Drug Policy Alliance. “That’s not what I’m fighting for.”
“It’s a cultural thing,” said Keith Stroup, founder of the National Organization for the Reform of Marijuana Laws, the country’s oldest consumer pot lobby. “All of us have at least a little bit of discomfort with the corporate stuff.”
Which brings me to big tobacco. “Marlboro-ization.” I’ve long suspected that Big Tobacco is keeping an eye on the effort to legalize pot … and drooling in the process. The tobacco industry has been in a long, slow decline for about 20 years now. So the industry will have to diversify. One way to accomplish this is by selling more cigarettes overseas — but the gargantuan market of China is off-limits because the Chinese government doesn’t want American tobacco companies taking over its state-owned market.
So, that leaves … marijuana. I would not be shocked. Not in the slightest if RJ Reynolds or Philip Morris got into the marijuana-selling business in the next 10 to 20 years. Pot advocates see it looming on the horizon. They mention beer companies, too.
“Beer, wine and tobacco people—I’ve met with them all,” said Allen St. Pierre, the executive director of NORML, which is above all a consumer rights organization. He doesn’t love the idea of Big Pot, but he believes it will help guarantee that users get a quality product at a fair price.
He recalled two lunches in Washington, D.C., (one at DC Noodles, the other at Pizza Paradiso); several office visits; and a grand tour through Savor, the district’s popular beer and food conference.
“It’s been so surreal,” he said, reflecting on more than two decades as a marijuana lobbyist, all of it spent outside the warm circle of the other vice industries.
“I always dreamed of these meetings,” he added. “I pictured balding guys, with comb-overs, red suspenders, eating in quiet restaurants—and lo-and-behold that’s what they’ve been.”
The article focuses pretty heavily on the alcohol industry and whether beer and spirits distributors might want to get involved in the marijuana business someday, or if they see marijuana simply as a competitor.
I’m focusing a bit more on the Big Tobacco aspect, because frankly at this point, I think it’s more likely Big Tobacco would get involved in pot rather than beer companies.
My old pal Stanton Glantz (one of the most prominent anti-tobacco crusaders of the past 30 years) is quoted extensively in the story.
Tobacco executives, meanwhile, have been studying the marijuana industry for years, according to Stanton Glantz, a professor of medicine at the University of California, San Francisco. His research has drawn an 80-million page archive of tobacco industry documents, spanning the 1960s to the late 1990s. Many of the documents reference softening pot laws, rising use, and the dual threat/opportunity of a third major vice industry.
In early 1970, for example, an unsigned memorandum distributed to Philip Morris’ top management read, “We are in the business of relaxing people who are tense and providing a pick up for people who are bored or depressed. The human needs that our product fills will not go away. Thus, the only real threat to our business is that society will find other means of satisfying these needs.”
“These documents reveal that since at least 1970, despite fervent denials, three multinational tobacco companies, Phillip Morris, British American Tobacco, and RJ Reynolds, all have considered manufacturing cannabis cigarettes,” according to an investigation by Glantz and two colleagues, published this summer in Milbank Quarterly, a peer-reviewed journal of public health.
Make no mistake. Pot will be legalized, if not everywhere in the U.S., than in most of the U.S. And I’m predicting sooner rather than later. The political will to keep it illegal is slowly caving. And it is big, big, big business, a multi-billion business. You can be damned sure Philip Morris and RJ Reynolds are thinking about it.
The question is … would that be a bad thing?
In my mind, only if they completely abandoned the scourge of the 20th century — tobacco.
Oh, happy day. Philip Morris (Altria), the No. 1 private cigarette manufacturer in the world, saw its profits drop a dramatic 8 percent in the second quarter of 2013, mostly due to lagging sales. Philip Morris shares dropped 2.5 percent as a result.
Here’s what is interesting. We all know the sales of cigarettes is down, so at first blush, this doesn’t seem to be a big surprise.
What IS a big surprise? The biggest reason for the drop in profits is the drop in sales of Philip Morris brands (mostly Marlboro) overseas.
One thing a lot of people may not realize is that while cigarette sales have been obviously dropping the U.S., the tobacco industry has weathered the storm just fine, mostly by expanding its overseas markets in burgeoning smoking regions such as India, the Philippines and Africa. Philip Morris is blaming a sluggish economy overseas:
According to USAToday:
The cigarette maker reported earnings of $2.12 billion, or $1.30 per share, in the quarter ended June 30, down from $2.32 billion, or $1.36 per share, a year ago.
Excluding excise taxes, revenue fell 2.5% to $7.9 billion despite higher prices. Costs to make and sell cigarettes rose more than 1% to $2.7 billion.
Cigarette shipments fell about 4% to 228.9 billion cigarettes as it saw volume declines in all of its regions. Total Marlboro volumes fell nearly 6% to 72.4 billion cigarettes.
Philip Morris International said economic woes in the European Union and increased excise taxes drove shipments down nearly 6% during the quarter. Shipments fell 3.6% in the company’s region that encompasses Eastern Europe, the Middle East and Africa. Shipments also fell 2.4% in Latin America and Canada.
In Asia, one of its largest growth areas, the company said that cigarette volume fell 3.5%, hurt by a recent tax increase in the Philippines, which saw a 16.5% decline in shipments.
Smokers face tax increases, bans, health concerns and social stigma worldwide, but the effect of those on cigarette demand generally is less stark outside the United States. Philip Morris International has compensated for volume declines by raising prices and cutting costs.
Anytime the tobacco industry is hurting that is great news. Perhaps its a bad economy, but maybe smoking bans, higher taxes and lower smoker rates in other countries is having an effect, as well. Of course, Philip Morris would never admit THAT.
Judge Richard J. Leon ruled this week that graphic warnings on cigarette packs violate the First Amendment, because, essentially, they go too far in forcing tobacco companies to advertise something against their will that goes against their own self-interests (Basically, there is a judicial precedent that as part of the First Amendment you can’t be forced to say something you don’t want to say. The government can require written labels on cigarette packs, but graphic images go too far in provoking an emotional reaction against the tobacco companies’ own product, the judge ruled.)
“The government’s interest in advocating a message cannot and does not outweigh plaintiff’s First Amendment right to not be the government’s messenger,” Judge Leon wrote.
This is a bummer, but after the injunction, I wasn’t very optimistic. The Justice Department and Obama administration can appeal the decision (They’ve already appealed the injunction, which was imposed late last year. I guess that appeal is moot now). It would first go to a Circuit Court of Appeals, but I expect it would eventually go before the U.S. Supreme Court, and with the incredibly pro-corporate judges on the Supreme Court, I’m not optimistic this ruling would get overturned.
Again, a bummer. Most of the countries in the West require these graphic images on cigarette packs, but in the U.S., it appears the tobacco companies will squirm out of it. Unfortunately, for the moment, the First Amendment seems to be on the tobacco companies’ side.
It all began in 1994. Years of outrage over decades of Big Tobacco’s lies finally seemed to be coming to fruition. 1994 was the year it seemed like we finally turned a corner in the fight against Big Tobacco.
The early 90s was pretty much the height of the lung cancer epidemic. Ever since then, lung cancer rates overall have been slowly dropping, especially among men. It was also the height of “Joe Camel,” a wildly successful marketing campaign by RJ Reynolds that appealed to beginning smokers (i.e., teenagers). What was really alarming people at the time was that the teenage smoking rate had been steadily decreasing until the mid- to late-80s. Then, shockingly, the teen smoking rate started going up, and going up markedly. Why? Joe Camel. Tobacco paying millions every year to insert “cool” smoking scenes in PG and PG-13 movies. They were finding a way to market to kids.
Congressman Harry Waxman held a famous series of Congressional hearings in 1994 in which the CEOs of the four major tobacco companies were subpoenaed to testify before Waxman’s committee about the cover-up and lies of Big Tobacco. All four CEOs — from RJ Reynolds, Phillip Morris, Brown & Williamson and Lollilard — steadfastly refused to budge an inch under withering questioning from Waxman and other congressmen that they knew cigarettes were addictive and were killing people. They all four claimed they did not believe this.
The public was outraged. It was a major public relations debacle for Big Tobacco. Within months, a perjury investigation was initiated by the Department of Justice. All four CEOs were eventually fired. Ultimately, the Department of Justice claimed it didn’t have enough evidence to prosecute for perjury because the four CEOs testified under oath they believed tobacco did not addict people nor cause cancer. They had crafted their answers very carefully, obviously with help from attorneys. Because they had used the word believe, they could not be prosecuted for perjury.
Then came the Global Settlement Agreement, which came oh, so close to passing. This was a settlement proposed between several plaintiffs and Big Tobacco to right at least some of the wrongs committed by Big Tobacco over the past century. This included payment of $365 billion to the states for their Medicaid costs caused by smoking. FDA would be given regulation over tobacco products, warning labels would be strengthened and all class-actions suits against Big Tobacco would be nullified.
This required an act of Congress (because of the FDA involvement), and Congress failed to pass the bill, which was carried by Sen. John McCain.
Out of the flames of that failure, came the the Master Settlement Agreement, which was announced in 1998, I cheered. Finally, Big Tobacco was being brought to its knees. It wasn’t as good as the GSA, but it still sounded good. Big Tobacco would be crushed by a $280 billion out-of-court settlement with 46 states … (give or take several billion depending on your accounting).
I continued to cheer it for at least five years … until I started finding out all that had been lost. All in all, this agreement was an abject failure on most levels, explained very well in Alan Brandt’s “The Cigarette Century.”
The Master Settlement Agreement is to this day the biggest court settlement ever reached in the history of litigation. Big Tobacco (RJ Reynolds, Phillip Morris, Lollilard and Brown & Williamson), was sued by the state of Mississippi in the early 1990s to reimburse the state for its Medicaid expenses caused by all the health problems caused by smoking. 40 other states joined the suit. Famed Mississippi attorney Dickey Scruggs took over the plaintiffs’ case, leading an army of lawyers against Big Tobacco.
The case had an interesting basis in law. The tobacco industry was adding untold billions to the Medicaid expenses of states dealing with the near-epidemic of health problems caused by cigarettes — lung cancer, heart disease, lung disease, etc. In the 70s and 80s, lung cancer especially hit a crescendo as all those heavy smokers who started smoking in the 1950s and 1960s (when the smoking rate was the highest) started getting lung cancer. The industry knew damn well that its product was making people sick, yet continued to sell it … and this was actually adding to taxpayers’ tax burdens.
All this information came out in a series of documents leaked over a period of years from various personal injury lawsuits against the tobacco industry. While few of these lawsuits succeeded (Most jury decisions for the plaintiffs were either overturned by higher courts or the damages greatly reduced), one good thing did come out of all this litigation. Discovery.
Through the discovery process, reams and reams of documents were released to the plaintiffs, who in turn made them available to the public, proving that the tobacco industry had known since the early 1950s that tobacco was giving people heart disease and lung cancer and that nicotine was physically addictive and that “light” cigarettes were not safer than “regular.” Documents were released showing that Big Tobacco executives did their damnedest to keep this information covered up, and to fabricate studies attempting to disprove that cigarettes were killing people. More documents also proved that the industry had been shamelessly marketing to “new smokers,” which is a Big Tobacco euphemism for “teenage smokers.”
With this reams upon reams of evidence now out in the public forum, Big Tobacco was forced to settle, or face constant lawsuits and judgments. However, the high-priced Big Tobacco lawyers completely outmaneuvered the state attorneys general in the settlement.
The biggest failure of the agreement? It was suggested in the agreement that a certain amount of the $280 billion go toward tobacco education and cessation programs. Everyone assumed it would. Everyone thought it was a MANDATE. It was never MANDATED however.
Anti-smoking programs did receive a lot of funding from the settlement for a few years, but it didn’t take states very long to figure out that the word “mandate” wasn’t in the settlement anywhere. Before long, state legislatures started diverted that money to balancing their general funds. Money for tobacco education dried up. Lazy state legislators got an easy source of money to balance their budget without raising property taxes. It turned into a huge windfall. Not only that, but states started selling bonds with the intention that they would be paid off by future tobacco settlement funds.
Instead of stamping out smoking, states had become utterly dependent upon tobacco. It wasn’t in the states’ interest to cut smoking rates.
There was one last chance to really nail the tobacco industry. A RICO racketeering lawsuit filed against Big Tobacco in the federal court by the Justice Department under Bill Clinton. They had a damn good case. Tobacco executives had conspired for years to cover up the addictiveness and deadliness of their product. They had conspired for years to cover up the fact that they were marketing their product to kids. They had lied that “light” cigarettes were safer.
The feds won their case in 2006, sort of. A federal judge issued a scathing ruling convicting Big Tobacco of racketeering under the RICO statutes. An appeals court upheld this decison. However, shockingly, the courts did not impose any financial penalties, saying the RICO statute did not allow this. Some argue that the Justice Department under Bush did not pursue the case as aggressively as it had been pursued under Clinton, and this was part of the reason for the mixed ruling. The case is still being appealed as the government is seeking more of a monetary punishment against Big Tobacco.
So, tobacco executive lost their jobs for lying to Congress, were investigated for perjury, but avoided an indictment. Big Tobacco was convicted by a federal judge of RICO racketeering, and that conviction was upheld by an appeals court, but no executives went to jail, nor was the industry even forced to pay penalties. A huge civil settlement with the states has simply turned into a windfall for state government.
Big Tobacco murdered people for decades. And murder is not too strong of a word for it. They knew since the early 1950s, maybe even earlier, that they had a product that was addicting people and was killing people. And they continued to sell it and market it, and then they marketed it to kids. And they covered up and lied. For decades. It’s amazing to me that not one person has ever spent a day in jail for it. And people are rotting in prison in Texas and Florida for selling pot.
They got away with it. The final chapter of Dr. Allan Brandt’s book, “The Tobacco Century,” is “The Crime of the Century.”
They murdered roughly 100 million people worldwide between 1950 and 2010, and by “murder,” I mean they knew full well they were killing people with their addictive product.
If you want to look at the glass half-full, a few good things did come out of the 1998 MSA:
* Joe Camel was retired for good. Big Tobacco is forbidden from marketing to kids again (no ads with cartoon characters). They have attempted to get around this provision several times.
* Payments to movie studios for product placement were forbidden. Weirdly enough, smoking scenes in movies after 1998 actually went up, not down. Big Tobacco insists they have nothing to do with this. It’s probably Hollywood’s continued love affair with the cigarette dating back to Casablanca. However, pressure has been put on Hollywood to cut gratuitous smoking scenes out of PG and G movies. That pressure seems to be working.
* The cost of cigarettes went up. To pay for the $280 billion settlement, the industry as expected raised their prices. Along with a number of states jacking up their cigarette taxes, in some cases dramatically, the price of cigarettes has skyrocketed in the past 10 years, helping to drive down the smoking rate.
* Spurred partly by outrage that sprang from Waxman’s hearings, more and more states and cities have passed smoking bans. Not only do smoking bans help drive down the smoking rate (because a lot of casual smokers only smoke in bars, and therefore, it gives them a good excuse to quit), they also protect nonsmokers from secondhand smoke.
* The FDA was given regulatory authority over tobacco in 2009. The first thing the agency did was ban candy-flavoured cigarettes, which are popular with kids.
* The smoking rate and teen smoking rate have declined since 1998, but not dramatically. The smoking rate was around 24-25 percent in 1998, and today it’s pretty much stuck at about 20 percent. The smoking rate for teens is a little harder to pin down, because few teens are what you would call “regular smokers,” but the percentage of teens who were smoking dropped from 28 percent in 2000 to 17 percent in 2010. However, that drop has stalled the last few years, probably because of the cut in tobacco education funding.
* Class-action suits against Big Tobacco have been halted, but individual lawsuits are still being allowed. In Florida, a Supreme Court decision there in 2006 allowed thousands of individual lawsuits to go forward against Big Tobacco for lying about the safety of “light cigarattes,” etc. So far, juries have awarded hundreds of millions of dollars for plaintiffs, with hundreds more suits in the works. None of those judgments have been paid out, however, as Big Tobacco is appealing all the verdicts. the industry will be dealing with these lawsuits for at least the next decade, maybe longer.