Big Tobacco and the Law

Article excerpt

A. Tobacco & The Campaign for Tort Deform

With the prospects of lawsuits causing major uncertainty for the tobacco industry's future well-being - and leading Wall Street to depress the value of its stocks - gaining effective legal immunity has long been at the top of Big Tobacco's wishlist.

It was the desire to escape from pending litigation and its uncertainty that led the industry to enter the agreement in June 1997 with the U.S. states attorneys general for a settlement to all existing lawsuits against the industry and an effective prohibition on future suits.

And the same motivation has made Big Tobacco into perhaps the leading industry proponent of "tort deform" - changes in the civil justice system to make it harder for victims of dangerous products to sue.

The tobacco papers illustrate the critical importance the industry attaches to tort deform and the enormous resources it has devoted to attaining it, especially at the state level.

In a 1987 memo, Hamish Maxwell, then CEO of Philip Morris, discussed "this corporation's drive toward improving products liability law at the federal and state levels." The project was of the highest importance, he wrote. "I cannot overemphasize the importance of this project. Weaknesses in the law which may enable plaintiffs to win outrageous lawsuits threaten the very core of our businesses" .

In a 1992 presentation to the Philip Morris board of directors, an unnamed high-level company official, apparently an attorney, explained why tort deform is so important to Philip Morris and how the company has succeeded in pushing tort deform: "State tort reform legislation can lead to codification of a number of defenses to product liability claims, establish limitations on the availability of punitive damages, and provide certain procedural protections. Tort reform can therefore serve to limit the significance of an increased number of lawsuits by reducing the possibility of and severity of adverse judgments in such lawsuits" .

"Our past tort reform efforts have been successful in a number of important jurisdictions," the presenter continued, "including California, New Jersey and Texas, among other states. You will recall that a statute adopted three years ago in California led to the immediate dismissal of over 20 cases in that state, and virtually immunized us from future smoking and health litigation in that jurisdiction."

Through tort deform efforts, the industry sought to reverse the doctrine of strict liability (which holds manufacturers absolutely liable for the harm their product causes, irrespective of a showing of negligence), to restrict use of class actions (which let plaintiffs with similar cases band together to sue a manufacturer or group of manufacturers) and to undermine the use of contingency fees (by which plaintiffs' lawyers are paid a percentage of what they win for plaintiffs, with no up-front charge and no payment if they fail to recover any money) .

In a 1992 "Checklist of Priority Issues Concerning Tort Reform and Product Liability," the Tobacco Institute listed key liability issues in state legislatures in 1993. The top issues were: tobacco manufacturer liability, product liability standards, comparative fault/negligence, statute of limitations, statute of repose, protective order/sealed settlement disclosure, punitive damages and contingency fees .

The tobacco papers also contain seemingly endless memos from the State Affairs Division of the Tobacco Institute describing state legislative prospects and lobbying strategies (see "Big Tobacco Goes to Washington: From Head to Toe," this issue).

B. Preemption Obsession

Preemption - the use of federal law to block state or local efforts to regulate tobacco or to block federal suits, or state law to block local regulations or private suits - has been a central obsession of the tobacco industry for more than three decades. …