The Senate's sweeping antismoking bill may be dead - but the
tobacco industry remains in deep legal trouble.
Big tobacco's foes will now shift their focus back to the
courts, where the number and range of lawsuits against the $50
billion industry has grown larger than ever.
A flood of damaging internal documents released via recent
settlements will only make tobacco firms' position worse. The result
could well be a many-front guerrilla war - just the thing the
industry has long sought to avoid.
Antitobacco "momentum continues, but it continues back in the
original forum where they began to play this out, in the state and
federal courts," says Richard Daynard, a professor at the
Northeastern University Law School and chairman of the Tobacco
Products Liability Project.
"The evidence just gets better and better for people suing the
industry," says Daynard.
One year ago, tobacco companies seemed assured of a different
future. A comprehensive settlement hammered out between the industry
and 40 state attorneys general would have forever altered the
nation's public-health prospects, as well as a $50 billion segment
the US economy.
The deal might have ended a fight between government and tobacco
first joined in 1965, when Washington began requiring warning labels
on cigarette packs.
In the settlement, tobacco firms agreed to pay the states $368
billion over 25 years, as compensation for state public health costs
related to smoking-caused illnesses.
In return, the industry would have received protection from the
many court cases lined up against them.
But its provisions required passage of national legislation - and
both the states and tobacco firms underestimated the amount to which
Washington lawmakers would alter its terms.
Washington foes of tobacco felt that the industry was weakening.
They saw it as a desperate effort to protect itself from court
so they began toughening the terms of settlement.
Thus, in the bill introduced by Sen. John McCain (R) of Arizona,
the $368 billion price of settlement was raised to $516 billion. The
industry was given no cap on its legal liability.
As the bill progressed, the mood of tobacco company officials
turned from acquiescence to anger. They announced their active
When tobacco firms pulled out, what had formerly been a voluntary
payment suddenly became a tax on cigarettes, set at $1.10 a pack.
Then firms poured $40 million into an ad campaign depicting the
McCain bill as typical Washington tax-and-spend legislation. All
sorts of special interests were scrambling to get their hands on the
cash raised by the tobacco tax, they said.
"We agreed to sit down to a negotiated process . …