Clinton Tobacco Legislation

President Clinton’s call this past week for sweeping tobacco legislation is a half-hearted attempt to fix a fundamentally flawed deal.

The state attorneys general deal, announced last June, gave the industry effective immunity from lawsuits for their past and future conduct—as well as a diminution in Food and Drug Administration authority and other benefits—in exchange for purported benefits that proved mostly illusory upon close examination.

President Clinton would restore FDA authority and hike the penalties for company failure to reduce teen smoking. He called for industry document disclosure—but the terms of the disclosure are unclear and would come after effective immunity was granted the industry.

Left in place would be the essential structure of the attorneys general deal. It unacceptably links public health gains to concessions to industry. And it would grant Big Tobacco effective immunity from lawsuits by victims of the industry, including those by the youthfully addicted and those involuntarily exposed to second-hand tobacco smoke.

The United States does not engage in horse-trading with drug dealers, and it should not be cutting deals with the tobacco pushers. Indeed, there has been no quid pro quo in government regulation of the auto or other industries.

The costs of the grant of effective immunity will not just include lost recompense to victims and lost opportunities to punish the industry—though these are reason enough to reject a bargain. Effectively exempting the tobacco industry from the civil justice system will forfeit a critical public health advancement tool, one that cannot be replaced with government regulation which has historically not moved until the civil lawsuits lead to the release of testimony and documents.

Private litigation is absolutely critical to the effective functioning of the regulatory sphere. While regulatory agencies can be captured or effectively paralyzed by clever lawyers, diverse private suits challenge the industry on multiple fronts, calling public attention to various industry abuses and highlighting public health hazards that industry has concealed or government regulators have failed to address.

There is very little record in this country of effective public health regulation in the absence of private litigation. Time and time again-whether it be asbestos, heart valves, auto safety or pharmaceuticals-it is private enterprise litigation that forces government regulators to do their job. The lessons of history certainly must be applied to prospective efforts to corral the product and industry which represents the single most glaring failure of government regulation-tobacco.

And if the worst industry is to receive immunity from civil liability, it won’t be long before every other industry goes to Congress with a demand of “Me, too.”

Instead of calling for modest reforms to the proposed deal, President Clinton should join tobacco control advocates in pursuing a two-pronged approach. First, let the state and class action cases against the companies-especially Minnesota’s case, scheduled to begin in January 1998 — proceed. There will be ever more incriminating document disclosures, leading to victories in court-and in the court of an aroused public opinion. The disclosures will spin off into more intensive and diverse criminal investigations and probable prosecutions.

The states by themselves will win or settle for hundreds of billions of dollars, probably approaching the $368 billion of the proposed deal, meaning the major, tangible benefit of the proposed deal-the price increase to offset the companies’ payment obligations-will be achieved without making any concessions to the industry.

The “most favored nation” clauses in the state settlements-provisions establishing that early settling states automatically gain the regulatory benefits obtained by later settling states (such as Florida’s billboard regulations), and included in the Mississippi and Florida settlements-will provide an opportunity for a unique ratcheting-up process as the state cases unfold. The end result will be that the state cases exact most if not all of the regulatory accomplishments of the proposed deal.

Second, capitalize on the growing momentum against the tobacco industry-accelerated by litigation-generated document disclosures-and pass sweeping tobacco legislation-without making concessions to the industry. That legislation should include high tobacco taxes, collected directly by the government, rather than the more modest and uncertain industry payment scheme suggested by President Clinton.

The tobacco lobby is severely weakened-evidenced most clearly by the September 10th 95 to 3 vote in the Senate to repeal the $50 billion tax credit. There is now an unprecedented historic opportunity to rein in the tobacco pushers. President Clinton’s plan falls far short of meeting that challenge.

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