The present danger for the industry, at least as perceived by the public, is the dual threat of FDA regulation and multifaceted litigation. The present opportunity for the industry is the possibility of a deal that may imperil public health for generations to come: a deal with Congress that would shield cigarette companies from the current barrage of litigation and particularly from the threat of both individual and class-action private-sector lawsuits. Such a deal might ensure the viability of the cigarette as a commodity well into the next millennium.
The recent settlement publicized widely but somewhat sketchily between the Liggett Group and the attorneys general of 22 states raises the spectre of a possible offer of Congressional or court-sanctioned protection for the tobacco industry. Indeed, this settlement between the states and the smallest of the major cigarette companies might become the prototype for a grand plan that all the major tobacco companies may ultimately advocate. The likely crux of such a plan would be a trade-off in which the industry pays money to the states in return for immunity from all lawsuits and the opportunity to do business as usual.
In this commentary I will:
- briefly review the successes of the cigarette industry in crisis management during the past five decades, as well as its pursuit of opportunity over danger.
- describe the three distinct challenges the industry now faces: (1) FDA regulation, (2) lawsuits brought by various states and cities to recoup the Medicaid funds expended in treating smoking-related diseases, and (3) individual and class-action lawsuits.
- explain why only one of these three challenges the threat of class action and individual lawsuits is the real threat to the industry.
- suggest that both the ongoing public debate about possible future FDA jurisdiction over tobacco products and the current focus on "state Medicaid suits" are principally red herrings that may distract the American public from the cigarette industry's primary goal: a Congressionally mandated "global deal." Such a deal would have the industry pay an as yet undetermined sum of money to each of the 50 states, to reimburse them for smoking-related healthcare costs, in return for protection from what the industry fears most: current and future lawsuits filed by smokers and the survivors of smokers harmed or killed by cigarettes.
- argue that if Congress consummates any deal with the industry that includes shielding it from current and future private-sector litigation, it would be an unparalleled setback for the cause of public health in America.
- present the details of the settlement between Liggett and the attorneys general and of the little-publicized separate but related deal that would offer Liggett complete protection from all current and future lawsuits.