Shifting tactics on tobacco

Ashcroft moves to settle lawsuit, while Congress considers FDA oversight of drug.

The move this week by Attorney General John Ashcroft to begin negotiations with Big Tobacco over a multibillion-dollar lawsuit may signal a new approach to how the Justice Department handles major cases under the Bush administration.

Analysts say the department will likely be more reluctant to unleash trial-lawyer tactics on business and industry. Instead, it is expected to move to resolve difficult issues through negotiation and regulation.

Yet behind the department's move, at least in this case, looms this question: Is the government acting too quickly to settle the dispute, for political reasons, or is it the best thing to do, given the case the government has?

During the campaign, President Bush expressed concern about the lawsuit as an example of how government could drag down a legal business. Since then, he has been reluctant to provide the full funding for the legal team who will get the case ready for trial. The latest announcement is just one more indication that the Bush team is reluctant to pursue the case.

Two years ago when Janet Reno's Justice Department brought its civil lawsuit against the tobacco industry, it was seeking to recover money the government spent to pay for smoking-related illnesses. A federal judge, Gladys Kessler, threw out that part of the case.

She ruled, however, that the government could go ahead with the part of the case alleging the tobacco industry engaged in a pattern of deceit - known in legal terms as racketeering - in the marketing of their products.

Tough standard

Winning a racketeering case is difficult, analysts say. Rather than merely proving that the tobacco industry had caused harm to individuals who then used federal money for treatment, government lawyers must show that Big Tobacco acted as a "criminal enterprise.

"In effect, they would have to prove that industry executives conducted their affairs in the same manner as Mafia kingpins through a pattern of racketeering activity.

Legal experts say it is a high hurdle, but not one that is insurmountable.

"I think it is a provable case," says Roger Trangsrud, a law professor at George Washington University here "The evidence the government would rely on is evidence that has been produced in a series of lawsuits against tobacco companies [at the state level]," Trangsrud says.

William Schultz, who oversaw the tobacco case during the Clinton administration, says the government has good evidence.

"We felt it was a strong case," he says. "And the judge upheld the legal theory [behind the racketeering charges] and said, in her opinion, billions of dollars are at stake."

Like others, Mr. Schultz is critical of the timing of the Ashcroft move.

"The idea of going into settlement negotiations by announcing that you think you have a weak case, and announcing to the world that you are not funding the case, is a very weak opening bid," he says. "It is not the way that a lawyer trying to get the most out of his case enters settlement discussions."

If there is a settlement of the suit, tobacco litigation lawyers now believe it will be settled for less than it could have been.

"I think the government could have won tens of billions, if not more," says Cliff Douglas, president of Tobacco Control Law & Policy Consulting. "It's possible the suit could have bankrupted the industry," says Mr. Douglas, who wrote the legal memorandum that was the basis for the suit.

Instead, tobacco litigation experts believe the administration may only get a symbolic amount of money from the industry and some weak agreements.

"I think they will get a promise from the tobacco companies that this time they really, really won't target children," says Richard Daynard, a professor of law at Northeastern University in Boston.

Moves in Congress

The Justice Department move comes at a time when new bills are before Congress to put Big Tobacco under Food and Drug Administration (FDA) jurisdiction. One sponsored by Rep. Henry Waxman (D) of Calif. would give the FDA much broader authority over tobacco.

Another, however, this one sponsored by Rep. Tom Davis (R) of Va., would give the FDA limited scope. Philip Morris favors this bill.

"The companies are interested in limited FDA oversight because it would give them help in their marketing," says Mr. Douglas. "They would be able to say that their product was now regulated and approved by the FDA."

(c) Copyright 2001. The Christian Science Monitor

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