Smoking Out Big Tobacco
A federal appeals court panel has ruled against the government's attempt to wrest some $280 billion in past tobacco company profits for conspiring to hide the addictive nature of smoking. This interim decision is an unfortunate one, and should be overturned by the full appeals court.
Health officials report that tobacco still leads to the death of some 400,000 Americans each year - reason enough for this suit to be resolved in the government's favor.
Last week, one of the two appeals court panel judges ruling in the majority noted that forcing big tobacco to forfeit previous profits is "a quintessentially backward-looking remedy" not consistent with anti-racketeering law, which the government used to file this suit.
In fact, even though the feds allege that big tobacco hid the problems related to smoking for some 50 years, a majority of the three-judge panel said that any rulings the courts issue in the case must be "forward-looking." That reasoning, however, lets big tobacco off a very big hook. News of the ruling sent share prices of tobacco companies up sharply.
These companies made ill-gotten profits by duping customers about their product. While those days may be over, the government needs to ensure that such damaging behavior doesn't reemerge in the future. One judge's dissenting opinion noted the government's evidence that big tobacco would probably continue deceiving the public about the ill effects of smoking, among other things, and would probably keep marketing cigarettes to children. Such a stipulation should make a "backward-looking" judgment legal.
Whether it wins this case or not, government should not let up in pursuing more tobacco industry restrictions, such as limiting cigarette ads in stores, forcing tobacco companies to end misleading descriptions on cigarette packages, and requiring them to disclose all ingredients in cigarettes.
Beyond that, Congress should move to give the Food and Drug Administration authority to regulate cigarettes. That would subject tobacco manufacturers to the kind of regulation most substances classified as drugs ordinarily get.