Can Uncle Sam beat Big Tobacco?
The federal lawsuit against smoking firms is complicated by Washington's internittent support of the industry.
WASHINGTON — The huge antitobacco lawsuit filed by the Justice Department last week may represent the most serious attack Washington has ever made on an industry with which it has had a lengthy, complicated relationship.
For decades, Uncle Sam has been both a harsh critic and an implicit supporter of tobacco firms, via such props as crop price supports and export promotion help.
The hefty federal cigarette tax can even be seen as linking the feds and tobacco firms close together, as it means that the United States profits from increased product sales.
To fight a charge of hypocrisy, the Justice Department intends to portray a Mafia-like tobacco company conspiracy, the full extent of which became apparent only recently.
And win or lose, administration lawyers may accomplish a nonlegal aim: further demonization of an industry that desperately wants to be left alone.
"This will be a state of the art liability case," says Richard Daynard, chairman of The Tobacco Products Liability Project and a law professor at Northeastern University in Boston.
The federal civil lawsuit comes at a time when the tobacco industry might have thought it had passed the shoals of government lawsuits and sailed into a calmer business environment.
The November 1998 settlement with 46 states eliminated the last of dangerous lawsuits in which states had sued tobacco firms for recovery of the costs of treating sick smokers.
In addition, it had become increasingly apparent that the US government, despite years of research, was not going to file a criminal suit alleging that industry executives lied in 1994, when they testified before Congress that cigarettes are not addictive.
The long criminal investigation of Big Tobacco ran into a series of legal dead ends, say analysts. The Justice Department decided that congressional witnesses can believe whatever they want to believe, legally speaking - even if scientific proof is heavily against them. And the statute of limitations on the executives' actions was expiring, meaning Uncle Sam had to file now, or never.
Earlier this year, in his State of the Union address, President Clinton indicated that the Justice Department was considering civil, instead of criminal action. That's the step the Justice Department took last week.
"They didn't feel they had a strong enough [criminal] suit, and the burden of proof is less [in a civil action]," says Bill Novelli, president of the Campaign for Tobacco-Free Kids.
In one sense the federal civil suit is similar to the state actions against tobacco. The government is asking for reimbursement of the money it has spent treating smoking-related illnesses of Medicare patients, military personnel, and federal employees.
But the United States action is different from what the states did in at least two major ways.
One lies in the nature of the long, intertwined relationship of the federal government and smoking. Tobacco firms intend to argue that, in their eyes, Uncle Sam was practically a partner.
Price supports are only part of the story. The well-known Surgeon General warnings on tobacco products might be seen as an industry shield, say some analysts. Under this theory, the warnings established a government-approved environment in which cigarette firms could continue to operate, despite scientific questions about the links between their products and illness.
In fact, when it comes to tobacco products, Washington makes more money than anyone else, say some analysts, because of the current 24-cent-per-pack excise tax on cigarettes.
"It is hypocritical that the federal government is getting $6 billion in taxes from the industry, which is more than its entire profits," says Robert Levy, a senior fellow in constitutional studies at the Cato Institute in Washington.
The government's defense against this charge may represent the second major way in which the federal lawsuit differs from state efforts. Justice lawyers will argue that they have only recently discovered that tobacco firms were fooling the public via a massive, decades-long conspiracy. In making this charge, the US is using one of the most potent tools in its law arsenal - the federal Racketeering Influenced and Corrupt Organizations Act.
The documents made available in state cases have helped the US build its racketeering case. The government's 88-page complaint makes tobacco firm actions sound like those of the Cosa Nostra - from a 1954 meeting at the Plaza Hotel where firms decided they needed a long-term strategy to fight health concerns about their product, to a day in 1970 when Philip Morris disbanded the "Mouse House" where scientists studied smoking effects.
"The government's case is very strong because it ... will be able to use the information from all the other cases," says Mr. Daynard of the Tobacco Products Liability Project. "And the Justice Department may be the biggest law firm in the world."
(c) Copyright 1999. The Christian Science Publishing Society