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 nti-smoking
activists think the Justice Department's recently announced effort
to settle its lawsuit against the tobacco industry is an outrage,
and they're right. The only honorable thing to do with this lawsuit
is to drop it immediately.
The federal government's attempt to extort billions of dollars from
smokers (who would pick up the tab for any settlement through higher
cigarette prices) was a transparent sham from the beginning. When
then-Attorney General Janet Reno testified before the Senate Judiciary
Committee in April 1997, Sen. Ted Kennedy (D., Mass.) noted that
four of his colleagues had written a letter urging her to imitate
the states that were suing the tobacco companies. He asked her about
the possibility of recovering money spent on smoking-related medical
expenses under Medicare and other federal programs. "What we have
determined," Reno replied, "was that it was the state's cause of
action and that we needed to work with the states, that the federal
government does not have an independent cause of action." Similarly,
a Justice Department spokesman told the Bergen County Record
that "right now, it would seem we don't have the authority to sue."
Two years later, when the Justice Department went ahead with its
suit anyway, the relevant law had not changed at all. But by agreeing
to settle the state lawsuits for $246 billion, Philip Morris et
al. had shown that you don't need a plausible legal theory to squeeze
money out of the tobacco industry. You just need staying power,
coupled with the possibility of a catastrophic damage award.
The idea that the federal government has been victimized by the
tobacco companies is laughable on several counts. Since the 1960s
the government has mandated cigarette warning labels and produced
one report after another on the hazards of smoking, so it can hardly
claim ignorance of tobacco's ill effects. During the same period
it has nevertheless forced taxpayers to subsidize other people's
health care, knowing that some of those people would smoke and get
sick as a result. It has also participated in the tobacco trade,
distributing smokes to servicemen and profiting from cigarette sales
through taxes. Indeed, the federal government makes more money from
the cigarette business than the tobacco companies do.
Even if the government's hands were spotless, it could not recover
damages because it hasn't suffered an injury. Since smokers tend
to die earlier than nonsmokers, the cost of treating tobacco-related
illness is offset by savings on other forms of health care (not
to mention Social Security). A 1997 study in The New England
Journal of Medicine found that if everyone stopped smoking total
medical spending would rise. In other words, smoking saves
taxpayers money.
Finally, assuming the government had suffered an injury that could
reasonably be linked to the tobacco industry's actions, there is
the minor matter of finding a statute that authorizes a lawsuit.
Last September, when a federal judge ruled that the Justice Department
could not pursue damages under the Medical Care Recovery Act or
the Medicare Secondary Payer Act, the government's lawyers could
hardly have been surprised, since their own boss had reached the
same conclusion. All that's left to the government's case are its
claims under the Racketeer Influenced and Corrupt Organizations
Act, which portray the industry's efforts to promote and sell cigarettes
as a "pattern of criminal activity" and demand that the tobacco
companies fork over their ill-gotten gains — i.e., all the
money they've made in the last half-century or so. But if anyone
is acting like a criminal organization in this case, it's the government,
which has been taking protection money from the industry for years
and is now leaning on it for more.
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