Scientists from the American Council on Science and Health today urged the nation's physicians and scientists to unite in rejecting any Congressionally sponsored "global deal" that would offer the cigarette industry immunity from current and future litigation. Such a deal which may be the product of negotiations now under way with the Philip Morris Cos. and RJR Nabisco Holdings Corp. was described in detail in a front-page article in the April 16, 1997, Wall Street Journal.
According to ACSH President Dr. Elizabeth Whelan, "We hear of the 'storm of the century' and the 'trial of the century'; well, this is the health-related deal of the century and it is a loser for public health." Dr. Whelan goes on to warn that "if this goes through, public health efforts against cigarettes will be absolutely, 100 percent paralyzed . . . for decades to come."
Under the terms of such a proposed deal, the cigarette industry would pay $250 billion into an industry fund to be used, in great part, toward individual smoker's claims against cigarette companies. The industry would also agree to accept FDA regulation and some minor advertising restrictions.
In return for these concessions, the industry would receive what, for them, would be a priceless gift: complete immunity to all current and future litigation. And this, says Dr. Whelan, makes the proposed deal "a pro-lawyer, pro-tobacco company deal, not a pro-public health deal. It will allow a surge in tobacco stock values and an unrestricted ticket to future cigarette company prosperity."
Although the deal may appear to punish the cigarette industry, the fine print suggests that it will benefit only the cigarette manufacturers and the attorneys who negotiate the deal. The $250-billion-dollar payment over 25 years in compensatory damages may appear to be a significant setback for the industry; in reality, however:
(a) Compensatory damages, unlike punitive damages, are tax deductible. This reduces the economic impact on the companies by half or more.
(b) What the industry would get in return immunity from lawsuits would tremendously enhance the value of cigarette stocks. Such a deal is thus a win-win scenario for the tobacco companies. (Tobacco stock prices soared even on the rumor of a settlement.)
The ever-present threat of litigation is a strong motivation to manufacturers to keep up to date and to be forthcoming on the medical risks of their products. If that threat is removed, the tobacco companies have no incentive to act responsibly or to make their products safer.
As Dr. Whelan notes,
"Cigarette manufacturers have long enjoyed a privileged legal status. The so-called 'Surgeon General's Warning' label of 1965 has offered [the tobacco industry] substantial immunity from lawsuits over the past 30-plus years. The time is long overdue that we treat cigarette companies as we treat any other American corporation, without the protection of Congressional intervention. Lawsuits against cigarette companies should be allowed to proceed unfettered by "deals." No other industry would be given such protection, so why should Congress protect the tobacco industry, the manufacturer of the product that is the leading cause of death in America? If future juries should find cigarette companies guilty of fraud, deception, or failure to warn, the decisions could trigger a cascade of events none of which would require government regulation that could lead to a natural decline in the prevalence of smoking in America."
