An article published Monday in Lawyers USA reveals that the FDA tobacco legislation will have a devastating effect on litigation against the tobacco industry because it will all but remove the prospect of punitive damages in these cases.
According to the article: "A bill that will give the Food and Drug Administration the authority to regulate tobacco products could make it harder for plaintiffs to obtain punitive and equitable remedies in tobacco cases. ... 'I’m sure companies will try to wrap themselves with the cloak … of being regulated by the FDA, and given that fact, punitive damages might be minimized,' said Edward Sweda, senior attorney for the Tobacco Products Liability Project at Northeastern University School of Law in Boston." ...
"If the FDA establishes more stringent rules for tobacco companies governing the marketing, warning labels and even the contents of tobacco products, it could become more difficult for plaintiffs to punish tobacco companies for practices that are allowed under such a tightened regulatory environment, lawyers said. In a statement after the bill passed the Senate, Altria Group, the parent company of Philip Morris, said that the new law will “establish a regulatory structure and standards for the manufacturing and marketing of tobacco products” - a hint that once the FDA sets these standards, it will argue that tobacco companies can’t be punished as long as they adhere to them. As a result, it might be harder for plaintiffs to obtain punitive damages in tobacco cases. The new law could also make it tougher for litigants to force tobacco companies to change their practices. 'Efforts by state attorneys general to try to further enforce the master settlement agreement or to take up regulatory action to try to get a court to crack down on particular practices in the industry will be affected, if the particular practice is already covered by the FDA regulations,' Sweda said."
The Rest of the Story
This story reveals yet another reason why the FDA tobacco legislation is a victory for Big Tobacco and a dream come true for Philip Morris. By virtue of FDA regulatory authority over tobacco products, the cigarette companies will be able to effectively argue that there is no further need for punitive damages, since the FDA can now regulate tobacco advertising, production, design, constituents, ingredient disclosure, etc. And the very low prospect for punitive damages will severely limit the pool of lawyers willing to take on these cases. Most importantly, it will eliminate the potential for any seriously damaging class action lawsuits, like Engle and Broin, which resulted in a huge verdict and a huge settlement, respectively, specifically because of the possibility for large punitive damage awards.
For this reason, the legislation effectively ends the threat of major financial damage from litigation for the industry. Thus, it gives Big Tobacco the gift of virtual immunity.
True, the industry may still need to pay out some individual smokers in terms of compensatory damages. However, this is pocket change for the industry and the slow stream of these cases poses no serious threat. Moreover, the industry is now able to use its vast resources to exhaust the resources of individual plaintiffs. We will see a return to the days when the tobacco industry almost never lost a case.
For all intents and purposes, the FDA tobacco legislation has ended the use of litigation as an effective tool for public health change in tobacco control. This is a devastating loss for the tobacco control movement, since it was in the courtroom that the movement realized some of the most important victories in the past decade and a half.
Another day. Another revelation about the devastating damage that the FDA tobacco legislation has done to the tobacco control movement and to the protection of the public's health.
It's just a shame that the public is only finding out about this after the fact. It would have been nice if our anti-smoking and health organizations had been honest with us up front. Now it's becoming clear why these groups had to lie to us to get the legislation passed. Telling the truth would have killed the bill. No wonder the Campaign for Tobacco-Free Kids was incapable of honest communication on the bill and needed to resort to a massive campaign of deception.