Wednesday, October 26, 2005

Sullum Hits Bullseye on DOJ Lawsuit and Master Settlement Agreement

I think that Jacob Sullum is exactly on the mark with his commentary in the Washington Times, published yesterday, which addresses the Department of Justice's (DOJ) lawsuit against the tobacco companies and the Master Settlement Agreement (MSA) between 46 states and the major tobacco companies.

Sullum points out, insightfully, that the DOJ lawsuit was flawed from the moment Judge Gladys Kessler disallowed the government's claim that it should be allowed to recover public expenditures for smoking-related diseases. When that arm of the government's charges against the cigarette companies was thrown out in 2000 and only the Racketeer Influenced and Corrupt Organizations Act (RICO) claims remained, Sullum argues, the government was in severe trouble.

And the D.C. Court of Appeals decision that disallowed disgorgement of past profits and emphasized that any civil remedies under RICO had to not only be forward-looking but also be designed to prevent and restrain future violations of the Act, Sullum opined, was perhaps the death knell for the case, as none of the government's major requested remedies meet these criteria.

As Sullum put it, "the Justice Department cannot follow through on its threat without breaking the law." In other words, to follow through on its original intent to severely punish the industry financially and to recover substantial money for federal government or public health coffers, DOJ has to push for remedies that are inconsistent with the appellate court's decision, and therefore, with the law.

With respect to the MSA, Sullum describes it as a "deal under which 46 states got billions of dollars a year from the major cigarette makers, the tobacco companies got protection from liability and competition, and smokers got stuck with the bill."

He argues that the Attorneys General who pushed for and signed the MSA violated the Consitution by entering into a multi-state compact without Congressional approval. In an attempt to derive billions of dollars for their states and improve their political standing by being able to state that they took on Big Tobacco, Sullum suggests, the Attorneys General actually helped the major tobacco companies achieve protection from liability and from competition from the smaller, non-participating manufacturers.

Sullum termed the Attorney General signatories to the MSA "extortionists" who "have reaped political benefits as foes of Big Tobacco. Talk about ill-gotten gains."

The Rest of the Story

Those who have followed my blog for any length of time will recognize that Sullum is making many of the same arguments that I have been trying to outline, with regards to both the DOJ lawsuit and the MSA, over the past months.

I agree that having to rely on RICO as the basis for the DOJ lawsuit tends to doom it from the start, as applying RICO to the tobacco industry is like trying to fit a square peg in a round hole, as I have suggested.

Furthermore, in order to use RICO to extract significant financial penalties from the tobacco industry, the Department of Justice and the public health intervenors have had to "break the law" (I wouldn't put it so bluntly, but agree that they have had to essentially ignore the D.C. Court of Appeals' decision and continue to pursue remedies that are clearly not allowable under the law).

I agree that there are no viable monetary remedies, including the "$10 billion for a smoking cessation program, $4 billion for anti-smoking 'education,' and financial penalties that would be imposed if the number of smokers under 21 does not decline at a government-specified rate."

I agree that the MSA was basically a deal under which the states received loads of money, the major cigarette companies achieved a large measure of immunity as well as protection from competition, and that the financial burden of the deal has largely been passed along to smokers in the form of cigarette price increases.

I agree that the MSA likely represents illegal collusion between the states and major tobacco companies that violates the Compact Clause of the Constitution.

And finally, I agree that the Attorneys General who negotiated and signed the MSA are extortionists in the sense that under false pretenses (that they were concerned about the public's health), they derived billions of dollars for their states, while at the same time committing the worst public health blunder of my lifetime, and at the end of the day, they have attempted to gain political standing by pretending that they helped to bring down Big Tobacco.

The lesson, I think, for anti-smoking advocates is that the ends do not justify the means. As noble as our ends might be, we must place more of a value on the integrity of our leading organizations. Using all tactics available to pursue what are arguably good ends, even if it involves the misapplication of the law, should simply not be acceptable to anti-smoking advocates.

In the end, it is not just the "gains" that matter, but how those gains were obtained. If they were "ill-gotten gains," then we as public health practitioners and organization do not stand on much higher ground than the very tobacco companies who we are attempting to extract money from on the grounds that their actions have been unethical.

And if we lose the moral high ground, then we will have lost the movement.

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