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HARVARD CONFERENCE RAISES ISSUES ABOUT DEAL [8.14.1]
Read For Yourself What Some Experts Say
A recent conference at the Harvard Law School on the proposed tobacco deal raised many important issues from a number of points of view.
Below, reprinted with his permission, are the notes taken by prominent
antismoking activist.
Bill Godshall, Executive Director of Smokfree Pennsylvania
Subject: Notes from Harvard Conference
Here are some of my notes from last week's conference by Bill Godshall:
Should Tort Law Be on the Table? Harvard Law School 7/31/97 Conference on Tobacco Industry Proposal
Tom Green 1st Assistant AG of Massachusetts (filling in for Matt Myers, who cancelled the day before) He spent 19 out of 20 minutes presenting the perceived public health benefits of the Deal, and less than one minute talking about preempting tort laws (which was the purpose of the conference).
During the Q & A, I stated that while Johnny-come-lately AGs now claim to be experts on tobacco control and public health, most tobacco control and public health experts oppose the deal. I then asked Green why almost none of these same AGs:
1. lobbied Congress to appropriate $34 million to FDA ?
2. lobbied Congress to raising cigarette taxes in budget deal?
3. enforced existing state youth access laws? and
4. lobbied their state legislatures to enact youth access bills? Green responded that Tobacco Free Kids, AMA, ACS and AHA (ie. the public health community) are mainly supportive of the deal and that most AGs have supported other tobacco control efforts.
Alan Morrison - Public Citizen Banning punitive damage awards would be a huge disincentive for attorneys to take cases against big tobacco. This would also shift litigation strategy to have the affect of putting the plaintiffs on trial. Recommends giving $60 billion back to industry and eliminate the punitive damage ban.
Having document disclosure only after Congress enacts the deal into law is analogous to deciding a verdict at a trial before any evidence is presented.
Dan Benson - Liggett Lawyer Liggett strongly opposes deal. If deal is enacted into legislation:
1. The tobacco industry will emerge much stronger, and
2. It will become a government sanctioned monopoly
John Broaddus - Connerton & Ray Law Firm in DC Sued tobacco industry on behalf of Labor Health Trust Funds, which are sanctioned under Taft - Hartley and provide healthcare coverage for 30 million labor union members.
If deal is enacted, 11 existing suits would be settled without any restitution, and the rest of their lawsuits would die due to class action ban.
Woody Wilner - Spoher, Wilner et al from Jacksonville He opposes the deal because:
1. Disclosure of documents ban (more evidence is emerging daily)
2. Ban on punitive damages (makes it less likely to file suit)
3. Ban on consolidation of claims (he's now trying to combine two cases) would cost plaintiff's lawyers and the courts more money for lawsuits.
Tom Miller - Iowa AG While the ban on consolidation of cases bothers him, he supports deal because he thinks it will be good for public health.
Responding to my question at end of conference, Tom Miller acknowledged that it also disturbed him that the deal would take away legal rights of all secondhand smokers and all cigarette fire and burn victims (totally innocents victims).
David Kentoff - Arnold & Porter law firm in DC Philip Morris lawyer
Thinks class action ban wouldn't change anything, as he thinks that few or no class actions would ever succeed.
Dan Childs - Johnson & Childs (two person law firm in Phila.) Opposes deal
Would pull the rug out from under his lawsuits against tobacco industry. He would probably not proceed with any of his cases if the deal is enacted.
Elizabeth Cabraser - Lieff, Cabraser et al (Castano lawyer from San Francisco)
Claimed to support class action law suits, but thinks that public health gains in deal can serve as benefiting plaintiff smokers. Never acknowledged the mega bucks she'll receive if deal is enacted.
Scott Strand - Minnesota Assistant AG
Minnesota wants to go to trial in January, which won't occur if deal is enacted before then.
The Deal isn't a settlement or legislation, but rather a "Concept paper for potential legislation".
Meyer Koplow - Wachtell, Lipton, Rosen & Katz Philip Morris lawyer (principal negotiator of deal). He argued that the deal was the best possible for opponents of the tobacco industry. Claimed that increase in tobacco stocks wasn't caused by negotiations, but rather by overall bull market.
Afternoon session
Jeff Harris - MIT Economics Professor Could BAT could divest itself of Brown & Williamson? Could Philip Morris International split off of PM USA? Predicts that very little, if any, litigation against tobacco industry will occur if punitive damages and class actions are eliminated.
Expects tobacco ads costs to decrease only by about 10% to 20% if deal is enacted, as tobacco industry is very creative at getting around ad restrictions.
Jon Hanson - Harvard University Law Professor Regulatory instruments in deal are opposite of those that should be implemented.
Price of cigarettes would be about $7 per pack if all external costs were included in the price.
Kyle Logue - University of Michigan Economics Professor Incentives most desirable way to regulate an industry, including: - civil litigation (each company held individually accountable for its own actions) - tobacco taxes (less desirable as each company's accountability would be spread throughout entire industry).
Command and Control regulations are the least desirable Of regulating an industry, as government dictates to industry, but industry has far more knowledge than government regulators. (tobacco deal fits into this model) (tobacco industry can easily circumvent these regulations)
Arthur Licata - Boston lawyer
State Tort rights shouldn't be bargained away for perceived short term special interests. Looking at potential gains without looking at concurrent losses is a huge mistake.
The deal trades everyone's individual rights for quick dollars that go to only a few.
There has never been a precedent for the tobacco proposal. Deal's negotiators have many conflicts of interests.
Deal is an abrogation of rights of those not represented by attorneys at the negotiations.
Susan Koniak - Boston Univ. Law and Corporate Ethics
Professor Kill the deal on moral grounds. Tobacco companies will be far stronger if deal is enacted. Deal is a new vehicle for industry to buy legislation, which will be further exploited by other industries. In law, if its done once, it will be repeated.
Tobacco industry's strategy was to pay off AGs to lobby for tobacco industry protection legislation because AGs have political clout and are perceived by public as opponents of industry.
Tobacco industry is paying AGs and a few trial lawyers to steal the rights of all individuals.
In most states its criminal for politician to accept money from an industry in exchange for special protection, but that's what the tobacco deal is.
Marc Galanter - University of Wisconsin Law Professor AGs have been clients, rather than lawyers, in this process. Castano lawyers have done most of the lawyering and negotiating with the tobacco industry.
The deal contains no restraints on defense (tobacco industry) tactics in court, but heavily restrains plaintiff's ability to sue and seek redress. AGs and Castano lawyers getting payoff in return for stopping future litigation.
While California product liability legislation was called the napkin deal, this proposal is the table cloth deal. Article VI Clause B-6 in Deal - Foreign profits can't be penalized, while industry is free to expand foreign markets.
Dick Daynard - TPLP Similar to the Amchem asbestos class action deal case (pg 33), while only some plaintiffs were represented, the deal would apply to all potential plaintiffs. Title 8, Section c-1 in Deal (Page 3.2.2) (last page in handout) Damage cap encourages industry to act irresponsibly in future, as it caps at $1 billion for punitive damages for the future.
Three chief interests of tobacco industry, in order, are:
1. Non tobacco US subsidiaries 2. Non US tobacco subsidiaries 3. US tobacco divisions
Deal provides industry with protection for all three interests. Deal gives amnesty (or pardon) to the industry, except that the industry will continue the wrongdoing.
Tobacco deal unlike Nuremburg trials, as Nazi's stopped their egregious actions before Nurenburg trials occurred. Per 7th circuit court case, Supreme Court may strike down State AG enforcement of consent decrees. If that occurs, tobacco industry couldn't be required to comply with what they agreed to.