Where there is war, there are war profiteers. The tobacco wars are no exception. In the wake of huge personal-injury awards and the U.S. tobacco companies' settlements with state governments, the war profiteers are racing to court to get their share of the spoils. The latest litigants include foreign governments, health-insurance companies and the federal government. All are seeking to claim their own shares of the tobacco purse.
The new litigants have one thing in common: They have actually suffered no injury from tobacco. Their legal theories range from the implausible to the incredible, but hope springs eternal when billions of dollars are in the balance.
Six countries have just consolidated their cases in a federal court in Washington, D.C. These newly found tobacco victims include Guatemala, Brazil, Bolivia, Nicaragua, Panama and Venezuela. A dozen other countries, including Russia, are reportedly considering lawsuits of their own.
The six countries claim that they were shocked--shocked!--to learn that tobacco could be harmful to their citizens. This epiphany appears to have occurred shortly after U.S. tobacco companies agreed to fork over $200 billion to the states in the tobacco settlement. These nations now insist that, like the American states, they too were deceived about the risks of smoking and, due to this deception, they allowed their citizens to engage in a harmful practice. Now, racked with guilt, they have come to express their outrage--and seek massive damages.
And so the federal court will be witness to a truly bizarre scene: countries with often infamous records on human rights or the environment seeking health-based damages in the name of their citizens. In Guatemala, the justification for the suit may be found in that country's "Historical Clarification Commission," which recently argued that the U.S. and private companies are responsible for "the country's archaic and unjust socio-economic structure." In Brazil, the government insists that it would have taken steps to protect its citizens from tobacco if only it had known that smoking was addictive. In Russia, the short life expectancy of many citizens makes tobacco illnesses look like a long-term investment. (Nevertheless, while the Russian government pursues a tobacco claim in Washington, the Duma is considering a tobacco monopoly in Moscow, thereby claiming both the profits and damages from this product.)
Notably, the suing countries' anger doesn't extend to their own domestic tobacco companies. Some of these countries actually have monopolies on tobacco or have domestic companies supplying a large share of the market. Guatemala insists that, while U.S. tobacco companies "lied to Guatemala . . . by misrepresenting cigarettes as harmless," its domestic companies (which control virtually 100% of the market) were also deceived and were not part of the fraud.
Brazil is the world's leading exporter of tobacco but claims that it is also an unwitting victim of Big Tobacco. Brazil's moral outrage studiously avoids its own tobacco companies, which in the past year have were cited 11 times by the U.S. for exporting tobacco containing 20 prohibited pesticides that are hazardous to human health. Likewise, it was a Brazilian subsidiary that introduced fumo louco, or "crazy tobacco" to the world market. Genetically altered to increase nicotine, fumo louco continues to be grown in Brazil and is so potent that farmers can become dizzy harvesting the crop.
Of course, when one considers the claims of our own health-insurance companies, these foreign suits look like the harmless pursuit of an alternative source of foreign aid. Blue Cross/Blue Shield once vehemently opposed the right of patients to sue it for uncompensated care. When it comes to their own suits, however, the Blues take a far more liberal attitude. The Blues have now gone to court to seek recovery of insurance payments due to tobacco injuries; this is despite the fact that their policyholders have already paid them for any losses in the form of higher insurance premiums. When policyholders in Minnesota sought an injunction to force the Blues to reimburse them for money acquired in the state settlement, the Blues got the action dismissed.
But it's the federal government that sets the standard for war profiteering. Consider: The federal government intends to seek damages for a product that it has long subsidized and long taxed as a major source of general revenue. The federal government's take from cigarette sales, currently 24 cents a pack, will increase to 39 cents by 2002. State taxes are often twice the federal level. As with the state settlement, any federal damages would likely be tied to future tobacco sales, only increasing the federal dependence on nicotine products. Smoking may be hazardous to your health but quitting would be positively lethal for your government.
The injury claimed by the U.S. government is equally questionable. As gruesome as it may be to contemplate, tobacco illnesses actually appear to save the federal government billions in veterans' benefits, Social Security, Medicare, disability and other federal programs. A study by Harvard economist Kip Viscusi found that smokers actually produce a net benefit for the government of 32 cents per pack.
If war is politics by another means, this is truly a war only Clauswitz could appreciate. After Attorney General Janet Reno informed the Senate that there was no legal basis for a federal action against tobacco companies, Mr. Clinton announced in his State of the Union address that there would be a federal action to recoup billions in damages. In a move that would make most slip-and-fall lawyers blush, the Justice Department must now find a way to justify the president's promise of billions in damages after it publicly rejected any good-faith basis to sue.
Of course, all wars begin with dreams of glory that are rarely achieved. Even if these litigants can secure a beachhead in federal court, they face some challenges as the tobacco wars progress. Earlier this month, for example, the major tobacco class action suit in Florida experienced a sharp reversal of fortune when an appellate court ordered trials on each individual claim. Such rulings now could turn the federal litigation into a legal version of invading Russia in the winter.
This isn't to say that the tobacco companies shouldn't be sued. There are legitimately injured parties who have every right to seek relief. These new litigants, however, weren't drawn to court by the victims but by the spoils of the tobacco war. They are indisputable proof that the first casualty of any war is the truth.
Jonathan Turley is a professor law at George Washington University.
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