White House Draws Flak for Tobacco Suit

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The New York Sun

WASHINGTON – As Vice President Cheney campaigned against big-ticket lawsuits that he said hurt corporations and the economy, federal lawyers began arguing history’s biggest tobacco lawsuit yesterday.


The Bush administration’s decision to press the $280 billion lawsuit begun by the Clinton administration drew criticism yesterday from some of its allies in the campaign against “lawsuit abuse” that has been featured in Mr. Bush’s re-election campaign.


“It is hypocritical to bring the tobacco suit while you are campaigning for tort reform,” said a scholar at the American Enterprise Institute, John Calfee.


At a campaign rally in Wauseon, Ohio, Mr. Cheney sounded what has been a constant theme for the Bush-Cheney campaign: “We will work to end lawsuit abuse. We know it’s a lot easier for America’s businesses to hire new workers if they don’t have to keep hiring lawyers,” he said.


Meanwhile, federal lawyers at district court in Washington said that major tobacco companies defrauded the American public through a “half-century campaign of deception, half truths, and flat out lies” that included denying the health risks of cigarettes, the addictiveness of nicotine, and surreptitiously marketing tobacco to children.


Critics said the government has a thin case under civil anti-racketeering laws, designed to go after organized crime.


“They are going after trial lawyers for bringing baseless litigation, then they turn around and do the same damn thing,” said a scholar at the libertarian Cato Institute, Robert Levy.


“If they really believe in tort reform, this is one of the suits they ought not be bringing,” said the general counsel to the Competitive Enterprise Institute, Sam Kazman.


However, a key group in the tort reform battle, the American Tort Reform Association, declined to take a position on the lawsuit, according its general counsel, Victor Schwartz. Mr. Schwartz said the federal government is attempting to enforce a federal statute and that the case is not technically a tort case: It is not a case in which personal injury law is being used to create regulation through the courts rather than through the political process.


“It’s apples and bananas. They may both be fruits, but they are different,” he said, adding that unlike in some state-level cases, the federal government is not using private trial lawyers on a contingency-fee basis.


Had the Bush administration dropped the case begun by the Clinton administration in 1999, it would have been accused of pleasing campaign contributors, he said. “The bottom line is the administration on this case is between a rock and a hard place, and they chose a rock,” he said.


The critics also took aim at the government’s use of the statute known as the Racketeer Influenced and Corrupt Organizations Act.


“I would think that anyone wanting to reform tort law would take a hard look at RICO,” said Mr. Calfee, who said the statute has been “extended far beyond” its intended purpose.


The case paralleled objectionable tort cases which “have become a tool for extracting large amounts of money from corporations with deep pockets,” he said. “That certainly has characterized government tobacco litigation so far.”


In opening arguments yesterday, a lawyer for the Department of Justice, Frank Marine, said the government would prove the tobacco companies engaged in a well-orchestrated “scheme to defraud” the American public by denying that smoking causes cancer and other diseases, that nicotine is addictive, and that the companies market to children, all while knowing the opposite to be true.


He quoted many internal industry memos in which executives described creating, funding, and controlling sham research institutes whose purpose was to produce findings that disputed scientific evidence that smoking caused disease. He said the findings were used in public relations campaigns, congressional testimony, and court cases.


He cited an internal memo dated from 1964 in which a Philip Morris executive wrote that the industry needed to raise doubts about the health risks of cigarettes in order to “provide smokers a psychological crutch and a self-rationale to continue smoking.”


The companies “did not believe that there was a raging worldwide controversy” over the health effects of smoking, said a government lawyer, Sharon Eubanks. “They just told the American public that there was one.”


The lawyers displayed tobacco advertisements and statements that proclaimed nicotine to be no more addictive than tennis and Coca-Cola, as well as private memos from industry executives and scientists that discussed nicotine’s addictive effects, as well as plans to heighten its “kick” in cigarettes.


Ms. Eubanks also argued that the industry engaged in “a collaborative yet clandestine operation to deny the harms of second-hand smoke” in order to discourage bans on smoking in public places and to protect their profits. The fraud “continues to this day,” she alleged.


Lawyers for the defendants are to make opening statements today. They are expected to argue that the government cannot demonstrate that the major tobacco makers, which settled state lawsuits in 1998, continue to engage in illegal conduct and will do so in the future, as required by civil racketeering laws.


The New York Sun

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