When the state of Minnesota and Blue Cross Blue Shield settled their lawsuit against tobacco companies last Friday, they boosted Congress’ effort to pass anti-tobacco legislation. The industry settled under the plaintiffs’ terms rather than risk a bigger loss under the jury’s decision, Attorney General Hubert Humphrey III said. The nation’s largest tobacco producers will pay $6.6 billion to the state, Blue Cross Blue Shield and their attorneys. The industry is also banned from distributing shirts, hats and other promotional items as well as marketing cigarettes to youths. The deal should motivate Congress to form comprehensive legislation that improves the regulation of tobacco companies. Sen. John McCain, R-Ariz., proposed a bill that was approved 19-1 by the Senate Commerce Committee. The proposal, scheduled for the Senate floor next Monday, offers a promising start.
Thankfully, McCain’s anti-tobacco proposal does not grant the industry the legal protections it demands. The bill could raise the industry’s legal bills by $1.5 billion a year. It would charge tobacco companies $516 billion over 25 years, raise the cigarette tax by $1.10 per pack over five years, restrict advertising and marketing, and extend the Food and Drug Administration’s regulation of the industry. It also mandates tobacco producers to reduce youth smoking by 60 percent over the next decade. While it places an annual $6.5 billion cap on legal liability, it permits lawsuits.
Mississippi Attorney General Michael Moore, who helped his state get $3.3 billion in its lawsuit against the industry, warns that legal protection is necessary. Without legal immunity, he said tobacco companies will challenge the constitutionality of advertising restrictions and youth smoking fines. Cigarette manufacturers say they will support national legislation only if it provides protection from state and individual suits. They argue that court battles will drive it to bankruptcy, leaving many tobacco company employees and farmers unemployed. In fact, the industry tried to negotiate a $368 billion settlement with state attorneys last June, in exchange for liability protection.
Luckily, the deal fell through. Using secret company documents, the state of Minnesota proved that the industry targeted children, manipulated nicotine levels and marketed a product they knew was life-threatening. Given that, tobacco companies must be held accountable for their shameful business practices. McCain’s bill might not pass if Senate Republicans continue to challenge it. Sen. Orrin Hatch, R-Utah has proposed a more modest national tobacco settlement of $398 billion. He suspects tobacco companies will use its lobbying power to block legislation.
Already, the tobacco industry has argued that higher cigarette taxes infringe on individuals’ right to smoke. Industry analysts also claim that McCain’s bill would disrupt the financial stability of the industry and create a black market. President Clinton says he will consider liability protection if a proposal significantly reduces youth smoking. But the Minnesota case reaffirmed that the tobacco industry is guilty of fraudulent business practices. Although Minnesota was one of the first to sue the industry, other states deserve their individual compensation for smoking-related illnesses.