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Tobacco Fallout
Written by: Del Meyer
Health organizations have been extremely successful in their drive to increase the taxes on cigarettes in order to pay for various health-related programs. Cautioned that this amounts to a "sin tax," these organizations were warned that this could back fire some day should folks decide "not to smoke." If the significant revenue stopped would we then encourage people to "resume sinning" so we can fund the programs telling us about the "harm of smoking?"
John Grisham, an attorney, in his recent book, The Runaway Jury, foreshadows the first successful litigation against the Tobacco Industry with a billion dollar award.
The press reported that one state attorney general after another is suing the tobacco industry for the excess in health care costs caused by smoking cigarettes. The cigarette industry noted that the taxes paid on cigarettes exceeds the health care costs that can be attributed to cigarettes.
Grisham in his latest book, The Partners, reflects how law partners divide their fees, and insist on one-third, even if millions. In this scenario, the law firm was to obtain thirty million of ninety million dollars of misappropriated tainted congressional funds.
Headlines in the press in June reflect a HUGE Tobacco deal which settled 40 state lawsuits and 17 class-action suits by paying out $360 billion over 25 years. It will also outlaw cigarette vending machines, license tobacco retailers, place nicotine under FDA regulations, and even allow the FDA to ban cigarettes after the year 2009.
Bob Butterworth, Florida attorney general sums it up: The Marlboro Man will be riding into the sunset on Joe Camel.
Paul A Gigot's Potomac Watch points out that the "mother of all lotteries," otherwise known as the tobacco settlement, has made Sultans out of tobacco lawyers like Hugh Rodham Jr. Gigot suggests that Hillary should give brother Hugh a copy of her 1992 speeches about the evils of "greed." He suggests that there is more going on here than "public health."
Russ Herman, a class action lawyer in response to keeping the fees for the 250 attorneys at one billion dollars, stated that he believed a 3% or 11 billion dollar contingency fee would be reasonable. This adds up to about $50 million per attorney.
The White House is unbelievably quiet. They are confident that the trial lawyers will return significant amounts to them for the next elections.
Richard Klein, Cornell University professor and author of Cigarettes are Sublime, call this "Prohibition II." He notes that strong warnings will cover 25% of the front of every cigarette pack. Were negotiators unaware that "Death Head" cigarettes are drop-dead chic in London? He feels that prohibition is the logical outcome of the tobacco settlement and reminds us that "Prohibition I" didn't work.
Elliot Liff, MD, from Mill Valley points out the fallout from the tobacco suit. There are implications for even broader and further litigations against other industries. Just wait until someone finds a secret memo in the fast food industry that owners knew that serving greasy burgers with cheese and bacon is good for business despite all the data about risks of high fat diet and its relationship to heart disease, strokes, peripheral vascular disease, and premature death–perhaps even earlier than cigarette deaths?
Japan Tobacco Inc, that nation's cigarette manufacturing monopoly, is still majority-owned by the government. The government itself is the defendant in two class action suits. Japan's Ministry of Finance both regulates the tobacco industry and collects taxes on cigarette sales. The law banning sales to minors and advertising in childrens' magazines or during prime time is only sporadically enforced, and there is no significant punishment to those who break the rules.
In Brazil, B.A.T. Industries, controls 83% of Brazil's cigarette market and is the largest taxpayer in the country. It is reported that the anti-smoking movement in Brazil faces an uphill climb. Roberto Attuch, a tobacco analyst in a brokerage house states the 73.5% tax rate on cigarettes will not be placed in jeopardy "Because tobacco is such an important source of public revenue."
Well, albeit in other hemispheres, it looks like the Marlboro Man is still riding Joe Camel into the sunrise telling the kids coughing on their first cigarette: "I'll have you able to smoke up a storm before you can say malignant neoplasm."
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