Tobacco Settlement: Money Isn’t the Only Measure
Whatever their motive--shoring up stock prices or protecting themselves against jury awards--the nation’s two largest tobacco companies have been discussing a possible settlement of up to $300 billion over the next 25 years to put to rest the many lawsuits that are pending against them. The dollars may be impressive, but money alone should not be the ultimate measure of any settlement with an industry that has long denied, indeed lied about, the health damage done by cigarettes.
Philip Morris Cos. and RJR Nabisco Holdings Corp. have conducted secret talks with attorneys general from four states and plaintiff attorneys. An imminent settlement, however, is not expected.
The two companies are negotiating on behalf of the entire industry. In return for the proposed smokers compensation fund of $250 billion to $300 billion, the industry wants immunity from future lawsuits. Such an arrangement, similar to state workers’ compensation laws or the black lung fund for coal miners, would require legislation, in this case from Congress. The two firms are well known as big political contributors.
The companies are also said to be willing to embrace a concession once unthinkable for them: Some regulation by the Food and Drug Administration, which they have been opposing in court. They are said to be open to greater restrictions on marketing cigarettes to minors and more disclosure about ingredients in cigarettes.
The industry’s change in tactic comes as it faces unprecedented legal and regulatory challenges. More than a dozen states have sued tobacco companies seeking reimbursement for Medicaid costs for treating smokers. Other class action suits are pending.
Members of the industry stood together in their opposition until Liggett Group Inc. recently broke ranks and agreed to turn over important documents that, among other things, could support allegations that the companies deliberately hid research showing cigarettes are addictive.
The settlement negotiations provide an opportunity to commit tobacco companies to major policy changes to protect the nation’s health. The firms should be required to turn over internal documents on nicotine, and the industry should be required to disclose to consumers the amount of the addictive substance that is present in cigarettes. The tobacco companies also must embrace the tough anti-smoking programs the FDA announced last August, programs they have been aggressively fighting. Otherwise, a $300-billion settlement is too easy and immunity decidedly unfair.
