Key Republicans Try to Thwart Tobacco Industry Suit

Seeking to stop the federal government’s lawsuit against the tobacco industry, key Senate Republicans are lining up behind a provision that could stymie the Justice Department’s ability to defend or prosecute most major civil litigation.

The provision, expected to be taken up by the Senate this week, is buried in the massive 2001 spending bill for the Department of Agriculture.

It would repeal language that allows the Justice Department to obtain reimbursement from other government agencies for major lawsuits it undertakes on their behalf. Roughly one-third of the department’s budget for general civil litigation is paid with funds from other agencies, according to the department.

In the case of the tobacco lawsuit, the Justice Department would also have to refund any money it got from other agencies to prepare the lawsuit.

The tobacco suit, filed in September, charges that cigarette manufacturers knew the addictive nature of smoking but conspired to hide it from the federal government and are responsible for costs borne by taxpayers of treating people with smoking-related disease. The Justice Department, the White House and anti-smoking groups are lining up to fight the proposed change in the law.

“If Congress repeals this provision, it will undermine our efforts to defend the United States in court and hamper our ability to recover taxpayer dollars in cases such as our suit to recover tobacco-related health care costs,” said Atty. Gen. Janet Reno.

White House officials called the provision a back-door way to deny the public a chance to get the money it deserves.

“It’s an outrage that some in Congress are trying to keep the taxpayers from having their day in court,” said Bruce Reed, chairman of President Clinton’s Domestic Policy Council.

Lawmakers, however, countered that the Justice Department over-reached when it looked to other agencies for reimbursement of the costs of the tobacco litigation.

Justice Department officials “turned themselves into bankers,” said Sen. Ted Stevens (R-Alaska), chairman of the Senate Appropriations Committee, adding that the department was “tithing” other agencies to fund lawsuits.

Even before it was formally filed, the tobacco lawsuit drew fire from business groups as well as some Republican lawmakers, who have argued that cigarettes are a legal product and that the Justice Department is pursuing a political agenda through the courts.

“We’re increasingly concerned about the government as super-plaintiff,” said Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce. The chamber plans to send a letter to lawmakers supporting the provision’s repeal and is hoping to get a coalition of powerful business groups to push for the measure as well.

Josten said that the chamber is not looking to hamper the government as it defends other agencies.

“That’s not our intent,” Josten said. “We’ll have somebody work with people up on the Hill to draft language to deal with that. Our concern is that we have an agency intent on pursuing legal industries with lawsuits.” He noted that earlier this year the Department of Housing and Urban Development said it was joining a lawsuit brought by public housing authorities against gun manufacturers.

Cigarette company representatives declined to comment because of the pending litigation. However, tobacco companies launched a public relations effort criticizing the lawsuit about the time the suit was filed.

The provision allowing the Justice Department to be reimbursed by other agencies was added in a 1995 spending bill to help the department pay the astronomical cost of defending the Department of Defense against a lawsuit brought by General Dynamics Corp. and McDonnell Douglas Corp.

The provision says that, in litigation involving “unusually high costs,” the Justice Department could be reimbursed for salaries and expenses by the government agency represented in the litigation.

The McDonnell Douglas and General Dynamics case, one of the largest contract disputes ever litigated against the federal government, involved the A-12, a radar-evading attack plane whose manufacture was canceled in 1991 by then-Defense Secretary Dick Cheney because of cost overruns and construction delays. The case, which has yet to be completed, required the government to construct a secure facility in which to store secret documents and to hire witnesses who were experts in financing and building A-12 aircraft.

The government is also defending another major set of cases brought by troubled thrifts that claim they deserve compensation because the government changed the accounting rules by which they were induced to acquire other ailing thrifts. Known as the Winstar cases, they could easily cost taxpayers billions of dollars if the government loses.

Justice Department officials also have received payment for lawsuits brought on behalf of the Department of the Interior against oil companies that government lawyers allege refused to pay adequate royalties for oil extracted on public and Native American lands.

Since the provision was passed, the Justice Department has been reimbursed $338 million. Three agencies whose health insurance programs have covered the costs of treating sick smokers--the Departments of Health and Human Services, Veterans Affairs and the Department of Defense--have reimbursed the Justice Department for $8 million of the roughly $14 million the department expects to spend this year to prepare the tobacco lawsuit.

The suit has reached a critical juncture, with government lawyers scheduled to make their first oral argument on June 2 in federal District Court in Washington. Senior Justice Department officials describe the provision repealing funding as “devastating” to their efforts to mount a strong case in the tobacco litigation. The case involves millions of pages of documents covering more than 40 years of scientific research, sales and advertising strategy by the cigarette manufacturers.

Stevens said he draws a distinction between reimbursements in cases in which the Justice Department is defending the government and those in which it is going after businesses. “I wasn’t concerned with tobacco. This provision was for the defense of the government.”

Democratic lawmakers who attended the legislative session at which the provision was debated disagree with that portrayal. They say Republicans were aiming squarely at the tobacco suit but fired more broadly. “They used a shotgun, not a rifle,” said Sen. Richard J. Durbin (D-Ill.), a member of the Senate Appropriations Committee and a strong anti-smoking advocate.

He noted that other Republican lawmakers who supported the provision’s repeal said that the tobacco suit and several other cases were nothing more than “politically correct lawsuits.” He underscored that the legislation granting the department reimbursement authority does not limit the reimbursements to cases in which an agency is being defended.