Even the Odious Have Legal Rights
As a society, we’ve allowed our hatred of tobacco companies to erode the integrity of our judicial system and the Constitution’s promise of due process. Indeed, in the context of tort law and civil trials, Big Tobacco is not unlike those “enemy combatants” stashed away at Guantanamo -- defendants so odious the rest of us hardly care if the system’s ordinary rules are stretched or suspended to go after them.
Cut to Madison County in Illinois, affectionately known by Chamber of Commerce types as the nation’s top “judicial hellhole.” It’s where George W. Bush went early in the year to give a speech on tort reform. Bush talked a lot about medical malpractice but didn’t mention the most notorious class-action case ever tried (as opposed to settled by a panicked corporate defendant) in that county. No surprise there; doctors make more sympathetic poster children for the cause of tort reform than tobacco peddlers.
Philip Morris -- which renamed itself Altria a few years back to sound like some Swedish relief agency that cares deeply about impoverished children in Africa -- was one corporate defendant that valiantly stepped into the Madison County judicial ring. It wasn’t pretty. The 2003 trial, Price vs. Philip Morris, led to a $10.1-billion judgment, and the ensuing wrangle over the size of the bond it had to post in order to appeal nearly bankrupted the company.
The Supreme Court of Illinois heard the appeal last November and could rule on it any day. It’s surprising it has taken this long -- the opinion need only be a pithy: “You’ve got to be kidding us. Reversed.” The trial was a crude abuse of the class-action system -- cases meant to allow a large group of individuals in a similar situation to file a common lawsuit.
Relying on state anti-fraud laws, creative plaintiff attorneys alleged that all Illinois buyers of either Marlboro Lights or Cambridge Lights cigarettes over the last three decades -- about 1.14 million people -- had been defrauded by claims that the cigarettes contained lower tar and nicotine levels. The wonderfully vague anti-fraud law provided an end run around the difficulties of “certifying” a large class when personal health injuries are at issue. Relying on the anti-fraud statute also meant Philip Morris wasn’t entitled to a jury trial (which corporate defendants don’t usually want unless they find themselves in a place like Madison County).
The plaintiffs produced 23 of the allegedly ripped-off smokers at trial, but even among these handpicked representatives, 17 of the 23 said they had kept smoking Marlboro Lights even after bringing the lawsuit. Apparently they didn’t feel all that defrauded, but then it’s common in such manufactured class-action suits for the lawyers, who in this case would be awarded $1.8 billion in fees, to feel more passionate about the case than the alleged victims of corporate wrongdoing.
Eleven of the 23 smokers said they started smoking more cigarettes when they switched to “light” brands. Such “compensation,” the lawsuit claimed, makes these cigarettes as harmful, if not more so, than their regular counterparts. That would be like saying low-fat ice cream is more fattening than regular ice cream because you will compensate and eat more of it. Whose fault is that?
Packs of Marlboro Lights, introduced into the market in 1971, carry the familiar surgeon general’s warning, and the “lowered tar and nicotine” wording at issue was approved by the Federal Trade Commission, the same federal agency that oversaw the system of measuring tar and nicotine levels. How can a company be accused of deceiving the public when it is complying with federal regulators?
Because this was ostensibly a fraud case alleging economic damages, and Lights cost the same as regular Marlboros, the plaintiffs (and the trial judge, Nicholas G. Byron) had to engage in some breathtaking creativity to invent damages. They conducted an online survey of 276 Marlboro Lights smokers. The smokers were asked to accept that their cigarettes are no healthier than regular Marlboros (which many of them already knew, of course). Then they were asked to imagine a truly healthier but tasty alternative to Marlboro Lights all those years. How much of a discount would they have needed to see in the price of their more harmful Lights to keep buying them?
Survey says: 92.3%.
In other words, according to the plaintiffs’ fairy tale, these smokers were defrauded 92.3% of the estimated $7.6 billion they paid for cigarettes over the years, which adds up (with a little interest thrown in) to $7.1 billion -- a few thousand for each smoker and that tidy $1.8 billion for the lawyers. To spread the wealth, Judge Byron tacked on $3 billion in punitive damages for the state.
The good news for California is that Proposition 64, passed last November, is blocking a similar case in this state. And the fact that tobacco companies are not alone in facing ludicrous class-action suits in state courts is one reason the Republican Congress just passed a law to remove many such cases to federal court.
More liberals should jump on the tort reform bandwagon, standing up for due process, national standards and the idea that government, not private bounty hunters, ought to be the nation’s primary regulator.