[corp-focus] A Civics Lesson for Big Tobacco

[Robert Weissman]

A Civics Lesson For Big Tobacco
By Russell Mokhiber and Robert Weissman

The $145 billion punitive damage award against the tobacco industry in the
Engle case in Florida should be celebrated as evidence of a civil justice
system that works, proof of the value of juries and a major public health
achievement.

And the nation should be saying to the Engle jury, "Thank you. Thank you
for making the system work. Thank you for delivering a civics lesson to us
all "

Lesson No. 1: Lives should matter more than profits.

"For them -- Big Tobacco -- this trial was about money," jury foreman
Leighton Finegan, an assistant principal at a Miami-Dade elementary
school, told reporters. "For us, it was about people's lives."

Finegan denounced Philip Morris attorney Dan Webb for saying a large
punitives award would be "a death warrant" for the industry. "He ignored
the death warrant on the millions of lives of people [the tobacco
industry] lied about," Finegan said.

Lesson No. 2: Corporations that engage in fraud and deceit, with deadly
consequences, should be held accountable.

"We want this message loud and clear: We will not tolerate fraud and
misrepresentation," Finegan said. "They belittled or denied causation of
the health effects of smoking and addiction, and had the gall to challenge
public health authorities."

Lesson No. 3: Punitive damages are a form of punishment -- they have to be
sufficiently large to make defendants take notice.

"We had a sense of mission," Finegan said to journalists. "And we did not
want to ignore the tremendous devastation that the product has caused. The
number had to match that. It had to be significant."

Lesson No. 4: The importance of punitive damages is their very uncertainty
-- they make it harder for corporations to calculate their liability and
engage in "rational" decisions to harm the public.

The jury thought the size of the verdict "would put the companies on
notice -- not just the tobacco companies, all companies -- concerning
fraud or misrepresentation of the American public," Finegan said.

These basic lessons have been obscured by a nimble public relations effort
by Big Tobacco, and its proxies, to spin media coverage and public
interpretation of the verdict.

The jury's award would throw the industry into bankruptcy, the tobacco
lawyers tell the media. But a tobacco firm memorandum that we obtained
candidly acknowledges that the verdict will not bankrupt the industry, and
that Florida law requires the judge to lower the award if necessary to
avoid such an outcome.

The leading independent expert on tobacco pricing, MIT's Jeffrey Harris,
points out that with substantial increases in price, Big Tobacco can
increase its revenues by tens of billions of dollars a year. The industry
is reluctant to raise cigarette prices to revenue-maximizing levels
because it knows this will deter future smokers and diminish the overall
number of smokers -- and thereby the industry's political influence.

The decision is certain to be overturned, say the tobacco industry
analysts on Wall Street, who have managed to convince investors not to
abandon tobacco stocks. Anything is possible on appeal, of course, but the
Florida Supreme Court has already declined to hear a challenge to the
industry's central bone of contention (that Florida smokers should not be
joined in a class, and instead should bring their cases on an individual
basis). And why is it that the media turns to tobacco industry analysts --
who are heavily invested in tobacco stocks and have recently evolved into
industry spokespeople -- for litigation predictions?

Most dangerous is the line, subtly supported by the tobacco industry, that
public policy should be made in Congress, not in the courts.

Public policy is, and should be, made both in the legislative and judicial
branches. In the case of tobacco, the nicotine-money-addicted Congress has
failed for decades to do its job. We should celebrate that the Engle jury
has done its job. Higher prices from the large award will cut smoking
rates dramatically, and over the years save hundreds of thousands of
lives. And the threat of future verdicts will prod the industry to engage
in less severe misconduct.

That is not to say that regulation isn't important. But just as litigation
is no substitute for regulation, regulation is no substitute for
litigation.

In the coming months, the industry and its allies will almost surely
propose a new legislative deal to trade regulatory concessions for
litigation protections and immunities.

The rejection of such an offer in 1997-1998 made possible the Engle
verdict, and the offer should be dismissed again, this time out of hand.
That is another of the civic lessons to be drawn from the Engle jury.

As the tobacco control movement looks ahead, blocking another tobacco
industry immunity proposal and focusing on the international operations of
Big Tobacco will be two of the primary challenges ahead.


Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor and co-director of Essential Action, a corporate
accountability group. Mokhiber and Weissman are co-authors of Corporate
Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe,
Maine: Common Courage Press, 1999, http://www.corporatepredators.org)

(c) Russell Mokhiber and Robert Weissman