Cornered

by Peter Pringle

  Also under fire were the provisions for disclosure of industry documents for which the companies claimed privilege. Under the proposal, a three-judge panel would review contested documents, but critics argued that this procedure would be slow—one document at a time—too expensive, and open to industry abuse. The industry’s real history would remain under wraps for years to come.

  Finally, there was the question of lawyers’ fees. Because it was such a contentious issue, the June 20 proposal had deliberately left the matter to a separate agreement between the lawyers and the industry. But this was a partisan issue: Republicans were traditional seekers of tort reform and despised plaintiffs’ lawyers, who, in their turn, tried to keep Republicans at bay by funding Democrats. Signaling a battle ahead, the congressional Republicans, led by Newt Gingrich, pledged that the lawyers would get not a penny more than they thought they deserved: fees at $150 an hour, considerably less than many had charged. “No matter how much it is it’ll sound like a lot [and] be another black eye for all of us,” said the Atlanta trial lawyer Ralph Knowles.

  * * *

  SHOWING HOW QUICKLY old enemies can become friends in this business, the key negotiators of the June 20 proposal—principally Mike Moore, Dick Scruggs, John Coale, and Stan Chesley—joined forces with the tobacco lobbyists to sell their extraordinary achievement on Capitol Hill. “I’m going up there arm-in-arm with Steve Parrish [of Philip Morris],” said Coale, “I actually like him.”

  Politicians of both parties found the process somewhat distasteful. “Who do these people think they are?” asked Arizona’s Republican senator John McCain. The new partners encountered a stream of complaints. Senator Edward Kennedy, of Massachusetts, a longtime tobacco foe, complained that the proposals pandered too much to industry demands. “It is not for the tobacco industry to dictate what controls on tobacco are acceptable.” He suggested that the industry’s payment should be doubled to compensate federal taxpayers to Medicare (the federal health-care program for the elderly) that had also paid out for smoking-related diseases. “The concessions made so far by the industry should be regarded as the beginning, not the end,” he said.

  In response, Mike Moore admitted that the deal was “not perfect, but very good for the goals we have.” He worried that the concessions gained could also be lost if the legislation took too long. “Move expeditiously,” he urged the senators at one committee hearing. Referring to an industry lawyer, Scott Wise, who was sitting beside him, Moore said, “I’ve got my foot on his neck right now. Let’s don’t miss this opportunity.” But Senator Tom Harkin, who grew up in rural Iowa, where his father was a coal miner, said, “Mr. Moore, I like how you say you have your foot on Mr. Wise’s neck, but it’s the first time this country boy has heard someone say he has his foot on someone’s neck, and that guy says he likes it.”

  The congressional leadership of both parties looked at the lengthening list of disputed issues and forecast that there could not possibly be any legislation until the spring of 1998, or later—unless the president gave the proposal a strong endorsement.

  The long-awaited White House response confirmed that the legislation would not be completed in short order. On September 17, in the Oval Office, President Clinton did not endorse the proposal. Instead, he outlined five broad principles: a combination of industry payments and penalties to reduce youth smoking by raising the price of cigarettes by up to $1.50 a pack; full authority for the FDA to regulate tobacco products; a voluntary ban on advertising to youth; legislation for broad disclosure of industry files; and moves to reduce secondhand smoke and to protect tobacco farmers and their communities. “We’re not rejecting what the attorneys general have done, we’re building on it,” he said. The president praised David Kessler and the AGs and the “private lawsuits” for starting the movement to change the tobacco industry. “Look, if it hadn’t been for what they did, we wouldn’t be here,” he said. Among the carefully chosen guest list in the Oval Office with Clinton were David Kessler, Matt Myers, Mike Moore, Stan Chesley, and Dianne Castano. There were no members of the tobacco industry. The president’s message was clear: the legislation was too complex and the key issues far from resolved. It could not be done in a few weeks, or even a few months.

  It was a great disappointment to Moore and Scruggs, who had clung to the hope that Clinton would endorse the proposals and restore momentum. Outside the White House, Moore suggested the president should ask Congress to stay in session beyond October to push the legislation along, but the answer came back: “No.”

  The industry was upset, as well. In a frosty statement, Philip Morris, R. J. Reynolds, Lorillard, and the United States Tobacco Company said they stood by the June 20 plan and would do their part to meet its “ambitious goals.” In a separate statement, Brown & Williamson objected to vice president Al Gore’s calling the June 20 plan “half a loaf.” Such a remark “trivialize[d] its considerable achievements,” said B&W. For a while, it seemed the deal might never come off.

  * * *

  IN THE END, Clinton had adopted much of what Drs. Kessler and Koop’s special commission had asked for—with one important exception. He made no mention of U.S. sales abroad—the fastest-growing markets and the key to the industry’s long-term profitability. More than 1.1 billion people smoke; about one-fifth of the world’s population. In developed countries, the habit is declining by 1.4 percent a year, but in the developing nations it is growing by 1.7 percent, according to the World Health Organization. Revenue from overseas sales of Philip Morris and R. J. Reynolds leaped from $5 to $27 billion between 1984 and 1996. In 1997, as legal fees and settlements bit into tobacco profits at home, international cigarette sales climbed 7.3 percent.

  With home consumption falling faster than in other developed countries, the U.S. companies had started looking at foreign markets well before the era of the Third Wave. New markets were opening up in Eastern Europe (with the heaviest smokers in the world), in Latin America, and in the Far East. Threatening severe economic sanctions, the Reagan administration had helped the industry pry open markets in Japan, South Korea, Taiwan, and China.

  As barriers in Asia came tumbling down, Philip Morris targeted Japanese women with Virginia Slims. Japanese female college students obliged. One study showed they were four times more likely to smoke than their mothers. RJR sought young smokers with Joe Camel. In South Korea, the U.S. cigarette invasion happened so fast that by the late ’80s students, antismoking activists, and local retailers staged protests against “tobacco imperialism,” and boycotted American cigarettes. In Taiwan, imported brands, most of them American, grew from 1 to 20 percent in less than two years.

  In China, with its 350 million smokers, there was a Marlboro soccer league and Marlboro music hour, a Kent billiards contest, and a Salem tennis tournament. In the Philippines, Asia’s most Catholic nation, U.S. brands could be found on promotional calendars under a picture of the Virgin Mary.

  Even before the collapse of the Soviet Union, Philip Morris and R. J. Reynolds happily responded to an emergency request from Mikhail Gorbachev when Soviet cigarette factories failed to meet demand. The U.S. companies delivered 34 billion cigarettes, the single biggest order in their export history. A pack of Marlboros became standard barter for a cab fare in Moscow. When the Soviet Union collapsed at the end of 1991, Western tobacco companies rushed to buy up dilapidated Russian cigarette enterprises and quickly became the largest investors in the former communist bloc. Philip Morris, RJR, the German tobacco conglomerate Reemstma, and BAT, the British tobacco giant, all snapped up shares. The Marlboro Man was among the first Western ads to appear on Gorky Street. Britain’s former prime minister Margaret Thatcher teamed up with Philip Morris (for a reported $1 million) to help the U.S. company establish a foothold in Kazakhstan, among other things. In the Ukraine, American companies outspent health ministry lobbying in the Rada, the national legislature, to reverse a ban on cigarette billboards and other outdoor advertising.

  The U.S. global invasio
n was so crude it sometimes backfired. In Europe, Philip Morris sought to counter moves for antismoking legislation by launching an ad campaign that suggested inhaling secondhand smoke was less dangerous than eating cookies or drinking milk. “Life is full of risks,” declared one headline above a picture of three cookies. “But they’re not all equal.” France’s health ministry complained; so did Belgian cookie makers, who said the ads defamed their product. Philip Morris dropped the ads.

  The unprecedented legal assault on the U.S. tobacco industry at home stimulated antismoking efforts abroad—especially in Britain, Canada, Australia, and Israel. The American antitobacco forces gave support to the strongest of these legal challenges—in Britain where Tony Blair’s new Labor government promised a new antismoking drive. A young environmental lawyer named Martyn Day launched Britain’s first smoking class action of forty-seven lung cancer victims against the two biggest cigarette companies, Imperial and Gallahers, which together control 80 percent of the British market. The claim was a simple one: that the manufacturers have known since the 1960s how to make less dangerous cigarettes and had failed to do so, despite their duty under British common law. Day had learned a lot from his U.S. counterparts and from the Merrell Williams documents. Elsewhere in Europe, legal action was minimal. In France, where smoking bans in public places are simply ignored, two individual cancer cases were pending. In Italy, one such case was recently lost against the state’s cigarette distribution monopoly. In Germany, there were moves to regulate secondhand smoke. In Asia, two class actions in Japan called on the government to end the state cigarette-manufacturing monopoly. In Brazil, the industry settled two lawsuits by agreeing to put tar and nicotine levels on cigarette packs. But nowhere outside the United States was government as supportive of antismoking measures; nowhere did the legal system present such opportunities to the plaintiffs’ bar to confront the tobacco industry.

  In 1998, as Congress begins to draft legislation, it has become clear that the legal system had reached its limits in the tobacco wars. It had been used effectively to expose a rogue industry. It could recoup government funds for Medicaid programs, and possibly also nonprofit health-care trusts, but it could not easily, or fairly, provide recovery for the tens of millions of smoking victims. There were simply too many of them and their illnesses and afflictions too diverse. For the courts, the national health epidemic of tobacco was like the national health disaster of asbestos, only worse because the number of victims was greater. Facing the asbestos litigation crisis, the Supreme Court had ruled on the fundamental distinction between courts and legislatures. In the Georgine asbestos class action, the court had turned down Ron Motley’s plan for a “global” settlement of current and future claims, ruling instead that such claims were more sensibly a matter for Congress to resolve. The problem was that Congress had done nothing, as it had done nothing about the greater public health calamity of tobacco. Now was the time.

  The small band of liability lawyers who had launched the Third Wave would now take a backseat—except for those who had yet to have their day in court—in Texas, in Minnesota, in a New York “son of Castano” case, and, of course, in the repeat performances of Woody Wilner in Jacksonville, Florida. (Wilner lost his third trial against R. J. Reynolds. The jury found the company was not negligent and its cigarettes were not “unreasonably dangerous and defective” in the case of a Jacksonville woman who had smoked for thirty years and developed lung cancer.)

  Together the plaintiffs’ lawyers had performed the civic duty that Dick Scruggs had spoken of three years earlier. They had pooled their resources to take on Big Tobacco’s “organized money,” to borrow Justice Hugo Black’s wonderful populist phrase for the funds of domineering corporations, and they had cornered the enemy sooner than anyone had thought possible. They had forced a truce on which the state attorneys general had been only too willing, after much huffing and puffing, to lay their imprint. The first two Medicaid suits, in Mississippi and Florida, were settled for $3 billion and $11.3 billion, more than they had dreamed of and in line with the June 20 proposal. At the next $14 billion battleground, in Texas, the industry vowed to stand and fight, but their past policy seemed to belie such valor. Each time they were confronted with a show trial and weeks of exposure in court, the companies had backed down. They settled the Broin secondhand smoke case brought by flight attendants in Florida. And at year’s end, the industry was making overtures to “Skip” Humphrey in Minneapolis to settle the Minnesota suit, but it still looked like it would be the first legal engagement of the new year.

  As the politicians set out to engineer the peace, the exhausted tobacco lawyers looked forward to a rest—or, as David Kentoff, the Arnold & Porter national coordinating counsel for Philip Morris, put it, to the day when the “exotic, bizarre and maverick” tort claims of the Third Wave would give way to a “more orderly and predictable environment.” That was how the old white-shoe campaigners, such as Kentoff, excused their outflanking at the hands of the guerrillas of the plaintiffs’ bar. But the battle would continue, of course. As Elizabeth Cabraser had said, after the smoke of the Third Wave had cleared there remained a body of plaintiffs’ lawyers with the same perpetual existence as the legal armies of Big Tobacco. They would be lining up at the field of dreams.

  NOTES

  Please note that some of the links references in this work may no longer be active.

  In the spring of 1994, the Third Wave of tobacco litigation burst onto the front pages of American national newspapers, in news magazines, and on television—first on ABC News. For the next four years, the tobacco industry would receive the most concentrated media examination in more than a century of existence. Key reports appeared in The New York Times [NYT], The Wall Street Journal (WSJ), The Los Angeles Times (LAT), and The Washington Post (WP). Among the professional publications, The Journal of the American Medical Association (JAMA), the New England Journal of Medicine (NEJM), The National Law Journal (NLJ), and American Lawyer (AL) ran prominent articles.

  Among congressional reports, legal and medical conference reports, and independent surveys are:

  Regulation of Tobacco Products: Hearings before the Subcommittee on Health and Environment of the Committee on Energy and Commerce, House of Representatives, Part 1, March 25 and April 14, 1994; Part 2, April 28, May 17, and 26; Part 3, June 21 and 23.

  The Tobacco Products Liability Project at Northeastern University 3-vol set: Cipollone and Related Document Packet #7-15-92.

  Annual Conferences of the Tobacco Products Liability Project, 10th annual conference, December 2–4, 1994 onward; also for quick reference, see TPLP’s Tobacco on Trial.

  Mealey’s Tobacco Litigation Conference Reports, Sponsored by Mealey Publications, Wayne, Pennsylvania; October 26–27, 1995; June 1–18, 1996; March 13–14, 1997; September 18–19, 1997; also the excellent bimonthly Mealey’s “Litigation Report: Tobacco.” The 12-volume submission of the tobacco industry to FDA, “Comments of Brown & Williamson, Liggett Group Inc., Lorillard Tobacco Company, Philip Morris Inc., R. J. Reynolds Tobacco Company, Tobacco Institute, before the United States Food and Drug Administration,” Docket no. 95N-0253 and no. 95N-0253J. Reports of the Surgeon General, U.S. Public Health Service, 1964, 1979, 1988, 1989, 1990, 1994.

  Among the several Internet sites now available are:

  Tobacco BBS (Bulletin Board System). Information on smoking, news stories, and links to other sites. http://www.tobacco.org

  Centers for Disease Control information and links to other groups. http://www.cdc.gov/nccdphp/osh/tobacco.htm

  National Center for Tobacco Free Kids. http//www.tobaccofreekids.org

  RJR Nabisco Inc. company information and news. http://www.rjrnabisco.com

  Tobacco Control Resource Center and The Tobacco Products Liability Project. http://www.tobacco.neu.edu

  PROLOGUE: DINNER AT ANTOINE’S

  This snapshot of the opposing forces in the Third Wave was the author’s first meeting with members of the plaintiff
s’ bar.

  CHAPTER 1: A NOVEL OBSERVATION

  The story of the Nathan Horton case comes from interviews in Lexington, Mississippi, with Don Barrett, Ella Horton, and Earline Hart, and from contemporary news reports, especially those by Morton Mintz, WP, and Myron Levin, LAT.

  The formation of the Mississippi suit comes from the author’s interviews with key participants: Dick Scruggs, Mike Moore, Don Barrett, Charles Mikhail, and Professor Laurence Tribe. Profiles of Dick Scruggs, AL, April 1996, and WSJ, March 15, 1996; Mike Moore profile, NYT, April 6, 1997.

  Garner, Donald, “Cigarettes and Welfare Reform,” Emory Law Journal, vol. 26, no. 2, Spring 1977.

  CHAPTER 2: A DEATH IN NEW ORLEANS

  The birth of the Castano class action was put together from interviews with Castano lawyers beginning in December 1994, especially with Wendell Gauthier, John Coale, Elizabeth Cabraser, Suzy Foulds, Russ Herman, Calvin Fayard, and Danny Becnel.

  For a racy introduction to the liability lawyers, see John Jenkins, The Litigators, New York: Doubleday, 1989. Stanley Chesley was profiled in AL, Jan–Feb 1994. For a round-up of the ABC case, see Ben Weiser in WP, January 7, 1996. Glenn Collins wrote the most colorful business reports of the Castano lawsuit; see his “A Tobacco Case’s Legal Buccaneers,” NYT, March 6, 1995.

  For background on the Georgine (later Amchem) asbestos class action, see Henry Weinstein’s “Debate Rages as Court Gets Plan to Settle Asbestos Cases,” LAT, February 21, 1994.

  CHAPTER 3: THE DRAMA TEACHER

  A series of author interviews with Merrell Williams started in May 1996. The author also interviewed Fox DeMoisey in Louisville, Kentucky. Phil Hilts published the first interview with Williams in NYT, August 8, 1994, and he expanded on the interview in his book Smokescreen, infra. Subsequent profiles of Williams appeared in LAT, June 23, 1996; WP, June 23, 1996; AL, Jul–Aug 1996. A key Brown & Williamson deposition of Williams was taken on March 20, 1996, in Pascagoula.