Tobacco regulations date back to the prohibition in many states in the early 1900s. Since becoming legalized again, few regulations have been enacted, while many others have been prevented. In 1955, the Federal Trade Commission issued a seven-point guide for cigarette companies to follow voluntarily. Although limited in scope and loosely enforced, laws against sales to minors have been enacted.
In the mid-1990s, the American Medical Association urged the U.S. government to regulate cigarettes as an addictive drug. It also urged banning the export of cigarettes.
The FDA, which has attempted to regulate tobacco, defines a drug as anything that is intended to affect the structure and function of the body. Nicotine definitely affects the function of the body. As stated in an earlier chapter, nicotine is in a class of compounds called alkaloids, which includes cocaine, morphine, quinine, and strychnine. Nicotine can increase alertness, improve mood, and sharpen your short-term memory—making it more addictive. Nicotine only takes seven seconds to stimulate the brain. It takes heroin 15 seconds. Dopamine, a neurotransmitter which plays a number of important physiological roles in the bodies of animals, is produced when nicotine reaches the brain. Dopamine plays a major role in the brain system that is responsible for reward-driven learning. Every type of reward that has been studied increases the level of dopamine transmission in the brain, and a variety of highly addictive drugs, act directly on the dopamine system.
In 1907, the federal government took antitrust action against American Tobacco Company. The feds ordered the company to break apart in 1911 because it was a monopoly. Another antitrust lawsuit is argued in 1941, but fails to proceed.
Since then, numerous lawsuits have been filed against tobacco companies, but none succeeded, until recently. Now, some new legal strategies are working against tobacco companies, including implied admissions, implied and express warranty, unjust enrichment, suppression of facts, assurance of safety, and fraud and conspiracy to addict, and RICO (Racketeering Influenced and Corrupt Organizations). U.S. Justice Department Suit in September 1999.
It helped when ex-tobacco lobbyist, Victor Crawford, switched sides and spoke against Big Tobacco before dying of lung and throat cancer, which were caused by smoking. Adding to the momentum, the Liggett Group admitted its knowledge of cigarette dangers. “Cigarettes kill people beyond a reasonable doubt,” a Liggett Group lawyer wrote. Since then, other industry insiders have come forward and helped build a variety of criminal cases against the tobacco industry, including, fraud, racketeering and a conspiracy to addict. Other lawsuits based on the faulty product angle have been abandoned because cigarettes—as deadly as they are—are working as intended.
In 1997, 46 states negotiated a $368.5 billion settlement with the tobacco industry to compensate them for healthcare costs spent taking care of sick and dying smokers. Oddly enough, the U.S. Congress killed this agreement in favor of a smaller $205 billion settlement with 46 states. Initially, these funds were spent on everything but tobacco education and cessation. However, the settlement does restrict tobacco marketing tactics slightly more than before. To pay for the landmark settlement, cigarette companies raised prices in the U.S. about $1 per pack. In addition, a great deal of cigarette production has moved abroad to avoid rising taxes and shipment costs.
In Florida, one in every five deaths is due to tobacco. Because of the costs associated with this carnage, Florida passed a special law to improve its odds in a class action lawsuit against Big Tobacco. The State ran ads in 68 newspapers across Florida seeking plaintiffs for its class action suit. As a result of this unprecedented effort, in July 1999, a jury found five tobacco companies guilty in a $200 billion settlement. It also set a precedent encouraging similar lawsuits across the country. The State earned a judgment of $11.3 billion from a previous settlement regarding Medicare costs incurred from tobacco damages.
Howard Aaron Engle (September 11, 1919 – July 22, 2009) was an American pediatrician and lifelong smoker who was one of the plaintiffs in a class action lawsuit filed in Florida against the tobacco industry. Engle claimed that he smoked multiple packs of cigarettes daily since he was in college and was unable to quit despite multiple attempts even after contracting emphysema, continuing to smoke until his death. In July 2000, after two years and 157 witnesses, the jurors held the tobacco companies liable for illegal and wrongful acts. The jury awarded $145 billion in punitive damages against the tobacco industry for knowingly selling a defective product, marketing to kids, and intentionally lying to the public and their own customers about the dangers of smoking and its addictive power. The punitive damage award was the largest by a jury in U.S. history.
The Florida Third District Court of Appeal overturned the verdict in May 2003, citing the fact that the group was too disparate to have been certified as a class as its members had started and continued to smoke for disparate reasons, that the punitive damage award was excessive and that the plaintiff’s attorneys had used arguments that were “racially charged”—likening the actions of the tobacco industry to slavery and genocide—to prejudice the six-member jury, four of whom were African American. The Florida Supreme Court decertified the group but allowed each of the class’s members, known as the “Engle progeny,” to file lawsuits of their own on an individual basis. Engle received an undisclosed settlement in the hundreds of thousands of dollars from the $700 million fund posted by the cigarette manufacturers during the appeals process.
“They feel they are above reproach,” said juror Leighton Finegan in an interview with the New York Times in July 2000. “They committed fraud. They lied to the American public. They devastated millions of lives.”
In 1998, Florida spent $70 million on an anti-tobacco campaign and achieved a 19 percent decrease in smoking rates among middle-school students. Despite this initial success, the Florida Legislature slashed this budget by almost half in 1999. The good old boy network dies hard.
Several other states have stepped up the pace of regulations and lawsuits because of the mounting sickness and deaths associated with smoking. In 2000, Massachusetts passed a law requiring tobacco companies to list all cigarette ingredients. In 2003, A federal appeals court ruled that a Massachusetts law requiring tobacco companies to disclose the ingredients in all their brands and products violates the constitutional prohibition against unreasonable seizure of property by “forcing companies to reveal trade secrets.”
The State of Minnesota has a history of anti-tobacco sentiment. It banned smoking on the floor of the House of Representatives in 1859. In 1887, it passed a state law demanding that public schools teach children about the hazards of smoking. It outlawed the sale of tobacco products altogether between 1909 and 1913. In 1998, the state won a lawsuit based on the premise that the conduct of the tobacco companies was illegal. The state broke through the industry’s shield of client-attorney privilege, which routinely worked to conceal secret information in past lawsuits. Tobacco-related illnesses cost the state $470 million per year. The state won a $6.6 billion settlement in 1998. Blue Cross and Blue Shield, an HMO and plaintiff, also received damages due to increased costs from treating sick smokers in the state. This marked the first time a health insurer received damages in a tobacco suit. It received $469 million.
“Tobacco companies have made hundreds of millions of dollars of profit, and the taxpayers have stood by and cleaned up the mess,” said Mississippi Attorney General, Mike Moore. The state won a $3.4 billion settlement over 25 years to cover added healthcare costs caused by smoking. Several other states, including Texas and West Virginia also have won suits against the tobacco industry because of its deceptive and deadly practices.
Several American Indian tribes also have taken legal action. In 1999, 20 Indian tribes appealed a ruling in federal court saying they were left out of the major provisions in the landmark settlement between tobacco companies and 46 states. However, In July 2001, their appeal was rejected. It’s expected that most states won’t share their tobacco settlement funds with approximately two million Indian Americans or Alaska Natives because of state sovereignty issues. As a result, the American population most ravaged by tobacco won’t benefit from the settlement.
Many countries also are seeking justice against the tobacco industry, including Australia, Guatemala and the Marshal Islands. In December 1999, a French court found local tobacco company Gauloise and Gitanes responsible in the death of a 49-year old smoker who died of lung and larynx cancer.
Of course, over the years, numerous individuals have taken tobacco companies to court in pursuit of health damages. Unfortunately, very few have succeeded against the legions of tobacco lawyers. In 1998, Rose Cipollone was the first person to be awarded damages in a smoking liability case in the U.S. However, the verdict was overturned on appeal and dropped.
In 1996, Lilo McLean filed a wrongful death suit against Philip Morris, makers of Marlboro. McLean filed on behalf of her deceased husband David McLean—a Marlboro Man in commercials during the 1960s. They claimed he choked through several packs of cigarettes on every shoot to get the smoke and the ashes on the cigarette just right for the camera crew and the directors. He died of lung cancer in 1995 at the age of 75.
“They used him as a pawn to make everybody smoke,” said Jack Baldwin, an attorney representing Mrs. McLean. “They didn’t even tell him the danger. He was duped.”
In 1998, Margaret Maddox received $1 million decision on behalf of her deceased husband, Roland. She sued Brown & Williamson, maker of Lucky Strikes. Momentum began to build.
The family of Milton Horowitz received $1.5 million from Lorillard Tobacco Co. in 1998 because he died of lung cancer in 1996. He died of a type of lung cancer attributable to the asbestos used in the filters of Kent cigarettes in the early 1950s.
In 1998, Philip Morris settled a class action securities suit filed on behalf of those who bought the company’s common shares between June 11, 1991 and May 6, 1994. The suit claimed that the company misled investors by denying the addictiveness of nicotine. Philip Morris agreed to pay $105 million.
In 1999, Patricia Henley, in San Francisco wins a $51.5 million verdict and a $26.5 million settlement from Philip Morris. The 52-year-old grandmother said she had her first cigarette at a high school dance and went on to develop lung cancer.
In 2001, a California jury awarded $3 billion to Richard Boenken, a 56 year-old securities and oil broker who smoked since he was 13. A jury found Philip Morris guilty of six counts of fraud, negligence and selling a defective product. After smoking two packs of Marlboro cigarettes per day for 40 years, he was diagnosed with lung cancer in 1999. The cancer subsequently spread to his brain, back and lymph nodes. In the trial, Mr. Boeken’s lawyer explained that his client was able to give up alcohol and heroin, but could not quit his nicotine habit.
“I have always believed very much in big business,” Boeken said after the trial. “I just believed what they said. I believed when they said it was not addictive and it’s not harmful to your health. Call me naïve, but I believed them.”
“We want them (Philip Morris) to be responsible for their product,” said Denise Key, a juror, after the trial. “We want them to put on the product: ‘It Kills’.”