FEDERAL SUIT: Coming Your Way This Fall
The Dallas Morning News reports that the Department of Justice will file a suit against the tobacco industry within two months, according to sources familiar with the case. The lawsuit, to be patterned after Texas' case against the industry, "is expected to seek repayment of hundreds of billions of dollars of smoking-related Medicare expenses ... and will accuse the tobacco companies of fraud, racketeering and antitrust violations." Tobacco industry analyst Mary Aronson said "it's only natural" that the federal government use the Texas case as a model, in that it was the only tobacco suit litigated in federal court and was the first to accuse the industry of racketeering. She said, "The Texas case gives (the Justice Department) a firsthand preview of how a federal court will view many of the allegations, especially the racketeering and antitrust allegations."
A Day Late and a Dollar Short?
Many experts note that the government may have waited too long to sue, jeopardizing its chances for success. "The Justice Department's window of opportunity is closing quickly and may in fact already be shut," said Mississippi Attorney General Mike Moore (D), a leader among state attorneys general in taking legal action against the industry. He added, "I hope they still bring the lawsuit because it's the right thing to do, but I fear the time in which such a case would have the biggest impact has passed." Tobacco companies plan to delay litigation until after President Clinton leaves office. Martin Feldman, analyst for Salomon Smith Barney, said, "The prospect of Bill Clinton gone and a George Bush presidency make the industry almost giddy. The industry knows it will fare much better in settlement negotiations with Bush than the current administration. Who knows, he may even kill the case outright." Bill Novelli, president of the Campaign for Tobacco-Free Kids, added, "It would have been so much better if the Clinton administration had filed their suit earlier. But now, the future of this case is in serious jeopardy. We don't know if a President Bush would let this lawsuit die or would he instruct his Justice Department to settle it on terms very favorable to the tobacco companies?" Bush has called the question "hypothetical," but said "it seems like we've filed plenty of lawsuits already." By waiting, the government may also have missed the height of negative public opinion toward the industry. Ron Motley, who represented 31 states in anti-tobacco lawsuits, said, "A major part of this lawsuit is public attitude and I can tell you, it's waning." Finally, the government may not be able to prosecute such a difficult case. Motley said, "Keep in mind, this is the same Justice Department that spent five years investigating whether the tobacco company executives raised their right hands and lied to Congress about the addictiveness and dangers of smoking. If they couldn't prove that case, then how in the world are they going to handle the most complex litigation ever? I'll believe the DOJ is going to sue when I see the lawsuit filed" (Curriden, 9/14).