This is Chapter 14 of my new book, working title “The Industry Playbook: Corporate Cartels, Corruption and Crimes Against Humanity” that is being published online chapter by chapter.
It is not just the army of scientists, PR spinsters, politicians and lobbyists. Without an army of lawyers, the industry playbook would be far from complete.
People started suing the cigarette companies as early as the 1950’s. In 1964, over 30 lawsuits had been filed against Big Tobacco accusing them of negligence and other crimes. The majority were dismissed or dropped. Others failed.
One of the main legal strategies was to do all kinds of maneuvers designed to maximize costs for the plaintiffs. Big Tobacco had deep pockets, meanwhile their victims, and the lawyers they worked with, simply couldn’t compete economically.
R.J. Reynolds attorney J. Michael Jordan specified, “The aggressive posture we have taken regarding depositions and discovery in general continues to make these cases extremely burdensome and expensive for plaintiffs’ lawyers…to paraphrase General Patton, the way we won all of these cases was not by spending all of [R.J. Reynolds’] money, but by making the other son of a bitch spend all his.”
It wasn’t until 1988 when a jury awarded Antonio Cipollone $400,000 in damages that we saw the first judgment against any tobacco company. Still, this was later overturned. It was estimated that the firm representing Cipollone had spent close to $10 million and a decade of 3,000 hours per year on this case.
The first actual payment of any damages didn’t occur until 1996 when lung cancer victim Grady Carter was awarded $750,000 in damages from Brown & Williamson.
That’s almost fifty years of a flawless legal defense! How were they able to do this?
Understand that this was often a use of monopoly power once again. In 1964 all the Big Tobacco executives agreed to let attorney Thomas Austern of Covington & Burling represent them all when they went up against the FTC.
Like there was a united front of PR by working with Hill & Knowlton, there would be a predominately united legal front too. In this case, it was defense against the FTC in regulation of ads, but the same strategy would be used elsewhere. This is summed up by an attorney with Brown & Williamson, J. Kendrick Wells. He said, “direct lawyer involvement is needed in all activities pertaining to smoking and health.”
The principle legal defense used against the people was that they were warned of the dangers with the FTC required warning labels. A law that was meant to help people against Big Tobacco’s excesses, in turn actually helped them out.
“Once the purchaser is informed of a danger, the burden of any injuries incurred from that danger would shift to him,” argued David Hardy, a partner at Shook, Hardy & Bacon. This Kansas City law firm helped shape the overall legal strategy that worked against plaintiffs.
They would also argue that even if cigarettes did cause cancer that they couldn’t prove it did so in any individual case of cancer. Epidemiologically that cigarettes caused cancer was clear. But in individual cases the causality was difficult to pin down.
One helpful strategy included the use of scientific experts, this time extended to the courtroom. Brandt writes, “In 1966, CTR had established, under the guidance of its Committee of Counsel, a ‘special projects’ program to undertake specific research projects and to prepare scientific witnesses for trials and congressional testimony. Special Projects offer the lawyers considerably more control to direct the research and to withhold negative findings. This was overseen by Ed Jacobs of the firm Jacob, Medinger, Finnegan & Hart. As one former R.J. Reynolds employee explained, ‘As soon as Mr. Jacob funded [a scientific study] it was a privileged communication and it couldn’t come into court.’”
This is how science is used to influence not just the body of scientific research and the public, but how law is both made and enforced.
One of the most useful legal defense strategies was to claim client-attorney privilege. By running research papers and other memos through their paid lawyers, Big Tobacco would state that these did not need to be disclosed.
This strategy worked for many decades, but eventually many of these privileged documents were leaked or disclosed. One example came from 1983. A legal memo from a law firm working for Philip Morris quotes researchers Victor DeNoble and Paul Mele in their paper “Nicotine as a Positive Reinforcer in Rats” that “their overall results are extremely unfavorable” and that “research such as this strengthens the adverse case against nicotine as an addictive drug.” Note that this was in a legal memo that eventually came out. There was no earlier record of this damning science showing that the tobacco companies knew about the addictiveness of nicotine while publicly admitting nothing.
Shook, Hardy & Bacon wrote to Philip Morris, “Research engaged in, as well as some possibly under consideration, by Philip Morris, has undesirable and dangerous implications for litigation positions the industry takes in regard to smoking behavior…the performing and publishing of nicotine research clearly seems ill-advised from a litigation point of view.”
The lawyers did not approve of this research. What does law have to do with scientific fact? Sadly, it seems to lead what can and should be investigated and what should not.
Even when laws have been breached, that doesn’t mean the playbook has run out of strategies. In 1994, Congressman Marty Meehan requested the DOJ investigate the tobacco companies for perjury and criminal conduct. Despite five years investigation by a task force the DOJ did not file any charges. Even Judge Kessler, who found the companies guilty in the RICO case, said “perhaps it suggests that additional influences have been brought to bear on what the government’s case is.”
I can’t say for sure why this was, but many people think the law and those involved, especially judges, are beyond reproach. Some of them, maybe even most of them. But that doesn’t mean that all are. This is conjecture, but various backroom deals are absolutely possible in this realm as well.
In Horton v. American Tobacco, the end result had been a hung jury with claims of jury tampering. Seeing everything else these lawyers and executives involved in, would you put that past them?
And just like Big Tobacco was able to steer much legislation in its favor, they would sometimes pull this off in losing legal battles too! In 1997 over 30 US states banded together to sue Big Tobacco for public health costs. In June that year, Attorney General Moore announced a “global settlement” with tobacco industry. They agreed to pay $365.5 billion to the states over the next 25 years.
By November 1998, this master settlement agreement, MSA, was negotiated. The amount was whittled down. Five major tobacco companies agreed to pay $206 billion to 46 states over 25 years. This also included funding a national foundation devoted to public health and some restrictions to advertising.
The bad guys had to pay. Sounds good right? Regarding this settlement, “It’s a terrible deal,” said UCSF health economist Dorothy Rice. She estimated California had $8.7 billion in costs related to cigarette illness but would receive only $500 million per year.
The settlement made it so that the governments would assure Big Tobacco was successful enough to keep making these payments. Brandt writes, “In Illinois, where Philip Morris lost a class-action suit with a judgment of $10.1 billion, more than thirty attorneys general filed an amicus brief warning that bankruptcy to the company would cause dire harm to the states. It was a remarkable turnabout to have the attorneys general defending the industry and its economic well-being…The MSA proved to be one of the industry’s most surprising victories in its long history of combat with the public health forces.”
So here we see a way to not just put Congress in your pockets through lobbying, but the state’s legal departments through good lawyering!
Big Tobacco was amazingly successful in the court room. But the truth did eventually come out. It was in the courtroom where many battles were eventually won. That will be covered in the upcoming chapter Discovery and Litigation.
Key Takeaways on Legal Defense
- Court cases against Big Tobacco began in the 1950’s. Due to an army of lawyers and a wide range of legal strategies, they didn’t lose a case until 1988, and paid nothing until 1996.
- Making cases difficult, long and expensive for anyone that came against them was the first key legal strategy.
- Like the united PR strategy, a united legal strategy was agreed on by the tobacco companies in many areas.
- A law meant to help people, by putting warning labels of cigarettes themselves, was a key defense strategy in saying that people had been warned.
- The lawyers became directly involved in science itself, directed what studies were done, what was withheld, all of it becoming client-attorney privileged communication and thus not open to the public.
- Despite criminal conduct and a successful RICO case, the DOJ never filed any charges against the tobacco companies. This raises the question of what larger influence they used.
- In at least one court case, there were accusations of jury tampering.
- Even a settlement made between the tobacco companies and the states, often trumpeted as a big win against Big Tobacco, would end up supporting the criminal companies. This made the states reliant on tobacco revenues which stopped further regulation or court battles.
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