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Tobacklash! | 1, 2, 3


First, the $3 billion award. The award granted to Boeken, who began smoking as a teenager in 1964, was divided into two parts: $5.5 million in general damages and $3 billion in punitive damages. In making the latter award, the jury recognized the enormous net worth of Philip Morris and decided that an award of this magnitude would be necessary to get the attention of the tobacco giant and force it to rethink its strategy on disclosure of health risks. Presumably, the jury was also well aware that there was no way the $3 billion award would stand. The tobacco company's inevitable appeal will bring the tag down dramatically.

More than an actual expectation, the size of the award is an indication of the jurors' response to what they learned in the courtroom. This jury heard witnesses document decades of industry deception. The jury saw documents that proved beyond a doubt that the industry was aware of the threat of lung cancer by 1950, if not before. Yet the industry publicly denied this causal association and made a largely successful effort to block the free flow of information about the dangers of smoking in the media -- by the sheer clout of its own advertising dollars. The jurors concluded that $3 billion best approximated the degree of the damage done by Philip Morris.

Second, the purpose of jury awards is not to enrich sick smokers but to provide the tobacco industry with a clear economic incentive to adopt more responsible rules of corporate behavior in the future -- if indeed you can actually responsibly market a product that kills your customers when used as intended.

Third, the facts at hand do not support any argument that the industry has already been punished by paying for past misdeeds. The tobacco industry felt no economic pain in the misguided $200 billion deal it cut with states to reimburse them for the healthcare costs of treating cigarette-related illnesses. Indeed, the industry not only recouped those outlays simply by passing on the costs to cigarette smokers in the form of higher pack prices but also further enhanced the dependence of state treasuries on cigarette sales. If sales declined, cigarette manufacturers would have less money to give to the states for healthcare.

In effect, the deal was so favorable to Big Tobacco that it literally turned state governments into economic partners in the sale of the cigarettes, the leading cause of preventable death in the United States. The most accurate description of the settlement came from Martin Broughton, chief executive officer of Brown and Williamson (maker of Kool, Lucky Strikes and Capri cigarettes): "They want to be paid off and we want a peaceful life."

Indeed, Big Tobacco's settlement with the states was starkly different from settlements to which other corporations accused of malfeasance have agreed. In effect, tobacco companies paid the fine, passed on the costs of the fine to consumers and then resumed business as usual. It's as if a chemical company that had been covertly dumping poisonous material into a river and making people sick was finally caught and fined, and then -- immediately after paying up -- resumed its dumping. From this point of view, the settlement was a monetary payment by tobacco companies for permission to stay in business.


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  Union of Concerned Scientists  
 
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As to "accepting" FDA regulation, Philip Morris is simply acting in its best economic interests, knowing full well that the FDA has little power to affect the sale of cigarettes and hopeful that the so-called regulation will allow it to get the U.S. government to sanction any claims it might make in the future for a safer cigarette.

Fourth, those who argue that individual smokers are responsible for their own smoking-related diseases are only partly correct.

There comes a point when an adult who is fully informed of the risks of smoking should be held responsible for developing a smoking-related disease. But even today, we have not reached the point where cigarette companies have sufficiently detailed the risks to allow a fully informed decision. And surely in the mid-l960s we were nowhere near the point of full disclosure.

Yes, in the Boeken case, an attorney for the tobacco industry broke industry precedent, going so far as to describe smoking as generally dangerous to health and conceding that the industry had failed to publicly acknowledge this danger. "These choices made by Philip Morris and the tobacco companies were the wrong choices," he said. "They fell out of step. They fought too long." But this same attorney and his colleagues would argue that the hazards of smoking have been widely known for decades and the fact that the industry was denying them was irrelevant -- because no one believed the industry anyway.

There are a number of flaws in this reasoning.

. Next page | Even today, most smokers have no concept at all about how dangerous cigarettes really are
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