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Blair Horner: A Big Gift For Big Tobacco?

This week is the scheduled end of the legislative session.  Often the end of session is a time when special interest legislation surfaces – it looks like this year is no exception.

Lawmakers are considering legislation that would give a gift to the tobacco industry.  Under the proposal, tobacco companies – and only tobacco companies, no other types of businesses – would not have to post a bond that is the equivalent of the judgment against them in court. 

Under New York law, if someone or a business loses in a lawsuit, they have to pay up.  If the entity chooses to appeal that judgment, in most cases they have to post a bond that is the equivalent to the amount of the judgment.  For example, if a tobacco company loses in a lawsuit and the injured consumer gets an award of – say -- $500 million, and the company wants to appeal, they have to post a bond of $500 million.  The reason is to protect the consumer who won in court by making sure the tobacco company would not be able to shift its assets outside of the state or nation in an effort to reduce its legal liabilities.

This rule applies to all who lose in a lawsuit.  Now, however, lawmakers are considering to limit the size of any bond that tobacco companies – and only tobacco companies – have to obtain if they lose a lawsuit.

Why protect Big Tobacco?  The argument is that the state receives so much in revenues from tobacco companies that there is a fear that if a tobacco company loses big in court, that state revenues will be put at risk.

But there are reasons why tobacco companies may lose in court.  The industry faces legal problems because of the dangers posed their products and their lies and deceptions in deceiving the public on the dangers of their products.

Big Tobacco has been involved in a decades-long effort to mislead policymakers and bamboozle the public about the dangers of their products.  But the industry’s deceptions were finally punished in the courts.

In 2006, a U.S. District Court issued a final judgment in the U.S. government's landmark lawsuit against the major tobacco companies that found the companies had violated civil racketeering laws and defrauded the American people by lying for decades about the health risks of smoking and their marketing to children.

The Judge also found that the tobacco companies' wrongdoing continues today: "The evidence in this case clearly establishes that Defendants have not ceased engaging in unlawful activity ... Their continuing conduct misleads consumers in order to maximize Defendants revenues by recruiting new smokers (the majority of whom are under the age of 18), preventing current smokers from quitting, and thereby sustaining the industry" (pages 1604-1605 of the opinion).

In 2010, the U.S. Supreme Court declined to hear appeals in the case, allowing the decision to stand.  As a result, the verdict in this case is now final: The major cigarette manufacturers are racketeers who carried out a decades-long conspiracy to deceive the American public and target children with their deadly and addictive products.

Tobacco companies claim that failure to cap appeal bonds could bankrupt the companies and threaten payments due to the state.  The state should not respond to such blackmail.  These companies are rich and getting richer.  Philip Morris’s parent, Altria, had net revenue of $1.3 billion in the first quarter of 2013 alone.  Moreover, case law has established that appeal bonds cannot be set at levels that force the defendant into bankruptcy.

Tobacco companies face the prospect of huge monetary judgments because they have amassed huge profits through callous disregard for the health of the American public.  Their products kill more than 25,000 New Yorkers every year.  Relieving cigarette manufacturers of the legal responsibilities faced by every other company doing business in New York would be just one more example of the special treatment afforded to an industry that has grown rich through the suffering of millions.

Given their history of lies, their marketing directed at children, and their production of an enormous public health menace that has cost New York, the nation and the world millions of lives and billions of dollars in health care costs, the tobacco industry simply does not deserve this benefit.

Let’s hope that lawmakers think about who they should be protecting – the public and children or Big Tobacco.

Blair Horner is the Vice President for Advocacy for the American Cancer Society, Eastern Division. His commentary does not necessarily reflect the views of the American Cancer Society.

The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.