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Editor: C. Calvin Warriner
Profession: Cigarette & Tobacco Attorney

Category: Tobacco Litigation

So what has really happened since the days of Joe Camel and the Marlboro Man...with advertising?

On April 3, 1997, in a conference room at the Crystal Sheraton Hotel in Washington D.C., Philip Morris' CEO, Geoffrey Bible raised a white flag and brandished the peace pipe, no pun intended. He and his cohort, R.J. Reynolds Tobacco Co.'s Stephen Goldstone told a gathering of thirty-five attorneys, and representative state attorneys general, that it was time to talk about some positive changes in the tobacco industry. Big Tobacco had seen the handwriting on the wall and was staring up at the sharpened edge of the sword of Damocles, i.e., FDA regulation of the cigarette industry.

Big Tobacco's representative at the meeting, former North Carolina Supreme Court Justice, Phil Carlton said, When we told them we were willing to do away with the Marlboro Man and Joe Camel, I thought the AGs were going to have a heart attack. They were shocked."

After sitting in the litigation catbird seat for five decades, and prevailing in nearly 100% of plaintiff suits ever filed against them...why would Big Tobacco ever call a truce, especially now?

Because with every passing day, the media was pounding home the message that Big Tobacco was devious; its products were dangerous... had lots of risk and little benefit; and its products were addictive, and no different than any other illegal drug. The media was also bringing home the message that Big Tobacco's products were polluting the air that we all breathe; and that children were falling prey to the pollution and addiction that would be following them, in a stepwise fashion, all the way from their gestation, into their teens and beyond into their early graves.

In the midst of this massive media onslaught, one framed with whistle blowers and savvy mass torts attorneys, Big Tobacco knew they could no longer always fight and win by spending hundreds of millions. Instead, they would have to spend billions, with much less chance of success.

As a result. Big Tobacco wanted a peaceful surrender to allow it to morph its empire once again; to make the media frenzy go away; to dazzle the AGs with a seemingly huge settlement; and to throw some prime rib at what Big Tobacco considered the contingent fee, mercenary attorneys who were the effective backbone of the state tobacco suits.

After the state settlement of course, all eyes, including those of the media, were on the attorneys, who bought faster planes, bigger boats and nicer cars. One mass torts attorney took home one billion dollars in fees. It seemed that obscene amounts of money were being handed out in contingency fee payments. Whether the fees were deserved or not, the appearance of undue opulence damaged the consumers' cause against the tobacco industry.

As a result of this focused publicity on contingency fees, congress and the general public became less interested in pushing for much needed regulation. The overreaching was clear. Everyone had tried to accomplish too much with a single settlement agreement. Likewise, the McCain Comprehensive Tobacco Bill died on the floor of the U.S. Senate for the same reason, attempting to accomplish too much with a single Bill. This is the result that Big Tobacco probably anticipated. The whole reason behind the settlement went up in smoke.

So, what has happened since 1997? Why it's business as usual.

Since 1997, Philip Morris has had a 36% rise in profit ($4.6 Billion in FY 2005), and a doubling in the company's stock price since the first state lawsuit in1994. But, only 8% of the $61 Billion received to date in state settlement payments has gone toward anti-smoking efforts. The remainder has funded ordinary state expenses and tax cuts. And $15 Billion went to the private attorneys who spearheaded the success of the litigation. But money isn't everything.

Most of all, Big Tobacco has taken a lesson from popular singer, Madonna and reinvented itself once again. The Marlboro Man, the real one who appeared in the commercials, has since died of lung cancer from years of smoking cigarettes, but his spirit lives on. Joe Camel, who walked a mile away from state settlement controversy is back once again, and bigger than ever with the kids. That's because R.J. Reynolds has brought them candy flavored Camels. Except for the coy reinvention of Big Tobacco's business methods, things have not changed. There ought be more media coverage of this continuing insanity. But most of all...

There ought to be a penalty.