The Guardian September 13, 2000


Tobacco industry strikes back

by Amit Sen Gupta*

A jury in Miami USA slapped fines amounting to US$145 billion against the 
US tobacco industry in July, as punitive damages. The award, in the case 
popularly known as the Engle (after Howard Engle, a Miami child specialist 
who suffers from emphysema  a disabling disorder of respiratory function 
that is often tobacco related), dwarfed other recent US damage judgements 
and is being see as a potential precedent that might bring the global 
tobacco industry to its knees.

The Miami jury, which had sat on the case since October 1998, ruled that US 
tobacco companies were liable for lung cancer and other ailments among an 
estimated 5,000 000 or more unidentified smokers in Florida.

The ruling covers five giant tobacco companies in the US, including the two 
largest companies  Philip Morris Co Inc, and R J Reynolds Tobacco Co. But 
as the tobacco industry manoeuvres to get the judgement annulled, it is 
still unclear whether the damages will ever be paid.

Series of verdicts

The punitive damages awarded were actually the third in a series of 
verdicts handed down by the Engle jury, all indicting the tobacco industry.

A year earlier, the jury found that cigarette smoking caused 20 diseases, 
and that the five cigarette manufacturer defendants, individually and in 
conspiracy with each other and two trade groups they had created, committed 
a variety of crimes including fraud and fraudulent concealment.

Then in April 2000, the jury found the defendants liable to three 
individual plaintiffs (who had brought in the case), rejecting the 
industry's claim that two of them had a rare form of lung cancer not 
related to smoking and that the third developed his throat cancer from wood 
dust rather than his years of smoking.

The jury awarded the plaintiffs compensatory damages for medical expenses, 
lost wages, and pain and suffering averaging more than US$4 million each.

Extrapolated to the 5,000,000 or more ill or dead Florida smokers estimated 
to be in the class, the industry's obligation just to Florida smokers could 
conceivably exceed US$2 trillion.

Unlike earlier settlements reached by the tobacco industry with States in 
the US, which it can meet with annual payments averaging US$10 billion a 
year in perpetuity, legal judgements after jury verdicts are fully payable 
once appeals have been exhausted.

Even so, if the industry's only legal liability were for the US$145 billion 
Engle punitive damage award, it could probably borrow the money to pay it 
off, financed by a modest price increase in its products. But it certainly 
could not pay US$2 trillion.

More generally, compensating the 95 per cent of Americans afflicted with 
disease caused by tobacco who are not Florida residents, at just 10 per 
cent of the rate adopted by the Engle jury in its individual verdicts, 
would leave the industry with a multi-trillion dollar liability that would 
mean bankruptcy.

There is more bad news for the tobacco industry.

The Engle case is unlikely to remain solely a Florida phenomenon. Unless 
the judgement is quickly reversed, courts in other States will be called on 
to provide their residents with similar rights to recover from the tobacco 
industry.

Indeed, in the week following the verdicts for punitive damages, public 
health groups in Australia, Britain and Canada publicly called for similar 
action in their countries, and the Health Minister of Italy proposed to sue 
cigarette manufacturers for damages to health.

Incriminating documents

What has changed the way courts are now viewing litigation against the 
tobacco industry, and has brightened the prospects for such litigation 
world-wide, is the widening availability of incriminating internal 
documents from the industry.

The Engle jurors pointed to these documents to explain and justify their 
verdicts. The documents clearly projected the industry to jurors as greedy, 
callous, deceptive, and manipulative.

Although the documents were unearthed largely as a result of litigation 
brought by state attorneys general in the United State, they provide 
evidence of a world-wide conspiracy.

This evidence will be useful for litigation everywhere.

Similarly, evidence from the documents apparently played a part in the 
European Commission's announcement last month that it plans to sue in the 
United States alleging involvement by American cigarette maker in European 
smuggling.

In the face of potentially bankrupting litigation in the United States and 
abroad, tobacco companies will probably once again seek relief through US 
congressional legislation granting them legal immunity.

The industry would probably agree to some regulation by the US Food and 
Drug Administration, and other concessions, to secure such legislation.

Global tentacles

In its first strike against the Miami verdict, the US tobacco industry has 
successfully had the case removed to a US Federal court from the Miami 
state court, and a federal judge is expected to rule within the next two 
months whether the case stays in the federal court or returns to the 
Florida state court.

The tobacco industry is banking on the case being moved permanently to the 
federal court because, as an industry spokesman puts it, "If the case 
remains in the federal court, this will be seen as a positive move, as most 
class actions of this type have been rejected by federal courts".

That the tobacco industry was going to hit back, was a foregone conclusion. 
Its global tentacles have been exhaustively documented, designed to 
undermine all attempts at tobacco control.

Unlike bacteria, fungi and viruses that spread disease, the tobacco 
industry employs sophisticated lawyers and public relations experts and 
even scientists to distort the scientific and political process.

Secret industry documents, now available, reveal a maze of lies, deceit and 
conspiracies.

For example, the tobacco industry knew that candy cigarettes encourage 
young children to smoke and they mounted effective campaigns to hide this 
truth and distort scientific research to protect the use of this effective 
promotional device.

In 1977, the multinational tobacco companies agreed to "Operation 
Berkshire".

This was a secret plan designed to implement the same conspiracy outside 
the United States that an 1954 agreement did in the United States, when 
executives agreed not to acknowledge the dangers of smoking and to set up a 
coordinated defence for the industry.

Discrediting the WHO

A major part of the tobacco industry's campaigning has been aimed at 
discrediting the World Health Organisation (WHO). Five years ago, American 
economist Richard Tollison mounted a major critique on the WHO's budgetary 
priorities.

Tollison's main claim was that too little of the WHO's money was spent on 
improving health in the developing world, and that "the poorest nations in 
WHO are interested in basic public health, and not in the more exotic 
forays of WHO into the public health issues of the modern industrialised 
West".

Much later it was revealed that Tollison was in the pay of British American 
Tobacco.

His attack, it now transpires, was designed to deflect attention away from 
the tobacco related diseases, which he termed as "public health issues of 
the industrialised world" and was part of an elaborate campaigning by the 
tobacco industry to discredit the WHO.

Last year the WHO set up an independent inquiry to investigate subversion 
of the WHO by the tobacco industry.

The report, now published, gives insights into the lengths to which an 
industry may go to protect its interests and into the methods it uses.

Tollison was a minor player compared with Paul Dietrich, an American lawyer 
with long-term undisclosed ties with tobacco companies.

According to the report, Dietrich's role was to undermine the WHO's 
credibility, raise questions about its mission, and redirect it priorities 
away from tobacco control.

In 1990, while receiving a monthly retainer from British American Tobacco, 
he was appointed to the development committee of the Pan-American Health 
Organisation, which also serves as the WHO's regional office for the 
Americas.

Documents from British American Tobacco credit him with persuading the Pan-
American Health Organisation to remove tobacco control from that year's 
priorities, in favour of immunisation and cholera campaigns.

Further, tobacco companies used institutions as well as individuals to 
influence policy decisions.

It not only funded apparently independent organisations such as the 
Institute for International Health and Development, described as non-profit 
foundation "devoted to examining public health and developing policies 
affecting developing nations", but also influenced the policies of other 
United Nations agencies.

Lobbying by the International Association of Tobacco Growers, secretly 
funded by the tobacco industry, persuaded the Food and Agriculture 
Organisation and the World Bank to shift emphasis from the health 
consequences of smoking to the economic benefits of tobacco growing.

Developing countries were also successfully lobbied to resist tobacco 
control for economic reasons.

The British Medical Journal reports in its recent issue about the evidence 
that the industry used different tactics in a notorious campaign to 
undermine a multi-centre case-control study on passive smoking, run by the 
International Agency for Research on Cancer.

These included using paid scientists to extract confidential information 
from participating researchers, setting up a coalition of scientists to 
raise questions about the validity of the study's methods, and running a 
media campaign to misrepresent the study's results.

Although the industry did not succeed in delaying or altering the results 
of the study, it did manipulate media accounts of the findings, leading 
many to believe that the study failed to show a relation between 
environmental tobacco smoke and lung cancer.

Scale of the problem

Meanwhile, a sobering thought for developing countries like India. Faced 
with repeated challenges in the developed world, tobacco companies are 
increasingly turning to the developing countries  China and India being 
the most prominent.

Today, about 80 per cent of the world's 1.1 billion smokers live in low-
income and middle-income countries.

Data from the high-income countries, where the tobacco epidemic is well 
established among men, suggest that about half of long-term regular smokers 
are killed by tobacco and that, of these, about half die in middle age (35-
69 years old).

World-wide, about four million people died of tobacco-related diseases in 
1998.

This figure is expected to rise to 10 million annual deaths by 2030, with 
70 per cent of these deaths occurring in low-income countries.

It is estimated that about 100 million people were killed by tobacco in the 
20th century and that, for the 21st century, the cumulative number could be 
one billion if current smoking patterns continue.

Many of these deaths over the next few decades could be prevented if 
current smokers quit, but quitting is rare in the low-income and middle-
income countries.

For example, one study shows that only about five per cent of males in 
Mumbai are former smokers. As the tobacco industry moves away from its 
earlier established markets in the West, countries like India look to be 
swamped by the industry's hunt for newer markets.

* * *
People's Democracy, paper of the Communist Party of India (Marxist)

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