PRODUCT LIABILITY IN THE TOBACCO INDUSTRY. A CONTEMPORARY ISSUE.
By Johan OlssonApril 29 1994
Note: Numbers within body text indicate footnotes not listed on this page. See general reference list for sources.
Prologue
Mr. Peter Anderson was a heavy smoker. He smoked approximately two packets a day of Camels. He had done so since he was eighteen years of age. In 1992, when he was forty-five, he died from lung cancer, and his doctors found a positive correlation that supported that the development and the fetal outcomes from the disease he suffered from were related to his smoking habits. Martha Anderson, Peter's wife went to see a lawyer, and wanted to know if she could recover any damages from the tobacco company. According to her lawyer, she would not have much of a chance to recover any damages, as the are warning labels on all cigarette packs sold in the United States today. He also told her that tobacco companies state that there is no direct proven scientific relationship between smoking and disease, and that most cases concerning this particular matter are judged on the basis of Star Decisis. Desperately she went to the trial court of Hawaii, and filed a court order against the Camel Tobacco Corporation.
This prologue represents a typical position that victims of tobacco usage are faced with. Are the caution labels on tobacco packages and on advertisements enough to protect the tobacco industry from product liability claims? After all, there are evidences that this industry is producing dangerous products, that also promote addiction. The issue of product liability in the tobacco industry is a contemporary issue, that is presently widely discussed. Victims, such as Peter Anderson and his wife mentioned in the prologue are waiting for a Supreme court judgment in favor of plaintiffs, that can serve as Star Decisis.
Introduction
Cigarette smokers are going to court to sue tobacco companies for injuries caused by long-term smoking. If they win, cigarette prices may rise substantially, which could reduce the number of smokers and thereby save lives. Some lawyers even argue that certain tobacco products, such as cigarettes should be illegal.1 The tobacco companies are fighting back, claiming that; First, the federal warning requirement on cigarette packs precludes liability in damage suits. Second, since the federal legislation pre-empts more extensive state legislation, the suits filed against cigarette companies in state courts are not legal. Finally, there are no scientific facts that directly draw a connection between the use of tobacco products and disease. This paper will prove that these arguments are not going to hold against the large number of suits that the industry presently faces.
The Labeling Issue
Proper labeling is a crucial part in the process of avoiding product-liability suits. Many products are today being protected by the use of clearly defined warning labels that warn the user about possible physical harm. The present federal warning requirement that was imposed on January 11, 1964, on cigarette packs, has been proven over and over to be protecting the tobacco industry from product-liability suits. In September 1987, a federal appeals court in Boston, ruled that the surgeon general's warning labels on cigarette packages shielded Liggett & Myers in a three million dollar lawsuit filed by the heirs of a lung cancer victim.2 An appeals court in Atlanta, Georgia, made a similar ruling in favor of Philip Morris, the largest cigarette firm in the United States. There is however a fundamental issue concerning the required labeling that has to be asked; Does the required health warning on cigarette packages and advertisements set a ceiling on the amount of information consumers are able to receive?
Thomas Cipollone versus Liggett & Meyers Group Inc Case
In the United States Supreme court case (No.90-1038), Thomas Cipollone versus Liggett & Meyers Group Inc, Cipollone lawyers argued that the tobacco industry hid the danger of smoking because of inadequate labeling.3 The outcome of the case was believed to be based on that the "Congress set both the minimum and maximum" of required information on the surgeon general's warning.4 Furthermore, individual states are not allowed to impose regulations or prohibitions of required warning labels on cigarette packs in their tort laws. In other words, the states are not allowed to impose different warnings labels. This federal restriction came under hectic discussions during this particular case. In the Cipollone case, the court could have ruled that plaintiffs cannot challenge the health warnings or the advertising, "Which bar most suits against cigarette manufacturers that allege fraud, failure to warn or misinterpretation."5 This would have been the best outcome for the tobacco industry. If the court would have ruled in favor of the plaintiffs, thus giving them the right to bring tort suits challenging the cigarette maker's advertising, labeling and the adequacy of their health warnings, would have been the best outcome for smokers. Smokers would than have been free to sue cigarette companies for fraud, failure to warn or inform, and misrepresentation.Cipollone versus Leggett & Meyers Group Inc. was a close call. The tobacco industry realized that, and they were able to settle the case for $400,000.6 According to a spokes person for Philip Morris Company; "Our view has always been that the cases do not belong in the courtroom." And that "People are aware of the claimed risks of cigarette smoking, so why should they get money?"7 At a first glance, the tobacco industry does seem the clear victor in the legal war over smoking. With the exception of the money award in Cipollone, no jury has assessed damages against a tobacco company.
On the other hand, the settlement laid the foundation for a massive discussion, and "We now have a very clear message from the Supreme Court on how to bring these lawsuits."8 But, Cipollone's greatest power has yet to be felt. In June 1992, the Supreme Court made it clear that cigarette makers have an affirmative duty to warn of tobacco's dangers. In addition, the justices took the standpoint of "Permitting damage suits alleging that the industry hid smoking's risks." Also, they clarified the constitution; that the states to regulate in areas not pre-empted by federal law.9
General Warning, Enough?
One may ask if tobacco manufacturers can enjoy full protection under the federal imposed general warning labels under any circumstances. Examine this hypothetical case: A manufacturer printed the congressionally mandated health warning along with information suggesting "the surgeon general's warning is not worth the paper it is written on." Would this kind of "bundle labeling" be legal? The Federal Trade Commission would interfere with such labeling, but it would surely affect the efficiency of the surgeon general's warning. I personally believe future court decisions will be based on a "middle road", and if the plaintiffs can show that tobacco companies tried to undermine the required health warnings through advertising, they will win the suits.In 1992, the Supreme court ruled that federal law does not prohibit all damage claims against tobacco companies. The court decided in a 7-2 vote that the 1964 federal law demanding health warnings on cigarette packages do not pre-empt state law damage claims against tobacco companies. The decision was based on the fact that cigarette companies "falsely stated or concealed knowledge concerning the harmful effects of smoking."10
Future Development
Since the beginning of the eighties, the tobacco industry has faced over two thousand cases concerning product-liability, and "A host of legal actions is presently threatening to engulf the tobacco giants."11 The first of hundreds of trials putting smokers with lung cancer and other diseases against the tobacco companies will test the corporations' apparent consumer-product laws, which may impose damage against manufacturers of products even if the producers were not aware of risks associated with these. This may help smokers' lawyers. On another front, a United States appellate court in Philadelphia, ruled in 1986, that tobacco companies have to release company documents exposing the industry's knowledge of cigarettes' health hazards. This has put the whole scenario in a different perspective. Before this ruling, all cigarette manufacturers were immunized from a duty to inform smokers of any additional knowledge the industry had of health risks.For years, tobacco firms based their defense on the claims that no hazards associated with smoking are known and that the link between smoking and disease is not scientifically proven. Cigarette companies maintained a hard line on the medical front, insisting that the evidence linking their product to cancer, and other health problems were inclusive. However, in 1992, significant documents that showed how industry representatives deceived the public about the link between smoking and disease. These documents also indicated that "Industry leaders lied to the Congress for many years in a successful effort to fend off regulation."12 In March this year, the tobacco giant Philip Morris was charged to have covered-up the company's discovery in 1983 that nicotine is highly addictive. This study was suppressed by the company. Philip Morris now faces a "$5 billion class-action suit on behalf of everyone who has been addicted to nicotine." According to one of the attorneys; "We will prove that the tobacco industry has conspired to catch you, hold you, and kill you."13 In the beginning of the 1980's it was believed that smoking alone caused 300,000 deaths a year, and according to recent facts the number has increased to 434,000. One can believe that these numbers speak for themselves, and demonstrate that there is a positive correlation between disease and smoking. This has forced the tobacco industry to change its attitudes, and today they agree that cigarette smoking has been linked as an important risk factor for emphysema, heart disease, lung cancer and other serious health problems.
New Regulations
The health effects on smoking are drawing new attention from federal regulators, such as the Occupational Safety and Health Administration (OSHA), and the Food and Drug Administration (FDA). The FDA is even taking a look at whether to classify nicotine as a drug-a move that would remove all cigarette packs from the shelves in normal stores. Dr. David Kessler believes that "nicotine is a highly addictive agent and that cigarette producers control the level of nicotine that creates and sustains the addiction."14 Furthermore, an FDA investigation proposes that the tobacco giant Philip Morris "manipulated the nicotine content of their cigarettes to keep customers smoking."15 The New Jersey Supreme Court, in a case that could have nationwide impact, ruled in March 1994 that "Municipalities have the right to ban cigarette vending machines."16 The ruling of this case was based on that minors attempted to buy cigarettes from vending machines, thus violating state legislation. This legislation prohibited the sale of cigarettes to minors.In 1993, a coalition of congressional supporters introduced the Fairness in Tobacco and Nicotine Regulation Act of 1993. This bill would put tobacco industry regulation under the control of the FDA, and would impose several restrictions on the marketing of tobacco. For example, it would set a national minimum age of eighteen for the sale of tobacco and "require the disclosure of addictives, including arsenic, cyanide, being used in tobacco products."17 Furthermore, the FDA would start charging the tobacco industry a fee as a percentage of total sales, to cover the costs of the proposed regulation. This would be more fair, than taking funds from regular tax payers. Instead, smokers will end-up paying for their own protection in the form of regulations. According to Congress Republican Pete Stark, smoking costs Medicare and Medicaid at least $7.2 billion every year for the treatment of smoking-related diseases.18
A report from the Environmental Protection Agency that was published in 1993, classified environmental tobacco smoke as a class-A carcinogen and estimated that 3,000 nonsmokers die each year from lung cancer as a result of other people's smoke.19 The tobacco industry is currently fighting the findings in this report in court, stating that there are no facts that can support the conclusions drawn in the report. Apparently, the tobacco industry has known for years that cigarette smoking may affect health. In 1988, Ligget Group Inc. was charged for its decision not to bring to market a "Safer" cigarette after spending about 25 years and $14.5 million to develop it. This particular cigarette relied mainly on palladium, a heavy metal, to remove carcinogen from smoking. It would have reduced the risk of developing lung cancer from 17 percent to eight percent. Witnesses said Liggett executives wanted to sell the new product, but lawyers blocked its marketing in fear that it would be an admission of liability to smokers of conventional cigarettes. Ligget Group Inc. Was dismissed, and it was decided that it was solely up to company executives if they wanted to market the new cigarette.
Finally, the tobacco companies are spending heavily on legal defenses, sheltering their assets, and taking their cases to the public. One victory by a smoker could cause a flood of suits against the tobacco industry.
There are a number of ways yet to be tried in court against tobacco companies. They could be charged with marketing to children or conspiring with local vendors to sell cigarettes to children. Former cigarette addicts could also sue cigarette companies for the cost of overcoming the addiction.20 "A ruling by a Mississippi judge may provide plaintiffs with their strongest ammunition yet." The judge wrote that cigarettes are "defective and unreasonably dangerous" because they cause illness when used as intended.21 If his reasoning becomes generally accepted, plaintiffs in smoking cases will no longer have to prove that tobacco companies were negligent but simply that cigarettes led to illness or death. Future cases will determine if cigarette manufacturers are alone responsible of the deaths of 435,000 smokers every year.
Conclusion>
Today, it is possible to conclude that past shelters used by the tobacco industry to hide behind will not work. Cigarettes are scientifically proven to be dangerous, the significance of proper labeling is being discussed, and the 1964 federal law demanding health warnings on cigarette packages do not pre-empt state law damage claims against tobacco companies anymore. Martha Anderson who was mentioned in the prologue, and thousands of other victims of the tobacco industry are fighting back, and they will not give-up until cigarettes are forever gone from the shelves in stores.
REFERENCE LIST
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3Tribe, Laurence H. "Federalism with smoke and mirrors." The Nation 7 June, 1986: 788-90
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5Schachner, Michael. "Cigarette litigation continues: lawyers do not view Cipollone dismissal." Business Insurance 16, November 1992: 1-3.
6"Stiffer warnings may mean less risk for cigarette makers." Business Week 15 October, 1987: 49
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8Gordon, Stacy. "Tobacco ruling's impact may be felt by other firms." Business Insurance 6 July, 1992:3-
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10Gordon, Stacy. "Tobacco ruling's impact may be felt by other firms." Business Insurance 6 July, 1992:3- 4
11Daynard, Richard A. "Filter tips: more ways to smoke the tobacco companies." Washington Monthly January-February 1993: 18-19
12"Is the smoking lamp going out for good?" Business Week 11 April, 1994: 30-31
13"Is the smoking lamp going out for good?" Business Week 11 April, 1994: 30-31
14Tribe, Laurence H. "Federalism with smoke and mirrors." The Nation 7 June, 1986: 788-90
15Culhane, Charles. "Coalition backs bill to let FDA regulate tobacco." American Medical News 7 June, 1993: 13
16Gordon, Stacy. "Tobacco ruling's impact may be felt by other firms." Business Insurance 6 July, 1992:3-
16McLeod, Douglas. "Supreme Court reverses tobacco liability rulings." Business Insurance 29 June, 1992: 1-2
16Gordon, Stacy. "Tobacco ruling's impact may be felt by other firms." Business Insurance 6 July, 1992:3- 4
17Lihane, Charles. "Coalition backs bill to let FDA regulate tobacco." American Medical News 7 June, 1993: 13
18Crawford, Alan. "Stark raving mad." Ad week 30 November, 1992: 16
19Culhane, Charles. "Coalition backs bill to let FDA regulate tobacco." American Medical News 7 June, 1993: 13
20Daynard, Richard A. "Filter tips: more ways to smoke the tobacco companies." Washington Monthly January-February 1993: 18-19
21"Mississippi judge (issues ruling favorable to plaintiffs in tobacco litigation) Time 24 May, 1993: 29