FWO Fellow at Ghent University, Ghent, Belgium
This chapter examines three waves of tobacco litigation from the 1950s to the present. I especially focus on the role that historians have played as expert judicial witnesses in these cases. Historians testify about whether or not the dangers of smoking were common knowledge in the 1950s, 1960s, 1970s and later and whether there existed a scientific controversy on the subject. Experts have to research all elements that characterize common knowledge and scientific knowledge, and the role the tobacco industry played in its construction. Subsequently, I discuss the legal strategies used by plaintiffs and defendants in tobacco litigation through basic forms of legal game theory. This chapter is also based on the results of my inquiry into the involvement of US historians in tobacco litigation between 1986 and 2014, comprising of 50 historians and 314 cases.
The aggressive posture we have taken regarding depositions and discovery in general continues to make these cases extremely burdensome and expensive for plaintiff’s lawyers. … To paraphrase General Patton, the way we won these cases was not by spending all of our money, but by making that other son of a bitch spend all his.
Michael Jordan, Attorney for R.J. Reynolds
13.1 The First Wave: Cipollone v. Liggett Group
From the 1950s onward, the tobacco industry has been sued by individual plaintiffs. The first case was brought in 1954 when “Ira Lowe, a Saint Louis factory worker, filed a products liability suit against the tobacco industry.”1 By 1964, the year the first Surgeon General’s Report on tobacco was published, there had only been 30 lawsuits filed against tobacco companies.2 Between 1954 and 1994, there had been 800 lawsuits brought against the industry.3 During this period, the tobacco companies’ legal strategies had been very successful. Their legal tactics were twofold: (1) The tobacco industry claimed there was a scientific controversy on the dangers of smoking, and that although a lot of research had been done, there was no conclusive evidence yet of a causal link between smoking and cancer or respiratory diseases. If there was no causal link, the tobacco companies had not acted in a negligible manner. (2) Secondly, tobacco’s legal counsel argued that the plaintiffs knew the dangers of smoking, thereby accepting to endanger their own health when they started smoking.4 Both strategies were constructed to eliminate the liability of the tobacco companies. During this whole period only two cases resulted in a ruling favouring the plaintiffs and both were reversed on appeal.5 Not a single case resulted in damages for the plaintiffs.6
Cipollone v. Liggett signified a breaking point. The Cipollone case from 1986 found Liggett Group guilty on charges of fraud and conspiracy. Liggett had failed to warn Rose Cipollone about the health risks of smoking and was held responsible in part for her disease, namely, lung cancer, which had been caused by her addiction to smoking. Ms. Cipollone had been diagnosed with lung cancer, to which she had succumbed in 1984. The case was brought by her husband, Antonio Cipollone. After his death their son, Thomas Cipollone, continued the litigation. After several appeals, the US Supreme Court partly reversed and partly affirmed the Cipollone verdict, so the trail had to be retried in part with the requirements set by the Supreme Court. Due to the augmenting costs of 8 years of litigation, Thomas Cipollone withdrew his suit.7 The Cipollone trial is an excellent example of another legal tactic generally used by the tobacco companies: scorched-earth litigation. Tobacco companies have greater means than any individual plaintiff. By prolonging the trail with motions, depositions, subpoenas, and eventually by appealing as high as the US Supreme Court; the tobacco industry sends a clear message: tobacco litigation will ruin you financially.
Brandt writes that already in the 1950s and 1960s lawyers were controlling the industry’s policy. Lawyers set forth the industries strategies to avoid the “potentially disastrous” consequences of liability litigation.8 “The lawyers were now in control, and litigation anxiety powerfully shaped on-going tobacco strategy”, Brandt further argues.9 Committees of senior industry lawyers were architects of a legal strategy that maintained that there was a scientific controversy on the health dangers of smoking, while they themselves were constructing the very controversy from within the tobacco industry itself.
Only in the final years of this first wave were historians used as expert witnesses. The first case which made use of a historian was Dewey v. R.J. Reynolds from 1986.10 In Cipollone v. Liggett Group Inc., historians were used to add historical gravitas to the legal strategies of the defence’s legal counsel, but also to augment the cost of litigation for the plaintiff. Expert do not come cheap. When the plaintiff does not have the funds to support its own expert witness, the tobacco companies had yet another advantage in court. There have been three historians involved in Cipollone v. Liggett Group. (1) Historian John Burnham had already testified in one tobacco-related trial the same year.11 As a medical historian, John Burnham is one of the few historians who has testified for the industry and has actually researched and published on tobacco history. (2) Historian Fred Carstensen, who had published on Russian economic history and business history in general, was also deposed and later on he testified in court.12 (3) Kenneth Ludmerer, a medical historian with no research specific on tobacco, started a long career of expert witnessing for the tobacco industry with his deposition in Cipollone.13
Brandt concluded that: “[f]ollowing the Cipollone verdict and the failure to secure a pay-out from the tobacco industry in similar suits, the plaintiff’s bar viewed tobacco liability litigation with considerable scepticism.”14 Despite the fact that the case had failed for the plaintiff, the Cipollone trial had “a truly historical impact.” The verdict had opened access “to some 300,000 internal tobacco industry documents.” This opened “a devastating crack in traditional industry defences.”15 For the first time in the history of tobacco litigation the question “who knew what when?”, could now also be answered from the perspective of the tobacco companies, thereby enabling the judge to make a judgment on the liability of the tobacco companies based on historical facts. At the time, anti-tobacco activist attorney Richard Daynard said that the documents procured from the Cipollone verdict “were only the tip of the iceberg”, but provided “a firm foundation for future plaintiffs to build a convincing case of fraud and conspiracy against the tobacco industry.”16 Tobacco Control, a journal devoted to publishing the results of the research on secret internal documents of the tobacco industry and tobacco control in general, was first published in 1992. Using the industry’s documents, the journal informed the public about the dangers of smoking and the conspiracy of the tobacco industry. Furthermore this research also “formed the basis for public and private lawsuits against the industry in the USA.”17
The “discovery” of secret tobacco documents knew another high day when in 1995 Professor Staton Glantz of the University of California in San Francisco received “a box containing several thousand pages of documents from the Brown & Williamson Tobacco Corporation.”18 The only return address was that of “Mr. Butts.”19 Brown & Williamson sued the university to have its documents returned, but their request was denied in court.20 In the following months the documents were published in the Journal of the American Medical Association and on the Internet.21 Glantz published The Cigarette Papers in 1996, a book with the results of his research of the secret documents. Everett Koop, US Surgeon General from 1981 until 1989, wrote the foreword and called the book “a vital weapon in the battle against tobacco.”22 Historians began their research of thousands of internal documents and with every note, transcript, record, and memorandum they read, it became clearer that the tobacco industry had committed a fraud against the American public.
Through the early 1990s, tobacco litigation continued with little success for the plaintiffs. The influence of tobacco’s internal secret files could not yet be fully measured or used. The secret documents were there but their amount and time-span [more than 60 years of internal documents] took a while to fully examine. So most cases continued to end in a victory for the defence. Typical for almost all plaintiffs was that they started smoking as kids. A typical case from this period of tobacco litigation is the Horton case. Afro-American Nathan Horton from Mississippi, whose wife sued the American Tobacco Company in 1987, had started smoking as a child. He became a two pack smoker when he joined the US Navy and could buy cigarettes at military discount prices. After his military service, he became a carpenter and continued smoking until he was diagnosed with lung cancer in 1986. David Sansing, another historian who was hired by the tobacco companies, was deposed in this case. Sansing specialized in the history of Mississippi.23 Eventually “the Horton case ended in a mistrial; the jury deadlocked.”24 The tobacco industry was accused of “jury tampering, but the charges were never proven.”25 The industry’s legal strategies, and extralegal strategies, were still very effective.
The early 1990s saw eight more cases wherein historians were involved.26 The historians who were hired as experts by the tobacco industry in the first wave were: Stephen Ambrose, James Breeden, John Burnham, Fred Carstensen, Otis Graham, Joan Hoff, Robert Hudson, Kenneth Ludmerer, James Kirby Martin, Michael Parrish, David Sansing, Todd Savitt, and William Stueck.27 Of these thirteen historians only Burnham had published on tobacco history, or has done since, for that matter.28 Stephen Ambrose was a military historian who wrote biographies of President Eisenhower. He became famous for his involvement in the making of the HBO mini-series Band of Brothers. 29 Joan Hoff also published on American presidents. She has continued to serve as an expert witness for the tobacco companies at least until 2012.30 Otis Graham was editor of the Public Historian and specialized in recent American history, without publishing anything on tobacco.31 The list goes on in the same logic. Historians who had never done any research on tobacco or the tobacco controversy were testifying under oath about the history of the tobacco industry, smoking, the scientific controversy, and common knowledge about tobacco risks from the 1950s onward.
These historians brought a historical narrative into the courtroom that fitted the legal strategies of the tobacco companies. These experts argued that there was a scientific controversy on the dangers of tobacco smoking, while also arguing that people had known that smoking was unhealthy. None of these historians researched the internal tobacco documents. It is hard to find any legitimate reasons for that choice. By leaving the involvement of the industry out of their historical research, these industry experts failed to meet the requirements of professional historical research. Furthermore, those historians should not have been allowed to testify because how could they possibly testify on the role of the tobacco industry in the cigarette controversy, if they had not researched it? In these final years of the first wave of tobacco litigation the Frye-rule on expert witnessing was still in place.32 The tougher regulations of the Daubert-ruling would not preclude these historians from testifying either.33 Tobacco’s legal counsel thus had been successful in selling the courts the idea that their expert historians had done historical research as it was generally accepted, without examining any of the internal tobacco documents. Unopposed by other historians who would have researched all available documents, the industry’s version of the history of the cigarette and smoking continued to prevail in court. After the tobacco industry had created a scientific controversy on smoking, tobacco’s legal counsel had now constructed their own version of the history of that tobacco controversy with the help of academic historians.
Despite the fact that the industry’s legal strategies continued to produce acquittal after acquittal, or maybe just because of that success, the tobacco companies were confronted with an increasing hostile public opinion. Spurred on by public sentiment, government officials toughened up on the tobacco companies. Brandt writes: “[a]s it had done in 1964, the industry took the offensive, expressing outrage and indignation over the charges of nicotine manipulation and the addictiveness of smoking.”34 On the 14th of April 1994, the CEO’s of the seven largest US tobacco companies appeared before the Waxman congressional Subcommittee.35 These hearings were “covered widely in the print and broadcast media.”36 The Waxman hearings were broadcasted live on C-SPAN and CNN. Under oath, the CEO’s answered Republican congressman Ron Wyden whether nicotine was addictive or not:
REP. RON WYDEN: Let me begin my questioning on whether or not nicotine is addictive. Let me ask you first, and I’d like to just go down the row, whether each of you believes that nicotine is not addictive. I heard virtually all of you touch on it. Yes or no, do you believe nicotine is not addictive?
MR. WILLIAM CAMPBELL, Philip Morris:
I believe nicotine is not addictive, yes.
REP. RON WYDEN: Mr. Johnston?
MR. JAMES JOHNSTON, R.J. Reynolds:
Mr. Congressman, cigarettes and nicotine clearly do not meet the classic definition of addiction. There is no intoxication.
REP. RON WYDEN: We’ll take that as a “no.” Again, time is short. I think that each of you believe that nicotine is not addictive. We would just like to have this for the record.
MR. JOSEPH TADDEO, US Tobacco:
I don’t believe that nicotine or our products are addictive.
MR. ANDREW TISCH, Lorillard:
I believe that nicotine is not addictive.
MR. EDWARD HORRIGAN, Liggett Group:
I believe that nicotine is not addictive.
MR. THOMAS SANDEFUR, Brown & Williamson:
I believe that nicotine is not addictive.
MR. DONALD JOHNSTON, American Tobacco Company:
And I, too, believe that nicotine is not addictive.37
The fact that the CEOs were the last seven people on earth to discover that nicotine was addictive caused genuine nationwide outrage. As health advocates described it in a 2006 article: “The image of the seven tobacco CEOs testifying before Congress left an indelible impression on the American public.”38 The scientific controversy-tactic and the call for more research had lost its effectiveness. The strategy was unable to be maintained while every day new documents were unearthed that the tobacco companies knew that smoking was unhealthy and addictive. These final attempts by the seven CEOs to keep the scientific controversy alive, were counterproductive. The tobacco industry’s fear to be subjected to harsh litigation and regulation was a very realistic future for the tobacco companies. Yet the seven CEOs had showed one other strategy that made the tobacco companies strong: they were all in it together.39
13.2 The Second Wave: Government v. The Tobacco Industry
In the second wave of tobacco litigation, the cases against the tobacco companies were brought by government entities. The individual states and the US federal government had larger financial resources, more experienced legal teams, and greater political power at their disposal than any individual plaintiff ever brought in play against the tobacco companies. The industry’s standard legal tactic of scorched-earth litigation had less impact on the government’s cases. The timing, as I discussed above, was excellent. Public opinion of the tobacco industry was at an all-time low, thanks to continued publication of internal documents and the declarations of the CEOs on nicotine.
13.2.1 The State Attorney Cases
Since the early 1990s groups of prominent tort lawyers had met to discuss further possibilities in tobacco litigation. Most of them had experience in asbestos tort litigation. The American asbestos industry had been bankrupted through litigation. Furthermore, asbestos litigation had produced “a skilled tort plaintiff’s bar.”40 Lawyers like Ron Motley, who was called “the legal nemesis of the asbestos industry”, became involved in tobacco litigation.41 While the internal secret documents of the tobacco companies were unearthed by the thousands, these lawyers considered that it was time for “a massive legal attack.”42
In Mississippi, an experienced legal team under the leadership of attorney general Michael Moore filed a lawsuit against the tobacco industry on the 23 of May 1994 on behalf of the state of Mississippi. At the press conference Moore explained: “[t]his lawsuit is premised on a simple notion: You caused the health crisis, you pay for it. The free ride is over. It’s time these billionaire tobacco companies start paying what they rightfully owe to the Mississippi taxpayers.”43 It was essential for lawyers like Motley and Don Barrett to evade the trap faced by an individual suit. In individual lawsuits, tobacco’s legal counsel would argue that the individual had made the choice to smoke. Barrett exclaimed: “The State of Mississippi has never smoked a cigarette.”44 Mississippi made no “choice” to smoke, and so another one of the key legal strategies of the tobacco industry was rendered useless. Other states soon followed Mississippi’s example: “Minnesota in August 1994, West Virginia, Florida and Massachusetts in 1995.”45
By 1997, more than 30 states had “joined the cause.”46 Legal counsel for the plaintiffs filed “motion after motion” in order to obtain the secret documents of the tobacco companies, a legal strategy they had already used in asbestos litigation. In the end they got more than 30 million internal documents.47 According to Brandt, “considerable evidence” was found that the industry had systematically destroyed evidence of its knowledge of health concerns caused by their product.48 Despite such attempts, the newly discovered documents proved an important source for legal evidence. As we have seen in the first three chapters which described the history of tobacco and the cigarette controversy, these internal documents showed that tobacco companies had been much more aware of the dangers of their product than they claimed to have been. The secret files demonstrated how tobacco companies had tried their best to convince the general public smoking was not dangerous, against their own knowledge of the contrary.
The tobacco industry was left exceptionally vulnerable from continued revelations of fraud by their own internal documents. An increasingly hostile media assured that damaging documents were brought to the public’s attention. Debate was even more augmented when in February 1996 CBS’s investigative news program 60 Minutes broadcasted an episode on Jeffrey Wigand, who had formally been a vice president at the Brown & Williamson Tobacco Company.49 Wigand had turned on the industry and had been deposed in November 1995 in the lawsuit brought by the State of Mississippi. His deposition was taken by plaintiff’s attorney Ron Motley. The deposition had been extremely polemical. Tobacco’s legal counsel objected to every question posed by Motley and every answer given by Wigand. The deposition by Wigand and the knowledge he wished to share was of enormous value for the plaintiffs and extremely dangerous for the tobacco industry. Wigand declared that Mr. Sandefur, the CEO of Brown & Williamson, had stated on multiple occasions that the tobacco companies were “in the nicotine delivery business.”50 60 Minutes offered an overview of the systematic smear campaign against Wigand organized by the tobacco industry. Wigand and his family suffered greatly under different kinds of harassment. The show itself had been delayed for 6 months out of fear of being subpoenaed by the industry. Eventually the program aired, discrediting the tobacco industry instead of Wigand. Wigand detailed in the interview on 60 Minutes how the industry adjusted nicotine levels to make cigarettes more addictive. Wigand declared that cigarettes were: “a delivery device for nicotine.”51 On later occasions in court the tobacco companies would argue that “blending tobacco is an art; it’s not a nicotine driven science.”52 In 1999 Wigand’s story was made into a Hollywood adaptation titled: The Insider. 53
Richard Kluger’s Ashes to Ashes: America’s Hundred-Year Cigarette War, the Public Health, and the Unabashed Triumph of Philip Morris published in 1997, narrated in great detail how tobacco companies continued to sell a deadly product and how the industry had succeeded in being permitted to continue to sell a dangerous product.54 His book won the Pulitzer Prize and contributed to an already heated public debate on the tobacco industry. Public opinion and the media were now eager to see the tobacco companies convicted for, what seemed, the greatest cover-up in American history.
At least in seven of the attorney general suits were historians deposed as expert judicial witnesses for the tobacco industry.55 In Florida Ambrose, Burns, and Ludmerer were deposed for the industry.56 By then these three historians had several years of experience in testifying for the defence. Hyman Berman and George Green were deposed and testified in court in the Minnesota trial. Hyman was a professor of history at the University of Minnesota specialized in American Labour history.57 It would be his only testimony for the tobacco companies. George Green was a colleague of Hyman at the University of Minnesota, he would also only testify this one time. Green is specialized in American business history.58 In Texas, Otis Graham served as an expert for the industry for a second time, accompanied by John Drobny, an independent consultant. Drobny is the only non-academic who has been identified to have been deposed as a historian in tobacco litigation.59 In the Mississippi attorney general case, experienced industry-employed experts Ludmerer and Sansing were deposed.60 Charles Lowery, a professor of History from the University of Mississippi was also deposed. He was specialized in civil rights history.61 John Ray Skates, a co-worker of Lowery, was also deposed in the same case. He was specialized in the history of Mississippi and the history of the American military struggle with Japan during World War II.62 Both Lowery and Skates only served as expert witnesses this one time. Experienced experts Ludmerer and Parrish were deposed in Washington.63 Michael Schaller was deposed in Arizona.64 He is a specialist in the diplomatic relation of the US and East Asia. Wayne Morgan, who studied American culture in the twentieth century, was deposed in Oklahoma.65
The industry’s legal strategy in most states probably was to construct an expert team of historians combined of, on the one hand local academic historians and on the other, experienced witnesses. It is very probable that there were many more historians involved in the attorney general cases. But since settlement negotiations started in early 1997, the records of the involvement of historians are scarce because in the end only a few were deposed. No historians were recruited by the state attorneys general as expert witnesses. In the end, with only the Mississippi state trial gone to court, no court had ruled, based on historical documents, that the tobacco industry had conspired against the American public. Settling was a valuable strategy for the tobacco companies. The attorneys general got their “victory”, and damages were paid. But further tobacco litigation still needed to prove in court that the industry had committed a fraud against the public as long as no judge had ruled on the alleged scientific controversy and the industry’s role in its construction.
13.2.2 The Master Settlement Agreement
The tobacco companies knew they were certain to lose some of the state attorney general cases and decided to negotiate a “global settlement agreement.”66 In June of 1997, the tobacco companies agreed to pay $365,5 billion over the next 25 years to the states. The settlement also stipulated that all individual litigation brought against Wigand and other whistle-blowers, and plaintiff’s lawyers would be ceased. The tobacco industry also agreed to be regulated by the FDA. In return, the tobacco industry would be protected from class action suits.67 The Minnesota trial team was awarded the “WHO’s Tobacco Free World Award”, for their involvement in the litigation against the tobacco companies.68 Former Minnesota state attorney general Hubert Humphrey III and former assistant attorney general Douglas Blanke wrote that: “[t]hruth matters” and “the real value of truth is in its power to effect change.”69 The cases brought by the state “altered the course of national debates” and helped “re-frame the tobacco issue.”70 Not all health advocates were agreeing that the settlement was “the most historic public health achievement in history”, as Mississippi attorney general Moore called it.71 Anti-tobacco advocate Stanton Glantz declared: “The fundamental reality of tobacco is that the way to beat them is to beat them. I have never found a single instance anywhere, anywhere, where a compromise with the industry served the public health.”72 In hindsight, Glantz was not that far off.
A bipartisan bill was prepared in Congress, which proposed serious regulation for the tobacco companies. Under the leadership of Republican senator John McCain from Arizona, a bill was drafted which was called “The McCain bill.” The draft included higher taxes on tobacco products, FDA regulation of nicotine and provisions that aimed to regulate and diminish teen smoking.73 It even augmented the proposals for damages in the “global settlement” from $385 billion to over $500 billion. In 1998, the McCain bill was voted out of the senate subcommittee. The lobbying machine of the tobacco industry in 1997 was sponsored with 23 % more funds when compared with the previous year. The tobacco companies devoted “a record $35.5 million to lobbying.” The industry also spent $40 million in radio and television ads in 1998 to represent the bill as “a new tax targeted at working people.”74 The tobacco industry “successfully lobbied to kill the bill on June 17, 1998.”75 The McCain bill was, furthermore, not supported by everyone in the health community. Anti-tobacco advocates like Staton Glantz were critics of the bill, arguing that the tobacco companies could be brought down in court, and settling would only assure the industry’s survival.76 The McCain bill was lost, and with it a great opportunity to regulate the tobacco industry in an unseen manner.
After the collapse of the McCain bill a new settlement had to be negotiated. The failure of the bill and the opposition by parts of the public health community made the state attorneys feel pressured for time and support. Such a “shift in leverage” produced a new settlement which bore little resemblance with the Global Settlement.77 The new Master Settlement Agreement of 1998 agreed that “five major tobacco companies had to pay $206 billion to 46 states over the next twenty-five years.”78 The four states that had already settled, Florida, Minnesota, Mississippi, and Texas added another $40 billion. The total cost to settle for the tobacco industry was a grand total of $246 billion.79 Only modest restrictions were put into place on advertising and promotions. Cartoon characters like Joe Camel were prohibited. But in general the marketing restrictions on youngsters and children had largely been removed from the settlement.80 The global settlement had lost a lot of its power.81 The proposed FDA regulatory power was dropped along with other provisions on youth smoking.82 Furthermore, the immunity requirements for class action litigation that were negotiated in the Global Settlement remained in place.83 However, a definitive success of the MSA was that the tobacco companies had agreed to release approximately “seven million documents” totalling “70 million pages of documents and nearly 20,000 other media materials.”84 By 2009, “several hundred peer-reviewed articles had been published” which had researched these sources.85 The insights gained from such research had significant impact on a national and international level.86 The MSA of 1998 “left the Marlboro Man in the Saddle”, as one observer noted. Health economist Dorothy Rice from the University of California, San Francisco calculated that the cost of treating smoking-related diseases for just 1 year in the state of California was about $8.7 billion. The state had negotiated a settlement in which the tobacco companies agreed to pay the State of California $500 million on a yearly base for the next 25 years. “It’s a terrible deal”, she concluded.87
The Minnesota settlement provisioned the creation of the Minnesota Partnership for Action Against Tobacco. The MPAAT was created in 1998 and aimed at “diminishing the human and economic consequences of tobacco use.”88 The organization was funded with damages paid by the tobacco industry. In an article in Tobacco Control from 2004, Glantz et al., detail how the industry attacked the foundation in a variety of ways, claiming misuse of funds and conflicts of interest and political expenditures.89 These accusations from the tobacco industry were backed up by a new ally of the tobacco companies, the state attorneys general. The attorneys general had found a new source of revenue for the states and were keen on defending that resource. Multiple amicus briefs were filed by state attorneys general in support of the tobacco companies in lawsuits concerning the funding of the MPAAT, fearing these expenditures “might jeopardize” the tobacco industry’s ability to make payments directly to the states required by the MSA.90 Brandt came to a similar conclusion: “The industry had secured new allies by providing a steady flow of state revenues. Now state governors and Attorneys General would help the companies fight off litigation.”91 Eventually, many of these tobacco funded programs established by the MSA saw their budgets significantly reduced.92
In general, for health advocates, the MSA was “a missed opportunity to make historic change.”93 Despite all the problems with the MSA, the price of a cigarette pack increased. According to Brandt: “[t]he MSA “tax” has itself had a significant impact on youth smoking” and “[i]n the years following the MSA, tobacco sales fell by more than 20 %, reaching a level not seen since 1950.”94 Despite this fall in tobacco sales, the tobacco industry which had been in mortal danger in 1997, entered the new millennium relatively intact ready to sell its product at home and abroad.
13.2.3 US v. Philip Morris et al.
In the State of the Union of 1999, President Bill Clinton announced that his administration would initiate civil litigation against the tobacco companies. After the individual states had settled with the tobacco companies, the Department of Justice (DOJ) sought to recover health care costs made by the federal government. The government accused the tobacco companies of having been engaged in “a conspiracy to deny well-established associations between smoking and multiple diseases, the association between second-hand smoke and lung cancer and the addictive nature of nicotine.”95 The tobacco companies were indicted under the Racketeering Influenced and Corrupt Organizations Act (RICO). In September 1999, the DOJ brought its case against the tobacco industry (Philip Morris, R.J. Reynolds, Brown & Williams, Lorillard, Liggett, American Tobacco Co., British American Tobacco, the Council for Tobacco Research, and the Tobacco Institute). The DOJ accused the tobacco industry of committing fraud, violation of state consumer protection statutes, marketing, selling of defective and unreasonably dangerous products [strict liability, negligence, and breach of implied warranty], and engagement in a general conspiracy against the American public. The federal government sought to recover federal spending on tobacco-related diseases for “an estimated $280 billion.” It was the largest sum ever demanded in a single trial in civil litigation in the history of American law, according to Brandt.96 Proceedings started in September 2000, the trial itself commenced in September 2004. The whole trial took 99 weeks. The case was appealed on multiple occasions and on various grounds. In 2006, the US Supreme Court denied certiorari.97 Still legal proceedings continued until November 12th of 2012 when Judge Gladys Kessler reaffirmed her ruling from 2006. In 2006, she had stated that the tobacco companies had lied about the dangers of cigarettes at least since 1964.98 The tone of her ruling was especially hard for the tobacco industry: “Defendants have marketed and sold their lethal product with zeal, with deception, with a single-minded focus on their financial success, and without regard for the human tragedy or social costs that success exacted.”99 The success of the active evasion by the industry of a condemning verdict, in which the industry was convicted for fraud, had now come to an end by the judgment in US v. Philip Morris et al. As we shall discuss in Chap. 14, historians played an important role in this trial as expert witnesses.100
13.3 The Third Wave: Engle Progeny Cases
The second wave of tobacco litigation had rendered much of the traditional legal tactics of the tobacco industry obsolete. The scientific controversy tactic had become useless when the internal documents, procured by the Cipollone verdict and the MSA, showed tobacco companies had been aware from early on about the health dangers of smoking and the addictiveness of nicotine. Furthermore, due to the decision in US v. Philip Morris et al., consumers could sue the tobacco companies for negligence, backed up by legal precedent. To diminish legal costs consumers joined in class action suits to sue the tobacco industry, creating an unseen number of tobacco-related court cases.101 The number of historians who were hired as experts for the industry doubled during the period 1999–2013. By 2014 50 historians had testified in tobacco litigation. Only four of them had testified for the plaintiffs, while 46 have been engaged on the defendant’s side.102
In the State of Florida on the fourth of May 1999 a class action suit was brought by six smokers with cancer against R.J. Reynolds, Philip Morris, Lorillard, American Tobacco co., Brown & Williamson, Liggett, Brooke Group, Dorsal Tobacco, the Council for Tobacco Research, and the Tobacco Institute.103 At first the class was defined as “[a]ll United States citizens and residents, and their survivors, who have suffered, presently suffer or who have died from diseases and medical conditions caused by their addiction to cigarettes that contain nicotine.”104 The class was later limited by the court to smokers from Florida because “a nationwide group of more than one million smokers was simply unmanageable.” The Engle case was the first smokers’ class action ever approved in the US.105 The Engle trial would become the longest in the history of US civil litigation.106
The trial was structured in three phases. Engle I established the general liability, or “common issues affecting all class members”, in other words the fraud committed by the tobacco industry. In the second phase the lump sum of $145 billion was awarded to the class, it was “the largest award of its kind in US history.”107 But before the third phase could get started, Engle II was overturned on appeal. The plaintiffs then appealed to the Florida Supreme Court. In its landmark decision of 2006, the majority opinion stated that in every single plaintiff’s case, the court had to determine “whether any class members relied on Tobacco’s misrepresentations or were injured by Tobacco’s conduct.”108 Furthermore, the court found that the entitlement of damages should be considered more closely. There were compensatory damages to which an individual could be entitled, but the court was not sure whether the individuals were entitled to punitive damages from the tobacco companies. The court asked to review the way in which punitive damages were included to the compensation of individuals.109 The court also addressed the class certification. According to the Florida Supreme Court it was problematic to handle class-wide punitive damages, and at the same time the negligence for every single class member. On those grounds the court decertified the class.110 The Federal Supreme Court denied certiorari on the first of October 2007.
The decision of the Florida Supreme Court created a “pragmatic solution” in order to try a large number of cases with highly individualized claims. The court determined that each future case would be considered individually. But the court had “affirmed that smoking cigarettes causes numerous diseases and health conditions … and many forms of cancer” and that “the defendants placed cigarettes on the market that were defective and dangerous … nicotine in cigarettes is addictive … the defendants agreed to conceal or omit information regarding the health effects of cigarettes or their addictive nature … all of the defendants sold or supplied cigarettes that were defective … and that all of the defendants were negligent.”111 This verdict made the tobacco conspiracy and thus the industry’s negligence res judicata.112 Plaintiffs could now, in theory, skip the costly trial period in which the tobacco conspiracy, the addictiveness, and the health dangers of smoking had to be proven.113
With the certainty that they did not have to prove the industry’s deceptive practices all over again, “more than 8,000 plaintiffs filed individual claims against the tobacco companies.”114 The cases were named the Engle Progeny cases. Bloomberg News reported in March 2013, after the reconfirmation by the Florida Supreme Court of its 2006 decision, that the combined number of cases related to Engle faced by Philip Morris and R.J. Reynolds alone was higher than 8,000. According to its yearly report, Philip Morris is currently involved in 4,800 post-Engle cases. R.J. Reynolds announced in its annual report that the company was currently engaged in 5,750 Engle Progeny cases.115 Phillip Morris and R.J. Reynolds alone are presently involved in about 10,550 court cases in Florida. I made a schematic overview of the cost of litigation for the tobacco companies in Engle Progeny cases (Table 13.1).
Payouts by the tobacco companies in Engle progeny litigationa
With only 2 % of all Engle Progeny cases brought to trial, the tobacco industry might be confronted with considerable legal cost and the payment of large amounts of damages in the future. In July 2014, a jury in Florida in an Engle Progeny case awarded $23,6 billion in damages to the wife of a smoker who had died of lung cancer. The jury awarded $17 million in compensatory damages, the rest of the $23 billion are punitive damages. Legal counsel for the tobacco companies promised a swift appeal. With thousands of Engle Progeny cases pending trial, tobacco companies’ legal counsel will sure go all out to limit the amount of damages awarded in Robinson v. R.J. Reynolds to avoid a dangerous precedent. 116 As legal professor from Northeastern University Richard Daynard put it: “There are real risks for the industry here” and “There’s presumably nothing about this case that is so special that it could not be replicated in many cases in the future.”117 Although damages are spread over several years and already budgeted into the yearly expenditures of several tobacco companies, several billions of dollars can do serious damage to a company, even to the tobacco industry.118 The example from the Florida tobacco litigation could inspire other states. Yet, as we shall see, tobacco’s lobbying machine has worked hard on avoiding repetition of Engle in other American states by urging for changes in laws on class actions and consumer protection.
Historians continue to play a role in Engle Progeny cases as frequent expert witnesses.119 Almost all historians serve as witnesses for the defence. They argue that the individual had enough information in order to make an informed adult choice.120 The “choice” strategy has now become tobacco’s main legal strategy. I found only two historians who testified for the plaintiffs in Engle Progeny cases: Robert Proctor and Louis Kyriakoudes.121 The Engle Progeny cases will take decades more to finalize and historians will continue to play a role, on both sides. This prospect of continued litigation-driven history, forces the historical and legal communities to reflect upon the practice of expert witnessing by historians.
13.3.2 Smaller Cases
Smaller cases; individual, third-party, and class action cases continued through the late 1990s and the 2000s.122 In February 2005, the Class Action Fairness Bill, was signed into law by Republican President George W. Bush. The law moved most class action from state courts to a federal level, thereby considerably augmenting litigation costs. The federal level is also considered “more hostile to class actions than the state courts.” Harry Read, then Democratic leader of the US Senate issued a press release after the bill was confirmed which stated: “Yet another real world effect of this bill is to help the tobacco industry avoid accountability.”123 Furthermore, civil liability and punitive damages were “increasingly constrained in the United States, particularly under the industry-friendly Bush Administration.”124
Despite continued litigation threats, the stock market did not lose its faith in tobacco shares. In an article which researches the influence of litigation on stock prices of tobacco shares, three economists concluded that after the MSA, there was a decline in systematic risk for tobacco stock. The risk was measured by the variance between the returns of a portfolio combined of tobacco shares and that of a diversified [efficient] portfolio.125 According to their research, “[t]here was no significant change in systematic risk during the litigation period.”126 The restrictions placed on civil liability and on punitive damages by the MSA and further legislation, allowed the tobacco companies to budget their legal costs, thereby ensuring stability and predictability.127 Furthermore, the “addictive nature of cigarettes” also contributed to the industry’s continued market power.128 According to the study, initial litigation had hurt tobacco, but after the MSA was implemented the risks dropped and tobacco shares remained attractive for buyers.129 Despite the fact that the tobacco industry was not immediately hit with deadly legal damages, in the long run cases like the Engle Progeny case could have considerable influence on the financial situation of tobacco companies, forcing tobacco companies to raise the prices of their products and so eventually diminish the number of smokers. Selling a hazardous product continues because the legal damages the industry has to pay are nowhere near the profit it makes selling them.
13.4 Tobacco Tactics in Court: Legal Game Theory
In this topic I analyse the legal strategies used by defence counsel in tobacco litigation. To present the industry’s tactics, I will use game theory. Game theory is very popular in law and has been used to draft legal policies, especially concerning negligence, and to understand other legal issues.130 Tort and antitrust legislation is based on the expected strategic behaviour of capitalist companies. [“Game theory is a set of tools and a language for describing and predicting strategic behaviour.”]131 Game theory focuses on the interdependence of decision making; worrying about the actions of others makes our own behaviour predictable.132 I now apply this kind of reasoning to the legal strategies that are used in tobacco litigation.
Tobacco companies have been sued by individuals, in class actions, by third-parties, like insurance companies and unions, and public governments. I will come back to the suits by the states and the federal government because they applied different legal tactics from those cases filed by individuals, third-parties, and in class actions. Individual tobacco victims started to sue tobacco companies from the 1950s onward. Without much success, as we have discussed earlier. The first wave of tobacco litigation revolved around two essential accusations. (1) The first question was whether smoking caused disease. And, as the scientific evidence became undeniable, when did the tobacco companies knew the dangers? The ultimate issue for this question was to determine scientific knowledge. (2) A second element was a personal element. How much did the plaintiff know about the dangers of smoking? Did he or she completely understand what the risk was? Did the plaintiff make a fully informed choice as the defence indicated? The ultimate issue for this question was to determine common knowledge. To answer both of these issues, historians were hired by the industry as expert witnesses to strengthen tobacco’s legal strategies with historical arguments. Defence experts explained to the judge and the jury that “there had been a scientific controversy”, which had withheld the tobacco companies from formally declaring that their products were dangerous. Meanwhile, these historians maintained that individuals who started smoking were fully aware that smoking was not without its dangers. According to the tobacco industry, smokers made an informed choice to smoke, accepting the risks of the product, whatever they were, and thereby excluding any liability on account of the tobacco companies.
It was extremely important for the tobacco companies that they maintained they were not convinced of the dangers of smoking, otherwise they risked being convicted for negligence. [Negligence: “the failure to exercise the care of an ordinarily prudent and careful man”, is a legal theory with an important social function.]133 Consumers are protected by standards that force producers of commodities to adhere to certain minimal rules to prevent that any harm may come to their customers. The socially acceptable levels of precautions taken are variable in time and space but the dominant amount of care is explained in the “Hand Formula”, drafted by Judge Learned Hand. He used it in his opinion in US v. Carroll Towing from 1947. The Hand Formula defines that in the case that the loss (A) was greater than the cost of prevention (B) then the person who could have prevented the loss acted negligently; (B) is measured in three elements: firstly the magnitude of the loss, secondly the probability of the harm, and thirdly the burden to take precautions.134 The point where (A) and (B) meet; (C) represents the expected amount of care that should be exercised.135
The problem for the tobacco industry is that it sells an inherently deficient and dangerous product. The dilemma is even worse. The harmful characteristics of the cigarette are responsible for its success, nicotine for example. Any augmentation in B has to eliminate nicotine from cigarettes, which would mean people would no longer be addicted to smoking and could stop whenever they wanted. This would mean enormous losses for the industry. As long as the industry could deny its negligence, costs might be high for the individual smoker’s health, but the tobacco industry could continue to make huge profits through selling a product that is fundamentally harmful. We have seen that tobacco companies have succeeded time after time in evading strict regulation. This regulatory absence lowered the possible cost of negligence litigation even further. “When the cost of accidents is less than the cost of prevention, a rational profit-maximizing enterprise will pay tort judgments to the accident victims rather than incur the larger cost of avoiding liability.”136 This is the fundamental problem in tobacco litigation. As long as the damages for the tobacco companies are “acceptable losses”, the industry will continue to produce their deadly product. Tobacco companies try to produce a healthier product, not less addictive. They do this only in small part because of risk of litigation. The dominant reason to make a healthier product is to ensure that their customers live longer. Dead smokers do not smoke.
Former assistant state attorney general Douglas Blanke and former state attorney general of Minnesota Hubert Humphrey III described how tobacco lawyers had created a “trial in a box.”137 In Boeken v. Philip Morris, the law firm hired by Philip Morris pre-packaged a standardized set of key documents for tobacco litigation.138 Tobacco litigation in general, whether it is in the first, second, or third wave, is marked by one general “legal” tactic. It is especially effective against individual plaintiffs: the scorched-earth litigation strategy. This tactic was aimed at outspending individual litigants by order magnitude while vehemently denying any association between their product and diseases.139