How Greed, Hubris and High-Stakes Lobbying Laid Waste to the $ 246 Billion Tobacco Settlement
ABA Journal
March, 2007

“The goal was "to bring this industy to its knees."

That's what Texas Attorney General Dan Morales said on March 28, 1996, as he announced filing the first-ever federal civil racketeering lawsuit against the major tobacco companies.

"The purpose of this lawsuit is to change how this industry does business," said Morales, who was the seventh state attorney general to sue the cigarette makers for smoking-related health care costs. "We are going to stop them from selling their deadly product to minors. We are going to force them to manufacture a safer product."

In a little more than a year, 30 more states had filed similar lawsuits.The monetary claims topped $ 100 billion. Hundreds of lawyers were employed by both sides.

"The money at stake was unprecedented. The breadth of the litigation, reaching to nearly every state, was unprecedented," says Tim Bouch, a Charleston , S.C. , litigator specializing in mass torts who closely followed the tobacco litigation. "And the legal claims, which were truly novel in theory, would have been unprecedented if successful."

But today, 10 years after the parties announced a record $ 369 billion settlement--which was later reduced to $ 246 billion--it's business as usual.

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Some legal observers say the full impact of the states' tobacco lawsuits may not be fully realized for many years.

"Lawsuits are a blunt instrument that can do one thing--pull the money lever," says law professor Stephan Landsman of DePaul University in Chicago . "But because of the documents and whistle-blowers unearthed by the attorneys general, plaintiffs actually have a fighting chance when they take a case before a jury now. That is a dramatic change."

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