TOPICS > Health

Fair Trade?

April 18, 1997 at 12:00 AM EDT


MARGARET WARNER: Now we discuss and debate the prospects of a settlement. Dr. C. Everett Koop served as surgeon general in the Reagan and Bush administrations. And he’s now professor of surgery at Dartmouth Medical School; Christine Gregoire is attorney general of the state of Washington; Stanley Rosenblatt is a plaintiffs’ lawyer involved in two class action suits against the tobacco industries. Manny Goldman is a tobacco industry analyst for Paine Webber in San Francisco. Philip Morris and RJR Nabisco officials declined our invitation to appear. Welcome all of you. Attorney Gregoire, who initiated these talks, and how much debate did you and your colleagues have internally about the advisability of negotiating at this time?

CHRISTINE GREGOIRE: Well, representatives of the industry itself came forward to us and asked if we would go to the table. And they indicated it would be worth our time and that they were prepared to enter into good faith negotiation with the attorneys general. We were very skeptical but we were urged to do so by them, by an intermediary, so we went there with that degree of skepticism to see if in fact they were going to act in good faith, and they were going to begin to put on the table the issues that we as attorneys general have set forward as our goals. But first and foremost protecting our children.

MARGARET WARNER: And have you found that in detail that they are putting forward any specific proposals to meet those goals?

CHRISTINE GREGOIRE: Yes. In fact, each of us said to them we will be at the table only so far as you’re able to meet our goals and make progress towards them and in fact act in good faith at the table. We are still at the table because we are talking with significant terms about protecting our children the health issues facing our public, and this industry is finally coming honest and forthright with the American consumers, and agreeing to be regulated as an industry in this country, something they’ve never agreed to in the past.

MARGARET WARNER: Manny Goldman, why would the industry now be willing–come forward and suggest negotiating?

MANNY GOLDMAN, Paine Webber, Inc.: Well, things have changed over the last several years. Most noteworthy I think that the companies feel that they are politically vulnerable. Even if they were to win every case going forward, you’d have very broad PR, you wouldn’t be able to open up the paper, or turn on the television without hearing something about cigarettes and what they mean from a health standpoint. And the fact that you had Jeff Bible, the chairman and executive officer of Philip Morris and Steven Goldstone from RJR Nabisco, same position. At the table–

MARGARET WARNER: Personally, they’re there?

MANNY GOLDMAN: Themselves, personally, with what amounts to have–their adversaries. This is really a momentous thing, and I think their concern–probably an analogy might be if you looked at–if you went back to 1917, right before prohibition 1918, I think maybe the cigarette manufacturers feel like the distilled spirits manufacturers felt at that time, under siege. But I think in the case of cigarette makers, I think they want to preempt any sort of egregious political legislation that might come out of this. And there is a second point, which is as long as you have this overhang of possible awards that could be substantial, just that overhang has had a very depressing effect on the stock prices of the cigarette companies.

MARGARET WARNER: All right. And what specifically do they want? Is it–what kind of immunity do they want from lawsuits?

MANNY GOLDMAN: I think the cigarette companies want fully immunity from past, present and future lawsuits, which is why apparently they’re talking many, many billions of dollars. If you look at the numbers that are being thrown around in the general press, $250 billion, $300 billion, that’s 300,000 million, so we’re talking big money, and so for big money, you want big immunity. That, I think, is very important to them.

MARGARET WARNER: Dr. Koop, from a public health standpoint, if the states could get the kinds of things they’re looking for, would this be a good idea?

DR. C. EVERETT KOOP, Former Surgeon General: Would you buy a used car from this man? I think nicotine is not addictive? That’s the sum of my answer. I think when you’ve had an industry that has deceived the public and lied to them as long as they have, more than three decades, you have to be very careful about anything you put forward. I would love to see some kind of a settlement. The things that were shown on the screen about changes in advertising are wonderful for public health, but we just heard that there are huge amounts of money, $300 billion is a lot of money, but if you figure that that’s being given over 25 years, and that each year 420,000 people will die, that comes to a mere $28,000 per life lost.

MARGARET WARNER: Are you saying–when you said would you buy a used car from this man–that you don’t think the tobacco companies are entering into this in good faith?

DR. C. EVERETT KOOP: I think they’re entering into it in as good faith as they can muster, and I think they would love to have a settlement, but having seen how they’ve been able to turn every single thing that’s happened since I’ve known about them to their advantage. I would be very, very wary about what they promise.

MARGARET WARNER: Madame Attorney General, respond to that one point about the–good faith and how much you really trusted these negotiations can get you what you want in the advertising area, in the regulation area, and in the fund.

CHRISTINE GREGOIRE: Well, I came to the table as skeptical as Dr. Koop. And I remain skeptical. We are by no means close to a settlement at all. We have yet to achieve the kinds of things that each of us as attorneys general want out of our litigation, and that is we want complete protection of our children. I’m tired of an industry that makes money by preying on our children. I want an industry that’s going to be open and honest with the American public about the addictive nature of their product, about the health care effects of it, and what they’ve known all the way along, and how they’ve geared their advertising toward children.

And I want an industry that will agree to be regulated, just like any and every other industry in this country. Unless and until we are able to achieve those goals at the table we are not willing to talk money. Our lawsuits are not about money; they’re about kids and health care issues. If we can achieve those goals, we’ll discuss money, but up until then we will not. And at this point it’s premature to talk about money.

MARGARET WARNER: All right. Stanley Rosenblatt, you have a couple of major lawsuits going forward in the private area. What do you think of these talks.

STANLEY ROSENBLATT: I am totally opposed to these settlements. I’m totally suspicious of the tobacco executives. This very week in New York City I have taken the depositions of the CEO’s of Philip Morris, RJ Reynolds, Lorrillard, Brown & Williamson, under oath, and would you believe that in April 1997 they still say cause has not been scientifically proven, they deny that cigarette smoking causes cancer; they deny it’s addictive; they deny secondhand smoke is a danger; they deny that they advertise for new customers. My index of suspicion is up to the sky in dealing with these people.

My trial starts June 2nd on behalf of some 60,000 flight attendants. We want to go forward. I do not trust these people, and that’s the smart money boys obviously reached the conclusion that if this settlement were going to go through, the stock price would soar. As Dr. Koop says, I don’t want with a clear conscience to go ahead and let an industry function with immunity when they continue to kill and be responsible for the deaths of close to ½ million people every year.

MARGARET WARNER: Dr. Koop, address the immunity issue. I mean, this has been used in other large situations.

DR. C. EVERETT KOOP: I’m not a lawyer, but I’m concerned that Congress has the right to step in and grant immunity.

MARGARET WARNER: You’re saying that because probably if we’re talking about blanket immunity, we’ve got to prove–

DR. C. EVERETT KOOP: For example, I’m a surgeon. Suppose that you had a serious problem, said, take any risk you can just save my life; and if I wanted to do something with you that guaranteed that you would not sue me, that is not legal. And therefore, if that’s not legal, I wonder how Congress can say to a whole industry that they grant them immunity for past, present, and future. This isn’t as though an automobile had a defect in it; it was not planned; and now we’re going to put a workman’s compensation fund thing together. This is a situation that has been planned for three decades whereby of fore knowledge we were deceived, we were lied to, and why should those people have immunity. I just don’t believe they should.


MANNY GOLDMAN: Margaret, I think that the interesting thing here is that if you look at the history of litigation in cigarettes, and I have no axe to grind with anybody; I’m a securities analyst. My job is to forecast; I take no sides. But just looking historically it’s interesting that the cigarette companies, even in the midst of a–kind of a difficult environment from a public relations political standpoint have won almost all of the cases, and that has to be considered as these negotiations go on, I’m sure it will be considered. And then usually when the case is–is that when you get juries together, they say something like, well, there’s a warning label, people knew that cigarettes were bad for them, they smoked anyway, and the addiction argument really hasn’t flown to date in most of the cases, and the reason for that is that so many of each person’s friends have given up smoking.

So when you get to the question of immunity or you get to the question of money, I think perhaps there’ll be an accommodation because I don’t think anyone–my guess is neither the industry nor those on the other side of the table wants this to go forever because theoretically you can have case after case after case going on forever, costly to the plaintiffs’ side, costly to the defendants’ side. So I don’t think everybody’s going to be satisfied, but when all is said and done, I think there will be a compromise with some large amount of money, and everyone will get in, and you’ll basically have a resolution to these issues.

MARGARET WARNER: Mr. Rosenblatt, what about that point, that this will be a bird in the hand, that you would have resolution without a lot of additional cost?

STANLEY ROSENBLATT: We don’t want a resolution. We want a resolution in a courtroom where a jury of Americans hear the full story, from beginning to end. The 50 year fraud, starting out with a flank statement, cigarette smokers in 1954, when the tobacco industry promised they were going to research this question, they had the nerve and the gall 43 years later–depositions taken this very week–to say, hey, we’re still researching this. As far as they’re concerned they’re going to research this into the next century when our children are adults. We’ve got to expose this industry to the damage that they have caused to the American people. This is not business as usual. I take a stand. People need to take a stand. America has gotten into a situation where everything is gray. Everything is relative.

There’s good and evil in this world, what the tobacco companies have done to the American people for the last half century is evil, and they can’t walk away and get immunity and go about their business. That would be wrong. And the way they’re going about these settlement negotiations is very sneaky, because my wife and I represent over ½ million people in these two class actions; they’ve never tried to talk to us, because they know I’m not going to be a part of any–

MARGARET WARNER: All right. Attorney General Gregoire, how do you answer the concerns that you just heard?

CHRISTINE GREGOIRE: Well, you know, I look at a lawsuit like this like I do any other lawsuit, and that is that I can never turn away the potential of a settlement. If I can achieve the goals and objectives that I set forth in my lawsuit by means of a settlement, to avoid the cost of litigation and the time associated with it, then that’s in the best interests of the Washingtonians that I represent.

MARGARET WARNER: What about the private other individuals, such as the ones Mr. Rosenblatt represents?

CHRISTINE GREGOIRE: I don’t represent private consumers. And they are represented at the table in the negotiations. While Mr. Rosenblatt is not, there are others at the table who represent private consumers who brought actions on behalf of them.

STANLEY ROSENBLATT: No one’s representing my clients, except me and my wife, and we weren’t even consulted about going in and talking to anybody. And I’m really proud of that, actually.

CHRISTINE GREGOIRE: And I did not set up the negotiations here. It was at the request of the industry. They brought the individuals by invitation to the table. We’re there and we’re there with a high degree of skepticism, but on behalf of each and every child in this country if we can turn this industry around, completely change its conduct, so that it no longer preys on our children and accepts responsibility for producing an addictive product and gets on with being regulated, as it should be by the FDA, I think we will have made a major step forward. I’m not going to turn my back on that kind of situation.

MARGARET WARNER: All right. Madame Attorney General and gentlemen, I’m sorry to have to leave it there. Thank you all very much.