Just Another Legal Travesty
By S.P. Brown

How else would you describe Friday's tobacco verdict? Six jurors, after enduring a two-year trial, deliberated less than five hours before agreeing to award the staggering sum of $145 billion to Florida's cigarette smokers.

The quickie verdict marked the third time this jury has ruled against big tobacco. In July 1999, they ruled that the industry makes a deadly product. Then, in April, they ruled the industry had to pay $12.7 million in compensatory damages to three smokers representing the claimants in the class action suite.

Lost on the munificent Florida jurors is the fact big tobacco has already agreed to make $206 billion ($6 billion has already been paid) in payments to 46 states over 25 years, which makes an additional $145 billion payment highly improbable.

Nevertheless, according to Stanley Rosenblatt, the Florida plaintiffs' lead attorney, this was "no time for timidity" and asked the jurors to "wipe out 50 years of treachery" by the industry.

One juror wholeheartedly agreed. "You can't just say you're sorry after 50 years," Gary Chwast told the Miami Herald. Chwast, a postal worker by trade, said the lawyers representing the tobacco companies offered no credible evidence that they couldn't afford to pay the judgment. "I'm not an idiot (really?), Chwast proclaimed. "The CEOs are making millions. Why are they making so much if the companies don't have the money? What are you not telling me? It offends me."

Have you asked your attorney these same questions, Mr. Chwast?

Obviously not. While Messrs. Rosenblatt and Chwast railed against Philip Morris CEO Geoffrey Bible and his million dollar bonuses in a post-verdict press conference, Rosenblatt conveniently failed to mention his own little tobacco bonus. In 1997, the do-good attorney pocketed a cool (or should that be Kool) $49 million for settling a $349 million in a secondhand-smoke class-action case filed by flight attendants.

But to be fair, Rosenblatt isn't the only enterprising attorney lining his pockets with tobacco gold. Last year's $206 billion settlement of 46 state lawsuits brought against the tobacco industry is expected to generate a bonanza of attorney fees, totaling at least $10 billion.

And that could just be the tip of the iceberg.

Contrary to what the state attorney generals have stated, there is no cap on attorney remuneration. In fact, some plaintiffs' lawyers involved in the $206 billion settlement believe they could eventually pull down 11-digit paydays.

Here's an example of how insidious the tobacco money-grab has become. According to Lester Brickman, an expert on attorney fees at Yeshiva University, Benjamin N. Cardozo School of Law, lawyers in Texas are seeking fees that average a staggering $92,000 per hour.

If that isn't a shameful enough display of covetousness, take a look at Mississippi attorney Richard Scruggs, who has proven to be the most dexterous attorney at absconding with tobacco's loot. Scruggs, who, along with Mississippi Attorney General Michael Moore, practically invented the tobacco industry shakedown, has appropriated nearly a $1 billion of tobacco money for his law firm, with nearly a third of that going to Scruggs personally (besides being an attorney, he's also Senate Majority Leader Trent Lott brother-in-law).

And it could get worse. Far richer rewards could go to lawyers who arranged to represent many different states at once in the $206 billion state settlement. According to the Dallas Morning News, the law firm of Ness, Motley of Charleston, South Carolina, could eventually realize fees exceeding $3 billion.

As for the Florida litigants, it's estimated Rosenblatt's constituency could reap anywhere from $150 to $400,000 per person, with Rosenblatt reaping hundred's of millions of dollars for himself.

So what exactly are these muckraking attorneys protecting us from, anyway? Since 1964, the Surgeon General has been warning Americans that smoking can be hazardous to their health. In fact, more perceptive Americans, which there seems to be precious few these days, have been aware of smoking's hazards long before the Surgeon General's warning.

Still, to hear today's enterprising attorneys tell it, cigarettes represent no good, and it's their duty to punish these grim reapers.

That's not entirely true, though. If cigarettes didn't provide some positive utility, no one would smoke. After all, how many people willingly ingest cyanide?

The fact is there are positives to smoking. The nicotine in cigarettes has a unique amphoteric quality, meaning it can counter both anxiety and depression. In other words, when you're up, it can bring you down, and when your down, it can lift you up.

Furthermore, there are other, less well-known, benefits of smoking. Smokers get Parkinson's disease at a rate half that of non-smokers. What's more, heavy smokers get osteoarthritis at a rate five times less than non-smokers.

Don't get me wrong; I'm not advocating smoking. Heart disease, lung cancer and emphysema are serious diseases. However, it's important to realize that people smoke for a reason and they do receive benefits from smoking.

So, given tobacco's benefits and costs, why do lawyers need to be part of equation?

Contrary to the health-protecting demagoguery, tobacco litigation is foremost about money. These lawsuits are a rich source of funds for government bureaucrats and new source of income for entrepreneur litigators, who, despite the moralistic soliloquies, are nothing more than social parasites.

The economic fact is lawyers can't create value; they can only confiscate it. Therefore, viewed from the consumers' perspective, these tobacco settlements effectively do nothing more than transfer wealth from smokers (mostly the middle-class and the poor) to states and attorneys.

Another factor that makes tobacco an enticing target for litigation is that it's an amazingly price-inelastic product, meaning demand barely falls when prices rise. In fact, since November 1998, the big cigarette makers have raised wholesale prices $0.76 a pack, which translates into a 37 percent increase in the average retail price of a pack of smokes, with nary a loss in market share.

Given this unique characteristic, don't look for the lawyers to back off anytime soon. They're not likely to be satisfied until the tobacco industry is nothing more than a conduit from smokers' bank accounts to their own.