Tobacco Regulation or Litigation

Abstract

Cigarettes kill hundreds of thousands of people every year, yet until recently litigation against the tobacco industry constantly failed. In case after case judges and juries found that smokers understood the risks of smoking and thus could not hold the tobacco industry legally responsible for the consequences. When states brought suits claiming that the tobacco industry owed them reimbursement for Medicaid expenses attributable to care for tobacco-related illnesses, observers expected the suits to go nowhere. The state suits appeared to be parasitic on the individual tort suits that had failed, for the states would not appear to have a claim unless the tobacco industry wronged the smokers who benefited from Medicaid. Yet the tobacco industry agreed to a settlement worth hundreds of billions of dollars, and to curb advertising and marketing practices. This Master Settlement Agreement (MSA) is just one brick in the regulatory edifice that houses the smoking policy of the United States. The federal government imposes an excise tax on cigarettes; regulates warning labels, advertising, and product characteristics; and forbids sales to minors. The state governments have their own excise taxes on cigarettes; they also regulate advertising and sales practices in ways that go beyond the requirements of the MSA, and restrict smoking in workplaces, restaurants, and other public spaces. Municipalities impose yet another layer of regulation.