ST. PAUL, Minn. — The tobacco industry, staggered by the prospect of massive new costs and regulations approved this week by a Senate committee, is threatening to launch a legal counterattack on three broad fronts.
But constitutional scholars, lawmakers and public health advocates said that the challenge is unlikely to seriously erode the sweeping bill, which cleared the Senate Commerce Committee, 19 to 1, on Wednesday.
No one doubts that the industry, which is spending more than half a billion dollars a year to defend itself in lawsuits across the country, can martial a phalanx of highly skilled attorneys on its behalf.
However, Matthew Myers, a lawyer and executive director of the National Center for Tobacco Free Kids, said that the industry counteroffensive could prove to be a "two-edged sword." He predicted that the full Senate might pile on even more costs--to raise even more money for anti-smoking programs--should the industry's attack claim some of the bill's other provisions.
If the Commerce Committee bill becomes law, industry attorney J. Phil Carlton warned Committee Chairman John McCain (R-Ariz.) in a letter this week, the industry would challenge three of its major components: marketing and advertising restrictions; penalties for failure to bring down youth smoking rates; and procedures for disseminating internal industry documents.
"We intend to assert our 1st Amendment, due process and other constitutional rights to overturn it in the courts," Carlton wrote.
The bill, by raising the price of cigarettes by $1.10 a pack over five years and requiring the tobacco companies to channel the proceeds to Washington, would cost the industry $516 billion over 25 years. By comparison, the industry agreed last year to a $368.5-billion price tag in a settlement of lawsuits filed against the tobacco companies by 40 state attorneys general.
The measure also would subject tobacco to regulation by the Food and Drug Administration and restrict the tobacco companies' freedom to market and advertise--with the goal of reducing the impact on young people.
In return, the cigarette companies would get considerably less legal relief than was included in last year's settlement with the states. The bill caps the industry's annual liability in damage suits at $6.5 billion (compared with $5 billion in the earlier settlement), but it would not ban class-action suits or punitive damages for past conduct, which are two of the protections the cigarette companies wanted most.
Without those protections, Carlton wrote McCain, the industry will not agree to sign consent decrees "required to implement many of the provisions" in the settlement.
The current McCain bill contains a "number of illegal and punitive provisions," according to Carlton and Meyer G. Koplow, a New York attorney who was Philip Morris Cos.' principal negotiator in the talks that led to last year's settlement. In particular, they argued, the legislation's advertising restrictions would not stand up to a constitutional challenge as an abridgment of free speech.
Myers, the anti-smoking activist, acknowledged that "some portions" of the bill might not survive court battles. But he scoffed at the notion being peddled by some of the bill's critics that the courts would discard it in its entirety.
"It's not all or nothing," Myers declared.
Several legal experts stressed that Congress could protect major portions of the bill easily with a clause stating that, even if certain provisions were deemed unconstitutional, the bill's other major provisions--cigarette price hikes, FDA regulatory authority and a government campaign to reduce teen smoking--would survive.
"Severability clauses are Congress' insurance policy," said David Vladeck, director of Ralph Nader's Public Citizen Litigation group, which specializes in constitutional law.
Moreover, Vladeck said, the law could include a clause stating that if the industry succeeds in striking the bill's advertising restrictions, it will also lose the bill's best feature: the yearly cap on lawsuit damages. Such a clause is included in a summary of the bill prepared by McCain's staff.
Some critics, such as Nader and the American Lung Assn., said that there is no reason to give the industry any legal protections. Myers said that, if the final bill includes such protections, they almost certainly would be tied to advertising restrictions.
There are two groups of advertising restrictions in the McCain bill: one set that adopts rules promulgated by the FDA and a second, broader set that is embodied in last year's settlement.
The key FDA rules require black-and-white, text-only advertising except in adult publications, a ban on outdoor advertising of tobacco products at schools and playgrounds, and a ban on tobacco company sponsorship of athletic events. A North Carolina federal judge voided those rules on technical grounds last year, and the decision is on appeal.