Massive Immunity: Problems with the Senate Commerce Committee's National Tobacco Legislation
Massive Immunity: Problems with the Senate Commerce Committee's National Tobacco Legislation
SAVE LIVES, NOT TOBACCO
The Coalition for Accountability
http://www.savelives.org
April 6, 1998
On Wednesday, April 1, 1998, the Senate Commerce Committee, chaired by John McCain (R-AZ) voted out its version of the deal between the tobacco industry and some state attorneys general. While this bill, S. 1415, raises the price of tobacco products higher than the deal and takes away some hurdles to FDA regulatory authority, it closely resembles the discredited industry deal and falls far short of the principles and goals of Save Laves, Not Tobacco and other public health and consumer groups.
Most disturbing are the massive and unprecedented special protections from legal liability that the industry would be granted under the bill, which should be known as the "Tobacco Industry Protection Act." Major problems include:
A Cap on Industry's Annual Civil Liability
The Commerce bill would cap the tobacco industry's total liability for all civil damages and penalties for all past and future wrongs to just $6.5 billion per year. The U.S. Treasury Department estimates that the economic costs alone of tobacco related illness is $130 billion a year. A $6.5 billion cap limits the industry's liability to 5 cents on the dollar. Despite claims by proponents of the cap that is not immunity at all, this cap gives tobacco companies 95% immunity.
Total Protection for Parent Corporations
While the tobacco subsidiaries get 95% immunity, their parent corporations get 100% protection from all civil damages and penalties. Under the bill, no health-related civil suits against tobacco parent corporations or foreign affiliates are allowed. Thus, domestic subsidiaries are protected by the $6.5 billion cap, and all other assets of these multinational conglomerates are shielded entirely from liability for past and future conduct.
Preemption of State Law
S. 1415 preempts state tort laws, and it severely limits enforcement of state and local consumer protection, racketeering and anti-tobacco laws. The effect of this broad preemption will be to freeze state and local regulatory initiatives and make it harder for state and local officials to enforce the law.
Weak Youth Smoking Penalties
The so-called "lookback" penalties against the tobacco industry aimed at reducing youth smoking are very weak, as these penalties are capped at $3.5 billion a year -- equal to only 15 cents a pack. Worse, the Commerce bill fails to target the penalties company-by-company, so there is no real incentive for companies to meet the targets.
Low Price Increases and Taxpayer Subsidies
Most health experts agree that the best way to reduce youth nicotine addiction is to raise prices sharply. The Commerce bill calls for a $1.10 increase over five years, just half of the $2 price hike the National Academy of Sciences called for years ago. At a minimum, the price increase should be $1.50 over three years to reduce both youth and adult smoking rates and save more lives.
While the tobacco lobbyists claim the Commerce bill will drive them to bankruptcy, the bill's special protections will let the industry laugh all the way to the bank. The public and members of Congress should not be fooled into giving Big Tobacco this sweetheart deal that protects them from being held fully accountable for past, present and future harm caused by their acts.
Anti-Immunity Resolution
On March 31, 79 Senators voted "Yes" to the non-binding "sense of the Senate" amendment to the Budget Resolution expressing opposition to giving any immunity to tobacco companies.
The 19 Senators who voted AGAINST the amendment (i.e., for immunity) were:
Bennet (R-UT), Burns (R-MT), Campbell (R-CO), Coats (R-IN), Cochran (R-MS), Enzi (R-WY), Faircloth (R-NC), Ford (D-KY), Gorton (R-WA), Hagel (R-NE), Hatch (R-UT), Helms (R-NC), Hollings (D-SC), Inhofe (R-OK), Jeffords (R-VT), Lott (R-MS), McConnell (R-KY), Sessions (R-AL), and Stevens (R-AK).
Two Senators didn't vote: Hutchinson (R-AR) and Mikulksi (D-MD).
Eliminate the Cap Amendment
In the Senate Commerce Committee markup of comprehensive tobacco legislation on April 1, Sen. Byron Dorgan (D-ND) moved to strike the $6.5 billion a year cap proposed in the bill. This cap lets the industry off the hook for cheap. The U.S. Treasury Department estimates that the economic costs alone of tobacco related illness is $130 billion a year. A $6.5 annual cap limits the industry's liability to 5 cents on the dollar of these tobacco-related costs.
Those voting FOR removing the cap were:
Ashcroft (R-MO), Brownback (R-KS), Dorgan (D-ND) and Rockefeller (D-WV).
Those voting AGAINST removing the cap were:
Abraham (R-MI), Breaux (D-LA), Bryan (D-NV), Burns (R-MT), Ford (D-KY), Frist (R-TN), Gorton (R-WA), Hollings (D-SC), Hutchison (R-TX), Inouye (D-HI), Kerry (D-MA), McCain (R-AZ), Snowe (R-ME), Stevens (R-AK), and Wyden (D-OR).
Comparing the Votes
Despite voting FOR the sense of the Senate resolution opposing immunity the day before, 10 Commerce Committee members voted AGAINST the Dorgan amendment to lift the caps. Several of these Senators said they did not believe a $6.5 billion cap on the industry's yearly liability was a form of "immunity" (even though that amount is only 5% of the tobacco industry's annual economic damage in health costs and lost productivity.)
Committee members who voted FOR the no immunity resolution but AGAINST the amendment to lift the cap were:
Abraham (R-MI), Breaux (D-LA), Bryan (D-NV), Frist (R-TN), Hutchison (R-TX), Inouye (D-HI), Kerry (D-MA), McCain (R-AZ), Snowe (R-ME), and Wyden (D-OR).
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