Illinois Legislators Should Reject Bill to Grant Special Legal Protection to Big Tobacco
Statement of Matthew L. Myers President, Campaign for Tobacco-Free Kids
March 08, 2003
Washington, D.C. — Illinois' Governor and Legislature should reject pending legislation that would single out the tobacco industry for special legal protection and limit the amount of bond money they have to post to appeal legal verdicts against them. This is the ultimate in special interest legislation. The legislation is being considered as a state judge prepares to rule on Monday in a class action lawsuit, known as the Miles case, alleging that tobacco giant Philip Morris misled smokers about the dangers of light cigarettes. If the judge rules against Philip Morris, the company could be forced to give up billions of dollars it has earned from its wrongful marketing and sales of light cigarettes.
The pending legislation would benefit only Philip Morris and other large tobacco companies. It would not benefit the people of Illinois in any way and can only be viewed as payback to the tobacco industry for its political support. Illinois legislators should not be protecting Philip Morris from the legal consequences of its decades of deceptive marketing.
A report issued by the National Cancer Institute in November 2001 concluded that the tobacco industry for decades has deceptively marketed light cigarettes as reducing smokers' health risks despite knowing from their own research that these cigarettes were no safer than regular brands. Based on internal tobacco industry documents, the report found that the tobacco companies intentionally manipulated the design of their light cigarettes to produce less tar when tested by government testing machines, but not when smoked by actual smokers who changed their smoking habits to maintain nicotine levels. If Philip Morris is found liable of deceiving the citizens of Illinois, the Legislature should not provide it with special protection from the legal consequences of these actions.
Sponsors of the legislation say they support this special protection for Philip Morris (Altria) to guarantee that it will not declare bankruptcy if it loses the Miles case. They say they are worried that Philip Morris might ask the bankruptcy court to suspend its obligation to continue to make payments to Illinois from the 1998 state tobacco settlement. This is a red herring. As shown by the settlement itself, Philip Morris (Altria) and the other tobacco companies are more than capable of paying large legal verdicts without risk of bankruptcy. The tobacco companies can easily pay appeal bond amounts in the hundreds of millions out of their existing revenue and profits. In addition, they have sufficient capital assets and future revenue streams that make it easy for them to borrow massive amounts of money as needed. They can also raise large amounts of additional revenue by raising their cigarette prices, as they have done to pay the state settlement. Financial analysts who follow the tobacco industry have estimated that tobacco companies are capable of posting appeal bonds in the tens of billions of dollars without risk of bankruptcy. The purpose of this bill is to protect Philip Morris, not the people of Illinois.