In his State of the Union Address, President Clinton announced that the Justice Department would sue the tobacco companies. This directly contradicted earlier testimony Attorney General Janet Reno provided the Senate Judiciary Committee, indicating the federal government had no independent cause of action to bring such a lawsuit. Now the administration is seeking $20 million, largely to hire lawyers who can help them determine how and where to file their lawsuit. A closer look at the legal theories, however, indicates that the administration does not have a viable case.
Last year, an outrageous transfer of wealth occurred – with as much as $250 billion going from the pockets of smokers (many of whom tend to be in lower income brackets) to state governments and private contingency-fee trial lawyers. This transfer was the result of a settlement entered into by the tobacco companies after a number of states filed lawsuits against them, but not before some states changed their laws to give the government an unprecedented upper hand in court.