Corporate suit unconstitutional, punishes poor Americans

Why Vassar’s smoking population should support big business

Graydon Gordian Guest Writer

Never thought you’d see the day the hipster community here at Vassar should be praising a right-wing think tank? Well, that day has come. Back in August, the Competitive Enterprise Institute (CEI), true defenders of the free market faith, filed a federal laswuit against the 1998 Master Settlement Agreement (MSA), also known as the ’98 Big Tobacco deal. Although you may not know it, these courageous capitalists are on your side.

But why?, you ask. For years, public health and consumer protection organizations went after tobacco companies in court, time after time coming up short as judges rightfully refused to penalize companies for providing their customers with a legal product. Then, in 1994, the state attorney general of Mississippi had a great idea. He decided to sue tobacco companies on the grounds that they should compensate the state for public health costs caused by the use of their products, which is, in fact, a completely erroneous charge in the first place, being that smokers actually lower public health costs as they die sooner.

Seeing an opportunity in what looked like a hopeless situation, the lawyers of the four major big tobacco companies sat down behind closed doors with eight State Attorney Generals, as well as an army of private attorneys and arose with the Master Settlement Agreement, in which the tobacco companies would pay state governments $250 billion over 25 years. Every other state in the country was given seven days to join the agreement without amendment, or be forced to take on the big four on their own. As is to be expected, pretty much everyone jumped on the bandwagon.

So, what’s so bad about that? Well, everything. First of all, there were almost no checks on how state governments could spend the money, so, as can be expected, quite little has gone to fund public health while quite a lot has been spent on whatever idiotic project state justice departments, who maintain control over much of the money, choose to fund.
Secondly, the big tobacco companies cut a deal with the state Attorney Generals so that consumers, instead of shareholders, would pay for the settlement. And by consumers I mean most of lower-middle class and working class America, as they consume a higher percentage of cigarettes than any other class in American society.

Thirdly, the army of private attorneys hired by the states to counterbalance the force of big tobacco’s legal team walked away wealthy, mostly with working class money (and if not that, then good old fashioned American taxpayer dollars).

Fourthly, any tobacco company that wanted to stay on the market had to pay into this extremely expensive system, handing over control of 99 percent of the market to the big four, and driving dozens of smaller companies out of existence. So, at the end of the day, Americans were left with a national tobacco cartel, as well as a de facto national tobacco tax that state governments could spend without any type of public control whatsoever.

So corporations, governments and lawyers have conspired to screw over the average American. What else is new? Well, it gets worse. This entire settlement is unconsitutional. Article I, Section 10 of the Constitution states “no state shall, without consent of Congress...enter into any agreement or compact with another state.”

You will very infrequently find me arguing that the federal government should continue to wrestle away power from the states, but if the MSA does not violate that section of the constitution, I don’t know what does. Established to stop the states from getting together and superceding the power of the federal legislature, this is exactly the type of scenario that this clause was designed to prevent. In fact, the MSA was a back up plan, as Congress had already rejected such a proposal. All the other points are just to highlight the pernicious nature of the agreement. They are not enough to overturn it. But this is.

Now is the time, my friends. Now is the time for Hayekians and hipsters to stand together, and hope against hope that a small but dedicated think tank can take on Big Tobacco, 50 state attorney generals and countless supposed “public interest groups” in the hopes that instead of paying so much for camel lights you can start saving up to buy that $200 pair of jeans. And for the first, and probably the last time, you will be thankful that Bush has stacked the federal courts with pro-free enterprise jurists who will, God willing, courageously come to your aid.