Tobacco settlement — a pinnacle of corporate-government collusion — faces challenge in Supreme Court

Back in 1998, a bunch of clever trial lawyers got together with the biggest tobacco companies and state attorneys general. They figured out how to set up a racket that would:

1) Enrich the lawyers beyond what anyone thought possible,

2) Protect Big Tobacco from competition,

and

3) Provide a new stream of revenue for the states.

It was called the Master Settlement Agreement (MSA), and it was an interstate pact imposing fees on Big Tobacco (purportedly to recover to costs to Medicaid of treating smoking), and basically prohibiting small tobacco companies from growing.

The free-market Competitive Enterprise Institute (where I once served as a journalism fellow) filed a suit, arguing that the pact was unconstitutional. CEI has now filed a brief with the Supreme Court, asking the body to hear the group’s complaint.

The argument, in brief:

CEI’s challenge to the tobacco settlement focuses on the Constitution’s Compact Clause (Article I, Section 10):

“No State shall, without the Consent of Congress …enter into any Agreement or Compact with another State, or with a foreign Power ….”

The Compact Clause was specifically aimed at preventing states from collectively encroaching on federal power or from ganging up on the citizens of other states. The tobacco settlement, a multi-state compact, plainly violates that provision.

A footnote: 1998 was not the last time Big Tobacco used Big Government to kill competition. In 2009 Philip Morris successfully passed, and Barack Obama signed, the Family Smoking Prevention and Tobacco Control Act, which — unlike the 1998 MSA — the other big tobacco companies opposed, calling it the “Marlboro Monopoly Act.”

Barack ObamaBeltway ConfidentialceiUS

Just Posted

A large crack winds its way up a sidewalk along China Basin Street in Mission Bay on Friday, Sept. 24, 2021. (Kevin N. Hume/The Examiner)
San Francisco’s sinking sidewalks: Is climate change to blame?

‘In the last couple months, it’s been a noticeable change’

For years, Facebook employees have identified serious harms and proposed potential fixes. CEO Mark Zuckerberg, pictured in 2019, and COO Sheryl Sandberg have rejected the remedies, causing whisteblowers to multiply. (Eric Thayer/New York Times)
Facebook’s problems at the top: Social media giant is not listening to whistleblowers

Whistleblowers multiply, but Zuckerberg and Sandberg don’t heed their warnings

Maria Jimenez swabs her 7-year-old daughter Glendy Perez for a COVID-19 test at Canal Alliance in San Rafael on Sept. 25. (Penni Gladstone/CalMatters)
Rapid COVID-19 tests in short supply in California

‘The U.S. gets a D- when it comes to testing’

Niners quarterback Jimmy Garoppolo led a late-game comeback against the Packers, but San Francisco lost, 30-28, on a late field goal. (Courtesy of San Francisco 49ers)
The Packers beat the Niners in a heartbreaker: Don’t panic

San Francisco is no better and no worse than you thought they were.

A new ruling will thwart the growth of solar installation companies like Luminalt, which was founded in an Outer Sunset garage and is majority women-owned. (Philip Cheung/New York Times)
A threat to California’s solar future and diverse employment pathways

A new ruling creates barriers to entering the clean energy workforce

Most Read