"The evasions, lies, and transfer of documents overseas by the tobacco industry to prevent any Government agency or cigarette-injured patient from finding them has distorted U.S. Government policy for 30 years.
...

"Had the administration and the Congress known [in 1965] what the tobacco industry knew, the warnings in the public health program of the U.S. Government would have been much stronger.
...

"Had we known what the tobacco companies knew and had we been privy to their research on the addictive nature of nicotine and their ability to manipulate the amount of nicotine in cigarettes, the 1979 Surgeon General's report would have found cigarettes addictive and we would have moved to regulate them. Unfortunately, the President of the United States, the Secretary of Health, Education, and Welfare, and the Surgeon General of the United States were all victims of the concealment and disinformation campaign of the tobacco companies."
From testimony of Joseph A. Califano, Jr., former U.S. Secretary of Health, Education, and Welfare, before the House Energy and Commerce Committee's Subcommittee on Health, May 17, 1994
I. Introduction

Should the U.S. Department of Justice sue the U.S. tobacco industry to recoup the costs incurred by the federal government for the medical treatment of individuals made ill by the use of tobacco products? Members of Congress, senior White House officials and leaders in the public health community have urged the U.S. Department of Justice to take such action for two primary reasons: 1) to recover tobacco-related health care costs borne by the government; and 2) to hold the tobacco industry accountable for decades of conspiratorial and fraudulent conduct that has cost the health and lives of millions of Americans.3 As discussed in the following pages, it is a well-settled legal principle that the United States can sue to recover monetary losses from those whose tortious acts caused such losses.

The need for such action has become more acute in the aftermath of the industry's successful campaign to defeat landmark federal tobacco control legislation last June4 and the tobacco industry's settlement with the state attorneys general in November 1998.5

The settlement of the state attorneys general came in response to the demise of the so-called McCain bill, which was defeated in part by a tobacco industry advertising campaign that had cost $40 million by the time the bill died6 and millions more in the subsequent months leading up to the November election. Its death was also presaged by the fact that, from 1987 to 1996, the tobacco industry "showered more than $30.4 million on Capitol Hill lawmakers and their national party committees,"7 and because tobacco interests made political contributions of more than $4 million in 1997 alone.8 It was also derailed because influential former lawmakers, including three former Senate Majority Leaders -- Republicans Robert Dole and Howard Baker, Jr., and Democrat George Mitchell - lobbied on behalf of the tobacco industry.9 As put succinctly by Charles Lewis, executive director of the non-profit Center for Public Integrity, "[d]espite the media spotlight on the industry since the seven tobacco executives stood before Congress in April 1994,10 despite the litigation, despite revelations about the industry's decades of lying to the American people, Congress's addiction to money continues."11

What, specifically, can the Justice Department do? There are several legal approaches that it could take in a cost recovery lawsuit. In addition to asserting common law theories, action could be taken under one or more of the following federal statutes, each of which is discussed in this analysis:

The Federal Medical Care Recovery Act, 42 U.S.C. 2651-53

The Sherman Act, 15 U.S.C. 1

The Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962

In the event that the Justice Department decides to proceed, how much should it seek to recover? Several sources offer some guidance:

According to an analysis published recently by leading health economists and funded by the U.S. Centers for Disease Control and Prevention, it cost $72.7 billion in 1993 to treat smokers for medical problems caused by cigarettes, a figure that dwarfs the recent settlement with the state attorneys general. The 1993 figure translated into approximately 11.8 percent of total United States medical expenditures that year.12