Hindsight from The New Gun Week December 10, 1998
Gunmaker Lawsuits: Follow the Money
by Joseph P. Tartaro
Executive Editory
It's budget bonanza time at the state and local level. Government officials and the media are puffing out their chests and proclaiming victory in the out-of-court settlement between the major tobacco companies and 46 state attorneys general.The settlement announced Nov. 20 involves the payment of about $209 billion to 46 states over the next 25 years.
This is big money that economists see as a huge hidden tax. The cream has been skimmed from another cash cow by government-hired lawyers and the states are divvying up the money. Each state gets to decide how the money is used, even though most of it is supposed to compensate the states and their counties for the cost of medical care resulting from tobacco addictions.
In Washington state, where the Second Amendment Foundation headquarters is located, the state will get $4 billion. Washington state Attorney General Christine Gregoire was one of the leaders among state AGs pushing the tobacco suit, and she got a lot of publicity from the settlement, a significant bonus for her political ambitions. However, ambitions took a back seat when Gregoire failed to join other state AGs in a suit against Microsoft, the computer giant with headquarters in her state.
New York's $24 Billion
New York state will get $24 billion, of which the share for Erie County, where the Gun Week office is located, will be $512 million. That's a hefty $20 million windfall each year for a county with about a million population. The settlement didn't help the political ambitions of New York state's attorney general, Republican Dennis Vacco, who presided over the big-tobacco lawsuit negotiations. Vacco narrowly lost to Democrat Eliot Spitzer on Nov. 3, even though an official recount is still in progress and the final results have not been confirmed.Spitzer is an even greater social activist than Vacco (he was one of the original proponents years ago of a measure to have every bullet marked with a serial number because he believed that would make it possible to trace projectiles used in crime to the criminals who launched them). In a late November op-ed column in several newspapers across the country, consumer activist Ralph Nader bemoans the fact that the states settled their tobacco cases too soon, because new social activist AGs in California and New York were more likely to exact a higher price and more restrictions on advertising from the tobacco giants.
Regardless of where you stand on the question of tobacco use, and its negative effects on the population and the possible resulting cost to the nation, the states and communities, there are some areas that deserve more careful examination.
First, the concept of government ignoring individual responsibility and playing nanny to a population that should know by now what the personal risks of tobacco use are, is a platform from which similar suits have already been launched against gunmakers. Carried to its logical conclusion, this approach threatens to spread to other industries, including alcohol, pharmaceuticals and automobiles. After all, prescription drug misuse and abuse, excessive alcohol consumption and motor vehicle accidents can also be extremely costly to the states and communities, significantly more so than firearms.
Second, the cost of such settlements will eventually be borne entirely by the consumers who use products, such as tobacco, rather than the companies that make such products. Some may feel that there is some justice in the case of smoking and alcohol consumption, but they may think otherwise when it comes to automobiles and medicine. The pattern for the future was set in the tobacco settlement, where the ink was hardly dry before the tobacco companies hiked retail cigarette prices over $3 a carton, and tobacco company stock prices leaped upward.
Biggest Lawyer Payout
Third, attorneys and their government clients in such industry suits are driven by a monstrous profit motive more than any interest in social benefit. Many of the major law firms involved in the tobacco settlement have mined pure gold, and will be looking for more. The New York Times on Nov. 29 reported that the tobacco settlement will net the lawyers involved $1.25 billion initially and about $500 million a year thereafter. "That's an $8 billion payout, or 20 times the biggest contingency fee ever paid...."As columnist Daniel J. Mitchell, a senior fellow in political economy at the Heritage Foundation, wrote in a Nov. 24 Washington Times op-ed commentary:
"The gun industry is simply one of an endless series of targets for the looter class."
Mitchell sees the lawsuits against the gun industry as increasing crime by increasing the cost of guns so that fewer people buy them for protection. "Two of the most sinister forces in American society, lawyers and politicians, joined forced in recent years to fleece the tobacco industry," Mitchell says. "Egged on by that success, a similar coalition has formed to go after gun manufacturers."
Mitchell cited the dangers in the New Orleans and Chicago suits, where the possibility of a sympathetic judge or a "brainless OJ-type jury" is likely to give the anti-gunners what they want.
Surprisingly, there have been many editorials-even in anti-gun newspapers like USA Today and The Chicago Tribune-against the absurdity of the New Orleans and Chicago lawsuits against the gun industry.
But that isn't stopping the trial lawyers who take much of the money they win in such suits to finance the political campaigns of people like Bill Clinton.
As Mitchell notes, the lawyers and the politicians are working hand in glove. Chicago Mayor Richard Daley even traveled to Washington, DC, to link his general anti-gun agenda with his city's lawsuit.
The gun industry does not have the kind of money that the tobacco people do. And gunmakers and sellers will not be able to hide the cost of a hidden gun tax in price increases like the cigarette companies. Gun buyers can't afford it.
When you cut through all the legal posturing and social engineering by following the money, you discover that the alliance of lawyers and politicians is behind it all. They both want to dig more gold from the mine they have opened, and they want to eliminate legal gun ownership.
The New Gun Week is published three times a month by the Second Amendment Foundation (SAF) on the 1st, 10th, and 20th. Hindsight is a commentary written by SAF President and Gun Week Executive Editor Joseph P. Tartaro. This commentary may be reprinted so long as credit is given to the author and the publication. For more information or to subscribe, write Gun Week, PO Box 488, Buffalo, NY 14209, or call 716-885-6408 Monday through Friday 9 a.m. to 5 p.m. EST, or inquire on Compuserve to John Krull, Production manager-JohnSAF@Compuserve.com or gunweeksaf@broadviewnet.netAlso, check out the New Gun Week at http://www.GunWeek.com