Individuals with product liability claims against the tobacco industry are not the only ones suing for compensation and redress. Nationwide, at the federal and state level, the U.S. government also sued the tobacco companies in a major federal tobacco lawsuit for compensation relating to the millions of dollars paid out to Medicare patients with smoking related cancers and illnesses.
In fact, in November of 1999, the state tobacco lawsuits against the big five tobacco companies, involving 46 states, four territories and the District of Columbia were ultimately settled for $206 billion. The goal of the settlement was primarily focused on reducing youth smoking, but the other main goal was to trade the right for each state to sue the tobacco companies for compensation towards states' tobacco-related Medicaid costs. The companies were guaranteed immunity from state tobacco lawsuits and they agreed to certain restrictions on advertising, marketing and on the tobacco lobby while the state attorneys general dropped any further pending lawsuits and agreed to file no further lawsuits against the tobacco companies involved in the settlement.
One of the main issues with the methods by which the tobacco companies were marketing products was that they were clearly using child and adolescent-friendly marketing tactics. The settlement dictated that the tobacco companies had to stop targeting children and adolescents with their marketing campaigns and they had to stop using methods, like cartoon characters as mascots. Their sponsorship of sporting events was also limited as was their methods of advertising, including billboards, transit advertisement and any product placement in the entertainment industry. Additionally, there was to be no more apparel with branded logos sold.
The federal government subsidizes a number of medical programs, including Medicare, Medicaid, the Department of Veterans' Affairs, the Department of Defense health program, the Federal Employees' Health Benefits Program (FEHBP), and the Indian Health Service and there were cases of smoking related illnesses across the board. In fact, in a study conducted by Columbia University's National Center on Addiction and Substance Abuse it was estimated that specifically tobacco-related health care costs accounted for 12 % of all the costs borne by federal health care programs in 1995. In the Medicare program alone, tobacco-related illnesses accounted for $25.5 billion, about 14 percent of total Medicare spending in that year.
The federal government gave opening arguments in their own lawsuit against the tobacco companies in 1994 on the basis of fraud and racketeering, the case was filed in 1999 and there are over $280 billion in fines at stake. Initially, the cornerstone of their case had been re-compensation for the immense cost of healthcare for smoking related illnesses, but those charges were dismissed.
Everyone now understands the dangers of smoking and the nefarious tactics big tobacco used to sell their products and create an almost nationwide addiction to cigarettes. Individual smoking and tobacco product liability lawsuits are slowly making their way through the courts, many of them winning large compensatory awards from the court. Many wonder at whether the federal tobacco lawsuit will continue as its prosecution has been severely under funded by the Bush administration while many critics still sit perplexed at the growing costs of smoking related illnesses and single agreed-upon settlement between the states and the big tobacco manufacturers.