CHAMPAIGN, Ill. - Lawsuits such as the landmark case against the tobacco industry are undermining traditional government regulation by shifting decision-making out of the public eye, according to a book co-written by a University of Illinois professor that will be published next year.
Law and business professor Andrew Morriss says the 1998 tobacco settlement amounted to a hefty tax increase on cigarettes to cover damages that will top $200 billion over 25 years, but left voters without a voice because the deal was brokered by lawyers not lawmakers.
"The bad thing is that significant policy decisions were made in back rooms, without the kind of public debate and public accountability that the normal legislative and regulatory processes have," Morriss said. "As bad as normal politics are, this is worse because at least when lawmakers have to vote, you can vote them out if you don't like it."
Similar high-profile lawsuits have redefined government standards on asbestos and diesel engines with no public debate, according to "Regulation by Litigation," a book co-authored by Clemson University economics professor Bruce Yandle and Case Western Reserve University law librarian Andrew Dorchak that will be published next fall by Yale University Press.
Other industries could become targets, including gun manufacturers and food makers, who could be vulnerable because of growing concerns over obesity, Morriss said.
But Morriss alleges the lawsuits are self-serving, not aimed at the public good.
Lawyers who sued tobacco companies and 46 state attorney generals who joined them were motivated by greed and political ambition rather than a campaign to curb smoking and recoup money states spent on health care for smokers, Morriss said.
"These lawsuits were alleged to be about saving the children from smoking and recovering medical costs. The money that went to the states was supposed to fund anti-smoking programs, but the states have spent it on highways, prisons and anything else they want, not on tobacco," said Morriss, whose analysis of the settlement with Yandle, Dorchak and legal scholar Joseph Rotondi will be published next spring in the University of Illinois Law Review.
It's unlikely lawmakers will move to slow the wave of lawsuits, such as adopting rules that require plaintiffs to pay legal costs for the defense if long-shot suits fail, said Morriss, a senior scholar at the Mercatus Center at George Mason University and a senior fellow at the Property & Environment Research Center in Bozeman, Mont.
But Morriss says judges and lawmakers could help by allowing input from more than just the parties involved when settlements are proposed. In the tobacco deal, he said the courts should have allowed feedback from smokers, who wound up footing the bill, and health-care groups, who had a stake in how the settlement money was used.
"This is a very bad phenomenon and there needs to be a lot more public scrutiny of these deals," said Morriss, the inaugural H. Ross and Helen Workman Professor of Law and professor of business on the Urbana-Champaign campus. "Otherwise, we'll continue to have public policy hijacked for private purposes, for private gain."
Editor's note: To contact Andrew Morriss, call 217-244-3449; e-mail morriss@illinois.edu.