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Capitol Hill Smoke-Out?
Move by Senate Republicans threatens Reno's
tobacco suit
Sam Skolnik
Legal Times
June 6, 1999
When Attorney General Janet Reno vowed to sue
the tobacco industry for damages, she knew she
would face a bruising courtroom battle on the law.
The Justice Department never thought it would also
have to fight a bloody political war on Capitol Hill.
But that's exactly what's happening.
Two weeks ago, Senate Republicans, led by key
appropriations lawmaker Judd Gregg, lashed out.
They inserted language into a report on the
department's fiscal 2000 spending bill that would
deny Justice the $20 million in new funds it says it
needs to spend on more attorneys, expert
witnesses, consultants, and other costs of the
suit.
And there's an even weightier threat. Not only are
some members of Congress seeking to withhold
the new dollars: They are also pushing a measure
that could stop Justice cold by barring Reno from
using any other Justice Department funds to sue
tobacco.
The congressional roadblock, which comes before
a lawsuit has even been filed, may prove fatal to
the federal government's attempt to recoup from
the tobacco companies the hundreds of millions of
Medicare dollars it has spent on sick smokers.
The effort was promised by President Bill Clinton in
his State of the Union address in January.
Last week, Reno and a small group of top aides
trudged to the Hill to implore their allies to push
harder for the budget boost.
The current scrape highlights the vulnerability of
the Clinton-Reno anti-tobacco campaign, which is
regarded as a tough battle on the law, even apart
from political difficulties.
Less than a year after state officials struck a
historic $246 billion settlement with the industry,
the federal government may not prevail in arguing
that it is entitled to recover funds under existing
law.
"It's not clear that they would succeed, even if they
are able to get the funds to sue," says Peter
Schuck, a Yale Law School professor and an
expert on tort law.
The current fight began when Gregg, a New
Hampshire Republican who chairs the Senate
Appropriations Subcommittee on Commerce,
Justice, State, and the Judiciary, inserted
language into the committee report to the Justice
spending bill when it moved through his panel two
weeks ago.
The brief passage says in part that "no funds are
provided for tobacco litigation." It leaves in limbo
the possibility of the department using other funds
within its proposed fiscal 2000 allotment of $17
billion. The insertion also prohibits Justice from
using any of its money to pay for expert witnesses
to testify in such a case.
By several congressional accounts, Gregg, who
has formerly voiced criticism of the tobacco
industry, was prodded to write the language by
subcommittee member and strong tobacco ally
Sen. Mitch McConnell (R-Ky.), with the backing of
Senate Majority Leader Trent Lott (R-Miss.).
In a written statement, Gregg said that given the
"severe budget restraints" in the DOJ's fiscal 2000
budget, "the Justice Department's legal division
does not have the resources to take on a major
new initiative."
Justice, like most federal agencies, is looking at a
significant cutback because of federal spending
caps. The proposed fiscal 2000 budget for the
Justice Department would involve a cut of $1.3
billion from the current fiscal 1999 budget of $18.3
billion.
To try to win at least half the battle (to allow the
department to reallocate other DOJ funds to a suit
if no money is added to its budget) Senate
Democrats pushed on two fronts in last month.
First, Sens. Tom Harkin (D-Iowa) and Ernest
Hollings (D-S.C.) attempted to persuade Gregg to
arrange a "colloquy" on the Senate floor, a planned
discussion that would have clearly explained that
Gregg's language would not prohibit the Justice
Department from reprogramming other of its funds
to pay for the suit.
That proposal has gone nowhere. The colloquy
request was sent to Gregg two weeks ago, says
one Senate Democratic source, and has not
moved.
Other Democrats are pushing a different route.
Sens. Bob Graham (Fla.) and Richard Durbin (Ill.)
are advocating for an amendment to the Justice
spending bill when it comes to the floor that would
also free the DOJ to spend existing money on the
suit.
Even if the department gets the OK to reprogram
its budget, it could prove difficult to reroute $20
million from elsewhere in the department's
apportionment, say DOJ officials. Without the
added funding, that intermediate solution could still
imperil the filing of the suit.
Reno imparted her concern to Congress about
adding the $20 million into her budget last week.
At Sen. Graham's request, Reno came to his office
on June 28 to meet with him, Sen. Kent Conrad
(D-N.D.), and staffers to Sen. Edward Kennedy
(D-Mass.). Reno was joined by her counsel,
Thomas Perrelli, and acting DOJ legislative chief
Jon Jennings.
Each side had a message to deliver, according to
three Justice and Senate Democratic staffers.
Reno beseeched the senators to push harder to
find a way to add the $20 million into the budget. In
theory, Democrats could work the funds into a
reconciliation budget bill, or a Senate-House
conference committee measure, later in the budget
process.
The senators, in turn, told Reno that for political
reasons, they need the department to work faster
to file a suit, regardless of how they get the money
to do it.
They also expressed another concern about the
DOJ's plans: a possible August deadline for filing
the suit. As first reported by National Journal's
CongressDaily, some legal experts are saying that
Justice may be facing a three-year statute of
limitations that runs out Aug. 11 -- the three-year
anniversary of the Food and Drug Administration
regulation that classified tobacco as a drug. Next
term, the Supreme Court will hear arguments on
whether that regulation is in fact constitutional.
Because Justice plans to sue based on claims of
intentional misconduct, the theory goes, it could
be subject to a statute of limitations that starts to
run on the day the plaintiff knew, or should have
known, about wrongdoing committed by the
defendant.
Justice officials say they interpret the law
differently and don't see August as their deadline.
While they are reluctant to set a timeline for filing,
one Justice official predicts the department will
"hopefully" move forward by the end of the year.
As the political fight runs its course, the Justice
Department's tobacco task force, comprising about
20 government lawyers, continues to quietly
explore possible strategies for the litigation.
Justice officials, including the task force and its
leaders, Civil Division attorneys J. Patrick Glynn
and William Schultz, are tight-lipped about
litigation tactics. In the past, Reno has said the
suit could be based on two federal statutes: the
Medicare Secondary Payer Act, which allows the
United States to recover for injuries done to
Medicare recipients, and the Medical Care
Recovery Act, which allows recovery from those
who commit a wrongful act that causes the
government to pay health care benefits.
Although the states were successful with their
similar claims, the possible federal strategy is
untested in the courts. And tobacco supporters
say it's simply unfair.
"Suing a legal industry is bad enough," says
tobacco industry spokesman Steve Duchesne, a
manager with the public relations firm BSMG
Worldwide, "but seeking $20 million from Congress
to do it is just mind-boggling. It's an abuse of the
legal system, no matter how you look at it."
Conversely, Matthew Myers, executive vice
president of the Campaign for Tobacco-Free Kids,
says the DOJ should not allow the possible loss of
its $20 million budget request to steer it away from
doing everything it can to file an aggressive,
comprehensive legal action against tobacco
companies. If the department loses its fight for the
additional cash, but wins approval to use other
internal funds for the battle, Myers says, "it truly
then becomes a matter of will.
"If the $20 million becomes an excuse, it reflects a
loss of control for the attorney general," says
Myers. |
