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Fighting the Class Action Plaintiffs' Bar:
How Can the Alcohol Industry Avoid the Fate the Tobacco Industry Suffered?


Monday, Aug. 02, 2004

Never underestimate the imagination or the perseverance of the trial lawyer establishment when it comes to scoping out new targets for its favorite revenue-enhancing toy - class action lawsuits.

Less than a decade ago, the trial bar's class action efforts garnered multi-billion dollar settlements from the tobacco industry. Not content with that, however, the trial bar is now teaming up with a new generation of ex-government bureaucrats, liberal doctors, and other do-gooders, to prepare a new set of class actions.

Their goal, once again, is to bring a perfectly lawful industry to its knees (and to make a pretty penny for themselves as part of the bargain). This time, it's the alcoholic beverage industry that is the trial lawyers' target.

But is there a way the alcohol companies can avoid the tobacco companies' fate? In this column, I will explore that question.

Few Predicted The Success of the Anti-Tobacco Industry Suits

Many observers are pooh-poohing the notion that the trial lawyers will succeed in their latest quest. But they should beware - for history may well repeat itself.

I recall many such optimists expressing overblown confidence in the mid-1980s, when the litigation against the tobacco industry was moving into high gear. They said then that the trial lawyers would "never succeed." How wrong they were.

The early reaction to the tobacco lawsuits was that they would fail for a simple reason: Smoking is a voluntary action. So if people choose to smoke, why should the manufacturer of the lawful product they chose to ingest be held liable for the subsequent, and well-known injury that would result?

The logic of this argument was unassailable. But it ultimately fell before the trial lawyers' class action onslaught. Why? The alcohol industry must understand the answer before it, too, is crippled by class action suits.

The Tobacco Industry's Achilles Heel: Claims of Marketing to Young Adults

The answer is that the trial lawyers succeeded because they recognized the weak spot in the tobacco industry's defenses. The logic of its arguments was strong. But the industry's marketing also happened to include a tangential target - young adults - that was distasteful to many Americans.

Recognizing this vulnerability, the trial lawyer bar began to claim that children were a primary target of tobacco industry advertising. In fact, that wasn't true. But the public was convinced - and Joe Camel was made out to be the advertising equivalent of Adolph Hitler

The result was that public opinion began to shift perceptibly in favor of the trial lawyer bar, and away from the logic of the tobacco industry's primary defense (voluntary adult decision-making). And the rest, as they say, is history. At this point, the tobacco industry is even cooperating in efforts to encourage children not to smoke. But it's too little, too late.

If It's Not Careful, The Alcohol Industry May Fall Prey to the Same Trap

Having learned from their slow start in the anti-tobacco campaign, this time the trial lawyers are now cutting right to the chase. They are carefully laying the groundwork for an assault on the alcohol industry by claiming - of course - that its advertising is targeting the children.

Suits based on this claim already are pending in several states, including Ohio, California, Nevada, North Carolina, Colorado and the District of Columbia.

They allege the alcohol industry is using very subtle and "sophisticated" advertising to target underage drinkers, and thereby encourage teens to drink alcohol.

The alcohol industry must be wiser, in response to these suits, than the tobacco industry was when facing similar allegations. If it is not, it may well meet the tobacco industry's fate.

A Key Tactic: Bringing in the Doctors and Academic "Experts"

As in their earlier tobacco litigation, the trial lawyers have brought in a powerful ally - physicians. Of course, not all physicians are on their side - but, enough of them are, to give the impression that they speak for this most respected of professions.

Additional allies for the trial lawyers come from academia - in particular, a "watchdog" consumer group formed at Georgetown University, called the Center on Alcohol Marketing and Youth, or "CAMY." They also have been recruited from the army of former federal bureaucrats that hang around academia like remoras on sharks. This pinstripe army is being assembled by the trial lawyers in an attempt to convince the American public that alcoholic beverage manufacturers are engaged in an evil mission to turn the country's teens into alcohol-dependent adults.

One of the most prominent among the academic types assisting the effort is none other than former Food and Drug Administration (FDA) Commissioner, Dr. David A. Kessler. Kessler is one of the nation's preeminent advocates of using the power of the federal government to force citizens to behave a certain way - so it's no surprise he has joined the anti-alcohol-industry forces. All that is surprising is that so far, he hasn't actually called for a return to Prohibition.

In the late 1990's, Dr. Kessler led the effort to have the agency he headed, the FDA, declare cigarettes to be "nicotine delivery devices" and therefore subject to its regulation. But in 2000, in the case of FDA v. Brown & Williamson, the U.S. Supreme Court made clear that Dr. Kessler's bid at tobacco regulation far exceeded the FDA's reach, as Congress had defined it. Put another way, Dr. Kessler was trying to exercise power his agency - which, after all, was supposed to regulate food and drugs, not cigarettes - simply didn't have.

Nonetheless, despite the Court's clear rebuke, Dr. Kessler's zeal to regulate private citizens' voluntary behavior apparently has not waned.

The Alcohol Companies Are Smart to Raise Strong First Amendment Defenses

These warriors against all things evil, including alcohol, are now engaged in a massive effort to regulate and limit alcohol advertising. One target of the lawsuits they have started is magazines containing alcohol advertising that they say appeal to young males (specifically, those under 21 years of age).

In fact, it's plain that the same advertising which appeals to young males - beautiful young women dressed in alluring outfits - necessarily appeals to older men as well. (Indeed, because sex sells, and beauty sells, it's hard to think of a field of advertising that does not employ beautiful young women - including cosmetic companies that themselves market to young women.) But that fact either doesn't occur to these crusaders, or is simply ignored by them.

Laudably, the alcohol companies, clearly mindful of the fate of their tobacco brethren, are not caving in; the economic stakes are too high. They have raised strong and appealing First Amendment defenses. They are also seeking to have the cases removed from state to federal courts -- where the rules are somewhat less favorable to class-action plaintiffs.

Still, in an environment in which class actions are simple to bring, and can coerce settlements even when the underlying suit is meritless, even these defenses may not be enough. This promises to be a long-term legal battle of epic proportions. What the alcohol industry should not do is follow in the tobacco companies' footsteps and presume they will win because they happen to be right - for that is the path to ruin.

Bob Barr served in the U.S. House of Representatives from January 1995 to January 2003. He was a senior member of the Judiciary Committee. He now practices law, writes extensively, works with the American Conservative Union, and consults on privacy matters with the ACLU.

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