From Dr. Stanton Glantz:
The recent news that the Obama Administration and some attorneys general are trying to push through a quick deal with the banks to settle state lawsuits against the banks for a wide range of mortgage fraud in which the banks would get immunity from further liability exchange for around $20 billion reminds me of the “global settlement” of tobacco lawsuits that the Clinton Administration tried to push through to end litigation against the tobacco industry in the mid-1990s.
Then, as now, a group of state attorneys general (as well as private attorneys) were pressing lawsuits against a major industry with legions of lawyers and there was pressure from the national government and some of the attorneys general to settle the cases before the full range of industry misbehavior was understood. The deal then was a trade that effectively granted Big Tobacco immunity from further litigation in exchange for some money, some voluntary agreements on marketing, and a form of FDA regulation.
Almost everyone got on “the train that was leaving the station” on the grounds that the global settlement was inevitable, and they did not want to be left behind.
The opposition came from me, Julia Carol (then executive director of Americans for Nonsmokers’ Rights), John Garrison (then CEO of the American Lung Association), Congressman Henry Waxman, and , most important, Minnesota Attorney General Hubert (Skip) Humphrey III. Skip Humphrey was particularly committed to seeing that the litigation not end before the tobacco industry’s behavior was fully investigated and made public.
The deal was presented as inevitable and those of us who opposed it as premature were presented as unrealistic perfectionists who were “ruining everything.” If you want to see how one of the primary behind-the-scenes advocates for the global settlement saw me, look at Mike Pertschuk’s book, Smoke in Their Eyes.) I think that the events since then have vindicated the skeptics’ position. Had the global settlement gone through, the following things would not have happened:
- There would have been no RICO case against the tobacco companies, including the judgment that they are (not were) racketeers. While the implementing the remedies under the ruling is dragging on, it is moving forward.
- There would be no Legacy Tobacco Documents Library which has now reached 80 million pages and is still growing. The availability and access to these documents has changed the tobacco issue all over the world.
- There would be no Engle cases in Flordia or other private litigation against the companies, cases that are winning more than they are losing.
- The FDA bill we have now, for all its problems, is better than the FDA bill specified in the global settlement.
- The Master Settlement Agreement is about the same as the provisions in the global settlement, without all the other problems in the global settlement.
Today I am proud to see that California Attorney General Kamila Harris, like Skip Humphrey before her, has said that the deal that the Obama Administration has been pushing is not ready for prime time. The investigation of the banks’ wrongdoing is nowhere near complete and the release of liability they want is too broad. (Obama, of course, has not been particularly mean to the banks, something that the Tea Party and Occupiers seem to agree on.) It is only prudent to demand to know more before even talking about settlement.
One of the important elements of the mortgage deal, at least as reported in the media, is a most favored nation clause in which if there are subsequent settlements better than the initial settlement, those improved terms apply retroactively to the earlier settling states. Most favored nation clauses are included in settlements to avoid creating a disincentives for the first parties in multiparty litigation to settle.
The most favored nation clauses were very important for the first four states that settled their cases before the Master Settlement Agreement because each subsequent settlement (beginning with Mississippi, followed by Florida, Texas, and Minnesota) strengthened the terms of the settlement and each subsequent settling state conferred benefits on those that preceded it, culminating in the MSA. (While I think the MSA was ok, I would have been happy to see this process continue one state at a time.)
The situation today is a little different, with many of the states — not just one — agreeing to a relatively weak deal with the banks. In this case, if California Attorney General Harris and other hold-outs refuse to go along with the current deal, they will be doing the heavy lifting for many other states. This is not really fair to those states, but I guess the world is not fair, especially a world dominated by big banks.
I certainly hope that Attorney General Harris and her other skeptical colleagues will resist the pressure to settle with the banks until the case is in. If the tobacco experience is any guide, the public will be a lot better off.
This post, with links to supporting materials, is available on my blog at http://tobacco.ucsf.edu/effort-push-through-global-settlement-end-state-litigation-against-banks-ignores-lessons-tobacco-his
“While We Were Sleeping”
Orwell Rolls In His Grave, featuring MCM – Buy the DVD
About News From Underground
News From Underground is a daily e-news service run by Mark Crispin Miller, a Professor of Culture and Communication at NYU. It is based on his belief that academics, like reporters, have a civic obligation to help keep the people well-informed, so that American democracy might finally work.
If you'd like to receive updates delivered to your inbox daily, sign up for News From Underground Alerts:
Help News From Underground!
Message from Mark: "I am a one-man operation, although assisted greatly by some volunteers, and, now and then, by people paid by others for one-time projects. There is no shortage of skilled, dedicated folks out there who want to help me. There is, however, nothing I can pay them with, unless you decide you can contribute something."
Please donate via the PayPal button above or via PayPal by email to: firstname.lastname@example.org
- Please HELP FUND this documentary on JFK’s assassination!
- Talkin’ World War One Blues…
- How Australia plans to keep its vaccinated children safe from illnesses that they can’t catch
- On the mass delusion now afflicting liberals (and putting all of us at risk)
- There’s actually more evidence in Pizzagate than there is in “Russia-gate.”
- Forbidden Bookshelf on
- Contact Lou Dobbs on
- Forbidden Bookshelf on
- Top US spooks see NO “conclusive evidence” of Russian hacking in Election 2016 on
- How blaming Trump’s “election” on the Russians could force Hillary on us after all—and end US democracy for good… on
- Forbidden Bookshelf
- The strange death of Nancy Schaefer (two items)
- Don't buy these products from Koch Industries!
- There's actually more evidence in Pizzagate than there is in "Russia-gate."
- How NYU squeezes billions from its students—and where that money goes
- Veterans for Common Sense
- Mainstream Baptist
- Cody Lyon
- History Unfolding
- The Existentialist Cowboy
- Fairness & Accuracy in Reporting
- Election Defense Alliance
- Democratic Undergroud
- Media Matters
- The International Human Press
- Suburban Guerrilla
- Writers Voice
- William Betz
- Citizens for Legitimate Government
- Media Channel
- Barry Gordon
- The Rude Pudit
- Richard Charnin
- t r u t h o u t
Need a bigger font size?
- Your link could be here too, contact us for pricing details.