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207 29 A Cliffhanger on Liability What was not okay with Matt in the draft bill were the liability provisions , which still included much of what the public health community had found so obnoxious in the settlement itself. As late as Monday, March 30, the Wall Street Journal was reporting that Chairman McCain had met the demands of “conservative committee members, who had insisted that the compromise provide cigarette makers with extensive protection from lawsuits.” Matt did not object to what he considered the one acceptable concession on liability: an overall cap on how many additional billions the industry would be required to pay out to smokers in total damages each year—with no overall limit on the total damages they could be forced to pay. The draft bill set such a cap at $6.5 billion a year. Under its provisions, the companies would remain fully liable to all private claimants for all court judgments, in any form that the ingenuity of the trial lawyers could maintain in court—to say nothing of the ten to twenty billion they would pay each year in indemnity for their wrongs in settlement of the attorneys general suits. All that the caps would achieve would be to allow the companies to spread out their additional payments over several years in the highly unlikely event that combined jury awards in any single year totaled more than the cap. As an added prod to the companies, the draft bill provided that the companies would be protected by the cap only if they met the bill’s stringent targets for reducing teenage smoking. Indeed, even the secret bottom-line outline that Kessler, Waxman, and Humphrey had agreed on among themselves the previous fall included : “Industry granted immunity for past actions, with a cap on financial obligations.” Kessler and Koop’s key strategist, Jeff Nesbit, told me, “I didn’t mind the cap. I thought it was a way to get out from under that problem.” But the McCain compromise would also have freed the companies 208 Smoke in Their Eyes from exposure to potentially huge punitive damages in lawsuits based upon their past wrongdoing. And, like the settlement, it would also have immunized the companies from all class actions based on past misconduct. This, Matt resisted fiercely. Matt’s intransigence triggered an explosive response from the attorneys general lawyers Joe Rice and Dick Scruggs, which surged beyond the boundaries of the negotiations into print. The Journal closed its story by reporting “an angry outburst from plaintiffs’ lawyer, Richard Scruggs. Messrs. Scruggs and Myers helped craft the proposed settlement with the industry, and Mr. Scruggs pointed out that Mr. Myers had endorsed its generous legal protections.” Jeff Nesbit, who witnessed this outburst, is somewhat more graphic in capturing Rice’s apoplexy: “Joe was at one the end of the table, and Matt at the other end arguing the public health position—and winning the day. Then Joe gets up from the table and storms around to Matt and yells, I just can’t believe you—you signed the fucking deal!’ ” “Dick was more controlled,” says Matt, “but just as angry.” Right or wrong, through his intransigence, Matt forfeited his seat at the negotiation table: “I had negotiated my way out. I had been pushing so hard on the liability issues that I was on the edge. The attorneys general no longer wanted to deal with me. I was no longer a team player, no longer capable of satisfying them. And we had no support from the White House.” But Matt had one remaining recourse: two staunch public health allies with whom he had built a strong working relationship, committee Democrats John Kerry, from Massachusetts—the senior non-tobacco-state member on the committee—and Oregon senator Ron Wyden. Earlier in that week, Kerry’s staff member Greg Rothschild had told Matt that Kerry considered the immunity issue “overblown; that the litigation was not a solution to the tobacco problem; that there was a deal to be made here and now; and that Kerry was determined to find a middle ground to get there.” So Kerry and his staff accepted the broad concessions on liability that McCain’s staff was proposing. Matt: “I remember one night talking with Kerry’s staff guys, David Kass and Greg Rothschild, saying to them, ‘I just have to warn you that all the good intentions in the world are just going to get you into a firestorm. There’s no way...

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