TOBACCO RAILROAD

...A final difficulty is that the claim underlying a federal case—namely, that smoking costs the federal government billions of dollars in health care expenditures—may be false...

...Rahm Emanuel, a former top Clinton aide, has told David Cloud of the Wall Street Journal that "if the White House hadn't asked, [Justice] would never have looked at [a lawsuit] again...

...But once the White House-backed tobacco bill died in June 1998, the president's interest in a lawsuit revived, and Justice was told to get cracking...

...Indeed, the "battle" is about to be joined on a new front...

...TOBACCO RAILROAD by Matthew Rees On June 17, 1998, President Clinton made an unscheduled appearance in the White House briefing room to attack senators who had blocked a comprehensive anti-tobacco bill earlier that day...

...But even with Hunger out of the way and pro-lawsuit attorneys in position, the problem remained that no statute gives the federal government an independent right of recovery for Medicare expenditures...

...John Coale, a prominent plaintiff's lawyer, told me he's met with White House officials "seven or eight times" to discuss a federal lawsuit...

...Perhaps, but judging by the exceptional lengths the administration is willing to go in its war on smoking, the playing field will be anything but level...

...So, they turned to the courts...

...It wasn't long before a Justice Department task force was established to craft the next move against the tobacco industry...

...The post was given instead to David Ogden, a Justice Department lawyer who had little management experience but who had served as Reno's chief of staff and, more important, had expressed sympathy for federal tobacco litigation...

...Anti-tobacco activists insist that over the past two years more information has been uncovered demonstrating that the tobacco companies TO ADMIT THAT SMOKING MIGHT ACTUALLY SAVE THE GOVERNMENT MONEY IS HERESY TO THOSE BENT ON A FEDERAL SUIT AGAINST BIG TOBACCO...

...The suit, which may be filed within a few weeks, will be one of the largest civil matters ever pursued by the Justice Department...

...Indeed, the federal government has never before attempted to recover Medicare funds from third-party tortfeasors...

...David Vladeck, an anti-tobacco lawyer at the Naderite group Public Citizen, observes in a pro-suit memo that "the government would have to shoulder the burden of showing that the tobacco industry's actions legally caused the injuries to millions of nameless individuals...

...They also insist that earlier, administration officials didn't look seriously at pursuing a case, but over the last year, compelling new legal analyses affirming the right to sue have gained currency...

...Frank Hunger, then the head of the Justice Department's civil division, which would have jurisdiction over such a suit, was strongly opposed...

...This, writes Vladeck, presents "perhaps the greatest obstacle to bringing an action under the Medical Care Recovery Act...

...He and one of his deputies, George Phillips, argued that the statutory authority simply didn't exist to sue the tobacco companies...

...Similarly, Michael Moore, the anti-tobacco attorney general of Mississippi, boasts of meeting with administration officials "on many occasions" and implies that his and Scruggs's "efforts" helped bring Justice around on the merits of a lawsuit...

...And Hunger's personal history inoculated him against charges he was pro-tobacco: His wife, who was Al Gore's sister, died from a smoking-related illness in 1984...

...To admit even the possibility that smoking might save the government money is, of course, heresy to those intent on suing big tobacco...

...Now an attorney in the Civil Division at Justice, Schultz is a veteran anti-tobacco crusader who's worked for Rep...

...His successor as head of the civil division was widely expected to be a Justice Department veteran who was valued for his non-political outlook and management experience...

...And in a choice that spoke volumes, one of the individuals selected to lead it was William Schultz...

...When Clinton administration officials began exploring a federal suit in 1997, they quickly encountered an obstacle...

...Hunger's opposition stopped the lawsuit locomotive...

...He, like Hunger, was skeptical of a federal case against the tobacco companies, and so he was passed over, underlining the importance of the lawsuit to the White House...

...Given their ties to the administration, as well as their experience with tobacco cases, these lawyers could become leading members of the prosecution in a future federal suit...

...Last December, though, the department modified its position...

...As Moore explained at a Senate hearing in June 1997, they had no success: "We were informed that the Justice Department and others did not feel that they had a cause of action under the federal statutory framework, so they could not file such a lawsuit...

...Senator Richard Durbin, an Illinois Democrat, was even more explicit, saying that since Clinton administration officials have "seen that the tobacco industry holds such sway over the Republican Congress, they don't feel there is the likelihood of any legislation being passed...

...Matthew Rees is a staff writer at THE WEEKLY STANDARD...

...The pro-lawsuit task force received unexpected good news early this year when Hunger announced he was leaving Justice to return to private practice and assist Gore's presidential campaign...

...Even Richard Daynard, who heads Northeastern University's Tobacco Control Resource Center, concedes, "I don't know of any precedent for something like this...

...Though inspired by the Medicaid-recovery litigation undertaken by 43 states since 1994, the federal suit is on an altogether vaster scale...

...Then he issued a warning: "I want the tobacco lobby and its allies on Capitol Hill to know that from my point of view, the battle is far from over...

...The president said he'd been "working for three years now to protect our children from the dangers of tobacco...

...Richard Scruggs and Michael Moore, two architects of the state lawsuits against the tobacco companies, began lobbying the Justice Department in 1994 to initiate litigation...

...The reality is much simpler: Politics trumped the law...

...criminally withheld data on the health risks associated with smoking...

...President Clinton first proposed a federal suit against the tobacco companies in his State of the Union address this past January, but the idea had been batted around in the upper echelons of the trial bar for a few years...

...I've always believed," says Daynard, "that on a level playing field, the tobacco companies lose...

...While they recognize they're entering uncharted legal waters, they expect the industry to be defeated if the case goes forward...

...But the Medical Care Recovery Act was never intended to cover Medicare, which was created only in 1965...

...There's just one drawback: Many lawyers argue that the federal government doesn't have a legal leg to stand on...

...On the president's orders, the Justice Department is preparing to sue the tobacco companies, seeking to hold them liable for increased Medicare costs stemming from smoking-related illnesses...

...But this individual had a problem...

...Henry Waxman and at the Food and Drug Administration for David Kessler...

...If the government is allowed to proceed with a case, it will immediately encounter a further challenge, as well: proving causation...

...Perhaps most revealing of all, Justice announced in April that it had hired as "consultants on tobacco litigation" Robins, Kaplan, Miller & Ciresi, a Minneapolis law firm that successfully represented the state of Minnesota and Blue Cross and Blue Shield in a $6.6 billion case against Philip Morris last year...

...Matthew Myers of the Campaign for Tobacco-Free Kids says the state and federal suits are as different as "a World War I shell and the atom bomb...

...Equally revealing of the pro-lawsuit mindset has been the nexus between the Clinton administration and anti-tobacco trial lawyers...

...Janet Reno herself had affirmed two months before that "the federal government [did] not have an independent cause of action" against the tobacco companies...

...In other words, the health records of every person with an illness could be scrutinized, and the government would have the burden of proving that smoking and not, say, lack of exercise, had caused each illness...

...Sensitive about appearances, Coale notes that "the lawyers have offered their services pro bono, so no one's going to make a buck...

...The statute cited most often in support of a case is the Medical Care Recovery Act, signed into law in 1962 to facilitate the recovery of health care costs incurred by members of the armed services...

...A June report from the Congressional Research Service, a government agency, concludes that because smokers die prematurely and thus do not receive retirement benefits or incur nursing-home costs, they save the federal government $29 billion each year in health care expenditures...