Shady Deals in Smoky Rooms

Can a little lawsuit shut down a big tobacco racket?

Jonathan Rauch | August 8, 2005

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With uncanny foresight, as if with the tobacco deal in mind, the Founders stipulated in Article I, Section 10—the Compacts Clause—that "No state shall, without the consent of Congress..., enter into any agreement or compact with another state." The clause is intended to prevent states from colluding to supplant or circumvent Congress's unique national authority. Pursuant to this clause, Congress has been asked to approve all sorts of state compacts over the years.

If the tobacco deal is not an interstate compact designed to circumvent and supplant Congress's authority, it is hard to imagine what would be. In fact, an earlier version was rejected on Capitol Hill. The Master Settlement Agreement was Plan B, specifically designed to cut Congress out of the picture.

Earlier court challenges have raised the Compacts Clause and failed; but none, Kazman says, has raised it as frontally as this new one. "The Compacts Clause claim is the heart of the case," he says. Even so, the odds are long. "Courts are very reluctant to unravel such a complicated and delicately balanced agreement as the MSA," says Kenneth Bass, who until June was a lawyer with Kirkland & Ellis, where he represented the Brown & Williamson tobacco company.

Meanwhile, state attorneys general are shopping for new opportunities to supplant Congress. Last year, eight AGs sued five big utilities for—this is not a joke—contributing to global warming. News reports quoted Connecticut Attorney General Richard Blumenthal as saying, "Some may say that the states have no role in this kind of fight or that there's no chance of success. To them I would say, 'Think tobacco.' "

Watch the new tobacco lawsuit. If it fails, watch your wallet.

© Copyright 2006 National Journal

Jonathan Rauch is a senior writer and columnist for National Journal and a frequent contributor to Reason. The article was originally published by National Journal.