Tuesday, January 23, 2007

Told You So

This from the Competitive Enterprise Institute: The Nations Top Ten Worst State Attorney Generals. And number one worst state attorney general is ... dum dum dum dum ... none other than Connecticut's own Richard Blumenthal.

Here's a snippet of the report, regarding Blumenthal's shady goings on as part of the crusade against "big tobacco."

First came all the shenanigans stemming from the tobacco lawsuits and settlement of the 1990s. While he was not the instigator, Blumenthal, more than anybody else, is responsible for the multi-state act of corruption and cartelism known as the Master Settlement Agreement (MSA). Wealthy trial lawyers across the nation received $14 billion nationally in attorneys’ fees10 under a $246 billion-plus settlement paid for primarily by smokers—the alleged victims of the very fraud that begat the settlement.

The settlement was structured to allow the major tobacco companies to maintain their market share and raise prices in unison in order to pass settlement costs on to smokers. Together, state attorneys general and major tobacco companies were also able to force smaller tobacco companies that had never been accused of any fraud to join the settlement or pay penalties for not doing so. In a word, the settlement created a cartel, defeating free competition. As the federal appeals court with jurisdiction over Blumenthal’s home state of Connecticut observed, had the tobacco company executives entered into a similar settlement without the collusion of the attorneys general, “they would long ago have had depressing conversations with their attorneys about the United States Sentencing Guidelines.” By getting a state official such as Blumenthal to sign their settlement, the tobacco companies were able to claim that the cartel was exempt from antitrust laws under a loophole known as “state action” immunity, which exempts many state-recognized cartels under the generous assumption that state officials would not sign off on a cartel unless it promoted the public interest.

The tobacco settlement was joined by 46 states—dubbed “Settling States”—but many of its provisions apply nationally, a major encroachment on state autonomy. The MSA requires tobacco companies that join the settlement to make payments to the Settling States based on their national cigarette sales, including sales in states that did not even join the tobacco settlement. Worse, it requires companies that never joined
the settlement agreement to make payments, even though, in the U.S. legal system, court settlements are not supposed to affect the rights of non-parties.14 Moreover, such companies must make payments on any of their cigarettes which end up in the Settling States, even cigarettes resold without their knowledge by third parties in a Settling State.


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