In short
How the U.S. tobacco industry responded to mounting evidence of smoking harm, and how state and federal lawsuits culminated in the 1998 Tobacco Master Settlement Agreement (MSA), plus what it changed and what problems followed.
Guest backgrounds
No episode guests. Hosts are Josh, Chuck, and Jerry (Stuff You Should Know).
Key claims
Tobacco companies sowed doubt (“case not proved”), suppressed studies, denied addiction, and targeted youth via marketing and product placement (e.g., Marlboro in Superman II). Youth smoking surged in the 1990s (peak 1997: 36.4% youth). States used Medicaid costs and RICO/fraud theories to pressure companies. Congress initially considered deals that would protect companies from future lawsuits, but failed; the MSA imposed payments and marketing restrictions.
Notable examples
Council for Tobacco Research/Tobacco Institute memos (Fred Panzer, 1972); “replacement smokers”; cigarette price wars; Camel Joe/Marlboro Man; 1997 negotiations (opening $368.5B); MSA terms (no cartoon ads, no free cigarettes to minors, document release, Truth Initiative funding); later DOJ racketeering case and FDA regulation (2009).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOHistory of Tobacco Awareness
0:59 to 2:15
Discussion on the historical awareness of the dangers of tobacco and smoking.
“On TikTok, millions of people are learning more about the universe around them every day.”
Cigarette Companies' Response
2:15 to 3:47
Exploration of how cigarette companies responded to health warnings and studies.
“Kennedy finally came out via his Surgeon General Luther Terry and said, all right, everybody, it's 1964.”
Tobacco Industry Tactics
3:47 to 6:39
Examining the tactics used by the tobacco industry to create doubt about cigarette dangers.
“And the first response that cigarette companies came up with was to say, all right, how about we put filters on cigarettes?”
Legal Landscape and Lawsuits
6:39 to 10:51
Discussion on the legal issues surrounding tobacco and the industry's litigation history.
“They're just throwing in the back file drawer every study that they had that showed that nicotine was addictive, that smoking was bad for you.”
State-Level Actions Against Tobacco
10:51 to 13:15
How state attorneys general initiated action against the tobacco industry due to health costs.
“You think he has an extra cigarette for me?”
Thriller-like Investigations
13:15 to 14:00
An engaging narrative about the tobacco industry's attempts to conceal damaging documents.
“Not only can we take them on, we can seriously threaten to bankrupt the entire tobacco industry right out of existence if we really try.”
The Tobacco Industry's Deceptive Practices
14:00 to 22:07
Explore the tobacco industry's strategies to mislead the public and target teens.
“He'd probably do a great job with it, where they're erasing documents out of offices while they're trying to actively bury these documents.”
The Tobacco Industry's Deceptive Practices
22:13 to 22:23
Explore the tobacco industry's strategies to mislead the public and target teens.
The Master Settlement Agreement
23:25 to 28:00
Understand the implications and outcomes of the Tobacco Master Settlement Agreement.
“Okay, so things are just kind of not going quite well because the whole thing was handed over from the states to Congress, and Congress just fumbled it as they do.”
The Master Settlement Agreement and Its Implications
28:00 to 34:00
Explore the details of the Master Settlement Agreement and its impact on tobacco manufacturers.
“So a bunch of manufacturers were like, we don't need to take part in this.”
Show all 15 chapters
The Master Settlement Agreement and Its Implications
35:30 to 36:27
Explore the details of the Master Settlement Agreement and its impact on tobacco manufacturers.
“I thought that if you had a home security system, that meant you had some like huge alarm that was really loud after someone broke in.”
Impact of Tobacco Regulations on Smoking Rates
36:50 to 42:05
Discuss the effects of tobacco regulations on smoking prevalence and youth smoking.
“We promised talk of what it all meant and means.”
The Impacts of the Tobacco Master Settlement
42:05 to 47:11
Explores how states have mismanaged funds from the tobacco settlement and its implications.
“Yeah, the only thing I can figure out there is they're like, hey, you're still selling cigarettes and this is still a problem for Medicaid.”
Blueprint for Corporate Accountability
47:11 to 48:28
Discusses how the Tobacco Master Settlement serves as a model for holding corporations accountable.
“specifically, again, in cases where there is harm that comes directly from using a product as directed or intended.”
Corporate Tactics and Public Health
48:28 to 49:39
Examines how corporations manipulate narratives and target consumers, impacting public health.
“If we can get kids hooked on this stuff and market to children, then we can make a lot more money for our investors.”
Transcript
Automatic transcript. May contain errors.0:00Josh Clark:This is an iHeart Podcast. Guaranteed Human.
0:04Chuck Bryant:With no fees or minimums on checking accounts, it's no wonder that Capital One Bank Guy is so passionate about banking with Capital One. If he were here, he wouldn't just tell you about no fees or minimums. He'd also tell you about how Capital One cafes are open seven days a week to assist with your banking needs. Yep, even on weekends. It's pretty much all he talks about. In a good way. What's in your wallet? Terms apply. See CapitalOne.com slash Bank Guy. Capital One N-A, member FDIC.
0:59Chuck Bryant:is full of mysteries. Black holes, quantum physics, galaxies. On TikTok, millions of people are learning more about the universe around them every day. Scientists break down complex theories, demonstrate experiments, and connect dots between the cosmos and our daily lives. One scroll might reveal the concepts on the fabric of space-time, the next an optical illusion. It's discovery on a massive scale, where millions learn something new every day.
1:28Josh Clark:Welcome to Stuff You Should Know, a production of iHeartRadio.
1:38Chuck Bryant:Hey, and welcome to the podcast. I'm Josh, and there's Chuck, and Jerry's here too, and this is Stuff You Should Know. I think part of our ongoing corporate malfeasance edition.
1:49Josh Clark:Yeah, for sure. And the beginning of this episode ties in a lot with, we did an episode about the history of the cigarette. Sure. Like just the thing that you shouldn't put in your mouth, but people do.
2:01Chuck Bryant:Right.
2:02Josh Clark:And so we're going to talk a little bit about that here at the beginning because you need to know a little bit about that as it leads up to what were the lawsuits against big tobacco. And we should start by saying that it's been a long time that we've known that tobacco and smoking was really bad for you and would kill you. So like the 1920s, we knew for sure. The 1950s, we really, really knew. And in the 1960s is when John F. Kennedy finally came out via his Surgeon General Luther Terry and said, all right, everybody, it's 1964. I'm finally going to issue a government report based on about a dozen studies with lots of data, about a million male smokers.
2:51Josh Clark:and this stuff is really bad for you. So we're going to have to start putting warning labels on packages.
2:57Chuck Bryant:Yeah. The great thing about those warning labels, though, is you were educated to imagine Sammy Davis Jr. saying it in your head. That's right. So the cigarette companies, this is the beginning of their playbook, and their playbook was basically, nuh-uh. Yeah. Prove it. You can't prove it. This is the whole idea of settled science, the idea that which is just a complete oxymoron. Science is never settled. It's a constant, ongoing process. But the idea that you have to have 100 percent definitive proof before you can even begin talking about whether something is harmful or not and really exploiting and manipulating the public through really horrible means.
3:45Chuck Bryant:This is where that all started. And the first response that cigarette companies came up with was to say, all right, how about we put filters on cigarettes? Because as everybody knows, cigarettes make your throat kind of scratchy. Sometimes they can make you hoarse. And that's OK. That's just part of smoking. These new filters are going to help with all of that. And there you go. Cigarettes are healthy, everybody.
4:08Josh Clark:That's right. In the 60s and 70s, that's when we saw lighter cigarettes or low-tar cigarettes. in the 50s they got really sort of organized and official about their PR campaigns I guess their propaganda campaigns when they formed the tobacco industry research committee under the guise of studying the health hazards of smoking but it was very much just a PR move they put out an ad called a frank statement to cigarette smokers early on which said like hey hey, we're really like your health is paramount to us as we sell you cigarettes. It's hard not to laugh because it's just so dumb to think about that people would have bought this.
4:52Chuck Bryant:Yeah, but also just so cynical that they would even say this too, you know.
4:55Josh Clark:But they said, all right, we're really going to pledge to research this, everyone, because we care about your health. But also, again, like you can't really prove that it's just a cigarette. It's like, how do you know that these people dying of lung cancer didn't also get it from all the other stuff that's going on in the world?
5:11Chuck Bryant:Yeah. And actually that would become kind of codified in what's called the Roper proposal. There was a Tobacco Institute vice president. So in addition to the Tobacco Industry Research Committee, they also came up with the Tobacco Institute. And then they renamed the TIRC, the Council for Tobacco Research. No word of the industry in it. So it's even more trustworthy, right? And Fred Panzer was vice president of the Tobacco Institute. And he wrote a memo in 1972 that said, essentially, here's what we should do. We need to create doubt about the health charge without actually denying it. And essentially, it's a variation on the theme that the case is not proved.
5:57Chuck Bryant:And he said kind of what you were saying, that like these are, like you can't really prove that it's cigarettes. So for example, extroverts are more likely to smoke cigarettes, but they're also more likely to get out in the world and drop dead of a heart attack. So maybe it's just that extroverts smoke cigarettes. Or that there was one called the constitutional hypothesis that was people who get sick from smoking are biologically predisposed to get sick in general. So it's really them. This was all just thrown about in 1972 to basically lie to the public and confuse the public about whether or not cigarettes were unhealthy or harmful.
6:37Josh Clark:Yeah. So they're pushing this campaign out behind the scenes. They're just throwing in the back file drawer every study that they had that showed that nicotine was addictive, that smoking was bad for you. Like they're suppressing that information as well as at the same time targeting children with, you know, product placement in movies, specifically Superman 2 in 1981 with Marlboro obviously we've talked about Camel Joe before in the history of the cigarette what did I say Camel Joe? I like Camel Joe okay we should leave all this in there except for the beep although there's plenty of those in episodes
7:19Chuck Bryant:yeah let's get the beep out
7:21Josh Clark:so that was in 1988 I like Camel Joe I think I always called him I always called him Camel Joe
7:29Chuck Bryant:I didn't know that wasn't the name. I'm sure there's some retired tobacco industry guy who's like, man, we should have called them Camel Joe. That is way better.
7:38Josh Clark:Here's a Gen X stat for you, which is fairly staggering, but completely believable. Youth smoking, like kids and teenagers smoking, had been on the decline kind of through the 70s and 80s for the most part. And then in the 90s, when Gen X came around to like prime smoking age, it really jumped. It hit an all-time high in 1997 of 36.4 % of youth were smoking. Adults were smoking at 24.7 % at the time. And that's just a staggering number. I think it's at like 3 point something percent now. So Gen Xers were smoking at a rate of 36%.
8:17Chuck Bryant:Yeah, and there's two things that they suggest had to do with that huge jump in youth smoking. One was this big campaign and push to target youth smokers. The tobacco industry called them replacement smokers. They would replace the other lifelong smokers that died off from smoking, right? And that's the thing, too, is like one of the things about smoking, very few people start smoking as adults. We call them total morons. Most people who smoke started smoking in adolescence. So the tobacco industry had every incentive to go after kids. They just knew that society would not allow them to do that if they did it overtly.
8:59Chuck Bryant:So they had to do it, you know, kind of under the radar with Camel Joe. um the other thing is that there was a price war that started in the mid 90s and that they think that um this the drop in the price of cigarettes yeah made it more likely for younger kids to smoke because younger kids are more price sensitive than older people who are smokers remember how
9:23Josh Clark:cheap cigarettes were back then yeah like a buck something buck 25 a pack or something for sure Yeah. I mean, I wasn't a regular smoker. I occasionally smoked, as we talked about before. So I wasn't like buying packs, but I sold them at the Golden Pantry in Athens, Georgia, on the east side. And cigarettes were cheap. And somebody told me the day that they were like$12 to$15 and like 20-something bucks in New York, a pack. I believe that. I totally believe that. Boy. Well, we'll see why here in a minute.
9:55Chuck Bryant:So, yeah, one of the other things, too, that they're doing at the same time besides suppressing studies, sowing doubt and confusion among the public about the harm of cigarettes. They're just out and out denying publicly that not only are cigarettes not harmful, they're not even addictive. That as recently as 1994. Yeah. They were publicly saying, like the head of Philip Morris was saying in interviews, we do not believe cigarettes are addictive. In the 90s. People had known, like, all you had to do is ask a smoker back in the 50s if they were addicted to cigarettes, and they could tell you that they probably were.
10:32Chuck Bryant:And, like, the industry in the 90s still wouldn't fess up to that. Like, that was their tactic. Just a complete solid wall with zero cracks in it over and over again being reinforced publicly.
10:46Josh Clark:Yeah, actually, in the 1950s, I think they probably said, like, no, I don't think they're addicted, but do you have a cigarette? Can I have a cigarette? Right. I see a guy over there smoking. You think he has an extra cigarette for me? Right. All right. So in the 1950s, we need to start with sort of lawsuit talk. There were a lot of lawsuits, all unsuccessful. By the mid-90s, when they were still saying that it wasn't addictive, there were at least 400 lawsuits that they never lost. They never settled. They had 100 % record.
11:17Chuck Bryant:That's crazy.
11:18Josh Clark:Which is staggering to learn. They had obviously a ton of money to form like the best legal representation they could. But they're also actively lobbying state governments about making it harder to sue about tort reform because like, hey, tobacco is a natural product. So cigarettes fall into that category, like despite all the other stuff that's in there. So you can't sue somebody for packaging a natural thing and selling it to people.
11:45Chuck Bryant:Yeah, that was the other thing they were doing, too, is they were really lobbying government really effectively. Like, they spent a lot of money on lobbyists, right?
11:55Josh Clark:Yeah, not like now.
11:56Chuck Bryant:So, yeah, they were like the Teflon Don of industries, I guess, the tobacco industry was. What did you just say, not like now? Because I picked up a sarcastic. Facetious tone.
12:10Josh Clark:Yeah. What were you mentioning? I'm sure they're still pouring tons of money into the lobby.
12:15Chuck Bryant:Oh, sure, sure. Yeah, I'm sure, too. But so they were they were just completely untouchable. Like, I mean, if you have 100 percent record, that in and of itself will prevent people from filing suit against you. Right.
12:31Josh Clark:Yeah, because it's expensive.
12:32Chuck Bryant:It is. Right. And you're just like, I'm not going to win or the chances of me winning are so low. I might not even file suit. So the state also, we should mention Congress is doing almost nothing about this at this point. So the state attorneys general, William Sapphire, just smiled from heaven, led by a guy named Michael Moore. He was the attorney general for Mississippi. They got together and they said, well, if the federal government's not going to do anything about it, we're going to. And one state might not be able to take on the tobacco industry, but every state, territory and D.C. together definitely can take on the tobacco industry.
13:15Chuck Bryant:Not only can we take them on, we can seriously threaten to bankrupt the entire tobacco industry right out of existence if we really try.
13:25Josh Clark:Yeah. And they played their cards right because they were like, how can we best go at them? uh maybe medicaid is the way to do it because we have these medicaid programs through our individual states that are not going bankrupt but they're they're in bad shape in a lot of cases because they're treating all these smokers who are really expensive uh to get through like you know lung cancer treatment and they have deceived us for all these years so let's go after for for rico status like fraud and racketeering and that'll that'll send a shiver uh even through the spine of a teflon don right and they were turning up uh like libya says like literal truckloads of documents from the industry about them selling to teenagers burying studies covering up what they knew about how addictive everything was and there were i mean this would be a good sort of thriller movie almost, like a Soderbergh kind of thing.
14:23Josh Clark:He'd probably do a great job with it, where they're erasing documents out of offices while they're trying to actively bury these documents. I think the guy from Texas was literally trying to put papers on a private jet so they could be taken to a district judge before the state court could seal them up because once the feds are investigating, it can't be sealed at the state level.
14:47Chuck Bryant:Right. Or even if they do steal it at the state level, this federal district judge is like, that doesn't apply to me. So I can I can make these public or part of a court case. Right. So, yeah. I mean, yeah, that is like a thriller. And there is something that kind of touched on this. It was the insider with who is the Australian actor who used to get in fights all the time?
Read the full transcript
15:07Josh Clark:Russell Crowe.
15:08Chuck Bryant:Yeah. Russell Crowe is Jeffrey Wigand, I think. Yeah. Who is like this whistleblower in the tobacco industry. It was great. I think that was a Michael Mann movie. Michael Mann. Man, I nailed it. You're just nailing all of it. I should be a guest on Movie Crush. Oh, man, if only. But one of the other things you kind of touched on, their strategy, like the focusing on lying to the public and targeting teens, that was a really smart strategy. because if they were just like, oh, cigarettes are harmful and we need to get rid of them. A lot of adults are like, you don't need to tell me whether I should smoke or not.
15:45Chuck Bryant:I can kill myself if I want to. So they left that part alone and they went after the fact that they were targeting teens and lying to the public because the public sentiment can get behind those two things. Like, yeah, kids are out of bounds. We don't want them smoking. And, you know, we were lied to all these years by these same people. Yeah, go get them. So that was a really smart strategy that these attorneys general like took on. Like it was amazing, an amazing court angle, I think is what they call them.
16:17Josh Clark:What a court angle. Look at that. Yeah, for sure. And the writing was on the wall for investors because we're talking about hundreds of billions of dollars at stake. And they were like, hey, this is going to look really bad and our stock prices are going to really go in the tank. And so you got to cut a deal here. uh so in which the tobacco company never had thought about you know because they had not only lost uh never lost they never settled anything yeah so finally in april of 97 uh they were set to go to trial in a few months and they're like all right let's get a meeting set up with this michael moore character from mississippi not the movie guy obviously sure uh and an attorney for tobacco free kids who was working with the states about all the the marketing toward uh you know with Camel Joe and everybody.
17:04Josh Clark:So they started negotiating like, all right, out of the gate, let's just say we'll get rid of Camel Joe. We love him. Kids love him, but we'll get rid of him and the Marlboro Man if that makes you happy. Kramer? And then a few months later in June, they said, all right, we got to start talking like hash out the money part. So how does$368.5 billion sound over 25 years as just an opening salvo?
17:31Chuck Bryant:Yeah. And the states were like, I was not expecting that, actually. But they so they were like, OK, here's the problem, though. These are like we need to bring the feds in. Like the Congress has to approve of this deal the way that we've set it up. And there were some federal aspects to it. One was that the FDA would start regulating tobacco products. another one was that the companies these tobacco companies would be protected against any further civil and class action lawsuits this is the big one yeah yeah in exchange they would create a fund to pay some of those people off and then there would also be federal restrictions on indoor smoking and this did not go very far because of that protection of the companies right
18:18Josh Clark:Yeah, I mean, that was the sticking point. I think they could not too happily live with the rest of it. But that was that was a big one as far as Congress. And soon enough, the American people were like, we can't have that.
18:32Chuck Bryant:No.
18:32Josh Clark:So Congress had a bill to ratify or at least considering a bill to ratify it. Universal Tobacco Settlement Act S1414. They were debating it. All this disclosure comes out and they're like, man, they were really awful companies and it's worse than we thought even. And the idea of them being protected moving forward, like, isn't going to fly. So the late Senator John McCain said, all right, how about S-14-15 where there's more money? Like how does$520 billion sound? And we're not going to protect you from now on. Like you can be sued moving forward too.
19:10Chuck Bryant:Yeah, the industry lobbied like they've never lobbied before to keep this from getting passed through. And again, you mentioned the stock prices. When all this stuff is going on, their stocks are tanking. When, you know, there would be a win in the negotiations for the tobacco companies, their stock prices would go back up. It's all very cynical. And the stock price went back up after McCain's bill did not get passed. And one of the reasons it wasn't passed is because other senators added, like, riders that had nothing to do with tobacco. And I'm guessing unpopular writers, probably at the behest of the tobacco companies, I could not find the writers to save my life, to basically sink this bill.
19:54Chuck Bryant:You know, like, like, imagine if you had this great bill and then somebody's like, I'm also adding a writer to repeal the requirement for child sexual predators from having to register and they can live by schools now. Your bill's not going to pass. And I get the impression that that's kind of what happened to McCain's bill.
20:14Josh Clark:Yeah, for sure. There was another thing we just sort of should mention in passing, at least. There was another suit in October of 97. This is while they're debating these original bills in Congress where they did settle. It was a separate class action suit that was filed in 91 by flight attendants in the United States saying like, hey, smoking sections and planes are like killing us. and it's pretty awful. So it was a husband and wife team named Stanley and Susan Rosenblatt who filed this one and they ended up settling for$300 million to fund medical research and they said this was a big sort of turning point and that's the first time they officially caved.
20:56Josh Clark:And again, this is while they're debating these bills in the Congress.
21:01Chuck Bryant:Chuck, I feel like we set things up pretty well for a break. Like we deserve an ad.
21:08Josh Clark:We deserve a break today. Let's do it.
21:10Chuck Bryant:Okay.
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23:49Chuck Bryant:Okay, so things are just kind of not going quite well because the whole thing was handed over from the states to Congress, and Congress just fumbled it as they do. So some of the states went on and were like, we're going to just keep going and negotiating our own agreements with the tobacco companies. Florida, Minnesota, Mississippi, who had led the charge originally in the first place, and Texas, they all came up with their own settlements. In pretty eye-popping amounts, Texas got more than$17.5 billion out of their agreement. Minnesota got a nice chunk of change, but they also had the foresight to say, not only are you going to settle with money, part of this is that you have to disclose public records.
24:43Chuck Bryant:All internal documents that are part of discovery in this process are going to be made public after this. And the tobacco companies had to agree with that. So that was where a lot of these disclosures came from, that they had just been lying, lying, lying, because these troves of documents that came up in discovery during these cases, just journalists went crazy. It was like a feeding frenzy on them.
25:09Josh Clark:Oh, yeah, for sure. They, you know, saw the writing on the wall once again. So they got together with the other remaining states who were all plaintiffs at this point in November of 1998. and agreed to what would end up being the Tabasco, the tobacco, oh man, the Tabasco settlement. Can you imagine the numbers? The Tobacco Master Settlement Agreement, the MSA, which would include$206 billion paid out over 25 years to 46 states, five territories in D.C. And they would allocate it according to like how many smokers they estimated each state had and how much, it was still based on the Medicaid thing.
25:52Josh Clark:So how much they had, you know, had to pay out in Medicaid for all these related costs. They said, well, also stop targeting minors, even though they really like to smoke, as it turns out. And they love cartoon camels. So no more cartoon characters in our ads. We're not going to give away free cigarettes to minors. At recess. Which is crazy. we are going to shut down these, you know, sort of shell research companies that are really just PR firms for us. Dissolving those, we're going to release all these documents, and we're going to create a national foundation to address underage tobacco use and addiction.
26:34Josh Clark:And we promise to care this time.
26:36Chuck Bryant:Yeah. We're a newer, gentler, loving tobacco company.
26:40Josh Clark:That's right.
26:42Chuck Bryant:They also created what's now known as the Truth Initiative, which is this whole teen anti-smoking campaign that was funded originally by tobacco companies. Those commercials were great. Yeah, they're still around. The Truth Initiative is. They seem to have migrated online. Surprisingly. Yeah, I'm sure. I mean, I guess that's where kids are these days or something. That's where the kids are. And so initially this agreement was just before or between these 46 states and territories in D.C. and the four largest tobacco companies, which represented the vast majority of the market share of the tobacco industry in the United States.
27:19Chuck Bryant:Philip Morris, R.J. Reynolds, Brown and Williamson and Laurelard.
27:23Josh Clark:I'd only heard of two of those.
27:26Chuck Bryant:Yeah, for sure. I've heard of the other ones, but I cannot tell you what they make. OK.
27:31Josh Clark:Yeah, no idea. Let's just leave it at that. Maybe they make bucks. I remember, I think we talked about bucks in the cigarettes episode. Those are rough. The Golden Pantry. Those were the ones that I think the rumor was at least they were just made from the Sweepings? The trimmings and sweepings up of factories. They would just package them as bucks.
27:51Chuck Bryant:I'm quite sure that that is true to some degree. I'm sure it is. There's a kernel of truth in there. And there's probably kernels of something in those buck cigarettes. I was just about to say that. So a bunch of manufacturers were like, we don't need to take part in this. We didn't do that much damage. They're called non-participating manufacturers. They were typically smaller players. I mean, if you weren't one of the big four, you were basically, by definition, one of the smaller players. But the states were like, not so fast. You still are going to have to pay money to us for each cigarette that you sell.
28:24Chuck Bryant:And those smaller players, most of them were like, well, maybe we'll sign this master settlement. agreement after all. So they really lassoed like a lot of tobacco manufacturers into this, this whole agreement. Yeah.
28:38Josh Clark:Uh, if you're wondering about dip, they had a different agreement, but it was still an agreement kind of under this banner with us tobacco company, which makes Skoll and Copenhagen. Uh, did you ever dip at all?
28:51Chuck Bryant:Yes, I did. One thing I never really did was chew. That was, I tried it once and turned as green as you can get.
28:59Josh Clark:Yeah. I chewed tobacco early on. We might've spoken about this when I was a youth group member at my church. It was pretty popular. So I chewed like Redman and Levi Garrett occasionally. And then here and there in college, I would dip with friends who dipped, but it never, like all nicotine never got its hooks in me, thankfully.
29:19Chuck Bryant:Yeah, that is thankful for sure. Cause once it does, it's hard to get rid of. Yeah, for sure.
29:24Josh Clark:But one difference with the dip companies is they were given out. And I remember this is a big deal. They used to just give out reams of dip to minor league baseball and major league baseball. That's why baseball was in other sports, too. But baseball was always associated with dipping. But they were like, you can't give this stuff away to like high school and college baseball teams anymore and minor league baseball teams.
29:47Chuck Bryant:Yeah, I think any sports team because like kids look up to them, right, which is a big part of why they were doing this. So the sunflower seed companies rejoiced.
29:57Josh Clark:Oh, for sure.
29:58Chuck Bryant:So there was another thing that came up that was fairly unpopular. But also, I think people were just kind of what's not ambivalent, but where you're of two minds and you're kind of tussling over it internally. Yeah. The internal tussle-y, we'll call it. $5.15 billion went to the National Tobacco Growers Settlement Trust Fund to compensate tobacco farmers. Because they were going to sell a lot less tobacco because of this.
30:34Josh Clark:It's interesting to think about.
30:36Chuck Bryant:Yeah, because you're like, on the one hand, like, who cares? It's tobacco. And then on the other hand, you're like, these are often family farmers who have been doing this for generations. So I kind of, yeah, I'm tussling internally over it.
30:48Josh Clark:What word is it? I know what you're talking about. Yeah. I don't know. I don't know. Someone write in.
30:55Chuck Bryant:And then one other thing about this, too, that was part of the provision was people were like, well, what about the federal government? Because Medicaid is this joint state-federal partnership. And the feds fund a lot of this. And the feds were like, no, we're leaving ourselves out. We're waiving any right to any of that money. This was the state's game. And they did a great job with it.
31:15Josh Clark:Yeah. A lot of public health officials were like not super happy about that because they were like, hey, listen, unless we have the the feds overseeing this, how do we know what the states are going to use this money for? And, you know, not to tease too aggressively, but I think we'll see in Act Three that that was very much a valid concern. Yeah, for sure.
31:37Chuck Bryant:The feds did come after them, though. I think they were secretly going to do this when they were like, no, no, we're just going to leave it to the states. And the tobacco companies were like, whew. And the feds were like, we have our own thing we're about to do. There was U.S. versus Philip Morris et al., and they saw billions and billions of dollars in compensation for health care money that they had spent out. I guess basically what they had shelled out as part of the Medicaid program. They also went after them for RICO as racketeers. And as being, if you're convicted of racketeering as an organization and you're allowed to continue on as an organization, The feds can basically garnish your profits for a very long time, or they can go back and seek previous profits.
32:26Chuck Bryant:And they did. They wanted a portion of the company's profits from the past 45 years in this case that was launched in 1999. Yeah. And in the meantime, Phil Morris was like, hey, Phil Morris et al., thanks a lot.
32:45Josh Clark:Like, why has it always got to be us? they're like you got a great name phil uh so the companies did not settle this time they're like all right we're getting bled dry by the states now the feds are coming after us so we were going to actually fight this thing uh and they lost uh in 2006 a district uh judge for the united states ruled for the doj said no you guys are racketeers um i'm going to greatly reduce that financial penalty down to 10 million i'm sorry 10 billion dollars yeah from the hundreds they were asking for. But you know what? You got to admit to fraud. You have to issue what are called corrective statements.
33:24Josh Clark:And we got we got to see all those documents because we know there are still more documents in your coffers.
33:30Chuck Bryant:Yeah. I think there is something like 14 million documents that were eventually released, internal documents.
33:36Josh Clark:Yeah.
33:37Chuck Bryant:And then finally, remember back as part of like that first settlement agreement that they tried to kick to the feds to ratify, that part of it was having the FDA start regulating tobacco. That was in 1998. Yeah. In 2009, the federal government finally got around to having the FDA regulate the tobacco industry. Yeah.
34:01Josh Clark:All right, let's take our second break and we'll come back and talk about what this all meant and means right after this.
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36:49All right.
36:51Josh Clark:We promised talk of what it all meant and means. And it kind of depends on who you ask or when you ask as well, because when it happened, an act, the Effective National Action to Control Tobacco group said, you know what? And I think other people, too, like the American Cancer Society, the American Psychological Association, they all got together and said, you know what, this isn't so great. Like that McCain bill really had teeth and that didn't pass and we really wanted it to. So this is sort of a win for the cigarette companies. It had a lot of like obvious immediate impacts. And, you know, I talked about, you know, why cigarettes are so expensive now.
37:31this is partially why because they're what's not going to happen is the investors aren't going to
37:37Josh Clark:lose any money so they're going to say like we'll just start jacking up cigarette costs and a lot less people are smoking so let's jack them up even more because we're not going to take a loss on this what are they going to do quit yeah so that started almost immediately as far as price hiking uh like 45 50 cents a pack right out of the gate is is was just the tip of the iceberg yeah i mean
38:00Chuck Bryant:did you say$20 a pack? I believe it, but that's still eye-popping.
38:05Josh Clark:I think a smoker told me they were like 20 bucks in New York, but I haven't verified that.
38:11Chuck Bryant:So one of the things that really happened that people point to the MSA as being directly responsible for is that like the youth smoking just dropped precipitously. once they removed the ability for tobacco companies to market directly to kids and they simultaneously had anti-smoking campaigns targeted towards kids, like it really had an effect. Like you said, it went from like 34 % to 3.8 % in 2021. I think it's even lower than that now. The problem is we didn't learn anything that, or we didn't leave it open enough to apply to future kinds of tobacco that hadn't been around. So companies like Juul and other e-cigarette and vape companies, they don't face these same regulations.
39:04Chuck Bryant:So they can basically market to kids. They can use celebrity endorsers. And they do, but they still get sued a lot. I think Juul paid out$462 million to six different states in 2023. So it's still going on. But that's been a huge dent in the incredible success of the curbing teen smoking. It's gone back up if you include vaping and hookahs and stuff like that. But I have also the impression that kids are a little smarter than we were at that age. Yeah, agreed. And they are seeing through a lot of this and it's not working quite as well as it did on us in the 90s.
39:46Josh Clark:yeah and you know more parental oversight and just there's a lot of factors for sure um on the e-cigs i think their day has come a little bit but i think that it's really they're in for some bad stuff moving forward because of just all the uh all the stuff that goes into that juice you
40:06Chuck Bryant:know yeah yeah we we took a pretty solid stand um or position on vaping i think we were if i remember correctly we were opposed to it in our episode on vaping uh that's right the other thing
40:19Josh Clark:that the settlements led to was just uh just a turning of the tide not just with kids smoking but smoking in general which was what they were after was like let's just try and get smoking way down overall and individual states started enacting bans i think in 98 utah and california were the first and only ones to say like hey you can't smoke in restaurants anymore you can't smoke in public places secondhand smoke is a real thing and most states have these bans in place now and people just generally uh look at smoking differently like you know when someone lights up in public i guess unless you're in philadelphia there are a lot of people now that will look sort of like
40:59Chuck Bryant:what are you doing dude yeah like who still does that exactly or when you flick a cigarette filter out the window when you're done with it?
41:08Josh Clark:Ah, geez. Sorry, I just went to a dark place.
41:12Chuck Bryant:No, I'm with you. I understand. So upsetting.
41:15Josh Clark:Yeah. Especially when one flicks off your windshield and you see a spark bounce.
41:18Chuck Bryant:Well, that's kind of pretty.
41:20Josh Clark:Well, just briefly, yes.
41:23Chuck Bryant:So there was a lot of success directly from the Master Settlement Agreement. Let's talk about the problems with the Master Settlement Agreement because a lot of people are like, this could have been done better. We should have done the McCain bill, right? And then really importantly, there were only a couple of states that had the foresight to designate the payments from the master settlement agreement from the tobacco companies that are made annually in perpetuity. I hadn't realized this. There's no end date to these payments as far as I know, which I don't fully understand because I think they settled on like an actual number, right?
42:04Chuck Bryant:So that doesn't quite make sense to me, but I've seen in multiple places that these are in perpetuity payments.
42:11Josh Clark:Yeah, the only thing I can figure out there is they're like, hey, you're still selling cigarettes and this is still a problem for Medicaid. So it's not like that's ever going to stop. That's the only thing I can figure out.
42:20Chuck Bryant:Yeah, I get that, too. I think that that's probably it. That's the best argument for it. But then does that mean that their ultimate payouts are going to exceed that the hundreds of billions of dollars that they agreed to pay out to the states over 25 years? Like, yeah, that's the part I don't get. But the problem is, is that the states, very few states actually said this money is designated for anti-smoking programs to pay for health care for smokers or to repay public costs for health care that we we spend on smokers. A lot of states don't do that. And in fact, most of the states use it to like fill budget gaps, to build new roads.
43:04Chuck Bryant:If they're strapped, they do something called securitization where they sell bonds against their future annual payment from the tobacco companies. Did you see that? Yeah.
43:13Josh Clark:Yeah. That's kind of, you know, it's a shell game with the government in a way, in a lot of ways, I think.
43:19Chuck Bryant:Yeah, because not only are they, I mean, it's just unseemly in the first place. But secondly, when those bonds come due, when they get that master settlement agreement annual payment to the state, they have to pay out not just the face value of the bonds that they sold. They have to use some of that money to pay the interest, too. So the state's getting less than it would have if it didn't sell those bonds ahead of time. Right. So that's that I think that's a sign of poor management of a state typically, if you ask me. Yeah, for sure.
43:50Josh Clark:I think in the end, less than 3 % of these funds have gone to smoking prevention and cessation programs, which was a lot of the reason they initially said they were going to do this. And I think no state has funded anti-tobacco programs at CDC recommended levels at all. Right.
44:13Chuck Bryant:And some states even use them to help the tobacco industry. I know North Carolina. Oh, man. They spent$45 billion, I think, on modernizing tobacco farms. Not, hey, here's money for your losses. I think I said$45 billion,$45 million. $42 million. 42 million. Not like here's some money to compensate you for your losses. Here's some money to get better at tobacco farming for the future. That's what North Carolina spent some of its money on.
44:44Josh Clark:Yeah, I think North Carolina, big tobacco state, obviously, they use 75 % of their settlement funds for tobacco production. That's crazy. Some of that to private tobacco producers, like you talked about, that had taken a hit. But also, yeah, like you said, like, hey, you want a tobacco museum? We'll build it with that money. Right.
45:07Chuck Bryant:And if we build it, they will come, the tobacco company.
45:10Josh Clark:Oh, man, it's hard to believe on that one.
45:11Chuck Bryant:There's another thing, too. The tobacco companies haven't exactly paid out all this money. They were supposed to pay out the couple hundred, I think, what was it, 300-something billion dollars over 25 years as part of the settlement in 1998. They have paid out, according to a press release from Vermont's attorney general office,$175 billion. So I think less than half of what they said. And it's been a lot longer than 25 years now, right? And one of the reasons why is because as part of the agreement, the tobacco companies, there are two calculations that have to be taken into account. There has to be an inflation calculation that adjusts for inflation so that the states are getting their actual value of the dollars that the tobacco companies agreed to.
45:59Chuck Bryant:That makes sense. There's also a sales formula that they have to calculate every year to take into account the amount of profits that they're losing to companies that aren't part of the master settlement agreement and therefore aren't hamstrung by those payments. Which means that in some cases, some years, there have been the sales calculation has been larger than the inflation calculation. Right. So the states have shouldered the burden of competition for these tobacco companies. Like the states took on that loss for the tobacco companies, which is just disgusting to me. Yeah.
46:43Josh Clark:And, you know, when you just think about what's happened with the raising the cost of cigarettes, there's a lot of people that look at the settlement of like, well, now you're just getting like the tobacco companies aren't paying states like people who still smoke cigarettes are just funneling money through the tobacco companies to the states.
47:00Chuck Bryant:Yeah, that's a great way to put it. Okay, Chuck. So one of the other things, the legacies of the Master Settlement Agreement is it created a blueprint. I think you said this kind of early on for other ways that states could get together and create real change against corporate malfeasance, specifically, again, in cases where there is harm that comes directly from using a product as directed or intended. Right. Not abusing it or something. You're just using it like it's supposed to be used and you're being harmed. So you have things like social media, opioids. Climate change is a trickier one, but fast food.
47:42Chuck Bryant:And the reason why also they fit this master settlement agreement framework is these companies are following like a lot of the same techniques that the tobacco industry laid down by starting back in the 50s.
47:56Josh Clark:Yeah, it's interesting because there are two playbooks. On the one side, you have the government now that's like, all right, now we got a playbook moving forward so we can sue Meta about social media and the harms to children and the fact that they know they're targeting children and harming children or opioids, of course, with the pharmaceutical companies. But then there's that other playbook, like you were talking about, where they were they end up getting sued. But Meta and the pharmaceutical companies were like, hey, you know what? If we can get kids hooked on this stuff and market to children, then we can make a lot more money for our investors.
48:34Chuck Bryant:Yeah. A good example of that, not necessarily targeting children, but of just this completely screwing up the narrative for their own gain at the expense of people's lives. The opioid pharmaceutical industry with opioids basically floated this idea called pseudo addiction to where the people who were supposedly addicted to opioids weren't actually addicted. What was happening is that their pain wasn't being managed adequately. That's why they needed to take more and were going around from doctor to doctor. And the answer, the solution was to up their dose. Don't cut them off. Don't put them in treatment.
49:11Chuck Bryant:Up their dose. That's what they really need because it's not real addiction because you can't get addicted to opioids. They actually publicly said stuff like that. And I mean, that's cause to go after them alone, you know?
49:24Josh Clark:Yeah. I mean, yeah, just as despicable as any of these huge corporations sort of issuing these really flimsy denials that the public just it just makes them look worse. You know, the public doesn't buy this stuff.
49:39Chuck Bryant:Yeah, it's true. now. I think we did before.
49:42Josh Clark:Yeah. You know? Yeah, you're probably right. You got anything else? I got nothing else. That's, uh, this is, we gotta, yeah, I feel like this is in a suite of episodes we've done over the years. Josh and Chuck take on the world. Big industry.
49:58Chuck Bryant:Uh, well, Chuck doesn't have anything else. Chuck said the world and I said big industry, so that combination obviously unlocked listener mail.
50:08Josh Clark:Uh, hey guys. amongst my favorite things, and that's favorite with an OU, so I think I know where Rebecca's from. Or at least, you know, one of a few places she could be from. One of my favorite things about Stuff You Should Know is Josh's jokes that don't land. Wow, all right. Absolutely hates my jokes that don't land, by the way, so you should feel good. Did she say that? And counting how many... No, no, no. Okay. And counting how many times Chuck says, that's right, in an episode. I guess I feel like I say sure more than that's right.
50:42Chuck Bryant:You say for sure, for sure.
50:44Josh Clark:Yeah, for sure.
50:45Chuck Bryant:But just one time I was adding a for sure to the first for sure. For sure.
50:50Josh Clark:My absolute favorite thing, though, guys, has to be the interlude jingles before and after. I love how the jingle always matches the theme of the show. For example, the short stuff on the benefits of singing in a group. Had the barbershop quartet. Episode about Shakespeare had the green sleeve style jingle in Schoolhouse Rock. Had the queen style jingle. My favorite one might have been the techno punk jingles on the cyberpunk episode, which was fantastic. All that to say, shout out to Jerry and the folks who produced these. They are appreciated. And Rebecca, I'm glad you brought this up. We said it a lot over the years, but it always bears repeating that, you know, these are written by Stuff You Should Know Listers and produced and performed.
51:27Josh Clark:And we just get these and people are like, hey, use this thing. I made it as a love letter to the show. and then Jerry does a great job of selecting the episodes where it has a nice fit. So we always like reiterating this is how it works. And Rebecca sends kindest regards and a P.S. shout out to Rebecca's twin sister, Lauren, who introduced Rebecca to Stuff You Should Know many years ago and they have been regularly discussing episodes weekly since.
51:54Chuck Bryant:That's awesome. Yeah, thank you. We love it when a family member or a friend turns somebody on to Stuff You Should Know and then they end up talking about it or listening together. That's kind of the point.
52:05Josh Clark:That's how a community is formed, everybody.
52:07Chuck Bryant:Also, shout out to Dave and Ben, too, who also do a pretty boss job of selecting jingles, but I think Jerry's probably the goat.
52:16Josh Clark:Agreed.
52:17Chuck Bryant:If you want to be like Rebecca and by proxy Lauren and get in touch with us via email, all you have to do is send it off to stuffpodcasts at iheartradio.com.
52:31Josh Clark:Stuff You Should Know is a production of iHeartRadio. For more podcasts from iHeartRadio, visit the iHeartRadio app. Apple Podcasts are wherever you listen to your favorite shows.
52:41Chuck Bryant:If car shopping feels like a whole thing, buying your car online on AutoTrader makes it way easier. Really, shop tons of cars online, compare prices, check financing and trading options from wherever you are. Start online, test drive at the dealer, and finish wherever works for you. Your info stays with you, so there's no starting over. Plus, you're working with local dealers with real people there to help. Buy your car online on AutoTrader. Really.
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From the publisher
By the 1990s, cigarette makers had been hooking and killing off their customers for about a century. And they’d gotten good at both as well as covering up their harms. In 1994 they were still denying cigarettes were addictive. Then, the 50 Attorneys General of the US rode into town to take them on.
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