Saudi Arabia continues to demand that American tobacco companies pay it billions of dollars for its smokers’ health care costs. Saudi Arabia is demanding 10 billion Saudi Riyals for past health care costs plus 500 million per year in the future in perpetuity.
The Saudi representative of the World Health Organization, the public-health arm of the United Nations, is now helping out the Saudi government by denouncing the American tobacco companies.
I earlier explained how the big tobacco companies encouraged this sort of lawsuit by entering into the 1998 multistate tobacco Master Settlement Agreement, which gave 46 states in the U.S. hundreds of billions of dollars to settle lawsuits brought by their state attorneys general, and gave wealthy trial lawyers at least $14 billion.
Just as sharks can smell blood from a wounded animal, government lawyers can smell money coming from an industry that has just paid billions to settle a case .
The 1998 American tobacco settlement contained a quid pro quo — provisions that put little tobacco companies that didn’t join the settlement at a disadvantage — but the big tobacco companies haven’t been as lucky in subsequent lawsuits by governments in Saudi Arabia, Nigeria, and Canada, where billions are being demanded from big tobacco, without any corresponding benefit being offered to it in return.
In the short run, the 1998 tobacco settlement looked like a good idea to the big tobacco companies, but it set a bad precedent for them — and for other industries — in the long run by encouraging governments to sue industries for billions.