This article, which was prepared for a symposium entitled "Lawyers as Activists: Achieving Social Change Through Civil Litigation," offers an assessment of the legal claims against the tobacco industry by the states which led to the $250 billion settlement now known as the Master Settlement Agreement ("MSA"). The MSA, which allowed the states to regulate tobacco indirectly, is easy to criticize from numerous perspectives. Some anti-tobacco activists think that it allowed the tobacco industry to avoid personal injury suits which would have forced it to compensate the countless number of smokers that were harmed by cigarettes, while more conservative critics argue that the settlement was based on suits that lacked any legal foundation. In this article I assume that the critics of the MSA are mostly correct, and argue that, in spite of its legal flaws, the MSA is nonetheless a satisfactory second-best response to the legal and political challenges posed by the history of tobacco consumption in the United States.

This article asks why, given the very serious legal infirmities of the states' suits, the tobacco companies agreed to the regulatory burdens contained in the MSA. I argue that the "pretext" upon most of the litigation was based - that the states could pursue claims for compensation based on their health care expenditures for smokers without running into the same problems that doomed smokers' personal injury cases - obscured a deeper, more dangerous legal claim based on consumer fraud statutes. These statutory consumer fraud claims still depended on controversial assumptions about proximate cause, but were sufficiently strong from a legal point of view that they could have persuaded the tobacco industry to accept "legal peace" with the states. The MSA produced relatively mild controls, including acquiescence by the tobacco industry to the redistribution of money from smokers to the states. I conclude by suggesting that the structure of the MSA, which employs a set of public-law remedies, is a fitting response to the litigation, which cloaked laudatory political aims within the pretext of a claim for redress under private law.