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Example research essay topic: Compensatory Damages Ethical Implications - 1,955 words

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... nies have, which makes entry into the market extremely difficult. The level of sales needed to justify the enormous legal cost associated with this controversial market also makes market entry difficult for new companies. Although tobacco companies' profit margin is about double that of any other packaged good, the substantial costs of packaged goods on a national scale, along with the money it takes to acquire facilities for production and distribution, are major barriers to entry in the tobacco industry (Hoovers). Higher selling prices and greater restrictions on where people are allowed to smoke have proven to be effective in lowering the consumption of tobacco. Another factor that has lowered consumption is America's increased interest in healthy living, largely attributable to the baby boom generation.

The older people get, the more they pay attention to what constitutes a healthy lifestyle. These factors have called for the increased government regulation of tobacco in its industry. The regulations the government has set forth however, have ironically made the tobacco companies more profitable. The U.

S. and state governments are direct beneficiaries of these profits receiving $ 11. 9 billion from excise taxes in 1993 (Contain). Tobacco, in this aspect, can be argued that it is a great economical asset to our governments. In 1998, a $ 206 billion agreement was reached between tobacco producers and 46 states to resolve all state claims for health costs related to smoking, which has forced the tobacco companies to make changes (Melillo).

Earlier this year, advertising on billboards, sides of buses, subways, and tops of taxis has come to a halt. Stadium advertising has also stopped and tobacco companies are only allowed one sponsorship per year per company. In addition to this agreement, President Clinton signed legislation in August of 1997 to reduce tobacco consumption even further. This legislation will increase the federal excise taxes (FET), on cigarettes to 34 cents per pack beginning on January 1, 2000.

Taxes on other tobacco products will also increase accordingly. On January 1, 2002, the FET will increase again for all tobacco products with a 39 cents per pack increase for cigarettes. In addition to the federal taxes, states can also impose taxes on tobacco products. These taxes range from one dollar per pack to as low as 2. 5 cents per pack. 43 states impose sales tax on cigarettes. The USDA has estimated that the taxes on tobacco have caused the consumption of cigarettes to decline nearly 10 percent from 1990 to 1998. The reason consumption has declined is because of consumers demand elasticity.

Demand elasticity is a measure of how responsive a market is to price changes. Since the tobacco market is elastic, an increase in price would cause a drop in consumption (Standard & Poors). The $ 206 billion dollar settlement that was reached last year between the tobacco companies and the 46 states was a compact replacement of the first attempted deal. The cigarette makers agreed to give the states $ 358 billion over 25 years, plus $ 10 billion up front in lump-sum damages. The money would have come from raising cigarette prices by 35 cents per pack straight away and by 62 cents after five years, plus allowances for evaluation.

The only people this deal would hurt would be the consumers. This plan failed because congressional leaders were not brought on board, and for the plan to work they had to agree to it. The bill was then recast as a "company-bashing measure" and the manufacturers backed out. This resulted in the $ 206 billion settlement, a multi-state deal that required no cooperation in Washington (Standard & Poors). It would have been better for states to impose an explicit, well-designed tax with more marketing restrictions. Instead, the settlement allows each participating state to levy a tax on cigarettes sold anywhere in America.

The states that do not take part will still pay the tax and will receive no share of the revenues, which is a strong incentive for states to sign on. The reasons the explicit, well-designed tax with more marketing restrictions was not imposed is because there would have been nothing in it for the lawyers. These taxes would have also required express legislative approval state by state, which the settlement was designed to get around, and because an explicit tax could only be levied by any particular state only on cigarettes sold within that state. In short, the lawyers have come up with the settlement so they can get a piece of the action (Economist).

Agriculture The nation's crop of leaf is grown by tobacco farmers, located mainly in the southeastern U. S. , and accounts for 502, 210 jobs (Capehart). Their crop is usually sold at public auction to the highest bidder. Leaf prices are supported under the Agricultural Adjustment Act of 1933, which has been amended many times over the years but the program's basic components remain in place. U. S.

tobacco growers are guaranteed minimum prices through price supports and this system has made U. S. grown tobacco more expensive than most non-U. S. tobacco, which results in a decline in exports (Standard & Poors). The number of farms growing tobacco has declined rapidly during the last 40 years.

From 1992 to 1997 farm numbers declined more than any other period since 1950. This trend toward fewer, larger farms will continue, but at what rate will depend on several factors such as the factors covered earlier: policies and programs affecting tobacco, U. S. and world consumption of tobacco, and alternative crop and off-farm income opportunities for tobacco growers (Foreman).

Ethical Implications Ethics is the general nature of morals and the specific moral choices an individual makes in relating to others. Like most major issues, the tobacco issue poses some ethical questions that are difficult to answer. One factor that makes these ethical questions so difficult is that people generally search for the answer that pleases them the most. For example, if one were to ask a person who had developed lung cancer from smoking whether or not the big tobacco companies should be responsible for his or her disease, he or she would probably answer affirmatively.

However, if someone were to ask a nonsmoker who should be responsible, he or she would probably answer that the individual himself is responsible. Some of the ethical issues that society is facing with the tobacco industry are: the placement of responsibility on the consumer or the producer, the question of whether the producers have to pay compensatory damages for smoking illnesses, the issue of involuntary smoking, selling in foreign markets and lastly the promotion of tobacco products. Tobacco use accounts for at least 29 % of all cancer deaths, is a major cause of heart disease, and is associated with conditions ranging from colds and gastric ulcers to chronic bronchitis, emphysema, and cerebrovascular disease. On average, each cigarette pack sold costs Americans more than $ 3. 90 in smoking-related expenses. The fact is, when smokers purchase a pack of cigarettes at the store they know what they are buying! Like many other products that are sold today, they are dangerous to your health if used excessively.

If it were to be decided that the tobacco companies were responsible for smoking related illnesses, it could open up a whole new view on product liability. Take the alcohol industry for example: drinking an excessive amount of alcoholic beverages has been proven to increase the chances of developing serious health problems. Should the alcohol manufacturers be responsible for this? The logical answer is no! There have been warnings posted on cigarette packs since 1966 informing the consumer of the carcinogenic contents of cigarettes and their harmful effects. Consumers of tobacco products understand that there are certain health risks involved in smoking.

It is not a case of merely educating people about the risks of smoking. What it comes down to is personal freedom: people have the right to smoke. Accompanying any type of right or privilege are consequences and responsibilities. People make the conscious choice to smoke and must therefore accept the consequences of that choice. Smoking costs the United States approximately $ 97. 2 billion each year in health-care costs and lost productivity. The ethical question posed here is whether or not the government should be compensated for this cost.

The U. S. Justice Department launched a multi-billion dollar lawsuit against the tobacco industry, accusing the world's largest cigarette companies of conspiring to defraud and mislead the public for more than 40 years. The lawsuit, filed in Washington, seeks to recover the medical costs for treating smoking-related conditions paid by the federal government over the past six years as well as a potentially huge sum representing "the disgorgement of ill-gotten gains" dating back to the 1950 's (Edgecliffe, 1). Critics of this lawsuit say that the case is not based on facts and that the government is merely trying to make a financial gain. They also point out that the government has been involved in almost every aspect of the tobacco industry and has already collected tens of billions of dollars in taxes on cigarette sales.

The case brought on by the justice department is not the only threat against the big tobacco companies. There are also cases being filed by 46 U. S. states, individual sick smokers, and even class action lawsuits. If the case with the U.

S. Justice Department was settled, it would prohibit punitive damages for all future legal claims against the tobacco industry, set an annual cap on the amount of compensatory damages allowable in all future legal cases against the industry, prohibit class-action lawsuits, third-party payer suits, and claims against industry attorneys, and legislatively settle all present and future claims of potential plaintiffs, including generations of future tobacco victims not yet born (Siegel, 15). Each of these rulings involves some ethical implications. By prohibiting punitive damages and putting a cap on the amount of compensatory damages, the Justice Department is addressing the fact that the tobacco manufacturers are not doing anything wrong in production of their products, but it allows for people to collect compensatory damages up to a certain limit when serious illnesses occur. When considering the ethical implications of smoking, one must look at everyone involved in the issue. Certainly, the consequences of tobacco use directly affect the user, who suffers the harm resulting from a conscious choice of using the substance.

Just as significantly, passive inhalation has contributed to the declining health of non-users, who are exposed to this product (Otapski, 1). In 1993, the U. S. Environmental Protection Agency declared that secondhand smoke is a human carcinogen. They estimate that about 3, 000 nonsmoking adults die of lung cancer each year as a result of breathing the smoke of others' cigarettes. Government regulations relating to smoking in public buildings were rare prior to the 1970 's.

Most of the regulations that were in effect were intended to promote safety through fire prevention. The number of regulations relating to second- hand smoke in public buildings has grown tremendously. These statutes, generally known as "clean indoor air laws, " extended public safety concerns by limiting the nonsmoker's exposure to tobacco smoke in public establishments and private work places (Otapski, 2). Smokers and nonsmokers have conflicting interests in exercising their respective liberty in shared facilities. To completely ban cigarette smoking would be unjust to smokers; yet allowing people to use tobacco products in public buildings, even if it is segregated, infringes on the non-user's rights.

This is the ethical problem that concerns individual rights. Since the effects of secondhand smoke were discovered, most public places have banned cigarette smoking while others have divided the seating up into smoking and non's...


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Research essay sample on Compensatory Damages Ethical Implications

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