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  • Writer's pictureKirk Hartley

Tobacco Industry Creates Law Firm Change for Shook, Hardy and Hughes, Hubbard

Tobacco industry defense is the driving force behind 25 or so lawyers exiting Shook, Hardy to join Hughes Hubbard. The Kansas City office of Shook Hardy is famous as the long time home for the national strategy for tobacco defense and defense of Phillip Morris. But today, Lorillard and Phillip Morris seek to have separate counsel, so lawyers are leaving Shook’s Kansas City office to work for Hughes Hubbard in a new Kansas City office it is creating to serve Lorillard. AmLaw Daily has the story here. Excerpts follow on the tobacco litigation industry aspects of the moves:

"The Kansas City office opening is largely a product of the shifting regulatory landscape confronting Big Tobacco.

With the Food and Drug Administration turning up the heat on tobacco makers in recent years, industry rivals are increasingly at odds over how far regulators should go, says Stephen Sugarman, a professor at the University of California, Berkeley School of Law who has written extensively on tobacco litigation and regulation.

Philip Morris, Sugarman says, has generally been more supportive of stricter regulations, in part because its dominance within the industry—in 2010, the company controlled nearly half the domestic retail market for cigarette sales—makes it more immune to those regulations. Bans on certain types of advertising, for example, would have less impact on a nationally recognized brand such as Philip Morris’s Marlboro than on lesser known brands trying to elbow their way into the market, Sugarman says.

Until the 1990s, the industry presented more of a united front, says Sugarman. That unity began to crumble with the landmark $200 billion Tobacco Master Settlement Agreement in 1998, in part because the settlement stipulated that several industry groups disband, he says.

That tobacco industry rivals are following divergent paths is no different than what has happened in other industries, according to Murphy, who adds that Hughes Hubbard was the only firm in the running to take over Shook’s Lorillard team.

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