The Recent Trend in "Collective Contracts"

I'm not a lawyer, but I am interested in the various ramifications--and the
constitutionality--of recent "sweeping contracts" between vendors,
lawmakers, consumers, etc.

Two recent example:

1. The "tobacco agreement." Supposedly a deal involving the transfer of
$360 billion from some number of tobacco companies in exchange for dropping
of liability suits, immunity from future claims, voluntary restrictions (!)
on advertising, etc. (And the "etc." is especially complicated in this huge
case.)

2. The "voluntary ratings" agreement being announced today by Al Gore and
some of the television networks. (Earlier "voluntary agreements" were
implemented, but, according to supporters of censorship, "failed." Hence
the new push for newer voluntary restrictions.)

The issue, it seems to me, is that ordinary concepts of illegality and
civil liability are being swept aside in favor of these huge "deals" to
reduce liability in exchange for various actions. Well, who is bound by
these deals?

If "Tim's Tobacco Company" starts up next year, after this deal is
"signed," is his company bound by this deal? If Tim the Smoker develops
lung cancer, is he blocked from suing?

(Caveat: My personal and libertarian view is that lawsuits against
cigarette companies are wrong and should not be supported in a free
society. And lawsuits by various states to "recover health care costs" are
especially bogus. By this logic, McDonald's could be sued by California
because California paid out more health care benefits to meat-eaters than
it did to vegetarians. Utterly bogus.)

Anyway, the free speech aspects of these deals are also worrisome. The
"voluntary restrictions" on advertising, for example. Would the
aforementioned "Tim's Tobacco Company," not a party to this Grand Deal, be
somehow bound by a deal wherein it could not sponsor sporting events? Or
advertise? Or even speak out against the deal?

Imagine the implications for cryptography, using the logic of these kinds
of deals:

"The voluntary agreement reached between the cryptography industry and
Washington calls for companies to voluntarily limit key sizes to 64 bits
unless a key recovery scheme is used. And Washington agrees to drop RICO
charges against PGP Inc. and RSA Data Security Inc. in return. Book
publishers, who became part of the negotiations last summer, have agreed to
limit the information published in books in exchange for relaxations on the
export requirements for computer media. "

Far fetched? Perhaps. But note the similarities to these other "collective
contracts."

And in many ways the Telephony Act, aka CALEA (Communications Act for Law
Enforcement Access), was just such a deal. When the various telecom
companies essentially said "we can live with this bill," they were tacitly
committing themselves to just such a collective contract. (What happens
when a new telecom company starts up and finds that it has been "bound" to
provide wiretap points into its switches?)

It seems to me that these contracts are going to collapse completely when
the Supreme Court points out that they bind nonparticipants to terms which
limit their constitutionally protected rights. (Quibblers can claim that
"corporations have no constitutional rights," but the publishing companies
which publish newspapers would take exception to this. And so on. There are
many cases where corporations are enjoying the fruits of the Constitution.
As it should be.)

These huge mega-deals are a crummy way to interpret the U.S. Constitution.
I fear the "Grand Compromise" deal that the telecom and crypto companies
are being drawn into.

--Tim May

There's something wrong when I'm a felon under an increasing number of laws.
Only one response to the key grabbers is warranted: "Death to Tyrants!"
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^1398269     | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."

On Thu, 10 Jul 1997, Tim May wrote:

> 1. The "tobacco agreement." Supposedly a deal involving the transfer of
> 2. The "voluntary ratings" agreement being announced today by Al Gore and
> 
> The issue, it seems to me, is that ordinary concepts of illegality and
> civil liability are being swept aside in favor of these huge "deals" to
> reduce liability in exchange for various actions. Well, who is bound by
> these deals?

I think that in the first case it is a "template" for legislative action,
so that if congress passes it, it binds the states and the companies.
Otherwise you have the lawyers and lobbyists for both sides getting all
the money.

The second case is more of an industry standards type argument - If Gore
was not there, then instead of one network saying "moderately nasty
language" and a second flashing L3 on the screen, everone will use the
same method, something like the SAE standardizes on tool sizes.
Politicians gather around because it makes it look like they are doing
something useful.

> (Caveat: My personal and libertarian view is that lawsuits against
> cigarette companies are wrong and should not be supported in a free
> society. And lawsuits by various states to "recover health care costs" are
> especially bogus. By this logic, McDonald's could be sued by California
> because California paid out more health care benefits to meat-eaters than
> it did to vegetarians. Utterly bogus.)

I think people have the right to sue, but no tobacco company can be found
guilty of witholding information (the warning on the cigarette pack was by
statute adequate notice - in the same law that required the notices).

One of the problems is that such agreements specifically limit my right to
use the courts to address torts - which should be for the court to decide
the validity.  Our legal system needs other reforms (e.g. loser pays), but
eliminating all civil courts isn't the way to correct it.

If states don't like paying medicaid and medicare to smokers, they are
free to pass laws (or have congress pass laws) denying public health care
to anyone who has smoked in the last X years.  Add drug and/or alcohol use
and our welfare rolls would nearly disappear.  I don't think anyone has
any more right to smoke and collect welfare than drink and drive.  (I go
further, but this is a proper subset of my views).

> Anyway, the free speech aspects of these deals are also worrisome. The
> "voluntary restrictions" on advertising, for example. Would the
> aforementioned "Tim's Tobacco Company," not a party to this Grand Deal, be
> somehow bound by a deal wherein it could not sponsor sporting events? Or
> advertise? Or even speak out against the deal?

As when the banks encourage you to "Buy Savings Bonds"?  Tim May could
probably say whatever he wanted in any place they would accept the ad, but
commercial speech seems to be more limited.  It would depend if the
contract was passed as a bill.

> These huge mega-deals are a crummy way to interpret the U.S. Constitution.
> I fear the "Grand Compromise" deal that the telecom and crypto companies
> are being drawn into.

The problem is they are bills masquerading as contracts.  The industry
assumes that congress will do the wrong thing if they don't act to get
something first.  Normally congress doesn't revisit an issue after
something is done and everyone forgets about it, and no one ever reads the
fine print.

The larger question is whether I, as a US Citizen, can write and publish a
program under the first ammendment, and could US Citizens use such a
program, if there were any crypto agreement in place or law passed
covering programs sold by US companies.  I don't think code-as-speech is
as threatened as code-as-product.  At least not yet.

--- reply to tzeruch - at - ceddec - dot - com ---

At 9:29 AM -0700 7/10/97, Tim May wrote:
>(Caveat: My personal and libertarian view is that lawsuits against
>cigarette companies are wrong and should not be supported in a free
>society. And lawsuits by various states to "recover health care costs" are
>especially bogus. By this logic, McDonald's could be sued by California
>because California paid out more health care benefits to meat-eaters than
>it did to vegetarians. Utterly bogus.)

It is especially bogus since it is not clear that the government isn't a
net winner between reduced social security and pension payments, and the
extra income from tobacco taxes.


-------------------------------------------------------------------------
Bill Frantz       | The Internet was designed  | Periwinkle -- Consulting
(408)356-8506     | to protect the free world  | 16345 Englewood Ave.
frantz@netcom.com | from hostile governments.  | Los Gatos, CA 95032, USA

At 11:20 PM -0700 7/10/97, Bill Frantz wrote:
>At 9:29 AM -0700 7/10/97, Tim May wrote:
>>(Caveat: My personal and libertarian view is that lawsuits against
>>cigarette companies are wrong and should not be supported in a free
>>society. And lawsuits by various states to "recover health care costs" are
>>especially bogus. By this logic, McDonald's could be sued by California
>>because California paid out more health care benefits to meat-eaters than
>>it did to vegetarians. Utterly bogus.)
>
>It is especially bogus since it is not clear that the government isn't a
>net winner between reduced social security and pension payments, and the
>extra income from tobacco taxes.

And of course the government has been subsidizing tobacco growing for the
last half century (at least).

Even non-libertarians see the absurdity in all this.

(But these same friends and family will cheerfully admit that "there ought
to be a law" banning tobacco. Especially some of those who smoke...they
want the government to pass a law, wave a magic wand, and cure their
smoking habit.)

The only consistent, reasonable, just solution is basically the libertarian
one (note that I am not using the word Libertarian). Namely:

Individual responsibility, free choice, a drastically reduced set of laws,
and end to all subsidies of any and all products, reduced tariffs, and an
end to social engineering through tax and tariff policies and
incentives/disincentives to businesses.


There's something wrong when I'm a felon under an increasing number of laws.
Only one response to the key grabbers is warranted: "Death to Tyrants!"
---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May              | Crypto Anarchy: encryption, digital money,
tcmay@got.net  408-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA  | knowledge, reputations, information markets,
Higher Power: 2^1398269     | black markets, collapse of governments.
"National borders aren't even speed bumps on the information superhighway."

Tim May <tcmay@got.net> writes:
> Individual responsibility, free choice, a drastically reduced set of laws,
> and end to all subsidies of any and all products, reduced tariffs, and an
> end to social engineering through tax and tariff policies and
> incentives/disincentives to businesses.

Freedom to act stupid.

Freedom of religion is the freedom to give one's money to crooks, many
of whom don't believe the nonsense they preach.

---

Dr.Dimitri Vulis KOTM
Brighton Beach Boardwalk BBS, Forest Hills, N.Y.: +1-718-261-2013, 14.4Kbps

On Fri, 11 Jul 1997, Dr.Dimitri Vulis KOTM wrote:

> Tim May <tcmay@got.net> writes:
> > Individual responsibility, free choice, a drastically reduced set of laws,
> > and end to all subsidies of any and all products, reduced tariffs, and an
> > end to social engineering through tax and tariff policies and
> > incentives/disincentives to businesses.
> 
> Freedom to act stupid.
> 
> Freedom of religion is the freedom to give one's money to crooks, many
> of whom don't believe the nonsense they preach.
> 

Yes, Dimitri.  Freedom is also the freedom to act "stupid".  Since
"acting stupid" is a subjective evaluation it implies that one is
allowed to make subjective, individual decisions.   This is as
opposed to having a central authority decide what is and isn't 
stupid -- telling us how to lead more efficient, carefully planned
lives.

Freedom is not necessarily efficient, but it beats the hell out of
whatever comes next.

"Sometimes it is said that man cannot be trusted with the government of
himself. Can he, then, be trusted with the government of others? Or have
we found angels in the form of kings to govern him? Let history answer
this question." --Thomas Jefferson: 1st Inaugural, 1801. 

'Nuf said...

Jim Burnes

-----BEGIN PGP SIGNED MESSAGE-----

At 09:29 AM 7/10/97 -0700, Tim May wrote:
>
>1. The "tobacco agreement." Supposedly a deal involving the transfer of
>$360 billion from some number of tobacco companies in exchange for dropping
>of liability suits, immunity from future claims, voluntary restrictions (!)
>on advertising, etc. (And the "etc." is especially complicated in this huge
>case.)

Note that the tobacco agreement was announced the same day as the NYT Net 
Threat story about how a drug culture is thriving unopposed on the Net.  The 
coincidence of these two events suggests what will happen to the Tobacco 
Settlement whether or not it is formally approved.

Just as third party political advertising defeated campaign regulations, I 
expect third party "advertizing" for controversial substances to defeat 
"voluntary" ad bans.

There are already plenty of cigarette sites on the Net and even though "Big 
Tobacco" may try and use copyright law to restrict pro cigarette third party 
"advertizing", those attempts will not succeed very well.  Boutique tobacco 
brands drop shipped from Mexico can play a part as well.  "Death's Head" 
cigarettes are supposed to be selling pretty well in the UK.  Cigarettes and 
cigars are all throughout pop culture these days (Julia Roberts looked good 
chain smoking in "My Best Friend's Wedding") and the authorities don't have 
much of an argument that will be successful against "cool" cigarettes.  The 
more they warn about cigarettes killing you, the cooler they'll seem.  Poor 
Gen X, Y, and Zers lack much of substance to revolt against these days so the 
Health Nazis are supplying a valuable authority figure to serve as the object 
of such a revolt.  

Heroic Mohawk (and other) cigarette smugglers smashed the high Canadian 
tobacco taxes a few years ago.  In a market in which everything is a boutique 
good and anyone with a little cash can put together a whole purchasing, 
production, and distribution chain overnight without actually hiring anyone, 
ordinary entrepreneurs will be able to supply the demand for cigarettes even 
while the Health Nazis think they've accomplished something by gelding "Big 
Tobacco."  They haven't noticed that size doesn't matter much in efficient 
markets. 

DCF

-----BEGIN PGP SIGNATURE-----
Version: PGP for Personal Privacy 5.0
Charset: noconv

iQCVAwUBM8ZCcoVO4r4sgSPhAQEd/wQA1mVFiguhpnRHnZ/uoBaMcmZKkvbfPgGH
7ryg4UGdxi6ExAxitcrO5nuUVWF0sbOmI0Z1KqlmavHuQMZ5LT+P+/eRCEgZ3m3J
EwxB7kwXGlWKAqZjDyUZifxFrSPeBLs20mtFcragNIVHIV5TMR39zzxqRqBeVQDX
okEkq4AWjoU=
=qlBI
-----END PGP SIGNATURE-----