Federal Judiciary

Sweeping tobacco ruling headed for Court?

By Akin Gump Supreme Court Practice Group

In a wide-ranging ruling that bristles with issues likely to be tested in the Supreme Court, the D.C. Circuit Court on Friday ruled that the tobacco industry engaged in a half-century-long campaign to deceive Americans about the health hazards of smoking.  The three-judge panel upheld major parts of a District Court’s sweeping order barring any such conduct in the future, and requiring the industry to issue a series of public statements to correct the messages it had put out denying that smoking is addictive and denying that it was hazardous to health. For example, the industry is required to stop using such words as “light” or “low tar” to indicate that such cigarettes are less risky to health.

The Circuit Court, however, refused to add to the remedies any requirement for nationwide campaigns to urge people to stop smoking, to educate the public about the harms from smoking, to persuade youths to reduce smoking, and to offset the marketing tactics that had promoted smoking in the past.  Once again, as it had in a prior ruling four years ago, the Circuit Court refused to order the tobacco companies to forfeit the profits from the alleged half-century of deceptive marketing – some $280 billion, by the government’s estimate.  Its 2005 denial of that remedy is “the law of the case,” the panel ruled.  (The Supreme Court refused to hear that earlier decision on Oct. 17, 2005; see this post.  It is unclear whether the issue of surrendering profits could be raised anew in a Supreme Court petition in the wake of the new Circuit Court ruling.)

The panel also declined a plea by the federal government for a court-appointed “monitor” to investigate the tobacco companies, and to order their restructuring.

The Circuit Court’s ruling in U.S. v. Philip Morris USA, et al. (Circuit docket 06-5267) can be downloaded here.  The opinion was unsigned; it was issued “Per Curiam,” indicating that it was written jointly by the three Circuit Judges on the panel: Chief Judge David B. Sentelle and Judges Janice Rogers Brown and David S. Tatel.

The long-running lawsuit, begun by the federal government in 1999, was based on the RICO law — the Racketeer Influenced and Corrupt Organizations Act of 1970.  The Justice Department sued 11 tobacco companies, and two industry organizations.  After the case entered a separate phase on remedies, it was joined by a group of anti-smoking advocacy organizations.

A key facet of the Circuit Court decision was that the RICO law applies to a group of corporations that act together in an “association-in-fact enterprise” to carry on illegal acts. The panel rejected the industry argument that only a group of individuals, not several corporations, can be such an enterprise.   (In the Supreme Court’s current Term, it is weighing a somewhat related issue on how to define such an enterprise, in the case of Boyle v. U.S. [07-1309], argued on Jan. 14 and now awaiting a decision.)

Full post as published by SCOTUSBLOG on May 22, 2009 (boomark / email).