Department of Justice Requests $14B in Remedies in Lawsuit Against Tobacco Companies
In a filing late Monday, Department of Justice lawyers asked a federal judge to order the tobacco industry to pay $10 billion to fund smoking-cessation programs, spend $4 billion to launch an education campaign about the dangers of smoking and be subject to financial penalties if youth smoking rates are not reduced by nearly half in the next 10 years, the Washington Post reports. The requests were made in DOJ's 60-page final judgment proposal to U.S. District Judge Gladys Kessler, who is presiding over the federal government's civil racketeering lawsuit against several U.S. tobacco companies (Leonnig, Washington Post, 6/29).
During closing arguments of DOJ's lawsuit earlier this month, a department attorney said that the government is asking for $10 billion to fund a five-year smoking-cessation program, rather than an anticipated $130 billion over 25 years. News reports have said that senior political appointees at DOJ pressured lawyers to reduce penalties and soften the testimony of government witnesses.
At the request of 50 Democratic lawmakers, DOJ's Professional Responsibility Advisory Office has launched an investigation to determine whether there was political interference in the case. A group of senators also has requested that Attorney General Alberto Gonzales remove Associate Attorney General Robert McCallum from involvement in the case.
McCallum allegedly instructed career government lawyers to reduce their recommended penalties. McCallum, who formerly was an attorney for a law firm that represented R.J. Reynolds, said the reduction was necessary in order to comply with an earlier appeals court ruling (California Healthline, 6/21).
The final judgment proposed by DOJ provides details on the restrictions and requirements the federal government would like Kessler to impose on cigarette makers if she finds them guilty of violating civil fraud and racketeering laws, the Los Angeles Times reports (Levin, Los Angeles Times, 6/29).
Under the proposal, the tobacco companies would be required to contribute $10 billion over five years to smoking-cessation programs. In addition, they would have to provide an additional $4 billion over 10 years for public-education campaigns related to youth-smoking prevention and the health risks of "light" cigarettes and secondhand smoke. The campaigns would be run by the American Legacy Foundation, which was created as part of the 1998 national tobacco settlement (O'Connell, Wall Street Journal, 6/29).
In addition, DOJ's proposed remedies would:
- Require companies to take out full-page newspaper ads featuring the words "SMOKING KILLS" in capital letters, also saying that secondhand smoke causes lung cancer and heart disease and that nicotine is as addictive as crack cocaine;
- Require a 6% annual reduction in smoking rates among people ages 12 to 20 for seven years, with each company fined $3,000 per youth smoker above the targets (Los Angeles Times, 6/29);
- Require companies to stop using terms such as "light" or "mild" to describe products;
- Cease sales of flavored cigarettes;
- Stop offering discounts on the top five brands smoked by youths (Roxe, AP/Philadelphia Inquirer, 6/29);
- Impose new rules on advertising at retail outlets;
- Require that every pack of cigarettes include an insert explaining the health consequences of smoking;
- Require companies to make available on their Web sites all company documents related to smoking, health, marketing and addiction; and
- Create a monitoring system to ensure the companies comply with the provisions of the proposal, including court-appointed investigations and hearing officers. The officers would have "sweeping powers" to attend board meetings and remove officials who violate the court's final order, according to the New York Times.
Tobacco industry lawyers "quickly dismissed" DOJ's requests as "inconsistent" with an appeals court ruling in February that found that the government cannot seek $280 billion in past profits from the tobacco companies, the New York Times reports. The ruling said DOJ must seek only forward-looking sanctions as a way to prevent future misconduct by the tobacco industry (Janofsky, New York Times, 6/29).
Dan Webb, a lawyer for Philip Morris' parent company Altria Group, said the company will "very quickly" file a "major motion" to dismiss DOJ's request (Wall Street Journal, 6/29). Webb said, "The remedies are so legally defective as to the matter of the law, we're entitled to a judgment right now." He added, "This will give [Kessler] an opportunity to end the case."
Tobacco industry lawyers also said that the restrictions requested by DOJ already were imposed on tobacco companies by the 1998 settlement. Charles Miller, a spokesperson for DOJ, said that government lawyers would not comment on the request (New York Times, 6/29).
William Corr, executive director of the Campaign for Tobacco-Free Kids, said DOJ's proposal "fails to reverse the government's capitulation" on its planned $130 billion request and does not provide adequate funding for education efforts. However, he added that remedies do "includ[e] many proposals that if fully and effectively implemented could prevent future industry wrongdoing and significantly reduce the death toll from tobacco in our country" (Washington Post, 6/29).
Sen. Edward Kennedy (D-Mass.) said the monetary request was "profoundly disappointing," also calling it a "serious breach of the Justice Department's responsibility to the American people and an abuse of power on behalf of the tobacco companies" (New York Times, 6/29). He added that the proposed remedy represented "a political decision to cave in to Big Tobacco at the expense of the American people" (AP/Philadelphia Inquirer, 6/29).
ALF CEO Cheryl Healton said she was "shocked" that DOJ included a funding request for the foundation in its proposed remedies. She added that she remains disappointed that DOJ reduced its request for funding for smoking-cessation programs (Wall Street Journal, 6/29).
Vermont Attorney General William Sorrell (D), incoming chair of ALF, said he was pleased that DOJ recognized "the merit of our programs." He added that the 1998 settlement "was a beginning. If the industry wants to say it was the end and the solution to all the issues, ... we have a rather marked disagreement" (AP/Philadelphia Inquirer, 6/29).
Lloyd Johnston, principal investigator for the University of Michigan's Monitoring the Future study, said DOJ's proposal to require the tobacco companies to reduce youth smoking rates by 6% annually is "doable" because the target rate approximately equals the reduction in teen smoking rates over the past eight years. However, he added that because the teen smoking rate already has dropped substantially, "it would take a concerted effort to continue the trend."
According to the Journal, if Kessler agrees to DOJ's proposed remedies, the money "would serve as a lifeline" for ALF.
The foundation's "Truth" advertising campaign, which seeks to highlight the risks of smoking for youth, is scheduled to run out of funding soon because of a sunset clause related to tobacco company contributions in the 1998 settlement. According to the Journal, tobacco executives "are reluctant to continue funding [ALF] ads beyond what they are required to do under the master settlement," in part because they have no control over the content of the ads.
Peggy Roberts, a spokesperson for Philip Morris, said, "We share the same goal with Legacy -- reducing youth smoking -- but in the past we often haven't agreed with the way Legacy goes about it."
Lawyers for the tobacco companies said that anti-smoking advocates have overstated the effectiveness of ALF's education campaign, and Kessler "at least once expressed doubt about whether the evidence submitted in court supports" the advocates' claims of effectiveness, the Journal reports. Kessler is not expected to rule on the case until fall.
Meanwhile, the two sides could agree to settle, and it is unclear whether the tobacco companies would agree to "set aside money" for ALF, the Journal reports (Wall Street Journal, 6/29).
Reuters reported on Tuesday that DOJ lawyers are reviewing a draft petition to the Supreme Court to overturn the appeals court's decision regarding the government's efforts to force the tobacco companies to disgorge past profits. DOJ officials must file an appeal by July 18. They have declined to discuss their efforts (Los Angeles Times, 6/29).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.