Department of Justice, Tobacco Companies Meet With Mediator To Discuss Potential Settlement of Lawsuit
Attorneys for the Department of Justice and several large tobacco companies have "met secretly" with a court-appointed mediator in an effort to settle a DOJ civil racketeering lawsuit against the companies -- a "striking turn" at a time when the two sides "are feeling new pressure to resolve the case," the Wall Street Journal reports (Wilke/O'Connell, Wall Street Journal, 3/22).
The lawsuit, filed in 1999, alleges that Brown & Williamson, Philip Morris USA, R.J. Reynolds, Lorillard Tobacco and the Liggett Group misled consumers about the health risks of smoking and directed multibillion-dollar promotional campaigns at children in violation of the civil Racketeer Influenced and Corrupt Organization Act. The lawsuit had sought $280 billion in damages in past profits.
However, an appeals court panel last month ruled that DOJ could not claim profit disgorgements and could only seek penalties that would prevent or restrain future violations. According to a brief sent to U.S. District Judge Gladys Kessler, who has overseen the lawsuit, DOJ currently seeks to require the tobacco companies "to fund sustained smoking-cessation programs that have been scientifically proven effective" (California Healthline, 3/8).
DOJ attorneys also have said that they could seek the removal of tobacco company officials.
According to the Journal, Kessler after the appeals court decision "privately urged both sides to forge a settlement," and the two sides have met "at least once" with Eric Green, a Boston University professor who mediated the settlement in the DOJ antitrust lawsuit against Microsoft in 2002.
Although Kessler previously has issued decisions in favor of DOJ, she said that the appeals court panel decision "struck a body blow to the government's case." DOJ has asked the full appeals court to rehear the issue, but "legal experts say it is unlikely to be successful," the Journal reports.
"It couldn't be determined whether progress was made" in the meeting with Green, but the two sides "are expected to meet again," according to unnamed individuals close to the DOJ lawsuit, the Journal reports.
According to the Journal, the two sides have "new incentives to settle." President Bush might have some concerns about the DOJ lawsuit, and the White House "may now be looking for a way to end the case" against tobacco companies that are "major contributors to the Republican Party," the Journal reports.
In addition, lawmakers last week introduced legislation that would provide FDA with authority to regulate tobacco products. A potential settlement of the lawsuit likely would include similar provisions as the legislation, which would allow FDA to regulate tobacco product labels, the design of tobacco products and the sale of candy and fruit-flavored cigarettes.
DOJ, the tobacco companies and Green declined to comment on a potential settlement of the lawsuit.
William Ohlemeyer, associate general counsel for Philip Morris USA, said that the allegations in the lawsuit are "wrong on the law ... and a mediocre substitute for regulation." Although Ohlemeyer did not directly comment on a potential settlement of the lawsuit, he said that "if someone put a reasonable alternative in front of us, then we'd work hard to find common ground."
Vince Willmore, a spokesperson for the Campaign for Tobacco-Free Kids, said that DOJ should continue the lawsuit because the case "still has the potential to put in place far-reaching measures to reduce tobacco use." Willmore added, "The best way to achieve strong public-health remedies is by pursuing the case" (Wall Street Journal, 3/22).