Final Defense Witness in Tobacco Case Calls DOJ’s Proposed Remedies Flawed
A "simple court injunction" would be more effective in restraining tobacco companies' actions than remedies proposed by four government witnesses, Dennis Carlton, a University of Chicago professor and industrial economics consultant, testified on Wednesday in the Department of Justice racketeering lawsuit against several large U.S. tobacco companies, the New York Times reports (Janofsky, New York Times, 6/3). The lawsuit 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.
DOJ made the allegations as part of a larger federal lawsuit first filed by the Clinton administration in 1999 that accuses the tobacco industry of conspiring to mislead consumers about the dangers of smoking. The trial, which has moved into the final stage, involves witness testimony on potential remedies. DOJ attorneys in February announced a strategy under which the department will seek to require the tobacco companies "to fund sustained smoking-cessation programs that have been scientifically proven effective."
In addition, DOJ will seek to require the tobacco companies to fund a public education campaign on the health risks of smoking and second-hand smoke and programs to discourage teenagers from smoking. DOJ also will seek to require the tobacco companies to pay fines in the event that youth smoking rates do not decrease at an adequate rate. U.S. District Judge Gladys Kessler, who has overseen the lawsuit, might apply the remedies if she rules in favor of DOJ (California Healthline, 5/12).
Carlton, the defense's last witness, said he believes the remedies suggested by government witnesses are flawed because they do not address specific misconduct by the companies and do not show how misconduct could be prevented or address "potentially adverse effects" a remedy could have on competition. However, Carlton acknowledged under questioning by DOJ attorney Renee Brooker that he had limited knowledge of a number of peer-reviewed studies that favored some of the government proposals.
Carlton also said that if companies raise the prices of their most popular brands of cigarettes to offset the costs of the proposed remedies, the action might "have the perverse effect of actually increasing smoking," especially among youths. "If the price goes up as a result of a remedy, some youths are going to switch to discount cigarettes and, therefore, they could smoke more," Carlton said.
Kessler said she has scheduled closing arguments from both sides for Tuesday, Wednesday and Thursday, and each side will have six and a half hours for final remarks. Lawyers for both sides on Thursday said they will be prepared for summations next week.
DOJ lawyers informed Kessler they would know by Friday whether they will try to offer a short rebuttal, which might include additional witnesses, to Carlton's testimony. According to the Times, keeping Kessler's schedule for closing arguments "would not be possible" if more witnesses are allowed (New York Times, 6/3).