Judge Upholds Ruling in Justice Department Tobacco Case
U.S. District Court Judge Gladys Kessler last Friday denied an appeal filed last month by the Justice Department to "revive parts of its lawsuit" against the nation's major cigarette makers, "handing a victory" to Big Tobacco, the Bloomberg News/Richmond Times-Dispatch reports. In a pair of rulings, Kessler "reaffirmed" a ruling that she issued last September, rejecting part of the government's multi-billion dollar case against the tobacco companies. The DOJ lawsuit sought to recoup $20 billion in funds that the federal government spent to treat smokers through Medicare and other public health programs, a claim that Kessler has rejected (Bloomberg News/Richmond Times-Dispatch, 7/28). Although Kessler will allow the government to pursue a racketeering charge against the tobacco companies to recover billions of dollars in profits "allegedly earned through fraud," the future of the "slimmed-down case still remains uncertain." Attorney General John Ashcroft has assembled a team of lawyers to negotiate a settlement with the tobacco companies -- Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp., Lorillard Tobacco Co., British American Tobacco and the Liggett Group Inc. -- and Bush administration sources have said that "they are worried about the strength of the case." According to industry lawyers, settlement talks have "produced no results," and the two sides "are far apart." Philip Morris attorney William Ohlemeyer said that the racketeering charges have "no legal basis," adding that the company will "take further action at the appropriate time to have those claims also rejected." Justice Department spokesperson Susan Dryden had no comment on last Friday's ruling (Zuckerbrod, AP/Nando Times, 7/27).