Supreme Court Refuses To Hear Appeal on Past Profits in DOJ Racketeering Case Against Tobacco Companies
The Supreme Court on Monday declined to hear a government appeal of a ruling that denied the Department of Justice's attempts to claim a $280 billion penalty from several large tobacco companies in its civil racketeering lawsuit, the Wall Street Journal reports (O'Connell/Bravin, Wall Street Journal, 10/18). DOJ in July requested the Supreme Court review of a February U.S. Court of Appeals ruling that the federal government cannot seek disgorgement of past profits from several large U.S. tobacco companies under federal racketeering laws. A three-judge panel of the appeals court ruled that DOJ could not claim $280 billion in past profits and only could seek penalties that would prevent or restrain future violations.
The appeals court in April voted to reject an appeal to reconsider the decision. The lawsuit, which was filed under the Clinton administration, alleges that Brown & Williamson, Philip Morris, 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 RICO (California Healthline, 7/19).
The nine-month trial ended in June, and U.S. District Judge Gladys Kessler is expected to rule whether the industry is liable by the end of 2005. Government lawyers now are seeking $14 billion in funding for public education campaigns and programs to help people quit smoking. In addition, DOJ wants the judge to appoint two monitors to oversee the tobacco companies and potentially make recommendations regarding the removal of employees or management (Wall Street Journal, 10/18). DOJ can renew the challenge seeking past profits after Kessler's final rulings, the Los Angeles Times reports.
U.S. Attorney General Alberto Gonzales said the decision was disappointing, adding, "We believe very strongly in this case. I'll have to sit down with our team of litigators and hear from them as to what is the appropriate next step."
William Ohlemeyer, associate general counsel for Altria Group, parent company of Philip Morris, said the Supreme Court "appropriately denied the government's petition" (Levin, Los Angeles Times, 10/18).