Tobacco Trial Underway

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COURT REPORTER

Tobacco Trial Underway [by Lisa Ridgely] The fate of a landmark federal lawsuit may hinge on how an appeals court interprets a racketeering statute that the government wants to use to prosecute the tobacco industry.

Oral arguments in an appeal to the country’s

Tobacco Co., British American Tobacco Ltd.,

done nothing wrong in the past but certainly

largest ever civil racketeering lawsuit, in

Brown and Williamson Tobacco Corp., Liggett

when you look at the 1998 Master Settlement

which the federal government is seeking

Group, Inc., and Lorillard Tobacco Co.--ar-

Agreement, there is a changed industry out

$280 billion from the tobacco industry, began

gued in the appeal that the RICO law does

there.”

Wednesday in Washington, DC.

not include monetary relief as an available remedy.

The lawsuit, filed in 1999, claims the nation’s

But antismoking activists want to see the industry held accountable.

tobacco companies violated civil provisions of

The bench trial began Sept. 21, with U.S.

the federal Racketeer Influenced and Corrupt

District Judge Gladys Kessler presiding,

If tobacco companies didn’t directly conspire

Organizations Act, known as RICO, enacted in

and could, after the examination of millions

with each other, “they definitely conspired

1970 as part of the Organized Crime Control

of documents and hundreds of exhibits and

within their own companies” to defraud the

Act. The first two counts of the government’s

witnesses, last more than half a year if the

public, said Chris Bostic, general counsel

complaint sought money for federal health-

appeal is not granted.

for the antismoking organization Action on

care costs related to smoking and were

Smoking and Health.

rejected; the third and fourth counts deal

Department of Justice Civil Division spokes-

with alleged RICO violations.

man Charles Miller said Wednesday that the

“Since the Master Settlement Agreement, the

suit is of particular significance in that “it is

tobacco industry has done a masterful job

The civil complaint alleges tobacco compa-

taking on one of the largest industries in the

of trying to change their image from being a

nies have denied that smoking cigarettes

United States and, for that matter, the world,

renegade industry to being a good public citi-

causes disease and that cigarettes are

and the size of the monies we’re asking for

zen, and it seems to be all flash. They haven’t

addictive, used marketing techniques to

(and) the fact that this is an industry that

actually done anything to reduce smoking or

make their products attractive to children,

has made a profit that has been injurious to

to reduce teen smoking but they want to be

and conspired to market cigarettes consum-

health.”

seen as responsible,” so the negative public-

ers believed were less hazardous when in

ity brought by a loss or settlement would be

fact they were not. With the shared goal of

A spokesman for Altria Corporate Services

maximized profits, the complaint states,

said the government is facing an uphill

the defendants organized and conspired to

battle in trying to prove that the industry is

The suit will move forward and ultimately be

deceive consumers for 50 years--the effects

conspiring to defraud now and in the future-

decided upon the facts unearthed in tens of

of which continue in the present. Without re-

-especially after the 1998 Master Settlement

millions of internal tobacco-industry docu-

straint, the government argues, “defendants

Agreement, in which the industry agreed to

ments, he said.

are likely to continue their unlawful activities

reformed marketing practices and pay-

into the future.”

ments to 46 states of almost $250 billion for

“The devil’s probably going to be in the de-

tobacco-related healthcare costs.

tails, and they’re going to have to show that there was collusion between the companies

The government seeks “equitable relief, including the disgorgement of defendants’

“It’s going to be very difficult for the govern-

ill-gotten gains.”

ment because this is a changed industry,”

PAGE 1

to defraud the public this way.”

said John Sorrells, an ACS director.

G. Robert Blakey, University of Notre Dame

“I guess the bottom line is, we feel like we’ve

tion, stated Wednesday in an email that it

law professor and author of RICO legisla-

The defendants--Philip Morris USA Inc. and its parent Altria Group Inc., R.J. Reynolds

a good thing, Mr. Bostic said.

continued on back

COURT REPORTER

is appropriate to charge the industry with racketeering.

“The facts fit the statute. The industry morphed into a front for drugs (nicotine, which is akin to heroin and cocaine) dealers.

Cigarettes sold to kids, as they are, are not legal products: they are addictive and lethal,” Mr. Blakey wrote.

According to the Centers for Disease Control and Prevention, 22.5 percent of American adults are smokers, and smoking causes an estimated 440,000 deaths annually.

“It’s the leading preventable cause of death in the United States,” said Joel London, press officer for the CDC Office on Smoking and Health.

Comprehensive tobacco-control programs need sustained funding to work, he said; with the help of such programs and youth media campaigns, smoking among high school students has been on the decline since 1997.

“If we don’t see sustained efforts, then we’re concerned that there may be continued slowing in the decline or even a reversal in smoking trends among youth,” he said.

Though $280 billion seems like a huge amount of money, Mr. Bostic said, “it’s been estimated that between direct medical costs and loss of productivity, that tobacco use in this country costs around $130 billion a year, so what they’re asking for is only a little over two years’ worth of damage being done.”

Though the first two counts against the tobacco industry were dismissed, Judge Kessler has denied all 10 summary judgment motions filed for by the defense while granting several summary judgment motions wholly or in part for the plaintiff.

In July, Judge Kessler fined Philip Morris USA $2.75 million for deleting emails that may have been found relevant to the case.

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