DOJ Press Coverage

US Department of Justice v Philip Morris et al

The National Law Journal, September 16, 2010

“DOJ, Tobacco Lawyers Back in Court Over Injunction”

By Mike Scarcella.

Government lawyers and attorneys for a group of tobacco companies met Wednesday to discuss how to implement a sweeping injunction lodged against the industry in 2006 by a federal judge who found the companies conspired for decades to conceal the health risks of smoking.

The brief status hearing marked the first time in more than two years that the attorneys for both sides appeared in the U.S. District Court for the District of Columbia. The government’s case against the tobacco companies — including Philip Morris USA (whose parent company is Altria Group) and R.J. Reynolds Tobacco Co. — has been held up in appellate courts since the injunction was issued.

Lawyers for Altria and Philip Morris, including Gibson, Dunn & Crutcher partner Miguel Estrada, unsuccessfully petitioned the U.S. Supreme Court to review parts of the case, which the attorneys for Altria called “an unprecedented effort to use litigation to obtain regulatory authority” over the tobacco industry. The high court in June denied petitions for certiorari pushing the racketeering case back into the trial court. With the case back in the district court, the task for the lawyers for both sides is to work out the enforcement of the injunction. A May 2009 ruling by the D.C. Circuit — which the Supreme Court declined to review — provides the guidance.

The appeals court remanded the case to determine, among other things, whether any of the defendants’ subsidiaries should be included in the injunction. The appeals court also wants Kessler to take a second look at the “corrective” statements she ordered; those statements require the tobacco companies to disclose the adverse health effects of smoking. The D.C. Circuit said the rights of retailers – when it comes to court-ordered countertop displays and banners – must be taken into account.

A lawyer for Philip Morris and Altria Group, Beth Wilkinson, said Wednesday in court that attorneys for the tobacco companies will spend the next two months speaking with DOJ attorneys to narrow down the list of unresolved disputes stemming from the D.C. Circuit decision last year. One big issue, Wilkinson said, is determining where Food and Drug Administration jurisdiction begins and where Kessler’s authority ends.

We all have incentive to make that list as small and crisp as possible,” said Wilkinson, a Paul, Weiss, Rifkind, Wharton & Garrison partner in Washington. Wilkinson filed a notice of appearance Aug. 20.

DOJ attorney Ann Ravel, deputy assistant attorney general in the Civil Division, noted in court Wednesday that the tobacco companies have not paid the government’s costs in the litigation, which have run close to $2.4 million, interest included. In court, Kessler said that while 2 or 3 million dollars may not “save the budget,” every dollar helps.

Reuters, Wed June 1, 2011

WASHINGTON – A court overseeing an extended battle between the Justice Department and an array of tobacco companies declined on Wednesday to shut the case because tobacco is regulated under a new law. Judge Gladys Kessler, who had ruled in 2006 that Philip Morris and other tobacco companies were guilty of racketeering because of years of deception about tobacco’s safety, insisted on Wednesday that she retain jurisdiction over the case. The companies had argued that she had lost jurisdiction because of a 2009 law giving the Food and Drug Administration authority to regulate tobacco. The companies also argued that being regulated by the FDA would make it less likely they would commit future racketeering offenses.

Kessler staunchly and tartly disagreed, calling their assertions “simply unconvincing.”

“Defendants’ contention that no reasonable likelihood of future RICO violations exists due to the FDA’s regulation is particularly unconvincing when defendants are simultaneously and vigorously challenging, both in a separate lawsuit and in administrative proceedings, many of the provisions of the Tobacco Control Act,” she wrote in Wednesday’s ruling. The racketeering case, filed in 1999 by the Clinton administration, sought to force the industry to fund a smoking cessation program and other remedies. Under the Bush administration, the U.S. Justice Department dropped demands from $280 billion to $14 billion.

Kessler ruled in 2006 that the companies broke the law and could no longer use expressions such as “low tar” or “light” in their cigarette marketing. But she also said she could not force them to fund a smoking cessation program, and an appeals court agreed. The Obama administration appealed to the Supreme Court, which ruled in June that tobacco companies could not be forced to pay billions for stop-smoking programs.

We continue to believe that the FDA is the appropriate agency to regulate tobacco products and we’re considering our appellate options,” said Steve Callahan, spokesperson for Altria Group.

Defendants named in the original suit include Reynolds American’s R.J. Reynolds Tobacco Co, Lorillard Inc and Altria, which owns Philip Morris USA Inc. A representative of Lorillard declined to comment.

(Reporting by Diane Bartz; Editing by Tim Dobbyn).

June 6, 2014

WASHINGTON, DC – U.S. District Judge Gladys Kessler on Monday issued a final order detailing how major U.S. cigarette manufacturers must publish “corrective statements” and finally tell the American people the truth about their deadly and addictive products. Judge Kessler first ordered the corrective statements in 2006 when she found the cigarette companies guilty of violating civil racketeering laws and lying to the public about the dangers of smoking and their marketing to children.

Judge Kessler’s latest order is a critical step toward finally holding the tobacco companies accountable and ending decades of deception that has resulted in the addiction, illness and death of millions.

It has been 15 years since the U.S. Department of Justice first filed this lawsuit and eight years since Judge Kessler issued her verdict. While Judge Kessler’s latest order is an important step forward, it is not the end of this long legal battle. The tobacco companies have filed time-consuming appeals at every stage of this lawsuit and indicated they will appeal the specific language of the corrective statements ordered by Judge Kessler. We urge them to end their delay tactics and finally tell the truth to the American people.

The U.S. Court of Appeals for the DC Circuit has rejected two previous industry appeals of Judge Kessler’s landmark 2006 decision, and it is our hope the appellate court would do so again. Judge Kessler’s latest order ensures that when all potential appeals are exhausted, the corrective statements will be ready to run without further delay.

To prevent the industry’s deception from continuing, Judge Kessler ordered the companies to make corrective statements through television and newspaper advertising, on the companies’ web sites and on cigarette packaging. In a November 2012 order specifying the language of the corrective statements, Judge Kessler ordered the tobacco companies to state at the beginning of each statement that a federal court had ruled the companies “deliberately deceived the American public.” The five corrective statements will address the companies’ deceptions regarding 1) the health effects of smoking; 2) the addictiveness of smoking and nicotine; 3) the false advertising of low-tar and light cigarettes as less harmful than regular cigarettes; 4) the designing of cigarettes to enhance the delivery of nicotine; and 5) the health effects of secondhand smoke.

Today’s order, which is based on an agreement between the Justice Department, six public health intervenors and the tobacco company defendants, spells out the specific details for implementing the corrective statements. Judge Kessler’s original order also required the companies to make the corrective statements through retail point-of-sale displays, but litigation is continuing over whether the companies must make the corrective statements in those venues.

Judge Kessler’s verdict and the corrective statements she ordered are necessary reminders that tobacco’s devastating toll is no accident. It stems directly from the tobacco industry’s deceptive and even illegal practices. As Judge Kessler found, “[This case] is about an industry, and in particular these Defendants, that survives, and profits, from selling a highly addictive product which causes diseases that lead to a staggering number of deaths per year, an immeasurable amount of human suffering and economic loss, and a profound burden on our national health care system. Defendants have known many of these facts for at least 50 years or more. Despite that knowledge, they have consistently, repeatedly and with enormous skill and sophistication, denied these facts to the public, the Government, and to the public health community.” Importantly, Judge Kessler found that “the evidence in this case clearly establishes that Defendants have not ceased engaging in unlawful activity.”

Our six public health organizations – the American Cancer Society, American Heart Association, American Lung Association, Americans for Nonsmokers’ Rights, National African American Tobacco Prevention Network and the Tobacco-Free Kids Action Fund (a 501c4 affiliate of the Campaign for Tobacco-Free Kids) – joined the case as intervenors in 2005.”