BREAKING NEWS ~ Judge rules tobacco industry liable in racketeering lawsuit

[JURIST] A federal judge ruled Thursday that the tobacco industry [JURIST news archive] is liable for civil racketeering charges filed against the industry by the DOJ in 1999. Federal prosecutors filed suit [DOJ materials] under the Racketeer Influenced and Corrupt Organizations Act (RICO) [text], claiming that tobacco companies conspired to mislead the public about the dangers of smoking. During the case, a federal appeals court ruled that the government could not seek a $280 billion penalty [JURIST report] against the companies for past profits, instead limiting relief to prevention of future violations. The US Supreme Court denied certiorari [JURIST report; cert petition, PDF] to review the issue.

Judge Gladys Kessler had urged the parties to settle the lawsuit [JURIST report] after federal prosecutors reduced the proposed penalty [JURIST report] against major tobacco companies from $130 billion to $10 billion, over the objection of their expert witness. The settlement offer reduction prompted a nonprofit legal group to file a civil lawsuit [JURIST report; case materials] against then Associate Attorney General Robert McCallum [official profile], now US Ambassador to Australia, to determine why the settlement offer was reduced.

Read Kessler's 1,742-page final opinion [PDF] and final judgment and remedial order [PDF].

5:50 PM ET - Kessler did not order the tobacco companies involved in the litigation to pay for a program to help people quit smoking as the DOJ had asked, citing the appeals court allowing only forward-looking remedies. Instead, the companies were ordered to publish

separate corrective statements concerning each of the following: (a) the adverse health effects of smoking; (b) the addictiveness of smoking and nicotine; (c) the lack of any significant health benefit from smoking "low tar," "light," "ultra light," "mild," and "natural," cigarettes; (d) Defendants' manipulation of cigarette design and composition to ensure optimum nicotine delivery; and (e) the adverse health effects of exposure to secondhand smoke (also known as environmental tobacco smoke, or ETS).
The "corrective statements" are to be published on the defendants' websites, affixed to cigarette packaging, put on display at retail establishments, included in full-page advertisements in several newspapers, and advertised on at least one major television network. In addition, defendants are required to maintain online document websites containing case documents and other relevant material. Kessler also ordered the defendants to pay the government's costs [JURIST report], which the DOJ has estimated will be over $140 million. AP has more.

6:33 PM ET - In a statement, the US Justice Department welcomed Kessler's finding of liability but expressed disappointment "that the Court did not impose all of the remedies sought by the government."

 

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