Federal appeals court stays tobacco industry penalties pending appeal

[JURIST] A federal appeals court on Tuesday stayed an August district court ruling finding tobacco companies liable for civil racketeering charges [JURIST report; opinion], thus delaying enforcement of the accompanying remedial order [PDF text] that required the tobacco companies to publish "corrective statements" about the health impacts of their products and pay DOJ case costs [JURIST report]. The temporary stay will remain in effect until the US Court of Appeals for the District of Columbia Circuit [court website] issues an opinion reviewing the district court decision.

The tobacco companies requested the stay [PDF emergency motion] in early October, arguing that the district court order imposes huge financial burdens on the tobacco companies that would not be recovered if the tobacco companies win on appeal, and that the order would "likely cause defendants to lose market share, brand equity, and consumer goodwill." Furthermore, the tobacco companies argued that the order forces the companies to publicly admit wrongdoing, even though the tobacco companies dispute that they altered the nicotine levels in their products, and this "forced speech" constitutes irreparable injury. Philip Morris announced their intent to appeal [press release] the day after the ruling was handed down.

In August, US District Judge Gladys Kessler avoided imposing the costly penalties sought by the DOJ, including $10 billion for a smoking cessation program or $4 billion for a "counter-marketing" youth advertising program. During the litigation, 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 that issue. Reuters has more.

 

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