Government Forges Ahead

Published in CSP Daily News

Tobacco trial entering remedies phase

WASHINGTON -- When an appeals court barred the government from seeking $280 billion in a civil racketeering trial against cigarette makers earlier this year, many legal scholars said the heart of the case had been ripped out.

But on Monday, the government pressed ahead as it began to lay out potential remedies, said the Associated Pressranging from smoking-cessation programs to court-imposed corporate monitorsthat could cost Big Tobacco billions of dollars.

Cigarette makers said many of the suggestions will not meet strict standards [image-nocss] the appeals court established, and others simply mirror restrictions in settlements the companies reached with states in the late 1990s.

You're left with the spectacle of spending all this time and all this money to establish that the companies should do things they're already compelled to do, said William S. Ohlemeyer, vice president of Altria Group Inc., the parent company of Philip Morris USA.

With no jury, U.S. District Judge Gladys Kessler will decide which penalties to impose if she agrees with the government's charge that cigarette makers conspired to deceive the public about the dangers of smoking.

When the appeals court took money off the table, it said the civil Racketeer Influenced & Corrupt Organizations Act (RICO) allows only for forward-looking remedies. Kessler called the February 4 ruling a body blow to the government's case, and allowed the U.S. Department of Justice to split off its presentation of potential penalties, creating a two-phase trial.

The government started the remedies phase by calling biostatistics expert Timothy Wyant. Also on the Justice Department witness list are professors, anti-smoking advocates and Surgeon General Richard Carmona.

On Monday, Wyant said an estimated 57 million people under age 21 became addicted to smoking between 1954 and 2000, and 13.4 million of them will likely die prematurely through 2050. Providing health care to this group will cost nearly $840 billion more than if they had never smoked, he said.

In court filings, companies listed more than a dozen potential witnesses to counter the government, ranging from tobacco executives to an expert on English law.

The late 1990s settlements, including the 1998 Master Settlement Agreement (MSA), revolutionized how tobacco companies do business by restricting how they advertise and promote products, dissolving industry organizations and hemming in lobbying. Some health advocates say those were broad-brush agreements, short on the type of detail included in a wide-ranging tobacco bill introduced by Senator John McCain (R-Ariz.), in 1997. That $516 billion proposal would have imposed tight advertising restrictions, a per-pack tax and regulatory oversight from the U.S. Food & Drug Administration (FDA).

Cigarette companies say the government has not sufficiently tailored the proposed penalties to the RICO violations it alleges. The companies also say a strict interpretation of the appeals court's decision could bar the Justice Department from any measure designed to correct past misconduct. Once you start talking about correcting something, you're talking about a backward-looking, not a forward-looking, remedy, Ohlemeyer said.

Backers of the government's case, however, say the addictive nature of smoking adds a twist to the argument. Even if they stopped all RICO violations and never committed another one, the addiction goes into the future, said Bill Corr, executive director of the Campaign for Tobacco-Free Kids.

Richard A. Daynard, president of the Tobacco Resource Control Center at Northeastern University in Boston, said if the companies' public statements led to the addiction of millions of Americans, the door should be open to a range of options. There's no particular reason to limit the DOJ's remedies, assuming Judge Kessler accepts the liability part of the government's case, he said.

A Justice Department spokesperson had no comment on the government's remedies proposals.

Defendants in the lawsuit are PM USA and its parent, Altria Group Inc.; R.J. Reynolds Tobacco Co.; Brown & Williamson Tobacco Co.; British American Tobacco Ltd.; Lorillard Tobacco Co.; Liggett Group Inc.; Counsel for Tobacco Research-U.S.A.; and the Tobacco Institute.