Fiore Flip-Flop

DOJ defends slashed penalty; case disappearing, Big Tobacco says

Published in CSP Daily News

WASHINGTON -- Federal prosecutors late last week defended their decision to downsize dramatically a proposed penalty against Big Tobacco, saying they tried to put the focus on future smokers who might become hooked if cigarette makers continue their alleged racketeering, the Associated Press said.

As closing arguments ended in the nearly nine-month trial, lawyers for the tobacco companies dismissed the U.S. Department of Justice's position as a last-minute attempt to put a better face on a losing proposition. The plaintiff's case is disappearing, and [image-nocss] this is a desperate effort to stop the fall, said Brown & Williamson lawyer David Bernick.

As reported in CSP Daily News, federal prosecutors this week told U.S. District Judge Gladys Kessler that they were seeking a $10 billion, five-year nationwide smoking cessation program as a penalty against the industry for a decades-long conspiracy to deceive the public about the health risks of smoking. That proposal was a fraction of the $130 billion, 25-year program suggested by government witness Michael C. Fiore, a University of Wisconsin medical professor.

On Thursday, Philip Morris USA attorney Dan Webb called that decision the Dr. Fiore flip-flop.

Unlike Fiore's proposal, the $10 billion program would be limited to a certain number of peopledecided by estimating how many smokers may become hooked as a result of any misbehavior by the companies within a year after the trial; however, Associate Attorney General Robert McCallum told reporters outside the courtroom that the program's services would be open to any of the 45 million smokers in the United States, not just future smokers.

The program could be extended or expanded should cigarette makers continue to misbehave, government lawyer Sharon Eubanks argued.

In February, an appeals court barred the Justice Department from seeking $280 billion in allegedly ill-gotten tobacco profits, saying the law required forward-looking remedies. Fiore's proposal was the next most-expensive proposal mentioned in the trial, which started in September.

The decision to downsize Fiore's plan outraged several Democratic members of Congress, who then asked the Justice Department's inspector general to look into whether political appointees influenced the prosecutors' decision to ask for the smaller program.

On Thursday, McCallum said career Justice Department employees and political appointees had worked together to devise the most appropriate strategy.

Webb resisted the idea that the decision was made to benefit tobacco companies, telling Kessler, that, I can tell you with absolute certainty, is not true.

Fleshing out a previous request for the court-appointed monitor to watch over the companies, Eubanks also suggested the monitor could hire a staff, police the companies, make recommendations for structural changes, and function as a hearing officer if necessary. Tobacco companies protested that such details had never been mentioned before. This is unfolding as we speak, Webb said.

In closing arguments, the tobacco companies argued the government never proved its claims and that the racketeering statute restricts what Kessler will be allowed to do. In addition, they said the companies have radically changed their behavior in recent years. The mammoth, nine-month trial has really been rendered moot by the passage of time, said PM USA attorney Ted Wells.

The 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.