Justice Department Seeks $14 Billion in Tobacco Penalties

Asks for fine, cessation program, education campaign, more

Published in CSP Daily News

WASHINGTON -- The federal government largely stayed its course in the racketeering trial against Big Tobacco despite steady criticism, asking a federal judge to impose $14 billion in penalties, the Associated Press said.

Cigarette makers on Tuesday said they would ask U.S. District Judge Gladys Kessler to throw out the proposed remedies.

The Department of Justice's request, filed shortly before midnight Monday, fleshed out proposals that prosecutors put forward during the trial's closing arguments earlier this month. The government [image-nocss] asked for companies to pay for a $10 billion, five-year smoking cessation program and a $4 billion, 10-year education campaign to counter tobacco marketing. Prosecutors also asked for cigarette makers to reduce youth-smoking levels by 42% by 2013, or pay stiff fines.

Philip Morris USA attorney Dan Webb said, Every single one of the remedies is legally defective," and companies will ask Kessler to dismiss the government's proposals. Though Kessler could choose to fashion her own penalties, Webb said prosecutors have not offered enough evidence to warrant doing so. "If all the remedies are legally defective, a judgment could be entered now in favor of the tobacco companies," he said.

Bill Corr, executive director of the Campaign for Tobacco-Free Kids, called the plan "an act of desperation," saying the companies "are about to lose the liability part of this case."

The government alleges tobacco companies conspired for decades to mislead the public about the health risks of smoking. The trial started in September.

The case came under fire from Democratic lawmakers and anti-smoking advocates this month when prosecutors slashed the size of a $130 billion stop-smoking plan offered by one of their own witnesses. At lawmakers' request, a Justice Department official agreed to investigate whether trial lawyers were inappropriately pressured to downsize the plan.

On Tuesday, Senator Edward Kennedy (D-Mass.), called the proposal "a political decision to cave in to Big Tobacco at the expense of the American people."

An appeals court in February barred the government from seeking $280 billion in allegedly ill-gotten tobacco profits. The government must decide by next month whether to appeal that decision to the Supreme Court.

Justice Department officials argued its $10 billion stop-smoking planwhich would include free telephone counseling and medications to 2.5 million smokers each yearbetter fits the standards of the racketeering law.

The American Legacy Foundation, which runs national advertisements designed to curtail youth smoking, would oversee the $4 billion education campaign. William Sorrell, Vermont's attorney general and the foundation's incoming chairman, said he was pleased the government saw "the merit in our programs."

William S. Ohlemeyer, vice president of PM USA's parent company Altria Group Inc., said Kessler questioned whether the government had shown the effectiveness of the foundation's ads.

The government's proposal would also stop companies from using terms such as "light" or "mild" to describe products, selling flavored cigarettes, or offering price promotions on the top five brands smoked by kids.

Ohlemeyer said many of the requests simply mirrored the Master Settlement Agreement (MSA) that companies reached with states in 1998.

Sorrell disagreed. "The MSA was a beginning. If the industry wants to say it was the end and the solution to all the issues...we have a rather marked disagreement with the industry on that point," he said.

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.