Tobacco.org

• Justice Dept. Won't Seek Rehearing On Tobacco Case 

The U.S. Justice Department won't seek a rehearing of a landmark decision this spring that found the tobacco industry violated federal racketeering laws, potentially increasing the odds that the controversy could make its way to the Supreme Court.

Tobacco companies involved in the litigation filed requests due Friday to have the matter heard by the full circuit court, but the Justice Department won't do the same.

"We will not be filing something today," said Justice Department spokesman Charles S. Miller. He declined to elaborate. . . .

In legal documents filed Friday, the tobacco companies offered numerous arguments as to why the full court should rehear the matter, including legislative changes approved in June that they say will tighten federal oversight of the tobacco industry to the point that industry members aren't likely to violate federal racketeering laws again, mooting the panel's ruling.

British-American Tobacco raised other issues, saying the panel's decision conflicts with those of other federal appellate courts and the U.S. Supreme Court on the application of U.S. anti-racketeering laws to non-U.S. firms. It called the panel's ruling "a breathtaking extension" of RICO, the Racketeer Influenced and Corrupt Organizations Act, to a foreign company, and called for review to correct an "unwise and unwarranted" extension of the U.S. law to a foreign firm.

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Runnin' Scared - Barrett: Sharpton Scolds Maloney, and Naturally There's an Ulterior Motive 

​Al Sharpton's rush to issue a statement this week denouncing Congresswoman Carolyn Maloney's use of the n-word in a magazine interview has once again made him a potential kingmaker. Thanks to Sharpton, Maloney may not stay in the 2010 senate race, making things easier for incumbent Kirsten Gillibrand.

Interestingly enough, there happens to be a connection between Sharpton and Gillibrand -- newly minted political consultant Charlie King. . . .

When the Voice called the Gillibrand campaign, staffers didn't seem to have any idea who King was. Though Gillibrand paid King's War Room, the company was not incorporated or licensed to do business in New York until late June. The campaign's filings reported the company's address as 110 Williams Street, but the Voice couldn't find King or any of his several companies -- which also include CGK Partners and 1st and Goal Productions -- listed there. Asked about it, King said his firm was "moving," but offered no new location. While running NAN, he did operate for some time out of the 45th Street offices of Storch, Amini and Mueves, the law firm that incorporated The Movement Group and includes King's longtime friend Bijan Amini (the firm's top two partners were on the opposite side of the tobacco litigation Gillibrand once worked on). In addition to political consulting, King says he is acting as a lobbyist, with clients like North Carolina-based SAS Corporation, and making a movie about education.

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Findings of Decades of Massive Fraud by Tobacco Industry Upheld in U.S. Court of Appeals 

This decision overwhelmingly affirms findings of liability and remedies by the lower court - findings that are especially damning for the tobacco industry. However, we regret that the Court upheld the lower court decision that the remedies available under the Racketeer Influenced and Corrupt Organizations Act (RICO) were limited and cannot be forward looking. The Foundation hopes that the Department of Justice will continue its strong advocacy on behalf of the victims of this massive fraud, as well as future victims of tobacco addiction and disease.

As this case moves forward, possibly to the Supreme Court, the Foundation supports both the government and our public health colleagues who argued for the efficacy and long-term health benefits derived from funding effective counter marketing programs to address youth smoking prevention and adult smoking cessation. These advocates intervened on behalf of the American public to assert that these remedies could save countless lives by funding effective programs to keep teens from starting to smoke, limit the effects of secondhand smoke and provide critical tools to help tobacco-addicted adults quit.

"With this decision, decades of deceptive marketing practices leading to massive disease and death have finally come home to roost for the tobacco industry," said American Legacy Foundation President & CEO Cheryl G. Healton, DrPH. "More than 400,000 Americans lose their lives to tobacco-related diseases each year."

Healton, who testified in the lower court proceedings, added that "research has consistently shown that for every dollar spent on prevention and cessation programs, lives are saved."

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MORAIN: Big Tobacco retains its clout 

On the very day when the House approved legislation authorizing FDA regulation, the industry sent an e-mail to Sacramento legislators inviting them to a "cigar mixer." The industry long has been among the big moneyed interests that keep Sacramento lubricated with money.

In case tobacco-friendly legislators need cover, the industry embarked on a campaign to gin up opposition to a proposed tobacco tax increase. You could walk into liquor stores in parts of the state this summer, and see evidence of tobacco's fight to block a higher tobacco tax. . . .

The index card-size notes, designed to be torn off by customers, urge that people call their legislators immediately. The call will be toll free, courtesy of Philip Morris, USA, the world's largest cigarette manufacturer. The effort had its impact. No matter that California's tobacco tax is lower than taxes imposed by more than 30 other states. The proposed tobacco tax increase stalled in the Legislature, and Gov. Arnold Schwarzenegger vowed to block any tax increase.

Foes of Padilla's SB600 range from chambers of commerce to anti-tax groups, many of which have received tobacco industry money in the past.

When the U.S. Court of Appeals affirmed the lower court conclusion that cigarette executives defrauded the public by claiming nicotine wasn't addictive and "light" cigarettes were less deadly than regular cigarettes, the judges were direct: "Defendants knew of their falsity at the time and made the statements with intent to deceive. Thus, we are not dealing with accidental falsehoods or sincere attempts to persuade; defendants' liability rests on deceits perpetrated with knowledge of their falsity."

Now that the FDA is about to start regulating tobacco, the public could be lulled into thinking that the industry has been brought to heel. Based on what is happening in California, that view would be naive.

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• Altria, Reynolds Sued for ‘Light’ Cigarette Marketing (Update2)  

Altria Group Inc., the largest U.S. tobacco producer, and Reynolds American Inc. were accused in a consumer lawsuit of fraudulent marketing by claiming “light” cigarettes were less harmful than regular cigarettes.

The suit filed by three Tennessee residents on behalf of smokers who bought “light” or “ultra-light” cigarettes in the state since Jan. 1, 2005, seeks class-action, or group, status.

The tobacco companies “have known for decades that filtered and low-tar cigarettes do not offer a meaningful reduction of risk to smokers,” the plaintiffs said in the complaint, filed in Nashville federal court yesterday. “Their marketing, which emphasized reductions in tar and nicotine, was false and misleading.”

The lawsuit is unsuitable for class-action status because a wide array of individual issues prompt people to choose light cigarettes, Jack Marshall, a spokesman at Philip Morris, said in a telephone interview. . . .

Altria and Reynolds were convicted of violating racketeering laws in August 2006 when U.S. District Judge Gladys Kessler found the companies conspired for decades to defraud the public by marketing cigarettes as “light” or “low-tar.” The U.S. Court of Appeals in Washington in May upheld the conviction that also bars the companies from labeling the cigarettes as “light.” . . .

The case is Alcorn v. Philip Morris USA Inc., Altria Group Inc., R.J. Reynolds Tobacco Co. and Reynolds American Inc., 09cv0624, U.S. District Court of Middle Tennessee (Nashville).

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• Big Tobacco: A history of its decline 

* Tobacco industry once known for big spending on campaigns, effective lobbyists

* As public opinion has turned on Big Tobacco, courts and Congress has too

* Despite moves against industry, "tobacco wars are anything but over," author says . . .

"My own view is that in many ways, the tobacco industry invented the kind of special-interest lobbying that has become so characteristic of the late 20th- and earlier 21st-century American politics," said Allan Brandt, dean of Harvard's Graduate School of Arts and Sciences.

The industry was known for its giant spending on political campaigns and effective lobbyists. The industry's representatives often had experience in politics or close ties to major power players.

"Today obviously, that lobby is much less powerful and successful than it was a generation ago," said Brandt, author of "The Cigarette Century: The Rise, Fall, and Deadly Persistence of the Product That Defined America." . . .

And just last month, in what Brandt considers "one of the most significant racketeering and fraud litigations" the U.S. Court of Appeals for the D.C. Circuit upheld U.S. District Judge Gladys Kessler's ruling in a Racketeer Influenced and Corrupt Organizations, or RICO, case, which found the tobacco industry guilty of engaging in a decades-long conspiracy to defraud the American public about the health risks of tobacco.

"Given the character of Kessler's findings -- and now the fact that her findings have been upheld by the appeals court -- this is really in a way a road map to tobacco regulation," Brandt said.

Stanton Glantz, a longtime anti-tobacco advocate and director of the Center for Tobacco Control Research and Education at the University of California, San Francisco, said the RICO ruling is what the public health community should use in its fight against the tobacco industry.

"I think it really can undermine the power of the industry politically by going to politicians and saying, 'These guys are crooks. They are crooks according to the D.C. Court of Appeals. Not just me,' " Glantz said.

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• Editorial - Tobacco Regulation, at Last  

After more than a decade of struggle -- and countless smoking-related deaths -- the Senate overwhelmingly approved a bill on Thursday that gives the Food and Drug Administration the power to regulate tobacco products. The House approved a similar bill in April, also by an overwhelming margin. The days when this rogue industry could inflict its harmful products on Americans with impunity are drawing to a close.

This is an enormous victory for public health. For that, we owe thanks to tireless advocacy by the Campaign for Tobacco-Free Kids, a nonprofit organization, and strong endorsements from medical groups.

It still might not have passed without the decision by Philip Morris . . .

To the extent allowed by the First Amendment, the regulators could restrict advertising and promotions to children -- industry needs to addict them to keep replenishing the population of smokers -- and could shape advertisements aimed at adults as well. The agency could prohibit unsubstantiated health claims about supposedly "reduced risk" products and require larger, more effective health warnings on packages and advertisements. . . .

It has now been proved beyond a shadow of a doubt that cigarette makers have spent decades making false statements, suppressing evidence of harm, and manipulating the design of cigarettes to increase their addictiveness. Federal regulators should be able to stop many of these abuses -- and we hope help prevent more Americans from losing their lives to smoking.

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R.J. Reynolds Tobacco Company will seek further review of government lawsuit (PDF) 

R.J. Reynolds Tobacco Company is disappointed that the U.S. Court of Appeals for the District of Columbia affirmed many of the findings of the district court in the lawsuit United States v. Philip Morris et al, particularly the finding that cigarette manufacturers violated federal racketeering laws.

“R.J. Reynolds strongly believes that neither the evidence presented at trial nor the legal standards justify a finding of liability,” said Martin L. Holton III, senior vice president and general counsel for R.J. Reynolds.

“R.J. Reynolds is pleased, however, that the Court of Appeals reaffirmed that the disgorgement of profits is not an available remedy in this case,” Holton adds. “We are also pleased that the Court of Appeals affirmed the district court’s decision not to require several of the remedies sought by the government, and ruled that some of the remedies the district court ordered were too broad.”

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• The Reintroduction of Kirsten Gillibrand 

After her clerkship, Gillibrand returned to Davis Polk, where she worked for nine years, logging long workweeks for a series of clients including the tobacco conglomerate Philip Morris. During her 2008 congressional reelection, operatives for Sandy Treadwell, her Republican opponent, compiled boxes of information that documented Gillibrand’s involvement with Philip Morris, but the media was largely uninterested. The New York Times revisited the material after Gillibrand’s Senate appointment. The Times’ 2,700-word front-page story depicted Gillibrand as a key player on the account, making trips to Philip Morris’s European cigarette-testing lab and using her office as a war room to plot strategy to defend the company against government claims that it knew tobacco was a carcinogen and hid that information from consumers. The story noted that Davis Polk allowed associates to decline to work for certain clients if they found the work ethically objectionable, but that Gillibrand appeared to have thrown herself wholeheartedly into her Philip Morris assignment.

. . . I asked her if she regretted her work, she answered with a defiant “No.” She didn’t defend the work on its own terms, however. “I had an opportunity to work with Robert Fiske on the case, and he is universally regarded as one of the great lawyers of our time,” she told me. Then she said, “And the work on that case allowed me to do pro bono cases.” . . .

Gillibrand says it was Bible study that awakened her to public service. “When I was working in New York, I taught a Bible class for 10-year-olds,” she says. “My favorite parable is the one Jesus tells about the talents.” She’s referring to the story in which a master becomes angry with a servant for wasting a coin, or “talent,” he was given. “What I took from that is we have to do the most with the talents God has given us. I was working as a corporate lawyer, where I wasn’t helping people. I was just helping big companies make money. And I wanted to do more.” The story may be true, but it clearly sounded rehearsed. . . .

It’s Schumer, more than anyone, who is responsible for Gillibrand’s relaunch. At Gillibrand’s lowest point, shortly after the Times tobacco story, New York’s senior senator agreed to cooperate with (and some suspect he orchestrated) what was viewed by some as a Times makeup call, a front-page story about how Schumer was taking Gillibrand under his wing. The piece implied that Schumer was supporting Gillibrand because he could manage her. The message Schumer meant to send was clear: He is on Gillibrand’s side and expects others to be as well.

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I had an opportunity to work with Robert Fiske on the case, and he is universally regarded as one of the great lawyers of our time. . . . And the work on that case allowed me to do pro bono cases.
NY Sen. Kirsten Gillibrand defends her work for Philip Morris in a NY Magazine article.

EDITORIAL: Bring tobacco under the FDA 

The Senate is expected to consider this month a bill that would give the Food and Drug Administration regulatory authority over tobacco products. Regardless of objections by tobacco state senators, the Senate should not hesitate to pass the bill. It’s already been passed by the House. And a vigorous ruling by a federal appeals court two weeks ago, and the latest report by a noted lung cancer research doctor, make the case for regulation indisputably clear. . . .

Judge Kessler ruled that the companies “marketed and sold their lethal product with zeal, with deception, with a single-minded focus on their financial success and without regard for the human tragedy or social costs that success exacted.” . . .

Given its record of deceit and fraud, however, tobacco companies deserve no relief. Through their deceit, fraud and legacy of dead tobacco users, they’ve earned strict regulation.

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• Court Can't Quit DOJ's Tobacco Case 

But defense lawyers and legal scholars following the case point out that the tobacco industry did not walk away with a wholesale loss. The cigarette makers "lost liability, but they lost the liability question years ago," said University of Notre Dame Law School professor G. Robert Blakey, who drafted the RICO law in the 1970s. "What they've won in this case is the narrowest possible remedy." . . .

Going forward, there are two main areas for a defense attack: corporate liability and available remedies.

The D.C. Circuit opinion -- issued per curiam by Chief Judge David Sentelle and judges David Tatel and Janice Rogers Brown -- rejected for a second time the government's bid for disgorgement as a remedy to prevent future RICO violations. . . .

Lawyers following the case predict the tobacco companies will also seek review in the high court on the liability finding, which is rooted in the government's theory that the defendants made up an "association-in-fact" enterprise with individuals and trade associations. Lawyers for the tobacco companies argued in briefs that association-in-fact enterprises involve individuals, not corporations. The D.C. Circuit, citing its own precedent, ruled that corporations can also be part of an association in fact.

The risk, say defense lawyers, is that a company will face RICO liability as part of an association-in-fact based on the actions of just a few employees. "It creates a huge opportunity for plaintiffs to haul multiple defendants into court, scare them with treble damages and induce them to settle cases that otherwise lack merit," said Steven Cottreau, a Washington partner at Clifford Chance who has defended clients in civil RICO cases.

More good news from a defense vantage: The appellate judges directed the trial court to re-examine whether subsidiaries should be lumped in with parent companies under the same remedial restraining order.

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• Editorial - A Rogue Industry  

The unanimous ruling by a three-judge panel of the United States Court of Appeals for the District of Columbia upheld major elements of a 2006 lower court decision that found big tobacco companies guilty of racketeering and fraud as part of a prolonged campaign to deceive and addict the public. That 1,742-page opinion, rendered by Judge Gladys Kessler, laid out in painstaking detail how the tobacco companies made false statements and suppressed evidence to deny or play down the addictive qualities and the adverse health effects of smoking. . . .

The House has already voted to give the F.D.A. power to regulate tobacco. Senators, who are getting ready to vote on similar legislation, now have fair warning, if they needed any more, that this is a rogue industry. It can't be trusted to behave responsibly or even adhere to agreements it has signed. It is time to grant the F.D.A. the power to regulate the content and marketing of tobacco products.

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HARRIS: DC Circuit affirms Phillip Morris case giving major victory for plaintiffs in tobacco suits nationwide  

On May 22, 2009, the DC Circuit Court of Appeals affirmed in large part one of the most damning verdicts ever rendered against the tobacco industry. . . .

Mirroring Judge Kessler's findings is the equally damning case of Engle v. Liggett et al. [PDF file]. Originally brought by Stanley and Susan Rosenblatt in Miami-Dade Circuit Court as a national class action in 1994, later reduced to a statewide class in 1996, a jury ultimately returned a record punitive damage award against the tobacco companies in the amount of $145 billion following a year-long trial. . . .

While the Florida Supreme Court took away the punitive damage award and decertified the class, like the DC Appeals Court, it let stand the Engle jury's unprecedented findings that the tobacco companies committed fraud, were negligent and concealed from consumers the addictive nature and dangers of smoking in order to sell more cigarettes. . . .

Having closed both the federal and state loops on tobacco companies' wrongdoing, the task of tobacco trial lawyers in Florida and elsewhere is to enlighten juries and even judges about the depth of the tobacco industry's deceit. As a Florida personal injury attorney representing 157 Engle progeny clients, the Appeal Court's ruling has just made the challenge of overcoming juror bias against smokers that much easier.

Also known as the “"you screwed up by trusting us" defense, tobacco companies continue to blame smokers for the sickness and death caused by addiction to nicotine. . . .

For those who are sick and dying, and for those whose families carry on the battle in their absence, the Engle and DC Appeal Courts' rulings stand as monuments to transparency that will provide beacons of hope and truth to all who think the deck is stacked against them, that the system is broken and that they could have stopped smoking had they only chosen to do so."

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SIEGEL: Appeals Court Upholds Denial of Monetary Remedies in Department of Justice Tobacco Lawsuit 

I believe the most important aspect of the appellate court's decision was its upholding of the district court's denial of monetary remedies against the tobacco companies. . . .

What this decision demonstrates is that the anti-smoking groups were wrong in their attack on McCallum and their insistence that the reduction of the $130 billion smoking cessation remedy to $10 billion represented an undermining of the case designed to aid the tobacco companies. As it turns out, that change had no effect on the government's case because, as I argued, no smoking cessation remedy was allowable in the first place.

As I wrote on August 18, 2006: "McCallum's decision to substitute a $10 billion smoking cessation remedy for a $130 billion smoking cessation remedy had no impact whatsoever on the case, because as Judge Gladys Kessler ruled, $0 of smoking cessation remedy was allowable under the D.C. Appeals Court's interpretation of the RICO statute."

If anything, McCallum's insistence on changing the request for a massive $130 billion smoking cessation remedy helped the Department of Justice save face somewhat.

Now it will be interesting to see if the anti-smoking groups apologize to McCallum and retract their political accusations, which have now been shown to have had no reasonable basis or merit. Americans for Nonsmokers' Rights (ANR) went so far as calling McCallum a "cancer" in the Justice Department. Certainly, ANR owes Mr. McCallum an apology. It will be interesting to see if ANR retracts its attack and apologizes.

Other groups which had attacked McCallum, accusing him of political interference, and which therefore need to retract their attacks and apologize, include the Campaign for Tobacco-Free Kids and the Stan Glantz Announcement List-Serve.

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LCA Hails US Court of Appeals Decision to Affirm Lower Court Ruling Tobacco Companies Guilty of Massive Fraud and Deception 

Lung Cancer Alliance (LCA) hailed the US Court of Appeals' decision on Friday upholding the 2006 ruling that found tobacco companies guilty of fraud and lying about the dangers and addictiveness of smoking. . . .

"This is an extremely important victory," said Laurie Fenton Ambrose, LCA President & CEO, "as it draws the brightest line on those who have committed decades of massive fraud and deception upon the American public. For the lung cancer community -- this is not just long overdue -- but life saving."

Fenton Ambrose continued, "But I must add that as important as this ruling is -- I am disappointed that it did not allow for additional remedies called for by LCA and other public health groups to help victims of the fraudulent practices of the tobacco companies." . . .

"Even though the Court ruling is disappointing on this front," continued Fenton Ambrose, we can take heart that the courts clearly recognize the highly addictive nature of nicotine, the deliberate collusion over the past fifty years by the tobacco companies to manipulate the amount of nicotine and their marketing strategies to addict more what they blandly referred to as 'replacement smokers' for those who died."

"If the courts recognize this, hopefully our public health policy makers will begin to understand that smoking is an addiction, that no one chooses to have lung cancer and that lung cancer, as the biggest single cancer killer, must be given priority in research funding," she said.

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