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On September 28, 2009, the tobacco Defendants asked the US Court of Appeals, DC Circuit to stay issuance of its mandate for the Defendants to adhere to Judge Kessler's order, pending their filing and disposition of a petition for a writ of certiorari to the Supreme Court.
Defendants' motion briefly delineates the arguments they will undoubtedly present in their petition to SCOTUS, mainly, in the words of their motion:
- whether a court of appeals is required to undertake de novo review of factual findings in a case that squarely implicates a defendant's First Amendment rights;
- whether corporations can be part of an "association in fact" RICO enterprise; and
- whether jurisdiction over this case was extinguished by the enactment of new federal legislation [ie, the FDA bill] that imposes comprehensive regulation on every aspect of Defendants' business. . . .
- The balance of equities also weighs strongly in favor of a stay because, in the absence of a stay, Defendants would be required to incur substantial, unrecoverable expenses to comply with the district court's injunctions during the pendency of their petitions for certiorari. . . .
-whether the fraud statutes and First Amendment permit allowing a corporation's specific intent to defraud to be proven through the collective knowledge of various employees, instead of the actual specific intent of one or more particular employees;
-and whether the district court's injunctions are impermissibly vague and overbroad.
This paragraph is particularly intriguing:
The [Appeals Court] Panel held that Defendants had formed an "association in fact" RICO enterprise, and concluded that Defendants were likely to commit future RICO violations-even though they had entered into the MSA with the States in 1998, which categorically prohibited Defendants from engaging in the racketeering activity alleged by the Government.2 In reviewing the district court's findings on this (and every other) issue, the Panel applied the clearly erroneous standard of review (slip op. 45), rather than undertaking an independent review of the district court's factual findings. The Panel applied this "highly deferential" standard (id.) despite the fact that the Government's RICO allegations were premised on Defendants' constitutionally protected speech, including statements that Defendants had made in legislative and regulatory forums as part of the public-health debate about smoking.
The FDA argument was to be expected:
Shortly after the Panel issued its opinion, Congress enacted the Family Smoking Prevention and Tobacco Control Act ("FDA Act"), Pub. L. No. 111-31, 123 Stat. 1776 (June 22, 2009), which subjects every aspect of Defendants' business to comprehensive oversight by the Food and Drug Administration ("FDA"). On July 31, 2009, Defendants petitioned for rehearing or rehearing en banc on the grounds that both the Panel and the full Court should consider the effect of that intervening legislation and reconsider several aspects of the Panel's decision.
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Pursuant to FED. R. APP. P. 41(d)(2) and D.C. Circuit Rule 41(a)(2), Defendants respectfully move this Court to stay issuance of its mandate pending the filling and disposition of timely petitions for writs of certiorari. This Court recognized the substantial nature of the arguments raised by Defendants—and the risk of irreparable harm confronting Defendants—when it issued a stay pending appeal. For similar reasons, a stay is also warranted pending the filing and disposition of Defendants’ petitions for certiorari.
A stay is appropriate because the Panel’s opinion raises substantial questions for certiorari, including: (1) whether a court of appeals is required to undertake de novo review of factual findings in a case that squarely implicates a defendant’s First Amendment rights; (2) whether corporations can be part of an “association in fact” RICO enterprise; and (3) whether jurisdiction over this case was extinguished by the enactment of new federal legislation that imposes comprehensive regulation on every aspect of Defendants’ business. The balance of equities also weighs strongly in favor of a stay because, in the absence of a stay, Defendants would be required to incur substantial, unrecoverable expenses to comply with the district court’s injunctions during the pendency of their petitions for certiorari. No other party would be prejudiced by the issuance of a stay because Defendants’ business will continue to be subject to stringent government oversight by the States and the federal Government while their petitions for certiorari are pending.
Corporate spending limits in U.S. political campaigns may be too broad and silence free-speech rights of small businesses like a local hairdresser, Supreme Court conservatives said on Wednesday.
But the court's four liberals, including new Justice Sonia Sotomayor, said more harm than good could be done by overturning precedents upholding the restrictions on corporations and labor unions.
The comments came during arguments in a special session to consider ending long-standing limits on corporate and union spending in political campaigns. . . .
During the arguments, Roberts said a tobacco company might want to run an ad opposing a candidate who wanted to make tobacco illegal. The law restricts broadcast ads by companies and unions right before elections.
Judge Sonia Sotomayor was an intense, no-nonsense prosecutor during five years spent at the Manhattan District Attorney’s office . . .
Sotomayor joined the office fresh out of Yale Law School in 1979, spurning big law firms because she hoped to get quick experience trying cases, the Washington Post reports. She got her wish, winning an early promotion to a felony unit after spending six months prosecuting offenses such as disorderly conduct, public urination and graffiti. Colleagues and friends described her as driven, competitive and focused on the details of her cases.
Former New York police detective Chris Montanino told the newspaper about his encounter with the Supreme Court nominee.
Montanino said he wanted to go after child-porn distributors but he couldn’t find a prosecutor who would take his case seriously. “Then he returned a call from a young woman at the local district attorney's office,” the Post writes, “an intense, chain-smoking prosecutor known for working into the night, fueled by the caffeine buzz from a string of Tab diet sodas.”
The U.S. Supreme Court Monday said it will decide whether New York can sue online cigarette sellers for not paying city taxes on tobacco products shipped to purchasers living there.
New York has the highest cigarette excise taxes in the country at $4.25 a pack, counting both state and city excise taxes. It sued several online tobacco sellers in 2003, claiming they were violating federal racketeering laws and seeking millions of dollars in excise taxes it says the companies must pay to ship tobacco products into the city.
Several of the lawsuits were consolidated into one legal proceeding. . . .
The high court will hear the case in the fall of 2009. The case is Hemi Group v. New York.
From The Oregonian of Monday, Feb. 22, 1999 -- Local Smoking suit seeks millions: The family of a Portland lung cancer victim wants Philip Morris Inc. to pay $110 million in damages
From The Oregonian of Monday, Feb. 22, 1999 -- Effort to pin tobacco ills on firms alights in Oregon: A $110 million suit against Philip Morris opens this week, and the case could be the next in a series of verdicts against cigarette-makers
"While we had hoped for a different outcome, the Supreme Court has decided not to review a narrow procedural ruling by the state court. Today's decision does not impact the court's earlier decisions on punitive damages," said Murray Garnick, Altria Client Services senior vice president and associate general counsel, speaking on behalf of Philip Morris USA. "Importantly, the Court did not disturb its 2007 Williams decision which held that a jury may not impose punitive damages for harm caused to anyone other than the plaintiff in a particular case," added Garnick.
The Court's decision, however, does not end the dispute, which has been ongoing for more than a decade. Oregon state law requires that sixty percent of any punitive damages award be paid to the state. Philip Morris USA believes that the Master Settlement Agreement, to which Oregon is a party, precludes the state from collecting any punitive damages award from the company. Oregon and Philip Morris USA are parties to a proceeding in Oregon state court that seeks a determination of whether the MSA bars the state from collecting punitive damages. If Philip Morris USA prevails, the company would be obligated to pay only the remaining forty percent of the punitive damages award to the plaintiff in this case.
The Supreme Court chose on Tuesday, after examining the issue for the third time, not to disturb a punitive damages verdict now totaling more than $150 million, won by the widow of a heavy smoker who died of lung cancer. The Court dismissed a new appeal by Philip Morris USA, saying it had “improvidently granted” review last June. The case, heard on Dec. 3, was Philip Morris USA v. Williams (07-1216). . . .
The marathon, however, apparently is not over yet. Philip Morris, at an earlier stage in the case, reserved the right to challenge a state law that requires that 60 percent of a punitive verdict goes to the state of Oregon. The company’s argument against that is that Oregon has achieved all of the proceeds it is entitled to have under the global settlement of a group of states’ lawsuit against the industry.
Mrs. Williams’ lawyers, backed by the Oregon attorney general, have argued that the tobacco settlement only applied to that specific case, and thus would have no effect on the verdict in her case.
Philip Morris said Tuesday, after the new decision, that it was pursuing this issue in a proceeding now in state court.
The Supreme Court today dealt a blow to Philip Morris, saying it would not decide the cigarette-maker's challenge of a punitive damages award brought by the widow of a longtime smoker that now is worth nearly $150 million.
The court's decision, announced in a one-sentence order, was a surprising and anticlimactic ending to a case that has bounded back and forth through the judicial system for nearly a decade. When an Oregon jury awarded Mayola Williams nearly $80 million following the death of her husband Jesse, it was the largest award of its kind.
Even though the justices have strongly implied that the award was too large and twice sent the case back west, the Oregon Supreme Court found reasons to leave it as it was. After the Oregon justices declined to change its decision for a second time, lawyers for Philip Morris petitioned the high court to "vindicate" its authority.
Instead, the court today said it should not have accepted the case for a third time, and in the language of the court, dismissed the case as "improvidently granted."
Because the case was argued in early December and the court issued its decision only today, it suggests the justices had trouble coming together on how to solve the legal issues raised. . . .
But the justices said that maybe the Oregon court had a point, after all.
Justice Stephen G. Breyer, who wrote the court's 2007 decision in the case, said he thought at first that Oregon was giving the court the "runaround." But after studying the case more closely, he said, "I'm not sure that I think that now."
Star Scientific, Inc. (Nasdaq: STSI) announced that the United States Supreme Court today denied the petition for a writ of certiorari filed with the Court by RJ Reynolds Tobacco Company (RJR). RJR had filed its petition for review on January 16, 2009 as part of its defense of the patent infringement lawsuits filed by Star Scientific, Inc. against RJR in 2001 and 2002.
The Supreme Court petition arose from a bench trial that was held in February, 2005 on RJR's defense claim of inequitable conduct. Shortly before that trial began, RJR also was permitted by the District Court to file a summary judgment motion on definiteness. Two years later, in January, 2007, the district court issued a ruling that granted RJR's summary judgment motion. On June 26, 2007, the district court ruled that Star committed inequitable conduct in the prosecution of its patents. Star immediately filed an appeal with the US Court of Appeals for the Federal Circuit. On August 25, 2008, the Federal Circuit issued a unanimous decision reversing the lower court's ruling on inequitable conduct. It also reversed the district court's grant of summary judgment which held Star's patents indefinite. The Supreme Court's denial of RJR's petition terminates the process through which RJR can appeal the Federal Circuit's decision in favor of Star.
The case has been remanded to the US District Court of Maryland for further proceedings, including a jury trial.
In a major setback for business groups that had hoped to build a barrier against injury lawsuits seeking billions of dollars, the Supreme Court on Wednesday said state juries may award damages for harm from unsafe drugs even though their manufacturers had satisfied federal regulators.
The ruling could have significant implications beyond drug manufacturing. Many companies have sought tighter federal regulation in recent years in part to shield themselves from litigation. . . .
The Supreme Court has been sympathetic in recent years to arguments that federal law should pre-empt state injury suits. Last year, in Riegel v. Medtronic, an eight-justice majority of the court ruled that many state suits concerning injuries caused by medical devices were barred by the express language in a federal law. Wednesday's decision addressed implied pre-emption, a different legal standard.
Drug companies and other businesses, supported by the Bush administration, had hoped the Vermont case would establish broader protections. They relied not on express language in a statute enacted by Congress, as in Riegel, but on what might be implied from federal regulatory standards and policies -- in this case, from the drug agency's authority to approve drug labels.
Producers of goods as different as antifreeze, fireworks, popcorn, cigarettes and light bulbs have sought to take refuge behind federal oversight in recent years to fend off litigation. After Wednesday's decision, those efforts are most likely to succeed if they are based on express language in a Congressional statute or a specific regulatory action that makes compliance with state requirements impossible.
Michael Dahl has smoked two packs of Camel Lights every day for more than 20 years. David Scott Huber has smoked nearly a pack of Camel Lights, Winston Select or Winston Lights every day for the past 10 years. The two Minnesotans are now suing the cigarette manufacturer, R.J. Reynolds Tobacco Company, on behalf of all people in the state who have smoked their “light” brands over the years.
The plaintiffs aren’t claiming that their health has suffered as a result of their tobacco use, but rather that they were deceived by the company’s advertising and marketing about the nature and effect of smoking “light” cigarettes.
The case stalled for a while due to a split in the U.S. circuit courts over whether the claims were pre-empted. But the decision from the U.S. Supreme Court last month in Altria Group Inc. v. Good that state law fraud claims relating to cigarette packaging and marketing are not pre-empted by federal law has allowed Dahl, Huber and many other plaintiffs to begin moving forward again.
Minneapolis attorney Gale Pearson, one of the attorneys representing the plaintiffs, said it’s important the tobacco companies don’t get away with deceiving customers into thinking light cigarettes are better for them than regular cigarettes.
In light of the U.S. Supreme Court opinion last week in Altria Group v. Good, Wisconsin consumers can plausibly sue tobacco companies under at least two different statutory provisions, sec. 100.20 and sec. 100.18.
Section 100.20, entitled "Methods of competition and trade practices", provides generally, "(1) Methods of competition in business and trade practices in business shall be fair.
Unfair methods of competition in business and unfair trade practices in business are hereby prohibited."
This is, for all material purposes, identical to the Maine statute at issue, which provides, "Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are declared unlawful." Me.Rev.Stat.Ann., Tit. 5, sec. 207.
However, sec. 100.18 of the Wisconsin statutes, entitled "Fraudulent representations," is even more applicable to suits alleging that the marketing of light cigarettes is misleading . . .
The downside to suing under sec. 100.18 is that it contains a three-year statute of repose, and the discovery rule does not apply, limiting the potential damages, and the number of potential plaintiffs. . . .
One problem consumers are likely to face should they bring similar suits in Wisconsin is that the "unconscious" and "unknowing[]" behaviors described above are frequently not unconscious or unknowing.
Many smokers of light cigarettes who engage in these nicotine-enhancing behaviors do so "unconsciously" only in the respect that, having consciously done so for so many years, the behaviors become subconscious.
A recent U.S. Supreme Court ruling breathed new life into at least three local cases against Big Tobacco that had been in danger of being snuffed out.
In a 5-4 ruling early last week, the nation’s highest court found that smokers are not barred by federal law from suing cigarette makers for deceiving them about the health risks from “light” cigarettes.
While Minnesota entered into a $6 billion settlement with cigarette manufacturers in 1998, the agreement only blocks state suits, not private litigation. The issue locally was whether federal cigarette labeling and advertising law pre-empted a fraud action brought under Minnesota law. A year ago, the Minnesota Court of Appeals ruled in Dahl, et al. v. R.J. Reynolds Tobacco Co., et al. that federal law did not shield tobacco companies from state-law fraud and misrepresentation claims over how they advertised “light” cigarettes. R.J. Reynolds sought review from the Minnesota Supreme Court, which stayed the case pending the U.S. Supreme Court’s resolution of the case decided last week.
The U.S. high court decision paves the way for the R.J. Reynolds case – and two other similar cases in Minnesota trial courts – to proceed to trial, according to Kay Nord Hunt, one of the attorneys representing the R.J. Reynolds plaintiffs on appeal.
If tobacco companies deceived smokers of "light" and "low tar" cigarettes, smokers can sue them under state consumer laws, the U. S. Supreme Court decided on Dec. 15.
Five Justices agreed that federal labeling laws do not pre-empt suits in state courts alleging that tobacco companies violated a duty not to deceive smokers.
In West Virginia, the decision allows Circuit Judge Arthur Recht of Wheeling to lift a stay he imposed on all tobacco suits in West Virginia.
Recht, who handles tobacco litigation by appointment of the Supreme Court of Appeals, imposed the stay while awaiting the decision.