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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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