Feature Article

On August 17, 2006, U.S. District Court Judge Gladys Kessler handed down her approximately 1,700 page opinion that the tobacco industry had violated the Racketeer Influenced and Corrupt Organizations Act (RICO).  Judge Kessler found for the U.S. Department of Justice on nearly every allegation, ruling that the tobacco companies had purposely deceived the public about the dangers of smoking and secondhand smoke, the hazards of "low tar" cigarettes, and their marketing of cigarettes to children. 

The case, United States v. Philip Morris, was originally filed by the Department of Justice on September 22, 1999. In 2005, the Court of Appeals for the D.C. Circuit held that the Department of Justice could not seek disgorgement of profits in the amount of $280 billion, and it limited damages only to "forward looking" remedies.  Due to this pastlimitation on remedies, Judge Kessler felt that she was unable to impose significant monetary penalties on the tobacco companies or order them to fund a national smoking cessation effort.  She did, however, prohibit the tobacco industry from marketing its cigarettes using descriptors that convey any diminished effect on health (such as "light" and "low tar"), and she ordered the companies to begin a newspaper and television advertising campaign to correct their past misrepresentations about the health effects of smoking.

The tobacco companies have already appealed the ruling the D.C. Circuit Court of Appeals.  The Department of Justice has been silent on whether or not it will appeal the restriction on remedies.  Although the Circuit Court has already ruled that only "forward looking" remedies are available in RICO cases, that holding could still be appealed to the U.S. Supreme Court.

Judge Kessler's thorough and well-documented ruling provides conclusive evidence of a decades-long conspiracy by the tobacco industry.  As Judge Kessler wrote, the tobacco industry "marketed and sold their lethal products with zeal, with deception, with a single-minded focus on their financial success, and without regard for the human tragedy or social costs of that success."  The effect of this ruling on other civil litigation remains to be seen.  Other plaintiffs will likely argue that the principle of "collateral estoppel" should apply and that Judge Kessler's findings should be the starting point for future litigation. This was recently argued in a New York "lights" cigarettes case where the plaintiffs are seeking to bring a class action lawsuit. The judge in that case has not yet ruled on whether collateral estoppel will apply.

For more information on Judge Kessler's ruling and summaries of her findings, click here.