Feature Article

In 1999, the U.S. Department of Justice (DOJ) sued the major cigarette manufacturers, alleging a decades-long scheme to mislead the public and target underage smokers.  Nearly six years later, after hundreds of pretrial motions, tens of millions of documents produced in discovery, and nine months of testimony, the last few days of the trial were dramatic - and deeply disturbing to tobacco control advocates.

Background

The DOJ sued the major tobacco companies under the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO). It alleged an illegal scheme, spanning several decades, to (1) mislead the public regarding the dangers of smoking, (2) mislead the public regarding the dangers of secondhand smoke, (3) misrepresent the addictiveness of nicotine and manipulate nicotine levels in cigarettes, (4) use misleading terms such as "light" and "low tar" to suggest that some cigarettes are safe or safer than others, (5) intentionally market cigarettes to youth, and (6) jointly agree not to market potentially safer cigarettes (because it might undermine the companies' position that cigarettes were not proven to cause disease). The cigarette manufacturers have simultaneously argued that the allegations are untrue and that the companies have reformed themselves such that any wrongdoing that occurred in the past will not happen again. The Tobacco Control Legal Consortium (of which the Tobacco Public Policy Center is a member) has produced a legal synopsis of the DOJ's case. The synopsis can be downloaded online here.

Originally, the most significant remedy requested by the DOJ was disgorgement, i.e., return of all the "ill-gotten" gains obtained as a result of the defendants' fraud. The DOJ estimated this amount at approximately $280 billion. In February, the Court of Appeals for the D.C. Circuit held that disgorgement was not an available remedy under the civil provisions of RICO. The Court found that the relevant provision of RICO provides for "forward-looking remedies" only, and that disgorgement is "a remedy aimed at past violations" and therefore not appropriate. The DOJ may appeal this decision to the United States Supreme Court, but for the time being, the appeals court's ruling governs the case.

In light of this decision, the DOJ requested various other remedies, including:

• funding for third-party public education and counter-marketing campaigns regarding the dangers of smoking and secondhand smoke;
• funding for a nationwide cessation program;
• additional restrictions on youth marketing; and
• a prohibition on brand descriptors of any kind (lights, smooth, etc.).

The tobacco companies have argued that many of these remedies are still impermissible under the appeals court's mandate that all remedies be "forward looking."

Conclusion of the Trial

The drama came during the closing arguments of the trial, when DOJ attorneys unexpectedly requested the court to order the defendants to fund a five-year, $10 billion cessation program. The DOJ's own expert witness, Dr. Michael Fiore, had previously testified that an effective cessation program would take 25 years and cost $130 billion. The DOJ's divergence from its own witness was highly unusual and unexplained. The DOJ attorneys also failed to request any specific amount of money for a public education and counter-marketing campaign.

The next day, the Washington Post reported that the DOJ's sudden reversal was due to "pressure[] by leaders in the attorney general's office, particularly [Associate Attorney General Robert] McCallum." Various Democratic congressmen and senators called for an investigation into whether "improper political interference" led to the DOJ's decision to ask for only $10 billion. Tobacco control advocates were also outraged. The Campaign for Tobacco-Free Kids issued a press release stating that "the watering down and lack of specificity regarding remedies is inconsistent with the powerful evidence introduced by the government and raise questions about whether decisions in this case are now being made based on political considerations, rather than legal and public health considerations." Even the judge noted that "perhaps [the DOJ's change in its request] suggests that additional influences have been brought to bear on what the government's case is."

Regardless of the DOJ's request, the judge, if she finds that the defendants have committed RICO violations, can impose whatever remedy she finds to be legally appropriate. However, the DOJ's reduction in its request raises the possibility that the DOJ may be preparing to settle with the defendants. Settlement talks have been ongoing, but the judge has imposed a gag order restricting either side from speaking with the press. Tobacco control advocates are concerned that the DOJ may agree to a weak settlement and that any settlement would allow the tobacco companies to escape a legal finding that they have committed fraud and are racketeers.

In the absence of a settlement, no decision will be issued for quite a while. The post-trial briefing schedule extends through September, and it would likely take several more months for the judge to finalize an opinion. (And of course, there would be appeals following any ruling.) Although it is unclear what the final result of this case will be, recent developments have been disheartening for tobacco control advocates.