Supreme Court Rejects Appeals of Tobacco Ruling
Thursday, July 15, 2010
The milestone racketeering verdict against cigarette companies will not be reviewed by the United States Supreme Court, according to a decision to deny a writ of certiorari which was issued without comment June 28, 2010.
The decision appealed by both sides of the suit, tobacco companies and the U.S. Department of Justice, was ordered in 2006 by United States District Court for the District of Columbia Judge Gladys Kessler. In appealing to the Supreme Court, the last option available for the case, tobacco companies sought to overturn a civil racketeering judgment on free speech grounds. Conversely, the federal government appealed to force tobacco companies to return up to $280 billion in profits from advertising campaigns which were judged to be untruthful about the health risks associated with smoking.
The decision comes as a relief to tobacco investors, according to Thilo Wrede, an industry analyst for Credit Suisse; "If the decision would have been the other way, you would have seen a headline saying a $280 billion case is open again.”
Antismoking advocates’ reactions to the denial are mixed, says Edward L. Sweda, a senior lawyer with the Tobacco Products Liability Project. "Obviously we’re disappointed, because we would have liked to force the companies to disgorge their ill-gotten gains… but we’re delighted with the upholding of the judge’s basic finding that the major tobacco companies are in fact adjudicated racketeers. Now that is established historical fact.”
While portions of Judge Kessler’s 2006 ruling have been subsequently imposed through federal legislation, the case will now return to her court in order to discern remedies other than disgorgement, such as possible corrective advertising.
NOTE: The appealed decision is United States v. Philip Morris USA, Inc., 449 F. Supp. 2d 1 (D.D.C. 2006) and is available at https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?1999cv2496-5732.
New York Times
By Duff Wilson
June 28, 2010