Appeals Court -- Cigarette Makers violated RICO
Altria Group Inc. and other U.S. cigarette makers lost an appeal of a lower court’s decision that the companies violated racketeering laws and barring them from marketing cigarettes as “light” or “low-tar.”
The U.S. Court of Appeals in Washington today upheld U.S. District Judge Gladys Kessler’s August 2006 ruling, which found that the companies conspired for decades to defraud the public and were likely to violate racketeering laws in the future. Today’s decision is a victory for the Justice department, which sued the industry in 1999.
“The district court found -- permissibly in our view -- that the enterprise had the common purpose of obtaining cigarette proceeds by defrauding existing and potential smokers,” the appeals court said in its 3-0 decision.
The companies had argued that the ban on “light” and “low-tar” descriptors, which was delayed pending the appeal, would cost hundreds of millions of dollars and would “fundamentally alter the business landscape.”
Altria and its Philip Morris USA unit said in a statement today that they intend to appeal. Reynolds American Inc.’s R.J. Reynolds Tobacco also said it will appeal.
