U.S. cigarette makers asked a federal appeals court to reconsider RICO ruling.
Altria Group Inc. and other U.S. cigarette makers asked a federal appeals court to reconsider its ruling that the companies violated racketeering laws and barring them from marketing cigarettes as “light” or “low-tar.”
On July 31, Altria and the other companies asked the full U.S. Circuit Court of Appeals in Washington to overturn the decision by a three-judge panel in a case filed by the Clinton administration in 1999. In the May decision, the court upheld a 2006 ruling by U.S. District Judge Gladys Kessler, who found the companies conspired for decades to defraud the public and were likely to violate racketeering laws in the future.
“The panel’s opinion upholds the government’s unprecedented effort to impose pervasive regulation on the tobacco industry, not through legislative channels, but through the Racketeer Influenced and Corrupt Organizations Act,” Altria’s Philip Morris USA unit said in its court filing.
The companies have argued that the ban on “light” and “low-tar” descriptors, which was delayed pending resolution of the appeal, would cost hundreds of millions of dollars and would “fundamentally alter the business landscape.”
Kessler’s ruling came after a nine-month trial that began in September 2004. In May the appeals court also upheld Kessler’s order barring the companies from future violations of the Racketeer Influenced and Corrupt Organizations Act, or RICO.
The appeals court agreed that the companies may be required to publish statements correcting past misstatements about addiction, the dangers of smoking and second-hand smoke, the companies’ manipulation of cigarette design and the dangers of “light” and “low-tar” cigarettes.
Kessler found that the companies misled consumers into believing that “light” cigarettes are less dangerous than other types. She ruled the restrictions were needed to prevent future RICO violations, rejecting the companies’ argument that a 1999 agreement between U.S. cigarette makers and 46 states already prevents them from violating the law.
In court papers filed July 31, Philip Morris argued that legislation signed in June giving the U.S. Food and Drug Administration new authority to regulate the tobacco industry “makes clear that there is no reasonable likelihood of defendants’ committing future RICO violations.”
The case is U.S. v. Philip Morris USA, 06-5267, U.S. Court of Appeals, District of Columbia Circuit (Washington).
