No Monetary Penalty For Big Tobacco

In this photo provided by Staci Britton, federal agents prepare to raid the home of Farooque Ahmed in Ashburn, Va. Wednesday, Oct. 27, 2010. Ahmed was arrested Wednesday and accused of casing Washington area subway stations in what he thought was an al-Qaida plot to bomb and kill DC-area commuters. (AP Photo/Staci Britton) NO SALES AP Photo/Staci Britton

A federal judge ruled Thursday that the nation's top cigarette makers violated racketeering laws, deceiving the public for years about the health hazards of smoking, but said she couldn't order them to pay the billions of dollars the government had sought.

U.S. District Judge Gladys Kessler did order the companies to publish in newspapers and on their Web sites "corrective statements" on the adverse health effects and addictiveness of smoking and nicotine.

She also ordered tobacco companies to stop labeling cigarettes as "low tar," "light," "ultra light" or "mild," since such cigarettes have been found to be no safer than others because of how people smoke them.

In her ruling in the long-running case, the judge said, "Over the course of more than 50 years, defendants lied, misrepresented and deceived the American public, including smokers and the young people they avidly sought as 'replacement smokers,' about the devastating health effects of smoking and environmental tobacco smoke (secondhand smoke)."

Kessler, who presided over the nonjury trial in the case, said that adoption of a national stop-smoking program, as sought by the government, "would unquestionably serve the public interest" but that she was barred by an appeals court ruling that said remedies must be forward-looking and not penalties for past actions.

The Justice Department called that disappointing, reports CBS News correspondent Wyatt Andrews. So did the Legacy Foundation — which was in line to spend any monetary damages for a public education campaign.

"I was surprised and disappointed on behalf of the American people because the judge rightly found massive liability — indeed racketeering — on the part of the tobacco industry," Legacy Foundation president and CEO Cheryl Healton told Andrews.

The government had asked the judge to make the companies pay $10 billion for smoking cessation programs, though the Justice Department's own expert said $130 billion was needed.

That reduction in recommended remedies led to accusations that Robert McCallum, an associate attorney general appointed by President Bush, had tried to weaken the case. An internal Justice Department investigation cleared him of wrongdoing, however, saying he was supporting a figure he thought could be sustained on appeal. McCallum is now U.S. ambassador to Australia.

Kessler's decision came nearly a decade after the states reached legal settlements with the industry worth $246 billion and aimed at recovering health care costs. Those settlements imposed some restrictions on the industry, such as banning ads on billboards and public transportation.

In the federal case, tobacco companies had denied committing fraud and had said changes in how cigarettes are sold now make it impossible for them to act fraudulently in the future.

In addition to saying she could not force the companies to pay for a quit-smoking program, Kessler rejected a government bid to impose fines on the industry if youth-smoking rates fail to drop in the coming years.
  • Melissa McNamara

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