No Monetary Penalty For Big Tobacco

Judge Rules Industry Lied To Public But Stops Short Of Ordering Fines

(AP) 
Mark Smith, a spokesman for R.J. Reynolds Tobacco Co., said company officials were “gratified that the court did not award unjustified and extraordinarily expensive monetary penalties.”

At the same time, Smith said, the company was disappointed by Kessler's finding that the companies had conspired to violate federal law and deceive consumers. He said company lawyers would analyze the decision and decide a next course of action.

The Justice Department, which filed the lawsuit, expressed disappointment in Kessler's decision not to impose financial penalties against cigarette makers.

“Nevertheless, we are hopeful that the remedies that were imposed by the court can have a significant, positive impact on the health of the American public,” the department said.

Sharon Eubanks, who recently stepped down as the head of the government's tobacco team said, “We won. It's clear the government won. This is the first time they've been found to violate the racketeering statute. For crying out loud, that's significant. They're racketeers.”

The government filed the civil case under a 1970 racketeering law commonly as RICO used primarily to prosecute mobsters in cases in which there has been a group effort to commit fraud.

The tobacco companies — except for one defendant, Liggett Group Inc. — were ordered to pay the government's cost for pursing the lawsuit. The government's costs, according to the most recent Justice Department estimate, were more than $140 million.

The suit was first filed in 1999 during the Clinton administration. The Bush administration pursued it after receiving early criticism for openly discussing the case's perceived weaknesses and attempting unsuccessfully to settle it.

A separate court issued an interim ruling last year, finding that civil racketeering laws did not permit the government to seek $280 billion from the companies for money they allegedly earned over many years through fraud.

During the trial, Kessler heard accusations that the companies established a “gentleman's agreement” in which they agreed not to compete over whose products were the least hazardous to smokers. That was to ensure they didn't have to publicly address the harm caused by smoking, government lawyers said. Tobacco lawyers denied the contention.

The defendants in the federal lawsuit were: Philip Morris USA Inc. and its parent, Altria Group Inc.; R.J. Reynolds Tobacco Co.; Brown & Williamson Tobacco Corp.; British American Tobacco Ltd.; Lorillard Tobacco Co.; Liggett Group Inc.; Counsel for Tobacco Research-U.S.A.; and the now-defunct Tobacco Institute.

The only cigarette maker excluded from Kessler's ruling was Liggett.

Kessler credited Liggett with coming forward in the 1990s to admit smoking causes disease and is addictive and for being the only company to disclose the ingredients of its cigarettes on its cartons. She also said the company had been helpful as state and federal officials pursued claims against the industry.

“Liggett is pleased with the court's decision to award no remedies against the company,” said Carrie Bloom, a spokeswoman for Liggett, which is based in Mebane, N.C., and makes discount brands.

[starlady2]

Well, considering that tobaco VP's were telling asian contries that deaths from tobacco poisoning was a nice way of keeping insurance costs down, by way of population control, what does that say about the rationale of this ruling?

[witherite]

So where can I get my treatment...Of course, that is, if the lawyers and the government don't get all the money and siphon off the morjority of it...You can bet they will get their share first, and most of them probably aren't even smokers...Like the last federal lawsuit, the lawyers where the winners...Makes you wonder who the real "Racketeers" are.

[welch-mike1]

This whole tobacco industry lawsuit by the states and the government is just another big government scheme to deem individuals as not responsible for their own actions. Nobody has to smoke, nobody said you should smoke, so why should tobacco companies be any more liable than McDonalds for the fact that there are fat people. Get a life. This is just another political witch hunt so some idiot like Chertoff can run for political office. Its all POLITICS!

[fatherfinigi]

While we are at it, the psychiatric/psychololgical industry has been engaged in racketeering dealing in fraud getting all imagined, untested, uncertified as real "disorders" passed when the "physicians" if you can legally call them that, insist that there is no verifiable cure for their "mental diseases". Getting government monies for their fraudulent research is a crime.

[fatherfinigi]

Are not the members of the pharmaceutical industry racketeers as well. If you are going to accuse the tobacco industry of that then the "Big Pharma" certainly follows suit. Racketeering id defined as engaging in a scheme for getting money or other benefits by fraud, intimidation or other illegitimate means. Pharmaceutical companies are certainly engaging in that!