Higher Tobacco Penalty Sought

The Justice Department on Monday asked the Supreme Court to allow it to seek $280 billion in past profits from tobacco companies.

An appeals court had barred the government from seeking the money in a major blow to the long-running federal racketeering lawsuit against the cigarette companies.

The request came at the deadline for the administration to decide whether to appeal the February ruling, by the U.S. Court of Appeals for the District of Columbia Circuit, that the government could not use a federal racketeering law to seek the huge penalty.

The $280 billion is the most ever sought in a civil racketeering trial. The government has described the sum as an estimate of money the companies earned illegally through fraudulent activities such as marketing to children and denying doing so.

A nine-month trial ended in June, but it could be months before U.S. District Judge Gladys Kessler decides the case. The judge has urged the sides to try to reach a settlement.

The government asked Kessler to require the companies to fund a five-year, $10 billion program, a fraction of the 25-year, $130 billion program suggested by government witness Michael C. Fiore, a University of Wisconsin medical professor.

Democrats and other administration critics claimed that top Justice Department officials pressured the lawyers handling the case to back off the more expensive anti-smoking campaign.

Attorney General Alberto Gonzales has said that decision was made on the merits of the case, independent of political considerations. But Justice is investigating whether improper political influence factored into the case.

On the new matter, the appeals court wrongly decided a critical issue in "the most important civil RICO action that the government has ever brought," the Justice Department said in its brief asking the high court to take the case. The ruling could affect other civil racketeering cases as well, it said.

Kessler ruled last year that the government could seek the penalty, called a "disgorgement," under the racketeering statute. The tobacco companies appealed and the appellate court sided with them, ruling the government couldn't recover any money using the racketeering law because the statute requires "forward-looking remedies."

The initial ruling by a three-judge panel was 2-1. Disgorgement is "a remedy aimed at past violations," Judge David Sentelle wrote. He was joined by Judge Stephen Williams. Both were appointed by President Reagan.

In dissent, Judge David Tatel said his colleagues ignored Supreme Court precedent, misread the law and contradicted the decision of another appeals court, the 2nd U.S. Circuit Court of Appeals in New York. Tatel was appointed by President Clinton.

Among the other penalties the government has suggested are long-term educational campaigns designed to counter tobacco marketing, quantifiable reductions in youth smoking rates, and restrictions on practices such as price discounts and in-store displays.

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

Filed in 1999, the suit contends that tobacco companies knew about the health dangers of smoking but hid that information from the public.