Tuesday, July 19, 2005

DOJ Appeals Tobacco Suit Ruling to Supreme Court

The Department of Justice yesterday appealed to the Supreme Court the D.C. Circuit Court of Appeals' decision limiting remedies in DOJ's lawsuit against the tobacco companies. If the Supreme Court decides to hear the case and then overturns the appellate court decision, it would then allow the Department to seek disgorgement of past tobacco industry profits (valued at $280 billion) as a remedy in its RICO-based lawsuit, as well as to seek other "backwards-looking" remedies, including requiring the tobacco companies to pay for a public anti-smoking media campaign and for a national smoking cessation program (valued at $130 billion).

A decision by the Supreme Court on whether to hear the appeal is not expected until fall 2005, and if the case is heard, it is unlikely to be heard until spring 2006, with a final decision issued no earlier than June 2006.

In commenting on the development, the Campaign for Tobacco-Free Kids stated: "Regardless of the outcome of this appeal, we believe the government and the judge still have a wide range of remedies available to them, including properly funded tobacco cessation and public education programs..."

The Rest of the Story

There are a number of important implications of the Department of Justice's decision to appeal to the Supreme Court:
  • First, it heads off criticism by anti-smoking organizations that Bush administration political appointees had taken over the case and were attempting to destroy it in order to protect tobacco companies. Failing to appeal the case would have been a sure way to destory any potential for monetary remedies in the case.
  • Second, it heads off, at least temporarily, a settlement of the case. There is now no reason for the Department to settle the case, at least until the Supreme Court makes a decision about whether to hear the appeal.
  • Third, it most likely will allow Judge Kessler to hold off on issuing any decision in the case until after the resolution of this appeal.
  • Fourth, it extends the length of the case substantially, assuming there is no premature settlement. The Supreme Court will not issue its decision about whether to hear the appeal until at least this fall, and if heard, the case would not be decided until next summer.
Surprisingly, it appears that despite the appeal, the Campaign for Tobacco-Free Kids is still pretending that the appeallate court decision does not exist, as it continues to argue that backwards-looking monetary remedies designed as a remedy for past industry misconduct -- such as requiring the industry to fund public anti-smoking campaigns or smoking cessation programs for current smokers -- would be allowable under the law even if the DOJ's appeal is not heard or not decided in the Department's favor.

The fact that the Department of Justice is now taking the appropriate legal steps is apparently not enough to focus the anti-smoking movement's attention on what is appropriate under the law, rather than on how much money they can obtain for their causes.

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