The response essentially asks the Court to disregard the Intervenors' brief because it is "virtually useless" and makes no "meaningful contribution to the necessary legal analysis."
The Defendants argue that the brief offers no meaningful legal analysis because it fails to offer any reasoning to support the assertion that the proposed remedies will "prevent and restrain" the alleged RICO violations, as required by 18 U.S.C. section 1964(a) (the civil remedies provision of the RICO statute).
The brief provides two major arguments, which address each of the major arguments made by the Intervenors in support of their proposed remedies' appropriateness under the RICO statute as interpreted by the D.C. Court of Appeals.
First, the Defendants argue that the idea that the smoking cessation, counter-marketing, and youth smoking reduction remedies are necessary in order to divest the tobacco companies of their interest in the RICO enterprise is "frivolous" and "bizarre." How could the individual smokers who were the alleged victims of the fraud constitute the enterprise? And how could forcing the tobacco companies to pay for smoking cessation programs or other programs to encourage smokers to quit constitute divestiture of the defendants' interest in the enterprise? After all, the government's theory in the case does not suggest that individual smokers are somehow members of the enterprise. And even if this bizarre smokers-as-enterprise theory were tenable, how would reducing the number of smokers prevent and restrain future RICO violations?
Second, the Defendants argue that the Intervenors fail to demonstrate (actually, that they provide no viable argument) that the proposed remedies will prevent and restrain RICO violations.
The Intervenors assert that the 3 proposed monetary remedies will prevent and restrain RICO violations by reducing the pool of smokers or the pool of youths to whom fraudulent marketing practices could be directed and help inoculate these groups against such practices, thus making it less profitable for the companies to commit RICO violations and ultimately, serving as a deterrent to their interest in committing these violations.
However, the Defendants point out that the D.C. Court of Appeals has ruled that simple deterrence is not enough to justify a remedy under RICO's "prevent and restrain" requirement, citing Judge Williams' concurring opinion that: "pure deterrence [is] an impermissible objective of orders under [section] 1964(a)". Defendants assert that the appellate court decision makes it clear that allowable remedies must "actually stop future violations from occurring, not merely mitigate their effects or theoretically make them less profitable by shrinking the size of a defendants' business."
The Rest of the Story
With regards to the proposed monetary remedies in this case, I find the Defendants' arguments to be entirely compelling.
First, with respect to the Intervenors' assertion that programs to encourage smoking cessation and prevent smoking initiation are statutorily appropriate because they would divest the companies of their interest in the RICO enterprise, I agree with the Defendants that this is both a bizarre and a frivolous argument (although I chose to describe it as a "rather wild" interpretation of the statute):
"This is a rather wild interpretation of the statute, which was clearly designed to prevent future RICO violations by breaking up the criminal enterprise - i.e., the business ventures, structures, and relationships - that would allow the violations to continue. As the intervenors themselves state: 'the civil remedies must be employed as a means of requiring individuals who have used racketeering methods to acquire or operate legitimate businesses to divest themselves of their ill-gotten interests and to refrain from entering the same lines of business.' This is a far cry from the purpose to which the intervenors would put the civil remedies provision of RICO. Running smoking cessation programs does not represent any direct breakup of any business enterprise. It does not force the defendants to refrain from entering the same lines of business."
Second, with regard to the Intervenors' assertion that the proposed monetary remedies meet the "prevent and restrain" requirements of the RICO statute because they will create an economic incentive for tobacco companies not to commit future RICO violations, I think one only need look as far as the appellate court decision itself to see that this argument lacks merit.
In fact, Judge Williams actually jokes about the argument that fashioning a remedy that deters illegal activity under RICO by imposing financial disincentives would meaningfully prevent and restrain future violations, given the other more direct remedies available under the statute:
"I find it hard to imagine a waffling villain—already in court for RICO violations—saying to himself: 'Well, my chances of escaping § 1963(a) forfeiture and imprisonment because of the statute of limitations and the burden of proof, and of escaping treble damages under § 1964(c), and contempt penalties for violating the court’s orders, still leave RICO violations attractive on a net basis; but that implied disgorgement under § 1964(a)—wow! Too much. It tilts me over the line.'"
Williams makes it clear that "the court must try to draw lines between equitable remedies that merely “hurt” the defendant and ones that have a genuine tendency to “prevent and restrain” his future violations."
And Judge Sentelle also makes it clear that a general deterrent effect of a proposed RICO remedy is not sufficient to meet the statutory requirement that the remedy prevent and restrain future violations: "It is true, as the Government points out, that disgorgement may act to “prevent and restrain” future violations by general deterrence insofar as it makes RICO violations unprofitable. However, as the Second Circuit also observed, this argument goes too far. “If this were adequate justification, the phrase ‘prevent and restrain’ would read ‘prevent, restrain, and discourage,’ and would allow any remedy that inflicts pain.”
While these arguments are sufficient to dismiss the Intervenors' brief, the Defendants make two additional critical arguments.
First, they point out that by mucking with the government's proposed remedies at this late date (after all the testimony and evidence in the trial has been presented), there are really no sufficient grounds on which the Court can make a credible judgment with regard to the added components of the proposed smoking cessation, public education, and youth smoking reduction programs. There has not been testimony on this aspect of the case and the defendants have not been given an opportunity to respond. In other words, there has been no litigation of these issues.
The specific issues added by the Intervenors include:
- a requirement that the smoking cessation program continue until less than 10% of smokers report that they want or intend to quit;
- a requirement that the public education and counter-marketing program continue until youth tobacco use declines to 5%;
- a requirement that the public education and counter-marketing program continue until less than 10% of the public fails to "fully understand the comparative health risks of different health products"; and
- a requirement that the public education and counter-marketing program continue until less than 10% of the public fails to be "fully informed of the disease risks and other harms associated with exposure to secondhand smoke."
I myself, as an experienced practitioner in the tobacco control field, have no idea what it means to say that a person "fully understands" the comparative health risks of different tobacco products or that a person is "fully informed" of the disease risks associated with secondhand smoke. And I have no idea how one would define or measure that. It is certainly possible that a method could be discussed and worked out, but it would certainly warrant some evidence and some testimony for the Court to even begin to grapple with the issue (even assuming that the remedy was otherwise appropriate and permissible).
The second additional critical argument made by the Defendants is that by mucking with the government's proposed remedies, the Intervenors have now fashioned remedies that require the defendants to do something beyond which they have control.
For example, it is not clear to me that by ceasing the alleged RICO violations, the tobacco companies could achieve the result of fewer than 10% of smokers saying that they want to quit. If anything, if those alleged violations ceased, I would think that the proportion of smokers who stated they want to quit would go up substantially because perhaps there would be less deception about the potential safety of smoking light or low-yield products!
And it is even less clear that a counter-marketing campaign could lower youth smoking levels to below 5%. That is certainly not under the defendants' control. There are simply too many other factors that influence youth smoking to assert that the tobacco companies single-handedly have the ability, through funding a counter-marketing campaign, to lower youth smoking prevalence to below 5%.
Finally, I would add one additional argument that would render the proposed monetary remedies unallowable even if a deterrent effect were ruled to be consistent with the "prevent and restrain" requirement. I do not believe that proposed smoking cessation, counter-marketing, and youth smoking reduction remedies would in fact create an economic incentive to deter future RICO violatioins. In fact, I think they would create a strong incentive for such violations to continue, especially under the scheme concocted by the Intervenors (whereby payments for these programs would continue essentially regardless of whether the companies were actually continuing to commit RICO violations or not).
The rest of the story suggests that the tobacco company defendants in the DOJ case have offered an entirely compelling set of arguments for why the Intervenors' post-trial brief has little if any legal merit and why it should therefore be disregarded.
I think the Defendants are right on the mark when they conclude that: "At bottom, the Intervenors’ brief — like the very fact of their intervention — simply underscores the extent to which this civil RICO lawsuit has degenerated into a public policy free-for-all, with segments of the public health community vying for this Court’s attention and lobbying for adoption of their favorite 'anti-smoking' wish-lists. But this lawsuit is not a seminar or public debate on the best ways to reduce smoking; it is a legal proceeding in which the Court’s jurisdiction is sharply limited to taking actions necessary to 'prevent and restrain' RICO violations."
In that sense, I think the public health community will be lucky if the Intervenors' brief is disregarded. Because if it is regarded (even if dismissed), it is going to help demonstrate to the Court what is really going on in this case. And that could be a fatal blow not only to the inappropriate monetary remedies, but to the entire house of cards.