Wednesday, March 30, 2005

The Citizens' Commission Amicus Brief: Further Commentary

In a previous post, I commented on what I believe to be an inappropriate omission in the amicus brief submitted by American Legacy Foundation-funded Citizens' Commission to Protect the Truth in the DOJ lawsuit: namely, the failure to disclose that the Citizens' Commission is funded by the Legacy Foundation. I think here it is also worth commenting on the substance of the Commission's argument, leaving aside the issue of whether or not there is an inherent conflict of interest in presentation of the basic argument.

The two basic arguments presented in the brief are that: (1) an appropriate remedy for the tobacco company defendants' violations of the RICO statute is to order them "to fund a public education and youth smoking prevention campaign"; and (2) that "the American Legacy Foundation's truth® campaign should be the organization so funded.

The brief argues that ordering the tobacco companies to fund a public education and youth smoking prevention campaign is an appropriate remedy because it will help prevent and restrain further violations of RICO: "requiring the Defendants to fund independent third-parties' marketing and advertising campaigns, such as the truth® campaign, prevents future violations by affecting the Defendants' future conduct and shifting the focus of the Defendants' future marketing activities. Such a remedy will require the Defendant tobacco companies to fund effective, independent smoking prevention programs, thereby avoiding the type of public misinformation campaign engaged in by the Defendants. Impacting Defendants' conduct by requiring them to fund third-party anti-smoking campaigns is an effective and authorized way both to address the Defendants' RICO violations and to satisfy the requirements set forth by the Circuit Court of Appeals, by aiming to prevent continuing and future violations rather than cure those of the past."

The Rest of the Story

I think that a careful analysis of this argument reveals it to be flawed. The main problem is that the argument incorrectly assumes an either-or scenario for the tobacco company's marketing activities. Either the companies continue their past patterns of deceptive marketing or they fund the Legacy Foundation and change the manner in which they market their products.

But it seems to me that there is another, more likely possibility: that the companies will fund the Legacy Foundation AND continue their past patterns of deceptive marketing. There is nothing that writing a check out to the American Legacy Foundation will do to change the basic marketing practices of the industry. Just because they are told they must pay for a "truth" campaign does not mean that they cannot or will not continue to use deceptive marketing practices to promote the use of their products. In other words, requiring Defendants to fund the truth® campaign will do nothing to deter future RICO violations. I think the argument fails.

Breaking the brief down, the central argument really rests on two basic premises:

(1) "Ordering the tobacco companies to fund an effective, independent smoking prevention campaign will serve precisely the function contemplated by [RICO civil remedies provision] by directing the manner in which Defendants will market their product."

This premise is flawed because having the Defendants write out a check for a third-party anti-smoking campaign does nothing to direct their marketing activities. They can continue to market the product however they wish, including using deceptive techniques to entice youth to smoke, undermining public health efforts to educate the public about the true risks of smoking, and targeting youths in their advertising. They can even directly undermine the anti-smoking campaign in their own marketing if they want to. If anything, the tobacco companies would be freer to continue their deceptive marketing, because they could use the fact that they are funding the truth® campaign to increase their public good will and detract attention from their marketing practices.

(2) "Placing the onus on the tobacco companies to fund a public education and smoking prevention campaign will effect a shift in the tobacco companies' marketing focus and conduct by forcing them to fund effective anti-smoking and smoking prevention advertising by third parties, rather than the current pro-smoking marketing in which the tobacco companies still are currently engaged."

This premise is flawed because forcing the companies to fund a smoking prevention campaign does not require them or entice them in any way to discontinue "the current pro-smoking marketing" in which they are currently engaged. If anything, it would give the companies more of an incentive to aggressively market their product. They would have to be increasingly effective in their "pro-smoking marketing" in order to offset any negative impacts of the independent anti-smoking campaign.

Frankly, the idea that forcing the companies the fund the truth® campaign will put an end to their current pro-smoking marketing or even to the deceptive aspects of their pro-smoking marketing seems to me to be weak at best and uninformed at worst.

Truly, what it sounds like to me is that the American Legacy Foundation and/or its grantee are struggling to come up with a way to get Legacy funded. The argument presented in the amicus brief seems to me to be so flawed that it makes one wonder whether this is more of a thinly-veiled attempt to promote Legacy's funding rather than a serious attempt at offering an important substantive evaluation of the relevant legal issues to the court.

In actually reading the relevant statute, I find it very difficult to imagine how the funding of a third-party anti-smoking campaign would even remotely serve the function contemplated therein: "The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to: ordering any person to divest himself of any interest, direct or indirect, in any enterprise; imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce; or ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons."

The situation would be different if a huge amount of money were involved. Huge punitive damages, whether they take the form of disgorgement of past profits or otherwise, could deter future RICO violations. But this is not the argument being made in the brief, and it is also not a remedy that is likely, unless the Circuit Court panel's decision is overturned.

The situation would also be different if the amicus brief were calling on the judge to impose direct marketing restrictions on the companies. That seems to be much more in line with what section 1964(a) has in mind.

I'm all for the idea of trying to extract whatever damages and remedies we can out of the tobacco companies in the interest of protecting the public's health. But those remedies must fall within the confines of the law. And here, I simply don't think that requiring the tobacco companies to fund the truth® campaign is a remedy that is consistent with 18 U.S.C. section 1964(a).

No comments: