By Zoe Tillman, From The National Law Journal
But D.C. Circuit says companies must still make disclosures about addictiveness.
Tobacco companies will not have to publicly advertise a judge’s conclusion that they “deliberately deceived” consumers about the health risks of smoking, the U.S. Court of Appeals for the D.C. Circuit ruled on Friday.
The D.C. Circuit said the tobacco companies, prosecuted under federal racketeering laws, will have to make certain disclosures about the addictiveness of their products. But the court held that the “deliberately deceived” language ordered by a U.S. district judge addressed the cigarette producers’ general conduct and, as a result, ran afoul of previous rulings in the case.
Racketeering law “empowers district courts to issue injunctions for one purpose and one purpose only: to prevent and restrain future RICO violations,” Judge David Tatel wrote for the appeals court. “Correcting consumer misinformation, which ‘focuse[s] on remedying the effects of past conduct,’ is thus an impermissible objective under RICO.”
Miguel Estrada of Gibson, Dunn & Crutcher argued for Altria Group Inc., Lorillard Tobacco Co., Philip Morris USA Inc. and R.J. Reynolds Tobacco Co. Estrada referred a request for comment to his clients. A spokesman for Altria said in an email that the company is “gratified that the appellate court struck down the preamble to each proposed communication, which was the critical part of the appeal. The court correctly found that the preamble violated federal law by focusing on past conduct, instead of the health consequences of cigarettes.”
U.S. Department of Justice spokeswoman Nicole Navas said in a statement that Friday’s decision “is the latest step in the Department of Justice’s long-standing racketeering case against the tobacco companies, in which a federal court found that the tobacco companies deliberately deceived the American public about the health consequences of smoking.”
Matt Myers, president of the Campaign for Tobacco-Free Kids, one of several public health groups that intervened in the case, said that although he was disappointed with the court’s decision to strike the preamble, “the decision is a resounding victory for public health because it rejects every other claim of the tobacco industry.” Howard Crystal of Meyer Glitzenstein & Crystal argued for the public health organizations.
The federal government sued a group of the largest U.S. tobacco companies in 1999, accusing them of conspiring to deceive Americans about the dangers of smoking.
U.S. District Judge Gladys Kessler in 2006 found the tobacco companies liable for defrauding the public about the addictiveness and health risks of their products. She ordered them to make “corrective” statements in print, television and radio advertising spots.
The preamble to the ads would state: “A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public about the health effects of smoking, and has ordered those companies to make this statement. Here is the truth:”
During arguments before the D.C. Circuit in February, Estrada said that while his clients were prepared to make certain fact-based representations about their products, Kessler’s proposed language was designed to humiliate the tobacco companies.
Melissa Patterson of the U.S. Department of Justice Civil Division argued that Kessler determined the preamble was necessary to make sure tobacco companies could not undermine the rest of the information in the ads.
Tatel, citing a 2009 ruling from the D.C. Circuit in this case, said Kessler could require the companies to make statements that “reveal the previously hidden truth about their products.” He wrote that the preamble statements, on the other hand, “reveal nothing about cigarettes; instead, they disclose defendants’ prior deceptive conduct. Accordingly, they cannot be justified on the basis of our 2009 opinion.”
Tatel wrote:
Reading the extensive briefs the parties and their amici have submitted, one might think this case presents thorny, unresolved questions under both RICO and the First Amendment. As we explain below, however, the heavy lifting has already been done. Given our earlier decisions in this case, the manufacturers’ objection to disclosing that they intentionally designed cigarettes to ensure addiction is both waived and foreclosed by the law of the case. Those decisions make equally clear that the district court, in ordering defendants to announce that they deliberately deceived the public, exceeded its authority under RICO to craft remedies that ‘prevent and restrain’ future violations.
Judges Harry Edwards and A. Raymond Randolph also heard the case.
Photo: skodonnell/iStockphoto.com
For more on this story go to: http://www.nationallawjournal.com/id=1202727248441/Tobacco-Companies-Defeat-Judges-Order-for-Deliberately-Deceived-Ads#ixzz3bFhSIjjH