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United States v. Philip Morris

January 31, 2001



I. Introduction

The United States of America ("the Government"), brought suit against eleven tobacco-related entities ("Defendants") *fn1 to recover health care expenditures the Government has paid for or will pay for to treat tobacco-related illnesses allegedly caused by Defendants' tortious conduct, and to disgorge the proceeds of that unlawful conduct. The Court previously dismissed two of the Government's claims, and dismissed Defendant B.A.T. Industries p.l.c. ("BAT Ind.") for lack of personal jurisdiction. See Memorandum Opinions and Orders of September 28, 2000. *fn2

This matter is now before the Court on the Government's Motion to Modify the Memorandum Opinion of the Court Granting BAT Ind.'s Motion to Dismiss the Complaint for Lack of Personal Jurisdiction ("Motion to Modify"). Upon consideration of the Motion, the Opposition, the Reply, and the entire record herein, the Government's Motion is granted in part and denied in part.

II. The Government's Request to Modify

The Government asks the Court to revisit the BAT Opinion. The Government's basic contention is that portions of that Opinion are inconsistent with the Supreme Court's decision in Salinas v. United States, 522 U.S. 52 (1997), and should therefore be stricken. Specifically, the Government requests that the Court strike from the BAT Opinion any statement indicating that Defendants must actually commit a racketeering act to be liable for a Racketeer Influence and Corrupt Organizations Act ("RICO") conspiracy. According to the Government, Salinas dictates that "a defendant may be liable for a RICO conspiracy under 18 U.S.C. § 1962(d) if the evidence establishes [either] that the defendant agreed that it or another member of the RICO conspiracy would commit two racketeering acts in furtherance of the affairs of the RICO enterprise" or the defendant "knowingly agreed to facilitate the commission of a RICO offense by another conspirator." Motion to Modify at 4.

Although the Government concedes that a plaintiff must show that a defendant engaged in two or more predicate acts to state a claim under one of RICO's substantive provisions (§ 1962(a), (b), or (c)), it argues that Salinas rejected such a requirement with respect to RICO's conspiracy provision under § 1962(d). The Government contends that any statements in the BAT Opinion which suggest otherwise are incorrect as a matter of law and should accordingly be modified to reflect the law announced in Salinas.

The Court agrees with the Government's reading of Salinas. *fn3 Accordingly, and given the fact that BAT Ind. does not appear to have any objection to the Motion insofar as it only seeks to strike certain language in the Memorandum Opinion, the Court will grant the Government's request. All statements in the Court's BAT Opinion that are inconsistent with Salinas are deemed stricken. *fn4

III. The Government's Request for Reconsideration

In addition to requesting that certain language in the Memorandum Opinion be modified or stricken, the Government states rather obliquely that the Court "may also wish to reconsider its dismissal of BAT Ind.," Motion to Modify at 4, and that the "Motion to Modify could bear directly upon the Court's decision to grant" BAT Ind.'s motion to dismiss. United States' Reply in Support of Mot. to Modify BAT Op. ("Reply") at 4-5. In other words, although the present motion is styled as a "Motion to Modify," the Government is also presenting it as a motion for reconsideration pursuant to Fed. R. Civ. P. 59(e). See Motion to Modify at 1 n.1. *fn5

To prevail on a motion for reconsideration, it is the moving party's burden to show "new facts or clear errors of law which compel the court to change its prior position." National Ctr. for Mfg. Sciences v. Department of Defense, 199 F.3d 507, 511 (D.C. Cir. 2000) (internal citation omitted). A motion for reconsideration will not be granted if a party is simply attempting to renew legal arguments that have already been rejected by the Court. See New York v. United States, 880 F. Supp. 37, 38 (D.D.C. 1995); Assassination Archives and Research Ctr. v. United States Dep't of Justice, 828 F. Supp. 100, 101-102 (D.D.C. 1993). In general, "reconsideration of a judgment after its entry is an extraordinary remedy which should be used sparingly." 11 Wright et al., Federal Practice and Procedure § 2810.1, at 124 (2d ed. 1995).

In its Motion to Modify, the Government cites two documents, both relating to a single episode, which it contends make a prima facie showing of a conspiracy, when the correct legal standard is applied. *fn6

The first document is a September 9, 1983 letter from BAT Ind.'s then-chairman, Sir Philip Sheehy, to a Philip Morris, Inc., executive, expressing objections to an advertising campaign launched in Holland by Philip Morris-Holland B.V. See Govt's Proffer of Publicly Available Evidence ("Prof.") Ex. 58. Mr. Sheehy stated that Philip Morris-Holland B.V. had made a "mockery of Industry co-operation on smoking and health issues" by republishing an advertisement originally run by an anti-smoking group which allegedly slandered a BAT Ind. cigarette brand, Barclay. Mr. Sheehy stated that he was "confident" that Philip Morris, Inc. did "not approve of the questionable tactics behind [its] Dutch company's advertisement," and strongly requested that the advertisement be retracted, upon threat of legal action. Id.

The second document contains the notes from a follow-up telephone conversation, approximately a month and a half later, in which a BAT Ind. official told a Philip Morris official that it was "[e]ssential to ensure that in future no member of the Industry does anything similar." Prof. Ex. 59.

To make a prima facie showing of conspiracy, the Government must show "(1) that two or more people agreed to commit a substantive RICO offense and (2) that the defendant knew of and agreed to the overall objective of the RICO offense." United States v. Posada-Rios, 158 F.3d 832, 857 (5th Cir. 1998) (recognizing import of Salinas), cert. denied, 526 ...

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