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U.S. v. PHILIP MORRIS USA

March 17, 2004.

UNITED STATES OF AMERICA, Plaintiff,
v.
PHILIP MORRIS USA, Inc., f/k/a Philip Morris, Inc. et al., Defendants



The opinion of the court was delivered by: GLADYS KESSLER, District Judge

MEMORANDUM OPINION

This matter is now before the Court on the Defendants'*fn1 Motion for Summary Judgment on the Grounds that the Government's RICO Claims Violate Separation of Powers ("Motion"). Upon consideration of the Motion, the Opposition, the Reply and the entire record herein, and for the reasons set forth below, the Defendants' Motion is denied.

I. INTRODUCTION

  Plaintiff, the United States of America ("the Government") has brought this suit against Defendants pursuant to Sections 1962(c) and (d) of the Racketeer Influenced and Corrupt Organizations Act Page 2 ("RICO), 18 U.S.C. § 1961 et seq.*fn2 Defendants are manufacturers of cigarettes and other tobacco-related entities. The Government seeks injunctive relief and $289 billion*fn3 for what it alleges to be a four-decade long unlawful conspiracy to intentionally and willfully deceive and mislead the American public. The Government's factual allegations have been described in some detail in prior opinions, and need not be repeated here. See e.g., United States v. Philip Morris Inc., 116 F. Supp.2d 131, 136-138 (D.D.C. 2000).

  In their Motion, Defendants seek summary judgment on the basis of the separation of powers doctrine. This doctrine reflects the "basic principle of our constitutional scheme that one branch of the Government may not intrude upon the central prerogatives of another." Loving v. United States, 517 U.S. 748, 757 (1996). According to the Defendants, the Government is improperly "usurping the legislative function" by bringing this RICO suit. Defs.' Mem. in Supp. at 2. They do not deny that the conduct alleged falls within the scope of RICO. Instead, they argue that Congress has created a distinct regulatory regime for tobacco, one which Page 3 reserves for Congress itself the power to regulate in this area and that the Government's claims and proposed relief "seriously impinge" on this reserved authority. Defs.' Mem. in Supp. at 9. For the reasons set forth below, Defendants are not entitled to summary judgment on this basis.

 II. SUMMARY JUDGMENT STANDARD

  Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment is appropriate if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Material facts are those that "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

  In considering a summary judgment motion, "the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255; see also Washington Post Co. v. United States Dep't of Health and Human Servs., 865 F.2d 320, 325 (D.C. Cir. 1989). In this Motion we are concerned with issues of law, rather than factual disputes. Page 4

 III. ANALYSIS

  A. Tobacco-Specific Legislation

  Congress has enacted legislation addressing tobacco. and health on at least six separation occasions since 1965. FDA v. Brown & Williamson Tobacco. Corp., 529 U.S. 120, 137 (2000).

  Through this legislation Congress has created a "distinct scheme to regulate the sale of tobacco. products." Id. at 157. For example, in the Federal Cigarette Labeling and Advertising Act ("FCLAA" or "Labeling Act"), 15 U.S.C. § 1331-40, Congress mandated the warnings that appear on every package of cigarettes sold in the United States, 15 U.S.C. § 1333. Congress has also, among other things, prohibited the advertisement of tobacco. through "any medium of electronic communication," subject to regulation by the Federal Communications Commission, 15 U.S.C. § 1335; required the Secretary of HHS to report to Congress concerning the addictive nature of tobacco, 42 U.S.C. § 290aa et. seq., and created incentives for States to regulate the sale of tobacco. products to minors, 15 U.S.C. § 300x et.seq.

  Defendants argue that this tobacco-specific legislation, viewed collectively, comprises a regulatory scheme in which Congress has expressed its intent to reserve to itself alone the authority to regulate tobacco, except where it has made some express delegation of that authority. Therefore, according to Page 5 Defendants, the Government's RICO claims must be dismissed because they impinge on this exclusive authority.

  In a prior motion Defendants argued that certain of the Government's claims came within the exclusive jurisdiction of the FTC and would effectively repeal the tobacco. regulatory regime that was purportedly administered by that agency alone. See Joint Defs.' Mot. for Partial Summary Judgment on Advertising, Marketing, Promotion and Warning Claims ("FTC Motion"). The court rejected this argument because it found that RICO did not conflict with either the FTC Act or the FCLAA. United States v. Philip Morris, 263 F. Supp.2d 72 (D.D.C. 2003) ("FTC ...


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