The opinion of the court was delivered by: GLADYS KESSLER, District Judge
This matter is now before the Court on the Motion for Summary Judgment
filed by Defendant Liggett Group Inc. ("Motion"). Upon consideration of
the Motion, the Government's Opposition, the Reply, and the entire record
herein, and for the reasons stated below, the Motion is denied.
Plaintiff, the United States of America ("the Government") has brought
this suit against the Defendants*fn1 pursuant to Sections 1962(c) and
(d) of the Racketeer Influenced and Corrupt Organizations Act ("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 billions of dollars for what it
alleges to be Defendants' unlawful conspiracy to deceive the American
public. The Government's Amended Complaint describes a four-decade long
conspiracy, dating from at least 1953, to intentionally and willfully
deceive and mislead the American public about, among other things, the
harmful nature of tobacco. products, the addictive nature of nicotine,
and the possibility of manufacturing safer and less addictive tobacco.
products. Amended Complaint ("Am. Compl.") at ¶ 3.
The Government seeks equitable relief under Section 1964(a) of RICO. In
order to obtain the requested injunctive relief and disgorgement, the
Government must demonstrate "a reasonable likelihood of future RICO
violations." United States v. Philip Morris Inc., et al.,
116 F. Supp.2d 131, 148 (D.D.C. 2000). Section 1964(a) is designed to
prevent and restrain future conduct rather than to punish past conduct.
See United States v. Carson, 52 F.3d 1173, 1182 (2d. Cir. 1995). II. Analysis
In the present Motion, one of the Defendants, Liggett Group Inc.
("Liggett"), seeks summary judgment on the grounds that it affirmatively
withdrew in the mid-1990s from any alleged conspiracy which might have
existed. In light of this alleged withdrawal, Liggett asserts that the
Government cannot meet its burden of demonstrating that Liggett poses a
continuing threat of RICO violations in the future.
While the Government acknowledges that Liggett has been somewhat
helpful and distinguishes Liggett's conduct from that of the other
Defendants, the Government asserts that the evidence of withdrawal which
Liggett claims is "undisputed" is in fact very much in dispute. According
to the Government, Liggett has failed to "come clean" to authorities
because it continues to assert that there never was a RICO conspiracy and
that if there was, it never participated in it. See Govt' s Opp' n at
20. In addition, the Government claims that Liggett's overall behavior
falls far short of action to disavow or defeat the conspiracy, as
required to establish withdrawal.
A. 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 (B.C. Cir. 1989).
Additionally, "if the evidence presented on a dispositive issue is
subject to conflicting interpretations, or reasonable persons might
differ as to its significance, summary judgment is improper." Greenberg
v. FDA, 803 F.2d 1213, 1216 (B.C. Cir. 1986). At the summary judgment
stage, "the court is not to make credibility determinations or weigh the
evidence." Dunway v. Int'l Brotherhood of Teamsters, 310 F.3d 758, 761
(D.C. Cir. 2002).
B. There Are Material Facts in Dispute About Whether Liggett Withdrew
from the Alleged Conspiracy
In order to be awarded the equitable relief it seeks under Section
1964(a), the Government must prove a reasonable likelihood of future RICO
violations on the part of Defendants. Liggett claims that the Government
cannot as a matter of law meet this burden because it withdrew from the
alleged conspiracy in the mid-1990s and thus cannot pose a risk of
future RICO violations.
To establish withdrawal, a co-conspirator must prove either that: (1) it took affirmative action to disavow or defeat the purpose of
the conspiracy which is communicated in a manner reasonably calculated to
reach co-conspirators, or (2) it "made a clean breast to the
authorities." See Hyde v. United States, 225 U.S. 347, 368-69 (1912);
United States v. Thomas, 114 F.3d 228, 267-68 (D.C. Cir. 1997). While
both Liggett and the Government stipulate that Liggett "broke ranks" from
the other Defendants in 1997, material facts remain in dispute regarding
whether Liggett's actions constitute "affirmative actions to disavow or
defeat the conspiracy " or "coming clean" to the authorities."*fn3
Liggett advances several arguments to demonstrate that it took
affirmative action to defeat the purpose of the conspiracy in the
mid-1990s. Liggett was the first domestic tobacco. company to admit that
smoking causes cancer and is addictive and include product warnings
beyond those required by law. See Motion at 4-5. Liggett asserts that it
was the only company to disclose the ingredients of its cigarettes and to
agree to submit to FDA jurisdiction. Id. at 4. In addition, Liggett
argues that it provided assistance and cooperation to the States'
Attorneys General in their prosecution of claims against other tobacco.
companies, Liggett's alleged co-conspirators. Id. In particular, Liggett
relies on the fact that its officials testified about the dangerous health effects of smoking.
Id. Liggett asserts that its cooperation was a key element in achieving
state settlements with the other tobacco. companies and that it has been
hailed as a "responsible tobacco. company." Id. Because it "broke ranks"
with the other ...