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United States v. Philip Morris USA

May 06, 2004


The opinion of the court was delivered by: Gladys Kessler United States District Court Judge


This matter is now before the Court on the Government's Motion for Partial Summary Judgment on Element That Defendants Have Caused Mailings and Wire Transmissions ("Motion"). Upon consideration of the Motion, Defendants' 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.

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 Serv., 865 F.2d 320, 325 (D.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 (D.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).

III. Analysis

RICO prohibits entities from engaging in racketeering activity associated with an"enterprise." To prove the alleged RICO violations, the Government must show: (1) the conduct (2) of an enterprise (3) through a pattern of racketeering activity." Salinas v. United States, 522 U.S. 52, 62 (1997). Racketeering activity includes, among other things, acts prohibited by any one of a number of criminal statutes. 18 U.S.C. § 1961(1). A"pattern" is demonstrated by two or more instances of"racketeering activity" that occur within 10 years of one another. 18 U.S.C. 1961(5). In this case, the alleged racketeering acts are violations of 18 U.S.C. §§ 1341 (mail fraud) and 1343 (wire fraud).

To demonstrate mail fraud or wire fraud, the Government must prove: (1) a scheme to defraud and (2) use of mails or interstate wire communications to further that scheme. United States v. Lemire, 720 F.2d 1327, 1334-35 (D.C. Cir. 1983).

In the present Motion, the Government seeks partial summary judgment on the element of its RICO claims that Defendants have caused the mailings and wire transmissions underlying the 145 racketeering acts alleged in its complaint, as well as 635 additional racketeering acts it later sought to rely upon. As to the latter 635 acts, the Court has ruled in its Order #487 and Memorandum Opinion of February 2, 2004, that because of their untimeliness they may not be relied upon as new racketeering acts.

All but six of the 145 acts alleged involve either: (1) correspondence sent or received by the Defendants, or (2) press releases or advertisements sent by the Defendants to newspapers, magazines, or other news outlets. See Motion at 14. The final six charged acts involve wire transmission of televised statements made by Defendants' representatives. Id. Citing Defendants' stipulations to certain mailings and wire transmissions and the Government's own tracing of other mailings, the Government argues that there is no genuine issue of material fact that those Defendants charged in each racketeering act caused all 145 mailing or wire transmissions underlying the RICO claims. See id. at 5-8, 14.

While certain Defendants have stipulated to causing certain mail and wire transmissions, they argue that merely"causing" the transmissions is not sufficient to demonstrate an element of mail or wire fraud. Defendants assert that the Government must instead prove that they caused the mailing or wire transmission in order to further the alleged scheme to defraud. Thus, according to Defendants, a finding that Defendants caused a mailing without reference to whether that mailing furthered a scheme to defraud is"a useless and unnecessary exercise," Defs.' Opp'n. at 2, and, in any case, would not ...

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