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United States v. Philip Morris USA Inc.

United States District Court, District of Columbia

June 27, 2017



          Gladys Kessler, United States District Judge

         This case was filed on September 22, 1999. In 2006, after a nine month trial, the Court ruled that the Defendant Cigarette Manufacturers had for decades conspired to deny the health effects of smoking in violation of RICO. USA v. Philip Morris. Inc.. 449 F.Supp.2d 1 (D.D.C. 2006) ("liability opinion").

         This Court ordered in that Opinion, among many other Orders, that Defendants disseminate corrective statements relating to the health effects of smoking in newspapers, on TV, on cigarette packages, and web sites. Id. at 938-41. As Judge Sentelle pointed out in the Court of Appeals' most recent Opinion relating to corrective statements, "[f]or more than a decade the parties have battled over the precise language of those statements -- both in and out of court." United States of America. United States Department of Justice, et al., Appellees v. Philip Morris USA. Inc., formerly known as Philip Morris, Incorporated, et al., Appellants, and Brown & Williamson Tobacco Corporation. Directly and as Successor by Merger to American Tobacco Company, et al. Appellees. #16-5101, decided April 25, 2017. Once again, the case has been remanded to this Court, on June 20, 2017 (received June23, 2017), to address the issue of corrective statements.

         Given the incredible amount of judicial time used, as well as lawyer time, and the actual findings of the Court of Appeals in its most recent Opinion, this Court will do her best to address them in the most efficient and succinct manner possible. The Court of Appeals focused on several separate issues.

         A. First, the Court of Appeals agreed with Appellants that the preambles which had been approved by the District Court in an earlier round of this litigation did suggest prior misconduct by Defendants which, of course, is not permitted under RICO. See USA v. Philip Morris USA. Inc., 566 F.3d 1095, 1140 (D.C. Cir. 2009) ("2009 Opinion").

         However, Judge Sentelle, writing for a unanimous court, concluded in its most recent Opinion that "[t]his problem is remedied by simply removing the phrase "Here is the Truth, " so that the preambles read only:

A federal court has ordered [Defendants] to make this statement about [the topic of the statement].

See, p. 7 of Court of Appeals Remand.

         The Court of Appeals ruled that, modified in this fashion, the preamble would satisfy RICO notwithstanding other arguments offered by the Defendants.

         B. Second, Defendants argue that even such modified preambles would violate their First Amendment rights. The Court of Appeals ruled, as it had in its earlier Opinions, that the present controversy is governed by Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985), and reminded the Parties that the Court had previously so held in its 2009 Opinion that Zauderer controlled the First Amendment issues in this case. 2009 Opinion, 566 F.3d at 1144-45. See also Revised Preamble Opinion, 164 F.Supp.3d at 126.

         The Court of Appeals also noted that it "did not question the district court's ruling that Zauderer was the appropriate standard in this case." Moreover, because "a court involved in later phases of a law suit should not reopen questions [already] decided, " Crocker v. Piedmont Aviation. Inc., 49 F.3d 735, 739 (D.C. Cir. 1995), "we continue to analyze the preambles under Zauderer." See, p. 11 of Remand.

         The Court of Appeals also found that the preamble requirements were "reasonably related to the [Government's] interest in previous deceptions of consumers." Zauderer, 471 U.S. at 651. See p. 12 of Remand. The Court made it clear that the "modification discussed above removes any inference of past misconduct, " and that mandating the inclusion of a one sentence preamble is not unduly burdensome.

         C. Defendants also challenge the topic descriptions in the preambles to statements (C) and (D), arguing that they exceed the remedies' scope of RICO because they convey past wrongdoing.

         As to Statement (C), Defendants also argue that statement (C)'s topic description, which requires Defendants to make the statement about selling and advertising low tar and light cigarettes as less harmful than regular cigarettes" is not acceptable. The Court of Appeals has determined that this language had not been previously considered and, therefore, is backward-looking after implying that Defendants previously sold and advertised cigarettes in such a way. After reaching that conclusion, the Court of Appeals offered the ...

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