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Action on Smoking and Health
A National Legal-Action Antismoking Organization Entirely Supported by Tax-Deductible Contributions
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Fed. Appeals to Hear Arguments for Penalty Limitations in $280B Racketeering Case [08/06-1]
Excerpts from: Appeals Crt To Hear Oral Argument Nov. 19 In Tobacco Case
By Christina Cheddar Berk The Wall Street Journal [08/05/04]
A federal appeals court will hear oral arguments on Nov. 19 in its review of a lower court ruling that refused to limit the $280 billion in penalties the U.S. Department of Justice is seeking in its racketeering case against the tobacco industry.
The court set the date on Wednesday. Arguments in the case will be heard before Judges David Sentelle and David Tatel and Senior Judge Stephen Williams.
In July, Altria Group Inc.'s (MO) Philip Morris USA and several other cigarette makers asked the court to consider the matter on an expedited basis
In May, U.S. District Court Judge Gladys Kessler denied the cigarette makers' motion to limit the government's ability to seize past profits, a practice also known as "disgorgement."
Judge Kessler's decision was a setback for the industry, which had argued that a key legal precedent limited the scope of disgorgement under federal racketeering law to funds that are currently available to pay for or promote future illegal conduct.
The government's suit alleges the tobacco industry engaged in decades of conspiracy and fraud in order to mislead the public about the dangers of smoking and addict young smokers.
The suit, which is the largest ever filed by the government, is scheduled to go to trial Sept. 13. It was originally filed in 1999.
In addition to Altria and Philip Morris, other defendants include R.J. Reynolds Tobacco Holdings Inc., Brown & Williamson, Loews Corp.'s (LTR) Lorillard Tobacco Co., and Vector Group Ltd.'s (VGR) Liggett Group Inc.
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