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Judge Fines Philip Morris $2.75 M for Destroying Emails in Federal Racketeering Case [07/22-3]
Excerpts from: UPDATE 1-U.S. judge fines Altria unit for destroying e-mails
Reuters [07/21/04]
The federal judge overseeing the government's racketeering case against the tobacco industry on Wednesday scolded Altria Group Inc. MO.N and its Philip Morris USA unit for destroying potential evidence and fined them $2.75 million.
U.S. District Judge Gladys Kessler called it "astounding" that at least eleven Philip Morris employees -- many of them high-ranking officers -- failed to comply with a 1999 court order and the company's document retention policy, which require employees to preserve all material that might be relevant to the case.
Kessler said the fine reflected "reckless disregard and gross indifference" displayed by the companies. And she disqualified all employees who failed to comply with the order from testifying in the racketeering trial scheduled to start in September.
The judge said it was "impossible to accurately assess what harm has been done to the government (case) and what prejudice it has suffered" as a result of the destruction of e-mails.
Because of the missing e-mails, lawyers at the Justice Department had asked Kessler to infer that Philip Morris had researched how to target its marketing at young people, manipulated the nicotine content of its cigarettes in order to addict smokers' and failed to market potentially less hazardous cigarettes after the order was issued.
However, the judge said drawing such an inference would be "inappropriate" and "cast too wide a net."
The government lawsuit has charged tobacco companies with deliberately misleading the public about the risks of smoking in a conspiracy going back to the 1950s. It is seeking $280 billion in redress.
Philip Morris and Altria deleted e-mails for at least two years after the order, Kessler said. Even after learning there was a potential problem, she said, the companies waited about four months before notifying the government and the court.
The e-mails destroyed were from employees responsible for tracking cigarette brand demographics, the review of yearly marketing plans and conducting consumer research, according to the Justice Department.
Among those who deleted the e-mails were officers and supervisors who worked on scientific, marketing, corporate, and public affairs issues that the judge said "are of central relevance to this lawsuit."
One of those involved, the judge said, was the director of corporate responsibility.
View the Order issued July 21, 2004 by Judge Gladys Kessler
View the
Memorandum Opinion issued July 21, 2004 by Judge Gladys Kessler
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