Obama administration seeking nearly $300 billion from tobacco industry in Supreme Court appeal

Both sides take tobacco fight to Supreme Court
By MARK SHERMAN | Associated Press | Feb 19, 10 4:37 PM CST in Business

The Obama administration asked the Supreme Court Friday to allow the government to seek nearly $300 billion from the tobacco industry for a half-century of deception that "has cost the lives and damaged the health of untold millions of Americans."

Both sides in a landmark, decade-long legal fight over smoking took their case to the high court Friday.

The administration, joined by public health groups, wants the court to throw out rulings that bar the government from collecting $280 billion of past tobacco profits or $14 billion for a national campaign to curb smoking.

Leading tobacco companies accounting for 90 percent of U.S. cigarette sales want the justices to wipe away court holdings that the industry illegally concealed the dangers of cigarette smoking. If they succeed, the attack on their profits also would be halted.

Friday's filings with the Supreme Court mark the latest phase in a lawsuit that began during Bill Clinton's presidency.

Philip Morris USA, the nation's largest tobacco maker, its parent company Altria Group Inc., R.J. Reynolds Tobacco Co., British American Tobacco Investments Ltd. and Lorillard Tobacco Co. filed separate but related appeals that take issue with a federal judge's 1,600-page opinion and an appeals court ruling that found the industry engaged in racketeering and fraud over several decades.

In 2006, U.S. District Judge Gladys Kessler ruled that the companies engaged in a scheme to defraud the public by falsely denying the adverse health effects of smoking, concealing evidence that nicotine is addictive and lying about their manipulation of nicotine in cigarettes to create addiction. A federal appeals court in Washington upheld the findings.

At the same time, however, the courts have said the government is not entitled to collect $280 billion in past profits or $14 billion for a national campaign to curb smoking.

The companies argue that the government improperly used the Racketeer Influenced and Corrupt Organizations, or RICO law, against them. The racketeering law often is employed against the Mafia and other criminal organizations.

The companies also say the courts' decision to brand their statements about smoking as fraudulent unfairly denied them their First Amendment rights to engage in the public-health debate about smoking. "As long as these statements were true or made in good faith, they fall squarely within the First Amendment's Speech and Petition Clauses, which provide constitutional protection for 'debate on public issues,' " Miguel Estrada, Philip Morris' lawyer, said. Philip Morris makes Marlboro cigarettes and more than a dozen other brands.

The administration said the money it seeks from the industry is commensurate with the harm it has caused. "For the last half century, those defendants have engaged in a pattern of racketeering activity and a conspiracy to engage in racketeering that has cost the lives and damaged the health of untold millions of Americans," Solicitor General Elena Kagan, the administration's top Supreme Court lawyer, wrote.

The public health groups in the case are: American Cancer Society; American Heart Association; American Lung Association; Americans for Nonsmokers' Rights; National African American Tobacco Prevention Network and Tobacco-Free Kids Action Fund.

The groups are most interested in forcing the tobacco companies to pay for a wide-ranging education campaign to discourage people from taking up smoking and helping others quit. They asked the court to recall its words from an earlier tobacco case.

"As this Court has recognized, 'tobacco use, particularly among children and adolescents, poses perhaps the single most significant threat to public health in the United States,'" said Howard Crystal, the groups' lead attorney.

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