Federal Judge Allows Six Public Interest Groups to Intervene in Damage Phase of Civil Racketeering Case against Tobacco Industry

In a case that has taken a number of unexpected twists and turns only after the actual trial ended, a federal judge has allowed six public interest groups to intervene in the litigation in order to argue for the imposition of damages and penalties against the tobacco industry which far exceed those requested by the Justice Department itself.

Although the defendants strongly opposed the highly unusual post-trial intervention of non-parties in the litigation, the court was inclined to allow it so that they could make the case that the government had not properly represented the interests of the public. The groups include the American Cancer Society, the Tobacco-Free Kids Action Fund, the American Heart Association, the American Lung Association, Americans for Nonsmokers’ Rights, and the National African American Tobacco Prevention Network.

As previously reported, from the instant the federal government literally bailed out of its civil racketeering case by inexplicably scaling back its long-standing damage demand from $130 billion to just $10 billion, every anti-smoking activist has cried “foul.”

On June 30, the aforementioned health advocacy groups filed a motion with U.S. District Judge Gladys Kessler to join the litigation for the limited purpose of presenting “arguments solely on the issue of the appropriate and necessary remedies that should be imposed in this case.”

Judge Kessler, who is presiding over this nonjury case, will make a determination as to the amount of the award, if any, after all filings on the issue are complete.

Amid great speculation and controversy as to its underlying motivations, the Justice Department filed its formal damage request motion on June 29. The $10 billion for a five-year stop-smoking program and a ten-year $4 billion for an anti-smoking education program is all that is being asked of an industry that stands accused of a decades-long conspiracy of fraud on the public and government agencies.   

The manner in which the trial came to an end immediately raised questions as to what motivated the dramatic and unexpected last-minute shift in the government’s position with respect to the amount of damages it was seeking in this six-year-old civil racketeering case. The allegations against the tobacco industry included engaging in a 50-year conspiracy to defraud and addict smokers by intentionally concealing information regarding the dangers associated with smoking.   

For years, the government has pursued the tobacco industry for “a decades-long pattern of material misrepresentations, half-truths, deceptions and lies that continue to this day.” (Excerpt from summation of Associate Attorney General Sharon Eubanks.)
The monetary damages the government had always been expected to demand from the industry was based on the extensive testimony of expert witnesses and was anticipated to be a $130-billion, 25-year smoking cessation program along with other penalties and injunctive relief prohibiting tobacco companies from targeting young smokers in their marketing campaigns.

Much of the evidence presented by the government was comprised of highly incriminating internal documents that included written memos from tobacco executives and scientists which described plans to encourage young people to smoke and to keep the public ignorant of the potentially dangerous and addictive nature of cigarette smoke.

Even Judge Kessler questioned the reduction in the demand as suggesting “that there are some additional influences being brought to bear on the government’s position in this case.” This uneasiness by the trial judge was among the reasons given for granting the motion to intervene along with a concern regarding the “lack of clarity and finality about those changes.”

Less than a month before summations, the Justice Department had filed an extensive legal brief with the trial judge which argued that the $130 billion smoking-cessation program was an appropriate and legally permissible sanction that was unaffected by the recent federal appeals court ruling that determined the government could not seek to force the tobacco industry to pay $280 billion in ill-gotten gains.

Following the unexpected shift in the Justice Department’s position, a group of 50 lawmakers sent a letter to Attorney General Alberto R. Gonzalez requesting that he not enter into any agreement with the tobacco industry “based on the unreasonably weak demands made by the government last week.”

Based upon the abandonment of the Justice Department’s previously aggressive stance with respect to damages and penalties, the attorneys for the tobacco industry defendants have requested Judge Kessler to throw out the entire case claming the government is not entitled to any of the remedies it now seeks to have imposed.

In granting the motion, Judge Kessler stated that: "in a case of this magnitude . . . it will serve the public interest for major public health organizations, who have long experience with smoking and health issues, to contribute their perspectives on what appropriate and legally permissible remedies may be imposed should liability be found."

While the groups that have been permitted to intervene will be allowed to argue for a larger fund to provide smoking-cessation programs to a broader range of smokers, they will not be allowed to introduce any new evidence on the issue.

This entry was posted in Legal News. Bookmark the permalink.

© 2005-2018 Parker Waichman LLP ®. All Rights Reserved.