Cigarette Companies Lose Appeal To Remove Court Activity

Cigarette Companies Lose Appeal To Remove Court Activity

The U.S. Appeals Court in Washington put cigarette makers on the back foot, by upholding a district court judgment, which said continuing court supervision of the cigarette industry’s marketing practice was desirable, considering their records, and the likelihood that the industry may again run afoul of the Racketeer Influenced and Corrupt Organizations Act.

Cigarette Companies Lose Appeal To Remove Court Activity

The June 1 ruling, by U.S. District Judge Gladys Kessler, in [U.S. v. Philip Morris USA Inc., 11-5145, U.S. Court of Appeals for the District of Columbia Circuit (Washington)] stated that the 2009 law empowering the Food and Drug Administration to monitor the industry and restrict the sale, promotion, and distribution of tobacco products in no way ended her involvement with activities of the cigarette makers.

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The Court of Appeals also upheld Judge Kessler’s original findings, that there was a substantial likelihood of future violations of the law by the tobacco industry, and that the tobacco companies should publish corrective statements and packet inserts on each of the topics for which they were found to have committed fraud.

The latest judgment relating to the 13-year old racketeering lawsuit affects cigarette makers, Altria Group, Inc. (NYSE:MO)’s Philip Morris International Inc. (NYSE:PM)’s USA unit, Reynolds American, Inc. (NYSE:RAI)’s R.J. Reynolds Tobacco, and Lorillard Inc. (NYSE:LO)’s Lorillard Tobacco Co.

The companies have therefore failed in their bid to end court monitoring of their marketing practices.

The lawsuit relates to 1999, and according to this report in CNN, the Justice Department under the Clinton administration charged “the tobacco industry of racketeering as part of a coordinated plan to deceive the public about the negative health effects of smoking.” Judge Kessler, in 2006, issued a 1,653 page ruling that held the tobacco industry engaged in a decade long racketeering conspiracy to misguide the public on the dangers of smoking.

In her historic ruling she wrote:

“Over the course of more than 50 years, defendants lied, misrepresented, and deceived the American public, including smokers and the young people they avidly sought as ‘replacement smokers,’ about the devastating health effects of smoking and environmental tobacco smoke.”

“They suppressed research, they destroyed documents, they manipulated the use of nicotine so as to increase and perpetuate addiction, they distorted the truth about low-tar and light cigarettes, so as to discourage smokers from quitting, and they abused the legal system in order to achieve their goal — to make money with little, if any, regard for individual suffering, soaring health costs, or the integrity of the legal system.”

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