Government Allowed To Seek $280 Billion In Illegal Tobacco Industry Profits

Statement of William V. Corr Executive Director, Campaign for Tobacco-Free Kids

May. 24 2004

Washington, DC — U.S. District Judge Gladys Kessler has handed the tobacco industry a major legal setback by ruling that the federal government can continue to seek $280 billion in illegally obtained industry profits as part of its racketeering lawsuit against the industry. Tobacco companies had sought a narrow interpretation of racketeering laws that would have severely restricted the financial penalty they faced if they lost the case. In a strongly worded opinion, Judge Kessler rejected this narrow approach and adopted a standard that will put a larger amount of the tobacco industry’s profits at risk, dramatically increasing what is at stake for the tobacco companies in this litigation.

This ruling shows that the federal tobacco lawsuit has great potential to hold the tobacco industry accountable for its long history of wrongdoing and to bring about fundamental change in the industry’s harmful practices. It will allow the government to put on the strongest possible case and to seek the strongest possible remedies allowed by law. It is critical that the Bush Administration and the U.S. Department of Justice provide full support to the government’s litigation team in putting on the strongest possible case for the American people.

The case, which was filed in September 1999, is scheduled for trial beginning September 13. It seeks to hold the tobacco industry legally accountable for decades of illegal and harmful practices, including marketing to children and concealing the health risks and addictiveness of its products. In its filings in the case, the Justice Department has indicated that it will seek fundamental changes in the marketing, manufacture and sale of tobacco products, the recovery of more than $280 billion in illegal industry profits, and funding of tobacco prevention, cessation and research programs.

In a series of rulings, Judge Kessler has rejected various tobacco industry motions to narrow the scope of the government’s racketeering case. Among other things, she refused to dismiss the government’s claim that the industry marketed to children and rejected the industry’s argument that provisions of the 1998 state tobacco settlement preclude future industry wrongdoing. These rulings have set the stage for the government to present a very strong case on behalf of the American people when the case goes to trial in September.

 

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