Sep. 23 2004
Washington, DC — During opening arguments in the federal government’s lawsuit against the tobacco companies, attorneys for the tobacco companies today argued that the government cannot prove a reasonable likelihood of future violations of racketeering laws because of “profound and permanent” changes in their practices, including changes brought about by the 1998 legal settlement between the states and the tobacco companies (the Master Settlement Agreement, or MSA). The tobacco companies’ claims of change are contradicted by their own current behavior, which provides considerable evidence that they continue to market to children and deceive consumers about the harm their products cause. Their arguments are also contradicted by Judge Gladys Kessler’s rulings that past conduct may be sufficient to establish a reasonable likelihood of future violations and the MSA does not preclude such violations.
Claims that the companies do not market to children are undermined by the following evidence:
The tobacco companies also continue to deceive consumers about the harm caused by their products. They continue to market light and low-tar cigarettes, which the National Cancer Institute and other authorities have concluded mislead consumers into believing these cigarettes are safer. They are repeating the light/low-tar consumer fraud by marketing a new generation of so-called “reduced risk” products that mislead consumers with unproven claims such as “all of the taste…less of the toxins” (Brown & Williamson’s Advance cigarettes); “reduced carcinogens, premium taste” (Vector’s Omni cigarettes); and “less risk of cancer” (R.J. Reynolds’ Eclipse). They continue efforts to sow doubts about the harm caused by secondhand smoke despite the overwhelming scientific consensus on that issue.
Even in statements in this case as late as 2002, the cigarettes companies continued to deny the overwhelming scientific consensus about the harms of tobacco products. As U.S. Representative Henry Waxman (D-CA) concluded in a September 17, 2002, report on statements submitted by the five largest cigarette manufacturers in this case, four of the five still questioned whether smoking causes disease; all five denied that secondhand smoke causes disease in non-smokers; four of five failed to admit that nicotine is addictive; and individual tobacco companies were unwilling to take responsibility for well-documented corporate behavior, such as manipulation of nicotine. (View the Waxman report)
The tobacco companies’ defense is also undermined by Judge Kessler’s previous rulings in the case. On May 6, 2004, Judge Kessler issued a ruling denying the defendants’ motion for summary judgment on the grounds that there is no reasonable likelihood of future RICO violations (the ruling is available at www.dcd.uscourts.gov/99-2496ab.pdf). In that ruling, Judge Kessler reached several important conclusions. First she stated, “To the extent that Defendants are arguing that past RICO violations alone cannot demonstrate a reasonable likelihood of future RICO violations, they are wrong” (footnote, p. 4).
Judge Kessler also stated, “Despite the superficial appeal of Defendants’ argument, the Court concludes that the existence of the MSA cannot establish, as a matter of law, that there is no reasonable likelihood of future RICO violations” (p. 5). The judge listed several reasons for her conclusion, including: 1) she was not prepared to accept that the defendants have complied with the settlement and that the settlement was adequately enforced; 2) Congress has given the responsibility to enforce RICO to the federal government not to the states; 3) the MSA itself precludes defendants from relying upon it in this lawsuit; and 4) the government is seeking considerable relief not covered by the MSA, including disgorgement of $280 billion in illegal profits, funding of smoking cessation therapies and programs to help smokers quit, and other changes in the manufacturing, marketing and sale of tobacco products.
In summary, the judge has ruled that the reasonable likelihood of future violations can be established by past conduct alone. Even so, the government has said that it will provide evidence during the trial of both past and ongoing misconduct, and the industry’s current behavior provides plenty of current examples.