Apr. 20 2005
Washington, DC — We urge the U.S. Department of Justice to file an immediate appeal to the U.S. Supreme Court of the lower court ruling barring the government from seeking the disgorgement, or forfeiture, of illegal profits as a remedy in its ongoing civil RICO lawsuit against the tobacco industry. A final legal resolution to this issue is critical not only to holding the tobacco industry accountable for decades of deceptive and harmful practices, but also to effective application of the civil RICO law to other wrongdoing, including organized crime and corporate fraud. Today’s decision by the full U.S. Court of Appeals for the DC Circuit not to hear the case clears the way for an appeal to the Supreme Court so that this important issue can be resolved as quickly as possible.
For now, today’s decision allows to stand the 2-1 ruling by a three-judge panel of the Appeals Court that disgorgement of profits is not an allowable remedy under civil RICO. That ruling represented a fundamental reinterpretation and weakening of the civil RICO law that has widespread ramifications for law enforcement. The dissenting judge and the Justice Department have argued that the appeals court ruling conflicted with Supreme Court precedents, rulings in other federal court circuits and Congressional intent.
It is also important to remember that disgorgement of profits is not the only important remedy, or even the most important remedy, available if the government wins this case. Even if disgorgement is not allowed, the Justice Department has argued persuasively that the trial judge can impose other remedies that would fundamentally reform the tobacco industry’s harmful practices and require the industry to pay billions of dollars – possibly tens or hundreds of billions – to fund programs to prevent kids from smoking and help smokers quit. The government should continue to pursue the case aggressively with the goal of achieving these important public health remedies, and it should reject any effort by the tobacco industry to get off the hook with a weak settlement. The tobacco companies should be held accountable for decades of wrongful practices, many of which are still ongoing, that are the basis of this lawsuit, including marketing to children and concealing the health risks and addictiveness of their products.