U.S. judge declines to shut tobacco racketeering case

WASHINGTON Wed Jun 1, 2011 5:32pm EDT

WASHINGTON (Reuters) - A court overseeing an extended battle between the Justice Department and an array of tobacco companies declined on Wednesday to shut the case because tobacco is regulated under a new law.

Judge Gladys Kessler, who had ruled in 2006 that Philip Morris and other tobacco companies were guilty of racketeering because of years of deception about tobacco's safety, insisted on Wednesday that she retain jurisdiction over the case.

The companies had argued that she had lost jurisdiction because of a 2009 law giving the Food and Drug Administration authority to regulate tobacco.

The companies also argued that being regulated by the FDA would make it less likely they would commit future racketeering offenses.

Kessler staunchly and tartly disagreed, calling their assertions "simply unconvincing."

"Defendants' contention that no reasonable likelihood of future RICO violations exists due to the FDA's regulation is particularly unconvincing when defendants are simultaneously and vigorously challenging, both in a separate lawsuit and in administrative proceedings, many of the provisions of the Tobacco Control Act," she wrote in Wednesday's ruling.

The racketeering case, filed in 1999 by the Clinton administration, sought to force the industry to fund a smoking cessation program and other remedies. Under the Bush administration, the U.S. Justice Department dropped demands from $280 billion to $14 billion.

Kessler ruled in 2006 that the companies broke the law and could no longer use expressions such as "low tar" or "light" in their cigarette marketing. But she also said she could not force them to fund a smoking cessation program, and an appeals court agreed.

The Obama administration appealed to the Supreme Court, which ruled in June that tobacco companies could not be forced to pay billions for stop-smoking programs.

"We continue to believe that the FDA is the appropriate agency to regulate tobacco products and we're considering our appellate options," said Steve Callahan, spokesperson for Altria Group.

Defendants named in the original suit include Reynolds American's R.J. Reynolds Tobacco Co, Lorillard Inc and Altria, which owns Philip Morris USA Inc.

A representative of Lorillard declined to comment.

The case in U.S. District Court for the District of Columbia is no. 99-2496.

(Reporting by Diane Bartz; Editing by Tim Dobbyn)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.