Posted on 02/04/2005 2:38:17 PM PST by neverdem
WASHINGTON, Feb. 4 - A federal appeals court ruled today, in a big victory for cigarette makers, that the federal government could not use an antiracketeering statute to collect $280 billion from the tobacco industry, which it accuses of conspiring for decades to hook people on smoking and conceal the deadly effects of the habit.
A panel of the United States Court of Appeals for the District of Columbia Circuit ruled, 2 to 1, that the government could not use the Racketeer Influenced and Corrupt Organizations Act, familiarly known as RICO, to "disgorge" billions of dollars from the industry.
The majority held that "disgorgement," which a layman might interpret as forcing a party to surrender its ill-gotten gains, was not an appropriate remedy in this case because that particular remedy is meant to make up for past violations - not for anticipated future violations.
Judge Sentelle said the government might have sought remedies like injunctions against future wrongful activities or dissolution of the companies, but not disgorgement, which he called "a quintessentially backward-looking remedy focused on remedying the effects of past conduct to restore the status quo." As such, he said, it is not allowed under civil sections of the RICO act, which was originally meant as a weapon against organized crime.
Neither the tobacco companies nor the Justice Department had an immediate reaction to the ruling. But given the importance of the issue, and the thicket of suits against tobacco companies in recent years, an appeal to the full District of Columbia Circuit is likely, as is perhaps an eventual appeal to the United States Supreme Court.
Judge Sentelle wrote for himself and Judge Stephen F. Williams that there is no Supreme Court precedent dealing with disgorgement under the RICO law. "With no Supreme Court case having direct application, it is our duty to construe the statute," Judge Sentelle held. "That is what we have done."
In so ruling, the majority overturned a district court ruling that disgorgement was appropriate in this case, in which the government is suing Philip Morris and other big tobacco companies.
The government could have proceeded under criminal sections of the RICO act, but a much higher standard of proof would have been required.
Judge David S. Tatel wrote a sharply worded dissent, arguing that the majority had interpreted the RICO section in question too narrowly and that the government's claims that "the companies are likely to continue their deceptive practices and commit further racketeering violations in the future" were entitled to deference, and that the district court had ruled correctly.
"If the district court concludes that the government has shown that the tobacco companies have committed RICO violations by advertising to youth despite assertions to the contrary and by falsely disputing smoking's addictive, unhealthy effects, then it may order whatever equitable relief it deems appropriate," Judge Tatel held.
In celebration, I just lit up another coffin nail.
ping. Light 'em up!
When will our government grow up and quit extortion schemes on large industry? If cigarettes are so bad, BAN THEM. But we know better...never kills the goose that lays golden eggs....just keep taking the eggs.
Yeah, well the federal government itself could be found guilty of racketeering for spending years getting the entire working population hooked on Social Security which has turned out to be a monumental Ponzi scheme.
If Judge Tatel really believes this to be the case, then the next round of RICO charges would be filed against every state government that collects taxes on cigarettes and permits these dangerous/unhealthy products to be sold despite knowing and formally acknowledging just how dangerous/unhealthy they are.
Puff Ping.
Stephen F. Williams: Nominated by Ronald Reagan on February 19, 1986, to a seat vacated by Malcolm R. Wilkey; Confirmed by the Senate on June 13, 1986, and received commission on June 16, 1986. Assumed senior status on September 30, 2001.
David B. Sentelle: Nominated by Ronald Reagan on February 2, 1987, to a seat vacated by Antonin Scalia; Confirmed by the Senate on September 9, 1987, and received commission on September 11, 1987.
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Go figure that the only National Socialist in the bunch was appointed by Billy Jeff Clinton. I guess the difference between the American National Socialists and the Deutsche National Socialists is that the Deutsche flavor just flat-out nationalized the particular industry in question. The American National Socialists prefer to use the various penumbras and emanations to capture just the cash from the industry. That way they don't have to get their hands dirty actually awarding their friends control of the company/industry in question.
This is helpful around election time, because they can collect campaign cash from the EVIL corporations with one hand while using the other hand to finger the EVIL corporations for the various transgressions of the day.
FOX reported that Janet Reno started this lawsuit. When Ashcroft came into office, he filed to have dismissed. However, some enterprising dem added the funding of the lawsuit to an appropriations bill and Ashcroft was forced to follow through with the suit.
Ashcroft is on record as saying the govt had no right to go after those funds in the first place.
So .. if you see anything in any local paper re Ashcroft being to blame - please set the record straight.
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