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Department of Justice Lawsuit Against the Tobacco Industry

November 27, 2018

After the massive Master Settlement Agreement (MSA) between states and the tobacco industry regarding fraud associated with the sale and marketing of cigarettes, the U.S. Department of Justice (DOJ) decided to file a similar lawsuit against the industry. In 1999, the DOJ sued the nation’s largest cigarette manufacturers and tobacco trade organizations in the U.S. District Court for the District of Columbia (“District Court”), claiming civil fraud and racketeering violations under the Racketeer Influenced and Corrupt Organizations (RICO) Act. The violations pertained to: 1) the hazards of smoking; 2) nature of addiction; 3) nicotine manipulation; 4) “light” cigarettes; 5) secondhand smoke; 6) marketing to youth; and 7) suppression of information. The government requested injunctive relief to prevent further fraud, as well as monetary damages to disgorge ill-gotten profits and provide funding for programs dedicated to smoking cessation and public education.

In 2004, the DC Circuit ruled that disgorgement is impermissible under civil RICO provisions, as equitable relief may only “prevent or restrain” future violations, not punish past conduct or wrongdoing. The government continued to seek monetary damages under other claims, proposing a new set of amended remedies in 2005. Much to the concern of public health advocates, the amended remedies contained a drastic reduction in requested relief for cessation program funds. At that time, the American Cancer Society, along with health partners such as the Campaign for Tobacco Free Kids, filed for “intervenor” status in the case for the purposes of being heard on the scope of the proposed remedies. Intervention occurs when a nonparty has a strong interest in the case so that the judge allows them to participate as parties in the case. The District Court granted the request, and public health groups have been intervenors since that time, participating in every phase of the lawsuit as it has continued for nearly two decades.

Federal District Court Judge Gladys Kessler issued a 1,500 page ruling in 2006, finding that, “over the course of more than 50 years, Defendants lied, misrepresented, and deceived the American public, including smokers and the young people they avidly sought as ‘replacement smokers,’ about the devastating health effects of smoking and environmental tobacco smoke, they suppressed research, they destroyed documents, they manipulated the use of nicotine so as to increase and perpetuate addiction, they distorted the truth about low tar and light cigarettes so as to discourage smokers from quitting, and they abused the legal system to achieve their goal – to make money with little, if any, regard for individual illness and suffering, soaring health costs, or the integrity of the legal system.” For a helpful summary of keys points of this landmark decision, see The Verdict Is In: Findings From United States v. Philip Morris Collection (Public Health Law Center, William Mitchell College of Law).

Judge Kessler held that the civil RICO provisions could not be used to force the tobacco industry to pay for smoking cessation and public education programs. However, RICO would permit injunctive relief to prevent and restrain future violations, including a prohibition on certain industry practices and the mandatory disclosure of documents previously withheld from the public. Additionally, cigarette manufactures could be compelled to make “corrective statements” on topics about which they had historically defrauded and deceived the American public. All sides appealed to the DC Circuit, and the court affirmed most of Judge Kessler’s judgment in 2009. A subsequent appeal was rejected by the Supreme Court.

After nearly two decades of litigation, the content of the corrective statements was finalized in late June of 2017.

The statements began to run in television and newspaper advertisements in November, 2017. 

In  June, 2018, the statements were posted on industry websites.  Beginning November 21, 2018 [link to press release], the statements must be attached to cigarette packages as “onserts” for two weeks’ worth of product shipped three times per year for two years.  be.

Here is what the tobacco industry is ordered to say:
 

A.  Adverse Health Effects of Smoking

A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about the health effects of smoking.

  • Smoking kills, on average, 1,200 Americans. Every day. 
  • More people die every year from smoking than from murder, AIDS, suicide, drugs, car crashes, and alcohol, combined
  • Smoking causes heart disease, emphysema, acute myeloid leukemia, and cancer of the mouth, esophagus, larynx, lung, stomach, kidney, bladder, and pancreas. 
  • Smoking also causes reduced fertility, low birth weight in newborns, and cancer of the cervix.

  
B.  Addictiveness of Smoking and Nicotine

A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about the addictiveness of smoking and nicotine.
 

  • Smoking is highly addictive. Nicotine is the addictive drug in tobacco. 
  • Cigarette companies intentionally designed cigarettes with enough nicotine to create and sustain addiction. 
  • It's not easy to quit. 
  • When you smoke, the nicotine actually changes the brain -- that's why quitting is so hard. 

 
C.  Lack of Significant Health Benefit from Smoking "Low Tar," "Light," "Ultra Light," "Mild," and "Natural" Cigarettes

A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about low tar and light cigarettes being as harmful as regular cigarettes.

  • Many smokers switch to low tar and light cigarettes rather than quitting because they think low tar and light cigarettes are less harmful. They are not
  • "Low tar" and "light" cigarette smokers inhale essentially the same amount of tar and nicotine as they would from regular cigarettes. 
  • All cigarettes cause cancer, lung disease, heart attacks, and premature death-- lights, low tar, ultra lights, and naturals. There is no safe cigarette. 

 
D.  Manipulation of Cigarette Design and Composition to Ensure Optimum Nicotine Delivery

A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about designing cigarettes to enhance the delivery of nicotine.
 

  • Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA intentionally designed cigarettes to make them more addictive. 
  • Cigarette companies control the impact and delivery of nicotine in many ways, including designing filters and selecting cigarette paper to maximize the ingestion of nicotine, adding ammonia to make the cigarette taste less harsh, and controlling the physical and chemical make-up of the tobacco· blend. 
  • When you smoke, the nicotine actually changes the brain -- that's why ·---quitting is so hard.
     

E.  Adverse Health Effects of Exposure to Second Hand Smoke

A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about the health effects of secondhand smoke.
 

  • Secondhand smoke kills over 38,000 Americans each year. 
  • Secondhand smoke causes lung cancer and coronary heart disease in adults who do not smoke. 
  • Children exposed to secondhand smoke are at an increased risk for sudden infant death syndrome (SIDS), acute respiratory infections, ear problems, severe asthma, and reduced lung function. 
  • There is no safe level of exposure to secondhand smoke.

 

    Still at issue: whether the court can order the corrective statements be posted at retail establishments – or the “point-of-sale” (POS) – for tobacco products. POS displays were originally required under Judge Kessler’s 2006 Final Opinion, but the DC Circuit vacated this remedy on appeal in 2009. The case was remanded back to the District Court with instructions to consider the impact of the displays on the rights of third-parties and clarify the provision accordingly. ACS CAN believes this communication at POS is critical to informing consumers across the country and preventing future fraud.  Read our filing on POS.

    Public health groups will continue to engage in every phase of this dispute until the truth about cigarettes prevails.