United States v. Philip Morris USA, et al.

In 1999, the United States filed a lawsuit in the U.S. District Court for the District of Columbia against the major cigarette manufacturers and related trade organizations alleging that defendants, while acting as an enterprise, fraudulently misled American consumers for decades about the risks and dangers of cigarette smoking and exposure to secondhand smoke in violation of the Racketeer Influenced Corrupt Organizations Act (RICO). In 2006, the court found that defendants violated civil provisions of RICO and that there was a reasonable likelihood that defendants would continue to violate RICO in the future. On appeal, the district court’s findings were upheld, in part, vacated, in part, and remanded, in part, to the district court. After the U.S. Supreme Court declined to hear appeals from both sides in the case in June 2010, the district court began to implement the 2006 final order.

This opinion of the U.S. Court of Appeals for the District of Columbia Circuit reviews the District Court’s rejection of the defendants challenge to the continued jurisdiction of the Court.  The defendants argued that the Family Smoking Prevention and Tobacco Control Act should take away the jurisdiction of the court because the Act contained similar subject matter as the case.  Here the appellate court affirms the lower court’s decision maintaining jurisdiction.  The appellate court agrees there is a reasonable likelihood of further RICO violations by the defendants and the lower court did not err in maintaining the jurisdiction of the court despite the passage of the Act.

United States v. Philip Morris USA Inc., et al., No. 11-5145 (D.C. Cir. 2012).

  • United States
  • Jul 27, 2012
  • U.S. Court of Appeals for the District of Columbia Circuit

Parties

Plaintiff United States

Defendant Philip Morris USA Inc.

Legislation Cited

Related Documents

Type of Litigation

Tobacco Control Topics

Substantive Issues

Type of Tobacco Product

None

"The question before the district court here was whether it was still reasonably likely the defendants would commit future RICO violations despite the passage of the Tobacco Control Act. As the district court observed, that question was squarely within its area of expertise; 13 years of litigation, nine months of trial, and 4000 findings of fact surely gave it unique insight into the defendants’ tendency to circumvent or ignore the law. See Vacatur Opinion, 787 F. Supp. 2d at 79–80. And while the Tobacco Control Act gave the FDA the authority to regulate much of the defendants’ conduct, it gave the FDA no particular insight into whether the defendants were likely to comply with those restrictions. That is why courts consistently have refused to invoke the primary jurisdiction doctrine for “claims based upon fraud or deceit”—claims that are “within the conventional competence of courts.” Dana Corp. v. Blue Cross & Blue Shield Mut. of N. Ohio, 900 F.2d 882, 889 (6th Cir. 1990) (citing Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 305–06 (1976), and In re Long Distance Telecomm., 831 F.2d 627, 633–34 (6th Cir. 1987))."
"Even if the district court had found the defendants were likely to comply with the Act, the injunctions would not have been moot. There are significant parts of the injunctive order that the Act does not cover, see Appellee’s Br. at 26–28, and as the court noted, the injunctions, unlike the Act, are specifically designed to combat racketeering activity, see Vacatur Opinion, 787 F. Supp. 2d at 75, and therefore may be enforced differently. Moreover, the scope of the Act itself was unclear when the court ruled because another court had struck down portions of the Act as unconstitutional. See id. at 76 (citing Commonwealth Brands, Inc. v. United States, 678 F. Supp. 2d 512, 521 (W.D. Ky. 2010)). In sum, we hold the district court maintained jurisdiction because it applied the correct legal standard, and did not clearly err in finding the defendants still exhibited a reasonable likelihood of committing future RICO violations."