Federal judge rules tobacco firms lied to public

WASHINGTON – A federal judge ruled Thursday that tobacco companies have violated civil racketeering laws, concluding that cigarette makers conspired for decades to deceive the public about the dangers of their product and ordering the companies to make landmark changes in the way cigarettes are marketed.

But U.S. District Judge Gladys Kessler said that under a 2005 appellate court ruling, she could not impose billions of dollars in penalties that had been sought by the Justice Department in its civil racketeering suit against the eight defendant tobacco companies.

All she could do, she said, was try to deter future illegal acts by the companies, and to that end, she ordered them to stop using terms such as “low tar,” “light” and “mild” and to undertake a massive media campaign in an effort to correct years of misrepresentations.

It is a penalty that will cost the industry millions of dollars – a fraction of the cost of sanctions the companies faced at the outset of the case, when the Justice Department sought $280 billion from the industry.

In the opinion, which runs 1,742 pages and was more than a year in the drafting, Kessler wrote that there is “overwhelming evidence” of most of the charges leveled at the industry – that it conspired to violate, and indeed violated, federal racketeering laws.

“In short,” she wrote, “defendants have marketed and sold their lethal product with zeal, with deception, with a single-minded focus on their financial success, and without regard for the human tragedy or social costs that success exacted.”

Tobacco company officials indicated they would appeal at least parts of the decision. David Howard, a spokesman for the R.J. Reynolds Tobacco Co., said the judge was wrong. “We are disappointed and disagree with the judge’s ruling,” he said.

At the same time, Howard said, the firm was “gratified that the court did not reward any unjustified and extraordinarily expensive monetary penalties that had been sought by the government.”

Long awaited, the ruling was a significant, if incomplete victory for the government and for anti-smoking advocates.

“It’s an historic decision of major importance,” said David Kessler of the University of California, San Francisco, who as commissioner of the Food and Drug Administration during the Clinton administration led an unprecedented effort to regulate tobacco in the same way that agency places controls on some drugs.

“It ends any debate about what the industry knew and what they did for decades,” said Kessler, who is not related to the judge. “This was the greatest conspiracy to put the public’s health at risk, and this decision makes that exceptionally clear.”

In a statement, the Justice Department said officials were pleased with the decision to find the industry liable, but “disappointed that the Court did not impose all of the remedies sought by the government. Nevertheless, we are hopeful that the remedies that were imposed by the Court can have a significant, positive impact on the health of the American public.”

It was eight years ago that the industry agreed to pay states $246 billion in compensation for the public money spent on treating the health effects of smoking. A year later, the Justice Department filed its racketeering suit in federal court. Anti-tobacco activists predicted that government and private litigation would ultimately cripple the industry.

But after Thursday’s decision, and last month’s Florida Supreme Court decision overturning a $145 million judgment against tobacco makers, some said the industry may not be as threatened as it once appeared to be.

“This was the last big really major case against the industry. Individual smokers will continue to sue, but that’s going to amount to static. I don’t think there’s going to be another big case like this,” said Mary Aronson, a tobacco litigation analyst in Washington.

But other experts said the industry was not yet out of the woods. If the decision is appealed by either side, and the appeals court limits on the penalties are overturned, Kessler’s decision could provide the groundwork for imposing staggering fines.

“If it’s appealed, and the government wins its remedies, then this will hit the industry,” said G. Robert Blakey of Notre Dame Law School.