Earlier this month, Judge Gladys Kessler refused to vacate her 2006 ruling finding that Philip Morris and other tobacco companies were guilty of racketeering. Her newest ruling effectively blocks, for the present, tobacco’s attempt to get out from under Justice Department supervision of their marketing activities.
Judge Kessler’s original ruling in 2006 found Altria Group Inc. (owners of Philip Morris), Reynolds American Inc.’s R.J. Reynolds Tobacco, Lorillard Inc.’s Lorillard Tobacco and other tobacco companies guilty of racketeering under the Racketeer Influenced Corrupt Organization Act (RICO). The ruling was based on the tobacco companies’ deceptive practices in marketing tobacco products and concealing the health risks from consumers.
Citing the 2009 Tobacco Control Act, which gives regulation of the tobacco industry to the Food and Drug Administration (FDA), tobacco companies filed court papers in March arguing that the federal court’s oversight for racketeering activities was no longer needed. According to the tobacco companies, the Tobacco Control Act removed the need for Judge Kessler’s jurisdiction over their activities. They also argued that being regulated by both the FDA and the court could lead to potential conflicting regulatory requirements.
Two Separate Issues, One Outcome Desired by the Tobacco Industry – No Regulation at All
In her opinion, Judge Kessler pointed out that the FDA is concerned with public health. The Justice Department’s concern is the conspiracy entered into by tobacco companies to deceive the public regarding the health dangers of their tobacco products. The deception is what resulted in the original racketeering charges under RICO. Judge Kessler also noted that in a separate case currently pending in the U.S. Court of Appeals for the 6th Circuit, the tobacco defendants are challenging the very Tobacco Control Act which they claim takes the place of federal court oversight.
Judge Kessler stated, “It is difficult to understand how defendants can argue that the Tobacco Control Act will produce their future compliance with RICO when they do not believe that a great portion of the Act should apply to them at all.”