Court to Hear Appeals In Landmark Tobacco Case

A federal appeals panel hears oral arguments in the Clinton-era case accusing the tobacco industry of violating civil racketeering laws by defrauding the public about the deadly nature of cigarettes. A district court ruled for the government, but not for the remedy sought. Both sides appealed.

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Big tobacco was back in court today trying to overturn a federal judge's ruling in a massive racketeering case. The lawsuit has spanned two presidents and now appears to be headed into a third administration. NPR's Debbie Elliott reports on today's oral arguments before the Federal Court of Appeals here in Washington, D.C.

DEBBIE ELLIOTT: The federal government's racketeering case against cigarette makers dates back to 1999, when Bill Clinton was president.

Former President BILL CLINTON: As everyone knows, our children are targets of a massive media campaign to hook down on cigarettes.

ELLIOTT: States had just settled their tobacco lawsuits, and during his state of the union, President Clinton said it was time for the federal government to take on the industry.

Former President CLINTON: You know, the states have been right about this. Taxpayers shouldn't pay for the cost of lung cancer, emphysema, and other smoking-related illnesses. The tobacco company should. So tonight, I announced that the Justice Department is preparing a litigation plan to take the tobacco companies to court and with the funds we recover, to strengthen Medicare.

ELLIOTT: The Justice Department sued and eventually won, although no new money is flowing into federal coffers as a result. In 2006, Federal judge Gladys Casler found that tobacco companies violated civil racketeering laws for illegally profiting from a legal addictive product. Her 1,700 page ruling laid out a 50-year industry conspiracy to deceive the public about the dangers of smoking, to manipulate nicotine levels to hook customers, and to target young people as, quote, "replacement smokers."

She ordered the firms to stop using labels like light and low tar and to make public statements about the health effects and addictive nature of cigarettes, but she said she had not authority to order damages, even though the government sought $14 billion for a national public education in stop smoking campaign.

Both the government and the tobacco industry appealed, landing the case in the DC Appeals Court today. Tobacco lawyer Michael Karvin argued the civil cases of grotesque expansion of federal racketeering laws intended to target organized crime. They are trying to turn us into the Gambino family, he said.

Karvin said it was not fraud, for example, when the defendant companies disagreed with policy makers about whether cigarettes were addictive. Tobacco executives acknowledged unpleasant withdrawal sensations but denied that cigarettes were addictive in the way that heroin and cocaine are. It was an absurd semantic debate, Karvin said, not a collective intent to defraud.

The judges questioned the Justice Department for reasons to believe the industry's actions were part of a pattern of racketeering. The government's lead attorney in the case, Mark Stern, struggled at first to come up with specific examples. I am at a loss, he said at one point, and then cited an RJ Reynolds executives claims on television that there was no evidence smoking causes disease. He described how companies moved internal research operations overseas or shut them down completely when the results threatened their business. Stern said, quote, "this is a pattern repeated in so many ways and at the highest levels. Our argument is that the top guys knew." Debbie Elliott, NPR News, Washington.

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