“In this latest round in the government’s heavyweight bout against the tobacco industry, the defendant cigarette manufacturers challenge the district court’s refusal to vacate injunctions imposed in 2009,” Judge Janice Brown wrote for the three-judge panel. “Because the district court’s ruling survives our review, we give this round to the government.”

A federal judge issued the injunction after finding that the industry committed more than 100 RICO violations over more than 50 years.

But when President Obama signed the Family Smoking Prevention and Tobacco Control Act into law just 1 month after the ruling, Phillip Morris and other Big Tobacco companies sought to vacate the injunctions.

They claimed the new law removed jurisdiction from the courts, handing over regulatory responsibility to the FDA. They also claimed the new law “eliminated any ‘reasonable likelihood’” of future RICO violations.

The court rejected both arguments, prompting the appeal.

After “13 years of litigation, nine months of trial, and 4,000 findings of fact” the D.C. Circuit affirmed the district court’s expertise in the matter and agreed that a likeliness of future RICO violations did exist.

The D.C. Circuit also reaffirmed – for the second time – that the district court had jurisdiction over the matter.

The 2009 injunction restrains tobacco companies from committing RICO violations, including intentionally and deliberately deceiving consumers, and forces the companies to make corrective statements about the health effects of smoking. The injunction also forces disclosure of the industry’s marketing and sales information to the public and the Justice Department.

Last year, five tobacco companies, including R.J. Reynolds, Lorillard, and the Liggett Group, successfully sued the FDA to stop the agency from forcing the companies to place graphic warning messages on cigarette packages – including one message containing a picture of a dead body lying on an autopsy table.

A federal judge granted an injunction enjoining the FDA from enforcing the rule until the court could issue a final ruling.

Though the injunction will stave off the graphic warnings for 15 months, the appeals court ruling will hold the tobacco industry responsible for warning its customers of the risks associated with tobacco.

“The district court did not clearly err when it found the defendants were reasonably likely to commit future RICO violations despite the passage of the Tobacco Control Act,” the D.C. Circuit rules. “Nor did the court abuse its discretion when it refused to vacate its injunctions under the primary jurisdiction doctrine. Accordingly, the district court’s denial of the defendants’ motion to vacate the injunction is affirmed.”

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By RYAN ABBOTT/ Courthouse News Service

See this article at its original location >

The U.S. Court of Appeals for the District of Columbia upheld a 2009 injunction banning the company, which sells Marlboro and other cigarettes, from making misleading statements or implying health benefits.

The court had previously upheld injunctions placed under the Racketeer Influenced and Corrupt Organizations Act, but the cigarette company brought a new challenge after Congress passed the Family Smoking Prevention and Tobacco Control Act in 2009.

Read the entire Reuters news report >

We need to take the revenue out of big tobacco and reverse this trend.

First, the issue drawing the most public attention was the company’s dealings with groups representing farm workers who toil under dangerous conditions and provide the tobacco that brings prosperity to the company and its key executives. At least 20 individuals who attended the meeting dominated the question-and-answer session, urging the company to meet directly with the Farm Labor Organizing Committee (FLOC)  after many years of failing to achieve such a meeting. Reynolds American CEO Daniel M. Delen publicly pledged that he would be willing to participate in such a meeting. Dozens of protestors outside the building underscored the message of the supporters of the human rights of tobacco farm workers.

Delen also touted an April 2012 “multilateral” meeting in Raleigh as a first step in addressing issues of inadequate worker safety in the tobacco fields of North Carolina. [See Oxfam America’s report: “A State of Fear: Human Rights Abuses in North Carolina’s Tobacco Industry”]

A second issue was contained in the shareholder resolution that called on RAI to establish a special ethics committee to examine the company’s marketing practices. The purpose of this special committee is “to ensure shareholders that its products and product promotions, as far as is possible, not undermine efforts of governments at any level to adopt laws and practices that will free Americans from the negative consequences of use of our tobacco products.”

In addition to commenting on the text of the resolution, Father Michael Crosby denounced RAI’s heavy-handed campaign to oppose California’s Proposition 29, which would raise that state’s cigarette excise tax by $1 per pack and increase taxes on cigars and pipe tobacco from 31.73 percent to 54.89 percent. If passed by the voters, the proposal would raise about $735 million annually, most of which would go toward cancer research.

Fr. Crosby also cited the company’s support of the right-wing political organization ALEC, the American Legislative Exchange Council, whose stealth activities have come under increased scrutiny following public disclosures of ALEC’s drafting of and advocacy for Florida “Stand Your Ground” law and several states’ anti-immigrant legislation.

The shareholder resolution was defeated, according to the preliminary tally reported at the meeting, with 6.4 million shares in favor, 418 million shares opposed and 6.3 shares abstaining.

The third key issue was litigation, specifically RAI’s “litigation progress” – or lack thereof – in dealing with the Engle Progeny cases in Florida. During the business presentation by Mr. Delen, RAI’s CEO stated that, since 2010, RAI had been “successful” in two-thirds of the Engle Progeny trials. Such “successes” included not only defense verdicts but also – for the first time publicy stated in this author’s memory at any tobacco company’s shareholders meeting – mistrials (such as when a jury is deadlocked without being able to reach a verdict).

In 2009, a Florida jury awarded $3.3 million in compensatory damages and $25 million in punitive damages against Reynolds American in a case involving the death of Benny Ray Martin, the husband of Mathilde Martin. Her case is one of thousands of “Engle Progeny” lawsuits in Florida, cases that followed the landmark 2006 ruling by the Florida Supreme court in Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006). After losing on appeal at every stage in the Florida’s state court system, RAI filed a petition for certiorari with the Supreme Court of the United States.

In arguing in December 2011 that its petition for a writ of certiorari should be granted, Reynolds’ attorneys (Paul D. Clement of Bancroft PLLC, Gregory G. Katsas of Jones Day and Eric E. Murphy of Jones Day) claimed that in “their conduct of Engle progeny litigation, the Florida state courts are engaged in serial due-process violations that threaten the defendants with literally billions of dollars of liability.” (emphasis added) Moreover, “the massive liability imposed on the Engle defendants – which currently stands at over $375 million in adverse judgments – will… steadily increase as Engle progeny trials continue with no end in sight.” (emphasis added).

RAI’s attorneys’ description of doomsday for the company became reality on March 26, 2012 when the Supreme Court announced that it would not consider RAI’s appeal in the Martin case. As I described at the time, “At long last, Reynolds American and the other major tobacco companies will be held accountable for their massive and reprehensible misconduct that harmed thousands of Florida smokers. As Reynolds’ own lawyers have concluded, denial of its cert petition is a very big deal indeed.”

Citing the question I asked at the 2011 Reynolds American Shareholders Meeting about the Martin case, the response I received from Mark Holton, RAI’s Executive Vice President and General Counsel, that he was “confident that the Engle process violates due process” and that the company’s legal arguments were strong and would ultimately prevail, and the fact that on March 26, 2012 the U.S. Supreme Court refused to consider RAI’s appeal of the $28 million verdict, this RAI shareholder from Massachusetts asked the following question:

“Given how Mr. Holton got it wrong last year about this important case, why shouldn’t investors and shareholders be skeptical when they hear pronouncements by Reynolds American management about tobacco litigation?”

In response, Mr. Holton acknowledged what the Supreme Court had done regarding the Martin case, but cited what he called “encouraging” developments with two appeals of plaintiff verdicts in the state court system in Florida. This included a March 30th ruling by Florida’s Second District Court of Appeal affirming a $2.5 million wrongful death verdict against Reynolds American and Philip Morris USA. In that appeal of the Douglas case, the Court of Appeal also certified the following question to the Supreme Court of Florida: “Does accepting as res judicata the eight Phase I findings approved in Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006) violate the tobacco companies’ due process rights guaranteed by the Fourteenth Amendment of the United States Constitution?”

Mr. Holton notably did not address the doomsday scenario outlined by his company’s attorneys who filed the writ for certiorari. So, in a span of just five months, this RAI shareholder received from the company diametrically polar opposite predictions concerning the future of tobacco litigation, depending on which side of the Reynolds American corporate mouth was talking.

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By By Edward L. Sweda, Jr., Public Health Advocacy Institute

WHO economists developed a costing tool that is now available to assist countries with the planning of national tobacco control strategies (Scaling up action against noncommunicable diseases: How much will it cost?). http://whqlibdoc.who.int/publications/2011/9789241502313_eng.pdf

Investment in FCTC implementation as a priority NCD prevention measure has been proven to be affordable, as well as effective and cost-effective and for this reason is recommended as a “best buy” priority intervention.
http://www.who.int/nmh/publications/best_buys_summary.pdf

There is no reason for governments to stall on the implementation of the proven tobacco control policies we know save lives while saving money.

The Bloomberg Initiative has supported the implementation of effective tobacco control policies in low and moderate income countries, thereby protecting some of the world’s most vulnerable people from the death and disease caused by tobacco addiction.

The announcement was made during Mr. Bloomberg’s remarks at the 15th World Conference on Tobacco or Health in Singapore where it was hailed by the enthusiastic delegates. The announcement means that funding for the Bloomberg Initiative to Reduce Tobacco Use will be continued for at least four more years.

The Bloomberg Initiative has supported the implementation of effective tobacco control policies in low and moderate income countries, thereby protecting some of the world’s most vulnerable people from the death and disease caused by tobacco addiction. These policies are specified in the Framework Convention on Tobacco Control (FCTC), the world’s
first public health treaty and include:

• Banning smoking in public places and workplaces;
• Requiring warning labels on all tobacco products;
• Banning tobacco advertising; and
• Adopting tax policies that significantly increase the price of tobacco

Since the Bloomberg Initiative began in 2006, effective tobacco control policies have been implemented in 30 countries,covering 1.3 billion people and saving 3.7 million lives.

About Bloomberg Philanthropies

Bloomberg Philanthropies works primarily to advance five areas globally: the Arts, Education, the Environment, Government Innovation and Public Health. The Bloomberg Initiative to Reduce Tobacco Use is focused on reducing the public health impact of tobacco use globally by implementing proven tobacco control policies in low- and middle-income countries where 80% of tobacco-related deaths occur. For more information please visit www.mikebloomberg.com

About ASH

Action on Smoking and Health works to reduce the disease, damage and death caused by tobacco through advocacy, legal action and its network of international partners. For more than 40 years, it has fought for smoking bans, tobacco taxes and other measures proven to reduce tobacco consumption and save lives.

Media Contact:
Laurent Huber, Executive Director, ASH
Phone: +1 202.352.3284
Fax: +1 202.289.7166
media@ash.org