Washington - The tobacco industry is asking a federal appeals panel to overturn a landmark ruling that could open the door to more lawsuits from US smokers claiming they were harmed because they were deceived by cigarette companies.
The US Court of Appeals for the D.C. Circuit scheduled arguments on Tuesday to hear from both the industry and the government. The two parties are challenging different aspects of a judge's 2006 ruling that the tobacco industry deceived the public for decades about smoking risks.
That ruling barred cigarette companies from using terms such as "low tar" or "light" in their marketing, but did not impose financial penalties.
Cigarette companies say they did nothing wrong, while the Justice Department wants the industry to pay roughly $14 billion for a smoking cessation program and related efforts.
"The current punishment does not fit the magnitude of the crime," said M. Cass Wheeler, who heads the American Heart Association and wants the court to levy billions of dollars in penalties against tobacco companies. "That money should be used for education and cessation programmes to break the cycle of addiction, not to entice children and adults to start and maintain a very deadly habit."
Misleading the public
In August 2006, US District Judge Gladys Kessler ruled that the nation's top cigarette makers violated racketeering laws, misleading the public for years about the health hazards of smoking. But she said she lacked authority to order them to pay the billions of dollars the government had sought.
Kessler, however, did order the companies to publish in newspapers and on their websites "corrective statements" on the adverse health effects and addictiveness of smoking and nicotine.
She also ordered tobacco companies to stop labelling cigarettes as "low tar," "light," "ultra light" or "mild," since such cigarettes have been found to be no safer than others because of how people smoke them.
In her ruling in the long-running case, the judge said, "Over the course of more than 50 years, defendants lied, misrepresented and deceived the American public, including smokers and the young people they avidly sought as 'replacement smokers,' about the devastating health effects of smoking and environmental tobacco smoke (secondhand smoke)."
Kessler, who presided over a nonjury trial in the case, said that adoption of a national stop-smoking programme, as sought by the government, "would unquestionably serve the public interest" but that she was barred by an appeals court ruling that said remedies must be forward-looking and not penalties for past actions.
The government had asked the judge to make the companies pay $10bn for smoking cessation programmes, though the Justice Department's own expert said $130bn was needed.
'They're racketeers'
Kessler's decision came nearly a decade after the states reached legal settlements with the industry worth $246bn and aimed at recovering health care costs. Those settlements imposed some restrictions on the industry, such as banning ads on billboards and public transportation.
In the federal case, tobacco companies had denied committing fraud and had said changes in how cigarettes are sold now make it impossible for them to act fraudulently in the future.
In addition to saying she could not force the companies to pay for a quit-smoking programme, Kessler rejected a government bid to impose fines on the industry if youth-smoking rates failed to drop in the ensuing years.
Sharon Eubanks, who once headed the government's tobacco prosecution team said, "We won. It's clear the government won. This is the first time they've been found to violate the racketeering statute. For crying out loud, that's significant. They're racketeers."
The government filed the civil case under a 1970 racketeering law commonly as RICO used primarily to prosecute mobsters in cases in which there has been a group effort to commit fraud.
The tobacco companies - except for one defendant, Liggett Group - were ordered to pay the government's cost for pursing the lawsuit. The government's costs, according to some Justice Department estimate, totaled more than $140m.
The suit was first filed in 1999 during the Clinton administration. The Bush administration pursued it after receiving early criticism for openly discussing the case's perceived weaknesses and attempting unsuccessfully to settle it.
- AP