The Justice Department yesterday asked the Supreme Court to overturn an appeals court ruling that barred the government from seeking $280 billion in past profits from cigarette makers in a civil racketeering suit.
The government should be allowed to pursue the $280 billion to address “ongoing concerted unlawful activity in the tobacco industry spanning decades and affecting the lives of millions of Americans,” the department said in asking the high court to take the case.
The appeals court decision barring the action had been a major blow to the government’s long-running racketeering lawsuit against the cigarette companies.
Yesterday’s request came at the deadline for the administration to decide whether to appeal the February ruling, by the U.S. Court of Appeals for the District of Columbia Circuit, that the government could not use the Racketeer Influenced and Corrupt Organizations (RICO) federal racketeering law to seek the huge penalty.
The tobacco case is “the most important civil RICO” lawsuit the government has filed, the brief said, and the ruling on the penalty could affect other civil racketeering cases as well.
The $280 billion is the most ever sought in a civil racketeering trial. The government has described the sum as an estimate of money the companies earned illegally through fraudulent activities such as marketing to children and denying doing so.
A nine-month trial ended in June, but it could be months before U.S. District Judge Gladys Kessler decides the case. The judge has urged the sides to try to reach a settlement.
Filed in 1999, the suit contends that tobacco companies knew about the health dangers of smoking but hid the information from the public.
The issue is separate from the Justice Department’s decision to ask cigarette companies to pay for a $10 billion, five-year nationwide stop-smoking program. That total was far less than the $130 billion, 25-year program called for by a key prosecution witness.
Democrats and other administration critics said that top Justice Department officials pressured the lawyers handling the case to back off the more expensive anti-smoking campaign.
Attorney General Alberto R. Gonzales has said the decision was made on the merits of the case, independent of political considerations. But the Justice Department is investigating whether improper political influence was used in the case.
The new matter also is independent of settlements worth $246 billion that states reached with the industry in the late 1990s to recoup the cost of treating sick smokers. The agreements imposed marketing restrictions on the companies and forced them to adjust other business practices.
But Judge Kessler ruled last year that the government could seek the penalty, called a “disgorgement,” under the racketeering statute. The tobacco companies appealed and the appellate court sided with them, ruling the government couldn’t recover any money using the racketeering law because the statute requires “forward-looking remedies.”