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Justice Department asks high court for right to Big Tobacco money

STORY HIGHLIGHTS
  • The high court will consider appeals from tobacco firms, Justice in coming weeks
  • If petition were granted, Big Tobacco could owe billions in damages, liability expert says
  • Philip Morris asked that court rulings about an attempt to hide dangers of smoking be rejected
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WASHINGTON (CNN) -- The Department of Justice on Friday asked the U.S. Supreme Court to overrule a lower court decision denying the government the right to seek $280 billion from the tobacco industry for ill-gotten gains.

"For the last half century, those defendants ... have engaged in a pattern of racketeering activity and a conspiracy to engage in racketeering that has cost the lives and damaged the health of untold millions of Americans," the department said in its petition to the high court.

The money sought represents proceeds from cigarette sales to the "youth addicted population" between 1971 -- the year after the Racketeer Influenced and Corrupt Organizations law was enacted -- and 2001. The population includes smokers who became addicted before the age of 21.

Friday's filing is an appeal of a federal appeals court ruling in a May 2009 federal appeals court ruling that said the government could not seek disgorgement -- repayment of the money -- because it used the RICO statutes illegally.

If the petition were to be granted, the hundreds of billions of dollars that Big Tobacco could ultimately be forced to cough up could potentially bankrupt the industry, said Richard Daynard, head of the Tobacco Products Liability Project at Northeastern University in Boston, Massachusetts.

"That's a big deal," he said in a telephone interview.

Philip Morris USA also took its case to the high court on Friday, asking it to reject lower court rulings that said the industry illegally hid the dangers of smoking from the public.

Other tobacco firms filing appeals Friday included R.J. Reynolds and Lorillard. Together with Philip Morris USA, those companies make up about 90 percent of domestic cigarette sales.

The high court will consider the appeals from the tobacco companies and the Justice Department in coming weeks. If accepted, oral arguments would likely be held this fall. If the justices decline to intervene, the lower court rulings would stand.

Daynard expressed optimism that the Justice Department's case, which was filed by the solicitor general, would be approved.

"While there's no certainty that the Supreme Court will take the case, they take a much higher proportion of cases filed from the solicitor general than from ordinary litigants," he said. "And they particularly are likely to take cases where there's a conflict among the circuits, as there is here."

The 2nd Circuit of the Court of Appeals and the 5th Circuit had held that, under some circumstances, disgorgement remedies would be permitted under RICO, whereas the District of Columbia Circuit said they are never permitted, he said.

"That's a straightforward conflict and, in fact, it was acknowledged as such by the D.C. Circuit."

Litigation in the case has dragged on for more than a decade.

 
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