Court Upholds Restrictions on Cigarette Makers in Racketeering Case

Tobacco companies lose bid to end monitoring

WASHINGTON -- Cigarette makers, including Altria Group Inc.'s Philip Morris USA unit, lost a bid to end court monitoring of the industry's marketing practices stemming from the government's 13-year-old racketeering lawsuit, reported Bloomberg.

The U.S. Appeals Court in Washington has upheld a lower court decision that oversight of the companies resulting from the federal government lawsuit is necessary and should continue because of the companies' records.

U.S. District Judge Gladys Kessler ruled June 1 that her involvement with the cigarette makers was not ended by a 2009 law empowering the Food & Drug Administration to monitor the industry and restrict the sale, promotion and distribution of tobacco products.

The appeals court said in its decision that the district court "did not clearly err" when it found the companies were reasonably likely to commit future violations of the Racketeer Influenced & Corrupt Organizations (RICO) Act.

The appeals court said Kessler acted reasonably when she decided last year to keep the earlier restrictions in place, according to a separate Dow Jones report.

In 2006, Kessler ordered a variety of marketing, sales and advertising restrictions on the tobacco industry. She also required cigarette makers to issue corrective statements about the dangers of their products, which would appear on television, newspapers, product packaging and countertop displays in retail outlets, said the report.

Along with Richmond, Va.-based PM USA, the defendants include Winston-Salem, N.C.-based Reynolds American Inc.'s R.J. Reynolds Tobacco Co. and Greensboro, N.C.-based Lorillard Inc.'s Lorillard Tobacco Co.

The case is U.S. v. Philip Morris USA Inc., 11-5145, U.S. Court of Appeals for the District of Columbia Circuit (Washington).