U.S. Seeks Tobacco Penalties

Rebuffed in their pursuit of billions of dollars in past tobacco profits, Justice Department lawyers Wednesday told the judge in their racketeering case against cigarette makers that she can still force them to fund smoking cessation programs and other measures to make amends for their past misconduct.

In a brief filed with U.S. District Judge Gladys Kessler in Washington, government lawyers served notice that they aim to fight on despite a major setback: a federal appeals court ruling precluding them from seeking disgorgement of $280 billion in allegedly ill-gotten gains by the tobacco industry. Justice attorneys said they would seek reconsideration of the disgorgement ruling by the full Circuit Court of Appeals for the District of Columbia.

In a resounding victory for cigarette makers Feb. 4, a three-judge panel ruled 2 to 1 that disgorgement of past profits was not a suitable remedy in civil suits brought under the federal racketeering statute.

Whether or not that ruling sticks, the Justice Department said Wednesday that it in no way stopped Kessler from ordering a broad array of sanctions if she found the industry guilty of fraud and racketeering.

“The government filing is making it very clear that the most important remedies from a public health perspective are still available for this court to impose,” said William V. Corr, executive director of the Campaign for Tobacco-Free Kids.

The government has accused top cigarette makers of conspiring to distort the risks and addictiveness of smoking and of misleading the public on the hazards of secondhand smoke. The defendants, including Altria Group Inc.’s Philip Morris USA, Reynolds American Inc.’s R.J. Reynolds Tobacco Co. and Loews Corp.’s Lorillard unit, have denied the charges. The trial began in September and is expected to last at least until May.

The government plans to seek an order requiring the companies “to fund sustained smoking cessation programs that have been scientifically proven effective,” according to its 15-page brief.

Justice Department lawyers said they also wanted to require the cigarette makers to fund a long-running public education campaign on the ill effects of smoking and secondhand smoke and to invest heavily in programs against teen smoking -- featuring financial penalties if youth smoking doesn’t drop quickly enough.

The industry is scheduled to file its reply next week.

In a statement Wednesday, Philip Morris contended that the appeals court ruling not only barred disgorgement but also made it impossible for the government to seek other sanctions.

“The government’s approach to this case continues to ignore the fundamental and irreversible changes” in industry conduct that “have occurred ... over the last decade,” the statement said.

Sources told The Times that at a meeting Feb. 9, when the judge set the briefing schedule, she suggested that the parties seek a settlement. It could not be determined whether any such discussions had taken place.