U.S. appeals court fines tobacco companies lied..

May 22, 2009 - The case is U.S. v Philip Morris USA et al, U.S. Court of Appeals (3-judge panel) for the District of Columbia, No. 06-5267. U.S. appeals court on Friday, 5/22 upheld a trial judge's racketeering verdict agreeing that cigarette companies systematically lied for years in order to sell tobacco products they knew were dangerous.

In a blow to anti-smoking groups, the U.S. Court of Appeals for the District of Columbia also upheld the lower court's decision to reject expensive remedies, like funding a smoking cessation program.

The tobacco companies had appealed the decision of U.S. District Judge Gladys Kessler in August 2006 that included ordering cigarette makers to cease using expressions such as "low tar" or "light" in their cigarette marketing.

"Defendants knew of their falsity at the time and made the statements with the intent to deceive," said the 92-page ruling. "Thus, we are not dealing with accidental falsehoods, or sincere attempts to persuade; Defendants' liability rests on deceits perpetrated with knowledge of their falsity."

Other companies appealing Kessler's ruling were the R.J. Reynolds Tobacco unit of Reynolds American Inc, Lorillard Inc, Vector Group Ltd's Liggett Group, British American Tobacco Plc and its Brown & Williamson unit, as well as now defunct industry groups: the Council for Tobacco Research and the Tobacco Institute.

Despite the racketeering finding, the tobacco companies have managed to avoid major monetary penalties in the case that was originally filed by the Clinton administration in 1999 seeking $289 billion in damages. During the trial, that began in 2004, lawyers for the Justice Department under the Bush administration scaled back the monetary demands to $14 billion for anti-smoking campaigns.

But the appeals court upheld the order requiring warnings on cigarette packages and demanding that tobacco sellers publish the corrective statements on corporate websites, that they issue full-page advertisements in thirty-five major newspapers and put at least ten advertisements on a major television network.

The appeals court was highly critical of the tobacco companies, rejecting their arguments that they had never advertised "light" cigarettes as less dangerous. The court also pointed to evidence that the companies knew that second-hand smoke (passive ETS, environmental, involuntary) was dangerous, dismissing their assertions that there was no "scientific consensus."

Philip Morris and Altria said they would press on with the legal fight.

Reference: U.S. appeals court finds tobacco companies lied by Diane Bartz, Reuters, 5/22/2009.