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D.C. Circuit Upholds RICO Penalties for Cigarette Companies

By Tanya Roth, Esq. on July 31, 2012 | Last updated on March 21, 2019

The D.C. Circuit Court of Appeals has made a decision on the RICO case involving cigarette makers. The big cigarette companies aren't smiling about this one.

In April, we brought you details on the oral arguments in the U.S. v. Philip Morris USA Inc case.

Back in 2009, the Food and Drug Administration was given authority to monitor the cigarette industry and its marketing practices. This authority came from a case brought under the Racketeering Influence and Corrupt Organizations Act.

The cigarette companies, including Altria Group, R.J. Reynolds Tobacco and Lorillard Tobacco, were ordered to stop marketing their products as "low-tar" and "light." Furthermore, they were ordered to make public statements in newspapers and magazines about the harmful effects of smoking.

In the present appeal, the cigarette companies, with their superstar lawyer Miguel Estrada, argued that the penalties were moot and that the companies didn't need court supervision. Essentially, Estrada claimed that the current regulatory environment already regulated and restricted the marketing of cigarettes. So why the need for court-ordered supervision of their marketing practices?

As we mentioned in our previous blog post, the three-judge panel didn't seem touched or moved by the arguments.

In fact, in their decision, the judges found that they had no reason to believe that the cigarette companies would comply with the new regulatory scheme given their history of non-compliance with various legal requirements, writes Bloomberg BusinessWeek.

Obviously, representatives for the cigarette companies aren't thrilled with the decision. But according to BusinessWeek, the cigarette companies are considering the next steps. Supreme Court, anyone?

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