Federal tobacco suit ruling

by Walter Olson on August 18, 2006

As Ted notes at Point of Law, Judge Gladys Kessler has ruled in partial favor of the federal government in its longstanding racketeering case against the tobacco industry (Jun. 21, 2005 and links from there), begun under the Clinton Administration (after much backstage string-pulling and blandishment by private plaintiff’s lawyers) and continued by the Bush Administration. In particular, Judge Kessler is ordering the tobacco companies to make admissions of fraud and racketeering that may prove damaging to them in future private litigation (you can see why those private lawyers were smart to lobby). She did, however, at various stages throw out or disallow large portions of the government’s case, including most of its sweeping demands for money.

A few preliminary comments, based on a reading of the shorter remedial section but not the 1,653-page ruling (PDF) itself:

1) It is now familiar, if still a scandal, that business decisions which would have been near-universally regarded as perfectly lawful at the time can retroactively be defined not only as giving rise to liability, but even as “racketeering”. By this point, with the “racketeering” label having been flung around (and sometimes with success) in so many garden-variety commercial disputes, it may be on the verge of losing its sting.

2) This case, however, was not of the garden variety. From the start, it sought to stigmatize as racketeering tobacco companies’ public advocacy efforts — their efforts to defend their product in public debate and marshal every good and bad argument on its behalf the same way a lawyer might, their P.R. efforts to plant favorable articles in the press, their support of groups like the Tobacco Institute, and so forth. The Justice Department’s complaint charges them, revealingly, with responsibility for taking “false and misleading positions on issues” (emphasis added) (see Sept. 23, 1999). It should be obvious (but apparently still isn’t) that lots and lots of other defendants, who are not for the moment as politically unpopular as tobacco companies, might also someday be in peril of legal charges for advancing false and misleading “positions on issues”.

3) Although Judge Kessler may have thrown out substantial portions of the feds’ case, the remedies she approved nonetheless impinge on values of free advocacy. Tobacco companies are to be ordered to admit in communications to consumers various supposed facts which they do not believe to be true, and which in fact may not be true (for example, that no particular formula for a cigarette’s ingredients is safer or more natural than any other) but which fit the desired anti-tobacco message. They are to be forbidden to utter a great many other statements which they believe to be true on the grounds that — well, basically on the grounds that the government disapproves of those statements and doesn’t want them aired as part of public debate.

4) It goes without saying that the advancement of erroneous or misleading arguments, the promotion of dubious science, etc. as part of an effort to sell one’s product line is not going to be deemed “racketeering” when certain other groups of professionals do it — say, politicians and lawyers.

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