Appeals Court Upholds Landmark Cigarette Industry Racketeering Case

A federal appeals court has affirmed a landmark legal case, first filed by the U.S. government in 1999 under laws used to prosecute mobsters and other organized criminals, which accused cigarette companies of conspiring to hide the dangers of smoking.

The ruling means cigarette makers including R.J. Reynolds Tobacco and Lorrilard Inc. can no longer advertise their products as “low tar,” “light,” “ultra-light” or “mild.” Such products have been shown to be just as dangerous as cigarettes not bearing such language.

Also, the companies must publish “corrective statements” on the adverse health effects and addictiveness of smoking and nicotine.

The U.S. Court of Appeals in Washington upheld most of a 2006 ruling that found the nation’s top tobacco companies had committed fraud and violated racketeering laws in the marketing of their products. The ordered changes to cigarette labeling and other aspects of the court ruling had not taken effect while the tobacco companies continued their appeals of the decision.

Gentleman’s Agreement Alleged

The lawsuit was filed in 1999 under then-President Bill Clinton using RICO laws. The suit was then pursued by former President George W. Bush. A trial on the lawsuit determined that big tobacco executives had entered into a “gentleman’s agreement” whereby they agreed not to compete over whose products were least hazardous to smokers.

The cigarette companies hoped that by not claiming some cigarettes were safer than others, they would not have to disclose the risks of lung cancer, heart disease, and other side effects of smoking, according to prosecutors.

Named as defendants in the government’s case against big tobacco were Philip Morris USA Inc. and its parent, Altria Group Inc.; R.J. Reynolds Tobacco Co.; Brown & Williamson Tobacco Corp.; British American Tobacco Ltd.; Lorillard Tobacco Co.; Liggett Group Inc.; Counsel for Tobacco Research-U.S.A.; and the now-defunct Tobacco Institute.

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