Tobacco Cos. Lose Appeal in Racketeering Case

WASHINGTON, D.C. -- The U.S. Court of Appeals for the District of Columbia Circuit has upheld a trial judge's decision to maintain the restrictions she imposed on cigarette makers in 2006 for violating federal racketeering laws.

According to the Wall Street Journal, today's ruling rejects the tobacco industry's argument that the 2006 restrictions should be set aside because Congress in 2009 passed a law that imposed other restrictions on the industry and gave the Food and Drug Administration (FDA) the authority to regulate tobacco products.

The appeals case stemmed from U.S. District Court Judge Gladys Kessler's ruling on June 1, 2011, that her authority over the case did not end with the 2009 Family Smoking Prevention and Tobacco Control Act. As CSNews Online reported at the time, Kessler in her 2011 ruling cited the cigarette makers' continued challenge to the 2009 law granting the FDA regulation over the industry. If the tobacco companies win that challenge, Kessler reasoned that it would "be all the more necessary for them to be restrained by this court from any future violations" of the RICO Act.

According to today's ruling by the U.S. Court of Appeals, Kessler acted reasonably when she decided last year to keep her 2006 restrictions in place, the WSJ reported.

Kessler ordered a variety of marketing, sales and advertising restrictions on the tobacco industry. She also required cigarette makers to issue corrective statements about the dangers of their products, which would appear on television, in newspapers, product packaging and countertop displays in retail outlets, the report added.

Today's ruling is the latest chapter in the federal government's long-running racketeering case against the tobacco industry, which dates back to 1999. Defendants in the case include Altria Group Inc.'s Philip Morris USA; Reynolds American Inc.'s R.J. Reynolds Tobacco Co.; and Lorillard Tobacco Co., a unit of Lorillard Inc.