DOJ, Tobacco Lawyers Back in Court Over Injunction

Government lawyers and attorneys for a group of tobacco companies met Wednesday to discuss how to implement a sweeping injunction lodged against the industry in 2006 by a federal judge who found the companies conspired for decades to conceal the health risks of smoking.

The brief status hearing marked the first time in more than two years that the attorneys for both sides appeared in the U.S. District Court for the District of Columbia. The government’s case against the tobacco companies — including Philip Morris USA (whose parent company is Altria Group) and R.J. Reynolds Tobacco Co. — has been held up in appellate courts since the injunction was issued.

Lawyers for Altria and Philip Morris, including Gibson, Dunn & Crutcher partner Miguel Estrada, unsuccessfully petitioned the U.S. Supreme Court to review parts of the case, which the attorneys for Altria called “an unprecedented effort to use litigation to obtain regulatory authority” over the tobacco industry. The high court in June denied petitions for certiorari pushing the racketeering case back into the trial court.

With the case back in the district court, the task for the lawyers for both sides is to work out the enforcement of the injunction. A May 2009 ruling by the D.C. Circuit — which the Supreme Court declined to review — provides the guidance.

The appeals court remanded the case to determine, among other things, whether any of the defendants’ subsidiaries should be included in the injunction. The appeals court also wants Kessler to take a second look at the “corrective” statements she ordered; those statements require the tobacco companies to disclose the adverse health effects of smoking. The D.C. Circuit said the rights of retailers — when it comes to court-ordered countertop displays and banners — must be taken into account.

A lawyer for Philip Morris and Altria Group, Beth Wilkinson, said Wednesday in court that attorneys for the tobacco companies will spend the next two months speaking with DOJ attorneys to narrow down the list of unresolved disputes stemming from the D.C. Circuit decision last year. One big issue, Wilkinson said, is determining where Food and Drug Administration jurisdiction begins and where Kessler’s authority ends.

“We all have incentive to make that list as small and crisp as possible,” said Wilkinson, a Paul, Weiss, Rifkind, Wharton & Garrison partner in Washington. Wilkinson filed a notice of appearance Aug. 20.

DOJ attorney Ann Ravel, deputy assistant attorney general in the Civil Division, noted in court Wednesday that the tobacco companies have not paid the government’s costs in the litigation, which have run close to $2.4 million, interest included. In court, Kessler said that while 2 or 3 million dollars may not “save the budget,” every dollar helps.

With the case back in district court, other lawyers in Washington have also filed notices announcing participation in the case. Jones Day partner Noel Francisco, representing R.J. Reynolds Tobacco Co., filed a notice of appearance last week.

Gibson’s Estrada filed his notice of appearance Sept. 10. Estrada argued for the tobacco companies in the U.S. Court of Appeals for the D.C. Circuit.

Winston & Strawn partner Thomas Frederick in Chicago, who chairs the firm’s litigation department, is also identified as counsel for Philip Morris and Altria Group.

Kessler wants the lawyers to return to court in late December. “I’m sure we’ll have a great deal to talk about at that time,” Kessler said in court.


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