Big Tobacco blasted in judge's decision

WASHINGTON — In a sweeping condemnation of Big Tobacco, a federal judge Thursday agreed with the government that leading tobacco companies conspired to break anti-racketeering laws and deceive the public about the health risks of smoking for about 50 years.

Judge Gladys Kessler of district court ordered companies to make "corrective statements" about the addictiveness of smoking and its adverse health effects. The statements must appear in stores and packaging as well as on corporate Web sites and through a paid advertising campaign in newspapers and television, Kessler ruled.

But the judge also said federal law did not permit her to order the companies to pay $14 billion for stop-smoking campaigns, as federal prosecutors had sought. That could have crippled the industry's major players, already hurt by dwindling numbers of smokers and foreign competition.

The Justice Department's seven-year case against Phillip Morris USA and its parent company Altria Group, R.J. Reynolds Tobacco, Brown & Williamson Tobacco, British American Tobacco, Lorillard Tobacco and Liggett Group was one of the largest in the agency's history.

Kessler blasted the companies for selling "a highly addictive product" that leads to "a staggering number of deaths per year, an immeasurable amount of human suffering and economic loss, and a profound burden on our national health-care system."

Among other remedies, the judge ordered the companies to stop making false statements about the health effect of cigarettes, to stop stating that cigarettes advertised with descriptions such as "light," "low-tar" and "mild," are less hazardous than other types.

Mark Smith, an R.J. Reynolds spokesman, told The Associated Press the company was "gratified that the court did not award unjustified and extraordinarily expensive monetary penalties," but disappointed that Kessler found the firms had engaged in conspiracy.

Anti-tobacco groups hailed the decision.

"Judge Kessler has found that we've got a rogue industry in this country," said William Corr, executive director of the Campaign for Tobacco-Free Kids.

It was eight years ago that, in a separate action, the industry agreed to pay states that sued the industry $246 million in compensation for the public money spent on treating the health effects of smoking. Washington Gov. Christine Gregoire, then the state's Attorney General, played a key role in negotiating the settlement between tobacco companies and 46 states. A year later, the Justice Department filed its racketeering suit in federal court. Anti-tobacco activists predicted that government and private litigation would ultimately cripple the industry.

But after Thursday's decision, and last month's Florida Supreme Court decision overturning a $145 million judgment against tobacco makers, some said the industry may be less threatened.

But other experts said the industry was not out of the woods. If the decision is appealed by either side, and the appeals court limits on the penalties are overturned, Kessler's decision could provide the groundwork for imposing staggering fines.

The Justice Department lawsuit originally sought $280 billion in what the government argued were the tobacco industry's ill-gotten gains from the marketing of a harmful, addictive product.

But the U.S. Court of Appeals for the D.C. Circuit ruled that a company could not be forced to turn over past profits as a way of preventing future misconduct.

The Justice Department subsequently proposed a $130 billion penalty to pay for anti-smoking programs, but scaled that back to a total of $14 billion — $10 billion to help people quit smoking and $4 billion to educate the public about the risks of smoking.

Critics inside and outside the department saw the huge cut in the proposed remedy as part of political effort to insulate the companies. In the end, Kessler said, the government proved that the tobacco companies "suppressed research, they destroyed documents, they manipulated the use of nicotine so as to increase and perpetuate addiction ... and they abused the legal system in order to achieve their goal — to make money with little if any regard for individual illness and suffering, soaring health costs or the integrity of the legal system."

The judge also saved a few pointed comments for the lawyers who have represented the tobacco industry over the past 50 years.

"What a sad and disquieting chapter in the history of an honorable and often courageous profession," she said.