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Tobacco case due up

The government and the tobacco industry appear likely to learn as soon as Oct. 17 the fate of the campaign by the Justice Department to force the surrender of profits from an alleged decades-long campaign of deception about smoking hazards. The Court’s electronic docket now shows that the Justices will consider the Department appeal on Friday, Oct. 14 — thus, if the Court makes up its mind then for or against review, an announcement may come three days later.

The case reaches the Court in an unusual posture: it is a dispute over a remedy for a violation of the RICO anti-racketeering law, but no violation has yet been found in District Court, where the case continues on a separate track. That is the point the industry drives hardest in urging the Court not to hear U.S. v. Philip Morris USA (docket 05-92). The Justice Department has countered that argument by reminding the Court that the disgorgement issue was taken to the D.C. Circuit even while the case proceeded in trial, and Supreme Court intervention at this stage would make it possible for the District Court to move quickly toward a final ruling with all potential RICO remedies left on the table.

At the time the government appeal was filed on July 18, the case was continuing to move at a most deliberate pace in District Court. Now, final briefing in the case has just been completed on the liability issue, and on remedies other than disgorgement. (The case had its sixth anniversary in District Court a week ago; as of Thursday, there had been 5,687 docket entries. District Judge Gladys Kessler has managed the mammoth case from the beginning. Early on, she had thought the case might go to trial as early as 2003. Lately, she has shown some impatience to move the case to a conclusion; she bluntly refused early this month, for example, to give the industry more time to file their post-trial papers, saying the industry had “virtually unlimited resources” to deploy in the case.)

The government had been seeking surrender of $280 billion in industry profits — what it has repeatedly called “ill-gotten gains.” After the D.C. Circuit barred the disgorgement remedy, the government called for alternative remedies that would cost at least $10 billion over five years for a campaign to try to persuade smokers to quit, and $4 billion over ten years for public education and for advertising campaigns against smoking.

Although lawyers close to the defense team for the industry have predicted publicly that the Court was likely to deny review, they also have conceded that the Justices might be attracted to the case because the stakes are huge, and because it is a government appeal — a factor that usually gives an appeal a better chance of review.

One unknown at this point is whether the new Chief Justice, John G. Roberts, Jr., will take part in Supreme Court action on the case. When the D.C. Circuit denied rehearing en banc, Roberts, then a member of that Court, was recused. As usual, no reason was given, so it is unclear whether that reason is still present. If he does not take part, the prospect of a 4-4 split might loom — and that might be another deterrent to Court review.