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Analysis: Tobacco case ends

(NOTE TO READERS:  The Supreme Court will issue the final orders of the Term at 10 a.m. Tuesday.  The most significant case awaiting the Court’s action is a test of the constitutionality of a federal ban on so-called “soft money” to political parties.  The blog will provide full coverage of the orders.)



Almost eleven years after it began, with billions of dollars at stake, the federal government’s sweeping anti-racketeering case against the tobacco industry suddenly halted Monday, in a simple order from the Supreme Court: review denied.  All seven pleas for review by the Court — five from tobacco companies, one from the federal government, and one from anti-smoking advocacy groups — were turned aside and, as usual, there was no explanation.  There also was no indication of any dissenting votes among the Justices. The government and the anti-smoking groups were the bigger losers.

The government will not now be able to collect some $280 billion in profits the companies had earned since 1971, and the industry’s foes lose a chance to compel the companies to put on a public education program to try to persuade consumers not to take up smoking in the first place, as well as a nationwide smoking-cessation campaign, aimed at people — especially youths — who already smoke.  Moreover, the 1970 anti-racketeering law — the Racketeer Influenced and Corrupt Organizations Act — has now been pared down so that the judges seeking to impose restrictions for violations of the law can only require “forward-looking” action.

As a result of the Court’s refusal to hear any of the cases, a D.C. Circuit Court ruling issued thirteen months ago now goes into effect.  What that means to the industry is that it has been found to have carried on, illegally, a four-decades-long campaign to deceive the nation about the health hazards and addictive nature of cigarettes, and it must abide by a series of judge-fashioned limitations on its marketing activities.  (The industry is now subject to a separate regime of federal regulations, imposed by Congress recently in the Family Smoking Prevention and Tobacco Control Act, although the industry is pursuing challenges to some parts of that law in lower courts.  And the industry remains under some restrictions to accepted in 1998 as part of settlements of lawsuits against it by forty-five states.)

Among the restrictions the industry must observe under the RICO injunction issued by U.S. District Judge Gladys Kessler are these: It must avoid making any false or deceptive claims about cigarettes’ health effects or how cigarettes are made, it must not use any health “descriptor” for cigarettes — such as “light” or “low tar,” and it must make corrective public disclosures about addiction, adverse health effects of smoking, adverse health effects of second-hand smoke, and about how they manipulated nicotine doses.   In their petitions to the Supreme Court, the companies leveled First Amendment and other challenges to all parts of the injunction, and contended that they should not have been found to have violated any law by their marketing and production practices.

The Court’s refusal to hear the government’s plea for an order to the companies to “disgorge” $280 billion in profits was the Court’s second; it also denied review in 2005, when that issue came up before the trial in U.S. District Court was completed.   The Justice Department and the anti-smoking organizations, in their petitions, sought a chance to have the case returned to District Court, with authority to impose more sweeping measures that were denied by the judge, because of her finding that those remedies were “backward-looking” and thus did not satisfy a 2005 D.C. Circuit Court ruling scaling back RICO injunction remedies.   (Further details of what was at stake in the case can be found in this background post.)

Had the Court granted review of any parts of the case, and should Justice-nominee Elena Kagan be on the Court next Term, she probably would have taken herself out of any role in the case, since she pursued the government’s appeal to the Supreme Court in her role as U.S. Solicitor General.  Whether that prospect for recusal influenced the other Justices in their decision not to hear the case is unknown, but it could have been a factor.

While turning aside the tobacco case, the Court on Monday did add six new cases to its docket for decision in the Term that opens Oct. 4.  One of the most important of those is a test of an Arizona law that imposes severe penalties on companies in that state for hiring illegal aliens as workers.  The case does not directly involve Arizona’s most recent anti-immigrant law, requiring police to check up on the alien status of people they suspect of having no right to be in the country, but the decision on the law that is at issue may clarify the roles of state governments in dealing with what they perceive to be immigration problems.  That case is U.S. Chamber of Commerce v. Candelaria (09-115).   The Solicitor General, asked by the Court for advice on the case, urged the Court to grant review, but to limit the scope of the review; the Court imposed no limit on the grant.

The Court also agreed to hear next Term a case in which the Solicitor General had urged the Court to deny review.  The case of Janus Capital Group v. First Derivative Traders (09-525) tests whether an investment adviser to a mutual fund may be held liable for securities fraud, if the fund itself makes misleading statements in its public reports about trading practices.  Also contrary to the Solicitor General’s suggestion, the Court granted review of CIGNA Corp. v. Amara, et al. (09-804), asking the Court to clarify when a company harms its workers by failing to give them full information about a pension plan it is adopting, and their benefits under the plan.  Justice Sonia Sotomayor did not take part in the CIGNA order.

Another newly granted case — also recommended for denial by the Solicitor General -  is Henderson v. Shinseki (09-1036), testing the deadline for a military veteran to seeking court review of a denial of veterans’ disability benefits.  The question is whether that filing deadline can be suspended for good reasons.   The other two newly granted cases are Pepper v. U.S. (09-6822), on whether a convicted individual’s rehabilitation after sentencing can support a lowering of the sentence under federal Guidelines, and Milner v. Navy Department (09-1163), on access under the federal Freedom of Information Act to government documents about stored explosive materials at a naval depot near Port Townsend, Wash.; the documents are being sought by a local resident who wants to know if he is at risk from those munitions.

The Court asked the Solicitor General to submit the federal government’s views on the right of universities and other non-profit organizations to own patents to inventions that were made during federally funded research.  There is no deadline for the SG’s response to Stanford University Trustees v. Roche Molecular Systems (09-1159).

Among the cases the Court refused to hear were two on which the Solicitor General had offered the government’s views.  One was an appeal by the Vatican (Holy See v. Doe, 09-1), seeking immunity from a damages lawsuit filed in U.S. court for the sexual abuse of boys by priests in the U.S.  The Solicitor General suggested that the Court either deny review, or send the case back to a lower court for further review; the Court denied it.   At the government’s suggestion, the Court also refused to hear a test case on the legality of state and local laws requiring employers to provide minimum spending to cover their workers’ health care needs.  That case was Golden Gate Restaurant Association v. San Francisco (08-1515).