The Justice Department asked the Supreme Court on Friday to review a 2006 federal fraud racketeering conviction against the tobacco industry and to authorize the district judge in the case to require tobacco companies to give up as much as $280 billion in “ill-gotten gains.”
Also on Friday, Philip Morris, R. J. Reynolds, Lorillard and British American Tobacco filed papers asking the Supreme Court to overturn the racketeering conviction or return it to an appellate court for review.
It will be at least a month before the court decides whether to take the case.
In the 2006 decision, nine tobacco companies and two trade organizations were found to have deceived the public about the dangers of secondhand smoke and so-called light cigarettes, and to have manipulated the nicotine levels in cigarettes.
The companies “have marketed and sold their lethal product with zeal, with deception, with a single-minded focus on their financial success and without regard for the human tragedy or social costs,” Judge Gladys Kessler, of the Federal District Court in Washington, wrote in a 1,653-page opinion after a nine-month trial.
The case was filed by the Clinton administration in 1999 under a civil statute normally used for organized crime.
Although the industry lost the case, it avoided crippling monetary damages. Judge Kessler had originally agreed to consider requiring the tobacco companies to give up profits if they lost the case, but she was overruled after the industry filed a pretrial motion with an appeals court.
If the Supreme Court were to agree to reopen the case, “it puts everything back on the table,” said Richard A. Daynard, a tobacco law specialist at the Northeastern University School of Law in Boston. “However rich these companies are, they’re not quite that rich. The court would have to decide whether it wanted to bankrupt the companies.”
David Adelman, a tobacco industry analyst at Morgan Stanley, predicted that the Supreme Court would accept the case. But he said it was unlikely that the necessary legal decisions would go against the tobacco companies to require them to pay the money the Justice Department was seeking.
“It’s certainly not a good development for the industry,” Mr. Adelman said, but added, “I think it’s a manageable issue.”
In its filing Friday, Philip Morris, maker of the dominant Marlboro brand, wrote that some of what it termed the trial judge’s “flimsy” findings had penalized companies for exercising free-speech rights in questioning some of the emerging science on tobacco and addiction.
A consortium of health and antitobacco groups also filed a petition with the Supreme Court Friday supporting the return of profits. “The government is asking for a much more expansive set of remedies than it asked for at the conclusion of the trial or before the Court of Appeals,” said Matthew L. Myers, a lawyer and president of the Campaign for Tobacco-Free Kids.
The government filing, terming the case “an issue of exceptional importance,” was signed by Elena Kagan, the solicitor general appointed by President Obama last year. Tobacco critics view her pursuit of the case as a positive sign.
Ms. Kagan worked on antitobacco legislative issues in the Clinton White
House. A former dean of the Harvard Law School, she is also considered a
possible candidate for openings that may occur on the Supreme Court.