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US: Tobacco Firms Can Be Sued Under RICO

Associated Press
March 18th, 2004

The Justice Department is within its rights to pursue a racketeering lawsuit against the tobacco industry, a federal judge ruled Wednesday.

Lawyers for the tobacco industry argued that the department's claims should be tossed out because the agency was trying to regulate the cigarette industry a power the industry said the department didn't have.

U.S. District Judge Gladys Kessler said the department was "not engaging in policymaking" but was trying to enforce the Racketeer Influenced and Corrupt Organizations Act, known as RICO. She said Congress "explicitly authorized the attorney general to bring RICO suits such as this one."

The lawsuit accuses the tobacco industry of concealing information that nicotine is addictive and smoking causes disease. The government also contends that the companies targeted children through advertising to lure new smokers.

The government is seeking to recoup profits it says the industry earned through fraud. A government estimate puts those profits at more than $280 billion.

The Justice Department also wants the judge to impose new restrictions on the tobacco industry, including a ban on vending machines and on advertising terms such as "light" and "low tar."

The Justice Department declined to comment on Wednesday's ruling. Philip Morris USA Inc. lawyer William Ohlemeyer, in a statement, said there are "several viable defenses in addition to the separation of powers argument." He said the industry "will ultimately prevail."





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