Cigarette makers are no strangers to the courtroom, but after settling a lawsuit with US states, they face Uncle Sam as the plaintiff this fall in what is shaping up as the biggest civil racketeering trial in history.
Repeated efforts to get the US$280 billion case dismissed have failed. So has an attempt by the George W. Bush administration to negotiate a settlement.
Last week, US District Judge Gladys Kessler rejected the latest bid to have the case thrown out, and the government submitted a list of witnesses it intends to call. On it is a who's who of the tobacco industry.
Six years ago, 46 states settled their suit against the industry for US$206 billion, payable over 25 years. Four states settled separately for a total of US$40 billion. The states recovered costs for treating sick smokers.
Kessler ruled the federal government cannot do the same. Instead, she is letting the Justice Department sue the industry for allegedly conspiring to deceive the public about the dangers of tobacco and the addictive nature of nicotine. The government also claims the companies targeted children through advertising and then lied about it.
Government lawyers are pursuing the civil case under the Racketeer Influenced and Corrupt Organizations Act, known as RICO. The 1970 law was created to prosecute mobsters.
The suit was filed in 1999 under President Bill Clinton. The Bush administration has allowed it to continue after receiving criticism for publicly discussing the case's perceived weaknesses and attempting unsuccessfully to settle it three years ago.
"My sense is that through pressure from Capitol Hill and elsewhere, the case has been funded and that the career attorneys [not political appointees] have been permitted to make the major litigation decisions," said William Schultz, a former Justice Department lawyer who headed the case during the Clinton administration.
The department would not comment on the case or say how much is being spent on it. Observers say the cost to the government is tens of millions of dollars annually.
The defendants are Philip Morris USA and its parent, Altria Group; RJ Reynolds Tobacco; Brown and Williamson Tobacco; British American Tobacco; Lorillard Tobacco; Liggett Group; Counsel for Tobacco Research USA and The Tobacco Institute.
Justice lawyers argue that the US$280 billion amount to "ill-gotten gains." Philip Morris lawyer William Ohlemeyer called that "a made up number" and said there is no way the companies can pay that much.
Even if the government can show the money was earned through fraud, it also would have to prove the fraud was likely to continue, Ohlemeyer said.
"I think it's going to be impossible for the government to prove that there's a reasonable likelihood that these companies are engaged in fraud as we speak and likely to engage in fraud in the future," he said.
The industry is awaiting a ruling from the judge on that issue.
The government argues cigarette makers still make public statements that are out of step with prevailing medical views, including denying the dangers of secondhand smoke.
Government lawyers also say the industry's past behavior is sufficient proof that future wrongdoing is likely.
Cigarette makers say that terms of the settlements with the states prevent bad behavior. For example, the settlement prohibits the companies from using cartoon characters or from advertising on public transportation or billboards.
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