In 1953, the chief executives of the country's leading cigarette companies and officials from a major public relations firm gathered at the Plaza Hotel in Manhattan.
What they discussed that day and what happened over the next 50 years as a result go to the heart of the biggest legal challenge the tobacco industry has ever faced.
In a nonjury trial scheduled to start here today in Federal District Court, the government is seeking to strip the companies -- disgorgement, in legal terms -- of US$280 billion that Justice Department lawyers say was earned through fraud. As the largest civil case ever prosecuted under the federal Racketeer Influenced and Corruption Organizations Act, it has the potential to put the companies out of business.
Five years in preparation, at a cost to the government of US$135 million, the trial is scheduled to last at least six months. Company lawyers say the hotel meeting produced only a research organization, now defunct, to study smoking and health.
The government's lawyers say the meeting led to a widespread conspiracy of deception that remains in effect, reflecting a carefully built strategy to misrepresent the addictive nature of cigarettes, lie about the health risks of secondhand smoke and direct marketing efforts at young people to sustain a large population of smokers.
The defendant companies -- Philip Morris USA; its parent, the Altria Group; the RJ Reynolds Tobacco Co; the Brown & Williamson Tobacco Corp, which merged over the summer with Reynolds; the Lorillard Tobacco Co, a subsidiary of the Loews Corp; British American Tobacco and the Liggett Group -- say that the government's case is groundless.
They deny engaging in a conspiracy and accuse the government of distorting history to drive them into bankruptcy. They also say that under the terms of a 1998 settlement with 46 states that sued to recover nearly US$250 billion for the health care costs of smoking, the companies have already complied with orders that the government is seeking in the lawsuit.
RSS