Altria, Tobacco Firms Lose Bid to Delay RICO Ruling
Altria Group Inc.'s Philip Morris USA and other U.S. cigarette makers lost their bid to delay enforcement of a racketeering decision the companies claim may cost them hundreds of millions of dollars.
U.S. District Judge Gladys Kessler in Washington today refused to delay the decision while the cigarette makers appeal. She ruled Aug. 17 that the companies violated the Racketeer Influenced and Corrupt Organizations Act, or RICO, in a case filed in 1999 by the U.S. Department of Justice.
Kessler ordered the companies to stop marketing cigarettes as ``light'' and ``low-tar'' by January and to make statements about the health effects of smoking in newspapers, magazines and on cigarette packages. A stay of her decision could've delayed those steps by months or years.
``Smokers, potential smokers, young people exposed to defendants' extensive and ubiquitous advertising and marketing campaigns, and those exposed -- particularly the very young and elderly -- to environmental tobacco smoke will be directly and seriously harmed if a stay is granted,'' Kessler wrote in today's order.
Kessler, 68, ruled after a nine-month trial ending in 2005 that the companies violated RICO, as the government claimed. She declined to order the companies to fund $14 billion in nationwide smoking cessation and anti-smoking education programs.
Will Appeal Ruling
In addition to Philip Morris, the defendants that requested the stay are Reynolds American Inc.'s R.J. Reynolds Tobacco; Brown & Williamson Tobacco Corp.; Loews Corp.'s Lorillard Tobacco Co. and British American Tobacco Plc's British American Tobacco (Investments) Ltd.
Altria spokesman John Sorrells and R.J. Reynolds spokesman David Howard said the companies will file an appeal to Kessler's order with the U.S. Court of Appeals in Washington.
Shares of New York-based Altria fell 32 cents to $76.97 in New York Stock Exchange composite trading. Shares of Winston- Salem, North Carolina-based Reynolds American were unchanged at $62.76.
The case is U.S. v. Philip Morris USA, 99-CV-2496, U.S. District Court, District of Columbia (Washington).
