Supreme Court Turns Away Justice Department Demand in Tobacco Lawsuit

Supreme Court Turns Away Justice Department Demand in Tobacco Lawsuit

Statement by Hans Bader, Special Projects Counsel, Competitive Enterprise Institute
October 17, 2005

<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Washington, D.C., October 17, 2005— The Supreme Court today rightly rejected the Justice Department’s attempt to revive its demand that the tobacco industry pay the Government $280 billion under the Racketeer-Influenced and Corrupt Organizations Act (RICO), denying the Justice Department’s petition for certiorari in United States v. Philip Morris.

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The government argued that a statutory provision permitting the government “to prevent and restrain violations” of RICO allowed it to seek money for past violations, even though that same money could be sought by individual citizens, who can obtain treble damages for any violations. The D.C. Circuit Court of Appeals disagreed, holding that the government’s power to “prevent and restrain” only includes forward-looking remedies against future misconduct, not compensation for past violations, such as “disgorgement.”