U.S. v. Philip Morris Incorporated, Civil Action No. 99-2496 (GK) (D. D.C. 5/23/2003)
| Decision Date | 23 May 2003 |
| Docket Number | Civil Action No. 99-2496 (GK). |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. PHILIP MORRIS INCORPORATED, et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
Murray R. Garnick, Leslie Wharton, Peter Thomas Grossi, Jr., Michael R. Geske, Jonathan Louis Stern, Stacy J. Pollock, James Miller Rosenthal, Amy Elizabeth Ralph, Jeanna Maria Beck, Floyd E. Boone, Jr., Kevin M. Green, Ryan David Guilds, Melissa L. Marglous, Amy L. McGinnis, Nick Malhotra, Anne McBride Walker, Sharma Jnatel Simmons, Duane J. Mauney, Susan Louise Lyndrop, Kendall Millard, Sharon L. Taylor, Brain K. Esser, Arnold & Porter, Washington, DC, Cynthia S. Cecil, Hunton & Williams, Richmond, VA, Timothy M. Broas, Seyfarth Shaw, Washington, DC, Patricia M. Schwarzschild, pro hac vice, Cindy L. Gantnier, pro hac vice, Hunton & Williams, Richmond, VA, Dan K. Webb, pro hac vice, Bradley E. Lerman, Ricardo E. Ugarte, pro hac vice, Kevin J. Narko, pro hac vice, Luke A. Palese, pro hac vice, Jeffrey Wagner, pro hac vice, Elizabeth D. Jensen, pro hac vice, Winston & Strawn, Chicago, IL, Daniel C. Jordan, Hunton & Williams, McLean, VA, Herbert M. Wachtell, pro hac vice, Ben M. Germana, pro hac vice, Steven M. Barna, pro hac vice, Jeffrey M. Wintner, Wachtell, Lipton, Rosen & Katz, New York City, C. Ian Anderson, Davis, Polk & Wardwell, New York City, Lauren J. Bernstein, Winston & Strawn, New York City, Alfred McDonell, pro hac vice, Arnold & Porter, Denver, CO, Robert M. Rader, Thomas M. Stimson, Winston & Strawn, Washington, DC, Ashley Cummings, pro hac vice, Hunton & Williams, Atlanta, GA, Seth Barrett Tillman, Montgomery, AL, for Philip Morris USA, Inc., Philip Morris Companies, Inc., Altria Group, Inc.
Paul Sommer Ryerson, Peter John Biersteker, Robert Francis McDermott, Jr., Jonathan M. Redgrave, Patrick L. Hubbard, pro hac vice, Geoffrey T. Wright, pro hac vice, Jones Day, Washington, DC, Scott C. Walker, Elizabeth P. Kessler, Jones, Day, Reavis & Pogue, Columbus, OH, Robert C. Weber, pro hac vice, Paul Crist, David B. Alden, Randal S. Baringer, Jones, Day, Reavis & Pogue, Cleveland, OH, John Buchanan Williams, William M. Bailey, Collier Shannon Scott, PLLC, Washington, DC, Nicholas N. Nierengartern, Gray, Plant, Mooty, Mooty & Bennett, PA, Minneapolis, MN, Lisa M. Sheppard, Womble, Carlyle, Sandridge & Rice, PLLC, Winston-Salem, NC, Ivan C. Smith, Jones Day Reavis & Pogue, Columbus, OH, Robert M. Rader, Winston & Strawn, Washington, DC, Harold K. Gordon, Jones Day Reavis & Pogue, New York City, for R. J. Reynolds Tobacco Co.
William Charles Hendricks, III, Andrew Martin McCormack, King & Spalding, Washington, DC, David M. Bernick, Kirkland & Ellis, Chicago, IL, Leign Ann Dowden, pro hac vice, Dan H. Willoughby, pro hac vice, King & Spalding, Atlanta, GA, Dawn D. Marchant, Kenneth N. Bass, Karen McCartan DeSantis, Jason Beckerman, pro hac vice, David Mendelson, David Sullivan, pro hac vice, Kirkland & Ellis, LLP, Washington, DC, Rebecca I. Ruby, Goodwin Procter, LLP, Washington, DC, Stephen R. Patton, Douglas G. Smith, Pro hac vice, Michelle H. Browdy, pro hac vice, Deirdre A. Fox, pro hac vice, Steven D. McCormick, pro hac vice, Kirkland & Ellis, Chicago, IL, for Brown & Williamson Tobacco Corp.
Matthew David Schwartz, Edward Craig Schmidt, Thompson Coburn, LLP, Washington, DC, Paige Q. Szajnuk, pro hac vice, Thomas A. Duncan, pro hac vice, Shook, Hardy & Bacon, Kansas City, MO, James M. Cox, pro hac vice, Thompson & Coburn, LLP, St. Louis, MO, Michael B. Minton, Bruce D. Ryder, pro hac vice, J. William Newbold, Richard Paul Cassetta, pro hac vice, Thompson Coburn, LLP, St. Louis, MO, Robert M. Rader, Winston & Strawn, Washington, DC, for Lorillard Tobacco Co.
Fred W. Reinke, Clifford, Chance, Rogers & Wells, LLP, Washington, DC, Aaron H. Marks, pro hac vice, Marc E. Kasowitz, pro hac vice, Daniel R. Benson, pro hac vice, Nancy E. Straub, pro hac vice, Leonard A. Feiwus, pro hac vice, Julie R. Fischer, pro hac vice, Kasowitz, Benson, Torres Friedman, L.L.P., New York City, Melodie M. Mabanta, Robinson Woolson, P. A., Baltimore, MD, Robert M. Rader, Winston & Strawn, Washington, DC, for Liggett Group, Inc.
Jason Beckerman, pro hac vice, Jason Beckerman, pro hac vice, David Mendelson, David Sullivan, pro hac vice, Kirkland & Ellis, LLP, Washington, DC, Robert M. Rader, Winston & Strawn, Washington, DC, for American Tobacco Co.
Michael Asher Schlanger, Sonnenschein, Nath & Rosenthal, Washington, DC, Mary Elizabeth McGarry, Michael V. Corrigan, Demetra Frawley, Simpson, Thacher & Bartlett, New York City, Robert M. Rader, Winston & Strawn, Washington, DC, for British American Tobacco, P.L.C.
Robert M. Rader, Winston & Strawn, Washington, DC, William Salvatore D'Amico, Chadbourne & Parke, Washington, DC, Timothy M. Hughes, pro hac vice, Garyowen P. Morrisroe, F. John Nyhan, Bruce G. Sheffler, pro hac vice, Jessica L. Zellner, pro hac vice, Chadbourne & Parke, New York City, for British American Tobacco (investments) Ltd.
Steven S. Michaels, pro hac vice, Kevin C. Lombardi, Judah Best, Bruce G. Merritt, Debevoise & Plimpton, Washington, DC, Robert M. Rader, Winston & Strawn, Washington, DC, Joseph P. Moodhe, pro hac vice, Dennis H. Hranitzky, pro hac vice, David Runtz, pro hac vice, Debevoise & Plimpton, New York City for Council for Tobacco Research-USA, Inc.
Keith Allen Teel, James Alexander Goold, Joseph A. Kresse, Clausen Jr. Ely, Covington & Burling, Washington, DC, Robert M. Rader, Winston & Strawn, Washington, DC, for Tobacco Institute, Inc.
David Charles Shonka, Fed. Trade Com'n, Office of Gen. Counsel, Washington, DC, for Federal Trade Com'n.
Steven D. Gordon, Holland & Knight, L.L.P., Washington, DC, for SmithKline Beecham Corp., GlaxoSmithKline Consumer Healthcare, L.P.
Arnon D. Siegel, Robbins, Russell, Englert, Orseck & Untereiver, Washington, DC, for Pharmacia Corp.
Kate C. Beardsley, Buc & Beardsley, Washington, DC, for Elan Corp. PLC.
Stephen Printiss Murphy, Reed Smith, Washington, DC, for Novartis Consumer Health, Inc.
Stephen Paul Mahinka, Morgan, Lewis & Bockius, L.L.P., Washington, DC, for Pfizer, Inc.
D. Jacques Smith, Arent, Fox, Kintner, Plotkin & Kahn, Washington, DC, for Impax Laboratories, Inc.
This matter is now before the Court on Joint Defendants'1 Motion for Partial Summary Judgment on Advertising, Marketing, Promotion, and Warning Claims and the United States' Cross Motion for Partial Summary Judgment on Affirmative Defenses. The Defendants2 seek summary judgment as to the United States' advertising, marketing, promotion and warning claims on the basis that these claims are within the exclusive jurisdiction of the Federal Trade Commission ("FTC" or "the Agency"). The United States seeks summary judgment as to all of Defendants' affirmative defenses premised upon the FTC's purportedly exclusive jurisdiction.
Upon consideration of the Motions, Oppositions and the entire record herein, and for the reasons stated below, the Joint Defendants' Motion is denied and the Government's Cross Motion is granted in part and denied in part.
A. Factual Allegations
Plaintiff, the United States of America ("the Government") has brought this suit against the Defendants pursuant to Sections 1962(c) and (d) of the Racketeer Influenced and Corrupt Organizations Act ("RICO), 18 U.S.C. § 1961 et seq.3 Defendants are manufacturers of cigarettes and other tobacco-related entities. The Government seeks injunctive relief and billions of dollars for what it alleges to be an unlawful conspiracy to deceive the American public.
The Government's Amended Complaint describes a four-decade long conspiracy, dating from at least 1953, to intentionally and willfully deceive and mislead the American public. According to the Government, the underlying strategy Defendants adopted was to deny that smoking caused disease and to consistently maintain that whether smoking caused disease was an "open question." Am. Compl. at ¶ 34. In furtherance of the strategy, Defendants allegedly issued deceptive press releases, published false and misleading articles, destroyed and concealed documents which indicated that there was in fact a correlation between smoking and disease, and aggressively targeted children as potential new smokers. Am. Compl. at ¶ 36.
The Government also alleges that over the course of the conspiracy, Defendants have made false and misleading statements concerning the addictiveness of nicotine. Defendants continually denied that nicotine is addictive, even in the face of what the Government calls overwhelming evidence to the contrary. Am. Compl. at ¶¶ 71-72. Defendants allegedly have taken actions to make cigarettes even more addictive by manipulating and increasing the potency of nicotine in their cigarettes. Am. Compl. at ¶ 77. Nevertheless, Defendants have repeatedly denied that they manipulated the level of nicotine in their products. Am. Compl. at ¶ 79.
The Government also alleges that Defendants have used deceptive marketing to exploit smokers' desire for less hazardous products and have "misled consumers by marketing products that consumers believe are less harmful, even though they are not." Am. Compl. at ¶ 83. For example, according to the Government, Defendants have marketed "light" or "low tar/low nicotine" cigarettes as being less hazardous to smokers even though there is no basis for believing they are safer than other cigarettes. Am. Compl. at ¶ 86.
Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment is appropriate if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to...
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