United States v. Philip Morris USA Inc.

• Decision Date: 27 July 2012
• Docket Number: No. 11–5146.,11–5146.
• Citation: 686 F.3d 839
• Parties: UNITED STATES of America, United States Department of Justice, et al., Appellees v. PHILIP MORRIS USA INC., formerly known as Philip Morris Incorporated, et al., Appellants American Tobacco Company, Directly and as Successor to the Tobacco Interest of American Brands, Inc., et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

686 F.3d 839

UNITED STATES of America, United States Department of Justice, et al., Appellees

v. PHILIP MORRIS USA INC., formerly known as Philip Morris Incorporated, et al., AppellantsAmerican Tobacco Company, Directly and as Successor to the Tobacco Interest of American Brands, Inc., et al., Appellees.

No. 11–5146.

United States Court of Appeals,District of Columbia Circuit.

Argued April 20, 2012.

Decided July 27, 2012.

Appeal from the United States District Court for the District of Columbia (No. 1:99–cv–02496).

Noel J. Francisco argued the cause for appellants. With him on the briefs were Robert F. McDermott, Peter J. Biersteker, Miguel A. Estrada, Amir C. Tayrani, Michael B. Minton, Bruce D. Ryder, and A. Elizabeth Blackwell. Dace C. Martinez entered an appearance.

Sarang Vijay Damle, Attorney, U.S. Department of Justice, argued the cause for appellee. With him on the brief were Michael F. Hertz, Deputy Assistant Attorney General, and Mark B. Stern and Alisa B. Klein, Attorneys. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.

Howard M. Crystal and Katherine A. Meyer were on the brief for appellees Tobacco–Free Kids Action Fund, et al.

Before: SENTELLE, Chief Judge, BROWN, Circuit Judge, and SILBERMAN, Senior Circuit Judge.

Opinion for the Court filed by Chief Judge SENTELLE.

SENTELLE, Chief Judge:

Appellant tobacco companies seek review of a district court order clarifying an injunction requiring appellants to disclose marketing data to the government. Appellants claim that the clarification of the injunction actually effects a modification of the requirements. Our jurisdiction over this interlocutory appeal is dependent on the district court having modified the injunction. Because we conclude that it did not, we dismiss the appeal for lack of jurisdiction.

I.

In 1999, the United States brought a civil action against appellants under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961–1968. Alleging that the tobacco companies had engaged in a decades-long conspiracy to “deceive the American public about the health effects of smoking,” the government sought disgorgement of profits and injunctive relief under 18 U.S.C. § 1964. First Am. Compl. at ¶ 3, United States v. Philip Morris USA, Inc., 449 F.Supp.2d 1 (D.D.C.2006) (No. 99–cv–2496, ECF No. 274). In 2006, after this Court ruled that disgorgement was not an available remedy under the statute, see United States v. Philip Morris USA, Inc., 396 F.3d 1190 (D.C.Cir.2005), the district court issued Order # 1015, which granted injunctive relief against the tobacco companies in order to prevent future RICO violations. See United States v. Philip Morris USA, Inc., 449 F.Supp.2d 1 (D.D.C.2006) (Order # 1015). On appeal, we largely affirmed the district court's decision, vacating and remanding only with regard to a handful of peripheral issues not relevant to this appeal. See United States v. Philip Morris USA, Inc., 566 F.3d 1095, 1150 (D.C.Cir.2009). Some of those issues are still before the district court on remand.

The injunction included provisions requiring appellants to make disclosure to the government of various marketing data:

16. Each Defendant shall be required to disclose all disaggregated marketing data to the Government in the same form and on the same schedule which Defendants now follow in disclosing disaggregated marketing data to the Federal Trade Commission. Defendants must disclose such data to the Government for a period of ten years from the date of this Final Judgment and Remedial Order.

17. Disaggregated Marketing Data shall be maintained in the databases and formats maintained by Defendants, and all reports generated from such Disaggregated Marketing Data shall be made available to the Government.

18. In addition, each year's Disaggregated Marketing Data shall be separately maintained in a format suitable for downloading (e.g., comma separated value (CSV) file, compressed in a ZIP or similar format). All data fields shall be specified.

19. All Disaggregated Marketing Data shall be deemed “confidential” and “highly sensitive trade secret information,” as defined in Orders # 7 and # 36, and shall be subject to the provisions of those Orders.

Philip Morris, 449 F.Supp.2d at 944–45 (Order # 1015). Neither appellants nor the government sought reconsideration or appellate review of the data-disclosure requirement during the original litigation; therefore, these paragraphs were not considered by this Court in the prior appeal of Order # 1015.

After remand, the parties disagreed as to the meaning of “disaggregated marketing data.” Appellants asserted that they were only required to disclose the same disaggregated marketing data that they already disclose to the Federal Trade Commission (“FTC”). The data appellants currently provide to the FTC include the total number of cigarettes sold and given away in the United States, and the yearly amount spent on advertising in categories such as newspapers, magazines, and point-of-sale advertisements. However, the district court had defined the term “Disaggregated Marketing Data” in a glossary appended to its remedial order. That definition reads:

Data that has been broken down by type of marketing (including sales data), brand, geographical region (to the smallest level of geographic specificity maintained by each Defendant), type of promotion or marketing used, number of cigarettes sold, advertising in stores and any other category of data collected and/or maintained by or on behalf of each Defendant. This breakdown of marketing data is required by the FTC but kept confidential. The FTC only publishes only the aggregated data.

Philip Morris, 449 F.Supp.2d at 946–47. Appellants also argued that they were only required to submit the data to the Department of Justice (“DOJ”), and that the DOJ could not share it any further under the confidentiality requirements in Paragraph 19. The government contended that it should be allowed to share data obtained from appellants under the final order with “other appropriate Executive Branch agencies,” subject to the confidentiality orders listed in Paragraph 19.

Given the inability of the parties to agree on the parameters of the disclosure requirement, the government filed a motion for clarification with the district court. The district court agreed with the government's understanding of the disclosure requirement, reasoning that the term “Disaggregated Marketing Data” must be read in conjunction with the definition in the glossary and a similar definition found in the text of the prior opinion. United States v. Philip Morris USA Inc., 778 F.Supp.2d 8, 11 (D.D.C.2011). In addition, the court concluded that the narrow reading of the confidentiality provision requested by appellants would undermine the explicit transparency objective of Order # 1015 and “preclude the Government from sharing such information with experts whose opinion they were seeking, as well as with other Government entities with an obvious interest in the data,” such as law enforcement and experts in the fields of marketing and statistics. Id.

After considering the motion, the response of the tobacco companies, and the entire record, the district court entered Order # 20–Remand, which granted the government's motion. More specifically, the order explicitly provided that the term “Disaggregated Marketing Data” was as defined in the glossary attached to the court's original opinion. This had the effect of requiring the companies to furnish the full range of disaggregated marketing data sought by the government under its understanding of the injunction. Finally, the new order explicitly provided that the government could disclose the data to other governmental entities, subject to the confidentiality provisions of the final order. The tobacco companies filed the present appeal, seeking reversal of the district court's Order # 20–Remand and arguing that it was an unlawful modification of the existing injunction beyond the jurisdiction of the district court at this stage of the proceedings.

II.

A.

Appellants contend that the order under review constitutes a modification of the injunction beyond the jurisdiction of the district court. Appellants contend that the new order “completely rewrites” the data-disclosure requirements of the original injunction. They rely specifically on the language of Paragraph 16, which required the companies to “disclose all disaggregated marketing data to the Government in the same form and on the same schedule which Defendants now follow in disclosing disaggregated marketing data to the Federal Trade Commission.” Philip Morris, 449 F.Supp.2d at 944 (Order # 1015). Under Order # 20–Remand, appellants must disclose

all marketing data broken down by type of marketing or promotion use[d] (including sales data), geographical region (to the smallest level of geographic specificity maintained by each Defendant), number of cigarettes sold, advertising in stores, and any other category of data collected and/or maintained by or on behalf of each Defendant.Philip Morris, 778 F.Supp.2d at 12 (Order # 20–Remand). Under the new requirements, appellants argue, a significantly larger amount of data must be disclosed. They contend that the original language is clear: it requires the tobacco companies to disclose disaggregated marketing data “in the same form” and “on the same schedule” as the data provided to the FTC. Data provided “in the same form,” they contend, must be the same data.

In support of their interpretation of the original language, appellants point to the district court's explanation in the original opinion, which stated that the requirement was for appellants to “provide their disaggregated marketing data to the Government according to the same schedule on which they provide it to the FTC.” Philip Morris, 449 F.Supp.2d at 932 (emphasis added). They reason that the word “it” in that sentence can only refer to the...