Gladys Kessler, United States District Judge.
More than 15 years ago, the United States filed this RICO action against the major cigarette manufacturers operating in 1999. In 2006, after years of discovery, pre-trial litigation, and a nine-month bench trial, this Court issued an Opinion containing over 4,000 findings of fact and concluding that the Government had proven by "overwhelming evidence" that the Defendants had maintained an illegal racketeering enterprise in violation of the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1962(d).
Thereafter, the Court prepared five separate sets of bullet points and ordered the cigarette manufacturers to disseminate them in the public media.
Four of the original Defendants — Philip Morris USA Inc., Altria Group, Inc., R.J. Reynolds Tobacco Company, and Lorillard Tobacco Company — appealed, arguing that the corrective statements exceeded this Court's remedial authority under RICO and violated the First Amendment.
In 2015, the Court of Appeals ruled that a number of the arguments raised by the Defendants had been waived for failure to have raised them at an earlier appropriate time. Other arguments were denied on the basis of the law-of-the-circuit doctrine.
Thereafter, this Court was led to believe by the Parties that mediation might be successful; unfortunately, it was not. The Parties were then given time to submit briefs and provide actual language to correct the
Despite the fact that the Court of Appeals accepted the five topics that the Court had chosen to include and had rejected
That is ridiculous — a waste of precious time, energy, and money for all concerned —
After careful reading of all the briefs, the Court concludes that the revised wording of the preambles submitted by the Government and Intervenors has remedied the concern of the Court of Appeals in its 2015 Opinion and Remand. Corrective Statement Opinion II, 801 F.3d at 261-63. The Court of Appeals ruled that the phrase "deliberately deceived the American public" in the preambles could not be used because it "disclose[d] defendants' prior deceptive conduct" instead of using language that "would prevent and restrain future RICO violations by `[r]equiring Defendants to reveal the previously hidden truth about their products.'"
Prior introductory text United States' proposed introductory text A Federal Court has ruled that Altria, R.J. A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public USA to make this statement about [particular about [particular topic], and has ordered those topic]. companies to make this statement. Here is the truth: Here is the truth:
The Court has reached this conclusion for the following reasons:
First, and most importantly, the Government and Intervenors have removed the phrase in the preambles to each of the five topics contained in this Court's ruling that Defendants "deliberately deceived the American public." Not only did that change comply with the ruling of the Court of Appeals, it also shortened the introductory preambles so as to make reading them a little easier for the public.
The newly crafted preambles do not in any way send a message to the public that Defendants deceived them in the past, nor that Defendants are being punished for
Second, the Government and Intervenors have retained the wording "Here is the Truth," which Defendants complained about, so as to make clear to the public that the following commentary in each of the five topics is, in fact, the truth. Again, retention of that phrase is consistent with the Court of Appeals' ruling that "[r]equiring defendants to reveal the previously hidden truth about their products will prevent and restrain them from disseminating false and misleading statements, thereby violating RICO, in the future." Affirmance Opinion, 566 F.3d at 1140.
Third, the Government and Intervenors have, out of an abundance of caution, removed the word "falsely" from statement C's introduction which refers to the lack of significant health benefits from smoking "Low Tar," "Light," "Ultra Light," "Mild," and "Natural" cigarettes.
Fourth, as the Court of Appeals noted, many of the objections and arguments made by Defendants have already been waived for failure to have raised them earlier, and, therefore, cannot be raised again now, or were denied under the law-of-the-circuit doctrine. Corrective Statement Opinion II, 801 F.3d at 252, 257.
Fifth, the Government and Intervenors changed the term "filtered" cigarettes in the second bullet point to refer to "low tar" cigarettes because "filtered" was confusing and not totally accurate.
As to the Defendants' own proposals, there are many serious problems. First example-the Defendants watered down the preambles so that the first words a member of the public would read are that a Federal Court has "determined" that you should know the following, thereby omitting the clear, straightforward introduction that "a Federal Court Ordered [Defendants] to make this statement," followed by a separate line saying "Here is the Truth." In addition, the tobacco companies completely removed their names from the corrective statements.
Second example — Defendants complain that the statements attribute the Court's order to them. However, in 2006, all Defendants except Altria and Philip Morris USA actually proposed mandatory attribution language. Given the fact that the Court accepted the request, R.J. Reynolds and Lorillard are obviously estopped at this late date from objecting to the use of their names.
Altria and Philip Morris, thought not estopped in 2006, remained silent when ordered to submit their views on attribution in Order # 1025 at 2. Since they never articulated views on the subject, they have waived any objections they now have.
Defendants also argue that the statements proposed by the Government and Intervenors do not meet the First Amendment standard. In its 2012 decision, this Court examined the issue of First Amendment standards for commercial speech, and concluded that
In order to buttress their argument, Defendants rely upon
Defendants also raise the issue that no implementation order may be issued at this time. They argue that the Court should reject the Government's proposal and adopt their proposed language to the Implementation Consent Order which was reached June 2, 2014. The Government and Intervenors request that certain "minor changes" be made in the Consent Order implementing the corrective statement remedies under Order # 1015 and Order # 34-Remand. While it is true that it is well established that after hearing from parties, a court may alter a consent order in conformance with the terms of a consent decree and changed circumstances,
In this case, the parties did negotiate for well over a year to reach the proposed Consent Order on implementation of that Order. The Parties made it clear to the Court that the proposed Order reflected compromises and negotiated trade-offs by all parties. Indeed, the Intervenors' brief, at page 13, agrees that the Consent Order "reflected a `complex' agreement hammered out through many month of negotiation and compromises on all sides[.]" Intervenors' Br. at 13 [Dkt. No. 6172].
The Government is now proposing a series of modifications to the Consent Order. At least one (and perhaps more) of the Government's requested modifications are of significant importance to the Defendants. The one that Defendant seem most upset about appears to be the Government's request to change the "Trigger Date." The Consent Order provides that the Defendants will begin publishing corrective statements within a specific named time period after a "Trigger Date." The Consent Order defines "Trigger Date" as "the date on which appeals are exhausted in the appeal noticed from Order # 34-Remand... and in any timely appeals noticed from this Consent Order." Order # 51-Remand, § I(L). In other words, the Defendants were relieved from publishing any of the corrective statements until the very last available appeal (including even a possible appeal to the Supreme Court). In its brief, the Government now requests that the Court modify the Consent Order's "Trigger Date" to mean "the date of this Order" (i.e., whatever Order this Court issues in response to the Parties' briefing).
Oddly enough, despite their position on the Trigger Date, Defendants themselves also ask for certain changes to the Consent Order. Defs.' Br. at 30-33. The Court cannot help but note that what is sauce for the goose is sauce for the gander. Consequently, again relying on the clear language of the Consent Order, and this Court's own knowledge from the Parties about the difficulties they had in negotiating that document, the Court concludes that neither Party at this time may make any unilateral changes in the Consent Decree.
For all these reasons and, in accordance with the Remand of the Court of Appeals, this Court adopts the corrective statements submitted by the Government and contained on pages 124-25 herein.