Government Suit Against Big Tobacco Dealt Setback

ByABC News
September 28, 2000, 2:37 PM

W A S H I N G T O N, Sept. 28 -- A judge today dealt a blow to thegovernments effort to recover billions of dollars from cigarettemakers for treating ill smokers, dismissing two of the claims in afederal lawsuit against the industry.

U.S. District Judge Gladys Kessler ruled the government couldpursue federal racketeering claims against the industry but couldnot use the Medical Care Recovery Act or the Federal EmployeesHealth Benefits Act to recover Medicare expenses related to illsmokers.

The judge said that if the government wanted to recover expensesdating to the 1950s, it should have acted sooner.

Congress total inaction for over three decades precludes aninterpretation of MCRA that would permit the government torecover Medicare and FEHBA expenses, Kessler ruled.

Accordingly the governments MCRA claim must be dismissed,the judge ruled.

Racketeering Claims PossibleThe judge, however, ruled the government could proceed with twoothers of its claims under federal racketeering laws.

That means the government can continue to try to prove that thecigarette makers misled the public about the dangers of smoking andshould be forced to surrender the profits from past years resultingfrom what it called unlawful activity.

Based on the sweeping nature of the governments allegationsand the fact that the parties have barely begun discovery to testthe validity of these allegations, it would be premature for thecourt to rule, Kessler wrote, explaining why she did not dismissthe entire lawsuit.

At a very minimum the government has stated a claim forinjunctive relief: whether the government can prove it remains tobe seen, she wrote.

Government Ready to ProceedAt the Justice Department, Assistant Attorney General David W.Ogden said, We are pleased the court has ruled that we can goforward with this important case. We look forward to proceeding totrial and holding the tobacco companies accountable for thefraudulent conduct alleged in this lawsuit.