Cigarette makers lose appeal in Washington

A federal appeals court on Friday agreed with the major elements of a 2006 landmark ruling that found the nation's top tobacco companies guilty of racketeering and fraud for deceiving the public about the dangers of smoking.

The United States Appellate court in Washington D.C. upheld necessities that manufacturers alter the way they commercialize cigarettes, which have been on hold pending appeal. The ruling banishes labels such as "low tar," "light," "ultra light" or "mild," because cigarettes have been found out to be no better than others because of how people smoke them.

It also states the parties must release "corrective statements" in newsprints and on their Web sites on the harmful health effects and addictiveness of smoking and nicotine.

Throughout the decade the case has been processed, tobacco companies have refused committing fraud in the past and said alterations in how cigarettes are sold now make it impossible for them to act fraudulently in the future. The companies have contended the ban on labels like "light" would cost them hundreds of millions of dollars.

The government filed the civil case under a 1970 racketeering law generally as RICO Act utilized mainly to pursue gangsters in cases in which there has been a group effort to commit fraud.

The lawsuit was first lodged in 1999 during President Clinton term. The Bush administration followed up on it after getting early criticism for openly talking about the case's perceived weaknesses and seeking unsuccessfully to adjudicate it.

The nine-month judiciary trial included live and published testimony from 246 witnesses and about 14,000 exhibits in evidence.

United States District Judge Gladys Kessler heard charges that the companies built a "gentleman's agreement" in which they agreed not to compete over whose products were the least unsafe to smokers. That was to assure they didn't have to publicly address the damage caused by smoking, government lawyers said. Tobacco attorneys abnegated the contention.

"The government presented evidence from the 1950s and continuing through the following decades attesting that the defendant manufacturers were knowledgeable -- increasingly so as they conducted more research -- that smoking causes disease, including lung cancer," the appeals court wrote. "Evidence at trial disclosed that at the same time defendants were disseminating ads, publications, and public statements abnegating any harmful health effects of smoking and advertising their 'open question' strategy of sowing doubt, they internally admitted as fact that smoking causes disease and other health hazards."

The government had called for Kessler to make the companies pay $10 billion for a national smoking cessation program, but Kessler said that wasn't within her legal authority. That issue was not addressed in the appeal decision.

The defendants in the lawsuit were: Philip Morris USA Inc. and its parent, Altria Group Inc.; R.J. Reynolds Tobacco Co.; Brown & Williamson Tobacco Corp.; British American Tobacco Ltd.; Lorillard Tobacco Co.; Liggett Group Inc.; Counsel for Tobacco Research-U.S.A.; and the now-defunct Tobacco Institute.

Liggett was excluded from the ruling because the judge said the company stepped forward in the 1990s to acknowledge smoking causes disease and is habit-forming and collaborated with government investigators.

The court of appeals ruled that the Counsel for Tobacco Research-U.S.A. and Tobacco Institute be dropped from the case. Both are trade organizations for the cigarette manufacturers, but they did not manufacture or distribute tobacco products. The companies had no immediate response to the appeals court decision.

Charles Miller, a Department of Justice spokesman, alleged attorneys there were reviewing the decision.