States Ask to Argue for Continued MSA funding of Document Sites and Legacy

September 16, 2005 7:58 pm by Gene Borio

In a motion to appear as amici curiae, 21 states and DC are asking Judge Kessler to order Defendants’ to maintain their MSA-mandated document websites through June 2030, and to fund the American Legacy Foundation.

There has been no news about this remarkable motion, and it is not apparently available on PACER from the Docket.

However, the Defendants have filed a reply opposing the motion. The Defendants’ opposition states:

1. The legality and propriety of such remedies can not be argued “using post-trial submissions.” In fact, Defendants threaten, the mere filing of such a brief attempting to introduce new “evidence outside the record” could endanger any judgement the court issues.

2. The States assert that the document sites “helped support public education . . . which has helped instill resistance among consumers — and particularly among young potential smokers — to the companies’ advertising and promotional efforts.” These assertions, Defendants argue, are “wholly unsupported by any evidence in the record,” and amount to introducing into the record expert opinions that have not been subjected to the trial process.

3. There are already 4 other amici briefs. Thus, admitting another “will simply sow confusion.”

The states are: Arkansas, Connecticut, Hawaii, Idaho, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Nevada, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Tennessee, Vermont, Washington, Wisconsin, and Wyoming.

Text follows of 9/14/05 Defendants’ Reply to States’ Motion to Appear as Amici Curiae

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIAnkm

Civil Action No. 99-CV-2496 (GK

Next Scheduled Court Appearance: None

UNITED STATES OF AMERICA,

Plaintiff,

and

TOBACCO-FREE KIDS ACTION FUND,

et al.,

Plaintiff-Intervenors,

v.

PHILIP MORRIS USA INC. (f/k/a ) PHILIP MORRIS INCORPORATED, et al.,

Defendants.

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DEFENDANTS OPPOSITION MEMORANDUM OF POINTS AND AUTHORITIES IN RESPONSE TO MOTION FOR LEAVE TO PARTICIPATE AS AMICI CURIAE BY APPLICANT STATES

Twenty-one states1 and the District of Columbia (collectively, the “Applicant States”) seek leave to appear as amici curiae to support the Government’s requests for funding for the American Legacy Foundation,2 to require various Defendants to maintain document websites established pursuant to the Master Settlement Agreement (”MSA”) through June 30, 2030, and to require additional Defendants to establish such document websites. Specifically, the Applicant

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1 The moving states are: Arkansas, Connecticut, Hawaii, Idaho, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Nevada, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Tennessee, Vermont, Washington, Wisconsin, and Wyoming.

2 As Defendants have demonstrated, the public education and countermarketing campaign for which the Government seeks funding for the Foundation is not a permissible remedy under Section 1964(a) of RICO. See Joint Defendants’ Memorandum of Points and Authorities in Support of Their Motion for Judgment on Partial Findings Pursuant to Fed. R. Civ. P. 52(c) with Respect to Certain Remedies Sought by the United States at 16-19; Defendants’ Reply Memorandum of Points and Authorities in Support of Joint Defendants’ Motion for Judgment on Partial Findings Pursuant to Fed. R. Civ. P. 52(c) with Respect to Certain Remedies Sought by the United States at 11-15; Post-Trial Brief of Joint Defendants at 182-190.

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2

States assert that they “wish to file the attached brief in order to assist the Court in understanding the reasons behind the creation of the American Legacy Foundation and the document websites and why continued funding for the Foundation and continued availability of the websites are appropriate to prevent and restrain future unlawful conduct by the Defendants.” Applicant States’ Mot. at 2. The Applicant States’ motion is improper and should be denied for at least three reasons:

First, the Applicant States’ proposed brief seeks to introduce evidence that is not part of the trial record in this case. A defendant’s “right to litigate the issues raised” is “a right guaranteed to him by the Due Process Clause.” United States v. Armour, 402 U.S. 673, 682 (1971). “It is a cardinal principle of our system of justice that factual disputes must be heard in open court and resolved through trial-like evidentiary proceedings.” United States v. Microsoft, 253 F.3d 34, 101 (D.C. Cir. 2001). Disputes over the propriety of various remedies cannot be resolved using post-trial amici submissions, such as that offered by the Applicant States, which seek to introduce new evidence that was not subject to trial. Thus, permitting the Applicant States to file their proposed brief could endanger the propriety of any judgment entered by this Court because of their reliance on evidence outside the record that was not part of the trial in this matter.3

Second, and relatedly, the Applicant States’ proposed brief contains what is effectively expert opinion testimony that is being offered without being subjected to review for admissibility under Fed. R. Evid. 702 and Daubert. This is true, for example, with respect to the

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3 Defendants are well aware that the Court has recently rejected this argument and other arguments included herein as a basis for denying other amici motions, stating that “[i]f any of these objections are well taken, the Court can easily identify them and ignore any recommendations or arguments based upon such inadmissible material.” Mem. Op. to Order #1003 at 3. Defendants reiterate these arguments because they respectfully disagree with the Court’s ruling and wish to preserve their record with respect to the present motion.

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3

Applicant States’ assertions that document websites have “helped support public education programs by providing documents and other information that those programs have used in exposing the tobacco industry’s methods” and that these “education programs have helped instill resistance among consumers — and particularly among young potential smokers — to the companies’ advertising and promotional efforts.” See Applicant States Br. at 5. Not only are such assertions wholly unsupported by any evidence in the record, but they manifestly constitute expert opinions offered without being subjected to the rigors of cross-examination or tested for admissibility under Fed. R. Evid. 702 and Daubert.

Third, the U.S. Department of Justice brought this action on behalf of the United States and has prosecuted it for almost six years now. Over Joint Defendants’ strenuous and continuing objection, the Court saw fit in Order #987 to permit six public health organizations to intervene in this action to brief remedies issues in this case. Recently, in Order #1003, the Court granted leave to file four other amici briefs. There are thus already a range of voices that will be addressing remedies issues before this Court. Adding the Applicant States, with their particular issues and concerns, will simply sow confusion and increase the burdens on the Court and the parties rather than shed any useful and relevant new light. For the foregoing reasons, the Applicant States’ motion should be denied.

DATED: September 14, 2005 Respectfully submitted,

/s/ Matthew A. Campbell for _______________

Timothy M. Broas (D.C. Bar No. 391145)

WINSTON & STRAWN LLP

1700 K Street, N.W.

Washington, D.C. 20006-3817

Telephone: (202) 282-5000

Fax: (202) 282-5100

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4

Dan K. Webb

Thomas J. Frederick

WINSTON & STRAWN LLP

35 West Wacker Drive

Chicago, Illinois 60601-9703

Telephone: (312) 558-5600

Fax: (312) 558-5700

Theodore V. Wells, Jr. (D.C. Bar No.

468934)

James L. Brochin (D.C. Bar No. 455456)

PAUL, WEISS, RIFKIND, WHARTON &

GARRISON LLP

1285 Avenue of the Americas

New York, New York 10019-6064

Telephone: (212) 373-3000

Fax: (212) 757-3990

Attorneys for Defendants

Altria Group Inc. and Philip Morris USA Inc

/s/ Matthew A. Campbell for _______________

Robert F. McDermott (D.C. Bar No. 261164)

Peter J. Biersteker (D.C. Bar No. 358108)

Jonathan M. Redgrave (D.C. Bar No. 474288)

JONES DAY

51 Louisiana Avenue, N. W.

Washington, D.C. 20001-2113

Telephone: (202) 879-3939

Fax: (202) 626-1700

Robert C. Weber

Paul G. Crist

JONES DAY

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114-1190

Telephone: (216) 586-3939

Fax: (216) 579-0212

Attorneys for Defendant

R. J. Reynolds Tobacco Company

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/s/ Matthew A. Campbell for _______________

David E. Mendelson (D.C. Bar No. 471863)

KlRKLAND & ELLIS LLP

655 15th Street, N.W., Suite 1200

Washington, D.C. 20005

Telephone: (202) 879-5000

Fax: (202) 879-5200

David M. Bernick

Stephen R. Patton

Renee D. Honigberg

KIRKLAND & ELLIS LLP

200 East Randolph Drive, Suite 5900

Chicago, Illinois 60601

Telephone: (312) 861-2000

Fax: (312) 861-2200

Attorneys for Defendant

Brown & Williamson Tobacco Holdings, Inc.

/s/ Matthew A. Campbell for _______________

Edward C. Schmidt (D.C. Bar No. 199315)

Matthew D. Schwartz (D.C. Bar No. 436619)

THOMPSON COBURN LLP

1909 K Street, N.W.

Suite 600

Washington, D.C. 20006

Telephone: (202) 585-6900

Fax: (314) 552-7597

J. William Newbold

Michael B. Minton

Richard P. Cassetta (D.C. Bar No. 457781)

THOMPSON COBURN LLP

One US Bank Plaza, Suite 3500

St. Louis, Missouri 63101-1693

Telephone: (314) 552-6000

Fax: (314) 552-7597

Gene E. Voigts

Richard L. Gray

SHOOK, HARDY & BACON LLP

2555 Grand Blvd.

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6

Kansas City, Missouri 64108-2613

Telephone: (816) 474-6550

Fax: (816) 421-2708

Attorneys for Defendant

Lorillard Tobacco Company

/s/ Matthew A. Campbell for _______________

Bruce G. Sheffler

David L. Wallace

CHADBOURNE & PARKE LLP

30 Rockefeller Plaza, 34th Floor

New York, New York 10112-0219

Telephone: (212) 408-5100

Attorneys for Defendant

British American Tobacco (Investments)

Limited (f/k/a British-American Tobacco

Company Limited)

/s/ Matthew A. Campbell for _______________

Steven Klugman

Steven S. Michaels

DEBEVOISE & PLIMPTON LLP

9 1 9 Third Avenue

New York, New York 10022

Telephone: (212) 909-6000

J. William Newbold

Michael B. Minton

Richard P. Cassetta (D.C. Bar No. 457781)

Jason A. Wheeler

THOMPSON COBURN

One US Bank Plaza, Suite 3500

St. Louis, Missouri 63101-1693

Telephone: (314) 552-6000

Attorneys for Defendant

The Council for Tobacco Research-U.S.A.,

Inc.

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/s/ Matthew A. Campbell for _______________

James A. Goold

COVINGTON & BURLING

120 1 Pennsylvania Avenue, N. W.

Washington, D.C. 20004-2401

Telephone: (202) 662-6000

Attorneys for Defendant

The Tobacco Institute, Inc.

/s/ Matthew A. Campbell for _______________

Aaron H. Marks, Esq.

Leonard A. Feiwus, Esq.

Nancy E. Straub, Esq.

KASOWITZ, BENSON, TORRES &

FRIEDMAN LLP

1633 Broadway

New York, New York 10019-6799

Tel.: (212) 506-1700

Fax: (212) 506-1800

Counsel for Defendant Liggett Group Inc.

4 Responses to “States Ask to Argue for Continued MSA funding of Document Sites and Legacy”

  1. tobacco observer Says:

    Apparently this case has now degenerated into an open free-for-all where any public group even remotely related to anti-tobacco efforts feels free to file motions asking for cash and special favors.

    These “me toos” are becoming kind of comical at this point.

    Unfortunately for the plaintiffs, this particular brief isn’t just comical, it actually directly undermines the gov’ts case.

    Forget the 11th hour nature of this request. By now claiming that certain provisions of the MSA act as an appropriate “remedy” against future RICO violations, the States are bolstering Tobacco’s direct defenses and shooting the gov’ts case in the foot.

    The gov’t can’t simultaneously claim that the MSA is irrelevant, and doesn’t act to prevent RICO violations (which is what they have claimed at trial), yet simultaneously claim that extending the MSA provisions acts as a further deterrent to RICO violations! If the States claim is correct, that the MSA provisions by themselves effectively act to deter future RICO violations, then there is legally no reason for Judge Kessler to find any liability on that front for Tobacco.

  2. krueger Says:

    “The gov’t”

    is not an undifferentiated mass.

    “The gov’t” didn’t claim that MSA is irrelevant. The Department of Justice made some arguments about MSA in this trial.

    “The gov’t” is not filing this amicus; 21 states are.

    Federal government is not state government.

    Nor are all states together on this. 21 states are filing here; 29 are not.

    Thus it’s hardly surprising that different arguments are made. Different parties are making them.

  3. tobacco observer Says:

    >>Thus it’s hardly surprising that different arguments are made. Different parties are making them.

    That’s my whole point. The arguments made by the States in this ridiculous post-trial brief are undermining those of the Gov’t (ie the DOJ) made at trial. The States are shooting the DOJ in the foot. (Since the term “gov’t” is, apparently confusing, I’ll henceforth use “DOJ” instead).

    The DOJ (via its expert witnesses, especially Matt Myers) most certainly did claim at trial that the MSA was not an effective barrier to RICO violations, and the DOJ tried to minimize or negate any claims to the contrary made by Tobacco during their defense presentations. This entire case is based on that premise over the repeated objections of the Tobacco industry including a motion for summary judgment on those grounds denied by Judge Kessler (as premature) before the beginning of the trial. Now by asking for a re-negotiation of the provisions of the MSA, claiming they are necessary to prevent and restrain future RICO violations, the States are undermining the DOJ’s position on the value of the MSA in constraining unlawful activity.

    I’m just pointing out the inanity of the States arguments here. They appear to be oblivious to the fundamentals of the underlying case they are trying to participate in. For example, on its merits the State’s request doesn’t satisfy the most basic requirement of the DCCA’s ruling on available RICO remedies. The States brief proposes new remedies for future RICO violations in a vague sense, but doesn’t actually state *which ones* these proposed remedies are supposed to prevent and restrain, or how. The States mention marketing cigarettes to children, but once again even assuming it happened, that isn’t even a RICO violation.

    More shameful, in their proposed brief the States refer to the brief of the Citizens Commission to Protect the Truth, a group bought and paid for though the American Legacy Foundation *by the States*.

    Here’s the proof from the horses’ own mouth:
    http://www.protectthetruth.org/commission.htm
    “Principal funding for The Commission comes from the National Association of Attorneys General [ie the STATES] through a $1.5 million pass-through grant from the American Legacy Foundation.”

    The research the States refer to, claiming the benefits of “The Truth” program was published by Cheryl Heaton, the President of the American Legacy Foundation. She published a paper claiming outstanding results by her group, and is now in post-trial brief is asking for more money (though a front group paid for by her own organization) based on that “research”.

    In other words, it appears that the States are doing exactly what the DOJ has accused tobacco of doing in this lawsuit, namely paying for a front group to push research with apparent conflict of interest in an effort to benefit their own financial agenda!

    Even more astonishing, the States even have the gall to claim in their brief that more money is necessary from the Tobacco industry for anti-smoking programs *because the States cut funding to anti-tobacco programs!*.

    >>>”A substantial and well- funded public education program program like that carried out by the Foundation is needed to counteract the effects of that exposure, particularly in light of the fact that many State legislatures have significantly reduced funding for State smoking-prevention programs.”

  4. krueger Says:

    The confusion here appears to center on “necessary” and “sufficient”.

    The premise that MSA was not sufficient to stop Big Tobacco from its RICO violations is entirely compatible with the premise that some part of MSA was and remains necessary. It doesn’t follow that the latter premise in any way undermines the former.

    Consider for instance a campaign against tuberculosis. We might find that removing spittoons was necessary but not sufficient to stop the spread of TB.

    Now imagine that somehow it was possible to make hundreds of billions of dollars by spreading TB. Imagine that an industry had formed for this purpose, and that this industry was now arguing that since it had agreed to removal of spittons, the problem was now solved. We could say that removal had not solved the problem, yet removal was and is still part of the solution. Both assertions would be correct. The latter would not undermine the former.

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