US COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT: APPELLANTS’ OPENING BRIEF (Sep 29, 2014)

October 1, 2014 7:11 am by Gene Borio

20140929 APPELLANTS’ OPENING BRIEF

The PDF is Here

EXCERPT:

STATEMENT OF ISSUES

1. Whether the district court’s corrective statements violate the First Amendment and this Court’s 2009 mandate because they would compel Defendants to confess past misconduct and make assertions unsupported by the district court’s findings of fact, rather than provide purely factual and uncontroversial public-health information about Defendants’ products.

2. Whether the district court’s corrective statements violate RICO and this Court’s 2009 mandate because they are not geared toward “prevent[ing] and restrain[ing]” future RICO violations. 18 U.S.C. § 1964(a).

3. Whether the district court’s corrective statements violate due process because they impose criminal-like sanctions in a civil proceeding.

END EXCERPT

FULL TEXT:

USCA Case #13-5028 Document #1514391 Filed: 09/29/2014 Page 1 of 76

ORAL ARGUMENT NOT YET SCHEDULED
Nos. 13-5028 & 14-5161

IN THE
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
PHILIP MORRIS USA INC., et al.,
Defendants-Appellants.

On Appeal From Orders Of The United States District Court
For The District Of Columbia
1:99-cv-02496-GK

APPELLANTS’ OPENING BRIEF

Noel J. Francisco Miguel A. Estrada
Robert F. McDermott Amir C. Tayrani
Peter J. Biersteker Carlo D. Marchioli
JONES DAY GIBSON, DUNN & CRUTCHER LLP
51 Louisiana Avenue, N.W. 1050 Connecticut Avenue, N.W.
Washington, D.C. 20001-2113 Washington, D.C. 20036
Telephone: (202) 879-3939 Telephone: (202) 955-8257
Facsimile: (202) 626-1700 Facsimile: (202) 530-9616
Counsel for Appellant Counsel for Appellants Philip Morris USA
R.J. Reynolds Tobacco Company Inc. and Altria Group, Inc.

[Additional Counsel Listed On Inside Cover]

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Geoffrey K. Beach

R. Michael Leonard
WOMBLE CARLYLE SANDRIDGE & RICE,
PLLC
One West Fourth Street
Winston-Salem, NC 27101
Telephone: (336) 721-3721
Facsimile: (336) 733-8389
Counsel for Appellant

R.J. Reynolds Tobacco Company
Michael B. Minton
Bruce D. Ryder

A. Elizabeth Blackwell
THOMPSON COBURN LLP
One U.S. Bank Plaza, Suite 3500
St. Louis, MO 63101-1693
Telephone: (314) 552-6000
Facsimile: (314) 552-7597
Counsel for Appellant
Lorillard Tobacco Company

Thomas J. Frederick
WINSTON & STRAWN LLP
35 West Wacker Drive
Chicago, IL 60601-9703
Telephone: (312) 558-6700
Facsimile: (312) 558-5700

Counsel for Appellants Philip Morris
USA Inc. and Altria Group, Inc.

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CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES

Pursuant to D.C. Circuit Rule 28(a)(1), Defendants-Appellants Philip Morris
USA Inc., Altria Group, Inc., R.J. Reynolds Tobacco Company (individually and
as successor to Brown & Williamson Tobacco Corporation), and Lorillard Tobacco
Company file the following Certificate as to Parties, Rulings, and Related Cases.
Parties, Intervenors, and Amici

1. District Court
The following is a list of parties, intervenors, and amici that appeared before
the district court.

Parties: Plaintiff was the United States of America. Defendants were
Philip Morris USA Inc., Altria Group, Inc., R.J. Reynolds Tobacco Company,

Brown & Williamson Tobacco Corp.,* Lorillard Tobacco Company, British
American Tobacco (Investments) Ltd., The Council for Tobacco Research –
U.S.A., Inc., The Tobacco Institute, Inc., and Liggett Group, Inc.

Intervenors: Tobacco-Free Kids Action Fund, American Cancer Society,
American Heart Association, American Lung Association, Americans for

* Effective July 30, 2004, the U.S. assets, liabilities, and operations of Brown &
Williamson Tobacco Corporation’s cigarette and tobacco business were merged
with R.J. Reynolds Tobacco Company. Contemporaneously, Brown & Williamson
Tobacco Corporation changed its name to Brown & Williamson Holdings, Inc.,
and ceased manufacturing, researching, selling, or marketing cigarettes.
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Nonsmokers’ Rights, National African American Tobacco Prevention Network,
Elan Corporation, PLC, Glaxosmithkline Consumer Healthcare, L.P., Impax
Laboratories, Inc., Pfizer, Inc., Pharmacia Corporation, Smithkline Beecham
Corporation, and Novartis Consumer Health Inc.

Amici: Citizens’ Commission to Protect the Truth, Regents of the
University of California, Tobacco Control Legal Consortium, Essential Action,
City and County of San Francisco, Asian-Pacific Islander American Health Forum,
San Francisco African American Tobacco Free Project, Black Network in
Children’s Emotional Health, the Attorneys General of Arkansas, Connecticut,
Hawaii, Idaho, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Nevada,
New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Tennessee,
Vermont, Washington, Wisconsin, Wyoming, and District of Columbia, National
Association of Black Owned Broadcasters, Fox Broadcasting Company, National
Newspaper Publishers Association, National Association for the Advancement of
Colored People, Viacom Inc., A&E Television Networks, LLC, Interactive One,
LLC, Radio One, Inc., TV One, LLC, Univision Communications Inc., CW
Television Network, Little Rock Sun, and Turner Broadcasting System, Inc.

2. Court of Appeals
Parties: Appellants are Philip Morris USA Inc., Altria Group, Inc., R.J.
Reynolds Tobacco Company (individually and as successor to Brown &

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Williamson Tobacco Corporation), and Lorillard Tobacco Company. Appellee is
the United States of America.

Intervenors: Tobacco-Free Kids Action Fund, American Cancer Society,
American Heart Association, American Lung Association, Americans for
Nonsmokers’ Rights, and National African American Tobacco Prevention
Network.

Amici: The Washington Legal Foundation has given notice of its intention
to file an amicus curiae brief in support of Defendants-Appellants.

Rulings Under Review

In these consolidated appeals, Defendants-Appellants appeal from Order
#34-Remand (D.E. 5991; JA 157), entered by Judge Gladys Kessler on November
27, 2012, which ordered the text of corrective statements, as well as from the
Memorandum Opinion (D.E. 5992; JA 161) accompanying Order #34-Remand.
The Memorandum Opinion accompanying Order #34-Remand is available at 907
F. Supp. 2d 1 (D.D.C. 2012). Defendants-Appellants also appeal from
Memorandum Opinion And Order #50-Remand (D.E. 6094; JA 428), entered by
Judge Gladys Kessler on June 2, 2014, which granted the Joint Motion For
Consent Order Implementing The Corrective Statements Remedy Under Order
#1015 And Order #34-Remand (D.E. 6021), as well as from the accompanying
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Order #51-Remand (D.E. 6095; JA 436). Memorandum Opinion And Order #50Remand
and the accompanying Order #51-Remand are available electronically at
2014 WL 2505683 (D.D.C. 2014) and 2014 WL 2506611 (D.D.C. 2014),
respectively.

Related Cases

This case was previously before this Court in the following appeals: 015244
(United States v. Philip Morris Inc.); 02-5210 (United States v. Philip Morris
Inc.); 04-5207, 04-5208 (United States v. British American Tobacco (Investments)
Ltd.); 04-5252 (United States v. Philip Morris USA Inc.); 04-5358, 05-5129
(United States v. British American Tobacco Australia Services Ltd.); 06-5267, 065268,
06-5269, 06-5270, 06-5271, 06-5272, 06-5332, 06-5367, 07-5102, 07-5103
(United States v. Philip Morris USA Inc.); 11-5145 (United States v. Philip Morris
USA Inc.); 11-5146 (United States v. Philip Morris USA Inc.).

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CORPORATE DISCLOSURE STATEMENT

Pursuant to Fed. R. App. P. 26.1 and D.C. Circuit Rule 26.1, Defendants
make the following disclosures:

Philip Morris USA Inc. is a wholly owned subsidiary of Altria Group, Inc.
Altria Group, Inc. is the only publicly held company that owns 10% or more of
Philip Morris USA Inc.’s stock.

Altria Group, Inc. has no parent company, and no publicly held company
owns 10% or more of its stock.

R.J. Reynolds Tobacco Company is a wholly owned subsidiary of R.J.
Reynolds Tobacco Holdings, Inc., which in turn is a wholly owned subsidiary of
Reynolds American Inc., a publicly held company. Brown & Williamson
Holdings, Inc. holds more than 10% of the stock of Reynolds American Inc.
Brown and Williamson Holdings, Inc. is an indirect wholly owned subsidiary of
British American Tobacco, p.l.c., a publicly held corporation.
Lorillard Tobacco Company is a wholly owned subsidiary of Lorillard, Inc.
Lorillard, Inc. is the only publicly held company that owns 10% or more of
Lorillard Tobacco Company’s stock.

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TABLE OF CONTENTS

INTRODUCTION ……………………………………………………………………………………….. 1
JURISDICTIONAL STATEMENT ……………………………………………………………….. 4
STATEMENT OF ISSUES …………………………………………………………………………… 4
PERTINENT STATUTORY PROVISIONS …………………………………………………… 5
STATEMENT OF FACTS ……………………………………………………………………………. 5
SUMMARY OF ARGUMENT ……………………………………………………………………. 15
STANDARD OF REVIEW …………………………………………………………………………. 20
ARGUMENT …………………………………………………………………………………………….. 21

I.
The District Court’s Corrective Statements Violate The First
Amendment And This Court’s Mandate ……………………………………… 21
A.
Compelled Commercial Disclosures Must Convey Purely
Factual And Uncontroversial Information About A
Product ………………………………………………………………………….. 22
B.
The District Court’s Corrective Statements Are Not
“Purely Factual And Uncontroversial” Within The
Meaning Of Zauderer ……………………………………………………… 29
1.
The Confessional Preambles Are Improper ………………. 30
2.
Numerous Other Aspects Of The Corrective
Statements Are Improper ………………………………………… 33
a.
The Corrective Statements Contain
Additional Language That Forces
Defendants To Shame And Denigrate
Themselves ………………………………………………….. 33
b.
The Corrective Statements’ Characterization
Of Defendants’ Prior Conduct Conflicts
With The Conclusions Of Other Fact-
Finders ………………………………………………………… 34
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c.
Many Aspects Of The Corrective Statements
Are Not Supported By The District Court’s
Findings Of Fact…………………………………………… 38

C.
The District Court’s Corrective Statements Are Unduly
Burdensome …………………………………………………………………… 44

D.
Because The District Court’s Corrective Statements Do
Not Satisfy Zauderer’s Commercial-Disclosure Standard,
They Violate The First Amendment ………………………………….. 47

E.
The District Court’s First Amendment Analysis Is
Fundamentally Flawed …………………………………………………….. 52

II.
The District Court’s Corrective Statements Violate RICO And
This Court’s Mandate ……………………………………………………………….. 53

III.
The District Court’s Corrective Statements Violate Due Process …… 57

CONCLUSION ………………………………………………………………………………………….. 59

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TABLE OF AUTHORITIES

Page(s)

Cases

*

Am. Meat Inst. v. U.S. Dep’t of Agric.,

___ F.3d ___, 2014 WL 3732697

(D.C. Cir. 2014) (en banc) …………………………….. 2, 22, 23, 24, 26, 27, 28, 48, 51
Aspinall v. Philip Morris Cos.,
No. 98-6002, 2012 WL 1063342 (Mass. Super. Ct. Mar. 13, 2012) ……………… 37

Austin v. United States,
509 U.S. 602 (1993) ……………………………………………………………………………….. 57

Blue Cross & Blue Shield of New Jersey Inc. v. Philip Morris, Inc.,
No. 98-cv-3287 (E.D.N.Y.) …………………………………………………………………….. 35

Bolger v. Youngs Drug Prods. Corp.,
463 U.S. 60 (1983) …………………………………………………………………………………. 50

Bullock v. Philip Morris USA Inc.,
198 Cal. App. 4th 543 (2011) ………………………………………………………………….. 34

Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y.,
447 U.S. 557 (1980) ……………………………………………………………………………….. 22

City of Cincinnati v. Discovery Network, Inc.,
507 U.S. 410 (1993) ……………………………………………………………………………….. 51

City of St. Louis v. Am. Tobacco Co.,
No. 22982-09652-01, 2010 WL 2917188
(Mo. Cir. Ct. June 2, 2010) ……………………………………………………………….. 37, 53

Cobell v. Norton,
334 F.3d 1128 (D.C. Cir. 2003) ……………………………………………………………….. 58

* Authorities upon which we chiefly rely are marked with asterisks.
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Craft v. Philip Morris Cos.,
No. 002-00406-02, 2010 WL 8523193
(Mo. Cir. Ct. Dec. 28, 2010) ……………………………………………………………………. 37

Curtis v. Altria Grp., Inc.,
No. 27-cv-01-18042, 2009 WL 5820516
(Minn. Dist. Ct. Oct. 14, 2009) ………………………………………………………………… 37

In re Daniel Chapter One,
2010 WL 387917 (FTC Jan. 25, 2010) ……………………………………………………… 32

Daniel Chapter One v. FTC,
405 F. App’x 505 (D.C. Cir. 2010) …………………………………………………….. 32, 33

Edenfield v. Fane,
507 U.S. 761 (1993) ……………………………………………………………………………….. 51

Empire Healthchoice, Inc. v. Philip Morris USA Inc.,
393 F.3d 312 (2d Cir. 2004) ……………………………………………………………………. 36

Entm’t Software Ass’n v. Blagojevich,
469 F.3d 641 (7th Cir. 2006) …………………………………………………………………… 38

Hall v. R.J. Reynolds Tobacco Co.,
No. 00-1061 (Fla. Cir. Ct.)………………………………………………………………………. 35

Hicks v. Reiock,
485 U.S. 624 (1988) ……………………………………………………………………………….. 57

Ibanez v. Fla. Dep’t of Bus. & Prof’l Regulation,
512 U.S. 136 (1994) ……………………………………………………………………………….. 23

Inzerilla v. Am. Tobacco Co.,
No. 011754/96 (N.Y. Sup. Ct.)………………………………………………………………… 35

Iron Workers Local Union No. 17 Ins. Fund v. Philip Morris, Inc.,
No. 1:97-cv-1422 (N.D. Ohio) ………………………………………………………………… 36

Lucier v. Philip Morris Inc.,
No. 02AS01909 (Cal. Super. Ct.) …………………………………………………………….. 35

McLaughlin v. Am. Tobacco Co.,
522 F.3d 215 (2d Cir. 2008) ……………………………………………………………………. 37

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Milavetz, Gallop & Milavetz, P.A. v. United States,
559 U.S. 229 (2010) ……………………………………………………………………………….. 24

*
Nat’l Ass’n of Mfrs. v. SEC,
748 F.3d 359 (D.C. Cir. 2014) …………………………………………… 27, 28, 30, 50, 51
Novartis Corp. v. FTC,
223 F.3d 783 (D.C. Cir. 2000) …………………………………………………………………. 24

Pac. Gas & Elec. Co. v. Pub. Utils. Comm’n,
475 U.S. 1 (1986) …………………………………………………………………………………… 49

Pooshs v. Philip Morris USA Inc.,
904 F. Supp. 2d 1009 (N.D. Cal. 2012) …………………………………………………….. 36

*
R.J. Reynolds Tobacco Co. v. FDA,
696 F.3d 1205 (D.C. Cir. 2012) ………………………………………………. 26, 27, 30, 38
Rubin v. Coors Brewing Co.,
514 U.S. 476 (1995) ……………………………………………………………………………….. 51

Schwab v. Philip Morris USA, Inc.,
449 F. Supp. 2d 992 (E.D.N.Y. 2006) ………………………………………………………. 36

Shaffer v. R.J. Reynolds Tobacco Co.,
860 F. Supp. 2d 991 (D. Ariz. 2012) ………………………………………………………… 37

In re Tobacco Litig.: C. Blankenship/J. McCune,
No. 2:97-0204 (W. Va. Cir. Ct.) ………………………………………………………………. 35

Tune v. Philip Morris Inc.,
No. 97-4678 (Fla. Cir. Ct.)………………………………………………………………………. 35

Turner Broad. Sys., Inc. v. FCC,
512 U.S. 622 (1994) …………………………………………………………………………. 22, 49

United States v. Gementera,
379 F.3d 596 (9th Cir. 2004) …………………………………………………………………… 58

United States v. Nat’l Soc’y of Prof’l Eng’rs,
555 F.2d 978 (D.C. Cir. 1977) …………………………………………………………………. 28

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* United States v. Philip Morris USA Inc.,
566 F.3d 1095 (D.C. Cir. 2009)………………… 1, 3, 8, 9, 15, 17, 19, 20, 21, 22, 27
29, 34, 45, 47, 48, 49, 50, 53, 54, 55, 56

United States v. Philip Morris USA Inc.,
396 F.3d 1190 (D.C. Cir. 2005) ……………………………………………………… 6, 19, 54

United States v. Philip Morris USA Inc.,
449 F. Supp. 2d 1 (D.D.C. 2006) ……………………………………. 1, 6, 7, 8, 39, 42, 43

*
Warner-Lambert Co. v. FTC,
562 F.2d 749 (D.C. Cir. 1977) ……………………………………………………… 25, 26, 52
Welch v. Brown & Williamson Tobacco Corp.,
No. 00-CV-209292 (Mo. Cir. Ct.) ……………………………………………………………. 35

Wooley v. Maynard,
430 U.S. 705 (1977) ……………………………………………………………………. 16, 22, 49

*
Zauderer v. Office of Disciplinary Counsel of Supreme Court,
471 U.S. 626 (1985) …………………………….. 2, 8, 16, 17, 23, 24, 26, 27, 29, 44, 48
Statutes

* 18 U.S.C. § 1964 ……………………………………………………………………. 5, 6, 9, 26, 53
28 U.S.C. § 1292 ………………………………………………………………………………………….. 4
28 U.S.C. § 1331 ………………………………………………………………………………………….. 4
28 U.S.C. § 1345 ………………………………………………………………………………………….. 4
28 U.S.C. § 2201 ………………………………………………………………………………………….. 4
The Family Smoking Prevention and Tobacco Control Act of 2009,
Pub. L. No. 111-31, 123 Stat. 1776 ………………………………………………………….. 55

Rule

Fed. R. Evid. 801 ……………………………………………………………………………………….. 58

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Other Authorities

BBC, Tobacco firms told to pay for adverts warning of dangers
(Mar. 22, 2013), www.bbc.com/news/business… ………………….. 31

Lorillard Tobacco Co., Smoking and Health,
www.lorillard.com/respons… ……………………… 41

Philip Morris USA Inc., Smoking and Health Issues,
www.philipmorrisusa.com/e…
Cigarettes/Health_Issues/default.aspx?src=top_nav …………………………………… 40

R.J. Reynolds Tobacco Co., Guiding Principles and Beliefs,
www.rjrt.com/prinbeliefs…. ………………………………………………………… 41
Gideon Resnick, Big Tobacco’s Biggest Lies, Daily Beast (Jan. 20,
2014), www.thedailybeast.com/art…
s-biggest-lies.html ……………………………………………………………………… 31

Tom Schoenberg, Tobacco Companies Must Admit They Lied on
Products, Ads, Bloomberg (Nov. 28, 2012),
www.bloomberg.com/news/20…
ad-statements-decided-by-u-s-judge.html ………………………………….. 31

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INTRODUCTION

In 1999, the Government brought this suit against the major domestic
tobacco companies alleging that they violated RICO by engaging in a decades-long
conspiracy to deny the health risks of smoking cigarettes. After finding
Defendants liable in 2006, the district court issued a series of injunctions, one of
which requires Defendants to disseminate “corrective statements” on five topics
related to the health effects and addictiveness of smoking in multiple media
formats, including television, websites, newspapers, and cigarette package
“onserts.” United States v. Philip Morris USA Inc., 449 F. Supp. 2d 1, 938-41

(D.D.C. 2006).
On appeal from the district court’s 2006 final judgment, this Court upheld
the general concept of a corrective-statements remedy but had no opportunity to
pass upon the text of those statements, which the district court had not yet
formulated. To ensure that the statements ultimately crafted by the district court
complied with both the First Amendment and RICO, this Court directed that the
corrective statements be confined to “‘purely factual and uncontroversial
information’ geared towards thwarting prospective efforts by Defendants” to
deceive the American public about their products. United States v. Philip Morris
USA Inc., 566 F.3d 1095, 1144 (D.C. Cir. 2009) (citation omitted) (quoting

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Zauderer v. Office of Disciplinary Counsel of Supreme Court, 471 U.S. 626, 651
(1985)).

Consistent with this Court’s 2009 decision, Defendants stand ready and
willing to implement the corrective-statements remedy by disseminating factual
public-health information about cigarettes. The district court, however, did not
heed this Court’s clear mandate. Instead of focusing on the health effects of
Defendants’ products, the district court ordered Defendants to make corrective
statements about their past conduct. Those statements require Defendants to
disparage themselves as reprehensible and untrustworthy wrongdoers who
“deliberately deceived the American public,” JA 158, to confess publicly to
allegations of past misconduct that other finders of fact have rejected, and to
embrace assertions that are unsupported by the district court’s findings of fact in
this case. In short, these statements are designed to ensure that the public does not
believe anything Defendants say on any topic.

Without question, compelling Defendants to make public confessions about
their own supposedly bad character is a far cry from the “purely factual and
uncontroversial” commercial disclosures of product-related information upheld by
this Court. See, e.g., Am. Meat Inst. v. U.S. Dep’t of Agric., ___ F.3d ___, 2014
WL 3732697, at *9 (D.C. Cir. 2014) (en banc). These fundamental First
Amendment shortcomings are exacerbated by the requirement that Defendants bear

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the unnecessary burden of disseminating the corrective statements in multiple
media formats that will reach overlapping audiences without any incremental
benefit in preventing future misstatements by Defendants regarding their products.

In addition, the district court’s backward-looking remedy—which requires
Defendants to condemn their own credibility and reputation based on alleged
conduct that occurred as long as six decades ago—falls well outside the district
court’s limited jurisdiction to “prevent and restrain future RICO violations.”
Philip Morris USA Inc., 566 F.3d at 1140 (emphasis added). Those statements are
designed to punish and humiliate Defendants based on their past conduct, not to
prevent future RICO violations by “[r]equiring Defendants to reveal the previously
hidden truth about their products.” Id. at 1140 (emphasis added).

By promulgating corrective statements that effectively require Defendants to
brand themselves with a Scarlet Letter that labels them “Liars,” the district court
contravened this Court’s mandate and exceeded the bounds of the First
Amendment, RICO, and due process. Defendants are willing to provide the public
with factual information about the health effects and addictiveness of cigarettes—
and, indeed, Defendants proposed numerous alternatives that would have
accomplished that goal. But the wholly unprecedented self-vilification required by
the district court is well beyond the court’s authority and squarely foreclosed by
the First Amendment. This Court should vacate the district court’s corrective

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statements orders and remand with instructions to craft a remedy that is consistent
with this Court’s prior mandate and the limitations imposed by the Constitution
and RICO.

JURISDICTIONAL STATEMENT

The district court had subject matter jurisdiction under 28 U.S.C. §§ 1331,
1345, and 2201. On January 25, 2013, Defendants filed their Notice of Appeal
from Order #34-Remand and the Memorandum Opinion accompanying Order #34Remand,
both entered by the district court on November 27, 2012. That appeal
was docketed as No. 13-5028. On June 25, 2014, Defendants filed their Notice of
Appeal from the Memorandum Opinion and Order #50-Remand and Order #51Remand,
both entered by the district court on June 2, 2014. That appeal was
docketed as No. 14-5161 and consolidated with No. 13-5028. This Court has
jurisdiction over Defendants’ timely appeals under 28 U.S.C. § 1292(a).

STATEMENT OF ISSUES

1. Whether the district court’s corrective statements violate the First
Amendment and this Court’s 2009 mandate because they would compel
Defendants to confess past misconduct and make assertions unsupported by the
district court’s findings of fact, rather than provide purely factual and
uncontroversial public-health information about Defendants’ products.
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2. Whether the district court’s corrective statements violate RICO and
this Court’s 2009 mandate because they are not geared toward “prevent[ing] and
restrain[ing]” future RICO violations. 18 U.S.C. § 1964(a).
3. Whether the district court’s corrective statements violate due process
because they impose criminal-like sanctions in a civil proceeding.

PERTINENT STATUTORY PROVISIONS

The relevant portion of RICO provides:

The district courts of the United States shall have jurisdiction to
prevent and restrain violations of section 1962 of this chapter by
issuing appropriate orders, including, but not limited to: ordering any
person to divest himself of any interest, direct or indirect, in any
enterprise; imposing reasonable restrictions on the future activities or
investments of any person, including, but not limited to, prohibiting
any person from engaging in the same type of endeavor as the
enterprise engaged in, the activities of which affect interstate or
foreign commerce; or ordering dissolution or reorganization of any
enterprise, making due provision for the rights of innocent persons.

18 U.S.C. § 1964(a).

STATEMENT OF FACTS

I. The Government’s Suit
The Government brought this suit against Philip Morris USA Inc., Altria
Group, Inc., R.J. Reynolds Tobacco Company, and Lorillard Tobacco Company, as
well as other tobacco companies and industry groups, alleging that they had
violated RICO by associating together to provide false information to the
American public about the health effects and addictiveness of smoking. The

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Government premised its claims on Section 1964(a) of RICO, which grants district

courts jurisdiction to issue “appropriate orders” that “prevent and restrain” RICO

violations. 18 U.S.C. § 1964(a). Under that narrow remedial provision, the

Government sought injunctive relief restricting nearly every aspect of Defendants’

cigarette business, as well as the disgorgement of $280 billion in profits that

Defendants had earned from past cigarette sales.

In 2005, this Court held on interlocutory appeal that disgorgement of past

profits was not an available remedy because jurisdiction under Section 1964(a) “is

limited to forward-looking remedies that are aimed at future violations” of RICO.

United States v. Philip Morris USA Inc., 396 F.3d 1190, 1198 (D.C. Cir. 2005)

(“Disgorgement Opinion”) (emphasis added). Accordingly, the only relief that the

Government was permitted to seek, and that the district court purported to grant,

was prospective injunctive relief.

After a bench trial, the district court issued a Final Judgment and Remedial

Order, which contained a lengthy set of factual findings regarding Defendants’ past

conduct dating back to the early 1950s, and entered a series of sweeping

injunctions. See Philip Morris USA Inc., 449 F. Supp. 2d 1. The district court

found that Defendants had violated RICO by associating together to misinform the

American public regarding “the health effects of smoking and environmental

tobacco smoke, the addictiveness of nicotine, the health benefits from low tar,

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‘light’ cigarettes,” and the “manipulation of the design and composition of

cigarettes in order to sustain nicotine addiction.” Id. at 26-27. The district court

also found that Defendants were likely to commit similar RICO violations in the

future, and issued an extensive set of injunctions designed to prevent such future

violations of RICO. Id. at 911, 938-45.1

One of the district court’s injunctions ordered Defendants to make

“corrective statements” concerning “the adverse health effects of smoking,” “the

addictiveness of smoking and nicotine,” “the lack of any significant health benefit

from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild,’ and ‘natural,’ cigarettes,”

“Defendants’ manipulation of cigarette design and composition to ensure optimum

nicotine delivery,” and “the adverse health effects of exposure to secondhand

smoke.” Philip Morris USA Inc., 449 F. Supp. 2d at 938-39. The order required

Defendants to disseminate the corrective statements through newspapers,

television, Defendants’ websites, cigarette package “onserts,” and retail point-of

sale displays. Id. at 939-41. The district court did not specify the wording of the

1 Among other things, the district court’s injunctions prohibit Defendants “from
committing any act of racketeering . . . relating in any way to the manufacturing,
marketing, promotion, health consequences or sale of cigarettes,” and from making
“any material false, misleading, or deceptive statement or representation . . . that
misrepresents or suppresses information concerning cigarettes.” Philip Morris
USA Inc., 449 F. Supp. 2d at 938. There have been no violations of those
injunctions since they were entered in 2006.

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corrective statements in its 2006 Final Judgment and Remedial Order, but stated
that it would determine their precise content at a future date after receiving
proposals from the parties. Id. at 939.

Defendants appealed the district court’s Final Judgment and Remedial
Order. This Court affirmed in part, but vacated several aspects of the injunctive
relief and remanded the case for the district court to reconsider those aspects of its
injunctions. See Philip Morris USA Inc., 566 F.3d at 1135-36. With regard to the
corrective statements, the Court upheld the district court’s general authority to
require Defendants to make corrective disclosures, but underscored that “the court
must ensure the corrective disclosures are carefully phrased so they do not
impermissibly chill protected speech.” Id. at 1144. “Consequently,” the Court
continued, the district “court must confine the statements to ‘purely factual and
uncontroversial information,’ geared towards thwarting prospective efforts by
Defendants to either directly mislead consumers or capitalize on their prior
deceptions by continuing to advertise in a manner that builds on consumers’
existing misperceptions.” Id. at 1144-45 (citation omitted) (quoting Zauderer, 471

U.S. at 651). The Court emphasized that only if the corrective statements “me[t]
these requirements” would they constitute “a permissible restraint on Defendants’
commercial speech.” Id. at 1145.
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The Court further held that, under Section 1964(a) of RICO, the corrective-
statements remedy must be tailored to “[r]equir[e] Defendants to reveal the
previously hidden truth about their products,” which “will prevent and restrain
them from disseminating false and misleading statements, thereby violating RICO,
in the future.” Philip Morris USA Inc., 566 F.3d at 1140. Finally, the Court
vacated the provision of the district court’s order requiring that the corrective
statements be displayed at retail point-of-sale locations because the district court
had “fail[ed] to consider the rights of retailers,” who were not parties to the court’s
remedial proceedings. Id. at 1141. The Court directed the district court on remand
“to evaluate and ‘make due provision for the rights of innocent persons,’ either by
abandoning this part of the remedial order or by crafting a new version reflecting
the rights of third parties.” Id. at 1142 (alteration omitted) (quoting 18 U.S.C.
§ 1964(a)).

II. The District Court’s Corrective Statements
Before Defendants noticed an appeal from the district court’s Final
Judgment and Remedial Order, each party submitted proposed language for the
district court to consider in crafting its corrective statements. Defendants each
proposed their own formulations of statements that conveyed factual public-health
information on the five topics designated by the district court. See JA 54, 64, 67,

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76.2 On remand, the Government submitted yet another set of proposed corrective
statements, and the parties then filed briefs addressing the various proposals.
Consistent with this Court’s mandate, Defendants stated their willingness to
“provid[e] consumers with factual and noncontroversial information about the
health effects and addictiveness of smoking,” but objected to the Government’s
proposal, which contained numerous inflammatory and inaccurate statements that
bore “no resemblance to the factual and uncontroversial statements contemplated
by” this Court. D.E. 5881, at 1-2. While the district court did not adopt any of the
Government’s proposals wholesale, it nonetheless largely rejected Defendants’
arguments and ordered the following corrective statements:
A. Adverse Health Effects of Smoking
A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and
Philip Morris USA deliberately deceived the American public about the health
effects of smoking, and has ordered those companies to make this statement. Here
is the truth:

2 For example, on the topic of the adverse health effects of smoking, Philip
Morris USA proposed the following statement: “Cigarette smoking causes lung
cancer, heart disease, emphysema, and other serious diseases in smokers. Smokers
are far more likely to develop serious diseases, like lung cancer, than non-smokers.
Smoking by pregnant women increases the risks for fetal injury, premature birth,
and low birth weight. There is no safe cigarette.” JA 56. Each of the other
Defendants submitted similar statements conveying factual public-health
information about their products. See JA 64, 67, 76.

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Smoking kills, on average, 1200 Americans. Every day.

More people die every year from smoking than from murder, AIDS,
suicide, drugs, car crashes, and alcohol, combined.

Smoking causes heart disease, emphysema, acute myeloid leukemia,
and cancer of the mouth, esophagus, larynx, lung, stomach, kidney,
bladder, and pancreas.

Smoking also causes reduced fertility, low birth weight in newborns,
and cancer of the cervix.
B. Addictiveness of Smoking and Nicotine
A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and
Philip Morris USA deliberately deceived the American public about the
addictiveness of smoking and nicotine, and has ordered those companies to make
this statement. Here is the truth:


Smoking is highly addictive. Nicotine is the addictive drug in
tobacco.

Cigarette companies intentionally designed cigarettes with enough
nicotine to create and sustain addiction.

It’s not easy to quit.

When you smoke, the nicotine actually changes the brain – that’s why
quitting is so hard.
C. Lack of Significant Health Benefit From Smoking “Low Tar,”
“Light,” “Ultra Light,” “Mild,” and “Natural” Cigarettes
A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and
Philip Morris USA deliberately deceived the American public by falsely selling
and advertising low tar and light cigarettes as less harmful than regular cigarettes,
and has ordered those companies to make this statement. Here is the truth:


Many smokers switch to low tar and light cigarettes rather than
quitting because they think low tar and light cigarettes are less
harmful. They are not.

“Low tar” and filtered cigarette smokers inhale essentially the same
amount of tar and nicotine as they would from regular cigarettes.
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All cigarettes cause cancer, lung disease, heart attacks, and premature
death – lights, low tar, ultra lights, and naturals. There is no safe
cigarette.
D. Manipulation of Cigarette Design and Composition to Ensure
Optimum Nicotine Delivery
A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and
Philip Morris USA deliberately deceived the American public about designing
cigarettes to enhance the delivery of nicotine, and has ordered those companies to
make this statement. Here is the truth:


Defendant tobacco companies intentionally designed cigarettes to
make them more addictive.

Cigarette companies control the impact and delivery of nicotine in
many ways, including designing filters and selecting cigarette paper to
maximize the ingestion of nicotine, adding ammonia to make the
cigarette taste less harsh, and controlling the physical and chemical
make-up of the tobacco blend.

When you smoke, the nicotine actually changes the brain – that’s why
quitting is so hard.
E. Adverse Health Effects of Exposure to Secondhand Smoke
A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and
Philip Morris USA deliberately deceived the American public about the health
effects of secondhand smoke, and has ordered those companies to make this
statement. Here is the truth:


Secondhand smoke kills over 38,000 Americans each year.

Secondhand smoke causes lung cancer and coronary heart disease in
adults who do not smoke.

Children exposed to secondhand smoke are at an increased risk for
sudden infant death syndrome (SIDS), acute respiratory infections, ear
problems, severe asthma, and reduced lung function.

There is no safe level of exposure to secondhand smoke.
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JA 158-60; see also JA 437 (adopting minor textual modifications and specifying
the order in which the four Defendants’ names will appear in each iteration of the
statements).

In an accompanying opinion, the district court held that its corrective
statements complied with the First Amendment. Despite the inflammatory
language requiring Defendants to condemn their own conduct and character, the
court concluded that the statements are “purely factual and uncontroversial”
because they are “based in specific Findings of Fact,” are “simple declarative
sentences,” and use “basic, uncomplicated language.” JA 185, 193. And although
dissemination of the statements imposes significant collateral consequences on
Defendants—including likely tainting future jury pools—the court determined that
the statements do not “impermissibly chill Defendants’ protected speech” or
otherwise impose undue burdens on Defendants because the statements are
supposedly aimed at thwarting future efforts by Defendants to misinform the
public. JA 207.

The court also rejected Defendants’ argument that imposing confessional
corrective statements in a civil proceeding violates their due process rights. The
court did not dispute that its statements require Defendants to shame and humiliate
themselves in public, but instead stated without further explanation that the
remedy’s “purpose is not punitive, but corrective.” JA 213.

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In its order accompanying the corrective statements, the district court
directed the parties to participate in discussions with a Special Master regarding
the implementation of the remedy. JA 160, 224. The parties thereafter engaged in
more than a year of mediation and ultimately filed a Revised (Proposed) Consent
Order that addresses implementation of the corrective statements in four media:
newspapers, television, websites, and package “onserts.” D.E. 6081. On June 2,
2014, the district court entered the parties’ proposed consent order, which provides
that Defendants must:


Purchase space to publish each of the corrective statements in separate
Sunday editions of the print versions and on the Internet homepages
of more than 45 newspapers, which cover thirty-three States and the
District of Columbia, JA 431, 439-41;

Run the corrective statements in five primetime television spots per
week for one year, for a total of 260 television spots, JA 443-44;3

3 The Consent Order requires Defendant R.J. Reynolds Tobacco Company
(“RJRT”) to run two sets of television spots—one on its own behalf and one on
behalf of Brown & Williamson Tobacco Corp. As expressly anticipated by the
Consent Order, JA 457, RJRT has filed a motion challenging that requirement. See

D.E. 6103. That motion has been fully briefed and is now awaiting decision by the
district court.
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Display the corrective statements prominently on their corporate and
branded websites, possibly in perpetuity, JA 446-51; and

Six times evenly spaced over the course of two years, affix “onserts”
that feature the corrective statements to the packaging of two weeks’
worth of estimated annual volume of all of their cigarette brands, JA
453.4
The Consent Order reserves Defendants’ “right to challenge on appeal the
content of the Court-ordered Corrective Statements and the requirement that the
Court-ordered Corrective Statements appear in the multiple media referenced in the
Remedial Order and herein.” JA 457. Defendants’ obligation to commence
implementation of the corrective-statements remedy is triggered by the exhaustion
of this appeal. JA 438.

SUMMARY OF ARGUMENT

This Court instructed the district court to craft corrective statements that are
confined to “purely factual and uncontroversial information” and that “[r]equir[e]
Defendants to reveal the previously hidden truth about their products.” Philip
Morris USA Inc., 566 F.3d at 1140, 1144 (internal quotation marks omitted). In

4 The Consent Order did not address the point-of-sale component of the
corrective-statements remedy that this Court vacated and remanded. JA 456. That
issue was separately briefed by the parties and is now awaiting decision by the
district court.

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accordance with this Court’s mandate, Defendants are willing to disseminate
corrective statements that transmit public-health information about cigarettes.
Indeed, Defendants proposed numerous alternative formulations of the corrective
statements that plainly would have achieved this result. See JA 54, 64, 67, 76. The
district court’s corrective statements, however, go well beyond the statements
contemplated by this Court and any compelled commercial disclosures ever upheld
by an appellate court. The district court’s statements require Defendants to shame
and humiliate themselves by confessing to past misconduct and by branding
themselves as liars who “deliberately deceived the American public.” These
unprecedented, inflammatory statements—which Defendants must publish in
multiple media, ensuring repetitive and redundant exposure—violate this Court’s
mandate, the First Amendment, the district court’s remedial authority under RICO,
and due process.

I. Although compelled speech is generally subject to strict scrutiny, see
Wooley v. Maynard, 430 U.S. 705, 714 (1977), the Supreme Court has recognized
a narrow exception for disclosures of “purely factual and uncontroversial
information” about a product that are not otherwise “unduly burdensome.”
Zauderer, 471 U.S. at 651. In its 2009 opinion, this Court directed the district
court to craft corrective statements that fall within this limited constitutional
exception for “‘purely factual and uncontroversial’” commercial disclosures about
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Defendants’ products. Philip Morris USA Inc., 566 F.3d at 1144 (quoting

Zauderer, 471 U.S. at 651).

Rather than limiting the corrective statements to straightforward public-

health information about cigarettes, however, the district court mandated that

Defendants make confessional disclosures about themselves, in which they must

condemn and publicly shame themselves for engaging in the misconduct found by

the district court. The preamble to each statement—“[a] Federal Court has ruled

that [Defendants] deliberately deceived the American public”—requires

Defendants to announce publicly that they are liars, and the “Here is the truth”

declaration suggests (erroneously) that Defendants previously disputed all of the

information conveyed in the accompanying bulletpoints. Moreover, several of

those bulletpoints require Defendants to disparage themselves further based on

both their past and ongoing conduct, including allegedly “design[ing] cigarettes . . .

to create and sustain addiction.”

The inherently controversial nature of these self-denigrating statements is

underscored by the fact that numerous judges and juries have rejected the

allegations on which the district court’s statements are based. In addition, the

statements are nonfactual in numerous respects because they require Defendants to

declare as “truth” multiple items that lack support in the district court’s own

findings of fact and mischaracterize Defendants’ actual conduct. For example,

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they require Defendants to confess to having “deliberately deceived the American
public,” even though the district court never made any findings of such deception
because the question whether any individual smoker actually believed Defendants’
alleged misstatements was not at issue in the case. These First Amendment
deficiencies are compounded by the district court’s unwarranted requirement that
Defendants disseminate the same statements in multiple media formats that will
repetitively reach overlapping audiences.

It is impossible to square the district court’s incendiary, counterfactual, and
needlessly burdensome statements with this Court’s mandate, which is a sufficient
reason, standing alone, to vacate the district court’s corrective-statements orders.
The Court should also vacate those orders on First Amendment grounds because it
is impossible to fit those statements within Zauderer’s narrow exception for
“purely factual and uncontroversial statements.” Indeed, because the corrective
statements focus principally on Defendants’ conduct—rather than their products—
they do not even qualify as commercial speech and should be subject to strict
scrutiny. In any event, the statements are unconstitutional even under the Central
Hudson standard for commercial speech because they are not narrowly tailored to
further the Government’s interest in preventing Defendants from committing future
RICO violations.

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II. The district court’s corrective statements also exceed its jurisdiction
under Section 1964(a) of RICO and violate this Court’s mandate because they
would require Defendants to vilify themselves based on their alleged past
wrongdoing, rather than “[r]equir[e] Defendants to reveal the previously hidden
truth about their products” so as to “thwart[ ] prospective efforts by Defendants” to
mislead consumers. Philip Morris USA Inc., 566 F.3d at 1140, 1144.
As this Court has repeatedly recognized, Section 1964(a) does not authorize
“backward-looking remed[ies] focused on remedying the effects of past conduct,”
Disgorgement Opinion, 396 F.3d at 1198, but is instead limited to forward-looking
relief that “prevent[s] and restrain[s] future RICO violations.” Philip Morris USA
Inc., 566 F.3d at 1140 (emphasis added). The district court nevertheless ordered
Defendants to make statements centered on their past acts of alleged misconduct—
acts that Defendants were found to have committed in a district court opinion
issued nearly ten years ago, that were the subject of a lawsuit filed fifteen years
ago, and that occurred as long as six decades ago. Each statement begins with a
clause in which Defendants declare that—at some undefined point in the past—
they “deliberately deceived the American public” about the health effects or
addictiveness of smoking. This retrospective language serves to denigrate
Defendants and punish them for past wrongdoing, not to “prevent and restrain
them from disseminating false and misleading statements, thereby violating RICO,

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in the future.” Id. And while such public shaming and self-castigation may so
thoroughly discredit Defendants that the public would never believe anything that
they say on any subject in the future, this Court has already made clear that a
remedy “may not be justified simply on the ground that whatever hurts a civil
RICO violator necessarily serves to ‘prevent and restrain’ future RICO violations.”
Id. at 1148.

III. The punitive nature of the corrective statements also denies
Defendants their due process rights. The requirement that Defendants disparage
and vilify themselves through the dissemination of statements about their own acts
of past wrongdoing is a form of punishment that can only be imposed in a criminal
proceeding that provides enhanced procedural protections not afforded to
Defendants in this civil RICO action.
STANDARD OF REVIEW

This Court reviews de novo the district court’s legal conclusions that the
corrective statements comport with its prior mandate, do not violate the First
Amendment, are authorized by RICO, and are consistent with due process. Philip
Morris USA Inc., 566 F.3d at 1110, 1147.

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ARGUMENT

In its 2009 opinion, this Court imposed several critical constraints on the
district court’s authority to craft its corrective statements: in particular, the
statements had to be “purely factual,” “purely . . . uncontroversial,” and “geared
toward thwarting prospective efforts by Defendants” to mislead the public by
“[r]equiring Defendants to reveal the previously hidden truth about their products.”
Philip Morris USA Inc., 566 F.3d at 1140, 1144 (emphases added). The statements
adopted by the district court depart from each of this Court’s requirements and, in
so doing, violate the First Amendment, RICO, and due process. Defendants stand
ready to publish corrective statements that provide the public with factual
information about the health risks and addictiveness of cigarettes. But requiring
Defendants to disseminate the district court’s statements would compel them to
denigrate and humiliate themselves in public. It would be one thing for a third
party to make such statements. To coerce Defendants to vilify themselves in the
public square, however, is to bring back the days of the Scarlet Letter.

I.
The District Court’s Corrective Statements Violate The First
Amendment And This Court’s Mandate.
The district court’s corrective statements cannot be reconciled with the First
Amendment or this Court’s 2009 mandate because they are profoundly
controversial, pervaded by inaccuracies, and needlessly burdensome.

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A.
Compelled Commercial Disclosures Must Convey Purely
Factual And Uncontroversial Information About A
Product.
The freedom of speech protected by the First Amendment “includes both the
right to speak freely and the right to refrain from speaking at all.” Wooley, 430

U.S. at 714. Subject to limited exceptions, government-compelled speech
therefore must survive strict scrutiny. See Turner Broad. Sys., Inc. v. FCC, 512
U.S. 622, 643 (1994).
The Supreme Court and this Court have recognized a narrow exception to
this rule for certain categories of compelled commercial disclosures. Commercial
speech—whether undertaken voluntarily by a manufacturer or retailer, or
compelled by the Government—is speech that focuses on a manufacturer’s or
retailer’s product: It provides “information related to proposing a particular
transaction, such as price,” and also “include[s] material representations about the
efficacy, safety, and quality of the advertiser’s product.” Philip Morris USA Inc.,
566 F.3d at 1143 (emphasis added). To justify its regulation of commercial
speech, the Government must establish that its “chosen means ‘directly advance[s]
the state interest involved’ and [that] it is narrowly tailored to serve that end.” Am.
Meat Inst., 2014 WL 3732697, at *6 (first alteration in original) (quoting Cent.
Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557, 564
(1980)). In the context of compelled commercial disclosures, this means-end

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requirement is satisfied where the disclosure is “reasonably crafted” to provide
only “‘purely factual and uncontroversial information’” about a product and is not
“‘unduly burdensome.’” Id. at *7 (quoting Zauderer, 471 U.S. at 651).

The Government’s burden in demonstrating the constitutionality of
compelled commercial disclosures “is not slight.” Ibanez v. Fla. Dep’t of Bus. &
Prof’l Regulation, 512 U.S. 136, 143 (1994). As the Supreme Court has
emphasized, “the ‘free flow of commercial information is valuable enough to
justify imposing on would-be regulators the costs of distinguishing the truthful
from the false, the helpful from the misleading, and the harmless from the
harmful.’” Id. (quoting Zauderer, 471 U.S. at 646); see also Am. Meat Inst., 2014
WL 3732697, at *14 (Kavanaugh, J., concurring in the judgment) (“The majority
opinion properly does not equate Zauderer to mere rational basis review . . . .”).

Cases applying the commercial-disclosure exception to the general
prohibition on compelled speech consistently draw a distinction between
compelled disclosures regarding a product’s characteristics—which are generally
valid if properly restricted to purely factual and uncontroversial information—and
compelled disclosures regarding a manufacturer’s conduct—which have been
almost invariably rejected by appellate courts. In Zauderer, for example, the
Supreme Court upheld a state-law requirement that attorneys include in their
advertisements “information about the terms under which [their] services will be

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available,” such as whether a client would need to pay his own costs if he hired the

attorney. 471 U.S. at 651. In reaching that conclusion, the Court emphasized that

the required disclosure involved “purely factual and uncontroversial” information

about the services being advertised, and thus did not impermissibly intrude on the

speaker’s First Amendment rights. Id.

Consistent with Zauderer, the Supreme Court and this Court have approved

compelled commercial disclosures where they are limited to straightforward

statements of fact about a product or service. See, e.g., Milavetz, Gallop &

Milavetz, P.A. v. United States, 559 U.S. 229, 233 (2010) (“We are a debt relief

agency. We help people file for bankruptcy relief under the Bankruptcy Code.”);

Am. Meat Inst., 2014 WL 3732697, at *9 (country-of-origin labeling requirement

for meat products); Novartis Corp. v. FTC, 223 F.3d 783, 785 (D.C. Cir. 2000)

(“Although Doan’s is an effective pain reliever, there is no evidence that Doan’s is

more effective than other pain relievers for back pain.”). As this Court recently

confirmed, “[t]o match Zauderer logically, the disclosure mandated must relate to

the good or service offered by the regulated party, a link that in Zauderer itself was

inherent in the facts, as the disclosure mandate related to such goods or services.”

Am. Meat Inst., 2014 WL 3732697, at *7 (emphasis added); see also id. (Zauderer

permits the Government to utilize a “disclosure mandate to achieve a goal of

informing consumers about a particular product trait”); id. at *14 n.1 (Kavanaugh,

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J., concurring in the judgment) (“To state what is probably obvious, the compelled
disclosure must be a disclosure about the product or service in question to be
justified . . . .”).

In contrast, this Court has rejected compelled commercial disclosures that
focus on a manufacturer’s past misconduct or that are otherwise designed to
embarrass, vilify, or denigrate the speaker. In Warner-Lambert Co. v. FTC, 562
F.2d 749 (D.C. Cir. 1977), for example, the Court upheld in part and rejected in
part a Federal Trade Commission order that required the manufacturer of Listerine
mouthwash to state in its advertisements that “Contrary to prior advertising,
Listerine will not help prevent colds or sore throats or lessen their severity.” Id. at

763. While the Court upheld the component of the statement that conveyed factual
information about the product—“Listerine will not help prevent colds . . . .”—it
rejected the confessional preamble “Contrary to prior advertising.” Id. The Court
held that the preamble was “not warranted” because there was no basis for
“humiliat[ing]” the advertiser and because the presentation of straightforward
factual information about the product would “necessarily attract the notice of
readers, viewers, and listeners.” Id. The Court reached this conclusion even
though the manufacturer had been “misrepresenting the efficacy of Listerine
against the common cold” for nearly 100 years and had been spending an average
of $10 million a year disseminating that false message. Id. at 752 & n.1. The
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required disclosure, the Court explained, “should not be more intrusive than

necessary to achieve fulfillment of the governmental interest.” Id. at 763 & n.68.5

More recently, in R.J. Reynolds Tobacco Co. v. FDA, 696 F.3d 1205 (D.C.

Cir. 2012), overruled on other grounds by Am. Meat Inst., 2014 WL 3732697, the

Court invalidated a Food and Drug Administration rule requiring the display of

graphic warnings on cigarette packaging. The Court held that the warnings were

not “purely factual and uncontroversial” because many of the images—which

included a man smoking through a tracheotomy hole—were “unabashed attempts

to evoke emotion (and perhaps embarrassment) and browbeat consumers into

quitting.” Id. at 1217. The images therefore fell well “outside the ambit of

Zauderer.” Id.6

5 In Warner-Lambert, the Court left open the possibility that an FTC order
intended to “humiliate the advertiser . . . might be called for in an egregious case.”
562 F.2d at 763. That dictum, however, does not survive Zauderer—which
subsequently limited compelled commercial disclosures to “purely factual and
uncontroversial information” about a product, 471 U.S. at 651—or this Court’s
decisions in R.J. Reynolds Tobacco Co. and National Association of
Manufacturers, discussed immediately below. In any event, the type of punitive
disclosure referenced in Warner-Lambert is foreclosed by RICO, which limits
courts to ordering relief that “prevent[s] and restrain[s]” future RICO violations, 18

U.S.C. § 1964(a), as well as by the Due Process Clause. See infra Parts II, III.
6 In R.J. Reynolds Tobacco Co., the Court distinguished the present litigation,
stating that the “FDA has not shown that the graphic warnings were designed to
correct any false or misleading claims made by cigarette manufacturers in the
past,” which are “matters [that] are the subject of a pending—and entirely

[Footnote continued on next page]

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The Court reached a similar result in National Association of Manufacturers

v. SEC, 748 F.3d 359 (D.C. Cir. 2014), overruled on other grounds by Am. Meat
Inst., 2014 WL 3732697, where the Court invalidated on First Amendment

grounds an SEC rule requiring certain companies to state on their websites that

their products were not “DRC conflict free,” a disclaimer that referred to the

ongoing civil war in the Democratic Republic of the Congo. Id. at 370. While

concluding that Zauderer was inapplicable because the disclaimer did not target

consumer deception—a position later rejected by the en banc Court in American

Meat Institute—the Court nevertheless explained that the required disclaimer could

not be upheld even if Zauderer did apply because it “convey[ed] moral

responsibility for the Congo war.” Id. at 371. “By compelling a[ ] [company] to

confess blood on its hands,” the disclaimer requirement “interfere[d] with th[e]

[Footnote continued from previous page]
separate—line of litigation against the Companies.” 696 F.3d at 1216 n.10 (citing
Philip Morris USA Inc., 566 F.3d 1095). The Court offered this distinction
because, in its view, the Zauderer standard was “limited to cases in which
disclosure requirements are ‘reasonably related to the State’s interest in preventing
deception of consumers’” and the graphic warnings were therefore subject to an
even more stringent standard of First Amendment scrutiny. Id. at 1213 (quoting
Zauderer, 471 U.S. at 651). That aspect of R.J. Reynolds Tobacco Co. was
recently overruled by the en banc Court in American Meat Institute. 2014 WL
3732697, at *3. But the Court’s separate holding in R.J. Reynolds Tobacco Co.
that the graphic warnings were not “purely factual and uncontroversial” under
Zauderer was unaffected by American Meat Institute and applies with equal force
to the district court’s corrective statements.

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exercise of the freedom of speech under the First Amendment.” Id.; see also
United States v. Nat’l Soc’y of Prof’l Eng’rs, 555 F.2d 978, 984 (D.C. Cir. 1977)
(holding that it violated the First Amendment to compel a Sherman Act defendant
to “state affirmatively” in its Code of Ethics that “it does not consider competitive
bidding to be unethical”).

Finally, and most recently, this Court reiterated these basic principles in
American Meat Institute. The Court explained that “to match Zauderer logically,
the disclosure mandated must relate to the good or service offered by the regulated
party, a link that in Zauderer itself was inherent in the facts, as the disclosure
mandate necessarily related to such goods or services.” 2014 WL 3732697, at *7.
Underscoring this point, Judge Kavanaugh explained in his concurring opinion that
a “compelled disclosure must be a disclosure about the product or service in
question to be justified under Central Hudson and Zauderer.” Id. at *14 n.1
(Kavanaugh, J., concurring in the judgment). This must be true because “[t]he
First Amendment does not tolerate a government effort to compel disclosures
unrelated to the product or service—for example, a compelled disclosure on all
food packages (not just cigarette packages) that cigarette smoking causes cancer.”
Id. Judge Kavanaugh concluded that the “majority opinion, as I read it, agrees
with that principle.” Id.

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Consistent with this settled First Amendment backdrop, this Court’s 2009
opinion directed the district court to craft corrective statements that are “confine[d]
. . . to ‘purely factual and uncontroversial information’ geared towards thwarting
prospective efforts by Defendants” to mislead the American public. Philip Morris
USA Inc., 566 F.3d at 1144 (quoting Zauderer, 471 U.S. at 651) (citation omitted).
The Court further emphasized that the validity of the corrective-statements remedy
would “rel[y] on the commercial nature of the speech it burdens,” which means
that the statements must pertain to the “efficacy, safety, and quality of the
[Defendants’] product[s].” Id. at 1143, 1144 (emphasis added).

Even a cursory examination of the district court’s statements makes clear
that—far from providing purely factual and uncontroversial information about
cigarettes—they require Defendants to make inflammatory, counterfactual, and
needlessly burdensome assertions about themselves and their past conduct. The
obvious effect is to undermine the credibility of anything that Defendants say on
any topic. Such self-vilifying compelled speech, however, is simply incompatible
with the First Amendment

B.
The District Court’s Corrective Statements Are Not “Purely
Factual And Uncontroversial” Within The Meaning Of
Zauderer.
The district court’s corrective statements are not “purely factual and
uncontroversial” because they would force Defendants to brand themselves as

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“Liars” based on their past conduct and make disclosures about their ongoing
conduct in the design and manufacturing of cigarettes, because they are premised
on factual findings rejected by numerous other judges and juries, and because
many aspects of the statements find no support in the district court’s findings of
fact.

1. The Confessional Preambles Are Improper.
The prefatory language that introduces each of the district court’s corrective
statements irreparably taints those statements as compelled confessions of past
wrongdoing by Defendants rather than purely uncontroversial information about
Defendants’ products.

The preamble to each statement requires Defendants to announce that a
“Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and Philip
Morris USA deliberately deceived the American public” about the health effects or
addictiveness of smoking, and is followed by the declaration, “Here is the truth.”
Defendants are therefore required to declare publicly that they have been found
liable for intentionally lying to and deceiving the American people. Rather than
informing the public about the health risks and addictiveness of cigarettes, that
language is designed to “convey[ ] . . . responsibility” for deceit and actual
deception, Nat’l Ass’n of Mfrs., 748 F.3d at 371, and to “evoke emotion” in
viewers and “embarrassment” in Defendants. R.J. Reynolds Tobacco Co., 696

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F.3d at 1217. The message that Defendants would be required to communicate to
viewers through these statements is clear and unmistakable: “We are liars.”

Indeed, the Government candidly acknowledged as much in the district
court, where it touted the emotional reactions of focus-group participants as a
reason to adopt statements that highlight Defendants’ past conduct. See D.E. 5891,
at 20 (“‘I was one of those people that switched to light. I don’t smoke now, for
the last year and half but it ticks me off that they did lie.’”) (emphasis added).7
Moreover, the public response to the district court’s statements confirms that they
are reasonably understood as requiring Defendants to “mak[e] clear that they had
lied in the past” and to make “admissions of guilt.” Gideon Resnick, Big
Tobacco’s Biggest Lies, Daily Beast (Jan. 20, 2014), www.thedailybeast.
com/articles/2014/01/20/big-tobacco-s-biggest-lies.html.8 Finally, any doubt on

7 See also, e.g., D.E. 5987-1 at 4 (regarding Government’s proposed Statement B:
“They basically manipulated you to keep buying them and keep smoking them and
it’s not easy to quit so basically we got you where we want you.”); id. at 14
(regarding Government’s proposed Statement D: “Just throws in your face all of
the lies and things that they did to keep people to smoke and to keep people
addicted.”).

8 See also, e.g., Tom Schoenberg, Tobacco Companies Must Admit They Lied on
Products, Ads, Bloomberg (Nov. 28, 2012), www.bloomberg.com/
news/2012-11-27/altria-group-corrective-ad-statements-decided-by-u-s-judge.html
(“U.S. tobacco companies . . . must . . . say[ ] they lied to the public about the
health hazards of smoking.”); BBC, Tobacco firms told to pay for adverts warning
of dangers (Mar. 22, 2013), www.bbc.com/news/business…

[Footnote continued on next page]

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this score is dispelled by the reactions of the Government’s focus groups to the

similar statements proposed by the Government.9 There is accordingly no credible

argument that the district court’s statements are limited to “purely factual and

uncontroversial” commercial disclosures.

Neither Zauderer nor this Court’s mandate permits the district court to force

Defendants to brand themselves—through speech compelled out of their own

mouths—liars and cheats. There is, quite simply, no other opinion in the federal

reporters that embraces such a startling understanding of Zauderer’s narrow

exception to the general prohibition on compelled speech.10

[Footnote continued from previous page]
(reporting that the district court’s corrective statements require Defendants to
“confess[ ]” and “admit[ ] they lied” and characterizing the statements as a
“campaign of self-criticism”).

9 See, e.g., D.E. 5875-1 ¶ 130 (In this statement “they are saying ‘we falsely
market these cigarettes.’ Just with that they are telling us, it’s all a scam.”); D.E.
5987-1 at 3 (regarding Government’s proposed Statement B: “[I]t’s saying that
they lied”); id. at 8 (regarding Government’s proposed Statement C: “[T]hey are
admitting to have lied”).

10 This Court’s unpublished decision in Daniel Chapter One v. FTC, 405 F.
App’x 505 (D.C. Cir. 2010), does not provide support for corrective statements
that require Defendants to make sweeping confessions of past wrongdoing and
reprehensible character. The Federal Trade Commission order upheld in that case
required the defendant to disseminate a letter to its customers informing them that
the Federal Trade Commission had found that its health claims regarding four
specific brands of dietary supplements were deceptive and providing accurate
public-health information about those products. In re Daniel Chapter One, 2010
WL 387917, at *4 (FTC Jan. 25, 2010). The Court held that this relief was

[Footnote continued on next page]

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2.
Numerous Other Aspects Of The Corrective
Statements Are Improper.
Nor is the confessional nature of the preamble the only flaw in the corrective
statements. In addition, they (a) contain several assertions that require Defendants
to vilify themselves based on both past and ongoing conduct in their design and
production of cigarettes, (b) compel Defendants to embrace a characterization of
their past conduct that conflicts with the findings of other judges and juries, and (c)
force Defendants to make statements that are not supported by the district court’s

findings of fact.
a. The Corrective Statements
Language That Forces DefendDenigrate Themselves.
Contain
ants To
Additional
Shame And

The confessional nature of the corrective statements—which is clear from

the prefatory language standing alone—is compounded by additional language

within several of the statements that targets Defendants’ past and current conduct.

Statement B, for example, requires Defendants to state that “[c]igarette

companies intentionally designed cigarettes with enough nicotine to create and

[Footnote continued from previous page]
“carefully tailored to protect [the defendant’s] clientele from deception.” Daniel
Chapter One, 405 F. App’x at 506. The district court’s corrective statements, in
contrast, require Defendants to make an undifferentiated confession of misconduct
in connection with every statement they have made regarding the health effects and
addictiveness of smoking and will be indiscriminately disseminated to tens of
millions of Americans without regard to whether they have ever purchased
Defendants’ products or were even potentially misled by their alleged deception.

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sustain addition.” Statement D likewise states that the “Defendant tobacco
companies intentionally designed cigarettes to make them more addictive.” It
further requires Defendants to confess that they supposedly continue to “control
the impact and delivery of nicotine in many ways, including designing filters and
selecting cigarette paper to maximize the ingestion of nicotine, adding ammonia to
make the cigarette taste less harsh, and controlling the physical and chemical
make-up of the tobacco blend.” These statements focus principally on Defendants’
conduct—rather than on their products—and will inevitably engender widespread
public ill-will and anger against Defendants for purportedly engaging in “nicotine
manipulation” to keep smokers addicted. Cf. Bullock v. Philip Morris USA Inc.,
198 Cal. App. 4th 543, 562 (2011) (the “manipulation of the narcotic effect of
nicotine in cigarettes . . . weighs in favor of high reprehensibility”).

b.
The Corrective Statements’ Characterization Of
Defendants’ Prior Conduct Conflicts With The
Conclusions Of Other Fact-Finders.
Numerous judges and juries have reached conclusions that contradict the
corrective statements’ characterization of Defendants’ prior conduct. Indeed, this
Court itself expressly stated that it “may not have reached all the same conclusions
as the district court” had it been the factfinder and not bound to apply the
deferential clearly-erroneous standard to the district court’s findings on appeal.
See Philip Morris USA Inc., 566 F.3d at 1134. The conflict between the corrective

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statements and the findings rendered in other cases all but forecloses a

determination that the statements are “purely factual and uncontroversial.”

A substantial number of judges and juries have rejected allegations of fraud

against Defendants identical to those advanced by the Government in this case.

For example, Defendants have prevailed in a number of trials involving allegations

that they concealed the health risks of smoking. See, e.g., In re Tobacco Litig.: C.

Blankenship/J. McCune, No. 2:97-0204 (W. Va. Cir. Ct.); Hall v. R.J. Reynolds

Tobacco Co., No. 00-1061 (Fla. Cir. Ct.); Tune v. Philip Morris Inc., No. 97-4678

(Fla. Cir. Ct.). In addition, juries have refused to impose any liability against

Defendants in at least eight cases involving alleged fraud relating to low tar

cigarettes. See, e.g., Welch v. Brown & Williamson Tobacco Corp., No. 00-CV

209292 (Mo. Cir. Ct.); Inzerilla v. Am. Tobacco Co., No. 011754/96 (N.Y. Sup.

Ct.); Lucier v. Philip Morris Inc., No. 02AS01909 (Cal. Super. Ct.).

Notably, at least one of those cases involved federal RICO claims identical

in many respects to the claims in this case. In Blue Cross & Blue Shield of New

Jersey Inc. v. Philip Morris, Inc., No. 98-cv-3287 (E.D.N.Y.), the largest health

insurer in New York brought federal RICO claims (along with a variety of state-

law claims) that accused tobacco companies of defrauding the American public

regarding the health effects of smoking, including through making misleading

statements about the health effects of low tar cigarettes. The trial lasted seventy

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five days and involved many of the same witnesses as this case. Yet, the Blue
Cross jury reached the opposite conclusion from the district court and returned a
verdict in favor of the defendants on the RICO claims. See also Iron Workers
Local Union No. 17 Ins. Fund v. Philip Morris, Inc., No. 1:97-cv-1422 (N.D.
Ohio) (verdict in favor of the defendants in a state-law RICO claim brought by a
class of union trust funds).11

As a result of the inconsistency between the findings of the district court in
this case and those of other fact-finders, every court that has considered the
question has refused to give collateral-estoppel effect to the district court’s findings
in other litigation. See, e.g., Pooshs v. Philip Morris USA Inc., 904 F. Supp. 2d
1009, 1034 (N.D. Cal. 2012) (“It appears that every court that has been asked to
apply offensive nonmutual issue preclusion to the findings in the DOJ case has
refused to do so. This includes state courts in Massachusetts, Missouri, Maine, and
Minnesota, and federal district courts in California, New York, and Arizona.”);
Schwab v. Philip Morris USA, Inc., 449 F. Supp. 2d 992, 1079 (E.D.N.Y. 2006)

11 In addition to its defense verdict on the plaintiffs’ RICO claims, the Blue
Cross jury returned a verdict in favor of the plaintiffs on a separate state-law claim,
although at a fraction of the damages sought by the plaintiffs. That plaintiffs’
verdict was subsequently overturned on appeal, and judgment was entered in favor
of the defendants on the entirety of the plaintiffs’ claims. See Empire
Healthchoice, Inc. v. Philip Morris USA Inc., 393 F.3d 312 (2d Cir. 2004) (per
curiam).

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(“[D]efendants have won so many of the tobacco cases” that applying “conclusive
effect to” the district court’s findings would be “inappropriate.”), rev’d on other
grounds sub nom., McLaughlin v. Am. Tobacco Co., 522 F.3d 215 (2d Cir. 2008).12

As these decisions make clear, the district court’s findings regarding
Defendants’ past conduct are subject to reasonable dispute. But the unqualified
pronouncement in the corrective statements that “[a] Federal Court has ruled that
[Defendants] deceived the American public” will communicate to the public that
the district court’s findings regarding Defendants’ prior conduct are unequivocally
true. That overbroad and misleading message is not “purely factual and
uncontroversial.” The First Amendment does not permit the district court to
compel Defendants to make corrective statements that portray controversial,
sharply contested characterizations of their prior conduct as orthodoxy—at the
expense of denigrating their own reputations, potentially misleading the American

12 See also, e.g., Shaffer v. R.J. Reynolds Tobacco Co., 860 F. Supp. 2d 991, 996

(D. Ariz. 2012) (“The inconsistent cases in this area of tobacco litigation
. . . indicate that it would be unfair to give preclusive effect to the findings in the
DOJ Case to establish liability in this case.”); City of St. Louis v. Am. Tobacco Co.,
No. 22982-09652-01, 2010 WL 2917188, slip op. at 17 (Mo. Cir. Ct. June 2,
2010); Aspinall v. Philip Morris Cos., No. 98-6002, 2012 WL 1063342, slip op. at
12 (Mass. Super. Ct. Mar. 13, 2012); Craft v. Philip Morris Cos., No. 002-0040602,
2010 WL 8523193, slip op. at 9 (Mo. Cir. Ct. Dec. 28, 2010); Curtis v. Altria
Grp., Inc., No. 27-cv-01-18042, 2009 WL 5820516, slip op. at 8 (Minn. Dist. Ct.
Oct. 14, 2009), aff’d in relevant part, 792 N.W.2d 836, 853-55 (Minn. Ct. App.
2010).
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public, and tainting the jury pools that will decide these disputed issues of fact in
future cases against Defendants. See Entm’t Software Ass’n v. Blagojevich, 469
F.3d 641, 652-53 (7th Cir. 2006) (invalidating a state law that required video-game
retailers to post signs and display brochures explaining video-game rating
standards because the law required retailers “to communicate that any video games
in the store can be properly judged pursuant to the standards,” which was an
assertion that remained subject to dispute).

c.
Many Aspects Of The Corrective Statements Are Not
Supported By The District Court’s Findings Of Fact.
Defendants acknowledge that certain portions of the district court’s
corrective statements provide factual information about cigarettes. See, e.g., JA
158 (“Smoking causes heart disease, emphysema, acute myeloid leukemia” and a
number of types of cancer.); JA 159 (“All cigarettes cause cancer, lung disease,
heart attacks, and premature death.”). Other portions of the statements, however,
are far from “indisputably accurate” and would create an unacceptable risk of
misleading the American public. R.J. Reynolds Tobacco Co., 696 F.3d at 1216
(internal quotation marks omitted).

Most importantly, the confessional preamble in each statement incorrectly
states that the district court found that Defendants “deceived the American public.”
Actual deception was not at issue in this case, where the district court found that
Defendants intentionally made false statements on various topics—and therefore

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committed RICO predicate acts of mail and wire fraud—but made no finding as to
whether any member of the public actually was deceived by those statements. As
the district court explained in its Final Judgment and Remedial Order, Defendants
“may not escape liability for their scheme to defraud by claiming that the public
was not injured by their misconduct” because, “[t]o establish a mail or wire fraud
violation, a plaintiff is not required to prove that . . . the wrongdoer succeeded in
deceiving or defrauding the intended victim.” Philip Morris USA Inc., 449 F.
Supp. 2d at 900 n.72 (emphasis added). Accordingly, the factual findings cited by
the district court to substantiate that Defendants “deceived the American public,”
JA 216, pertain to the alleged inaccuracy of Defendants’ public statements about
smoking and health—not to whether any member of the public was actually
“deceived” by Defendants. See, e.g., JA 216 n.1 (citing finding that “Defendants
have publicly denied, distorted and minimized the hazards of smoking for
decades”) (internal quotation marks omitted). This factual error is particularly
problematic and prejudicial because the question whether Defendants deceived the
public is a disputed factual issue in every fraud case brought against Defendants by
an individual smoker. If the corrective statements are not modified, that question
will be decided in future cases by jurors exposed on countless occasions to the
erroneous assertion in the corrective statements that a federal court has found that
Defendants in fact “deceived the American public.”

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Moreover, the preamble to each corrective statement lacks essential context
and explanation. The “Here is the truth” clause implies that Defendants denied the
“truth” of all that follows. But that implication finds no support in the district
court’s factual findings. For example, the district court supports the first bullet
point in Statement A—“Smoking kills, on average, 1200 Americans. Every
day”—with evidence substantiating that statement, not with evidence that
Defendants ever specifically denied that claim. JA 216 n.3. Nor did the district
court make any findings regarding public beliefs on the subject matter of the
bulleted statements, and it therefore had no basis to conclude that the content of the
corrective statements is in fact related to claimed misimpressions held by the
public regarding cigarettes or smoking and health.

The preamble to the district court’s corrective statements also fails to
identify the time period covered by the district court’s findings. Some of the
conduct on which the district court based those findings occurred as long as six
decades ago, but the corrective statements do not even hint at that fact. Instead, the
implication of the corrective statements will be the opposite—that Defendants still,
at the time of the statements’ publication, are engaged in ongoing deceptions,
despite the fact that all Defendants, for more than a decade, have unequivocally
declared that cigarette smoking causes disease and is addictive. See, e.g., Philip
Morris USA Inc., Smoking and Health Issues, www.philipmorrisusa.com/

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en/cms/Products/Cigarettes/Health_Issues/default.aspx?src=top_nav; R.J.

Reynolds Tobacco Co., Guiding Principles and Beliefs, www.rjrt.com/

prinbeliefs.aspx; Lorillard Tobacco Co., Smoking and Health, www.lorillard.

com/responsibility/smoking-and-health/.

Several of the district court’s bullet points suffer from additional

inaccuracies. Statement B, for example, asserts that Defendants “intentionally

designed cigarettes with enough nicotine to create and sustain addition.”

Statement D likewise contends that Defendants “intentionally designed cigarettes

to make them more addictive” and “maximize the ingestion of nicotine.” These

statements are susceptible to substantial misinterpretation because, even without

any adjustments made by Defendants, all cigarettes would be addictive, as the

Government and Intervenors have insisted and as the “lights” corrective statement

(Statement C) effectively asserts. See JA 154 (Government’s proposed Statement

B: “Smoking is very addictive.”); see also JA 102. Moreover, the district court
never found that Defendants intended to “maximize the ingestion of nicotine.” In
the finding that the district court cited to support that statement, the court merely
concluded that Defendants used “cigarette design features . . . to control nicotine
delivery.” JA 221 n.37 (emphasis added; internal quotation marks omitted). In
fact, the court found elsewhere that “Defendants’ control of nicotine has not
focused simply on delivering as much nicotine as possible” and that Defendants
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have employed various design features—such as filters and porous paper—that
“reduc[e] tar and nicotine yields.” Philip Morris USA Inc., 449 F. Supp. 2d at 337,
391 (emphases added); see also id. at 310 (finding that Defendants employed
“product design techniques that would assure the delivery of the minimum dose of
nicotine that provides smokers with sufficient ‘impact’ and ‘satisfaction’”)
(emphasis added).

Statement D also asserts that “cigarette companies” . . . add[ ] ammonia to
make the cigarette taste less harsh.” A reasonable consumer would likely
understand this to mean that all cigarette companies add ammonia to all
cigarettes—a conclusion that would be indisputably false. Lorillard, for example,
adds ammonia to none of its cigarettes. The district court nevertheless maintained
that the statement accurately “specifies that adding ammonia is only one of ‘many
ways’ in which cigarette companies control the impact and delivery of nicotine.”
JA 190. But the fact that adding ammonia is one of several methods allegedly used
by Defendants to control the impact of nicotine does not remotely detract from the
statement’s unmistakable and erroneous message that all cigarette companies
engage in that practice, among others, with respect to all cigarettes.

Finally, the second bullet point in Statement C contains at least two distinct
falsehoods. First, the statement is not factual when it says that “‘Low tar’ and
filtered cigarette smokers inhale essentially the same amount of tar and nicotine as

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they would from regular cigarettes.” The statement incorrectly suggests that
“regular” cigarettes are unfiltered, and, in turn, implies that filtered cigarettes are
no safer than unfiltered cigarettes. That conclusion is at odds with the district
court’s own finding that “the shift from unfiltered to filtered cigarettes” played a
role in reducing the risk of lung cancer. Philip Morris USA Inc., 449 F. Supp. 2d
at 448.

Second, Statement C incorrectly assumes that compensation—an
unconscious phenomenon through which some smokers who switch to lower-yield
cigarettes may alter their smoking behavior and thereby obtain the same amount of
tar and nicotine as they did from their higher-yield brands—is uniform and
complete across smokers. This statement also conflicts with portions of the district
court’s own findings. The district court reviewed a number of studies addressing
smoker compensation and found that the studies “as a whole suggested that
compensation is not complete but substantial.” Philip Morris USA Inc., 449 F.
Supp. 2d at 444; see also id. at 442 (“The mean estimate of the extent of
compensation in [a 1999] article was about 50-60%.”). The court nonetheless
crafted a corrective statement that asserts that smokers of all types of cigarettes
“inhale essentially the same amount of tar and nicotine”—an assertion contrary to
the court’s own findings.

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* * *

These various errors—some bigger than others—underscore how far the
corrective statements exceed the limited bounds of Zauderer. That decision
established a narrow exception to the First Amendment’s prohibition on compelled
speech that applies only to “purely factual and uncontroversial” information about
a product. The confessional, inflammatory, and factually inaccurate corrective
statements crafted by the district court simply cannot be squared with this narrow
exception.

C.
The District Court’s Corrective Statements Are Unduly
Burdensome.
The district court’s corrective statements also violate Zauderer’s
requirements for compelled commercial disclosures because they are “unduly
burdensome.” 471 U.S. at 651. By modifying the statements’ language to focus
on Defendants’ products and eliminating the redundant channels of dissemination,
the district court could prevent and restrain future RICO violations without
imposing unwarranted burdens on their First Amendment rights.

The First Amendment burdens on Defendants would be drastically
diminished if the corrective statements were modified to provide factual
information about the health effects and addictiveness of smoking, rather than
inflammatory and inaccurate characterizations of Defendants’ conduct. Forcing
Defendants to disparage and condemn themselves is wholly unnecessary to attain

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the court’s anti-deception goal because statements conveying objective and

unbiased public-health information would be sufficient, standing alone, to prevent

Defendants from making contrary assertions in the future. See Philip Morris USA

Inc., 566 F.3d at 1140 (“Requiring 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.”). Indeed, the

Government’s own expert report submitted in support of its proposed corrective

statements indicated that prefatory language attributing the statements to the

Surgeon General and the National Cancer Institute attracted almost as much viewer

attention, and was seen as being nearly as credible, as confessional prefatory

language. D.E. 5875-1 ¶¶ 217-18. Accordingly, there is simply no basis for the

district court’s confessional preambles instead of an approach, proposed by several

Defendants in their submissions below, that attributes the content of the statements

to the Surgeon General or the National Cancer Institute. See JA 69-73, 77-80.

It was equally unnecessary for the district court to require that Defendants

disseminate the corrective statements through multiple, overlapping channels of

communication. The district court’s orders require that Defendants (1) purchase

space to publish each statement in separate Sunday editions of the print versions

and on the Internet homepages of more than 45 newspapers with a combined print

publication of approximately 11.6 million, (2) run the statements five times a week

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during primetime television for a total of 260 television spots, (3) display the
statements prominently on their corporate and branded websites, possibly in
perpetuity, and (4) attach the statements to nearly 2.7 billion packages of
cigarettes.13

In light of these overlapping distribution channels, members of the public
will be confronted with the corrective statements dozens of times in multiple
formats—when they read the Sunday newspaper, watch their favorite primetime
show, surf the Internet, or pick up a pack of cigarettes. (This estimate assumes that
the district court will not resurrect the point-of-sale requirement, which would lead
to substantially more redundant exposure, especially if the district court adopts the
Government’s most recent proposals for expanding that remedy. See D.E. 6100, at
5 n.13.) These needlessly duplicative distribution channels exacerbate the
significant First Amendment burdens imposed by the corrective statements. A
more tailored distribution plan limited to, for example, print editions of Sunday

13 This estimate is derived by taking Defendants’ cumulative cigarette production
in 2013, dividing that production into packs, and then calculating that 11.54% of
annual production (six weeks’ worth) will be subject to the onsert requirement for
each of two calendar years. Defendants’ 2013 cigarette production is available in
Altria Group, Inc.’s and Lorillard, Inc.’s 2013 10-K forms (available at http://
www.sec.gov/Archives/edga…
htm and www.sec.gov/Archives/edga…
000119312514062721/d649269d10k.htm, respectively) and, for RJRT, in a
declaration submitted in the district court. See D.E. 6097-2 ¶ 1.

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newspapers and Internet homepages of such papers would be equally effective at
preventing and restraining Defendants from future RICO violations because those
statements would reach tens of millions of smokers and nonsmokers alike and
make it practically impossible for Defendants to turn around and dispute the
statements’ public-health message in other settings—which, after all, is the sole
basis upon which this Court allowed the corrective-statements remedy. See Philip
Morris USA Inc., 566 F.3d at 1140 (“Defendants will be impaired in making false
and misleading assurances about, for instance, smoking-related diseases . . . if they
must at the same time communicate the opposite, truthful message about these
matters to consumers.”). At most, nothing more than print/online newspapers and
onserts is necessary.

Because there is no need for redundant statements in all of the ordered
media, as opposed to some subset, the Government cannot shoulder its burden of
demonstrating that the myriad combinations of less-restrictive alternatives are
insufficient to further its interest in preventing future RICO violations.

D.
Because The District Court’s Corrective Statements Do Not
Satisfy Zauderer’s Commercial-Disclosure Standard, They
Violate The First Amendment.
The controversial and nonfactual features of the district court’s corrective
statements place them well outside the scope of this Court’s 2009 mandate, which
directed the district court to “confine the statements to ‘purely factual and

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uncontroversial information.’” Philip Morris USA Inc., 566 F.3d at 1144 (quoting
Zauderer, 471 U.S. at 651). The Court could vacate the district court’s corrective-
statements order on that basis alone. In addition, the inflammatory and inaccurate
aspects of the statements—together with the undue burdens they impose on
Defendants—mean that the statements violate the First Amendment because they
do not fall within Zauderer’s narrow safe harbor for compelled commercial
disclosures. The Court should also reject the corrective statements on this
constitutional ground.

In American Meat Institute, this Court indicated that Zauderer can be
understood as an application of the Central Hudson commercial-speech
framework. Where Zauderer’s requirements are met—i.e., the compelled
commercial disclosure is “purely factual and uncontroversial” and not unduly
burdensome—then the disclosure is consistent with Central Hudson’s commercial-
speech standard and the First Amendment. See Am. Meat Inst., 2014 WL 3732697,
at *8 (“[O]ne could think of Zauderer largely as an application of Central Hudson,
where several of Central Hudson’s elements have already been established.”)
(internal quotation marks omitted); see also id. at *6 (“Zauderer’s method of
evaluating fit differs in wording [from the Central Hudson test], though perhaps
not significantly in substance, at least on these facts.”). Conversely, where a
compelled commercial disclosure does not satisfy the requirements of Zauderer—

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i.e., it is nonfactual, controversial, or unduly burdensome—then the disclosure also

fails to meet the requirements of Central Hudson and therefore violates the First

Amendment. Because the district court’s corrective statements are inaccurate,

inflammatory, and needlessly onerous—and thus fall well outside the bounds of

Zauderer’s standard for compelled commercial disclosures—they are necessarily

unconstitutional under Central Hudson.

Even if a First Amendment inquiry separate from Zauderer were required,

however, the Government could not meet its burden with respect to the district

court’s corrective statements. As an initial matter, as discussed at length above,

the corrective statements do not even qualify for review under Central Hudson’s

commercial speech framework because they predominantly target Defendants’

conduct, rather than providing information about the “efficacy, safety, and quality

of [their] product.” Philip Morris USA Inc., 566 F.3d at 1143 (emphasis added).

The Court should therefore subject the corrective statements to the most “exacting”

standard of First Amendment review—strict scrutiny—because they infringe upon

Defendants’ basic right to make “the choice of what not to say.” Pac. Gas & Elec.

Co. v. Pub. Utils. Comm’n, 475 U.S. 1, 16 (1986) (plurality opinion); see also

Wooley, 430 U.S. at 714; Turner Broad. Sys., Inc., 512 U.S. at 642. The corrective

statements cannot conceivably satisfy that stringent standard.

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In any event, the district court’s corrective statements are unconstitutional
even if Central Hudson applies. Under Central Hudson, the Government bears the
burden of proving that the speech restraints are narrowly tailored to further a
substantial governmental interest. See, e.g., Bolger v. Youngs Drug Prods. Corp.,
463 U.S. 60, 71 n.20 (1983) (“The party seeking to uphold a restriction on
commercial speech carries the burden of justifying it.”). Thus, to constitute a
permissible restriction on commercial speech, the Government must demonstrate,
through record evidence, that a substantial government interest is “directly and
materially advanced by the restriction” and that “the restriction is narrowly
tailored.” Nat’l Ass’n of Mfrs., 748 F.3d at 372. The district court’s corrective
statements—which require Defendants to vilify, humiliate, and shame themselves
to the American public based on the district court’s characterization of their past
conduct and which also contain numerous factual inaccuracies—are not narrowly
tailored to advance the Government’s interest in “preventing Defendants from
committing future RICO violations.” Philip Morris USA Inc., 566 F.3d at 1144.

The confessional, conduct-focused elements of the district court’s corrective
statements are wholly unnecessary to prevent and restrain Defendants from
deceiving the American public about the health risks and addictiveness of
smoking. The district court made no effort to determine the least burdensome
method of achieving this goal, which could be accomplished more effectively—

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and with far fewer burdens on Defendants’ First Amendment rights—by
mandating the dissemination of public-health information about cigarettes. Nor
did the district court or the Government point to any record evidence that the
corrective statements are “narrowly tailored” to “directly and materially
advance[ ]” the Government’s interest in preventing future RICO violations. Nat’l
Ass’n of Mfrs., 748 F.3d at 372; see also Am. Meat Inst., 2014 WL 3732697, at *7
(“When the Supreme Court has analyzed Central Hudson’s ‘directly advance’
requirement, it has commonly required evidence of a measure’s effectiveness.”)
(citing Edenfield v. Fane, 507 U.S. 761, 770-71 (1993)). Indeed, the record
contains numerous alternatives, proposed by Defendants below, see JA 54, 64, 67,
76, that are equally as effective yet impose far less severe burdens on Defendants’
speech. “[T]he availability of these options, . . . which could advance the
Government’s asserted interest in a manner less intrusive to [Defendants’] First
Amendment rights, indicates that [the Government’s preferred approach] is more
extensive than necessary” and therefore unconstitutional. Rubin v. Coors Brewing
Co., 514 U.S. 476, 491 (1995); see also City of Cincinnati v. Discovery Network,
Inc., 507 U.S. 410, 417 n.13 (1993) (“[I]f there are numerous and obvious less-
burdensome alternatives to the restriction on commercial speech, that is certainly a
relevant consideration in determining whether the ‘fit’ between ends and means is
reasonable.”); Nat’l Ass’n of Mfrs., 748 F.3d at 373 (same).

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E.
The District Court’s First Amendment Analysis Is
Fundamentally Flawed.
According to the district court, its corrective statements are “purely factual
and uncontroversial,” and consistent with both this Court’s mandate and the First
Amendment. Its analysis is flawed in multiple respects.

The district court reasoned that its corrective statements are uncontroversial
because, unlike the graphic-warning labels invalidated by this Court in R.J.
Reynolds Tobacco Co., they are not images but rather “simple declarative
sentences and basic, uncomplicated language.” JA 193. The statements’ “simple”
and “uncomplicated” approach, however, only amplifies their vilifying, incendiary
message. No one reading the prefatory language—“[a] Federal Court has ruled
that [Defendants] deliberately deceived the American public”—would fail to
appreciate the clear message being conveyed: Defendants are liars. Indeed, it is
often the most simple messages that are the most powerful and persuasive, and, in
turn, the most constitutionally problematic. See, e.g., Warner-Lambert Co., 562
F.2d at 763 (“Contrary to prior advertising, . . . .”).

The district court also rejected the argument that the inconsistent factual
findings of other judges and juries render its corrective statements controversial
because, the district court emphasized, its findings “are the law of this case.”
JA 197. But the fact that Defendants are bound by the district court’s findings for
purposes of this case does not transform those findings into universal,

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incontrovertible truth for all other purposes—including public discourse outside
the courtroom and fact-finding in other cases. It is for that reason that every court
that has considered the issue has declined to give collateral-estoppel effect to the
district court’s findings in other proceedings. See City of St. Louis, 2010 WL
2917188, slip op. at 17 (“there is absolutely no doubt that application of offensive
collateral estoppel in this case would be glaringly inconsistent with a large number
of prior jury verdicts in many cases around this country where identical (or else
nearly-identical) issues were litigated”). Because numerous finders of fact have
reached conclusions that are fundamentally at odds with those of the district court,
its findings cannot plausibly be deemed “purely . . . uncontroversial.”

II.
The District Court’s Corrective Statements Violate RICO And
This Court’s Mandate.
In addition to denying Defendants their First Amendment rights, the district
court’s corrective statements violate RICO—and this Court’s 2009 mandate—by
forcing Defendants to shame and humiliate themselves based on their alleged prior
conduct, rather than attempting to “thwart[ ] prospective efforts by Defendants” to
mislead consumers. Philip Morris USA Inc., 566 F.3d at 1144.

Under Section 1964(a) of RICO, a district court has jurisdiction “to prevent
and restrain violations of” the statute. 18 U.S.C. § 1964(a). Throughout this
litigation, the Court has made clear that the district court’s authority under this
provision “is limited to forward-looking remedies that are aimed at future

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violations” of RICO. Disgorgement Opinion, 396 F.3d at 1198 (emphases added).
The Court therefore held that Section 1964(a) does not authorize disgorgement
because that remedy is “both aimed at and measured by past conduct.” Id.

Applying those principles in its 2009 opinion, the Court concluded that the
district court possessed jurisdiction to issue corrective statements that “[r]equire[d]
Defendants to reveal the previously hidden truth about their products” because that
remedy would “prevent and restrain them from disseminating false and misleading
statements . . . in the future.” Philip Morris USA Inc., 566 F.3d at 1140. The
Court explained that “Defendants will be impaired in making false and misleading
assurances about, for instance, smoking-related diseases or the addictiveness of
nicotine . . . if they must at the same time communicate the opposite, truthful
message about these matters to consumers.” Id.; see also id. at 1144 (reiterating
that the corrective statements must be “geared towards thwarting prospective
efforts by Defendants to either directly mislead consumers or capitalize on their
prior deceptions by continuing to advertise in a manner that builds on consumers’
existing misperceptions”) (emphasis added).

The district court’s corrective statements, however, are not the “truthful
message[s]” about “smoking-related diseases or the addictiveness of nicotine” that
this Court authorized as appropriate exercises of the district court’s jurisdiction
under Section 1964(a). As noted previously, Defendants stand ready to make those

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statements. Rather, the district court’s inflammatory, confessional statements
serve primarily to force Defendants to vilify and shame themselves for past
wrongdoing, not to “prevent and restrain” them from engaging in future RICO
violations.

The district court’s jurisdictional overreach is most apparent in the prefatory
language requiring Defendants to announce that they were found to have
“deliberately deceived the American public”; the “Here is the truth” language; and
the bulletpoints in Statements B and D that address Defendants’ past acts of
alleged nicotine manipulation. See supra section I.B. These aspects of the
corrective statements are thoroughly backward-looking. They focus on the past
RICO violations found by the district court, rather than on “prevent[ing] and
restrain[ing]” future RICO violations by “[r]equiring Defendants to reveal the
previously hidden truth about their products.” Philip Morris USA Inc., 566 F.3d at
1140.

Statement C is likewise entirely backward-looking. It would require
Defendants to state that they “deliberately deceived the American public by falsely
selling and advertising low tar and light cigarettes.” JA 159. The Family Smoking
Prevention and Tobacco Control Act of 2009, Pub. L. No. 111-31, 123 Stat. 1776,
however, now prohibits Defendants from using descriptors such as “low tar” and
“light” (in the absence of Food and Drug Administration approval). Statement C

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therefore cannot possibly “prevent and restrain” future RICO violations. Indeed,
the statement would inevitably confuse consumers and undermine efforts to
communicate public-health information about smoking by reintroducing
terminology that Defendants no longer are permitted to use.

The fact that compelling Defendants to engage in such public self-
condemnation may make it unlikely that anyone would ever believe anything
Defendants have to say—on any subject—is insufficient to bring the corrective
statements within the scope of Section 1964(a). That provision does not authorize
remedies that, by mandating public self-vilification or otherwise focusing on
Defendants’ past misconduct, are aimed at broadly impairing Defendants’ general
credibility and reputation. The Court made this clear when it rejected the
Government’s cross-appeal from the denial of its proposed counter-marketing
remedy. In so doing, the Court explained that a remedy “may not be justified
simply on the ground that whatever hurts a civil RICO violator necessarily serves
to prevent and restrain future RICO violations.” Philip Morris USA Inc., 566 F.3d
at 1148 (internal quotation marks omitted). Nor is it sufficient that the “proposed
remedies attempt to prevent and restrain future effects of past RICO violations.”
Id. at 1147. Section 1964(a) instead permits a targeted remedy that requires
Defendants “to reveal the previously hidden truth about their products” to prevent
future RICO violations. Id. at 1140. The corrective statements’ unprecedented

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requirement that Defendants publicly disparage their own credibility and reputation
plainly exceeds that narrow statutory authorization.

III. The District Court’s Corrective Statements Violate Due Process.
The district court’s corrective statements also violate Defendants’ due

process rights because their requirement that Defendants engage in public shaming

and self-vilification constitutes a criminal sanction improperly imposed in a civil

setting.

“[C]riminal penalties may not be imposed on someone who has not been

afforded the protections that the Constitution requires of such criminal

proceedings.” Hicks v. Reiock, 485 U.S. 624, 632 (1988). Constitutionally

mandated procedural protections therefore forbid the imposition in a civil case of a

sanction “so punitive that the proceeding must reasonably be considered criminal.”

Austin v. United States, 509 U.S. 602, 608 n.4 (1993).

The district court disavowed any punitive purpose behind its corrective

statements. JA 213. But, if that disclaimer were dispositive, courts would be free

to impose punitive sanctions unencumbered by the Constitution’s procedural

guarantees for criminal proceedings simply by declaring a remedy to be civil rather

than criminal. The language of the corrective statements—which forces

Defendants to brand themselves as “Liars” and publicly shame themselves for their

past conduct—leaves no doubt that the corrective statements in fact serve

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principally to denigrate and punish Defendants, rather than to prevent and restrain
future wrongdoing. See Cobell v. Norton, 334 F.3d 1128, 1146-47 (D.C. Cir.
2003) (a sanction “intended to punish” one’s “past failure” is “criminal in nature”).
The type of public shaming mandated by the corrective statements can be imposed,
if at all, only in the criminal setting where Defendants would be afforded
procedural protections not provided in the civil context. Cf. United States v.
Gementera, 379 F.3d 596 (9th Cir. 2004) (upholding a requirement that a
convicted criminal, as a condition of supervised release, hold a placard outside a
post office stating “I stole mail. This is my punishment.”).

Moreover, the collateral consequences of this government-mandated public
shaming go far beyond discrediting Defendants with consumers deciding whether
to purchase Defendants’ lawful products. By requiring Defendants to admit past
wrongdoing on issues that are the subject of extensive litigation in cases pending
throughout the country, and to state as “the truth” matters that they will be
contesting in that litigation, the corrective statements will inevitably taint the jury
pools that will be deciding those cases and limit Defendants’ ability to credibly
contest various issues at trial. Indeed, plaintiffs in other cases might invoke the
statements in an effort to foreclose Defendants from making legal arguments
inconsistent with the statements or as admissible evidence under Federal Rule of
Evidence 801(d)(2). These concerns are most acute in connection with the

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language requiring Defendants to admit that they falsely marketed low tar and light
cigarettes and manipulate nicotine levels to create and sustain addiction. These
issues are central to Defendants’ arguments in cases seeking billions of dollars in
damages based on the allegedly fraudulent marketing of “light” cigarettes. The
district court was required to afford Defendants the full panoply of rights that the
Constitution provides to criminal defendants before issuing a remedy with such
potentially far-reaching collateral consequences.

CONCLUSION

For the foregoing reasons, this Court should vacate the district court’s orders

setting forth the content and scope of the corrective statements, and direct the

district court to craft corrective statements that are consistent with the requirements

imposed by this Court’s prior mandate, the Constitution, and RICO.

Dated: September 29, 2014 Respectfully submitted,

/s/ Miguel A. Estrada
Noel J. Francisco Miguel A. Estrada
Robert F. McDermott Amir C. Tayrani
Peter J. Biersteker Carlo D. Marchioli
JONES DAY GIBSON, DUNN & CRUTCHER LLP
51 Louisiana Avenue, N.W. 1050 Connecticut Avenue, N.W.
Washington, D.C. 20001-2113 Washington, D.C. 20036
Telephone: (202) 879-3939 Telephone: (202) 955-8257
Facsimile: (202) 626-1700 Facsimile: (202) 530-9616

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Geoffrey K. Beach

R. Michael Leonard
WOMBLE CARLYLE SANDRIDGE &
RICE, PLLC
One West Fourth Street
Winston-Salem, NC 27101
Telephone: (336) 721-3721
Facsimile: (336) 733-8389
Counsel for Appellant

R.J. Reynolds Tobacco Company
Michael B. Minton
Bruce D. Ryder

A. Elizabeth Blackwell
THOMPSON COBURN LLP
One U.S. Bank Plaza, Suite 3500
St. Louis, MO 63101-1693
Telephone: (314) 552-6000
Facsimile: (314) 552-7597
Counsel for Appellant
Lorillard Tobacco Company

Thomas J. Frederick
WINSTON & STRAWN LLP
35 West Wacker Drive
Chicago, IL 60601-9703
Telephone: (312) 558-6700
Facsimile: (312) 558-5700

Counsel for Appellants Philip Morris
USA Inc. and Altria Group, Inc.

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CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitation established by Federal
Rule of Appellate Procedure 32(a)(7)(B)(i) and this Court’s Order of August 28,
2014, because it contains 13,343 words, excluding the parts of the brief exempted
by Rule 32(a)(7)(B)(iii). This brief complies with the typeface requirements of
Rule 32(a)(5) and the type-style requirements of Rule 32(a)(6) because it has been
prepared in a proportionally spaced font using Microsoft Word 2010 in 14-point
Times New Roman type.
Dated: September 29, 2014

/s/ Miguel A. Estrada
Miguel A. Estrada

Counsel for Appellants Philip Morris USA Inc.
and Altria Group, Inc.

USCA Case #13-5028 Document #1514391 Filed: 09/29/2014 Page 76 of 76

CERTIFICATE OF SERVICE

I hereby certify that on this 29th day of September, 2014, I electronically
filed the foregoing Appellants’ Opening Brief with the Clerk of the Court for the
United States Court of Appeals for the D.C. Circuit by using the appellate
CM/ECF system.

I certify that all participants in the case are registered CM/ECF users and
that service will be accomplished by the appellate CM/ECF system.

/s/ Miguel A. Estrada
Miguel A. Estrada

Counsel for Appellants Philip Morris USA Inc.
and Altria Group, Inc.

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