6171: United States’ Opening Brief in Support of United States’ Proposed Corrective Statements, Oct. 21, 2015

October 22, 2015 2:18 am by Gene Borio

The PDF is Here

EXCERPT:

The text the United States proposes recasts the same wording that the Defendants have already been able to challenge and that the D.C. Circuit has already reviewed. The only wording changes the United States proposes are those that the Court of Appeals ordered in May, most significantly eliminating the preambles’ reference to Defendants’ “deliberate deception” of the American public. Thus altered, the text complies with the D.C. Circuit’s remand and faithfully carries out its instructions to “prevent and restrain” Defendants from future RICO violations by “ ‘requiring Defendants to reveal the previously hidden truth about their products.’ ” . . . These revisions ensure that the focus of the statements is Defendants’ products, not “[D]efendants’ prior deceptive conduct.” . . . Any objections by Defendants to the proposed text are waived, meritless, or both, and should be rejected.

. . .

The statements’ wording, the D.C. Circuit’s opinion makes clear, requires only minimal changes to ensure that the statements are a proper exercise of this Court’s remedial authority under RICO. Thus, the United States proposes the following wording, which is identical to the wording the D.C. Circuit examined in 2015 other than the changes the D.C. Circuit ordered to the preambles (and changing the “filtered” reference to become “low-tar”). It recasts the introductory text to remove the “deliberately deceived the American public” language that the Court of Appeals found inappropriate, while preserving the other important elements of this Court’s corrective statements . . . The introductory text thus faithfully implements the Court of Appeals’ instruction that the statements are to “ ‘reveal[ ] the previously hidden truth about [the manufacturers’] products.’ ” . . . . It reads thus:

Prior introductory text

A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public about [particular topic], and has ordered those companies to make this statement.

Here is the truth:

United States’ proposed introductory text

A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about [particular topic].

Here is the truth:

END EXCERPT

FULL TEXT:

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

and

TOBACCO-FREE KIDS ACTION FUND, et al.,

Intervenor-Plaintiffs,

v.

PHILIP MORRIS USA INC., et al.,

Defendants,

and

ITG BRANDS LLC, et al.,

Post-Judgment Intervenors as to Remedies.

Civil No. 99-CV-02496 (GK)

Next scheduled court appearance:
None

UNITED STATES’ OPENING BRIEF IN SUPPORT OF UNITED STATES PROPOSED CORRECTIVE STATEMENTS

TABLE OF AUTHORITIES ………… iii

INTRODUCTION……………. 1

FACTUAL AND PROCEDURAL HISTORY ……………. 2

I. In 2006, this Court ordered corrective statements on five specific topics to prevent

and restrain future misconduct ………. 2

II. In 2009, the Court of Appeals affirmed a corrective-statement remedy on the five

specific topics identified by this Court ………… 3

III. In 2012, this Court issued wording for the statements, and in 2014, issued a

consent decree addressing all implementation details ………………. 4

IV. In 2015, the Court of Appeals affirmed most of the corrective statement wording,

and remanded for further proceedings …………. 5

V. On remand, this Court first ordered mediation, and then the current briefing ….. 7

THE UNITED STATES’ PROPOSAL …………. 8

ARGUMENT ……. 12

I. The United States’ proposal conforms to the Court of Appeals’ mandate …….. 13

A. The proposal recasts the preamble sentence to remove the “deliberately

deceived” phrase that was rejected by the Court of Appeals ……………… 13

B. The proposal modifies the wording of Statement C (light and low-tar) as

required ……… 13

II. The revised preamble is a proper exercise of this Court’s authority and is

consistent with the decision of the Court of Appeals ……………… 14

A. “Attribution” language, to disclose that the Court ordered named Defendants to

make the statements, is permissible and appropriate …………… 15

i. In 2006, all Defendants other than Philip Morris USA and Altria requested

mandatory attribution language, and are therefore estopped from opposing it now …….. 16

ii. All Defendants have waived any objections to mandatory attribution

language ………………. 17

iii. The mandatory attribution language is a lawful exercise of this Court’s

authority ………………. 20

B. The “Here is the truth” clause enhances, rather than diminishes, the statements’

ability to prevent and restrain future violations …….. 21

C. The statement introductions should continue to specify the topics …………… 24

CONCLUSION ……………… 25

LIST OF EXHIBITS………. 27

TABLE OF AUTHORITIES

FEDERAL CASES

3D Global Solutions, Inc. v. MVM, Inc., 754 F.3d 1053 (D.C. Cir. 2014) ………………. 17

Crocker v. Piedmont Aviation, Inc., 49 F.3d 735 (D.C. Cir. 1995) …….. 19

Laffey v. Nw. Airlines, Inc., 740 F.2d 1071, 1089 (D.C. Cir. 1984) …………7

United States v. Kanu, 695 F.3d 74 (D.C. Cir. 2012) …….. 17

United States v. Philip Morris USA, Inc.,

396 F.3d 1190 (D.C. Cir. 2005) (“Disgorgement Opinion”) ……………20, 21

United States v. Philip Morris USA, Inc.,

449 F. Supp. 2d 1 (D.D.C. 2006) (“Original Opinion”) ………………. passim

United States v. Philip Morris USA, Inc.,

566 F.3d 1095 (D.C. Cir. 2009) (“Affirmance Opinion”) ……………… passim

United States v. Philip Morris USA Inc.,

841 F. Supp. 2d 139 (D.D.C. 2012) …………… 8

United States v. Philip Morris USA, Inc.,

907 F. Supp. 2d 1 (D.D.C. 2012) (“Corrective Statement Opinion I”) …………. passim

United States v. Philip Morris USA, Inc.,

No. 99-cv-2496, 2014 WL 2506611 D.D.C. June 2, 2014) (“Corrective Statement Consent Order”) ……. 4-5, 9, 15

United States v. Philip Morris USA, Inc.,

Nos. 13-5028, 14-5161, 2015 WL 5599177 (D.C. Cir. May 22, 2015) (“Corrective Statement Opinion II”) ………………. passim

United States v. Philip Morris USA, Inc.,

No. 13-5028 Consolidated with 14-5161, 2015 U.S. App. LEXIS 13750 (D.C. Cir. Aug. 5, 2015) (per curiam order) ………… 7, 15

Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio,

471 U.S. 626 (1985) …………… 21, 24

FEDERAL STATUTES

18 U.S.C. § 1962(c) ……………2

18 U.S.C. § 1962(d) ………….. 2

FEDERAL RULES

Fed. R. Civ. P. 50(c)(1) ……..24

OTHER AUTHORITIES

Robert W. Bly’s Copywriter’s Handbook (2005) …………..23

Tom Altstiel & Jean Grow, Advertising Creative: Strategy, Copy, Design (3d ed. 2013) …… 23

INTRODUCTION

It has been nine years since this Court found that the Defendants were engaged in a massive, decades-long conspiracy to maintain an illegal racketeering enterprise, and ordered them, among other things, to issue corrective statements in order to prevent and restrain future violations. It has been three years since the Court ordered the specific statements—an order that the D.C. Circuit, this past May, largely affirmed. All that remains in order for the corrective statements to issue, at long last, is for this Court on remand to approve revised statements that reflect the guidance provided by the Court of Appeals.

The text the United States proposes recasts the same wording that the Defendants have already been able to challenge and that the D.C. Circuit has already reviewed. The only wording changes the United States proposes are those that the Court of Appeals ordered in May, most significantly eliminating the preambles’ reference to Defendants’ “deliberate deception” of the American public. Thus altered, the text complies with the D.C. Circuit’s remand and faithfully carries out its instructions to “prevent and restrain” Defendants from future RICO violations by “ ‘requiring Defendants to reveal the previously hidden truth about their products.’ ”United States v. Philip Morris USA, Inc., ___ F.3d ___, Nos. 13–5028, 14–5161, 2015 WL 5599177, at *9 (D.C. Cir. May 22, 2015) (“Corrective Statement Opinion II”) (quoting United States v. Philip Morris USA, Inc., 566 F.3d 1095, 1140 (D.C. Cir. 2009) (“Affirmance Opinion”) (emphasis added by Corrective Statement Opinion II)) (brackets omitted). These revisions ensure that the focus of the statements is Defendants’ products, not “[D]efendants’ prior deceptive conduct.” Id. (quoting Affirmance Opinion, 566 F.3d at 1140) (emphasis added by Corrective Statement Opinion II). Any objections by Defendants to the proposed text are waived, meritless, or both, and should be rejected.

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FACTUAL AND PROCEDURAL HISTORY

I. In 2006, this Court ordered corrective statements on five specific topics to prevent and restrain future misconduct

The government initiated this RICO action against the United States’ major cigarette manufacturers in 1999. In 2006, after a nine-month bench trial, this Court made over 4,000 factual findings, and concluded that for decades, as proven by “overwhelming evidence,” the companies had maintained, and continued to maintain, an illegal racketeering enterprise in violation of 18 U.S.C. § 1962(c), and conspired to do so in violation of 18 U.S.C. § 1962(d). United States v. Philip Morris USA, Inc., 449 F. Supp. 2d 1, 27, 851-906 (D.D.C. 2006) (“Original Opinion”), aff’d in relevant part, 566 F.3d 1095 (D.C. Cir. 2009) (“Affirmance Opinion”).

The Court found that “an injunction ordering Defendants to issue corrective statements is appropriate and necessary to prevent and restrain them from making fraudulent public statements on smoking and health matters in the future.” Original Opinion, 449 F. Supp. 2d at 926. The Court rejected Defendants’ argument that the First Amendment barred such corrective statements, which the Court determined are “necessary to prevent current and future advertisements from becoming themselves part of the continuing deception of the public,” and which the Court concluded were “narrowly tailored to prevent Defendants from continuing to disseminate fraudulent public statements and marketing messages by requiring them to issue truthful corrective communications.” Id. at 926-27 (internal quotation marks omitted). The Court prescribed five media channels for the statements: newspapers, television, company websites, package onserts, and retail point-of-sale. Id. at 928.

The Court likewise prescribed five topics for the statements: (A) “the adverse health effects of smoking”; (B) “the addictiveness of smoking and nicotine”; (C) “the lack of any

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significant health benefit from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild,’ and ‘natural,’ cigarettes”; (D) “Defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery”; and (E) “the adverse health effects of exposure to secondhand smoke (also known as environmental tobacco smoke, or ETS).” Original Opinion, 449 F. Supp. 2d at 938-39. The Court deferred deciding “the exact wording of these statements” until further briefing. Id. In accord with the Court’s directions, all parties submitted proposed wording in October 2006 (Dkt. Nos. 5778, 5780-5783; all filed 10/16/2006.) Three days later, the Court directed the parties to submit their views on several issues, including “[w]hether the corrective statements should indicate that they are being issued pursuant to Court Order.” Order #1025 at 2 (Dkt. No. 5784; issued Oct. 19, 2006).

II. In 2009, the Court of Appeals affirmed a corrective-statement remedy on the five specific topics identified by this Court

On appeal, the D.C. Circuit upheld corrective statements on the five topics this Court specified as a proper exercise of this Court’s authority under RICO. Affirmance Opinion, 566 F.3d at 1139-40. As the Court of Appeals put it, “[r]equiring Defendants to reveal the previously hidden truth about their products will prevent and restrain them from disseminating false and misleading statements, thereby violating RICO, in the future.” Id. at 1140. And again: “Defendants will be impaired in making false and misleading assurances about, for instance, smoking-related diseases or the addictiveness of nicotine—as the district court found they continue to do—if they must at the same time communicate the opposite, truthful message about these matters to consumers.” Id. (internal citation omitted).

In the same decision, the D.C. Circuit also considered and rejected the tobacco companies’ First Amendment arguments. Id. at 1142-45. In particular, the Court of Appeals reiterated this Court’s determination that, “ by requiring [the tobacco companies] to issue truthful

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communications,” the corrective statements would prevent and restrain “fraudulent public statements and marketing messages,” and were therefore narrowly tailored. Id. at 1144 (internal quotation marks omitted; quoting Original Opinion, 449 F. Supp. 2d at 927).

The Court of Appeals vacated one of the media channels this Court ordered for the statements, point-of-sale, and remanded for further consideration. Id. at 1141-42. The tobacco companies’ only other protest against specific implementation details was an argument that requiring the statements to appear on package onserts would conflict with the Federal Cigarette Labeling and Advertising Act; the Court of Appeals rejected this argument. Id. at 1140-41.

III. In 2012, this Court issued wording for the statements, and in 2014, issued a consent decree addressing all implementation details

On remand, the United States conducted extensive research into every corrective statement that every Defendant had proposed in 2006, as well as modified forms of the statements proposed in 2006 by the public-health intervenors, and a new set of statements prepared by the National Cancer Institute. The United States filed its recommended corrective-statement text in February 2011 (Dkt. No. 5875; filed Feb. 23, 2011), and the Court received additional briefs over the following three months.

In November 2012, after additional briefing and oral argument, this Court ordered specific text for the five statements, and ordered the parties to negotiate over implementation details. United States v. Philip Morris USA, Inc., 907 F. Supp. 2d 1 (D.D.C. 2012) (“Corrective Statement Opinion I”), aff’d in part & rev’d in part, 2015 WL 5599177 (“Corrective Statement Opinion II”). In June 2014, the Court issued a consent order that incorporated its prior wording and added agreed-upon implementation details for the four media channels that remain in force: newspapers, television, company websites, and package onserts. Order #51-Remand (Dkt. No. 6095; issued June 2, 2014) (“Corrective Statement Consent Order”), available as United States v.

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Philip Morris USA, Inc., No. 99-cv-2496, 2014 WL 2506611 (D.D.C. June 2, 2014). The consent order provided that if the corrective-statement text changed as a result of further litigation, “the parties reserve the right to seek different requirements than those stated herein.” Id. ¶¶ VI(5) & (6), 2014 WL 2506611, at *10.

IV. In 2015, the Court of Appeals affirmed most of the corrective statement wording, and remanded for further proceedings

The tobacco companies appealed from the consent order to the extent that it incorporated the statement text originally ordered in November 2012, and on appeal, challenged the statements’ wording based on both the RICO statute and the First Amendment. They contended that the “deliberately deceived the American public” clause would require them to “condemn and publicly shame themselves for engaging in the misconduct found by the district court” via “compelled confessions of past wrongdoing” that were “thoroughly backward-looking.” Appellants’ Opening Br. 17, 30, 55, Corrective Statement Opinion II, 2015 WL 5599177 (Nos. 13-5028 & 14-5161), 2014 WL 4827112. The tobacco companies argued against the “Here is the truth” clause on the same grounds. Id. at 17, 30, 40, 55; Appellants’ Reply Br. 16-17, Corrective Statement Opinion II, 2015 WL 5599177 (Nos. 13-5028 & 14-5161), 2015 WL 106365.

In May 2015, the D.C. Circuit affirmed in part and reversed in part. Corrective Statement Opinion II, 2015 WL 5599177. The D.C. Circuit recounted this Court’s precise wording of the statements, addressed Defendants’ various challenges to this wording, and rejected most of those challenges. The Court of Appeals concluded that many of the tobacco companies’ arguments were subject to waiver and law-of-the-case principles. See id. at *5. As the Court of Appeals explained, this Court’s “2006 remedial order warned [D]efendants that they would be required to make . . . corrective statements about their ‘manipulation of cigarette design and composition to ensure optimum nicotine delivery,’ ” and “[t]he manufacturers did not object to this requirement

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when they appealed the remedial order in 2008.” Id. at *6 (quoting Original Opinion, 449 F. Supp. 2d at 939). The court explained that it had previously “approved” the topics this Court prescribed, “across the board, concluding that such disclosures would ‘prevent and restrain [Defendants] from disseminating false and misleading statements, thereby violating RICO, in the future.’ ” Id. (quoting Affirmance Opinion, 566 F.3d at 1140). “Having thus decided the issue in the earlier appeal,” the court announced it would “not revisit it here.” Id.

The court similarly upheld the wording for all factual bullet points (other than ordering a reference to “filtered” cigarettes that it concluded was a “typo” to be changed to “low-tar” cigarettes, id. at *8), reasoning that Defendants’ challenges to them were supported by this Court’s previous factual findings or were otherwise meritless. See id. at *8-9. The court likewise rejected Defendants’ challenge to this Court’s publication requirements, explaining that defendants had not objected to these requirements in their earlier appeal and that “[t]his question is thus settled.” Id. at *12.

The only significant part of Defendants’ argument the D.C. Circuit accepted related to part of the statement preambles that disclosed, “ ‘[a] Federal Court has ruled that [the manufacturers] deliberately deceived the American public’ about the dangers of cigarettes and has ‘ordered [them] to make this statement.’ ” 2015 WL 5599177, at *9. The court concluded that this language “reveal[s] nothing about cigarettes; instead, they disclose defendants’ prior deceptive conduct.” Id. (emphasis in original). But the only permissible purpose for a RICO injunction, the Court of Appeals ruled, was “to prevent and restrain fraudulent statements about smoking and health and addiction. The bulleted statements will achieve this goal because they ‘reveal the previously hidden truth about [the manufacturers’] products.’ ” Id. at *11 (internal quotation marks, brackets, and citation omitted; citing Affirmance Opinion, 566 F.3d at 1140, 1149;

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emphasis added by Corrective Statement Appeal). By contrast, the court held, disclosing “defendants’ prior deceptive conduct” would not “prevent and restrain future RICO violations.” Id. at *9.

The decision did not address the “Here is the truth” sentence Defendants had challenged.1

The Court of Appeals found that many of the tobacco companies’ arguments were subject to waiver, under which “a party waives a contention that could have been but was not raised on a prior appeal.” Id. at *5 (internal quotation marks omitted; quoting Laffey v. Nw. Airlines, Inc., 740 F.2d 1071, 1089 (D.C. Cir. 1984)). These included waived challenges to the language for Statements B and D, disclosing—as first required in 2006—the companies’ “manipulation of cigarette design and composition to ensure optimum nicotine delivery,” id. at *6, 7 (internal quotation marks omitted; quoting Original Opinion, 449 F. Supp. 2d at 939); and a waived challenge to the multiple media channels first ordered in 2006, id. at *12.

V. On remand, this Court first ordered mediation, and then the current briefing

After the remand, the Court directed the parties to enter mediation on “replacement language of the phrase singled out by the Court of Appeals,” i.e., “the phrase ‘deliberately deceived the American public’ adopted by this Court in its Opinion.” Order #59-Remand 1, 2 (Dkt. No. 6164; issued Aug. 20, 2015) (quoting Corrective Statement Opinion I, 907 F. Supp. 2d at 8). The Court also directed the parties to “address any and all concerns about changes in the

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1 On July 6, 2015, based on communications with the tobacco companies about their reading of the decision, the United States moved for panel rehearing, to clarify that the D.C. Circuit’s May 2015 decision does not require the statements to hide the topics of the statements, keep the companies anonymous, or change the “Here is the truth” sentence. U.S. Pet. for Panel Reh’g, Corrective Statements Opinion II, 2015 WL 5599177 (Nos. 13-5028 & 14-5161). The panel denied the motion on August 5, 2015, but rather than simply issue its usual single-sentence denial, it stated that “[t]he government’s petition seeks relief that the district court may consider in the first instance on remand.” United States v. Philip Morris USA, Inc., Nos. 13-5028 & 14- 5161, 2015 U.S. App. LEXIS 13750 (D.C. Cir. Aug. 5, 2015) (per curiam order).

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layout because of shorter introductory language.” Id. at 2. The parties’ mediation efforts did not succeed, and the Court set the present briefing schedule. Order #61-Remand (Dkt. No. 6170; issued Oct. 1, 2015).

THE UNITED STATES’ PROPOSAL

Over nine years have passed since this Court first imposed its corrective-statement remedy in August 2006, after finding that the remedy was “necessary” to prevent and restrain future fraud. Original Opinion, 449 F. Supp. 2d at 927. Just three days after the parties’ first post-judgment filings on corrective statements, in October 2006, the Court announced that it was “exceptionally concerned about the delay which would be necessitated” if it “adopt[ed] . . . a ‘hands-on’ approach” to the corrective statements. More than five years later, in January 2012, the Court rejected Defendants’ bid to postpone any corrective-statement decisions until after the close of unrelated challenges to large graphic warnings promulgated by the Food and Drug Administration, and observed that “there is no question but that the public has a very substantial interest” in prompt access “to whatever corrective action statements may be adopted.” United States v. Philip Morris USA Inc., 841 F. Supp. 2d 139, 142 (D.D.C. 2012). After another two years, in January 2014, the Court stated that it was “very concerned about the delays. . . . [T]he bottom line is that the public is not getting what I consider to be the benefit of the corrective statements.” Tr. Jan. 22, 2014 Status Conf. at 39.

The United States shares similar concerns about the time that has passed and the additional time that will be required if, as anticipated, there are appeals from this Court’s forthcoming decision. To reduce the number of topics on which further appeals will be needed, the United States is proposing the same font, typesize, and layout that the Court previously approved, with the tobacco companies’ consent, in June 2014; and Order #56-Remand’s agreed-

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upon language for ITG Brands and its affiliates.2 Exhibit 3 to this brief is a redline comparison, showing how closely the current proposal tracks the 2014 Consent Order.

Television is the only media channel that requires filing new exhibits with the Court. The specifications in the United States’ proposed order for the other three media channels— newspaper, company websites, and package onserts—all follow the same technical specifications the Court previously approved out in the Corrective Statement Consent Order, which fully characterize the required statements for those media. By contrast, the desired pace, rhythm, and tone for television voiceover cannot easily be defined in the four corners of a written order. This is why the parties previously submitted the precise television spots that they anticipated would be run. For the same reason, the United States has prepared TV spots with the same look and feel that the parties agreed upon last time, but with the changes to the on-screen text explained below, and corresponding changes to the voiceover.

The statements’ wording, the D.C. Circuit’s opinion makes clear, requires only minimal changes to ensure that the statements are a proper exercise of this Court’s remedial authority under RICO. Thus, the United States proposes the following wording, which is identical to the wording the D.C. Circuit examined in 2015 other than the changes the D.C. Circuit ordered to the preambles (and changing the “filtered” reference to become “low-tar”). It recasts the introductory text to remove the “deliberately deceived the American public” language that the Court of Appeals found inappropriate, while preserving the other important elements of this Court’s corrective statements, most significantly: the fact that a Federal Court has ordered the relevant companies to make the statement and the names of the companies subject to the order;

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2 Under the 2014 Consent Order, the United States and the Public-Health Intervenors would be entitled to propose wholly new implementation specifications, because the prior text was changed on the appeal. Corrective Statement Consent Order, ¶ VI(6), 2014 WL 2506611, at *10
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the “Here is the truth” tagline; and a statement-specific explanation of each statement’s topic. The introductory text thus faithfully implements the Court of Appeals’ instruction that the statements are to “ ‘reveal[ ] the previously hidden truth about [the manufacturers’] products.’ ” Corrective Statement Opinion II, 2015 WL 5599177, at *10 (quoting Affirmance Opinion, 566 F.3d at 1140) (emphasis and brackets added by Corrective Statement Opinion II). It reads thus:

Prior introductory text

A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public about [particular topic], and has ordered those companies to make this statement.

Here is the truth:

United States’ proposed introductory text

A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about [particular topic].

Here is the truth:

This is the United States’ full proposed text for the five statements:

A. Adverse Health Effects of Smoking

A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about the health effects of smoking.

Here is the truth:

• 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 birthweight in newborns, and cancer of the cervix.

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B. Addictiveness of Smoking and Nicotine

A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about the addictiveness of smoking and nicotine.

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 ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about selling and advertising low tar and light cigarettes as less harmful than regular cigarettes.

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 “light” cigarette smokers inhale essentially the same amount of tar and nicotine as they would from regular cigarettes.

• All cigarettes cause cancer, lung disease, heart attacks, and premature death - lights, low tar, ultra lights, and naturals. There is no safe cigarette.

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D. Manipulation of Cigarette Design and Composition to Ensure Optimum Nicotine Delivery

A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about designing cigarettes to enhance the delivery of nicotine.

Here is the truth:

• Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA 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 ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about the health effects of secondhand smoke.

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.

ARGUMENT

With the exception of those changes ordered by the D.C. Circuit earlier this year, the United States proposes text identical to that which Defendants have already been able to challenge and that the D.C. Circuit has already reviewed. The United States’ proposed text and implementation details call for an appropriate exercise of this Court’s equitable authority under RICO, fully consistent with the First Amendment, to prevent and restrain future RICO violations by the tobacco companies, consistent with the D.C. Circuit’s previous rulings in this matter.

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I. The United States’ proposal conforms to the Court of Appeals’ mandate

The D.C. Circuit summarized its Affirmance Opinion as explaining that “disseminating corrective statements on the proposed topics would prevent and restrain future RICO violations by [1] ‘[r]equiring Defendants [2] to reveal the previously hidden truth [3] about their products.’ ” Corrective Statement Opinion II, 2015 WL 5599177, at *9 (quoting Affirmance Opinion, 566 F.3d at 1140) (italics added by Corrective Statement Opinion II). By contrast, the court reasoned, “disclos[ing] defendants’ prior deceptive conduct . . . cannot be justified on the basis of our 2009 opinion.” Id. (citing Affirmance Opinion, 566 F.3d at 1140). The United States’ proposals conform to the mandate, by (1) requiring the tobacco companies (2) to disclose the truth (3) about their products, on the proposed topics.

A. The proposal recasts the preamble sentence to remove the “deliberately deceived” phrase that was rejected by the Court of Appeals

Because the Court of Appeals held that “disclos[ing] defendants’ prior deceptive conduct . . . cannot be justified on the basis of our 2009 opinion,” id. at *9, the United States’ proposed text removes the introduction’s (accurate) statement that “[a] Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public.”

B. The proposal modifies the wording of Statement C (light and low-tar) as required

The D.C. Circuit’s decision requires two changes to Statement C, which addresses light and low-tar cigarettes. First, this Court’s original introduction to Statement C said that a federal court had ruled that the tobacco companies deliberately deceived the American public “by falsely selling and advertising low tar and light cigarettes as less harmful than regular cigarettes.” Corrective Statement Opinion I, 907 F. Supp. 2d at 8 (emphasis added). Defendants have indeed

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falsely sold light and low-tar cigarettes on just such premises. It is law of the case that “Defendants orchestrated ‘highly sophisticated marketing and promotional campaigns to portray their light brands as less harmful than regular cigarettes’ ” and that “ ‘[Defendants’] public statements are blatantly false in relation to the marketing of ‘light’ cigarettes.’ ” Affirmance Opinion, 566 F.3d at 1125 (quoting Original Opinion, 449 F. Supp. 2d at 860, 861). Nonetheless, the Court of Appeals’ most recent decision suggests that Statement C’s original reference to “falsely” selling such cigarettes as less harmful might be considered to address “conduct” and thus—although true—not be authorized by RICO. Corrective Statement Opinion II, 2015 WL 5599177, at *9-10. In an abundance of caution and to avoid disputes on this point, the United States’ proposal removes the word “falsely” from the Statement C introduction.

Second, the Court of Appeals directed that a reference to “filtered” cigarettes, in the second bullet point in this statement, be changed to refer to “low-tar” cigarettes. Id. at *8. The United States’ proposal does this.

II. The revised preamble is a proper exercise of this Court’s authority and is consistent with the decision of the Court of Appeals

As noted above, the Court of Appeals held in its Affirmance Opinion, and reiterated in its most recent decision, that the mechanism by which “corrective statements on the proposed topics would prevent and restrain future RICO violations [is] by [1] ‘[r]equiring Defendants [2] to reveal the previously hidden truth [3] about their products.’ ” Corrective Statement Opinion II, 2015 WL 5599177, at *9 (quoting Affirmance Opinion, 566 F.3d at 1140); see also id. at *11 (approving corrective statements that “‘reveal[ ] the previously hidden truth about [the manufacturers’] products”) (quoting Affirmance Opinion, 566 F.3d at 1140). Shortly afterwards, the parties exchanged views on potential revisions to the corrective statements in light of the D.C. Circuit’s decision. The tobacco companies indicated that they objected to (1) “attribution”

14
language that would name them and attribute their making the statements to a Court order; (2) language identifying the bulleted statements as “the truth”; and (3) language identifying what the statements are about. In short, they urged that the statements’ prevent-and-restrain effect would be vitiated if the statements disclosed (1) that they were being made because a Court had ordered named Defendants to do so; or (2) that they revealed the truth; or even (3) their topics.

The United States sought clarification from the D.C. Circuit on these matters, and it ruled that “the district court may consider [them] in the first instance on remand.” United States v. Philip Morris USA, Inc., Nos. 13-5028 & 14-5161, 2015 U.S. App. LEXIS 13750 (D.C. Cir. Aug. 5, 2015) (per curiam order). As explained below, each of these components is both necessary and appropriate in order to require Defendants to reveal the previously hidden truth about their products. Defendants have waived many of their possible objections to these components, and any other arguments against them should be rejected.

A. “Attribution” language, to disclose that the Court ordered named Defendants to make the statements, is permissible and appropriate

The statements this Court ordered in 2012 included a mandatory “attribution” phrase, disclosing that Defendants were making the statements under Court order; the parties later agreed to have the statements identify the specific companies that were subject to the Court’s order. Compare Corrective Statement Opinion I, 907 F. Supp. 2d at 8-9 (“A Federal Court has ruled that the Defendant tobacco companies deliberately deceived the American public about the health effects of smoking, and has ordered those companies to make this statement”), with Corrective Statement Consent Decree, ¶ I(C), 2014 WL 2506611, at *1 (definition of “Corrective Statements”) (replacing the phrase “Defendant tobacco companies” with “Altria, R.J. Reynolds

15
Tobacco, Lorillard, and Philip Morris USA”).3 As previously explained, the United States’ current proposed language removes the “deliberately deceived the American public” phrase, and recasts the rest of the sentence to preserve the Court’s attribution language: “A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about [particular topic].” (Emphases added.)

The tobacco companies indicated shortly after the Court of Appeals’ decision that they objected to being identified as having been “ordered” by name, because they believed this suggested prior wrongdoing. Nonetheless, the companies long ago waived any objection to mandatory attribution language, and their objection has no merit in any case.

i. In 2006, all Defendants other than Philip Morris USA and Altria requested mandatory attribution language, and are therefore estopped from opposing it now

This Court’s 2006 post-trial decision and judgment directed each party, within 60 days, to submit “a proposal for the exact wording of such corrective statements,” and required that the wording “shall identify the Defendant making the corrective statements.” Original Opinion, 449 F. Supp. 2d at 939, 940. All Defendants other than Philip Morris USA and Altria Defendant affirmatively proposed mandatory attribution language, saying that the statements were being

—–

3 Defendants did not challenge on appeal the requirement for the statement wording to “identify the Defendant making the corrective statements,” Original Opinion, 449 F. Supp. 2d at 940, and thus waived any objection to this requirement. Moreover, as just observed, Defendants agreed in 2014 to replace “the Defendant cigarette companies” in the statement introductions with their company names; and did not challenge this wording on the just-completed appeal. Defendants have thus waived any challenge to being named in an attribution statement. Accordingly, the Court should reject any watered-down language that attributes the statements to the Court, but avoids naming the companies, e.g., “A Federal Court has required this statement be made.”
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provided “pursuant to a Court order” or “Pursuant to Order #1015, § II.B, ¶ 5.”4 In November 2012, this Court included such language in its order. These Defendants are thus estopped from contesting mandatory attribution language. 3D Global Solutions, Inc. v. MVM, Inc., 754 F.3d 1053, 1055 (D.C. Cir. 2014) (“It has long been settled that on appeal a litigant cannot avail himself of an error that he induced the court under review to commit.”) (internal quotation marks omitted); United States v. Kanu, 695 F.3d 74, 80 (D.C. Cir. 2012) (“Under the invited error doctrine[,] a party may not complain on appeal of errors that he himself invited or provoked the district court to commit.”) (internal quotation marks and brackets omitted).

ii. All Defendants have waived any objections to mandatory attribution language

To be sure, Philip Morris USA and Altria did not request mandatory attribution language in 2006, and so are not subject to estoppel on that ground. Instead, they ignored the requirement to provide language to “identify the Defendant making the corrective statements.” Original Opinion, 449 F. Supp. 2d at 940.5 Nonetheless, Philip Morris USA and Altria waived any objection in 2006 by remaining silent when the Court later specifically ordered the parties to submit their views on “[w]hether the corrective statements should indicate that they are being

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4 Certain Jt. Defs.’ [R.J. Reynolds and B&W] Prop. Corr. Stmts. 3-7 (Dkt. No. 5780; filed 10/16/2006) (“This message is furnished by [Defendant] pursuant to a Court Order and is taken from the 2004 Surgeon General’s Report”) (brackets around “Defendant” in original); Lorillard Prop. Corr. Stmts. 2-5 (Dkt. No. 5781; filed 10/16/2006) (“The following statement is made by Lorillard Tobacco Company pursuant to a Court Order in United States of America, et al. v. Philip Morris USA, Inc., et al., Civil Action No. 99-2496 (GK) (Order #1015, Aug. 17, 2006, at 4; Final Op. at 1636) (on appeal)”) (footnote omitted); Submission of BATCo Pursuant to Order #1015, § II.B, ¶ 5, at 2 (“Pursuant to Order #1015, § II.B, ¶ 5, British American Tobacco (Investments) Limited (‘BATCo’) makes the following submission”).

5 Philip Morris USA Prop. Corr. Stmts. (Dkt. No. 5776; filed 10/16/2006) (no mention of any Defendant); Altria Prop. Corr. Stmts. (Dkt. No. 5777; filed 10/16/2006) (“supporting” Philip Morris USA submission).

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issued pursuant to Court Order.” Order #1025 at 2 (Dkt. No. 5784; issued 10/19/2006). The Defendants’ responsive joint filing waived any claim that mandatory attribution language was legally prohibited: “As defendants’ proposed corrective statements submissions reflect, defendants hold differing views about whether the statements should be attributed to the Court’s Order. Defendants have articulated their respective views on the propriety of attribution to the Court’s Order in their prior submissions.” Certain Defs.’ Resp. to Order at 6 (Dkt. No. 5787; filed 10/30/2006) (citing same pages of same filings cited in footnotes 4 and 5of this brief, supra). In “their prior submissions,” Philip Morris USA and Altria “articulated” no “views” at all on “the propriety of attribution to the Court’s Order.” Id.6 By failing to contest mandatory attribution language when asked, Philip Morris USA and Altria waived any contentions against such language.

Nor did any Defendant object to mandatory attribution language in the briefing leading up to the corrective-statement text this Court ordered in November 2012. The United States submitted its recommended corrective statements in February 2011, and the final sentence of Recommended Statements B, C, and D included mandatory attribution language. (Dkt. No. 5875; filed Feb. 23, 2011) (“Paid for by [Cigarette Manufacturer Name] under order of a Federal District court.”). An appendix to Defendants’ opposition highlighted every word to which they objected, but conspicuously did not object to the mandatory attribution language at the end:

—–

6 In their joint filing, Defendants did argue that the Court was “required” to give each of them “the option to indicate that objectionable statements are made pursuant to the Court’s Order.” Id. (emphasis added). Defendants did not attempt to reconcile this with the Court’s prior call for “exact wording” and requirement that “no . . . variations may be implemented without prior approval from the Court.” Original Opinion, 449 F. Supp. 2d at 939.

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Case 1:99-cv-02496-GK Document 5881 Filed 03/03/11 Page 33 of 36

• The phrase “Every day” is inaccurate because it is based on an annual number.

Proposed Statement on Topic B–Corrective Statements for Addictiveness of Smoking and Nicotine:

We told Congress under oath that we believed nicotine is not addictive. We told you that smoking is not an addiction and all it takes to quit is willpoer. Here’s the truth:

• Smoking is very addictive. And it’s not easy to quit.

• We manipulated cigarettes to make them more addictive.

• When you smoke, the nicotine actually changes the brain–that’s why quitting is so hard.

Paid for by [Cigarette Manufacturer Name] under order of a Federal District court.

Defs.’ Resp. to Gov’t’s Prop. Corr. Stmts. 33 (Dkt. No. 5881; filed 3/3/2011) (yellow highlighting in original).

Then on appeal in 2014 and 2015, Defendants objected to the opening of the introductions (“A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public about . . .”). But they made no argument against the mandatory attribution language at the end (“. . . and has ordered those companies to make this statement”). By failing to challenge the mandatory attribution language on appeal, Defendants waived any objection. Corrective Statement Opinion II, 2015 WL 5599177, at *7 (holding that Defendants “likewise waived their First Amendment challenge,” because “ ‘prior rulings of the trial court that could have been but were not challenged on an earlier appeal’ fall within ‘subsidiary waiver principle’ of law-of-the-case doctrine”) (quoting Crocker v. Piedmont Aviation, Inc., 49 F.3d 735, 739 (D.C. Cir. 1995) (emphasis in original)).

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iii. The mandatory attribution language is a lawful exercise of this Court’s authority

The mandatory attribution statements are needed in order to serve the purpose of the corrective statements, as recognized by the Court of Appeals, to require “Defendants to reveal the previously hidden truth about their products [in order to] prevent and restrain them from disseminating false and misleading statements, thereby violating RICO, in the future.”Affirmance Opinion, 556 F.3d at 1140 (emphases added). The only way for Defendants to be “impaired in making false and misleading assurances about, for instance, smoking-related diseases or the addictiveness of nicotine,” id., is for Defendants to be required by a court to tell the truth about their products. Indeed, that the statements are clearly attributable to this Court’s order further distinguishes them from routine public-health education and counter-marketing messages— which this Court and the Court of Appeals have both held cannot be imposed as RICO remedies. Original Opinion, 449 F. Supp. 2d at 936-37; Affirmance Opinion, 566 F.3d at 1147-48.

Nor is it impermissibly “backward looking” for the statements to disclose that the Court is requiring Defendants to tell the truth. The Court of Appeals’ 2005 disgorgement decision held that disgorgement is not a permissible RICO remedy because it is “a quintessentially backward- looking remedy focused on remedying the effects of past conduct to restore the status quo. . . . [I]t it is both aimed at and measured by past conduct.” United States v. Philip Morris USA Inc., 396 F.3d 1190, 1198 (D.C. Cir. 2005) (“Disgorgement Opinion”).

But the decision emphatically did not hold that a RICO remedy cannot allow any inferences about a RICO defendant’s “past conduct,” lest the remedy (somehow) become unable to prevent and restrain future violations. To the contrary, as the D.C. Circuit’s most recent decision reiterated, its Affirmance Opinion recognized that this Court “had ordered corrective disclosures on five topics, including ‘the manufacturers’ manipulation of cigarette design and

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composition to ensure optimum nicotine delivery.’ And we approved those topics across the board, concluding that such disclosures would ‘prevent and restrain [defendants] from disseminating false and misleading statements, thereby violating RICO, in the future.’ ” Corrective Statement Opinion II, 2015 WL 5599177, at *6 (quoting Affirmance Opinion, 566 F.3d. at 1138, 1140). It is the law of the case that corrective statements that disclose past misconduct on Defendants’ part—such as their manipulating cigarette design and composition— will prevent and restrain future violations. The phrase at the start of the United States’ proposed introductions, “A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about . . . ,” is not “a quintessentially backward-looking remedy”; is not “focused on remedying the effects of past conduct”; and is not focused on “restor[ing] the status quo.” Disgorgement Opinion, 396 F.3d at 1198. Rather, the phrase is the lead-in for statements that will “prevent and restrain future RICO violations by [1] ‘[r]equiring Defendants [2] to reveal the previously hidden truth [3] about their products.’ ” Corrective Statement Opinion II, 2015 WL 5599177, at *9 (quoting Affirmance Opinion, 566 F.3d at 1140).7

B. The “Here is the truth” clause enhances, rather than diminishes, the statements’ ability to prevent and restrain future violations

The Court of Appeals’ recent decision emphasized the truth-disclosing role that its 2009 Affirmance Opinion mandated for the corrective statements:

As mentioned above, we explained in our 2009 opinion that the correctivedisclosure remedy complied with RICO because the manufacturers would be

—–

7 Nor is there any First Amendment problem. There can be no plausible claim that mandatory attribution language—simply disclosing that the Court ordered Defendants to make the statements—would “impermissibly chill protected speech.” Affirmance Opinion, 566 F.3d at 144 (citing Zauderer v. Office of Disciplinary Counsel of Supreme Court, 471 U.S. 626, 651 (1985)). Nor can there be any plausible claim that the disclosure that the Court ordered Defendants to make the statements is something other than “purely factual and uncontroversial information.” Id. (quoting Zauderer, 471 U.S. at 651).

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“impaired in making false and misleading assurances” about cigarettes if simultaneously required to tell the truth. See supra at *4. In other words, we held, disseminating corrective statements on the proposed topics would prevent and restrain future RICO violations by “[r]equiring Defendants to reveal the previously hidden truth about their products.” 2009 Opinion, 566 F.3d at 1140 (emphasis added [and altered here]). But unlike the bulleted statements, which do just that, the preambles reveal nothing about cigarettes; instead, they disclose defendants’ prior deceptive conduct. Accordingly, they cannot be justified on the basis of our 2009 opinion. See id. (holding that corrective statements, in revealing the truth about cigarettes, will prevent and restrain defendants from again violating RICO).

Corrective Statement Opinion II, 2015 WL 5599177, at *9 (boldface emphases added; italic emphasis altered); see also id. at *5 (quoting Defendants’ brief, which in turn approvingly quoted the “reveal the previously hidden truth” line). The D.C. Circuit has explained that the statements will prevent and restrain future violations precisely by revealing “the previously hidden truth.” Affirmance Opinion, 566 F.3d at 1140. Calling these statements “the truth” is entirely consistent with the D.C. Circuit’s explanation of the statements’ purpose and effect.

Moreover, the Court of Appeals’ decision reveals no intention to strike down “Here is the truth.” The relevant discussion begins by characterizing the preambles:

This, then, brings us to the preambles. Each preamble announces that “[a] Federal Court has ruled that [the manufacturers] deliberately deceived the American public” about the dangers of cigarettes and has “ordered [them] to make this statement.” Unlike the corrective-disclosure topics, the preambles were nowhere presaged in the district court’s 2006 remedial order. Nor obviously were they before us in 2009. Accordingly, neither waiver nor law-of-the-case doctrine bars the manufacturers’ challenge.

Corrective Statement Opinion II, 2015 WL 5599177, at *9 (brackets in original). There is no suggestion that the Court of Appeals meant to subsume the sentence “Here is the truth” in its criticism of “the preambles.”

The tobacco companies have already waived any objection to the use of a tagline or a subhead in its own right. (A subhead reinforces the main idea of the message, breaks up large blocks of copy, and leads readers into the body copy; a tagline is a short phrase that is used

22

across all messages and thus provides continuity for a campaign. Tom Altstiel & Jean Grow, Advertising Creative: Strategy, Copy, Design 181, 184 (3d ed. 2013).) The Court’s November 2012 decision ordered “Here is the truth” as a subhead with the functional role of a tagline, and, in an appendix, directed the parties to negotiate the relative size of “the . . . tagline” as it would appear in newspaper layouts. Corrective Statement Opinion I, 907 F. Supp. 2d at 33 (App’x B). On appeal, Defendants made no protest to the use of a subhead or a tagline per se. Any such objection is therefore waived.8

Even on the merits of the waived argument, subheads are used in copywriting precisely because they provide both visual separation and transition between the header and the bullet points. The overall layout that the parties previously agreed to, including the placement of “Here is the truth” as a subhead, is consistent with recommendations from a classic copywriting book, Robert W. Bly’s Copywriter’s Handbook 38-62 (2005), which identifies elements of good copy such as breaking the text into short sections, sentences, and bullet points as well as ensuring the smooth flow of text. The use of “Here is the truth” provides a cue to the reader by emphasizing the accuracy of the bullet points that follow: these are not mere opinions, but scientifically established facts. The subhead makes the facts more memorable and trustworthy than competing (mis)information. Such a short, descriptive statement is well within the Court’s RICO authority.9

—–

8 Since the bullet points that follow “Here is the truth” have been upheld by the Court of Appeals, and are undeniably truthful, “Here is the truth” is a logical and appropriate subhead and tagline. Nevertheless, to the extent Defendants object to the specific words “Here is the truth” (and given the threat of delay that would be caused by yet another appeal and remand), the Court should consider conditionally approving alternative phrasing.

9 Nor is there any credible First Amendment objection to “Here is the truth.” The Affirmance Opinion upheld this Court’s determination that, “ by requiring [the tobacco companies] to issue truthful communications,” the corrective statements would prevent and restrain “fraudulent public statements and marketing messages,” and were therefore narrowly tailored. Affirmance Opinion, 566 F.3d at 1144 (internal quotation marks omitted; quoting Footnote continues on next page

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C. The statement introductions should continue to specify the topics

Shortly after the D.C. Circuit’s May 2015 decision, the tobacco companies indicated that they objected to having the statement introductions identify the topics of the various statements, on grounds that some of the topics were focused on their conduct, and that all the topics implied that the companies had previously concealed information on the topics. Any such objections are foreclosed for multiple reasons.

First, Defendants previously agreed to have the same topics, described in similar and sometimes identical language, appear as headers in the “full text” website displays. See Dkt. No. 6081, Ex. 8, at 5 (“Newport Pleasure Mobile (Non-Menthol), Phase 1 – Years one through five”) (showing header language for all five statements, from “Adverse Health Effects of Smoking” through “Adverse Health Effects of Exposure to Secondhand Smoke”). By failing to challenge the agreed-upon header language on appeal, Defendants waived any objections to that language—which as noted, is the same as or similar to the topic language in the United States’ proposed statement introductions. See Corrective Statement Opinion II, 2015 WL 5599177, at *7 (“The manufacturers have likewise waived their First Amendment challenge. . . . ‘[P]rior rulings of the trial court that could have been but were not challenged on an earlier appeal’ fall within ‘subsidiary waiver principle’ of law-of-the-case doctrine.”) (quoting Crocker, 49 F.3d at 739).

Second, the Court of Appeals has already upheld mandatory statements on all five topics, including Statement B’s disclosing that Defendants “intentionally designed cigarettes with enough nicotine to create and sustain addiction,” and Statement D’s disclosing that Defendants

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Footnote continues from previous page

Original Opinion, 449 F. Supp. 2d at 927). Indeed, since the First Amendment requires the statements to be “purely factual and uncontroversial,” Zauderer, 471 U.S. at 651, it can hardly violate the First Amendment for the statements to disclose that they reveal “the truth” about Defendants’ products.

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“intentionally designed cigarettes to make them more addictive.” Corrective Statement Opinion II, 2015 WL 5599177, at *7 (internal quotation marks omitted). It violates neither RICO nor the First Amendment for the introductions to these statements to explain that Statement B is “about the addictiveness of smoking and nicotine,” and that Statement D is “about designing cigarettes to enhance the delivery of nicotine.”

Third, even assuming that the topics specified in the United States’ proposed introductions (such as, “[this is a] statement about the addictiveness of smoking and nicotine,” or “about designing cigarettes to enhance the delivery of nicotine”) imply that the tobacco companies have engaged in fraud and deception about those topics, the Court of Appeals has already “conclud[ed] that such disclosures would ‘prevent and restrain [defendants] from disseminating false and misleading statements, thereby violating RICO, in the future.’ ” Id. at *6 (quoting Affirmance Opinion, 566 F.3d at 1140).

CONCLUSION

For the foregoing reasons, the Court should adopt the United States’ proposed wording and implementation details.

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DATED: October 21, 2015

Respectfully submitted,

BENJAMIN MIZER

Principal Deputy Assistant Attorney General

JONATHAN F. OLIN

Deputy Assistant Attorney General

MICHAEL S. BLUME, Director

ANDREW CLARK, Assistant Director

Consumer Protection Branch

/s/ Daniel K. Crane-Hirsch

DANIEL K. CRANE-HIRSCH

Trial Attorneys

Consumer Protection Branch

U.S. Department of Justice

P.O. Box 386

Washington, DC 20044

(202) 616-8242

daniel.crane-hirsch@usdoj…

/s/ Linda McMahon

LINDA McMAHON

Trial Attorney

Commercial Fraud Section

U.S. Department of Justice

Washington, DC 20044

(202) 307-0448

linda.mcmahon2@usdoj.gov

26

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

and

TOBACCO-FREE KIDS ACTION FUND, et al.,

Intervenor-Plaintiffs,

v.

PHILIP MORRIS USA INC., et al.,

Defendants,

and

ITG BRANDS LLC, et al.,

Post-Judgment Intervenors as to Remedies.

Civil No. 99-CV-02496 (GK)

Next scheduled court appearance:
None

UNITED STATES’ OPENING BRIEF IN SUPPORT OF UNITED STATES’PROPOSED CORRECTIVE STATEMENTS

LIST OF EXHIBITS

Exhibit

Description

1

Spanish version of Corrective Statements

2

Television spots in MP4 or a similar format suitable for Court review using a standard desktop computer and software; and in high-resolution, large files to be transmitted to and aired by TV networks (Note: Placeholder being filed via the Court’s CM/ECF system)

3

Redline comparison of the Court’s June 2, 2014 consent order against the United States’ proposed order

4

Proposed order

27

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