USA v Philip Morris, et. al.: ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA: BRIEF FOR THE UNITED STATES, Nov 16, 2016

November 19, 2016 1:37 pm by Gene Borio

The PDF is Here

EXCERPT:

Nothing in this Court’s ruling required the removal of the phrase “Here is the truth” from the statements’ text. Nor did the Court require the district court to reopen the process of formulating the text of the corrective statements, much less to adopt the Manufacturers’ newly proposed text in lieu of modifying the text this Court had already examined. The district court properly concluded that the Manufacturers’ proposal to “return to the drawing board and start the process all over again” made it “obvious that Defendants are, once again, attempting to stall any final outcome to this long-standing litigation.”

END EXCERPT

FULL TEXT:

NOT SCHEDULED FOR ORAL ARGUMENT

Nos. 16-5101 & 16-5127

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 THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

BRIEF FOR THE UNITED STATES

BENJAMIN C. MIZER

Principal Deputy Assistant

Attorney General

CHANNING D. PHILLIPS

United States Attorney

MARK B. STERN

ALISA B. KLEIN

MELISSA N. PATTERSON

(202) 514-1201

Attorneys, Appellate Staff

Civil Division, Room 7230

U.S. Department of Justice

950 Pennsylvania Ave., N.W.

Washington, D.C. 20530

TABLE OF CONTENTS

Page(s)

CERTIFICATE AS TO PARTIES, RULINGS, AND

RELATED CASES

GLOSSARY

STATEMENT OF THE ISSUE ……. 1

PERTINENT STATUTES AND REGULATIONS …………………. 1

STATEMENT OF THE CASE …….. 1

A. PRIOR PROCEEDINGS …………….. 3

1. The 2006 District Court Decision ……………. 3

2. This Court’s 2009 Decision ………. 4

3. This Court’s 2015 Decision ………. 5

B. PROCEEDINGS ON REMAND ……………… 11

SUMMARY OF ARGUMENT ……. 16

STANDARD OF REVIEW ………… 17

ARGUMENT ……………….. 18

I. THE DISTRICT COURT APPROPRIATELY REVISED THE CORRECTIVE STATEMENTS TO CONFORM WITH THIS COURT’S 2015 OPINION……. 18

A. Identifying The Corrective Statements As “The Truth” Is Consistent With This Court’s 2015 Opinion ……. 18

B. The District Court Did Not Abuse Its Discretion By Rejecting Defendants’ Attempt To Rewrite The Statements On Remand …….. 24

II. THE MANUFACTURERS’ OTHER CHALLENGES ARE FORECLOSED AND MERITLESS ……. 25

A. The Manufacturers Cannot Now Challenge Other Aspects Of The Corrective Statements Under RICO ……. 25

1. Statements C and D……… 25

2. Court Attribution Language ………… 28

3. Phrasing Tailored To Post-Judgment Parties …………….. 30

B. This Court Has Already Concluded That Corrective Statements That Adhere To Its Guidance Regarding RICO Are Consistent With The First Amendment ……. 34

CONCLUSION ……………. 39

CERTIFICATION OF COMPLIANCE WITH FEDERAL RULE OF APPELLATE PROCEDURE 32(a)

CERTIFICATE OF SERVICE

ADDENDUM

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TABLE OF AUTHORITIES

Cases: Page(s)

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

760 F.3d 18 (D.C. Cir. 2014) (en banc) …………….. 7-8, 37

Blum v. Bacon,

457 U.S. 132 (1982) ……. 35

National Ass’n of Mfrs. v. SEC:

748 F.3d 359 (D.C. Cir. 2014) ………………… 38

800 F.3d 518 (D.C. Cir. 2015) ………….. 37, 38

United States v. Philip Morris USA Inc.:

*449 F. Supp. 2d 1 (D.D.C. 2006) (Liability Op.) ……………….. 2, 3, 4, 19, 23, 26, 27, 31

*566 F.3d 1095 (D.C. Cir. 2009) (2009 Op.) ………….. 2, 4, 5, 6, 7, 9, 16, 17, 18, 19, 26,

27, 34, 35, 36, 37, 38

907 F. Supp. 2d 1 (D.D.C. 2012) ……… 26, 34

686 F.3d 832 (D.C. Cir. 2012) ……………….. 28

*801 F.3d 250 (D.C. Cir. 2015) (Corrective Statements Op.) ………… 2, 6, 7, 8, 9,

14, 16, 17, 18, 20, 21, 22, 25

27, 28, 29, 30, 33, 34, 35, 36. 38

__ F.3d __, 2016 WL 6437368 (D.C. Cir. Nov. 1, 2016) ………… 2

United States v. Thomas,

572 F.3d 945 (D.C. Cir. 2009) ………………….. 27

Wagner v. Taylor,

836 F.2d 596 (D.C. Cir. 1987) ……………. 30, 32

* Authorities chiefly relied upon are marked with an asterisk.

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

471 U.S. 626 (1985) ………………. 5, 34

Statutes:

Racketeer Influenced and Corrupt Organizations Act (RICO):

18 U.S.C. § 1961 et seq. …………………. 1

18 U.S.C. § 1962 ……………. 1

18 U.S.C. § 1962(c) ……. 1, 2

18 U.S.C. § 1962(d) ………………. 1, 2, 3

18 U.S.C. § 1964 ……………. 1

18 U.S.C. § 1964(a) ……… 1, 2, 18, 197

Other Authorities:

The Federalist Papers:

No. 25 (Hamilton) ……… 22

No. 44 (Madison) ……….. 22

No. 69 (Hamilton) ……… 23

Michelle Obama, Remarks of the First Lady at Tuskegee University Commencement Address (May 9, 2015), www.whitehouse.gov/ the-press-office/2015/05/09/remarks-first-lady-tuskegee-universitycommencement- address (last visited Nov. 15, 2016) ……………… 22

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CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES

Pursuant to D.C. Circuit Rule 28(a)(1), the undersigned counsel certifies as follows:

A. Parties and Amici.

1. Parties.

a. The United States of America was the plaintiff in the district court proceedings and is the appellee in this appeal.

b. The following entities were the defendants in the district court: Philip Morris USA Inc.; Altria Group, Inc. (formerly Philip Morris Companies, Inc.); R.J. Reynolds Tobacco Company; Brown & Williamson Tobacco Corp.; Lorillard Tobacco Company; American Tobacco Company; British American Tobacco, P.L.C.; British American (Investments) Ltd.; The Council for Tobacco Research-U.S.A., Inc.; The Tobacco Institute, Inc.; and Liggett Group, Inc. The district court added the following entities as post-judgment parties regarding remedies, when ITG Brands, LLC acquired several defendants’ cigarette brands: ITG Brands, LLC; Commonwealth Brands Inc.; and Commonwealth-Altadis, Inc.

The following defendants are the appellants in this appeal: Philip Morris USA Inc.; Altria Group, Inc.; and R.J. Reynolds Tobacco Company (individually and as successor to Lorillard Tobacco Company). ITG Brands, LLC, Commonwealth Brands Inc., and Commonwealth-Altadis, Inc. are also appellants here.

c. The following entities were intervenors in the district court: American Cancer Society; American Heart Association; American Lung Association; Americans for Nonsmokers’ Rights; National African American Tobacco Prevention Network; Tobacco-Free Kids Action Fund; Smithkline Beecham Corporation; Glaxosmithkline Consumer Healthcare, L.P.; Pharmacia Corporation; Elan Corporation, PLC; Novartis Consumer Health Inc.; Pfizer, Inc.; and Impax Laboratories, Inc. Counsel for the following intervenors have entered appearances in this appeal: American Cancer Society; American Heart Association; American Lung Association; Americans for Nonsmokers’ Rights; National African American Tobacco Prevention; and Tobacco-Free Kids Action Fund.

2. Amici.

The following entities were amici in the district court: 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.

The United States is unaware of any amicus participating on appeal.

B. Rulings Under Review.

Appellants seek review of Order #62 (JA916-17, Dkt. No. 6184), entered on February 8, 2016, and the accompanying opinion (JA918-28, Dkt. No. 6185), and of Order #64 (JA1100-1135, Dkt. No. 6195), entered on April 19, 2016. The rulings were entered in No. 99-cv-2496 (D.D.C.) by Hon. Gladys Kessler. Only the opinion accompanying Order #62 has an official citation. See 164 F. Supp. 3d 121 (D.D.C.
2016).

C. Related Cases.

This case was previously before this Court in the following appeals: United States v. Philip Morris Inc., No. 01-5244; United States v. Philip Morris Inc., No. 02-5210; United States v. British American Tobacco (Investments) Ltd., Nos. 04-5207 and 04-5208 ; United States v. Philip Morris USA Inc., No. 04-5252; United States v. Philip Morris USA Inc., Nos. 04-5358 and 05-5129; United States v. Philip Morris USA Inc., Nos. 06-5267, 06-5268, 06-5269, 06-5270, 06-5271, 06-5272, 06-5332, 06-5367, 07-5102, and 075103; United States v. Philip Morris USA Inc., No. 11-5145; United States v. Philip Morris USA Inc., No. 11-5146; United States v. Philip Morris USA Inc., Nos. 13-5028, 14-5161;

United States v. Philip Morris USA Inc., No. 15-5210.

/s/ Melissa N. Patterson

MELISSA N. PATTERSON

GLOSSARY

JA Joint Appendix RICO Racketeer Influenced and Corrupt Organizations Act

STATEMENT OF THE ISSUE

In this civil action under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq., the district court found that Defendants for decades operated 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). Exercising its remedial authority under 18 U.S.C. § 1964(a), the court ordered defendant tobacco companies to issue corrective statements to prevent and restrain them from committing future RICO violations. In 2009, this Court affirmed this judgment in large part, holding that appropriately worded corrective statements are permissible under RICO and the First Amendment. In 2015, this Court held that the statement language the district court crafted contained one “typo” and exceeded the district court’s remedial authority insofar as it required Defendants to announce that they deliberately deceived the American public. On remand, the district court fixed the typo and removed the language regarding Defendants’ deliberate deception of the American public. The issue presented here is whether the revised text of the corrective statements is consistent with this Court’s prior decisions.

PERTINENT STATUTES AND REGULATIONS

Pertinent statutes are reproduced in the addendum to this brief.

STATEMENT OF THE CASE

The government initiated this RICO action against various tobacco company Defendants in 1999. In 2006, after a nine-month bench trial, the district court made more than 4,000 factual findings, and concluded that Defendants have for decades operated 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 (D.D.C. 2006) (“Liability Opinion”). In fashioning a remedy designed to prevent and restrain future violations under 18 U.S.C. § 1964(a), the court ordered Defendants to issue corrective statements on five specified topics. See id. at 938-39.

In United States v. Philip Morris USA Inc., 566 F.3d 1095 (D.C. Cir. 2009) (“2009 Opinion”) (per curiam),1 this Court upheld the corrective statements on the specified topics as a proper exercise of the district court’s authority under RICO and held that appropriately crafted corrective statements would not violate the First Amendment. See id. at 1138-45.

In United States v. Philip Morris USA Inc., 801 F.3d 250 (D.C. Cir. 2015) (“Corrective Statements Opinion”), this Court concluded that aspects of the corrective statements’ preamble language as originally formulated by the district court fell outside the court’s remedial authority under RICO and that the statements’ bullet

1 This Court has also referred to this 2009 opinion as the “Remedial Opinion.” United States v. Philip Morris USA, Inc., __ F.3d __, 2016 WL 6437368 (D.C. Cir. Nov. 1, 2016). The district court referred to it as the “Affirmance Opinion.” JA918-19. This brief conforms to the nomenclature this Court used in its 2015 opinion regarding the corrective statements. See United States v. Philip Morris USA Inc., 801 F.3d 250, 253 (D.C. Cir. 2015).

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points contained one “typo,” but rejected Defendants’ other challenges as waived or controlled by earlier decisions in the case.

On remand, the district court revised the corrective statements’ text in light of this Court’s 2015 opinion. The defendant tobacco companies—now joined by several post-judgment parties connected with the transfer of Defendant cigarette brands (collectively, “Manufacturers”)—here challenge the text of the modified corrective statements.

A. PRIOR PROCEEDINGS

1. The 2006 District Court Decision

In August 2006, the district court entered final judgment against defendant cigarette manufacturers, finding “overwhelming evidence” that they have maintained, and continued to maintain, an illegal racketeering enterprise, and that each defendant has “participated in the conduct, management, and operation of the Enterprise,” in violation of 18 U.S.C. § 1962(c), as well as conspired to do so in violation of 18 U.S.C. § 1962(d). Liability Opinion, 449 F. Supp. 2d. at 27, 851-906.

The district court found that based on the overwhelming evidence, Defendants were reasonably like to commit further RICO violations in the future. See Liability Opinion, 449 F. Supp. 2d at 908-19. The district 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.” Id. at 926. The court identified the five areas in which it

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would order Defendants to make corrective statements: addiction; the adverse health effects of smoking; the adverse health effects of exposure to environmental tobacco smoke; their manipulation of physical and chemical design of cigarettes; and light and low tar cigarettes. Id. at 928. The district court ordered that “[t]he statements shall identify the Defendant making the corrective statements.” Id. at 940. The court deferred deciding on “the exact wording of these statements” until further briefing by the parties. Id.

2. This Court’s 2009 Decision

Defendants appealed, and this Court affirmed “in large part” the district court’s finding of liability and “largely affirm[ed] the remedial order,” including corrective statements on the specified topics. 2009 Opinion, 566 F.3d at 1105. This Court rejected Defendants’ argument that the corrective-statement remedy would violate the First Amendment. See id. at 1142-45. This Court dismissed Defendants’ argument that the corrective statements warranted strict scrutiny, making clear that “Defendants’ various claims—denying the adverse effects of cigarettes and nicotine in relation to health and addiction—constitute commercial speech.” Id. at 1143-44. The “intentionally fraudulent character of the [Defendants’] noncommercial public statements” intertwined with their commercial speech “undermines any claim for more exacting scrutiny.” Id. at 1144.

This Court noted that “[t]he district court has not yet determined the content of the corrective statements,” and emphasized that when it did so, it “must ensure the

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corrective disclosures are carefully phrased so they do not impermissibly chill protected speech.” 2009 Opinion, 566 F.3d at 1144 (citing Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651 (1985)). This Court concluded that “the 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 concluded that “[a]ssuming the corrective advertising once drafted meets these requirements, it is a permissible restraint on Defendants’ commercial speech.” Id. at 1145.

3. This Court’s 2015 Decision

a. On remand from the 2009 Opinion, the district court formulated the text of the corrective statements on the five topics this Court had approved. See JA457-520 (Dkt. No. 5992).2 The district court specified a number of bullet points containing factual statements on each topic. These bullet points were to be preceded by a preamble stating “A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public about [the topic of the statement], and has ordered those companies to make this statement.

2 Citations in this brief to “Dkt. No.” refer to filings in No. 1:99-cv-02496 (D.D.C.).

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Here is the truth[.]” See JA465-68; Corrective Statements Opinion, 801 F.3d at 254-56. Defendants appealed, challenging the wording and various aspects of the implementation.

b. This Court affirmed in part and reversed in part. See Corrective Statements Opinion, 801 F.3d 250. This Court described Defendants’ challenge thus:

“[D]efendants challenge a district court order requiring that they add two statements to their cigarette packages and advertisements: an announcement that a federal court has ruled that they ‘deliberately deceived the American public’ about the dangers of cigarettes; and a declaration that they ‘intentionally designed cigarettes” to maximize addiction.’” Id. at 252. This Court concluded that under its prior decisions, “the manufacturers’ objection to disclosing that they intentionally designed cigarettes to ensure addiction is both waived and foreclosed by the law of the case,” but that “the district court, in ordering defendants to announce that they deliberately deceived the public, exceeded its authority under RICO.” Id.

This Court explained its prior RICO holdings, emphasizing that it had held “that the corrective-statement remedy was permissible under section 1964 because defendants, if compelled to tell the truth about cigarettes, would, at the same time, be ‘impaired in making false and misleading assurances.’” Corrective Statements Opinion, 801 F.3d at 257 (quoting 2009 Opinion, 566 F.3d at 1140). “In other words, ‘[r]equiring Defendants to reveal the previously hidden truth about their products will prevent

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and restrain them from disseminating false and misleading statements, thereby violating RICO, in the future.’” Id. (quoting 2009 Opinion, 566 F.3d at 1140).

This Court also emphasized “two basic principles of judicial review,” the lawof- the-case and waiver doctrines. Corrective Statements Opinion, 801 F.3d at 257. The first “recognizes that court[s] involved in later phases of a lawsuit should not re-open questions decided,” and that “[w]hen there are multiple appeals taken in the course of a single piece of litigation, law-of-the-case doctrine holds that decisions rendered on the first appeal should not be revisited on later trips to the appellate court.” Id. (quotation marks omitted). “The second, related principle—waiver—is sometimes understood as an application of law-of-the-case doctrine to prior rulings of the trial court that could have been but were not challenged on an earlier appeal.” Id. (quotation marks omitted). “[A] legal decision made at one stage of litigation, unchallenged in a subsequent appeal when the opportunity to do so existed, governs future stages of the same litigation, and the parties are deemed to have waived the right to challenge that decision at a later time.” Id.

Applying these principles, the Court concluded that Defendants had waived any challenge to the topics of the statements by failing to raise such a challenge in their appeal from the district court’s 2006 judgment and remedial order. Corrective Statements, 801 F.3d at 258. The Court also addressed Defendants’ claims that some the bulleted statements run afoul of the First Amendment under American Meat Institute v. U.S. Department of Agriculture, 760 F.3d 18, 27 (D.C. Cir. 2014) (en banc),

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because they were not “purely factual.” Corrective Statements, 801 F.3d at 260. The Court rejected two such assertions because the statements were in fact supported by evidence. See id. at 260-61 (discussing Defendants’ challenge to facts about compensation and ammonia addition). The court concluded that one factual challenge was to a statement that included a “typo,” and directed the district court to correct it on remand. Id. at 260. The Court also rejected Defendants’ First Amendment challenge to the requirement that they publish the statements through multiple media channels, concluding that this challenge too was foreclosed by Defendants’ failure to challenge it earlier. Id. at 263.

Turning to the preambles, the Court addressed Defendants’ “argument that the district court, in ordering the manufacturers to disseminate what they call ‘backwardlooking’ language that condemns their ‘past wrongdoing,’ exceeded its limited remedial authority under RICO.” Corrective Statements Opinion, 801 F.3d at 261. The Court concluded that the challenged preamble language “cannot be justified on the basis of [the] 2009 opinion.” Id. Nor could it be justified on the basis that it would correct and prevent future consumer deception, the court reasoned, since that rationale “focuses not on restraining the RICO violator, but on safeguarding consumers against RICO violations.” Id. at 262. Noting that the bulleted statements “‘reveal[] the previously hidden truth about [the manufacturers’] products,’” the court rejected the preambles insofar as they “do no such thing and may not be justified on grounds of general deterrence.” Id. at 263 (quoting 2009 Opinion, 566 F.3d at 1140) (alterations in

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original). The Court remanded for further proceedings consistent with its opinion.

See id.

c. The United States filed a petition for panel rehearing, seeking clarification regarding which portions of the statements this Court expected to be altered on remand. See U.S. Pet. for Panel Reh’g, Nos. 13-5028 & 14-5161 (July 6, 2015). The government explained that “[t]his Court made clear that the corrective statements may not refer to defendants’ deliberate deceptions regarding the proposed topics, but it did not specify exactly which portions of those statements must be removed.” Id. at 2.

The government noted that it appeared that the Defendants “agree that some form of introduction is necessary,” but considered numerous aspects of the original statements impermissibly backward-looking. Id. at 2-3. To avoid further extending this “long-running” litigation, Corrective Statements Opinion, 801 F.3d at 252, the government asked this Court to clarify the scope of the revisions it expected. See U.S. Pet. for Panel Reh’g at 3.

This Court denied the petition, stating that “[t]he government’s petition seeks relief that the district court may consider in the first instance on remand.” Reh’g Order, Nos. 13-5028 & 14-5161 (Aug. 5, 2015).

d. Before this Court had issued its 2015 Corrective Statements Opinion, defendants R.J. Reynolds Tobacco Company and Lorillard Tobacco Company sought permission to sell certain cigarette brands to non-defendant ITG Brands, LLC, and to make ITG Brands, LLC and its affiliates Commonwealth Brands, Inc. and Commonwealth9 Altadis, Inc. (collectively, “ITG Entities” or “Post-Judgment Parties”) parties to this case for limited purposes. Dkt. Nos. 6142 (JA561-64), 6143; see JA83-84 (2006 district court order requiring Defendants to obtain court permission before transferring any brands to non-defendants). No party opposed this motion. JA561; see also Dkt. No. 6145, at 22-23 (transcript of hearing regarding transfer, describing the lengthy negotiations among the parties).

After this Court had issued is 2015 opinion, the district court granted the motion to transfer, based on the assurances of counsel for all parties “in the strongest terms that this Order would not in any possible way diminish the effectiveness of the injunctive relief originally entered.” Dkt. No. 6152, at 7. ITG Brands and its affiliates thus became “parties to this litigation for the sole and limited purpose of compliance with Order #1015 on the terms set forth in [the district court’s] Order, including participation as parties in future proceedings with respect to Order #1015.” Dkt. No. 6151, at 3 (JA567). The order specified that the ITG Entities would be responsible for publishing corrective statements on cigarette package onserts and on cigarette- related websites with “slightly modified preamble language for each Corrective Statement.” Id. at 6-8 (JA570-72); see also id. at 15 (JA579) (stating that if the remedial orders’ requirements are “subsequently modified as to all defendants, those modifications shall also presumptively apply to” ITG Brands and affiliates “unless company-specific factors warrant different treatment”).

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B. PROCEEDINGS ON REMAND

On remand, the district court revised the text of the five corrective statements. JA918-28. The district court explained that in its 2015 opinion, this Court had “upheld all of the corrective statements prepared by this Court—except for one sentence only—namely, the preamble to the statements themselves.” JA919. The court explained it gave the parties the opportunity to “submit briefs and provide actual language to correct the one sentence that the Court of Appeals had rejected.” Id.

Despite the limited nature of the defects identified in the Corrective Statements Opinion, the court noted that “Defendants submitted a 40 page opening brief” on remand, proposing to “rewr[ite] much of the five statements already approved by the Court of Appeals.” JA920. The district court rejected Defendants’ attempt to “have this Court return to the drawing board and start the process all over again,” deeming it “ridiculous,” “a waste of precious time, energy, and money for all concerned,” and “a loss of information for the public.” Id. The court declared it “obvious that Defendants are, once again, attempting to stall any final outcome to this long-standing litigation,” and refused to “follow[] that path.” Id.

Instead, the court concluded that “the revised wording of the preambles submitted by the Government and Intervenors has remedied the concern of the Court of Appeals in its 2015 Opinion and Remand.” JA920. The court explained that the government and intervenors had “totally withdrawn” the phrase “deliberately deceived the American public” from the preambles, which were thus “fully consistent

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with the Court of Appeals’ ruling that nothing in the corrective statements could refer to the past fraudulent conduct of Defendants.” Id. The district court provided this comparison of the original and revised introductory text:

Prior introductory text United States’ proposed 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:

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:

JA921. The district court thus ordered the corrective statements to read as follows:

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, 1,200 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.

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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’s the truth:

• Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA intentionally designed cigarettes to make them more addictive.3

• 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.

3 This Court’s Corrective Statements Opinion uses the phrase “Defendant tobacco companies” in this bullet point. See 801 F.3d at 255. The district court, however, had replaced that phrase with Defendants’ names throughout the statements. See JA532 (Dkt. No. 6095 at 2); United States’ Brief at 12 n.4, No. 15-14-5161 (D.C. Cir.) (filed Dec. 1, 2014).

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• 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.

JA921-23 (Dkt. No. 6185, at 4-6); see also JA1101 n.1 (Dkt. No. 6195 at 2 n.1) (addressing sequence of company names).

The district court explained that “[t]he newly crafted preambles do not in any way send a message to the public that Defendants deceived them in the past, nor that Defendants are being punished for their previous conduct.” JA923. The district court rejected Defendants’ argument that retaining “Here is the truth” was inconsistent with this Court’s 2015 opinion, noting that this introduction “ma[de] clear to the public that the following commentary in each of the five topics is, in fact, the truth.” JA924.

The court concluded that “Defendants’ own proposals” had “many serious problems.” JA924. The court noted that all Defendants except Altria and Philip Morris USA “actually proposed mandatory attribution language,” and that they therefore were estopped from objecting to it now. JA925. Although Altria and Philip Morris USA were not estopped, the court reasoned, they “remained silent when ordered to submit their views on attribution.” Id. (citing Order #1025 (JA347-49)). “Since they never articulated any views on the subject, they have waived any objections they now have.” JA925.

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The district court rejected Defendants’ arguments under the First Amendment, noting that this Court had not questioned its analysis in its 2015 opinion. JA925-26. The court also declined to change the “Trigger Date” of the Consent Order, which specified how to calculate when Defendants had to begin publishing the statements. JA926-27.

SUMMARY OF ARGUMENT

In 2009 this Court held that the corrective-statement remedy is consistent with RICO and the First Amendment, so long as its language is factual, uncontroversial, and “geared towards thwarting prospective efforts by Defendants” to again violate RICO. 2009 Opinion, 566 F.3d at 1144-45. In 2015, this Court held that its prior decisions made “clear that the district court, in ordering defendants to announce that they deliberately deceived the public, exceeded its authority under RICO to craft remedies that ‘prevent and restrain’ future violations.” Corrective Statements Opinion, 801 F.3d at 252. Accordingly, the district court excised the preambles’ references to Defendants’ deception of the public, and fixed the one “typo” this Court identified, but otherwise left the statements unchanged. Its decision to continue to label the facts that the statements convey as “the truth” is entirely consistent with this Court’s prior instructions to craft text that reveals such truths, as well as with the need to prevent and restrain Defendants from continuing to engage in RICO violations to sow doubt about public health facts regarding cigarettes.

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Nothing in this Court’s ruling required the removal of the phrase “Here is the truth” from the statements’ text. Nor did the Court require the district court to reopen the process of formulating the text of the corrective statements, much less to adopt the Manufacturers’ newly proposed text in lieu of modifying the text this Court had already examined. The district court properly concluded that the Manufacturers’ proposal to “return to the drawing board and start the process all over again” made it “obvious that Defendants are, once again, attempting to stall any final outcome to this long-standing litigation.” JA920.

The remainder of the Manufacturers’ opening brief is devoted to matters that are long-since foreclosed by either their own choices in the many prior stages of this litigation, or by this Court’s prior decisions. As in 2015, this Court should reject Defendants’ attempt to circumvent the “basic principles of judicial review” that prevent litigants from raising matters previously settled. Corrective Statements Opinion, 801 F.3d at 257.

STANDARD OF REVIEW

This Court reviews the district court’s conclusions of law de novo and otherwise reviews for abuse of discretion the court’s decision to issue an injunction to prevent and restrain future RICO violations. 2009 Opinion, 566 F.3d at 1110.

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ARGUMENT

I. THE DISTRICT COURT APPROPRIATELY REVISED THE CORRECTIVE STATEMENTS TO CONFORM WITH THIS COURT’S 2015 OPINION.

A. Identifying The Corrective Statements As “The Truth” Is Consistent With This Court’s 2015 Opinion.

1. In revising the text of the corrective statements, the district court faithfully implemented this Court’s instructions from the 2015 Corrective Statements Opinion. There, this Court held that its prior decisions made “clear that the district court, in ordering defendants to announce that they deliberately deceived the public, exceeded its authority under RICO to craft remedies that ‘prevent and restrain’ future violations.” 801 F.3d at 252 (quoting 18 U.S.C. § 1964(a)). This Court reiterated that the statements could, consistent with RICO, “[r]equir[e] Defendants to reveal the previously hidden truth about their products.” Id. at 261 (first bracket in original) (quoting 2009 Opinion, 566 F.3d at 1140). However, because the original preambles “disclose defendants’ prior deceptive conduct,” rather than the truth about Defendants’ product, this Court concluded the district court’s chosen language went beyond the bounds of the district court’s remedial authority. Id. at 261-63.

Accordingly, the district court on remand excised all references to Defendants’ prior deceptive conduct. The revised preamble states:

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:

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JA921. This introductory language contains no reference to any prior acts of Defendants, the only aspect of the original preamble this Court identified as outside the scope of the district court’s remedial authority under 18 U.S.C. § 1964(a). This “reworking of the text … is fully consistent with the Court of Appeals’ ruling that nothing in the corrective statements could refer to the past fraudulent conduct of Defendants.” JA920.

As the district court explained, retaining the phrase “Here is the truth” is permissible and appropriate. See JA924. That phrase “make[s] clear to the public that the following commentary in each of the five topics is, in fact, the truth.” Id. Clearly labeling the facts in the bullet points as “the truth”—rather than opinions or matters subject to doubt—will help prevent and restrain Defendants from violating RICO in future by “making false and misleading assurances about, for instance, smoking- related diseases or the addictiveness of nicotine.” 2009 Opinion, 566 F.3d at 1140; see also id. at 1106-08 (summarizing evidence regarding Defendants’ “‘open question’ strategy of sowing doubt” regarding various dangers associated with cigarettes); see, e.g., Liability Opinion, 449 F. Supp. 2d at 39, 180, 195, 208, 692, 728, 801 (discussing manufacturers’ “open question” strategy). The district court’s reformulated language does nothing more than require Defendants to “communicate the opposite, truthful message about these matters to consumers,” which this Court has already approved as a legitimate exercise of the court’s remedial authority. 2009 Opinion, 566 F.3d at 1140.

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2. The Manufacturers do not contest that some form of preamble is appropriate, nor could they, since they themselves propose introductory language. See, e.g., Br. 38. Instead, they contend that the district court’s decision to retain the previously crafted preambles, minus the reference to deliberate deception, violated this Court’s 2015 opinion. See Br. 30-43. In particular, they argue that the district court was obliged on remand to eliminate the phrase “Here is the truth” in introducing the bullet points. Br. 31-33.

The Manufacturers are mistaken. As the district court concluded, this Court’s 2015 opinion required the removal of only the portions of the preambles referring to Defendants’ prior deliberate deception of the public. The first paragraph of that opinion clearly announces the portions of the statements that were inconsistent with RICO: “[I]n ordering defendants to announce that they deliberately deceived the public, [the district court] exceeded its authority under RICO to craft remedies that prevent and restrain future violations.” Corrective Statements Opinion, 801 F.3d at 252 (emphasis added; quotation marks omitted). Indeed, the only place in the opinion this Court even mentioned the phrase “Here is the truth” is in its reproduction of the original corrective statements text.

Perhaps recognizing that this Court never referred to the phrase “Here is the truth” as improper under the court’s remedial authority, the Manufacturers contend that this Court declared “the entire preambles” impermissible under RICO. Br. 31; see also Br. 40. But this Court required revision of the preambles only to the extent that

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they “disclose defendants’ prior deceptive conduct,” Corrective Statements Opinion, 801 F.3d at 261, and its analysis focused on the preambles’ reference to Defendants’ “deliberate deception,” both in terms of how the Court understood Defendants’ challenge and the conclusions it reached.4

The Manufacturers next insist that the phrase “Here is the truth” does in fact address Defendants’ prior conduct, rather than reveal truths about their products. Br. 31-33. The district court correctly rejected this contention. “[T]here is simply no support for Defendants’ argument that even the new sanitized preambles will convey to members of the public that they have been deceived in the past.” JA923. This phrase labels the bulleted facts regarding the approved topics as true, entirely in keeping with this Court’s prior instructions that the statements should require

4 See Corrective Statements Opinion, 801 F.3d at 252 (“[D]efendants challenge a district court order requiring that they add two statements to their cigarette packages and advertisements: an announcement that a federal court has ruled that they ‘deliberately deceived the American public’ about the dangers of cigarettes; and a declaration that they ‘intentionally designed cigarettes’ to maximize addiction.”); id. (“[I]n ordering defendants to announce that they deliberately deceived the public, [the district court] exceeded its authority under RICO to craft remedies that ‘prevent and restrain’ future violations.”); id. at 258 (“The manufacturers principally challenge (1) the bulleted statements in disclosures B and D, which reveal that they ‘intentionally designed cigarettes’ to ensure addiction and (2) the preambles announcing that a federal court has ruled that they ‘deliberately deceived the American public’ about the dangers of cigarettes.”); id. at 261 (“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.’”); id. (“But unlike the bulleted statements, which do just that [reveal previously hidden truth about products], the preambles reveal nothing about cigarettes; instead, they disclose defendants’ prior deceptive conduct.”).

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Defendants to “reveal the previously hidden truth about their products.” Corrective Statements Opinion, 801 F.3d at 254.

The Manufacturers suggest that correcting a lie is the only reason a speaker would “affirm[] that a message is ‘the truth,’” and insist that the “inescapable message” of this phrase is that they previously “withheld” these truths. Br. 31, 42, 50. But the phrase “here is the truth” need not imply that the speaker lied or omitted truths in the past. Rather, it can underscore the importance and accuracy of the points that follow without any such implication, as current usage makes clear. See, e.g., Michelle Obama, Remarks by the First Lady at Tuskegee University Commencement Address (May 9, 2015), www.whitehouse.gov/the-pr… lady-tuskegee-university-commencement-address (last visited Nov. 15, 2016) (“Because here is the truth—if you want to have a say in your community, if you truly want the power to control your own destiny, then you’ve got to be involved.”).5

5 Other examples contradict Defendants’ insistence that a penumbra of deceit necessarily surrounds “affirm[ing] that a message is ‘the truth.’” Br. 31; see also Br. 42. “The truth is” is also commonly used in a manner analogous to the above example, appearing multiple times in The Federalist Papers. See, e.g., The Federalist No. 25 (Hamilton) (“The framers of the existing Confederation, fully aware of the danger to the Union from the separate possession of military forces by the States, have, in express terms, prohibited them from having either ships or troops, unless with the consent of Congress. The truth is, that the existence of a federal government and military establishments under State authority are not less at variance with each other than a due supply of the federal treasury and the system of quotas and requisitions.”) (emphasis added), No. 44 (Madison) (“[I]n the last resort a remedy must be obtained from the people who can, by the election of more faithful representatives, annul the acts of the usurpers. The truth is, that this ultimate redress may be more confided in

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“Here is the truth” simply indicates that the following information is unequivocally true. As the district court explained, this introduction speaks only to the information about Defendants’ products, not their conduct. See JA923-34. And as discussed above, against the backdrop of Defendants’ prior RICO violations— which took the form of falsely creating doubt about the accuracy of public health information about smoking in an attempt to “give smokers a psychological crutch and a self-rationale to continue smoking,” Liability Opinion, 449 F. Supp. 2d at 174—the district court did not abuse its discretion in concluding that requiring the Manufacturers to label the truth about smoking as the truth about smoking would prevent and restrain Defendants from committing such RICO violations. Indeed, the Manufacturers’ strenuous objections to identifying the bullet points as unambiguously true recall the very RICO violations that prompted the corrective statements remedy. See, e.g., id. at 208 (explaining that “each and every one of these Defendants … mounted a coordinated, well-financed, sophisticated public relations campaign to attack and distort the scientific evidence demonstrating the relationship between against unconstitutional acts of the federal than of the State legislatures … .”) (emphasis added). When that phrase is used to refute the accuracy of statements, it is preceded with a description of the challenged misinformation. See, e.g., The Federalist No. 69 n.1 (Hamilton) (“A writer in a Pennsylvania paper, under the signature of TAMONY, has asserted that the king of Great Britain owes his prerogative as commander-in-chief to an annual mutiny bill. The truth is, on the contrary, that his prerogative, in this respect, is immemorial ….”).

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smoking and disease, claiming that the link between the two was still an ‘open question’”).6

B. The District Court Did Not Abuse Its Discretion By Rejecting Defendants’ Attempt To Rewrite The Statements On Remand.

Defendants offer no basis for their assertion that the district court should have adopted their own proposed introductory language. The predicate for this argument is the mistaken assumption that the revised preambles, which do not refer to Defendants’ conduct, nonetheless “convey[] Defendants’ wrongdoing.” Br. 39. As discussed above, that is incorrect.

Defendants provide no other reason for their assertion that the district court erred in refusing to “return to the drawing board and start the process [of crafting statements] all over again.” JA920. The district court could have chosen on remand to “re[write] … the five statements already approved by the Court of Appeals.” Id. But its refusal to do so was hardly an abuse of discretion. See id. (explaining that it would be “ridiculous” and “a waste of precious time, energy, and money for all concerned” to “start the process all over again”). On the contrary, the district court’s decision to take the language this Court had already examined, make the targeted

6 The Manufacturers intimate that the district court’s adoption on remand of the United States’ proposed revisions is inconsistent with this Court’s denial of the United States’ petition for panel rehearing of the Corrective Statements Opinion. See Br. 17. But this Court specifically stated that the district court could consider the United States’ proposals “in the first instance on remand.” Reh’g Denial Order, Nos. 13-5028 & 14-5161 (Aug. 5, 2015).

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changes this Court directed, and leave the statements otherwise untouched was a sensible way to comply with this Court’s mandate without creating new avenues for Defendants to further “stall any final outcome to this long-standing litigation.” Id.

II. THE MANUFACTURERS’ OTHER CHALLENGES ARE FORECLOSED AND MERITLESS.

The Manufacturers also challenge three other aspects of the statements and attempt to re-litigate the corrective statements’ compliance with the First Amendment. See Br. 33-40, 43-63. These challenges are all foreclosed by either the many previous stages of this litigation or the Manufacturers’ representations to the district court. As in 2015, this Court should reject the Manufacturers’ attempt to circumvent the “basic principles of judicial review” that prevent litigants from raising matters previously settled. Corrective Statements Opinion, 801 F.3d at 257.

A. The Manufacturers Cannot Now Challenge Other Aspects Of The Corrective Statements Under RICO.

1. Statements C and D.

The Manufacturers attempt to challenge the topics of Statements C and D as inconsistent with this Court’s prior guidance regarding the bounds of RICO remedial authority. Br. 36-37. Statement C addresses “selling and advertising low tar and light

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cigarettes as less harmful than regular cigarettes,” and Statement D addresses “designing cigarettes to enhance the delivery of nicotine.” JA922.7

The precise words the Manufacturers now attempt to challenge appeared in the district court’s first formulation of the corrective statements in 2012. See United States v. Philip Morris USA, Inc., 907 F. Supp. 2d 1, 8-9 (D.D.C. 2012).8 They had a chance to challenge this wording in their appeal from the district court’s November 2012 order.

And they did challenge parts of it. Defendants specifically attacked this formulation of Statement C as backward-looking. See Opening Br. 55-56, No. 13-5028 (D.C. Cir.) (filed Sept. 29, 2014). Defendants also chose to challenge aspects of Statement D. See id. at 33-34, 41.

This Court largely rejected those challenges. With respect to Statement D, this Court explained that as early as the district court’s 2006 remedial order, Defendants

7 These are the same topics that the district court formulated in 2006. Liability Opinion, 449 F. Supp. 2d at 938-39 (specifying as topics (C) and (D) “the lack of any significant health benefit from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild,’ and ‘natural,’ cigarettes” and “Defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery”). They are the same topics that this Court approved in 2009. See 2009 Opinion, 566 F.3d at 1138 (similar).

8 The original preamble to Statement C also included the word “falsely” before the language Defendants now challenge. See Philip Morris, 907 F. Supp. 2d at 8 (“A Federal Court has ruled that the Defendant tobacco companies deliberately deceived the American public by falsely selling and advertising low tar and light cigarettes as less harmful than regular cigarettes.”) (emphasis added). “[O]ut of an abundance of caution,” the United States and Intervenors proposed eliminating the word “falsely,” and the district court did so. JA924. Defendants did not object to this removal below, and do not even attempt to argue that this deletion somehow revived their ability to challenge the unchanged language that follows.

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knew “that they would be required to make just such corrective statements about their ‘manipulation of cigarette design and composition to ensure optimum nicotine delivery.’” Corrective Statements Opinion, 801 F.3d at 258 (quoting Liability Opinion, 449 F. Supp. 2d at 939). “The manufacturers did not object to this requirement when they appealed the remedial order in 2008, so they are ‘deemed to have waived the right to challenge [it].’” Id. (alteration in original) (quoting United States v. Thomas, 572 F.3d 945, 949 (D.C. Cir. 2009)). Moreover, this Court explained “[i]n our 2009 opinion … we recognized that the district court had ordered corrective disclosures on five topics, including ‘the manufacturers’ manipulation of cigarette design and composition to ensure optimum nicotine delivery,’” and “approved those topics across the board.” Id. (quoting 2009 Opinion, 566 F.3d at 1138). “Having thus decided the issue in the earlier appeal, we will not revisit it here.” Id. at 258-59 (noting that the district court’s wording did not go “beyond the defendants’ manipulation of cigarette design”); see also id. at 252 (“Given our earlier decisions in this case, the manufacturers’ objection to disclosing that they intentionally designed cigarettes to ensure addiction is both waived and foreclosed by the law of the case.”).

With respect to Statement C, this Court rejected Defendants’ arguments, and concluded that this statement “prevents and restrains defendants from making false health assurances about [their] cigarettes,” no matter what “new look” defendants might assign to the cigarettes they previously marketed as “light” and “low-tar.”

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Corrective Statements Opinion, 801 F.3d at 259-60. This Court explained that Defendants had already lost their challenge that intervening legislation obviated the need for Statement C in an earlier appeal. See id. (citing United States v. Philip Morris USA Inc., 686 F.3d 832, 835 (D.C. Cir. 2012)). This Court also rejected Defendants’ challenge to a Statement C bullet point about compensation, and concluded that a different bullet point in this statement had a “typo.” Id. at 260.

Nevertheless, the Manufacturers now attempt to challenge these topics as impermissibly backward-looking under RICO, without even attempting to explain why these matters could be open to appeal at this stage in this litigation. See Br. 36-37. Under this Court’s unambiguous holding, Defendants’ renewed challenge to Statement D is foreclosed by the principles of waiver and the law of the case doctrine, just as it was in 2015. See Corrective Statements Opinion, 801 F.3d at 258-59. Defendants’ challenge to the formulation of Statement C is similarly foreclosed, since this Court rejected on the merits Defendants’ arguments regarding this identically phrased topic in its Corrective Statements Opinion.

2. Court Attribution Language.

By the same principles, the Manufacturers cannot now challenge the preambles’ statement that “a Federal Court has ordered” them to make these statements. This phrase is unchanged from the Corrective Statements Opinion. Compare Br. 33, with 801 F.3d at 254-56. Defendants did not challenge it in the appeal that yielded that

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opinion.9 Because Defendants did not appeal this language previously, they cannot appeal it now. See Corrective Statements Opinion, 801 F.3d at 258-59.

Indeed, the district court correctly concluded that even before the 2014-15 appeal, Defendants had waived any such challenge. JA925. Lorillard in 2006 specifically requested a preamble including a phrase that Defendants had been ordered by a court to make these statements. JA219-21; JA925. Similarly, R.J. Reynolds and Brown & Williamson requested that the statements include the phrase “This message is furnished by [Defendant] pursuant to a Court Order.” JA138 (alteration in original). Noting this language in Defendants’ submissions, the District Court ordered the parties to submit briefing on “[w]hether the corrective statements should indicate that they are being issued pursuant to Court Order.” JA348. None of the defendants affirmatively objected to such language in response to the district court’s specific direction to give their views, stating only that their previous filings indicated differing views on the matter. JA355; JA925; see also JA91. However, Defendants did all affirmatively represent that they “agree[d] that they have a clear constitutional right to disassociate themselves from compelled speech and that this

9 On the contrary, Defendants’ 2014 brief specifically invoked as an appropriate alternative Lorillard’s own proposed text in 2006, which included similar language to that Defendants protest now. See Opening Br. 16, No. 13-5028 (D.C. Cir.) (filed Sept. 29, 2014) (asserting that “Defendants proposed numerous alternative formulations of the corrective statements that plainly would have achieved” the desired result) (citing JA76 (Dkt. No. 5781)); Dkt. No. 5781, at 2-4 (proposing statements with preamble language “The following statement is made by Lorillard Tobacco Company pursuant to a Court Order”).

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right requires that they have the option to indicate that objectionable statements are made pursuant to the Court’s Order.” JA355 (Dkt. No. 5787, at 6) (response by Altria Group Inc., Philip Morris USA Inc., Brown & Williamson Tobacco Holdings, Inc., Lorillard Tobacco Company). Because Defendants either affirmatively invited such language or failed to object to it, they cannot now contest it. See Corrective Statements Opinion, 801 F.3d at 257-59; see also, e.g., Wagner v. Taylor, 836 F.2d 596, 599 (D.C. Cir. 1987) (“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.”). Moreover, in 2011 Defendants again failed to object to the government’s proposal to include the phrase “Paid for by [Cigarette Manufacturer Name] under order of a Federal District court.” See JA417-19. And even now, the Manufacturers urge that the district court should have crafted statements that conclude with the phrase “Under court order, paid for by [Defendants].” Br. 38 (alteration in original). No reason exists—and the Manufacturers do not even attempt to devise one—why the district court’s remedial authority under RICO would permit it to put such a phrase at the end of the statements, but not the beginning.

3. Phrasing Tailored To Post-Judgment Parties.

Nor can the Manufacturers base their challenge on the district court’s decision to tailor the statements to be published by the non-defendant Post-Judgment Parties. See Br. 35-36. R.J. Reynolds, Lorillard, and the ITG Entities themselves proposed

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such tailoring, without opposition from the other Defendants, and the Manufacturers are therefore estopped from challenging it now.

Under the district court’s 2006 order, Defendants had to get court permission to transfer any cigarette brands to non-defendants. See Liability Opinion, 449 F. Supp. 2d at 945. In order to get this permission, the defendants seeking to sell certain brands and the prospective post-judgment party seeking to buy them represented that “ITG Brands will provide Corrective Statements on the packaging for the Acquired Brands, with the preambles tailored slightly to reflect truthfully that ITG Brands was not named as a defendant and was not found liable.” Dkt. No. 6143, at 12-13; see also id. at 13 (promising that “ITG Brands (which has no websites at present) will also put Corrective Statements on websites that promote or advertise the Acquired Brands or cigarettes generally, also with the language tailored to reflect that ITG Brands was not named as a defendant and was not found liable”).10 The government did not oppose, and the district court granted, their motion on this understanding. See Dkt. Nos. 6145, at 23-29 (Transcript of May 19, 2015 hearing), 6152. Indeed, the district court explicitly noted its “concern[] that language in the Proposed Order, which modifies the corrective statements as applied to the Acquired Brands, would diminish the corrective statements’ effectiveness.” Dkt. No. 6152, at 10-11. The government

10 The district court’s 2006 order required that each statement “shall identify the Defendant making the corrective statements,” Liability Opinion, 449 F. Supp. 2d at 940, and no Defendant challenged that requirement on appeal.

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explained the lengthy consultation process among the parties, and “that it had consulted with experts in the area of health communications, who concluded that the language would not adversely affect the interest or comprehension of the public.” Dkt. No. 6152, at 11; Dkt. No. 6145, at 21-29. “Based upon the clear and comprehensive assurances by all counsel,” the district court granted the motion authorizing the transfer of certain cigarette brands. Dkt. No. 6152, at 11.

Even after this Court’s mandate in the Corrective Statements Opinion had issued— and the parties briefed what changes the district court should make in light of that opinion—Defendants and the Post-Judgment Parties continued to assert that any references to the court order in the statements would make it “necessary to formulate modified language for ITG Brands making clear its status as a purchaser of brands rather than a Defendant.” JA640 (Dkt. No. 6175, at 7 n.1); see also JA644 (Dkt. 6175 at 11) (“‘Defendant’ would be inaccurate for ITG Brands, which was not a Defendant, and would require additional clarifying language on statements disseminated by ITG Brands.”). Against this backdrop, the Manufacturers cannot base their challenge on the fact that the district court introduced the very changes into the corrective statements text they sought. See Wagner, 836 F.2d at 599 (“A starker instance of invited error, if indeed any error was committed, could hardly be imagined.”).

In any event, the Manufacturers are incorrect in suggesting that a comparison between the text Defendants are to publish and the modification for the ITG Entities

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impermissibly creates an inference that Defendants previously deceived the public. As this Court has already made clear, some of the statements will refer to some of Defendants’ past actions regarding nicotine manipulation. See Corrective Statements Opinion, 801 F.3d at 258-59. The district court’s minor modifications for ITG Entities-published statements simply preserve the accuracy of those statements, by clarifying—at the Manufacturers’ own urging—that the ITG Entities were not defendants and were not themselves originally ordered to make statements. They do not refer to any past actions beyond those this Court has already approved.

Moreover, it is unclear how the Manufacturers propose to remedy the alleged inference raised by the differences between Defendants’ text and ITG Brands’ text. To the extent the Manufacturers would like the texts to be synchronized, the government has no objection to the ITG Entities using the same language the district court ordered for Defendants. Based on their previous representations, however, the ITG Entities appear unwilling to accept such a reconciliation of these texts. To the extent that the Manufacturers are now attempting to use the ITG Entities’ presence in the case to force wholesale modifications to the corrective statements, their argument manifestly conflicts with their prior representations to the district court “in the strongest terms that this Order [permitting the transfer to ITG Brands] would not in any possible way diminish the effectiveness of the injunctive relief originally entered in Order #1015.” Dkt. No. 6152, at 7 (relying upon government counsel’s understanding that there would be “some minor rewordings to adjust for a transition

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of ownership” but that “[t]he major elements of the permanent injunction are absolutely in place, and the only changes are intended to just adjust logistic issues that arise as a natural part of the transaction”).

B. This Court Has Already Concluded That Corrective Statements That Adhere To Its Guidance Regarding RICO Are Consistent With The First Amendment.

1. This Court analyzed the First Amendment strictures on the corrective statements in its 2009 opinion. There, this Court explained that if “the corrective advertising once drafted meets [certain] requirements, it is a permissible restraint on Defendants’ commercial speech.” 2009 Opinion, 566 F.3d at 1145. The Court specified these “requirements”: 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 v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985)).

On the first remand, the district court attempted to meet these requirements, yielding the 2012 order. See Philip Morris, 907 F. Supp. 2d. at 12-20. The Defendants challenged this text, and in 2015, this Court held that “the district court, in ordering defendants to announce that they deliberately deceived the public, exceeded its authority under RICO to craft remedies that ‘prevent and restrain’ future violations.” Corrective Statements Opinion, 801 F.3d at 252.

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Notably, the Court in 2015 rejected the proposition that “this case presents thorny, unresolved questions under both RICO and the First Amendment,” explaining that “the heavy lifting has already been done” in its earlier opinions. Corrective Statements Opinion, 801 F.3d at 252. This Court explained that in one of those prior opinions, it had already “rejected the manufacturers’ RICO and First Amendment challenges to the corrective-disclosure remedy” and “explained that, in light of their subject matter, the corrective statements would qualify as commercial speech and satisfy the First Amendment if designed to prevent defendants from misleading consumers through fraudulent marketing in the future.” Id. at 254 (citing 2009 Opinion, 566 F.3d at 1144-45). Thus, the Court explained that it could “begin, as usual, with the statutory challenge,” and “end there too” because of “claims waived and questions already settled.” Id. at 256 (“Where a party raises both statutory and constitutional arguments … ordinarily [federal courts] first address the statutory argument in order to avoid unnecessary resolution of the constitutional issue.”) (alterations in original) (quoting Blum v. Bacon, 457 U.S. 132, 137 (1982)).

On remand, the district court complied with this Court’s directions, removing the requirement that the Manufacturers had “to announce that they deliberately deceived the public.” Corrective Statements Opinion, 801 F.3d at 252; JA918-28. With this change made and the statements now confined to “prevent[ing] defendants from misleading consumers through fraudulent marketing in the future,” they “satisfy the First Amendment.” Corrective Statements Opinion, 801 F.3d at 254.

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2. The Manufacturers contend that this Court “has not yet had occasion to address” their First Amendment challenge, and devote twenty pages to reasserting this claim, including re-raising their contention that the corrective-statement remedy warrants strict scrutiny. Br. 43-63.

The Manufacturers misunderstand this Court’s 2015 opinion. This Court did not, as the Manufacturers argue, leave for another day the resolution of the First Amendment challenge they launched in that appeal. Instead, the Court made clear that it had already held that corrective-statement text appropriately crafted to prevent and restrain future RICO violations by the Manufacturers is consistent with the First Amendment. See Corrective Statements Opinion, 801 F.3d at 254; 2009 Opinion, 566 F.3d at 1144-45. The Court observed that while “the extensive briefs the parties and their amici have submitted” might lead one to “think this case presents thorny, unresolved questions under both RICO and the First Amendment,” those questions were controlled by the Court’s “earlier decisions in this case.” Corrective Statements Opinion, 801 F.3d at 252. Although the Manufacturers have once again engaged in extensive briefing, Br. 43-63, there are no First Amendment issues left unresolved in this case, and we therefore respond only briefly to the Manufacturers’ renewed attempt to re- litigate these claims.

The Manufacturers’ First Amendment arguments are meritless. Their contention that the corrective-statements remedy warrants strict scrutiny is incorrect—as well as foreclosed—for the reasons previously set out by this Court. See

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2009 Opinion, 566 F.3d at 1142-44. As with their RICO challenge, the Manufacturers’ argument that the statements impermissibly burden their commercial speech largely hinges on their incorrect view that the revised statements impermissibly “convey information about past misconduct” and on their attempt to re-litigate settled questions. Br. 50-58 & n.8 (challenging the “topics (C) and (D),” claiming that the factual findings are not “universally accepted, uncontroversial information,” and asserting that the preambles “communicate only one side” of the story).11 Each line of the corrective statements is firmly rooted in the district court’s factual findings and designed “toward thwarting prospective efforts by Defendants” to commit future RICO violations. 2009 Opinion, 566 F.3d at 1144-45. Under this Court’s precedent, they are therefore “a permissible restraint on Defendants’ commercial speech.” Id. at
1145.

The Manufacturers’ suggestion that recent decisions of this Court call into question its earlier decisions in this case is baseless. Br. 45, 57-59 & nn.8-9. This Court’s en banc decision in American Meat Institute v. U.S. Department of Agriculture, 760 F.3d 18 (D.C. Cir. 2014), made clear that Zauderer’s standard for disclosure mandates is not limited to consumer deception. See id. at 20. The decision in National Ass’n of Manufacturers v. SEC, 800 F.3d 518 (D.C. Cir. 2015), addressed an SEC disclosure

11 The Manufacturers’ suggestion that other courts have found facts in conflict with the statements is incorrect. Compare Br. 53, with JA493 (Dkt. No. 5992, at 37) (district court finding that “none of the cases cited by Defendants support their argument”); see also Dkt. Nos. 5930-1, 5935-2.

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requirement “unconnected to advertising” that applied generally to securities firms utilizing certain minerals. Id. at 522; National Ass’n of Mfrs. v. SEC, 748 F.3d 359, 363 (D.C. Cir. 2014). Here, however, this Court previously explained that the corrective- statement remedy in this case was appropriate precisely because of Defendants’ prior false advertising. 2009 Opinion, 566 F.3d at 1143-44 (explaining that against the backdrop of Defendants’ lengthy past and likely future RICO violations in the form of “false and fraudulent statements to consumers about their products,” the “publication of corrective statements addressing Defendants’ false assertions is adequately tailored to preventing Defendants from deceiving consumers”). And even were there any conflict, National Ass’n of Manufacturers could not have overruled this Court’s Corrective Statements Opinion, which also postdated and examined the en banc American Meat Institute decision. 801 F.3d at 260.

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CONCLUSION

The judgment of the district court should be affirmed.

Respectfully submitted,

BENJAMIN C. MIZER

Principal Deputy Assistant Attorney General

CHANNING D. PHILLIPS

United States Attorney

MARK B. STERN

ALISA B. KLEIN

/s/ Melissa N. Patterson

MELISSA N. PATTERSON

(202) 514-1201

Attorneys, Appellate Staff

Civil Division, Room 7230

U.S. Department of Justice

950 Pennsylvania Ave., N.W.

Washington, D.C. 20530

NOVEMBER 2016

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CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF APPELLATE PROCEDURE 32(a)

I hereby certify that this brief complies with the requirements of Fed. R. App. P. 32(a)(5) and (6) because it has been prepared in 14-point Garamond, a proportionally spaced font. I further certify that this brief complies with the type- volume limitation of Fed. R. App. P. 32(a)(7)(B) because it contains 9,316 words, excluding the parts of the brief exempted under Rule 32(a)(7)(B)(iii), according to the count of Microsoft Word. /s/ Melissa N. Patterson

MELISSA N. PATTERSON

CERTIFICATE OF SERVICE

I hereby certify that on November 16, 2016, I electronically filed the foregoing brief with the Clerk of the Court for the United States Court of Appeals for the District of Columbia Circuit by using the appellate CM/ECF system.

The participants in the case are registered CM/ECF users and service will be accomplished by the appellate CM/ECF system, except the following, for whom service will be accomplished by Federal Express:

Robert J. Brookhiser Jr.

Baker & Hostetler LLP

1050 Connecticut Avenue, NW

Washington Square, Suite 1100

Washington, DC 20036-5304

/s/ Melissa N. Patterson

MELISSA N. PATTERSON

ADDENDUM

18 U.S.C. § 1962

18 U.S.C. § 1964

18 U.S.C. § 1962. Prohibited activities

(a) It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal within the meaning of section 2, title 18, United States Code, to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce. A purchase of securities on the open market for purposes of investment, and without the intention of controlling or participating in the control of the issuer, or of assisting another to do so, shall not be unlawful under this subsection if the securities of the issuer held by the purchaser, the members of his immediate family, and his or their accomplices in any pattern or racketeering activity or the collection of an unlawful debt after such purchase do not amount in the aggregate to one percent of the outstanding securities of any one class, and do not confer, either in law or in fact, the power to elect one or more directors of the issuer.

(b) It shall be unlawful for any person through a pattern of racketeering activity or through collection of an unlawful debt to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.

(c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.

(d) It shall be unlawful for any person to conspire to violate any of the provisions of subsection (a), (b), or (c) of this section.

18 U.S.C. § 1964. Civil remedies

(a) 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

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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.

(b) The Attorney General may institute proceedings under this section. Pending final determination thereof, the court may at any time enter such restraining orders or prohibitions, or take such other actions, including the acceptance of satisfactory performance bonds, as it shall deem proper.

(c) Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee, except that no person may rely upon any conduct that would have been actionable as fraud in the purchase or sale of securities to establish a violation of section 1962. The exception contained in the preceding sentence does not apply to an action against any person that is criminally convicted in connection with the fraud, in which case the statute of limitations shall start to run on the date on which the conviction becomes final.

(d) A final judgment or decree rendered in favor of the United States in any criminal proceeding brought by the United States under this chapter shall estop the defendant from denying the essential allegations of the criminal offense in any subsequent civil proceeding brought by the United States.

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