USA v PHILIP MORRIS, et. al. Appeal: APPELLEE BRIEF, Dec 2, 2016

December 2, 2016 10:38 pm by Gene Borio

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EXCERPT:

Although this Court already held that the corrective statements may, consistent with RICO and the First Amendment, compel the cigarette manufacturers to “reveal the previously hidden truth about their products,” the companies now argue that the district court somehow contravened this Court’s past rulings by adopting preambles stating “Here is the truth” before setting forth entirely accurate statements concerning the health effects and addictiveness of cigarettes. Further, although the manufacturers themselves also proposed that the public be informed that the disclosures are being made “[u]nder court order,” the companies now also complain that such language has been included in the preambles.

STATEMENT OF FACTS

This is the seventh tobacco company appeal in this “long-running RICO case against the nation’s cigarette manufacturers” for engaging in a “‘pervasive scheme to defraud consumers and potential consumers of cigarettes,’ carried out ‘over the course of more than 50 years.’”

END EXCERPT

FULL TEXT:

12/02/2016 APPELLEE BRIEF [1648965] filed by American Cancer Society, American Heart Association, American Lung Association, Americans For Nonsmokers’ Rights, National African American Tobacco Prevention Network and Tobacco-Free Kids Action Fund in 16-5101, 16-5127 [Service Date: 12/02/2016 ] Length of Brief: 8,740 words. [16-5101, 16-5127] (Glitzenstein, Eric)

​ [ORAL ARGUMENT NOT YET SCHEDULED] Nos. 16-5101 & 16-5127 [image]

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

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UNITED STATES OF AMERICA,

Plaintiff-Appellee,

TOBACCO-FREE KIDS ACTION FUND, et al.,

Plaintiff-Intervenor-Appellees, v.

PHILIP MORRIS USA, INC., et al.,

Defendants-Appellants. [unsupported_shape_0]

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

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BRIEF FOR THE PLAINTIFF-INTERVENOR-APPELLEES TOBACCO-FREE KIDS ACTION FUND, et al.

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Eric R. Glitzenstein

Katherine A. Meyer

MEYER GLITZENSTEIN & EUBANKS, LLP

4115 Wisconsin Ave., N.W. Suite 210

Washington, DC 20016

202-588-5206

202-588-5029 (facsimile)

​ INTERVENOR APPELLEES’ CERTIFICATE AS TO PARTIES, RULINGS AND RELATED CASES AND CORPORATE DISCLOSURE STATEMENT

A. Parties, Intervenors and Amici

The parties, intervenors and amici appearing before the district court and in this Court are listed in United States Appellee’s Certificate.

Plaintiffs-Intervenors Appellees’ Rule 26.1 Corporate Disclosure Statement

The Tobacco-Free Kids Action Fund, American Cancer Society, American Heart Association, American Lung Association, and Americans for Nonsmokers’ Rights, are non-profit education and advocacy organizations dedicated to a number of public health issues, including working to prevent and reduce tobacco use and its harms. The National African American Tobacco Prevention Network is a national non-profit organization dedicated to facilitating the development and implementation of comprehensive and community competent tobacco control programs to benefit communities of African descent.

None of the Intervenors has any parent companies or issues any stock or partnership shares.

B. Rulings Under Review

Reference to the ruling at issue appears in the United States Appellee’s Certificate.

C. Related Cases

Related cases are listed in United States Appellee’s Certificate.

Respectfully submitted,

/s/ Katherine A. Meyer

Katherine A. Meyer

Meyer Glitzenstein & Eubanks, LLP

4115 Wisconsin Ave., N.W. Suite 210

Washington, D.C. 20016

(202) 588-5206

Counsel for Intervenors-Appellees

December 2, 2016

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​ TABLE OF CONTENTS

PAGE TABLE OF AUTHORITIES iii GLOSSARY vi STATEMENT OF THE ISSUE 1 RELEVANT STATUTES 1 STATEMENT OF THE CASE 1 STATEMENT OF FACTS 4

A. The District Court’s Initial Remedial Order And This Court’s 2009 Affirmance Of The Corrective Statement Remedy 5

B. The District Court’s Efforts To Craft Corrective Statement Language, And This Court’s 2015 Ruling Rejecting Virtually All Of The Cigarette Manufacturers’ Objections To That Language 9 C. The District Court’s Adoption of Corrective Statements Without The Preamble Language That The Court Held Impermissible. 13

SUMMARY OF ARGUMENT 16

STANDARD OF REVIEW 17

ARGUMENT 17

I. THE DISTRICT COURT HAS BROAD DISCRETION TO FASHION A CORRECTIVE STATEMENTS REMEDY AS LONG AS THE STATEMENTS SATISFY THE STATUTORY AND CONSTITUTIONAL PARAMETERS ESTABLISHED BY THIS COURT’S PRIOR RULINGS. 17

II. AS REWORDED, THE PREAMBLES, IN CONJUNCTION WITH THE BULLETED STATEMENTS, PROPERLY PREVENT AND RESTRAIN FUTURE RICO VIOLATIONS BY REQUIRNG DEFENDANTS TO REVEAL THE PREVIOUSLY HIDDEN TRUTH ABOUT THEIR PRODUCTS AS INSTRUCTED BY THIS COURT. 19

III. THE COURT’S PRIOR RULINGS COMPEL THE CONCLUSION THAT THE REVISED CORRECTIVE STATEMENTS PASS MUSTER ON FIRST AMENDMENT GROUNDS. 27 IV. A. The Preambles As Revised By The District Court Comport With Zauderer, As Mandated By This Court. 28

B. This Court’s Recent Commercial Speech Rulings Do Not Afford Any Basis For Rejecting The Revised Preambles. 33

CONCLUSION 36

CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE

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​ TABLE OF AUTHORITIES

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

760 F.3d 18 (D.C. Cir. 2014) (en banc)…………………………………………..30, 31, 35

Central Hudson Gas & Elec. Corporation v. Public Service Commission of N.Y.,

447 U.S. 557 (1980)…………………………………………………………………………..34, 35

Deal v. U.S., 508 U.S. 129 (1993) 23

Inc. v. Merc Exchange, LLC,

547 U.S. 388 (2006) 19

LaShawn A. v. Barry,

87 F.3d 1389 (D.C. Cir. 1995) 34

Milavetz, Gallop & Milavetz v. United States,

559 U.S. 229 (2010)……………………………………………………………………..29, 30, 33

National Association of Manufacturers. v. SEC,

800 F.3d 518 (D.C. Cir. 2015)……………………………………………………….19, 34, 35

New Hampshire v. Maine,

532 U.S. 742 (2001) 26

R.J. Reynolds Tobacco Co. v. Food & Drug Admin.,

696 F.3d 1205 (D.C. Cir. 2012) 30

*United States of America v. Phillip Morris USA Inc.,

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

*United States v. Philip Morris USA Inc.,

566 F.3d 1095 (D.C. Cir. 2009)…………………………………………………………….1, 34

United States v. Philip Morris USA Inc.,

No. 99-2496 (GK), 2005 WL 1830815 (D.D.C. July 22, 2005) 5

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*Authorities principally relied upon

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*United States v. Phillip Morris USA, Inc.,

686 F.3d 832 (D.C. Cir. 2012)…………………………………………………………8, 18, 22

*United States v. Phillip Morris USA Inc.,

801 F.3d 250 (D.C. Cir. 2015)…………………………………………….11, 12, 13, 20, 21

Warner-Lambert Co. v. Federal Trade Comm’n,

562 F.2d 749 (D.C. Cir. 1977)…………………………………………………………….23, 24

Weinberger v. Romero-Barcelo,

456 U.S. 305 (1982) 19

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

471 U.S. 626 (1985)……………………………………… 7, 28, 29, 30, 31, 32, 33, 34, 35

Statutes

Family Smoking Prevention and Tobacco Control Act, Pub. L. No.

111-31, 123 Stat. 1776 (2009) ………………………………………………………………8, 18

*Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§

1961-1968 …………………………………………… 1-8, 10-13, 15-21, 24, 26-28, 31, 32, 35, 36

Other Authorities

*U.S. Constitution First Amendment …………….. 1-4, 6, 7, 10, 11, 13, 16-18, 27-29, 31-36

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*Authorities principally relied upon iv

​ GLOSSARY

FDA Food and Drug Administration JA Joint Appendix

RICO Racketeer Influenced and Corrupt Organizations Act

SEC Securities and Exchange Commission

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​ STATEMENT OF THE ISSUE

Whether preambles stating “Here is the truth,” followed by statements accurately describing the adverse health effects and addictive properties of cigarettes, satisfy this Court’s prior ruling that corrective statements “[r]equiring Defendants to reveal the previously hidden truth about their products” and to “communicate . . . the truthful message about these matters to consumers,” United States v. Philip Morris USA Inc., 566 F.3d 1095, 1140 (D.C. Cir. 2009) (“Remedial Opinion”), comply with both the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968, and the First Amendment to the U.S. Constitution.

RELEVANT STATUTES

The pertinent provisions of RICO are set forth in the addendum to the government’s brief.

STATEMENT OF THE CASE

In 2009, this Court affirmed the district court’s ruling that the defendant cigarette manufacturers violated RICO by “knowingly and intentionally engag[ing] in a scheme to defraud smokers and potential smokers.” Remedial Opinion, 566 F.3d at 1117. The Court likewise affirmed the district court’s ruling that the cigarette manufacturers were “likely to commit future RICO violations” in the

absence of appropriate remedies, including “‘corrective statements’ concerning the topics about which they had previously misled consumers.” Id. at 1131, 1138.

In its 2009 ruling, this Court also rejected the cigarette manufacturers’ arguments that corrective statements addressing those specific matters as to which the manufacturers had defrauded the public violate the “prevent and restrain” limitation for relevant civil remedies under RICO and the First Amendment.

As to RICO, the Court held that “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 their products.” Remedial Opinion, 566 F.3d at 1140 (emphasis added). Accordingly, the Court reasoned that “[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. (emphasis added).

As for the First Amendment, this Court held that, contrary to the cigarette manufacturers’ arguments, the corrective statements “fall within the commercial speech doctrine.” Id. at 1142-45. Therefore, as long as the statements are “geared towards thwarting prospective efforts by Defendants to either directly mislead consumers or capitalize on their prior deceptions by continuing to advertise in a

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manner that builds on consumers’ existing misperceptions,” the statements are a “permissible restraint on Defendants’ commercial speech.” Id. (citing Zauderer v. Office of Disciplinary Counsel of Supreme Court, 471 U.S. 626, 651 (1985)).

The district court subsequently crafted specific language as to each of the topics that this Court held are proper subjects of corrective statements. On appeal, this Court “largely upheld the order specifying the text of the corrective statements.” United States of America v. Phillip Morris USA Inc., F.3d , 2016 WL 6437368, at *2 (D.C. Cir. Nov. 1, 2016) (“Reynolds Opinion”) (citing United States v. Phillip Morris USA Inc., 801 F.3d 250, 252-62 (D.C. Cir. 2015)) (“Corrective Statements Opinion”). The Court held that most of the cigarette manufacturers’ objections, including “disclosing that they intentionally designed cigarettes to ensure addiction,” had been “both waived and foreclosed by the law of the case.” Corrective Statements Opinion, 801 F.3d at 252. However, the Court held that a single phrase within the preambles – stating that the companies “deliberatively deceived the American public” – exceeded the district court’s “authority under RICO to craft remedies that ‘prevent and restrain’ future violations.” Id.

On remand, the district court deleted the “deliberately deceived” phrase from the statements, adopted several other minor changes designed to satisfy this Court’s prior mandates, and rejected Defendants’ statutory and constitutional

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challenges to the statements as revised. See Joint Appendix (“JA”) at 918-28. Although this Court already held that the corrective statements may, consistent with RICO and the First Amendment, compel the cigarette manufacturers to “reveal the previously hidden truth about their products,” Remedial Opinion, 566 3d at 1140 (emphasis added), the companies now argue that the district court somehow contravened this Court’s past rulings by adopting preambles stating “Here is the truth” before setting forth entirely accurate statements concerning the health effects and addictiveness of cigarettes. JA 921-23. Further, although the manufacturers themselves also proposed that the public be informed that the disclosures are being made “[u]nder court order,” JA 640, the companies now also complain that such language has been included in the preambles.

STATEMENT OF FACTS

This is the seventh tobacco company appeal in this “long-running RICO case against the nation’s cigarette manufacturers” for engaging in a “‘pervasive scheme to defraud consumers and potential consumers of cigarettes,’ carried out ‘over the course of more than 50 years.’” Corrective Statements Opinion, 801 F.3d at 253 (quoting United States v. Phillip Morris USA Inc., 449 F. Supp. 2d 1, 851-54 (D.D.C. 2006)) (“Liability Opinion”). Because the “history of this case is described in [this Court’s] many prior decisions,” Reynolds Opinion, 2016 WL

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6437368, at *1, we summarize only those facts bearing on the narrow issue now on appeal.

A. The District Court’s Initial Remedial Order And This Court’s 2009 Affirmance Of The Corrective Statement Remedy

The United States filed this RICO case in 1999. In 2005, the district court granted intervenor status to the Public Health Intervenors – Tobacco-Free Kids Action Fund, American Cancer Society, American Heart Association, American Lung Association, National African American Tobacco Prevention Network, and Americans for Nonsmokers’ Rights – so that they could advocate for remedies that would effectively ameliorate any RICO violations. See United States v. Philip Morris USA Inc., No. 99-2496 (GK), 2005 WL 1830815, at *6 (D.D.C. July 22,
2005) (explaining that “it will serve the public interest for major public health organizations, such as Intervenors, who have long experience with smoking and health issues, to contribute their perspectives on what appropriate and legally permissible remedies may be imposed should liability be found”).

A decade ago, “supported by more than 4,000 findings of fact,” the district court entered final judgment against the cigarette manufacturers, found that the manufacturers were “likely to commit future RICO violations,” and held a two- week trial for the purpose of ascertaining those remedies that would “prevent or restrain” such future violations within the meaning of RICO as construed by this Court. Corrective Statements Opinion, 801 F.3d at 253 (citing United States v.

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Philip Morris USA Inc., 396 F.3d 1190, 1192 (D.C. Cir. 2005)) (“Disgorgement Opinion”). The district court ultimately rejected certain “remedies the government and public-health intervenors had requested, including counter-marketing and national smoking-cessation programs.” Corrective Statements Opinion, 801 F.3d at 254. However, to “prevent or restrain” RICO violations that would otherwise be committed by the cigarette manufacturers in the future, the district court “ordered them to make corrective disclosures about five topics as to which the court found they had made fraudulent public claims: (1) the adverse health effects of smoking; (2) the addictiveness of smoking and nicotine; (3) the lack of any significant health benefit from smoking ‘low tar’ or ‘light’ cigarettes as opposed to regular cigarettes; (4) the manufacturers’ manipulation of cigarette design to ensure optimum nicotine delivery; and (5) the dangers of exposure to secondhand smoke.” Id.

In its 2009 ruling this Court “largely affirmed the district court’s remedial order,” reasoning that “‘breadth is warranted to prevent further violations where, as here, a proclivity for unlawful conduct has been shown.’” Id. (quoting Remedial Opinion, 566 F.3d at 1137)). As the Court subsequently summarized, its 2009 ruling “rejected the manufacturers’ RICO and First Amendment challenges to the corrective-disclosure remedy” on the grounds that “ordering the manufacturers to issue corrective statements on the proposed topics complied with RICO since

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‘[r]equiring Defendants to reveal the previously hidden truth about their products [would] prevent and restrain’ future RICO violations.” Corrective Statements Opinion, 801 F.3d at 254 (emphasis added) (quoting Remedial Opinion, 566 F.3d at 1140). The Court explained that:

Defendants will be impaired in making false and misleading assurances about, for instance, smoking-related diseases or the addictiveness of nicotine – 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. Requiring Defendants to reveal the previously hidden truth about their products will prevent and restrain them from disseminating false and misleading statements, thereby violating RICO, in the future.

Remedial Opinion, 566 F.3d at 1140 (emphasis added).

The Court’s 2009 ruling “further 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.” Corrective Statements Opinion, 801 F.3d at 254 (emphasis added) (citing Remedial Opinion, 566 F.3d at 1144-45). Applying the framework for compelled commercial disclosures adopted by the Supreme Court in Zauderer and its progeny, the Court held that the “intentionally fraudulent character” of the cigarette manufacturers’ past and ongoing statements concerning the health effects and addictiveness of their products “undermines any claim for more exacting scrutiny.” Remedial Opinion, 566 F.3d at 1144. The Court further held that:

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[t]he issue of corrective advertising’s possible peripheral impact on protected speech does not affect the character of the burdened speech, but rather bears on whether the remedy is sufficiently narrowly tailored to achieve a substantial government interest – in this case, preventing Defendants from committing future RICO violations. We have no reason to think it is not. The district court found that, for over fifty years, Defendants violated RICO by making false and fraudulent statements to consumers about their products. The court also found Defendants reasonably likely to commit similar violations in the future, and concluded the corrective statements were necessary to counteract these anticipated violations . . . Thus, contrary to Defendants’ argument, the publication of corrective statements addressing Defendants’ false assertions is adequately tailored to preventing Defendants from deceiving consumers.

Id. (emphasis added).1

[unsupported_shape_0] 1 In 2012, this Court also affirmed the district court’s rejection of the cigarette manufacturers’ contention that the corrective statements and other injunctive remedies ordered by the district court should be vacated in light of Congress’s enactment of the Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111-31, 123 Stat. 1776 (2009) (“Tobacco Control Act”), which imposed various limitations on cigarette marketing and advertising. See United States v. Phillip Morris USA, Inc., 686 F.3d 832 (D.C. Cir. 2012) (“Tobacco Control Act Opinion”). Of particular relevance here, this Court rejected the cigarette manufacturers’ arguments that the new statutory requirements rendered the corrective statements and other remedies ordered by the district court moot. Rather, the Court found “reasonabl[e]” the district court’s view of Defendants’ ongoing “tendency to circumvent or ignore the law,” and the district court’s finding that “[i]f the defendants were not deterred by the possibility of RICO liability” – thus making it necessary for the district court to craft the corrective statements and other remedies in the first instance – the manufacturers “were not likely to be deterred by the Tobacco Control Act either.” Id. at 837, 838 (emphasis added). 8

B. The District Court’s Efforts To Craft Corrective Statement Language, And This Court’s 2015 Ruling Rejecting Virtually All Of The Cigarette Manufacturers’ Objections To That Language

On remand from the Court’s 2009 ruling, “the district court set about drafting the required corrective disclosures.” Corrective Statements Opinion, 801 F.3d at 254. After extensive proceedings, the district court ordered the manufacturers to disseminate statements regarding the five specific topics that had been approved by this Court, preceded by “preambles announcing that a federal court has ruled that Defendants ‘deliberately deceived the American public’” as to each particular topic at issue. Id. Thus, each of the original preambles stated that “A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public about [the specific topic addressed in the statement], and has ordered those companies to make this statement.” Id. at 254-56. The preambles concluded with the statement, “Here is the truth,” followed by the bulleted statements on the adverse health effects of smoking; the addictiveness of smoking and nicotine; the lack of health benefits from smoking law “low tar” or “light” cigarettes; the manufacturers’ manipulation of cigarette design to ensure maximum nicotine delivery; and the adverse health effects of exposure to second-hand smoke. Id. at 254-56.

On appeal from the district court’s order requiring dissemination of the

statements, the cigarette manufacturers broadly challenged the substance of the

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bulleted statements, as well as the preambles, on both RICO and First Amendment grounds. In reviewing those challenges, however, this Court stressed that, contrary to Defendants’ efforts to reopen long-settled matters regarding the corrective statements, the “heavy lifting has already been done” in the Court’s prior rulings concerning the propriety of such statements under both RICO and the First Amendment. Corrective Statements Opinion, 801 F.3d at 252.

With regard to the manufacturers’ statutory and constitutional challenges to the substance of the bulleted statements – and particularly statements “which reveal that [the manufacturers] ‘intentionally designed cigarettes’ to ensure addiction” (statements B and D) – the Court held that those challenges were “waived and foreclosed by the law of the case.” Id. at 252, 256. The Court explained that the district court’s “2006 remedial order warned Defendants that they would be required to make just such corrective statements about their ‘manipulation of cigarette design and composition to ensure optimum nicotine delivery’ – statements, in other words, revealing that they ‘do manipulate [the] design of cigarettes in order to enhance the delivery of nicotine.’” Id. at 258 (internal quotation omitted). Therefore, because the manufacturers had previously “raised no specific objection to the requirement that they disclose their ‘manipulation of [the] physical and chemical design of cigarettes,’” and had also “challenged none of the district court’s findings of fact supporting that

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requirement,” such as the “‘finding that “Defendants have designed their cigarettes to precisely control nicotine delivery levels and provide doses of nicotine sufficient to create and sustain addiction,’” the Court held that the manufacturers had waived any challenge to statements requiring such disclosures. Id.

In addition, the Court stressed that its 2009 ruling had expressly “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 that the Court had “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.’” Id. (quoting Remedial Opinion, 566 F.3d at 1140). Therefore, because the manufacturers identified no way in which the language crafted by the district court “went beyond the defendants’ manipulation of cigarette design” to keep smokers addicted to their products, the Court held that it had already “decided the issue in the earlier appeal,” and hence would not “revisit” either the tobacco manufacturers’ statutory or First Amendment objections. Corrective Statements Opinion, 801 F.3d at 259.2

[unsupported_shape_0] 2 This Court also rejected the cigarette manufacturers’ argument that waiver and law of the case principles do not apply to First Amendment objections, explaining that the manufacturers had “offered no authority for this novel claim, nor are we aware of any.” 801 F.3d at 259. The Court also rejected Defendants’ argument that the Tobacco Control Act’s prohibition on the use of “low-tar” and 11

Although the cigarette manufacturers challenged the preambles in their entirety, this Court invalidated them on specific narrow grounds. Specifically, the Court held that the language “announc[ing] that ‘[a] Federal Court has ruled that [the manufacturers] deliberately deceived the American public’” about the topics addressed in the statements contravened the Court’s rulings on the scope of RICO remedies. Id. at 261. The Court explained that “unlike the bulleted statements,” which operated to “prevent and restrain future RICO violations by ‘[r]equiring Defendants to reveal the previously hidden truth about their products,’” language in the preambles that required Defendants to disclose their “prior deceptive conduct” – i.e., that the companies had “deliberately deceived” the American

[unsupported_shape_0] “light” descriptors means that the district court’s corrective statements are unnecessary to “prevent and restrain” future RICO violations. Id. at 2. The Court explained that it had already rejected a “broader version of this argument” in “yet another appeal in this case,” id. (citing Tobacco Control Act Opinion, 686 F.3d at 835-37; supranote1), and that it saw no reason to deviate from that ruling, especially in view of recent evidence supplied by the Public Health Intervenors that the cigarette manufacturers were merely changing the way in which they were referring to the same products (e.g., changing from “Marlboro Lights” to “Marlboro in the gold pack”) while at the same time “ma[king] sure” that “consumers know that cigarettes once dubbed ‘light’ and ‘low-tar’ remain on the market.” 801 F.3d at 260 (describing the notes placed by Altria Group on the packages of Marlboro Lights “informing purchasers that ‘Your Marlboro Lights package is changing, but your cigarette stays the same’”). The Court held that the relevant corrective “[s]tatement [C] therefore prevents and restrains defendants from making false health assurances about these cigarettes, whatever their new look.” Id. 12

public – was not permissible under RICO. Id. (quoting Remedial Opinion, 566 F.3d at 261).

The Court further explained that entirely “‘backward-looking’ language that condemns [the cigarette manufacturers’] ‘past wrongdoing’” without “revealing the truth about cigarettes” would accomplish only “general deterrence” and would not “prevent and restrain” future RICO violations within the meaning of the Court’s precedents. 801 F.3d at 259, 261. At the same time, nothing in the Court’s opinions suggested that the “Here is the truth” phrase, in and of itself – i.e., as divorced from the “deliberately deceived the American public” language that was the focus of the Court’s ruling (and Defendants’ appeal) – was legally problematic. Nor did the Court in any way suggest that merely referring to the fact that the corrective statements are being made pursuant to a federal court’s “order” violates RICO or the First Amendment.

C. The District Court’s Adoption of Corrective Statements Without The Preamble Language That The Court Held Impermissible

On remand, the district court scrupulously followed this Court’s mandate. After receiving additional briefing and argument from the parties (as well as an unsuccessful effort at a mediated resolution), the court removed the “deliberately deceived” phrase from the preambles, see JA 921 (contrasting the preambles), and instead adopted preambles that do no more than reinforce the truthfulness of the statements that follow. Accordingly, each of the preambles now reads: “A Federal

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Court has ordered Altria, J.R. Reynolds Tobacco, Lorillard, and Phillip Morris USA to make this statement about [the relevant topic]. Here is the truth:” followed directly by the statement itself. JA 921-23; 1101-03; see also Gov’t Br. 12-15.

The district court explained that the preambles as modified “remedied the concern of the Court of Appeals in its 2015 Opinion and Remand” and that, contrary to the cigarette manufacturers’ objections:

[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. Because the preambles are now shorter and explain what each statement is about, why they are being made, and who is making them, there is simply no support for Defendants’ argument that even the sanitized preambles will convey to members of the public that they have been deceived in the past.

JA 920, 923.

With regard to Defendants’ objection to retaining the words “Here is the truth,” the district court explained that this language merely “make[s] clear to the public that the following commentary in each of the five topics is, in fact, the truth,” and that “retention of that phrase is consistent with the Court of Appeals’ ruling that ‘[r]equiring defendants to reveal the previously hidden truth about their products will prevent and restrain them from disseminating false and misleading

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statements, thereby violating RICO, in the future.’” JA 924 (quoting Remedial Opinion, 566 F.3d at 1140).3

The district court also spelled out why it was rejecting the manufacturers’ alternative proposals presented on remand. JA 924-25. Importantly, the manufacturers did not object in principle to the inclusion of any preambles prior to the bulleted corrective statements. Nor did the manufacturers object to the inclusion of language making it clear that the statements were being made pursuant to judicial decree. To the contrary, Defendants merely advocated for what the district court characterized as “watered down” preamble language, JA 924, stating that “A federal court has determined that you should know the following about the health effects of cigarettes.” JA 640-41 (emphasis added). The district court found that this language had “many serious problems,” including that it was simply not as

[unsupported_shape_0] 3 The district court also adopted two refinements to statement C’s preamble. First, although a reference in statement C’s preamble to Defendants “falsely selling and advertising low tar and light cigarettes” was not specifically addressed in this Court’s 2015 ruling, in keeping with the Court’s distinction between references to Defendants’ “products” versus their “prior deceptive conduct,” Corrective Statements Opinion, 801 F.3d at 255, 261, the district court agreed with the government’s and Public Health Intervenors’ proposal that, out of an “abundance of caution,” the word “falsely” be removed from the preamble. JA 924. Second, in accordance with this Court’s 2015 ruling, the district court also changed statement C’s reference to “filtered” cigarettes to “light” cigarettes because “‘filtered’ was confusing and not totally accurate.” JA 924; see also Corrective Statements Opinion, 801 F.3d at 260 (explaining that Statement C’s earlier reference to “‘Low tar’ and filtered cigarettes,” which could imply that “regular” cigarettes were unfiltered, was “probably a typo” that could be readily “fixed”). 15

“clear” and “straightforward” as the preamble language adopted by the court. JA 924. 4

SUMMARY OF ARGUMENT

The preambles as revised by the district court on remand comply fully with this Court’s prior mandates and hence with the dictates of RICO and the First Amendment. In its Corrective Statements Opinion, this Court in large measure rejected the cigarette manufacturers’ statutory and First Amendment challenges to the corrective standards crafted by the district court. However, as to the language in the preambles concerning the manufacturers’ prior deceptive conduct – i.e., that they “deliberately deceived the American public” – the Court held that such language was not permissible under the “prevent and restrain” provision of RICO. Because, on remand, the district court removed that language and adopted abbreviated preambles that say nothing about Defendants’ past fraudulent conduct and, instead, merely reinforce that the factually accurate statements about Defendants’ products are “the truth,” the preambles now fully comport with this

[unsupported_shape_0] 4 Defendants also proposed that for some forms of communication each bulleted corrective statement be followed by the sentence: “Under court order, paid for by Philip Morris USA, R.J. Reynolds Tobacco, Lorillard, and Altria.” JA 640. Under Defendants’ proposal, this sentence “would not be included on websites and onserts . . . because it will be apparent that the statement is being funded by the company that sponsors the website or manufacturers the relevant brand.” JA 640 n.1. 16

Court’s rulings for what the statements should say to conform to RICO and the First Amendment.

STANDARD OF REVIEW

Intervenors agree with the standard of review as set forth in the government’s brief (at 17).

ARGUMENT

I. THE DISTRICT COURT HAS BROAD DISCRETION TO FASHION A CORRECTIVE STATEMENTS REMEDY AS LONG AS THE STATEMENTS SATISFY THE STATUTORY AND CONSTITUTIONAL PARAMETERS ESTABLISHED BY THIS COURT’S PRIOR RULINGS.

Before turning to the specific reasons why the cigarette manufacturers’ latest challenge to the corrective statements is baseless, it is important to address an overarching theme that runs throughout Defendants’ brief. Defendants appear to be laboring under the illusion that the district court was somehow obligated by this Court’s prior mandates to either defer to Defendants’ preferred approach to the corrective statements, or at the very least justify in detail why that approach was being rejected in favor of the statements ultimately adopted. See, e.g., Defs.’ Br. 38 (arguing that the “Manufacturers proposed preambles would fully achieve the Government’s only permissible interest of providing factual information to prevent and restrain future RICO violations.”); id. at 61 (asserting that “there is every indication that the Manufacturers’ alternative equally advances the Government’s

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interest”). But there is nothing in this Court’s prior rulings in this case, or in any other controlling precedent, that required the district court to afford Defendants’ preferences any particular weight, as long as the court, in crafting the corrective statements, abided by the parameters of RICO and the First Amendment as explicated by this Court.

Indeed, in its most recent ruling in this case, this Court stressed that “[u]nder RICO . . . even though district court remedial authority is limited to ‘preventing and restraining’ violations of the statute, courts nonetheless retain expansive power to craft remedies within that stricture, as the comprehensive injunction in this case well illustrates.” Reynolds Opinion, 2016 WL 6437368, at * 4 (emphasis added). In its other rulings, the Court has likewise emphasized the district court’s discretion to craft appropriate injunctive relief in light of Defendants’ proven “proclivity for unlawful conduct,” Remedial Opinion, 566 F.3d at 1137 (“breadth is warranted to prevent future violations where, as here, a proclivity for unlawful conduct has been shown”) (emphasis added), as well as the district court’s “expertise” and “unique insight into the defendants’ tendency to circumvent or ignore the law.” Tobacco Control Act Opinion, 686 F.3d at 838 (explaining that whether “it was still reasonably likely the defendants would commit future RICO violations despite the passage of the Tobacco Control Act” was “squarely within [the district court’s] area of expertise; 13 years of litigation, nine months of trial,

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and 4000 findings of fact surely gave it unique insight into the defendants’ tendency to circumvent or ignore the law”) (emphasis added).5

Consequently, the burden is not, as the cigarette manufacturers would have it, on the district court to justify why it declined to embrace the RICO violators’ preferred corrective statements (although the district court did explain why the preambles it adopted were preferable). Rather, the burden is on the manufacturers to demonstrate that the court abused its broad discretion by adopting statements, including preambles, that run afoul of RICO or constitutional strictures as delineated by this Court. Defendants have not remotely satisfied that burden.

II. AS REWORDED, THE PREAMBLES, IN CONJUNCTION WITH THE BULLETED STATEMENTS, PROPERLY PREVENT AND RESTRAIN FUTURE RICO VIOLATIONS BY REQUIRNG DEFENDANTS TO REVEAL THE PREVIOUSLY HIDDEN TRUTH ABOUT THEIR PRODUCTS AS INSTRUCTED BY THIS COURT.

Although on remand the district court removed from the preambles the only language that this Court deemed impermissible under RICO on the grounds that it focused on Defendants’ prior fraudulent conduct rather than their products, the

[unsupported_shape_0] 5 See also ebay Inc. v. Merc Exchange, LLC, 547 U.S. 388, 394 (2006) (“the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts”); Weinberger v. Romero-Barcelo, 456 U.S. 305, 313 (1982) (“‘The comprehensiveness of this equitable discretion is not to be denied or limited in the absence of a clear and valid legislative command. Unless a statute in so many words, or by a necessary and inescapable inference, restricts the court’s jurisdiction in equity, the full scope of that jurisdiction is to be recognized and applied.’”) (internal quotation omitted).

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cigarette manufacturers nonetheless argue that this Court should yet again invalidate the preambles, thus further prolonging this already protracted litigation. Defs.’ Br. 31. While this result would surely serve Defendants’ interests in indefinitely delaying the implementation of remedies for Defendants’ RICO violations, there is no legal merit to these objections.

To begin with, the cigarette manufacturers erroneously contend that this Court has “already rejected preambles with the tagline” on which Defendants mainly concentrate their objection – i.e., “Here is the truth” – and/or refer to the statements being required by court order. Defs.’ Br. 31, 32. In reality, there is nothing in the Court’s 2015 Corrective Statements Opinion that either explicitly or implicitly invalidated the use of this language to reinforce the bulleted statements themselves. Rather, the Court’s ruling remanding the preambles focused solely on language in the previous preamble that required Defendants to disclose their “prior deceptive conduct,” 801 F.3d at 261. That language in turn was limited to the phrase stating that Defendants had “deliberately deceived the American public” – a phrase that has now been excised along with any other language that could reasonably be construed as “disclos[ing] defendants’ prior deceptive conduct” rather than reflecting on the “previously hidden truth about their products.” Corrective Statements Opinion, 801 F.3d at 261 (internal quotation omitted).

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Moreover, Defendants’ argument that the phrase “Here is the truth” is “impermissibly ‘backwards-looking,’” Defs.’ Br. 32 (internal quotation omitted), makes no legal or logical sense. If, as this Court has previously held, the bulleted statements themselves “prevent and restrain future RICO violations by ‘[r]equiring Defendants to reveal the previously hidden truth about their products,” 801 F.3d at 261 (quoting 566 F.3d at 1140), then preambles that merely declare that the statements to follow are “the truth” cannot sensibly fall afoul of RICO’s strictures as defined by the Court. In other words, because the statements themselves properly “reveal the previously hidden truth about [Defendants’] products” rather than their past conduct – as this Court has held, id. – preambles reinforcing the validity of those very same statements must likewise also “reveal the previously hidden truth” about Defendants’ products rather than their conduct.

Because Defendants cannot point to anything in the revised preambles that actually refers to Defendants’ past fraudulent conduct – rather than “the truth” about their products – Defendants must resort to arguing that the implicit “message from the preambles is that Defendants would not have been ‘ordered’ to tell the ‘truth’ unless they had previously denied ‘the truth.’” Defs.’ Br. 32 (emphasis added). This argument is fatally flawed for several reasons.

First, Defendants’ argument that the “inescapable message” of the revised preambles – and particularly the “Here is the truth” lead-in – is that “Defendants

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previously withheld ‘the truth’ about the health effects of smoking,” Defs.’ Br. 31, and that “[t]he unequivocal message is that Defendants are being compelled to speak as punishment for prior conduct,” id. at 29, has no basis in reality. Rather, as explained by the district court, the “shortened” preambles, on their face, simply “make clear to the public that the following commentary in each of the five topics is, in fact, the truth,” JA 924, thus “impair[ing] [Defendants] in making false and misleading assurances about, for instance, smoking-related disease or the addictiveness of nicotine – as the district court found they [would] continue to do” in the absence of the statements. Remedial Opinion, 566 F.3d at 1140.6

Contrary to Defendants’ assumption, reinforcing that a particular statement is “the truth” does not logically, let alone “inescapably” or “unequivocally,” mean that the speaker (or anyone else) must have lied about the matter in the past. Rather, such language serves to focus the reader’s attention and emphasize the

[unsupported_shape_0] 6 Defendants argue that the “district court pointed to no evidence that the public would doubt the truth of the bullet points without the tagline,” Defs.’ Br. 41. Defendants, however, cite no authority for the proposition that the court was obligated to proffer “evidence” to support its common-sense conclusion that prefacing the bulleted statements with “Here is the truth” would help to “reveal the previously hidden truth about Defendants’ products.” JA 924. So long as the district court ensured the removal of language in the preambles “disclos[ing] defendants’ prior deceptive conduct,” Corrective Statements Opinion, 801 F.3d at 261 – which it did – the court had discretion to fashion statements that, in the exercise of the court’s “expertise” and “unique insight,” would assist in countering “defendants’ tendency to circumvent or ignore the law” in the future. Tobacco Control Act Opinion, 686 F.3d at 838.

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importance and accuracy of the information conveyed. See, e.g., The Declaration of Independence para. 2 (U.S. 1776) (using the phrase “[w]e hold these truths to be self-evident” to reinforce “that all men are created equal” and are “endowed by their Creator with certain inalienable rights”); see also Gov’t Br. 22-23 & n. 5 (providing additional historical and contemporary examples). Once again, that is precisely what this Court has said the corrective statements “must” do in order to “prevent and restrain [Defendants] from making fraudulent public statements on smoking and health matters in the future.” Remedial Opinion, 566 F.3d at 1140 (internal quotation omitted); see id. (“Defendants will be impaired in making false and misleading assurances about, for instance, smoking-related diseases or the addictiveness of nicotine . . . if they must at the same time communicate, the truthful message about these matters to consumers.”) (emphasis added).7 [unsupported_shape_0] 7 Defendants’ assertion that the “‘Here is the truth’ tagline is indistinguishable from the ‘contrary to advertising’ language in Warner-Lambert Co. v. Federal Trade Comm’n, 562 F.2d 749 (D.C. Cir. 1977),” Defs.’ Br. 32, ignores the plain meaning of language. The phrase “[c]ontrary to advertising” – like “deliberately deceived the American public” – is an explicit reference to prior misleading conduct. In contrast, “Here is the truth” – especially when used in the context of indisputably accurate descriptions of the present and ongoing properties of cigarettes – is forward-looking language “[r]equiring Defendants to reveal the previously hidden truth about their products.” Corrective Statements Opinion, 801 F.3d at 1140; cf. Deal v. U.S., 508 U.S. 129, 132 (1993) (explaining the “fundamental principle of statutory construction and, indeed, of language itself, that the meaning of a word cannot be determined in isolation, but must be drawn from the context in which it is used”). The preambles as revised are legally indistinguishable from the portion of the corrective statement that, Defendants concede, was upheld in Warner-Lambert, which “conveyed factual information 23

Second, nothing in the Court’s prior rulings holds, or in any way suggests, that the validity of the corrective statements turns on any unstated “message” a member of the public might possibly infer from the statements. To be sure, a member of the public could conceivably infer that any statements made by cigarette manufacturers divulging the “truth” about their own products, including the statements that have been sustained by this Court – e.g., that “[m]ore people die every year from smoking than from murder, AIDS, suicide, drugs, car crashes, and alcohol combined”; that “[c]igarette companies intentionally designed cigarettes with enough nicotine to create and sustain addiction”; and that “[s]econdhand smoke kills over 38,000 Americans each year,” JA 921-23 – would not voluntarily be made by the manufacturers of such products.

That, however, did not prevent this Court from agreeing that the bulleted statements are an appropriate means of “prevent[ing] and restrain[ing] future RICO violations by ‘[r]equiring Defendants to reveal the previously hidden truth about their products.’” Corrective Statements Opinion, 801 F.3d at 261 (internal quotation omitted). The same reasoning applies to the preambles: the implicit “message” that someone might deduce from the revised preambles has no bearing

[unsupported_shape_0] about Listerine’s effectiveness . . . .” Defs.’ Br. 47 (citing Warner-Lambert, 562 F.2d at 752).

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on whether they permissibly reinforce “the truth” of the bulleted statements’ descriptions of cigarettes and their effects on public health. Rather, the dispositive question posed by this Court’s 2009 and 2015 rulings is whether the preambles actually require Defendants to say anything about their past fraudulent conduct. The answer is that they do not.

Third, the cigarette manufacturers’ objection is even less persuasive in view of the alternative formulation of the corrective statements advocated by the manufacturers themselves. As explained, Defendants have not proposed bulleted statements with no accompanying explanation as to why those statements are being made. Rather, Defendants proposed preambles stating that a “[a] federal court has determined that you should know the following,” and they further proposed (for some forms of disclosure) a sentence following the bulleted statements reading: “Under court order, paid for by Philip Morris USA, R.J. Reynolds Tobacco, Lorillard, and Altria.” JA 640-41 (emphasis added).

While the district court explained why it was rejecting this “watered down” version, JA 924, the critical fact is that, from the standpoint of Defendants’ asserted legal objections, there is little, if any, meaningful difference between the version adopted by the district court and the one advocated by Defendants. For example, if, as the cigarette manufacturers insist, the phrase “a Federal Court has ordered [Defendants] to make this statement’” somehow “communicate[s] that

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Defendants engaged in prior wrongdoing and are being compelled to speak as punishment,” Defs.’ Br. 34, then the same is true for language stating that the bulleted statements are being “paid for by” the enumerated Defendants “[u]nder court order,” along with the preamble statement that a “federal court has determined that you should know” the information set forth in the statements.

Indeed, employing Defendants’ own logic, members of the public could deduce that a federal court would not be involved in “ordering” cigarette manufacturers to pay for statements about the dangers of their own products, and would also not be in the business of “determin[ing] what you should know” about the health hazards and addictiveness of cigarettes, unless Defendants had been less than forthcoming about such matters in the past. Consequently, not only are Defendants estopped from making any argument that attributing the statements to a judicial decree somehow renders them impermissible, see New Hampshire v. Maine, 532 U.S. 742, 749 (2001), but Defendants’ own proposed formulation undercuts any notion that the appropriate test to be applied is the unstated “message” that theoretically could be gleaned from the reworded statements rather than the actual statements themselves.

In sum, Defendants’ paradoxical position in this Court and before the district court allows for but one conclusion: Defendants have no principled legal argument that their proposed language would properly “prevent and restrain” future RICO

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violations, while the language adopted by the district court would not serve this function. Rather, Defendants merely prefer their “watered down” version. JA 924. However, that preference hardly affords a legal basis for invalidating the district court’s revised remedial order, which carefully follows this Court’s directive to delete references to Defendants’ past fraudulent conduct, and accomplishes what this Court has already ruled is entirely permissible – i.e., reinforcing “the truth” about Defendants’ egregiously harmful products.8

III. THE COURT’S PRIOR RULINGS COMPEL THE CONCLUSION THAT THE REVISED CORRECTIVE STATEMENTS PASS MUSTER ON FIRST AMENDMENT GROUNDS.

This Court’s 2009 and 2015 rulings establish as the law of the case that as long as the corrective statements crafted by the district court comply with RICO – i.e., if they are “geared towards thwarting prospective efforts by Defendants to either directly mislead consumers or capitalize on their prior deceptions by

[unsupported_shape_0] 8 As explained in the government’s brief, Defendants are foreclosed by this Court’s prior rulings from challenging, and/or have waived such challenges to, the topic descriptions in Statements C and D, as well as the minor differences between the statements that must be issued by the original Defendants and those that must be made by ITG Brands LLC and its affiliates (the “ITG Entities”). See Gov’t Br. 25-28, 30-34. As to the latter issue – i.e., the fact that the statements made by the ITG Entities may refer in the preamble to the “previous maker” of the particular cigarette brand at issue, see JA 1127-29 – not only are these differences the direct result of the cigarette manufacturers’ own suggested language in the district court, see Gov’t Br. 30-34, but they reveal nothing at all about any of the Defendants’ “prior deceptive conduct,” Corrective Statements Opinion, 801 F.3d at 261, and hence do not run afoul of this Court’s analysis in any case. 27

continuing to advertise in a manner that builds on consumers’ existing misperceptions” – they also constitute a “permissible restraint on Defendants’ commercial speech.” Remedial Opinion, 566 F.3d at 1145. Accordingly, because the revised preambles, in conjunction with the bulleted statements, are designed to “prevent and restrain” future RICO violations as that language has been construed by the Court, the cigarette manufacturers’ broad First Amendment objections must also necessarily be rejected. See Corrective Statements Opinion, 801 F.3d at 259- 60; Gov’t Br. 34-38.

In an attempt to avoid this inevitable conclusion, the cigarette manufacturers argue that (1) the district court did not “conform” the preambles to the standards set forth in Zauderer, as mandated by this Court in 2009; and (2) “even if the revised preambles conform to this Court’s mandate, they should be vacated because they independently violate the First Amendment and this Court’s recent First Amendment decisions.” Defs.’ Br. 45. However, as discussed below, neither argument has merit.

A. The Preambles As Revised By The District Court Comport With Zauderer, As Mandated By This Court.

Defendants concede that in 2009 “[t]his Court directed the district court to conform the corrective statements to Zauderer.” Defs.’ Br. 45. That concession is fatal to Defendants’ suggestion that “strict scrutiny” or any similarly stringent First Amendment analysis applies to the corrective statements – either in general or

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specifically to the preambles – as revised on remand. Id. at 45. See, e.g., Corrective Statements Opinion, 801 F.3d at 252 (the parties are bound by this Court’s “earlier decisions in this case”).

Further, in Zauderer v. Office of Disciplinary Counsel of Supreme Court, 471 U.S. 626, 637 (1985), the Supreme Court not only reaffirmed that commercial speech as a whole is entitled to “less extensive” protection than other kinds of speech, but also that there are “material differences” in the commercial speech context “between disclosure requirements and outright prohibitions on speech.” Zauderer, 471 U.S. at 650. The Court explained that “[b]ecause the extension of First Amendment protection to commercial speech is justified principally by the value to consumers of the information such speech provides” – rather than any overriding need to protect the commercial conveyer of the information – the commercial speaker’s “constitutionally protected interest in not providing any particular factual information in his advertising is minimal.” Id. at 651 (emphasis added) (citing Va. Bd. of Pharmacy v. Va. Citizens Consumers Council, Inc., 425 U.S. 747, 762 (1976)); see also Milavetz, Gallop & Milavetz v. United States, 559

U.S. 229, 249 (2010) (reaffirming that “First Amendment protection for commercial speech is justified in large part by the information’s value to consumers”).

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The Court in Zauderer further “emphasized that because disclosure requirements trench much more narrowly on an advertiser’s interests than do flat prohibitions on speech, ‘warning[s] or disclosure[s] might be appropriately required . . . in order to dissipate the possibility of consumer confusion or deception.’” Zauderer, 471 U.S. at 651 (internal quotation omitted). Accordingly, “an advertiser’s rights are adequately protected as long as disclosure requirements are reasonably related to the [government’s] interests in preventing deception of consumers.” Zauderer, 471 U.S. at 628 (emphasis added); see also Milavetz, 559 U.S. at 249 (holding that “because the challenged provisions impose a disclosure requirement rather than an affirmative limitation on speech . . . the less exacting scrutiny described in Zauderer governs our review”); R.J. Reynolds Tobacco Co. v. Food & Drug Admin., 696 F.3d 1205, 1212 (D.C. Cir. 2012) (“R.J. Reynolds”) (explaining that “Zauderer’s standard” is “akin to rational-basis review” and is “lenient”), overruled in part on other grounds by American Meat Inst. v. U.S. Dep’t of Agric., 760 F.3d 18 (D.C. Cir. 2014) (en banc).

The preambles as revised easily satisfy these standards, especially in view of the fact that the bulleted statements themselves – which the preambles simply declare are “the truth” – are indisputably consistent with Zauderer as applied by this Court. Indeed, the cigarette manufacturers’ own proposal for corrective statements conceded that each of the bullet points – including that “[c]igarette

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companies intentionally designed cigarettes with enough nicotine to create and sustain addiction” and that “[t]obacco companies intentionally designed cigarettes to make them more addictive,” JA 640-41 – “is consistent with the D.C. Circuit’s decisions regarding the restrictions that RICO and the First Amendment impose on the statements.” JA 630 (emphasis added). Because the statements themselves are admittedly “consistent with” the First Amendment by conveying truthful information about cigarettes and are appropriately “geared towards thwarting prospective efforts by Defendants to either directly mislead consumers or capitalize on their prior deceptions,” Remedial Opinion, 566 F.3d at 1144-45, it would make no sense for this Court to rule that the revised preambles – which merely reinforce these very same statements as “the truth” – somehow contravene Zauderer.9

[unsupported_shape_0] 9 In R.J. Reynolds, the Court held that graphic images that the Food and Drug Administration (“FDA”) required to be placed on cigarette packages should not be assessed for First Amendment purposes under the lenient Zauderer standard because they were designed to “evoke an emotional response” rather than make “clear statements that were both indisputably accurate and not subject to misinterpretation by consumers.” 696 F.3d at 1216. Of particular relevance here, the Court held that the FDA “has not shown that the graphic warnings were designed to correct any false or misleading claims made by cigarette manufacturers in the past,” and that “[s]uch matters are the subject of a pending – and entirely separate – line of litigation against” Defendants. Id. & n. 10 (emphasis added) (citing Remedial Opinion). The clear implication of R.J. Reynolds, therefore, is that “indisputably accurate” corrective statements about cigarettes that are designed to counteract past “false or misleading claims” do satisfy Zauderer and other First Amendment precedents. 31

Defendants’ argument to the contrary is mainly a recapitulation of their groundless contention that the “revised preambles convey information about past misconduct, not Defendants’ ‘products.’” Defs.’ Br. 50. However, because, again, the shortened preambles say nothing about the cigarette manufacturers’ “past misconduct,” this argument is no more persuasive in the First Amendment context than it is with regard to RICO.10

Also unavailing is Defendants’ contention that the “availability of the Manufacturers’ proposal (and others) dooms the district court’s statement as unjustified.” Defs.’ Br. 54. Not only did the district court explain why it found the cigarette manufacturers’ “watered down” version of the corrective statements less effective than the language adopted, JA 924, but Zauderer itself instructs that the district court had no obligation other than to adopt corrective statements “reasonably related” to counteracting Defendants’ likely future RICO violations. See Zauderer, 471 U.S. at 651 & n.14 (“[b]ecause the First Amendment interests implicated by disclosure requirements are substantially weaker than those at stake when speech is actually suppressed, we do not think it appropriate to strike down such requirements merely because other possible means by which the

[unsupported_shape_0] 10 By the same token, Defendants’ unsubstantiated contention that “other judges and juries have rejected similar allegations” of “misconduct” as those detailed in the district court’s massive liability ruling, Defs.’ Br. 53, is irrelevant because the revised preambles say nothing about Defendants’ fraudulent conduct. 32

[government] might achieve its purposes can be hypothesized”) (emphasis added); see also Milavetz, 559 U.S. at 251 (holding that a law firm’s mere “preference” for referring to itself as something other than a “debt relief agency,” as required by statute, “lacks any constitutional basis”).

In short, because Defendants concede that “this Court directed the district court to conform the corrective statements to Zauderer,” Defs.’ Br. 45, and because the preambles as amended “easily pass muster” under the standard established in Zauderer for compelled commercial speech, 471 U.S. at 652, Defendants’ First Amendment objection must be rejected. 11

B. This Court’s Recent Commercial Speech Rulings Do Not Afford Any Basis For Rejecting The Revised Preambles.

Defendants argue that “[i]n addition to violating this Court’s mandate, the revised preambles independently violate the First Amendment.” Defs.’ Br. 57. However, because the preambles do satisfy the Court’s 2009 and 2015 mandates, [unsupported_shape_0] 11Zauderer likewise necessitates rejection of Defendants’ argument that the district court was obligated to marshal “evidence” supporting the court’s adopted preambles in lieu of those preferred by the cigarette manufacturers. Defs.’ Br. 61. The Supreme Court held that when the “possibility of deception” is “self-evident . . . we need not require the [government] to ‘conduct a survey of the . . . public’” before the government may impose a reasonably tailored disclosure obligation. Zauderer, 471 U.S. at 652-53 (internal quotation omitted). Here, the possibility of future deception is not only “self-evident,” but the district court made voluminous specific factual findings (which this Court affirmed) that the cigarette manufacturers are “likely to commit similar violations in the future” and that corrective statements are necessary to counteract these anticipated violations. Remedial Opinion, 566 F.3d at 1144. 33

the only way in which the preambles could be held to violate the First Amendment would be if there has been an “intervening change” in controlling precedent that requires the Court to modify its earlier analysis. Defs.’ Br. 59 n. 9 (citing Kimberlin v. Quinlan, 199 F.3d 496, 500 (D.C. Cir. 1999)). There has been no such change.

First, Defendants cite National Association of Manufacturers. v. SEC, 800 F.3d 518 (D.C. Cir. 2015), for the proposition that the Court should apply the “more demanding” standard, id. at 522, set forth in Central Hudson Gas & Elec. Corporation v. Public Service Commission of N.Y., 447 U.S. 557 (1980), in lieu of the “loose standard of review” adopted in Zauderer. Nat’l Ass’n of Mfrs., 800 F.3d at 522; see Defs.’ Br. 57-58. As Defendants concede, however, the law of this case – as established in both the Remedial Opinion and the Corrective Statements Opinion – is that the district court was required only to “conform the corrective statements to Zauderer.” Defs.’ Br. 45. Because the district court has done so, and because one panel of this Court “does not have authority to overrule another three- judge panel,” LaShawn A. v. Barry, 87 F.3d 1389, 1395 (D.C. Cir. 1995), National Association of Manufacturers cannot dictate a different outcome.12

[unsupported_shape_0] 12 National Association of Manufacturers is also distinguishable on its facts. That case involved a Securities and Exchange Commission (“SEC”) rule requiring certain companies that use extractive minerals in their manufacturing processes to issue disclosures stating the manufacturers were not “conflict free.” The Court held that this SEC requirement did not in any manner involve “commercial advertising” 34

The Court’s en banc ruling in American Meat Institute is equally unhelpful to Defendants’ position. That ruling broadened the application of Zauderer in this Circuit by holding that the Supreme Court’s more relaxed standard for compelled disclosures applies to governmental interests other than that of “remedying deception.” Am. Meat Inst., 760 F.3d at 22 (“[a]ll told, Zauderer’s characterization of the speaker’s interest in opposing forced disclosure as ‘minimal’ seems inherently applicable beyond the problem of deception”). In addition, the Court held that to satisfy Zauderer’s “less exacting scrutiny,” the “disclosure mandated must relate to the good or service offered by the regulated party,” and that “evidentiary parsing is hardly necessary when the government uses a disclosure mandate to achieve a goal of informing consumers about a particular product trait, assuming of course that the reason for informing consumers qualifies as an adequate interest.” Id. at 26 (emphasis added; internal quotation omitted)).

[unsupported_shape_0] and, moreover, that the disclosure mandate required the companies to “convey[] moral responsibility for the Congo war,” thus “skew[ing] public debate on a matter” of public controversy. 800 F.3d at 523, 530. In contrast, the corrective statements here are designed to redress commercial advertising that has been held to be fraudulent, and this Court has already ruled that statements conveying the factual truth about Defendants’ products are in fact necessary to “prevent and restrain” future RICO violations and are therefore consistent with the First Amendment. See Remedial Opinion, 566 F.3d at 1142-46. Consequently, the statements, including the revised preambles, pass constitutional muster regardless of whether Zauderer or Central Hudson is applied. 35

Here, all of the corrective statements “relate to the good or service offered by” the cigarette manufacturers, and the statements, including the revised preambles, are carefully designed to disclose “the truth” about “particular product trait[s]” of cigarettes. As a result, American Meat Institute is entirely consistent with the approach adopted in this Court’s 2009 and 2015 rulings in this case and, taken together, the Court’s opinions strongly support the constitutional validity of the corrective statements, including the revised preambles.

CONCLUSION

It has been a decade since the district court determined that corrective statements are an appropriate remedy for Defendants’ violations of RICO, and more than seven years since this Court affirmed that determination. The district court has now adopted corrective statement language that fully accords with this Court’s prior mandates and interpretations of RICO and the First Amendment. The time has finally come for those statements to be put into effect to “prevent and restrain” the cigarette manufacturers from making “false and misleading assurances” about smoking-related diseases and the addictiveness of nicotine, “as the district court found they continue to do.” Remedial Opinion, 566 F.3d at 1140.

Accordingly, the district court’s decision should be affirmed.

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Respectfully submitted,

/s/ Eric R Glitzenstein

Eric R. Glitzenstein

Katherine A. Meyer

Meyer Glitzenstein & Eubanks, LLP

4115 Wisconsin Ave., N.W. Suite 210

Washington, D.C. 20016

Telephone: (202) 588-5206

Facsimile: (202) 588-5049

December 2, 2016

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​ CERTIFICATE OF COMPLIANCE PURSUANT TO FED. R. APP. P. 32(a)(7)(C)

I certify that the foregoing Brief for the Public Health Intervenors contains 8,740 words and hence complies with the 8,750 word limit set by this Court’s July 8, 2016 Order granting the Intervenors’ motion for a separate brief.

/s/ Katherine A. Meyer

Katherine A. Meyer

​ CERTIFICATE OF SERVICE

I certify that on December 2, 2016, I electronically filed the foregoing Appellee Brief with the Clerk of the D.C. Circuit, by using the CM/ECF system. All participants in this appeal are CM/ECF users, and will be served by the CM/ECF system.

/s/ Eric R. Glitzenstein

Eric R. Glitzenstein

Counsel for the Public Health Intervenors

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