Vice Squad
Friday, February 04, 2005
Big Tobacco Wins One

A federal court of appeals has ruled that the government cannot force tobacco companies to "disgorge" past profits through an ongoing racketeering lawsuit. This is the big case originally brought by Clinton's Justice Department, and continued by the Bush administration. As it is a civil case, the $280 billion in past profits could not be grabbed by the government as a punishment, but only as a remedy (if I understand the legal issue, and I well may not). The trial judge allowed the government to seek the profit disgorgement, but also permitted an appeal of that decision to take place simultaneously with the trial proceedings. It was that appeal that was ruled upon today. Apparently the appeals court ruled that the racketeering case is only applicable to the threat of future illegal behavior, so that damages for past misbehavior are not actually on the table. But I have not read the opinion, and don't really understand it from news reports like this one.

Last March, Vice Squad was unimpressed with the government's claim to the past profits -- a view that undoubtedly swayed the appeals court.

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