Court Rules U.S. Can't Pursue $280 Billion as Tobacco Penalty
New York Times
February 5, 2005

A federal appeals court delivered a major victory to the nation's leading tobacco companies on Friday, ruling that the government cannot force them to turn over $280 billion in profits if a trial court finds that the companies engaged in a conspiracy of fraud and deceit to promote smoking.

The 2-to-1 decision by the United States Court of Appeals for the District of Columbia strikes at the heart of the government's biggest legal effort ever to punish cigarette makers.

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William V. Corr, executive director of the Campaign for Tobacco-Free Kids, a nonprofit group that has fought cigarette companies for years, expressed disappointment over the appellate ruling but said in a statement that the options open to Judge Kessler still ''hold the greatest potential for reducing the death and disease caused by tobacco use.''

Mr. Corr also urged the Justice Department to resist any request by the companies to settle the case, a possibility that company lawyers said they would consider if disgorgement was no longer a factor in the case.

''Today's ruling,'' Mr. Corr said, ''should not be an excuse to let the tobacco industry off the hook for the wrongful practices that are the basis of the lawsuit.''

Dean Richard A. Daynard of the Northeastern University Law School in Boston, a longtime industry critic, said tobacco opponents were initially skeptical of the Bush administration's commitment to the suit. But Dean Daynard said he believed that the administration would appeal the ruling and continue to press the case.

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