WASHINGTON- LAWFUEL – Aug. 17, 2006 –Late Thursday afternoon, Ju…

WASHINGTON- LAWFUEL – Aug. 17, 2006 –Late Thursday afternoon, Judge Gladys Kessler of the United States District Court for the District of Columbia ruled that the tobacco industry conspired for decades to deceive the public about the dangers of smoking.

Judge Kessler specifically found that the defendant cigarette companies had deceived smokers of “light” cigarettes about the risks of those products, which do not offer any significant health benefit relative to regular cigarettes.

The implications of the ruling extend beyond the Government case. Virtually identical claims have been made against the tobacco industry in a RICO class action pending in the Eastern District of New York. The DC district court ruling bolsters those claims and provides a precedent to which the New York court could look as it considers the issues at upcoming hearings.

In its 1653-page opinion, the Court made detailed findings of fact. The Court specifically found that the industry had engaged in criminal RICO conspiracy designed to mislead their customers for decades. The conspiracy included Defendants marketing “low tar” cigarettes by suggesting that they were less harmful than conventional cigarettes while they recognized internally that such cigarettes offered no clear health benefit.

The Court also found that Defendants knew that smokers switch to light Cigarettes, rather than quitting, because they believe they are less harmful. The opinion explains how the tobacco companies intentionally manipulated the design of their cigarettes to produce low enough nicotine and tar measurements on smoking machines to justify the “light” label, while delivering sufficient nicotine levels to create and sustain addiction.

As a result of these findings, Judge Kessler ordered defendants to cease all use of terms such “low tar,” “light,” “ultra light,” “mild,” “natural,” and any other words which reasonably could be expected to result in a consumer believing that smoking the cigarette brand may be less hazardous to health than smoking other brands of cigarettes. The Court also ordered Defendants to draft “corrective statements” to explain their deceit. These corrective statements will be published in major newspapers and included in advertisements on major television networks.

While some analysts see a potential silver lining for tobacco companies insofar as the court did not assess significant monetary damages, the companies’ liability for their RICO conspiracy is not be limited by today’s ruling. Virtually identical claims are the subject of the New York class action filed on behalf of millions of “light” cigarette consumers. The opinion could therefore have an important bottom-line effect on these companies. According to Paul T. Gallagher, (Cohen, Milstein, Hausfeld & Toll) one of the lead Plaintiffs’ lawyers in that case, “Today’s opinion and order is not the end of the impact that the tobacco companies’ illegal conduct will have on their financial situation.

The companies are exposed to a several hundred billion dollar claim for damages in our light cigarette case. This decision today by the DC District court affirms the accuracy and strength of these civil plaintiffs’ claims for damages.”

Mr. Gallagher is available to discuss today’s ruling and the light cigarette case.

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