WINSTON-SALEM, N.C., Feb. 6 2005 – LAWFUEL – The Law News Network — A federal appellate court today ruled that the U.S. government cannot continue to seek
disgorgement from the tobacco industry in the suit filed by the Department of
Justice (DOJ) against the nation’s major cigarette manufacturers. In doing
so, the court struck down the DOJ’s claim that the manufacturers could be
forced to disgorge $280 billion because of past racketeering activity.
“We are extremely pleased that the appellate court agreed with our long-
held belief that disgorgement is not an appropriate remedy in civil RICO
suits, such as this,” said Charles A. Blixt, executive vice president and
general counsel for R.J. Reynolds Tobacco Company, on today’s ruling by the
U.S. District Court of Appeal for the District of Columbia. “This ruling
dramatically transforms the DOJ suit.
“While we continue to believe that no remedies are warranted under the
facts of this case,” he said, “with the threat of disgorgement removed, the
principal remedies still available to the government are forward-looking
measures. These would include marketing and sales restrictions already put in
place by our company and others under the Master Settlement Agreement.”
In its ruling that the lower district court erred, the appellate court
found that ” … we can find no justification for considering any order of
disgorgement … ” Adding, “We need not twist the language to create a new
remedy not contemplated by the statute.”
R.J. Reynolds Tobacco Company (R.J. Reynolds) is an indirect wholly owned
subsidiary of Reynolds American Inc. (NYSE: RAI). R.J. Reynolds is the
second-largest tobacco company in the United States, manufacturing about one
of every three cigarettes sold in the United States. R.J. Reynolds’ product
line includes five of the nation’s 10 best-selling cigarette brands: Camel,
Winston, Kool, Salem and Doral. For more information about R.J. Reynolds,
visit the company’s Web site at http://www.RJRT.com .
Web Site: http://www.RJRT.com
