Saturday, February 5, 2005
The D.C. Circuit issued an opinion on Feb. 4 (here) rejecting the government's disgorgement claim under RICO against the leading tobacco companies (U.S. v. Philip Morris USA et al.). The court's 2-1 decision reverses the district court, which had permitted the government's claim to go forward in seeking disgorgement of $280 billion (which would be real money even to Everett Dirksen). The court held "The relevant section of RICO, 18 U.S.C. § 1964(a), provides the District Courts jurisdiction only for forward-looking remedies that prevent and restrain violations of the Act. Because disgorgement, a remedy aimed at past violations, does not so prevent or restrain, we reverse the decision below . . . "
Not surprisingly, the shares of the tobacco companies rose rather sharply in response to the news. It wouldn't be surprising either if the government appealed to the Supreme Court. (ph)