Wouldn’t this be funny, if the tobacco giants suddenly had to cough up $280,000,000,000? Racketeer Influenced and Corrupt Organizations sounds like an apt description of Altria and others, actually. Their business model was always pretty obvious: convince consumers that cigarettes weren’t all that bad for you, and especially that Brand A was better than Brand B.
The Justice Department asked the Supreme Court on Friday to review a 2006 federal fraud racketeering conviction against the tobacco industry and to authorize the district judge in the case to require tobacco companies to give up as much as $280 billion in “ill-gotten gains.”
In the 2006 decision, nine tobacco companies and two trade organizations were found to have deceived the public about the dangers of secondhand smoke and so-called light cigarettes, and to have manipulated the nicotine levels in cigarettes.
The companies “have marketed and sold their lethal product with zeal, with deception, with a single-minded focus on their financial success and without regard for the human tragedy or social costs,” Judge Gladys Kessler, of the Federal District Court in Washington, wrote in a 1,653-page opinion after a nine-month trial.
The case was filed by the Clinton administration in 1999 under a civil statute normally used for organized crime.
Although the industry lost the case, it avoided crippling monetary damages. Judge Kessler had originally agreed to consider requiring the tobacco companies to give up profits if they lost the case, but she was overruled after the industry filed a pretrial motion with an appeals court.
[Click to continue reading U.S. Asks Justices to Review Tobacco Company Ruling – NYTimes.com]
I doubt the Roberts Court would allow such a drastic outcome of course, but might be a good time to short some tobacco stock, no?