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"LIGHT" AD RESTRICTIONS APPLY OUTSIDE US, KESSLER RULES 

Jump to full article: Tobacco On Trial, 2007-03-16
Author: Gene Borio

Intro:

From Judge Kessler’s Memo on Order #1028, issued March 16, 2007:

"In sum, the Court concludes that the provisions in the Remedial Order prohibiting the use of express or implied health messages or descriptors in Section II. A. 4. do apply to actions of the Defendants taken outside the United States. To rule otherwise would not only frustrate the salutary anti-fraud principles embodied in RICO, but would also allow the Defendants to spread fraudulent and misleading health messages and descriptors about their products throughout the world, even though they are prohibited from doing so in the United States. This Court sees no justification, either legal or ethical, for concluding that Congress intended to allow Defendants to continue to tell the rest of the world that “low tar/light” cigarettes are less harmful to health when they are prohibited from making such fraudulent representations to the American public. . . .

"Under the “effects test,” RICO has extraterritorial effect where illegal activity abroad causes a “substantial effect” within the United States. Id. As to the effects test, there is no question that, as the Findings of Fact detail at great length (particularly in the sections on international organizations, committees, and groups (Section III. I.), environmental tobacco smoke (Section V. G. 6 and 7), destruction of documents and suppression of scientific research (Section V. H.)), the fraud perpetrated by Defendants involved extensive activity that occurred outside our national borders. For example, Defendants participated in an extraordinary number of international organizations and committees throughout the world, used scientists in countries as far apart as Switzerland, Japan, Finland, Germany, Sweden, Thailand, Argentina, and Brazil, engaged in document destruction in Australia, concealed and destroyed research documents in England, and supported extensive smoking and health research in both Germany and England.

"All these activities, despite being carried out beyond our shores, were part of the Defendants’ scheme to defraud the American public about the adverse health effects of smoking and environmental tobacco smoke. The activities which took place abroad were all devoted to advancing and furthering the efforts of the Defendants to mislead and deceive American smokers and potential smokers about the lower health risks of “low tar,” “lite,” “ultra lite,” “mild” and “natural” cigarettes, as well as the dangers of smoking, nicotine addiction, and environmental tobacco smoke. . . .

"[I]n light of the extensive Findings of Fact and the lengthy Conclusions of Law, the actual nine month trial record, and the complexity of the scheme to defraud outlined in those Findings of Fact, Defendants have more than sufficient notice of the illegal conduct that is prohibited under the Sections of the Remedial Order relating to General Injunctive Relief.

"Given the entire context of this case, “Rule 65(d) does not require the [D]istrict [C]ourt to ‘predict exactly what [the Defendants] will think of next.’” . . . Indeed, it would be impossible to foresee what the ingenuity and creativity of Defendants’ cadres of sophisticated lawyers could “think of next.” For all these reasons, the Defendants’ request for clarification regarding the General Injunction provisions at II. A. 1. and II. A. 3. is denied."

Note that the retail/counter display restrictions do _not_ apply outside US.

Also note that the issue is moot for now, as all of Judge Kessler's original order was stayed in October, pending appeal.

Altria/Philip Morris USA said in a press release:

"[N]ow that proceedings in the district court have been completed, the companies will now proceed with their appeal to the United States Circuit Court of Appeals for the District of Columbia. "

Text follows of:

03/16/2007 5799 ORDER #1028 granting in part and denying in part 5743 Certain Defendants' Motion for Clarification or, in the Alternative, for Relief Under Rules 52, 59, and 60 with Respect to the Court's August 17, 2006 Order. Signed by Judge Judge Gladys Kessler on 3/16/07. (CS, ) (Entered: 03/16/2007)

http://www.tobacco-on-trial.com/files/20070316jko.pdf

03/16/2007 5800 MEMORANDUM OPINION to Order #1028. Signed by Judge Gladys Kessler on 3/16/07. (CS, ) (Entered: 03/16/2007)

http://www.tobacco-on-trial.com/files/20070316jkomemo.pdf

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