United States Court of Appeals, District of Columbia Circuit
United States of America, United States Department of Justice, et al., Appellees
Philip Morris USA Inc., formerly known as Philip Morris Incorporated, et al., Appellants Brown & Williamson Tobacco Corporation, directly and as successor by merger to American Tobacco Company, et al., Appellees
February 14, 2017
from the United States District Court for the District of
Columbia (No. 1:99-cv-02496)
Michael A. Carvin argued the cause for appellants. On the
briefs were Noel J. Francisco, Peter J. Biersteker, Miguel A.
Estrada, Amir C. Tayrani, Jeffrey A. Mandell, and Robert J.
Melissa N. Patterson, Attorney, U.S. Department of Justice,
argued the cause for federal appellees. With her on the brief
were Benjamin C. Mizer, Principal Deputy Assistant Attorney
General, and Mark B. Stern and Alisa B. Klein, Attorneys.
R. Glitzenstein argued the cause for appellees Tobacco-Free
Kids Action Fund, et al. With him on the brief was Katherine
Before: Brown, Circuit Judge, and Sentelle and Randolph,
Senior Circuit Judges.
Sentelle, Senior Circuit Judge.
2006, the district court found that Appellant cigarette
manufacturers had for decades conspired to deny the health
effects of smoking in violation of RICO. United States v.
Philip Morris USA, Inc., 449 F.Supp.2d 1 (D.D.C. 2006)
("Liability Opinion"). As a remedy, the
court ordered Appellants to disseminate "corrective
statements" relating to the health effects of smoking in
newspapers, on television, on cigarette packages, and on
websites. Id. at 938-41. For more than a decade
since, the parties have battled over the precise language of
these statements-both in and out of court. Appellants claim
the most recent language proposed by the government is
conduct-focused and is backward-looking beyond the scope of
RICO and, for other reasons, violates the First Amendment.
The district court approved the government's proposed
language. We affirm in part and reverse in part.
August 2006, a district court found that Appellant cigarette
manufacturers ("Defendants") had violated RICO by
associating together to misinform the public about smoking.
Liability Opinion, 449 F.Supp.2d at 851-906. The
district court found that "an injunction ordering
Defendants to issue corrective statements is appropriate and
necessary to prevent and restrain them from making fraudulent
public statements on smoking and health matters in the
future." Id. at 926. The court identified five
topics about which it would order Defendants to make
corrective statements but deferred deciding the wording of
the statements pending further briefing. Id. at 928,
appeal, we upheld the concept of a corrective-statements
remedy against RICO and First Amendment challenges because
"[r]equiring Defendants to reveal the previously hidden
truth about their products will prevent and restrain them
from disseminating false and misleading statements, thereby
violating RICO, in the future." United States v.
Philip Morris USA Inc., 566 F.3d 1095, 1140 (D.C. Cir.
2009) ("2009 Opinion"). Still, we noted,
such statements must be "confine[d] . . . to 'purely
factual and uncontroversial information, ' geared
toward thwarting prospective efforts by Defendants to
either directly mislead consumers or capitalize on their
prior deceptions by continuing to advertise in a manner that
builds on consumers' existing misperceptions."
Id. at 1144-45 (quoting Zauderer v. Office of
Disciplinary Counsel, 471 U.S. 626, 651 (1985)).
remand from the 2009 Opinion, the district court
formulated the text of the corrective statements, including
bullet points containing factual statements on each topic
preceded by a preamble stating: "A Federal Court has
ruled that [Defendants] deliberately deceived the American
public about [the topic of the statement], and has ordered
those companies to make this statement. Here is the
truth[.]" United States v. Philip Morris USA,
Inc., 907 F.Supp.2d 1, 8-9 (D.D.C. 2012). Defendants
Court held that the "district court exceeded its
authority under RICO because the preambles reveal nothing
about cigarettes; instead, they disclose defendants'
prior deceptive conduct." United States v.
Philip Morris USA Inc., 801 F.3d 250, 261 (D.C. Cir.
2015) ("Corrective Statements Opinion")
(emphasis in original). While the bulleted statements
"reveal[ed] the previously hidden truth about
[Defendants'] products, " the preambles did
not and could "not be justified on grounds of general
deterrence." Id. at 263 (quoting 2009
Opinion, 566 F.3d at 1140) (emphasis in original). The
Court did not address Defendants' constitutional
challenges to the preambles. See id. at 256. The
Court remanded for further proceedings. The United States
filed a petition for panel rehearing, seeking clarification
regarding which portions of the preambles the Court expected
to be altered. We denied the petition, stating that the
Government sought "relief that the district court may
consider in the first instance on remand." Orders,
United States v. Philip Morris USA Inc., Nos.
13-5028 & 14-5161 (D.C. Cir. Aug. 5, 2015).
the district court granted two Defendants permission to sell
certain cigarette brands to non-Defendant ITG Brands, LLC,
and to make ITG and its affiliates ("ITG Entities")
parties to this case for limited purposes. The order
specified that the ITG Entities would be responsible for
publishing corrective statements with "slightly modified
preamble language." Order Authorizing Transfer of
Certain Cigarette Brands and Businesses to ITG ...