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Justice Department vows to proceed with tobacco lawsuit
WASHINGTON (CNN) -- The Justice Department said Thursday it would go ahead with its case against the tobacco industry, even though a federal judge threw out two key portions of the civil suit. U.S. District Court Judge Gladys Kessler ruled the government could not use the Medicare Recovery Act or the Federal Employees Health Benefits act to recover billions of dollars it spent on Medicare expenses for sick smokers. She said that if the government wanted to recover expenses dating back to the 1950s, it should have acted sooner. "Congress' total inaction for over three decades 'precludes' an 'interpretation' of MCRA that would permit the government to recover Medicare and FEHBA expenses," Kessler ruled.
"Accordingly the government's MCRA claim must be dismissed," the judge ruled. Kessler said the government could go ahead with federal racketeering claims. "At a very minimum the government has stated a claim for injunctive relief: whether the government can prove it remains to be seen," she wrote. The government alleges that cigarette makers misled the public about the dangers of smoking and should be forced to surrender profits from what it calls "unlawful activity." "We are pleased the court has ruled that we can go forward with this important case. We look forward to proceeding to trial and holding the tobacco companies accountable for the fraudulent conduct alleged in this lawsuit," Assistant Attorney General David W. Ogden said. Justice Department officials said court rules do not allow the government to appeal the ruling at this point, because the entire case was not dismissed. The officials said the government may appeal the case -- including the dismissal of the portions thrown out Thursday -- after the case has been heard and ruled on by the trial judge. The government sued the major tobacco companies last year seeking to recover $20 billion a year spent by Medicare and other federal health plans to treat smoking-related illnesses. The government argued it is legally entitled to seek payments dating back to 1954, when the Justice Department alleges the cigarette makers began conspiring to mislead the public about the dangers of smoking. Republicans and members of Congress from tobacco states have tried to deny the Justice Department money to pursue the lawsuit. In June, they suffered a bipartisan defeat when the House voted 215-183 to allow the Justice Department to get $4 million each from the departments of Defense, Veterans Affairs and Health and Human Services next year. The departments are the client agencies in the case. The Senate Appropriations Committee, however, has approved a bill that would block the transfers. The government estimates the lawsuit will cost a total of $40 million this year and next year. CNN Justice Department Producer Terry Frieden and The Associated Press contributed to this report. RELATED STORIES: Two tobacco companies reportedly in settlement talks RELATED SITES: Truth Tour: trade tobacco ads for gear | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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CNN's Gene Randall interviews Anthony Sebok of Brooklyn Law School about the Florida landmark punitive-damages verdict against tobacco companies (July 15)
