Tobacco firms may still face federal lawsuit

WASHINGTON — A federal judge ruled Wednesday that the legal settlement reached between the tobacco industry and states six years ago does not shield cigarette makers from the federal government’s $280 billion suit.

The ruling was a victory for prosecutors, who asked U.S. District Judge Gladys Kessler to prevent the cigarette makers from arguing that the settlement with the states made the federal racketeering case moot.

The industry reached a $206 billion settlement with 46 states in 1998 to cover the cost of treating sick smokers. Four other states settled previously for $40 billion.

The agreements led to advertising and marketing restrictions on the industry, such as banning cigarette ads on billboards. Kessler said in her ruling she would consider those restrictions if she has to set remedies for alleged wrongdoing in the federal case.

The Justice Department alleges tobacco companies deceived the public about the dangers of tobacco and the addictive nature of nicotine.

The government also claims the companies targeted children through advertising and lied about it.

The trial is set to begin in September, although the industry is seeking an interim appeal to block the government from going after $280 billion that tobacco companies allegedly earned fraudulently.

In a motion filed Tuesday, the industry asked the U.S. Court of Appeals for the District of Columbia to overturn a ruling by Kessler allowing the government to go after the industry’s financial gains.

In addition to seeking the money, the government wants the judge to impose new restrictions on the industry, including banning vending machines and limiting in-store promotions.

The defendants in the federal suit are Philip Morris USA Inc. and its parent, Altria Group Inc.; R.J. Reynolds Tobacco Co.; Brown & Williamson Tobacco Corp.; British American Tobacco Ltd.; Lorillard Tobacco Co.; Liggett Group Inc.; Counsel for Tobacco Research-U.S.A.; and The Tobacco Institute.