By Brent Kendall
WASHINGTON--A federal appeals court on Monday signaled it may
scale back a judge's order requiring tobacco companies to say in
product warnings that the industry deceived the American public
about the dangers of smoking.
The product warnings are one of the requirements U.S. District
Judge Gladys Kessler placed on the industry after she ruled that
cigarette makers committed civil racketeering violations by
engaging in a decadeslong scheme to mislead the public.
Judge Kessler required the tobacco companies to make the product
warning statements in newspaper and television ads, as well as on
their websites and product packaging. She initially ruled against
the tobacco industry in 2006, triggering a series of appeals. Since
2012 the two sides have been fighting over the content of the
advertising warnings.
If the appeals court finds that parts of the warnings go too
far, the ruling could further delay a final resolution of the case,
which dates back to a Justice Department lawsuit filed in 1999
during the Clinton administration.
During an hourlong oral argument Monday, a three-judge panel on
the U.S. Court of Appeals for the District of Columbia Circuit made
clear some of the cigarette makers' legal attacks against the
product warnings were likely to fail.
For example, the court suggested Judge Kessler was on solid
ground when she ordered the tobacco companies to say they
"intentionally designed cigarettes with enough nicotine to create
and sustain addiction."
D.C. Circuit Judge David Tatel noted an earlier ruling from his
court in the case said the tobacco companies could be ordered "to
reveal the previously hidden truth" about their products.
But Judge Tatel expressed reservations about Judge Kessler's
decision to force that tobacco companies to disclose in the
warnings they had deliberately deceived the public. "That's
different than focusing on the product," he said.
Lawyer Miguel Estrada, representing Philip Morris USA, R.J.
Reynolds Tobacco Co. and Lorillard Tobacco Co., said the cigarette
makers "stand ready to disseminate truthful, factual information
about the health effects of their products." But he argued the
wording of Judge Kessler's product warnings was designed to punish
and stigmatize the companies. He said it would violate the First
Amendment to force his clients to publicly brand themselves as
wrongdoers.
Justice Department lawyer Melissa Patterson responded that when
courts or federal agencies find that defendants have engaged in
wrongdoing, it is fine in some circumstances to require them to
disclose those findings. "This is hardly unprecedented," she
said.
Ms. Patterson said Judge Kessler wasn't trying to humiliate the
tobacco companies and instead was focused on making sure the
product warnings would be effective in countering tobacco-company
efforts to mislead consumers.
Two other judges on Monday's panel were less active in their
questioning than Judge Tatel. But Judge Harry Edwards sent clear
signals that he was skeptical of the tobacco companies' arguments,
while Judge A. Raymond Randolph was more skeptical of the
government.
A ruling is expected in the coming months.
The D.C. Circuit in 2009 ruled that Judge Kessler could force
the tobacco companies to make "corrective statements" about their
products. The appeals court's prior opinion said the corrective
warnings had to be confined to purely factual and uncontroversial
information.
Write to Brent Kendall at brent.kendall@wsj.com
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