United States v. Philip Morris USA Inc., 419 U.S. App. D.C. 273

Background

The United States sued major cigarette manufacturers under RICO, alleging a decades‑long conspiracy to deceive the public about smoking’s health risks and addictiveness; a nine‑month bench trial produced thousands of findings and a 2006 judgment finding RICO liability.
The district court ordered forward‑looking injunctive relief including corrective disclosures on five topics (health effects, addictiveness, “light”/“low tar” claims, design/manipulation for nicotine delivery, and secondhand smoke) to be published on multiple media including package onserts and websites.
The government initially sought disgorgement of profits; this court held disgorgement unavailable under RICO because §1964(a) authorizes only remedies to “prevent and restrain” future violations.
On prior appeal (2009), this Court affirmed RICO liability and upheld the corrective‑statement remedy in principle, limiting permissible relief to statements that reveal the truth about products and thereby impair future misleading claims.
On remand the district court adopted precise corrective statements, including (a) bulleted factual statements that manufacturers intentionally designed cigarettes to ensure addiction and (b) preambles stating a federal court had ruled the companies “deliberately deceived the American public.”
Defendants challenged the content and placement of the corrective statements as exceeding RICO authority and violating the First Amendment; this appeal resolves which parts are permissible.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether disclosures that manufacturers "intentionally designed cigarettes" for addiction are authorized by RICO	Government: corrective factual disclosures about product design prevent future RICO violations by impairing defendants’ ability to mislead	Manufacturers: such statements are backward‑looking, conduct‑focused, and exceed §1964(a) authority; also First Amendment challenge	Held: Affirmed — these bulleted statements fall within prior remedial order and law‑of‑the‑case/waiver; they are forward‑looking disclosures of product truth that prevent future violations
Whether preambles stating the court found defendants "deliberately deceived the American public" are authorized by RICO	Government: preambles help correct consumer misinformation and thereby prevent future deception; expert evidence supports efficacy	Manufacturers: preambles are backward‑looking condemnations focused on past wrongdoing, exceeding §1964(a) which authorizes only remedies to prevent and restrain future RICO violations	Held: Reversed as to preambles — they primarily remedy past conduct/consumer misinformation and cannot be justified under §1964(a) or by general deterrence
Whether specific factual language in corrective statements lacks evidentiary support or is imprecise (First Amendment factual/uncontroversial test)	Government: statements are supported by district court findings and are factual	Manufacturers: some bullets overstate findings or contain drafting errors (e.g., "filtered" vs "light")	Held: District court must correct minor textual errors (e.g., "filtered"→"light"); overall court found adequate factual support in the record for the bulleted claims
Whether publication channels (websites, packages, newspaper/TV) are unduly burdensome/restricted by prior rulings	Government: multiple channels needed to prevent future violations; district court already required them in 2006	Manufacturers: duplicative and unduly burdensome; reservation to challenge later doesn't revive waived claims	Held: Rejected — channel issues were decided previously; manufacturers waived further challenge by failing to timely appeal; multiplicity of media remains required per prior order

Key Cases Cited

Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S. 375 (federal courts have only the powers granted by Constitution and statute)
United States v. Philip Morris USA, Inc., 396 F.3d 1190 (D.C. Cir. 2005) (disgorgement unavailable under §1964(a); RICO relief is forward‑looking)
United States v. Philip Morris USA Inc., 566 F.3d 1095 (D.C. Cir. 2009) (upholding corrective‑statement remedy in principle; limits on remedies to prevent and restrain future violations)
LaShawn A. v. Barry, 87 F.3d 1389 (D.C. Cir. 1996) (law‑of‑the‑case doctrine promotes consistency)
Yakus v. United States, 321 U.S. 414 (constitutional rights may be forfeited by failure to timely assert)
Carson v. United States, 52 F.3d 1173 (2d Cir. 1995) (rejecting remedies justified solely by general deterrence)
Blum v. Bacon, 457 U.S. 132 (statutory questions addressed before constitutional ones)
Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (limits on unduly burdensome compelled commercial disclosures)
Crocker v. Piedmont Aviation, Inc., 49 F.3d 735 (law‑of‑the‑case prevents re‑opening decided issues)
Laffey v. Northwest Airlines, Inc., 740 F.2d 1071 (waiver of contentions not raised on earlier appeal)
United States v. Thomas, 572 F.3d 945 (D.C. Cir. 2009) (unchallenged prior decisions govern later stages)