United States v. Philip Morris USA Inc.
840 F.3d 844
| D.C. Cir. | 2016Background
- In 1999 the government sued major cigarette manufacturers under RICO for conspiring to deceive the public about smoking dangers; after trial the district court entered a broad remedial injunction in 2006 that included televised "corrective statements."
- The remedial order applied to each defendant and to each of their successors; Brown & Williamson (BWH) had merged its domestic tobacco operations into R.J. Reynolds (RJR) before trial and later became a passive holding company.
- On appeal the D.C. Circuit upheld the corrective-statement remedy and remanded for factual findings about BWH; the parties later agreed BWH was not a defendant and therefore not subject to the injunction.
- The court later set the final text of the corrective statements; while implementation was negotiated, the government took the position the injunction requires RJR to run two sets of ads (one as an original defendant and one as successor to BWH).
- RJR moved under Fed. R. Civ. P. 60(b)(4) (void judgment) and 60(b)(6) (other reason justifying relief) to eliminate the successor-based (double-ad) obligation; the district court denied relief, and RJR appealed.
Issues
| Issue | Plaintiff's Argument (U.S.) | Defendant's Argument (RJR) | Held |
|---|---|---|---|
| Whether Rule 60(b)(4) permits voiding remedial injunctions that exceed a court's remedial authority | Rule 60(b)(4) relief is limited to jurisdictional defects or due-process violations; remedial overreach is not "void." | The injunction is void because it is punitive/exceeds RICO remedial jurisdiction, so Rule 60(b)(4) applies. | Court: Rule 60(b)(4) is limited to rare defects (subject-matter/personal jurisdiction or due-process); remedial-authority errors are not void. |
| Whether appellate jurisdiction exists under 28 U.S.C. §1292(a) to review denial of RJR's motion | Denial clearly refused to dissolve a specific injunction obligation, so interlocutory appeal is authorized. | Intervenors: denial merely clarified obligations, so no §1292(a) jurisdiction. | Court: §1292(a) jurisdiction exists because district court clearly denied a specific request to dissolve the injunction. |
| Whether RJR can obtain relief under Rule 60(b)(6) for double-ad requirement | RJR: extraordinary circumstances justify reopening final judgment to eliminate successor obligation. | Government: RJR unduly delayed and failed to raise the issue earlier; no extraordinary circumstances. | Court: Denial affirmed — RJR filed untimely and failed to show the high "extraordinary circumstances" needed for 60(b)(6). |
| Whether RJR's prior concessions/omissions precluded Rule 60 relief | Government: RJR previously conceded the double-ad requirement and failed to timely appeal, so relief is barred. | RJR: earliest practical opportunity to challenge successor obligation arose in 2014 during implementation negotiations. | Court: RJR conceded the obligation earlier; it cannot both claim clarity (for jurisdiction) and ambiguity (to excuse delay); delay bars 60(b)(6) relief. |
Key Cases Cited
- United States Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010) (Rule 60(b)(4) applies only in rare cases—jurisdictional defects or due-process violations)
- Steel Co. v. Citizens for Better Environment, 523 U.S. 83 (1998) (jurisdiction is a multifaceted concept; courts must address jurisdiction first)
- Salazar ex rel. Salazar v. District of Columbia, 671 F.3d 1258 (D.C. Cir. 2012) (narrow construction of §1292(a) and standards for interlocutory appeal of injunctions)
- United States v. Philip Morris USA, Inc., 566 F.3d 1095 (D.C. Cir. 2009) (remedial opinion upholding corrective-statement remedy and remanding on successor/control issues)
- United States v. Philip Morris USA, Inc., 686 F.3d 839 (D.C. Cir. 2012) (discussion of interlocutory appeal jurisdiction in this litigation)
- Kramer v. Gates, 481 F.3d 788 (D.C. Cir. 2007) (Rule 60(b)(6) cannot rescue litigants from strategic choices later regretted)