Judge Certifies Tobacco Industry’s Interlocutory Appeal on Disgorgement Claim in Department of Justice Lawsuit

On Friday, U.S. District Judge Gladys Kessler granted a motion brought by Philip Morris USA and the other tobacco industry defendants seeking an immediate appeal on the issue of disgorgement in the Department of Justice lawsuit.

On May 21, Judge Kessler denied a motion by Philip Morris USA and other cigarette companies to issue a partial summary judgment dismissing the government’s disgorgement claim.

The government claims the companies have received "ill-gotten gains" from "wrongful activities" in the past and the companies should be forced to disgorge those monies to prevent any future "wrongful activities."

After Judge Kessler’s May 21 ruling, the companies asked the Court to certify a question concerning whether disgorgement is an appropriate remedy in the case - and if so, to what extent - to the U.S. Court of Appeals for the District of Columbia Circuit for immediate appellate review.

In her ruling Friday granting the companies’ request, Judge Kessler noted that, for interlocutory appellate review, "the District Court must find that its order (i) ‘involves a controlling question of law,’ (ii) ‘as to which there is a substantial ground for difference of opinion,’ and (iii) ‘that an immediate appeal from the order may materially advance the ultimate termination of the litigation.’ This Court is ‘of the opinion’ that all three requirements are satisfied."

Procedurally, Philip Morris USA and the other tobacco companies now have 10 days from the issuance of the order to petition the U.S. Court of Appeals for the District of Columbia asking the court to consider the issue. The government will have seven days to respond to that petition, and the companies would then have five days to reply.

If the Court of Appeals agrees to hear the appeal, it will then establish a schedule for the parties to brief the disgorgement issue.

Judge Kessler also said that "while the Court fully recognizes the many demands made upon our Court of Appeals ... it is hoped that the appeal will be accepted and the briefing expedited."

Altria Group is the parent company of Kraft Foods, the world’s second largest food company, Philip Morris International, the world’s leading international cigarette business, and Philip Morris USA, the leading cigarette manufacturer in the United States. For more information about Altria, its family of companies, and the Department of Justice lawsuit, visit www.altria.com/doj.

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