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Appeals Court Rejects Disgorgement as Remedy in Government Suit against Tobacco Companies
NEW YORK
February 04,
2005
A federal appeals court in Washington, D.C. today ruled that the civil Racketeer Influenced Corrupt Organizations Act (RICO) does not permit the government to seek disgorgement of past revenues and profits as a remedy in its case against Philip Morris USA, the other major tobacco companies and other defendants.
"The specific civil RICO provision that the government has invoked does not allow for an award of disgorgement," said William S. Ohlemeyer, Altria Group, vice president and associate general counsel. Altria and its tobacco company subsidiary, Philip Morris USA, are among the defendants. Ohlemeyer also noted that for the government to obtain any other remedy under the civil RICO statute, it must not only prove that the companies have engaged in fraudulent behavior in the past, but that they are likely to do so in the future.
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