Now that Burns! RICO for Basis for Product Liability Claims
Several years ago, a Federal Appeals Court upheld a lower court ruling of guild under the Racketeering Influenced and Corrupt Organizations Act (RICO) against various big tobacco companies. In its decision, the court based its finding on a “multi-faceted, sophisticated scheme to defraud the public about the dangers of smoking.” This finding essentially opened the floodgates for product liability suits by consumers against the big tobacco companies.
However, according to a report by the First Amendment Center last week, the big tobacco companies struck back, filing briefs at the Supreme Court seeking reversal of the appeals court ruling. The briefs—filed separately by the companies—rely heavily on the First Amendment. The tobacco companies claim in these briefs that the First Amendment protects “statements made to congressional committees and in press releases that the government pointed to in its prosecution.” This is in contrast to the rulings of the District and Appeals Court, each of which held that “because the statements were examples of fraudulent commercial speech, they were not protected by the First Amendment”.
The crux of the argument against the lower courts’ rulings is that, if left to stand the government and public would be able to use RICO as a device for penalizing and “chilling public debate on scientific matters and constraining constitutionally protected speech.” In other words, the tobacco companies are arguing that, at the time the statements were made, they were valid, scientific opinions. More so, according to the 1960s Noerr-Pennington Doctrine, companies are not liable for statements they make when trying to lobby legislation or regulations.
From a products liability point of view, the Supreme Court’s decision on this case will have significant impact. Since the product liability claims against cigarettes are largely based on the concept of fraudulent information and marketing, if the court rules this finding was in error, such claims will likely be limited in the future.
Monheit is the managing lawyer at Monheit Law, outside Philadelphia, Pennsylvania. He has practiced law since 1989. Michael Monheit was the managing attorney of the law offices of Herbert Monheit — now Silverman and Fodera — a firm founded by... Michael Monheit→
