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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 20, 2012 Decided July 27, 2012 

No. 11-5145 

UNITED STATES OF AMERICA, 

APPELLEE

v. 

PHILIP MORRIS USA INC., ET AL., 

APPELLANTS

Appeal from the United States District Court 

for the District of Columbia 

(No. 1:99-cv-02496) 

 Miguel A. Estrada argued the cause for appellants. With 

him on the briefs were Amir C. Tayrani, Dace C. Martinez, 

Robert F. McDermott, Peter J. Biersteker, Noel J. Francisco,

R. Michael Leonard, Michael B. Minton, Bruce D. Ryder, A. 

Elizabeth Blackwell, Beth A. Wilkinson, and Thomas J. 

Frederick. 

 Daniel J. Popeo and Richard A. Samp were on the brief 

for amicus curiae Washington Legal Foundation in support of 

appellants. 

 Sarang Vijay Damle, Attorney, U.S. Department of 

Justice, argued the cause for appellee. With him on the brief 

were Michael F. Hertz, Deputy Assistant Attorney General, 

USCA Case #11-5145 Document #1386050 Filed: 07/27/2012 Page 1 of 12
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and Mark B. Stern and Alisa B. Klein, Attorneys. R. Craig 

Lawrence, Assistant U.S. Attorney, entered an appearance.

 

 Katherine A. Meyer and Howard M. Crystal were on the 

brief for appellees Tobacco Free Kids Action Fund, et al. 

 Before: SENTELLE, Chief Judge, BROWN, Circuit Judge, 

and SILBERMAN, Senior Circuit Judge. 

Opinion for the Court by Circuit Judge BROWN. 

 BROWN, Circuit Judge: In this latest round in the 

Government’s heavyweight bout against the tobacco industry, 

the defendant cigarette manufacturers challenge the district 

court’s refusal to vacate injunctions imposed in 2009. 

Because the district court’s ruling survives our review, we 

give this round to the Government. 

I 

Thirteen years ago, the Government sued several 

cigarette manufacturers and related industry organizations for 

civil violations of the Racketeer Influenced and Corrupt 

Organizations Act (“RICO”). The suit asserted the 

defendants had conspired to deceive consumers about the 

health effects and addictiveness of smoking. It sought 

injunctive relief and disgorgement of $280 billion in profits 

under RICO’s Section 1964(a). See 18 U.S.C. § 1964(a). 

On appeal of an interlocutory order, we held Section 

1964(a) did not provide a disgorgement remedy. We 

explained that because the Section only affords the district 

court with jurisdiction to “prevent and restrain” future RICO 

violations, the court was “limited to forward-looking 

remedies.” United States v. Philip Morris USA, Inc., 396 F.3d 

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1190, 1198 (D.C. Cir. 2005). Disgorgement, as “a 

quintessentially backward-looking remedy,” was out. Id. 

The district court proceeded to conduct a nine-month 

bench trial, make over 4000 findings of fact, and impose an 

extensive set of injunctions. The court identified “more than 

100 predicate [RICO violations] spanning more than a halfcentury,” and found the defendants’ “numerous misstatements 

and acts of concealment and deception were made 

intentionally and deliberately . . . as part of a multi-faceted, 

sophisticated scheme to defraud.” United States v. Philip 

Morris USA, Inc., 449 F. Supp. 2d 1, 909 (D.D.C. 2009) 

(“Injunction Opinion”). Based on that long history of 

misconduct, and the defendants’ “countless [future] 

‘opportunities’ and temptations to take similar unlawful 

actions in order to maximize their revenues,” the court 

determined there was “a reasonable likelihood that 

[d]efendants’ RICO violations will continue in most of the 

areas in which they have committed violations in the past.” 

Id. at 909–12. Asserting its authority to “prevent and 

restrain” the defendants from committing such future RICO 

violations, 18 U.S.C. § 1964(a), the court prohibited the 

defendants from making false or deceptive statements about 

cigarettes, or “conveying any express or implied health 

message or health descriptor for any cigarette brand.” Id. at 

938. The court also ordered the defendants to issue 

“corrective statements” in various media outlets about the 

health effects of smoking, id. at 938–41, and disclose certain 

marketing and sales information to the public and the 

Department of Justice, id. at 941–45. 

On appeal, we affirmed all but four discrete aspects of the 

injunction order and remanded for further proceedings on 

those narrow issues alone. See United States v. Philip Morris 

USA, Inc., 566 F.3d 1095 (D.C. Cir. 2009) (per curiam) 

USCA Case #11-5145 Document #1386050 Filed: 07/27/2012 Page 3 of 12
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(“Affirmance Opinion”). We held the district court had 

jurisdiction to issue the injunctions because it did not clearly 

err in finding the defendants exhibited a reasonable likelihood 

of committing future RICO violations. See id. at 1131–34. 

And though we acknowledged that the court’s chosen 

injunctions were “broad,” we held that breadth was 

“warranted to prevent further violations where[, as here,] a 

proclivity for unlawful conduct has been shown.” Id. at 1137. 

Exactly one month after we issued our opinion, the 

President signed the Family Smoking Prevention and Tobacco 

Control Act (the “Tobacco Control Act” or the “Act”) into 

law. See Pub. L. No. 111-31, 123 Stat. 1776 (2009). The Act 

imposed stringent restrictions on the conduct of cigarette 

manufacturers. It limited marketing by prohibiting 

distribution of branded merchandise, id. § 102, false or 

misleading labeling, id. § 903(a), and claims of reduced risk 

of harm (such as the use of descriptors like “light” or “mild”) 

without prior approval of the FDA, id. § 911. It strengthened 

warning labels by directing cigarette manufacturers to include 

one of several textual warnings on every pack. Id. § 202(b). 

And to ensure enforcement, it granted the FDA a hefty 

budget, id. § 919, and the authority to impose monetary 

penalties, id. § 103(c). 

The defendants responded by moving to vacate the 

injunctions on jurisdictional grounds because the Tobacco 

Control Act’s restrictions on their conduct eliminated any 

“reasonable likelihood” they would commit future RICO 

violations. Alternatively, they claimed the court should 

vacate the injunctions out of deference to the FDA’s 

newfound primary jurisdiction over cigarette sales and 

marketing. 

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The court rejected both arguments and left the injunctions 

intact. See United States v. Philip Morris USA, Inc., 787 F. 

Supp. 2d 68 (D.D.C. 2011) (“Vacatur Opinion”). On the 

jurisdictional argument, it found the defendants were still 

reasonably likely to commit future RICO violations because: 

(1) the defendants were not likely to comply with the Tobacco 

Control Act given their previous disregard for RICO and the 

Master Settlement Agreement they had entered into with 46 

state attorneys general in 1998; (2) the Act “target[ed] 

different conduct” than the injunctions did; and (3) the 

defendants’ pending lawsuits challenging the Act had resulted 

in the invalidation of some of its restrictions, and could result 

in the invalidation of even more restrictions, id. at 75–76. On 

the primary jurisdiction argument, the court chose to retain 

jurisdiction because several factors—including its relative 

expertise in RICO cases, and the dissimilarities between the 

proscriptions of the RICO statute and the requirements of the 

Tobacco Control Act—weighed against ceding jurisdiction to 

the FDA. Id. at 77–82. 

The defendants appealed. We have jurisdiction to 

entertain their challenge under 28 U.S.C. § 1292(a)(1). 

II 

 The defendants advance the same arguments they 

advanced below. Their primary argument is that the Tobacco 

Control Act deprived the district court of jurisdiction by 

eliminating any reasonable likelihood they would commit 

future RICO violations. Their fallback argument is that even 

if the district court retained jurisdiction following the passage 

of the Act, it should have vacated the injunctions out of 

deference to the FDA’s newly obtained primary jurisdiction. 

We address those claims in turn. 

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A 

 RICO’s “Section 1964(a) grants district courts 

jurisdiction ‘to prevent and restrain’ RICO violations.” 

Affirmance Opinion, 566 F.3d at 1131. Accordingly, the 

district court only had jurisdiction to maintain its injunctions 

if it found the defendants “exhibit[ed] a reasonable likelihood 

of committing future [RICO] violations.” Id. The court 

found such a likelihood existed despite the passage of the 

Tobacco Control Act because the defendants “offer[ed] no 

facts which would warrant revisiting” the court’s pre-Act 

findings on their proclivity for misconduct. Vacatur Opinion, 

787 F. Supp. 2d at 75. 

The defendants contend the district court twice applied 

the wrong legal standard. They argue the court erred first 

when it refused to vacate the injunctions under a line of cases 

involving intervening legislation. In those circumstances, 

courts had “deemed cases moot where a new law [wa]s 

enacted during the pendency of an appeal and resolve[d] the 

parties’ dispute.” Log Cabin Republicans v. United States, 

658 F.3d 1162, 1166 (9th Cir. 2011) (per curiam). 

The intervening legislation in those cases is 

distinguishable from the Tobacco Control Act because the 

legislation there made it “impossible for the court to grant any 

effectual relief whatever.” Cody v. Cox, 509 F.3d 606, 608 

(D.C. Cir. 2007). In Log Cabin Republicans, for example, the 

court could not grant the plaintiffs any effectual relief on their 

challenge to the “Don’t Ask, Don’t Tell” policy because 

Congress subsequently passed a law repealing the policy. See 

658 F.3d at 1165–66. Similarly, in Diffenderfer v. GomezColon, 587 F.3d 445 (1st Cir. 2009), the court could not grant 

the plaintiffs any effectual relief on their challenge to Puerto 

Rico’s Spanish-only ballots because Puerto Rico subsequently 

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passed a law requiring the bilingual ballots plaintiffs desired. 

Id. at 450–51. By contrast, the Tobacco Control Act did not 

make it impossible to grant effectual relief because it did not 

make it impossible for the defendants to commit future RICO 

violations; it did not repeal RICO, exempt the defendants 

from RICO’s application, or legislate the defendants out of 

existence. It simply subjected the defendants “to the 

comprehensive regulatory oversight of the FDA.” 

Appellants’ Br. at 31. The relevant question—as the district 

court recognized—was whether that oversight made it so 

difficult for the defendants to commit RICO violations that 

there was no longer a reasonable likelihood of such violations 

occurring. See Vacatur Opinion, 787 F. Supp. 2d at 75. 

The defendants contend the district court made a second 

error when answering that question. In reaching its 

conclusion that the defendants “offer[ed] no facts which 

would warrant revisiting” its earlier finding of reasonable 

likelihood, the court noted that “‘a defendant claiming that its 

voluntary compliance moots a case bears the formidable 

burden of showing that it is absolutely clear that the allegedly 

wrongful behavior could not reasonably be expected to 

recur.’” Id. (quoting Friends of the Earth, Inc. v. Laidlaw 

Environmental Services, Inc., 528 U.S. 167, 190 (2000)). The 

defendants argue the court should not have imposed such a 

“formidable” burden of proof because their claimed future 

compliance with RICO was not “voluntary”—it was 

mandatory under the terms of the Tobacco Control Act. 

Of course, that argument assumes the defendants’ 

compliance with the Tobacco Control Act. And in light of the 

defendants’ history of non-compliance with various legal 

requirements, there was no reason for the district court to 

make such an assumption. Indeed, the court expressly found 

the Tobacco Control Act was not likely to produce 

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compliance when RICO and the Master Settlement 

Agreement (“MSA”) had failed to do so in the past. See

Vacatur Opinion, 787 F. Supp. 2d at 76. The defendants 

claim the Tobacco Control Act imposes tougher restrictions 

and penalties than the MSA did, and is therefore more likely 

to spur compliance, but the Act does not provide for penalties 

as sweeping as those available under RICO. If the defendants 

were not deterred by the possibility of RICO liability, the 

district court reasonably found the defendants were not likely 

to be deterred by the Tobacco Control Act either. In light of 

that finding, it was appropriate for the district court to hold 

the defendants to the higher standard of proof reserved for 

claims of mootness based on voluntary compliance.1

 

Even if the district court had found the defendants were 

likely to comply with the Act, the injunctions would not have 

been moot. There are significant parts of the injunctive order 

that the Act does not cover, see Appellee’s Br. at 26–28, and 

as the court noted, the injunctions, unlike the Act, are 

specifically designed to combat racketeering activity, see

Vacatur Opinion, 787 F. Supp. 2d at 75, and therefore may be 

enforced differently. Moreover, the scope of the Act itself 

was unclear when the court ruled because another court had 

struck down portions of the Act as unconstitutional. See id. at 

76 (citing Commonwealth Brands, Inc. v. United States, 678 

F. Supp. 2d 512, 521 (W.D. Ky. 2010)). 

 

1

 That finding—that the Tobacco Control Act was unlikely to 

produce compliance where other laws had failed—also justifies the 

district court’s refusal to vacate the portions of the injunctions that 

overlapped with certain restrictions in the Act. See Appellants’ Br 

at 46–51 (requesting such relief). If the defendants were not likely 

to comply with those particular restrictions in the Act, those 

restrictions did not moot the similar provisions in the injunctive 

order. 

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In sum, we hold the district court maintained jurisdiction 

because it applied the correct legal standard, and did not 

clearly err in finding the defendants still exhibited a 

reasonable likelihood of committing future RICO violations. 

See Affirmance Opinion, 566 F.3d at 1131. 

B 

 The defendants’ primary jurisdiction argument fares no 

better. When adjudicating a claim would “require[] the 

resolution of issues which, under a regulatory scheme, have 

been placed within the special competence of an 

administrative body,” the primary jurisdiction doctrine 

permits a court to suspend the judicial process “pending 

referral of such issues to the administrative body for its view.” 

United States v. W. Pac. R.R. Co., 352 U.S. 59, 64 (1956); see 

also Reiter v. Cooper, 507 U.S. 258, 268 (1993). The district 

court found “this case d[id] not present the appropriate 

circumstances for invocation of the primary jurisdiction 

doctrine.” Vacatur Opinion, 787 F. Supp. 2d at 78. We 

review that ruling for abuse of discretion, see Nat’l Tel. Coop. 

Ass’n v. Exxon Mobil Corp., 244 F.3d 153, 156 (D.C. Cir. 

2001), and find none. 

 Although “[n]o fixed formula exists for applying the 

doctrine of primary jurisdiction,” some principles emerge 

from our precedents. W. Pac. R.R. Co., 352 U.S. at 64. “The 

primary jurisdiction doctrine rests both on a concern for 

uniform outcomes (which may be defeated if disparate courts 

resolve regulatory issues inconsistently) . . . and on the 

advantages of allowing an agency to apply its expert 

judgment.” Allnet Comm’cn Serv., Inc. v. Nat’l Exchange 

Carrier Ass’n, 965 F.2d 1118, 1120 (D.C. Cir. 1992). 

Consequently, we have found the primary jurisdiction 

doctrine applicable when the precise question before the 

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district court was one within the particular competence of an 

agency: whether a tariff levied by local exchange carriers 

complied with FCC regulations, for example, see id. at 1120–

21, or whether, under FDA regulations, a new drug was “safe 

and effective for interstate sale,” Israel v. Baxter Labs., Inc., 

466 F.2d 272, 280 (D.C. Cir. 1972). 

 The question before the district court here was whether it 

was still reasonably likely the defendants would commit 

future RICO violations despite the passage of the Tobacco 

Control Act. As the district court observed, that question was 

squarely within its area of expertise; 13 years of litigation, 

nine months of trial, and 4000 findings of fact surely gave it 

unique insight into the defendants’ tendency to circumvent or 

ignore the law. See Vacatur Opinion, 787 F. Supp. 2d at 79–

80. And while the Tobacco Control Act gave the FDA the 

authority to regulate much of the defendants’ conduct, it gave 

the FDA no particular insight into whether the defendants 

were likely to comply with those restrictions. That is why 

courts consistently have refused to invoke the primary 

jurisdiction doctrine for “claims based upon fraud or 

deceit”—claims that are “within the conventional competence 

of courts.” Dana Corp. v. Blue Cross & Blue Shield Mut. of 

N. Ohio, 900 F.2d 882, 889 (6th Cir. 1990) (citing Nader v. 

Allegheny Airlines, Inc., 426 U.S. 290, 305–06 (1976), and In 

re Long Distance Telecomm., 831 F.2d 627, 633–34 (6th Cir. 

1987)). 

 The defendants attempt to draw support from 

Kappelmann v. Delta Air Lines, Inc., 539 F.2d 165 (D.C. Cir. 

1976). There, shortly after Congress gave the FAA authority 

to regulate the transportation of hazardous materials, the 

plaintiff sought an injunction requiring an airline to provide 

“adequate warning” to passengers about the “presence of a 

significant amount of radioactive materials” on board a flight. 

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Id. at 168. We affirmed the district court’s invocation of the 

primary jurisdiction doctrine because the requested injunction 

“would in effect constitute a regulation covering one phase of 

the interstate transportation of one group of hazardous 

materials on one airline,” and such “determinations [we]re 

better made on an industry-wide basis in an agency 

rulemaking proceeding.” Id. at 171. 

 Though Kappelmann bears a passing resemblance to this 

case, there are two critical, and ultimately dispositive, 

differences. First, in Kappelmann, we noted “that Congress 

recognized the need for uniformity of regulation in this area” 

when it passed the law empowering the FAA to engage in 

rulemaking. Id. at 170. By contrast, when it passed the 

Tobacco Control Act, Congress was aware of the district 

court’s injunctions, see Pub. L. No. 111-31, 123 Stat. 1776, § 

2(47)–(49), yet it explicitly stated the Act should not be 

construed to “affect any action pending in Federal, State, or 

tribal court,” id. § 4(a)(2). We can infer from that statement 

that Congress was not concerned about the district court’s 

injunctions interfering with the proper functioning of the Act. 

 The second difference is timing. In Kappelmann—and in 

every other case the defendants cite on primary jurisdiction—

the court’s decision to defer to the agency came near the 

beginning of the case. That is no coincidence. The primary 

jurisdiction doctrine is rooted in part in judicial efficiency; if 

an agency has particular expertise in an area, then invoking 

the primary jurisdiction doctrine could “enhance court 

decision-making and efficiency by allowing the court to take 

advantage of [that] administrative expertise.” Chabner v. 

United of Omaha Life Ins. Co., 225 F.3d 1042, 1051 (9th Cir. 

2000). Here, the district court has spent over a decade with 

the case, and has issued expansive injunctions that this Court 

has largely affirmed. Vacating those injunctions now would 

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turn the efficiency rationale for the primary jurisdiction 

doctrine on its head. 

III 

 The district court did not clearly err when it found the 

defendants were reasonably likely to commit future RICO 

violations despite the passage of the Tobacco Control Act. 

Nor did the court abuse its discretion when it refused to 

vacate its injunctions under the primary jurisdiction doctrine. 

Accordingly, the district court’s denial of the defendants’ 

motion to vacate the injunction is 

Affirmed. 

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