US Appeals Court Upholds Restrictions Against Tobacco Industry in Racketeering Case

07/27/2012| 11:07am US/Eastern

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   By Brent Kendall 
 

WASHINGTON--A federal appeals court on Friday upheld a trial judge's decision to maintain the restrictions she imposed on cigarette makers in 2006 for violating federal racketeering laws.

The ruling, by the U.S. Court of Appeals for the District of Columbia Circuit, rejected the tobacco industry's argument that the 2006 restrictions should be set aside because Congress in 2009 passed a law that imposed other restrictions on the industry and gave the Food and Drug Administration the authority to regulate tobacco products.

The appeals court said U.S. District Court Judge Gladys Kessler acted reasonably when she decided last year to keep the earlier restrictions in place.

Judge Kessler in 2006 ordered a variety of marketing, sales and advertising restrictions on the tobacco industry. She also required cigarette makers to issue corrective statements about the dangers of their products, which would appear on television, newspapers, product packaging and countertop displays in retail outlets.

Friday's ruling was the latest chapter in the federal government's long-running racketeering case against the tobacco industry, which dates back to 1999.

Defendants in the case include Altria Group Inc.'s (>> Altria Group, Inc.) Philip Morris subsidiary; Reynolds American Inc.'s (>> Reynolds American, Inc.) R.J. Reynolds Tobacco Co.; and Lorillard Tobacco Co., a unit of Lorillard Inc. (>> Lorillard Inc.).

Write to Brent Kendall at brent.kendall@dowjones.com

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