# Petition for Writ of Certiorari — United States v. Philip Morris USA Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2005
- **Citation:** 546 U.S. 960

## Text

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include the power to order equitable disgorgement.
Pet. App. 18a-23a. In an opinion written by Judge
Sentelle, the majority declared that “[t]his language
indicates that the jurisdiction is limited to forward-
looking remedies that are aimed at future violations,”
whereas disgorgement, in the majority’s view, “is a
quintessentially backward-looking remedy focused on
remedying the effects of past conduct to restore the
status quo.” Jd. at 15a-16a. The majority further noted
that RICO’s criminal forfeiture provision, 18 U.S.C.
1963(a), and the private right of action for treble dam-
ages, 18 U.S.C. 1964(c), provide remedies for past con-
duct, and it concluded that “{tjhis ‘comprehensive and
reticulated’ scheme, along with the plain meaning of the
words themselves, serves to raise a ‘necessary and
inescapable inference’ * * * that Congress intended to
limit relief under § 1964(a) to forward-looking orders,
ruling out disgorgement.” Pet. App. 20a (citation
omitted).”

Judge Tatel stated in his dissenting opinion that the
court should dismiss the interlocutory appeal to “pre-
serv(e] section 1292(b)’s integrity and discourag[e] the
kind of litigating tactics reflected in this record.” Pet.
App. 49a. But because the majority addressed the
merits, he did so as well. /d. at 49a-78a. Judge Tatel
concluded that the majority’s narrow reading of Con-
gress’s grant of power to “prevent and restrain” RICO |
violations is inconsistent with this Court’s decisions in

2 Judge Williams joined in Judge Sentelle’s opinion, but wrote
separately to emphasize his disagreement with the Second Cir-
cuit’s conclusion in Carson that disgorgement should be available
when unlawfully obtained profits are “being used to fund or pro-
mote the illegal conduct, or [that] constitute capital available for
that purpose.” Pet. App. 23a (quoting Carson, 52 F.3d at 1182); see
id. at 23a-25a.

7

Porter v. Warner Holding Co., 328 U.S. 395 (1946), and
Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288
(1960), which established that a grant of equitable juris-
diction encompasses the full range of traditional equi-
table remedies unless the statute by its terms or by
necessary inference restricts the court’s jurisdiction in
equity. Pet. App. 5la-65a. He rejected the proposition
that disgorgement is, by its nature, “backward-look-
ing,” id. at 67a-68a, and urged that the district court
should be allowed to decide in the first instance “what
remedy or combination of remedies” would “serve to
prevent and restrain” defendants from committing fu-
ture RICO violations, id. at 73a.

The court of appeals denied the government’s peti-
tion for rehearing en banc by a 3-3 vote, with 3 judges
not participating. Pet. App. 156a-157a.*

REASONS FOR GRANTING THE PETITION

The court of appeals’ decision in this case holds that a
district court’s equitable authority to “prevent and
restrain” violations of the Racketeer Influenced and
Corrupt Organizations Act (RICO), 18 U.S.C. 1964(a),
excludes, as a matter of law, the remedial authority to
order disgorgement of illegally obtained proceeds.
There are compelling reasons for this Court to review
that decision.

First, the divided court of appeals’ erroneous con-
struction of RICO’s remedial provisions has fractured
widely accepted understandings respecting a district
court’s equitable jurisdiction. That decision: (a) rejects
this Court’s teachings in Porter v. Warner Holding Co.,

3 The district court has not stayed the trial proceedings during
_ the interlocutory appeal. The court has heard testimony and re-
ceived other evidence, heard closing arguments, and scheduled
post-trial briefing. See note 7, infra.

8

328 U.S. 395 (1946), and Mitchell v. Robert DeMario
Jewelry, Inc., 361 U.S. 288 (1960); and (b) presents a
direct and self-acknowledged conflict with the decisions
of two other courts of appeals on the precise issue pre-
sented, see Richard v. Hoechst Celanese Chem. Group,
Inc., 355 F.3d 345, 354-355 (5th Cir. 2008), cert. denied,
125 S. Ct. 46 (2004); United States v. Carson, 52 F.3d
1173, 1181 (2d Cir. 1995), cert. denied, 516 U.S. 1122
(1996). Those conflicts, by themselves, warrant this
Court’s review.

Second, the divided panel has incorrectly decided an
issue of surpassing importance in an exceptionally im-
portant case. Congress enacted RICO to create new
tools to combat structured illicit activities and gave the
government the full panoply of equitable remedies
needed to. achieve that goal. See United States v.
Turkette, 452 U.S. 576, 585 (1981). The government
invoked those powers in this case to address ongoing
concerted unlawful activity in the tobacco industry
spanning decades and affecting the lives of millions of
Americans. The government’s suit, by any measure, is
the most important civil RICO action that the govern-
ment has ever brought. The government’s ability to
achieve justice in this case depends on the availability
of the full scope of equitable remedies that Congress
conferred. The government cannot protect the public
interest if it cannot “divest the [RICO enterprise] of
the fruits of its ill-gotten gains.” Ibid.

Third, while the interlocutory character of a court of
appeals’ decision normally counsels against this Court’s
immediate review, in this case it heightens-the need for
the Court’s intervention. This case was in the court of
appeals pursuant to 28 U.S.C. 1292(b), which Congress
enacted specifically to provide for appellate review of
controlling questions of law while a case is still pending

_9

in the district court. This Court has granted certiorari
in a number of cases that reached the court of appeals
through that special mechanism, where the issue
decided by the court of appeals otherwise warrants
review. Here, moreover, the district court certified its
order for interlocutory appeal under 28 U.S.C. 1292(b)
because it discerned the need for interlocutory
guidance on a relatively narrow remedial issue. At
respondents’ urging, however, the panel majority went
much further and entered an erroneous categorical
ruling that will impede, rather than advance, the
ultimate resolution of this case. The Court’s inter-
vention at this juncture will not only resolve the conflict
with decisions of this Court and other courts of appeals,
but also will reinvest the district court with the
authority it needs for the expeditious and correct re-
solution of this litigation.

I. THE COURT OF APPEALS’ DECISION IS INCON-
SISTENT WITH THE DECISIONS OF THIS
COURT AND DECISIONS OF OTHER COURTS OF
APPEALS

A. The Court Of Appeals’ Decision Conflicts With The
Principles Established By This Court’s Decisions In
Porter and Mitchell

This Court’s decisions provide a specific analytical
framework for determining the scope of equitable
jurisdiction of the type conferred by Section 1964. As
the Court observed in Turkette, Congress enacted
RICO to provide “new remedies to deal with the unlaw-
ful activities of those engaged in organized crime.” 452
U.S. at 589 (quoting Organized Crime Control Act of
1970, Pub. L. No. 91-452, 84 Stat. 923). Section 1964(a)
correspondingly vests the courts with broad equitable
jurisdiction to “prevent and restrain” RICO violations

10

through “appropriate orders.” 18 U.S.C. 1964(a).“ As
the Court explained in Porter and Mitchell, statutory
provisions of this character authorize the district courts
to employ the full range of equitable powers, including
an order of disgorgement, so that those courts can
fashion appropriate relief. See Mitchell, 361 U.S. at
290-293; Porter, 328 U.S. at 397-398.

1. When Congress enacted RICO in 1970, it was
legislating against the backdrop of this Court’s 1946
Porter decision and its 1960 Mitchell decision. This
Court may properly presume that Congress was aware
of the Court’s well known, firmly established, and di-
rectly relevant decisions. See, e.g., United States v.
Alaska, 521 U.S. 1, 35 (1997); Cannon v. University of
Chicago, 441 U.S. 677, 699 (1979). The decisions in
Porter and Mitchell established that a legislative grant
of general equitable authority, such as the power to
“enjoin” or “restrain” statutory violations, encompasses
all the traditional equitable powers of chancery, in-
cluding the power to order disgorgement of ill-gotten

profits.
- Porter construed the Emergency Price Control Act
of 1942 (EPCA), ch. 26, 56 Stat. 23. EPCA authorized
courts to issue orders “enjoining such acts or practices”
that “constitute or will constitute a violation of any pro-
vision of section 4 of this Act” and to issue orders

4 Those remedies include, but are “not limited to: ordering any
person to divest himself of any interest, direct or indirect, in any
enterprise; imposing reasonable restrictions on the future activi-
ties or investments of any person, including, but not limited to,
prohibiting any person from engaging in the same type of endeavor
as the enterprise engaged in, the activities of which affect inter-
state or foreign commerce; or ordering dissolution or reorgani-
zation of any enterprise, making due provision for the rights of
innocent persons.” 18 U.S.C. 1964(a).

11

“enforcing compliance with such provision.” 328 U.S. at
397 (quoting EPCA § 205(a), 56 Stat. 33). The Court
held that, “{uJnless otherwise provided by statute, all
the inherent equitable powers of the District Court are
available for the proper and complete exercise of that
jurisdiction,” including the power to enter a “decree
compelling one to disgorge profits.” Jd. at 398.
Mitchell, which quoted Porter at length, similarly held
that federal legislation authorizing courts “to restrain
violations” of the Fair Labor Standards Act of 1938
(FLSA), ch. 676, § 17, 52 Stat. 1069, granted equitable
power to order reimbursement of wages lost because of
an unlawful discharge. See 361 U.S. at 290-293.

Porter and Mitchell explicitly set out general prin-
ciples governing the scope of a court’s powers when the
court acts pursuant to a legislative grant of equitable
jurisdiction. In Porter, the Court pronounced the
general principle that “(uJnless otherwise provided by
statute, all the inherent equitable powers of the
District Court are available for the proper and complete
exercise” of the grant of equitable jurisdiction. 328 U.S.
at 398 (emphasis added). The Court made clear that the
“comprehensiveness of this equitable jurisdiction is not
to be denied or limited in the absence of a clear and
valid legislative command.” Ibid. Accordingly, “[uJn-
less a statute in so many words, or by a necessary and
inescapable inference, restricts the court’s jurisdiction
in equity, the full scope of that jurisdiction is to be
recognized and applied.” Ibid. Porter emphasized that
when “the public interest is involved,” the court’s
“equitable powers assume an even broader and more
flexible character than when onlya private controversy
is at stake.” Jbid. Fourteen years later, Mitchell re-
iterated the vitality of Porter's teachings, quoting

12

Porter’s crucial passages as controlling authority. See
361 U.S. at 291.

The court of appeals’ decision in this case defies those
venerable principles and turns the Court’s governing
presumption on its head. The majority reasoned that
Section 1964(a)’s scope should be restricted because it
could not find “any necessary implication” in RICO that
Section 1964(a) includes disgorgement. Pet. App. 18a.
The majority’s ruling cannot be reconciled with Porter’s
explicit holding that a legislative grant of equitable
jurisdiction must be interpreted to include “the full
scope” of equitable powers, including disgorgement,
“ynless a statute * * * by anecessary and inescapable
inference, restricts” that authority. 328 U.S. at 398
(emphasis added).

2. None of the court of appeals’ purported bases for
declining to follow Porter and Mitchell survives
analysis. The majority attempted to confine Portér to
the particular statute that the decision construed by
noting that, after the Court announced the controlling
principles of construction, it went on to “set forth two
theories under which” the restitution order fit within
the specific language of EPCA. Pet. App. 15a. This
Court’s decision in Mitchell, however, expressly re-
jected just such an attempt to limit Porter. The Court
stated that “[t]he applicability of [Porter's] principle is
not to be denied * * * because, having set forth the
governing inquiry, [Porter] went on to find in the
language of the statute affirmative confirmation of the
power to order reimbursement.” 361 U.S. at 291.
Mitchell left no doubt that Porter stated a rule of
general applicability: “When Congress entrusts to an
equity court the enforcement of prohibitions contained
in a regulatory enactment, it must be taken to have
acted cognizant of the historic power of equity to pro-

13

vide complete relief in light of the statutory purposes.”
Id. at 291-292.

The majority also stated that Porter is distinguish-
able on the ground that a district court’s authority
under RICO to “prevent and restrain” violations is
uniquely forward-looking in a way that EPCA’s grant
of jurisdiction to enter an order “enforcing compliance”
with the statute was not. Pet. App. 14a-15a. Mitchell,
however, applied Porter's principle of construction to
the FLSA, which, like RICO, authorizes the courts to
“restrain violations” of the act, a phrase that the Court
equated.to “the enforcement of prohibitions contained
in [the] enactment.” 361 U.S. at 289, 291-292. As Judge
Tatel observed in dissent, “[i]f this language opens the
door to all equitable relief, then RICO’s language—to
“prevent and restrain” violations, 18 U.S.C. 1964(a)—
certainly does the same.” Pet. App. 58a. In Mitchell,
the Court held that the power to “restrain violations”
includes ordering reimbursement of lost wages fol-
lowing a retaliatory discharge that violated the FLSA.
It follows that here, the power to “restrain violations”
includes the authority to order disgorgement of
proceeds obtained from violations of RICO.°

5 The court of appeals also erred more generally in char-
acterizing disgorgement as a “quintessentially backward-looking
remedy” (Pet. App. 16a). See id. at 66a-75a (Tatel, J., dissenting).
This Court and the lower courts have repeatedly recognized that
disgorgement serves a crucial deterrent function. See, ¢.g., Porter,
328 U.S. at 400 (“Future compliance may be more definitely
assured if one is compelled to restore one’s illegal gains.”); SEC v.
First City Fin. Corp., 890 F.2d 1215, 1230 (D.C. Cir. 1989) (“{djis-
gorgement is an equitable remedy designed to deprive a wrong-
doer of his unjust enrichment and to deter others from violating”
federal law); FTC v. Gem Merch. Corp., 87 F.3d 466, 470 (11th Cir.
1996) (same) (quoting First City Fin., 890 F.2d at 1230); SEC v.
Manor Nursing Ctrs. Inc., 458 F.2d 1082, 1104 (2d Cir. 1972) (“The

14

The court of appeals also inferred a limitation on the
relief available under 18 U.S.C. 1964(a) based on the
section’s specification of certain authorized remedies,
including “ordering any person to divest himself of any
interest, direct orindirect, in any enterprise; imposing
reasonable restrictions on the future activities or
investments of any person * * * ; or ordering dissolu-
tion or reorganization of any enterprise.” Applying the
canons of noscitur a sociis and eyusdem generis, the
court believed the relief available under Section 1964(a)
to “prevent and restrain” violations must be limited to
remedies of a similar character. See Pet. App. 19a. The
court was wrong for two reasons.

In the first place, ordering disgorgement of unlawful
profits is similar to (if not expressly encompassed by)
the example of “ordering any person to divest himself
of any interest, direct or indirect, in any enterprise.”
But in addition, the purpose of RICO’s remedial pro-
visions was to afford “enhanced sanctions and new
remedies,” 84 Stat. 923 (emphasis added). The evident
reason for expressly including certain specific remedies
in Section 1964(a) was to ensure that it would be read
expansively to encompass specifically tailored remedial
measures that were deemed essential in the partitular
context of removing the illicit influence and economic
base of RICO violators from commerce. See Turkette,
452 U.S. at 585, 591-598. Nothing in the statute was
intended to preclude traditional equitable relief; indeed,

deterrent effect of an SEC enforcement action would be greatly
undermined if securities law violators were not required to dis-
gorge illicit profits.”); CFTC v. Hunt, 591 F.2d 1211, 1223 (7th Cir.
1979) (“to allow a violator to retain the profits from his violations
would frustrate the purposes of the regulatory scheme”); CFTC v.
CO Petro Mktg. Group, Inc., 680 F.2d 573, 584 (9th Cir. 1982) _
(same).

15

a? 66

the type of “appropriate orders” “permitted under the
statute expressly includes, but is “not limited to,” those
RICO-specific orders. The court of appeals therefore
fundamentally erred in inferring from the identification
of certain remedies in Section 1964(a) an affirmative
intent to limit the breadth that the words “prevent and
restrain” have under this Court’s decisions in Porter
and Mitchell. 3

The majority’s additional contention that the other .
remedies provided in RICO outside of Section 1964(a)
constitute a “‘comprehensive and reticulated’ remedial
scheme” that, by implication, excludes disgorgement
from the equitable powers available under Section
1964(a), Pet. App. 19a, 20a, cannot be reconciled with
the similar characteristics of EPCA and the FLSA,
which provided similarly broad ranges of remedies.
EPCA, which was at issue in Porter, “authorized a
broad array of other remedies, both criminal and civil,”
including a right for individual suits for treble damages
and a provision that the Administrator could sue for the
same remedy on behalf of the United States if the in-
dividual was not entitled to sue. /d. at 52a (Tatel, J.,
dissenting). As for the FLSA, the Court in Mitchell
“thought it insignificant that because both the ag-
grieved employees and the Secretary could seek lost
wages in actions at law under FLSA * * * duplicative
recovery might occur.” /d. at 58a (citing 361 U.S. at 303
(Whittaker, J. dissenting)).

The majority was also mistaken in suggesting that
disgorgement should be disallowed because the “over-
lap” between disgorgement and criminal- forfeiture
would circumvent “the additional procedural safe-
guards that attend criminal charges.” Pet. App. 20a-
2la. Congress did not intend RICO’s criminal and civil
remedies to be mutually exclusive. Rather, Congress

—~s

16

intended that the deliberately “enhanced sanctions and
new remedies” in RICO, 84 Stat. 923, would give the
government a full range of criminal and civil tools and
the ability to choose whichever would be most effective.
See S. Rep. No. 617, 91st Cong., Ist Sess. 80 (1969)
(observing that criminal prosecution is “a relatively
ineffectual tool” for implementing RICO’s “economic
policy”). Indeed, Congress recognized the potential
“overlap” between RICO’s criminal and civil remedies,
noting that a criminal influence “can be legally sepa-
rated from the organization, either by the criminal law
approach * * * or through a civil law approach of
equitable relief.” Id. at 79.

In finding a statutory overlap, the majority also in-
correctly equated equitable disgorgement with the pro-
visions for eriminal forfeiture and private damages. In
contrast to the mandatory sanction of criminal for-
feiture, an award of disgorgement under Section
1964(a) is subject to the court’s sound discretion and
must make “due provision for the rights of innocent
persons.” See Pet. App. 72a-73a. And, unlike a private
damages award under Section 1964(c), disgorgement is
not trebled or keyed to a victim’s loss, but is directly
tied to the wrongdoer’s profits.

3. The court of appeals placed erroneous reliance on
Meghrig v. KFC Western, Inc., 516 U.S. 479 (1996), for
the view that “it cannot be assumed that Congress
intended to authorize by implication additional judicial
remedies,” such as disgorgement under Section 1964(a),
in light of the “elaborate enforcement proceedings” set
forth in RICO. Pet. App. 18a. Mehgrig arose in the
wholly different context of a private action seeking
compensation for past clean-up costs through a citizen
suit under the Resource Conservation and Recovery

17

Act of 1976 (RCRA), 42 U.S.C. 6901 et seg. 516 U.S. at
484.

This Court has long recognized that the citizen suit
provisions of environmental statutes, which require
advance notice to the alleged violator and are barred if
the government is taking enforcement action, are
“meant to supplement rather than to supplant govern-
mental action,” and are specifically addressed to on-
going violations of the statute. Gwaltney of Smithfield
Ltd. v. Chesapeake Bay Found., 484 U.S. 49, 60 (1987).
Meghrig also turned on the irrationality of RCRA’s
scheme if citizen clean-up actions were permitted, 516
U.S. at 486, and on Congress’s express provision, in a
companion environmental statute, of a mechanism for
private recovery of past clean-up costs, id. at 484-485.
_ Against that background, it is not surprising that the
Court said that “it cannot be assumed that Congress
intended to authorize by implication additional judicial
remedies for private citizens suing under the statute.”
Id. at 488 (internal quotation marks omitted).

This case, in contrast, involves a governmental action
for equitable relief, where the “public interest” justifies
a “broader and more flexible” application of “equitable
powers” than in a mere “private controversy.” Porter,
328 U.S. at 398. The applicable canon in the present
context is drawn from Porter: a clear and unmistakable
inference is required to curtail the court’s equitable
jurisdiction. No such inference can be drawn here.
Thus, as Judge Tatel correctly recognized, “Porter and
Mitchell, not Meghrig, ‘directly control’ this case.” Pet.
App. 62a.

18

B. The Court Of Appeals’ Decision Creates A Direct
Conflict With Decisions Of Other Courts Of Appeals

The court of appeals’ decision not only conflicts with
the principles that this Court set out in Porter and
Mitchell, but also creates a direct conflict with the
Second Circuit’s decision in United States v. Carson, 52
F.3d 1173 (1995), and the Fifth Circuit’s decision in
Richard v. Hoechst Celanese Chem. Group, Inc., 355
F.3d 345 (2003). As the court of appeals in this case
itself acknowledged (Pet. App. 21la-22a), its decision
stands in irreconcilable conflict with those decisions and
isolates the D.C. Circuit as the only court of appeals to
reject disgorgement under RICO regardless of the
facts.

Carson and Richard each hold, in accordance with
this Court’s decisions in Porter and Mitchell, that Sec-
tion 1964(a) authorizes equitable disgorgement as an
available RICO remedy in appropriate circumstances.
It is true that those decisions impose fact-based limita-
tions on a district court’s use of that remedy. Carson
states that disgorgement is limited to assets that are
“being used to fund or promote the illegal conduct, or
{that] constitute capital available for that purpose,” 52
F.3d at 1182, while Richard states that disgorgement is
available only to prevent ongoing and future RICO vio-
lations, 355 F.3d at 354-355. The dissent rightly con-
cluded that this Court’s decisions do not sanction those
limitations. See Pet. App. 5la-65a. But regardless of
those limitations, the Second and Fifth Circuit decisions
cannot be reconciled with the panel majority’s ruling in
this case that Section 1964(a) precludes the govern-
ment, as a matter of law, from obtaining equitable dis-
gorgement in a civil RICO action under any circum-
stances. See Richard, 355 F.3d at 354 (“disgorgement

19

is generally available under § 1964”); Carson, 52 F.3d at
1181 (“As a general rule, disgorgement is among the
equitable powers available to the district court by
virtue of 18 U.S.C. § 1964.”).°

6 The panel majority’s decision is also inconsistent with
numerous decisions of other courts of appeals applying the
principles of Porter and Mitchell to other statutory schemes. As
Judge Tatel explained (Pet..App. 58a-59a), those courts have
repeatedly held that grants of equitable authority similar to the
grant in RICO do not restrict a district court’s inherent power to
order disgorgement or restitution. See, e.g., FTC v. Gem Merch.
Corp., 87 F.3d 466, 469 (11th Cir. 1996) (authorization “to enjoin”
violations of the Federal Trade Commission Act encompasses the
power to order disgorgement); United States v. Universal Mgmt.
Servs., 191 F.3d 750; 760 (6th Cir. 1999) (grant of jurisdiction in
Section 332(a) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 332(a)) “to restrain” violations authorizes district courts to
compel disgorgement and restitution), cert. denied, 530 U.S. 1274
(2000); SEC v. First City Fin. Corp., 890 F.2d 1215, 1230 (D.C. Cir.
1989) (provisions of the Securities Exchange Act, 15 U.S.C. 78u(d)-
(e), authorizing the district court “to enjoin” future violations allow
disgorgement); ICC v. B & T Transp. Co., 613 F.2d 1182, 1183,
1184-1185 (1st Cir. 1980) (provision of Motor Carrier Act of 1980
empowering ICC “to seek only prospective injunctions to restrain
future conduct” encompassed authority to seek restitution); CFTC
v. Hunt, 591 F.2d 1211, 1223 (7th Cir. 1979) (in the absence of an
express restriction, the Commodity Exchange Act authorizes an
order compelling disgorgement of illegally obtained profits); CFTC
v. British Am. Commodity Options Corp., 788 F.2d 92, 94 (2d Cir.)
(following Hunt), cert. denied, 479 U.S. 853 (1986); CFTC v.
American Metals Exch. Corp., 991 F.2d 71, 76 & n.9 (3d Cir. 1993)
(same); CFTC v. CO Petro Mktg. Group, Inc., 680 F.2d 573, 583-
584 (9th Cir. 1982) (same).

20

Il. THE COURT OF APPEALS’ DECISION IN-
CORRECTLY RESOLVES AN IMPORTANT ISSUE
IN A CRITICALLY IMPORTANT CASE

In formulating RICO, Congress gave the federal
government essential resources for combating the use
of an unlawful enterprise to violate federal fraud pro-
scriptions for financial gain. RICO’s civil remedy pro-
visions, which are to “be liberally construed to effectu-
ate [RICO’s] remedial purposes,” Pub. L. No. 91-452,
§ 904(a), 84 Stat. 947, provide the curative instruments
for eradicating the wrongful conduct. The court of
appeals has disabled the government from employing a
critically important remedial tool—equitable disgorge-
ment—for achieving Congress’s objectives. That court
has done so in a case of vital interest to the American
public.

As this Court has explained, Congress sought to
curtail the “revenue and power” that RICO violators
derive from past illegal conduct, and it therefore pro-
vided remedies that would allow “an attack * * * on
their source of economic power itself.” Turkette, 452
U.S. at 591-592 (quoting, with emphasis, S. Rep. No.
617, 91st Cong., lst Sess. 79 (1969)). Section 1964(a)
accordingly grants courts authority to craft “equitable
relief broad enough to do all that is necessary” to ad-
dress “the economic base” of RICO violators and to
“free the channels of commerce from all illicit activity.”
S. Rep. No. 617, supra, at 79. “Although certain re-
medies are set out, the list is not exhaustive.” IZd.
_at 160.

This Court’s decision in Turkette envisioned that the
government would seek equitable disgorgement, as one
of RICQ’s various remedies, in order to rectify past
RICO violations and deter future misconduct. 452 U.S.

7S

21

at 585. The court of appeals, however, brushed aside
the Court’s express recognition that Section 1964 em-
powers the courts “to divest the association of the frurts
of its ill-gotten gains,” ibid. (emphasis added), and held
that disgorgement is categorically unavailable precisely
because it is “aimed at separating the criminal from his
prior ill-gotten gains.” Pet. App. 19a. That holding
frustrates one of the chief aims of RICO’s civil remedies
—deterring future RICO violations by depriving the
RICO enterprise of the economic benefits of its unlaw-
ful conduct. Accomplishing that purpose is especially
important in the context of this case, because the
addictive nature of the products that are the subject of
respondents’ extensive pattern of fraud has ensured
that their conduct will have a lasting effect in its impact
on victims and in generating profits for respondents
that continue to this day and beyond.

The court of appeals’ decision has potentially far-
reaching implications for RICO cases generally and
enormous consequences for the American public. The
decision already has had consequences for the ongoing
litigation in this important civil-RICO action. The
government alleges that respondents—which include
the Nation’s major tobacco companies—formed an en-
terprise to convince millions of past, present, and future
smokers, through numerous documented instances of
mail and wire fraud over a period of decades, that
cigarettes—including “light” and “low-tar” varieties—
are safe and non-addictive and that second-hand smoke
does not pose a significant health risk. The government
has put forward extraordinarily extensive evidence in
the nine-month trial that respondents have violated
RICO. Notwithstanding the government’s compelling
showing of liability, the court of appeals’ decision will

22

severely constrain the remedies available to the
government.’

In the wake of the court of appeals’ decision, respon-
dents have argued that the ruling broadly “prohibits
remedies that ‘cure ill effects of past unlawful
conduct,” including: (a) a “smoking cessation program
* * * aimed at ameliorating * * * the addiction of
smokers * * * -deceived by fraudulent conduct”; (b)
“monitoring [of] smokers for the onset of smoking-
related diseases”; or (c) a “public education campaign
and * * * youth smoking prevention campaign” that
would “protect the public from being negatively
impacted by [respondents’] violations.” Defendants’
Memo. Regarding Non-Disgorgement Remedies 3, 9,
10, 11 (Feb. 23, 2005). The district court has not
definitively decided the scope of permissible relief, but
it has stated that the court of appeals’ ruling “simply
does not permit non-disgorgement remedies to prevent
and restrain the effects of past violations of RICO.”
Order #886, at 5 (Feb. 28, 2005). The government has
correspondingly curtailed its proposed remedies to
accord with the divided court of appeals’ ruling.®

7 The government’s evidence in support of RICO liability and
remedies has included testimony from 178 witnesses and more
~ than 11,000 offered or admitted trial exhibits. The government has
described its evidence in its opening statement, Trial Tr. 8-197, in
interim summations, id. at 6398-6455, 14,214-14,296, 19,676-19,758,
and in closing arguments, id. at 22,894-23,102.

8 The government developed evidence in discovery supporting
a disgorgement remedy that could have required respondents to
relinquish $280 billion in ill-gotten gains. But at trial, in light of
the court of appeals’ decision, the government has requested from
the trial court more limited remedies that, if imposed, would re-
quire respondents to pay at least $10 billion over five years for a
smoking cessation program and $4 billion over ten years for public

23

This case graphically illustrates the practical conse-
quences of the court of appeals’ decision. Under that
decision, the government faces the prospects that it
cannot effectively compel RICO violators to address
the consequences of their statutory violations and that
those violators may retain the profits of their unlawful
activity no matter how destructive the consequences
for the American public as a whole. Congress did not
intend that result, which in this case could prevent the
government from formulating effective equitable re-
medies and obtaining disgorgement of many billions of
dollars of proceeds that respondents obtained ee
the violation of federal law.

lil. THE INTERLOCUTORY CHARACTER OF THE
COURT OF APPEALS’ DECISION IN THIS
INSTANCE WEIGHS IN FAVOR OF THIS
COURT'S REVIEW

The United States has pointed out in numerous
instances that the interlocutory character of a court of
appeals’ decision normally counsels against this Court’s
immediate review because the proceeding in the lower
court may obviate the need for the Court’s interven-
tion. See, e.g., Brotherhood of Locomotive Firemen &
Enginemen v. Bangor & Aroostook R.R., 389 U.S. 327,
328 (1967). But the Court has recognized that “there is .
no absolute bar to review of nonfinal judgments of the
lower federal courts” and that the interlocutory char-
acter of a decision affects only the prudential calculus of
whether certiorari should be granted. See, e.g.,
Mazurek v. Armstrong, 520 U.S. 968, 975 (1997) (per
curiam) (summarily reversing an interlocutory order).
When “there is some important and clear-cut issue of

education and counter marketing. See [Proposed] Final Judgment
and Order (June 27, 2005).

24

law that is fundamental to the further conduct of the
case and that would otherwise qualify as a basis for
certiorari, the case may be reviewed despite its inter-
locutory status.” Robert L. Stern et al., Supreme Court
Practice 259 (8th ed. 2002). The Court has not hesitated
to review an interlocutory decision when “it is neces-
sary to prevent extraordinary inconvenience and em-
barrassment in the conduct of the cause.” American
Constr. Co. v. Jacksonville, Tampa & Key West Ry.,
148 U.S. 372, 384 (1898). Indeed, this Court has granted
review of interlocutory court of appeals decisions, de-
cided pursuant to 28 U.S.C. 1292(b), innumerable
times.” 3

This case presents an instance in which the pru-
dential considerations weigh heavily in favor of im-
mediate review. The issue presented here—whether
Section 1964(a) authorizes a court to grant the govern-
ment the remedy of equitable disgorgement in a RICO
action—plainly warrants this Court’s review for the
reasons already stated: (1) the divided court of appeals’
resolution of that issue is inconsistent with the de-
cisions of this Court and other courts of appeals (pp. 9-
19, supra); and (2) and the issue presents a vitally
important and recurring question that has major
consequences for this important case (pp. 20-23, supra).
The interlocutory character of the court of appeals’
ruling on that issue should not preclude this Court’s

® For a few recent examples, see, e.g., Cutter v. Wilkinson, 125
S. Ct. 2113 (2005); Norfolk S. Ry. v. Kirby, 125 S. Ct. 385 (2004);
Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369 (2004); Gratz v.
Bollinger, 539 U.S. 244 (2003); Beneficial Nat'l Bank v. Anderson,
539 U.S. 1 (2003); Breuer v. Jim’s Concrete of Brevard, Inc., 538
U.S. 691 (2003); Bartnicki v. Vopper, 532 U.S. 514 (2001); Green
Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (2000); Harris Trust
& Sav. Bank v. Salomon Smith Barney Inc., 530 U.S. 238 (2000).

25

review where the interlocutory review process has
produced an erroneous intermediate appellate court
ruling that, if left undisturbed, would require the
district court to fashion a remedy based on funda-
mentally mistaken principles of law.
- The district court determined five years ago that
Section 1964(a) allows equitable disgorgement, Pet.
App. 117a-121a, and it certified its May 24, 2004, order,
despite the government’s objection, for the limited
purpose of obtaining guidance on whether the so-called
“Carson standard” for disgorgement applies to this
case. See id. at 148a-153a. Over a forceful dissent, the
court of appeals panel majority elected to go beyond the
narrow issue that prompted the district court to certify
its order. See id. at 37a-49a, (Tatel, J., dissenting); see
note 1, supra. Indulging respondents’ “questionable
tactics” (id. at 48a), the divided court reached out to
decide an issue unnecessarily and contrary to the
decisions of this Court, other courts of appeals, and the
court of appeals’ own precedent. See pp. 9-19, supra.
That unwarranted and badly mistaken decision—
which the en bane court left unreviewed following a tie
vote on whether to grant rehearing—will impair, rather
than advance, the ultimate resolution of this case. The
district court certified its order for interlocutory review
to address the applicability of the Carson standard,
which that court discerned to provide a “substantial
ground for difference of opinion.” See Pet. App. 15la
(emphasis omitted). The court of appeals majority
instead reached out to address an issue—the avail-
ability of disgorgement—over which the district court
and the courts of appeals were heretofore in agreement.
If the Court postpones correction of the court of ap-
peals’ mistaken guidance until after the district court
issues an artificially constrained final judgment and this

: 26

complex case traces a new route through the court of
appeals, then the district court will be precluded from
correctly resolving this litigation until remand pro-
ceedings can be convened at a far distant date."

The district court has-not yet rendered a ruling on
liability in this case, but respondents have no basis for
expecting a favorable outcome. The government has
put forward a powerful liability case, see note 7, supra,
and the district court has provided no indication that
the government has failed to carry its burden of proof.
In any event, this Court has repeatedly granted review
of interlocutory court of appeals decisions in similar cir-
cumstances involving issues of far less significance. For
example, the Court recently reviewed an interlocutory
court of appeals decision addressing remedial issues
in advance of a liability determination in Norfolk
Southern Railway v. Kirby, 125 8S. Ct. 385 (2004). That

10 Under the current schedule, post-trial briefing will not be
completed until October 2005. See Order #964-A (June 10, 2005).
The district court could conceivably issue a final decision by early
2006, but even if the court of appeals undertook expedited review,
the briefing in the court of appeals would likely not be completed
until the summer of 2006. Given the massive record in this case,
the court of appeals would be unlikely to issue a decision until 2007.
Under the best of circumstances, this Court would not receive a
petition for writ of certiorari before the summer of 2007. If the
Court granted the petition, it could not reasonably be expected to
issue a decision until 2008. Under this optimistic projection,
remand proceedings would be unlikely to commence until late 2008
at the earliest. In light of the daunting burden the district court
would face in recommencing proceedings three or more years from
now in this complex six-year-old case, the Court should resolve the
correctness of the court of appeals’ interlocutory guidance during
its 2005 Term so that the district court can issue a final
decision—relying on this Court’s definitive guidance—by the
summer of 2006.

27

case, which involved narrow issues of maritime liability
affecting a limited number of carriers, involved matters
of far less pressing public importance than the issue
involved here. Nevertheless, the Court granted review
to decide—before the district court had determined
petitioner’s liability in the maritime contract dispute
—whether petitioner was entitled to the protection of
potential contractual liability limitations. See id. at
392."

In short, this case warrants the Court’s attention at
this critical juncture of the litigation. The court of
appeals’ mistaken interlocutory guidance not only pre-
sents an obstacle, rather than an aid, to the ultimate
termination of the litigation, but it stands as a mistaken
precedent that will continue to misdirect other courts
and constrain the government’s ability to seek full relief
in future civil RICO cases. As the court of appeals

'!'The Court followed the same practice in Yamaha Motor
Corp., U.S.A. v. Calhoun, 516 U.S. 199 (1996), granting review to
determine, in advance of a liability determination, whether certain
state law remedies remain available to a personal injury claimant
in a maritime wrongful-death suit. See id. at 204. The Court also
followed that practice in Chan v. Korean Air Lines, Ltd., 490 U.S.
122 (1989), granting review, in advance of a liability determination,
to determine whether the Warsaw Convention’s limitation on
damages for passenger death applies despite the defendant’s fail-
ure to provide adequate notice of the limitation. See id. at 124.
Similarly, the Court decided a case concerning the availability of
an innocent-owner defense in a civil forfeiture action where the
claimant, on remand, could also defeat forfeiture by rebutting the
finding of probable cause. United States v. 92 Buena Vista Ave.,
507 U.S. 111 (1993). Each of these cases reached the Court after
the respective court of appeals rendered a decision through the
interlocutory procedure set out in 28 U.S.C. 1292(b). See Kirby,
125 S. Ct. at 392; Yamaha, 516 U.S. at 204-205; Chan, 490 U.S. at
124-125; 92 Buena Vista Ave., 507 U.S. at 116.

28

panel itself acknowledged, its decision has created a
circuit conflict, and the court of appeals’ inability to
decide the issue en banc ensures that the conflict will
persist until this Court resolves it.

- CONCLUSION

The petition for a writ of certiorari should be
granted.
Respectfully submitted.

EDWIN S. KNEEDLER ss
Acting Solicitor General

PETER D. KEISLER
Assistant Attorney General

MICHAEL R. DREEBEN
Deputy Solicitor General
JEFFREY P. MINEAR
Assistant to the Solicitor
General

SHARON Y. EUBANKS
“ STEPHEN D. BRODY
FRANK J. MARINE
MARK B. STERN
ALISA B. KLEIN
MARK R. FREEMAN
Attorneys

JULY 2005

* The Solicitor General is disqualified in this case.

Court, U.S.

FILED
05-92 JUL 18 208
No. OGhkicE a= 7 13 CI EPK

In the Supreme Court of the Gnited States

UNITED STATES OF AMERICA, PETITIONER
Vv.

PHILIP Morris USA, INC., ET AL.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

APPENDIX TO THE
PETITION FOR A WRIT OF CERTIORARI

EDWIN S. KNEEDLER
Acting Solicitor General
Counsel of Record

PETER D. KEISLER
Assistant Attorney General

MICHAEL R. DREEBEN
Deputy Solicitor General
JEFFREY P. MINEAR

Assistant to the Solicitor ee
General

SHARON Y. EUBANKS

STEPHEN D. BRODY

FRANK J. MARINE

MARK B. STERN

ALISA B. KLEIN

MARK R. FREEMAN
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

TABLE OF CONTENTS

Page

Appendix A (court of appeals opinion,

dated Feb. 4, 2005) ....... idinidiblinapienpatiiegAciabeiins la
Appendix B (district court memorandum opinion,

REG OIE Fi OOO. cetcescescnsasscsensteveccncsonsonenasenasshesiateis - 79a
‘Appendix C (district court memorandum opinion,

dated May 21, 2004) ........ccccesecevee jindisishinindiinaingins 129a
Appendix D (district court memorandum order #579,

OE IND Big BPD hctietincntcintadcsiicnesintivanitanbisnsinncdtbenndite 148a
Appendix E (district court order, dated

EE i, PE sisncicesetiptnicncintininsintitivinndominnanionsactananiahasee 154a
Appendix F (district order, dated Ape. 19, 2005) .......... 156a
Appendix G (statutory provision) ............:sssssssersseseeeee 158a

(I)

APPENDIX A

UNITED STATES COURT OF APPEALS
DISTRICT OF COLUMBIA CIRCUIT

No. 04-5252
UNITED STATES OF AMERICA, APPELLEE

v.

PHILIP Morris USA INC., ET AL., F/K/A PHILIP MORRIS
INCORPORATED, APPELLANTS

Feb-4, 2005

OPINION

Before: SENTELLE and TATEL, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge
SENTELLE.

Concurring opinion filed by Senior Circuit Judge
WILLIAMS.

Dissenting opinion filed by Circuit Judge TATEL.
SENTELLE, Circuit Judge.

A group of cigarette manufacturers and related enti-
ties (“Appellants”) appeal from a decision of the District
Court denying summary judgment as to the Govern-
ment’s claim for disgorgement under the Racketeer
Influenced and Corrupt Organizations Act (““RICO” or
“the Act”), 18 U.S.C. §§ 1961-68. The relevant section

(la)

2a

of RICO, 18 U.S.C. § 1964(a), provides the District
Courts jurisdiction only for forward-looking remedies
that prevent and restrain violations of the Act. Be-
cause disgorgement, a remedy aimed at past violations,
does not so prevent or restrain, we reverse the decision
below and grant partial summary judgment for the
Appellants.

I. Background

In 1999 the United States brought this claim against
appellant cigarette manufacturers and research organi-
zations, claiming that they engaged in a fraudulent
pattern of covering up the dangers of tobacco use and
marketing to minors. The Government sought damages
under the Medical Care Recovery Act (“MCRA”), 42
U.S.C. §§ 2651-53, and the Medicare Secondary Payer
(“MSP”) provisions of the Social Security Act, 42 U.S.C.
§ 1895y to recover health-care related costs Appellants
allegedly caused. The United States also claimed that
Appellants engaged in a criminal enterprise to effect
this cover-up, and sought equitable relief under RICO,
including injunctive relief and disgorgement of pro-
ceeds from Appellants’ allegedly unlawful activities.
The Government sought this relief under 18 U.S.C. §
1964(a), which gives the District Court jurisdiction .

to prevent and restrain violations of [RICO] by issu-
ing appropriate orders, including, but not limited to:
ordering any person to divest himself of any inter-
est, direct or indirect, in any enterprise; imposing
reasonable restrictions on the future activities or
investments of any person, including, but not limited
to, prohibiting any person from engaging in the
same type of endeavor as the enterprise engaged in,
the activities of which affect interstate or foreign

3a

commerce; or ordering dissolution or reorganization
of any enterprise. .. .

18 U.S.C. § 1964(a).

Appellants moved to dismiss the complaint in 2000.
The District Court did dismiss the MCRA and MSP
claims, but allowed the RICO claim to stand. United
States v. Philip Morris, Inc., 116 F. Supp. 2d 131, 134
(D.D.C. 2000).

Section 1964(a) conferred jurisdiction on the District
Court only to enter orders “to prevent and restrain vio-
lations of the statute.” In considering whether dis-
orgement came within this jurisdictional grant, the
court relied on a decision of the Second Circuit, the only
circuit then to have considered “whether .. . dis-
gorgements . . . are designed to ‘prevent and restrain’
future conduct rather than to punish past conduct.”
United States v. Carson, 52 F.3d 1173, 1182 (2d Cir.
1995) (emphasis in original). After noting that “RICO
has a broad purpose [and] the legislative history of
§ 1964 indicates that the equitable relief available under
RICO is intended to be ‘broad enough to do all that is
necessary,” id. at 1181, the Carson court went on to
observe that it did not see how it could “serve[ } any
civil RICO purpose to order disgorgement of gains ill-
gotten long ago. . . .” Z/d. at 1882. The portion of
Carson relied upon by the District Court in the present
controversy suggested that disgorgement might “serve
the goal of ‘preventing and restraining’ future viola-
tions,” but flatly held that the remedy would not do so
“unless there is a finding that the gains are being used
to fund or promote the illegal conduct, or constitute

4a

capital available for that purpose.”' Jd. at 1182. The
Second Circuit went on to caution that disgorgement
would be better justified under this analysis where the
“gains [were] ill-gotten relatively recently.” Jd. The
District Court accepted the Second Circuit’s suggested
holding that the appropriateness of disgorgement
depends on whether the proceeds are available for the
continuing of the criminal enterprise, but ruled that the
question was premature, and denied the motion for
dismissal on the RICO-disgorgement claim. Philip
Morris, 116 F. Supp. 2d at 151-52. Neither party
sought leave to file an interlocutory appeal of that
ruling.

The case proceeded, and the Government sought dis-
gorgement of $280 billion that it traced to proceeds
from Appellants’ cigarette sales to the “youth addicted
population” between 1971 and 2001. This population
includes all smokers who became addicted before the
age of 21, as measured by those who were smoking at
least 5 cigarettes a day at that age.

1 While the Carson language may appear to be dicta, the
Second Circuit remanded for determination of which disgorgement
amounts were sufficiently directed to prevention and restraint to
qualify under § 1964(a), thus treating the language on availability
of disgorgement as essential to the outcome of the case, and
therefore a holding. Some other courts have followed Carson. See,
¢.g., Richard v. Hoechst Celanese Chem. Group, Inc., 355 F.3d 345,
354 (5th Cir. 2003) (observing that “the Second Circuit noted
that disgorgement is generally available under § 1964”); United
States v. Private Sanitation Indus. Ass'n, 914 F. Supp. 895, 901
(E.D.N.Y. 1996) (“{(T]he disgorgement in this case is clearly di-
rected towards the prevention of future illegal conduct, and is
therefore a permissible remedy for civil RICO violations under the
limitations imposed by Carson.”).

5a

After discovery, Appellants moved for summary
judgment on the disgorgement claim arguing that (1)
disgorgement is not an available remedy under
§ 1964(a), (2) even if disgorgement were available, the
Government’s model fails the Carson test for permissi-
ble disgorgement that will “prevent and restrain” fu-
ture violations, and (3) even if disgorgement were avail-
able, the Government’s proposed model is impermissi-
ble because it includes both legally and illegally ob-
tained profits in violation of SEC v. First City Finan-
cial Corp., 890 F.2d 1215 (D.C. Cir. 1989). The District
Court denied this motion in a memorandum order
designated “#550.” United States v. Philip Morris
USA, Inc., 321 F. Supp. 2d 72 (D.D.C. 2004). On motion
of the defendants, the District Court certified Order
#550 for interlocutory appeal pursuant to 28 U.S.C.
§ 1292(b). That section provides for interlocutory ap-
peal where a district judge has certified that “an order
not otherwise appealable . . . involves a controlling
question of law as to which there is substantial ground
for difference of cpinion and that an immediate appeal
from the order may materially advance the ultimate
_termination.of litigation. . . .” Under § 1292(b), the
Court of Appeals may then decide whether to permit
the appeal to be taken from such order. In the present
case, we allowed the appeal.

II. Analysis

<—

A. Scope of Review

At the outset, the Government urges that our review
should be limited to the narrow question of whether the
disgorgement it seeks is consistent with the standards
of Carson, not whether disgorgement vel non is an
available remedy under civil RICO. The Government
bases this argument on the theory that the order on

6a

appeal—that is the memorandum order denying
“defendants’ motion for partial summary judgment dis-
missing the Government’s disgorgement claim”—was
reiterating a prior order on the general question of
availability of disgorgement. Further, the Government —
argues, the order spoke anew only to the measure of
disgorgement, assuming such disgorgement to be
otherwise available. In support of its proposed limita-
tion of our review, the Government relies upon Ya-
maha Motor Corp., USA v. Calhoun, 516 U.S. 199, 116
S. Ct. 619, 183 L. Ed. 2d 578 (1996). In Yamaha, the
Supreme Court dealt with the breadth of review prop-
erly conducted by a court of appeals under 28 U.S.C.
§ 1292(b). Id. at 204, 116 S. Ct. 619. The Government
selectively quotes from Yamaha the sentence that,
“The court of appeals may not reach beyond the certi-
fied order to address others made in the case.” Id. at
205, 116 S. Ct. 619. Based on this sentence, the Gov-
ernment then argues that because the first order deny-
ing a motion to dismiss had dealt with the question of
the availability of disgorgement, this certified interlocu-
tory review of the subsequent summary judgment
order is restricted to the new theory considered by the
court on that occasion-that the disgorgement the Gov-
ernment pursued exceeded the standard available for
such disgorgement as set by the Second Circuit in
Carson.

Unfortunately for the Government’s position, the
Yamaha opinion did not end with the sentence upon
which the Government relies. The Supreme Court
went on to say in the same paragraph: “But the appel-
late court may address any issue fairly included within
the certified order because ‘it is the order that is ap-
pealable, and not the controlling question identified by

Ta

the district court.’” Id. (emphasis in original) (quoting 9
J. MOORE & B. WARD, MOORE’S FEDERAL PRAC-
TICE § 110.25{1) at 300 (2d ed. 1995) and citing 16 C.
Wright, A. Miller, E. Cooper, & E. Greshman, Federal
Practice & Procedure § 3929 at 144-45 (1977)). Appel-
lants’ motion below was for “Summary Judgment Dis-
missing the Government’s Disgorgement Claim,” and
granting this motion would have resulted in complete
dismissal of the Government’s claim for disgorgement
with prejudice. See Appellee’s App. at 19, 79. Thus the
District Court’s denial was on the question of whether
disgorgement would be allowed at all, and we may
review it as such regardless of the grounds the District
Court gave for its decision. In the memorandum ac-
companying its denial of this motion, evidencing an
accurate understanding of the summary judgment
standard provided by Rule 56 of the Federal Rules of
Civil Procedure, the District Court noted that “sum-
mary judgment is appropriate if the pleadings, deposi-
tions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of
law.” Philip Morris, 321 F. Supp. 2d at 74 (citing FED.
R. Civ. P. 56(c)). Significantly, the court further noted
that “Defendants argue that any disgorgement which
might be ordered upon a finding of liability must be
limited by both the text of Section 1964(a) itself and the
holding in United States v. Carson . . . interpreting
that section.” Philip Morris, 321 F. Supp. 2d at 74
(emphasis added). Thus the court clearly implied the
possibility that none might be ordered, and that sta-
tutory issues outside Carson were before the court.

8a

Our dissenting colleague argues that the availability
of the disgorgement claim vel non is not before us be-
cause Appellants did not fully restate their earlier argu-
ments in their motion, but only expressed their reser-
vation in a footnote referencing the District Court’s
prior rejection of their position. While it is true, as our
colleague reminds us, that we have held that a “litigant
does not properly raise an issue by addressing it in a
‘cursory fashion,’ with only ‘bare-bones arguments,”
Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855,
869 (D.C.Cir. 2001) (per curiam), our prior holdings on
that subject have been in very different contexts. In
Cement Kiln, for example, and in Wash. Legal Clinic
for the Homeless v. Barry, 107 F.3d 32, 39 (D.C. Cir.
1997), relied upon by the dissent, we were determining
whether an issue was properly before us that had been
raised in no other fashion: In the present case, we are
reviewing a summary judgment decision, presumably
according to the standards set forth by the Supreme
Court in such decisions as Yamaha, and the issue in
question was clearly decided by the District Court in
the first rejection of the motion to dismiss. The issue
was called to the attention of the second summary
judgment order, now under direct review, and ex-
pressly pointed out in the footnote which our colleague
disdains. Furthermore, the motion leading to the order
presently before us sought summary judgment of
dismissal of the disgorgement claim, not simply a
limitation to such disgorgement as might have been
supported by the Carson test or other factors. Given
the Supreme Court’s plain teaching in Yamaha, par-
ticularly its adoption from a learned treatise of the
language “it is the order that is appealable, and not the
controlling question identified by the district court,”
Yamaha, 516 U.S. at 205, 116 S. Ct. 619 (see other

9a

authorities, supra), Cement Kiln and Barry have no
applicability. Yamaha controls. We therefore proceed
to review the denial of summary judgment, under the
usually applicable standards, not simply the sole
question to which the Appellees and the dissent would
restrict us.

Our dissenting colleague suggests that we are limited
by “our general policy of declining to consider argu-
ments not made to the district court in the motion lead-
ing to the order under appeal.” Dissent at 1211. We
know of no such “general policy” that the particular
issue addressed has to have been raised in the parti-
cular motion. Rather, we understand our general policy
to be following the instructions of the Supreme Court
that we are to “address any issue fairly included within
the certified order.” Yamaha, 516 U.S. at 205, 116 S.
Ct. 619. Insofar as our colleague’s differing under-
standing rests on United States v. British Am. Tobacco
(Invs.) Ltd., 387 F.3d 884, 892 (D.C. Cir. 2004) (citing
United States v. Hylton, 294 F.3d 130, 135-36 (D.C. Cir.
2002)), cited by Dissent at 1213, we do not read that
case aS supporting a general policy that limits con-
sideration to those arguments raised in the particular
motion leading to the certified order, as opposed to
being “fairly included” within that order, or even to
address the point. The court in British American
Tobacco held only that an intervenor that had raised a
privilege issue with respect to an entire collection of
documents at one stage of the litigation, but that failed
to participate at all in later proceedings focused on one
of the documents, despite having notice, had not ade-
quately preserved its objection as to that single docu-
ment. 387 F.3d at 887-88. It had nothing to do with the
scope of review on an interlocutory appeal under

10a

§ 1292(b). Neither it nor Hylton dealt in any fashion
with the breadth of interlocutory review, nor was
establishing any standard for the papers in which an
argument must have been raised. Each rejected an
attempt by an appellant to raise a new ground for the
first time on appeal. Appellants before us raised and
preserved their argument as set forth in the text above.
We read nothing in British American Tobacco or
Hylton to suggest a general policy barring our review
under the Yamaha standard.

We find no history of such a general policy that would
bar us from considering questions logically antecedent
and essential to the order under review. Especially is
this so given the Supreme Court’s instructions in Ya-
maha that we are to “address any issue fairly included
within the certified order.” That must include at least
issues that are logically interwoven with the explicitly
identified issue and which were properly presented by
the appellant. Even ignoring the apparent allusion to
the broader issue of summary judgment preserved in
the caption of the motion, the relief sought, and the
footnote provided above, it is difficult to see how we
could establish such a policy that would cause us to
affirm a decision denying summary judgment when a
ground compelling its grant is fairly encompassed
within the order. Our colleague’s interpretation of
general policy would seem to compel us to return for
trial a case before us for review of a denial of summary
judgment, no matter how plain the absence of sub-
stantial question of material fact, on the grounds that
the denial of summary judgment had been based on
rejection of some other reasoning in a previous motion,
even though the trial court had earlier erred in denying
the first motion to dismiss—even when the appellant

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_1697%3A1. Public record. Not legal advice.