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

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yp ementegs

: 09-978 FEB 19 2010

No.

Jn 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

PETITION FOR A WRIT OF CERTIORARI

ELENA KAGAN

Solicitor General

Counsel of Record

TONY WEST

Assistant Attorney General

EDWIN S. KNEEDLER

MICHAEL R. DREEBEN

Deputy Solicitors General

ANTHONY A. YANG

Assistant to the Solicitor

General

MARK B. STERN

ALISA B. KLEIN

MARK R. FREEMAN

GREGORY C.J. LISA

Attorneys

Department of Justice

Washington, D.C. 20580-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217

QUESTION PRESENTED

Under 18 U.S.C. 1964(a), a district court has jurisdic-

tion to issue “appropriate orders” to “prevent and re-

strain” violations of the Racketeer Influenced and Cor-

rupt Organizations Act (RICO), 18 U.S.C. 1961 et seq.

Respondents were found liable for decades-long RICO

violations that entailed a multi-faceted scheme to de-

fraud the American public for the purpose of addicting

smokers, deceiving actual and prospective smokers

about the health effects and addictive properties of re-

spondents’ products, and thereby obtaining revenue

from the sale of cigarettes. The question presented is:

Whether 18 U.S.C. 1964(a) categorically bars a dis-

trict court from ordering disgorgement of ill-gotten

gains as well as other equitable relief, such as smoking-

cessation and public-education remedies, designed to

redress the continuing consequences of RICO violations.

(I)

TABLE OF CONTENTS

Page

SE. Cccavenectewnereedcaububsredceeecwesnes 1

SE cccstuns othe knevwes scnedhdecweearvuneuen 1

Statutory provisions involved .......................--..- 2

PE Vetcnnbuwdtccnskedenedb cone ustuaoreescenawel 2

Reasons for granting the petition ................0-..08- 13

A. The D.C. Circuit’s narrow interpretation of Sec-

tion 1964(a) conflicts with decisions of this Court

and imposes unwarranted constraints on equita-

SN oS hancaaueuepanssneneneabeeentes 14

B. The D.C. Circuit’s interpretation of Section

1964(a) conflicts with decisions of other courts of

GED awecccnacenkseeudennbecasubescsbeen sie. 26

C. The court of appeals incorrectly decided an issue

of exceptional importance ....................... 28

EE dwidesnaneaaens cuievabvenees Luonsueune beara 32

TABLE OF AUTHORITIES

Cases:

American Sur. Co. v. Marotta, 287 U.S. 513 (1933) ..... 22

Boyle v. United States, 129 S. Ct. 2237 (2009) .......... 18

Bridge v. Phoenix Bond & Indem. Co., 128 8. Ct. 2131

SE Savin ccacikn eck ke ck eee baa ame eens eae 18

Cannon v. University of Chic., 441 U.S. 677 (1979) ..... 17

CFTC v. American Metals Exch. Corp., 991 F.2d 71

Se EE ccG-o anes cucueeuaaecabedsasoue sen 27

CFTC v. British Am. Commodity Options Corp.,

788 F.2d 92 (2d Cir.), cert. denied, 479 U.S. 853

GR ck ccbncvcccudscueseekeleuensahaves iiaks ais 27

CFTC v. CO Petro Mktg. Group, Inc., 680 F.2d 573

Ge Cy MED bn bWeb bs VCs edeaW eee barseenewatees 27

Cases—Continued:

CFTC v. Hunt, 591 F.2d 1211 (7th Cir. 1979)

CFTC v. Wilshire Inv. Mgmt. Co., 531 F.3d 1339

(11th Cir. 2008)

Federal Land Bank v. Bismarck Lumber Co., 314

U.S. 95 (1941)

Ford Motor Co. v. United States, 406 U.S. 562 (1972) ... 20

FDA v. Brown & Williamson Tobacco Corp.,

529 U.S. 120 (2000)

FTC v. Gem Merch. Corp., 87 F.3d 466 (11th Cir.

ICC v. B&T Transp. Co., 613 F.2d 1182 (1st Cir. 1980) .. 27

Klehr v. Smith Corp., 521 U.S. 179 (1997)

Meghrig v. KFC W., Inc., 516 U.S. 479 (1996)

Miller v. French, 530 U.S. 327 (2000)

Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S.

Pacific Bell Tel. Co. v. Linkline Commce’ns, Inc.,

129 S. Ct. 1109 (2009)

Phelps Dodge Corp. v. NLRB, 313 U.S. 177 (1941)

Porter v. Warner Holding Co., 328 U.S. 395

Richard v. Hoechst Celanese Chem. Group, Inc., ;

355 F.3d 345 (5th Cir. 2003), cert. denied, 543 U.S.

917 (2004)

Russello v. United States, 464 U.S. 16 (1983)

SEC v. First City Fin. Corp., 890 F.2d 1215 (D.C. Cir.

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985)

United States v. Alaska, 521 U.S. 1 (1997)

Cases—Continued: Page

United States v. Carson, 52 F.3d 1173 (2d Cir. 1995),

cert. denied, 516 U.S. 1122 (1996) ..............-. 8, 26

United States v. Glaxo Group Ltd., 410 U.S. 52 (1973) .. 20

United States v. Lane Labs-USA Inc., 427 F.3d 219

EE ovine sur dcde cuted aprieear edn eunaces 28

United States v. Oakland Cannabis Buyers’ Coop.,

ee errr re rrr 15

United States v. Ra Depot, 438 F.3d 1052 (10th Cir.),

cert. denied, 549 U.S. 817 (2006) ..........2..00005- 28

United States v. Turkette, 452 U.S. 576 (1981) .... passim

United States v. Universal Mgmt. Servs., Inc.,

191 F.3d 750 (6th Cir. 1999), cert. denied, 530 U.S.

a ee ae rn 27

Statutes:

Emergency Price Control Act of 1942, ch. 26,

a AERA 5 TIPE a me eh a Me eR 15

rrr errr rrr 16

Fair Labor Standards Act of 1938, 29 U.S.C. 201

CG eae v tence soars ce cewtes eure ceeneeereoee 16

PEE EE bree ccwddesdaveseteewesdaewie a 16

Family Smoking Prevention and Tobacco Control Act,

Pub. L. No. 111-31, Div. A, 123 Stat. 1776

ht ER SS} Beer errs rrr rrr er errr 31

f § fer re rrr err 31

Organized Crime Control Act of 1970, Pub. L. No.

DU<GEE, OE GUE. GED onc cece cccecnscecens 14, 22, 24

Fe NE hrs verecrccussaceuucecuaws 18

Statutes—Continued: Page

Racketeer Influenced and Corrupt Organizations Act,

cs ccc pdeusevedees béevnewns 2

Ee 6

De Oe i eevee cyudeebeen beans 6

ones cree eeweer es 6,9

ee a ei peweesenensue 6,9

oe ene eeween 7, 23

eae ec ec ee nweneeewen 8, 18, 22, 29

a, a passim

es cn emai 7, 23, 25

Resource Conservation and Recovery Act of 1976,

cece ec hee eehebeoes cece 25

Securities Exchange Act, 15 U.S.C. 78u(d)(1) .......... 27

ee eee ena naee as ae tata eae 6

re ae hehe eheweeGee ewes sewn’ 6

ee cet eck cone be bes on bn ed beunedees 7

Miscellaneous:

Federal Trade Commission, Cigarette Report for 2006

ee ee as cee bene e aeons 5

S. Rep. No. 617, 91st Cong., Ist Sess.

TE ee eo ae 18, 19, 22, 24, 28, 29

Webster’s Third New Int'l Dictionary (1961) .......... 19

In the Supreme Court of the Gnited States

No.

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

PETITION FOR A WRIT OF CERTIORARI

The Solicitor General, on behalf of the United States of

America, respectfully petitions for a writ of certiorari to

review the judgment of the United States Court of Appeals

for the District of Columbia Circuit in this case.

OPINIONS BELOW

The opinions of the court of appeals (Pet. App. 1a-98a,

99a-176a) are reported at 566 F.3d 1095 and 396 F.3d 1190.

The opinions of the district court (Pet. App. 258a-400a,

177a-195a, 196a-245a) are reported at 449 F. Supp. 2d 1,

321 F. Supp. 2d 72, and 116 F. Supp. 2d 131.

JURISDICTION

The judgment of the court of appeals was entered on

May 22, 2009. Petitions for rehearing were denied on Sep-

tember 22, 2009 (Pet. App. 246a-249a). On December 11,

2009, the Chief Justice extended the time within which to

(1)

file a petition for a writ of certiorari to and including Febru-

ary 19,2010. The jurisdiction of this Court is invoked under

28 U.S.C. 1254(1).

STATUTORY PROVISIONS INVOLVED

Pertinent provisions are set out in the appendix to the

petition (Pet. App. 254a-257a).

STATEMENT

1. The United States brought this action under the

Racketeer Influenced and Corrupt Organizations Act

(RICO), 18 U.S.C. 1961 et seq., against nine cigarette manu-

facturers and two related trade organizations. For the last

half century, those defendants (collectively, respondents)

have engaged in a pattern of racketeering activity and a

conspiracy to engage in racketeering that has cost the lives

and damaged the health of untold millions of Americans.

As the district court explained, “the evidentiary picture

must be viewed in its totality in order to fully appreciate

how massive the case is against [respondents], how irre-

sponsible their actions have been, and how heedless they

have been of the public welfare and the suffering caused by

the cigarettes they sell.” Pet. App. 298a.

Respondents’ business “survives, and profits, from sel]-

ing a highly addictive product which causes diseases that

lead to a staggering number of deaths per year, an immea-

surable amount of human suffering and economic loss, and

a profound burden on our national health care system.”

Pet. App. 29la. Respondents “have known many of these

facts for at least 50 years or more,” and, “[{dJespite that

knowledge, they have consistently, repeatedly, and with

enormous skill and sophistication, denied these facts to the

public, to the Government, and to the public health commu-

nity.” Jd. at 29la-292a. Each year, “over 400,000 people die

of smoking related diseases” and an additional, “relatively

small number of people * * * quit smoking.” Jd. at 324a;

cf. id. at 306a. Accordingly, to maintain and expand its cus-

tomer base, respondents’ “overarching economic goal” has

been “to keep smokers smoking; to stop smokers from quit-

ting; to encourage people, especially young people, to start

smoking; and to maintain or increase corporate profits.”

Id. at 321a-322a.

Since 1953, respondents have used the mails and wires

to execute a “multi-faceted, sophisticated scheme to de-

fraud” for the purpose of obtaining revenue from the sale

of cigarettes to smokers and potential smokers. Pet. App.

344a, 356a; id. at 307a, 349a-350a, 357a-358a. At its core,

the scheme “misleads consumers in order to maximize [re-

spondents’] revenues by recruiting new smokers (the ma-

jority of whom are under the age of 18), preventing current

smokers from quitting, and thereby sustaining the indus-

try.” Jd. at 357a-358a.

Nicotine addiction forms a core of respondents’ scheme.

Respondents “have long known that nicotine creates and

sustains an addiction to smoking” and that their sales, prof-

its, and financial health “depend on creating and sustaining

that addiction.” Pet. App. 313a. Respondents have con-

ducted “extensive research into how nicotine operates

within the human body” and have used their scientific

knowledge to “design[] their cigarettes to precisely control

nicotine delivery levels,” with “[e]very aspect of a cigarette

* * * precisely tailored” to deliver “the optimum amount

of nicotine [to] create and sustain smokers’ addiction.” /d.

at 313a-314a, 316a.

Respondents are also acutely aware—and have been

for decades—that “smoking causes disease, suffering, and

death.” Pet. App. 306a-308a. From 1953 until at least 2000,

however, respondents “repeatedly, consistently, vigor-

ously—and falsely—denied the existence of any adverse

health effects from smoking.” Jd. at 307a. To combat grow-

ing research from the scientific and medical communities,

respondents “established, staffed, and funded” an “intri-

cate, interlocking, and overlapping web of national and in-

ternational organizations, committees, affiliations, confer-

ences, research laboratories, funding mechanisms, and re-

positories for smoking and health information.” Jd. at 305a.

Respondents then “mounted a coordinated, well-financed,

sophisticated public relations campaign to attack and dis-

tort the scientific evidence demonstrating the relationship

between smoking and disease, claiming that the link be-

tween the two was still an ‘open question.’” Jd. at 307a-

308a.

Respondents also “have repeatedly made vigorous and

impassioned public denials—before Congressional commit-

tees, in advertisements in the national print media, and on

television—that neither smoking nor nicotine is addictive,

and that they do not manipulate, alter, or control the

amount of nicotine contained in the cigarettes they manu-

facture.” Pet. App. 315a-316a. “Those denials were false.”

Td. at 318a.

Notwithstanding those denials, respondents “knew that

many smokers were concerned and anxious about the

health effects of smoking” and that such smokers “would

rely on the health claims made for low tar cigarettes as a

reason * * * for not quitting smoking.” Pet. App. 322a.

Respondents accordingly “marketed und promoted their

low tar brands as being less harmful than conventional ciga-

rettes” in order to give “smokers an acceptable alternative

to quitting smoking, as well as an excuse for not quitting.”

Id. at 320a-321a.

Respondents implemented “massive, sustained, and

highly sophisticated marketing and promotional campaigns

to portray their light brands as less harmful than regular

cigarettes,” notwithstanding that respondents have “known

for decades” that such claims are “blatantly false” and

“misleading.” Pet. App. 43a-44a (citations omitted). “By

engaging in this deception,” respondents “successfully

* * * marketed and promoted their low tar/light ciga-

rettes,” “dramatically increased their sales of [such] ciga-

rettes, assuaged the fears of smokers about the health risks

of smoking, and sustained corporate revenues in the face of

mounting evidence about the health dangers of smoking.”

Id. at 322a-323a; see 449 F. Supp. 2d at 860 (“[Respon-

dents’) efforts have been successful. Even though low tar

smokers have a greater desire to quit, their misconception

that low tar cigarettes are less harmful dissuades them

from doing so.”). As a result, the market share for “low tar

brands” increased from 2% to 81.9% of total cigarette sales

between 1967 and 1998, see 2d. at 508, and, by 2006, “low

tar” brands accounted for 92.7% of the 343 billion cigarettes

sold that year in the United States. Federal Trade Com-

mission, Cigarette Report for 2006 2, 7 (2009).

In order to replenish their customer base, respondents

turned to the Nation’s youth. Respondents understood that

“smokers are remarkably brand-loyal,” that “brand switch-

ing rates are low and falling,” and that the “only way [re-

spondents] can sustain themselves is by bringing in large

numbers of replacement smokers each year.” Pet. App.

325a-326a. “The majority of people who become addicted

smokers start smoking before the age of eighteen, and

many more before the age of twenty one.” /d. at 325a. Re-

spondents thus “realize[d] that they need[ed] to get people

smoking their brands as young as possible in order to se-

cure them as lifelong loyal smokers.” /d. at 326a.

Respondents “intensively researched and tracked young

people’s attitudes, preferences, and habits” and used that

research “to create highly sophisticated and appealing mar-

keting campaigns targeted to lure [young people] into start-

ing smoking and later becoming nicotine addicts” in order

to “replace those who die * * * or quit.” Pet. App. 334a.

That marketing “historically, as well as currently,” targets

“young people, including those under twenty-one, as well as

those under eighteen.” /d. at 333a-334a. Respondents have

“spent billions of dollars” annually on such marketing—

which is a “substantial contributing factor to youth smoking

initiation and continuation”—while “consistently, publicly,

and falsely, denying they do so.” Jd. at 333a, 335a.

“In short, [respondents] have marketed and sold their

lethal product with zeal, with deception, with a single-

minded focus on their financial success, and without regard

for the human tragedy or social costs that [their] success

exacted.” Pet. App. 292a.

2. In 1999, the United States filed this civil action

against respondents under RICO and two other statutes

not relevant here. The government alleged that respon-

dents conducted and conspired to conduct the affairs of an

enterprise through a pattern of racketeering activity in

violation of 18 U.S.C. 1962(c) and (d), by engaging in a

decades-long scheme to defraud that was executed in part

through respondents’ use of mail and wire communications.

Pet. App. 178a-179a, 300a; see 18 U.S.C. 1341, 13843,

1961(1)(B) and (5). The government sought equitable relief

under RICO’s “(clivil remedies” section, which provides:

The district courts of the United States shall have juris-

diction to prevent and restrain violations of section 1962

of [RICO] by issuing appropriate orders, including, but

not limited to: ordering any person to divest himself of

any interest, direct or indirect, in any enterprise; impos-

ing 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 commerce; or or-

dering dissolution or reorganization of any enterprise,

making due provision for the rights of innocent persons.

18 U.S.C. 1964(a). As part of its original request for relief,

the government sought equitable disgorgement of approxi-

mately $280 billion for ill-gotten gains that respondents

obtained through their scheme to defraud. Pet. App. 178a

& n.A4.

After more than two years of discovery, respondents

moved for partial summary judgment on the scope of the

government’s disgorgement remedy. Pet. App. 179a-180a,

301a-302a. The district court denied that motion (id. at

177a-195a), rejecting respondents’ argument that a dis-

gorgement remedy is limited under RICO to those ill-

gotten gains that are presently available to fund further

unlawful activities. 7d. at 183a-193a.

3. In 2005, on respondents’ interlocutory appeal under

28 U.S.C. 1292(b), a divided panel of the court of appeals

reversed. Pet. App. 99a-176a. The majority concluded that

RICO’s grant of jurisdiction to enter appropriate orders “to

prevent and restrain violations of [RICO],” 18 U.S.C.

1964(a), is “limited to forward-looking remedies that are

aimed at future [RICO] violations.” Pet. App. 113a; see id.

at 111a-120a. That limitation, the court observed, prohibits

any order of disgorgement because, in its view, disgorge-

ment of ill-gotten gains “is a quintessentially backward-

looking remedy focused on remedying the effects of past

conduct to restore the status quo.” /d. at 113a-114a.

The court further noted that RICO’s criminal forfeiture

provision, 18 U.S.C. 1963(a), and the private right of action

for treble damages, 18 U.S.C. 1964(c), provide remedies

for past conduct. “This ‘comprehensive and reticulated’

scheme,” the court concluded, “along with the plain mean-

ing of the words [of Section 1964(a)], serves to raise a ‘neces-

sary and inescapable inference’ * * * that Congress in-

tended to limit relief under § 1964(a) to forward-looking

orders, ruling out disgorgement.” Pet. App. 118a (citation

omitted).

The court recognized that its holding was in conflict

with decisions of the Second Circuit in United States v. Car-

son, 52 F.3d 1173 (1995), cert. denied, 516 U.S. 1122 (1996),

and the Fifth Circuit in Richard v. Hoechst Celanese Chem-

ical Group, Inc., 355 F.3d 345 (2003), cert. denied, 543 U.S.

917 (2004). Pet. App. 119a-120a. But the court found it

impossible to “avoid creating [a] circuit split{]” given its

interpretation of Section 1964(a). Zbid.'

In his dissenting opinion (Pet. App. 133a-176a), Judge

Tatel concluded that the majority’s narrow reading of Sec-

tion 1964’s grant of authority to the district courts to “pre-

vent and restrain” RICO violations is inconsistent with this

Court’s decisions in Porter v. Warner Holding Co., 328 U.S.

395 (1946), and Mitchell v. Robert DeMario Jewelry, Inc.,

361 U.S. 288 (1960), which establish that a grant of equita-

ble jurisdiction includes the full range of traditional equita-

ble remedies unless the statute by its terms or by necessary

inference restricts the court’s jurisdiction in equity. Pet.

App. 149a-164a. Judge Tatel also rejected the proposition

that disgorgement is, by its nature, “backward-looking,” 7d.

at 165a-166a, and concluded that the district court should

be allowed to decide in the first instance “what remedy or

combination of remedies” would “serve to prevent and re-

strain” RICO defendants from committing future RICO

violations, zd. at 171a.

' Judge Williams joined the majority opinion, but wrote separately

to emphasize his disagreement with the Second Circuit’s decision in

Carson. Pet. App. 121a-123a.

;

The court of appeals denied the government’s petition

for rehearing en banc by a 3-3 vote, with 3 judges not par-

ticipating. Pet. App. 252a-253a. The United States peti-

tioned for a writ of certiorari before further district court

proceedings resolved the merits and granted remedies.

The Court denied that petition. 546 U.S. 960 (2005).

4. The district court held a nine-month bench trial and,

in August 2006, entered final judgment against respon-

dents. The court’s comprehensive decision, which includes

over 4000 specific findings of fact and encompasses nearly

one volume of the Federal Supplement, see 449 F’. Supp. 2d

at 1-987,” details the “overwhelming evidence” that respon-

dents maintained, and have continued to maintain, an illegal

racketeering enterprise, and that each defendant has vio-

lated 18 U.S.C. 1962(c) and (d) by agreeing to and actually

“participat{ing] in the conduct, management, and operation

of the Enterprise through a pattern of racketeering activ-

ity.” Pet. App. 289a-290a, 341a, 346a-249a, 353a; see zd. at

357a (concluding that the evidence “clearly establishes that

{respondents] have not ceased engaging in unlawful activ-

ity” and “continue[] to engage in conduct that is materially

indistinguishable from their previous actions, activity that

continues to this day”).

The court found that respondents “devised a scheme to

defraud” the public in which respondents “coordinated sig-

nificant aspects of their public relations, scientific, legal,

and marketing activity” and repeatedly used the mails and

wire communications to further their scheme. Pet. App.

® The district court’s decision is reproduced in excerpted form in

Volume II of the petition appendix (Pet. App. 258a-400a).

344a, 349a. More specifically, the court found that respon-

dents

executed the scheme by using several different strate-

gies including: (1) denying that there were adverse

health effects from smoking; (2) making false, mislead-

ing, and deceptive public statements designed to main-

tain doubt about whether smoking and exposure to sec-

ondhand smoke cause disease; (3) denying the addictive-

ness of smoking cigarettes and the role of nicotine

therein; (4) disseminating advertising for light and low

tar cigarettes suggesting they were less harmful than

full flavor ones; and (5) undertaking a publicly an-

nounced duty to conduct and publicize disinterested and

independent research into the health effects of smoking

upon which the public could rely.

Id. at 349a-350a. “[MlJore colloquially,” the court explained

that,

over the course of more than 50 years, [respondents]

lied, misrepresented, and deceived the American public,

including smokers and the young people they avidly

sought as “replacement smokers,” about the devastat-

ing health effects of smoking and environmental tobacco

smoke, they suppressed research, they destroyed docu-

ments, they manipulated the use of nicotine so as to in-

crease and perpetuate addiction, they distorted the

truth about low tar and light cigarettes so as to discour-

age smokers from quitting, and they abused the legal

system in order to achieve their goal—to make money

with little, if any, regard for individual illness and suf-

fering, soaring health costs, or the integrity of the legal

system.

Id. at 344a.

The district court further found it reasonably likely that

the cigarette-manufacturer respondents (other than Lig-

gett) will continue to violate RICO in the future. Pet. App.

354a-363a. The court accordingly granted injunctive relief

barring respondents from engaging in further racketeering

or fraud, reconstituting certain joint organizations, and

using health descriptors such as “light” and “low tar.” Jd.

at 371a-375a, 390a-391a. The court also required that re-

spondents make corrective statements in specified media,

continue to maintain document depositories containing in-

dustry documents disclosed in litigation, and provide

disaggregated marketing data to the government. /d. at

376a-390a.

The district court denied an equitable decree requiring

respondents to fund a national smoking-cessation program

and a public-education campaign. Pet. App. 391a-392a,

398a-399a. The court acknowledged that respondents had

executed an “extremely successful scheme to increase their

revenues at the expense of smokers, potential smokers, and

the American public” by “defraud[ing] consumers regard-

ing [the health effects of] light and low tar cigarettes,” and

that the government’s requested smoking-cessation pro-

gram “would unquestionably serve the public interest.” Jd.

at 391a-392a; see id. at 398a (respondents’ fraud was “ex-

ceptionally effective”). The court similarly acknowledged

that the government’s requested public-education cam-

paign, “aimed at diluting both the impact of [respondents’]

fraudulent statements and at undermining the efficacy of

[respondents’] marketing efforts towards youth,” would

“unquestionably serve the public interest.” Jd. at 399a. But

the court ultimately concluded that the court of appeals’

interlocutory decision precluded both remedies because

they are “not specifically aimed at preventing and restrain-

ing future RICO violations.” /d. at 392a, 399a.

5. In May 2009, the court of appeals issued a decision

(Pet. App. la-98a) affirming in part, reversing in part, and

remanding for further proceedings “regarding only four

discrete issues.” Jd. at 97a-98a. The court affirmed the

district court’s holding that respondents violated RICO as

to all but the two trade-organization respondents (which

were dissolved before judgment). The court explained that

respondents participated in the conduct of the affairs of an

enterprise with “the common purpose of obtaining cigarette

proceeds by defrauding existing and potential smokers”

and that respondents’ RICO “tiability rests on deceits per-

petrated with knowledge of their falsity” reflected in

“countless examples of [their] deliberately false state-

ments.” Jd. at 25a, 41a-42a; see id. at 13a-67a. The court

also largely affirmed the remedies granted by the district

court but remanded for further consideration of four dis-

crete remedial issues not relevant here. Jd. at 67a-86a, 98a.

Relying on its disgorgement opinion, the court of ap-

peals affirmed the district court’s rejection of equitable

smoking-cessation and public-education remedies. Pet.

App. 90a-95a. Under the reasoning of its prior opinion, the

court explained, “the district court may craft only forward-

looking remedies aimed at preventing and restraining fu-

ture RICO violations.” Jd. at 90a-9la. The court acknowl-

edged the government’s position that the smoking-cessation

and public-education remedies were justified because re-

spondents’ future cigarette sales to “a smoker who became

addicted in the past due to [respondents’] fraud” is “a con-

tinuing effect of the past fraud, due to the nature of addic-

tion.” 7d. at 91a. But the court nonetheless concluded that

the smoking-cessation and public-education remedies are

impermissible under Section 1964(a), as previously con-

strued, because they “attempt to prevent and restrain fu-

ture effects of past RICO violations, not future RICO viola-

tions.” Jd. at 92a.

REASONS FOR GRANTING THE PETITION

The court of appeals has significantly curtailed Con-

gress’s plenary grant of equitable jurisdiction in 18 U.S.C.

1964(a) “to prevent and restrain violations” of RICO by

holding that a district court may “craft only forward-look-

ing remedies aimed at preventing and restraining future

RICO violations.” Pet. App. 90a-91a, 113a. Under that

ruling, the court barred, as a matter of law, any equitable

disgorgement of ill-gotten gains or other equitable relief to

redress the continuing effects of past conduct. /d. at 9la

(citing id. at 113a-114a). That holding contradicts the text

and purposes of RICO, erroneously restricts the broad and

flexible equitable authority that Congress conferred upon

federal courts under RICO, and conflicts with the decisions

of this Court and other courts of appeals.

One of the principal functions of equitable relief under

RICO “4s to divest the association of the fruits of its ill-got-

ten gains.” United States v. Turkette, 452 U.S. 576, 585

(1981). Indeed, this Court has made clear that congressio-

nal grants of equitable authority to “enjoin” or “restrain”

statutory violations similar to that in RICO encompass all

traditional equitable remedies, including decrees compel-

ling defendants “to disgorge profits * * * acquired in vio-

lation of [statutory prohibitions],” Porter v. Warner Hold-

ing Co., 328 U.S. 395, 398-399 (1946), and directing “reim-

bursement for [injuries] caused by an unlawful {course of

action]” so as to “provide complete relief” for statutory vio-

lations. Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S.

288, 289, 292 (1960). Other courts of appeals have properly

followed the rule of Porter and Mitchell, but the D.C. Cir-

cuit in this case created an acknowledged division of author-

ity by restricting the broad equitable authority granted by

RICO.

The court of appeals’ erroneous legal rulings have ex-

ceptional importance to this case. By holding that federal

courts lack authority to advance the public interest by

granting equitable relief either to separate respondents

froin their ill-gotten gains or to redress the ongoing effects

of their violations of RICO, the court of appeals has eviscer-

ated the relief available in the most significant civil RICO

action ever filed by the United States. The ruling thwarts

the district court’s efforts to craft appropriate equitable

relief to remedy the ongoing effects of fifty years of unlaw-

ful racketeering activity—unlawful acts that have harmed

and continue to harm the lives and health of many millions

of Americans.

A, The D.C. Circuit’s Narrow Interpretation Of Section

1964(a) Conflicts With Decisions Of This Court And Im-

poses Unwarranted Constraints On Equitable Jurisdiction

1. Congress enacted RICO to provide “new remedies

to deal with the unlawful activities of those engaged in or-

ganized crime.” Turkette, 452 U.S. at 589 (quoting Orga-

nized Crime Control Act of 1970 (OCCA), Pub. L. No.

91-452, 84 Stat. 923). To that end, Congress vested the dis-

trict courts with jurisdiction to issue “appropriate orders”

to “prevent and restrain” violations of RICO. 18 U.S.C.

1964(a). That broad grant of remedial authority is not, as

the court of appeals held, limited “to forward-looking reme-

dies aimed at preventing and restraining future RICO viola-

tions.” Pet. App. 75a, 92a. The text of Section 1964(a), this

Court’s decisions in Porter and Mitchell construing parallel

grants of equitable jurisdiction, and the specific context in

which Congress enacted RICO demonstrate that Congress

vested district courts with full equitable authority to award

complete relief for violations of RICO, including orders to

disgorge ill-gotten gains and to redress the continuing

health and other effects of respondents’ fraudulent scheme

to cause countless individua!s to commence and maintain an

addiction to their products that will continue well into the

future.

When Congress enacted RICO in 1970, it legislated

against the backdrop of the Court’s decisions in Porter and

Mitchell. Those decisions establish that “[w]hen Congress

entrusts to an equity court the enforcement of [statutory]

prohibitions,” it invokes “the historic power of equity to

provide complete relief.” Mitchell, 361 U.S. at 291-292.

Under such a statute, “all the inherent equitable powers of

the District Court are available for the proper and complete

exercise of that jurisdiction,” in the absence of “a clear and

valid legislative command” limiting the “comprehensive-

ness” of such authority. /d. at 291 (quoting Porter, 328 U.S.

398). The “full scope” of “the court’s jurisdiction in equity”

must therefore “be recognized and applied” “{uJnless a stat-

ute in so many words, or by a necessary and inescapable

inference,” restricts that authority. /bid. (quoting Porter,

328 U.S. 398). And when “the public interest is involved”

in a suit brought by the government, the court’s “equitable

powers assume an even broader and more flexible charac-

ter than when only a private controversy is at stake.” bid.

(quoting Porter, 328 U.S. 398).

The Court in Porter applied those principles in constru-

ing the Emergency Price Control Act of 1942 (EPCA), ch.

26, 56 Stat. 23. EPCA authorized the government to apply

to an appropriate court for “an order enjoining [prohibited]

* See also Miller v. French, 530 U.S. 327, 340 (2000) (requiring “an

‘inescapable inference’” to “construe a statute to displace courts’ tradi-

tional equitable authority”) (citation omitted); United States v. Oakland

Cannabis Buyers’ Coop., 532 U.S. 483, 496 (2001).

acts or practices” or “enforcing compliance” with the Act,

and provided that if a violation was established, “a perma-

nent or temporary injunction, restraining order, or other

order shall be granted.” 328 U.S. at 397 (quoting EPCA

§ 205(a), 56 Stat. 33). The Court construed this provision to

authorize a court to issue a “decree compelling [the defen-

dant] to disgorge profits * * * acquired in violation of the

[EPCA].” Id. at 398-399. Such a decree, the Court ex-

plained, both assures “[fJuture compliance” by compelling

a violator “to restore [his] illegal gains” and falls “within the

recognized power and within the highest tradition of a court

of equity” to “act in the public interest by restoring the

status quo.” Jd. at 400, 402.

| Mitchell reaffirmed Porter's recognition of the broad

scope of federal equity jurisdiction, and held in the context

of government suits to enforce the Fair Labor Standards

Act of 1938 (FLSA), 29 U.S.C. 201 et seq., that district

courts may redress the effects of past statutory violations

through appropriate equitable decrees. In language echoed

in 18 U.S.C. 1964(a)’s authorization to “restrain violations”

of RICO, the F'LSA vests district courts with jurisdiction to

“restrain violations” of the FLSA in actions brought by the

Secretary of Labor. 29 U.S.C. 217. That authorization to

“restrain violations,” Mitchell held, invokes “the historic

power of equity to provide complete relief” and includes the

power “to order reimbursement for loss of wages caused by

[a retaliatory] discharge” of employees in violation of the

Act. 361 U.S. at 289, 291-292.

Porter and Mitchell directly govern the interpretation

of Section 1964(a)’s authorization to issue “appropriate or-

ders” to “prevent and restrain” violations of RICO. The

grant of authority to “prevent” violations of RICO is not

materially different from the statutory authority in Porter

to issue orders “enjoining” prohibited acts and practices

and “enforcing” compliance with the Act, which permitted

courts to direct defendants “to disgorge profits” flowing

from statutory violations. See Porter, 328 U.S. 398-399.

And authority to “restrain violations” of RICO is materially

identical to the authority in the FLSA that Mitchell held

confers the power to “provide complete relief” by directing

monetary payments to redress harmful effects “caused by

[the defendant’s] unlawful” actions. Mitchell, 361 U.S. at

289, 291-292. The Congress that enacted Section 1964(a) in

1970 is presumed to have legislated with such firmly estab-

lished and directly relevant decisions in mind. See, ¢.g.,

United States v. Alaska, 521 U.S. 1, 35 (1997); Cannon v.

University of Chi., 441 U.S. 677, 698-699 (1979).*

The background rule of Porter and Mitchell means that

RICO’s text authorizes a district court to exercise the full

range of equitable remedies—including disgorgement and

other relief designed to undo the effects of past wrongdo-

ing—absent a “clear” statutory command that “in so many

words, or by a necessary and inescapable inference,” re-

* The court of appeals’ attempts to distinguish Porter and Mitchell

are unavailing. The majority sought to confine Porter to the particular

statute in that case, noting that, after Porter 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. 112a-113a. Mitchell, however, expressly rejected 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

provide complete relief in light of the statutory purposes.” /d. at

291-292.

stricts a district court’s traditional, flexible equitable au-

thority. See Mitchell, 361 U.S. at 291 (quoting Porter, 328

USS. at 398). Nothing of the sort appears in RICO. Quite

the contrary, the clear statutory command of RICO and the

inescapable inference from its origins is that courts have

broad authority to provide appropriate relief targeting ill-

gotten gains and harmful effects of respondents’ unlawful

conduct.

Congress specifically directed in RICO’s text that the

statute “be liberally construed to effectuate its remedial

purposes,” OCCA § 904(a), 84 Stat. 947, and this Court has

emphasized that this “liberal-construction mandate” applies

with particular force “in § 1964, where RICO’s remedial

purposes are most evident.” Sedima, S.P.R.L. v. Imrex

Co., 478 U.S. 479, 492 n.10 (1985). The Court has also re-

peatedly recognized that Congress enacted RICO to “pro-

vide new weapons of unprecedented scope” to attack the

“economic roots” of the targeted activity. Russello v.

United States, 464 U.S. 16, 26 (1983). “RICO was an ag-

gressive initiative to supplement old remedies and develop

new methods for fighting crime” and, for that reason, the

Court has emphasized that “all of the Act’s provisions

should be read” in the spirit of “attacking crime on all

fronts.” Sedima, 473 U.S. at 498; see S. Rep. No. 617, 91st

Cong., Ist Sess. 79 (1969) (Senate Report) (RICO is in-

tended to attack “their source of economic power” on “all

available fronts”). That attack was intended, inter alza, to

® Even outside the Section 1964 context, the Court has consistently

rejected arguments intended to restrict the statute’s “clear but expan-

sive” text, and has “repeatedly refused to adopt narrowing construc-

tions of RICO in order to make it conform to a preconceived notion of

what Congress intended to proscribe.” Boyle v. United States, 129 S.

Ct. 2287, 2246-2247 (2009) (quoting Bridge v. Phoenix Bond & Indem.

Co., 128 S. Ct. 2131, 2145 (2008)) (collecting cases).

“divest the association of the fruits of its ill-gotten gains.”

Turkette, 452 U.S. at 585.

The error in the court of appeals’ narrow and rigid in-

terpretation of Section 1964(a) in the face of that liberal

construction mandate is especially vivid in the court’s cate-

gorical rejection of the government’s proposed smoking-

cessation and public-education remedies. Those measures

were intended to halt the continuing and serious adverse

health consequences of the fraudulent scheme perpetrated

by respondents to induce untold numbers of individuals to

commence and maintain into the future an addiction to re-

spondents’ products. The remedies would thereby prevent

respondents from continuing to reap the financial benefits

of their unlawful conduct that produced the addiction. One

established meaning of “restrain” makes clear that Section

1964(a)’s broad grant of equitable authority includes the

authority to compel such measures. Whereas “restrain” in

some contexts can mean “to hold (as a person) back from

some action,” Webster’s Third New Int'l Dictionary 1936

(1961) (definition la), the term also carries an additional

meaning of particular relevance to those remedies: “to

moderate or limit the force, effect, development, or full ex-

ercise of.” See ibid. (definition 2a). Equitable orders that

mitigate or limit the continuing “force” and “effect” of past

statutory violations fall comfortably within the grant of

authority in Section 1964(a) to “restrain” such violations.

That conclusion is reinforced by this Court’s recognition

of the appropriate scope of remedies in government en-

forcement actions under the antitrust laws, on which Con-

gress drew to ensure an expansive reach of Section 1964(a).

See, ¢.g., Senate Report 81; Klehr v. A.O. Smith Corp., 521

U.S. 179, 189 (1997). This Court has stressed that “[t]he

purpose of relief in an antitrust case is ‘so far as practicable,

[to] cure the ill effects of the illegal conduct, and assure the

public freedom from its continuance.’” United States v.

Glaxo Group Ltd., 410 U.S. 52, 64 (1973) (second brackets

in original) (citation omitted); see also Ford Motor Co. v.

United States, 405 U.S. 562, 573 n.8 (1972) (relief “neces-

sary and appropriate in the public interest to eliminate the

effects of the acquisition offensive to the statute”) (citation

omitted). So too here, the remedies the government sought

were intended, inter alza, to cure and eliminate the effects

of the conduct offensive to RICO.®

2. The court of appeals did not question the “historic

power of equity to provide complete relief,” Mitchell, 361

U.S. at 292, including the power to compel a wrongdoer to

disgorge its ill-gotten gains, Porter, 328 U.S. at 401. It con-

cluded, however, that RICO’s text and structure restrict

the scope of that authority, Pet. App. 111a, and that a “dis-

trict court may craft only forward-looking remedies aimed

at preventing and restraining future RICO violations,” 7d.

at 90a-9la. The court of appeals was wrong.

Nothing in RICO limits court orders to forward-looking

remedies targeting future RICO violations. As Porter and

Mitchell make clear, past statutory violations can produce

ill-gotten gains or continue to cause harm that should, in

® The court of appeals distinguished the equitable relief available

under RICO from that available in the antitrust context by reasoning

that “[t]he condition of monopolization is itself a violation of the

Sherman Act” and, for that reason, “district courts may order remedies

to cure the monopolizing effects” of statutory violations. Pet. App. 98a.

That is incorrect. “Simply possessing monopoly power and charging

monopoly prices does not violate” the Sherman Act, which instead

“targets ‘the willful acquisition or meintenance of [monopoly] power.’”

Pacific Bell Tel. Co. v. Linkline Comme'ns, Inc., 129 S. Ct. 1109, 1118

(2009) (citation omitted). Accordingly, as with RICO, a court in an

antitrust case can grant equitable relief to redress the continuing

effects of a defendant’s prior violation. See, 6.g.; Ford Motor Co., 405

U.S. at 575-576, 578.

the public interest, be redressed by an “appropriate order.”

A rigid distinction between forward- and backward-looking

remedies under RICO simply ignores the “historic power

of equity to provide complete relief in light of the statutory

purposes.” Mitchell, 361 U.S. at 292. And where RICO

violations produce effects that survive the violation itself,

the authority “to act in the public interest by restoring the

status quo” falls squarely within the federal judiciary’s

“highest tradition.” Porter, 328 U.S. at 402. None of the

bases for the court of appeals’ restrictive interpretation of

Section 1964(a) survives analysis.

a. The court inferred that RICO limits a court’s equita-

ble authority from Section 1964(a)’s statement that courts

have jurisdiction to issue appropriate orders “including, but

not limited to:” ordering any person to divest himself of

any interest in any enterprise; imposing reasonable restric-

tions on the future activities or investments of any person;

or ordering the dissolution or reorganization of any enter-

prise. 18 U.S.C. 1964(a). The court reasoned that those

remedies “are all aimed at separating the RICO criminal

from the enterprise so that he cannot commit violations in

the future,” and that Section 1964(a) should therefore be

read as authorizing only “remedies similar in nature” under

the interpretive canons of noscitur a sociis and eyusdem

generis. Pet. App. 113a, 116a-117a. There are two basic

flaws in that analysis.

First, the court of appeals was wrong in its premise

about the purpose of the remedies that Section 1964(a)

identifies as “includ[ed].” While orders requiring divesti-

ture, restrictions on future activities, or dissolution or reor-

ganization of an enterprise can serve to separate the RICO

violator from the enterprise and thereby protect against

future violations, that is not the only purpose of such reme-

dies. They also serve to restrain the ongoing effects of past

conduct—e.g., by undoing the corrupt election of a labor

union leader, or reorganizing a company that has been infil-

trated by organized crime to restore the company to lawful

and fair operations.

Second, and in any event, RICO authorizes appropriate

orders to “prevent and restrain” violations of RICO—

statutory text that under Porter and Mitchell confers the

full power of equity to afford complete relief in government

enforcement actions, including repayment of ill-gotten

gains and undoing the continuing effects of past violations.

Nothing in the succeeding phrase introduced by the word

“including” limits the scope of that broad grant of authority.

See Federal Land Bank v. Bismarck Lumber Co., 314 U.S.

95, 100 (1941); Phelps Dodge Corp. v. NLRB, 313 U.S. 177,

189 (1941).

The word “include” is “frequently, if not generally, used

as a word of extension or enlargement.” American Sur. Co.

v. Marotia, 287 U.S. 513, 517 (1983). That is clearly so here.

The express “inclu[sion]” of specific remedies in Section

1964(a) guaranteed that it would be read expansively to

encompass certain remedial measures that Congress

deemed essential to address the illicit influence and eco-

nomic base of RICO violators. See Turkette, 452 U.S. at

585, 591-593. Section 1964’s remedial provisions afforded

“enhanced sanctions and new remedies.” 84 Stat. 923 (em-

phasis added). By identifying certain remedies, Congress

ensured a broad, not restrictive, application of the equitable

authority it conferred on federal courts to “prevent and

restrain” RICO violations. That conclusion is underscored

by Section 1964(a)’s express directive that the appropriate

orders it authorizes are “not limited to” those identified, as

well as by the legislative history. See Senate Report 81

(“The use of such remedies as prohibitory injunctions and

the issuing of orders of divestment or dissolution is explic-

itly authorized. Nevertheless, it must be emphasized that

these remedies are not exclusive, and that [RICO” seeks

essentially an economic, not a punitive goal.”).’

b. The court of appeals’ analysis of RICO’s structure

likewise furnishes no basis for its decision. The court cor-

rectly observed that RICO provides for the district court in

a criminal case to include a fine and mandatory forfeiture

of unlawfully obtained proceeds as part of the sentence, 18

U.S.C. 1963(a), and that a person injured in his business or

property by a RICO violation may sue the offender for tre-

ble damages, 18 U.S.C. 1964(c). See Pet. App. 117a-118a.

But those alternative sanctions and remedies do not curtail

the independent authority of the government to invoke the

court’s equitable jurisdiction to provide complete relief in

the public interest.

Both Porter and Mitchell found such equitable authority

available under statutes that provided a similarly broad

range of alternative remedies. EPCA, at issue in Porter,

provided “{ljegal, equitable and criminal sanctions,” includ-

ing a private cause of action allowing injured parties to re-

cover treble damages caused by violations. See Porter, 328

US. at 404 & n.4, 406 n.9 (Rutledge, J., dissenting). The

statute also permitted the government to seek such dam-

ages on behalf of the United States if the individual was not

* The court of appeals also erred in characterizing disgorgement of

ill-gotten gains as a “quintessentially backward-looking remedy,” Pet.

App. 118a. See id. at 165a-174a (Tatel, J., dissenting). This Court and

courts of appeals have repeatedly recognized that disgorgement serves

a crucial forward-looking deterrent function. See, e.g., Porter, 328 U.S.

at 400 (“Future compliance may be more definitely assured if one is

compelled to restore one’s illegal gains.”); see also, e.g., SEC v. First

City Fin. Corp., 890 F.2d 1215, 1230 (D.C. Cir. 1989) (“{d]isgorgement

is an equitable remedy designed to deprive a wrongdoer of his unjust

enrichment and to deter others from violating” federal law); F'TC v.

Gem Merch. Corp., 87 F.3d 466, 470 (11th Cir. 1996) (same).

entitled to sue. Pet. App. 150a (Tatel, J., dissenting). Yet

such alternative remedies did not displace the equitable

authority to protect “the public interest by restoring the

status quo.” Porter, 328 U.S. at 402. In Mitchell, the Court

similarly “thought it insignificant that * * * both the ag-

grieved employees and the Secretary could seek lost wages

in actions at law under FLSA.” Pet. App. 156a (Tatel, J.,

dissenting) (citing Mitchell, 361 U.S. at 303 (Whittaker, J.

dissenting)). :

The majority below was also mistaken in imposing rigid

limitations on available remedies under Section 1964(a) on

the ground that, in its view, the “overlap” between dis-

gorgement and criminal forfeiture would circumvent “the

additional procedural safeguards that attend criminal

charges.” Pet. App. 118a. Congress did not intend RICO’s

criminal and civil remedies to be mutually exclusive.

Rather, Congress intended that RICO’s deliberately “en-

hanced sanctions and new remedies,” 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 Senate Report 80 (observing that criminal prosecution

is “a relatively ineffectual tool” for implementing RICO’s

“economic policy”). Congress was fully aware of the poten-

tial overlap between RICO’s criminal and civil remedies,

and it intended that a criminal influence “can be legally

separated from the organization, either by the criminal law

approach * * * or through a civil law approach of equita-

ble relief.” Jd. at 79. That very “combination of criminal

and civil penalties” was enacted by Congress to establish

“an extraordinary potential for striking a mortal blow

against the property interests” o. RICO violators. Tur-

kette, 452 U.S. at 592 (citation omitted).

The majority erred in equating equitable disgorgement

with RICO’s provisions for criminal forfeiture and private

damages. Unlike both forfeiture and damages, disgorge-

ment and other equitable remedies, such as the govern-

ment’s proposed smoking-cessation program, are commit-

ted to the court’s sound discretion. And, unlike a private

damages award under Section 1964(c), disgorgement is not

trebled; and neither disgorgement. nor the other remedies

authorized by Section 1964(a) are keyed to a victim’s loss,

but rather are directly tied to the wrongdoer’s ill-gotten

gains, the ongoing effects of its RICO violation, and the

deterrence of any future violations.

ce. The court of appeals similarly erred in believing that

Meghrig v. KFC Western, Inc., 516 U.S. 479 (1996), sup-

ports its conclusion that Section 1964(a)’s authority to “re-

strain” RICO violations is “only aimed at future actions.”

See Pet. App. 114a. Meghrig construed a provision of the

Resource Conservation and Recovery Act of 1976 (RCRA),

42 U.S.C. 6901 et seg., that permitted courts to “restrain

any person” who contributed to the improper disposal of

solid or hazardous waste. That provision, the Court con-

cluded, contemplates prohibitory injunctions to prevent “a

responsible party from further violating RCRA” but does

not permit the court in a citizen suit to order the defendant

to reimburse a private party for costs incurred to clean up

a defendant’s past RCRA violations. Meghrig, 516 U.S. at

484. RCRA’s distinctive text and context warranted that

limitation for reasons that have no application to Section

1964(a).

Moreover, Meghrig emphasized that RCRA authorizes

relief only if a plaintiff shows “imminent” danger of harm to

health or the environment. That requirement, the Court

concluded, was incompatible with a reading of RCRA as

permitting suits to compensate private plaintiffs for cleanup

efforts that have already redressed the harm. Meghrig, 516

U.S. at 485-486. Indeed, RCRA bars citizens suits if the

government is prosecuting a separate enforcement action.

That limitation confirmed that RCRA was not “designed to

compensate private parties for their past cleanup efforts,”

because it would make RCRA “a wholly irrational mecha-

nism for doing so.” Jd. at 486. Those distinctive forward-

looking features of RCRA created an “inescapable infer-

ence,” Porter, 328 U.S. at 398, that Congress did not intend

in RCRA to vest courts with full equitable authority to pro-

vide complete relief. RICO contains no analogous restric-

tions.

B. The D.C. Circuit’s Interpretation Of Section 1964(a) Con-

flicts With Decisions Of Other Courts of Appeals

1. The court of appeals’ interpretation of Section

1964(a) not only conflicts with the principles established in

Porter and Mitchell, but also creates a direct conflict with

the Second Circuit’s decision in United States v. Carson, 52

F.3d 1178 (1995), cert. denied, 516 U.S. 1122 (1996), and the

Fifth Circuit’s decision in Richard v. Hoechst Celanese

Chemical Group, Inc., 355 F.3d 345 (2003), cert. denied, 543

U.S. 917 (2004). As the panel itself recognized (Pet. App.

119a-120a; see zd. at 102a n.1), the D.C. Circuit is the only

court of appeals to hold that disgorgement is categorically

unavailable under Section 1964(a), regardless of the facts.

In Carson, the Second Circuit held that “disgorgement

is among the equitable powers available to the district

court” under Section 1964(a), and concluded that disgorge-

ment may be ordered if “the gains are being used to fund or

promote the illegal conduct, or constitute capital available

for that purpose.” 52 F.3d at 1181-1182. In Richard, the

Fifth Circuit agreed that “disgorgement is generally avail-

able under § 1964,” and similarly stated that disgorgement

may be ordered to prevent future statutory violations. 355

F.3d at 354-355. This Court’s decisions do not sanction the

limitations on disgorgement identified in Carson and Rich-

ard. But regardless of those limitations, the Second and

Fifth Circuit decisions cannot be reconciled with the D.C.

Circuit’s holding that disgorgement is, as a matter of law,

unavailable under Section 1964(a).

2. The D.C. Circuit’s decision is also inconsistent with

decisions of other courts of appeals applying the principles

of Porter and Mitchell in other contexts. As Judge Tatel

explained (Pet. App. 157a), those courts have repeatedly

held that grants of equitable authority similar to that in

Section 1964(a) do not restrict a federal court’s power to

order equitable disgorgement or restitution. See, e.7.,

United States v. Universal Mgmt. Servs., Inc., 191 F.3d

750, 760 (6th Cir. 1999) (grant of jurisdiction in the Federal

Food, Drug, and Cosmetic Act (FFDCA) “to restrain” vio-

lations authorizes disgorgement and restitution), cert. de-

nied, 5380 U.S. 1274 (2000); FTC v. Gem Merch. Corp., 87

F.3d 466, 469 (11th Cir. 1996) (authorization “to enjoin”

violations of the Federal Trade Commission Act does not

restrict power to order disgorgement); SEC v. First City

Fin. Corp., 890 F.2d 1215, 1230 (D.C. Cir. 1989) (provisions

of Securities Exchange Act enabling court “to enjoin” viola-

tions, 15 U.S.C. 78u(d)(1), encompasses power to order dis-

gorgement); ICC v. B&T Transp. Co., 613 F.2d 1182, 1183-

1184 (1st Cir. 1980) (provision of Motor Carrier Act of 1980

empowering ICC “to seek only prospective injunctions to

restrain future conduct” encompasses restitution); CF'TC v.

Hunt, 591 F.2d 1211, 1223 (7th Cir. 1979) (absent express

restriction, Commodity Exchange Act (CEA) authorizes

order compelling disgorgement of illegally obtained prof-

its); 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).

Decisions of courts of appeals since the D.C. Circuit

rendered its controlling decision in this case in 2005 further

underscore the anomaly of its approach. For instance, the

Eleventh Circuit has since followed Porter and Mitchell to

hold that Congress’s grant of jurisdiction “to enjoin” viola-

tions of the CEA “carries with it the full range of equitable

remedies, among which is the power to grant restitution.”

CFTC v. Wilshire Inv. Mgmt. Co., 531 F.3d 1339, 1344

(2008). The Third Circuit has likewise held that the

FFDCA, which confers jurisdiction “to restrain violations,”

authorizes an order compelling restitution. United States

v. Lane Labs-USA Inc., 427 F.3d 219, 223-225 (2005). And

the Tenth Circuit, specifically rejecting the D.C. Circuit’s

premise that disgorgement is a wholly backward-looking

remedy, has held that the FFDCA authorizes disgorgement

of ill-gotten gains. United States v. Rx Depot, 438 F.3d

1052, 1058 & n.4, 1061, cert. denied, 549 U.S. 817 (2006).

Those recent decisions both underscore the error of the

court of appeals’ interpretive approach and heighten the

need for this Court’s review.

C. The Court Of Appeals Incorrectly Decided An Issue Of Ex-

ceptional Importance

As this Court has explained, Congress sought to curtail

the “revenue and power” that RICO violators derive from

their illegal conduct, and it therefore provided remedies

that would allow “an attack * * * on their source of eco-

nomic power itself.” Turkette, 452 U.S. at 592 (quoting

Senaie Report 79). Section 1964(a) accordingly grants

courts authority to craft “equitable relief broad enough to

do all that is necessary” to address “the economic base” of

RICO violators and to “free the channels of commerce from

all illicit activity.” Senate Report 79.

This Court’s decision in Turkette recognized that Sec-

tion 1964 empowers courts “to divest the association of the

fruits of its ill-gotten gains.” 452 U.S. at 585. The court of

appeals nonetheless held that disgorgement is categorically

unavailable precisely because it is “aimed at separating the

criminal from his prior ill-gotten gains.” Pet. App. 117a.

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. And the court of appeals’ further rejection of

the proposed smoking-cessation and education remedies

frustrates the courts’ ability to redress the continued ef-

fects of RICO violations. The court of appeals’ decision

therefore has potentially far-reaching implications for

RICO cases generally.

In addition, the court of appeals’ imposition of rigid limi-

tations on the broad and flexible remedial authority in-

tended by Congress under Section 1964(a) raises a question

of preeminent importance in the context of this case. The

findings sustained by the court of appeals establish that, for

half a century, respondents participated in the conduct of

the affairs of an enterprise with “the common purpose of

obtaining cigarette proceeds by defrauding existing and

potential smokers” about the health effects and addictive-

ness of cigarettes. Pet. App. 25a. Their “efforts to deny

and distort the scientific evidence of smoking’s harms are

demonstrated by not only decades of press releases, re-

ports, booklets, newsletters, television and radio appear-

ances, and scientific symposia and publications, but also by

evidence of their concerted[] efforts to attack and under-

mine the studies in mainstream scientific publications.” 449

F. Supp. 2d at 855. These public statements were not

merely false or misleading; they were “clearly and deliber-

ately false”: “[Respondents] knew of their falsity at the

time and made the statements with the intent to deceive.”

Pet. App. 41a-42a.

At the same time, the manufacturers “marketed and

promoted their low tar brands to smokers—who were con-

cerned about the health hazards of smoking or considering

quitting—as less harmful than full flavor cigarettes despite

either lacking evidence to substantiate their claims or

knowing them to be false.” Pet. App. 6a. And based on

their extensive research regarding the ways in which “the

physical and chemical design parameters of cigarettes influ-

ence the delivery of nicotine to smokers,” respondents “en-

gineered their products around creating and sustaining this

addiction.” Jbid.; see also 2d. at 34a-35a. As a result of

their intentional deception, respondents’ “efforts have been

successful” both in dissuading low tar smokers from quit-

ting (notwithstanding their “greater desire to quit”), 449 F’.

Supp. 2d at 860, and in “dramatically increas[ing] their

sales of low tar/light cigarettes.” Pet. App. 322a-323a; see

p. 5, supra.

The smoking-cessation and public-education remedies

precluded by the court of appeals would directly remedy

the “extremely successful scheme to increase [respon-

dents’] revenues at the expense of smokers, potential smok-

ers, and the American public” and, as the district court con-

cluded, “would unquestionably serve the public interest.”

Pet. App. 391a-392a, 399a. Such remedies are essential to

complete relief in this case. The human and economic con-

sequences of respondents’ actions are difficult to overstate.

“More than 400,000 people die each year from to-

bacco-related illnesses, such as cancer, respiratory ill-

nesses, and heart disease, often suffering long and painful

deaths.” FDA v. Brown & Williamson Tobacco Corp., 529

U.S. 120, 134 (2000) (citation omitted). “Tobacco alone kills

more people each year in the United States than acquired

immunodeficiency syndrome (AIDS), car accidents, alcohol,

homicides, illegal drugs, suicides, and fires, combined.” /d.

at 134-135 (citation omitted). Because nicotine is so addic-

tive, the serious health effects of respondents’ massive

fraud, along with respondents’ ability to continue profiting

from that conduct, will persist indefinitely absent relief

such as the smoking-cessation and public-education reme-

dies.

Under the text of RICO-and the Court’s decisions in

Porter and Mitchell, the district court has the equitable

authority to “divest the association of the fruits of its

ill-gotten gains,” Turkette, 452 U.S. at 585, and to rectify

“the continuing effects of past illegal conduct” on smokers

addicted through fraud and on respondents’ continued abil-

ity to profit from their past wrongs, Pet App. 92a. The

Court’s review is warranted to resolve the conflict between

the decision below and this Court’s decisions in Porter and

Mitchell; to resolve the conflicts among the court of appeals

on the scope of equitable relief, both under RICO and more

generally; and to restore to the district court the discretion

required to fashion appropriate remedies for respondents’

sustained and extensive violations of RICO.

® The exceptional importance of remedies such as those has not been

altered by Congress’s recent enactment of the Family Smoking Pre-

vention and Tobacco Control Act (FSPTCA), Pub. L. No. 111-31, Div.

A, 123 Stat. 1776 (to be codified in part at 21 U.S.C. 387 et seq.). Al-

though the FSPTCA provides, inter alia, for the prospective regulation

of tobacco products in certain respects, it does not address the ongoing

effects of respondents’ scheme to defraud, and Congress specifically

directed that “{nJothing in th{e] [FSPTCA] * * * shall be construed

to— * * * affect any action pending in Federal * * * court.” Jd

§ 4(a), 123 Stat. 1782.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.