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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2010
- **Citation:** 561 U.S. 1025

## Text

S
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

ee

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)

2

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

3

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

4

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

D

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-

6

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

7

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-

8

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.

;
u}

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).

10

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.

11

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.

12

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-

13

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-

14

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

15

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).

16

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

17

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.

18

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).

19

“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

20

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.

21

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

22

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-

23

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).

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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.

oz

CONCLUSION
The petition for a writ of certiorari should be granted.
Respectfully submitted.
ELENA KAGAN
Solicitor General
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

FEBRUARY 2010

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1615%3A1. Public record. Not legal advice.