SUPPLEMENTAL DISCLOSURE OF DEFENDANT LORILLARD TOBACCO COMPANY’S CORPORATE AFFILIATIONS AND FINANCIAL INTERESTS

June 30, 2015 2:42 pm by Gene Borio

The PDF is Here

EXCERPT:

We, the undersigned counsel of record for Defendant R.J. Reynolds Tobacco Company . . . certify that, to the best of our knowledge and belief, LTC has ceased to exist as a separate entity. For that reason, LTC has no companies, subsidiaries, or affiliates that have any outstanding securities in the hands of the public, nor does any company own at least 10% of the stock of LTC.

END EXCERPT

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Judge Kessler’s Status Hearing: What a Difference a Month Makes…

June 30, 2015 12:22 pm by Gene Borio

June 30, 2015. At the 20-minute hearing this morning, Judge Kessler wanted 2 issues addressed in light of the May 22, 2015 Court of Appeals ruling which struck down the self-vilifying language in the preambles of the corrective statements (The PDF is Here):

1. The new language; and

2. The formatting/placement, display, fonts, etc. (If in the final version, the sentence is shorter that before, for example, the DOJ would want the text in a newspaper ad, say, to expand to fill the same amount of space.)

Kessler began the hearing expressing her desire to have the parties’ briefs submitted by Aug. 1, hopefully preceded by the parties getting together to agree on most issues.

However, both sides had their own ideas of how to handle the issues, the DOJ’s taking one month or more, the Defendants’ taking 3 months and involving Special Master Levy.

Finally, seemingly fed up with the time the case has taken already, and with pleas about the rigors of adhering to a “summer schedule” ringing in her ears, Judge Kessler had pretty much heard enough. She said, basically, “Look, it’s ONE SENTENCE, you’re all lawyers, you could get this done in a DAY.”

So what happens now? Good question. Expect an order soon.

PS: All this would be precluded, of course, by any surprise appeal by the higher-ups at the DOJ (last date to appeal: Mon, 7/6).

PPS: Judge Kessler did mention one other “very complex” issue that has yet to be dealt with. Intervenors’ lawyer Howard Crystal noted that that issue was undoubtedly the Point of Sale displays of the corrective statements–which the convenience store industry is up in arms about.)

USA, DOJ, APPELLEES v. PHILIP MORRIS USA INC., ET AL., APPELLANTS (PDF) 5/22/15

June 30, 2015 12:15 pm by Gene Borio

The PDF is Here

EXCERPT:

The preamble might provide an effective—perhaps even the very best—means of curing consumer misconception and preventing consumer deception going forward. Were this an enforcement proceeding brought by the Federal Trade Commission, an action that permits remedies intended to “dissipate future effects of a company’s past wrongful conduct,” the preamble might well represent a proper exercise of the court’s remedial power. But this is a civil RICO case, and as we have explained, that statute empowers district courts to issue injunctions for one purpose and one purpose only: to prevent and restrain future RICO violations. Correcting consumer misinformation, which “focuse[s] on remedying the effects of past conduct,” is thus an impermissible objective under RICO. Seeking to prevent consumer deception is similarly impermissible because, although forward-looking, it focuses not on restraining the RICO violator, but on safeguarding consumers against RICO violations. . . .

For the reasons set forth above, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

END EXCERPT

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ORDER #57-Remand: the Parties shall appear at a Status Conference on June 30, 2015, at 10:45 a.m

June 21, 2015 9:24 am by Gene Borio

The PDF is Here

EXCERPT:

More than 8 years ago, this Court enjoined the Defendants from presenting any false or misleading information about cigarettes and smoking to the public, and ordered them to make corrective disclosures on five topics about which the Court found they had made fraudulent public claims. While the Court of Appeals upheld the substance of those five disclosures, it also concluded that the introductory language to them could not be justified because they “reveal nothing about cigarettes; instead, they disclose defendants’ prior deceptive conduct. Accordingly, they cannot be justified on the basis of [that Court’s] 2009 opinion.”United States v. Philip Morris USA Inc., No. 13-5028, 2015 WL 2445064, at *9 (D.C. Cir. May 22, 2015) (emphasis in original). The Court ruled that “[e]ven if the preambles [to the disclosures] would discourage cigarette manufacturers from falsely marketing cigarettes by arming consumers against misinformation, thus making RICO violations unprofitable[,] . . . ‘[s]uch a remedy [would] reach [] beyond the bounds of section 1964(a), which authorizes the district court to order injunctions [only] to prevent and restrain fraudulent statements about smoking and health and addic.tion. “‘ Philip Morris, 2015 WL 2445064, at *10 (quoting United States v. Philip Morris USA Inc., 566 F.3d 1095, 1149 (D.C. Cir. 2009)). However, “[t]he bulleted statements will achieve this goal because they ‘reveal[] the previously hidden truth about [the manufacturers’] products . . . .’ The preambles, however do no such thing and may not be justified on grounds of general deterrence.” Id. (emphasis in original).

In order to comply with the Court of Appeals’ remand for further proceedings in accordance with its Opinion, the Court hereby

ORDERS, that the Parties shall appear at a Status Conference on June 30, 2015, at 10:45 a.m., to discuss briefing and scheduling of future submissions.

END EXCERPT

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DOCKET for USA v. PHILIP MORRIS USA, et al Jun 9-Jun 21, 2015

June 21, 2015 8:43 am by Gene Borio

Date Filed # Docket Text

06/11/2015 6153 ORDER #57-Remand: the Parties shall appear at a Status Conference on June 30, 2015, at 10:45 a.m., to discuss briefing and scheduling of future submissions (see Order for details). Signed by Judge Gladys Kessler on 6/11/15. (CL) (Entered: 06/11/2015)

06/11/2015 Set/Reset Hearings: Status Conference set for 6/30/2015 10:45 AM in Courtroom 26A before Judge Gladys Kessler. (CL) (Entered: 06/11/2015)

06/15/2015 6154 NOTICE of Closing of Transaction by R.J. REYNOLDS TOBACCO COMPANY (Francisco, Noel) (Entered: 06/15/2015)

06/15/2015 6155 NOTICE REGARDING TRANSFER OF CERTAIN CIGARETTE BRANDS AND BUSINESSES TO ITG BRANDS, LLC PURSUANT TO ORDER #56 - REMAND by COMMONWEALTH BRANDS INCORPORATED, Commonwealth Altadis, ITG Brands, LLC (McCallum, Elizabeth) (Entered: 06/15/2015)

06/15/2015 6156 NOTICE of Appearance by Jeffrey A. Mandell on behalf of R.J. REYNOLDS TOBACCO COMPANY (Mandell, Jeffrey) (Entered: 06/15/2015)

DOCKET for USA v. PHILIP MORRIS USA, et al May 28-Jun 8, 2015

June 8, 2015 3:52 pm by Gene Borio

Date Filed # Docket Text

06/01/2015 6149 RESPONSE TO ORDER OF THE COURT re 6146 Order, filed by ALTRIA GROUP, INC., PHILIP MORRIS USA INC.. (Estrada, Miguel) (Entered: 06/01/2015)

06/04/2015 6150 RESPONSE TO ORDER OF THE COURT re 6146 Order, filed by UNITED STATES OF AMERICA, PUBLIC HEALTH INTERVENORS, LORILLARD TOBACCO COMPANY, ITG BRANDS, LLC, COMMONWEALTH BRANDS, INC., COMMONWEALTH-ALTADIS, INC., and filed by R.J. REYNOLDS TOBACCO COMPANY. (Francisco, Noel) (Entered: 06/04/2015)

06/08/2015 6151 ORDER #56-Remand granting 6142 the Unopposed Motion for Order Authorizing Transfer of Certain Cigarette Brands and Businesses to ITG Brands, LLC, Pursuant to Order #1015, Paragraph 20. Signed by Judge Gladys Kessler on 6/8/15. (Attachments: # 1 Exhibit A) (CL) (Entered: 06/08/2015)

06/08/2015 6152 MEMORANDUM OPINION to Order #56-Remand. Signed by Judge Gladys Kessler on 6/8/15. (CL) (Entered: 06/08/2015)

Exhibit A: ONSERT SPECIFICATIONS: RJR Brands & Lorillard Maverick Brand

June 8, 2015 3:47 pm by Gene Borio

The PDF is Here

Post -Judgment Parties: Regarding Remedies. MEMORANDUM OPINION 6/8/15

June 8, 2015 3:41 pm by Gene Borio

The PDF is Here

EXCERPT:

Based upon the clear and comprehensive assurances by all counsel, as well as the Court’s own detailed scrutiny of the Parties’ submissions, the Court concludes that Order # 1015 will continue to apply as originally intended and the public interest will not be harmed by granting the Unopposed Motion. Therefore, for the forgoing reasons, the Unopposed Motion for an Order Authorizing Transfer of Certain Cigarette Brands and Businesses to ITG Brands LLC, Pursuant to Order #1015, Paragraph 20 [Dkt. No. 6142] shall be granted.

END EXCERPT

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ORDER #56 Remand 6/8/15

June 8, 2015 3:30 pm by Gene Borio

The PDF is Here

EXCERPT:

4. ITG Brands submits to the jurisdiction of this Court concurrently with its acquisition by sale or transfer of the Acquired Brands, brand names, cigarette product formulas, or cigarette businesses.

a. In the “Phase 1 website preamble,” as defined in Order-#51 Remand (at 11), such Website Corrective Statements shall contain the following preamble language:

A Federal Court has ruled that Altria, Philip Morris USA, R.J. Reynolds Tobacco (the previous maker of Winston, Salem, [and ]Kool[, and Doral] 1), and Lorillard (the previous maker of Maverick) deliberately deceived the American public and ordered these statements. Here is the truth:

• Health effects of smoking

• Addictiveness of smoking and nicotine

• Falsely selling and advertising low-tar and light cigarettes as less harmful than regular cigarettes

• Designing cigarettes to enhance the delivery of nicotine

• Health effects of secondhand smoke

• Para informacion en espanol, clic aquz”‘

13. ITG Brands, Commonwealth, Commonwealth-Altadis, Covered Subsequent Affiliates, and any Covered Persons and Entities will comply prospectively with the remedial obligations associated with Document Disclosure in Depositories and on Websites, as set forth in Order #1015, § II.C, and modified by Order #1021, and Order #27-Remand.

END EXCERPT

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JOINT RESPONSE TO ORDER #54-REMAND 6/4/15

June 4, 2015 4:45 pm by Gene Borio

The PDF is Here

EXCERPT:

the answer is No: The FTC action does not in any way affect the information and assurances given to the Court at the May 19 hearing. In fact, the information and assurances provided to the Court, both with the April 30 filings and during the May 19 hearing, were in anticipation of the FTC’s action and are fully consistent with it. . . .

Because the parties to the transaction intend to proceed expeditiously to closing upon receipt of
this Court’s approval, RJRT, LTC, and ITG Brands, LLC, respectfully request that the Court
grant the pending (Proposed) Unopposed Order (Dkt. No. 6142-1, filed April 30, 2015), as soon
as possible. No other party objects to this request.

END EXCERPT

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