The Washington Post

WASHINGTON — A federal judge on Thursday dismissed a large part of the Justice Department’s civil lawsuit against the tobacco industry, but cleared the way for the government to move forward with its claim that the industry violated federal racketeering laws by conspiring to mislead the public about the dangers of smoking.

U.S. District Judge Gladys Kessler ruled that the Justice Department could not seek to recover billions of dollars in smoking-related health care costs. But she said it could continue efforts to seize billions of dollars in tobacco profits under the racketeering statute.

"In sum, while the government’s theories of liability have been limited, the extent of defendant’s potential liability remains, in the estimation of both parties, in the billions of dollars," Kessler wrote in a 56-page ruling.

Tobacco industry officials had asked Kessler to throw out the entire case, saying it was built on flawed legal theories. They said Thursday that Kessler’s decision is a "step in the right direction" and predicted they ultimately will prevail.

The Justice Department said the preservation of the racketeering count means the government still will be able to attack the industry’s "fraudulent conduct."

Northeastern University law professor Richard Daynard, a longtime opponent of the tobacco industry who heads the Tobacco Products Liability Project, contended that Kessler actually did the government a favor by dismissing the shakiest elements of its case. "I’m delighted," Daynard said. "I think she made the case bulletproof."

Prodded by President Clinton, the Justice Department filed the lawsuit one year ago, naming nine tobacco companies and two industry groups as defendants. From the start, Attorney General Janet Reno and others said a primary goal was to recover billions of dollars spent to treat smoking-related diseases by the Medicare program and other government health plans covering veterans and federal employees. The other chief goal was to gain control of profits earned in what they contended was a 45-year conspiracy by the industry to cover up health risks and market its products to children.

Defendants in the case include: Philip Morris Inc.; Philip Morris Companies Inc.; R.J. Reynolds Tobacco Co.; Brown &amp Williamson Tobacco Corp.; Lorillard Tobacco Co.; American Tobacco Co.; British-American Tobacco Industries PLC; British-American Tobacco (Investments) Ltd.; the Council for Tobacco Research, and the Tobacco Institute Inc.