United States v. Philip Morris USA

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA, : : Plaintiff, : : Civil Action No. v. : 99-2496 (GK) : PHILIP MORRIS USA, Inc., : et al. : : Defendants. :

MEMORANDUM OPINION

This civil action brought by the United States under the

Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18

U.S.C. §§ 1961-1968, is now before the Court on Defendants’ Motion

to Clarify Order #1015 Concerning Enforceability [Dkt. No. 5896].

Upon consideration of the Motion, Oppositions, Reply, and the

entire record herein, and for the reasons stated below, Defendants’

Motion to Clarify is denied.

I. BACKGROUND

On August 17, 2006, this Court issued a lengthy opinion

finding that all Defendants “(1) have conspired together to violate

the substantive provisions of RICO, pursuant to 18 U.S.C. §

1962(d), and (2) have in fact violated those provisions of the

statute, pursuant to 18 U.S.C. § 1962(c).” United States v. Philip

Morris USA, Inc., et al., 449 F. Supp. 2d 1, 26 (D.D.C. 2006). In

particular, the Court held that Defendants “knowingly and

intentionally engaged in a scheme to defraud smokers and potential smokers, for purposes of financial gain, by making false and

fraudulent statements, representations, and promises.” Id. at 852.1

Accordingly, the Court imposed a number of injunctive measures

in order to prevent future violations of RICO. Id. at 937-945. On

May 22, 2009, the Court of Appeals for the District of Columbia

Circuit affirmed this Court’s judgment of liability and affirmed

major provisions in its Remedial Order. United States v. Philip

Morris USA, Inc., et al., 566 F.3d 1095, 1150 (D.C. Cir. 2009),

cert. denied, 130 S. Ct. 3501 (2010). The Court of Appeals remanded

the case with directions to address four discrete remedial issues.2

While the case has been an remand for consideration of the

issues specified by the Court of Appeals, Defendants have presented

a litany of other arguments for clarifying, limiting,

reformulating, or entirely vacating this Court’s factual findings

1 The extensive factual findings of the Court may be found at Philip Morris, 449 F. Supp. 2d at 34-851. 2 The Court of Appeals remanded the case with directions to (1) evaluate the extent to which Brown & Williams Holdings is reasonably likely to commit future violations; (2) determine which subsidiaries of the Defendants should be included in the remedial order; (3) reformulate the prohibition on the use of health messages or descriptors to exempt foreign activities that have no substantial, direct, and foreseeable domestic effects; and (4) consider the rights of innocent third parties and clarify accordingly the remedial order’s provisions regarding point-of-sale displays. Philip Morris, 566 F.3d at 1150. The Court of Appeals also ordered this Court to dismiss CTR and TI from the suit, as those organizations had dissolved, id., and that was done in Order #7-Remand [Dkt. No. 5846]. The Court has already addressed the first two issues, in Orders #7-Remand and #13-Remand [Dkt. No. 5877].

2 and Remedial Order, Order #1015. In the Motion currently before the

Court, Defendants request that language be added to Order #1015

that “(1) clarifies that this Court has exclusive jurisdiction to

enforce Order #1015; (2) confirms that only the Government may seek

to enforce Order #1015 absent leave of Court; and (3) requires the

parties to meet and confer pursuant to LCvR 7(m) before motions to

enforce Order #1015 are filed, absent exigent circumstances.”

Defs.’ Mot. 1-2. To serve these purposes, Defendants propose that

the Court add the following provision to Order #1015:

V. Enforcement

22. This Court retains exclusive jurisdiction over this case for the purpose of issuing such further orders or directions as may be necessary or appropriate for the construction or carrying out of this Order, for the modification of any of the provisions thereof, for the enforcement of compliance therewith, and for the punishment of any violation thereof. Only Plaintiff and Defendants may seek to enforce the provisions of this Order without leave of Court to do so. Before seeking to enforce the provisions of this Order, Plaintiff and any affected Defendant shall comply with LCvR 7(m) by conferring in good faith in an attempt to narrow or resolve any issues raised without Court intervention; provided, however, Plaintiff may in its discretion seek to enforce this Order without first complying with LCvR 7(m) if it concludes that emergent circumstances require immediate enforcement action.

Id. at 2-3.

Defendants filed their Motion on March 24, 2011. On April 25,

2011, the Government (“Gov.’s Opp’n”) [Dkt. No. 5926] and the

3 Public Health Intervenors (“PHI’s Opp’n”) [Dkt. No. 5927] filed

separate Oppositions. On April 5, 2011, Defendants filed their

Reply [Dkt. No. 5928].

II. STANDARD OF REVIEW

The parties disagree, as an initial matter, as to what

standard of review should govern Defendants’ Motion. Intervenors

argue that Defendants’ Motion should be reviewed under Federal Rule

of Civil Procedure 60(b), because “Defendants plainly seek to

modify the Order.” PHI’s Opp’n 5 (emphasis in original). Defendants

respond that no rule governs their Motion because “Defendants’

motion is in fact a classic motion for clarification.” Defs.’ Mot.

3.

Defendants are correct that there is no Federal Rule of Civil

Procedure specifically governing “motions for clarification.” The

question, however, is whether Defendants’ Motion is properly

construed as a motion seeking relief from a judgment or order under

Rule 60(b). U.S. v. Hart, 933 F.2d 80, 84 (1st Cir. 1991)

(“prolific case law across the circuits maintains that a title

given to a motion . . . does not control its meaning.”); Catz v.

Chalker, 566 F.2d 839, 841 (9th Cir. 2009).

On the one hand, Intervenors observe that a number of courts

have interpreted a “motion for clarification” as a Rule 60(b)

motion. See PHI’s Opp’n 5; Napoli v. Town of New Windsor, 600 F.3d

160, 170 (2d Cir. 2010); In re Walter, 282 F.3d 434, 439 (6th Cir.

4 2002); see also Vaughn v. Laurel Cnty. Jail, 85 F.3d 630, 1996 WL

254660, at *1 (6th Cir. May 14, 1996) (motion for clarification

reviewed under Rule 60(b) because “[a]ny post-judgment motion that

asks for relief other than correction of a purely clerical error

and which is filed more than ten days after entry of judgment is

treated as a Rule 60(b) motion.”).

On the other hand, Defendants point to other cases in which

courts have ruled on a motion for clarification without resort to

Rule 60(b) standards. See Defs.’ Reply 4; Int’l Rectifier Corp. v.

Samsung Electronic Co. Ltd., 361 F.3d 1355, 1359-62 (Fed. Cir.

2004); Pimentel v. Dreyfus, No. C11-119 MJP, 2011 WL 1085886, at

*3-4 (W.D. Wash. Mar. 22, 2011); Knighten v. Palisades Collections,

LLC, No. 09-CIV-20051, 2011 WL 835783, at *3 (S.D. Fla. Mar. 4,

2011); Potter v. District of Columbia, 382 F. Supp. 2d 35, 42

(D.D.C. 2005).

The Court concludes that, viewed in the context of this case

as a whole, Defendants’ Motion is best understood as a motion

seeking relief from a judgment or order under Rule 60(b), rather

than as a motion for clarification as that terminology is generally

used. “The general purpose of a motion for clarification is to

explain or clarify something ambiguous or vague, not to alter or

amend.” Resolution Trust Corp. v. KPMG Peat Marwick, et al., No.

92-1373, 1993 WL 211555, at *2 (E.D. Pa. June 8, 1993) (finding

that “Peat Marwick does not seek a motion for clarification but

5 rather asks the court to alter its previous ruling and make

findings of fact.”). It is significant that Defendants fail to

identify anywhere in their Motion which provisions of Order #1015

are “ambiguous” or “vague.” Rather, what Defendants seek is to add

new language to Order #1015 containing new declarations of law.

Further, unlike the motions for clarification in the cases

cited by Defendants, their Motion does not ask the Court to

construe the scope of its Order by applying it in a concrete

context or particular factual situation. See Int’l Rectifier, 361

F.3d at 1359-62 (holding that the district court abused its

discretion by refusing to grant a “motion to clarify, vacate, or

modify” its injunction when that court had impermissibly expanded

its scope to cover certain extraterritorial activity); Knighten,

2011 WL 835783, at *3 (granting motion to clarify whether the

court’s summary judgment order entitled plaintiff to statutory

damages and attorney’s fees); Potter, 382 F. Supp. 2d at 42

(granting a motion to clarify whether the “rather vague

prohibitions” of a preliminary injunction applied to defendant’s

specific conduct);3 see also Regal Knitwear Co. v. Nat’l Labor

Relations Bd., 324 U.S. 9, 15, 65 S.Ct. 478, 481-82, 89 L.Ed. 661

(1945) (“we think courts would not be apt to withhold a

3 Defendants’ citation to Pimentel v. Dreyfus, supra, is unpersuasive, since the court simply granted the plaintiff’s uncontested motion for clarification. 2011 WL 1085886, at *3.

6 clarification in the light of a concrete situation that left

parties . . . in the dark as to their duty toward the court.”).

Instead, as discussed below, Defendants request that the Court

modify Order #1015 by announcing a series of abstract and far-

reaching legal determinations in order to preempt potential future

litigation. Defendants do not seek clarification of any language in

the Court’s Order. Rather, they ask the Court to issue advisory

determinations on complex issues affecting the jurisdiction of

federal and state courts based on legal arguments raised neither at

the remedial phase of the litigation nor in any concrete context.

See United States. v. W. Elec. Co., Inc., 46 F.3d 1198, 1202 (D.C.

Cir. 1995) (Modifications at the request of the enjoined party

relieving it of the decree’s constraints “come within Rule

60(b)(5). . . .”); Napoli, 600 F.3d at 170 (motion for

clarification “on several issues that the district court had not

addressed in its previous order” construed under Rule 60).4 Because

4 Defendants argue that because the Court recently granted a Motion for Clarification by the Government, the Government cannot “credibly maintain that this Court must apply to it a more exacting standard than the Government itself so recently secured from this Court.” Def.’s Reply 3; see United States v. Philip Morris USA Inc., F. Supp. 2d , no. 99-2496, 2011 WL 1479917 (D.D.C. April 19, 2011). The differences between the Government’s Motion and the Defendants’ Motion merely highlight why Defendants’ Motion is properly considered under Rule 60(b).

Unlike Defendants’ “Motion for Clarification,” the Government’s Motion sought to resolve a disagreement between the parties “about the meaning of certain language contained” in Order #1015. Id. at *1. Specifically, parties disagreed over “(1) what (continued...)

7 Defendants do not seek clarification of any vague or ambiguous

portion of Order #1015 but do seek the addition of language which

could substantially restrict enforcement of the Order, the Court

will consider Defendants’ Motion under Rule 60.5

Defendants’ Motion may be considered under two provisions of

Rule 60(b).6 Rule 60(b)(5) provides, in relevant part, that a

district court may grant relief from a final order if “applying it

prospectively is no longer equitable.” Fed. R. Civ. P. 60(b)(5)

(2011). The Supreme Court has held that “it is appropriate to grant

a Rule 60(b)(5) motion when the party seeking relief from an

injunction or consent decree can show ‘a significant change either

in factual conditions or in law.’” Agostini v. Felton, 521 U.S.

203, 215, 117 S. Ct. 1997, 138 L.Ed.2d 391 (1997) (quoting Rufo v.

Inmates of Suffolk County Jail, 502 U.S. 367, 384, 112 S. Ct. 748,

4 (...continued) categories of data Defendants are required to provide; and (2) whether the Department of Justice may share the data with other Government agencies.” Id. Hence, the Government’s Motion concerned the scope of particular language in Order #1015 in the specific context of Defendants’ compliance with the Order’s disclosure requirements. See W. Elec. Co., Inc., 46 F.3d at 1202. 5 The Court has previously determined that “Rule 54(b) has no applicability to this case, since appeals have been exhausted and the judgment of liability has been affirmed by the Court of Appeals.” United States v. Philip Morris USA, Inc., —F. Supp. 2d—, no. 99-2496, 2011 WL 1252662, at *3 (D.D.C. Mar. 28, 2011). 6 Intervenors agree that either Rule 60(b)(5) or 60(b)(6) may apply. PHI’s Opp’n 5-6.

8 116 L.Ed.2d 867 (1992)); see also Potter v. District of Columbia,

558 F.3d 542, 554 (D.C. Cir. 2009).7

Rule 60(b)(6) permits a district court to grant relief from a

final order for “any other reason that justifies relief.” Fed. R.

Civ. P. 60(b)(6)(2011). The Supreme Court has held that only

extraordinary circumstances can justify relief under this section.

Ackermann v. United States, 340 U.S. 193, 199-202, 71 S. Ct. 209,

95 L.Ed. 207 (1950); Agostini v. Felton, 521 U.S. 203, 239, 117

S.Ct. 1997, 2018, 138 L.Ed.2d 391 (1997). Our Court of Appeals has

recently emphasized that the Rule “‘should be only sparingly used’

and may not ‘be employed simply to rescue a litigant from strategic

choices that later turn out to be improvident.’” Salazar v.

District of Columbia, 633 F.3d 1110, 1120 (D.C. Cir. 2011) (quoting

Kramer v. Gates, 481 F.3d 788, 792 (D.C. Cir. 2007)).

III. ANALYSIS

As noted above, Defendants propose inserting a paragraph

entitled “Enforcement” into Order #1015. This paragraph would, in

fact, include language addressing three separate issues: (1)

whether this Court has exclusive jurisdiction to enforce Order

#1015; (2) whether only the Government may seek to enforce Order

#1015; and (3) whether the parties must meet and confer before the

7 This Potter decision affirmed a different ruling by the same district court cited above, supra at p. 5. See Potter v. District of Columbia, Nos. 01-1189 (JR), 05-1792 (JR), 2007 WL 2892685 (D.D.C. Sept. 28, 2007), aff’d, 558 F.3d 542.

9 Government seeks to enforce Order #1015. Each issue will be

addressed in turn.

A. Jurisdiction to Enforce Order #1015

Defendants first propose that Order #1015 be modified to

provide that:

This Court retains exclusive jurisdiction over this case for the purpose of issuing such further orders or directions as may be necessary or appropriate for the construction or carrying out of this Order, for the modification of any of the provisions thereof, for the enforcement of compliance therewith, and for the punishment of any violation thereof.

Defs.’ Mot. 2. Defendants argue that such a pronouncement is

necessary because plaintiffs in In re Engle Progeny Cases Tobacco

Litig.: Claudette Campbell, et al., No. 09-CA-000493 (Cir Ct., 13th

Judicial Cir., Hillsborough Co., Fla.), who have sued some of the

same companies who are in this case, have argued that these

Defendants should be precluded from advancing certain arguments on

the ground that those arguments “would somehow contravene the

requirements imposed by this Court’s injunctions.” Defs.’ Reply 5.

Defendants reason that, since “the law is clear that only the court

that issues an injunction may enforce it,” this Court should add to

Order #1015 the language quoted above prohibiting any other court

from enforcing its injunction. Defs.’ Mot. 3.8

8 If judges included broad statements of well-accepted legal principles in every Order they signed, the Federal Supplement would (continued...)

10 Defendants’ argument is unpersuasive for two reasons. First,

Defendants offer no authority to support the broad contention that

a court either could or should enjoin other courts from relying

upon its rulings. Defendants merely provide case law that stands

for the well established principles that (1) a court always retains

jurisdiction to modify its own injunction; and (2) a contempt

motion for violation of an injunction is properly brought before

the court that issued that injunction. See, e.g., W. Elec. Co., 46

F.3d at 1202 (courts have jurisdiction to modify their own

injunctions); Baker v. Gen. Motors Corp., 522 U.S. 222, 236, 118

S.Ct. 657, 665, 139 L.Ed.2d 580 (1998) (“Sanctions of violations of

an injunction . . . are generally administered by the court that

issued the injunction.”).

Second, and perhaps more importantly, Defendants seek a

blanket ruling as to the effect of this Court’s Order #1015 outside

of any specific context. If, as Defendants contend, the law is

clear that other courts may not in any way enforce this Court’s

injunction, they are free to make that argument at an appropriate

time, before the appropriate court, in a specific factual context.

This Court will not issue an abstract advisory opinion as to the

enforceability of Order #1015, especially without the benefit of

any factual or procedural context. See, e.g., Hall v. Beals, 396

8 (...continued) be far lengthier than it already is.

11 U.S. 45, 48, 90 S.Ct. 200, 202, 24 L.Ed.2d 214 (1969) (courts

should “avoid advisory opinions on abstract propositions of law.”);

Chamber of Commerce v. EPA, F.3d , No. 09-1237, 2011 WL

1601753, at *4 (D.C. Cir. Apr. 29, 2011) (“federal courts are

without authority ‘to render advisory opinions. . . .’”) (quoting

Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 2334, 45

L.Ed.2d 272 (1975)).9 In sum, Defendants have failed to demonstrate

any change in fact or law, or any other extraordinary circumstance

that would justify modifying Order #1015 to include this Court’s

opinion on the jurisdiction of other courts to consider the effect

of Order #1015 on their individual cases.10 Id.

B. Standing to Enforce Order #1015

Defendants next request that the Court amend Order #1015 to

specify “that only the Government has standing to request

enforcement of the injunctive remedies imposed by Order #1015.”

Defs.’ Mot. 5. Defendants claim that the absence of such a

provision “will ensure nothing short of chaos.” Id. at 7.

Defendants caution that “the Court will inevitably . . . become

involved in an endless stream of disputes” and that “literally

9 It is worth noting that the relief sought now was not requested in response to the United States’ post-trial proposed final order, nor was it raised on appeal. Salazar, 633 F.3d at 1120, supra at p. 10. 10 Defendants wish to preclude the plaintiffs in the Engle litigation from seeking certain relief they believe that Order #1015 provides. This Court has no authority--or desire--to insert itself in any way into the Engle litigation.

12 thousands of Engle plaintiffs . . . would be free to seek to

enforce Order #1015.” Id.

Although the parties engage in an extensive discussion of

whether the Intervenors would have standing in this case to enforce

Order #1015, there is no reason to resolve what is at this time a

totally speculative issue. Hall, 396 U.S. at 48. While Defendants

trot out the usual “parade of horribles,” they have pointed to no

discernible threat that their predictions will prove accurate.

Moreover, Defendants offer no reason why the Court could not

resolve this issue in a concrete context if and when it ever comes

to pass that the Government declines to enforce Order #1015 and

Intervenors or others attempt to bring their own enforcement

action. Again, Defendants have offered no change in fact or law nor

any extraordinary reason to amend Order #1015 to address a purely

speculative problem prematurely. Salazar, 633 F.3d at 1120.11

C. Meet-and-Confer Requirement

Finally, Defendants urge the Court to add a provision to Order

#1015 stating:

Before seeking to enforce the provisions of this Order, Plaintiff and any affected Defendants shall comply with LcvR 7(m) by

11 Defendants seem greatly exercised over the “chaos” that will follow if its exclusivity language is not adopted, and raise the specter of “thousands of Engle plaintiffs” swamping either this Court or the Florida court with demands to enforce Order #1015. This rather apocalyptic scenario is just a bit far-fetched. Suffice it to say that both this Court and the Florida court will be able to manage the issues when and if they arise.

13 conferring in good faith in an attempt to narrow or resolve any issues raised without Court intervention; provided, however, Plaintiff may in its discretion seek to enforce this order without complying with LcvR 7(m) if it concludes that emergent circumstances require immediate enforcement action.

Defs.’ Mot. 2-3.

Defendants have failed to demonstrate that there is any

benefit to be gained by adding such language to Order #1015.

Indeed, Defendants previously obtained just such a provision in

their Master Settlement Agreement (“MSA”), resolving the lawsuit by

fifty-two jurisdictions, including forty-six states and the

District of Columbia, against a number of cigarette manufacturers,

including several of these Defendants. See Philip Morris, 449 F.

Supp. 2d at 844. In considering the effect of that provision, this

Court has already found that the mandatory consultation and

discussion rule “leads to time-consuming enforcement efforts” and

is one of several structural issues making the MSA “a far less

powerful enforcement mechanism than Defendants claim.” Id. at 914-

15. This Court sees no reason to either overturn or revisit this

factual finding.

Defendants have offered no reason why the Court should now,

nearly five years after issuance of Order #1015, introduce such an

impediment to enforcement of its Remedial Order.

Defendants argue that any motion to enforce the injunction

would be subject to LCvR 7(m)’s meet-and-confer requirement. It is

14 far from clear that LCvR 7(m) covers post-judgment litigation.12

But, in any event, as with Defendants’ other arguments, their meet-

and-confer argument under LCvR 7(m) may be litigated if and when

the Government attempts to enforce the Order without prior

consultation.13 Defendants’ concern is simply premature. Defendants’

desire for the addition of meet-and-confer language is not an

extraordinary circumstance nor one that would render the

prospective application of Order #1015 inequitable unless it is

amended pursuant to Rule 60(b)(5)-(6). Salazar, 633 F.3d at 1120.

Finally, Defendants argue that “requiring the parties to meet

and confer before the filing of a motion to enforce Order #1015 is

just common sense.” Id. at 12. “Common sense” is often in the eye

of the beholder. Moreover, it is simply not the relevant standard

for obtaining an amendment to Order #1015, pursuant to Rule 60(b).

Defendants have offered no change in fact or law nor any

extraordinary circumstance that would warrant imposition of a

blanket meet-and-confer requirement.

12 It must be pointed out that the great majority of cases cited by Defendants concern consent decrees in which the Government agreed to meet-and-confer before seeking enforcement of court orders. Defs.’ Mot, at 12-13. Of course, what defendants in other cases may have been able to bargain for in a consent decree is entirely irrelevant to whether the Government in this case has a legal obligation to meet-and-confer prior to enforcement of an injunction entered in a hotly contested proceeding. 13 The Government, for its part, has made it very clear that it will go out of its way to voluntarily confer with Defendants before seeking enforcement from the courts. Gov.’s Opp’n 8.

15 IV. CONCLUSION

For the reasons set forth above, Defendants’ Motion for

Clarification is denied.

An Order will issue with this opinion.

/s/ June 22, 2011 Gladys Kessler United States District Judge

Copies to: counsel of record via ECF