United States v. Philip Morris USA ( 2011 )

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
16