Anti-smoking groups called the ruling a disappointment but a relatively minor assault to the government's case.
William V. Corr of the Campaign for Tobacco-Free Kids acknowledged that the dollar figure was dramatic but said the center of the case remains the government's demand for industry reforms. That could include prohibiting the companies from marketing cigarettes to young people and requiring them to pay to help the 45 million adult smokers quit the habit.
"Today's ruling is disappointing because it takes away from the government a powerful deterrent," Corr said. "But this opinion does not restrict the trial judge's authority to order remedies that would . . . cause them to pay billions of dollars to undo the addiction they've caused and the damage they've done."
William B. Schultz, a deputy assistant attorney general in the Clinton administration and part of the team that crafted the tobacco suit, noted fears that the case was doomed in 2000 when Kessler rejected the government's bid to recover medical care costs. But overwhelming evidence of company fraud kept the case strong, he said.
"No one's going to tell you they aren't disappointed and this isn't difficult," Schultz said. "But, just as we said then, there's really still a lot left."
The decision was written by Sentelle, who comes from the tobacco-producing state of North Carolina and was appointed by President Ronald Reagan. He was joined by another Reagan appointee, Senior Judge Stephen F. Williams. Judge David Tatel, who was appointed by President Bill Clinton, wrote a dissent agreeing with the government.
Lawyers on both sides said yesterday that they had expected the decision ever since they heard the panel's pointed disagreements with the government during oral arguments in November.
As the case moves on, William Ohlemeyer, senior vice president for Philip Morris said, he doubts the government can prove the industry engaged in a pattern of fraud and is likely to do so again. He said the industry has already restructured its marketing and promotion practices because of the 1998 settlement and its own initiative.
"Given the profound change, it's hard to imagine what more the government wants the industry to do," Ohlemeyer said.
