[00:00:04] Speaker 00: Case number 16-5101 at L, United States of America, United States Department of Justice at L, versus Philip Morris USA, Inc., formerly known as Philip Morris Incorporated at L Appellants, Brown and Williamson Tobacco Corporation, directly and as successor by merger to American Tobacco Company at L. Mr. Carvin for Appellant, Philip Morris USA, Inc. [00:00:26] Speaker 00: Miss Patterson for Appellee USA. [00:00:29] Speaker 00: Mr. Glinzenstein for Appellees, [00:00:31] Speaker 00: Apple Ease Tobacco Free Kids Action Fund at L. [00:00:41] Speaker 07: Good morning, Your Honors. [00:00:42] Speaker 07: Michael Carvin for the appellant manufacturers. [00:00:44] Speaker 07: I've reserved two minutes for rebuttal. [00:00:47] Speaker 07: At the end of this journey, the disagreement with the government is more narrow than when we began, but it's still quite important. [00:00:53] Speaker 07: And we think that the district court's error is straightforward. [00:00:55] Speaker 07: In the corrective statements case, this court ruled that the preamble can't say, deceived. [00:01:02] Speaker 07: And now the only question is whether it can clearly imply that we deceived the public in the past. [00:01:08] Speaker 07: We think that's the clear implication of the preamble at this point. [00:01:11] Speaker 04: What was it just said by court order? [00:01:14] Speaker 04: Is it just said by court order? [00:01:16] Speaker 04: This is the truth. [00:01:18] Speaker 07: I think obviously in conjunction it creates a worse implication because federal courts don't order you to tell the truth unless they found that you've told falsehoods in the past. [00:01:30] Speaker 04: We have the word order. [00:01:31] Speaker 04: I'm wondering if the prior holdings concerning [00:01:37] Speaker 04: Rico relief not being backward-looking mean we have to totally ignore the existence of the past when we craft forward-looking remedies. [00:01:46] Speaker 07: I think that was the essential teaching of corrective statements, Your Honor. [00:01:49] Speaker 07: After all, it was backward-looking in terms of our prior conduct. [00:01:53] Speaker 07: and therefore it did not prevent and restrain, and that was the clear holding of corrective statements, even assuming that it prevented consumer deception. [00:02:02] Speaker 07: In addition to the fact that it's backward-looking and violates RICO for that reason, the other point I'd like to make is their formulation violates the First Amendment because it doesn't do any good in terms of preventing and restraining. [00:02:14] Speaker 07: In other words, even if it doesn't do the RICO harm, it also doesn't do a positive good. [00:02:19] Speaker 04: So you would say that we simply have to strike both of the pre-angular phrases? [00:02:25] Speaker 07: Yes. [00:02:26] Speaker 07: The remedy we're seeking is obviously to – the truth is you could have no preamble other than identifying the defendants, because as this Court held in corrective statements, the preambles really don't do anything. [00:02:36] Speaker 07: What does something in terms of preventing restraining is the bullet points, the speech about the products. [00:02:41] Speaker 07: This has nothing to do with the health or not of cigarettes. [00:02:45] Speaker 07: It has to do with characterizing the bullet points that are about to come. [00:02:49] Speaker 07: And the key point is, under NAM, they cannot prove that their formulation is more effective in accomplishing prevent and restraint, and they certainly can't show that it's more effective than our alternative. [00:03:00] Speaker 04: Could we just order the [00:03:03] Speaker 04: tracking of the preambular phrases and otherwise affirm in part and send this back for the world to go on instead of having to have more hearing. [00:03:11] Speaker 07: Yes, I'm sure this Court is tired of all these appeals, and obviously you could just strike the phrases we want. [00:03:16] Speaker 07: It seems to me at that point you've got two options. [00:03:18] Speaker 07: It's just to say no reference in the preamble except to the defendant's names or adopt our less intrusive alternative. [00:03:26] Speaker 07: But I don't think we want to go back and start from scratch all over again. [00:03:29] Speaker 07: I think we can get out of this. [00:03:32] Speaker 07: And the point I was trying to make about [00:03:34] Speaker 07: NAM was, it clearly held that the government doesn't get to get its preferred form of speech. [00:03:40] Speaker 07: It's our speech. [00:03:41] Speaker 07: They need to show that their formulation accomplishes something that ours does not. [00:03:46] Speaker 07: And they can't do it here for two reasons. [00:03:48] Speaker 07: One is they never tried to prove effectiveness in any way. [00:03:52] Speaker 07: The district court rejected the expert report that purported to do that. [00:03:56] Speaker 07: And again, the essential teaching of corrective statements was, look, [00:03:59] Speaker 07: The preambles have nothing to do with preventing and restraining because they have nothing to do with telling you about the health effect of cigarettes. [00:04:08] Speaker 07: And the idea of preventing and restraining is we can't say they're unhealthy on Monday and then turn around and say they're healthy on Tuesday, and the preambles really don't bring anything to the table in that regard. [00:04:19] Speaker 06: Is there any evidence, and this strikes me as an evidentiary question rather than a question of law, [00:04:26] Speaker 06: You read it one way, somebody else reads it another way. [00:04:30] Speaker 06: Were there any focus groups that were polled to determine how the average person would view the preamble? [00:04:41] Speaker 07: No, that's an essential point, Judge Randolph. [00:04:43] Speaker 07: They did a 500-page expert report where they did that kind of thing, which they claimed should show that their formulations were more effective in preventing consumer deception. [00:04:54] Speaker 07: But if you look at footnote 15 of the district court's order, she made it quite clear she didn't pay any attention to that expert report, mainly because she didn't want to give us a chance to respond to it or introduce our own expert report. [00:05:05] Speaker 07: So she affirmatively eschewed any evidence in terms of which of these is more effective. [00:05:10] Speaker 07: And as I say, only apart from exceeding RICO, that means that this violates the First Amendment because this court held quite clearly in NAM that you need to show that your formulation, that is the government's formulation, is more effective than the speaker's preferred speech, particularly if the speaker's speech is lesser. [00:05:28] Speaker 06: Yeah, but we're not talking about effectiveness now. [00:05:31] Speaker 06: What we're talking about is whether this, the combination of the [00:05:36] Speaker 06: here is the truth and by court order etc. [00:05:43] Speaker 06: would be taken by someone reading that to mean that the tobacco companies had not [00:05:52] Speaker 06: had not been telling the truth? [00:05:53] Speaker 07: No, fair enough. [00:05:54] Speaker 07: There's two points, and I want to make sure I'm separating them. [00:05:57] Speaker 07: That's the violation of RICO, is the question that you just focused on, which is, does it imply prior wrongdoing? [00:06:03] Speaker 07: I think there's no evidence on this one way or another. [00:06:05] Speaker 07: There's no surveys. [00:06:07] Speaker 07: I think common sense tells you that it's obvious that a federal court doesn't tell you to tell the truth today if they hadn't found yesterday that you had told falsehoods. [00:06:17] Speaker 04: and the other point well i'm just a moment but we'll meet the phrase of this is the truth is that necessarily saying you've committed falsehoods in the past it wouldn't be equally consistent with you just haven't said anything uh... i think that that formulation is less troublesome first time the government ordered you first time the government ordered the back accountants to put the warnings on cigarettes they were not saying that [00:06:47] Speaker 04: They had, at that point, established that there had been deception, although I'm sure they suspected it. [00:06:51] Speaker 04: All they were doing was adding some language that hadn't been used before. [00:06:55] Speaker 04: Why wouldn't that be equally consistent with the court order phrase? [00:06:59] Speaker 07: Well, again, you'd have to ask yourself two questions. [00:07:02] Speaker 07: One is, why are they saying the court ordered us to do anything? [00:07:05] Speaker 03: Well, I ask myself, why are you coming back up here with this? [00:07:07] Speaker 03: Somebody else might ask themselves what you're coming up with. [00:07:11] Speaker 07: Then that's a fair question, Your Honor. [00:07:13] Speaker 07: We went through mediation. [00:07:15] Speaker 07: We bent over backwards. [00:07:16] Speaker 07: to create the kind of language that you're talking about. [00:07:19] Speaker 07: If they thought that a federal court order lended some imprimatur to what followed, we gave them that. [00:07:24] Speaker 07: We said a federal court thinks you should know it, and that under court order, this was paid for by a defendant. [00:07:30] Speaker 07: So we went the extra mile to see if we could accommodate whatever reasonable concerns they had. [00:07:35] Speaker 07: The reason they continue to disagree with us [00:07:37] Speaker 07: is because our language does not, as their language does, imply prior wrongdoing. [00:07:42] Speaker 07: And the point I was making in terms of NAM is, if you don't see any perceived difference between your revision to Judge Kessler's language and ours, ours wins, because it's our speech, [00:07:56] Speaker 07: Under Hurley, as NAM made clear, we get to tailor our speech to what I – what we want to say. [00:08:03] Speaker 07: If they think they've got some reason to alter the speech, then and only then, if they've proven it, can you order us to speak their language. [00:08:11] Speaker 07: If it's a draw, then we would win. [00:08:15] Speaker 07: And I think in that regard, it's important to emphasize that this is a narrow-tailoring case. [00:08:21] Speaker 07: They need to show evidence that our less restrictive alternative does not work. [00:08:26] Speaker 07: And I can only point you to the 2009 opinion, which they say is controlling. [00:08:30] Speaker 07: And I think it's very helpful to look at page 1143 of that opinion, which, after citing Zauder and Central Hudson, says the following. [00:08:40] Speaker 07: There's different formulations, but the Supreme Court's bottom line is clear. [00:08:44] Speaker 07: The government must affirmatively demonstrate its means are narrowly tailored to achieve a substantial government interest. [00:08:51] Speaker 07: So they were clearly applying central Hudson narrow tailoring. [00:08:54] Speaker 07: This court, in the graphic warnings case involving the FDA, said that that's exactly what was the rule that was applied in the 2009 opinion, and that is what they are following here. [00:09:06] Speaker 07: Also again, [00:09:08] Speaker 07: under NAM made it clear that Central Hudson applies outside the context of disclaimers on voluntary ads. [00:09:16] Speaker 07: That's the only place that AAMI and Zauder applies. [00:09:20] Speaker 07: And that's of course true because if they are compelling you to speak, [00:09:24] Speaker 07: as opposed to compelling you to add a disclaimer to your own voluntary advertisement, then we always use central Hudson. [00:09:30] Speaker 07: That was the rule of Novartis. [00:09:32] Speaker 07: That was the rule in Warner-Lambert. [00:09:34] Speaker 07: And, of course, United Foods, which purely involved compelled speech, commercial speech about advertisements for mushrooms, [00:09:41] Speaker 07: said it was judged by strict scrutiny. [00:09:43] Speaker 07: So we think it's quite clear, under both the law of this case and the law of this circuit, that Central Hudson-Marrow-Tallaring is the governing standard to be applied here. [00:09:52] Speaker 04: So what would you say – and I know it's in here, but remind me – what you're accepting as being a lawful phrasing for the warnings [00:10:03] Speaker 07: Yeah, to be precise, the preamble would say, a federal court has determined that you should know the following about these topics. [00:10:12] Speaker 07: And then there's a footer at the end which says, under court order, paid for by defendants. [00:10:17] Speaker 07: That's quoted on page 18 of our brief. [00:10:20] Speaker 07: OK. [00:10:21] Speaker 07: I've run out of time, unless there's further questions. [00:10:25] Speaker 02: All right, thank you. [00:10:34] Speaker 01: May it please the court, Melissa Patterson for the United States. [00:10:37] Speaker 01: I think it's helpful to review what happened after this court's last opinion in 2015. [00:10:44] Speaker 01: The same statements that had been before this court last time went back to the district court. [00:10:51] Speaker 01: And the district court refused to return to the drawing board and start all over again because she said that would be a waste of time and it would be ridiculous. [00:11:01] Speaker 01: She said, I'm going to look at this court's 2015 opinion, determine what parts of this language is problematic under this court's 2015 opinion, and redline it. [00:11:17] Speaker 01: And that's exactly what the district court did. [00:11:20] Speaker 01: So the language that's before this court today is language that defendants have had a chance to fully and fairly challenge before. [00:11:29] Speaker 01: And the only question remaining for this court, the only legitimate fodder for appeal at this stage in the litigation, is the phrase, here is the truth. [00:11:41] Speaker 01: Those four words. [00:11:43] Speaker 01: Defendants did challenge them last time, and this court did not explicitly address them in its 2015 opinion. [00:11:51] Speaker 01: However, the reasoning of this court's opinion, we think in two respects, makes clear that that was a permissible formulation for the district court to leave in. [00:12:02] Speaker 01: And those two reasons are this court identified deceptive conduct and the references that the preambles used to contain, [00:12:11] Speaker 01: about their deceptive conduct as beyond the scope of what the district court was allowed to do. [00:12:16] Speaker 01: And it emphasized, and this is key, that the statements were not supposed to be focused on consumers. [00:12:23] Speaker 01: They were supposed to be focused on preventing and restraining these defendants from again committing the particular types of RICO violations they committed in past. [00:12:34] Speaker 01: And so by labeling the bullet point statements, which we know are all factual, we know we're all supported by the record, as the truth, this is a remedy precisely aimed at these defendants. [00:12:49] Speaker 06: Because the homework- What is the phrase, here's the truth? [00:12:54] Speaker 06: What function is that? [00:12:56] Speaker 01: I think it's a preventing and restraining function, Your Honor, because the way the fraud here unfolded was that defendants would take public health facts that were out there in the Surgeon General reports and other government reports and sow doubt about them. [00:13:11] Speaker 01: This was the open question strategy. [00:13:13] Speaker 01: So you had, for example, [00:13:15] Speaker 01: publications by defendants called Children in Smoking, The Balanced View. [00:13:20] Speaker 01: And it would say, well, it's not conclusive that smoking during pregnancy is harmful to the baby. [00:13:27] Speaker 01: It's not conclusive that secondhand smoke. [00:13:29] Speaker 01: We need more studies. [00:13:30] Speaker 01: And so when you have a demonstrated history of RICO violations that take public health backs and try to sow doubt about them, try to muddy them up, [00:13:41] Speaker 01: requiring defendants to put public health facts out there, unambiguously labeling these ones, these facts are the truth, is a very narrowly, precisely tailored remedy to prevent them, as we know they are likely to do, to go out and in other statements try to undermine the public health facts that are contained in the bullet points. [00:14:06] Speaker 06: But wouldn't, you know, accepting all that, if it simply said a federal court has ordered our company to make the following statements and then list the statements, the bullet points, I don't see why anybody could take that as other than accurate. [00:14:28] Speaker 01: Well, Your Honor, I'm not sure why anybody could take the Surgeon General's repeated reports and warnings as anything other than accurate. [00:14:34] Speaker 01: But the district court found that these defendants engaged in a sophisticated and creative conspiracy to undermine things that had a strong imprimatur of truth before. [00:14:48] Speaker 01: You had the EPA. [00:14:49] Speaker 01: You had the Surgeon General. [00:14:50] Speaker 01: You had public health groups putting facts out there before. [00:14:54] Speaker 01: And remember, what we're trying to do is to prevent and restrain these [00:14:57] Speaker 01: particular defendants from committing their particular flavor of RICO violations again and where you have this demonstrated history where they take public health facts [00:15:09] Speaker 01: And they try to undermine them. [00:15:11] Speaker 01: They try to undercut them. [00:15:12] Speaker 01: They try to say, don't worry. [00:15:14] Speaker 01: We've got to do more research. [00:15:16] Speaker 01: We've got to get more facts. [00:15:18] Speaker 01: I think the district court, when she said, all I'm doing, I'm not talking about your conduct. [00:15:23] Speaker 01: All I'm doing is saying, you must say that these are, in fact, facts. [00:15:28] Speaker 01: These are the truth. [00:15:29] Speaker 01: Now, I want to make clear, we're not trying to sort of sneak in any inferences about conduct. [00:15:36] Speaker 01: If there were some formulation that this court identified that served that same function of preventing and restraining the defendants from in future, trying to muddy up. [00:15:48] Speaker 06: I don't see how, excuse me. [00:15:51] Speaker 06: If the here is the truth is exercise, [00:15:55] Speaker 06: Well, forget that for a moment. [00:15:59] Speaker 06: The preamble says that the federal court has ordered us to make the following statement. [00:16:06] Speaker 06: Here is the truth. [00:16:07] Speaker 06: That's part of the following statement. [00:16:09] Speaker 06: The federal court has ordered us to say here is the truth. [00:16:12] Speaker 06: And then all the bullet points. [00:16:14] Speaker 06: What is to prevent a company if they have evidence to say, even though the federal court ordered us to say that, it's scientifically inconclusive? [00:16:26] Speaker 01: Your honor, it is possible they would try to do that. [00:16:29] Speaker 01: But this court's insight in 2009, the basis on which this court upheld the corrective statements remedy, was that it would make it harder for them to talk out of both sides of their mouth if they had to put out there in public the truth. [00:16:47] Speaker 01: It would make it harder for them to simultaneously try to undertake. [00:16:51] Speaker 06: The way it's phrased, it's the court has ordered them to say, here is the truth. [00:16:58] Speaker 01: Yes, Your Honor, and that is by their own request. [00:17:01] Speaker 01: They would like these statements labeled as being made under court order. [00:17:05] Speaker 01: And we, of course, are not contesting that. [00:17:08] Speaker 04: What does that second, preambular phrase about here is the truth, what's the value of it? [00:17:16] Speaker 01: Of here is the truth, Your Honor? [00:17:18] Speaker 04: Yeah. [00:17:19] Speaker 01: uh... by labeling the facts as the truth as facts it makes it harder for them to come in later and try to sow doubt that was the hallmark of their fraud you take things it's not that these are unknown facts hearing you talk past each other but uh... i thought that randolph was saying asking you why they couldn't make exactly the same thing but the court told us we had to say that but it's not [00:17:45] Speaker 04: I'm not sure I see why anybody's fighting this hard over these phrases, but I'm not sure I see why the government is. [00:17:55] Speaker 04: What does it really matter whether it has that second preambular phrase in there or not? [00:17:59] Speaker 01: Again, Your Honor, we think the district court was well within the bounds of its discretion to simply say, I just want you to label these as facts. [00:18:08] Speaker 01: We don't have any, we're not wedded to this particular formulation if there is something that this court wanted to identify as serving the same restraining function using [00:18:18] Speaker 01: different words, we would appreciate clarity from this court. [00:18:23] Speaker 01: We think the reasoning of the 2015 appeal makes it clear that what we can't refer to in the preambles is deceptive conduct. [00:18:30] Speaker 01: Again, we had a fight about that in district court. [00:18:33] Speaker 01: The district ultimately sided with us. [00:18:35] Speaker 01: The district court at this point has twice attempted to comply with this court's instructions. [00:18:41] Speaker 01: So at this point, to prevent further litigation about [00:18:44] Speaker 01: four words or two words or one word or something else, we would appreciate if this court, if it found in any respect that these preambles needed to be modified, if it could identify an acceptable alternative. [00:18:56] Speaker 01: Now we don't think that's necessary, but if the court disagrees, we do ask for clarity. [00:19:01] Speaker 06: Truth is not a scientific term, is it? [00:19:05] Speaker 06: I suppose one could have a metaphysical debate about that, but I think the clear... It hasn't been falsified. [00:19:14] Speaker 06: You have the hypothesis, the whole Karl Popper theory. [00:19:21] Speaker 06: But truth is not something that you see in any scientific studies. [00:19:26] Speaker 06: So an alternative is simply say that it has been shown scientifically and then bullet point, bullet point, bullet point. [00:19:38] Speaker 01: Again, Your Honor, we're not wedded to a particular formulation. [00:19:41] Speaker 01: I think the district court chose this one because it had been before this court before, and this court had not identified any problem with it. [00:19:48] Speaker 01: And the district court, as an alternative, the government proposed, here are the facts. [00:19:54] Speaker 01: So it's not that we think these words are somehow magical, but we do think they're serving an important function here, and that it will make it harder for them to say on Tuesday, [00:20:06] Speaker 01: They're not true. [00:20:07] Speaker 01: If they've had a say on Monday, these are true, or these are the facts, or the things in the bullet point, those are the real deal. [00:20:14] Speaker 01: Whatever we may come in and try to say later. [00:20:18] Speaker 01: I see I'm out of time. [00:20:19] Speaker 01: If the court has no further questions, we ask that this court affirm. [00:20:23] Speaker 02: Thank you. [00:20:35] Speaker 05: Good morning. [00:20:36] Speaker 05: To start off with Judge Randolph's last question, I think the reason why the district court, who of course has lived with this case for many years now and made innumerable findings of fact and has had many opportunities to try to address the corrective statements issue, used the phrase, this is the truth, is because in the court's initial opinion affirming the corrective statements remedy, that is the word that this court used on several occasions. [00:21:01] Speaker 05: The court specifically said, [00:21:03] Speaker 05: that a corrective statements remedy which is designed to prevent and restrain RICO violations by preventing the tobacco companies from denying the truth about the impact of their products would be an appropriate remedy. [00:21:17] Speaker 05: So I don't think it's something that this report came up [00:21:19] Speaker 05: with on her own, she came up with that because she saw that this, of course, ruling as authorizing language like that. [00:21:26] Speaker 05: Now, having said that, again, there could be somewhat different formulations, but I think it's important also to recognize that the tobacco companies are not disputing at this stage, that the actual statements that they're asked to label the truth [00:21:40] Speaker 05: are in fact the truth or are using phraseology from First Amendment precedent are accurate and non-controversial or factual non-controversial. [00:21:48] Speaker 05: If you look at their own proposal, which is at pages 640 through 641, beginning before they get to the statements, they say point blank, the following statements are consistent with the D.C. [00:22:00] Speaker 05: Circuit's decisions, this Court's decisions, regarding the restrictions that WICO and the First Amendment impose on the statements text. [00:22:07] Speaker 05: So they are admitting point blank that these, in fact, are factually accurate and factual and non-controversial. [00:22:13] Speaker 05: So if they're acknowledging that and simply having a statement that says beforehand, this is the truth, means that you would have to find that their problem is that statements which are the truth could not simply be labeled the truth. [00:22:25] Speaker 05: And I would respectfully submit that that can't be a principle that makes any sense from the standpoint of RICO or First Amendment. [00:22:31] Speaker 05: The other point I would just make very quickly is Mr. Carver's test is what would be implied. [00:22:36] Speaker 05: Well, again, if you look at their statement, the footer on their statement says, under court order paid for by Philip Morris, et cetera, this is on page 640, at the beginning it says the federal court has determined. [00:22:48] Speaker 05: Now, there could be all kinds of ways that one could imply [00:22:51] Speaker 05: things about those kinds of statements. [00:22:53] Speaker 05: Why would anybody be ordered to say something that a federal court has determined or paid under court order? [00:23:00] Speaker 05: So I respectfully suggest that the standard cannot be, what could someone imply? [00:23:04] Speaker 05: The question is whether this statement, in fact, satisfies the Court's RICO and First Amendment principles, which we suggest that it clearly does in light of what this Court itself has said. [00:23:15] Speaker 05: removed the language that District Court did that specifically referred to any kind of backward-looking behavior. [00:23:22] Speaker 05: It formulates these statements in a way that the public would better understand. [00:23:25] Speaker 05: The interveners respectfully submit that after many, many years, we've reached a point where there has to be some finality. [00:23:33] Speaker 05: One point I was just making closing, the district court's order providing for these corrective statements initially required that they could be out in February 2007. [00:23:41] Speaker 05: So it's literally a decade since this remedy, which was upheld in principle by this court in 2009, was endorsed. [00:23:50] Speaker 05: I just echo what the Justice Department said. [00:23:53] Speaker 05: We want a finality. [00:23:55] Speaker 05: We think that it is appropriate under the circumstances to affirm this particular formulation. [00:24:00] Speaker 05: But in any event, we respectfully suggest that time has come for this [00:24:03] Speaker 05: remedy that this court has endorsed in principle before. [00:24:06] Speaker 06: Did the district court stay its order? [00:24:09] Speaker 06: Excuse me your honor? [00:24:09] Speaker 06: Did the district court stay its order? [00:24:13] Speaker 05: The way in which the parties agreed that the corrective statements would not go into effect until after all appeals had run. [00:24:20] Speaker 05: That was obviously to give the courts an opportunity. [00:24:24] Speaker 05: We recognized that there were important issues that were raised under Rico and the First Amendment. [00:24:29] Speaker 05: The tobacco companies had every right to pursue their appeals. [00:24:32] Speaker 05: This is the third bite at the apple on these corrective statements. [00:24:35] Speaker 05: We think the time has come for these to be put into effect. [00:24:38] Speaker 02: I guess I should have asked Ms. [00:24:40] Speaker 02: Patterson this, but I'm curious whether you agree with Mr. Carvin that if the statements could be said to be, the tobacco company's statements could be said to be more effective, or if they are equally effective, I suppose, that they win. [00:25:05] Speaker 05: I don't think that's really the test, actually, either under Central Hudson from a First Amendment standpoint or Zauderer. [00:25:12] Speaker 05: Zauderer actually point blank says, well, the fact that one might be able to formulate alternative approaches is not a basis to find that these are violative of the First Amendment. [00:25:21] Speaker 05: And I think Central Hudson, even if you analyze it under that, requires that there be a substantial interest in those particular formulations the district court came up with. [00:25:30] Speaker 05: So I don't think this is a situation where you look at theirs as, quite frankly, [00:25:34] Speaker 05: the entities that were found to be in violation of RICO and say they prefer theirs and therefore that should get any kind of presumption. [00:25:42] Speaker 05: I think if anything, Your Honor, the presumption should go to the district court who made the original factual findings in the 2012 ruling that Your Honor authored declining to declare the whole remedial issue moot on the grounds of the Tobacco Control Act stress that this is a court who has lived with this case [00:25:59] Speaker 05: literally for more than a decade, and was in a position to evaluate what kinds of statements would be most consistent with the First Amendment and with RICO. [00:26:10] Speaker 05: And these are the statements that she formulated. [00:26:12] Speaker 05: So I think the question is, do they, in fact, violate the First Amendment or RICO principles, not is there some reason to why the tobacco companies might prefer theirs? [00:26:21] Speaker 05: I do think it's important, Your Honor, in that respect, that they have not disputed that preambles can be incorporated. [00:26:28] Speaker 05: They could have come to this court and said, no preambles, that's completely out of bounds after the court's 2009 ruling. [00:26:34] Speaker 05: They haven't taken that position. [00:26:35] Speaker 05: They've not only put in preambles, they put in this footer referring to under court order paid for. [00:26:40] Speaker 05: So I think they're way down the road of acknowledging [00:26:44] Speaker 05: that these kinds of statements are appropriate, they simply don't like the ones that district court came up with, and I respectfully suggest that is not the standard that this court should apply in determining whether the district court abused or distracted. [00:26:56] Speaker 06: What's your answer to that? [00:26:59] Speaker 06: I asked earlier, it seems to me that this is an argument about what effect this language will have on the reader. [00:27:10] Speaker 06: and not whether lawyers can parse the language and come up with different interpretations and so on and so forth. [00:27:17] Speaker 06: And the reader is not going to be engaging in a legal analysis when they read it, but there's no . [00:27:25] Speaker 06: . [00:27:26] Speaker 06: . [00:27:26] Speaker 06: I don't think Judge Kessler didn't allow the record to be reopened on remand from us, did she? [00:27:34] Speaker 05: Well, she decided she did not need to have a new evidentiary proceeding. [00:27:37] Speaker 05: She regarded this court's ruling, as the court itself said, largely upholding the corrective statements and getting rid of the language that she thought the court found problematic. [00:27:47] Speaker 05: What I would say, Your Honor, in response is, [00:27:50] Speaker 05: In some ways, I think, looking at the reader's reaction and doing some big proceeding on that, which I think all parties hopefully would agree would just prolong this even further, is not necessary for the following reason. [00:28:03] Speaker 05: What this court stressed in 2009 and 2015 in the corrective statements opinion is the focus is not on the consumers and whether this would help address consumer deception. [00:28:13] Speaker 05: In fact, the court said that can't be the focus. [00:28:16] Speaker 05: The focus is on restraining the violator. [00:28:19] Speaker 05: And we think what the district court applied was an extraordinarily sort of basic common sense principle that if the violator has to say, this is the truth, it will have a tendency to restrain and prevent the violator from saying in the future, this is not the truth. [00:28:35] Speaker 05: And so I don't think you need a big focus group to analyze it from that vantage point. [00:28:39] Speaker 05: In fact, ironically, it seems to me it's the tobacco company's position that goes down the road that this court says you can't go down by focusing on how will people react, what will they think, what will they imply. [00:28:51] Speaker 05: You can get rid of all of that by looking at this court's past decisions and saying, what will help restrain the violator? [00:28:57] Speaker 05: And it will restrain the violator by them having to say, this is the truth. [00:29:01] Speaker 05: And so I think that was the district court's approach [00:29:03] Speaker 05: And that makes perfect sense as far as the public health interveners are concerned. [00:29:11] Speaker 05: Thank you, Your Honor. [00:29:16] Speaker 07: Just to briefly respond to a few of the judge's questions, Judge Randolph, we don't need evidence on how somebody will interpret this, because they are not defending, if you say ordered followed by the truth, that that clearly implies prior wrongdoing. [00:29:30] Speaker 07: That's why they're so insistent in focusing on here is the truth in isolation and decoupling it from ordered. [00:29:36] Speaker 07: Indeed, in Joint Appendix 612, they concede [00:29:39] Speaker 07: below that order to tell the truth does reflect prior conduct. [00:29:44] Speaker 07: So that's basically undisputed. [00:29:46] Speaker 07: If we want to look at here is the truth in isolation, in addition to the points I previously made, under Zauderer, even Zauderer, the statement needs to be purely factual. [00:29:56] Speaker 07: The notion that here is the truth is a factual assertion is obviously wrong. [00:30:01] Speaker 07: It's at least partially an opinion. [00:30:03] Speaker 07: It's a characterization of what is to follow. [00:30:06] Speaker 07: So under Zauder, even if here is the truth did serve some prevent and restrain purpose, it's violative of the First Amendment because it's here. [00:30:20] Speaker 04: you still object to because of the preamble of your phrase? [00:30:23] Speaker 07: Right. [00:30:24] Speaker 07: And look, they've come up here and told you, look, there's not a dime's worth of difference between what we proposed and at least if you strike it, here is the truth. [00:30:32] Speaker 07: If that's true, then to answer Judge Rodgers' Brown question, it's our speech. [00:30:37] Speaker 07: We get to use our speech. [00:30:39] Speaker 07: If they can't say that there's any difference between the two... Well, it's not just your speech at this point. [00:30:44] Speaker 04: However we phrase this, [00:30:46] Speaker 04: However, the preamble or the lead-in is phrase. [00:30:49] Speaker 04: It's saying now that it's court order. [00:30:51] Speaker 04: It's not just your speech. [00:30:53] Speaker 07: Right. [00:30:53] Speaker 07: But it's putting it in our mouths. [00:30:55] Speaker 07: And it is compelling us to make these speeches. [00:30:58] Speaker 07: And I agree that the prior cases have said you can put speeches. [00:31:01] Speaker 04: Compel speech inherently is not going to be the pure speech that Hudson would imply would be the norm in commercial speech. [00:31:11] Speaker 04: This is compel speech. [00:31:13] Speaker 04: It is. [00:31:13] Speaker 04: We're past that barrier. [00:31:16] Speaker 07: No, fair enough. [00:31:16] Speaker 07: You can compel us to speak under the First Amendment. [00:31:19] Speaker 07: The question is whether you can compel us to speak in the way that they want or in something that's its functional equivalent. [00:31:26] Speaker 07: And the essential teaching of NAM in a compelled speech context was if conflict minerals doesn't bring anything to the table that they haven't shown is more effective than a less restrictive, less pejorative term, then you can't force that form of compelled speech [00:31:43] Speaker 04: On the speaker. [00:31:45] Speaker 04: NAM was Monte Rico relief. [00:31:47] Speaker 07: No, no, fair enough. [00:31:47] Speaker 07: But it was the government telling you, it was the United States Congress. [00:31:50] Speaker 04: It had to do with putting on notice about whether they even could put on notice about the metal at the source. [00:31:57] Speaker 07: Fair enough. [00:31:58] Speaker 07: And the only point I'm trying to make here is it's an entirely different context. [00:32:02] Speaker 07: But nonetheless, you look behind a congressional finding, not some inkling by a district court judge that this was important language to reduce tensions in the Congo. [00:32:12] Speaker 07: And if that's true, then you need to look behind this formulation and say, does the district court and the government's preferred formulation really accomplish anything that ours [00:32:29] Speaker 04: Simply to prevent the consumer being deceived is to prevent the defendants from continuing Enrico-violative conduct. [00:32:38] Speaker 07: Right. [00:32:38] Speaker 07: And there's no evidence that their formulation will do that better. [00:32:42] Speaker 07: And the common sense response is the one I think that Judge Randolph alluded to earlier. [00:32:46] Speaker 07: If you say a federal court ordered me to do something, to say something, you're distancing yourself from that language. [00:32:53] Speaker 07: If your doctor said, the FDA has ordered me to tell you that all forms of secondhand smoke are harmful, you would say, well, what's your opinion? [00:33:02] Speaker 07: Tell me the real truth. [00:33:03] Speaker 07: So by definition, if you're trying to accomplish something to prevent us from restraining something from saying tomorrow, this federal court ordered language hurts that effort. [00:33:13] Speaker 07: It does not help. [00:33:15] Speaker 07: unless there are further questions. [00:33:17] Speaker 07: Thank you. [00:33:21] Speaker 02: The case will be submitted.