The Enterprise Engaged in and Its Activities Affected Interstate and Foreign

The Enterprise Engaged in and Its Activities Affected Interstate and Foreign

Commerce There can simply be no denying that the Enterprise engaged in, and its activities affected,

¶interstate or foreign commerce. This has been proven, in part, by the fact that each individual Defendant itself had an extensive nexus to interstate or foreign commerce. See, e.g., United States v. Farmer, 924 F.2d 647, 651 (7th Cir. 1991); United States v. Norton, 867 F.2d 1354, 1359 (11th Cir. 1989) (collecting cases); United States v. Doherty, 867 F.2d 47, 68 (1st Cir. 1989); United States v. Bagnariol, 665 F.2d 877, 892-93 (9th Cir. 1981); United States v. Long, 651 F.2d 239, 241-42 (4th Cir. 1981); United States v. Stratton, 649 F.2d 1066, 1075 (5th Cir. 1981).

¶In fact, each of the cigarette company Defendants stipulated that from 1953 to the present it has been engaged in, and its activities affect, interstate and foreign commerce within the meaning of 18 U.S.C. § 1962(c) and (d). Similarly, Altria stipulated that it has engaged in interstate and foreign commerce since it was formed as Philip Morris Companies in 1985. See Order #280.

¶Between 1954 and 1998, Defendants CTR and TI (beginning in 1958), both incorporated in New York state, each received over $500 million in funding in interstate commerce via the interstate banking system from various cigarette company Defendants located in different states. See Findings of Fact Section IV(I,J). During that same time period, CTR funded millions of dollars of research projects, which were conducted by researchers and institutions in various states and abroad, the results of which were published in periodicals and books throughout the United States and in foreign countries. Similarly, TI issued thousands of press releases and public relations advertisements which were disseminated in interstate commerce throughout the United States in various newspapers, magazines, periodicals and books. See Findings of Fact Section III(C,D). Thus, CTR and TI were engaged in and their activities affected interstate commerce.

¶Because many of BATCo's Racketeering Acts took place outside the United States, Defendants claim that they cannot be the basis of RICO violations. RICO may apply to conduct which occurs outside the United States as long as it has a substantial direct effect on the United States. Doe I v. Unocal, 395 F.3d 932 (9th Cir. 2002). RICO is an expansive statute, broadly construed to reach a wide array of activity. United States v. Pepe, 747 F.2d 632 (11th Cir. 1984). Generally, courts have concluded that this broad construction does not include international schemes largely unrelated to the United States. See e.g., Brink's Mat Limited v. Diamond, 906 F.2d 1519, 1524 (11th Cir. 1990) . In determining whether RICO applies extraterritorially, allegations must meet either the "conduct" test or the "effects" test. Under the "conduct" test, RICO applies where the conduct within the United States directly caused a foreign injury. North South Fin. Corp. v. Al- Turki, 100 F.3d 1051 (2d Cir. 1996). Under the "effects" test, RICO applies when the foreign conduct at issue has "substantial" effects within the United States. Consolidated Gold Fields PLC v. Minorco, S.A., 871 F.2d 252, 261-62 (2nd Cir. 1989). This test is met when the domestic effect is a "direct and foreseeable result of the conduct outside of the United States." Id. at 262. At all times, the primary consideration is whether the scheme to defraud or artifice has a tangential or direct effect on the United States. See e.g., Butte Min. PLC v. Smith, 876 F. Supp. 1153 (D. Mont. 1995); United States v. Noriega, 746 F. Supp. 1506, 1516-1517 (S.D. Fla. 1990); Consolidated Gold Fields PLC v. Minorco S.A., 871 F.2d 252, 261-62 (2d Cir.1989).

¶While it is true that many of BATCo's activities and statements took place outside of the United States, they nevertheless had substantial direct effects on the United States. First, many of BATCo's statements and policies at issue in this case concerned US subsidiary/affiliate Brown & Williamson and potential litigation in the United States. Second, and most importantly, BATCo's activities and statements furthered the Enterprise's overall scheme to defraud, which had a tremendous impact on the United States, as demonstrated in the Findings of Fact.

¶Finally, the evidence that all Defendants taken together have bought and sold literally over one trillion dollars of goods and services in interstate and foreign commerce since 1954 conclusively establishes the requisite effect on interstate commerce.

¶E. Each Defendant Was Associated with, but Distinct from, the Enterprise