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United States v. Philip Morris, Inc.

United States District Court for the District of Columbia

January 23, 2004, Decided

Civil Action No. 99-2496 (GK)



This matter is now before the Court on the United States' Motion for Partial Summary Judgment on Defendants' 1 Equitable Defenses of Waiver, Equitable Estoppel, Laches, Unclean Hands, and In Pari Delicto ("Motion"). The Government argues that each of these affirmative defenses is insufficient as a matter of law and must be dismissed. 2 

 [**2]  The essence of the Government's argument is that the equitable defenses of waiver, equitable estoppel, laches, unclean hands and in pari delicto may not be asserted against the United States when, as here, "it is acting in its sovereign capacity to exercise public rights to protect the public interest." Motion at 1-2. Defendants  [*66]  argue to the contrary that equitable defenses are routinely available against the Government and are supported by the evidence in this case.

The case law overwhelmingly supports the Government's position. ] The United States brings its RICO claims in its capacity as sovereign, acting on behalf of the public to vindicate public rights. The Supreme Court has stated that any waiver of such sovereign authority must be unmistakable, United States v. Cherokee Nation of Oklahoma, 480 U.S. 700, 707, 94 L. Ed. 2d 704, 107 S. Ct. 1487 (1987) (internal citation omitted), yet the Defendants have not pointed to anything in the record that constitutes an unmistakable waiver of the Government's right to pursue these claims. The case law is also clear that ] if equitable estoppel is ever to apply to the Government, the justification for it must be compelling and must go beyond the showing [**3]  a party would have to make against an ordinary opponent in an ordinary case. ATC Petroleum, Inc. v. Sanders, 274 U.S. App. D.C. 12, 860 F.2d 1104, 1111 (D.C. Cir. 1988). In this case, the Defendants have not even satisfied the traditional elements of equitable estoppel. It is equally clear that, ] under the law of this Circuit, laches and unclean hands are both unavailable as a matter of law when, as here, the Government acts in the public interest. Illinois Central Railroad Co. v. Rogers, 102 U.S. App. D.C. 327, 253 F.2d 349, 353 (D.C. Cir. 1958) (laches); United States ex rel. Purcell v. MWI Corp., 254 F. Supp. 2d 69, 74 n.2 (D.D.C. 2003) (laches); SEC v. Sprecher, 1993 U.S. Dist. LEXIS 18116, No. 92-2860, 1993 WL 544306, *2 (D.D.C. 1993) (citing Pan American Petroleum & Transport Co. v. United States, 273 U.S. 456, 506, 71 L. Ed. 734, 47 S. Ct. 416 (1927)) (unclean hands); SEC v. Gulf & Western Ind., Inc., 502 F. Supp. 343, 348 (D.D.C. 1980) (unclean hands). Finally, in pari delicto is only available when a party has "violated the law in cooperation with the defendant," Pinter v. Dahl, 486 U.S. 622, 632, 100 L. Ed. 2d 658, 108 S. Ct. 2063 (1988). Since Defendants have not even alleged that the Government [**4]  has committed any illegality during the period covered by the Complaint's allegations of conspiracy, the defense of in pari delicto has no applicability.

Upon consideration of the Motion, the Opposition, the Reply and the entire record herein; and for the reasons set forth below, the United States' Motion is granted.

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300 F. Supp. 2d 61 *; 2004 U.S. Dist. LEXIS 908 **


Subsequent History: Motion granted by, in part, Motion denied by, in part United States v. Philip Morris USA, Inc., 219 F.R.D. 198, 2004 U.S. Dist. LEXIS 1347 (D.D.C., Feb. 2, 2004)

Prior History: United States v. Philip Morris, Inc., 2004 U.S. App. LEXIS 486 (D.C. Cir., Jan. 13, 2004)

Disposition: United States' Motion for Partial Summary Judgment granted.


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Criminal Law & Procedure, Racketeering, Racketeer Influenced & Corrupt Organizations Act, General Overview, Governments, Federal Government, Claims By & Against, Legislation, Statute of Limitations, Equitable Estoppel, Civil Procedure, Defenses, Demurrers & Objections, Affirmative Defenses, Laches, Unclean Hands, Discovery, Methods of Discovery, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Genuine Disputes, Legal Entitlement, Materiality of Facts, Supporting Materials, Burdens of Proof, Antitrust & Trade Law, Private Actions, Racketeer Influenced & Corrupt Organizations, Responses, Waiver & Preservation of Defenses, Public Health & Welfare Law, Healthcare, Time Limitations, Abuse of Public Office, Neglect of Office, Elements, Equity, Maxims, Clean Hands Principle, Preliminary Considerations