Judge Skeptical of Tobacco Argument in U.S. Suit (Reuters)

WASHINGTON (Reuters) - A federal judge on Thursday voiced skepticism about a key argument that cigarette makers are using to defend themselves against government charges of civil racketeering.

U.S. District Judge Gladys Kessler expressed doubts after a tobacco lawyer said the industry should not be held liable for past misleading statements if the public never believed them.

"Twelve billion dollars a year (cigarette makers) are spending doesn't matter?" Kessler asked, referring to tobacco advertising and promotion spending cited by the government.

Brown & Williamson lawyer David Bernick conceded some industry statements over the years may have been "mistakes," but the judge should consider whether they were "material" to the case.

"Nobody was looking to us for health information," Bernick said, and results of public polls would back up that argument.

He said cigarette makers abandoned their efforts to aggressively counter health concerns during the 1980s and '90s after concluding that they were not working.

"I think what you're saying is what you said (in the past) doesn't matter," Kessler said skeptically during summation arguments on evidence presented in the past several of month. The trial began in September.

Bernick was trying to rebut government charges that cigarette makers for decades fraudulently denied that smoking was a proven cause of disease.

Brown & Williamson was a unit of British American Tobacco Plc, but was acquired by R.J. Reynolds in 2004.

Targeted in the government's lawsuit are Altria Group Inc. and its Philip Morris USA unit; Loews Corp.'s Lorillard Tobacco unit, which has a tracking stock, Carolina Group ; Vector Group Ltd.'s Liggett Group; Reynolds American Inc.'s R.J. Reynolds Tobacco unit and British American Tobacco Plc unit British American Tobacco Investments Ltd.

The tobacco companies deny they conspired to promote smoking and say the government has no grounds to pursue them after they drastically changed marketing practices as part of the 1998 settlement with state attorneys general.

Department lawyer Frank Marine told Kessler on Thursday that cigarette makers had portrayed the tobacco habit as comparable to jogging or listening to rock music.

"It wasn't," Marine said, recapping several months of testimony. "It was drug-driven, and they knew it."

Marine told Kessler that by the 1970s and '80s, scientists concluded that the nicotine in cigarettes was a dependency-producing drug.

Marine cited examples that he said demonstrated how the industry withheld those conclusions from the public and continued to put up what he called a "smokescreen" of "semantics and definitions" through the 1990s.

Earlier this month a federal appeals court stripped the government of its biggest weapon in the racketeering suit, barring the government's bid to have cigarette makers pay back $280 billion in past profits.

However, the department has said it will appeal the ruling and continue to pursue the case.