United States v. Philip Morris USA Inc.

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 17, 2004 Decided February 4, 2005
Reissued March 30, 2005

No. 04-5252

UNITED STATES OF AMERICA,
APPELLEE

v.

PHILIP MORRIS USA INC., ET AL., f/k/a PHILIP MORRIS
INCORPORATED ,
APPELLANTS

PHARMACIA CORPORATION AND
PFIZER INC.,
APPELLEES

Appeal from the United States District Court
for the District of Columbia
(No. 99cv02496)

Michael A. Carvin argued the cause for appellants. With
him on the briefs were Robert F. McDermott, Jr., Peter J.
Biersteker, Jonathan M. Redgrave, Allyson N. Ho, Timothy M.
Broas, Dan K. Webb, Kenneth N. Bass, Edward C. Schmidt,
Matthew D. Schwartz, Gene E. Voigts, Richard L. Gray, Bruce
G. Sheffler, James A. Goold, Theodore V. Wells, Jr., Murray
Garnick, David Eggert, David M. Bernick, J. William Newbold,
Michael B. Minton, Richard P. Cassetta, Steven Klugman, and
 2

Leonard A. Feiwus.

Robin S. Conrad, Jan S. Amundson, Quentin Riegel, and
Beth S. Brink mann were on the brief for amici curiae Chamber
of Commerce of the United States of America, et al. in support
of appellant.

Michael R. Dreeben, Attorney, U.S. Department of Justice,
argued the cause for appellee. On the brief were Peter D.
Keisler, Assistant Attorney General, Mark B. Stern and Alisa B.
Klein, Attorneys, Sharon Y. Eubanks, Director, Stephen D.
Brody, Deputy Director, and Frank J. Marine, Senior Litigation
Counsel.

Before: SENTELLE and TATEL, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge SENTELLE.

Concurring opinion filed by Senior Circuit Judge
WILLIAMS.

Dissenting opinion filed by Circuit Judge TATEL.

SENTELLE, Circuit Judge: A group of cigarette
manufacturers and related entities (“Appellants”) appeal from a
decision of the District Court denying summary judgment as to
the Government’s claim for disgorgement under the Racketeer
Influenced and Corrupt Organizations Act (“RICO” or “the
Act”), 18 U.S.C. §§ 1961-68. The relevant section of RICO, 18
U.S.C. § 1964(a), provides the District Courts jurisdiction only
for forward-looking remedies that prevent and restrain violations
of the Act. Because disgorgement, a remedy aimed at past
violations, does not so prevent or restrain, we reverse the
decision below and grant partial summary judgment for the
 3

Appellants.

I. Background

In 1999 the United States brought this claim against
appellant cigarette manufacturers and research organizations,
claiming that they engaged in a fraudulent pattern of covering up
the dangers of tobacco use and marketing to minors. The
Government sought damages under the Medical Care Recovery
Act (“MCRA”), 42 U.S.C. §§ 2651-53, and the Medicare
Secondary Payer (“MSP”) provisions of the Social Security Act,
42 U.S.C. § 1395y to recover health-care related costs
Appellants allegedly caused. The United States also claimed
that Appellants engaged in a criminal enterprise to effect this
cover-up, and sought equitable relief under RICO, including
injunctive relief and disgorgement of proceeds from Appellants’
allegedly unlawful activities. The Government sought this relief
under 18 U.S.C. § 1964(a), which gives the District Court
jurisdiction

to prevent and restrain violations of [RICO] by issuing
appropriate orders, including, but not limited to: ordering
any person to divest himself of any interest, direct or
indirect, in any enterprise; imposing reasonable restrictions
on the future activities or investments of any person,
including, but not limited to, prohibiting any person from
engaging in the same type of endeavor as the enterprise
engaged in, the activities of which affect interstate or
foreign commerce; or ordering dissolution or reorganization
of any enterprise . . . .

18 U.S.C. § 1964(a).

Appellants moved to dismiss the complaint in 2000. The
District Court did dismiss the MCRA and MSP claims, but
 4

allowed the RICO claim to stand. United States v. Philip
Morris, Inc., 116 F. Supp. 2d 131, 134 (D.D.C. 2000).

Section 1964(a) conferred jurisdiction on the District Court
only to enter orders “to prevent and restrain violations of the
statute.” In considering whether disgorgement came within this
jurisdictional grant, the court relied on a decision of the Second
Circuit, the only circuit then to have considered “whether . . .
disgorgements . . . are designed to ‘prevent and restrain’ future
conduct rather than to punish past conduct.” United States v.
Carson, 52 F.3d 1173, 1182 (2d Cir. 1995) (emphasis in
original). After noting that “RICO has a broad purpose [and] the
legislative history of § 1964 indicates that the equitable relief
available under RICO is intended to be ‘broad enough to do all
that is necessary,’” id. at 1181, the Carson court went on to
observe that it did not see how it could “serve[] any civil RICO
purpose to order disgorgement of gains ill-gotten long ago . . .
.” Id. at 1882. The portion of Carson relied upon by the District
Court in the present controversy suggested that disgorgement
might “serve the goal of ‘preventing and restraining’ future
violations,” but flatly held that the remedy would not do so
“unless there is a finding that the gains are being used to fund or
promote the illegal conduct, or constitute capital available for
that purpose.”1 Id. at 1182. The Second Circuit went on to

1
While the Carson language may appear to be dicta, the
Second Circuit remanded for determination of which disgorgement
amounts were sufficiently directed to prevention and restraint to
qualify under § 1964(a), thus treating the language on availability of
disgorgement as essential to the outcome of the case, and therefore a
holding. Some other courts have followed Carson. See, e.g., Richard
v. Hoechst Celanese Chem. Group, Inc., 355 F.3d 345, 354 (5th Cir.
2003) (observing that “the Second Circuit noted that disgorgement is
generally available under § 1964”); United States v. Private Sanitation
Indus. Ass'n, 914 F. Supp. 895, 901 (E.D.N.Y. 1996) (“[T]he
disgorgement in this case is clearly directed towards the prevention of
 5

caution that disgorgement would be better justified under this
analysis where the “gains [were] ill-gotten relatively recently.”
Id. The District Court accepted the Second Circuit’s suggested
holding that the appropriateness of disgorgement depends on
whether the proceeds are available for the continuing of the
criminal enterprise, but ruled that the question was premature,
and denied the motion for dismissal on the RICO-disgorgement
claim. Philip Morris, 116 F. Supp. 2d at 151-52. Neither party
sought leave to file an interlocutory appeal of that ruling.

The case proceeded, and the Government sought
disgorgement of $280 billion that it traced to proceeds from
Appellants’ cigarette sales to the “youth addicted population”
between 1971 and 2001. This population includes all smokers
who became addicted before the age of 21, as measured by those
who were smoking at least 5 cigarettes a day at that age.

After discovery, Appellants moved for summary judgment
on the disgorgement claim arguing that (1) disgorgement is not
an available remedy under § 1964(a), (2) even if disgorgement
were available, the Government’s model fails the Carson test for
permissible disgorgement that will “prevent and restrain” future
violations, and (3) even if disgorgement were available, the
Government’s proposed model is impermissible because it
includes both legally and illegally obtained profits in violation
of SEC v. First City Financial Corp., 890 F.2d 1215 (D.C. Cir.
1989). The District Court denied this motion in a memorandum
order designated “#550.” United States v. Philip Morris USA,
Inc., 321 F. Supp. 2d 72 (D.D.C. 2004). On motion of the
defendants, the District Court certified Order #550 for
interlocutory appeal pursuant to 28 U.S.C. § 1292(b). That
section provides for interlocutory appeal where a district judge

future illegal conduct, and is therefore a permissible remedy for civil
RICO violations under the limitations imposed by Carson.”).
 6

has certified that “an order not otherwise appealable . . . involves
a controlling question of law as to which there is substantial
ground for difference of opinion and that an immediate appeal
from the order may materially advance the ultimate termination
of litigation . . . .” Under § 1292(b), the Court of Appeals may
then decide whether to permit the appeal to be taken from such
order. In the present case, we allowed the appeal.

II. Analysis

A. Scope of Review

At the outset, the Government urges that our review should
be limited to the narrow question of whether the disgorgement
it seeks is consistent with the standards of Carson, not whether
disgorgement vel non is an available remedy under civil RICO.
The Government bases this argument on the theory that the
order on appeal–that is the memorandum order denying
“defendants’ motion for partial summary judgment dismissing
the Government’s disgorgement claim”–was reiterating a prior
order on the general question of availability of disgorgement.
Further, the Government argues, the order spoke anew only to
the measure of disgorgement, assuming such disgorgement to be
otherwise available. In support of its proposed limitation of our
review, the Government relies upon Yamaha Motor Corp., USA
v. Calhoun, 516 U.S. 199 (1996). In Yamaha, the Supreme
Court dealt with the breadth of review properly conducted by a
court of appeals under 28 U.S.C. § 1292(b). Id. at 204. The
Government selectively quotes from Yamaha the sentence that,
“The court of appeals may not reach beyond the certified order
to address others made in the case.” Id. at 205. Based on this
sentence, the Government then argues that because the first
order denying a motion to dismiss had dealt with the question of
the availability of disgorgement, this certified interlocutory
review of the subsequent summary judgment order is restricted
 7

to the new theory considered by the court on that occasion–that
the disgorgement the Government pursued exceeded the
standard available for such disgorgement as set by the Second
Circuit in Carson.

Unfortunately for the Government’s position, the Yamaha
opinion did not end with the sentence upon which the
Government relies. The Supreme Court went on to say in the
same paragraph: “But the appellate court may address any issue
fairly included within the certified order because ‘it is the order
that is appealable, and not the controlling question identified by
the district court.’” Id. (emphasis in original) (quoting 9 J.
MOORE & B. WARD, MOORE ’ S FEDERAL PRACTICE § 110.25[1]
at 300 (2d ed. 1995) and citing 16 C. WRIGHT, A. MILLER, E.
COOPER , & E. GRESHMAN, FEDERAL PRACTICE & PROCEDURE §
3929 at 144-45 (1977)). Appellants’ motion below was for
“Summary Judgment Dismissing the Government’s
Disgorgement Claim,” and granting this motion would have
resulted in complete dismissal of the Government’s claim for
disgorgement with prejudice. See Appellee’s App. at 19, 79.
Thus the District Court’s denial was on the question of whether
disgorgement would be allowed at all, and we may review it as
such regardless of the grounds the District Court gave for its
decision. In the memorandum accompanying its denial of this
motion, evidencing an accurate understanding of the summary
judgment standard provided by Rule 56 of the Federal Rules of
Civil Procedure, the District Court noted that “summary
judgment is appropriate if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment
as a matter of law.” Philip Morris, 321 F. Supp. 2d at 74 (citing
FED . R. C IV. P. 56(c)). Significantly, the court further noted that
“Defendants argue that any disgorgement which might be
ordered upon a finding of liability must be limited by both the
 8

text of Section 1964(a) itself and the holding in United States v.
Carson . . . interpreting that section.” Philip Morris, 321 F.
Supp. 2d at 74 (emphasis added). Thus the court clearly implied
the possibility that none might be ordered, and that statutory
issues outside Carson were before the court.

Our dissenting colleague argues that the availability of the
disgorgement claim vel non is not before us because Appellants
did not fully restate their earlier arguments in their motion, but
only expressed their reservation in a footnote referencing the
District Court’s prior rejection of their position. While it is true,
as our colleague reminds us, that we have held that a “litigant
does not properly raise an issue by addressing it in a ‘cursory
fashion,’ with only ‘bare-bones arguments,’” Cement Kiln
Recycling Coalition v. EPA, 255 F.3d 855, 869 (D.C. Cir. 2001)
(per curiam), our prior holdings on that subject have been in
very different contexts. In Cement Kiln, for example, and in
Wash. Legal Clinic for the Homeless v. Barry, 107 F.3d 32, 39
(D.C. Cir. 1997), relied upon by the dissent, we were
determining whether an issue was properly before us that had
been raised in no other fashion. In the present case, we are
reviewing a summary judgment decision, presumably according
to the standards set forth by the Supreme Court in such decisions
as Yamaha, and the issue in question was clearly decided by the
District Court in the first rejection of the motion to dismiss. The
issue was called to the attention of the court as a necessary
antecedent in the second summary judgment order, now under
direct review, and expressly pointed out in the footnote which
our colleague disdains. Furthermore, the motion leading to the
order presently before us sought summary judgment of dismissal
of the disgorgement claim, not simply a limitation to such
disgorgement as might have been supported by the Carson test
or other factors. Given the Supreme Court’s plain teaching in
Yamaha, particularly its adoption from a learned treatise of the
language “it is the order that is appealable, and not the
 9

controlling question identified by the district court,” Yamaha,
516 U.S. at 205 (see other authorities, supra), Cement Kiln and
Barry have no applicability. Yamaha controls. We therefore
proceed to review the denial of summary judgment, under the
usually applicable standards, not simply the sole question to
which the Appellees and the dissent would restrict us.

Our dissenting colleague suggests that we are limited by
“our general policy of declining to consider arguments not made
to the district court in the motion leading to the order under
appeal.” Dissent at 7. We know of no such “general policy”
that the particular issue addressed has to have been raised in the
particular motion. Rather, we understand our general policy to
be following the instructions of the Supreme Court that we are
to “address any issue fairly included within the certified order.”
Yamaha, 516 U.S. at 205. Insofar as our colleague’s differing
understanding rests on United States v. British Am. Tobacco
(Invs.) Ltd., 387 F.3d 884, 892 (D.C. Cir. 2004) (citing United
States v. Hylton, 294 F.2d 130, 135-36 (D.C. Cir. 2002)), cited
by Dissent at 11, we do not read that case as supporting a
general policy that limits consideration to those arguments
raised in the particular motion leading to the certified order, as
opposed to being “fairly included” within that order, or even to
address the point. The court in British American Tobacco held
only that an intervenor that had raised a privilege issue with
respect to an entire collection of documents at one stage of the
litigation, but that failed to participate at all in later proceedings
focused on one of the documents, despite having notice, had not
adequately preserved its objection as to that single document.
387 F.3d at 887-88. It had nothing to do with the scope of
review on an interlocutory appeal under § 1292(b). Neither it
nor Hylton dealt in any fashion with the breadth of interlocutory
review, nor was establishing any standard for the papers in
which an argument must have been raised. Each rejected an
attempt by an appellant to raise a new ground for the first time
 10

on appeal. Appellants before us raised and preserved their
argument as set forth in the text above. We read nothing in
British American Tobacco or Hylton to suggest a general policy
barring our review under the Yamaha standard.

We find no history of such a general policy that would bar
us from considering questions logically antecedent and essential
to the order under review. Especially is this so given the
Supreme Court’s instructions in Yamaha that we are to “address
any issue fairly included within the certified order.” That must
include at least issues that are logically interwoven with the
explicitly identified issue and which were properly presented by
the appellant. Even ignoring the apparent allusion to the broader
issue of summary judgment preserved in the caption of the
motion, the relief sought, and the footnote provided above, it is
difficult to see how we could establish such a policy that would
cause us to affirm a decision denying summary judgment when
a ground compelling its grant is fairly encompassed within the
order. Our colleague’s interpretation of general policy would
seem to compel us to return for trial a case before us for review
of a denial of summary judgment, no matter how plain the
absence of substantial question of material fact, on the grounds
that the denial of summary judgment had been based on
rejection of some other reasoning in a previous motion, even
though the trial court had earlier erred in denying the first
motion to dismiss–even when the appellant had called that
denial to the court’s attention in the caption of its motion, and a
proposed order accompanying the second motion.

Our dissenting colleague finds in Yamaha support for the
proposition that “the only issues ‘fairly included’ within a
certified order are those decided in the district court’s
accompanying memorandum . . . .” Dissent at 10. We
understand the law to be, as suggested in Yamaha, that issues are
not decided in memoranda at all, but rather in orders. Therefore,
 11

consistent with Yamaha, we review orders, not memoranda. Our
colleague asserts that in Yamaha the Court “found ‘fairly
included’ an issue that the district court had resolved in the same
opinion in which it decided the issue identified as the controlling
question of law.” Dissent at 10. While this may well be the
case, the Supreme Court not only did not stress that
circumstance, it did not even mention it. Indeed, we note that
our colleague had to repair to the unpublished opinion of the
District Court to discover the truth of his proposition. We
seriously doubt that the Supreme Court intended to establish a
precedent that difficult to discover, let alone apply.

Nothing in United States v. Stanley, 483 U.S. 669 (1987), is
to the contrary. The passage relied upon by our dissenting
colleague to the effect that courts considering interlocutory
appeals under § 1292(b) should “not consider matters that were
ruled upon in other orders,” id. at 677, did not address a
situation like the one before us. Here the order appealed from
reiterated, and totally depended upon, an issue fairly
encompassed within the motion before that court and the order
now before us. In Stanley, the court of appeals undertook
interlocutory review of an order dealing with one claim of a
multi-claim complaint. In that order, the district court had
refused to dismiss a claim asserted under the authority of Bivens
v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971).
On appeal, the court of appeals not only affirmed the district
court’s conclusion as to the Bivens claim, but reached back in
the record to order the district court to reinstate another claim
for relief asserted under the Federal Tort Claims Act, 28 U.S.C.
§ 2671 et seq. In the present case, the disputed “prior order” had
denied judgment of dismissal on the disgorgement claim. The
order concededly before us denied judgment of dismissal on the
same disgorgement claim. We see nothing in Stanley
inconsistent with the later instruction in Yamaha recognizing our
jurisdiction to “address any issue fairly included within the
 12

certified order.” Yamaha, 516 U.S. at 205. We therefore
proceed, obedient to our understanding of Yamaha, to review the
order before us denying summary judgment.

We review an order denying summary judgment de novo.
Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024, 1031
(D.C. Cir. 2004). Obedient to Yamaha, we will review Order
#550 denying summary judgment applying anew the standards
of Rule 56, and will not simply review that part of the District
Court’s thinking directed to the applicability of the Carson
standard or the consistency of the Government’s proffers with
that standard. Therefore, we must address the issue, logically
prior to the Carson question, of whether disgorgement is
available at all. We hold that the language of § 1964(a) and the
comprehensive remedial scheme of RICO preclude
disgorgement as a possible remedy in this case.

B. The Availability of Disgorgement

The Government argues that § 1964 contains a grant of
equitable jurisdiction that must be read broadly to permit
disgorgement in light of Porter v. Warner Holding Co., 328 U.S.
395 (1946), and its progeny. The Porter Court considered
reimbursement awards under the Emergency Price Control Act
of 1942 (“EPCA”) and concluded that where a statute grants
general equitable jurisdiction to a court, “all the inherent
equitable powers . . . are available for the proper and complete
exercise of that jurisdiction.” Porter, 328 U.S. at 398. This
grant is only to be limited when “a statute in so many words, or
by a necessary and inescapable inference, restricts the court’s
jurisdiction.” Id. In this case the text and structure of the statute
provide just such a restriction.

As the Supreme Court has repeatedly observed: “Federal
courts are courts of limited jurisdiction. They possess only that
 13

power authorized by Constitution and statute, which is not to be
expanded by judicial decree.” Kokkonen v. Guardian Life Ins.
Co. of America, 511 U.S. 373, 377 (1994) (citations omitted).
Reading Porter in light of this limited jurisdiction we must not
take it as a license to arrogate to ourselves unlimited equitable
power. We will not expand upon our equitable jurisdiction if, as
here, we are restricted by the statutory language, but may only
assume broad equitable powers when the statutory or
Constitutional grant of power is equally broad.

As our dissenting colleague correctly notes, the Court in
Porter was considering whether a district court acting under the
authority granted in the EPCA had the authority to order
restitution for overcharges. The implication of broad equitable
authority in Porter came from a statute which empowered the
district court to grant “a permanent or temporary injunction,
restraining order, or other order.” EPCA § 205(a), 56 Stat. 23,
33 (1942). The action before the Court in Porter was brought
under a section providing that “the Administrator” could bring
action against persons engaged in overcharges for “an order
enjoining such acts or practices, or for an order enforcing
compliance with such provision, and upon a showing by the
Administrator that such person has engaged or is about to
engage in any such acts or practices a permanent or temporary
injunction, restraining order, or other order shall be granted
without bond.” Id.

The Supreme Court did not have to make much of a stretch
to determine that the phrase “enforcing compliance with such
provision,” and expressly referring to “a permanent or
temporary injunction, restraining order, or other order,” would
include restitution for amounts collected exceeding the ceilings
determined under the statute. The Government in the present
case asks us to work a far greater expansion of the statutory
grant enabling the District Court in a civil RICO action brought
 14

by the Government under § 1964(a). We further note that the
Court in Porter was ordering restitution, under a statute
designed to combat inflation. Restitution of overcharge works
a direct remedy of past inflation, directly effecting the goal of
the statute. The Court in Porter set forth two theories under
which “[a]n order for the recovery and restitution of illegal rents
may be considered a proper ‘other order’” under the applicable
statute. 328 U.S. at 399. First, the recovery of the illegal
payment by the victim tenant “may be considered as an
equitable adjunct to the injunction decree,” as it effects “the
recovery of that which has been illegally acquired and which has
given rise to the necessity for injunctive relief.” Id. (noting that
“such a recovery could not be obtained through an independent
suit in equity if an adequate legal remedy were available.”). The
equitable jurisdiction of the Court having been properly
invoked, the Court then had the power “to decide all relevant
matters in dispute and to award complete relief . . . .” Id. Also,
and more to the point, the Court was authorized “in its
discretion, to decree restitution of excessive charges in order to
give effect of the policy of Congress.” Id. at 400. The policy of
Congress under the EPCA was to prevent overcharges with
inflationary effect. The goal of the RICO section under which
the government seeks disgorgement here is to prevent or restrain
future violations. We therefore must consider the forward-
looking nature of the remedy in a way not applicable to a
different remedy in Porter for the accomplishment of a different
goal under a different statute.

Section 1964(a) provides jurisdiction to issue a variety of
orders “to prevent and restrain” RICO violations. This language
indicates that the jurisdiction is limited to forward-looking
remedies that are aimed at future violations. The examples
given in the text bear this out. Divestment, injunctions against
persons’ future involvement in the activities in which the RICO
enterprise had been engaged, and dissolution of the enterprise
 15

are all aimed at separating the RICO criminal from the
enterprise so that he cannot commit violations in the future.
Disgorgement, on the other hand, is a quintessentially backward-
looking remedy focused on remedying the effects of past
conduct to restore the status quo. See, e.g., Tull v. United States,
481 U.S. 412, 424 (1987). It is measured by the amount of prior
unlawful gains and is awarded without respect to whether the
defendant will act unlawfully in the future. Thus it is both
aimed at and measured by past conduct.

The Government would have us interpret § 1964(a) instead
to be a plenary grant of equitable jurisdiction, effectively
ignoring the words “to prevent and restrain” altogether. This not
only nullifies the plain meaning of the terms and violates our
canon of statutory construction that we should strive to give
meaning to every word, see, e.g., Murphy Explor. & Production
Co. v. United States Dept. of the Interior, 252 F.3d 473, 481
(D.C. Cir. 2001), but also neglects Supreme Court precedent. In
Meghrig v. KFC Western, Inc., 516 U.S. 479, 488 (1996), the
Court held that compensation for past environmental cleanup
was ruled out by the plain language of the Resource
Conservation and Recovery Act which authorized actions “to
restrain” persons who were improperly disposing of hazardous
waste. If “restrain” is only aimed at future actions, “prevent” is
even more so.

Mitchell v. DeMario Jewelry, 361 U.S. 288 (1960), relied
on by the Government, is not to the contrary. The Mitchell case
was brought under the Fair Labor Standards Act of 1938, 29
U.S.C. § 215, 52 Stat. 1060 (1938) (“FLSA”). In that action, the
Government was invoking the court’s jurisdiction to restrain
violations of a section making it unlawful for a covered
employer to discharge or discriminate against employees who
had filed complaints or instituted actions under the FLSA. The
Court reviewed the whole breadth of that broad Act to conclude
 16

that the available remedies included not only injunction against
further discrimination and mandatory injunctions of
reinstatement, but also a “make whole” reimbursement for lost
wages because of the discriminatory discharge. As in Porter,
the Court reiterated that in equitable jurisdiction “[u]nless
otherwise provided by statute, all the inherent equitable powers
of the District Court are available for the proper and complete
exercise of that jurisdiction.” Mitchell, 361 U.S. at 291 (quoting
Porter, 328 U.S. at 398). In the RICO Act, Congress provided
a statute granting jurisdiction defined with the sort of limitations
not present in the FLSA or the EPCA. The statute under which
the Government sued Appellants, 18 U.S.C. § 1964(a), granted
only the jurisdiction which we set forth above. The District
Court, so far as is relevant to actions under that section, has
jurisdiction only

to prevent and restrain violations of [RICO] by issuing
appropriate orders, including, but not limited to: ordering
any person to divest himself of any interest, direct or
indirect, in any enterprise; imposing reasonable restrictions
on the future activities or investments of any person,
including but not limited to, prohibiting any person from
engaging in the same type of endeavor as the enterprise
engaged in, the activities of which affect interstate or
foreign commerce; or ordering dissolution or reorganization
of any enterprise . . . .

18 U.S.C. § 1964(a) (emphasis added). The order of
disgorgement is not within the terms of that statutory grant, nor
any necessary implication of the language of the statute.

In considering the broad language from Porter upon which
our dissenting colleague relies for the proposition that we should
find disgorgement available because Congress has not taken it
away, we note that the Supreme Court considered a similar
 17

argument in Meghrig. The High Court nonetheless limited the
available remedies under CERCLA to those provided in the
statute, declaring that

where Congress has provided “elaborate enforcement
provisions” for remedying the violation of a federal statute,
as Congress has done with RCRA and CERCLA, “it cannot
be assumed that Congress intended to authorize by
implication additional judicial remedies . . . .”

516 U.S. at 487-88 (quoting Middlesex County Sewerage Auth.
v. Nat’l Sea Clammers Ass’n, 453 U.S. 1, 14 (1981)).

In RICO, as in RCRA and in CERCLA, Congress has laid
out elaborate enforcement proceedings. One of those
proceedings is a government action brought under § 1964(a).
That one does not provide for disgorgement. That one provides
only for orders which “prevent or restrain” future violations.
Disgorgement does not do that.

It is true, as the Government points out, that disgorgement
may act to “prevent and restrain” future violations by general
deterrence insofar as it makes RICO violations unprofitable.
However, as the Second Circuit also observed, this argument
goes too far. “If this were adequate justification, the phrase
‘prevent and restrain’ would read ‘prevent, restrain, and
discourage,’ and would allow any remedy that inflicts pain.”
Carson, 52 F.3d at 1182.

The remedies available under § 1964(a) are also limited by
those explicitly included in the statute. The words “including,
but not limited to” introduce a non-exhaustive list that sets out
specific examples of a general principle. See Dong v.
Smithsonian Inst., 125 F.3d 877, 880 (D.C. Cir. 1997).
Applying the canons of noscitur a sociis and ejusdem generis,
 18

we will expand on the remedies explicitly included in the statute
only with remedies similar in nature to those enumerated. See
Wash. State Dep't of Soc. & Health Servs. v. Guardianship
Estate of Keffeler, 537 U.S. 371, 384 (2003). The remedies
explicitly granted in § 1964(a) are all directed toward future
conduct and separating the criminal from the RICO enterprise to
prevent future violations. Disgorgement is a very different type
of remedy aimed at separating the criminal from his prior ill-
gotten gains and thus may not be properly inferred from §
1964(a).

The structure of RICO similarly limits courts’ ability to
fashion equitable remedies. Where a statute has a
“comprehensive and reticulated” remedial scheme, we are
reluctant to authorize additional remedies; Congress’ care in
formulating such a “carefully crafted and detailed enforcement
scheme provides strong evidence that Congress did not intend to
authorize other remedies that it simply forgot to incorporate
expressly.” Great-West Life & Annuity Ins. Co. v. Knudson, 534
U.S. 204, 209 (2002) (quoting Mertens v. Hewitt Associates, 508
U.S. 248, 251, 254 (1993)) (internal quotations omitted)
(emphasis in original). RICO already provides for a
comprehensive set of remedies. When Congress intended to
award remedies that addressed past harms as well as those that
offered prospective relief, it said as much. In a criminal RICO
action the defendant must forfeit his interest in the RICO
enterprise and unlawfully acquired proceeds, and may be
punished with fines, imprisonment for up to twenty years, or
both. 18 U.S.C. § 1963(a). In a civil case the Government may
request limited equitable relief under § 1964(a). Individual
plaintiffs are made whole and defendants punished through
treble damages under 18 U.S.C. § 1964(c). This
“comprehensive and reticulated” scheme, along with the plain
meaning of the words themselves, serves to raise a “necessary
and inescapable inference,” sufficient under Porter, 328 U.S. at
 19

398, that Congress intended to limit relief under § 1964(a) to
forward-looking orders, ruling out disgorgement.

Congress’ intent when it drafted RICO’s remedies would be
circumvented by the Government’s broad reading of its §
1964(a) remedies. The disgorgement requested here is similar
in effect to the relief mandated under the criminal forfeiture
provision, § 1963(a), without requiring the inconvenience of
meeting the additional procedural safeguards that attend
criminal charges, including a five-year statute of limitations, 18
U.S.C. § 3282, notice requirements, 18 U.S.C. § 1963(l), and
general criminal procedural protections including proof beyond
a reasonable doubt. Further, on the Government’s view it can
collect sums paralleling–perhaps exactly–the damages available
to individual victims under § 1964(c). Not only would the
resulting overlap allow the Government to escape a statute of
limitations that would restrict private parties seeking essentially
identical remedies, see Agency Holding Corp. v. Malley-Duff &
Assoc., Inc., 483 U.S. 143, 156 (1987), but it raises issues of
duplicative recovery of exactly the sort that the Supreme Court
said in Holmes v. Securities Investor Protection Corp., 503 U.S.
258, 269 (1992), constituted a basis for refusing to infer a cause
of action not specified by the statute. Permitting disgorgement
under § 1964(a) would therefore thwart Congress’ intent in
creating RICO’s elaborate remedial scheme.

A note appended to the statute stating that RICO “shall be
liberally construed to effectuate its remedial purposes” does not
effect this structural inference. Organized Crime Control Act of
1970, Pub. L. No. 91-452, § 904(a), 84 Stat. 947 (codified in a
note following 18 U.S.C. § 1961). This clause may warn us
against taking an overly narrow view of the statute, but “it is not
an invitation to apply RICO to new purposes that Congress
never intended.” Reves v. Ernst & Young, 507 U.S. 170, 183
(1993). The text and structure of RICO indicate that those
 20

remedial purposes do not extend to disgorgement in civil cases.

The Second Circuit in Carson has interpreted “prevent and
restrain” not to eliminate the possibility of disgorgement
altogether, but to limit it to cases where there is a finding “that
the gains are being used to fund or promote the illegal conduct,
or constitute capital available for that purpose.” Carson, 52
F.3d at 1182. The Fifth Circuit adopted this interpretation in a
case holding that disgorgement after the defendant had ceased
production of an allegedly defective product would be
inappropriately punitive rather than directed toward future
violations. See Richard v. Hoechst Celanese Chemical Group,
355 F.3d 345, 355 (5th Cir. 2003). While we avoid creating
circuit splits when possible, in this case we can find no
justification for considering any order of disgorgement to be
forward-looking as required by § 1964(a). The language of the
statute explicitly provides three alternative ways to deprive
RICO defendants of control over the enterprise and protect
against future violations: divestment, injunction, and dissolution.
We need not twist the language to create a new remedy not
contemplated by the statute.

Our colleague reminds us that the Supreme Court has
instructed “[i]f a precedent of this Court has direct application
in a case, yet appears to rest on reasons rejected in some other
line of decisions, the Court of Appeals should follow the case
which directly controls, leaving to this Court the prerogative of
overruling its own decisions.” Dissent at 23 (quoting Rodriguez
de Quijas v. Shearson/American Express, Inc., 490 U.S. 477,
484 (1989)). This would be most devastating to one side of the
case or the other if we were in fact attempting to overrule a
Supreme Court precedent. That is, if there were a Supreme
Court case that had direct application to the facts before us, we
would be required to follow it, and that would be the end of the
matter. We would not need to consider any other line of cases.
 21

However, the Rodriguez de Quijas language is not particularly
helpful when no precedent of the Supreme Court “has direct
application,” as in the present case. There is not a Supreme
Court case dealing with the jurisdiction of a district court to
order disgorgement under RICO § 1964(a). There is not a
Supreme Court case discussing that question. There is, in short,
no Supreme Court case having direct application. With no
Supreme Court case having direct application, it is our duty to
construe the statute. That is what we have done.

III. Conclusion

Because we hold that the District Court erred when it found
that disgorgement was an available remedy under 18 U.S.C. §
1964(a), we reverse the District Court and grant summary
judgment in favor of Appellants as to the Government’s
disgorgement claim.
 WILLIAMS, Senior Circuit Judge, concurring: I join the
opinion for the court. I write separately to emphasize
problems with the government’s fallback interpretation of 18
U.S.C. § 1964(a), under which the government could obtain
disgorgement for purposes of reducing the defendant’s ability
to commit future RICO violations, with the amount
accordingly limited to assets “being used to fund or promote
the illegal conduct, or [that] constitute capital available for
that purpose.” United States v. Carson, 52 F.3d 1173, 1182
(2d Cir. 1995). This superficially appealing interpretation in
fact creates a kind of pushmi-pullyu, a beast that Congress is
most unlikely to have ordained.

I.

The statute gives district courts “jurisdiction to prevent
and restrain [RICO] violations.” 18 U.S.C. § 1964(a).
Reasoning that pure deterrence was an impermissible
objective of orders under § 1964(a), the Second Circuit went
on to find that disgorgement could “prevent and restrain” if
limited to the amount of ill- gotten gains that were “being used
to fund or promote the illegal conduct, or constitute capital
available for that purpose.” Id. at 1182. Because money is
fungible, as indeed are virtually all resources when viewed as
enablers of future criminal conduct, the government here
refines its Carson-derived fallback position, quite sensibly
rejecting any limitation to “ill- gotten gains” in the form of
specific money or resources so gained. Such a limit, we have
said (applying a different statute), would lead to absurd
results. SEC v. Banner Fund International, 211 F.3d 602, 617
(D.C. Cir. 2000). There the defendant proposed to confine
disgorgement to the “actual assets” unjustly received. We
said that what mattered was not the specific assets but the
amount by which the defendant was unjustly enriched; the
alternative would allow a defendant to escape liability by
 2

spending ill- gotten gains while husbanding other assets. Id. at
617. Thus the government’s proposal is that the amount of
the ill- gotten gains should set a ceiling on the disgorgement
recovery, subject to the further limit mentioned above—
essentially purporting to limit the disgorgement to crime-
enabling resources, broadly construed.

In Carson itself the court ruled that this prevented the
government from forcing disgorgement of funds, ill- gotten in
the distant past, from a RICO defendant by then retired from
the RICO enterprise itself (a union). In the context of
corporate defendants such as those before us, a possible limit
would be the entire net worth of the companies (a good deal
less than the $280 billion that the government claims to have
been ill- gotten gains). But perhaps not. Even that limit is
arbitrary, as resources can be used for criminal purposes even
if offset by company debt. Subject to the bankruptcy laws,
nothing in the logic of the crime-enablement theory clearly
calls for stopping at confiscation of the shareholders’
interests; why not the bondholders’ as well?

On the other side, it might be plausible under the Carson
theory to exempt firm resources now devoted to non-tobacco
enterprises. It is probably about as difficult for these
defendants to re-allocate resources from the businesses of
cheese and crackers, for example, to criminality in the sale of
cigarettes, as for the union in Carson to lure Carson and his
funds back from retirement to union criminality.

In short, Carson and the government’s fallback position
send the court off on a virtually metaphysical quest to draw
lines based on the likelihood that particular resources will be
devoted to crime.
 3

II.

It is hardly surprising that there are only gossamer lines
between drastic disgorgement (destruction of bondholder as
well as shareholder wealth) and relatively mild disgorgement
(cordoning off resources in non-tobacco subsidiaries). The
plain fact is that wealth deprivation is an extremely crude
device for “prevent[ing]” criminal behavior. Granted, a
criminal miscreant with a billion dollars is potentially more
dangerous than an impoverished criminal miscreant. But
ordinarily the forces most affecting the likelihood of criminal
action are, besides the actors’ ethical standards and sense of
shame, truly forward- looking conditions: the returns to crime
versus the possible costs, all adjusted for risk (such as the risk
of getting caught).

Confusion arises from an ambiguity in our understanding
that, in the civil context, such remedies as damage awards and
restitution “deter,” and thus in a sense “prevent” commission
of torts, breaches of contract, and other civil wrongs. It is
quite true that a rule or practice of awarding such remedies
deters, and thus prevents, such wrongs. Indeed, under one
viewpoint that is the primary or even sole purpose of
awarding such remedies. See William M. Landes & Richard
A. Posner, The Economic Structure of Tort Law (1987). But it
is the rule or practice that creates the incentive. To make the
rule credible, of course, the awards must be made; but no
individual award has a material deterrent effect.

To evaluate that last statement consider a society that
empowered some deus ex machina to randomly excuse one
damage judgment in a million. Such an exception to the rules
would have no detectible effect on the commission of torts or
breaching of contracts. Even the lucky defendant who
 4

enjoyed the benefit of the pardon wouldn’t—unless a
complete fool—materially alter his future conduct because of
that manna from heaven.

The equity court, empowered under § 1964(a) to “prevent
and restrain” future violations, has before it the history of the
defendant, including his past wrongs. It can decree relief
targeted to his plausible future behavior. It can define the
conditions bearing directly on that behavior. It can, for
example, establish schedules of draconian contempt penalties
for future violations, and impose transparency requirements so
that future violations will be quickly and easily identified.

In assessing the likelihood that Congress intended an
additional disgorgement remedy, it makes sense to inquire
into the tendency of such an implied remedy to “prevent and
restrain” future violations by the defendant. Of course the
rule the government seeks here would be a rule, not merely a
random extra penalty. But the question would be its
incremental effect, on top of (1) RICO’s explicit provisions
for criminal penalties (including disgorgement and
imprisonment under § 1963(a)) and for victim recoveries
(trebled) under § 1964(c), and (2) the whole available panoply
of genuinely forward-looking remedies—express controls
over substantive conduct, transparency-enhancing orders, and
contempt penalties for violations. It seems almost
inconceivable that many aspiring criminals would find the
incremental risk decisive. I find it hard to imagine a waffling
villain—already in court for RICO violations—saying to
himself: “Well, my chances of escaping § 1963(a) forfeiture
and imprisonment because of the statute of limitations and the
burden of proof, and of escaping treble damages under
§ 1964(c), and contempt penalties for violating the court’s
orders, still leave RICO violations attractive on a net basis;
 5

but that implied disgorgement under § 1964(a)—wow! Too
much. It tilts me over the line.”

The weakness of that scenario supports the inference that
for the defendant who winds up before the equity court,
Congress intended the words “prevent and restrain” to
authorize only a tailored, forward- looking remedy. Penalties
for violations of the court’s decree, and transparency-
enhancing measures meet that standard. A purported
§ 1964(a) disgorgement remedy, on top of those explicitly
authorized, would provide only a trivial incremental effect
(the reverse of the pardon granted once in a million), and
would not qualify. Nor would disgorgement aimed at
reducing the defendant’s crime-enabling resources, a factor
linked only crudely to his future tendency toward criminality.

Once we (1) accept the proposition that § 1964(a) limits
the equity court to forward- looking remedies, as even the
dissent appears to do with respect to the government’s
narrower argument, see Dissent at 31 (“I also share the
Second Circuit’s apparent conclusion . . . that disgorgement
may be ordered only to prevent and restrain a defendant from
future RICO violations.”), and (2) reject the supposition that
“whatever hurts a civil RICO violator necessarily serves to
‘prevent and restrain’ future violations,” Carson, 52 F.3d at
1182, the court must try to draw lines between equitable
remedies that merely “hurt” the defendant and ones that have
a genuine tendency to “prevent and restrain” his future
violations.

Because disgorgement under § 1964(a) so evidently lacks
that tendency, the dissent relies on Porter and on the
government’s experts. Porter indeed includes the twice cited
phrase suggesting that “[f]uture compliance may be more
 6

definitely assured if one is compelled to restore one’s ill-
gotten gains.” Dissent at 28, 32. But the statute at issue in
Porter gave district courts power to issue orders “enforcing
compliance” and thus didn’t seem to narrow the grant to
forward-looking remedies. Indeed the Porter dissent never
suggests such a limit; nor, so far as appears, did the defendant
firm. For construing § 1964(a), Porter is of remarkably little
help.

The expert testimony offered by the government for the
proposition that backward- looking disgorgement will
“‘prevent and restrain’ defendants from committing future
RICO violations,” see Dissent at 33, serves no better.
Obviously such testimony cannot alone resolve the issue,
turning legal analysis of the statute into a fact battle among
experts. Thus the experts’ testimony is valuable for its
analytic quality, not its utterance by a PhD.

The dissent’s genuflection before the experts leaves the
reader to imagine some supporting analysis. Lest the
imagination run riot, I attach an appendix containing all of the
expert testimony that the government saw fit to offer on the
point in the summary judgment motion. The crux is Dr.
Franklin Fisher’s statement:

[Defendants’ experts] have also suggested that enjoining
Defendants from future illegal behavior and threatening
them with the possibility of financial penalties would be
more effective as future deterrents than would be
disgorgement. Professor Weil, for example, suggests that
‘the Court could establish now a schedule of fines or
punishments that it would levy should the Defendants
engage in prohibited behavior.’ These experts forget that
laws prohibiting this behavior already exist and that,
 7

despite these laws and their associated remedies, the
Defendants allegedly chose to engage in the illegal
behavior. In this context, it is important to note that
requiring Defendants to pay proceeds would strengthen
the credibility of existing laws and thus provide
additional economic incentives to deter future
misconduct. 1

While it is a nice rhetorical move to point out that the
defendants violated RICO (as we must assume) despite
existing sanctions, Fisher offers no analysis as to why the
presence of a civil disgorgement remedy in favor of the
government would have reduced the likelihood of violations.
(Indeed, on the government’s theory—that the statute actually
creates such a remedy—the defendants would have taken that
into account in deciding to proceed with violations.) More
important, Fisher looks at the wrong setting. Before this (or
any) RICO litigation against a particular defendant, that
defendant would have operated without the spotlight of the
lawsuit itself. (That may explain why the government let the
statute of limitations run for decades, and why the victims
failed to seek treble damages.) Now the spotlight is on, and
the plausible explanations for non-application of the explicit
remedies (other than § 1964(a) equitable relief) have
disappeared. And the district court can amplify the spotlight

1
United States Memorandum in Opposition to Defendants’
Motion for Partial Summary Judgment Dismissing the
Government’s Disgorgement Claim, Appellee’s Appendix at 813-
14. Although Appellee’s Appendix was filed under seal, the expert
testimony presented to the court has also been posted by the
government on its website.
 8

with transparency-enhancing and prior-approval measures.
The real question is whether the imposition of this extra
remedy on the defendants before the court—backward-
looking civil disgorgement in favor of the government—
would materially alter their readiness to persist in violations,
in the face of all RICO’s explicit remedies, and a forward-
looking schedule of penalties for even minute infractions,
made doubly effective by compulsory disclosure and approval
measures. The government’s experts simply did not address
that question. This court’s own analysis provides a clear
answer that the extra “remedy” would not do so.

The dissent’s use of the government’s experts is part of
its effort (in its qualified endorsement of the government’s
fallback position) to transform an issue of statutory
interpretation into one of fact. See Dissent at 27, 33-34; see
also id. at 28 (noting that in Meghrig v. KFC Western, Inc.,
516 U.S. 479 (1996), there was no affirmative evidence that
the defendants were likely to commit future RCRA violations,
and thus suggesting that the case was something other than
pure statutory interpretation). But the “facts” hypothesized by
the dissent are unrelated to the real world faced by RICO
defendants—already arraigned for their past offenses and
subject to a battery of new disincentives on top of all RICO’s
conventional explicit remedies. Statutory interpretation
shouldn’t turn on factual hypotheticals such as, “What if pigs
had wings.”

III.

The above analysis seems to me to confirm what intuition
suggests about the jurisdictional issue in this case. Even the
most narrowly formulated question about the validity of the
 9

district court’s order—the choice between the government’s
primary position (that § 1964(a) creates unlimited discretion
to order disgorgement) and its fallback position (that it
provides authority to award crime-enabling disgorgement)—
requires the court to plumb the meaning of § 1964(a). The
issues in this case, all turning on the interpretation of
§ 1964(a)’s lone sentence, are so thoroughly enmeshed that
we needn’t explore the court’s language limiting § 1292(b)
jurisdiction to issues “logically interwoven” with the
explicitly identified issue. Maj. Op. at 10. The dissent’s
hypotheticals as to what might be covered, see Dissent at 8-9,
plainly depend on an astonishingly broad notion of either
logic or weaving. Having analyzed § 1964(a) and having
found the order in conflict with its terms, the court must
reverse.

One final note. The dissent chides the court for creating a
circuit split. See Dissent at 2. But if we confined ourselves to
what the dissent acknowledges to be properly before us, and
adopted the dissent’s preferred position (that disgorgement is
available like any other equitable remedy, regardless of its
likely effects on a defendant’s future behavior, simply becaus e
RICO doesn’t explicitly preclude it), we would create no less
of a split between this circuit and the Second.
 10

Appendix

Excerpt from United States Memorandum in Opposition to
Defendants’ Motion for Partial Summary Judgment
Dismissing the Government’s Disgorgement Claim,
Appellee’s Appendix at 812-14.

B. Disgorgement Provides Economic Incentives That Will
Prevent Further RICO Violations

172. Despite the fact that it is not necessary for the United

States to prove this, disgorgement will prevent and restrain

further bad acts.

173. Drs. Fisher and Kothari have both stated in their

expert reports and deposition testimony, that disgorgement of

the proceeds calculated by Dr. Fisher would in fact act to

prevent and restrain future RICO violations. Dr. Fisher

directly addressed this point in his rebuttal report in which he

states:
 11

Defendants’ experts have suggested that disgorgement
of ill- gotten gains such as the proceeds sought in this
matter will not serve the goal of preventing or
restraining the defendants from engaging in similar
bad acts in the future. For example, Professor Carlton
argues, “Having to disgorge past proceeds, by itself,
would not affect a defendant’s incentives to engage in
misconduct in the future because it would not affect
the returns (if any) from future misconduct.” I address
these criticisms with well-known economic principles.
What Professor Carlton and the other defendants’
experts who espouse this view fail to recognize is that
requiring defendants to pay proceeds will affect their
expectations (and those of others contemplating
malfeasance) about the returns from future
misconduct. As a matter of economic principle, the
higher the proceeds amount, the lower the expected
returns from future misconduct and the greater the
desired effect of deterrence.

Expert Rebuttal Report of Franklin Fisher, United States v.

Philip Morris, (R. 1450; filed July 24, 2002) at 4-5 ¶ 12.

174. Dr. Kothari’s expert report confirms Dr. Fisher’s

conclusion:

Requiring the defendants to pay ill- gotten proceeds is
relevant. The economic incentive for illegal behavior
is higher (for defendants and onlookers) if defendants
are not required to pay the proceeds. While payment
 12

of proceeds has some of the features of sunk cost, it is
not identical to a sunk cost because it will affect future
decisions or behavior. The higher the proceeds paid
the greater the economic incentive to avoid illegal
behavior in the future.

Expert Report of S.P. Kothari, United States v. Philip Morris,

(R. 1451; filed July 24, 2002) at 3-4, ¶ 8.

175. Dr. Fisher expressly states in his expert report:

[Defendants’ experts] have also suggested that
enjoining Defendants from future illegal behavior and
threatening them with the possibility of financial
penalties would be more effective as future deterrents
than would be disgorgement. Professor Weil, for
example, suggests that ‘the Court could establish now
a schedule of fines or punishments that it would levy
should the Defendants engage in prohibited behavior.’
These experts forget that laws prohibiting this
behavior already exist and that, despite these laws and
their associated remedies, the Defendants allegedly
chose to engage in the illegal behavior. In this
context, it is important to note that requiring
Defendants to pay proceeds would strengthen the
credibility of existing laws and thus provide additional
economic incentives to deter future misconduct.

Expert Rebuttal Report of Franklin Fisher, United States v.

Philip Morris, (R. 1450; filed July 24, 2002) at 5-6, ¶ 14.
 13

176. Dr. Fisher has repeatedly confirmed the preventative

benefit of disgorgement. At his deposition he stated:

Q. … the idea is that disgorgement
prevents and restrains future violations by altering the
defendants’ expectations about the returns they might
receive from future misconduct. Is that right?

A. …I believe that to be correct.

Q. Does disgorgement prevent and restrain
future RICO violations in any other way?

A. Well, it removes at least some, and
possibly all, of the assets with which to engage in
future illegal activities.

Deposition of Franklin Fisher, United States v. Philip Morris,

September 12, 2002, 828:4-19 (Exhibit 77).

177. “[A]s I have repeatedly and clearly stated in my

report and deposition testimony, disgorgement of Defendants’

proceeds, as I have calcula ted them, would in fact act to

prevent and restrain future RICO violations.” Declaration of
 14

Franklin Fisher, United States v. Philip Morris, at 7, ¶ 16

(Master Rule 7.1/56.1 St. Exhibit 5)
 TATEL, Circuit Judge, dissenting: Congress passed the
Organized Crime Control Act of 1970, which included RICO,
“to seek the eradication of organized crime in the United States
. . . by providing enhanced sanctions and new remedies to deal
with the unlawful activities of those engaged in organized
crime.” United States v. Turkette, 452 U.S. 576, 589 (1981)
(quoting Pub. L. No. 91-452, 84 Stat. 922, 923 (1970)).
Through this lawsuit, the United States seeks to end what it
perceives as rampant racketeering violations within the tobacco
industry. Specifically, the government offers voluminous
evidence, which we must view in the light most favorable to it,
see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)
(stating that at summary judgment the “evidence of the non-
movant is to be believed, and all justifiable inferences are to be
drawn in [its] favor”), that Philip Morris, Altria Group, R.J.
Reynolds, Brown & Williamson, Lorillard, BATCo, and Liggett
have engaged in a half century of deceptive practices to the
detriment of the health—and lives—of their customers. Acting
both individually and in concert through collective agreements
and jointly funded organizations like the Council for Tobacco
Research and the Tobacco Institute (also defendants), these
companies publicly defended smoking as both harmless and
nonaddictive despite knowing from internal research that it was
neither. In their advertising campaigns the companies targeted
young people, who “often lack the experience, perspective, and
judgment to recognize and avoid choices that could be
detrimental to them,” Bellotti v. Baird, 443 U.S. 622, 635
(1979), despite publicly claiming otherwise.
The government alleges that during the course of this
behavior, the defendants committed over ninety racketeering
violations between RICO’s 1970 effective date and the
government’s 1999 complaint. Significantly for this appeal, the
government further claims that absent court intervention and
despite the master settlement agreement between the tobacco
companies and the states, the companies are likely to continue
their deceptive practices and commit further racketeering
violations in the future. The government’s claim regarding
 2

likely future conduct rests not only on the companies’ alleged
history of deceptive activities, but also on record evidence that
the companies continue making their misleading statements
about both the health consequences of smoking and the
addictive nature of nicotine, as well as persisting in their
marketing efforts aimed at young people. The government asks
the district court to enjoin the tobacco companies from future
unlawful conduct and to order them to disgorge the profits they
have earned due to their racketeering violations since RICO’s
effective date—profits the government estimates amount to
$280 billion.
In now holding that district courts may never order
disgorgement as a remedy for RICO violations, this court
ignores controlling Supreme Court precedent, disregards
Congress’s plain language, and creates a circuit split—all in
deciding an issue not properly before us. Because the tobacco
companies ask us to address an issue not fairly included in the
certified order and not presented at that time to the district court,
I would dismiss this interlocutory appeal. Were it appropriate
to reach the merits, I would uphold the district court’s denial of
summary judgment on either of two grounds. First, unless “a
statute in so many words, or by a necessary and inescapable
inference, restricts the court’s jurisdiction in equity,” district
courts may grant any equitable relief. Porter v. Warner Holding
Co., 328 U.S. 395, 398 (1946). Because under a fair application
of Supreme Court precedent, see id. at 398-403, no such
inference can be drawn about RICO, I would conclude that the
district court has authority to order disgorgement. Alternatively,
even if RICO’s phrase “prevent and restrain violations,” 18
U.S.C. § 1964(a), limits the district court’s equitable
jurisdiction, I would still uphold the denial of summary
judgment because the government has presented evidence that
disgorgement will accomplish just that purpose in this case.
 3

I.
Under 28 U.S.C. § 1292(b), if a district court “shall be of
the opinion that [an] order involves a controlling question of law
as to which there is substantial ground for difference of opinion
and that an immediate appeal from the order may materially
advance the ultimate termination of the litigation,” it may certify
the order for interlocutory review, and the court of appeals “may
thereupon, in its discretion, permit an appeal to be taken from
such order.” Section 1292(b) establishes a “two-tiered
arrangement.” Swint v. Chambers County Comm’n, 514 U.S.
35, 47 (1995). Congress “chose to confer on district courts first
line discretion to allow interlocutory appeals,” id., and “even if
the district judge certifies the order under § 1292(b), the
appellant still has the burden of persuading the court of appeals
that exceptional circumstances justify a departure from the basic
policy of postponing appellate review until after the entry of a
final judgment,” Coopers & Lybrand v. Livesay, 437 U.S. 463,
475 (1978) (internal quotation marks and citation omitted). In
accepting this interlocutory appeal, this court not only (at the
least) pushes the bounds of its jurisdiction, but also exercises its
discretion on behalf of defendants whose litigating tactics leave
much to be desired.

A.
In 2000, the tobacco companies—usually referred to in this
opinion as “Philip Morris”—filed a motion to dismiss, arguing
(among other things) that “disgorgement . . . is never available
under a civil RICO count.” See United States v. Philip Morris
Inc., 116 F. Supp. 2d 131, 150 (D.D.C. 2000). Denying that
motion, the district court held that disgorgement could be
available under 18 U.S.C. § 1964(a), but did not address whether
disgorgement would be available in this particular case. See id.
at 150-52. Philip Morris never sought certification of that order,
though it could have done so at any time after the order’s
 4

issuance. See Fed. R. App. P. 5(a)(3) (providing that the time
for filing an appeal runs from when the district court amends the
order to include certification, not from the issuance of the actual
order); 16 Wright, Miller & Cooper, Federal Practice and
Procedure § 3929 (2d. ed. 1996) (“This latitude [in Rule 5(a)]
makes it possible to employ § 1292(b) with some precision,
deferring the question of appeal until it is clear that prompt
appeal is apt to be useful.”).
In 2004, Philip Morris sought summary judgment regarding
the government’s request for disgorgement in this case.
Contrary to the court’s statement, see majority op. at 5, Philip
Morris neither reargued the position it took in 2000 nor asked
the district court to revisit its 2000 decision. Philip Morris’s
only reference to its prior position came in a one-sentence
footnote: “As noted previously, Defendants respectfully
disagree with the Court and maintain that disgorgement in any
fashion is unavailable to the Government in a civil RICO
action.” Defs.’ Br. in Supp. Mot. Partial Summ. J. at 6 n.4.
Instead, Philip Morris urged the court to grant its motion for
summary judgment for two primary reasons. First, relying on
United States v. Carson, where the Second Circuit held that
district courts may order disgorgement as a RICO remedy only
where the gains “are being used to fund or promote the illegal
conduct, or constitute capital available for that purpose,” id. at
20 (quoting United States v. Carson, 52 F.3d 1173, 1182 (2d
Cir. 1995)), Philip Morris claimed that 18 U.S.C. § 1964(a)
“limits disgorgement to the amount of ill-gotten gains that
remain available to defendants to fund future RICO violations,”
id. Philip Morris further argued that “the Government
deliberately has refused to develop the proof properly required
under Carson” and this in turn “requires dismissal of the
Government’s disgorgement claim.” Id. at 25. Second, Philip
Morris asserted that the government’s disgorgement model fails
as a matter of law to reasonably approximate the defendants’ ill-
gotten gains.
 5

The district court rejected both arguments and denied
summary judgment to Philip Morris. United States v. Philip
Morris USA, Inc., 321 F. Supp. 2d 72 (D.D.C. 2004).
Interpreting section 1964(a) more broadly than had the Second
Circuit, the court concluded that it could order disgorgement in
situations besides those identified in Carson. Id. at 77-79.
Unsurprisingly, the district court did not revisit its 2000
decision, observing only (in a footnote) that this decision had
held “that disgorgement is a permissible remedy under Section
1964(a).” Id. at 76 n.7. The district court also rejected Philip
Morris’s contention regarding the government’s disgorgement
model. Id. at 81-82.
Philip Morris then asked the district court to certify its 2004
order under section 1292(b). In its certification request, Philip
Morris did not reassert its legal argument from 2000. Instead,
it stated that “[w]hether the Carson standard applies to the
Government’s disgorgement claim is clearly a controlling
question of law. . . . If the Government is wrong, and Carson
applies, nothing is left of its claim in this case.” Def’s Br. Supp.
Mot. Certify Order #550 for Interloc. App. at 4.
The district court agreed that a controlling question of law
existed as to whether “the disgorgement allowed under 18
U.S.C. § 1964(a) is limited to those ill-gotten gains which are
‘being used to fund or promote the illegal conduct or constitute
capital available for that purpose.’” United States v. Philip
Morris USA, Inc., No. 99-2496, slip op. at 2-4 (D.D.C. June 25,
2004) (quoting Carson, 52 F.3d at 1182). Although in its 2004
order the district court had rejected Carson’s interpretation of
section 1964(a), it found substantial ground for difference of
opinion on this issue, explaining that “it is obvious that the
arguments to the contrary in Carson are neither insubstantial nor
frivolous,” and certified the 2004 order. Id. at 4, 7.
In its initial petition urging this court to accept the
interlocutory appeal, Philip Morris never raised the broader
 6

question the district court had addressed in 2000, i.e., whether
disgorgement is ever available under section 1964(a). Instead,
Philip Morris focused on the narrower issue actually raised in its
2004 motion for summary judgment, arguing that the district
court had erred in rejecting Carson’s interpretation of section
1964(a) and claiming that “[i]f this Court agrees with the Second
Circuit in Carson, its decision on appeal would dispose of the
Government’s disgorgement claim.” Emergency Pet. for
Permission to Appeal an Order at 9. The government opposed
Philip Morris’s section 1292(b) petition, arguing that a host of
factual issues would require resolution regardless of whether this
court adopted Carson’s or the district court’s interpretation of
section 1964(a) and thus that “interlocutory appeal would not
materially advance the termination of this litigation.” Resp. in
Opp’n to Emergency Pet. at 15.
Responding to the government’s opposition, Philip Morris
suddenly changed tack and brought in play the issue decided in
2000. Philip Morris wrote:
The district court rejected [the government’s] argument
[that an interlocutory appeal would not materially advance
the litigation’s termination] as a reason not to permit an
appeal, and this Court should as well.
First, and most obviously, if this Court reverses the
district court’s ruling that ‘disgorgement is a permissible
remedy under section 1964(a),’ (Summary Judgment Order
at 8 n.7), then the Government’s $280 billion claim is
precluded as a matter of law.
Reply to Emergency Pet. for Permission to Appeal an Order at
5. This entirely disingenuous statement conveyed the
impression that the district court had ruled on this broader issue
in the certified 2004 order rather than simply mentioning its
2000 decision. Moreover, by placing this statement under the
heading “The District Court Properly Determined That an
Appeal From Its Order Would Materially Advance This
 7

Litigation,” id., Philip Morris insinuated that the district court
had certified this issue to this court as opposed to the narrower
question actually resolved in the 2004 order. The government,
of course, had no opportunity to correct these
misrepresentations, and a motions panel accepted Philip
Morris’s appeal, expressly leaving the merits panel free to
reconsider and dismiss the appeal. In re Philip Morris USA,
Inc., No. 04-8005 (D.C. Cir. July 15, 2004).
Philip Morris’s opening brief on the merits reveals the
scope of its bait and switch. The brief devotes forty pages to the
issue decided in the 2000 order and only seven to the issues
decided in the certified 2004 order. In response, the government
urges us to dismiss the appeal entirely, suggesting that we lack
jurisdiction over the issue decided in the 2000 order and
observing that “Defendants’ tactics subvert the mechanism for
appeal established by section 1292(b).” Appellee’s Br. at 45-46.

B.
As the foregoing discussion indicates, Philip Morris asks
us—and the court now agrees—to decide an issue (1) not briefed
in the motion leading up to the certified order, (2) not decided in
the district court’s opinion accompanying the certified order, (3)
not raised by Philip Morris in its request for certification, (4) not
discussed in the order granting certification, (5) not raised by
Philip Morris in its section 1292(b) petition before this court,
and (6) decided in an entirely different order which Philip
Morris could at any time have asked the district court to certify.
This presents serious questions on two separate fronts: our
jurisdiction over this appeal under section 1292(b), and our
general policy of declining to consider arguments not made to
the district court in the motion leading to the order under appeal.
Unlike the court, I cannot brush these concerns aside.
Regarding our jurisdiction under section 1292(b), the
 8

Supreme Court has made clear that an appellate court can review
“any issue fairly included within the certified order” because
“[a]s the text of § 1292(b) indicates, appellate jurisdiction
applies to the order certified to the court of appeals, and is not
tied to the particular question formulated by the district court.”
Yamaha Motor Corp., USA v. Calhoun, 516 U.S. 199, 205
(1996) (holding that where the district court decided two issues
in the certified order but identified only the damages issue as the
controlling question of law, the court of appeals could
nonetheless address the other issue). But the “court of appeals
may not reach beyond the certified order to address other orders
made in the case.” Id.; see also United States v. Stanley, 483
U.S. 669, 677 (1987) (holding that the court of appeals erred in
addressing a claim not raised in the certified order though
closely related to it). Both “[c]ommentators and courts have
consistently observed that ‘the scope of the issues open to the
court of appeals is closely limited to the order appealed from
[and] [t]he court of appeals will not consider matters that were
ruled upon in other orders.’” Stanley, 483 U.S. at 677 (quoting
16 Wright, Miller, Cooper & Gressman, Federal Practice and
Procedure § 3929 (1977)) (second and third alterations in
original).
This case falls near the intersection of these commands. For
all intents and purposes, Philip Morris asks us to address the
2000 order. Today’s decision overturns that order. This court
has jurisdiction to do this under Yamaha only if the issue
addressed in the 2000 order is “fairly included within the
certified order.” Taking a broad view of “fairly included,” the
court concludes that because the 2004 order denies dismissal of
the government’s disgorgement claim, we may review (at a
minimum) any basis for summary judgment that is “logically
interwoven with the explicitly identified issue.” See majority
op. at 10. This approach not only gives us jurisdiction over the
issue decided by the district court in the 2000 order, but also
over the district court’s 2002 determination, made in denying
 9

Philip Morris’s motion for a jury trial, that disgorgement is an
equitable remedy rather than a legal one, United States v. Philip
Morris, Inc., 273 F. Supp. 2d 3, 8-11 (D.D.C. 2002). Indeed,
although the concurrence apparently does not share this
approach, see sep. op. at 8-9 (Williams, J., concurring), the
majority opinion suggests that any issue which would result in
“complete dismissal of the Government’s claim for
disgorgement with prejudice” lies within our jurisdiction
“regardless of the grounds the District Court gave for its
decision,” see majority op. at 7. By this logic, we may also have
interlocutory jurisdiction to review the district court’s denial of
the tobacco companies’ 2000 motion to dismiss, where they
claimed that the government has not “adequately alleged that
Defendants’ racketeering activity will continue into the future,”
116 F. Supp. 2d at 147-50, and even the district court’s denial of
Liggett’s 2000 motion to dismiss, where the company argued
that (as to it) the government could not show two elements
required for a RICO claim, id. at 152-53. Because victory for
the tobacco companies on the first issue (and, for Liggett,
victory on the second) could also trigger dismissal of the
government’s disgorgement claims, under the court’s theory our
interlocutory jurisdiction may extend to these issues as well.
The court’s approach is problematic in several respects.
Most significantly, it curtails the district court’s section 1292(b)
certification role. In this case, the district court had neither an
opportunity to exercise “first line discretion to allow
interlocutory appeal[],” Swint, 514 U.S. at 47, on the broader
issue resolved in its 2000 order nor notice that Philip Morris
would raise this issue with us. In future cases, district courts
will lose their flexibility to certify discrete issues for review,
since the certification of one order may give this court
jurisdiction over all sorts of prior orders. Today’s situation
illustrates this: under the court’s theory, we have jurisdiction in
this interlocutory appeal to review at a minimum two prior
orders, neither of which Philip Morris sought to certify.
 10

Moreover, by reducing the opportunity for tailored review, the
court’s jurisdictional theory threatens this circuit with
interlocutory overload. Parties who persuade us to accept an
interlocutory appeal may feel encouraged to raise any or even all
issues decided in prior orders that fall within our newfound
jurisdiction especially since, according to the court, issues raised
in prior orders are “preserved” for section 1292(b) purposes, see
majority op. at 10, and not simply for the purpose of appeal after
final judgment.
By contrast, no harm of consequence would result from
holding, as I would, that the only issues “fairly included” within
a certified order are those decided in the district court’s
accompanying memorandum—exactly the situation with the
issue reached by the Supreme Court in Yamaha, 516 U.S. at
203-05. There, the Court found “fairly included” an issue that
the district court had resolved in the same opinion in which it
decided the issue identified as the controlling question of law,
see Calhoun v. Yamaha Motor Corp., USA, No. 90-4295, 1993
WL 216238 (E.D. Pa. June 22, 1993). While the Court did not
explicitly rely on this point, it is relevant to determining whether
Yamaha’s “fairly included” language stands for the proposition
that appellate courts have interlocutory jurisdiction over all
possible bases for reversing a summary judgment denial (as my
colleagues read it) or only over bases which the district court
considered and resolved in this denial (as I read it).
My approach, moreover, respects the Court’s instruction in
Stanley that we should “not consider matters that were ruled
upon in other orders.” 483 U.S. at 677 (citation omitted); cf.
Briggs v. Goodwin, 569 F.2d 10, 25 (D.C. Cir. 1977) (noting
that any possible justification for addressing “all other issues
relevant to the result reached by [a certified] order” would “be
substantially diminished . . . where the order certified for appeal
is a separate order from the one [containing the other issues]”);
Dinsmore v. Squadron, Ellenoff, Plesent, Sheinfeld & Sorkin,
135 F.3d 837, 840 (2d. Cir. 1998) (finding that the certified
 11

order referred to rather than incorporated a prior order and
concluding that no interlocutory jurisdiction existed over the
issue decided in the prior order). It is thus hardly surprising that
the court today points to no case in which an appellate court has
exercised interlocutory jurisdiction over an issue decided in a
different order from the one under certification. True, under my
approach a party seeking an interlocutory appeal on a matter
split across two orders would need to seek certification of both
orders to bring the matter fully to this court. But that seems a
small burden. If the party fails to make this effort (as in this
case) and we conclude that it would be inappropriate to address
only the issues raised in the certified order (as I would here),
then we have discretion under section 1292(b) to refuse to
permit the interlocutory appeal altogether—a point this court
overlooks.
In addition to resting on a dubious interpretation of section
1292(b), the court’s decision to review the broader issue runs
counter to this circuit’s general rules regarding waiver. Parties
may raise here only those arguments they presented to the
district court in their papers seeking (and opposing) the order
under review, since only in exceptional circumstances will we
consider an argument not made to the district court. See United
States v. British Am. Tobacco (Invs.) Ltd., 387 F.3d 884, 887-88
(D.C. Cir. 2004) (finding waiver based on a party’s failure to
appear and defend a privilege claim in the proceedings resulting
in the interlocutory appeal, even though the party had asserted
the privilege in a related proceeding in the same case); see also
id. at 892 (refusing to consider argument not raised below)
(citing United States v. Hylton, 294 F.3d 130, 135-36 (D.C. Cir.
2002)). Here, as discussed earlier, Philip Morris never argued
the broader issue in the relevant pleadings; a sentence-long
footnote stating “respectful disagreement” is not an argument,
particularly when offered in such a cursory fashion. Cf., e.g.,
Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855, 869
(D.C. Cir. 2001) (per curiam) (observing that a “litigant does not
 12

properly raise an issue by addressing it in a ‘cursory fashion’
with only ‘bare-bones arguments’”); Wash. Legal Clinic for the
Homeless v. Barry, 107 F.3d 32, 39 (D.C. Cir. 1997) (declining
to address argument made in a footnote). Although it is true, as
the court points out, that in the two just-cited cases the issues
were apparently never raised at an earlier stage, here we are
reviewing not the entire case but only the certified 2004 order,
which sets the bounds of both our jurisdiction and waiver
doctrine. Moreover, while we sometimes make exceptions to
our waiver rules, I would not do so here given Philip Morris’s
questionable tactics. Even under my colleagues’ jurisdictional
theory, only by exercising our discretion to accept an argument
not raised in the district court—and further exercising our
discretion to accept the interlocutory appeal—does the broader
issue stand before us.
In sum, whether viewed in terms of jurisdiction or waiver,
only Philip Morris’s narrower challenge is properly before us.
True, this means we should dismiss the appeal altogether, as it
makes little sense to decide the narrower question at this time
when the broader question might be appealed later. But Philip
Morris itself created this problem. It had several ways it could
properly have brought the broader issue to our attention. In its
2004 motion for summary judgment, it could have reargued the
broader question and asked the district court to reconsider its
decision; the district court’s denial of reconsideration would
have brought the issue fairly into the challenged order. Even
more appropriately, Philip Morris could have asked the district
court to certify both the 2000 and 2004 orders and candidly
explained that it wished this court to review the earlier order as
well. Either way, the district court, having fair notice that Philip
Morris wanted to raise both issues with us, could have
performed its section 1292(b) gatekeeping function. Taking
neither approach, Philip Morris instead not only jumped the
fence at the district court level, but also circumvented our own
screening process by waiting until after the government’s
 13

opposition to raise the broader issue with the motions panel.
This court should not be rewarding such tactics by exercising its
discretion to hear this appeal.
I would therefore dismiss the interlocutory appeal. I reach
this conclusion reluctantly because I certainly understand how
hearing this interlocutory appeal could be helpful to Judge
Kessler, who is presiding over a long and difficult trial. In my
view, however, preserving section 1292(b)’s integrity and
discouraging the kind of litigating tactics reflected in this record
far outweigh the efficiency that hearing this interlocutory appeal
might produce in this concededly complex case.
But the court disagrees with my position. The appeal stands
before us, so in the following sections I exercise a dissenter’s
prerogative to address the merits. See, e.g., Gratz v. Bollinger,
539 U.S. 244, 291 (2003) (Souter, J., dissenting); Arizona v.
Evans, 514 U.S. 1, 18 (1995) (Stevens, J., dissenting); Larson v.
Valente, 456 U.S. 228, 258 (1982) (White, J., dissenting).

II.
Like my colleagues, I begin with the structure and language
of RICO’s remedial provisions. RICO authorizes criminal
penalties and civil remedies against those engaging in patterns
of racketeering behavior. 18 U.S.C. § 1963 sets out the criminal
penalties: guilty persons shall “be fined under this title or
imprisoned . . . or both, and shall forfeit to the United States”
any illegally acquired interest. Section 1964 provides for the
civil remedies. At issue in this case is subsection (a), which
states:
The district courts of the United States shall have
jurisdiction to prevent and restrain violations of section
1962 of this chapter by issuing appropriate orders,
including, but not limited to: ordering any person to divest
himself of any interest, direct or indirect, in any enterprise;
 14

imposing reasonable restrictions on the future activities or
investments of any person, including, but not limited to,
prohibiting any person from engaging in the same type of
endeavor as the enterprise engaged in, the activities of
which affect interstate or foreign commerce; or ordering
dissolution or reorganization of any enterprise, making due
provision for the rights of innocent persons.
Another subsection, § 1964(c), authorizes injured persons to sue
RICO violators for treble damages and to recover attorneys’
fees. Finally, Congress directed that RICO “shall be liberally
construed to effectuate its remedial purposes,” Pub. L. No. 91-
452, § 904(a), 84 Stat. 922, 947 (1970) (codified in a note
following 18 U.S.C. § 1961)—a provision that, if it “is to be
applied anywhere, [should be applied] in § 1964, where RICO’s
remedial purposes are most evident,” Sedima, S.P.R.L. v. Imrex
Co., 473 U.S. 479, 491 n.10 (1985).
The government argues that district courts have authority to
order any remedy, including disgorgement, within their inherent
equitable powers. More narrowly, the government argues that
assuming the district courts may only impose equitable remedies
for the purpose of keeping defendants from committing RICO
violations, disgorgement—by reducing the incentives for the
tobacco companies to violate RICO in the future—will
accomplish that purpose in this case. These two distinct
arguments present very different consequences for district
courts: under the first theory, courts may order disgorgement
any time they find the remedy necessary to ensure complete
relief, while under the second theory courts may order
disgorgement only to prevent ongoing or future violations. In
this case, the district court accepted only the second argument.
See 321 F. Supp. 2d at 74-80. The court today rejects both.

A.
In dismissing the argument that district courts may impose
 15

any equitable remedy for RICO violations, the court
distinguishes—unconvincingly, in my view—the two Supreme
Court cases relied on by the government, Porter v. Warner
Holding Co., 328 U.S. 395 (1946), and Mitchell v. Robert
DeMario Jewelry, Inc., 361 U.S. 288 (1960). I believe these two
cases control this case and compel the conclusion that district
courts may impose any equitable remedy for RICO violations.
In Porter, the Supreme Court considered whether a district
court had authority to order restitution in a suit brought by the
Price Control Administrator against a landlord who had violated
the Emergency Price Control Act (EPCA) by charging too much
rent. The act contained no specific provision for restitution or
disgorgement, but—like RICO—authorized a broad array of
other remedies, both criminal and civil. On the criminal side,
offenders could be fined and imprisoned. EPCA, § 205(b)-(c),
56 Stat. 23, 33 (1942). On the civil side, injured individuals
could sue for treble damages plus attorneys’ fees, and if they
were not entitled to sue or the statutory period for their suit had
passed, the Administrator could sue for the same remedy on
behalf of the United States. Id. § 205(e), 56 Stat. at 34, as
amended by Stabilization Extension Act of 1944, § 108(b), 58
Stat. 632, 640-41. The Administrator could also sue to suspend
a violator’s license. Id. § 205(f)(2), 56 Stat. at 35.
In the section most at issue in Porter, the act further
provided that
[w]henever in the judgment of the Administrator any person
has engaged or is about to engage in [violations of the act],
he may make application to the appropriate court for an
order enjoining such acts or practices, or for an order
enforcing compliance with such provision, and upon a
showing by the Administrator that such person has engaged
or is about to engage in any such acts or practices a
permanent or temporary injunction, restraining order, or
other order shall be granted without bond.
 16

Id. § 205(a), 56 Stat. at 33. Although this section clearly
authorized injunctions aimed at future behavior, it made no
express provision for restitution and did not, contrary to my
colleagues’ suggestion, explicitly “grant[] general equitable
jurisdiction” to the district courts, see majority op. at 12.
Indeed, in Porter, the Eighth Circuit had held that district courts
were without authority to order restitution as a remedy for
violations of the EPCA. Bowles v. Warner Holding Co., 151
F.2d 529, 532 (8th Cir. 1945) (concluding that the district court
had no authority to order restitution because “[i]t is well settled
‘That where a statute creates a right and provides a special
remedy, that remedy is exclusive’”) (citations omitted).
The Supreme Court reversed. Discussing “the jurisdiction
of the District Court to enjoin acts and practices made illegal by
the Act and to enforce compliance with the Act,” 328 U.S. at
397-98, the Court concluded—and I quote at length since the
language is so critical to the disposition of this case—that
[s]uch a jurisdiction is an equitable one. Unless otherwise
provided by statute, all the inherent equitable powers of the
District Court are available for the proper and complete
exercise of that jurisdiction. And since the public interest
is involved in a proceeding of this nature, those equitable
powers assume an even broader and more flexible character
than when only a private controversy is at stake. . . . [T]he
court may go beyond the matters immediately underlying
its equitable jurisdiction and decide whatever other issues
and give whatever other relief may be necessary under the
circumstances. Only in that way can equity do complete
rather than truncated justice.
Moreover, the comprehensiveness of this equitable
jurisdiction is not to be denied or limited in the absence of
a clear and valid legislative command. Unless a statute in
so many words, or by a necessary and inescapable
inference, restricts the court’s jurisdiction in equity, the full
 17

scope of that jurisdiction is to be recognized and applied.
Id. at 398 (citations omitted). The Court concluded that because
the EPCA, despite the very detailed and specific nature of the
authorized remedies, did not rule out restitution by a “necessary
and inescapable inference,” the district court could order
restitution even if not expressly authorized by the statute. See
id. at 398-400; see also Mitchell, 361 U.S. at 291 (discussing
Porter).
Indeed, the Court further suggested that restitution could be
considered an “other order” to enjoin or enforce compliance
within section 205(a) in either of two ways. First, it could be
“considered as an equitable adjunct to an injunction decree”
since “where, as here, the equitable jurisdiction of the district
court has properly been invoked for injunctive purposes, the
court has the power to decide all relevant matters in dispute and
to award complete relief even though the decree includes that
which might be conferred by a court of law.” 328 U.S. at 399.
Second, restitution could “be considered as an order appropriate
and necessary to enforce compliance with the Act” since
“[f]uture compliance may be more definitely assured if one is
compelled to restore one’s illegal gains.” Id. at 400. The Court
then remanded for the district court to “exercise the discretion
that belongs to it” and decide whether to order restitution. Id. at
403.
Porter was not unanimous. “It is not excessive to say that
perhaps no other legislation in our history has equaled the Price
Control Acts in the wealth, detail, precision and completeness of
its jurisdictional, procedural and remedial provisions,” id. at
404, wrote Justice Rutledge in dissent. “The scheme of
enforcement was highly integrated, with the parts precisely
tooled and minutely geared.” Id. “Congress could not have
been ignorant of the remedy of restitution. It knew how to give
remedies it wished to confer.” Id. at 405. “[E]ven courts of
equity may not grant relief in disregard of the remedies
 18

specifically defined by Congress.” Id. at 408.
The court’s opinion today sounds a lot like the Porter
dissent. The court observes that the language of section
1964(a)—a court has “jurisdiction to prevent and restrain
violations”—does not explicitly open the door to all of equity,
but neither did EPCA section 205(a) (a court may issue orders
“enjoining” violations or “enforcing compliance”). The court
asserts that reading full equitable jurisdiction into RICO will
render section 1964(a)’s language largely meaningless, but
Porter rejected just this concern with regard to EPCA section
205(a). The court emphasizes that RICO “already provides for
a comprehensive set of remedies,” majority op. at 18, but the
EPCA had at least as comprehensive a remedial structure. The
court further points out that should restitution be available, the
government could obtain duplicative recovery (given RICO’s
criminal forfeiture provisions) and also escape the applicable
statutes of limitations, but the Porter majority dismissed similar
concerns, 328 U.S. at 401-02; see also id. at 406-08 (Rutledge,
J., dissenting). Finally, the court attempts to distinguish Porter
on the grounds that the EPCA had a different policy goal than
RICO (preventing inflation rather than seeking to eradicate
organized crime), but this has no effect on Porter’s essential
holding that “the court may go beyond the matters immediately
underlying its equitable jurisdiction . . . and give whatever other
relief may be necessary under the circumstances,” see id. at 398.
In sum, the court offers no basis for concluding that RICO’s
structure and language get the statute past Porter’s high bar for
finding by a “necessary and inescapable inference” that
Congress intended to empower district courts to order only
limited equitable relief.
Nor does Philip Morris point to anything in RICO’s
legislative history that creates such a “necessary and inescapable
inference.” Only one remark even gives me pause. The Senate
Committee report stated, “Subsection [1964](a) contains broad
 19

remedial provisions for reform of corrupted organizations.
Although certain remedies are set out, the list is not exhaustive,
and the only limit on remedies is that they accomplish the aim
set out of removing the corrupting influence and make due
provision for the rights of innocent persons.” S. Rep. No. 91-
617, at 160 (1969); accord H. Rep. No. 91-1549, at 57 (1970).
The second part of this “limit”—requiring due provision for the
rights of innocent persons—poses no concern, for it describes
equity rather than constricts it. See, e.g., Holly v. Domestic &
Foreign Missionary Soc’y, 180 U.S. 284, 295 (1901) (“[A] court
of equity will not transfer a loss that has already fallen upon one
innocent party to another party equally innocent.”). But the first
part of this “limit”—that remedies should accomplish the aim of
removing the corrupting influence—does more than simply
restate an equitable principle. Suggesting that the remedies must
remove the corrupting influence, it allows one to infer that
remedies may accomplish only this aim. But that inference is,
to use Porter’s words, neither “necessary” nor “inescapable.”
One could also infer that remedies must accomplish this aim as
a lower limit (i.e., no corrupting influence may remain), but may
also accomplish other aims—just as remedies must make due
provision for the rights of the innocent, but may presumably do
much more. Indeed, this reading comports with how RICO’s
sponsor, Senator McClellan, described the bill when he
introduced it: the “ability of our chancery courts to formulate a
remedy to fit the wrong is one of the greatest benefits of our
system of justice. This ability is not hindered by the bill.” 115
Cong. Rec. 9567 (1969).
Mitchell, the second Supreme Court decision the
government relies on, considered whether district courts could
order restitution of wages lost from unlawful discharge in suits
brought by the Secretary of Labor under section 17 of the Fair
Labor Standards Act (FLSA), 29 U.S.C. § 217 (1960). Relying
on Porter, the Court concluded that where the statute provided
that “the district courts are given jurisdiction . . . for cause
 20

shown, to restrain violations” of the act, 29 U.S.C. § 217, district
courts had full equitable powers, 361 U.S. at 291-95; see also id.
at 289. Reaffirming Porter’s strong presumption in favor of
finding equitable relief fully available, the Court stated: “When
Congress entrusts to an equity court the enforcement of
prohibitions contained in a regulatory enactment, it must be
taken to have acted cognizant of the historic power of equity to
provide complete relief in the light of statutory purposes. As
this Court long ago recognized, ‘there is inherent in the Courts
of Equity a jurisdiction to . . . give effect to the policy of the
legislature.’” Id. at 291-92 (quoting Clark v. Smith, 38 U.S. (13
Pet.) 195, 203 (1839)) (omission in original); see also Califano
v. Yamasaki, 442 U.S. 682, 704-06 (1979) (using the Porter
presumption to conclude that district courts could order
injunctive relief not explicitly authorized by the Social Security
Act). The Mitchell Court thought it insignificant that because
both the aggrieved employees and the Secretary could seek lost
wages in actions at law under FLSA section 16, 29 U.S.C. § 216
(1960), duplicative recovery might occur. 361 U.S. at 292-93.
But see id. at 303 (Whittaker, J., dissenting) (concluding that the
statutory scheme “seems plainly to show that Congress intended
by s 16(c) to allow recovery of unpaid minimum wages and
overtime compensation at the instance of the Secretary only in
an action at law, brought under that subsection, and triable by a
jury”).
Mitchell reinforces the proposition that district courts may
order any equitable relief in civil RICO suits brought by the
government. My colleagues suggest that in “the RICO Act,
Congress provided a statute granting jurisdiction defined with
the sort of limitations not present in the FLSA.” Majority op. at
16. The only jurisdictional hook in the FLSA’s text, however,
was its language: “the district courts are given jurisdiction . . .
for cause shown, to restrain violations” of the act, 29 U.S.C. §
217. If this language opens the door to all equitable relief, then
RICO’s language—“[t]he district courts . . . shall have
 21

jurisdiction to prevent and restrain violations”—certainly does
the same. And if the possibility of duplicative recovery did not
circumscribe the district court’s equitable authority under the
FLSA, then neither should that possibility under RICO do so.
Not surprisingly, in the wake of Mitchell and Porter, circuit
courts including this one have read general equitable jurisdiction
into a variety of statutes that fail to provide explicitly for it. In
SEC v. First City Financial Corp., 890 F.2d 1215 (D.C. Cir.
1989), we held that district courts may order disgorgement under
the Security Exchange Act’s sections 21(d) and (e), 15 U.S.C. §
78u(d)-(e) (1989), which provide that the district courts “shall
have jurisdiction to issue writs of mandamus, injunctions, and
orders commanding” compliance with the act and regulations
made under it. See 890 F.2d at 1230 (relying on Porter and
Mitchell). “Disgorgement, then, is available simply because the
relevant provisions of the Securities Exchange Act of 1934,
sections 21(d) and (e) . . . vest jurisdiction in the federal courts.”
Id.; see also SEC v. Tome, 833 F.2d 1086, 1096 (2d Cir. 1987);
SEC v. Wash. County Util. Dist., 676 F.2d 218, 227 (6th Cir.
1982). Other circuits have reasoned similarly in interpreting
other acts. See, e.g., FTC v. Gem Merch. Corp., 87 F.3d 466,
468-70 (11th Cir. 1996) (applying Porter in holding that courts
may order restitution as a remedy for violations of the Federal
Trade Commission Act); ICC v. B&T Transp. Co., 613 F.2d
1182, 1183-86 (1st Cir. 1980) (applying Porter in holding that
courts may order restitution as a remedy for violations of the
Motor Carrier Act, though noting that “[i]f we were writing on
a blank slate, we might agree with the district court that the
language of the Motor Carrier Act cannot justify” the remedy of
restitution); CFTC v. Hunt, 591 F.2d 1211, 1221-23 (7th Cir.
1979) (applying Porter in holding that courts may order
disgorgement as a remedy for violations of the Commodity
Exchange Act).
Instead of following Porter and Mitchell, the court relies on
 22

a later Supreme Court decision, Meghrig v. KFC Western, Inc.,
516 U.S. 479 (1996). In Meghrig, the Supreme Court
considered whether private citizens could seek restitution under
the Resource Conservation and Recovery Act (RCRA) for the
cost of having cleaned up a prior landowner’s toxic waste. The
statute provided that the “district court shall have jurisdiction .
. . to restrain any person who has contributed or who is
contributing” to waste problems, “to order such person to take
such other action as may be necessary, or both.” Id. at 482 n.*
(quoting 42 U.S.C. § 6972(a)). The Court held that it was
“apparent from the two remedies described . . . that RCRA’s
citizen suit provision is not directed at providing compensation
for past cleanup efforts.” Id. at 484. While not explicitly
defining the limits of the two remedies described, the court
suggested that these remedies should be equated with
prohibitory and mandatory injunctions. Id. Moreover, relying
in part on the fact that an analogous statute expressly authorized
damages, the Court concluded that “neither remedy . . .
contemplates the award of past cleanup costs, whether these are
denominated ‘damages’ or ‘equitable restitution.’” Id. at 484-
85. According to the Court, it “is an elemental canon of
statutory construction that where a statute expressly provides a
particular remedy or remedies, a court must be chary of reading
others into it.” Id. at 488 (quoting Middlesex County Sewerage
Auth. v. Nat’l Sea Clammers Ass’n, 453 U.S. 1, 14-15 (1981)).
The Meghrig Court noted that in arguing that the district
court had inherent authority to award equitable remedies, the
plaintiffs relied on Porter and its progeny. Id. at 487. Without
expressly distinguishing those cases, the Court explained that
“the limited remedies described in [RCRA], along with the stark
differences between the language of that section and the cost
recovery provisions [of the analogous statute], amply
demonstrate that Congress did not intend for a private citizen to
be able to undertake a cleanup and then proceed to recover its
costs under RCRA.” Id. Notably for our purposes, Meghrig did
 23

not overrule Porter. Indeed, even after Meghrig, the Supreme
Court has cited Porter for the proposition that “we should not
construe a statute to displace courts’ traditional equitable
authority absent . . . an ‘inescapable inference’ to the contrary.”
Miller v. French, 530 U.S. 327, 340 (2000); see also United
States v. Oakland Cannabis Buyers’ Co-op, 532 U.S. 483, 496
(2001).
At one level, reconciling Meghrig with Porter and Mitchell
is difficult. Meghrig suggests that “to restrain” only authorizes
prohibitory injunctions. By contrast, Mitchell holds that this
language imposes no limit on the district court’s full equitable
powers. Meghrig, relying on a version of the canon expressio
unius est exclusio alterius, observes that courts should be
“chary” in reading remedies into a statute which expressly
provides for other remedies. By contrast, Porter indicates that
in the context of equity jurisdiction, the general expressio unius
canon gets inverted, meaning that district courts possess all
equitable powers unless the statute “inescapabl[y]” provides to
the contrary. Cf. Renegotiation Bd. v. Bannercraft Clothing Co.,
415 U.S. 1, 18-20 (1974) (discussing these competing canons).
These tensions cannot be dealt with simply by dismissing
Porter and Mitchell. Meghrig not only left both cases intact, but
also suggested that the “limited remedies” in RCRA, together
with the “stark differences” between RCRA and the analogous
statute, explain the different outcomes. Given this, our
responsibility is to follow the Supreme Court’s oft-cited
instruction that “[i]f a precedent of this Court has direct
application in a case, yet appears to rest on reasons rejected in
some other line of decisions, the Court of Appeals should follow
the case which directly controls, leaving to this Court the
prerogative of overruling its own decisions.” Rodriguez de
Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484 (1989);
see also Agostini v. Felton, 521 U.S. 203, 237 (1997)
(reaffirming this requirement).
 24

In my view, Porter and Mitchell, not Meghrig, “directly
control” this case. Several reasons support this conclusion, and
nothing points the other way. First, RICO’s statutory scheme
resembles the EPCA more than the RCRA. Both RICO and the
EPCA stand alone in grappling with a broad social issue,
whereas the RCRA had a closely related statute on which the
Court in Meghrig relied heavily. Second, as in both Porter and
Mitchell, the government brought the suit rather than a private
party like the Meghrig plaintiff, and Porter makes clear that
district courts may have “even broader and more flexible”
equitable powers where the public interest is involved, 328 U.S.
at 398. This point has particular traction if the government is
the only party that may seek equitable relief under RICO. See
Religious Tech. Ctr. v. Wollersheim, 796 F.2d 1076, 1083-89
(9th Cir. 1986) (holding that equitable relief under RICO is
available only to the government). But see Nat’l Org. for
Women, Inc. v. Scheidler, 267 F.3d 687, 695-700 (7th Cir. 2001)
(holding that private plaintiffs can seek equitable relief under
RICO), rev’d on other grounds, 537 U.S. 393 (2003). Finally,
Meghrig’s suggestion that “restrain” in the RCRA refers only to
prohibitory injunctions cannot apply to section 1964(a), since
that section explicitly authorizes other remedies—e.g.,
divestment—to “prevent and restrain” RICO violations. For
these reasons, in determining whether the phrase “prevent and
restrain” limits the district court’s equitable powers, I think it
makes more sense to look to Porter and Mitchell, not Meghrig.
The court “[r]ead[s] Porter in light of” the statement in
Kokkonen v. Guardian Life Insurance Co., 511 U.S. 375, 377
(1994), that “‘[f]ederal courts are courts of limited jurisdiction’”
and “‘possess only that power authorized by Constitution and
statute, which is not to be expanded by judicial decree.’”
Majority op. at 12-13. But “‘[j]urisdiction,’ it has been
observed, ‘is a word of many, too many, meanings.’” Steel Co.
v. Citizens for a Better Env’t, 523 U.S. 83, 90 (1998) (citation
omitted). Kokkonen simply makes the unremarkable point that
 25

federal courts have subject-matter jurisdiction over cases only
if the Constitution or Congress so provides, 511 U.S. at 377, and
the Supreme Court has since clarified that it is “unreasonable”
to apply subject-matter jurisdiction principles where a statute
uses the term jurisdiction “merely [in] specifying the remedial
powers of the court,” Steel Co., 523 U.S. at 90.
Finally, while Congress modeled section 1964(a) on the
antitrust laws, see 115 Cong. Rec. 9567 (1969) (statement of
Sen. McClellan); see also 15 U.S.C. § 4 (the “district courts . .
. are invested with jurisdiction to prevent and restrain
violations”); accord 15 U.S.C. § 25, I disagree with Philip
Morris that the Supreme Court’s antitrust decisions provide
useful guidance as to whether the phrase “prevent and restrain”
limits the equitable remedies available to district courts. On the
one hand, the Court once ignored, though did not explicitly
reject, an invitation by Justice Douglas to apply Porter to
antitrust actions. See United States v. Nat’l Lead Co., 332 U.S.
319, 366-67 (1947) (Douglas, J., dissenting in part); cf. United
States v. Oregon State Med. Soc’y, 343 U.S. 326, 333 (1952)
(emphasizing that in antitrust actions the purpose of injunctive
relief is to “forestall future violations”); Texas Indus., Inc. v.
Radcliff Materials, Inc., 451 U.S. 630, 639-47 (1981) (declining
to fashion and apply a common law right of contribution in the
antitrust context). On the other hand, some antitrust cases
suggest that courts may impose equitable remedies beyond those
intended merely to stop future violations from occurring. E.g.,
United States v. Crescent Amusement Co., 323 U.S. 173, 189
(1944) (although the district court ordered a remedy said to
“exceed any reasonable requirement for prevention of future
violations,” the “Court has quite consistently recognized in this
type of Sherman Act case that the government should not be
confined to an injunction against further violations. . . . Those
who violate the Act may not reap the benefits of their
violations”); cf. United States v. U.S. Steel Corp., 251 U.S. 417,
452 (1920) (observing that the Sherman Act is “clear in its
 26

direction that the courts of the nation shall prevent and restrain
[monopolies] (its language is ‘to prevent and restrain violations
of’ the act); but the command is necessarily submissive to the
conditions which may exist and the usual powers of a court of
equity to adapt its remedies to those conditions”); Schine Chain
Theatres v. United States, 334 U.S. 110, 128 (1948) (suggesting
that “[l]ike restitution,” divestment “merely deprives a
defendant of the gains from his wrongful conduct” and
upholding it as a remedy under the Sherman Act), overruled on
other grounds by Copperweld Corp. v. Indep. Tube Corp., 467
U.S. 752, 763 n.8, 777 (1984). As these cases illustrate, antitrust
precedent offers little reason to doubt the applicability of Porter
and Mitchell to the case at hand.
To sum up, Porter and Mitchell rather than Meghrig control
this case, and no “necessary and inescapable inference” limits
the district court’s jurisdiction in equity. If the district court
concludes that the government has shown that the tobacco
companies have committed RICO violations by advertising to
youth despite assertions to the contrary and by falsely disputing
smoking’s addictive, unhealthy effects, then it may order
whatever equitable relief it deems appropriate. Of course, the
court must work within the bounds of equitable doctrines,
recognizing defenses like laches and unclean hands, paying due
regard for the rights of the innocent, and generally exercising its
discretion. With these principles in mind, the district court can
“do complete rather than truncated justice,” Porter, 328 U.S. at
398.

B.
In addition to rejecting the government’s argument that
district courts may impose any equitable remedy on RICO
violators, the court rejects the government’s alternative,
narrower argument—that even if district courts may order only
remedies that “prevent and restrain” RICO violations,
 27

disgorgement can appropriately accomplish that purpose.
Because the court’s analysis of this argument is as flawed as its
analysis of the government’s broader argument, I add this
discussion of the issue. In my view, the court transforms what
should be a question of fact—what remedies appropriately
prevent and restrain future violations—into a question of
statutory interpretation in a way that disregards section
1964(a)’s plain language and ignores Supreme Court precedent
recognizing the equitable flexibility of district courts.
Under section 1964(a), district courts may issue
“appropriate orders” “to prevent and restrain” RICO violations.
“Prevent” has many meanings. The first nonarchaic one listed
in Webster’s Third New International Dictionary (1961) is “to
deprive of power or hope of acting, operating, or succeeding in
a purpose.” “Restrain” can mean “to hold (as a person) back
from some action, procedure, or course: prevent from doing
something (as by physical or moral force or social pressure)”
and “to limit or restrict to or in respect to a particular action or
course: keep within bounds or under control.” Webster’s Third
New International Dictionary (1961).
The government offers expert testimony to the effect that a
disgorgement order will deter the tobacco companies from
violating RICO in the future—in the dictionary’s language, it
will deprive them of the hope of succeeding in benefiting from
future RICO violations and hold them back from committing
such violations. In essence, the government claims that the
tobacco companies, having engaged in a persistent pattern of
deceptive representations over decades, will be less likely to
continue this illegal behavior if they must surrender their past
ill-gotten profits. Treating the government’s expert testimony
as correct, as we must at this stage of the litigation, see
Anderson, 477 U.S. at 255, I think it enough to forestall
summary judgment in Philip Morris’s favor. Indeed, the
Supreme Court has accepted just this theory of deterrence,
 28

stating in Porter that restitution “could be considered as an order
appropriate and necessary to enforce compliance with the Act”
since “[f]uture compliance may be more definitely assured if
one is compelled to restore one’s illegal gains.” 328 U.S. at 400.
If restitution helps enforce compliance, then we should have
little doubt that disgorgement helps prevent and restrain
violations.
This court does not conclude that disgorgement can never
have a restraining effect on future conduct of the
defendants—the only conclusion that could justify a holding that
district courts can never order disgorgement under section
1964(a). Instead, the court offers several unpersuasive reasons
for its conclusion that as a matter of statutory interpretation
disgorgement is not a permissible remedy under section 1964(a).
First, the court states that disgorgement “is a
quintessentially backward-looking remedy.” Majority op. at 15.
Although I agree that a court sitting in equity cannot order
disgorgement that exceeds a defendant’s past ill-gotten profits,
see Tull v. United States, 481 U.S. 412, 424 (1987) (observing
that “[r]estitution is limited to ‘restoring the status quo and
ordering the return of that which rightfully belongs to the
purchaser or tenant’”) (quoting Porter, 328 U.S. at 402), this
does not mean disgorgement is always backward-looking and
can never have a forward-looking effect on the defendants. The
Supreme Court made this clear in Porter, 328 U.S. at 400, and
Meghrig nowhere rejects Porter’s conclusion that a
disgorgement order can impact future conduct—indeed, there
was no evidence in Meghrig that the defendants were likely to
commit future RCRA violations, and in any event, as discussed
supra at 23-24, Porter and Mitchell are the cases most directly
on point for our purposes.
Second, the court concludes that district courts are limited
not merely by the words “prevent and restrain,” but also “by
those [three remedies] explicitly included in the statute” by
 29

application of the canons noscitur a sociis and ejusdem generis.
See majority op. at 17; cf. United States v. Thomas, 361 F.3d
653, 659 (D.C. Cir. 2004) (defining these canons). Even
assuming we should apply these canons, however, they spell out
nothing more than what everyone agrees on: that the only
“appropriate” orders under this section are equitable ones. See
West v. Gibson, 527 U.S. 212, 225-26 (1999) (Kennedy, J.,
dissenting) (observing that these canons “suggest the appropriate
remedies authorized by [a statute using the word ‘including’] are
remedies of the same nature as reinstatement, hiring, and
backpay--i.e., equitable remedies” and noting that “the phrase
‘appropriate remedies,’ furthermore, connotes the remedial
discretion which is the hallmark of equity”).
More important, I doubt the canons apply here at all. While
the canons can prove useful where there is otherwise “no general
principle in sight,” Dong v. Smithsonian Inst., 125 F.3d 877, 880
(D.C. Cir. 1997); see also Wash. State Dep’t of Health Servs. v.
Guardianship Estate of Keffeler, 537 U.S. 371, 384 (2003)
(applying the canons in interpreting the last listed term of
“execution, levy, attachment, garnishment, or other legal
process”), here the statute provides the general principle of
preventing and restraining violations. Indeed, the Supreme
Court declined to use these canons altogether in interpreting a
statute which gave the EEOC the power of enforcement
“through appropriate remedies, including reinstatement or hiring
of employees with or without back pay,” 42 U.S.C. § 2000e-
16(b). See West , 527 U.S. at 218 (stating that the “word
‘including’ makes clear that ‘appropriate remedies’ are not
limited to the examples that follow that word”); cf. Harrison v.
PPG Indus., Inc., 446 U.S. 578, 588-89 (1980) (declining to
apply ejusdem generis canon where Congress used “expansive
language”). I see no reason why we should do otherwise here,
especially since section 1964(a) uses the even more expansive
language: “including, but not limited to.” Finally, noscitur a
sociis and ejusdem generis should not be used to limit the types
 30

of equitable relief available to district courts given Congress’s
instruction that RICO “shall be liberally construed to effectuate
its remedial purposes,” see supra at 14, one of which is
preventing and restraining future violations—an aim that, far
from being a “new purpose[] that Congress never intended,” see
majority op. at 19 (quoting Reves v. Ernst & Young, 507 U.S.
170, 183 (1993)), expressly appears in the statute’s text. If an
equitable remedy achieves this goal, then the statute authorizes
it.
Third, the court suggests that disgorgement should be
unavailable because it allows the government to achieve relief
“similar in effect” to criminal forfeiture, raising concerns that
the government can achieve duplicative recovery and evade the
procedural safeguards girding the forfeiture provision. See
majority op. at 19. To be sure, such concerns are relevant in
considering whether to infer additional causes of action. As
discussed earlier, supra at 18, however, given the Supreme
Court’s explicit rejection of similar concerns in Porter and
Mitchell, they cannot carry the day. Nor should such concerns
stop a court from issuing equitable orders that accomplish the
express statutory purpose of preventing and restraining RICO
violations, whether the remedies are specifically listed in section
1964(a), e.g., divestment, or available as other “appropriate
orders.” Discussing RICO, the Supreme Court has observed that
“Congress has provided civil remedies for use when the
circumstances so warrant. It is untenable to argue that their
existence limits the scope of the criminal provisions.” United
States v. Turkette, 452 U.S. 576, 585 (1981). The converse
should hold as well. If an equitable remedy prevents and
restrains RICO violations—one of the remedial purposes which
we should liberally construe the statute to effectuate—it is
untenable to claim that the existence of criminal provisions
renders this remedy nonetheless beyond the scope of district
court authority.
 31

Of course, that disgorgement may sometimes serve to
prevent and restrain defendants from committing RICO
violations does not mean that it will always accomplish that
purpose. As the district court here recognized, a court must first
find that the defendants are likely to commit future RICO
violations. 321 F. Supp. 2d at 75-76. This is not a foregone
conclusion. In Carson, for example, while the Second Circuit
recognized that disgorgement can sometimes serve to prevent
and restrain RICO violations, it was rightly skeptical that
disgorgement of the “gains ill-gotten long ago by a retiree” who
had long since left the union position that he had abused in
accepting kickbacks would accomplish this purpose. 52 F.3d at
1182. Assuming district courts are limited to remedies that
prevent and restrain, but see supra Part II.A, I also share the
Second Circuit’s apparent conclusion that disgorgement may be
ordered only to prevent and restrain a defendant from future
RICO violations, see 52 F.3d at 1182. But see Richard v.
Hoechst Celanese Chem. Group, 355 F.3d 345, 355 (5th Cir.
2003) (leaving open the possibility that disgorgement might be
ordered solely to deter other possible offenders). Because any
remedy imposed for a solely exemplary purpose (i.e., to
dissuade others from committing RICO violations) would
amount to punishment, it goes beyond what Congress intended,
see S. Rep. No. 91-617, at 81, as well as pushes the boundaries
of what equity permits, cf. Tull, 481 U.S. at 422. In this case,
however, the government offers evidence that the defendant
companies themselves are likely to commit future RICO
violations by misleading the public about the health
consequences of smoking and the addictive effects of nicotine,
as well as by persisting in marketing to young people.
According to Philip Morris, only injunctions are
“appropriate orders” under section 1964(a) because, in its view,
they will always adequately prevent past lawbreakers from
committing future violations, particularly given the threat of
heavy contempt penalties. Refining this point, the concurrence
 32

finds it “almost inconceivable” that disgorgement can change
the incentives governing a defendant’s future behavior given
RICO’s other provisions. See sep. op. at 4 (Williams, J.,
concurring). The concurrence thus concludes that as a matter of
law, Congress intended to exclude disgorgement from those
remedies appropriate to prevent and restrain RICO violations.
See id. at 4-5. I think this approach is flawed in several respects.
To begin with, as noted above, Porter indicated that
disgorgement may encourage guilty defendants to obey the law
in the future. Interpreting a statute replete (like RICO) with
other remedies, the Court concluded that “[f]uture compliance
may be more definitely assured if one is compelled to restore
one’s illegal gains.” 328 U.S. at 400. We are without license to
ignore the Supreme Court’s views on this point.
Moreover, Philip Morris’s suggestion that only injunctions
provide “appropriate” relief under section 1964(a) not only cuts
against the statute’s plain language—Congress would hardly
have included divestment in its list of sample remedies if it
thought injunctions alone would be adequate—but also ignores
the equitable flexibility the statute was designed to preserve, see,
e.g., 115 Cong. Rec. 9567 (1969) (statement of Sen. McClellan).
Indeed, nothing in the statute requires courts to prefer contempt
penalties (not explicitly named in section 1964(a)) to
disgorgement (also not explicitly named). Rather, no single
remedy is always appropriate. “The essence of equity
jurisdiction has been the power of the Chancellor to do equity
and to mold each decree to the necessities of the particular case.
Flexibility rather than rigidity has distinguished it.” Swann v.
Charlotte-Mecklenburg Bd. of Educ., 402 U.S. 1, 15 (1971)
(quoting Hecht Co. v. Bowles, 321 U.S. 321, 329-30 (1944)).
Sometimes injunctive relief alone will make the most sense;
other times, different equitable remedies or combinations of
equitable remedies, perhaps including disgorgement, might
prove as or more effective.
 33

To be sure, given RICO’s comprehensive remedial scheme,
disgorgement orders may prove appropriate in preventing and
restraining future violations only in rare circumstances. But
“[i]n equity, as nowhere else, courts [should] eschew rigid
absolutes,” Franks v. Bowman Transp. Co., 424 U.S. 747, 777
n.39 (1976) (internal quotation marks and citation omitted), and
precisely what remedy or combination of remedies, within the
bounds of the equitable doctrines discussed earlier, will serve to
prevent and restrain defendants from committing RICO
violations is an issue of fact, not statutory interpretation. For
these determinations, we must rely in the first instance not on
what we appellate judges can or cannot imagine will “prevent or
restrain,” but on tried and true methods of fact-finding before
district courts—including cross-examination and presentation of
contrary evidence. Cf. id. at 780 (noting district courts’ “‘keener
appreciation’ of peculiar facts and circumstances”) (citation
omitted).
Finally, and again as noted earlier, record evidence in this
case suggests that disgorgement will in fact “prevent and
restrain” defendants from committing future RICO violations.
As one of the government’s experts stated, “[R]equiring
defendants to pay proceeds will affect their expectations . . .
about the returns from future misconduct.” Appellee’s App. at
813. The expert added that, even if coupled with an injunction
laden with contempt penalties, disgorgement will “provide
additional economic incentives to deter future misconduct” by
“strengthen[ing] the credibility of existing laws” which the
defendants have allegedly violated in the past. Id. at 814.
Disagreeing, the concurrence offers its own “expert opinion” of
the incentives driving the behavior of past RICO violators. See
sep. op. at 3-5, 7-8. According to the concurrence, the most
appropriate deterrence will stem from the “spotlight of the
lawsuit,” if properly “amplif[ied]” by “transparency-enhancing
and prior-approval measures.” Id. at 7-8. Perhaps so, but “on
summary judgment, the evidence should be viewed in favor of
 34

the nonmoving party, not,” as the concurrence would have it,
“the other way around.” Langon v. Dep’t Health & Human
Servs., 959 F.2d 1053, 1059 (D.C. Cir. 1992) (reversing district
court grant of summary judgment where that court disregarded
admissible expert testimony); see also Sears, Roebuck & Co. v.
Gen. Servs. Admin., 553 F.2d 1378, 1381-83 (D.C. Cir. 1977)
(holding that district court inappropriately granted summary
judgment where experts disagreed about whether certain data
constituted a “trade secret” from which an intelligent competitor
could gain information). At this stage of the litigation, then, we
must assume that the government expert is correct and that
disgorgement will “prevent and restrain” future RICO
violations. Should Philip Morris offer expert testimony along
the lines suggested by the concurrence, then it will be up to the
district court to evaluate the competing evidence and make
appropriate findings of fact. Should either party appeal, this
court, unrestrained by the inferences required at summary
judgment, would then review that factual determination pursuant
to Rule 52’s clear error standard. See Fed. R. Civ. P. 52
advisory committee’s note (observing that judgment under this
standard “differs from a summary judgment under Rule 56 in the
nature of the evaluation made by the court”); see also 9A Wright
& Miller, Federal Practice and Procedure § 2585 (2d. ed. 1994)
(noting that under Rule 52 a reviewing court need not view the
evidence in the light most favorable to the appellee).

C.
In sum, were this case properly before us, I would hold, in
accordance with Porter and Mitchell, that district courts have
authority to order any remedy, including disgorgement,
necessary to ensure complete relief. As the concurrence points
out, sep. op. at 9 (Williams, J., concurring), my approach would
create a circuit split, since Carson did not apply Porter and
Mitchell to RICO (and, indeed, the parties do not appear to have
brought these cases to the Second Circuit’s attention). Even if,
 35

as Carson holds, district courts may only impose equitable
remedies for the purpose of keeping defendants from
committing RICO violations, I would still affirm the denial of
summary judgment, leaving it to the district court to determine,
on the basis of a fully developed record, whether disgorgement
will help accomplish this purpose. I disagree with my
colleagues’ conclusions not because they have created a circuit
split of their own by rejecting Carson’s holding that
disgorgement may prevent and restrain RICO violations, but
because they have done so by accepting an interlocutory appeal
that we should not hear and by disregarding both Supreme Court
precedent and section 1964(a)’s plain language.

III.
This leaves one final, distinct issue. Philip Morris claims
that the government’s disgorgement model fails as a matter of
law to measure the tobacco companies’ ill-gotten profits.
Because the district court decided this issue in the certified
order, it is—unlike the issue the court does resolve—properly
before us. See Yamaha, 516 U.S. at 205.
In calculating disgorgement, the government first identifies
what it calls the “Youth Addicted Population” (YAP), namely,
all people who were smoking an average of at least 5 cigarettes
a day at the time they turned 21. The government next
calculates that from RICO’s effective date in 1970 to 2001, the
tobacco companies earned profits of $280 billion through sales
to these people. The government arrives at this calculation by
(1) determining the gross revenue from these total sales minus
the direct costs (excluding overhead and taxes) and (2) adjusting
for the time value of money. Philip Morris asserts that the
government has failed to show that these profits are attributable
to the companies’ alleged RICO violations, relying on
admissions by government experts that it would be “highly
unlikely” to say that “nobody under the age of 21 would have
 36

ever smoked regularly . . . but for the defendants’ alleged RICO
violations.”
Philip Morris cannot prevail on this issue at summary
judgment because the government need not show that nobody
under 21 would have smoked but for the RICO violations. As
we held in First City Financial, 890 F.2d at 1229,
“disgorgement need only be a reasonable approximation of
profits causally connected to the violation.” In First City
Financial, we found that the district court appropriately ordered
disgorgement of all profits on a stock sale where the defendants
failed to make a material disclosure, purchased stock whose
value would likely have already risen had the disclosure been
made, and then sold the stock for a killing after the undisclosed
news broke. See id. at 1229-32. Although the government
never proved that all increases in the stock’s value stemmed
from the violation, we rejected the defendants’ argument that
because the increase in price may have depended on other
factors, disgorgement of all profits was “simplistic, quite
unrealistic, and so de facto punitive.” See id. at 1231. Noting
that “[r]ules for calculating disgorgement must recognize that
separating legal from illegal profits exactly may at times b e a
near-impossible task,” we held that “the government’s showing
of appellants’ actual profits on the tainted transactions at least
presumptively satisfied” its “burden of persuasion that its
disgorgement figure reasonably approximates the amount of
unjust enrichment.” Id. at 1231-32. Although recognizing that
this might result in “actual profits becoming the typical
disgorgement measure,” we observed that “the risk of
uncertainty should fall on the wrongdoer whose illegal conduct
created that uncertainty.” Id. at 1232; see also SEC v. Banner
Fund Int’l, 211 F.3d 602, 617 (D.C. Cir. 2000).
Disentangling the tobacco companies’ legal and illegal
profits might also be a “near-impossible task.” The government
offers evidence that the tobacco companies not only fraudulently
 37

suggested that smoking was harmless and nonaddictive, but did
so through a comprehensive, decades-long pattern of deliberate
behavior. The government further offers evidence that
advertising is a “very substantial influence on young people
starting to smoke,” see Appellee’s App. at 783, and that the
tobacco companies committed RICO violations in advertising to
young people while publicly denying that they were doing so.
Under First City Financial, then, the government’s calculations
serve as a reasonable approximation: just as we permit actual
profits in insider trading cases to serve as a proxy for ill-gotten
gains, so too can actual profits from sales to the YAP meet the
government’s initial burden of reasonably approximating the
tobacco companies’ unlawful gains. The burden would thus
shift to Philip Morris to “demonstrate that the disgorgement
figure was not a reasonable approximation,” 890 F.2d at 1232,
and the district court would have to sort out who is right.