The immense case, which already has cost the two sides hundreds of millions of dollars, has been described as the largest civil suit ever brought under the federal anti-racketeering statute known as RICO (Racketeer Influenced and Corrupt Organizations Act).

A federal appeals court in February wiped out what was, for the industry, the most worrisome part of the lawsuit: a government demand that the firms be required to forfeit US$280 billion (HK$2.18 trillion) in allegedly ill-gotten profits.

But the stakes are high. Despite the industry's dismal reputation, it is eager to avoid the stigma of a racketeering verdict - which would be the first such judgment against a major industry.

A loss also could force the firms to spend billions of dollars on remedial measures sought by the Justice Department, among them a smoking cessation program that would cost the companies up to US$130 billion over 25 years.

A lot is riding on the verdict for the Justice Department as well, where lawyers are eager to vindicate their longtime pursuit of the industry.

For the industry, avoiding a costly verdict would put a major challenge out of the way, though its problems would not be over: Philip Morris is appealing a US$10.1 billion verdict in an Illinois class-action suit involving deceptive marketing of low-tar cigarettes. And in Florida, plaintiffs in a class action seek to reinstate a US$144.8 billion punitive-damages award that was reversed by an appeals court.

In the largest series of tobacco suits resolved to date, the industry agreed in 1998 to pay US$246 billion to settle claims by the states. The tobacco industry has both won and lost smaller cases brought by individual smokers.

With Justice Department and industry lawyers allotted 6½ hours apiece, summations in the racketeering case are expected to last until tomorrow. Then, US District Judge Gladys Kessler, who has heard the case without a jury, will retire to consider 45,000 pages of testimony by more than 240 witnesses, along with roughly 15,000 exhibits.

Government lawyers have painted the companies as outlaws that engaged in a 50-year conspiracy to addict and mislead people about the risks of smoking and second-hand smoke, at a cost of millions of premature deaths.

The cigarette makers have accused the government of exaggerating past wrongdoing, ignoring its own long-time support for the tobacco business, and of failing to acknowledge significant changes in the companies' conduct since their settlement with the states.

Defendants include Philip Morris USA, a unit of Altria Group; R J Reynolds Tobacco and Brown & Williamson, which have merged to form Reynolds American; British American Tobacco; the Lorillard Tobacco unit of Loew's Corp; and Vector Group's Liggett.

In addition to the smoking-cessation program, the government may seek to impose a system of stiff fines if teen smoking fails to decline by targeted amounts and monitors for industry executives.

But some remedies seem in jeopardy from the sweeping appeals court ruling barring forfeiture of profits.

By a 2-1 vote, a panel of the US Court of Appeals reversed Kessler and ruled that the civil provisions of RICO do not permit sanctions to undo past harm, only to prevent future frauds.

Kessler is regarded as sympathetic to the government's case. But because the remedies sought by the government could be deemed - like forfeiture of profits - to be improperly focused on past misconduct, experts say the judge has little room to exercise her will.

LOS ANGELES TIMES