The US was trying to use anti-mafia legislation to fine tobacco firms

The US Justice Department was seeking $280bn (�160bn) in damages from firms it accuses of misleading the public over the dangers of smoking.

But the Supreme Court denied its request to overturn an earlier ruling.

An appeals court had barred the government from seeking damages under the anti-racketeering legislation.

Correspondents say the Supreme Court's decision is a major victory for tobacco companies. Their stocks rose sharply following the decision.

Remedies

The firms had argued successfully that the anti-mafia legislation could not be used retroactively to fine them.

The appeals court ruled in February that this law only allows for forward-looking remedies designed to prevent future violations.

Companies involved in the case include Philip Morris, Altria, RJ Reynolds, Brown & Williamson Tobacco and British American Tobacco.

They have denied conspiring to mislead people about the dangers of smoking.

The appeals court reversed a decision by the trial judge, Gladys Kessler, who had concluded that the law does allow the government to seek money as a legal remedy for decades of alleged fraud.