A federal judge left tobacco companies fuming after refusing to dismiss the federal government's $289 billion racketeering case against the industry in a ruling made public on Friday.

U.S. District Judge Gladys Kessler Thursday denied an industry motion to throw out the case on the grounds that tobacco companies would not be able to commit future misdeeds.

"To answer that question, the court must hear and weigh the evidence, which is properly done at trial," Kessler said in her opinion.

She also said that the likelihood of future wrongdoing "obviously requires an evaluation of material factual issues that are clearly in dispute."

The Department of Justice filed suit against the industry in 1999, but the only remaining charge is that the tobacco companies engaged in racketeering to mislead the public about smoking hazards. The suit seeks disgorgement of $289 billion in estimated profits resulting from the deception, as well as tougher rules on marketing, advertising and health warnings.

In a response to the judge's ruling,

Altria's

(MO) - Get Report

Philip Morris unit said: "The government is required to legally show that there is a likelihood that the companies would engage in future improper conduct. That is a burden the company believes the government cannot meet at trial."

Kessler has yet to rule on a separate motion by the tobacco industry that argues the government has no legal basis to seek disgorgement of $289 billion in industry profits.

The government has brought claims against Altria Group;

R.J. Reynolds

( RJR);

Loews'

( LTR) Lorillard Tobacco unit, which has a tracking stock,

Carolina Group

(CG) - Get Report

; and

Vector Group

's

(VGR) - Get Report

Ligget Group.

Altria was downgraded by Prudential analysts in March on account of the litigation process, which is now set to continue even longer.

Prudential's three-person analyst team said at the time that lawsuits from smoking victims on both the federal and state level could provide negative news flow that "may have a substantial impact on the valuation at current valuations."

Altria shares fell 59 cents, or 1.05%, to $55.76. R.J. Reynolds were down 50 cents, or 0.8%, at $63.26.