Department of Justice Racketeering Case: Tobacco Cos. Ordered to Publish Corrective Statements. November 17, 2017

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1 Department of Justice Racketeering Case: Tobacco Cos. Ordered to Publish Corrective Statements November 17, 2017

2 Overview Short History of U.S. vs. Philip Morris Court s Findings and Order The Corrective Statements Details of running corrective statements How public health advocates can make the most of the statements 2

3 Timeline of Events U.S. DOJ sues major cigarette manufacturers. Judge Gladys Kessler grants intervenor status to public health groups. Court of Appeals upholds Judge Kessler s findings and most remedies. Major U.S. tobacco companies begin to run corrective statements in newspapers and on TV Trial lasts from September 2004 to June August 17, 2006: Judge Kessler issues her 1,683- page Opinion. Tobacco companies file numerous appeals on corrective statements and use other tactics to delay implementation. 3

4 The Public Health Intervenors American Cancer Society American Heart Association American Lung Association Americans for Nonsmokers Rights National African American Tobacco Prevention Network Tobacco-Free Kids Action Fund (affiliate of ) 4

5 Minneapolis-St. Paul Star Tribune, June 24, 2001

6 Why Intervention? Political interference by Bush Administration Concerns DOJ will not seek strong remedies Judge Kessler finds intervenors have a protected interest in scope of remedies and the federal government no longer adequately represents those interests. 6

7 Big Tobacco Lied to Public, Judge Says Industry Avoids Huge Penalties but Is Ordered to Correct False Advertising August 18, 2006 Henri E. Cauvin and Rob Stein A federal judge ruled yesterday that tobacco companies have violated civil racketeering laws, concluding that cigarette makers conspired for decades to deceive the public about the dangers of their product and ordering the companies to make landmark changes in the way cigarettes are marketed. But U.S. District Judge Gladys Kessler said that under a 2005 appellate court ruling, she could not impose billions of dollars in penalties that had been sought by the Justice Department in its civil racketeering suit against the eight defendant tobacco companies. All she could do, she said, was try to deter future illegal acts by the companies, and to that end, she ordered them to stop using terms such as "low tar," "light" and "mild" and to undertake a massive media campaign in an effort to correct years of misrepresentations. It is a penalty that will cost the industry millions of dollars -- a fraction of the cost of sanctions the companies faced at the outset of the case, when the Justice Department sought $280 billion from the industry. In the opinion, which runs 1,742 pages and was more than a year in the drafting, Kessler wrote that there is "overwhelming evidence" of most of the charges leveled at the industry -- that it conspired to violate, and indeed violated, federal racketeering laws.

8 Judge Kessler s Opinion: August 17, 2006 (This case) is about an industry, and in particular these Defendants, that survives, and profits, from selling a highly addictive product which causes diseases that lead to a staggering number of deaths per year, an immeasurable amount of human suffering and economic loss, and a profound burden on our national health care system. Defendants have known these facts for at least 50 years or more. Despite that knowledge, they have consistently, repeatedly, and with enormous skill and sophistication, denied these facts to the public, to the Government, and to the public health community... In short, Defendants have marketed and sold their lethal products with zeal, with deception, with a single-minded focus on their financial success, and without regard for the human tragedy or social costs that success exacted. 8

9 ites/default/files/resources/tclc-verdictis-in.pdf 9

10 The Corrective Statements Remedy Defendants ordered to make corrective statement about five topics that were subjects of defendants fraud: Adverse health effects of smoking Addictiveness of smoking and nicotine Lack of significant health benefit from smoking low tar, light, ultra light, mild, and natural cigarettes Manipulation of cigarette design to ensure optimum nicotine delivery Adverse health effects of exposure to secondhand smoke 10

11 Corrective Statements Dissemination Television Newspapers Defendants corporate websites Cigarette pack onserts Start November 26 Point of sale still subject of litigation Details still being finalized 11

12 Corrective Statements: The Legal Issues Defendants challenged court s authority to order corrective statements under RICO statute and as First Amendment violation 2009 D.C. Circuit ruling upholds corrective statements remedy under RICO RICO gives federal courts authority to prevent and restrain violations of RICO.... Court held requiring defendants to communicate truth about their products would deter continued false and misleading claims; will prevent and restrain them from future RICO violations. Court rejected First Amendment challenge: corrective statements would not infringe free speech rights of companies if confined to purely factual and uncontroversial information. However, ruling did not address specific corrective statements. 12

13 Corrective Statements: Version #1 A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public about the health effects of smoking, and has ordered those companies to make this statement. Here is the truth: Smoking kills, on average, 1200 Americans. Every day. More people die every year from smoking than from murder, AIDS, suicide, drugs, car crashes, and alcohol, combined. Smoking causes heart disease, emphysema, acute myeloid leukemia, and cancer of the mouth, esophagus, larynx, lung, stomach, kidney, bladder, and pancreas. Smoking also causes reduced fertility, low birth weight in newborns, and cancer of the cervix. 13

14 Corrective Statements: Version #1 (with changes after appeals) A Federal Court has ruled that ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public about the health effects of smoking, and has ordered those companies to make this statement about the health effects of smoking. Here is the truth: Smoking kills, on average, 1200 Americans. Every day. More people die every year from smoking than from murder, AIDS, suicide, drugs, car crashes, and alcohol, combined. Smoking causes heart disease, emphysema, acute myeloid leukemia, and cancer of the mouth, esophagus, larynx, lung, stomach, kidney, bladder, and pancreas. Smoking also causes reduced fertility, low birth weight in newborns, and cancer of the cervix. 14

15 Corrective Statements: Final Version A Federal Court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about the health effects of smoking. Smoking kills, on average, 1200 Americans. Every day. More people die every year from smoking than from murder, AIDS, suicide, drugs, car crashes, and alcohol, combined. Smoking causes heart disease, emphysema, acute myeloid leukemia, and cancer of the mouth, esophagus, larynx, lung, stomach, kidney, bladder, and pancreas. Smoking also causes reduced fertility, low birth weight in newborns, and cancer of the cervix. 15

16 Corrective Statements: 11 Years of Appeals Tobacco companies filed at least 4 appeals of corrective statements. February 2016: Judge Kessler called companies litigation tactics ridiculous a waste of time, energy and money for all concerned and a loss of information for the public. October 2017: Appeals come to an end, and judge issues final implementation order for newspapers and television. 16

17 Summary of Court-Ordered Corrective Statements Remedy: United States v. Philip Morris USA Inc. Television: Tobacco companies must purchase ads with text and voice-over containing one of the five corrective statements that must: Run five times per week for one year (52 weeks) for a total of 260 spots. Run Mon.-Thurs. between 7:00 p.m. and 10:00 p.m. on one of the three major networks (CBS, ABC or NBC). Four of the ads are 45-second spots and one is a 30- second spot. Begin to air the week of November 26,

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19 Summary of Court-Ordered Corrective Statements Remedy: United States v. Philip Morris USA Inc. Newspapers: Tobacco companies must purchase five full-page ads in the first section of the Sunday edition of 50+ newspapers specified by the court. Each newspaper ad will contain one of the five corrective statements according to the following schedule: November 26, 2017 Adverse Health Effects of Smoking December 10, 2017 Addictiveness of Smoking and Nicotine January 7, 2018 Lack of Significant Health Benefit from Smoking Low Tar, Light, Ultra Light, Mild, and Natural Cigarettes February 4, 2018 Manipulation of Cigarette Design and Composition to Ensure Optimum Nicotine Delivery March 4, 2018 Adverse Health Effects of Exposure to Secondhand Smoke 19

20 November 26, 2017 Adverse Health Effects of Smoking 20

21 December 10, 2017 Addictiveness of Smoking and Nicotine 21

22 January 7, 2018 Lack of Significant Health Benefit from Smoking Low Tar, Light, Ultra Light, Mild, and Natural Cigarettes 22

23 February 4, 2018 Manipulation of Cigarette Design and Composition to Ensure Optimum Nicotine Delivery 23

24 March 4, 2018 Adverse Health Effects of Exposure to Secondhand Smoke 24

25 Defendants Haven t Changed The evidence in this case clearly establishes that Defendants have not ceased engaging in unlawful activity. Still marketing the most popular brands to youth Still fighting proven policies to reduce tobacco use Still disingenuously claiming to be transformed companies 25

26 Tobacco Companies Statements on Corrective Statements Companies Look to the Future as Long- Running Federal Lawsuit Nears End The tobacco industry today is very different than it was when this lawsuit was filed in More than a decade ago, Reynolds American and its operating companies began a journey to transform the tobacco industry. Today, the industry is working with the FDA, other regulators and some in the public health community more than ever before to create a regulated marketplace that encourages innovation while reducing the harm from smoking. This industry has changed dramatically over the last twenty years, including becoming regulated by the FDA, which we supported. We re focused on the future and, with FDA in place, working to develop less risky tobacco products. As part of the injunction, the court ordered the defendants to make certain corrective statements related to issues raised in the litigation. Since 2006, the parties have vigorously litigated aspects of the injunction, including the content of the corrective statements.

27 Amplifying the Corrective Statements: Goals Expand reach of the corrective statements themselves Tell public, policymakers, media and other audiences why tobacco companies must make the statements: A federal court found them guilty of racketeering, fraud, conspiracy, deception and lies Counter tobacco companies claims they have changed Use the corrective statements to make the case for policy goals 27

28 Amplifying the Corrective Statements: Key Messages Tobacco companies aren t making these statements voluntarily or because of a settlement. A federal court ordered them to do so after finding they violated racketeering laws and engaged in a decadeslong conspiracy to deceive and defraud the American public. Tobacco companies haven t changed and remain the main cause of the problem. They still market to kids, fight proven policies, falsely portray themselves as part of the solution. 28

29 Amplifying the Corrective Statements: Key Messages Tobacco companies fought for 11 years to block, delay and weaken the corrective statements. That shows how little they have changed. We need more than corrective statements. We also need strong corrective action to win the fight against tobacco, which is still the #1 cause of preventable death (tobacco tax increases, smoke-free laws, tobacco 21, etc.) 29

30 Amplifying the Corrective Statements: Earned Media Issue press release using corrective statements as hook to highlight state/local policy goal(s) Tobacco-Free Kids will provide template (swisscheese) press release Submit op-ed or letter-to-the-editor 30

31 Amplifying the Corrective Statements: Social Media Share TV ads of corrective statement on your Facebook, Twitter and other social media channels (Tobacco-Free Kids will post ads on YouTube on Nov. 27) Share social media graphics: find shareable graphics at Use hashtag #TobaccoRacketeers Reach out to policy makers and urge them to share the corrective statement ads or social graphics 31

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