Tag Archives: Philip Morris

New York Times story: U.S. Chamber has become a “front group” for Big Tobacco

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Another big New York Times article on how the U.S. Chamber of Commerce is shilling around the world on behalf of Big Tobacco.

In the past several years, the U.S. Chamber of Commerce, which used to be a fairly nonpolitical organization, but it has been transformed, mostly by its executive director Thomas Donohue, into a highly politicized lobbying organization.

And lately, much of the Chamber’s lobbying efforts have been directed toward not only defending Big Tobacco but aggressively attacking countries attempting to reign in tobacco marketing and packaging. The New York Times story uses the example of the Irish prime minister who visited the U.S. Chamber offices to lobby for investments, business opportunities in Ireland, and instead Donohue lobbied him to drop new Irish laws requiring plain packaging on tobacco products.

From the New York Times article:

Since taking over in 1997, Mr. Donohue has transformed the chamber into a powerful lobbying force, an evolution most starkly epitomized by its aggressive advocacy for tobacco. While the organization represents a variety of industries, its strategy has been a boon for cigarette makers, which have relied heavily on the chamber to push their agenda at home and abroad.

Few allies of Big Tobacco are as enduring as Mr. Donohue, who has personally lobbied the speaker of the House, the United States trade representative and the Irish prime minister on the industry’s behalf. A review of industry records, which came to light during government litigation, highlights the longevity of his ties.

In the 1990s, after taking over the chamber, Mr. Donohue fought the Justice Department’s tobacco litigation, personally lobbied against antismoking legislation in the Senate and promised “a unique role in determining the future direction of the U.S. Chamber of Commerce” to a big cigarette maker in a letter.

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U.S. Chamber Executive Director Tom Donohue — New York Times photo

The US. Chamber’s lobbying efforts around the world on behalf of Big Tobacco has been talked about a lot in the past year. I’ve written about it and there’s been a number of major articles about it, including CVS Pharmacy quitting the U.S. Chamber over its tobacco lobbying. John Oliver has likewise taken on Big Tobacco’s battles against smaller countries.

This is specifically what’s changed just in the past year or two. While the U.S. Chamber has been for some time now lobbying for Big Tobacco in the U.S., it’s been putting a ton of energy into lobbying for Big Tobacco around the world lately. According to the Times article, it has gotten to the point that officials with the World Health Organization are literally calling the U.S. Chamber a “front group” for the tobacco industry.

According to the Times, a few weeks after Donohue took over at the U.S. Chamber in 1997, he received a letter from a Philip Morris executive.  According the to the New York Times:

Mr. Donohue’s ambition, he wrote in a reply to the Philip Morris executive, was “to build the biggest gorilla in this town.” He scrapped the chamber’s in-house cable network and magazine, which were centerpieces of his predecessor.

“The chamber has become the antithesis of its former self,” a Philip Morris memo reported in 1999, while an executive said in an internal email, the “chamber is doing good work.”

There’s even been a  revolving door between Philip Morris and the U.S. Chamber. A former Philip Morris executive is now one of the top executives in the U.S. Chamber … and better yet, a former U.S. Chamber employee is now a spokeswoman for Philip Morris International.

Another Engle Case judgement — $17.3 million against Philip Morris


This is yet another in a long line (literally thousands) of Engle Case lawsuits in Florida. The Engle case was a Supreme Court decision that overturned a $145 billion class-action judgement against Big Tobacco, while at the same time allowing individual lawsuits against various tobacco companies to be filed. This opened up a floodgate of lawsuits and jury awards in the hundreds of millions (perhaps even billions by now, I don’t know if anyone is keeping track.)

According to Wikipedia, the tobacco industry has lost 77 of the 116 Engle cases that have gone to trial so far.

This case is in Jacksonville and the plaintiff is a 64-year-old woman’s whose legs were amputated due to vascular disease caused by 40-plus years of smoking. The jury found the plaintiff, Donna Brown, 45 percent to blame and Philip Morris 55 percent to blame for lying about and covering up the dangers of smoking and awarded Brown $9 million in punitive damages and $8.3 million in compensatory damages.

From the article:

“The jury recognized that every person has a right not to be hurt by the careless, intentional misconduct of another, and Donna was hurt very badly by Philip Morris’ reckless and intentional misconduct,” attorney Nathan Finch said Friday.

Brown was a Marlboro smoker, but she also occasionally smoked Winstons, made by RJ Reynolds, which apparently reached a settlement with her.

The woman tried to quit several times, using Chantix, nicotine patches, nicotine gum, even a hypnotist,  but nothing worked. She was not able to quit until she finally had a stroke in 2014 (Sounds like my mom, who kept smoking through cancer, heart attacks, chronic bronchities, etc., and only quit when she had a severe COPD episode.).

Philip Morris, R.J. Reynolds lose another $41 million settlement, this one for giving a person COPD

camelTobacco giants Philip Morris and R.J. Reynolds lost another major settlement this week in Florida.

This case is one of the thousands of Engle cases winding their way through the Florida courts. R.J. Reynolds will appeal this verdict (oh, yes they will) but several of these verdicts have been upheld by appeals courts.

The Engle cases stem from a huge $145 billion class-action judgement in 2000. In 2006, the Florida Supreme Court overturned that settlement, but made an important decision to allow individual lawsuits against tobacco companies. Since then, several thousand lawsuits have been filed against tobacco companies, primarily Philip Morris, R.J. Reynolds and Lorrilard, and judgements ranging between a few million to $23.6 billion have been handed down by juries (I believe that $23.6 billion judgement will get tossed on appeal as excessive … when I Googled it, Google asked me “do you mean $23.6 million?”).

According to the article:

Attorney Kenneth Byrd of the Nashville office of national plaintiffs’ law firm Lieff Cabraser Heimann & Bernstein, LLP, announced that a jury in federal court in Florida today returned a verdict of $41.1 million against Philip Morris USA Inc. and R.J. Reynolds Tobacco Company for conspiring for decades to conceal the hazards of smoking and the addictive nature of cigarettes. The jury award consists of $15.8 million in compensatory damages and punitive damages in the amounts of $15.7 million against Philip Morris and $9.6 million against R.J. Reynolds.

“The cigarette industry argues that as Engle class members and their spouses die, their lawsuits die with them. We will continue working night and day to see that these class members get their day in Court.”

Interesting that was in federal court, I’m positive other Florida cases were in state courts.

This case is also a little unusual because most of these Engle cases at this point are being filed by relatives of people who died from lung cancer. This one was filed by the smoker, who is still alive and is suffering from COPD, not lung cancer. I believe that’s the first major judgement I’ve seen against a tobacco company for its role in giving a person COPD. I’m sure there’s been some, I just don’t remember ever coming across a story about it until now.

According to the article:

“At trial Philip Morris and R.J. Reynolds sought to place all the blame on Mr. Kerrivan for becoming addicted to nicotine as a teenager in a time when the defendants widely marketed smoking cigarettes using celebrities and famous athletes and advertised on television shows popular with children and teenagers. Thankfully, the jury rejected this defense and held Philip Morris and R.J. Reynolds accountable for their decision to target an entire generation of post-World War II American teenagers with a lifetime addiction to nicotine,” stated Mr. Byrd. “The cigarette industry argues that as Engle class members and their spouses die, their lawsuits die with them. We will continue working night and day to see that these class members get their day in Court.”

Philip Morris profits down 8 percent in second quarter 2013

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Oh, happy day. Philip Morris (Altria), the No. 1 private cigarette manufacturer in the world, saw its profits drop a dramatic 8 percent in the second quarter of 2013, mostly due to lagging sales. Philip Morris shares dropped 2.5 percent as a result.

Here’s what is interesting. We all know the sales of cigarettes is down, so at first blush, this doesn’t seem to be a big surprise.

What IS a big surprise? The biggest reason for the drop in profits is the drop in sales of Philip Morris brands (mostly Marlboro) overseas.

One thing a lot of people may not realize is that while cigarette sales have been obviously dropping the U.S., the tobacco industry has weathered the storm just fine, mostly by expanding its overseas markets in burgeoning smoking regions such as India,  the Philippines and Africa. Philip Morris is blaming a sluggish economy overseas:

According to USAToday:

The cigarette maker reported earnings of $2.12 billion, or $1.30 per share, in the quarter ended June 30, down from $2.32 billion, or $1.36 per share, a year ago.

Excluding excise taxes, revenue fell 2.5% to $7.9 billion despite higher prices. Costs to make and sell cigarettes rose more than 1% to $2.7 billion.

Cigarette shipments fell about 4% to 228.9 billion cigarettes as it saw volume declines in all of its regions. Total Marlboro volumes fell nearly 6% to 72.4 billion cigarettes.

Philip Morris International said economic woes in the European Union and increased excise taxes drove shipments down nearly 6% during the quarter. Shipments fell 3.6% in the company’s region that encompasses Eastern Europe, the Middle East and Africa. Shipments also fell 2.4% in Latin America and Canada.

In Asia, one of its largest growth areas, the company said that cigarette volume fell 3.5%, hurt by a recent tax increase in the Philippines, which saw a 16.5% decline in shipments.

Smokers face tax increases, bans, health concerns and social stigma worldwide, but the effect of those on cigarette demand generally is less stark outside the United States. Philip Morris International has compensated for volume declines by raising prices and cutting costs.

Anytime the tobacco industry is hurting that is great news. Perhaps its a bad economy, but maybe smoking bans, higher taxes and lower smoker rates in other countries is having an effect, as well. Of course, Philip Morris would never admit THAT.

Oregon Supreme Court came, saw, then kicks Philip Morris’ ASS


Philip Morris got its ass handed to it by the Oregon Supreme Court, which shockingly (to me, because the good guys rarely win these cases, at least completely win) upheld a jury award to the widow of a smoker killed by lung cancer. The Supreme Court ruled that Philip Morris must pay another $99 million to the widow of Jesse Williams, Mayola Williams. The original decision was made by a jury way back in 1999, but then got appealed and appealed all the way to the U.S. Supreme Court. The U.S. Supreme Court upheld a punitive damage of $79.5 million, but kicked part of the case back to the Oregon Supreme Court. That figure is now up to $99 million in part due to interest. OK, I know what you’re thinking — $99 million is nothing to a multi-billion dollar company like Philip Morris. True. But ask yourself why the hell would Philip Morris fight this for 12 years and spend millions on legal fees? Because the tobacco industry is TERRIFIED of legal precedent. Philip Morris was essentially fighting the dollar amount. The tobacco company had already paid millions to the widow. The widow and the state of Oregon, prosecuting the case, reached an interesting settlement. If they won before the Oregon Supreme, the state would receive $55 million to go toward its crime victim’s fund (which makes sense, since what the tobacco companies do is a crime), while Ms. Williams would receive $45 million (somehow, that adds up to $99 million). Philip Morris had an interesting argument. The company contended that Oregon had already signed off on its right to the money because in 1998 – one year before the jury’s verdict – the state agreed not to pursue any more claims for injuries from tobacco exposure in the massive 1998 Master Settlement Agreement. The clause was part of a settlement brokered with Philip Morris, other tobacco companies and 46 states for the billions of dollars the states had paid and would continue to pay for health care for ailing, low-income smokers. Under that deal, the tobacco companies agreed to pay Oregon $2.1 billion during the first 25 years and then about $81 million a year in perpetuity. But attorneys for Oregon and Ms. Williams argued that state was simply trying to collect on the 60 percent due to it under the state’s punitive-damages law, separate from the 1998 MSA. The Supreme Court agreed. No word if Philip Morris will appeal, but I suspect it will.