Too, too funny…. R.J. Reynolds, makers of Camel and, soon-to-be makers of Newport cigarettes, which for years fought smoking bans tooth and nail (often times through tavern associations and other fronts), will be banning smoking in its buildings, except for specially designated “smoking rooms.” (Wonder if they will be glass rooms like at the airport in Salt Lake City?)
I think it’s funny they’re “phasing it in,” to not disrupt their smoking employees too much. First smoking will be banned in conference rooms and elevators in their buildings in North Carolina, New Mexico and Tennessee, but you can still smoke in hallways and personal offices (Interesting … according to my information, New Mexico bans smoking in all workplaces — so this article may have overlooked that. You can still smoke in some workplaces in N.C. Tennessee doesn’t have any statewide law.). Anyway, I digress. By, 2016, you will only be able to smoke in R.J. Reynolds buildings in designated smoking rooms.
Interesting, again … Reynolds already bans smoking in its factories and cafeterias.
According to Reynolds smokesman (err, spokesman) David Howard:
“We recognize that indoors restrictions are the norm today, so most people expect a smoke free business environment,” Reynolds American spokesman David Howard.
“We respect the rights and personal choices of employees who choose to smoke or use other tobacco products and those who don’t.”
“We are simply better aligning our tobacco use policies with the realities of what we’re seeing in the general public today,” he said. (Yeah, a reality that Reynolds fought to the death for nearly 20 years in countless smokefree workplace battles around the country.)
I talked about this in a post the other day. A jury last week awarded $23.6 billion in punitive damages against RJ Reynolds in one of the thousands of Engle cases in Florida. I said that dollar amount would likely never hold up on appeal.
Well, sure enough, some legal experts have weighed in, saying it can’t possibly hold up, but it may not matter, because it might signal future huge punitive damages against RJR.
“Nobody thinks the $23 billion is going to remain,” said Richard Daynard, a law professor at Northeastern University and the chair of its Tobacco Products Liability Project.
Because of constitutional guarantees of due process, the Supreme Court has shown a reluctance to allow punitive damages that are far out of line with compensatory damages in the same case, he said. The court’s general guideline is that the ratio of punitive to compensatory damages should be below 10:1.
However, the compensatory damages in the case were roughly $16 million, which means, Daynard says, there could still be punitive damages up to $150 million.
“I worked with juries for several decades, and I cannot put my mind on what they are doing, but the Florida jury (in awarding a huge sum) seems to be sending a message,” said Duke’s Vidmar. “This is a statement from the jury that this was an outrageous behavior by the tobacco companies.
One thing I saw in this article, and something I have wondered about, is how much the tobacco industry has actually paid out in the Engle cases. The original class-action award was $145 billion, which was overturned by the Florida Supreme Court 8 years ago. Since then, RJ Reynolds has paid out $114 million in 15 resolved cases. Another $180 million in damages are held up on appeal.
I also mentioned this in my my earlier post. These huge damages I think — eventually — will force RJ Reynolds to simply settle with the remaining defendants. Obviously $23.6 billion isn’t going to happen, but constant, never-ending $20 million here and $20 million there is going eat away at RJ. Might be better to just settle and get rid of the legal uncertainty.
“You’re going to have a lot more cases where juries could find themselves similarly outraged,” he said. “The reluctance of the tobacco companies to settle these cases, thinking they can handle the cases as a matter of course, may be a mistake,” Daynard said.
Wow, this is a big “wow.” A big wow that will likely get reduced upon appeal.
In one of the thousands of Engle liability cases in Florida, a jury awarded a settlement of $23.6 billion (yeah, billion) in favor of one of the 8,000 Engle plaintiffs. (The Engle decision was a Florida Supreme Court decision in 2006 overturning a $145 billion class action decision against Big Tobacco in favour of the plaintiffs. While the court upheld many of the merits of the case, it threw out the class action part of a lower court decision, meaning those 8,000 plaintiffs all have to sue individually.
So thousands of lawsuits in Florida have moved forward. This is by far the biggest jury judgement against R.J. Reynolds. The jury awarded $15 million in compensatory damages and $23.6 billion in punitive damages (to punish R.J. Reynolds for lying and covering up the true dangers of their product and the addictive nature of nicotine.). That’s one case … versus $145 billion for 8,000 plaintiffs.
Unfortunately, that punitive damage amount is so outrageous, I can’t imagine it will stand up to appeal. As much as I think it sends a message to the tobacco industry from the jury that “Wow, we really think you lied your asses off,” I don’t think it necessarily does a lot of good to make judgements so huge that they can’t possibly hold up. The tobacco industry has not been successful lately, especially in Florida, in winning these Engle cases, but they have been successful in dragging out appeals indefinitely. An appeal will be automatic in this case over such a large sum of money.
Anyway, there are literally hundreds more of these cases in Florida, and the tobacco industry has been consistently losing them, which is ultimately a good thing. I think ultimately, all these judgements will force RJ and Philip Morris to eventually settle with the thousands of Engle plaintiffs for an amount that for the tobacco industry will still be the “cost of doing business.” Because, I figure even the tobacco industry has to get sick of constantly being in court all the time and constantly dealing with legal fees.
The No. 2 tobacco company in America — R.J. Reynolds — is in talks to buy the No. 3 tobacco company in America — Lorillard (which I have misspelled Lollilard more times than I can count.). Imperial Tobacco is also involved in the deal.
This deal would create a $56 billion company and would create a monster rival to the dominant No. 1 tobacco company in America — Altria, otherwise known as Philip Morris (its dominant brand is Marlboro, of course).
Reynolds and Lorillard would combine for 42 percent of the cigarette market, joining Reynolds’ big product — Camel — what Lorillard’s — Newport. Other Lorillard brands are Kent and Old Gold, while other Reynolds’ other brands are Pall Mall, Winston, Salem and Kool. But, Camel and Newport are the dominant brands.
The new joint company then would sell off several of their smaller brands to Imperial Tobacco, a British-owned company that would then become the No. 3 company in America.
According to the New York Times, declining cigarette sales are driving this move, as both companies work to restore their past profits. E-cigs are also a factor in this deal, as the e-cig industry is booming (got mixed feelings about that), and Lorillard owns the No. 1 e-cig brand, Blu E-Cigarettes.
According to the New York Times:
Still, a takeover of Lorillard by Reynolds would represent the industry’s boldest response yet to a declining, if still profitable, market. A general drop in smoking rates and aggressive public health campaigns aimed at curbing smoking have cut into sales in the United States.
About 42 million people in the United States, or nearly 18 percent of the adult population, smoke cigarettes, according to the Centers for Disease Control and Prevention. That compares with about 21 percent of the adult population nearly a decade ago and 43 percent of the adult population in 1965, according to the C.D.C.
What remains of the traditional cigarette industry is dominated by Altria, whose Philip Morris arm sells one out of every two cigarettes in the United States.
Opportunity has beckoned in the new business of e-cigarettes. A deal by Reynolds to buy the leading purveyor of e-cigarettes could spur other mergers within the industry as manufacturers jockey for position.
“This transaction in our view will be very positive for the global tobacco industry and could be just the beginning of future transactions with e-cigs/vapor being the underlying catalyst,” Wells Fargo analysts wrote in a note.
Anyway, interesting story as the industry adjusts to a rapidly changing and evolving market. This deal is not cast in stone, as it must be approved by federal regulators and could face scrutiny over
This story didn’t get as much attention as I would’ve have expected, I think because it’s actually becoming routine.
A jury last week awarded a family who lost their wife and mother to lung cancer in 1995 after years of smoking a $37.5 award from R.J. Reynolds.
This judgement is part of the old Engle Florida Supreme Court case. In that case, a huge class action settlement — $145 billion — was awarded to a number of smokers for the tobacco industry’s long and sordid history of lying about the addictiveness of nicotine and for marketing to kids.
The tobacco industry filed an appeal to the Florida Supreme Court and the court threw the award out. At the time — 2006 — it appeared to be a big victory for Big Tobacco, but it was a mixed ruling. The Supreme Court threw out the award, but did allow each of the plaintiffs to file individual lawsuits against the tobacco industry.
That has turned out to be a big deal. There were a total of 8,000 individual lawsuits filed in Florida as a result of the ruling, so Big Tobacco is constantly in court in Florida, and repeatedly losing jury awards. $37.5 million won’t break RJR, but multiply $37.5 million by 8,000 — now you’re hurting the industry … big time. So far, $360 million damages have been awarded as a result of the Engle ruling — nowhere near the original $145 billion number, but hurting the industry nonetheless (You know the biggest reason cigarettes are more expensive now than 10 years ago? It’s not cigarette taxes, it’s legal costs.)
R..J Reynolds tried to use the old hoary defence of “it was her choice to smoke,” but that defence has failed time and again in these jury awards, for two reasons A) Big Tobacco was knowingly selling a toxic, poisonous and physically addictive product .. and lied for decades about the addictive nature of nicotine, and B) Because of the industry’s long and sordid history of marketing to teens (R.J. Reynolds are the guys who invented Joe Camel, remember.). It’s interesting reading a lot of the comments on this story about what BS the ruling is because it was her choice to smoke. No, they don’t get it. That defence doesn’t carry much weight with juries or judges, the fact is because they lied and covered up the dangers of their product, the tobacco industry is still liable for damages … “it was their choice to smoke” isn’t going to work. I tried making that point on that thread at HP; I got a few likes but no responses.
The woman who died in this case — Laura Grossman — was only 38 when she died of lung cancer in 1995.
R.J. Reynolds (which makes Philip Morris look like choir boys by comparison sometimes) also made the absolutely despicable defence that Grossman’s death was her husband’s fault because he didn’t do more to make her quit.
R.J. Reynolds Tobacco Company has appealed the verdict, claiming that Grossman’s husband, Jan Grossman, should be held responsible for Laura’s death for “failing to change another person’s course of conduct.” As part of the court ruling, Grossman’s husband and two children were also awarded $15 million in compensatory damages.
That just shows how utterly venal these guys are, especially R.J. Reynolds.
R.J. Reynolds will definitely appeal, the company always does. And they might get the award reduced; Big Tobacco has had some success there, but not as often as in the past.
The Obama administration and the Food and Drug Administration appealed an exasperating federal court ruling on the legality of graphic warning labels on cigarette packs.
The judge ruled that the warnings violated Big Tobacco’s First Amendment rights by (and I’m simplifying here) forcing them to publish warning labels to provoke an emotional reaction so people won’t buy their product. (It sounds wacky, but there is some legal precedent there — as part of the First Amendment, there are limits to how much you can make people say things they don’t want to say.).
What I don’t totally get is the logic that text warnings on cigarette packs DON’T violate the First Amendment, but graphic warnings DO.
So, while graphic warnings are being put in place around the world, in America they are on hold.
Anyway, this is going to the U.S. Circuit Court of Appeals, and will very likely end up before the U.S. Supreme Court. With the business-friendly “corporate personhood” court currently in power, I would bet money Big Tobacco wins. We need a couple of those old right-wingers on the court to retire, dammit! (Though they never will as long as Obama is president).
OK, if Herman Cain’s pathological bigotry toward Muslims and his borderline Uncle Ruckus “Blacks have been brainwashed into voting for Democrats” schtick wasn’t enough reason to hate him, now there is this.
(Thanks to Sandy at Current for cluing me in on this, BTW.)
In the 1990s, when Herman Cain, owner of Godfather’s Pizza, was a lobbyist for the restaurant industry, he partnered with RJ Reynolds and Philip Morris to oppose smoking bans for restaurants. Cain helped lobby against local and state smoking bans on behalf of the tobacco giants. Why? Whoooooaaaa, Nelly! Here we go! A letter from Herman Cain to SAFE — the Save American Free Enterprise fund, a tobacco industry front group at the time:
On behalf of National Restaurant Association and the
Save American Free Enterprise (SAFE) fund, I want
thank you for RJ Reynolds Tobacco Company’s generous
contribution to the SAFE fund.
As you know, the purpose of the SAFE fund is to provide
financial support to state restaurant associations in
their efforts to defeat anti-business ballot initiatives,
along with pro-actively promoting free enterprise
through federal and state legislation .
Rob, as we head into a new millenium, it will take
courage and leadership from industry leaders like you if
we are to Save American Free Enterprise .
Again, many thanks for your ongoing support and
participation with the National Restaurant Association.
Sincerely,
Herman Cain
What a fucking weasel. We are talking about smoking bans in … FAMILY RESTAURANTS … where children eat. It’s bad enough for employees to breath secondhand smoke for 40 hours a week, but they were fighting bans around kids.
Wow, just when you think a guy couldn’t be a bigger douchebag (and really, after Cain’s cracks about Muslims and towns should be able to ban mosques, he’s pretty damn high on the douchebag scale.), Cain takes it one step higher.
File this one under, “you have to be absolutely shitting me.”
Five Big Tobacco companies, led by (cue shock) R.J. Reynolds, the sleaziest of the sleaze Big Tobacco companies, filed suit against the Food and Drug Administration over graphic warning labels being required by the agency.
Get this, the complaint claims the labels would make their customers, i.e., smokers, “depressed, discouraged and afraid” to buy their products.
Oy.
That’s the FUCKING point! To DISCOURAGE and make people AFRAID to use the product.
Arrrrrggghhhhhhh!!!!!!!! Must …. avoid … kicking …. cat…..
These warning labels are all part of legislation signed into law in 2009 that gave the FDA regulatory authority over Big Tobacco. These same kinds of graphic warnings have been implemented in Great Britain, Canada and Australia (and they’ve been controversial in those places, as well.)
Altria, i.e. Philip Morris, as usual likes to play nice and has not joined this litigation. With 60 percent of the cigarette market cornered, Philip Morris doesn’t need to jump into these frivolous suits (and Philip Morris actually helped write that 2009 law to begin with, which is weird, because if their competitors can no longer advertise, they can cling on to that 60 percent market share much more easily.).
These images, which will be unveiled a year from now, include sickly children, people dying of cancer and diseased gums and lungs. These kinds of images have been on cigarette packs in Commonwealth countries for a few months now.
It all began in 1994. Years of outrage over decades of Big Tobacco’s lies finally seemed to be coming to fruition. 1994 was the year it seemed like we finally turned a corner in the fight against Big Tobacco.
The early 90s was pretty much the height of the lung cancer epidemic. Ever since then, lung cancer rates overall have been slowly dropping, especially among men. It was also the height of “Joe Camel,” a wildly successful marketing campaign by RJ Reynolds that appealed to beginning smokers (i.e., teenagers). What was really alarming people at the time was that the teenage smoking rate had been steadily decreasing until the mid- to late-80s. Then, shockingly, the teen smoking rate started going up, and going up markedly. Why? Joe Camel. Tobacco paying millions every year to insert “cool” smoking scenes in PG and PG-13 movies. They were finding a way to market to kids.
Congressman Harry Waxman held a famous series of Congressional hearings in 1994 in which the CEOs of the four major tobacco companies were subpoenaed to testify before Waxman’s committee about the cover-up and lies of Big Tobacco. All four CEOs — from RJ Reynolds, Phillip Morris, Brown & Williamson and Lollilard — steadfastly refused to budge an inch under withering questioning from Waxman and other congressmen that they knew cigarettes were addictive and were killing people. They all four claimed they did not believe this.
The public was outraged. It was a major public relations debacle for Big Tobacco. Within months, a perjury investigation was initiated by the Department of Justice. All four CEOs were eventually fired. Ultimately, the Department of Justice claimed it didn’t have enough evidence to prosecute for perjury because the four CEOs testified under oath they believed tobacco did not addict people nor cause cancer. They had crafted their answers very carefully, obviously with help from attorneys. Because they had used the word believe, they could not be prosecuted for perjury.
Then came the Global Settlement Agreement, which came oh, so close to passing. This was a settlement proposed between several plaintiffs and Big Tobacco to right at least some of the wrongs committed by Big Tobacco over the past century. This included payment of $365 billion to the states for their Medicaid costs caused by smoking. FDA would be given regulation over tobacco products, warning labels would be strengthened and all class-actions suits against Big Tobacco would be nullified.
This required an act of Congress (because of the FDA involvement), and Congress failed to pass the bill, which was carried by Sen. John McCain.
Out of the flames of that failure, came the the Master Settlement Agreement, which was announced in 1998, I cheered. Finally, Big Tobacco was being brought to its knees. It wasn’t as good as the GSA, but it still sounded good. Big Tobacco would be crushed by a $280 billion out-of-court settlement with 46 states … (give or take several billion depending on your accounting).
I continued to cheer it for at least five years … until I started finding out all that had been lost. All in all, this agreement was an abject failure on most levels, explained very well in Alan Brandt’s “The Cigarette Century.”
The Master Settlement Agreement is to this day the biggest court settlement ever reached in the history of litigation. Big Tobacco (RJ Reynolds, Phillip Morris, Lollilard and Brown & Williamson), was sued by the state of Mississippi in the early 1990s to reimburse the state for its Medicaid expenses caused by all the health problems caused by smoking. 40 other states joined the suit. Famed Mississippi attorney Dickey Scruggs took over the plaintiffs’ case, leading an army of lawyers against Big Tobacco.
The case had an interesting basis in law. The tobacco industry was adding untold billions to the Medicaid expenses of states dealing with the near-epidemic of health problems caused by cigarettes — lung cancer, heart disease, lung disease, etc. In the 70s and 80s, lung cancer especially hit a crescendo as all those heavy smokers who started smoking in the 1950s and 1960s (when the smoking rate was the highest) started getting lung cancer. The industry knew damn well that its product was making people sick, yet continued to sell it … and this was actually adding to taxpayers’ tax burdens.
All this information came out in a series of documents leaked over a period of years from various personal injury lawsuits against the tobacco industry. While few of these lawsuits succeeded (Most jury decisions for the plaintiffs were either overturned by higher courts or the damages greatly reduced), one good thing did come out of all this litigation. Discovery.
Big Tobacco spent millions on advertising cigarettes in movies
Through the discovery process, reams and reams of documents were released to the plaintiffs, who in turn made them available to the public, proving that the tobacco industry had known since the early 1950s that tobacco was giving people heart disease and lung cancer and that nicotine was physically addictive and that “light” cigarettes were not safer than “regular.” Documents were released showing that Big Tobacco executives did their damnedest to keep this information covered up, and to fabricate studies attempting to disprove that cigarettes were killing people. More documents also proved that the industry had been shamelessly marketing to “new smokers,” which is a Big Tobacco euphemism for “teenage smokers.”
With this reams upon reams of evidence now out in the public forum, Big Tobacco was forced to settle, or face constant lawsuits and judgments. However, the high-priced Big Tobacco lawyers completely outmaneuvered the state attorneys general in the settlement.
The biggest failure of the agreement? It was suggested in the agreement that a certain amount of the $280 billion go toward tobacco education and cessation programs. Everyone assumed it would. Everyone thought it was a MANDATE. It was never MANDATED however.
Anti-smoking programs did receive a lot of funding from the settlement for a few years, but it didn’t take states very long to figure out that the word “mandate” wasn’t in the settlement anywhere. Before long, state legislatures started diverted that money to balancing their general funds. Money for tobacco education dried up. Lazy state legislators got an easy source of money to balance their budget without raising property taxes. It turned into a huge windfall. Not only that, but states started selling bonds with the intention that they would be paid off by future tobacco settlement funds.
Instead of stamping out smoking, states had become utterly dependent upon tobacco. It wasn’t in the states’ interest to cut smoking rates.
There was one last chance to really nail the tobacco industry. A RICO racketeering lawsuit filed against Big Tobacco in the federal court by the Justice Department under Bill Clinton. They had a damn good case. Tobacco executives had conspired for years to cover up the addictiveness and deadliness of their product. They had conspired for years to cover up the fact that they were marketing their product to kids. They had lied that “light” cigarettes were safer.
The feds won their case in 2006, sort of. A federal judge issued a scathing ruling convicting Big Tobacco of racketeering under the RICO statutes. An appeals court upheld this decison. However, shockingly, the courts did not impose any financial penalties, saying the RICO statute did not allow this. Some argue that the Justice Department under Bush did not pursue the case as aggressively as it had been pursued under Clinton, and this was part of the reason for the mixed ruling. The case is still being appealed as the government is seeking more of a monetary punishment against Big Tobacco.
So, tobacco executive lost their jobs for lying to Congress, were investigated for perjury, but avoided an indictment. Big Tobacco was convicted by a federal judge of RICO racketeering, and that conviction was upheld by an appeals court, but no executives went to jail, nor was the industry even forced to pay penalties. A huge civil settlement with the states has simply turned into a windfall for state government.
Big Tobacco murdered people for decades. And murder is not too strong of a word for it. They knew since the early 1950s, maybe even earlier, that they had a product that was addicting people and was killing people. And they continued to sell it and market it, and then they marketed it to kids. And they covered up and lied. For decades. It’s amazing to me that not one person has ever spent a day in jail for it. And people are rotting in prison in Texas and Florida for selling pot.
They got away with it. The final chapter of Dr. Allan Brandt’s book, “The Tobacco Century,” is “The Crime of the Century.”
They murdered roughly 100 million people worldwide between 1950 and 2010, and by “murder,” I mean they knew full well they were killing people with their addictive product.
If you want to look at the glass half-full, a few good things did come out of the 1998 MSA:
* Joe Camel was retired for good. Big Tobacco is forbidden from marketing to kids again (no ads with cartoon characters). They have attempted to get around this provision several times.
* Payments to movie studios for product placement were forbidden. Weirdly enough, smoking scenes in movies after 1998 actually went up, not down. Big Tobacco insists they have nothing to do with this. It’s probably Hollywood’s continued love affair with the cigarette dating back to Casablanca. However, pressure has been put on Hollywood to cut gratuitous smoking scenes out of PG and G movies. That pressure seems to be working.
* The cost of cigarettes went up. To pay for the $280 billion settlement, the industry as expected raised their prices. Along with a number of states jacking up their cigarette taxes, in some cases dramatically, the price of cigarettes has skyrocketed in the past 10 years, helping to drive down the smoking rate.
* Spurred partly by outrage that sprang from Waxman’s hearings, more and more states and cities have passed smoking bans. Not only do smoking bans help drive down the smoking rate (because a lot of casual smokers only smoke in bars, and therefore, it gives them a good excuse to quit), they also protect nonsmokers from secondhand smoke.
* The FDA was given regulatory authority over tobacco in 2009. The first thing the agency did was ban candy-flavoured cigarettes, which are popular with kids.
* The smoking rate and teen smoking rate have declined since 1998, but not dramatically. The smoking rate was around 24-25 percent in 1998, and today it’s pretty much stuck at about 20 percent. The smoking rate for teens is a little harder to pin down, because few teens are what you would call “regular smokers,” but the percentage of teens who were smoking dropped from 28 percent in 2000 to 17 percent in 2010. However, that drop has stalled the last few years, probably because of the cut in tobacco education funding.
* Class-action suits against Big Tobacco have been halted, but individual lawsuits are still being allowed. In Florida, a Supreme Court decision there in 2006 allowed thousands of individual lawsuits to go forward against Big Tobacco for lying about the safety of “light cigarattes,” etc. So far, juries have awarded hundreds of millions of dollars for plaintiffs, with hundreds more suits in the works. None of those judgments have been paid out, however, as Big Tobacco is appealing all the verdicts. the industry will be dealing with these lawsuits for at least the next decade, maybe longer.
Don’t these douchebags ever get sick of being in court? Or are they in court so often they just see it as a normal way of life?
Oh, this is too rich. RJ Reynolds and Lollilard, which are usually the defendants have actually filed suit against the Federal Drug Administration over its tobacco policy advisory board.
The two tobacco giants are claiming that the advisory panel is biased against the tobacco industry and that several members have conflicts of interest.
One of the items the panel is chewing over is whether or not to recommend if menthol should be banned in cigarettes. Menthol is a continuing source of controversy in tobacco control. The FDA after it was granted regulatory authority over tobacco in 2010 quickly banned “candy-flavoured” cigarettes, but ignored menthol, well, because menthol has been around for a long time and is a huge part of the tobacco market. Lollilard’s No. 1 product, Newport, is a menthol brand. Newport brings in 90 percent of Lollilard’s revenues. It’s also the No. 1 type of cigarette for black smokers.
The suit was filed in United States District Court in Washington, D.C. According to the New York Times, the cigarette makers claim that three members of the panel — “Dr. Neal L. Benowitz, Dr. Jack E. Henningfield and Dr. Jonathan M. Samet — have received tens of thousands of dollars as expert witnesses in litigation against cigarette makers and as advisers to pharmaceutical companies that make smoking cessation products. They are all university professors, researchers and national experts in the antismoking movement.”
Phillip Morris made a similar complaint last year that was dismissed.
