Tobacco Companies Agree on Ads Admitting Smoking Lies

By Andrew Zajac, Bloomberg News
Altria Group Inc. (MO), Reynolds American Inc. (RAI) and other tobacco companies agreed with the U.S. on how they will publicize admissions that they deceived the American public on the dangers of smoking.
The companies and the Justice Department resolved that “corrective statements” will appear in the print and online editions of newspapers and on television as well as on the companies’ websites. Expanded information on the adverse health effects of smoking will appear on cigarette packages, according to the agreement filed yesterday in federal court in Washington.
The plan for the statements is another stage in a 15-year-old civil racketeering case against the tobacco companies brought by the U.S.
The ads, fought over in court for more than two years, were ordered by U.S. District Judge Gladys Kessler, who in 2006 found the tobacco companies violated anti-racketeering laws by conspiring to hide cigarettes’ risks. The defendants in the case include Lorillard Inc. (LO)
Kessler also ordered the companies to stop marketing cigarettes as “light” and “low-tar.”
She later approved the text of corrective messages. The tobacco companies lost their bid to overturn Kessler’s decisions on the statements at the U.S. Court of Appeals in Washington in 2012.

Judge’s Approval

The agreement on the dissemination of the ads, which covers details such as the size of lettering and schedules of publication, is subject to Kessler’s approval.
Negotiations are continuing on whether the corrective ads will be required in retail locations, according to the agreement.
The consent order was filed the day before the 50th anniversary of the U.S. Surgeon General’s watershed Jan. 11, 1964, report warning of the health consequences of smoking.
Each of the ads begins by declaring that a federal court found that the four companies “deliberately deceived the American public” and goes on to state “here is the truth.” A description of companies’ wrongdoing follows, along with correct public health information in five areas including the dangers of smoking and its addictiveness, second-hand smoke and false advertising about low-tar and light cigarettes.

Appeals Pending

The ads are scheduled to begin after companies’ appeals connected to Kessler’s order have run their course.
The “agreement ensures that when all potential appeals are exhausted, the corrective statements will be ready to run without further delay,” according to a statement by Tobacco-Free Kids Action Fund and five other public health groups that joined the case.
Brian May, a spokesman for Richmond, Virginia-based Altria and its Philip Morris USA unit, declined to comment on the agreement
Bryan Hatchell, a spokesman for Winston-Salem, North Carolina-based Reynolds American, didn’t immediately respond after regular business hours yesterday to a phone message seeking comment on the agreement. No one responded to an e-mail to Lorillard’s press contact address after regular business hours yesterday.
The case is U.S. v. Philip Morris USA Inc., 99-cv-2496, U.S. District Court, District of Columbia (Washington).
http://www.bloomberg.com/news/2014-01-10/tobacco-companies-u-s-agree-on-ads-admitting-smoking-lies-1-.html