U.S. Says Tobacco Firms Broke Pact
Filing Alleges Industry Misled on Light Cigarettes,
Secondhand-Smoke Effects
By VANESSA O'CONNELL
Staff Reporter of THE WALL STREET JOURNAL
July 6, 2004; Page A2
Setting out central arguments in its lawsuit seeking $280 billion from tobacco companies, the Justice Department accused cigarette makers of using fraudulent means to recruit new smokers, misleading the public on the health dangers of secondhand smoke and violating the industry's landmark legal settlement in 1998.
In a filing late Thursday totaling more than 2,500 pages, the government argued that the companies' past and continuing conduct indicates "a reasonable likelihood" of future violations. The filing serves as a blueprint of the arguments the government will use when the case goes to trial on Sept. 13 before Judge Gladys Kessler of U.S. District Court for the District of Columbia.
While echoing some positions laid out in earlier filings, the government strengthened its arguments that tobacco companies misled the public about the health dangers of secondhand smoke and the hazards of so-called light and low-tar cigarettes. Other documents filed by the government late last week also mention instances when tobacco companies may have skirted terms of its 1998 settlement with state governments by allegedly selling so-called kiddie packs and using cartoon images to promote a cigarette brand.
The government's most recent filing said that cigarette companies worked to "financially reward scientists in every world market" with the "overarching goal" of raising doubt about the health dangers of secondhand smoke, in hopes of forestalling the spread of new bans on smoking in public places.
Lawyers for the Justice Department also blamed tobacco companies for marketing "light" and "ultralight" cigarettes in a way that led many smokers to "perceive them as an acceptable alternative to quitting smoking."
Light and low-tar cigarettes provided "a false sense of reassurance to smokers," the government said, weakening "their resolve to quit smoking" and even drawing "ex-smokers back into the market." Tobacco companies deny the allegations.
Launched during the Clinton administration in 1999, the lawsuit seeks $280 billion in allegedly ill-gotten profits from the five largest U.S. cigarette makers. The total sought by the government tops the $246 billion that major tobacco companies agreed to pay states in the 1998 settlement.
"These documents are important because they are the roadmap to the government's case," said Paul M. Honigberg, a partner at law firm Blank Rome LLP and a former member of the Justice Department's tobacco-litigation team.
Since the case was initially filed, he said, the government has added a lot more detail about secondhand smoke and light cigarettes. "Both are examples of current issues in the smoking and health debate," he said.
Tobacco companies argue that the industry has changed its ways since it signed the agreement with 48 states. The landmark settlement, known as the Master Settlement Agreement, places certain limitations on the industry, including restricting how it can promote its products.
"Most people would agree that the way this product is sold has changed dramatically since the late 1990s, even before the lawsuit was filed," said William S. Ohlemeyer, associate general counsel for Altria Group Inc., which, along with its Philip Morris USA unit, is a defendant in the case.
"The reason the Justice Department filing contains so little discussion of current misconduct is that it is a major hole in their case," he added.
Seth Moskowitz, a spokesman for R.J. Reynolds Tobacco Holdings Inc., which is also a defendant, said the company hadn't had a chance to review the government's filing. Other defendants include British American Tobacco PLC's Brown & Williamson unit, Loews Corp.'s Lorillard Tobacco Co. and Vector Group Ltd.'s Liggett Group Inc.
In addition to the $280 billion, the government also wants to place tougher restrictions on the marketing, manufacturing and sale of tobacco products. "We think overall that the government lays out a strong case that the industry has not only a long history of wrongdoing but that its wrongdoing continues, just in a different guise," said Vince Willmore, communications director for the Campaign for Tobacco-Free Kids, a Washington, D.C., advocacy group.
--Christina Cheddar Berk contributed to this article.
Write to Vanessa O'Connell at vanessa.o'connell@wsj.com |
