Spitzer Sues Tobacco Company For Violations Of Tobacco Settlement Agreement

Attorney General Spitzer today announced a lawsuit against the R.J. Reynolds Tobacco Company for utilizing billboard advertising in violation of the tobacco Master Settlement Agreement (MSA). New York's lawsuit is one of six actions being filed today in a coordinated effort by attorneys general across the country to challenge the way that R.J. Reynolds markets and sells its products.

"The most important part of the MSA is not the money that it brings to New York and our local governments, but rather the marketing restrictions that shield our children from Big Tobacco's cigarette advertisements," said the Attorney General. "This lawsuit sends a strong message that I will enforce those restrictions aggressively, in order to protect our children from a lifetime of addiction to tobacco products."

The six states involved in this coordinated effort have brought lawsuits relating to three major violations of the MSA by R.J. Reynolds:

  • New York, California, Arizona and Washington are seeking to prevent R.J. Reynolds from having year-round billboard advertisements at auto racetracks, which violate the 100-day limit for such outdoor advertising at sponsored events.

  • California is challenging RJR's magazine advertising practices as a violation of the MSA's prohibition against advertising practices that "target youth." Unlike the other major tobacco companies, RJR advertises in magazines like Sports Illustrated and Rolling Stone that have significant youth readership.

  • Ohio is suing to stop RJR from placing cigarette advertisements on matchbooks, which violates the MSA's prohibition against placement of tobacco advertisements on merchandise.

Attorney General Spitzer noted that there have been occasional MSA violations by other tobacco companies, but generally those companies have been willing to change their practices when contacted by his office or by attorneys general in other states.

"Every time the states have pointed out problems or potential violations, the other companies have complied, but not R.J. Reynolds," Spitzer said. "We cannot allow RJR to continue its blatant disregard for the MSA. The company must now answer for its actions in court."

Spitzer noted that the coordinated lawsuits by the states came about only after the failure of repeated efforts to obtain voluntary compliance from RJR.

New York's lawsuit relates to RJR's billboard advertisements at the Watkins Glen International Speedway in Watkins Glen, New York. Although the MSA generally prohibits outdoor advertising, it allows such billboards at "brand name sponsored" events, from 90 days prior to the race to 10 days after the event. R.J. Reynolds sponsors only a single race at Watkins Glen - the "Winston Cup" race scheduled for August 9-12, 2001. As a result, no Winston billboards can be placed before May 9, 2001, but the billboards have been at the racetrack continuously at least since last year's event, which is a clear violation of the MSA.

Spitzer stressed that the state is not seeking to eliminate or reduce advertising of NASCAR or other racing events at Watkins Glen. Rather, the state is attempting to ensurethat RJR's billboard advertisements comply with the MSA.

"Watkins Glen has a great racing tradition that will continue and flourish for many years to come. RJR agreed to limit its advertising at The Glen and at racetracks throughout the nation, and we expect them to live up to that promise here in New York," Spitzer said.

Spitzer noted that "The Glen" is used for other auto races throughout the year, as well as car shows, the Finger Lakes Wine Festival, and other events, many of which are attended by children. Some of these events also are televised. The elimination of billboards that advertise tobacco products is one of the principal public health provisions of the MSA, and applies not just to outdoor advertising, but also to signs and placards in arenas and stadiums, which large numbers of youth view both in person and on television.

While cigarette use by adults has decreased during the past 10 years, smoking by teenagers and younger children actually has increased during the same time period. Approximately 87,000 children under the age of 18 begin smoking every year in New York State, one-third of high school students are smokers, and if current trends continue, approximately 377,000 children alive today in New York will die prematurely from smoking. Indeed, of all smokers who start using tobacco in adolescence and continue smoking throughout their lives, over 50% will die as a result of a tobacco-related disease.

One of the primary reasons for the continued use of tobacco products by children has been the advertising and marketing practices of the tobacco industry. Numerous studies have shown that tobacco marketing and advertising increase the consumption of cigarettes by youth, because children are particularly susceptible to advertisements promoting smoking. Moreover, certain types of advertising and marketing, such as outdoor advertising, product merchandise, event sponsorships and product placement, thrust pro-smoking messages upon viewers in a way that cannot be avoided. These unwanted messages counteract parents' attempts to caution their children about the dangers of smoking.

This case is being handled by Assistant Attorneys General Christine Morrison and Melvin Goldberg of the Attorney General's Consumer Frauds Bureau.