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In re NJOY, Inc. Consumer Class Action Litigation [United States] [February 02, 2016]
A court ruled that a lawsuit against e-cigarette maker NJOY could not proceed as a class action. Potential class members had asserted that NJOY: (1) conducted misleading advertising indicating that e-cigarettes are safer than regular cigarettes; and (2) omitted information on its packaging about product ingredients and the risks of such ingredients. The court affirmed an earlier ruling prohibiting the lawsuit from proceeding as a class action, saying that class members failed to demonstrate how damages can be proven for the entire class. Specifically, the court said that the class was not able to show how it could calculate the difference between the price paid by consumers of NJOY and the true market price that reflects the impact of the unfair or fraudulent business practices. Although the ruling means that the case may not proceed as a class action, individuals may sue NJOY independently.
R.J. Reynolds v. United States Food and Drug Administration [United States] [January 15, 2016]
Tobacco companies challenged the composition of the Tobacco Products Scientific Advisory Committee (TPSAC), which was established by the U.S. Food and Drug Administration (FDA) to advise the agency on scientific issues related to tobacco products, including the use of menthol in cigarettes. The tobacco companies alleged that three of the scientific members of the Committee had both an actual and a perceived conflict of interest because each consulted with companies that developed nicotine replacement therapies and testified as expert witnesses in lawsuits against tobacco manufacturers. The court ruled in favor of the tobacco companies, finding that the challenged committee members had both financial conflicts of interest and an appearance of conflicts of interest, which fatally tainted the composition of the Committee and its work product, including the 2011 Committee report on menthol in cigarettes. The court issued an order requiring the FDA to reconstitute the Committee’ membership to comply with ethics laws and barred the agency from using the Committee’s menthol report, which had recommended removing menthol cigarettes from the marketplace. The FDA appealed, and a three-judge panel of the appeals court unanimously reversed the lower court ruling, finding that plaintiffs had not shown imminent injury from the appointment or the actions of challenged Committee members.
Price v. Philip Morris, Inc. [United States] [November 04, 2015]
A group of smokers filed a class action against Philip Morris alleging that the company’s marketing of “light” and “lowered tar and nicotine” cigarettes violated certain fraud statutes. The trial court denied the company’s attempt to dismiss the case and awarded the smokers $10.1 billion. After numerous appeals, an Illinois court reinstated the case in 2014. In this decision, the Illinois Supreme Court rejected the appeals court’s decision (based on procedural reasons) and dismissed the class action, effectively ending the case.
ASA Adjudication on Hubbly Bubbly [United Kingdom] [June 10, 2015]
A variety of ads for Hubbly Bubbly electronic cigarettes were challenged by the government agency that regulates e-cigarettes. The Advertising Standards Authority (ASA) concluded that one of the ads did not make clear that the product contained nicotine as required by the country’s Advertising Code. The ads also included celebrity endorsements, depicted models who did not appear to be over the age of 25 using the devices, and were filmed in cool and trendy scenes. The ASA concluded that these communications created an association with youth culture and would be likely to appeal to those under the age of 18 in breach of the Code. The ASA ordered the company not to use the ads again in their current form.
Quebec Class Action [Canada] [May 27, 2015]
Two class action lawsuits were filed in Canada in 1998 against major tobacco companies; the cases were later combined. One class (Blais) involved Quebec residents with lung cancer, throat cancer, or emphysema. The other class (Letourneau) involved Quebec residents addicted to nicotine. After a lengthy trial, the court found that the tobacco companies caused injury, failed to inform customers of the risks and dangers of its products, and violated Quebec law.
In the Blais case, the court awarded moral damages (e.g., for pain and suffering) of $15.5 billion, to be paid jointly by the three tobacco companies. In the Letourneau case, although the court found that the tobacco companies were at fault, it did not award moral damages because there was not enough evidence to determine the total amount of the class members’ claims. In both cases the court awarded punitive damages, which it calculated based on one year of before-tax profits for each tobacco company. In Blais, the court reduced this award to the symbolic amount of $30,000 for each defendant, representing one dollar for each death the tobacco industry causes in Canada each year. In Letourneau, the court awarded punitive damages of $131 million. The tobacco companies must make an initial deposit on the judgment of $1 billion while the appeal is pending.
United States v. Philip Morris USA [United States] [May 22, 2015]
In 1999, the United States filed a lawsuit in the U.S. District Court for the District of Columbia against the major cigarette manufacturers and related trade organizations alleging that defendants, while acting as an enterprise, fraudulently misled American consumers for decades about the risks and dangers of cigarette smoking and exposure to secondhand smoke in violation of the Racketeer Influenced Corrupt Organizations Act (RICO). In 2006, the court found that defendants violated RICO and that there was a reasonable likelihood that defendants would continue to violate RICO in the future. On appeal, the district court’s findings were upheld, in part, vacated, in part, and remanded, in part, to the district court. After the U.S. Supreme Court declined to hear appeals from both sides in the case in June 2010, the district court began to implement the 2006 final order.
As a means of preventing future RICO violations, the district court ordered the tobacco companies to issue corrective statements on five topics in which they had misled the public, including the adverse health effects of smoking and the addictiveness of smoking and nicotine. The companies challenged the language and form of the corrective statements. In this decision, the Court of Appeals found that the tobacco companies had waived their right to challenge the wording of the corrective statements. However, the court found that an introduction to the corrective statements (explaining that a federal court has ruled that tobacco companies deliberately deceived the American public) exceeded the scope of scope of remedies allowed under RICO. Finally, the court found that tobacco companies had waived their right to challenge the distribution of corrective statements via company websites, cigarette packages, and newspaper and television ads.
ASA Adjudication on Mirage Cigarettes Ltd [United Kingdom] [April 29, 2015]
The Advertising Standards Authority (ASA) reviewed a television ad depicting a couple using electronic cigarettes in a sultry and glamorous manner. The couple was shown surrounded by heavy vapor, which appeared to be a result of the product being used off screen. The ASA found that the ad created a strong association with traditional tobacco smoking and that by depicting this behavior in a positive light, indirectly promoted the use of tobacco products in violation of the Advertising Code. The ASA ordered the company not to broadcast the ads again in their current form.
ASA Ruling on Lightercase Inc. [United Kingdom] [March 11, 2015]
The Advertising Standards Authority (ASA) reviewed a sponsored Facebook ad for a mobile phone case containing a built in cigarette lighter. The ad depicted a cigarette being lit followed by the text “TAG SOMEONE WHO CAN USE THIS.” The ASA noted that, although there are no advertising restrictions on cigarette lighters, the ad presented smoking in a positive light and could not be used again in its current form.
ASA Adjudication on Must Have Ltd [United Kingdom] [December 24, 2014]
Two television ads for e-cigarettes featured a close-up of a woman’s face while using an e-cigarette and exhaling vapor. In response to nearly 200 complaints, the Advertising Standards Authority (ASA) investigated the ads and found that they indirectly promoted the use of tobacco products because the ads created a strong association with traditional tobacco smoking and presented the product in a sultry and glamorous way. In response to other complaints, the ASA found that the ads were not likely to cause offense as overtly sexual, the ads did not appeal to minors, and the ads did not encourage the use of e-cigarettes. The ASA ordered the ad not to appear in its current form.
ASA Adjudication on Vape Nation Ltd [United Kingdom] [December 24, 2014]
A television ad featured a group of adults discussing e-cigarettes, with one stating, “I used to smoke normal cigarettes but after I quit, I tried these.” The Advertising Standards Authority (ASA) ruled that the ad violated the country’s Advertising Code as irresponsible because it encouraged non-smokers to begin using e-cigarettes. The ASA noted that the ad implied that the man who spoke had stopped smoking for a period of time and was therefore a non-smoker who had subsequently begun using the company’s e-cigarettes. The ASA ordered that the ad should not appear again in its current form.