Reaction to Justice Department's Proposed Remedies Order in Tobacco Lawsuit

Statement of William V. Corr, Executive Director, Campaign for Tobacco-Free Kids

Jun. 28 2005

Washington, DC — The proposed remedies order filed by the U.S. Department of Justice late Monday fails to reverse the government's capitulation regarding the smoking cessation remedy, does not adequately fund public education campaigns and leaves many important questions unanswered. At the same time, it includes many proposals that if fully and effectively implemented could prevent future industry wrongdoing and significantly reduce the death toll from tobacco in our country.

Going forward, the Justice Department needs to correct the deficiencies in its proposal and resist any efforts to weaken the positive aspects. It has been widely and reliably reported that the government's sudden weakening of its proposed cessation remedy during closing arguments was the direct result of pressure from political appointees. The lesson from closing arguments is that political interference could at any time undermine the portions of this order that would make a difference. It is essential that the court remain vigilant to ensure that political interference does not undermine the effort to seek remedies that can prevent and restrain future industry wrongdoing.

The government's 61-page proposal requires a careful, detailed analysis to determine whether restrictions on industry practices are effective and not easily circumvented and the independent investigative officer it creates has sufficient authority to ensure the industry complies with the remedies and does not violate the law in the future. The one thing that can be said with certainty now is that the government's failure to increase the size and length of its five-year, $10 billion smoking cessation plan seriously undercuts the government's overall proposal. The government should seek the full 25-year, $130 billion smoking cessation remedy recommended by its own expert witness. We are also concerned that the government failed to seek adequate funds for the proposed public education campaigns.

The proposed order does include several important provisions that can have a positive impact on restraining future tobacco industry wrongdoing including:

• A total ban on all direct and indirect cigarette brand health descriptors and health messages, such as "light" and "mild," which the industry has used to mislead consumers and deter smokers who want to quit from doing so.
• A ban on cigarette price promotions and discounts that currently constitute the bulk of industry marketing expenditures and have their greatest impact on youth, the most price-sensitive customers. However, the proposal does not include needed restrictions on image advertising, such as magazine and store advertising, that also appeal to youth.
• A requirement for industry disclosure of past, current and future marketing data, broken down by type of marketing, brand, geographic area and other categories, that will provide information needed to determine whether the industry continues to market to youth or in ways intended to deter smokers from quitting.
• Financial penalties if the tobacco companies fail to meet targets for reducing youth smoking rates.
• The imposition of a court-appointed independent investigative officer to monitor industry behavior and recommend corrective action where appropriate.

Contrary to tobacco industry claims, we believe these are all forward-looking remedies that are aimed at preventing and restraining future industry wrongdoing and therefore consistent both with the civil RICO law and with the February 4, 2005, Court of Appeals ruling regarding the kinds of remedies allowed under civil RICO. Preventing and restraining future industry wrongdoing requires a comprehensive set of remedies that a) effectively restrict and counter the industry's marketing practices that encourage youth tobacco use, mislead consumers and discourage smokers from quitting; b) create adequate economic incentives that prevent and restrain continued wrongful behavior by making it unprofitable; and c) put in place a system of monitoring the industry's behavior that grants the monitor sufficient authority, independence and resources to collect the information needed and effectively enforce the court's order. The government should seek this full range of remedies free of political interference.