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Attorney General Lockyer Praises $20 Million Fine against R.J. Reynolds for Targeting Minors with Ads

San Diego Court Ruling Marks Fourth Successful Lawsuit Against Tobacco Company in Two Years
Thursday, June 6, 2002
Contact: (415) 703-5837

(SAN DIEGO) – Attorney General Bill Lockyer today announced a San Diego court ruled that R.J. Reynolds Tobacco Co. unlawfully placed cigarette advertisements in magazines with a large percentage of readers aged 12-17 in violation of the 1998 Master Settlement Agreement and the court order approving that settlement in California.

"When hundreds of your customers die every day, the only way to stay in business is to hook new ones," Lockyer said. "But targeting children in your quest for new consumers is unlawful, shameful and will not be tolerated in California."

In his ruling, San Diego Superior Court Judge Ronald S. Prager found that R.J. Reynolds, the nation's second-largest tobacco company, made "absolutely no changes to its advertising campaigns," failed to include the goal of reducing youth exposure to tobacco advertising in its marketing plans and failed to take action to track whether it was meeting its "professed goal" of reducing youth smoking.

Following a three-week trial in San Diego, the judge ordered R.J. Reynolds to pay $20 million in fines, plus attorneys' fees and other costs. It also requires the company to take specific actions to comply with the terms of the MSA, which bans tobacco manufacturers from directly or indirectly targeting youth in advertising, promotions and marketing. The landmark agreement reached between 46 states and the tobacco industry also prohibits outdoor advertising of tobacco products on billboards and buses, restricts the size of signs in retail stores that sell tobacco products and prohibits tobacco companies from paying to promote tobacco in the media and sponsoring events that attract a large number of youth.

Lockyer noted that studies show 80 percent of all adult smokers started before the age of 18. They also show that every day in the U.S., more than 2,000 people under the age of 18 begin smoking and that one-third of them will one day die from a tobacco-related disease.

In his ruling, the judge found that R.J. Reynolds violated the prohibition on targeting youth by exposing millions of California teenagers to thousands of advertisements for its Camel, Winston, Salem and Doral cigarette brands in magazines such as "Sports Illustrated," "Spin," "Vibe," "Rolling Stone," "Hot Rod," and "Car and Driver."

Begining in 1999, the California Attorney General's Office spearheaded a multi-state effort to convince Philip Morris and other tobacco companies to cease advertising in magazines that have youth audiences of more than 15 percent of their readership. But negotiations with R.J. Reynolds over its ads targeting children were unsuccessful and the office filed a lawsuit.

Although other major tobacco companies had agreed not to place ads in magazines in which those aged 12-17 make up more than 15 percent of its readers, R.J. Reynolds resisted making similar changes. In June 2000, the company dropped its youth readership level from 50 percent to 33 1/3 percent, and to 25 percent in March 2001 on the day the California Attorney General filed this lawsuit. The judge found the only "tangible consequence" of those reductions were the removal of two magazines from the R.J. Reynolds approved list of publications: "Vibe" and "Spin."

The Attorneys General from New York, Connecticut, Maryland and Pennsylvania assisted in the case.

The case marked the fourth successful prosecution of R.J. Reynolds filed by the Attorney General's Tobacco Litigation and Enforcement Section, which Lockyer established in 1999 to enforce state laws regarding the sale and marketing of tobacco products and the national MSA.

Last month, a Los Angeles court fined R.J. Reynolds $14.8 million for illegally handing out more than 100,000 packs of free cigarettes on public grounds in violation of state law. In December, a court found R.J. Reynolds Tobacco Company had violated the MSA by posting outdoor advertising at sporting events. And in January 2001, the company settled a case brought by the Attorney General for distributing free cigarettes through the mail without first properly verifying the identify and age of recipients and ensuring they wanted to participate in consumer testing and evaluation of cigarettes, also a violation of the MSA.

The Attorney General's Office also has successfully filed suit against Swedish Match for violating prohibitions against handing out free tobacco samples.

Californians who suspect violations of tobacco laws or the MSA may file complaints by calling (916) 565-6486 at anytime, or by writing to the Tobacco Litigation and Enforcement Section at P.O. Box 944255, Sacramento, CA 94244-2550. Additional information is available on the Attorney General's website at http://www.ag.ca.gov/tobacco/

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02-067-rj_ad_1.pdf953.63 KB

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