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Attorney General Lockyer Sues Tobacco Manufacturer to Enforce Terms of Master Settlement Agreement

Suit Alleges R.J. Reynolds Violating Agreement in Mailing of Free Samples
Thursday, May 11, 2000
Contact: (415) 703-5837

(SAN DIEGO) – Attorney General Bill Lockyer has filed suit in San Diego Superior Court seeking to stop the R.J. Reynolds Tobacco Company (RJR) from violating the terms of the national tobacco settlement that restricts the ability of tobacco companies to distribute free cigarettes in California.

Under the terms of the Master Settlement Agreement (MSA), tobacco manufacturers are prohibited from distributing any free samples of tobacco products within California except for the purpose of conducting legitimate consumer testing programs and coupon-style offers. The prohibition was included in the settlement agreement, in part, to prevent tobacco companies from using marketing strategies that target children. According to the action filed by Lockyer, RJR has engaged in a massive program to distribute free cigarettes to California residents through the mail in violation of the MSA - mailing up to 10 packs of cigarettes to citizens at their home, sometimes repeatedly to the same person.

“The agreement reached with tobacco companies blocks their harmful, tried-and-true strategies for addicting Californians to their products,” Lockyer said. “By vigorously enforcing the terms of the tobacco settlement I intend to hold the industry accountable for its mischievous acts.”

The action alleges that the methods used by RJR for this program violated the requirements of the MSA, and it appears to be designed as a marketing tool for the company’s cigarettes. The action states that RJR mailed an estimated 900,000 packs of free cigarettes in multiple-pack mailings to the homes of 115,000 Californians in 1999. The action alleges that RJR’s distribution program violates the terms of the MSA by, among other things, mailing samples to individuals who have not certified their name and that they are over the age of 18; distributing free packs of cigarettes to persons who have not agreed to receive them at their home; and, failing to employ procedures which reasonably ensure that the product will actually reach the intended recipient. Prior to filing this court action, Attorney General Lockyer made repeated demands that RJR cease and desist from mailing free cigarettes to California residents but the company refused to do so.

The hearing on this action is set for July 10, 2000, before San Diego Superior Court Judge Ronald S. Prager.

In December, 1998, the San Diego Superior Court approved the Master Settlement Agreement (MSA) resolving lawsuits filed against the tobacco industry by California and 45 other states, the District of Columbia and four territories. In addition to placing significant new restrictions on advertising and distribution, the MSA requires the tobacco industry to pay the settling states more than $206 billion over the next 25 years. California will receive about $1 billion per year, or 12.8% of the settlement money in perpetuity. State and local jurisdictions will split equally California’s share of the settlement money.

The MSA provides the following restrictions on tobacco companies:

- Direct or indirect targeting of youth in advertising, marketing and promotions;

- Brand name sponsorship of (1) concerts, (2) sports events, (3) events with an intended audience having a significant percentage of youth, and (4) events with paid participants who are youth;

- Payments for placement of tobacco products in the media;

- Outdoor advertising of tobacco products;

- Transit ads, on or in public or private vehicles;

- Using cartoons to advertise tobacco products; and,

- Tobacco brand-name merchandise.

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