Bloomberg News

Altria Should Pay $544 Million Over ‘Light’ Ads, Lawyer Says (3)

April 22, 2013

Altria Group Inc. (MO:US)’s Philip Morris U.S.A. unit falsely marketed its “light” cigarettes as a healthier choice than regular cigarettes and should pay $543.6 million in restitution to California smokers, a lawyer said at the start of a trial.

Mark Robinson, who represents smokers who brought the lawsuit as a class action, or group case, said in state court in San Diego today he will present internal Philip Morris documents proving its top executives were aware that Marlboro Lights were as addictive and dangerous to smokers as Marlboro Reds and continued selling the Lights as a healthy alternative.

“Their own documents tell the truth,” Robinson said in his opening statement at the nonjury trial. He said financial experts will testify in support of his request for damages for a class of smokers from January 1998 to April 2001.

The case, filed in 1997, accused Philip Morris (PM:US) and other tobacco companies of making misleading statements about the health risks and addictiveness of smoking, and sought restitution for money that smokers spent on cigarettes.

Philip Morris U.S.A., based in Richmond, Virginia, is the only remaining defendant in the case and the only claim still at issue is that it made false statements concerning light cigarettes. California Superior Court Judge Ronald S. Prager is presiding over the trial.

False Impression

The plaintiffs allege Philip Morris deceptively marketed and labeled cigarettes as “light” and “low tar” because it created the false impression that these cigarettes were less dangerous than full-flavor ones, according to an April 19 court filing by Philip Morris.

“People’s perceptions were that Lights were healthy as a result of a brilliant marketing campaign,” Robinson said today.

Robinson presented video depositions and written reports from top-level Philip Morris executives that he said showed that they were aware that even if smokers switched to cigarettes marketed as low-tar or low-nicotine, scientific research showed that these smokers would compensate to meet their body’s “daily nicotine quota” by either taking deeper puffs of the light cigarettes or smoking more of them.

“Philip Morris had knowledge that their light cigarettes were not only not healthy but that they were just as addictive and dangerous as regular cigarettes,” Robinson said.

Denies Misleading

Philip Morris denies that labeling cigarettes as “light” was misleading and contends it never claimed that they were more healthy than full-flavor cigarettes, according to court filings.

Greg Stone, an attorney for Philip Morris, said in his opening statement that the advertising claims made by Philip Morris are factual.

“In many ways Marlboro Lights are designed to contain lower tar and nicotine than Marlboro Reds,” he said.

Stone said the Lights are designed to contain less tobacco, have a longer filter with more ventilation holes and offer more resistance to the smoker’s “draw,” or puff.

“What is not an issue in this case is whether smoking can cause lung cancer or that nicotine is addictive,” Stone said. “This case is about Marlboro Lights and whether Marlboro Lights have lower tar and nicotine as it states on the label.”

Stone presented statistics from research by the Federal Trade Commission, the Massachusetts Department of Public Health and other studies that show lower rates of tar and nicotine in Marlboro Lights than in Marlboro Reds.

Desserts Analogy

Stone drew an analogy between Marlboro Lights and low- calorie desserts.

“Of course, if you eat more low-calorie desserts you’re going to wind up consuming just as many calories as in the high- calorie desserts,” he said.

The San Diego court ruled in 2004 that the smokers’ case couldn’t proceed as a class action because some of the plaintiffs didn’t meet a requirement that they personally suffered injury or financial loss.

The California Supreme Court said in 2009 that even if the plaintiffs in the case didn’t meet the requirement, the case shouldn’t be decertified as a class action. Instead, the plaintiffs should be allowed to amend the lawsuit to redefine the group that is suing or find new class representatives.

The case is In re Tobacco Cases II, JCCP 4042, California Superior Court, County of San Diego.

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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Companies Mentioned

  • MO
    (Altria Group Inc)
    • $40.6 USD
    • -0.52
    • -1.28%
  • PM
    (Philip Morris International Inc)
    • $82.01 USD
    • -1.18
    • -1.44%
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