Tobacco firm fined $20 million for ads targeting teens

By The Associated Press

06.07.02

Printer-friendly page

SAN DIEGO — The nation's second-largest tobacco company has been fined $20 million for pitching cigarettes to teens in the pages of Spin, Vibe, Hot Rod and Rolling Stone — a ruling the company claims is censorship.

Superior Court Judge Ronald Prager ruled yesterday that R.J. Reynolds Tobacco Co. violated a landmark 1998 settlement with 46 states that barred Big Tobacco from taking "any action, directly or indirectly, to target youth."

Reynolds, maker of the Camel, Winston, Doral and Salem brands, denied it deliberately was aiming for an underage audience with its $200 million magazine campaign. The firm said it would appeal and will seek a stay of Prager's ruling.

"Today's decision might be politically correct but it disregarded the facts, the law, the First Amendment and the relevant provisions" of the nationwide tobacco settlement, Reynolds spokesman Tommy Payne said.

Prager issued his 19-page ruling after weighing evidence from a three-week trial in May. The California attorney general's office, which sued Winston-Salem, N.C.-based Reynolds last year, had asked the judge to fine Reynolds $20 million and ban it from advertising in 50 magazines often read by teens.

The judge did not go so far as to ban advertising in specific magazines but ordered Reynolds to take "reasonable measures" designed to reduce youth exposure to tobacco ads to a level "substantially lower" than its reach of adults.

Payne complained that the ruling imposed an "illogical double standard" in California because magazines that are "too youthful" for Camel cigarettes are still acceptable forums for beer, wine, liquor and R-rated movies.

Stephen Sugarman, a law professor at the University of California at Berkeley and an author of books on tobacco policy, said Prager's ruling could signal the first step in the lengthy process of interpreting how the 1998 tobacco settlement affects magazine ads.

"Over time, one of two things is going to happen," Sugarman said. "One, they're going to reach a reasonable standard around the country." Or, he said, there could be a "splintering" of opinion. "It's not beyond the realm of possibility that as a practical matter you'll have different standards in different places," he said.

The attorney general's office said it would monitor Reynolds' magazine advertising to ensure it complies with the judge's order.

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

Reynolds had U.S. sales of $8.6 billion and profits of $444 million in 2001. The company has about 25% of the U.S. tobacco market, second to Philip Morris.

The judge said Reynolds saw itself losing market share to other companies and fought back with a more aggressive ad campaign "even though the likely effect of these efforts was to cause significant exposure to youth."

"It was, or should have been, apparent to the skillful and bright people who managed RJR's multimillion-dollar, sophisticated print advertising campaign that youth were exposed to tobacco advertising at levels substantially similar to targeted adult smokers," the judge said.

Previous

State accuses tobacco company of targeting teens
California official says R.J. Reynolds should be punished for having 'aimed its advertising at teens by advertising in magazines that teens read.'  04.24.02

Related

California court likely to dismiss suit accusing tobacco firms of targeting teens
Judge issues preliminary ruling, saying restrictions sought by plaintiffs are too 'onerous to pass constitutional muster.'  09.16.02