Stella Case No. 045, Originally Published: 30 April 2003
Tobacco companies have long been the boogiemen of U.S. industry. It was proven that they manipulated nicotine levels and lied about the safety of their product, leading to hundreds of thousands, if not millions, of deaths in the U.S. alone. Long pounded in the courts, “big tobacco” finally lost big time with a multi-billion-dollar “settlement” to be paid to each of the 50 states to compensate the states for caring for indigent tobacco victims, and to help educate their citizens as to the dangers of smoking.
No state has been more active in anti-smoking public awareness campaigns than California, which started anti-tobacco advertising long before the settlement in a bold attempt to convince smokers to stop, and non-smokers not to start. The ads are funded by a 25-cent-per-pack tax on cigarettes voters approved in 1988. In the ads, the state likes to say that it’s “America’s smoke-free section,” and apparently the campaign is working: since the special tax passed, cigarette sales have dropped by half in California.
R.J. Reynolds spokeswoman Ellen Matthews says that the decade-long ad effort in California has “infiltrated every segment of the media in California.” That was pretty much the state’s goal, but RJR says that result has prejudiced potential jurors in any future anti-tobacco court action in the state against them — so much so that the tobacco companies are “vilified” by the people who may have to judge them in future lawsuits.
Thus, R.J. Reynolds and Lorillard, two of the largest tobacco companies in the U.S., have sued California in federal court in Sacramento, asking the court to order a stop to the state’s anti-tobacco advertising.
“Suing to stop the most successful tobacco prevention program in the nation is further proof that they’re not serious in saying they don’t want kids to smoke,” said Bill Corr, executive director of the Campaign for Tobacco-Free Kids in Washington, D.C.
California Gov. Gray Davis is ready for the fight the companies have picked. “I say, Bring it on,” Davis said. “They spend infinitely more than we do [on marketing] to get their message out. I don’t think anyone should feel too sorry for them.”
Tobacco companies “vilified”? The horror! But it’s hardly surprising that an industry so often sued would think of using the courts to get what it wants. As in love and war, the tobacco business thinks turnabout is fair play.
- “Tobacco Companies Sue State, Saying Ads ‘Vilify’ Industry”, Associated Press, 2 April 2003
The basis of the tobacco companies’ suit was a “novel First Amendment claim,” judges said: the companies argued that California violated their First Amendment rights by imposing a surtax on cigarettes, and then using some of the proceeds of that surtax to pay for advertisements that criticize their industry. That makes it “compelled subsidization of speech,” prohibited by the First Amendment, they said.
Further, they argued the advertisements improperly stigmatized them in violation of the Fourteenth Amendment, that the advertisements interfered with their right to a jury trial under the Seventh and Fourteenth Amendments, and that the advertisements violated the California Constitution.
The state countered that the advertisements are government speech, which is entirely immune from First Amendment attack, and made a motion to dismiss, arguing that even if all of the companies’ claims were proven, there could not be reparation to the companies.
In July 2003, the U.S. District Court (Eastern District of California) found that the companies “state no claims upon which relief can be granted,” and dismissed the suit. The companies appealed. In May 2004, the 9th Circuit Court of Appeals upheld the ruling. Case closed? Read on.
My 2020 Thoughts on the Case
It keeps on: on 1 June 2020, R.J. Reynolds, joined by the American Snuff Company (no, really), and the Santa Fe Natural Tobacco Company, sued the County of Los Angeles. Their complaint: the city passed an ordinance, which went into effect 1 May 2020, prohibiting the sale of flavored tobacco products, which is often the gateway for the young into the tobacco habit.
Reynolds is in a losing business. Governments are tired of having to clean up the health mess created by the companies, and is using everything in their power to reduce smoking, ideally to zero. The companies should consider another line of business. Maybe buy Nabisco? Nah: that company wouldn’t want them around either.
So while this week’s featured case was closed, there have been others along the same vein since. The tobacco companies have been sued again and again and again, so my conclusion in 2003 seems to have held up well: “As in love and war, the tobacco business thinks turnabout is fair play.”
The letters about about the proposal by the American Bar Association to make it illegal for anyone but a lawyer to provide any sort of legal advice (Editorial: Power Grab) continued to stream in. Let’s start with a law student:
Bryan in Washington: “Actually, I’m all for the proposed law — as long as we’re going to socialize lawyers first. Everybody is entitled to equal protection under the law, so sure: they should go ahead and make it so only lawyers can deliver legal advice, but they should also prohibit the private practice of law if they do that. But then I’m all for socialized law practice anyway. How can we have equality without equal representation?”
Bryan’s idea is certainly interesting, but I’m not sure how much I like it — imagine the bureaucracy of having the government involved in every legal matter. But at least it’s an “out of the box” sort of thought on how to start reforming the legal system from the ground up.
Cristy in Oregon: “While I read the special essay, I did not realize what danger this ‘law’ could place me in. I am a union steward. For those of you that are not unionized, a steward is a regular employee of a company that has a contract with a union that covers their employees. In an adversarial environment this would mean I represent the employee(s) in grievances. As a steward employee, I routinely advise both the employee and employer (HR and management) with contract interpretations. I also routinely screen state and federal websites regarding labor rights/laws and advise employees I represent what their rights are under the current labor laws. I also advise the employer when there is a possible conflict with contractual rights or labor laws. I am interpreting this ABA definition as placing me and my fellow stewards, as well as other union staff employees, at great risk. In the strictest definition, it sounds like we would have to have lawyers to do contract negotiations, interpretations and employee representations. Can you imagine the additional costs associated with this? If a lawyer was required to do the contract interpretations, labor law interpretations, and worker rights law disseminations, my employer and union would have to close the doors; they would be unable to support the lawyers this law would require.”
Peter, an army officer in England: “Sometime between 1939 and 1945, you chaps sent some soldiers over to Europe to help get rid of a Fascist dictator who was laying the law down and severely punishing anyone who did not do as he said. He did it to protect his own interests. As the ABA is obviously thinking along the same tracks as the Fascist guy (I think his name was Hitler or something), would you all like us Brits to send some soldiers over to help you get rid of these ABA guys? After all, what they are doing is totally against democracy. There is also the small point that what they are doing is something you call ‘Anti-American’. You either live in a democracy over the pond, or you don’t. Americans are not known for their knuckling down to obey people with fascist ideas. Apparently not until now anyway.”
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