Archive for the ‘News’ Category
Tuesday, November 15th, 2016
In a powerful long form article by by John Rosengren covers the impact of gambling addiction and the predatory casino industry. The article, entitled “How Casinos Enable Gambling Addicts,” details the ways that electronic gambling machines, like slot machines, along with outrageously predatory tactics used by casinos to bait problem gamblers, combine to destroy the lives of gamblers and their families.
The well-written and deeply researched piece quotes Northeastern University Distinguished Professor of Law and PHAI President, Richard A. Daynard along with PHAI Senior Staff Attorney Lissy Friedman .
Gambling is a public health issue that causes or exacerbates psychiatric disorders, alcoholism, and substance abuse. Addicted gamblers are at dramatically increased risk for suicide and may steal to continue gambling. Casinos do not deliver on the economic promises they make and often contribute to economic problems at the community level. PHAI seeks to use legal and policy measures to reduce the public health impact of predatory gambling.
Wednesday, August 24th, 2016
On August 8, 2016, new regulations by the FDA went into effect that have a profound impact on a major segment of the electronic cigarette industry: vape shops. The shops that mix flavors for vaping products are now considered to be manufacturers and subject to the same requirements as manufactures owned by the companies that make Marlboros, Camels, and Newports.
The new rules will require each and every flavor variation of electronic cigarettes to be approved by the FDA as a new tobacco product. The cost associated with each application is estimated by the agency to average over $300,000. Vape shops had typically created many dozens of varieties of “e-juice” every month and, under the new rules, the revenues from these flavor varieties would account for only a small fraction of the cost for submitting new tobacco product applications. This has led some vape shops to close their doors.
WGBH’s Isaiah Thompson reported on these developments for NPR’s All Things Considered (with an expanded written version). PHAI’s executive director, Mark Gottlieb, is quoted in the piece.
Wednesday, November 4th, 2015
Mark Gottlieb, the executive director of PHAI, discussed the legality of paid daily fantasy sports games in Massachusetts on New England Cable News channel’s public affairs show, “Broadside” with Sue O’Connell. The segment aired on November 3, 2015.
(please excuse commercial content with video)
Friday, October 30th, 2015
The Boston Globe has published on opinion piece by PHAI’s executive director, Mark A. Gottlieb, which summarizes the organization’s legal research concluding that paid Daily Fantasy Sports games are illegal under Massachusetts law. The piece, entitled, “Fantasy Sports Gambling is Illegal Under State Law,” explains the law and several reasons why it is important to enforce it.
Gottlieb argues that Daily Fantasy Sports games operated by DraftKings and FanDuel are a consumer rip-off as currently operated with almost all of the winnings going to full-time professionals. He goes on to criticize Internet gambling as posing a threat to current and potential compulsive gamblers, and that it is inconsistent with the limited casino gambling authorized by the state.
Massachusetts is among several states considering regulatory approaches to these games. Six states have banned them entirely.
Monday, October 26th, 2015
A review by a prominent public interest law organization based in Boston revealed that online sports gambling operators like DraftKings are in “clear” violation of Massachusetts law.
The findings were included in an October 16th legal memo to Attorney General Maura Healey’s office that was prepared by the Public Health Advocacy Institute (PHAI) at Northeastern University.
PHAI, led by Northeastern University Distinguished Professor of Law Richard Daynard, is nationally-recognized for its effective legal advocacy combating the epidemics caused by tobacco and obesity.
In contrast, Attorney General Healey, has publicly said the law regarding online fantasy sports gambling is “unclear.”
“The lack of any action to stop the illegal business of online fantasy sports gambling and look the other way or wait until some future legislative action allows it sends the wrong message: that it is acceptable to engage in an illegal business now and, if it generates enough revenue, wait until lobbyists and corporate interests change its legal status,” said Mark Gottlieb, Executive Director of PHAI.
PHAI conducted its review after being contacted by Stop Predatory Gambling, a national government reform group against state-sponsored gambling operations.
The findings of PHAI’s review include:
- “Daily Fantasy Sports” constitutes illegal internet sports gambling under Massachusetts law and is legally indistinguishable from a privately run lottery or numbers game.
- The Supreme Judicial Court has long ago settled what constitutes illegal gambling and online fantasy sports gambling operators clearly fall into this category
- The profit model for online fantasy sports gambling operators is based on the mass recruitment of unskilled players, which is why state residents have been blanketed with nonstop advertising
- Online fantasy sports gambling operators are targeting Massachusetts youth
- Other states have recognized that online fantasy sports gambling IS gambling
“The internet gambling operations run by DraftKings and FanDuel are predatory, deceptive, illegal and coming at the expense of everyday citizens,” said Les Bernal, National Director of Stop Predatory Gambling.
Wednesday, August 5th, 2015
In 2014 and 2015, the Public Health Advocacy Institute (PHAI) conducted testing to determine whether kids could purchase lottery tickets from the vending machines located in a number of area supermarkets. At markets in Cambridge, Somerville, and Arlington, Massachusetts, a teenage tester was easily able to purchase lottery tickets in every attempt.
Massachusetts law expressly prohibits the sale of lottery tickets to “any person under age eighteen.” Yet the Massachusetts Council on Compulsive Gambling reports that over two-thirds of teenage boys (aged 14-17) have gambled in the past year, and over half of teenage girls have done so. About a third of these children gambled by playing lottery games.
Stop & Shop lottery vending machine with scanner in Somerville, MA
On March 10, 2015, PHAI sent Stop & Shop a legal demand under Massachusetts’ consumer protection law, on behalf of the father of the teenage purchaser, Cambridge City Councilor Craig Kelley, and on behalf of the national non-profit Stop Predatory Gambling Foundation, seeking steps to prevent children from using the lottery ticket vending machines in the company’s stores. According to the demand letter, selling the tickets to minors is an unfair and deceptive sales practice prohibited by law.
The action drew media attention and led to an editorial in the Boston Globe urging that the problem be addressed. Representatives from Stop & Shop responded by working with the Massachusetts Lottery Commission to activate drivers’ license scanners in the lottery ticket machines, which operate to confirm that a lottery ticket purchaser is at least 18 years old before the machine will vend a ticket. Stop & Shop informed PHAI last week that all of its lottery ticket vending machines would have these protections in place by the end of July, 2015.
PHAI staff spot checked Stop & Shop machines in 3 counties and found that its machines will, in fact, not operate without first scanning an adult driver’s license.
Cambridge City Councilor Kelley said he was pleased to see some progress made. “It’s a real problem,” Kelley said. “As a father and as a city councilor, I was truly shocked at how easy it was for a kid to buy tickets from these machines.”
Mark Gottlieb, executive director of PHAI, noted that “While Stop & Shop’s efforts to quickly address the problem are laudable, the vast majority of lottery ticket vending machines in the state don’t have driver’s license scanners. This includes many places like bowling alleys and convenience stores that are frequented by kids.” Gottlieb added that “we will continue to work to prevent sales of scratch tickets to kids through vending machines as a public health policy measure.”
Monday, June 1st, 2015
By Edward L. Sweda, Jr.
There are 8,760 hours in any given year (excluding leap years). The management of Altria Group, Inc. used just under one of those 8,760 hours to conduct its 2015 Annual Shareholders’ Meeting at the Greater Richmond Convention Center in Richmond, Virginia on the morning of May 20th. The meeting began precisely at 9:00 A.M. and was adjourned at 9:57 A.M.
In his business presentation, Altria Group, Inc. Chairman, CEO and President Martin J. Barrington reported that “2014
was a very strong year for Altria and its shareholders,” that “Marlboro achieved record retail share of 43.8%, larger than the next ten brands combined” and Altria “delivered shareholder return of over 34%, far outpacing the S&P 500 and the S&P Food, Beverage and Tobacco Index.” Addressing an important concern in Washington, Mr. Barrington stated that Altria believes that the U.S. Food and Drug Administration “has an unprecedented opportunity to advance public health goals by recognizing that some types of tobacco products may have significantly lower risk compared to cigarettes.”
During the Question and Answer session, I asked the following question:
“According to Altria Group’s most recent form 10-K filed with the SEC ‘an unfavorable outcome or settlement of pending tobacco-related or other litigation could encourage the commencement of additional litigation. Damages claimed in some tobacco-related or other litigation are significant and, in certain cases, range in the billions of dollars.’ Just last month, the Boston Globe reported on an upsurge of tobacco product liability lawsuits that have been filed in Massachusetts, spurred on by a recent ruling from the state’s Supreme Judicial Court that is favorable to plaintiffs in those cases. Moreover, Altria’s Form 10-K also states on page 67 that ‘after exhausting all appeals in those cases resulting in adverse verdicts associated with tobacco-related litigation since October of 2004, PMUSA has paid in the aggregate judgments (and related costs and fees) totaling approximately $144 million as of December 31, 2014.’ So my question is ‘Why shouldn’t Altria’s shareholders and investors expect the company to continue to pay judgments in the hundreds of millions, if not billions, of dollars in the years to come?’”
Mr. Barrington answered that litigation “presents risks to this company and to others. But it is also true that we have considerable experience in managing that risk. And I think if you look at the track record for Altria, and fill it more so over the years, you see that it has been extremely well managed. The approach we take is to defend the cases strongly and vigorously and you overwhelmingly see that from time to time, a matter may present itself in which we have a unique opportunity to resolve the matter. And if we think it’s in shareholders’ best interest to do that, we will go ahead to do that, but I think actually if you look at the curve of tobacco litigation over the last, I don’t know, 7 to 10 years, you will see that it is not up at all. In fact, it’s sharply down. And I think that’s because we have managed it and we have addressed the challenges that we have had in litigation that you are pointing out.”
Father Michael Crosby of the Province of St. Joseph of the Capuchin Order in Milwaukee addressed the issue of forced labor in tobacco fields. After Mr. Barrington had stated that Altria opposes illegal cigarette smuggling, Fr. Crosby commented that Altria “does not seem to be that much against illegal trafficking in human beings who are coming into our fields to produce and harvest the tobacco. You called the trafficking of tobacco products criminal behavior, for me it’s criminal behavior when this company is aware of the illegality of having so many undocumented workers, some people say up to 70% of all farm workers in the United States are undocumented, that means this company is involved in illegal behavior maybe not directly but indirectly it knows it’s going on and doesn’t do anything, so there’s culpability. This is the elephant in the board room. This is the elephant in the shareholders meeting that our dividends are coming on the back of illegal activities.”
In response, Mr. Barrington stressed that “we oppose exploiting labor on the farm or elsewhere.” He added that, as opposed to doing nothing, the company “have put it in our supplier code of conduct. We tell the growers that they should not be using forced labor or exploitive labor in our work.”
Officials from the AFL-CIO’s Farm Labor Organizing Committee addressed concerns about child labor in tobacco fields as well as the effort to get substantive change in the conditions, wages and housing for tobacco farm workers.
Cathy Rowan, on behalf of Trinity Health as well as Catholic Health Initiatives , the Sisters of St. Dominic of Caldwell, New Jersey, the Sisters of Charity of St. Elizabeth and the Sisters of St. Francis, supported a resolution asking the Altria Board of Directors to “initiate efforts to develop materials informing tobacco users who live below the poverty line or have little formal education about the health consequences of smoking our products along with market-appropriate smoking cessation materials.” The proposal “speaks to the high prevalence of smoking among people living in poverty, people with disabilities and minority populations. Many of these are fellow citizens who are people who have the fewest resources, the least amount of social support and the least access to cessation services.” The company’s opposition to this resolution claims that the company “believes the wide variety of current communication programs sponsored by multiple parties addresses the objectives of this proposal.” This resolution was defeated.
Two other shareholder resolutions were presented. One, sponsored by the AFL-CIO, called on Altria Group, Inc. to prepare a report on the steps it has taken to reduce the risk of acute nicotine poisoning (or “Green Tobacco Sickness”) for farmworkers in the company’s supply chain for tobacco. The other resolution, sponsored by the Province of St. Joseph of the Capuchin Order in Milwaukee, requested the company’s Board of Directors to “create a policy that all its suppliers throughout its tobacco procurement supply chain verify (with independent monitoring) their commitment and compliance regarding non-employment, directly or indirectly, of laborers who have had to pay to cross the U.S. border to work or, once here, to work on U.S. farms.” Just as at the Reynolds American Shareholders Meeting two weeks earlier , both of these resolutions were defeated.
Wednesday, May 27th, 2015
Click for video of sale
In recent months, PHAI has worked with concerned parents and a national anti-predatory gambling group to address youth access to instant lottery tickets through unattended vending machines. Fears around easy access to scratch tickets by kids grew when we found that a 14-year-old was able to easily purchase tickets from lottery vending machines in supermarkets in Arlington, Cambridge, and Somerville, Massachusetts. Each attempt was made in the late afternoon without any effort to conceal the sale. In each instance, the teenager was able to approach the machine and make a slow and deliberate purchase while customers and store personnel were nearby.
PHAI filed a lawsuit on behalf of the father of the teenager as well as Stop Predatory Gambling against one of the supermarket chains, Star Markets, and has initiated legal action against Stop & Shop. In the story published today in the Boston Globe, the Massachusetts Lottery Commission announced that some vending machines will now use a scanning technology feature to verify the age of purchasers through their drivers’ license or state-issued identification. The executive director of the Commission, Beth Bresnahan, indicates that, “following some incidents of underage play that recently transpired . . . the Lottery is activating this feature across all of the approximately 500 PAT machines currently in the field to fully protect the integrity of ticket sales at retail locations.” “PATs,” or “Player Activated Terminals,” represent less than 30% of all lottery vending machines in Massachusetts.
The “incidents” Ms. Bresnahan referred to are, presumably, those that were brought to the attention of the Commission through PHAI’s litigation and coverage of the lawsuit by the Boston Globe as well as its strong editorial calling for effective age-restriction enforcement by the Commission.
It remains to be seen whether these new measures will be effective, particularly because they affect only a fraction of the vending machines that are in places frequented by youth.
Monday, May 18th, 2015
By Edward L. Sweda, Jr.
Like clockwork, the 2015 Reynolds American (RAI) Annual Shareholders Meeting started precisely at 9:00 A.M. on Thursday May 7, 2015 at the company’s headquarters in Winston-Salem, North
Carolina. Seventy-five minutes later, the meeting was adjourned.
Before I could attend the meeting, I had to proceed through intense security, with machines provided by Security Detection, empty my pockets and hand over my camera to the RAI staff.
The meeting was held again in the company’s main auditorium that seats around 200 people. On the dais were the following representatives of RAI management: Thomas C. Wajnert, the Non-Executive Chairman of the Board, who ran the meeting; Dara Folan, Senior Vice President, Deputy General Counsel and Secretary; Mark Holton, Executive Vice President and General Counsel; Andrew Gilchrist, the Chief Financial Officer and Executive Vice President; and Susan M. Cameron, RAI’s President and Chief Executive Officer. After announcing the rules of conduct for the meeting and potential penalty for violation of the rules, Mr. Wajnert turned to Ms. Cameron for an overview of the company’s business performance for 2014. Curiously, Ms. Cameron began by noting that 2014, while being a “good year” for RAI, “seems a long time ago.” She cited some specifics of RAI’s 2014 performance, including Camel’s high market share and VUSE’s “successful national expansion.” She described RAI’s plans to acquire Lorillard Tobacco Company as the “Right Decision at the Right Time” that is still awaiting regulatory approval by the U.S. Federal Trade Commission. She also called on the U.S. Food and Drug Administration to adopt different regulations for e-cigarettes than for combustible cigarettes. Ms. Cameron made no mention of any of the company’s customers who died during 2014 from smoking-caused diseases.
Much of the remainder of the meeting dealt with farm labor issues. Many members of FLOC (the Farm Labor Organizing Committee of the AFL-CIO) were in the audience; they dominated the 30-minute question-and-answer session. While Mr. Wajnert admitted that “bad conditions exist” on tobacco farms in North Carolina, he claimed that “we are working with our growers” to try to remedy those conditions. FLOC representatives cited ongoing violations of child labor laws in the tobacco fields and emphasized that many of the farm workers were doing extremely hard and dangerous work for a minimum wage salary of $7.25 per hour. Another major grievance was the fact that RAI, despite its claims of transparency, continues to refuse to provide FLOC with a list of tobacco growers with which RAI has contracts to provide it the tobacco for its cigarettes.
During the question-and-answer session, I asked the following question on ongoing tobacco litigation.
“During last month’s RAI First Quarter Earnings Conference Call, Chief Financial Officer and Executive VP Andrew Gilchrist said that ‘a significant portion of our legal budget at this point is being spent on Engle.’ The Engle verdicts in Florida keep on coming. Just last week, a Florida jury returned a verdict of over $6 million for a plaintiff. Meanwhile the Boston Globe last month reported on an upsurge in tobacco product liability lawsuits being filed in Massachusetts – an upsurge that was spurred on by a recent state supreme court ruling that is favorable to plaintiffs.
“I have a two-part question. Would you clarify that when Mr. Gilchrist or other executives refer to the company’s legal budget, that it includes not just salaries of company lawyers and payments to local counsel but also the payment of judgments in cases where plaintiff verdicts have survived all appeals?
“Secondly, instead of using broad adjectives like ‘significant,’ would you give shareholders the specific dollar amount of the company’s legal budget and a breakdown by category of cases?”
In response, Mr. Holton said that the amount paid in judgments is not included in the “legal budget” category. He also said that the company provides overall amounts for the legal budget, though not broken down by category of cases, to the U.S. Securities and Exchange Commission.
Two shareholder resolutions were defeated. The first, supported by the North Carolina AFL-CIO, called on RAI’s Board of Directors to prepare a report “on the steps the Company has taken to reduce the risk of acute nicotine poisoning (‘Green Tobacco Sickness’) for farmworkers in the Company’s supply chain for tobacco. The report should include a quantitative summary of the results of the Company’s inspections of its suppliers.” The supporters of the resolution noted that children “who are under age 18 work as tobacco farmworkers in the United States and are exposed to Green Tobacco Sickness as an occupational risk. A 2014 Human Rights Watch report described symptoms of Green Tobacco Sickness in nearly three-quarters of 141 child tobacco workers, ages 7 to 17, who were interviewed and worked in North Carolina, Kentucky, Tennessee and Virginia in 2012 or 2013.”
The second resolution, which dealt with issue of forced labor in tobacco fields, was sponsored by the Province of St. Joseph of the Capuchin Order in Milwaukee, Wisconsin. Specifically, the proposal noted that, “with U.S. immigration reform stymied, undocumented workers (often the main workforce in many agricultural areas) can be exploited. In their country of origin they often must pay contract labor brokers thousands of dollars to cross our borders; once here, they often are under the control of other labor contractors in order to work on U.S. farms. This practice results in forms of forced and compulsory labor on many, if not most, U.S. farms, including tobacco farms.”
The proposal called on RAI’s Board of Directors to “create a policy that all its suppliers throughout its tobacco procurement supply chain verify (with independent monitoring) their commitment and compliance regarding non-employment, directly or indirectly, of laborers who have had to pay to cross the U.S. border to work or, once here, to work on U.S. farms.”
Father Michael Crosby presented the proposal and noted that currently RAI is financially benefitting from forced labor. That is a fundamental moral issue that must be addressed, he added.
In seconding this resolution, I noted that RAI’s opposition statement that the issue of forced labor is “an issue that should be addressed in a comprehensive manner as part of immigration reforms and policies at the national level” was technically true but amounted to an excuse to pass the buck since there is no likelihood that the current Congress will allow a comprehensive immigration reform bill to be voted upon, given the track record of the House majority in the last Congress.
So, in this regard as in so many other aspects of Reynolds American’s business, the status quo continues.
Friday, May 1st, 2015
The April 30th edition of the Boston Globe featured an article authored by correspondent Peter Keogh entitled: “The Plight of the Smoking Man.”
The piece explained the difficulties that some smokers have faced in the wake of increasing restrictions on smoking, including in many multiunit residential buildings. While the article spends some time exploring the perspective of members of a Cambridge-based smokers’ rights group, it gave the final word to PHAI’s Chris Banthin, who directs the Tobacco Control Resource Center at PHAI. Most of Mr. Banthin’s time is devoted to educating landlords, tenants, condominium associations, and property management companies why and how to successfully implement smokefree policies through the Massachusetts Smokefree Housing Project.
This excerpt of the article includes Mr. Banthin’s response to some of the concerns raised by the smokers’ rights group members:
Chris Banthin is a lawyer working with Northeastern University’s Public Health Advocacy Institute . In a 2013 interview with WBUR, Helfer, the smokers’ rights group cofounder, describes the institute’s Tobacco Control Resource Center as “public health absolutists [who] feel that if we all do what they tell us to do, we’re going to have some kind of utopian state.”
Banthin, however, describes it as “an organization that seeks to use the law to improve public health.”
When it comes to regulating smoking in privately owned properties, Banthin sees no pressing need for legislation. “A lot of landlords are going smoke-free voluntarily,” he says. “Condos also. It’s a selling point.”
But aren’t they trespassing on the right to do what you want in your own home? Aren’t the restrictions more moralistic than a valid response to any health threat?
“Those arguments fall flat,” Banthin says. “If we accept the premise that landlords can do with their property as they wish, the argument is inconsistent. And if you have the right to do what you want in your home, shouldn’t your neighbor have the same right? Your right to do what you want stops at your neighbor’s nose.
“As for secondhand smoke, the science is 100 percent irrefutable and widely accepted.”
Banthin sympathizes with those affected by bans. He advises landlords and other stakeholders on how to implement a no-smoking rule. Part of that includes engaging residents in the process.
“I have gone to hundreds of housing authority meetings,” he says. “I’m the first one that tells them. Most of them are upset, but most say, ‘OK, I recognize it’s important, so I’ll go outside.’ I think everybody gets it.”