Northeastern University Distinguished Professor of Law and President of the Public Health Advocacy Institute, Richard Daynard, published an op-ed in The Hill on December 6, 2022 laying out the importance of punitive damages in civil justice to protect public health.
Professor Richard Daynard
The article references a billion dollar punitive damages verdict in a Massachusetts tobacco case from September in which PHAI’s Center for Public Health Litigation participated. The case involved a a wrongful death claim by the family of a woman who smoked Marlboro and Parliament cigarettes for many years and who was addicted to cigarette smoking as a teen. Barbara Fontaine died as a result of lung cancer at the age of 60.
The jury listened to 3 weeks of evidence of the culpability of Philip Morris, USA in Ms. Fontaine’s death including testimony from a historian, an addiction expert, and a lung cancer expert. Compensatory damages of $8 million were awarded by the Middlesex County, Massachusetts jury. The jury also learned about the enormous profits that Philip Morris USA derives from cigarette sales to this day and, in order to punish and deter its reprehensible conduct, issued a punitive damages verdict of $1 billion.
Daynard argues that such large punitive damages awards are needed where a corporation is so profitable in an enterprise that harms population health that a smaller award is simply as cost of doing business.
The Center for Public Health Litigation at PHAI returns to the courtroom for a wrongful death tobacco trial in Boston against Philip Morris as well as R.J. Reynolds Tobacco in January.
Professor Daynard’s opinion piece can be accessed through this link.
On September 6, 2022, attorneys general from 33 states announced a tentative settlement of their joint investigation of the company involving cash payments to the states of $438.5 million over several years. PHAI’s executive director, Mark Gottlieb, discussed the settlement on NBC News NOW the following morning. That short interview can be seen here.
Puff Bar Charged With Violating Massachusetts’ Ban on Flavored e-Cigarettes In direct violation of state law, Puff Bar sells flavored, disposable e-cigarettes that appeal to teens
BOSTON, MA (June 11, 2020) – Today, the Public Health Advocacy Institute (PHAI) at Northeastern University School of Law initiated action against Puff Bar and Cool Clouds Distribution, Inc., the makers and distributors of flavored, disposable Puff Bar e-cigarettes.
In its claim letter, PHAI alleges that Puff Bar e-cigarettes are sold in Massachusetts in clear violation of a November 2019 state law that prohibits the sale of all flavored e-cigarettes. Puff Bar has become extremely popular, eclipsing JUUL as the favored vape product among young people.
The claim is brought on behalf of 22-year old Juliana Larson of Medford and 33-year old Juliana Shulman-Laniel of Boston, both acting as testers for PHAI. In April, both testers purchased a flavored Puff Bar online through puffbar.com and had the product mailed to their homes in Massachusetts. The package was left at each tester’s doorstep without obtaining a signature.
“Apparently Puff Bar and Cool Clouds Distribution thought that nobody would notice or care that they have been selling flavored e-cigarettes here in blatant violation of Massachusetts law,” said Mark Gottlieb, Executive Director of PHAI. “We care and we will put a stop to it.”
According to PHAI, the sale and shipment of flavored Puff Bar e-cigarettes to Larson and Shulman-Laniel not only violated the state’s 2019 ban on flavored e-cigarettes, it also defied a Massachusetts Attorney General regulation that requires a delivery of e-cigarettes to be made only with a verified adult signature – two laws that aim to safeguard minors from dangerous products, such as Puff Bar e-cigarettes.
The claim also outlines multiple ways Puff Bar is being marketed to youth. A recent Puff Bar advertisement targeted youth and evoked coronavirus stay-at-home orders, stating: “We know that the inside-vibes have been . . . quite a challenge. Stay sane with Puff Bar this solo-break . . . . It’s the perfect escape from the back-to-back zoom calls, parental texts and WFH stress.”
Puff Bars are sold in 24 different flavors, including “blueberry ice,” “sour apple,” “strawberry donut,” and “mint chip” – flavors that make Puff Bars easily inhalable and attractive to teens. Puff Bar is designed to be sleek, cute, and discreet – appearing less like a nicotine delivery device and more like a harmless, fun accessory. At first glance, a Puff Bar may appear simply to be a USB drive, a design that enables young people to use Puff Bar devices surreptitiously without parents, teachers, or other adults knowing. As a disposable product, Puff Bar is also simple to use and relatively inexpensive – two features that make youth initiation especially easy.
“Puff Bar has recently flooded the e-cigarette market with a product that is designed and marketed to addict young people,” said Dick Daynard, President of the Public Health Advocacy Institute. “Puff Bar and Cool Clouds are selling Puff Bar products in Massachusetts in clear violation of state law, and we want to ensure that these dangerous products are no longer accessible to Massachusetts kids and teens.”
This claim is brought amidst a rising wave of national concern about Puff Bar products, including calls from Congress to close a federal loophole that has allowed for the proliferation of Puff Bar products amidst a nationwide ban on most e-cigarette flavors. The Massachusetts law, however, bans the sale of all flavored tobacco products with very limited exceptions.
If PHAI’s claim prevails, Puff Bar and Cool Clouds Distribution, Inc. will be required to cease their illegal sale of flavored Puff Bar e-cigarettes in Massachusetts.
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The Public Health Advocacy Institute (PHAI) is a non-profit legal research center focused on public health law located at Northeastern University School of Law. In 2014, PHAI formed the Center for Public Health Litigation, a nonprofit law firm, which uses the civil justice system to improve public health by focusing on litigation targeting tobacco industry products, unhealthy foods, deceptive health marketing, and deceptive gambling practices.
The Public Health Advocacy Institute (“PHAI”) is pleased to announce that two tobacco lawsuits tried this month in St. Thomas, V.I., have concluded with verdicts totaling $113.3 million. The cases, Gerald v. R.J. Reynolds Tobacco Co. and Brown v. R.J. Reynolds Tobacco Co., were brought by two deceased smokers who had been hooked on Newport cigarettes as minors.
Rare Double Jury Trials
The cases were tried simultaneously, with both 6-person juries together hearing evidence common to both cases, and each separate jury hearing issues such as medical testimony that was specific to its case. These are the first tobacco cases to be brought in the U.S. Virgin Islands, the first tobacco cases tried together in this way, and among the largest verdicts achieved to date in individual tobacco litigation.
Comment of Tobacco Litigation Expert, Richard Daynard
PHAI President (and Northeastern University law professor) Richard Daynard commented:
“We are delighted that two juries independently concluded that Newport’s original manufacturer, Lorillard, and its successor company R.J. Reynolds,
Ms. Brown as a Teen
sold an unreasonably and unnecessarily dangerous product, marketed it by use of fraud, fraudulent concealment, and conspiring with the other major cigarette producers, and engaged in outrageous conduct with evil motive or in reckless or callous disregard of the rights or safety of others. The juries saw through the defendant’s con game: they addicted these two smokers through deceptive advertising and free samples, made thousands of dollars of profits from their subsequent purchase of Newports, and then tried to blame them for their ‘irresponsible’ decision to keep using these products. The smokers in these two cases were among the more than 20 million Americans who died of cigarette-caused deaths since the first Surgeon General’s Report in 1964.”
Lucien England
Background
Lucien England, the decedent in the Gerald case, began smoking Newport cigarettes as a child, when, as part of a nationwide marketing campaign, free samples of the cigarettes were hung from the doorknobs of the apartment building where he grew up. His death was caused by bladder cancer from smoking Newports.
Patrice Brown, the decedent in the Brown case, began smoking Newport cigarettes as a teenager, influenced by an advertising campaign that promoted Newports as having a “hint of mint,” and died from lung cancer after smoking those menthol cigarettes for decades.
PHAI is a public health research and advocacy non-profit located at Northeastern University School of Law in Boston. www.phaionline.org.
The case was brought by St. Thomas attorney Russell Pate, and tried by attorneys Michael Weisman and Gordon Rhea, with the assistance of PHAI attorney Meredith Lever. Mr. Weisman is Of Counsel with PHAI. With the Brown case, Weisman reprised his 2010 success in the case of the late Marie Evans, in which a Boston jury awarded $71 million in compensatory damages and $81 million in punitive damages against the maker of Newport cigarettes for causing Evans’ premature death from lung cancer. Ian A. McWilliams handled the audio-visual services for plaintiff’s exhibits in the Evans as well as the Virgin Island trials.
Brown v. R.J. Reynolds Tobacco Co. = $70 m compensatory + $12.3 m in punitive damages
Gerald v. R.J. Reynolds Tobacco Co. = $1 m compensatory + $30 m in punitive damages
Despite the scientifically established link between consuming sugar drinks and obesity, type 2 diabetes, and heart disease, the Coca-Cola Company and its trade association, the American Beverage Association, deceive consumers by denying and obscuring soda’s link to those diseases, according to a lawsuit filed today.
Bringing the action filed today in the Superior Court of the District of Columbia are Reverend William H. Lamar IV, pastor of the historic Metropolitan African Methodist Episcopal Church in Washington, DC; Reverend Delman Coates, senior pastor of Mt. Ennon Baptist Church in Clinton, MD; and the Praxis Project, a nonprofit organization focused on building healthier communities. Praxis had brought, but soon withdrew, similar litigation against Coke and the ABA in California pending the addition of the new plaintiffs.
“For far too long, Coca-Cola has been convincing people, including children, that soda is a source of fun and happiness and that it is safe to drink,” said Rev. Coates. “But from my vantage point, Coca-Cola is devastating the African American community by fueling an epidemic of obesity and an epidemic of type 2 diabetes. I visit hospitals and homes, and officiate at funerals. I routinely encounter blindness, loss of limbs, strokes, and even death. Efforts to talk about the role of sugar drinks and advertising in these epidemics, including many of my own efforts—are hampered by the effects of Coca-Cola’s deceptive marketing.”
The lawsuit quotes Coca-Cola executive Katie Bayne’s much-publicized statement that “[t]here is no scientific evidence that connects sugary beverages to obesity” as representative of the kind of deception that Coke and the ABA publicly engage in. Sugar-sweetened beverage consumption is linked scientifically not only to obesity but also to type 2 diabetes and heart disease. The Centers for Disease Control and Prevention, the federal government’s 2015 Dietary Guidelines for Americans, the American Heart Association, the American Medical Association, and numerous other prominent medical and health authorities all acknowledge such links.
Plaintiffs and Andrew Rainer Discuss the Lawsuit
“When industry wanted to sell more cigarettes, it used powerful advertising to make smoking seem glamorous, and it tried to muddy the waters and make it seem as if smoking’s link to lung cancer were in doubt,” said Rev. Lamar. “Soda might not be smoking, but the tactics of the companies are strikingly similar to me: Market heavily. Cast doubt on science. People need and deserve to know the facts about soda consumption. They need to know that the beautiful bodies seen in Coke commercials are not the norm for regular soda drinkers. And they need to know about the possibility of lost limbs, blindness, sexual dysfunction, and premature death.”
Coca-Cola and the ABA’s larger advertising campaign attacks the science while promoting lack of exercise as the primary driver of obesity and related epidemics. The ABA wrote that “the anti-soda campaign misleads people with unsound science,” and that “[A]ll calories are the same regardless of food source,” according to the complaint. James Quincey, Coca-Cola’s new CEO, claimed in a widely publicized interview that “the experts are clear—the academics, government advisors, diabetes associations … a calorie is a calorie.”
Coke also paid health professionals to promote sugar-sweetened beverages on the Internet, including one dietitian blogger who suggested that an eight-ounce soda could be a healthy snack, like “packs of almonds,” according to the complaint. The complaint also cites the widely reported secret funding by Coca-Cola—$120 million between 2010 and 2015—to scientists and projects that publicly advanced the proposition that “energy balance” is more important than reducing soda consumption. Meanwhile, advertising campaigns like “Be OK” misleadingly implied that light exercise, such as laughing out loud for 75 seconds, offsets the health effects of Coke consumption, or, in the words of the ABA-funded campaign known as “Mixify,” that some afternoon Frisbee earned players “more” soda.
Coca-Cola’s Deceptive Ad Campaign
Other promotions deceptively advance sugar drinks as a safe form of essential hydration. The complaint again cites Coca-Cola’s Bayne, who claimed that “What our drinks offer is hydration. That’s essential to the human body. We offer great taste and benefits … We don’t believe in empty calories. We believe in hydration.”
“We need to put permanent protections into place that protect kids’ health by shielding them from Coke’s omnipresent and deceptive marketing,” said Praxis Project executive director Xavier Morales. “It seems to me that Coke plays the long game and wants to hook consumers young. But its marketing and advertising are putting too many Americans, especially children and teens of color—who are twice as likely to see an advertisement for soda—on a trajectory that includes obesity, diabetes, and heart disease. These medical conditions kill or maim. When one in every two Latino and African American youth born since 2000 are expected to get diabetes in their lifetime, we need to stand up and take action. Praxis is proud to be bringing this lawsuit.”
In Washington, DC, more residents die each year from complications related to obesity than from AIDS, cancer, and homicides combined, according to the city’s health department.
The plaintiffs are represented by Maia Kats, litigation director of the nonprofit Center for Science in the Public Interest; Andrew Rainer and Mark Gottlieb of the Public Health Advocacy Institute; Daniel B. Edelman of the law firm Katz Marshall and Banks, LLP; and Michael R. Reese of the law firm Reese LLP. The suit seeks an injunction under the District of Columbia’s Consumer Protection Procedures Act, which protects District residents from improper trade practices. Such an injunction would stop Coke and the ABA from engaging in the unfair and deceptive marketing of sugar-sweetened drinks—including any direct or implied claim that the drinks do not promote obesity, type 2 diabetes, or cardiovascular disease.
“For decades, the tobacco industry engaged in a systemic campaign of deception to cast doubt on the science connecting smoking to lung cancer,” said Kats. “Today Coca-Cola and the ABA are conducting their own campaign of deception to hide the science connecting sugar-sweetened beverages to obesity, and obesity-related diseases like diabetes and heart disease. We seek to protect consumers and to stop the deception.”
The Public Health Advocacy Institute’s litigation director Andrew Rainer, who has tried cases against cigarette companies, said, “Coca-Cola and the ABA have taken not just a page but a whole chapter out of Big Tobacco’s playbook for denying scientific truth. They claim there is “no science” linking their products to obesity, type 2 diabetes.”
As I approached the Greater Richmond Convention Center on the partly cloudy morning of Thursday, May 18, 2017, thoughts of sub-freezing temperatures and snowstorms never entered my mind. But, before the morning gave way to the afternoon, I realized that I had just seen dozens of snowflakes.
As he opened the meeting just before 9:00 A.M., Altria Group Chairman, President and CEO Martin J. Barrington declared that the company had experienced “another outstanding year” in 2016. That was followed by a “solid start” in the first quarter of 2017. He listed four priorities for the company:
Tobacco Harm Reduction;
Marketing;
Supply Chain Responsibility; and
Employees.
The company’s strategies are:
Maximize income from core tobacco businesses over the long term;
Grow new streams with innovative tobacco products (including MarkTen XL, the “fastest growing e-vapor brand” in the last quarter of 2016); and
Manage diverse income streams and a strong balance sheet to deliver consistent financial performance (citing Altria’s ownership of over 10% of AB InBev and its Ste. Michelle Wine Estates ).
I was able to begin the Question and Answer session of the meeting with the following question:
“You and other executives of Altria Group have often referred to tobacco litigation as an issue that is ‘manageable’ and, therefore, should not be troubling to investors.
Yet, just within the past two months, the following developments have occurred:
On April 6th, the Florida Supreme Court in the R.J. Reynolds Tobacco Co. v. Marotta case ruled that federal law does not preempt Engle Progeny plaintiffs from bringing strict liability and negligence claims against tobacco companies.
On April 12th in the Boatright v. Philip Morris USA, Inc. case, a Florida Appeals Court affirmed a jury award of $35 million against Philip Morris USA, Inc., and reversed the reduction of the award by the trial judge because the smoker was also at fault for his illnesses, ruling that Florida’s comparative fault law does not apply to intentional torts. This increases the company’s exposure to liability.
On April 6th in the Sommers v. Philip Morris case, a Florida state jury awarded $1 million to the widow of a lawyer and real estate developer after finding Philip Morris responsible for his coronary artery diseases and fatal lung cancer.
My question is:do you understand why there are shareholders who believe that the tobacco litigation problem is no longer simply ‘manageable’?”
Mr. Barrington’s response was, while acknowledging these and other recent legal setbacks for Altria, to emphasize that in the larger picture, tobacco lawsuits are still “manageable” in the view of Altria’s management. He admitted that “litigation presents a risk and we devote substantial resources to it.” Mr. Barrington also claimed that the litigation has been “well managed” and that the slope of the numbers of cases “has been coming down.” Regarding Engle, he said that it presents a “complex set of individual cases” and that Altria is “working our way through it.” He complained that the “terms on which those cases are being tried are not particularly fair to the defendants.” He concluded by stating that tobacco litigation is “a complex matter but it is a finite matter.”
Reality Check’s Jonathan Chaffe asked about the growing number of localities across the country that have adopted Age 21 policies – making it illegal to sell or give cigarettes and other tobacco products to people under age 21. Mr. Barrington responded by saying that he prefers to minimum age to be 18 rather than 21. He also raised the potential problem of communities that have passed Age 21 laws being surrounded by other communities that hadn’t, thus encouraging young smokers to travel to a place where the minimum age is still 18. Finally, he opined that it would be better to have this issue dealt with by Congress, rather than by states or localities.
A 15-year-old student from Elmira, New York asked Mr. Barrington what steps Altria is taking “to ensure that specific populations with higher smoking rates based on ethnicity, income, education and mental health are not being profiled by Altria’s advertising?” Altria’s current top executive gave an answer that any number of his predecessors have given over the years. He claimed that the company markets cigarettes “only to adults.”
In response to a question about how Altria plans to respond to the U.S. Department of Housing and Urban Development’s November 2016 policy for smoke-free public housing, Mr. Barrington said that Altria “hasn’t weighed in” on the issue but that, as a general rule, homeowners should decide whether to allow smoking in people’s homes.
A shareholder resolution, sponsored by the Sisters of St. Francis of Philadelphia (see http://osfphila.org/ ), called on the company to “voluntarily commit itself that, by August 15, 2017, it will not allow any images of its logo or products be placed anywhere outside any store, in store windows or anywhere else inside any store selling its tobacco products and will stop incentives to any retailer for such placements.” The proposal noted that “people of low socioeconomic status have higher rates of cigarette smoking than the general population” and that a city of Philadelphia analysis of licenses found that lower income zip codes “had two-thirds more tobacco retailers per capita than higher-income zip codes and three-quarters more within 1000 feet of a school.”
The resolution received a 2.6% YES vote.
Before, during and after the meeting, at least thirty teenagers demonstrated outside the convention center, carrying teal and black balloons to emphasize how young people who begin using a deadly and addictive product become replacement smokers for Altria’s customers who die from smoking-caused diseases. The teenagers, who were accompanied be several adults, were representatives of Reality Check New York ) and No Limits Nebraska.
After the 50-minute meeting had ended, I emerged from the meeting room to learn that the approximately 85 attendees were blocked from exiting from the same doors through which they had entered an hour or so earlier. Instead, everyone had to walk down a long corridor – about the length of a city block – to get to the exit which led to the parking garage.
Why did Altria management take this action, which had never been done before in my experience of having attended annual shareholder meetings for more than 20 years?
If it hadn’t done so, shareholders would have seen dozens of teenagers wearing T-shirts with the message “People Over Profit.” They would have seen the balloons that represent both tobacco’s death toll and replacement toll. They would have heard the chants that describe the lies used by tobacco companies to help maximize profit levels at the expense of the health and the lives of the public.
In May 2016, the Urban Dictionary defined “snowflake” as “an overly sensitive person, incapable of dealing with any opinions that differ from their own.” The key message of this year’s Altria Group shareholders meeting was not that 2016 was an “outstanding” year for the company. It was that Altria’s management is afraid of opinions that differ from their own, especially when those opinions are espoused by young people who have the courage to speak truth to power – up close and personal.
BOSTON – Two non-profits that use litigation as a public health strategy have joined forces in a lawsuit accusing the Coca-Cola Company (“Coke”) along with the American Beverage Association (“ABA”) of misleading the public about the science that links heart disease, obesity, and diabetes to consumption of sugary beverages. For years, the Public Health Advocacy Institute at Northeastern University School of Law in Boston and the Center for Science in the Public Interest in Washington, DC relied on civil litigation as a tool to achieve policy change to benefit public health.
The lawsuit was filed today in federal court in the Northern District of California on behalf of a California non-profit, the Praxis Project, which has had to devote resources to correcting the misleading messages that Coke and the ABA have disseminated. These include spreading the notion that the main cause of obesity is lack of exercise or that “a calorie is a calorie,” regardless of whether it comes from Coke or from kale. The science, in fact, shows that sugary drinks such as Coca-Cola have been found to play a real role in the obesity crisis and that calorie intake is more significant than calorie expenditure in terms of the problems of obesity and overweight. The lawsuit also accuses Coke of failing to comply with its pledge to not market to children. The action alleges violations of California’s Business and Professional Code as well as negligent and intentional breaches of a special duty to protect the consuming public.
The plaintiffs seek a court order to enjoin Coke and ABA from denying the link between sugary drinks and obesity, diabetes, and cardiovascular disease and to stop any marketing to children. They also seek a court order for defendants to disclose and publish all research they have directly or indirectly conducted on the impact of sugary beverages on health and the impact of exercise on obesity vs sugary drink consumption. Furthermore, the plaintiff asks the court to order the defendants to fund a corrective public education campaign and place prominent warnings on their internet sites that consumption of sugary beverages can lead to obesity, diabetes, and cardiovascular disease.
The attorneys for the plaintiff include Maia C. Kats, litigation director of the nonprofit Center for Science in the Public Interest; Andrew Rainer, litigation director of the nonprofit Public Health Advocacy Institute; and Michael R. Reese of the law firm Reese LLP.
PHAI attorney Andrew Rainer considers this lawsuit to be about defending science from manipulation by those who seek to increase profit at the expense of public health. Rainer says, “the Public Health Advocacy Institute has joined in this complaint in an effort to prevent the distortion of science for corporate gain. Just as the tobacco industry manipulated and distorted science for decades to deny the dangers and addictiveness of cigarettes, and the oil industry works to systematically distort science to deny climate change, Coca Cola and the American Beverage Association are engaged in a campaign to deny the established science linking sugar-sweetened beverages to obesity and diabetes.”
Mark Gottlieb, executive director of the Public Health Advocacy Institute, characterizes this filing as, “the tip of the iceberg when it comes to purveyors of sugar-added products seeking to shift all responsibility for health harms to their consumers. Coke pays dietitians to tell consumers things like drinking coke can be a healthy snack and pays scientists to deny that sugary drinks are linked to obesity and then suggests that the main cause of obesity and related disease is lack of exercise. The hypocrisy of suggesting to consumers that burning calories through laughing can offset the harmful effects of drinking soda is no laughing matter. And, yes, Coke really suggested that.”
PHAI’s partner, the Center for Science in the Public Interest included the following bullet points from the complaint in its press release.
Coca-Cola’s senior vice president, Katie Bayne, claims that “[t]here is no scientific evidence that connects sugary beverages to obesity.”
“There is no unique link between soda consumption and obesity,” claims a post on the ABA’s website.
“Simply put, it is wrong to say beverages cause disease,” the ABA stated in another release.
Coke’s incoming CEO, James Quincey, equated sugar-sweetened beverages to any other calories, dismissing their unique contribution to the obesity epidemic by asserting such beverages contribute only two percent of calories overall.
Coke also paid health professionals to promote sugar-sweetened beverages, including one dietitian who suggested that an eight-ounce soda could be a healthy snack, like “packs of almonds.”
The Public Health Advocacy Institute set up its Center for Public Health Litigation in 2014 in order to hold responsible corporate interests that harm public health and defend policies that protect public health.
On May 23, 2016, the widow and children of baseball great Tony Gwynn filed a wrongful death lawsuit against Altria Group alleging that the manufacturers of Skoal smokeless tobacco’s negligence, fraud, defective design, and failure-to-warn caused the death of the Hall of Famer in 2014.
Richard Daynard, PHAI’s president and University Distinguished Professor of Law at Northeastern University, discussed the case in the New York Times and also on ESPN along with Neil Romano of the National Spit Tobacco Education project.
When Reynolds American International (RAI) President and CEO Susan M. Cameron told the company’s 2016 annual shareholders meeting that it is “always a pleasure to report good news,” this shareholder was reminded of a similar message: “Alive with Pleasure.” That ubiquitous advertising slogan for Newport cigarettes – which RAI acquired
Cameron with a “digital vapor cigarette”
in 2015 when it purchased Lorillard Tobacco Company – emphasized the short-term, pleasurable qualities of the deadliest consumer product while ignoring the long-term consequences of using that product.
Ms. Cameron listed the examples of “good news” from 2015: shareholder return of 49%; an increase of 7.5% in dividends; a 2 for 1 stock split. Integration with the Newport brand has “done well,” she said. Vuse, RAI’s leading brand of “digital vapor cigarettes”, was the most successful new product in convenience stores.
There was no mention of the enormity of cigarettes’ 2015 death toll during the course of the 80-minute shareholders meeting. Nor was there any mention of litigation against R.J. Reynolds Tobacco Co. until Agenda Item #10, the Question & Answer session. My question to RAI Chairman of the Board Thomas C. Wajnert was as follows:
“Just within the past two months, the following developments have occurred:
“On March 17, the Florida Supreme Court ruled in the Soffer case that the widow of a smoker who died of lung cancer can seek punitive damages against RJR on strict liability and negligence claims.
“On March 24, the Florida Supreme Court in the Ciccone case ruled that a smoker did not need an official diagnosis before the cutoff date for membership in the original Engle class.
“On April 21 and 22, a Florida jury returned verdicts in the Turner case totaling $13 million for the children of a heavy smoker who died of lung cancer, finding that RJR hid the dangers of cigarettes from her until she was hopelessly addicted.
“And just last week, on April 25, the Connecticut Supreme Court in the Izzarelli case ruled that the “good tobacco” language of the Restatement 2nd of Torts does not shield tobacco companies from product liability lawsuits.(see news coverage) This is similar to a ruling in Massachusetts.
“Why shouldn’t RAI shareholders and investors be very concerned about these negative litigation developments for the company?”
For a response, Mr. Wajnert turned to Mark Holton, RAI’s executive vice president, and general counsel. While acknowledging the litigation developments I had just cited, Mr. Holton advised that shareholders and investors should consider the company’s overal
Edward L. Sweda, Jr.
l litigation strategy, that has been used for many years, rather than a string of setbacks that had occurred since mid-March. He also mentioned that there had been some recent defense verdicts during that time span and, as to the Izzarelli case, he noted that RJR still had other legal grounds for its appeal of the jury’s $28 million verdict. On that case, Mr. Holton congratulated me on the ruling by the Connecticut Supreme Court and noted that I had submitted anamicus curiae brief for the Public Health Advocacy Institute (PHAI) on behalf of Ms. Izzarelli.
The day before the RAI Annual Shareholders Meeting, the Associated Press reported that several growers who sell tobacco to R.J. Reynolds Tobacco Co. had children under the age of 13 working in their fields, despite RAI’s pledge to prohibit the hiring of children of that age. A news release by the Farmworkers Labor Organizing Committee (FLOC) commented that the “presence of child labor, which the company has denied for years, confirms what the farmworkers’ union, FLOC, has been telling the company since 2007: the tobacco industry is guilty of turning a blind eye to child labor, dangerous working conditions, and many other abuses for far too long.” That news was consistent with the findings of a December 2015 report by Human Rights Watch, entitled, “Teens of the Tobacco Fields: Child Labor in Unites States Tobacco Farming.”
During the question & answer session, several speakers raised the issue of working conditions for farm workers. Hillary Laslo, a FLOC member from Toledo, OH, spoke of abusive conditions on the farm and the fear of retaliation. Julie Taylor, the ex-Director of the National Farm Worker Ministry, visited farm labor camps and saw “terrible housing” conditions. A 20-year-old FLOC member described many problems working in the fields, including not getting necessary breaks while working in the fields, especially on brutally hot days.
Fred Romero, a 14-year-old high school freshman who had worked in the fields for the last 2 to 3 years, described how he had gotten ripped off, being paid even less than the $7.25 per hour minimum wage. He noted how his mother struggles hard to pay the family’s bills; he asked Mr. Wajnert whether RAI will sign an agreement to get a livable wage paid for those who work on farms that provide the tobacco for RAI. Mr. Wajnert answered that the company would not do so.
After the meeting concluded at 10:20 A.M., more than 100 FLOC supported demonstrated in the rain against RAI for its refusal to do more to improve working conditions for farm workers and to end child labor in tobacco fields.
Just a week after the meeting, RAI suffered yet another courtroom loss when a Florida jury in the Dion case returned a $12 million verdict to the widower of a woman who died of lung cancer after smoking for decades.
acco products and will stop incentives to any retailer for such placements.” The proposal noted that “people of low socioeconomic status have higher rates of cigarette smoking than the general population” and that a city of Philadelphia analysis of licenses found that lower income zip codes “had two-thirds more tobacco retailers per capita than higher-income zip codes and three-quarters more within 1000 feet of a school.”
