Posts Tagged ‘litigation’
New Lawsuit Alleges Coca-Cola, American Beverage Association Deceiving Public About Soda-Related Health Problems
Thursday, July 13th, 2017
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.”
Monday, June 12th, 2017
By Edward L. Sweda, Jr., PHAI Senior Attorney
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;
- Supply Chain Responsibility; and
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.
PHAI Joins Center for Science in the Public Interest in Filing Lawsuit Against Coca-Cola for Deceptive Marketing
Wednesday, January 4th, 2017
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.
Download the Complaint here.
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.
Tuesday, May 24th, 2016
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.
Monday, September 21st, 2015
In March, the non-profit Public Health Advocacy Institute (“PHAI”) announced that it had formed a center to bring important public health litigation, and had hired a former Assistant Attorney General to oversee this litigation in the Massachusetts courts. Today, PHAI, which is based at Northeastern University, announced the filing of its latest suit, and also the formation of a strategic alliance with a group of prominent Boston lawyers to pursue important public health cases, including cases against the tobacco industry on behalf of the families of former smokers who have suffered devastating disease from cigarettes.
“We are so pleased to be working with this outstanding group of lawyers to help some of tobacco’s victims in Massachusetts,” said Andrew Rainer, PHAI’s Litigation Director and Director of the Center for Public Health Litigation. Working together with PHAI will be:
- Lisa Arrowood, Kevin Peters and Jed DeWick of Arrowood Peters, LLP
- Sam Perkins of Brody, Hardoon, Perkins & Kesten, LLP
- Neil Leifer, of Neil T. Leifer, LLC
- Leo Boyle, Michael Bogdanow and Valerie Yarashus of Meehan, Boyle, Black & Bogdanow, PC
PHAI’s latest suit, filed today in Middlesex Superior Court in Woburn together with Perkins and Brody, Hardoon, Perkins & Kesten, LLC, is brought on behalf of Linda Troupe and her husband Carleton against R.J. Reynolds Tobacco Company of Winston-Salem, North Carolina, and Donelan’s Supermarkets, Inc. of Littleton, Massachusetts. Mrs. Troupe, who smoked Winston and Kool cigarettes for over 35 years, was diagnosed in 2013 with throat cancer. The suit alleges that, in order to treat Mrs. Troupe’s cancer, doctors had to remove her larynx, and she has lost most of her ability to speak with her four children and eleven grandchildren.
Arrowood, Peters, DeWick and Leifer will be working with PHAI on two cases previously filed in the Middlesex Court — the first brought for the family of James Flavin, Jr., a former executive of Filene’s and Staples, who died of lung cancer in 2012 after smoking Newport cigarettes for over 40 years, and the second brought for Patricia Greene, a Newton realtor, who was diagnosed with lung cancer in 2013, even though she had stopped smoking Marlboro cigarettes 25 years earlier.
Arrowood is the current President of the Boston Bar Association, and a fellow of the American College of Trial Lawyers. Perkins is a founding partner of Brody, Hardoon, Perkins & Kesten, and a previous Lawyer of the Year. Leifer, a former partner of Thornton & Naumes (now the Thornton firm), represented the Commonwealth of Massachusetts in its successful litigation against the tobacco industry to recover the health care costs incurred by the state in caring for residents harmed by smoking. Boyle and Yarashus are past Presidents of the Massachusetts Bar Association. Boyle also served as President of the Association of Trial Lawyers of America (now the American Association for Justice), and is a fellow of the American College of Trial Lawyers.
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.
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.”
Wednesday, May 27th, 2015
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.
R.J. Reynolds’ Shareholder’s Report from Winston-Salem: A “Good Year,” a Proposal to Merge and a Death Toll that Must Not Be Acknowledged
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.
Thursday, March 26th, 2015
For Immediate Release
Contact: Mark Gottlieb – 617-373-2026
The Public Health Advocacy Institute (“PHAI”) announced today that its newly formed Center for Public Health Litigation has filed lawsuits against two major tobacco companies and several local distributors on behalf of the families of two former smokers who suffered devastating disease from smoking cigarettes.
“This is the first time a non-profit organization has directly taken on the tobacco industry in court,” said Richard Daynard, University Distinguished Professor at Northeastern University School of Law and the President of PHAI. “Big Tobacco kills more than 50% of the people who buy its products, and it has for years tried to deny its legal responsibility for this public health calamity. The Center for Public Health Litigation is going to ask the Massachusetts courts to hold the tobacco companies accountable in these two cases, and in more cases to be filed soon.”
The two cases were filed yesterday afternoon in the Middlesex Superior Court in Woburn. The first was brought for the family of James E. Flavin, Jr., a former executive of Filene’s and Staples, who died of lung cancer in 2012 after smoking Newport cigarettes for over 40 years. Mr. Flavin had tried repeatedly to quit smoking, using almost every method he could find, including
nicotine patches, hypnosis, and numerous other cessation products. The companies named as defendants in Mr. Flavin’s case are Lorillard Tobacco Company, manufacturer of Newport cigarettes, and two local distributors, Garber Bros, Inc. of Stoughton and Albert H. Notini & Sons, Inc. of Lowell.
The second case was brought for Patricia Greene, a Newton realtor, who was diagnosed with lung cancer in 2013, even though she had stopped smoking 25 years earlier. Ms. Greene, like many others, had begun smoking as a result of being given free Marlboro cigarettes in downtown Boston when she was a teenager. The companies named as defendants in Ms. Greene’s case are Philip Morris USA, Inc., manufacturer of Marlboro, and Star Markets Company, Inc. of West Bridgewater, owner of the store where Ms. Greene bought her cigarettes for years.
According to Andrew Rainer, the Director of the Center for Public Health Litigation, “Massachusetts is now the best state in the country in which to bring suit against the manufacturers and sellers of cigarettes, because of a 2013 ruling by the Massachusetts Supreme Judicial Court.” In that 2013 case, Evans v. Lorillard Tobacco Co., the Court ruled that a manufacturer of cigarettes could be held responsible for the death of one of its customers, because it could have manufactured a cigarette that was safer and less addictive, but chose not to. The high Court’s decision also upheld an award of damages to the deceased customer’s family of $35 million plus interest. The case was later settled for $79 million.
Friday, October 10th, 2014
The Center for Public Health Litigation, a project of the Public Health Advocacy Institute at Northeastern University School of Law, has launched an advertising campaign in Massachusetts to help inform victims of cigarette companies of their legal rights. While Massachusetts is the best state in the nation to hold cigarette makers responsible in court for the decades of damage they have done after two landmark rulings from the state’s highest court, few Massachusetts victims realize that they are in a position to find some measure of justice in the courtroom.
The Center for Public Health Litigation seeks to inform victims of their rights and, where possible, provide or find legal representation to hold the industry liable. The ad, reproduced below, will appear in newspapers and other media over the next several weeks. It makes references to the $79 million payment by Lorillard Tobacco Company to the family of lung cancer victim Marie Evans.
Unlike other advertising by trial lawyers, this is an effort by a non-profit public health-committed organization. It is one of several public health legal initiatives being undertaken by PHAI’s new Center for Public Health Litigation.