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Posts Tagged ‘Philip Morris’

Shareholder meeting report – Altria Group CEO Michael Szymanczyk: An artful dodger

Thursday, May 26th, 2011

By Edward L. Sweda, Jr., Senior Attorney

RICHMOND, VA. – Just eight days before the Altria Group, Inc. 2011 Annual Shareholders Meeting in this historic city,  Altria Group’s former Chief Executive Officer, Louis Camilleri, complicated matters for his successor.  At the Philip Morris International Annual Shareholders Meeting in New York City on May 11, 2011, Camilleri answered a question from a shareholder who is also a nurse who has treated many smokers with serious diseases.  While admitting that smoking is addictive, Camilleri added the comment that “it is not that hard to quit” using tobacco products.  That comment made international headlines after the Associated Press reported it.

So, when Altria Group’s Szymanczyk gave management’s report at the meeting in Richmond on May 19th, he specifically, on page 10 of his prepared remarks stated: “Because tobacco use is addictive and it can be very difficult to quit, our tobacco companies help connect adult tobacco consumers who have decided to quit with cessation information from public health authorities.”

During the question and answer session, shareholder Rev. Michael Crosby of the Interfaith Center for Corporate Responsibility and I both pressed Szymanczyk to state whether, as Altria Group’s CEO, he disagreed with Camilleri’s comment and, if so, why.  Refusing to do so, he stated that “I would simply say that what I said is on our website.  There is nothing new here.”  The juxtaposition between the public statements of two tobacco executives just six days apart was the central focus of the Richmond Times-Dispatch article on the meeting.

I also pressed Szymanczyk on the issue of the ongoing Engle Progeny trials taking place in Florida.  Noting that 30 out of 43 (now, as this report is written, 32 out of 46) such trials resulting in verdicts have seen jurors return plaintiff verdicts, I asked whether Altria Group, for the sake of its shareholders, would abandon its no-settlement policy regarding the thousands of  Engle Progeny cases remaining throughout Florida.  His response was simply to refer shareholders to the company’s 10Q form, which restates its standard policy of refusing to settle these cases.

Virginia shareholder Anne Morrow Donley, citing studies from March 2011 which showed that a fetus subjected to secondhand smoke is at a higher risk of stillbirth, lower birth weight and lower birth length , asked Szymanczyk whether he would publicly advise smokers not to smoke around women of child-bearing age.  His response was to acknowledge that pregnant women should not be exposed to secondhand smoke, but he refused to broaden that recommendation to include women of child-bearing age.

Cathy Rowan, representing shareholder Trinity Group, noted Altria Group’s willingness to address concerns about implementing internally agreed upon code upholding the human rights of tobacco farm workers and about ensuring that the company’s suppliers are enforcing those rules.  Altria Group’s cooperation with shareholders following a 2009 vote of shareholders where 25% supported a resolution to protect the human rights of farm workers stands in contrast to the rigid opposition by the management of Reynolds American, Inc.  to similarly worded resolutions.

In his prepared remarks, Szymanczyk also bragged about Altria Group’s donations to various charitable and civic organizations, including the Boys and Girls Clubs, 4H, as well as the Virginia Museum of Fine Arts, the Kennedy center and the National gallery of Art.  He boasted that “Altria made nearly $50 million in cash and in-kind corporate contributions to non-profit organizations” in 2010, without noting that the $50 million figure represented just 0.205% of the company’s net revenues ($24.363 billion) in 2010.

A shareholder resolution was offered, calling on the Board of Directors to move “to ensure that Altria stops the production of any of its tobacco products with characterizing flavoring added, as well as their distribution and marketing, unless and until it can be proven by independent and evidence-based research that such added characterizing flavors do not contribute significantly to youth initiation of tobacco use.”   That resolution was defeated, with 97.5% of shares voting NO, with 2.5% voting YES.

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At a Richmond restaurant after the 2011 Altria Group, Inc. Annual Shareholders Meeting. From left to right: Anne Morrow Donley, Rev. Michael Crosby, Cathy Rowan and Edward L. Sweda, Jr.



Philip Morris and RJ Reynolds hit by $40 million verdict in Florida this week

Friday, April 29th, 2011

FOR IMMEDIATE RELEASE

Contact: Edward L. Sweda, Jr. or Mark Gottlieb 617-373-8462 or 617-373-2026

A Jacksonville, Florida jury this week assessed $34 million in punitive damages against tobacco giants Philip Morris and R.J. Reynolds Tobacco Co. for their reprehensible misconduct in the case of Andy Allen v. R.J. Reynolds Tobacco Co., et al.  This award followed a compensatory damages award of $6 million for the family of Patricia Allen, who died of chronic obstructive pulmonary disease (COPD) after having smoked for 36 years. Ms. Allen, who was born in 1948, started smoking in high school at a time when the tobacco companies were targeting teenage girls, according to Allen family attorney Keith Mitnick of Morgan & Morgan.

Edward L. Sweda, Jr., senior Attorney for the Tobacco Products Liability Project (TPLP), a project of the Public Health Advocacy Institute, based at Northeastern University School of Law in Boston, was delighted with the jury’s verdict. Noting that the jury “expressed appropriate and justifiable outrage at the reprehensible misconduct of these tobacco companies,” Sweda applauded the verdict, which was the third highest among the 30 plaintiff verdicts of the 43 Engle Progeny trials that have reached a verdict since February 2009.

It is also significant that this huge plaintiff victory occurred in Jacksonville, since approximately 4000 Engle Progeny cases are pending in state and federal court in Jacksonville.

TPLP Executive Director Mark Gottlieb said, “these trials stemming from the Engle class action suit of the 1990s disrupt business as usual for cigarette companies as juries continually find them liable at an astaunding rate.”



Minnesota Court Of Appeals gives green light to “light” cigarette class action lawsuit against Philip Morris

Tuesday, December 28th, 2010

FOR IMMEDIATE RELEASE

Contact: Edward L. Sweda, Jr. or Mark Gottlieb (617) 373-8462 or (617) 373-2026

Class is certified; consumer protection law claims are reinstated since they establish “public benefit;” claims not barred by Minnesota’s 1998 settlement with tobacco companies or by 2009 federal legislation; claims not barred by statute of limitations.

The Minnesota Court of Appeals today issued a “resounding victory” for a class of Minnesota smokers of Marlboro Light cigarettes, according to Edward L. Sweda, Jr., Senior Attorney for the Tobacco Products Liability Project (TPLP), which is a project of the Public Health Advocacy Institute (PHAI), based at Northeastern University School of Law in Boston.

In a the case of Curtis, et al. v. Altria Group Inc. and Philip Morris, Inc., which was filed in 2001, the plaintiffs allege that Philip Morris engaged in a decades-long pattern of “false advertising, consumer fraud and deceptive trade practices regarding ‘light cigarettes in violation of Minnesota consumer-protection statutes.”  As class certification in similar “light” cigarette lawsuits in Missouri, Massachusetts and New Hampshire has been upheld, the Minnesota Court of Appeals today affirmed the district court’s certification of the plaintiff class, noting that the district court “found that all members of the class have been similarly injured by Philip Morris’s alleged lengthy course of prohibited conduct.  And the record supports this finding.”

Sweda also was pleased that the Court of Appeals rejected Philip Morris’s contention that Minnesota’s 1998 settlement with the major tobacco companies barred this lawsuit, which was brought on behalf of individual consumers, not the state of Minnesota.  Importantly, the Court of Appeals ruled that the public-benefit requirement of the claims “is met in this case,… by the fact that Philip Morris made allegedly false representations to the general public, and we reject the argument that prior action by the attorney general deprives this lawsuit of public benefit.”

“Now that this important consumer-protection lawsuit can proceed, I look forward to it going to the trial in the near future,” Sweda concluded

The decision can be read here.

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New Hampshire Court Grants Class Certification for Plaintiffs in a Light Cigarettes Class Action Lawsuit against Philip Morris

Tuesday, November 23rd, 2010

FOR IMMEDIATE RELEASE : November 23, 2010
Contact: Edward L. Sweda, Jr. 617-373-8462 or 857-753-9560

A New Hampshire state court on Monday granted a motion to certify a class action in a lawsuit brought under that state’s Consumer Protection Act (CPA) in the case of Lawrence et al. v. Philip Morris, USA, Inc.  The ruling makes New Hampshire the third state, after Missouri and Massachusetts, where such a class certification has been approved in a consumer-protection lawsuit against the tobacco industry’s light cigarettes scam.

Merrimack County Superior Court Judge Larry M. Smukler ruled that the plaintiffs had met all of the legal requirements for a class action under New Hampshire law.  Referring to the lawsuit which was filed on March 29, 2002, Judge Smukler ruled that “in this case, common issues of law and fact predominate over individual issues.”
The plaintiffs are represented by Attorney Chuck Douglas, who can be reached at 603-224-1988.

Edward L. Sweda, Jr., Senior Attorney for the Tobacco Products Liability Project, (TPLP) welcomed the court’s ruling.  “Just as courts in Missouri and Massachusetts have determined, a class action is an appropriate type of lawsuit to hold the tobacco companies accountable for their reprehensible misconduct in inflicting their light cigarette scam onto the public,” Sweda said.

In August 2006, U.S. District Judge Gladys Kessler ruled that the tobacco companies had violated federal anti-racketeering law.  She noted that the tobacco industry’s light cigarette scam was one of the examples of misconduct that violated the Racketeer Influenced Corrupt Organizations (RICO) Act.

See the Certification Order here.



National Cancer Institute Study may Affect Cigarette Litigation

Thursday, November 4th, 2010

Results of a study released today by the National Cancer Institute suggests that heavy smokers may be able to reduce the chances of dying from lung cancer through low-dose helical computed tomography (CT) scans. In a randomized national trial of more than 53,000 current and former heavy smokers, CT scans led to outcomes with 20% fewer deaths from lung cancer.

This finding will likely play a very significant role in several class action lawsuits against Philip Morris which seek to have the company pay for periodic CT scans for heavy Marlboro smokers.  One such case, Donovan v. Philip Morris, has been certified as a class action in federal court in Massachusetts. In 2009, the Massachusetts Supreme Judicial Court recognized medical monitoring as a valid cause of action (the Harvard Law Review discusses this decision here in a pdf).A similar case is awaiting a decision on class certification in New York: Caronia v. Philip Morris. The class in both cases are represented by the firm of Levy Phillips & Konigsberg.

The important thing about this and similar cases is that they are on behalf of people who are not yet suffering from lung cancer from smoking but who are at dramatically increased risk for the disease.  Most health insurance plans will not cover CT scans, even for heavy smokers.  Therefore, the people at the highest risk for lung cancer do not usually benefit from this diagnostic procedure.  However, until today, there was not as clear a case to be made that CT scans would substantially benefit heavy smokers.   Risks from these procedures include possible unnecessary radiation exposure and complications from further diagnostic procedures subsequent to an inconclusive scan.

The only case of this sort to go to trial did so twice (due to a mistrial) and resulted in a defense verdict. That case was Blankenship v. Philip Morris. The findings from the NCI study released today might very well have led to a different result there and in pending and future cases.



Report on Altria Group, Inc.’s Annual Shareholders Meeting – Richmond, Virginia, May 20, 2010

Wednesday, June 2nd, 2010

By Edward L. Sweda, Jr., Senior Attorney- PHAI

DEATH PENALTY

On May 20, 2010, the Commonwealth of Virginia executed Darick Demorris Walker, who had been convicted of murdering Stanley Beale in 1996 and Clarence Elwood Threat in 1997.  Also on May 20, 2010, the Altria Group, Inc. Annual Shareholders Meeting took place in Richmond, Virginia.

During the meeting’s question and answer session, shareholder Anne Morrow Donley asked chairman and chief executive officer, Michael E. Szymanczyk the following question: “Earlier this year, the U.S. Supreme Court made a quite controversial decision, noting that essentially corporations are like people.  Therefore, fair is fair.  There’s a death penalty when murder is committed, so it seems only fair that there should be a corporate death penalty for this company because it admits that it is making a product that kills people.  A corporate death penalty could require Altria to apologize for its weapons of mass destruction and could require Altria to cease and desist from the destruction of life.  So my question is, since the company itself has admitted in legal proceedings that it makes products which kill people, and courts in various states have upheld challenges from the company saying that Altria is legally responsible for the deaths of customers, therefore, why should not Philip Morris, or Altria itself, not be subject to the death penalty?”

His response was to fall back on the tired refrain that cigarettes are a “legal product” and that people, aware of smoking’s risks, still choose to do so.

FLORIDA LAWSUITS

Having noted that Philip Morris had lost jury verdicts in seven “Engle Progeny” cases during a 15-month span, Tobacco Products Liability Project Senior Attorney Edward L. Sweda, Jr. asked Mr. Szymanczyk when his company will change its policy of refusing to settle the “Engle Progeny” cases, which number approximately 9500.  His response was to declare that Altria is “bullish” about the long-term prospects of tobacco litigation in the United States.   He said this even though in recent years, when state legislatures considered bills to put an artificial cap on total awards against tobacco companies in product liability cases, company lobbyists have supported such bills by portraying the company as risking bankruptcy if the caps were not imposed.  Mr. Szymanczyk’s “bullish” comment became the headline in the Richmond Times-Dispatch’s account of the meeting.

ALTRIA’S ATTEMPT TO REMOVE CERTAIN PANELISTS FROM A SCIENTIFIC PANEL DESIGNED TO ADVISE THE U.S. FOOD AND DRUG ADMINISTRATION (FDA)

During his business presentation just prior to the question and answer session, Mr. Szymanczyk cited the company’s “Mission,” which includes a pledge that it will “actively participate in resolving societal concerns that are relevant to our business.”  Shareholder Rev. Michael Crosby of the Interfaith Center for Corporate Responsibility, noted that, according to a report in late April in the Wall Street Journal in March 2010 Altria had attempted to remove four members of an FDA advisory panel because of alleged conflicts of interest.  The FDA rebuffed Altria’s attempt to remove those panelists.  Fr. Crosby said that such a power play by Altria contradicted that pledge.  Mr. Szymanczyk’s response was that the company is “participating in” the FDA’s regulatory process and that “part of participating involves representing shareholder interests.’

SHAREHOLDER RESOLUTIONS

There were two shareholder resolutions considered at the 2010 Shareholders Meeting.  The first, which called on the company to “commission an independent study and issue a resulting report on the affect of our company’s marketing on the purchasing practices of poor people.  Shareholders ask that this report offer ways to alleviate the harm done to innocent children, such as food insecurity, by such adults who smoke.  Shareholders ask that this report include recommendations as to whether our Company should continue marketing its products in census tracts with over 50% poverty.”  Supporters of this resolution noted that families with at least one smoker spend 2% to 20% of their income on tobacco.  In many instances, such spending deprives children of necessities such as food.

Management opposed this resolution, claiming that Philip Morris USA’s “responsible marketing practices, cessation support and the regulatory authority of the United States Food and Drug Administration (‘FDA’) are sufficient to address the concerns raised by this proposal.”

This resolution received 4.3% of the total number of shares and, thus, is not eligible to be refilled for the 2011 Shareholders Meeting.

The second resolution called on the company to create human rights protocols for itself and its suppliers.  Noting that Philip Morris USA contracts with suppliers who employ migrant farm workers, the proponents cited the serious problems of Green Tobacco Sickness (GTS).  GTS occurs when the skin absorbs nicotine from touching tobacco plant; the illness threatens more than 33 million tobacco farm workers globally.  The shareholders supporting this resolution “request the Altria Board of Directors to commit itself to create procedures to implement the internationally agreed-upon core human rights conventions in the countries in which it operates and to find ways to ensure that its suppliers are enforcing these as well.”

Management opposed the resolution, claiming that there are already sufficient practices and programs in place in the United States that “address farm safety and working conditions.”  This resolution received 20.5% support and will therefore be eligible for submission next year.

TPLP’s Edward L. Sweda, Jr. (left), with Rev. Michael Crosby and Anne Morrow Donley of Virginia, on the morning of May 20, 2010, shortly before attending the 2010 Altria Group, Inc. Annual Shareholders Meeting at the Greater Richmond Convention Center



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