R.J. Reynolds Settles Advertising Lawsuit for $11.4M in Penalties
California Attorney General Bill Lockyer (D) on Wednesday announced that R.J. Reynolds Tobacco has agreed to pay a total of $17.3 million in penalties and costs to settle a lawsuit over its advertising practices, as well as cut back on its advertising in magazines that have large teenage audiences, the Los Angeles Times reports (Vrana, Los Angeles Times, 12/23).
Lockyer filed the lawsuit in 2001 alleging that Reynolds violated the national tobacco settlement by indirectly targeting youths in its advertising when the company failed to take "meaningful steps to avoid reaching significant numbers of teens." The state sought monetary sanctions and a court order to force Reynolds to alter its advertising practices.
In closing arguments in May 2002, California attorneys said the tobacco firm should be fined $20 million and banned from advertising in 50 magazines to prevent the company from targeting teenagers (California Healthline, 5/22/02).
Under the settlement, which was approved by San Diego Superior Court Judge Ronald Prager, Reynolds will pay $11.4 million in civil penalties and $5.9 million to cover costs. In June 2002, Prager ruled that the company had to pay the $20 million penalty, but a California appeals court in March ordered him to reconsider his ruling.
The settlement also bans Reynolds from advertising in any magazine that has a teenage readership of 15% or more of its total readership, according to Lockyer, the Times reports.
The settlement covers Reynolds brands owned when the lawsuit was filed, as well as brands the company acquired this year, including Camel, Winston, Salem, Doral, Kool, Lucky Strike and Pall Mall.
"This settlement is an important victory in the ongoing effort to end tobacco advertising that targets our children and helps them get hooked on a deadly product," Lockyer said, adding that Reynolds "has finally agreed to adopt serious, effective limits for advertising in magazines that have disproportionately large numbers of young readers."
Reynolds spokesperson Ellen Matthews could not be reached for comment, according to the Times (Los Angels Times, 12/23).