On June 2, 2014, the United States District Court for the District of Columbia approved an agreement (the “Revised Consent Order”) between the federal government and Philip Morris, R.J. Reynolds and Lorillard Tobacco, which resolved a dispute that has been ongoing for over a decade. The federal government sued the three tobacco companies, alleging, among other things, that the tobacco companies had engaged in deceptive marketing and advertising practices. In 2006, after finding that the tobacco companies had made false and deceptive statements, the District Court entered a Final Judgment and Remedial Order #1015 (“Remedial Order”). The Remedial Order required the tobacco companies to publish corrective statements covering five topics where court determined that the tobacco companies had made deceptive statements.
In 2009, the United States Court of Appeals for the District of Columbia affirmed the District Court’s finding of liability as well as many of the provisions set forth in the Remedial Order. The tobacco companies sought two other appeals, which were denied. In 2012, the District Court ordered the parties to mediate issues involving the implementation of the corrective statements. Since then, the federal government and the tobacco companies have presented the District Court with several proposed agreements in the form of consent orders to define the scope of the corrective statements. The District Court denied the first proposed consent order and required the parties to engage in further negotiations.
After numerous appeals over the tobacco companies’ liability and the provisions of the Remedial Order, as well as significant time mediating the scope of the corrective statements, the District Court accepted the Revised Consent Order earlier this month. This order outlines when and where the tobacco companies will publish the corrective statements. Both the Remedial Order entered in 2006, as well as the Revised Consent Order entered just earlier this month, set forth newspapers and television stations in which the corrective statements should be published and aired.
The Revised Consent Order calls for the publication of the corrective statements in at least twelve more newspapers than provided in the Remedial Order. While the Remedial Order only required corrective statements to be published in newspapers in ten states, as well as Washington, D.C., the Revised Consent Order provides that the advertisements will run in newspapers in thirty-three states and Washington, D.C.
In terms of the television advertisements, both the Remedial Order and the Revised Consent Order specify prescribed days of the week and hours of the day in which the advertisements must run. The Remedial Order limited the tobacco companies’ obligation to airing the remedial statements on three networks – ABC, NBC and CBS. The Revised Consent Order, however, provided the tobacco companies with the option of airing up to one-third of the total television spots on channels other than ABC, NBC and CBS. The advertisements aired on stations other than ABC, NBC and CBS are required to appear on a station that has an overall audience equal to or larger than the least viewed slot on ABC, NBC and CBS for the prescribed day and time. This revision was in an effort to reach a broader audience and to reach a significant number of minority viewers.