Court issues order requiring cigarette companies to post corrective statements; resolves historic RICO tobacco litigation

The U.S. Department of Justice, together with the U.S. Department of Health and Human Services, announced Tuesday the entry of a court order that resolves the government’s long-running civil racketeering lawsuit against the largest United States’ cigarette companies. The lawsuit was filed in 1999 in the U.S. District Court for the District of Columbia. Following a 2004-2005 trial, the court found that the cigarette companies had defrauded consumers about the health dangers associated with cigarette smoking. Today’s order imposes the last of several corrective remedies ordered by the court.

Under the order, defendants are now required to display signs in retail stores featuring corrective statements about the health effects and addictiveness of smoking. The order applies to defendants Altria, Philip Morris USA Inc. (PM USA) and R.J. Reynolds Tobacco Company (RJRT) as well as to four cigarette brands owned by ITG Brands LLC (ITG).

“Justice Department attorneys have worked diligently for over 20 years to hold accountable the tobacco companies that defrauded consumers about the health risks of smoking,” said Associate Attorney General Vanita Gupta. “Today’s resolution implements the last remedy of this litigation to ensure that consumers know the true dangers of the smoking products they may consider purchasing.”

“Cigarette companies misled the public for decades about the health risks of smoking and were ordered by a federal court to implement a series of corrective measures,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “All of these measures have been implemented, except one—the display of corrective statements in retail stores that sell cigarettes. Today’s order requiring implementation of that remaining remedy is a major achievement that will educate American consumers and save lives.”

“This is an important moment in the history of cancer control in the United States,” said Associate Director William Klein of the National Cancer Institute’s Behavioral Research program. “Smoking causes about 30% of all cancer deaths in the United States, and therefore the court-ordered corrective statements appearing at the point of cigarette sale will help support our mission to reduce the burden of cancer. We are grateful to our colleagues at the Department of Justice for having completed this significant work.”

“We know that tobacco product marketing in retail stores influences young people to start using tobacco, increases tobacco product consumption, and makes it harder for people to quit,” said Director Deirdre Lawrence Kittner of the Centers for Disease Control and Prevention, Office on Smoking and Health. “These statements will be an important complement to evidence-based strategies that prevent and reduce commercial tobacco use—the leading preventable cause of disease and death in the United States.”

“It is critical that we use our expertise and the full power of the law to protect Americans from tobacco-related disease and death,” said Director Brian King of the FDA’s Center for Tobacco Products. “Today’s order further emphasizes the federal government’s commitment to take whatever steps that are necessary to protect public health, including preventing false and misleading labeling and advertising by manufacturers.”

There are approximately 300,000 retail locations in the United States that sell cigarettes. About 200,000 of those retailers have retail merchandising agreements with PM USA, RJRT and ITG that allow the companies to control how their cigarettes are displayed at those retailers’ stores. The order entered by the court today requires these companies to amend their agreements with retailers to require the placement of corrective statements in retail stores. The issuance of the order followed an evidentiary hearing open to all retailers that wished to testify about the order’s effects on them.

The corrective statements, which are displayed on color signs designed to be eye-catching, provide truthful information to consumers relating to: the adverse health effects of smoking; the addictiveness of smoking and nicotine; the lack of health benefits from cigarettes advertised as light or low tar; cigarette companies’ manipulation of cigarette design and composition to ensure optimum nicotine delivery; and the adverse health effects of exposure to secondhand smoke. The statements include, among other things, that:

• Smoking cigarettes causes numerous diseases and on average 1,200 American deaths every day.

• The nicotine in cigarettes is highly addictive and that cigarettes have been designed to create and sustain addiction.

• So-called light, low-tar and natural cigarettes are just as harmful as regular cigarettes.

• Secondhand smoke causes disease and death in people who do not smoke.

Examples of the signs that will be displayed may be found at www.justice.gov/civil/consumer-protection-branch/case/philip-morris/settlement-images.

The order will go into effect on July 1, 2023 and gives defendants three months to post the required corrective statements. Retailers will display the signs for 21 months thereafter. The corrective statements will be in both English and Spanish, with the latter required in geographic areas with significant Spanish-speaking populations. Independent auditors will periodically evaluate compliance with the order, and a tip line will be established so that the public may report incidents where they believe the statements are not being displayed properly or at all. The order further implements certain measures designed to discourage noncompliance, including specific consequences for retailers who fail to properly display the corrective statements after warnings and opportunities to cure.

This point-of-sale corrective statements remedy is the only remedy issued by the trial court that has not yet been implemented. These corrective statements are part of a broader order aimed at preventing the cigarette companies from continuing to engage in fraud and deception. Starting in 2017, the corrective statements also appeared as newspaper advertisements, in television spots, on cigarette packages and on the companies’ websites and cigarette-brand social media pages. The point-of-sale statements were the subject of several appeals, however, and were to be the subject of a July 2022 hearing about their effects on retailers. In May 2022, the parties, along with representatives of several groups of retailers that sell cigarettes, negotiated an agreement that corrective statements would be displayed in retail stores for two years. The hard-fought negotiations were led by the U.S. Department of Justice and also involved various public health organizations who intervened as plaintiffs in the case.

Many Justice Department attorneys played significant and critical roles in this case over the past two decades, most notably Senior Trial Attorneys Daniel Crane-Hirsch and James T. Nelson, both of whom devoted thousands of hours to this case since joining the case team in the early 2000s. The most recent phase of the litigation is being handled by the Civil Division’s Consumer Protection Branch, specifically Assistant Director Adam E. Lyons, Senior Trial Attorneys Daniel Crane-Hirsch, James Nelson, Stephen Tosini, Trial Attorneys Meredith B. Healy and Zachary A. Dietert, Assistant Director Lisa K. Hsiao and Assistant U.S. Attorney Leo Wise.

For additional information about the Consumer Protection Branch and its enforcement efforts, visit its website at www.justice.gov/civil/consumer-protection-branch.