Dirt Diggers Digest

At the headquarters of Reynolds American (parent of R.J. Reynolds Tobacco) in North Carolina and the Virginia headquarters of Altria (parent of Philip Morris USA) time is apparently running backwards. The two companies just filed a lawsuit in DC federal court that reads like it was written in 1995, not 2015.

The target of the suit (15-CV-00544) is the U.S. Food and Drug Administration, which the companies apparently have forgotten was given authority by Congress in 2009 to regulate tobacco marketing, including the introduction of new products. That law came after years of vociferous opposition by Big Tobacco.

What has the companies up in arms is an FDA guidance document issued in March concerning review requirements for packaging changes. The agency takes the position that certain modifications in background color, logo and descriptors can be significant enough to trigger the stricter rules regarding new products.

Presenting themselves as victims of government overreach, the companies argue that their First Amendment rights are being violated: “FDA’s unlawful actions already have harmed Plaintiffs and threaten greater harms in the future by restricting Plaintiffs’ ability to modify their product labels without FDA preauthorization and by chilling and restricting protected speech.”

Although the case does not involve the federal warning labels that have been required for decades, it makes the puzzling argument that the FDA guidelines also violate the industry’s Fifth Amendment rights against self-incrimination.

While it is not unusual for big business to assert free speech rights to oppose regulations, this position is particularly galling when it comes from the tobacco industry. These are the companies, after all, that for decades concealed and denied the hazards of smoking, asserting it was their right to “believe” their products were non-addictive and did not cause cancer despite the mountain of evidence to the contrary. Their dishonest claims were made all the more fraudulent when documents came to light indicating that firms such as Brown & Williamson (now part of Reynolds American) knew about the dangers at least as far back as the early 1960s.

The issue of control over tobacco packaging was already fought, and the industry lost. In 2006 a federal court, finding that the industry had caused “an immeasurable amount of suffering,” ordered it stop labeling cigarettes with designations such as low tar, light and natural that gave the misleading impression that they were safe.

Tobacco companies began using techniques such as package coloring to get around the restriction. In 2010 a New York Times article on the practice quoted Prof. Gregory Connolly of the Harvard School of Public Health as saying the industry was “circumventing the law.” He added: “They’re using color coding to perpetuate one of the biggest public health myths into the next century.”

At the heart of the new case is the tension between public policies designed to discourage tobacco use and the continued existence of an industry which has to attract customers to survive. The industry’s lawsuit, with its assertion of free speech rights, proceeds from the assumption that producing and selling tobacco products is a legitimate activity. A more appropriate premise might be that tobacco is a public health menace that should be controlled as tightly as possible until the last smoker has kicked the habit and the companies can shut down.

Big Tobacco would do well to stop wrapping itself in the Bill of Rights and acknowledge that it is lucky it is still allowed to sell its deadly products at all.

Note: This piece draws from my new Corporate Rap Sheets on Reynolds American and Altria.

It took decades for the federal government to overcome tobacco industry deception and adopt warning labels for cigarette packages in the 1960s. It took three more decades before the Food and Drug Administration was given the authority to regulate both the content of tobacco products and their marketing.

Now a branch of the industry is seeking to turn back the clock with regard to a specific product. Swedish Match is petitioning the FDA to drop the customary dire warning requirements for its smokeless tobacco called snus, which is sold as small packages that the user tucks between the lip and the gums.

Giving in to the Swedish Match proposal for a “light” warning that in effect says that snus is not as harmful as cigarettes would begin to differentiate the regulation of different types of tobacco products. It would be a coup not only for Swedish Match but potentially for makers of e-cigarettes, who also claim to be selling something safer than regular cancer sticks. Swedish Match, by the way, does not sell cigarettes, but it does produce cigars and chewing tobacco.

Yet perhaps the worst impact of granting Swedish Match’s request is that it would begin to restore credibility to an industry whose level of irresponsibility is perhaps unmatched in the world of business. Let’s recall the history.

Warnings about the harmful effects of smoking date back at least to the early 1950s, when Reader’s Digest published a widely discussed article on the subject. Rather than address the underlying issues, Big Tobacco started promoting filtered cigarettes, especially the R.J. Reynolds brand Winston, as a supposedly safer alternative. Reynolds also tried to give a healthier allure to its unfiltered Camels with an ad campaign claiming they were smoked by more doctors than any other brand. Lorillard promoted its Micronite filter as the greatest protection in cigarette history (much later it came out that the filter contained asbestos).

The same thing happened after the publication of the famous 1964 Surgeon General report on the dangers of smoking. While refusing to acknowledge the growing body of evidence, the industry stepped up its marketing efforts and introduced new products, such as Philip Morris’s low-tar Merit brand, that deceived consumers into thinking they were less deleterious.

Along with the warning labels, Congress banned cigarette advertising on radio and television, yet the tobacco companies used other channels. Reynolds egregiously sought to hook youngsters with its ads featuring a friendly cartoon character named Joe Camel.

Philip Morris, whose parent company is now called Altria, took another tack that was also in its own way pernicious. Once it became clear that federal regulation was coming, the company jumped on the bandwagon but slowed it down by pushing for oversight only on marketing to children. The well-funded argument that smoking was a legitimate adult activity slowed the push toward more comprehensive regulation and caused countless deaths.

Although the industry eventually had to accept such regulation in the United States, it is doing its best to thwart protections elsewhere, especially in smaller and poorer countries. Philip Morris International, which was spun off by Altria into a separate company, has tried to bully nations such as Uruguay and Togo into abandoning strong anti-smoking policies by threatening to drag them into expensive legal proceedings under the auspices of the World Trade Organization.

Swedish Match may protest that it has not been involved in many of these practices, yet it is a dominant player in the market for chewing tobacco, which like cigarettes is linked to cancer. It is also worth noting that the company was built by Ivar Kreuger, whose financial empire turned out to be a Ponzi scheme that collapsed during the Great Depression.

Whether or not there are significant differences between the health effects of cigarettes and snus, federal officials should do nothing to weaken a regulatory system that remains vitally important for public health.

Note: This piece draws from my new Corporate Rap Sheet on Altria and Philip Morris International as well as a soon-to-be-posted one on Reynolds American.