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Price v. Philip Morris12/15/2005
(see 36 Fed. Reg. 784 (1971)). See also Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 18- 19 (December 31, 1970).
The voluntary approach was seen by the FTC as a more efficient means of accomplishing its goal. As then-chairman Fitzpatrick said, "Trade regulation rules, if contested in the courts, might take a long time to become effective. A workable voluntary plan by the industry could be put into effect immediately." (As late as 1997, the voluntary agreement remained in effect. See Cigarette Testing; Request for Public Comment, Federal Trade Commission, 62 Fed. Reg. 48,158 (September 12, 1997). Nothing in the record suggests that the agreement has been terminated since that date.) As a result of this voluntary agreement, PMUSA and the other major manufacturers of cigarettes have, since 1971, included information on tar and nicotine yields as measured by the FTC method on packaging and in advertising. See Federal Trade Commission, Staff Report on the Cigarette Advertising Investigation, May 1981, at 4-5.
The descriptor "low tar" began to appear in cigarette advertising by the late 1960s as the industry responded to public interest in lowered tar and nicotine by adopting innovations, such as the use of filters, aeration holes, or wrapping paper that burned more quickly. Each of these innovations caused reductions in the amounts of tar and nicotine measured by the FTC method. As noted above, the FTC and industry members were well aware that the FTC method did not replicate actual smoking behavior. They were also aware that smokers who switched from a brand that was higher in tar and nicotine to a brand with one of these features tended to compensate by smoking more cigarettes or by smoking differently.
In 1969, the FTC informed cigarette manufacturer American Brands of its intent to charge the company with engaging in unfair, misleading, and deceptive advertising with respect to the tar content of its Pall Mall and Lucky Strike cigarettes. (American Brands, Inc., was formed in 1969 as the parent company of the American Tobacco Company, which traced its corporate roots to the founding of W. Duke & Sons in North Carolina in 1864.)
Shortly thereafter, but before a formal complaint was filed, the Code Authority of the National Association of Broadcasters sought an advisory opinion from the FTC. See 16 C.F.R. ยง1.1 (permitting any person, partnership, or corporation to request advice from the FTC "with respect to a course of action which the requesting party proposes to pursue"). By letter to the FTC, the Code Authority inquired whether the FTC had formulated a policy regarding the use of words such as "low," "lower," and "reduced" in describing the level of tar and nicotine in cigarettes. American Brands, Inc., 77 F.T.C. 1623 (1970). The FTC responded, by letter, that "the use of `low' and `less' or similar words when describing tar and nicotine content, create an imprecise picture, which, absent a full and fair disclosure, could lead to a mistaken conclusion that the advertised brand is lower in tar and nicotine than many other brands." American Brands, Inc., 77 F.T.C. at 1624. The FTC also stated that the "degree of imprecision created would vary," depending on what representations were being made and the actual tar and nicotine levels of the advertised cigarette, but that "imprecision could almost always be avoided" if "clear and conspicuous disclosure" was made of the tar and nicotine content, in milligrams, of the advertised cigarette, that brand to which it was being compared, and the domestic cigarettes with the highest and lowest yields. American Brands, Inc., 77 F.T.C. at 1624. The FTC further advised the Code
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