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Price v. Philip Morris12/15/2005
like qualifying terms, unless the statement is accompanied by a clear and conspicuous disclosure of:
1. The `tar' and nicotine content in milligrams of the smoke produced by the advertised cigarette; and
2. If the `tar' content of the advertised brand is compared to that of another brand or brands of cigarette, (a) the `tar' and nicotine content in milligrams of the smoke produced by that brand or those brands of cigarette, and (b) the `tar' and nicotine content in milligrams of the lowest yield domestic cigarette." American Brands, 79 F.T.C. at 225.
The consent order further defined the term "tar" as "the total particulate matter in the mainstream smoke of cigarettes as determined by the testing method employed by the Federal Trade Commission in its testing of the smoke of domestic cigarettes." American Brands, 79 F.T.C. at 225.
The content of the consent order was slightly different from that of the order the FTC anticipated in its 1970 Report to Congress. Significantly, the FTC originally intended to require that any claim of low or lower tar be accompanied not only by the tar and nicotine content in milligrams, but also by the tar and nicotine content of the lowest yield domestic cigarette. See Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 21 (December 31, 1970). In the end, the order allowed the use of the words " `low,' `lower,' or `reduced' or like qualifying terms," so long as the tar and nicotine content of the cigarette being advertised was clearly and conspicuously disclosed. Only if the advertised brand was being compared to another specific brand or brands of cigarettes was the manufacturer required to disclose the additional information.
Later in 1971, after having reached a voluntary agreement with most cigarette manufacturers to disclose tar and nicotine levels in their advertising (and having obtained the compliance of American Brands and other nonsigners through the 1971 consent order), the FTC announced its intention to file complaints against six cigarette companies if they failed to display in their advertising, clearly and conspicuously, the same warning that Congress had already required on cigarette packages. Again, negotiations between the FTC and the major cigarette manufacturers resulted in the entry of a consent order. In re Lorillard, 80 F.T.C. 455 (1972). (In 1975, the FTC sought civil penalties against the six major cigarette manufacturers for violations of these consent orders. See United States v. R.J. Reynolds Tobacco Co., No. 76 Civ. 813 (JMC) (S.D.N.Y., February 20, 1981) (disposing of last remaining enforcement action after five other companies entered into consent judgment approved by the FTC).
In its 1971 Report to Congress, the FTC described the resolution of the American Brands dispute via consent order as part of its " egulatory activity" for the year. Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 13- 14 (December 31, 1971). In addition, the FTC reported under the heading of "Regulatory activity" its "extended negotiations" with "six proposed respondents" in the Lorillard matter. Settlement by consent order would "meet the public interest in this matter" and would "take effect much sooner than orders resulting from adjudicative proceedings." Such orders, the FTC observed, would "carry the force of law" and violation of the orders could carry civil penalties. The FTC did not comment on the effect or application of the orders on companies that were not parties thereto. Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 16 (December 31, 1971).
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