Tobacco Companies Must Admit They Lied on Products, Ads

U.S. tobacco companies including Altria Group Inc. (MO)’s Philip Morris USA were told by a judge they must publish warnings with their products, in advertisements and on their websites saying they lied to the public about the health hazards of smoking.

U.S. District Judge Gladys Kessler in Washington yesterday ruled on the text of so-called corrective statements proposed by the Justice Department. According to the ruling, one states: “Tobacco companies intentionally designed cigarettes to make them more addictive.” Another says: “All cigarettes cause cancer, lung disease, heart attacks, and premature death.”

The statements stem from the government’s 1999 case against the tobacco industry. In 2006, Kessler found the defendants, also including Reynolds American Inc. (RAI)’s R.J. Reynolds Tobacco and Lorillard Inc. (LO)’s Lorillard Tobacco, violated anti- racketeering law by conspiring to hide cigarettes’ risks.

Kessler previously ordered the companies to stop marketing cigarettes as “light” and “low-tar” and to make statements about the health effects of smoking in newspapers and magazines and on materials attached to cigarette packages.

Court’s Mandate

“This court has heeded its mandate to fashion corrective statements that are purely factual and uncontroversial and are directed at preventing and restraining the defendants from deceiving the American public in the future,” Kessler said in yesterday’s 55-page ruling.

Each of the five categories of statements begins with a similar introduction stating that “a federal court has ruled that the defendant tobacco companies deliberately deceived the American public” then says “here is the truth” before going into specifics on the dangers of smoking, health effects of exposure to secondhand smoke, the addictiveness of nicotine and the manipulation of cigarette design and composition.

One statement among those on adverse health effects reads: “More people die every year from smoking than from murder, AIDS, suicide, drugs, car crashes, and alcohol, combined.”

Yesterday’s ruling didn’t set a deadline for publication. The types of media the companies use to convey commercial messages changed dramatically in the six years since her initial ruling, the judge said. She told the parties to report to her by March 1 on efforts to devise a plan to disseminate the statements.

Company Spokesmen

Brian May, a spokesman for Richmond, Virginia-based Altria, said the company is studying the judge’s decision. He declined to comment further. Bryan Hatchell, a spokesman for R.J. Reynolds Tobacco, said the company was reviewing the decision and considering its next steps.

Charles Miller, a Justice Department spokesman, said in an e-mail message that the department is pleased with the ruling.

The case is U.S. v. Philip Morris USA Inc., 99-cv-02496, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington federal court at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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