Highlights
- In a court filing on December 4, coordinated with several other states, Attorney General Brown sought an order to show cause preventing Reynolds from any further use of cartoon imagery in promoting cigarettes through the company's Camel "Farm Rocks" campaign. The centerpiece of the suit is a nine-page, special fold-out section in the Nov. 15th edition of Rolling Stone magazine, which contained Farm Rocks ads and numerous cartoon images that are prohibited by the Master Settlement Agreement. During a hearing in open court on Dec. 4, Reynolds committed to shut down its Farm Rocks website by Dec. 5, not use any Farm Rocks images in print advertising or at live events until the litigation is resolved, and not distribute any Farm Rocks music CDs. Hearings in several other states' cases against Reynolds were postponed when Reynolds agreed to nationwide relief pending settlement discussions.
- Application for Order to Show Cause
[PDF 991 kb / 2 pg] - Memorandum of Points and Authorities. [PDF 631 kb / 14 pg]
- Application for Order to Show Cause
- On October 23, the Attorney General joined 41 other attorneys general in an agreement with Kroger, the nation’s largest grocery chain with 2,468 supermarkets in 31 states under two dozen banners and 779 convenience stores in 15 states under 5 banners. All but 92 of the convenience stores are company-owned. Nearly 500 Kroger stores are operating in California under the Ralph’s, Food 4 Less, Foods Co., and Quik Stop names. The agreement requires Kroger to implement comprehensive youth prevention tobacco retailing practices in its company-owned stores. The company will also take a number of steps to prevent youth access to tobacco in its franchise outlets. Our office took the lead in the negotiations with Kroger. The Kroger "Assurance of Voluntary Compliance" is the eleventh such agreement produced by an ongoing, multi-state enforcement effort. Previous agreements cover all 7-Eleven, CVS, Wal-Mart, Walgreens and Rite Aid stores, and all gas stations and convenience stores operating under the Conoco, Phillips 66, 76, Exxon, Mobil, BP, Amoco, ARCO and Chevron brand names, in the signing states. A couple of years ago we reached a separate litigation settlement with Safeway. Combined, these agreements cover over 80,000 retail outlets across the nation.
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Ninth Circuit rejects antitrust challenge to the MSA in Sanders v. Brown.
In a unanimous, published decision issued on September 26, 2007, the U.S. Court of Appeals for the Ninth Circuit upheld a U.S. District's Court's dismissal of a case brought by Steve Sanders on behalf of all California smokers. Sanders alleged that the 1998 tobacco Master Settlement Agreement created a cartel of the major U.S. cigarette makers, allowing them to charge "supra competitive" prices for their product. The appellate court concluded that Sanders had not alleged sufficient facts to show that the MSA and two related state laws violated the federal Sherman Act. The court also held that the state Attorney General and the tobacco company defendants are immune from liability under the Sherman Act because the MSA is a litigation settlement that was approved by a state court and the two state laws are acts of the state legislature. More [PDF 112 kb / 27 pg]
- California Attorney General Jerry Brown has reached a settlement with U.S. Smokeless Tobacco Company (USSTC). The settlement, which was approved by the San Diego Superior Court on August 17, resolves California's lawsuit alleging that USSTC violated the landmark 1998 Smokeless Tobacco Master Settlement Agreement by, among other things, promoting its Skoal brand name through sponsorship of National Hot Rod Association (NHRA) drag racing events at which minors compete. Central to the settlement was the NHRA's recent decision to change its official rules starting in 2008 so that persons under 18 can no longer compete in any race at the national events Skoal sponsors. USSTC, without admitting any liability, agreed to pay $1.5 million in costs to the state, and further agreed to withdraw its brand name sponsorship of national events if at any time the NHRA changes it rules to again permit minors to race. Finally, USSTC has agreed never to expand its brand name sponsorship beyond the one series, one competition and one car that it now sponsors. More [PDF 481 kb" / 10 pg]
- On May 7, 2007, Attorney General Brown, joined by 36 other attorneys general, praised Beam Global Spirits and Wine, Inc., for adopting new advertising standards intended to reduce exposure to underage persons. Breaking from its competitors, the largest distiller in the U.S., announced that it will make sure that no more than 25% of the audience for any of its TV, radio or print advertisements is under 21 (the current industry standard is 30%) and that no more than 15% of the annual average audience for its TV, radio, and print advertising is underage. Beam's voluntary commitment comes after more a year of meetings between representatives of Beam and the California Attorney General's Office. Over two years ago the attorneys general called on the alcohol industry to stop overexposing youth to alcohol ads, as the Institute of Medicine had recommended in 2003. In March of this year, acting Surgeon General Kenneth Moritsugu urged the industry to stop disproportionately exposing youth to ads for alcoholic beverages. In addition, Beam will not introduce or market any flavored malt beverages (sweetened, flavored alcoholic drinks, also known as alcopops, which the AMA and others have found to be particularly popular with teenage girls), will not advertise within 500 feet of schools, playgrounds, or places of worship, will not market its products on college campuses or in connection with Spring Break events, and will adopt enhanced standards for advertising at promotional events and restrictions on brand name merchandise.
- On March 26, 2007, Attorney General Brown and the attorneys general of 38 other states and the District of Columbia filed comments on proposed federal regulations governing the tax classification of cigars and cigarettes. Last May the states petitioned the federal government to close a regulatory loophole that has increased youth and adult smoking of “brown” cigarettes. The petition points out a regulatory loophole that allows manufacturers to evade marketing restrictions and higher taxes applying to cigarettes. In proposed regulations, the federal Alcohol and Tobacco Tax and Trade Bureau proposes revised definitions for cigars and cigarettes to ensure that mislabeled “little cigars” –which are actually cigarettes wrapped in brown paper—are classified, taxed and priced as cigarettes. More. [PDF 137 kb / 11 pg]
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