U.S.

States Sue Over Tobacco Ads

By CBSNews.com staff CBSNews.com staff

March 19, 2001 / 3:02 PM EST / CBS

Five states Monday filed six lawsuits against cigarette-maker R.J. Reynolds for advertising that allegedly violated the national tobacco settlement, the New York attorney general said.

The lawsuits, which were filed by the states of California, Washington, Arizona, New York and Ohio, single out ads by R.J. Reynolds Tobacco in magazines, on matchbooks and at car race tracks.

The states allege these ads violate the terms of a $206 billion settlement agreement with 46 states in which cigarette manufacturers agreed to phased-in restrictions on outdoor advertising and brand-name sponsorships, as well as curbs on the distribution of free samples and apparel and merchandise with brand-name logos.

Spending The Money

A CBS News analysis shows more than half of the states have locked up their share of the national tobacco settlement money in trust funds and are using only the interest to pay for anti-tobacco programs.

According to the New York attorney general's statement, Arizona, California, New York, Ohio and Washington state are suing over R.J. Reynolds' year-round advertising at race tracks, which the states claim violates the settlement's 100-day limit on outdoor advertising.

New York's specific objection is to ads at the Watkins Glen International Speedway in Watkins Glen, N.Y. where R. J. Reynolds sponsors the Winston Cup every August but allegedly posts ads all year.

California also is filing a second action charging R.J. Reynolds with breaching the settlement by placing ads in magazine like Rolling Stone and Sports Illustrated that target youth.

Click here for a timeline on the war against big tobacco.

Ohio's suit concerns ads on matchbook covers, which the state claims violates the settlement's ban on putting ads on merchandise.

A statement by the New York attorney general, Eliot Spitzer, claims that "One of the primary reasons for the continued use of tobacco products by children has been the advertising and marketing practices of the tobacco industry."

The offices of other attorneys general were contacted by CBS News but could not immediately provide comment.
In a statement, R.J. Reynolds chairman and CEO Andrew Schindler said "We are confident that our cigarette advertising and marketing fully comply with the (settlement). The enforcement actions announced today, if successful, would not resolve youth-smoking issues, but would severely and unnecessarily restrict legitimate competition for adult smokers' business."

The company contends it only advertises in magazines with 75 percent adult readership. It claims that matchbook ads don't target kids because matches should only be provided to adults. And it says that signs saying "Winston Cup," although involving a cigarette brand name, don't fall under the 100-day limits on outdoor ads.

R.J. Reynolds Tobacco Holdings used to be part of R.J.R./Nabisco, but was spun off in 1999.

In late trading, R.J. Reynolds Tobacco Holdings stock was down 28 cents to $54.93, or roughly one-half percent on the day.