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Students at the University of Florida (UF) and the University of Central Florida (UCF) spent last Saturday morning raising their voices for justice for tobacco workers. Chanting�"Justice now!" and holding signs that read "Hasta la Victoria" ("Onward to Victory"), dozens of students marched and rallied on UF's Gainesville campus.
The students joined members of the Farm Labor Organizing Committee (FLOC), the Student/Farmworker Alliance and the National Farm Worker Ministry to demand justice for tobacco farm workers in North Carolina who suffer low wages and poor working conditions at the hands of Big Tobacco.
The rally followed a UF Student Senate resolution calling for a pay increase and better treatment of Immokalee farm workers, who pick the tomatoes used by Aramark, UF's food provider. "Somebody's got to fight for social justice," said UF junior Justin Wooten.
The students and activists wanted to send a message to Susan Ivey, CEO of Reynolds American, the parent of R.J. Reynolds, the nation's second-largest tobacco company. Ivey has refused to meet with FLOC members
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Fending off accusations it misappropriated the names of more than 185 indie rockers to promote cigarettes, Rolling Stone magazine on Thursday appeared to have one appellate justice solidly in its corner.
However, two votes are needed to win and one justice was absent during oral arguments in San Francisco's 1st District Court of Appeal. The third didn't tip his hand.
Rolling Stone was sued last year by a class of indie bands -- led by the San Francisco Bay Area's Xiu Xiu and Toronto's Fucked Up -- who claimed the magazine had traded on their names by using them in a November 2007 graphic/article juxtaposed with a four-page, fold-out advertisement by the R.J. Reynolds Tobacco Co. that touted Camel cigarettes and the manufacturer's collaborations with indie groups. . . .
Nonetheless, the bands claim Rolling Stone intentionally used their names to help R.J. Reynolds sell Camels and that the ad implied the bands endorsed the product.
Trying to buy a company that specializes in products that help people quit smoking may seem like a radical change for Reynolds American Inc.
But analysts said yesterday that it all depends on how Reynolds would potentially use and market cigarette-replacement products in gum, pouch and spray form made by that company, Niconovum AB.
Media reports have said that Reynolds is close to buying Niconovum, of Helsingborg, Sweden, for $44.5 million. The reports are based on comments by David Sweanor, a law professor at the University of Ottawa and a tobacco analyst. Sweanor could not be reached for comment.
Reynolds said it is against its policy to comment on speculation. Niconovum officials could not be reached for comment. . . .
Niconovum was formed in 2000 by Karl Olov Fagerström, who is considered a leading expert on smoking cessation and nicotine dependence. It is managed by many of the individuals who were pivotal in the development of Nicorette, a nicotine-replacement gum.
Although some analysts view Niconovum's products as primarily smoking cessation, the company says on its Web site that it "believes that there is a market for a range of nicotine-replacement therapy products that will deliver nicotine more quickly and effectively than those currently available, thereby giving the consumer a perceived better control of cravings."
The evolution of some health-advocacy groups from anti-smoking to anti-tobacco is ratcheting up the moralistic aspect of buying and consuming a legal product.
Bill Godshall, the executive director of SmokeFree Pennsylvania, said he believes that smokers and public health could benefit if Reynolds buys Niconovum or its patents.
"Its smoke-free nicotine products are 99.9 percent less hazardous alternatives to cigarettes, pose no risks to nonusers, and appear to be more smoker friendly than similar products marketed as smoking cessation aids,'' Godshall said.
It would be either one of the most cynical diversifications ever--or a brilliant stroke of synergy.
If a report in The Wall Street Journal is correct, America's second-largest seller of cigarettes may soon be peddling products that help people quit smoking. The Journal reported on Nov. 9 that Reynolds American (RAI), the distributor of Pall Mall, Camel, and Natural American Spirit cigarette brands as well as smokeless tobacco, is in "advanced talks" with Niconovum, a Swedish manufacturer of nicotine replacement products such as gum and mouth spray. University of Ottawa law professor David Sweanor told the Journal he was briefed by people close to the deal.
The move would mark the first time that a big tobacco company also sold smoking-cessation products, according to industry analysts. But it would be in line with the industry's efforts to diversify as cigarette purchases shrink in the U.S. One analyst referred to a purchase of Niconovum as a "cheap hedge" against the smoking decline. . . .
But as Morningstar's Gorham points out, Reynolds can make far more money convincing people to smoke than helping them quit. The cost per unit to produce cigarettes is extremely low—operating margins average 25%-30% industrywide, he says, which is high for consumer goods. (Pepsi (PEP), by comparison, which enjoys enormous scale and volume operating margins, reaches into the high teens, according to Gorham.)
It's unlikely that returns from smoking-cessation products can compete with that anytime soon. "I think we're talking 20 years-plus at this point before tobacco sales are offset by other sources," says Gorham.
Indeed, some view any talks between Reynolds and Niconovum as more of a publicity stunt, designed to place Reynolds in a better light.
Like a fast-food chain selling diet supplements or a gasoline company building electric cars, a major tobacco company is eyeing a surprising business: Helping the smokers who buy their products kick the habit.
Reynolds American Inc. , which sells the Camel and Pall Mall brands of cigarettes, is in talks to buy a Swedish company that makes nicotine gum and mouth spray designed to help people quit smoking by reducing their cigarette cravings, according to a report in The Wall Street Journal.
Reynolds could buy Niconovum AB for roughly $44.5-million (U.S.), according to University of Ottawa law professor and tobacco expert David Sweanor, who said he had spoken with someone close to the deal. A spokesperson for Reynolds declined to comment.
The deal would also mark a shift for cigarette companies, many of which embraced diversification decades ago but have changed course in recent years. . . .
The acquisition of Niconovum would give Reynolds another cigarette alternative.
In addition to the gum and mouth spray, the Swedish company also makes a Snus-like product called the Zonnic pouch, which has nicotine but no tobacco. Many countries in the European Union as well as Australia and New Zealand, ban oral tobacco, Prof. Sweanor said. The pouch could give Reynolds a way around those regulations.
"I think this may be a very profitable business. They're catering to the same crowd, essentially," said Indiana University's Prof. Beneish, who was a smoker for 30 years. "They have a captive audience. Trust me."
- When it became clear that the state budget was in crisis mode, three industries with much at stake in Harrisburg opened their wallets.
Gambling interests, natural-gas drillers, and tobacco companies have since January spent more than $4.5 million combined on lobbying efforts, according to expense reports filed last week with the state.
Those industries were among the few winners in a budget ravaged by the recession.
Casinos are poised to introduce poker and other newly legalized table games. Natural-gas drillers and tobacco companies fought off new taxes. . . .
Republican legislative leaders defeated the proposed cigar tax, along with one proposed for smokeless products such as chewing tobacco and snuff. Left standing was a new tax on little cigars - cigarillos.
In all, tobacco interests large and small spent nearly $1.5 million on lobbying from January through Sept. 30, records show.
Reynolds American Inc., whose subsidiary Conwood Co. is the nation's second-largest producer of smokeless tobacco products, devoted the most - $670,658.
A federal judge ruled Thursday that tobacco companies hoping to block new restrictions on their marketing have little chance of succeeding.
The companies had asked U.S. District Judge Joseph H. McKinley Jr. to issue a preliminary injunction in a lawsuit they filed in August claiming new tobacco regulations violate their right to free speech.
The companies, including two of the industry's three largest, are challenging provisions of a law that gave the U.S. Food and Drug Administration new authority over tobacco. In a 29-page decision, McKinley outlined the arguments in the lawsuit and found that blocking the provisions was not warranted. . . .
The companies say the law, which takes full effect over three years, prohibits them from using "color lettering, trademarks, logos or any other imagery in most advertisements, including virtually all point-of-sale and direct-mail advertisements." Their complaint also says the law prohibits tobacco companies from "making truthful statements about their products in scientific, public policy and political debates."
The tobacco makers say new mandated warnings for cigarettes would relegate their branding to the bottom half of cigarette packaging and make it "difficult, if not impossible, to see."
In its response to the lawsuit, the FDA said the new marketing rules do not restrict free speech and serve a greater public health interest.
Cigarettes' big three—Altria, R.J. Reynolds and Lorillard—are facing aggressive challenges from down trading and segment shifting in the convenience-store channel.
The nation's top three brands—Marlboro, Camel and Newport—are battling to hold onto market position in the convenience channel, some six months since Congress approved a record increase in the federal excise tax (FET) to finance expansion of the national children's insurance program, SCHIP.
Based on an exclusive survey conducted by CSP Daily News and UBS Tobacco Analyst Nik Modi, Lorillard appears to be the safest of the three.
Responding to the survey question asking, "Are you seeing substantial trade down from the big three premium brands?" half of the survey respondents said yes.
Asked which of the three premium brands are seeing the most negative pressure, about 40% named Marlboro specifically, and another 40% cited Camel or other Reynolds' brands such as Winston and Salem,
Is using smokeless tobacco just as harmful as smoking, or is it potentially a safer option?
Getting a definitive answer to that question has proved elusive despite centuries of medical research.
Resolving the issue, and providing clarity amid the heated rhetoric, has prompted a new series of medical studies sponsored by the National Cancer Institute.
One set focuses on whether such smokeless products as snus and the dissolvable products from R.J. Reynolds Tobacco Co., provide "a truly less-harmful alternative to conventional tobacco products, both at the individual and population level," according to the institute's grant application.
Another set, including one that was started Sept. 1 at Wake Forest University School of Medicine, is aimed at developing strategy to encourage reduced use or even quitting smokeless-tobacco products. Wake Forest is receiving a $2.9 million grant for its study.
Maura Payne, a spokeswoman for Reynolds, said that the company supports "well-designed studies" that could help develop science-based, tobacco-harm-reduction strategies." Payne said that Reynolds does not promote its new smokeless products as a way to quit smoking.
The institute said that the studies are necessary because "previous tobacco-use reduction efforts pursued by the public-health community were disadvantaged by incomplete knowledge and methods for evaluating the health impact of modified tobacco products."
R.J. Reynolds Tobacco Co. said today that it will raise the list price on its cigarette brands from 6 to 8 cents a pack for wholesale customers.
The price increase takes effect on Monday and affects all of its cigarette brands. . . .
The decision comes five days after Philip Morris USA announced a 6-cent a pack increase, which went into effect today.
"As marketing restrictions become stronger the pack becomes the best marketing tool," Hammond says. "When the words come off the pack, the industry relies on colors to a greater extent then they used to."
For example, Pall Mall recently removed descriptors like "full flavor" and "light," relying entirely on the color of the pack and the names of colors to identify each flavor.
"Of course, brands have always used colors," Hammond says. "The so called strengths of brands are aligned with the strengths of colors, and many smokers use colors as an indicator of risk. For example, red is perceived to be stronger than blue."
In other words, as the flavors get "lighter," so the do the colors. . . .
"Orange is a very interesting choice," Bansal-Travers says. "No other brand I can think of uses orange as a cigarette pack color, but orange is certainly the lightest that PM uses, creating a spectrum of color and trying to equate that with the spectrum of risk."
Primary design changes: Flavor descriptors, such as "Filter" and "Light," have been dropped, replaced with the names of colors.
Secondary design changes: The phrase "Famous American Cigarettes" has been moved to the bottom. While the logo and Latin phrases "Per aspera ad astra" ("Through hardships to the stars") and "In hoc signo vinces" ("By this sign you shall conquer") remain, the phrases "KING SIZE BOX" and "Wherever particular people congregate" have been removed from the front of the boxes.
For its Salem brand, manufacturer RJ Reynolds has changed the coloring of the packs and the descriptor terms.
Morris Moore
Good morning and thank you for joining us. Today we'll discuss Reynolds American's results for the third quarter and first nine months. We'll also review our revised full-year outlook. We'll discuss our results on both a reported and adjusted basis. A reconciliation of reported to adjusting earnings is on our press release which is on our website at www.reynoldsamerican.com.
Joining me this morning are RAI’s Chairman and CEO, Susan Ivey and our CFO, Tom Adams.
In a case with potentially major implications for scholars and publishers, a Stanford University professor who often serves as an expert witness against tobacco companies is fighting an effort by lawyers for the R.J. Reynolds Tobacco Company to obtain the manuscript of his unpublished and unfinished book on that industry.
A Florida state court judge has already authorized the tobacco company's lawyers to issue a subpoena requiring Robert N. Proctor, a Stanford professor of the history of science, to make his book manuscript available to them so they can comb it for possible material to use in cross-examining him in a civil lawsuit pending there.
But the lawyers for the plaintiffs suing the tobacco company last week filed a motion asking the court to reconsider that decision and protect Mr. Proctor from being forced to grant access to the unpublished manuscript. Their motion calls Mr. Proctor their "single most important witness" in their case against the tobacco company, and argues that forcing him to share the manuscript would violate his privacy, his free-speech rights, his academic freedom, and his rights as an author.
Mr. Proctor, for his own part, refused to produce the manuscript at a recent deposition in the case and has retained a San Francisco law firm to fight the subpoena—as well as any other efforts to obtain his book—in California state courts.
In an interview Monday, he said of the book: "It's my private thoughts. They are not organized yet. They are not in finished form." . . .
The Florida court where the case is pending, the state's Seventh Judicial Circuit Court in Volusia County, possibly could entertain arguments for and against the subpoena at a hearing scheduled for Thursday. . . .
Robert M. O'Neil, director of the Thomas Jefferson Center for the Protection of Free Expression at the University of Virginia and a veteran scholar of issues related to academic freedom, said Monday that the legal fight over the manuscript "has profound implications" for academe. . . .
Mr. Proctor said Monday that lawyers for the tobacco company have sought for more than a year to obtain the manuscript to his planned book, tentatively titled "Golden Holocaust: A History of Global Tobacco." . . .
In a deposition filed in connection with the Florida case, he describes himself as one of only two professors of history in the nation who regularly testify against the tobacco industry, and alleged that "the tobacco industry has spent years trying to harass, intimidate, and use multiple legal means to prevent me from testifying in litigation." He said that his book "will contain previously unpublished information regarding tobacco-industry practices,"
Golden Holocaust: A History of Global TobaccoTentative title of Robert N. Proctor's work-in-progress. RJR is battling in a Florida court for a sneak preview.
A state appeals court has upheld a San Francisco jury's award of $2.85 million in damages to the family of a woman who died of lung cancer after smoking cigarettes for 27 years, ruling that she relied on tobacco companies' claims that their products were safe.
In another development, San Francisco's ban on tobacco sales in drugstores survived a legal challenge from Philip Morris. City Attorney Dennis Herrera's office said the tobacco company had dropped its appeal of a ruling upholding the year-old ordinance.
The Ninth U.S. Circuit Court of Appeals in San Francisco upheld the ban last month, rejecting Philip Morris' argument that the city was effectively prohibiting tobacco advertising at drugstores in violation of freedom of speech. The court said the ordinance restricted only tobacco sales, not advertising.
A state appeals court in San Francisco is considering a separate suit by Walgreens, which says the ordinance discriminates against drugstores by allowing supermarkets and big-box retail stores with pharmacies to sell tobacco.
Another panel of the state appeals court ruled Wednesday in favor of the family of Leslie Whiteley, who sued R.J. Reynolds and Philip Morris before her death in 2000 at age 40.
Defendants Philip Morris Inc. (Philip Morris) and R.J. Reynolds Tobacco Company (R.J. Reynolds) appeal from judgments in favor of plaintiffs in a combined wrongful death and survival action by the estate and the surviving spouse and children of Leslie Whiteley (Whiteley), a smoker who was diagnosed with lung cancer in 1998 and who died in July 2000.
This is the second appeal by defendants. . . .
On retrial, the jury rendered verdicts in favor of plaintiffs on their causes of action for false promise and negligent misrepresentation. For the personal injury claims, the jury awarded Whiteley's estate $90,640 for past economic damages, which was increased to $225,000 based on a previous stipulation. It awarded Leonard Whiteley $30,000 for pre-death loss of consortium. The jury awarded plaintiffs damages of $2,345,964 on the wrongful death claims. Deadlocking on the issue of whether there was sufficient evidence of malice to warrant punitive damages against Philip Morris, the jury assessed $250,000 punitive damages against R.J. Reynolds on the false promise cause of action. Following a limited retrial of the punitive damages claim against Philip Morris, the jury found in favor of Philip Morris. Judgment was entered against R.J. Reynolds on July 13, 2007, and against Philip Morris on November 19, 2007. These consolidated appeals followed.
Defendants urge us to reverse the judgments, contending: (1) plaintiffs were collaterally estopped by a special verdict in Whiteley I from showing Whiteley's reliance upon false statements by agents of defendants and, therefore, the trial court erred in admitting evidence of such statements by various entities and organizations alleged to be agents of defendants; (2) the jury's findings of Whiteley's reliance on false promises or other misrepresentations by defendants was unsupported by substantial evidence; and (3) the personal injury action (as distinguished from the wrongful death action) was barred by the statute of limitations.
We shall affirm the judgments. . . .
A. Evidence at the Second Trial
Whiteley's deposition testimony was presented at both the first and second trials. She testified that, in February 1998, she had what she called "chronic bronchitis" for approximately a week. It was "a cold that got worse. As the symptoms got worse, then I went to seek medical care." She saw Dr. LaMonica one time at the Ojai Valley Community Health Center. Whiteley's testimony continued as follows:
"Q. Did Dr. LaMonica tell you that smoking was, in his opinion, a likely cause of your chronic bronchitis?
"A. Yes.
"Q. Was your chronic bronchitis at that time, in your opinion, causing you appreciable pain?
"A. Yes, it was.