Vermont nets $8.3M in penalties from R.J. Reynolds lawsuit
The state has recovered $8.3 million in penalties under a settlement with the R.J. Reynolds Tobacco Co. over deceptive advertising, the Attorney General's Office said Monday.
The settlement is the result of a 2005 lawsuit over the company's marketing of the Eclipse brand cigarette.
The state received $14 million overall with the remaining amount going to attorneys' fees and costs that will be divided among the Vermont Attorney General's Office, other state attorneys general offices and a private attorney that worked on the lawsuit, along with the National Association of Attorneys General Tobacco Enforcement Fund, a news release said.
A Vermont judge in 2010 ruled that Reynolds had intentionally misled customers through direct mail marketing, print and Internet ads, and ads on the cigarette packs that touted Eclipse as a reduced-risk cigarette.
"The best choice for smokers worried about their health is to quit," one ad read. "The next best choice is to switch to Eclipse."
Other marketing messages included claims that smoking Eclipse -- because it "primarily heats rather than burns tobacco" -- produces less toxic smoke than other cigarettes. That "may present less risk of cancer, chronic bronchitis, and possibly emphysema," according to Reynolds' ads.
Such unsubstantiated claims violate Vermont's consumer protection laws and the state's 1998 consent decree pursuant to the Master Settlement Agreement.
That 46-state settlement, in addition to mandating the country's four largest tobacco companies pay billions of dollars in compensation to states for treating tobacco-related illnesses, imposed restrictions on their promotional practices.
Reynolds made its deceptive "less risk" claims in print ads placed in nationwide publications, on a website promoting the product, in direct mail materials sent to Vermont consumers and on cigarette packages of Eclipse sold in Vermont, a news release said.
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