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Type of Litigation: Government Enforcement Action

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Public Ministry of Rio de Janeiro v. Rock World SA, Souza Cruz Ltda, and Vega Fina Tabacaria Eireli [Brazil] [November 02, 2020]

The Public Ministry in Rio de Janeiro presented a civil action against Rock World SA, Souza Cruz Ltda, and Vega Fina Tabacaria Eireli for illegal advertising in the festival "Rock in Rio" 2017. On November 2, 2020, the court concluded that the defendants engaged in unlawful advertising during the festival. The illegal advertising included (i) visually ostentatious advertising of smoking products and (ii) "mobile sellers.” On the other hand, the sale of a kit that included cigarettes and a lighter with the logo of "Rock in Rio" was not recognized as an illegal practice. The defendants were sanctioned as follows – (1) Defendants were fined R$ 2,000,000.00 for collective moral damages. For individual material and moral damages, each consumer will need to prove individually the actual damage suffered. (2) Defendants must carry out counter-advertising in partnership with public universities and hospitals informing consumers about the risks, prevention, and treatment of Chronic Obstructive Pulmonary Disease (COPD), and smoking cessation.

In addition to bringing this enforcement action against the illegal advertising that took place at the Rock in Rio 2017, the Public Ministry sought an interim judgment barring illegal promotional activities at the then upcoming Rock in Rio 2019 festival. In response to this request, the court issued a series of orders restricting the promotional activities at the 2019 festival.

ASA Ruling on British American Tobacco UK Ltd. [United Kingdom] [December 18, 2019]

Following complaints by leading health organizations, the UK’s Advertising Standards Authority (ASA) ruled that British American Tobacco (BAT) can no longer use any public Instagram account to promote e-cigarettes in the UK. The ruling includes BAT’s use of influencer marketing to advertise e-cigarettes and orders BAT to remove unlawful e-cigarette advertising content currently on Instagram.

UK regulations clearly prohibit online advertising of e-cigarettes, but allow a manufacturer to provide factual product information such as the name, content and price of the product on its own websites. The ASA ruling has clarified that public social media accounts, like @govype run by BAT, are not analogous to a website, and therefore, neither factual nor promotional content for e-cigarettes is permitted.

State of Maharashtra v. Sayyed Hassan Sayyed Subhan [India] [September 20, 2018]

The government appealed a Bombay High Court order that overturned police action prosecuting individuals for violations of the Maharashtra gutkha ban under the Indian Penal Code. The Supreme Court reversed the Bombay High Court's finding regarding Indian Penal Code (IPC) prosecution, noting that there is no prohibition on IPC prosecution merely because provisions in the Food Safety Standards Act prescribe penalties. The Supreme Court remanded consideration of specific IPC offenses against the individuals to the Bombay High Court.

Seema Sehgal v. Union of India [India] [August 21, 2018]

Homemaker, Seema Sehgal, seeks extension of the COTPA regulatory scheme to e-cigarettes. Cancer Patients Aid Association (CPAA), filed an impleadment application, and court admitted the association as a party. In its petition, CPAA submitted that regulating e-cigarettes will undermine efforts of state governments to prohibit such products and that a comprehensive ban on the manufacture, import, sale, distribution, storage and advertisement of e-cigarettes throughout India is imperative and in the public interest. On August 21, 2018, the court issued direction to the Ministry of Health & Family Welfare to indicate within a week the timeframe in which regulatory measures regarding Electronic Nicotine Delivery Systems (ENDS)/e-Cigarettes shall be undertaken.

United States v. Philip Morris USA Inc., et al. [United States] [October 05, 2017]

In 1999 the United States sued major U.S. tobacco companies for violating the Racketeer Influenced Corrupt Organization Act (RICO). The suit claimed tobacco companies had violated RICO for decades, by fraudulently misleading American consumers about the risks and dangers of smoking and secondhand smoke. In 2006, the U.S. District Court for the District of Columbia agreed, finding the tobacco companies did violate RICO and would continue to violate RICO.

As a means of preventing future RICO violations, the district court ordered the tobacco companies to issue corrective statements on five topics in which they had misled the public, including the adverse health effects of smoking and the addictiveness of smoking and nicotine. The companies challenged the language of the corrective statements ordered by the court and, in 2016, the district court affirmed the publication of the corrective statements.

Finally, in October 2017, the tobacco companies and U.S. Department of Justice reached an agreement on the details for implementing the corrective statements, which must begin to run on November 26, 2017. The agreement specifies the corrective statements that will be used in television and newspaper advertisements. To ensure the corrective statement are effective in reaching the public, the statements must be in the print and online Sunday edition of newspapers; must air on major television networks during high viewing times; and must appear in both English and Spanish. 

Australian Competition and Consumer Commission v. The Joystick Company Pty Ltd. [Australia] [May 02, 2017]

The Australian Competition and Consumer Commission successfully took action against an e-cigarette company for making false and misleading statements in violation of the Australian Consumer Law. The e-cigarette company stated on its website and in a YouTube video that its products did not contain carcinogens and toxic substances found in traditional tobacco cigarettes. 

In this decision, the court accepted the Commission’s recommendations and ordered the company to stop making statements that its products do not contain carcinogens and toxic substances for a period of three years. The court found that the company had no evidence to support its statements, which had the potential to mislead consumers who might not have purchased the products if they had known about the presence of these chemicals. Additionally, the court ordered the company to include information on its website about this decision for 90 days. Finally, the court fined the company $50,000 and its director $10,000. 

Australian Competition and Consumer Commission v. Social-Lites Pty Ltd [Australia] [May 02, 2017]

The Australian Competition and Consumer Commission successfully took action against an e-cigarette company for making false and misleading statements in violation of the Australian Consumer Law. The e-cigarette company stated on its website and in a YouTube video that its products did not contain carcinogens and toxic substances found in traditional tobacco cigarettes. 

In this decision, the court accepted the Commission’s recommendations and ordered the company to stop making statements that its products do not contain carcinogens and toxic substances for a period of three years. The court found that the company had no evidence to support its statements, which had the potential to mislead consumers who might not have purchased the products if they had known about the presence of these chemicals. Additionally, the court ordered the company to include information on its website about this decision for 90 days. Finally, the court fined the company $50,000 and its director $10,000. 

Australian Competition and Consumer Commission v. Burden [Australia] [May 02, 2017]

The Australian Competition and Consumer Commission successfully took action against an e-cigarette company for making false and misleading statements in violation of the Australian Consumer Law. The e-cigarette company stated on its website that its products did not contain harmful chemicals and carcinogens found in traditional tobacco cigarettes. 

In this decision, the court accepted the Commission’s recommendations and ordered the company to stop making statements that its products do not contain harmful chemicals and carcinogens for a period of three years. The court found that the company had no evidence to support its statements, which had the potential to mislead consumers who might not have purchased the products if they had known about the presence of these chemicals. Additionally, the court ordered the company to include information on its website about this decision for 90 days. Finally, the court fined the company $40,000 and its director $15,000. 

ASA Adjudication on Fontem Ventures [United Kingdom] [June 29, 2016]

Information about this decision coming soon. 

United States v. Philip Morris USA Inc., et al. [United States] [February 08, 2016]

In 1999, the United States filed a lawsuit in the U.S. District Court for the District of Columbia against the major cigarette manufacturers and related trade organizations alleging that defendants, while acting as an enterprise, fraudulently misled American consumers for decades about the risks and dangers of cigarette smoking and exposure to secondhand smoke in violation of the Racketeer Influenced Corrupt Organizations Act (RICO). In 2006, the court found that defendants violated RICO and that there was a reasonable likelihood that defendants would continue to violate RICO in the future. On appeal, the district court’s findings were upheld, in part, vacated, in part, and remanded, in part, to the district court. After the U.S. Supreme Court declined to hear appeals from both sides in the case in June 2010, the district court began to implement the 2006 final order.

As a means of preventing future RICO violations, the district court ordered the tobacco companies to issue corrective statements on five topics in which they had misled the public, including the adverse health effects of smoking and the addictiveness of smoking and nicotine. The companies challenged the language of the corrective statements ordered by the court. A previous decision upheld all of the corrective statements with the exception of the introductory sentence. In this decision, the district court found that a revised introductory statement submitted by the government is acceptable because it removes any reference to tobacco companies’ prior deceptive conduct. The judge castigated the tobacco companies for attempting to rewrite the corrective statements entirely, calling it a “ridiculous – a waste of precious time, energy, and money for all concerned – and a loss of information for the public.” The court also refused to change any of the terms in the previously agreed upon consent order.