Schwab v. Philip Morris

Amidst allegations of fraudulent marketing and deceptive practices by cigarette manufacturers, a lawsuit under the Racketeer Influenced and Corrupt Organizations Act (RICO) was brought forth by current and former smokers. The class alleged the tobacco companies duped smokers into believing that “light” cigarettes were less harmful to them. Despite lingering questions about when consumers became aware of the deception, class certification was approved, and the court sanctioned the use of statistical evidence to establish liability and damages,. This case highlights the ongoing battle between public health concerns and corporate accountability in the tobacco industry.

Schwab et al. v. Philip Morris, Inc., et al., 449 F. Supp. 2d 992 (E.D.N.Y. 2006).

  • United States
  • Sep 25, 2006
  • U.S. District Court, Eastern District of New York

Parties

Plaintiff Barbara Schwab (class action)

Defendant

  • Philip Morris, Inc.
  • R.J. Reynolds Tobacco Co.
  • Brown & Williamson Tobacco Corp.
  • Lorrilard Tobacco Co.
  • Liggett Group, Inc.
  • America Tobacco Co.
  • Altria Group, Inc.
  • British American Tobacco (Investments) Ltd.

Legislation Cited

Related Documents

Type of Litigation

Tobacco Control Topics

Substantive Issues

Type of Tobacco Product

None

"As plaintiffs' experts properly concede, the cited studies do not definitively resolve the question of the link between promotion of "light" cigarettes by defendants and smoking rates. The data they contain do, however, provide a reasonable basis for the experts' inference that there is such a connection. The experts' testimony will "assist the trier of fact" by showing the jury one inference—though not the only one—it could draw from those studies. The jury need not accept the experts' opinions and will be so instructed. Defendants also challenge plaintiffs' reliance on defendants' internal documents, which suggest that defendants were aware that "light" cigarette smokers were potential quitters, and adjusted their marketing to deter them from quitting. These documents state, for example: "[L]ow tar cigarette smokers ... are potential cigarette quitters . . .. And more of them than the average have tried to quit smoking. Since low tar smokers are an expanding share of the market, their greater desire to quit smoking poses a special problem for the industry." "A Study of Public Attitudes Toward Cigarette Smoking and the Tobacco Industry in 1978," May 1978, Bates 501565967-6019 at 6008 (Pls.' Class Cert. Mem. Ex. 71). And: Smokers remain prepossessed by exactly the same concerns that brought about the proliferation of successful lighter brands. They, presumably, remain open to and need new ways of delivering LESS.... It is useful to consider lights more as a third alternative to quitting and cutting down—a branded hybrid of smokers' unsuccessful attempts to modify their habit on their own.. Defendants are correct that these documents do not purport to quantify the impact of marketing "light" cigarettes on quit or initiation rates. They are unsuitable for an expert purporting to demonstrate such a statistically determined impact. They would be admissible, however, to demonstrate defendants' beliefs. Using them, in conjunction with actions taken (e.g., advertising expenditures) and results (e.g., smoking rates, dominant position of "light" cigarettes), a jury could properly conclude that the introduction and marketing of "light" cigarettes was intended to, did, and does affect the prevalence of smoking."