TOBACCO CONTROL LAWS

Texas v. American Tobacco Company

The State of Texas is seeking to recover costs incurred in providing medical care and other benefits to its citizens, including costs associated with the Medicaid program, as the result of the citizens' use of cigarettes and smokeless tobacco products. Defendants are tobacco companies and public relations firms. The State of Texas’s Second Amended Complaint seeks to impose liability against Defendants for their manufacturing, advertising, distributing, and selling tobacco products in the United States. In response to the allegations, Defendants filed motions to dismiss the complaint contending the State failed to state a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO) and other legal grounds. The District Court allowed the State to proceed with its claims under RICO while dismissing claims under antitrust laws, consumer protection statutes, and other theories.

State of Texas v. American Tobacco Co., 14 F.Supp.2d 956 (E. D. Tex., 1997).

  • United States
  • Sep 8, 1997
  • U.S. District Court, Eastern District of Texas, Texarkana Division
View Case History Download Document

Parties

Plaintiff State of Texas

Defendant

  • American Tobacco Co.
  • R.J. Reynolds Tobacco Co.
  • Brown & Williamson Tobacco Corp.
  • BAT Industries, PLC
  • Philip Morris, Inc.
  • Liggett Group, Inc.
  • Lorrillard Tobacco Co., Inc.
  • United States Tobacco Co.
  • Hill & Knowlton, Inc.
  • Council for Tobacco Research-USA, Inc.
  • Tobacco Institute, Inc.

Legislation Cited

Racketeer Influenced and Corrupt Organizations (as amended), 18 USC Ch. 96

Texas Business and Commerce Code

Texas Deceptive Trade Practices-Consumer Protection Act

Texas Product Liability Act

Related Documents

None

Type of Litigation

Health Care Cost Recovery
Governments or insurance agencies may seek reimbursement from the tobacco companies for health care costs related to tobacco. The most famous example is the case brought by individual states in the U.S.A. that resulted in the Master Settlement Agreement.

Tobacco Control Topics

Advertising, Promotion and Sponsorship
Measures restricting any form of direct or indirect tobacco advertising, promotion and sponsorship. (See FCTC Art. 13)
Liability
Measures dealing with criminal and civil liability, including compensation. (See FCTC Art. 19)

Substantive Issues

Right to Health
A violation of the right to the enjoyment of the highest attainable standard of health. Public health advocates may claim the public’s right to health is violated by weak tobacco control measures, industry tactics, or an organization’s or smokers’ actions.
Right to Commerce
A violation of the right to carry on trade, business, or profession of a person’s choice. This right may also be called the right to free enterprise or economic freedom. The industry may argue that a business should be able to conduct its business without government regulation, including whether or not to be smoke free.
Right to Access to Information
A violation of the public’s right to information. The tobacco industry may claim that advertising, promotion or sponsorship, or packaging regulations limit the industry’s ability to communicate information to their customers and therefore infringes on the customer’s right to receive information, and to distinguish one product from another. Alternatively, public health advocates may claim that tobacco industry misinformation violates their right to accurate information or that government must be transparent in its dealings with the tobacco industry.
Consumer Protection Violation

Any violation of a law designed to ensure fair trade, competition, or the free flow of truthful information in the marketplace. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue.

Industry-Perpetrated Fraud
The tobacco industry may have perpetrated a fraud upon the public or the courts by presenting false information or deliberately hiding known-facts.
Legal Product
Tobacco is a legal product and the tobacco industry is a legal industry.
Acceptance of Known Risk

A plaintiff’s liability may be limited where she has accepted the risks and consequences of her behavior.  The tobacco industry may argue that the dangers of smoking are well known, so liability should be limited.

Type of Tobacco Product

None

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