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Vermont Recovers $8.3 Million In Penalties From Tobacco Giant R.J. Reynolds

CONTACT: William H. Sorrell, Attorney General, (802) 828-3173

January 6, 2014

In a case with nationwide implications that has been praised by anti-smoking advocates, Vermont has recovered $8.3 million in civil penalties and permanent injunctive relief from R.J. Reynolds Tobacco Company. The recovery follows a successful lawsuit filed by Vermont Attorney General Bill Sorrell in 2005 charging Reynolds with making unsubstantiated advertising claims concerning the health consequences of using one of its tobacco products. In 2010, the trial court found that Reynolds did not conduct sufficient scientific studies to support its advertising claims that a non-traditional cigarette, Eclipse, would reduce smokers’ chances of developing cancer. The court later awarded the State $8.3 million in civil penalties for the violations and issued a permanent injunction against Reynolds to prevent similar conduct in the future. The court was in the process of considering the State’s request for attorneys’ fees and costs incurred in the lawsuit when the parties reached a settlement.

Under the settlement agreement, Reynolds will pay the State a total of $14 million. Vermont will recover $8.3 million in civil penalties from the settlement. The remaining amount is for attorneys’ fees and costs and 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 which advanced the costs incurred in the lawsuit. The permanent injunction against Reynolds will remain in effect.

“This was a long and hard, but successful fight. Reynolds crossed the line and it cost them. At a time when tobacco companies are trying to find ways to hook new smokers, Vermont has sent a message that advertising tobacco products with unsubstantiated health-benefit claims is illegal and will not be tolerated,” said Attorney General Sorrell.

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.

“Tobacco companies, including R.J. Reynolds, promised in the state tobacco settlement to stop deceiving the public about the health risks of their products, but it takes a determined attorney general like Bill Sorrell to enforce this promise,” said Susan Liss, Executive Director of the Campaign for Tobacco-Free Kids. “This case is a timely reminder of the industry’s long history of deception that has cost millions of lives. Health claims made by the tobacco industry should never be taken on faith and must be subject to rigorous regulatory review to ensure they are supported by sound science and protect public health.”

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