Year: 1998

Lieff Cabraser represented the Attorneys’ General of Massachusetts, Illinois, Louisiana, Indiana, Rhode Island, Maine, and New Hampshire, and 18 cities and counties in California, including the City and County of San Francisco, the City of Los Angeles, and the City of San Jose, in litigation against Philip Morris, R.J. Reynolds, and other cigarette manufacturers.

The lawsuits were resolved as part of the landmark $206 billion Master Settlement Agreement (“MSA”) announced in November 1998 between the tobacco industry and the states’ attorney generals. Under the MSA, our clients recieved $42 billion to be paid over 25 years.

Marketing Restrictions Under the Master Settlement Agreement

The states, cities and counties sought both to recover the public costs of treating smoking-related diseases and to require the tobacco industry to undertake extensive modifications of its marketing and promotion activities in order to reduce teenage smoking. The marketing curbs, part of the MSA, consist of bans on billboards, transit ads, cartoon characters, targeting of minors, youth access to free samples, and paid-for product placement in movies, TV shows, plays and concerts. Tobacco brand-name sponsorships are also limited.

Commenting one year after approval of the settlement, Owen Clements, Chief of Special Litigation for the San Francisco City Attorneys’ Office, observed, “Just a few years ago, you’d see a dozen tobacco billboards en route to any airport, not to mention cigarette t-shirts and all sorts of products. Now they’re vanishing. They’re not a part of the cultural landscape anymore.”

Key Fact

Following the signing of the MSA, tobacco usage in California dropped significantly, by 60% from 2000 to 2002. Californians consume less than half the tobacco compared to the national average, and only 16% of Californians smoke.

Government Lawsuits Under the MSA

On June 6, 2002, in a lawsuit filed by California Attorney General Bill Lockyer against R.J. Reynolds Tobacco Company for violating the MSA, California Superior Court Judge Ronald Prager found that R.J. Reynolds had sought to avoid losing market share through an aggressive ad campaign that exposed teens to its advertising to the same degree as adult smokers. The Court ordered R.J. Reynolds to change its marketing practices and fined the company $20 million. Read a copy of this Order (pdf format).

Project SCUM Marketing Campaign

In 1997 in the California tobacco litigation, Lieff Cabraser served document requests on R.J. Reynolds seeking their current marketing data for Red Kamel. After months of litigation and following an order compelling production, R.J. Reynolds finally produced the documents. Inside the scores of boxes of documents produced and reviewed was the Project SCUM document.

The document showed that R.J. Reynolds targeted San Francisco area gay and homeless communities for special marketing efforts in the mid-1990s. The plan was labeled “Project SCUM” for “Subculture Urban Marketing.”

Project SCUM was highly offensive not only because of how it characterized homeless and gay communities, but also because R.J. Reynolds sought to market to the so-called ‘rebellious’ and ‘Generation X’ population in San Francisco. Project SCUM highlighted how the tobacco industry in the late 1990s was still targeting young adults for a lifetime of nicotine addiction.

Read a copy of the Project SCUM document (pdf format).

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