USA v PHILIP MORRIS, et. al.: JOINT STATUS REPORT REGARDING CORRECTIVE STATEMENTS, Jul 11, 2017

July 11, 2017 5:11 pm by Gene Borio

The PDF is Here

EXCERPT:

First, since this Court issued Order #67-Remand, the parties have discussed steps to move forward expeditiously to the implementation of the corrective statements. The parties plan to update and submit for this Court’s consideration proposed Consent Order language to incorporate the revised text across all executions (newspapers, television, websites, and onserts); and to make other conforming changes to the Consent Order. Among possible changes to the Consent Order, Plaintiffs have proposed that the parties replace the agreed-upon Trigger Date mechanism with a date certain for implementation to begin in newspapers, television, and company websites, and a second date certain for implementation to begin on onserts; and that the parties remove the tobacco companies’ reservation of rights to appeal.

. . .

The parties respectfully request that the Court require them to apply their best efforts, by August 11, 2017, to submit an agreed upon (Proposed) Second Superseding Consent Order, or to provide a further status report to the Court outlining the status of finalizing mockups and any other remaining issues concerning the implementation of the corrective-statements remedy in these media channels. The parties are attaching a (proposed) Order for the Court to consider and, if acceptable, to enter.

END EXCERPT

FULL TEXT:

Case 1:99-cv-02496-GK Document 6211 Filed 07/11/17 Page 1 of 8

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

v.

PHILIP MORRIS USA INC., et al.,

Defendants.

Civil Action No. 99-CV-2496 (GK)

JOINT STATUS REPORT REGARDING CORRECTIVE STATEMENTS

Pursuant to Order #67-Remand (Dkt. No. 6208; issued June 27, 2017), the United States and Public Health Intervenors (collectively “Plaintiffs”); Philip Morris USA Inc., Altria Group, Inc., and R.J. Reynolds Tobacco Company (individually, as successor in interest to Brown & Williamson Tobacco Corporation, and as successor to Lorillard Tobacco Company) (collectively “Defendants”); and ITG Brands, LLC, Commonwealth Brands, Inc., and Commonwealth-Altadis, Inc. (collectively “Remedies Parties”) respectfully submit this joint status report regarding the Corrective Statements remedy.

First, since this Court issued Order #67-Remand, the parties have discussed steps to move forward expeditiously to the implementation of the corrective statements. The parties plan to update and submit for this Court’s consideration proposed Consent Order language to incorporate the revised text across all executions (newspapers, television, websites, and onserts); and to make other conforming changes to the Consent Order. Among possible changes to the Consent Order, Plaintiffs have proposed that the parties replace the agreed-upon Trigger Date mechanism with a date certain for implementation to begin in newspapers, television, and company websites, and a

Case 1:99-cv-02496-GK Document 6211 Filed 07/11/17 Page 2 of 8

second date certain for implementation to begin on onserts; and that the parties remove the tobacco companies’ reservation of rights to appeal.

Plaintiffs have identified at least one potential timing issue. In conjunction with and to facilitate the parties’ discussions about the Consent Order, the parties have started the process of exchanging mock-ups to accompany the anticipated Consent Order. New mockups for company websites are expected to take several weeks longer to prepare than new mockups for the other media channels, and two of those other media channels, newspapers and television, will need less preparation time but will require a certain amount of time to arrange media buys. As a result, plaintiffs have proposed that if the parties do not reach agreement on website mockups by the recommended filing date below, the parties should submit a (partial) proposed consent order accompanied by mockups for newspapers and television, and setting a date certain for implementation to begin in those media formats, with the expectation that website mockups (and companion consent-order language) would be submitted at a later date. For their part, Defendants and the Remedies Parties have not agreed to any of Plaintiffs’ suggested changes and continue to maintain that all parties’ agreement is necessary to amend the implementation order by consent.

The parties intend to address these and other issues as part of their discussions.

The parties respectfully request that the Court require them to apply their best efforts, by August 11, 2017, to submit an agreed upon (Proposed) Second Superseding Consent Order, or to provide a further status report to the Court outlining the status of finalizing mockups and any other remaining issues concerning the implementation of the corrective-statements remedy in these media channels. The parties are attaching a (proposed) Order for the Court to consider and, if acceptable, to enter.

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Second, in Order #67-Remand, the Court invited any “objections or comments” to the text of the Corrective Statements set forth in pages 5-7 of the Court’s June 27 Memorandum Opinion (Dkt. No. 6209). The parties have differing views on this issue, as outlined below. The parties jointly ask that the Court consider and rule on the comments below to avoid any delays in the work described in the previous paragraph. Page 2 of the attached (proposed) Order provides separate options for the Court to credit or disregard the comments of Defendants and the Remedies Parties.

Defendants’ and Remedies Parties’ position: In its most recent corrective-statements decision, the D.C. Circuit held that the prior topic descriptor in the preamble to Statement C “was not previously considered and is indeed backward-looking.” 855 F.3d 321, 328 (D.C. Cir. 2017). The D.C. Circuit offered three alternative topic descriptions that it held “would be permissible under both RICO and the First Amendment.” Id. at 329. This Court adopted the first of the three alternatives proposed by the D.C. Circuit—“about low tar and light cigarettes being as harmful as regular cigarettes.” The corrective statements, of course, constitute the Court’s conclusions, which Defendants and the Remedies Parties are compelled to disseminate in a variety of media. Defendants and the Remedies Parties intend to fully comply with the Court’s order regarding the content and dissemination of these statements. For these reasons, Defendants and the Remedies Parties defer to the Court’s judgment as among the three alternative topic descriptions suggested by the D.C. Circuit. Because the Court has solicited comments, Defendants and the Remedies Parties observe that the second of the alternative descriptions—“about the harmfulness of low tar and light cigarettes”— is simple, clear, and direct. 855 F.3d at 329. It also uses fewer words than the other alternatives. The Court has previously noted that shortening the preamble text may make reading the statements easier for the public. Feb. 8, 2016 Mem. Opinion (Dkt. 6185), at 6.

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The option the Court previously chose and that Plaintiffs prefer is awkwardly phrased to incorporate the conclusion that low-tar and light cigarettes are “as harmful as regular cigarettes.” That is superfluous, as the Court’s conclusion regarding the comparative effects of such cigarettes is made clear in the first bullet point.

Plaintiffs’ position: For two major reasons, the United States and the Public Health Intervenors concur with the Court’s “strong view” that Option 1 is the best Statement C introduction that the Court of Appeals suggested. Mem. Op. accompanying Order #67-Remand at 4. First, Statement C is meant to compare the health effects of light/low-tar cigarettes as against the health effects of regular cigarettes. As the Court explained when it set out the topic in 2006, Statement C is to address “the lack of any significant health benefit from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild,’ and ‘natural,’ cigarettes.” United States v. Philip Morris USA Inc., 449 F. Supp. 2d 1, 938-39 (D.D.C. 2006) (emphases added), aff’d in relevant part, 566 F.3d 1095 (D.C. Cir. 2009) (per curiam), cert. denied, 561 U.S. 1025 (2010). A “lack of any significant benefit” necessarily indicates a comparison to something else. The Court of Appeals found that the tobacco companies’ “false statements” about “whether ‘light’ cigarettes were less harmful than other cigarettes” suggested that they themselves consider such comparisons “material.” United States v. Philip Morris USA Inc., 566 F.3d 1095, 1122 (D.C. Cir. 2009) (per curiam) (emphasis added). The Option 1 introduction correctly frames Statement C as a comparison of light/low-tar as against regular cigarettes; while Option 2 would wrongly frame it as focused just upon light/low-tar cigarettes.

Plaintiffs also consider Option 1 the better introduction because it is simpler and easier to understand. A reference to “harm” is easily understood by consumers. Slightly more

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complex—and the only natural way to use a cognate of “harm” to make a comparison—is to say that one thing is “as harmful as” something else, as Option 1 does. But the key to the tobacco companies’ preferred Option 2 is the word “harmfulness,” which is the hardest term (and least likely to be used in most consumers’ daily lives) of the three. It makes no sense for the Court to drop the central point of Statement C—its “as harmful as” comparison between light/low-tar and regular cigarettes—to further complicate the text with the word “harmfulness.” The Court was correct to choose Option 1, and the companies make no claim that reconsideration is warranted on grounds such as mistake of law or fact, changed circumstances, or manifest error.

Third, the parties are in agreement that the final versions of corrective statements to be published by the Remedies Parties as onserts and on websites should include the slight modifications regarding ITG Brands, LLC ordered in Order #56-Remand, conformed to accord with the D.C. Circuit’s most recent corrective-statements decision. The language provided in Order #67-Remand did not include this modification, but the (Proposed) Second Superseding Consent Order that the parties expect to submit will reflect that language.

The parties respectfully ask the Court to consider the attached (proposed) Order as well as the comments set forth above with respect to the topic description for Statement C and fill out and enter the (proposed) Order accordingly.

Dated: July 11, 2017 Respectfully submitted,

/s/ Anand Agneshwar

Anand Agneshwar

ARNOLD & PORTER KAYE SCHOLER LLP

250 West 55th Street

New York, NY 10019-9710

Telephone: (212) 836-8011

Fax: (212) 836-8689

Miguel A. Estrada (D.C. Bar No. 456289)

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GIBSON, DUNN & CRUTCHER LLP

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036-5306

Telephone: (202) 955-8257

Fax: (202) 530-9016

Thomas J. Frederick

WINSTON & STRAWN LLP

35 West Wacker Drive

Chicago, Illinois 60601-9703

Telephone: (312) 558-6700

Fax: (202) 558-5700

Attorneys for Defendants Altria Group, Inc. and Philip Morris USA Inc.

Peter J. Biersteker (D.C. Bar No. 358108)

JONES DAY

51 Louisiana Avenue, N.W.

Washington, D.C. 20001-2113

Telephone: (202) 879-3939

Fax: (202) 626-1700

Jeffrey A. Mandell (D.C. Bar No. 999791)

STAFFORD ROSENBAUM LLP

222 West Washington Avenue, Suite 900

Madison, Wisconsin 53703

Telephone: (608) 256-0226

Fax: (608) 259-2600

Geoffrey K. Beach (D.C. Bar No. 439763)

WOMBLE CARLYLE SANDRIDGE & RICE, LLP

One West Fourth Street

Winston-Salem, NC 27101

Telephone: (336) 721-3600

Fax: (336) 721-3660

Attorneys for Defendant R.J. Reynolds Tobacco Company (individually, as successor in interest to Brown & Williamson Tobacco Corporation, and as successor to Lorillard Tobacco Company)

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Case 1:99-cv-02496-GK Document 6211 Filed 07/11/17 Page 7 of 8

Robert J. Brookhiser, Jr. (D.C. Bar No. 202168)

Elizabeth B. McCallum (D.C. Bar No. 451361)

BAKER & HOSTETLER LLP

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036-5304

Telephone: (202) 861-1500

Fax: (202) 861-1783

Attorneys for Post-Judgment Parties Regarding Remedies ITG Brands, LLC, Commonwealth Brands, Inc. and Commonwealth-Altadis, Inc.

JOSHUA WILKENFELD, Acting Director

ANDREW CLARK, Assistant Director

Consumer Protection Branch

___/s/_____________________________

DANIEL K. CRANE-HIRSCH

Trial Attorney

Civil Division

United States Department of Justice

PO Box 386

Washington, DC 20044-0386

Telephone: 202-616-8242 (Crane-Hirsch)

Facsimile: 202-514-8742

E-mail address:

daniel.crane-hirsch@usdoj…

Attorneys for Plaintiff United States of

America

____/s/_____________

Katherine A. Meyer (D.C. Bar 244301)

MEYER GLITZENSTEIN & EUBANKS LLC

4115 Wisconsin Ave., N.W. Suite 210

Washington, DC 20016

202-588-5206

meyer@meyerglitz.com

Attorneys for the Public Health

Plaintiff-Intervenors

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Case 1:99-cv-02496-GK Document 6211 Filed 07/11/17 Page 8 of 8

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on July 11, 2017, I filed a copy of the foregoing, which will electronically serve all counsel of record who have entered an appearance in this case.

Dated: July 11, 2017 Respectfully submitted,

/s/ Anand Agneshwar

Anand Agneshwar

ARNOLD & PORTER KAYE SCHOLER LLP

250 West 55th Street

New York, NY 10019-9710

Telephone: (212) 836-8011

Fax: (212) 836-8689

Attorney for Defendants

Altria Group, Inc. and Philip Morris USA Inc.

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