R.J. Reynolds Co. fined $20 million for ads targeting teens
Thursday, June 6, 2002
Associated Press WriterSAN DIEGO (AP) -- A judge fined R.J. Reynolds Co. $20 million Thursday for violating the terms of the 1998 national tobacco settlement by running magazine ads aimed at teen-agers.
The state Attorney General's office, which filed suit against the nation's No. 2 tobacco company last year, asked the judge to fine Reynolds $25 million and ban it from advertising in 50 magazines read by teens.
"This is the story of a company that refused over a long period to change its policies and practices as regards to teen exposure," Deputy Attorney General Karen Leaf said in closing arguments last month. "They have advertised in magazines very popular with teen-agers such as Motorcyclist, Hot Rod, and Spin."
The national tobacco settlement with 46 states makes no specific mention of magazine advertising but includes a ban on tobacco companies taking "any action, directly or indirectly, to target youth."
Superior Court Judge Ronald Prager found Reynolds violated that agreement.
Lawyers for Reynolds contended that such a restriction on advertising would violate the company's First Amendment rights.
"They want you to hold us in contempt and fine us $20 million for exercising a constitutional right," attorney Jeh Charles Johnson told the judge last month. "In this country, that is censorship."
Attorneys for Reynolds denied that the company deliberately targeted teens in its $200 million magazine ad campaigns for Camel cigarettes and other brands following the 1998 settlement.
Reynolds said its intended targets are young adults. Company policy forbids ads in magazines with youth readership of more than 25 percent. However, Reynolds lawyers conceded that an unintended consequence of targeting young adults is that some teens are likely to see its ads.
Expert witnesses testifying for the state said teens were often more likely than adults to see Reynolds' advertising, suggesting that the company was exploiting a loophole to reach youths.
"They were doing a better job of reaching teens than reaching their stated young adult target," said Leaf. "Substantial youth exposure cannot be explained away as incidental."
Reynolds had U.S. sales of $8.6 billion in 2001. It has about 25 percent of the American market through brands that include Camel, Winston, Doral and Salem.
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