Retailers should note that Philip Morris USA Inc., Altria Group, Inc., RJ Reynolds Tobacco Company have reached an agreement with the United States Department of Justice on warning signs to be placed in retail stores selling manufacturers’ cigarettes. to warn consumers about the health effects of tobacco. These are called “Corrective Statement Panels” because they are intended to make “corrections” to manufacturers’ alleged deliberate deceptions about the dangers of smoking from the 1950s through the early 2000s. Manufacturers have challenged these allegations and the case has been in litigation since September 1999. Although the exact wording and other details of the agreement have yet to be released, a joint petition for a status conference has been filed by the parties in the United States District Court for the District of Columbia reveals that the proposed settlement will cover nine main elements:
- the location and number of corrective statement panels adjacent to the main cigarette merchandising display at participating outlets;
- the installation of warning signs near the main entrance of the participating point of sale;
- sign design;
- the length of time signs are to be posted;
- the rotation of brands in participating points of sale;
- the posting of corrective statement signs in Spanish in certain locations;
- verification by a third party of compliance with the regulations;
- the consequences of non-compliance with the rules; and
- the creation of a working group to deal with implementation and compliance issues.
The genesis of these negotiations goes back to 2006, when, in United States v. Philip Morris United States and. Al., the district court ordered that “corrective statements” be displayed by cigarette manufacturers on packages, in print and television media, on their websites, and in retail stores in the form of counter displays and signs. headers. On appeal, the circuit court overturned the retail store claim because the district court failed to sufficiently consider the impact of the claim on retailers, particularly with respect to the requirement that retailers sacrifice counter space for displays. The issue went back and forth between the circuit and the lower court, which was told about the issue in 2014 and again in 2018, but no resolution to the statements had been reached until this week. This development comes just ahead of a scheduled evidentiary hearing on the matter which was due to be held in June this year.
The parties’ joint motion says they will seek the district court’s opinion on whether affected retailers should be given notice of the settlement and given an opportunity to be heard, and on a trial schedule in the event that settlement cannot be finalized. The National Association of Convenience Stores and the National Association of Tobacco Outlets have participated in the negotiations between the manufacturers and the federal government and will participate in the status conference to be scheduled at the “nearest convenience”.
Tobacco retailers should closely monitor future developments and potential opportunities to influence regulation and/or guidance regarding the posting of corrective statement signs.