Vermont Fines Reynolds Over Eclipse Marketing

Published in CSP Daily News

Ordered to pay state $8 million in penalties

MONTPELIER, Vt. -- In a lawsuit brought by the Vermont Attorney General's Office, a Vermont Superior Court judge has ordered R.J. Reynolds Tobacco Co. to pay the State of Vermont $8.3 million in penalties for violating Vermont's consumer protection laws. Judge Dennis Pearson imposed penalties based on what it said is Reynolds' deceptive advertising of one of its tobacco products, Eclipse, as a "risk-reduction" cigarette.

The judge also issued an injunction that prohibits Reynolds from making "risk-reduction" claims for its tobacco products without supporting studies that have been accepted by the scientific community.

The ad reads the "cigarette may [emphasis added] present less risk of cancer, chronic bronchitis and possibly emphysema.*"

The asterisk refers readers to this statement: "Eclipse is not perfect. For instance, we do not claim that Eclipse presents smokers with less risk of cardiovascular disease or complications with pregnancy. As everyone knows, all cigarettes present some health risks, including Eclipse."

Pearson found that Reynolds committed thousands of violations by using deceptive "reduced-risk" claims to promote a nontraditional cigarette, Eclipse, through an extensive multi-media advertising campaign: in print ads placed in nationwide publications, on a website Reynolds maintained for over four years, in direct mail materials it sent to Vermont consumers and on cigarette packages of Eclipse sold in Vermont. He also found that Reynolds continued making what he said are illegal statements for more than two years after receiving a letter from 40 attorneys general demanding that Reynolds stop.

In an earlier ruling in March 2010, Pearson found that Reynolds violated consumer protection law and a prior court order because it did not have sufficient scientific studies to support its advertising claims that Eclipse "would" reduce smokers' chances of developing cancer. In the latest ruling, Pearson concluded that Reynolds should be required to pay substantial civil penalties for its violations and that an additional injunction should issue against Reynolds to prevent similar conduct by Reynolds in marketing other tobacco products in the future.

"We are disappointed with the judge's ruling and are considering our options in this case, including our right to appeal," Bryan Hatchell, a spokesperson for Winston-Salem, N.C.-based Reynolds American, told CSP Daily News.

The case is State of Vermont v. R.J. Reynolds Tobacco Co., Vermont Superior Court, Chittenden Unit (Burlington, Vt.).