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07/18/2022

Tobacco Companies Reach Deal With Justice Department Over Retail Messaging

The U.S. District Court for the District of Columbia will hold a hearing on the proposed agreement later this month.
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tobacco sales at retail

WASHINGTON, D.C.— Major tobacco companies have come to an agreement with the U.S. Department of Justice (DOJ) over tobacco-related messaging at retail, bringing a nearly two decades-long challenge to a close.

According to NACS, the agreement requires Altria, Philip Morris USA Inc., RJ Reynolds Tobacco and ITG Brands to supply court-ordered signs to stores they have contracts with and require those stores to post the signs for 21 months.

The pact covers the last remaining dispute from the lawsuit DOJ filed against Altria, Philip Morris USA Inc., and RJ Reynolds in the 1990s. NACS and the tobacco companies spent 17 years fighting any signage requirement through the litigation process and, along with the National Association of Tobacco Outlets, also participated in the negotiations that led to the agreement in order to advocate for retailers.

"This litigation has always put the retailers in a uniquely bad position," said Doug Kantor, NACS general counsel. "Retailers were not parties to the lawsuit and should not be burdened with a court-ordered remedy, but this negotiated outcome avoids even worse results that DOJ and public health groups were advocating."

As the association reported, the agreement calls for each store under contract with one of the manufacturers to post at least one sign carrying one of 17 different, pre-approved health messages that will be distributed at random to retailers around the country. Each store will be required to rotate to a new message halfway through the time period required in the agreement.

The manufacturers will be required to hire auditors to check whether the signs are properly posted, NACS added.

To read the agreement, click here. In addition, frequently asked questions about the issue can be found here.

A hearing on the proposed agreement will be held in the U.S. District Court for the District of Columbia on July 28 and 29. The court will then decide whether to accept the agreement and enter an order to implement it. The timing of the requirements for signs to be posted will depend on when the court decides whether to accept the agreement, NACS said.

Retailers may support or oppose the agreement in writing or at the hearing, it added.  

This is not the only messaging-related rule the tobacco industry has challenged in recent history. In June 2011, the Food and Drug Administration published a final rule requiring updated health warnings on cigarette packages and in cigarette ads. The graphic warnings feature a combination of text and images depicting some of the health risks of cigarette smoking.

However, that final rule was challenged in court by several tobacco companies and was ultimately vacated in August 2012 after the U.S. Court of Appeals of the District of Columbia held that the rule violated the First Amendment. In March 2013, the federal government announced its decision not to seek further review of the court's ruling.

Following another lawsuit filed by several public health groups, a judge in the U.S. District Court for the District of Massachusetts issued an order directing the agency to publish the proposed rule by August 2019 and issue a final rule in March 2020.

The deadline for tobacco companies to comply has been pushed back several times and now stands at April 9, 2023.