Opinion ID: 3135178
Heading Depth: 3
Heading Rank: 2

Heading: The tar and nicotine content in milligrams of the lowest and highest yield domestic cigarettes; and

Text: 3. If the tar and nicotine content of the advertised cigarette is compared to any other specific cigarette, the brand name and tar and nicotine content in milligrams of the smoke produced by such other cigarettes.” Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 21 (December 31, 1970). One result of the advisory opinion rendered to the Code Authority, according to the Report, was that several television commercials had been withdrawn and that only two brands made comparative claims in broadcast advertisements during 1970. Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 21 (December 31, 1970). Subsequently, when the formal complaint against American Brands was filed, the FTC accused the company of creating the false impression that its cigarettes were low in tar when, in fact, Pall Mall Gold 100s and Lucky Filters contained approximately 20 and 21 milligrams of tar, respectively, at a time when the brand containing the lowest level of tar contained only 4 milligrams. In re American Brands, Inc. , 79 F.T.C. 225 (1971). By this time, the voluntary agreement had been reached, but American Brands had not signed on to it. The dispute between the FTC and American Brands was resolved in 1971, with the entry of a consent order that required American Brands to cease and desist from: “Stating in advertising that any cigarette manufactured by it, or the smoke therefrom is low or lower in ‘tar’ by use of the words ‘low,’ ‘lower,’ or ‘reduced’ or like qualifying terms, unless the statement is accompanied by a clear and conspicuous disclosure of: 1. The ‘tar’ and nicotine content in milligrams of the smoke produced by the advertised cigarette; and 2. If the ‘tar’ content of the advertised brand is compared to that of another brand or brands of cigarette, (a) the ‘tar’ and nicotine content in milligrams of the smoke produced by that brand or those brands of cigarette, and (b) the ‘tar’ and nicotine content in milligrams of the lowest yield domestic cigarette.” American Brands , 79 F.T.C. at 225. The consent order further defined the term “tar” as “the total particulate matter in the mainstream smoke of cigarettes as determined by the testing method employed by the Federal Trade Commission in its testing of the smoke of domestic cigarettes.” American Brands , 79 F.T.C. at 225. The content of the consent order was slightly different from that of the order the FTC anticipated in its 1970 Report to Congress. Significantly, the FTC originally intended to require that any claim of low or lower tar be accompanied not only by the tar and nicotine content in milligrams, but also by the tar and nicotine content of the lowest yield domestic cigarette. See Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 21 (December 31, 1970). In the end, the order allowed the use of the words “ ‘low,’ ‘lower,’ or ‘reduced’ or like qualifying terms,” so long as the tar and nicotine content of the cigarette being advertised was clearly and conspicuously disclosed. Only if the advertised brand was being compared to another specific brand or brands of cigarettes was the manufacturer required to disclose the additional information. Later in 1971, after having reached a voluntary agreement with most cigarette manufacturers to disclose tar and nicotine levels in their advertising (and having obtained the compliance of American Brands and other nonsigners through the 1971 consent order), the FTC announced its intention to file complaints against six cigarette companies if they failed to display in their advertising, clearly and conspicuously, the same warning that Congress had already required on cigarette packages. Again, negotiations between the FTC and the major cigarette manufacturers resulted in the entry of a consent order. In re Lorillard , 80 F.T.C. 455 (1972). (In 1975, the FTC sought civil penalties against the six major cigarette manufacturers for violations of these consent orders. See United States v. R.J. Reynolds Tobacco Co. , No. 76 Civ. 813 (JMC) (S.D.N.Y., February 20, 1981) (disposing of last remaining enforcement action after five other companies entered into consent judgment approved by the FTC). In its 1971 Report to Congress, the FTC described the resolution of the American Brands dispute via consent order as part of its “[r]egulatory activity” for the year. Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 13-14 (December 31, 1971). In addition, the FTC reported under the heading of “Regulatory activity” its “extended negotiations” with “six proposed respondents” in the Lorillard matter. Settlement by consent order would “meet the public interest in this matter” and would “take effect much sooner than orders resulting from adjudicative proceedings.” Such orders, the FTC observed, would “carry the force of law” and violation of the orders could carry civil penalties. The FTC did not comment on the effect or application of the orders on companies that were not parties thereto. Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 16 (December 31, 1971). By the early 1970s, in addition to including the tar and nicotine content numbers in their packaging and advertising in accordance with the voluntary plan and the 1971 and 1972 consent orders, several manufacturers were advertising their products as being “low” or “lower” in either or both tar and nicotine. Vantage, True, and Doral, for example, were advertised as low tar and nicotine cigarettes. Pall Mall Extra Mild, Silva Thins, Pall Mall Gold 100s, Lucky Ten, Carlton, and Iceberg 10 were advertised as low or lower in tar. Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 5 (December 31, 1973). In its 1974 Report to Congress, the FTC noted that “as the manufacturers of Raleighs, Kools, Pall Malls, Viceroy’s and Marlboros are doing, Winston now offers a Winston Light with lowered ‘tar’ and nicotine content.” Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 5 (December 31, 1974). By 1978, the FTC was reporting to Congress that low tar cigarettes, which it defined as those with 15 milligrams or less of tar, had increased in market share from 2% in 1967 to 28% in 1978. Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 3 (1978). In addition, the FTC noted that “[m]arketing shifts to lower ‘tar’ and nicotine cigarettes may be another way of assessing the effects of health warnings.” The increasing market share of the low tar brands was seen as an indication that the public health message was reaching consumers. The FTC also noted, however, that “[w]hile there is evidence suggesting that cigarettes with lower ‘tar’ and nicotine are less hazardous, the evidence is not conclusive and even the lowest yield of cigarettes presents health hazards much higher than would be encountered without smoking at all.” Federal Trade Commission, Report to Congress Pursuant to the Public Health Cigarette Smoking Act, at 3 (1978). By 1979, the FTC was reporting that the market share of low tar cigarettes had increased to 40.9%. Federal Trade Commission, Report to Congress Pursuant to the Federal Cigarette Labeling and Advertising Act, at 8 (1979). In this report, the FTC provided data on the total advertising expenditures and market shares for cigarettes with 15, 12, 9, 6, and 3 milligrams of tar. The report noted that advertisers sometimes described cigarettes with 3 milligrams or less of tar as “ultra low ‘tar.’ ” Federal Trade Commission, Report to Congress Pursuant to the Federal Cigarette Labeling and Advertising Act, at 11 (1979). In a footnote, the FTC stated that it had not defined “ ‘ultra-low tar’, or any term related to ‘tar’ level except for ‘low tar’, which the FTC defines as 15.0 mg. or less tar.” Federal Trade Commission, Report to Congress Pursuant to the Federal Cigarette Labeling and Advertising Act, 1979, at 11 n.8 (1979). “As a result,” the FTC observed, “advertisers use a variety of terms to distinguish among ‘tar’ levels.” Federal Trade Commission, Report to Congress Pursuant to the Federal Cigarette Labeling and Advertising Act, at 11 n.8 (1979). (An identical footnote appeared in the FTC’s 1980 Report to Congress. Federal Trade Commission, Report to Congress Pursuant to the Federal Cigarette Labeling and Advertising Act, at 11 n.8 (November 15, 1982). The FTC also employed the term “low ‘tar’ ” when it issued a press release on December 15, 1981, announcing the release of a report entitled “Report of ‘Tar,’ Nicotine and Carbon Monoxide of the Smoke of 200 Varieties of Cigarettes.” The lead paragraph in the press release stated that “Test results released today by the Federal Trade Commission show an increase in the number of cigarettes with low ‘tar,’ nicotine and carbon monoxide levels.” In addition, the report showed that 150 of the 200 brands tested had 15 milligram or less tar, compared to 125 of 187 brands tested the previous May. FTC Press Release–FTC Cigarette Report Shows More Brands on Market with Low “Tar,” Nicotine, Carbon Monoxide Levels (December 15, 1981). Over the years, the FTC conducted multiple investigations regarding the use of tar and nicotine levels and of descriptors such as “lights” and “low tar” in cigarette advertising. Such investigations took place in 1976, 1981, 1988, and 1992. In 1981, the FTC concluded that the warning on cigarette packages and in cigarette advertising was not effective and did not provide sufficient information to consumers regarding the health risks of smoking. Federal Trade Commission, Staff Report on the Cigarette Advertising Investigation, May 1981, at 4–7. The staff report concluded that even though warnings and disclosure of FTC test measurements of tar and nicotine were required by the FTC, the then-current state of cigarette advertising might be deemed deceptive under section 5 of the FTC Act because a substantial segment of the purchasing public was likely to be deceived. Federal Trade Commission, Staff Report on the Cigarette Advertising Investigation, May 1981, at 4–17. This conclusion was based on data in the report indicating that a large portion of the public lacked sufficient knowledge of the hazards of cigarette smoking. Federal Trade Commission, Staff Report on the Cigarette Advertising Investigation, May 1981, at 4–21, 4–36. The Commissioners unanimously agreed that this staff report should be transmitted to Congress. With only one Commissioner objecting, the staff report was released to the public. The entire Commission endorsed the substance of the report. See letter from David A. Clanton, Acting Chairman of the FTC, to George Bush, Vice President (May 21, 1981) (transmitting the staff report to the Senate). Nevertheless, neither the FTC nor Congress acted upon this staff suggestion that cigarette advertising under the then-current FTC policy and regulations should be deemed deceptive. Also in 1981, the FTC began an investigation of Barclay cigarettes. The investigation was triggered by complaints from manufacturer Brown & Williamson’s competitors, who claimed that the design of the Barclay filter caused it to falsely register very low tar measurements on the FTC smoking machine. Federal Trade Comm’n v. Brown & Williamson Tobacco Corp. , 778 F.2d 35, 37 (D.C. Cir. 1985). The FTC determined that the Barclay claim of 1 milligram of tar was false and deceptive and attempted to require Brown & Williamson (B&W) to state an estimated tar content of 3 to 7 milligrams. B&W refused, but changed its advertisements to state that the 1 milligram tar measurement was obtained using a method recognized by “independent laboratories.” Brown & Williamson , 778 F.2d at 38. The FTC thereafter sought an injunction to prevent such advertising and the district court granted injunctive relief. The Court of Appeals, although affirming the finding that B&W violated section 5 of the FTC act ( Brown & Williamson , 778 F.2d at 43), reversed on first amendment grounds ( Brown & Williamson , 778 F.2d at 45). After the 1988 investigation, the FTC recommended to Congress that it not adopt a proposed amendment to the Labeling Act that would have permitted states to impose additional duties with respect to such advertising. The FTC argued that allowing individual states to impose their own rules would conflict with the FTC program. In the 1992 investigation, the FTC considered whether the use of terms such as “low tar” and “light” in cigarette advertising should be banned because they were deceptive, given what was known about the limits of the FTC method and the real world phenomenon of compensation by smokers. The FTC concluded, however, that if the use of such terms was substantiated by FTC method results, they were not false, unfair, or misleading under the provisions of the FTC Act. In the course of at least two of the investigations, the FTC reexamined the test method and considered whether the protocol should be changed to render it a more accurate representation of human behavior, given the changes in cigarette design. In both cases, the FTC solicited public comment on the FTC method. The first reexamination occurred in 1977 and was triggered by the suggestion of Lorillard, Inc., that the protocol of the FTC method be changed so that the cigarette being tested would not be inserted quite as far into the machine. Lorillard’s concern was that when its cigarettes were inserted to the prescribed depth, the machine blocked the ventilation holes, resulting in a higher tar and nicotine rating than if the holes had remained uncovered. In the end, Lorillard was the only industry member to advocate altering the standard insertion depth. The FTC concluded that the protocol should not be changed. The agency reiterated its 1967 statement that the purpose of the testing was not to predict the tar and nicotine exposure of any individual smoker but, rather, to determine the amount of tar and nicotine generated when the cigarette was smoked by a machine under a prescribed protocol. 43 Fed. Reg. 11,856 (March 22, 1978). Noting that innovations such as aerated filters had complicated the task of providing comparability among cigarette brands, the FTC concluded that “a change in the insertion depth would cause a lack of continuity with previous test results.” 43 Fed. Reg. 11,856-57 (March 22, 1978). Further, the FTC noted that if a consumer “smoked each different cigarette the same way, he would inhale ‘tar’ and nicotine in amounts proportional to the relative values of the FTC figures.” 43 Fed. Reg. 11,856 (March 22, 1978). Thus, “in the absence of information indicating that a new insertion depth would be me more consistent with the manner in which smokers insert cigarettes in actual use,” the FTC decided not to modify the protocol. 43 Fed. Reg. 11,857 (March 22, 1978). In the end, the FTC concluded this investigation by issuing an advisory opinion stating that the tar values set forth in cigarette advertisements must be consistent with the latest applicable FTC tar number, based on the FTC methodology, and that any tar and nicotine claims not so substantiated were not permitted. See In re Lorillard , 92 F.T.C. 1035 (1978). The second reexamination of the FTC method occurred in the early 1980s, when some manufacturers began using channel ventilation systems rather than air holes. The channels remained open when the cigarette were inserted in the machine, yielding very low numbers. Competitors complained that the results were inaccurate because the channels did not remain open when the cigarette was in the hands of an actual smoker. In addition to initiating the Barclay investigation, noted above, the FTC invited public comment on this development and on possible modifications of its method that might render it a more accurate representation of actual smoking behavior. 48 Fed. Reg. 15,953-54 (April 13, 1983). The FTC also asked for comments on whether such modifications might result in unintended consequences or affect further innovation in cigarette design. 48 Fed. Reg. 15,954-55 (April 13, 1983). In addition, the FTC sought comment on the possibility of using a system of ranges or “bands” of tar content, as opposed to specific numerical values expressed in milligrams of tar. Finally, the FTC reiterated its long-standing position that its ratings were intended to be relative, not absolute, even as it posed the question: “should consumers be advised that the cigarettes’ actual ‘tar’ delivery depends on how it is smoked?” 48 Fed. Reg. 15,955 (April 13, 1983). Comments were received not only from those in the cigarette industry, but also from a number of health organizations. The opinions expressed were widely disparate, ranging from a call for development of a testing system that did approximate actual smoking behavior to a suggestion that all such testing be abolished. In response to the idea of a “banding” system, which would categorize cigarettes as high tar, medium tar, low tar, and ultra low tar, several manufacturers noted that this would tend to concentrate brands near the upper level of each range, in contrast to the existing system that gave manufacturers an incentive to create a product that would deliver the lowest possible level of tar. In the absence of a consensus on any means of eliminating or reducing the limitations of the FTC test method, the FTC made no changes to its testing methodology. The issue of cigarette labeling and advertising rules remained status quo until February 27, 1992, when The Coalition on Smoking OR Health (made up of the American Heart Association, the American Lung Association, and the American Cancer Society), filed a petition with the FTC in which it sought the issuance of an administrative complaint against PMUSA and other tobacco companies pursuant to section 5 of the FTC Act. Specifically, the Coalition alleged that PMUSA’s labeling and advertising of one of its low tar products and similar labeling and advertising by other manufacturers were false and misleading because the use of terms such as “low tar,” “light,” and “ultra low tar” falsely implied that these cigarettes were safer than other products. The Coalition charged that the failure of PMUSA and other manufacturers “to disclose that while the tar yield of their low tar cigarettes may be less than other tobacco-related products, there are numerous known carcinogens in the constituents of these tobacco products, carcinogens which pose a health hazard to the consumer,” and that this failure to make such additional disclosures “is a material omission in violation of the Federal Trade Commission Act.” Petition of The Coalition on Smoking OR Health before the Federal Trade Commission, par. 25 (February 27, 1992). The FTC responded to the Coalition’s petition by means of a letter from C. Lee Peeler, the Associate Director of the FTC. Peeler’s letter stated that after giving careful consideration to the questions raised in the Coalition’s petition, the FTC had asked the National Cancer Institute (NCI) to convene a “consensus conference” on this topic. Letter from C. Lee Peeler to Matthew L. Myers, Counsel to Coalition on Smoking OR Health (August 8, 1994). The National Cancer Institute Conference on the FTC Cigarette Test Method was also brought about by the request of Representative Henry A. Waxman, chairman of the Subcommittee on Health and the Environment of the House Committee on Energy and Commerce, who asked the NCI to convene a conference to review the FTC’s method of determining the relative tar and nicotine content of cigarettes. At the “direction of the Commission,” the FTC chairman wrote to the NCI director, noting the substantial overlap between the issues identified by Chairman Waxman and those the FTC was then examining. The FTC chair asked that the consensus conference “provide a comprehensive review of the existing scientific evidence on issues relating to low-tar and ultra-low tar cigarettes.” The letter further asked that the conference consider whether the “current rating system is sufficiently flawed as to pose harm to consumers who rely on the ratings.” Among the list of specifically suggested topics for the conference, the letter listed: “are low-tar cigarettes (cigarettes rated at 15 mg. or less of tar) less dangerous than high-tar cigarettes (those rated at more than 15 mg. of tar) and, if so, what is the extent of their health benefit?” and: “are ultra low-tar cigarettes (cigarettes rated at 6 mg. or less of tar) less dangerous than low-tar and/or high-tar cigarettes and, if so, what is the extent of their health benefit?” Letter from Janet D. Steiger, FTC Chairman, to Samuel Broder, M.D., Director, National Cancer Institute (July 20, 1994). The conference was held on December 5 and 6, 1994, in Bethesda, Maryland. The conferees concluded that yield numbers and descriptors of yield numbers, such as “light” and “ultra light,” were health claims. They recommended that such numbers and descriptors in labeling and advertising be accompanied by appropriate disclaimers as to health consequences of smoking, but did not recommend banning such descriptors. See NCI Monograph 7: The FTC Cigarette Testing Method for Determining Tar, Nicotine, and Carbon Monoxide Yields of U.S. Cigarettes (1996). The FTC, in the end, did not adopt a trade regulation rule or take other regulatory action to require such disclaimers for light and low tar descriptors. In 1994, the FTC initiated an investigation into the practices of the American Tobacco Company, which by this time had been sold by its corporate parent, American Brands. American Tobacco was advertising its Carlton brand cigarettes by showing 10 packs of Carltons next to a single pack of another brand. The tar and nicotine ratings for each brand was shown, along with a claim that 10 packs of Carltons had less tar than one pack of the other brand. In other ads, the claim was made that an entire carton of Carltons had less tar than a single pack of the other brand. The FTC complaint alleged that these ads were false and misleading because consumers would not, in fact, get less tar by smoking 10 packs of Carlton than by smoking one pack of the other brands. Although the other cigarettes were, indeed, rated as having 10 times or more tar, measured in milligrams, than Carltons, “those ratings are obtained through smoking machine tests that do not reflect actual smoking, in part because the machines do not take into account such behavior as compensatory smoking.” In re American Tobacco Co. , 119 F.T.C. 3 (1995). Again, the matter was resolved by agreement. American Tobacco agreed to abandon any representation of the tar and nicotine levels of Carlton cigarettes by using “a numerical multiple, fraction or ratio” of the tar or nicotine levels of other brands or by depicting more than one pack of Carltons versus one pack of any other brand. The agreed order provided, further, that “presentation of the tar and/or nicotine ratings of any of respondent’s brands of cigarettes and the tar and/or nicotine ratings of any other brand (with or without an express or implied representation that respondent’s brand is ‘low,’ ‘lower,’ or ‘lowest’ in tar and/or nicotine) shall not be deemed” to violate the ban on numerical comparisons. American Tobacco , 119 F.T.C. at 11. Prior to the entry of the agreed order, the FTC described this provision as a “limited ‘safe harbor’ for advertising that complies with certain requirements in its use of official tar and nicotine ratings.” Analysis of Proposed Consent Order to Aid Public Comment, In re American Tobacco Co. , F.T.C. File No. 932 2268 (August 31, 1994). Most recently, in 1997, the FTC solicited public comment on various proposals for altering the FTC testing method and for changing cigarette advertising so that it would more accurately reflect the limits of the testing method. The request for comment explained that the 1970 voluntary agreement between the FTC and most cigarette manufacturers “remains in effect today, and it forms the basis for current disclosure of tar and nicotine yield.” The request for comment also raised the issue of compensation and noted the inability of the current testing method to allow for compensatory behavior by smokers. See Cigarette Testing: Request for Public Comment, Federal Trade Commission, 62 Fed. Reg. 48,158 (September 12, 1997). The record suggests that this inquiry is still ongoing.