United States of America vs. Philip Morris USA Inc. et al.

United States of America vs. Philip Morris USA Inc. et al. is the most significant economic process in the history of the United States . The leading tobacco companies Philip Morris , RJ Reynolds , British American Tobacco , Liggett, and Lorillard, as well as the tobacco-related trade organizations they founded, the Tobacco Institute and the Council for Tobacco Research, were found guilty of their marketing practices on minors for smoking on August 17, 2006 to seduce, to conceal the health risks of tobacco consumption, to suggest the harmlessness and harmlessness of cigarette smoking and to falsify and cover up research results. In addition to a fine, the judgment also imposed drastic conditions that included restrictions on marketing measures and the disclosure of previously internal documents.

prehistory

Due to new results in research, criticism of tobacco products and their manufacturers became louder and louder in the early 1990s. While health organizations and experts had been aware of the harmfulness of tobacco consumption for many years and decades, the general public began to outlaw smoking. Many municipalities, cities, and even states began to ban tobacco use in public places. In addition, the smoking ban on airplanes also showed the progressive denormalization of tobacco consumption.

Dr. Jeffrey Wigand, then director of research at Brown & Williamson (now BAT), rekindled the discussion about the knowledge of the tobacco industry about the harmfulness of cigarettes and secondhand smoke as well as the dependence of consumers on nicotine by presenting several thousand originally secret documents to university professor Stanton Glantz to the tobacco industry. These documents clearly showed that the tobacco industry was not only aware of the harmfulness of tobacco consumption, but also of the addictiveness of nicotine. In addition, the documents showed that tobacco companies knowingly and through special cultivations attempted to increase the nicotine content of the tobacco plant without this being disclosed by the FDA's tests and thus having to be noted on the cigarette package. In addition to the manipulation of the products, the deliberate deception of consumers by tobacco manufacturers was uncovered. The publication of the documents was followed by a surge of liability claims. Private individuals, whose health had been damaged by years of tobacco consumption, blamed the tobacco industry for their suffering and accused them of deliberately misleading consumers and knowingly misinformation. The big tobacco companies tried to counteract this by making a global comparison. In November 1998, the so-called Master Settlement Agreement was signed by almost all states and the four largest tobacco companies, which made further claims by the injured party inadmissible. The American government, however, was not prepared to accept this settlement, and just a few months after the Master Settlement Agreement was passed, President Bill Clinton announced in his State of the Union Address that the government would file its own lawsuit against the leading tobacco companies. President Clinton wanted companies to be held liable for the many billions of dollars and to reclaim from manufacturers the amount that was spent under the Medicare program on the treatment of tobacco-related diseases. The greatest economic process in United States history was imminent.

In the same year, namely 1999, an investigation and then a proceeding were opened. In the years that followed, a number of potential witnesses and participants were interrogated, documents analyzed and charges examined. The process was not officially opened until 2004.

Arguments of the prosecutor

Prosecutors accused the leading tobacco companies of deliberate fraudulent and unlawful behavior and therefore sought reimbursement of tobacco-related medical expenses under the Medicare programs. The court admitted the fraudulent and unlawful behavior, but dismissed the claim for reimbursement of expenses for tobacco-related illnesses. In the following proceedings, the prosecutors tried to prove that the leading tobacco companies had knowingly and deliberately exposed their consumers to the dangers of tobacco consumption, that smokers had been withheld from smokers by concealing and manipulating scientific research results that had influenced consumer behavior, and that cigarette manufacturers targeted minors through their marketing strategies to tempt you to smoke. The public prosecutor's office was convinced that the leading tobacco companies, through targeted recruitment of underage new consumers, recruited so-called replacement smokers, who should replace the older smokers when they died. In addition to reimbursement of costs already incurred, stricter laws against marketing measures by the tobacco industry were also called for. In summary, the public prosecutor's office accused the tobacco industry of secretly hunting down children and young people, of deceiving smokers about the risks and dangers of cigarette consumption and of covering up and falsifying research results.

Arguments of the tobacco industry

The tobacco companies denied all allegations and stated that there was no connection between the consumption of tobacco products and health problems. In addition, the corporations argued that they would target their marketing campaigns exclusively to adult smokers. Marketing should not recruit new smokers, but only convince existing adult smokers of their own brand. Since the brand loyalty is particularly high among smokers, funds had to be used to convince them of a certain brand. The cigarette manufacturers also denied all allegations of manipulation and cover-up of research results.

Facts

In the seven years from President Clinton's announcement of a lawsuit in 1999 to the sentencing in 2006, a total of 30 Justice Department attorneys faced each other on behalf of the American people and over 300 tobacco industry defenders. Several million pages of documents were presented to the court, with the prosecution alone listing 40,000 pages of evidence. Around 1,000 interim decisions were made during the trial, 300 potential witness statements were presented, including those from scientists, health experts or managing directors, and 84 top-class experts testified in court. The cost of the procedure to the American federal government was approximately $ 140 million. Although not confirmed or published by the industry, it can be assumed that the litigation costs for the tobacco companies were significantly higher.

The Justice Department's lawsuit was based on the 1971 RICO Act, originally enacted to prosecute the Mafia. The public prosecutor's office justified this step with the decades-long action of the tobacco industry as a criminal association, which for a long time had agreed to systematically deceive consumers about the dangers and health risks of smoking and deliberately induced children and young people to smoke around the dying older smokers to replace. According to the public prosecutor's office, criminal activity was also reflected in the fact that cigarette manufacturers added up to 600 additives to their product to increase the potential for addiction and to discourage smokers from quitting.

In addition to establishing the tobacco industry as a criminal cartel, the Justice Department hoped that by basing its indictment on the RICO Act, as well as prosecuting cigarette manufacturers, it would also bring civil claims. Due to the low burden of proof, a civil litigation seemed more promising. Prosecutors hoped that account would be taken of all the tobacco industry profits and interest that cigarette manufacturers had made since 1954. As a result, prosecutors estimated a $ 742 billion refund. An actual maturity of this sum would have meant the bankruptcy of the entire tobacco industry. The tobacco industry was one of the largest sponsors of the 2000 Republican campaign, with $ 2.7 million in donations. Shortly after George W. Bush took office in the spring of 2001, the estimated total was lowered to $ 280 billion. In 2005, a profit skimming in civil proceedings was dismissed as inadmissible because, according to judge Gladys Kessler , this would amount to a penalty.

The verdict was pronounced 1742 pages by Gladys Kessler on August 17, 2006 and confirmed the government's allegations.

Judgment and conditions

The verdict handed down in August 2006 was in favor of the prosecutors. The financial impact on the tobacco industry has been relatively small, but the impact on public image and marketing policies and activities has been far more dramatic. The decision of the court forced the cigarette manufacturers to bear the legal costs and were also found guilty to market and sell "deadly products with zeal, deception, with an exclusive focus on financial success and without regard to human tragedies and social costs" for decades to have. The court also found that the tobacco companies had concealed scientific knowledge about the link between illness and death and cigarette consumption and had concealed the harmfulness. According to the court ruling, it was also proven that the industry had been aware of the addictive effects of cigarettes, and in particular of the active ingredient nicotine, since the 1950s, and that the design of their products was based on the provision of nicotine.

In addition to the finding of guilt, the cigarette manufacturers were also sentenced to various conditions. As of January 1, 2007, the court prohibited companies from advertising their products using misleading terms such as low-tar, light, ultra-light, mild or natural, so that potential consumers would not be misled about the actual health hazards. That meant a ban on all cigarette descriptors that distracted from health consequences or suggested harmlessness and harmlessness. In addition, the corporations were urged to correct earlier marketing strategies that suggested health risks in major newspapers, the three leading television stations, on information leaflets in the cigarette packs and on retail displays. Here, the manufacturers had to look at the harmfulness of smoking, the addictive effects of nicotine and smoking, the deficiencies in the significant health benefits of smoking low-tar cigarettes, the manipulation of the make and composition of the cigarettes to ensure the optimal release of nicotine and the harmful effects of the Draw attention to passive smoking. The manufacturers were given a period of 60 days to formulate the content of these corrections and submit them to the court. The defendants were also sentenced to provide the government with their disaggregated marketing materials, which would then be treated as confidential and highly sensitive. In order to ensure future compliance with the RICO Act, the tobacco companies were also condemned by the so-called transparency requirement to set up document archives and websites, so that both the government and the general public always had access to the industrial documents that had been disclosed during the court proceedings.

Significance for Germany

The leading tobacco companies had agreed in the so-called “Gentlemen's Agreement” not to make any direct claims against competitors in their marketing campaigns and, for example, to present their own product as less harmful than others. In addition, the manufacturers decided not to carry out tests on live animals in America, and yet the effects of tobacco consumption on the living organism should be researched. Therefore, the companies began to advance their research abroad. Philip Morris ran a laboratory in Cologne, the Institute for Biological Research (INBIFO). In addition to the “Gentlemen's Agreement”, the Cologne test laboratory was also preferred, as it was outside the sphere of influence of the American judiciary and therefore secret research results could more easily remain hidden from the American public.

Even before the controversial laboratory activities of American cigarette manufacturers were disclosed, Germany was regarded as the paradise of the tobacco industry. When the European Union wanted to adopt a Europe-wide introduction of tobacco advertising bans, the Kohl government filed a complaint with the European Court of Justice. The lawsuit was continued by the Schröder government, so that the advertising ban could ultimately not be implemented. In addition, the decades of collaboration between well-known scientists, influential politicians and high officials with the German tobacco industry became known. The journalMED wrote: "In no other European country was the lobbying of the tobacco industry to prevent advertising bans, to prevent the protection of non-smokers and against sales restrictions for cigarettes as successful as in Germany."

literature

Adams, Michael, ed. The business of death. The largest economic process in the US and the beginning of the end of the tobacco industry . Frankfurt am Main: Two thousand and one, 2007.