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February 9th, 2016:

A study on liability and the health costs of smoking

Smoking can not only ruin your health, but it can also burn a nasty hole through your wallet. Tobacco use accounts for nearly half a million premature deaths in the U.S. each year and is the leading cause of lung cancer, according to the American Lung Association. Even those around tobacco smokers aren’t safe from its harmful effects. Since 1964, smoking-related illnesses have claimed 20 million lives in the U.S., 2.5 million of which belonged to nonsmokers who developed diseases merely from secondhand-smoke exposure.

However, the economic and societal costs of smoking-related issues are just as staggering. Every year, Americans collectively spend a total of $326 billion, including nearly $170 billion in direct health-care costs and more than $156 billion in lost productivity due to premature death and exposure to secondhand smoke. Unfortunately, some people will have to pay more depending on the state in which they live.

In light of Tobacco-Free Awareness Week and to encourage the more than 66 million tobacco users in the U.S. to kick the dangerous habit, WalletHub’s analysts gauged the true per-person cost of smoking in each of the 50 states and the District of Columbia. We did so by calculating the potential monetary losses — including the cumulative cost of a cigarette pack per day over several decades, health care expenditures, income losses and other costs — brought on by smoking and exposure to secondhand smoke.

Download (PDF, 749KB)

Judge Slams Big Tobacco’s Do-Over Request

(CN) – Philip Morris and other cigarette makers will soon be required to make public statements about the health effects of smoking, after a federal judge called the companies’ rewrite request “ridiculous.”

Monday’s ruling stems from a case the U.S. brought 15 years ago against the nine companies under federal anti-racketeering law. A judge concluded at the end of a nine-month trial that the defendants had engaged in a “pervasive scheme to defraud customers and potential customers of cigarettes” for more than 50 years.

The judgment found that the cigarette makers joined together to “maximize their profits” by misleading the public about the “devastating health effects of smoking.”

Despite that court’s finding that it had the authority to order disgorgement of fraudulently gained profits, the D.C. Circuit barred that damages route “because disgorgement is aimed at past violations,” and the RICO Act permits damages only to prevent future violations.

The government instead sought and won a judgment ordering the cigarette manufacturers to make corrective disclosures on cigarette packaging, in advertising and on their websites.

Affirming this remedy in 2009, the D.C. Circuit found that exposing “the previously hidden truth about their products [will] prevent and restrain” future RICO violations.

On remand, a federal judge approved a draft of the disclosures that the tobacco companies were required to make.

The draft required the cigarette makers to declare that they “intentionally designed cigarettes to make them more addictive,” to “maximize the ingestion of nicotine, adding ammonia to make the cigarette taste less harsh, and controlling the physical and chemical make-up of the tobacco blend.”

It also required that they include a preamble admitting that a federal court found they “deliberately deceived the American public” about the adverse health effects of smoking and second-hand smoke, the addictiveness of nicotine, the manipulation of cigarette design, and the lack of a significant difference between regular and “light” cigarettes.

R.J. Reynolds and the others appealed, however, saying such backward-looking corrective disclosures “force defendants to vilify and shame themselves for past wrongdoing” rather than “reveal the previously hidden truth.”

A three-judge panel of the D.C. Circuit upheld the corrective statements last year, insofar as they correct possible misinformation about tobacco products, but said the tobacco companies cannot be forced to admit their past acts of deliberate deception.

After this ruling, parties went to mediation, but failed to agree on new preamble language.

And back in court, the tobacco companies filed a 40-page brief seeking to rewrite all five of the statements approved by the appeals court, even though the appellate panel rejected only one sentence in the preamble.

“That is ridiculous – a waste of precious time, energy, and money for all concerned – and a loss of information for the public,” U.S. District Judge Gladys Kessler wrote in a Feb. 8 ruling. “The court has no intention of following that path, although it is obvious that defendants are, once again, attempting to stall any final outcome to this long-standing litigation.”

The government proposed a shortened preamble that eliminated the reference to the tobacco companies’ prior bad acts, and simply states, “A federal court has ordered Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA to make this statement about [particular topic].”

Kessler rejected the cigarette makers’ proposal that the preamble should use the word “determined” instead of “ordered,” as well as their proposal to remove a separate line stating, “Here is the truth.” In addition, the tobacco companies sought to completely remove their names from the statements.

The judge also rejected the government’s proposed modifications to the parties’ Consent Order regarding the requiring date for publishing the notices.

“In accordance with the remand of the Court of Appeals, this court adopts the corrective statements submitted by the government,” the 11-page opinion concluded.

High court blocks sale of e-liquids

The Federal High Court of Justice (BGH) ruled sales of e-liquids containing nicotine violate current law governing allowable ingredients in tobacco products, the Sueddeutsche Zeitung (SZ) reported.

The impact of the ruling is unclear because Germany is in the process of revising its laws on tobacco products, the newspaper said on its website. German law must conform to the revised EU Tobacco Products Directive (TPD) by 20 May. The TPD regulates e-cigarettes for the first time.

Under current German law, which does not address vaping products, liquids such as the ethanol used in e-cigarette liquids are banned from tobacco products, the SZ said. E-cigarettes are subject to current law on tobacco products because the nicotine in e-liquids comes from tobacco, according to the BGH. The high court in its ruling did not clearly define which e-liquid ingredients were illegal, said the SZ.

Handed down 23 Dec but only now made public, the BGH ruling upholds a fine levied by a lower court in Frankfurt against a man who sold e-cigarettes and liquids in his store and online. During the proceedings, authorities confiscated 15,000 bottles of e-liquid from the business.

A statement by the VdeH e-cigarette industry association said the German court ruling violates EU trade provisions. Sales of e-cigarettes and liquids have been legal throughout the EU since the TPD first was approved in May, 2014, the VdeH said. “This judgement is a bad joke,” said VdeH Chairman Dac Sprengel. “We ask the German authorities not to take any hasty action.”

Civil servants wined and dined by bankers and tobacco giants: Hospitality rules even softer than in Brussels!

Public officials have been wined, dined and showered with gifts by big business – raising the risk of serious conflicts of interest, a watchdog warned last night.

Tickets to Wimbledon, iPads, bottles of champagne and dinners at some of the best restaurants were handed out by bankers, arms firms and financial giants.

Civil servants have been treated to hampers from Fortnum & Mason and secured invitations to private viewings of art exhibitions and movie premieres, the National Audit Office found.

One official was sent a painting worth £300, while others were given tickets to FA Cup semi-finals and tours of the Harry Potter film studios, according to its report.

Perks have also been extended to the husbands, wives and children of Whitehall’s most powerful mandarins.

The watchdog concluded that Cabinet Office rules on the hospitality that bureaucrats can receive are even less stringent than the European Commission’s rules – opening up government to the risk of ‘substantial reputational damage’.

Looking at only three departments in depth, the report found that more than £150,000 of gifts and hospitality were given to officials in one year.

It comes a fortnight after Chancellor George Osborne faced a deluge of criticism over his claim that allowing Google to pay £130million to cover a decade of back taxes was a ‘victory’.

The report revealed that officials from HM Revenue & Customs were entertained by firms including Unilever, Sky and Imperial Tobacco – raising further questions about the taxman’s closeness to big business.


Between April 2012 and March 2015, senior officials in 17 departments accepted gifts and hospitality 3,413 times from 1,495 organisations or individuals.

In 2014/2015, the value of these freebies was estimated at £29,000. The report disclosed scores of examples of arms firms such as BAE Systems inviting officials from defence quangos to dinner, as well as firms providing hospitality despite also being major suppliers to government.

Across all departments, the City of London Corporation wined and dined senior officials 73 times, while the British Bankers Association funded 21 events.


The report said: ‘British Bankers’ Association was among the most frequent providers of hospitality, at the same time that some of its members were being investigated in the UK for market manipulations and by the competition regulator.’

As well as looking at Whitehall as a whole, the NAO carried out detailed work on three departments – the Department for Business, Innovation and Skills, HMRC and the Defence Equipment and Support quango – where they considered hospitality accepted by all officials; not just senior ones.

They found that these officials accepted £154,000 of gifts and hospitality in 2014/15. Arms firms have enjoyed regular access to officials from DE&S, with BAE Systems wining and dining them no fewer than 581 times in three years.

The NAO concluded: ‘Although the total value of hospitality accepted may not be high, the reputational risks around accepting it can be substantial.

‘While most of cases of gifts and hospitality appeared to be reasonable, we found some examples where acceptance may not have been consistent with the Cabinet Office principles.’

The Cabinet Office said: ‘The Government welcomes this report which shows that the system is working well, with offers of hospitality being recorded and properly acted upon.

‘This government is the most transparent ever.’