NATO Opposes 'Corrective Statement' Signs

Files legal brief in response to new proposal

Thomas A. Briant, NATO Executive Director

Corrective Statement Sign

MINNEAPOLIS -- In June, NATO reported about the issue of “corrective statements” that arose in 1999, when the U.S. Department of Justice brought a lawsuit against several cigarette manufacturers regarding statements made by the companies about cigarettes and smoking. Then, in August of 2006, Federal District Court Judge Gladys Kessler issued what is called a "remedial order" which, in part, required manufacturers to develop "corrective statements" about cigarettes and smoking.  

Besides requiring the manufacturers to air television ads and print newspaper ads with the corrective statements, Judge Kessler's order also required each manufacturer to place a countertop sign measuring 18" wide by 30" high with the corrective statements on the store counter in every checkout line of each retailer that had a retail merchandising contract with the manufacturer. In addition, the manufacturers would also need to place a corrective statement sign equivalent in size to a display case header sign on cigarette display cases.  

Both the counter top signs and the header display signs would need to be displayed for a two-year period. If a retailer refused to display the signs, the manufacturer would be required to suspend that retailer's merchandising contract for one year.

On June 4, NATO filed a legal brief with the U.S. Federal District Court for the District of Columbia explaining why the court should abandon the requirement that retailers have countertop and cigarette display case header signs that list “corrective statements” about cigarettes and cigarette smoking. At the same time, the U.S. Government and public health organizations filed their legal briefs and urged the federal judge to require point-of-sale corrective statement signs in the counter area of retail stores, rather than on store countertops.  This could include corrective statement signs hung from store ceilings or floor clings. In addition, the government suggested to the court that these signs be placed on the exterior of retail stores and on gasoline pumps. 

The health organizations also claimed that the corrective statement signs would not impair the merchandising contracts between manufacturers and retailers, and that the required two-year time period to display the signs is only temporary. Finally, both the government and the health organizations continued to assert that requiring these corrective statement signs does not violate retailers’ First Amendment rights.

In reply, on June 18, NATO filed an additional response brief to counter the new ceiling sign and floor cling proposal, reiterate how requiring the signs will impair merchandising contracts, and reinforce the fact that the First Amendment rights of retailers are being violated. In its brief, NATO argued that the proposal to hang signs from the ceiling will cause the same security risks as countertop signs because the line of sight for ceiling mounted or wall mounted security cameras will be blocked by the signs. Moreover, floor clings may have adhesion problems due to the various kinds of store flooring causing the clings to peel up and create trip hazards. Also, since cigarette sales are not conducted outside of a store or near gasoline pumps, there simply is no “point-of-sale” where signs should be required.

Contrary to the claim by the public health organizations, NATO explained that the merchandising contracts between manufacturers and retailers would be impaired because those retailers that decide not to display the signs will lose the promotional payments under the contracts. Regarding the First Amendment argument, retailers have a constitutional right to speak and not to speak at all. That is, retailers can choose whether or not to display the signs.  However, for a court to compel innocent retailers to display government-sponsored signs is a violation of the right not to speak under the First Amendment and on this point NATO will remained steadfast.

NATO is waiting for the federal district court to either issue a final ruling on whether the corrective statements proposal will be abandoned or if an oral argument hearing will be scheduled for the manufacturers and NATO to further explain why the court should not proceed with the point-of-sale corrective statement sign requirement.