Triple Win for RJR

Courts strike down Wash. sampling ban, gives company wins against Cigarettes Cheaper!

WINSTON-SALEM, N.C. -- R.J. Reynolds Tobacco Co. said it applauds last week's decision striking down a Washington state law that prohibits tobacco companies from sampling products to adult smokers in bars, nightclubs and other age-restricted venues.

In its court filing, R.J. Reynolds claimed the law, approved by Governor Christine Gregoire on March 9, violated the First Amendment and is preempted by the Federal Cigarette Labeling and Advertising Act (FCLAA), the federal law that generally bars states from regulating cigarette advertising and promotion.[image-nocss]

The law said its purpose was to protect minors, but Washington law already prohibits cigarette sampling where minors may be present, said Darryl R. Marsch, senior counsel for R.J. Reynolds. The new law was simply an unconstitutional attempt to prevent us from using an accepted form of product promotion to adult smokers.

In his ruling, U.S. District Court Judge Franklin D. Burgess said, The State ban on the distribution of cigarettes to members of the general public at no cost or at nominal cost for product promotion purposes is a state regulation of the promotion of cigarettes and thus, preempted by the FCLAA.

The law, which took effect June 7, is unenforceable as a result of the ruling, the company said.

R.J. Reynolds also said it is pleased with last week's unanimous decision by the 7th Circuit Court of Appeals to uphold two jury verdicts in favor of the company. The appellate ruling upholds R.J. Reynolds' successful trademark case against Cigarettes Cheaper!, a retailer headquartered in Benicia, Calif. The appellate court also upheld R.J. Reynolds' successful defense of an antitrust case brought by the retailer.

It's a double win for R.J. Reynolds, said Marsch. The appellate court confirmed that R.J. Reynolds did not conspire or discriminate against the plaintiff, and the court upheld the company's verdict against Cigarettes Cheaper! for importing foreign cigarettes into the U.S. in violation of R.J. Reynolds' trademark rights.

On May 5, 2004, a jury in U.S. District Court for the Northern District of Illinois awarded R.J. Reynolds $3.6 million in damages for trademark infringement committed by Cigarettes Cheaper!

On Oct. 15, 2004, the jury unanimously ruled in favor of R.J. Reynolds in the antitrust suit brought against the company by Cigarettes Cheaper!

R.J. Reynolds Tobacco, an indirect subsidiary of Reynolds American Inc., is the second-largest tobacco company in the United States. Its brands include five of the 10 best-selling U.S. cigarette brands: Camel, Kool, Winston, Salem and Doral.

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