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In re Tobacco Cases I

June 29, 2010

IN RE TOBACCO CASES I


APPEAL from an order of the Superior Court of San Diego County, Ronald S. Prager, Judge. Affirmed. (Super. Ct. No. JCCP 4041).

The opinion of the court was delivered by: Mcconnell, P. J.

CERTIFIED FOR PUBLICATION

Defendant, R.J. Reynolds Tobacco Company (Reynolds), appeals an order in favor of plaintiff, the People of the State of California, on the People's motion for an order to enforce a consent decree (Consent Decree) entered on a master settlement agreement (MSA). Reynolds contends the trial court erred by finding that certain images it used in an advertising campaign referred to as "Camel Farm" were "cartoons" as that term is defined in the MSA. Reynolds also contends the court erred by determining it has authority to assess sanctions against it for violating the MSA and the Consent Decree by using cartoons in its advertising. On the first point, we conclude the images in question are cartoons within the meaning of the MSA. We are not required to reach the second point because the court did not actually assess any sanctions against Reynolds, and thus it is not aggrieved by the ruling. We affirm the order.

FACTUAL AND PROCEDURAL BACKGROUND

In November 1998 the largest tobacco companies in the United States, including Reynolds, entered into the MSA with 46 states, including California, and the District of Columbia, to resolve claims against the tobacco companies pertaining to public health and the marketing of tobacco products to minors through cartoons and other means. Further, the People and Reynolds stipulated to the entry of the Consent Decree and a final judgment. As part of the Consent Decree, the Superior Court of San Diego County approved the MSA and retained exclusive jurisdiction over its implementation and enforcement.

The MSA prohibits the use of "cartoons" in the advertising, promoting, packaging or labeling of tobacco products. The MSA defines the term "cartoon" as "any drawing or other depiction of an object, person, animal, creature or any similar caricature that satisfies any of the following criteria: [¶] (1) the use of comically exaggerated features; [¶] (2) the attribution of human characteristics to animals, plants or other objects, or the similar use of anthropomorphic technique; or [¶] (3) the attribution of unnatural or extrahuman abilities, such as imperviousness to pain or injury, X-ray vision, tunneling at very high speeds or transformation." (Italics added.) The Consent Decree enjoins Reynolds from using "cartoons" in the advertisement or promotion of cigarettes.

In the second half of 2006, Reynolds launched its Camel Farm advertising campaign to promote the sale of Camel cigarettes to adult smokers who enjoy rock music performed by artists on independent labels. Reynolds used the Camel Farm campaign in various media, including special advertisements in publications, a promotional compact disc (CD) and a Web site (www.thefarmrocks.com).

As part of the Camel Farm campaign, Reynolds placed a four-page "gatefold" advertisement in the November 15, 2007, 40th anniversary edition of Rolling Stone magazine. The pages consisted of photographic collages, or photomontages, of such objects as a red tractor with film reels for wheels, which appears to be floating on air; radios, speakers and a television set that appear to be growing out of the ground on plant stalks; and a flying radio with helicopter rotors. The advertisement states such things as Reynolds is "Committed to Supporting & Promoting Independent Record Labels," and "The Best Music Rises from the Underground." (Some capitalization omitted.)

The four advertisement pages essentially bracketed five pages of Rolling Stone's editorial content, titled "Indie Rock Universe." (Some capitalization omitted.) Rolling Stone created the editorial pages, which consisted of hand-drawn illustrations of such things as a "rocket-powered guitar, a guitar-playing robot, a planet with a human mouth containing human-like teeth." There is no dispute that the images on the editorial pages were cartoons under any definition. Before the November 15 issue of Rolling Stone was printed, Reynolds was unaware of the content of the editorial pages.

In December 2007 the People commenced this enforcement action against Reynolds. The action focused primarily on the November 15 issue of Rolling Stone magazine. It alleged the Camel Farm images in Reynolds's advertisement were "cartoons" within the meaning of the MSA, and further, Reynolds violated the MSA because its advertisement was adjacent to Rolling Stone's editorial pages, which were covered with cartoons. The action alleged the "average person looking at these pages would assume that the nine pages are an integrated whole, that together they are advertising Camel cigarettes." The action also objected to Camel Farm imagery appearing in other media, such as on Reynolds's Web site, including the image of a flying tractor with jet propulsion engines.

The action sought injunctive and declaratory relief, as well as monetary sanctions based on the number of MSA violations that occurred in California. After suit was filed, Reynolds voluntarily suspended the Camel Farm campaign pending resolution of the suit, and it instituted "new [media] insertion guidelines to avoid future adjacency of its ads to cartoons."

After an evidentiary hearing, the court determined Reynolds was not responsible for Rolling Stone's editorial pages, or for the adjacency of the Camel Farm advertisement to the editorial pages. The court explained the MSA prohibits Reynolds from actively "using" cartoons or "causing" others to use cartoons.*fn1

As to the Camel Farm advertisement in Rolling Stone, the court found that a few of the images fit the MSA's definition of "cartoon." The court cited (1) "jet-powered tractors which fly," (2) "radios flying by means of attached helicopter rotors," (3) "televisions that grow on plant stems," and (4) tractors "with wheels made of film reels able to defy gravity." The court found injunctive and declaratory relief unnecessary, however, because Reynolds had already terminated the Camel Farm campaign, the MSA and Consent Decree already prohibit the use of cartoons in advertising, and Reynolds had taken steps to avoid the future adjacency of its advertising to cartoons.

Further, the court determined it had discretion under the terms of the Consent Decree to assess monetary sanctions against Reynolds for using cartoons in its advertising. The court, however, declined to assess any sanctions because it found Reynolds's violation of the ban on cartoons was unintentional and "in no way reprehensible"; the People stipulated there was no proof of the amount of actual damage on which to base a ...


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