Albuquerque Journal

Where there’s smoke, there’s fire: SF firm sued

Tobacco company’s terms may mislead

- BY SCOTT SANDLIN JOURNAL STAFF WRITER

Cigarette packages in appealing colors, the words “natural” and “additive-free,” along with images of a Native American smoking a pipe are part of what a new federal lawsuit calls a comprehens­ive campaign to mislead consumers into thinking Natural American Spirit cigarettes are more healthful or less harmful than other varieties.

That’s the contention in a national class action complaint filed Wednesday in U.S. District Court in Albuquerqu­e by a San Diego law firm, Ronald Marron, teamed up with the Rothstein Law Firm of Santa Fe that seeks damages, including punitive damages, from Santa Fe Natural Tobacco Company and Reynolds American Inc.

The plaintiffs include New Mexico plaintiff Ceyhan Haskal of Santa Fe, who has purchased the brand and paid a higher price based on advertisem­ents touting “natural” and “100% additive-free,” as well as other claims.

Santa Fe Natural Tobacco was founded in New Mexico in 1982 and has operated as subsidiary of Reynolds since a $340 million buyout in 2002, according to the lawsuit. The company now also has a production facility in North Carolina.

A Japanese company bought internatio­nal rights to Santa Fe Natural Tobacco earlier this year.

Messages seeking comment sent to Santa Fe Natural Tobacco via the company website did not elicit a response Wednesday.

The lawsuit includes plaintiffs from New Mexico, California, Illinois and Minnesota, but contends that applicatio­n of New Mexico law by the nationwide class is appropriat­e because Santa Fe Natural Tobacco maintains corporate headquarte­rs in New Mexico, and marketing and sales decisions occurred here.

Laws of other states might result in applicatio­n of laws that in effect ban class actions, the lawsuit says.

The New Mexico Unfair Practices Act bars deceptive or unconscion­able trade practices and permits persons who suffer over $100 in losses to recover damages.

While the packaging and advertisin­g suggest a product that is more healthful, a healthy cigarette doesn’t exist, though a growing body of research concludes that consumers associate terms such as “organic” and “additive-free” with a healthier product, according to the complaint.

Natural American Spirit cigarettes, despite claims, “are neither natural nor additive-free,” the complaint says.

They “contain a variety of harmful additives that are not disclosed to consumers,” it says.

According to one study of 11 brands cited in the complaint, Natural American Spirit and Gauloises Brunes, a French brand, had the highest level of free-base nicotine, which delivers a more powerful “kick” that some scientists believe indicates the presence of ammonia as an additive.

The tobacco crops also are grown with artificial fertilizer­s and pesticides, despite the “additive-free” claims, the complaint says.

The lawsuit takes aim as well at what it calls the deceptive use of Native American imagery, which it alleges “misleads consumers into believing that the cigarettes are affiliated with an Indian tribe.”

The complaint quotes a memo from Santa Fe Natural Tobacco to its retailers that was produced in other tobacco litigation: “The unique combinatio­n of `Indian’ and ‘natural’ gives us, and you, a solid competitiv­e edge, creates intense media interest and reinforces our basic message — The Smoke Speaks for Itself!”

The New Mexico Code of Regulation­s includes specific requiremen­ts for environmen­tal marketing claims, the complaint alleges, such as deceptive claims that Natural American Spirit cigarettes are made with “organic” tobacco and “Grown by Certified Farmers.”

It contends the company has failed to make clear whether the purported environmen­tal benefits relate to the product or the packaging, making it an unfair or deceptive practice.

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