Federal judge hears arguments on cigarette maker’s marketing practices
Natural American Spirit company says it isn’t trying to deceive customers; next hearing scheduled Aug. 1
ALBUQUERQUE — Lawyers pursuing a federal class action against the makers of Natural American Spirit cigarettes argued Friday that the company purposefully — and effectively — deceives customers into thinking their popular brand is safer and healthier than other smokes.
But at a hearing before U.S. District Judge James Browning, lawyers for Santa Fe Natural Tobacco, the company responsible for Natural American Spirit, countered that disclaimers on the cigarette packs and in print advertising show the company is not trying to mislead the “reasonable consumer.”
The disclaimer on the pack says,
“No additives in our tobacco does NOT mean a safer cigarette.” The message on print ads says “Organic tobacco does NOT mean a safer cigarette.” Those warnings are the result of a consent order with the Federal Trade Commission in 2000.
The company is asking the judge to dismiss the lawsuit, consolidated from multiple complaints filed by a variety of plaintiffs in several states. After hearing more than four hours
of arguments Friday, Browning scheduled another hearing for Aug. 1. The case is expected to go on for years.
The high-stakes court battle is the latest clash over what started in 1982 as a niche brand created by four Santa Fe investors and later grew into a top-selling premium cigarette after tobacco giant Reynolds American Inc. of WinstonSalem, N.C., bought Santa Fe Natural in 2002 for $340 million. Two years ago, a Japanese company paid $5 billion for overseas rights to Natural American Spirit.
As the brand grew in popularity, health advocates, regulators and others ratcheted up long-running criticisms that terms like “organic,” “natural” and “additive free,” combined with Native American imagery, fool buyers into thinking the company’s cigarettes are less damaging to their health. Now dozens of lawyers representing consumers are asserting those claims through litigation.
Minneapolis lawyer Melissa Wolchansky told Browning the printed disclaimers are not effective. “We represent 12 plaintiffs who purchased American Spirits thinking they were healthier,” she said. She argued that the entire package design — a logo featuring an American Indian in a feathered headdress holding a peace pipe, the stylized eagle at the top of the American Spirit pack, and the text on the bottom saying “100 percent additive free tobacco” — is meant to distract a consumer from the dangers of tobacco. She also said the word “Natural” in the brand’s name is itself misleading.
“This is not baby food,” she said, “it’s a poisonous and lethal product.”
But Matthew Schultz, a Pensacola, Fla., lawyer for Santa Fe Natural Tobacco, argued that “reasonable consumers” would read all of the packaging. He said it is obvious that “natural” does not mean that cigarettes don’t go through some kind of manufacturing process.
An agreement between the Food and Drug Administration and the cigarette maker would require the company to remove the terms “additive-free” and “natural” from its product labels, advertising and promotional materials. But the company still would be permitted to continue to keep the word “natural” as part of its brand name.
Numerous studies, Wolchansky said, show that consumers associate by overwhelming percentages words like “natural” and “organic” with products that are good for your health. She pointed out that the disclaimer on the side of the cigarette pack is much smaller than the messages on the front.
A June 7 letter in support of the plaintiffs from several medical and health organizations referred to a study by the Schroeder Institute for Tobacco Research and Policy Studies at Truth Initiative. That study, published last year, found nearly 64 percent of Natural American Spirit smokers “inaccurately believe such cigarettes are less harmful, compared to only 8.3 percent of smokers of other brands who believe that their cigarettes are less harmful.”
Organizations signing that letter were the American Academy of Pediatrics, the American Cancer Society Cancer Action Network, the American Heart Association, the American Lung Association, the Campaign for Tobacco-Free Kids and the Truth Initiative.
The false idea that American Spirit is a healthier cigarette, Wolchansky argued, is why that brand has grown while other brands are losing customers.
The two sides spent much of the time Friday arguing about American Spirit’s menthol cigarettes. Menthol is a synthetic chemical made from mint plants. Even though the menthol packs also say “additive free,” Wolchansky and Fort Lauderdale, Fla., lawyer Scott Schlesinger, also representing the plaintiffs, said menthol obviously is an additive.
Schultz, the company lawyer, said menthol is listed as an ingredient and that customers buying menthol cigarettes know what they’re getting because they want the menthol added. He argued that tobacco is one ingredient while menthol, which is in the filter of the cigarettes, is another.
Schlesinger told the judge that in the company’s early years American Spirit ads said Native Americans used tobacco without getting lung cancer.
These ads came up in the late 1990s, when then-state Attorney General Tom Udall, now a U.S. senator, was suing cigarette companies, including Santa Fe Natural Tobacco.
“They try and make the cigarettes seem natural by selling them in health food stores,” said former Attorney General Paul Bardacke, who as a private lawyer was a co-counsel for the state in that case. “There is no doubt that Santa Fe Natural Tobacco has marketed its product fraudulently and deceptively.”
Bardacke at a 1998 court hearing said the company’s mail-order marketing had included literature featuring testimonials from customers claiming the cigarettes helped them quit smoking. It sent customers survey results that said most American Spirit customers smoke less than when they used their old brand, some as much as 50 percent to 70 percent less.
Another document sent to customers had statements from a man the literature called “America’s leading Natural Foods teacher,” who said, “For centuries the North American Indians have smoked tobacco without developing cancer, and have utilized the plant for many medicinal purposes.”
Bardacke at the 1998 hearing called such marketing “as subtle and pernicious if not more so than that used by the major [tobacco] manufacturers.”