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N.Y. Bid for $15 Million Fee Against Tobacco Giant Ruled Excessive
New York Law Journal
October 30, 2009
A Manhattan judge has rejected New York state's bid to collect $15 million from R.J. Reynolds Tobacco Co. for allegedly violating a 1998 settlement agreement prohibiting the use of cartoons and non-tobacco-related merchandise to sell cigarettes.
At issue was a 2007 nine-page ad for independent music that depicted "flying radios with propellers" and a tractor "made of film reels" in Rolling Stone magazine. The ad campaign also featured a Web site and a CD, which was sent to R.J. Reynold's customers.
Claiming the ad and the CD distribution violated a 1998 master settlement agreement between several cigarette manufacturers and 46 states, the New York attorney general sued R.J. Reynolds for $15 million. The state requested a number of non-monetary remedies, including an order enjoining R.J. Reynolds from distributing the CD in New York. It also asked the court to order the company to pay a $100 fine for each alleged violation.
But Supreme Court Justice Barbara R. Kapnick last week refused the state's request for sanctions, finding the amount of $100 per violation bore "no rational relation to any actual loss or injury."
The case is State of New York v. Philip Morris Inc., 400361/97.
