Thursday, June 30, 2005

IN MY VIEW: Fashioning an Effective and Appropriate Remedy to Restrain RICO Violations

If public health groups really want to help the D.C. District Court fashion effect and appropriate remedies in the tobacco case, then I think their focus should be not on monetary remedies, which have no chance of being upheld, but rather on the non-monetary remedies, which is where I think the action is.

I think that several of the non-monetary remedies requested by DOJ, such as document disclosure (including marketing plans), prohibition of false or misleading statements about company products or health effects, and a ban on use of misleading health descriptors seem appropriate. But the area where I think help is needed is in fashioning a remedy to help prevent future targeting of youth in cigarette advertising and marketing.

The present remedy that DOJ has requested is problematic, because it seems overly broad to withstand a First Amendment challenge (the present request is to disallow any marketing that appeals to youths).

So the challenge as I see it is to fashion a remedy that will prevent the companies from targeting youths in their advertising but will be narrow enough and directly enough tied to future RICO violations so as to be both statutorily valid and not in conflict with the First Amendment. (Remember that targeting of youths in advertising, along with misrepresenting the health effects and addictiveness of cigarettes are the two major bases for the government's claim that tobacco companies have violated RICO.)

If public health groups want to submit a brief in the case, that is where I think they could be most helpful (not in again reiterating their demand for an extra $120 billion).

I have already argued that to some extent, using RICO as a mechanism to regulate tobacco industry behavior is kind of like trying to fit a square peg into a round hole. So I don't profess to have any obvious answers to the dilemma that I pose.

However, perhaps it may be helpful to suggest one possible remedy to start getting health groups thinking in terms of how to prevent targeting of youths in cigarette company marketing in a way that is consistent both with the appellate court's ruling and with the First Amendment. After all, the best that these groups can do to represent the interests of the public is to recommend to the judge a remedy that may actually be imposed and upheld. It doesn't advance the public's interest to propose billions of dollars that the government will never see.

So here's my idea: the most direct way that one could fashion a remedy to prevent targeting is to first define what targeting means. Does it mean creating ads that appeal to youths? That's part of it. But the real issue is the placement of those ads. Because ultimately, it is the pattern of ad placement that is going to determine whether youth targeting, and thus a continuing RICO violation, is taking place.

So how could one determine whether companies are targeting youths through their advertising placement? This is an area in which I have done a considerable amount of research. My thinking at this time is that it is really the relative exposure of youths compared to adults to brand-specific cigarette advertising that is perhaps the best, and most direct measure of whether targeting is taking place.

In other words, if Marlboro ads expose 90% of adults and 95% of kids, then it seems quite clear that the brand is targeting youths. There are certainly media vehicles available that would allow Marlboro to advertise in a way that would expose a large percentage of adults but without reaching almost every youth in the nation. If Marlboro were to change its advertising placements such that it were reaching 80% of adults but only 35% of kids, then I think it might be clear that it was no longer targeting youths.

The problem, of course, is defining the factor by which reach or exposure among youths must be lower than reach or exposure among adults in order to ensure that targeting is no longer taking place. Given the actual experience of Marlboro in its magazine ad placements over the past 5 years, I think a factor of 2 might not be unreasonable.

It would be important to fashion the remedy to apply to each cigarette brand, because on a company-wide basis, certain brands could still target youths but overall company ad exposure could meet the prescribed exposure limits.

I would note that this type of approach was very attractive to the judge in California who ruled in favor of the state in its suit against R.J. Reynolds for violating the Master Settlement Agreement's targeting provision.

I should also note that a broad statement that simply prohibits targeting of youths in cigarette company marketing would be problematic, because as we have seen with the MSA, it is quite vague and difficult to interpret, measure, and therefore enforce. Whatever remedies are issued must be specific enough so as to be easily measurable, interpretable, and enforceable.

I think that a remedy based on actual brand-specific marketing plans would be an appropriate one because it is directly tied to company violations of the youth targeting aspect of the lawsuit, it is readily measurable, interpretable, and enforceable, it is clearly fashioned with a specific and narrow intent to prevent and restrain future RICO violations in this area, and it is consistent with the First Amendment because it represents only the minimal amount of restriction on tobacco company marketing behavior that is reasonably necessary to prevent the violations in the future.

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