Robert Pitofsky, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle

In the Matter of


Docket No. 9285


On November 24, 1998, Complaint Counsel filed a motion to dismiss this matter on the grounds that the relief sought in this proceeding has now been achieved through a recent settlement between the major tobacco companies (including Respondent) and the attorneys general for 46 state and 5 other jurisdictions(1) and a modification of the annual survey on tobacco, alcohol, and drug use that is conducted by the Substance Abuse and Mental Health Services Administration of the U.S. Department of Health and Human Services. The Administrative Law Judge, by order dated December 2, 1998, certified this motion to the Commission, and, by order dated December 7, 1998, stayed further action in the adjudication before him, pending the Commission’s review of Complaint Counsel’s motion to dismiss. Respondent’s answer, directed to the ALJ on December 4, states that it agrees that this matter should be dismissed but urges the ALJ to recommend that the Commission dismiss with prejudice.(2) Respondent also asked the ALJ to take action respecting placement on the public record of certain materials received in discovery from the Robert Wood Johnson Foundation (“Foundation”) and Dr. John P. Pierce. In a statement filed with the Commission, the Foundation requested the Commission to order in camera treatment for its submissions and to order related relief.

Upon consideration of the submission of the parties, the Commission hereby dismisses the complaint without prejudice and denies the Foundation’s request for relief respecting materials it submitted in discovery. By Order dated December 29, 1998, the ALJ has denied Respondent’s motion for action respecting discovery materials.


Complaint Counsel’s Motion to Dismiss

The Commission’s notice order accompanying the complaint set out three key areas of relief: (1) a prohibition of advertisements to children of Camel brand cigarettes through the use of themes or images relating to "Joe Camel" or associated figures; (2) dissemination of public education messages discouraging persons under 18 from smoking; and (3) collection, maintenance, and making data available to the Commission concerning sales of each brand of Respondent’s cigarettes to persons under 18 and each brand’s share of smokers under 18.

With respect to the first area of relief, the November 23 Master Settlement Agreement specifically bans the use of all cartoon characters, including Joe Camel, in the advertising, promotion, packaging, and labeling of any tobacco product. As for the second, the settlement requires the tobacco companies to help finance a national public education fund designed to carry out on a nationwide basis sustained advertising and education programs to counter underage usage of tobacco products and to educate consumers about the causes and prevention of diseases associated with the use of tobacco products.(3) Finally, the Substance Abuse and Mental Health Services Administration of the U.S. Department of Health and Human Services is revising the protocol for its annual national household survey on drug abuse to add specific questions to elicit brand share of smokers under 18.(4)

Accordingly, the most important elements of the relief set out in the Commission’s notice order should be accomplished without the need for further litigation in this case. Therefore, the public interest warrants dismissal of the complaint.

Respondent’s Request for Dismissal with Prejudice

In its response, which was filed after the ALJ certified Complaint Counsel’s motion to dismiss to the Commission, Respondent requested that the ALJ make certain recommendations to the Commission to the effect that the complaint should be dismissed with prejudice.(5) Respondent also asked the ALJ to forward to the Commission the motion to dismiss that Respondent filed with the ALJ at the close of Complaint Counsel’s case-in-chief. That motion asked the ALJ to determine that Complaint Counsel had failed to meet its evidentiary burden on causation. Respondent claimed that forwarding its motion to the Commission would "inform it of the strong nature of Reynolds’ defenses -- and the concomitant advisability of a public interest dismissal" and thus would support Respondent’s request for a dismissal with prejudice. Respondent’s Response to Complaint Counsel’s Motion to Dismiss, at 4.

Rule 3.22(a) of the Commission’s Rules of Practice contemplates that the ALJ will rule in the first instance on most motions; Rule 3.22(e) also authorizes the ALJ to defer ruling on a motion to dismiss for failure to meet an evidentiary burden until immediately after all evidence has been received and the hearing record is closed. The ALJ is also required to certify a motion to dismiss on public interest grounds to the Commission.(6) Finally, Rule 3.22(a) authorizes the ALJ to accompany such a certification with "any recommendation that he or she may deem appropriate."

Here, consistent with his authority under Rule 3.22(e), the ALJ has not ruled on Respondent’s motion to dismiss. As for Complaint Counsel’s motion to dismiss, the ALJ has properly certified this motion to the Commission and has declined to make the recommendations requested by Respondent. The ALJ did, however, state in his December 7 Order Staying Proceedings that:

[t]o recommend . . . that the complaint be dismissed on the merits would require more than a quick decision on the submitted papers. I am not convinced that the link between the Camel advertising campaign and increased smoking among children must be demonstrated, as argued by respondent, only by a definitive, statistically significant scientific study. Furthermore, there may well be reliable evidence in the record of this case on this issue, in the 2,000 exhibits that have been received thus far, or in the testimony of the expert witnesses.(7)

Further, in dismissing this complaint, the Commission is not reaching a decision on the merits. Respondent’s motion to dismiss is not before the Commission for decision, and Respondent does not appear to ask the Commission to enter a ruling on the merits.(8) Indeed, a ruling on the merits would require the Commission to remand this matter to the ALJ, resulting in a possible resumption of the trial.(9) We understand that neither Complaint Counsel nor Respondent intends that result.

The Commission has consistently refrained from dismissing a complaint with prejudice absent a substantive ruling. Without such a ruling by the ALJ or the Commission, it is not appropriate to foreclose the possibility of further litigation where unanticipated problems might develop with one or more of the relevant remedies.(10)

We, therefore, conclude that the complaint should be dismissed without prejudice.

Requests Relating to Third Party Submissions

Respondent’s Response to Complaint Counsel’s Motion to Dismiss initially requested that the ALJ hold open the public record to permit Respondent "to place in evidence certain documents submitted in discovery from" the Foundation and Dr. Pierce. After opposing statements were filed by the Foundation and Dr. Pierce,(11) Respondent filed a submission with the ALJ explaining that its response had only requested (and, notwithstanding the stay, continued to request) that the ALJ issue an order establishing a schedule for a briefing and hearing on the disclosure issue. By order dated December 29, 1998, the ALJ declined to issue such an order.

The Foundation’s statement in opposition to Respondent’s request, which was filed with the Commission, asked the Commission to rule on its prior motion to the ALJ. That motion sought in camera treatment for Foundation documents. The statement also asked, as related relief, that Respondent "be required to (i) submit a certification that it has fully complied with the terms of the protective order with regard to the Foundation’s peer review materials [and] (ii) provide to the Foundation all copies of all agreements executed in accordance with paragraph 11 of the protective order."(12)

Rather than delaying the disposition of this matter by remanding the Foundation’s requests to the ALJ, the Commission has considered and hereby denies them. There is no basis for granting the Foundation’s request for in camera treatment because, in light of this Order dismissing the complaint, the documents are not to be used in litigation. In addition, Paragraph 11 of the ALJ’s July 18, 1997 protective order prohibits Respondent from disclosing the documents outside of this litigation and Paragraph 14 requires Respondent to return the documents upon dismissal of the proceeding. Paragraph 11 itself already entitles the Foundation to copies of the Paragraph 11 agreements at issue here.(13) The Foundation has not offered sufficient justification for the other related relief sought by its motion.

Accordingly, IT IS ORDERED that the Complaint is dismissed without prejudice. IT IS FURTHER ORDERED that the Foundation’s motion for in camera treatment and related relief is denied.

By the Commission.

Donald S. Clark

ISSUED: January 26, 1999



(1) Master Settlement Agreement Between Settling State Officials and Participating Manufacturers (Nov. 23, 1998)(available as of December 15, 1998 at http://www.naag.org/settle.html)(hereafter the "November 23 Master Settlement Agreement").

(2)Respondent attached to its response its Motion to Dismiss on the grounds that Complaint Counsel failed to satisfy its evidentiary burden, filed November 23, 1998. This motion was not certified to the Commission by the ALJ and is, accordingly, not before the Commission.

(3)The November 23 Master Settlement Agreement anticipates that each state will seek state court approval of the settlement.

(4) See Department of Health & Human Servs., Substance Abuse & Mental Health Servs., Agency Information Collection Activities: Submission for OMB Review; Comment Request, 63 Fed. Reg. 44,866 (1998) (noting that annual survey will be revised to include information on usual brands, including Reynolds’ brands, smoked by persons 12 and over). In the past, this survey has been used to determine the prevalence of use of tobacco, alcohol, and illegal drugs among persons 12 and over.

(5) Respondent requested that the ALJ recommend, among others, that "[t]his dismissal should be with prejudice. Subjecting Reynolds to the continued specter of litigation in this matter in light of the termination of the [Joe Camel] campaign, the length of the investigation and adjudication, and Complaint Counsel’s failure to establish causation would be unreasonable and unfair." Recommendations Concerning Complaint Counsel’s Motion to Dismiss, R.J. Reynolds Co., Docket No. 9285 (Dec. 4, 1998) (attached to Respondent’s Response to Complaint Counsel’s Motion to Dismiss).

(6)See Rule 3.22(a); Century 21 Commodore Plaza, Inc., 95 F.T.C. 808, 818 (1980); Herbert R. Gibson, Sr., 90 F.T.C. 275 (1977).

(7)(Emphasis in original) (footnote omitted). We decline to provide an advisory opinion on what is legally required to prove that the Joe Camel campaign caused or was likely to have caused children to begin or continue smoking. However, we do agree with the ALJ that proving a link between advertising and youth smoking might be accomplished by means other than a definitive, statistically significant scientific study. Because we are not ruling on the merits of this matter, we express no opinion on whether the record does or does not contain the necessary, relevant evidence.

(8) Respondent does argue that closure to the prosecution of Reynolds "can be accomplished by recognizing the arguments advanced in Reynolds’ pending Motion for Dismissal as additional rationales for terminating this proceeding," Respondent’s Response to Complaint Counsel’s Motion to Dismiss, at 2. We view this discussion of possible outcomes to fall short of a request for an explicit ruling on the merits of Reynolds’ motion.

(9)We view the ALJ’s Order Staying Proceedings as indicative of his lack of willingness to decide Respondent’s Motion to Dismiss at this time and, as discussed supra, the ALJ is authorized by Rule 3.22(e) to defer ruling on such a motion to dismiss until immediately after all evidence has been received and the hearing record is closed.

(10) The Commission is not persuaded that any future litigation challenging the Joe Camel campaign would violate any of Respondent’s Due Process or other legal rights. The doctrine of res judicata, which bars a subsequent action only if there is a final judgment on the merits in the earlier action, would not apply. As described above, no such judgment was rendered here by the ALJ or the Commission. See, e.g., United States v. Cunan, 156 F.3d 110 (1st Cir. 1998). In addition, the Double Jeopardy Clause of the Fifth Amendment "protects only against the imposition of multiple criminal punishments for the same offense." Hudson v. United States, 118 S. Ct. 488, 493 (1997)(emphasis in the original). Nor can we conclude that any passage of time between the dismissal of the instant complaint and the possible commencement of a new proceeding would deprive Respondent of an opportunity to present an effective defense. In any event, a future Commission would undoubtedly give careful consideration, as part of its determination that a case is in the public interest, to any claims Respondent might make that it was unfairly prejudiced by the passage of time.

(11)The Foundation and Dr. Pierce, along with the Commonwealth of Massachusetts, had previously filed oppositions before the ALJ to Respondent's Notice of Disclosure of confidential documents submitted by the Foundation and Dr. Pierce.

(12)The Paragraph 11 agreements are those executed by certain recipients of confidential materials obtained by RJR.

The Foundation also sought other related relief, including a requirement that Respondent ". . . (iii) identify all persons to whom the Foundation’s peer review materials have been disseminated or disclosed; (iv) describe with particularity any dissemination or disclosure of the peer review materials not authorized by or in accordance with the terms of the protective order; and (v) retrieve and return to the Foundation all copies of the peer review materials disseminated or disclosed contrary to the protective order’s terms."

(13)The protective order, by its own terms, continues to bind the parties’ communication and use of confidential materials after conclusion of the action. See Paragraph 16.