American Brands, Inc. v. National Ass'n of Broadcasters

308 F. Supp. 1166, 1969 U.S. Dist. LEXIS 13118, 1970 Trade Cas. (CCH) 73,074
CourtDistrict Court, District of Columbia
DecidedDecember 30, 1969
DocketCiv. A. 3517-69
StatusPublished
Cited by4 cases

This text of 308 F. Supp. 1166 (American Brands, Inc. v. National Ass'n of Broadcasters) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Brands, Inc. v. National Ass'n of Broadcasters, 308 F. Supp. 1166, 1969 U.S. Dist. LEXIS 13118, 1970 Trade Cas. (CCH) 73,074 (D.D.C. 1969).

Opinion

MEMORANDUM

MATTHEWS, Senior District Judge.

The matter before the Court is plaintiff’s motion for a preliminary injunction. In ruling on it the Court takes into consideration the record, the points and authorities in support of and in opposition to the motion, the exhibits, the affidavits, the depositions and the argument of counsel.

1. Cigarette Advertising is the subject of this litigation.

2. The plaintiff, American Brands, Inc., formerly known as the American Tobacco Company, is a leading manufacturer of cigarettes.

S.The defendants are the National Association of Broadcasters, the Columbia Broadcasting System, Inc., the National Broadcasting Company, Inc., the American Broadcasting Companies, Inc., the Federal Trade Commission and the members of that Commission.

4. One of the defendants — the National Association of Broadcasters — is a private trade association established for the purpose of serving the common needs of the broadcasting industry. Its functions include the maintenance of an entity entitled the Code Authority. The Code Authority was established in 1952, and today administers separate radio and television codes of programming and advertising standards. It attempts to establish standards pertaining to false and deceptive advertising and good taste in advertising content.

5. The three corporate defendants, Columbia Broadcasting System, Inc., National Broadcasting Company, Inc., and American Broadcasting Companies, Inc., are nationwide television networks which supply programming and advertisements to their owned and affiliated stations. They are among the subscribers to the mentioned Code authority as are approximately 65% of the television stations in the United States.

6. On September 29, 1969 the Federal Trade Commission issued a complaint charging plaintiff with false, deceptive and misleading advertising as to the tar content of certain of its cigarettes, and asserting that plaintiff’s acts and practices in regard thereto were and are to the prejudice and injury of the public and of plaintiff’s competitors, and constituted and now constitute unfair methods of competition and unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act. Plaintiff has filed an answer to the Commission’s complaint denying that any of its advertising of its cigarettes is false or deceptive.

7. There is attached to the mentioned complaint of the Federal Trade Commission against plaintiff a proposed order which would proscribe plaintiff from representing that the tar content of its cigarettes or the smoke produced *1168 by them is low or lower unless the following disclosures are also made: (1) the tar content in the smoke of the advertised cigarette, (2) the brand name and tar content in the smoke of any cigarette with which a tar content comparison is made, and (3) the tar content in the smoke of the highest and lowest yield domestic cigarettes.

8. The Federal Trade Commission proceedings have not terminated.

9. On September 2, 1969 the Director of the Code Authority of the National Association of Broadcasters sent a letter to the Federal Trade Commission making inquiry, among other things, as to whether the Commission had formulated any policy regarding the use of qualifying words such as “low’', “lower” and “reduced” in describing the tar and nicotine content of a cigarette in advertising copy, and advising the Commission that the Code Authority would value any guidance the Commission could offer on these points. This was before the filing by the Commission of its mentioned complaint against plaintiff.

10. By letter of October 8, 1969, the Commission responded to the Code Authority. It pointed out that the use of such adjectives as “low” and “less” when describing tar and nicotine content are imprecise and that their use, absent a full and fair disclosure of the basis of comparison, could lead to untrue conclusions by the members of the public as to the comparative tar and nicotine content of the advertised brand of cigarettes. It was also pointed out by the Commission that the degree of imprecision so created would vary according to the actual tar and nicotine content of the cigarettes advertised, but that such imprecision can almost always be avoided if the representation is accompanied by clear and conspicuous disclosure of (1) the tar and nicotine content in milligrams of the smoke produced by the advertised cigarette; (2) the tar and nicotine content in milligrams of the lowest and highest yield domestic cigarettes; and (3) if the tar and nicotine content of the advertised cigarette is compared to any other specific cigarette, the brand name and tar and nicotine content in milligrams of the smoke produced by such other cigarette.

11. On October 9, 1969, in view of the substantial public interest in the subject matter, the Commission publicly released its exchange of correspondence with the National Association of Broadcasters.

12. The Director of the Code Authority of the National Association of Broadcasters on October 13, 1969 wrote to plaintiff’s attorney regarding the Federal Trade Commission’s position on tar and nicotine references in cigarette advertisements. Thereafter said Director on November 22, 1969 wrote to the General Counsels of plaintiff and other cigarette manufacturers to inform them of a decision of the Code Authority'to adopt the Federal Trade Commission policy relating to broadcast cigarette advertising on code subscriber radio and television stations, and that the policy should be implemented as soon as possible but no later than January 1, 1970. At the same time — November 22, 1969 —plaintiff was invited to raise with the Code Authority any questions it might have about the new policy but plaintiff did not respond to this invitation. The new guidelines and their effective date were printed in the October issue of the Code News.

13. On December 11, 1969 plaintiff instituted this law suit. Plaintiff complains of the amendment by the National Association of Broadcasters of its cigarette advertising guidelines, effective January 1, 1970, to adopt the Federal Trade Commission’s policy on low tar and nicotine claims. Plaintiff was informed by the defendant networks that they would not continue after January 1, 1970, to accept the advertising for plaintiff’s Pall Mall Gold and Silva Thins unless plaintiff revised it to comply with the cigarette advertising guidelines effective January 1, 1970.

14. It is plaintiff’s contention that the decision to exclude after January 1, 1970 its cigarette advertising which had *1169 been approved prior to the amendment of the above-described guidelines constitutes a concert of action or combination and conspiracy by the defendants in unreasonable restraint of interstate trade and commerce in violation of the antitrust laws, 15 U.S.C. § 1 et seq. 1

15. On the other hand, the defendants deny any antitrust violation.

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Bluebook (online)
308 F. Supp. 1166, 1969 U.S. Dist. LEXIS 13118, 1970 Trade Cas. (CCH) 73,074, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-brands-inc-v-national-assn-of-broadcasters-dcd-1969.