R.J. Reynolds Tobacco Company

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IN THE MATTER OF R.J. REYNOLDS TOBACCO COMPANY FINAL ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket 9285. Complaint, May 28, 1997- Final Order, Jan. 26, 1999 This fmal order, among other things, dismisses the complilint against the respondent, for its Joe Camel cigarette advertising campaign, on the grounds that the relief sought in the proceeding has now been achieved through a multistate tobacco settlement and revisions of the U.S. Dept. of Health and Human Services' data collection protocol.

Participants For the Commission: Rosemary Rosso, David Shonka, C. Lee Peeler, Gerard Butters, Joseph Mulholland, Russ Porter and Genevieve Fu.

For the respondent: Guy Blynn, in-house counsel, Winston-Salem, N.C. andJudith Oldham, Collier, Shannon, Rill &Scott, Washington, D.C.

COMPLAINT The Federal Trade Commission, having reason to believe that R.J. Reynolds Tobacco Company, a corporation ("respondent"), has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

1. Respondent R.J. Reynolds Tobacco Company is a New Jersey corporation, with its office and principal place of business located at 401 North Main Street, P.O.B. 2959, Winston-Salem, North Carolina. 2. Respondent has advertised, promoted, offered for sale, sold; and distributed cigarettes and other tobacco products. J: The acts or practices of respondent alleged in this complaint have been in or affecting commerce, as "commerce" is defmed in Section 4 of the Federal Trade Commission Act. 4. Beginning sometime before 1987, Reynolds identified the need to attract "frrst usual brand" and/or "presmokers" and/or "learning" smokers to its brands in order to maintain or increase its market share. By 1984, some Reynolds employees recommended that the company establish a formal program to attract "first" usual brand" _smokers. Complaint 127 F.T.C. 5. Beginning in or around 1987, respondent disseminated or caused to be disseminated advertisements and promotions for its Camel brand cigarettes, including, but not necessarily limited to, the attached Exhibits A through F. The ads and promotions have as their central theme a cartoon camel sometimes referred to as "Old Joe," "Smooth Character" or as "Joe Camel" (hereinafter "Joe Camel"), and other similar cartoon characters.

6. The purpose of the Joe Camel campaign was to reposition the Camel br~nd to make it attractive to younger smokers. At least one of the targets of the campaign was "first usualbrand" smokers. 7. The Joe Camel campaign was successful in repositioning the Camel brand to make it attractive to younger smokers. In fact, the campaign was successful in appealing to many children and adolescents under the age of 18, or under the age at which cigarettes may lawfully be sold to consumers.

8. The Joe Camel campaign induced many of these children and adolescents under the age of 18 to smoke Camel cigarettes or increased the risk that they would do so. For many of these children and adolescents, the decision to smoke Camel cigarettes was a decision to begin smoking; for others, the decision to smoke Camel cigarettes was a decision to continue smoking. As a result, the Joe Camel campaign caused or was likely to have caused these children and adolescents to initiate or continue smoking cigarettes. 9. In fact, after the initiation of the Joe Camel campaign, the percentage of smokers under the age of 18 who smoked Camel cigarettes became larger than the percentage of all adult smokers aged 18 and older who smoked Camel cigarettes.

10. Reynolds knew or should have known:

a. That because of the themes and techniques it used in the Joe - Camel advertising and promotional campaign, that campaign would have a substantial appeal to children and adolescents below the age of 18, as well as to smokers over the age of 18; or b. That many smokers initiate smoking and become regular smokers before the age of 18, and that by targeting "first usual brand" and/or "presmokers" and/or "learning" smokers, the Joe Camel campaign would cause many children and adolescents below the age of 18 to smoke Camel cigarettes.

R.J. REYNOLDS TOBACCO COMPANY 51 49 Complaint 11. Consumers who smoke cigarettes risk addiction (i.e., nicotine dependency) and a number of immediate and long term adverse health effects including, but not limited to, coronary heart disease, lung and laryngeal cancer, oral cancer, esophageal cancer, chronic obstructive pulmonary disease, and low-birth-weight babies. 12. Many children and adolescents do not adequately comprehend the nature of the risk or the seriousness of nicotine addiction, or the other dangerous health effects of smoking cigarettes. 13. R.J. Reynolds' actions, as set forth in paragraphs 4, 5, 7, 8, 9 and 10 have caused or were likely to cause substantial and ongoing injury to the health and safety of children and adolescents under the age of 18 that is not offset by any countervailing benefits and is not reasonably avoidable by these consumers. . 14. Since at least 1988, most states and the District of Columbia have enacted laws that make it illegal to sell cigarettes to persons .under the age of 18, in order to protect children and adolescents from the significa!lt adverse consequences of cigarette smoking. In 1992, Congress passed a federal statute that provided that, as a condition of receiving grant funds for substance abuse programs, states must enact and enfor<?e laws prohibiting the sale or distribution of tobacco products to persons under the age of 18.

15. The acts and practices of respondent as alleged in this complaint constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. Commissioner Azcuenaga and Commissioner Starek dissenting. 52 FEDERAL TRADE COMMISSION DECISIONS . Complaint 127 F.T.C. EXHIBIT A Beach Pamphlet Smooth Moves ~ ~~ ,1 • 9 t-·f¥'$ ; ~ .. ~ \, .. : ' I ~ ': ·'ilf ~:. . ~r I" ;_, gg ;i · 0 r-< u trJ C/.l () 0 ......:J ~ "0 53....... 3 0to ...., E a >(") (") > 0 (") ~ .. ... ~ Complaint 127 F.T.C. EXHIBIT A ). P.--·: --,·· :·::·...

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R.J. REYNOLDS TOBACCO COMPANY 55 49 Complaint EXHIBIT A Ask c kin::i-looking strcnge~:.: 2. redeem it ..

Ask a gooci-looking strc:1ge' to 3. redeem it.

Offer each o Camel and start c 4. worm, wonderful friendship.

SURGEON GENERAL'S WARNING, Cigarene Smo~e Contains Carbon Monoxide.

lights 9 mg '"ta!··. U-7-_mg n •cot•n~. lights HARD PACK to mg "tar". 0 7 mg ntcoltne. LIGHTS IOO's· 12 mg ··t;::... 0 9 m~ n•coltoe. filters 16 mg '"tar". I Gmg ntcot•ne. FllTfRS HARD PACK 11 mg '"tar'".\.1 mg nocoune. fll Tfi'lS IOO"s IE r:tg '"tar ... 12 rr.~ n•co:one. REGULAR 21 mg '"ta· ... 14 mg ··cotme. a; pe: c•gareue by FTC method 1~----------------------------------.I'OL06 · I .......~u::tu~r•s couoo• I a...Atu:Jlon I !111 i ,~ II~ FREE Pack , : , :.~.......:..·--:::.·· 1.JLJ ~.:..~ ;l When . OfYou Buycamel!1. Any Style. 1 I AOJJL!A rou MUST nu"' •oR"ll. Anm "''cl too •:n ••CLUOI U L!S TUIS• 9070.: L----------------~-~-----~--~--- -- ~~ Complaint 127 F.T.C. EXHIBIT B Catalogue ;: 1 R.J. REYNOLDS TOBACCO COMPANY 57 49 Complaint EXHIBIT B Complaint 127 F.T.C. EXHIBIT B 59 R.J. REYNOLDS TOBACCO COMPANY Complaint EXHIBIT B (.

Complaint 127 F.T.C. EXHIBIT B r f :-.. - I R.J. REYNOLDS TOBACCO COMPANY 61 49 Complaint EXHIBIT B ( ( 235 lnore ordering please read tt.e instructions on I he cover of tt.is order form. ,, OfferItemreslricledOftniplioftto smokers 21yeart of age or older. Sirt Ouonrir]Please print• old~rly.C·Notes Total II II f(ift~ OM I Ordered bch (-Notes """ z 01-, 02 Hard Pack U.S. Tour Jockor l ll ICO z OJ Hord rock Sila'"r Curtain 7S 2 04 S Hard rock Tumw.,, Sel co z OS Hard ~· Tu.,bltr • .IH 2 ~ Hard P.ck fuosblt~ • ll4s • z 07 Hord Pack Turwltl., • fiord • 1 0. Hord Pack Tumbler • l"'rah • 2 Hord Pack Tuosbltt • fddit • l 10 IIi, To, li§ll_t., • Hord Pack •s '" l II flip f_Ofl li!htor • lont To lo SMooth s l It ll ..... 5Joo<ts • rool ,~., Joo l X1 IS l U,IS loser Shorts • Carrttl ~ach l n IS l lipl_o lrau li~tor • "Pttsonolirod!Turedo Joe ll l 17.. Zi,Jlo Brou li.ghter • ·renonafirod/Oriqinal (amol lJ c II Joo's Head (an Huqq., s 4 19 Joe Camel Ti< lS 20 .lao's Sun,laues 10 • 21.11 C..mol Jean locket l X1 ISO •c 1l. 14 .• harher a.... b.. .lackc! l Xl soo s 2S Noon (amol Si<Jn 600 s 26 Marorctclo Joo Dllfflo l6 s 27 ln/larable Air Matrrnr w/ladio 7S s 11 Camel o:ro<lar's Choir • .,.,_olirod/hr Name loo s 21 c....., ...,h flifl_lcf• IS lO Camel Walch • Tvrodo ~ 1S • ll C.mol Waldo • c-1 C..k .lao 1S • 32 14 or lrclwd Glon M"' • Dl.._, c.-1 IS • ll 16 01 lrched Glens Muq • for!! To a. Sooooorfl IS • l4 16 or lr<Md Glou M,.. • ,., ~.lao IS 10 • 1S '-"" <o,. c-la..dl ..... • l4 kwW c., • hal ,. .lao I lim 10 7 17 a...t. r-1-hal,._,.....,. 20 ' 7 ll ...... '-" . C.-.la...tt 20 7 ~ a..dt r-.f. "-4 M 20 7 40.41 ShOI1 Sl.ww T·Sioiff • lono To It s-ort. l X1 1 42 43 _looog_sa.- J.Sioiff ....... To .. s-ort. l n 11• 7 4-4 4S Slww1 sw- l-Shirt ..... a-a ""-" l n 1 44 47 ~-sa.- t-S~Yn ..... ._.. r..,.,.,. l n 12• 1 u 4t Sloor1 SM... J.Sioiff. c-1 C..h l n 1 SO Sl ~SM... f.SIIiff. c-1 c..~ l n 12• 1 S2 c.-1 fin<• Slroom ........ ,..,... .... liimo lC 1 Sl c-1 f&.e<t Sloertl • Joe c-1 ,.... lC TOTAl TOTAl •f11 io lar ,..,_,.....! s--t. SMf li,. Uti- (l.mols llon.n ..._) ·- __ Din<tcw.'r a-;.("-< 12 Wn.n _._) - - - _ - -- - - - - - Complaint 127 F.T.C. EXHIBIT B Ofle< rnlrict.J Ia smokHs 21 years ol tge or olclet. lle.,.. ,.isl d.atly. uc-c~c--. ..... Ao""'' "...,._.,_..,.,..,Jtrm o<po~.,.;.,.usa _ .-.--ocoo~ • .....--. ... Oll.<,.ot.W. ............ Io................ ·· ·-·"'-cltoo.l(~(-................. --.-."'"....,.._ -- 10_,.,...,_ ~-............ ___.,"""! -,.lo-lr- ..... ,.. ____ ..___ -.. - Name _______________________~--------------------------------- · Addreu------------:----- Phone# __. ____ _ _ City _______________ State Zip _____ _ My usual What is your birthdate? __} __} __ Sex Brand is _____ _ <l<h . DO.. ' lc~-~otl- • .,....,, .-..1..,11 ,.., o~.,.., .W.• eMIIoot 1-tonc.iwlncod,..-.tt"· ,_..,..~ . "'ofl"'lo .... IMII. I oo4o,..4 tt.r '"" 1-.. ..f-"_., • .,.,, ,_oil"'...., C8011int1t t ........ J 1ft Signature l_roqu•rt4l------------------ SURGEON Generals WARNING: Cigarette Smok• Contains Carbon Mono1id1.

1 1'" 121 A.J A£Y'<Ol OS TOBACCO CO R.J. REYNOLDS TOBACCO COMPANY 63 49 Complaint EXHIBIT B SSF eR eseNIS 4 ra An eS Leh Cia tt OO. OS MW yt yar hd Paar tee 4s Pee MAVsi ye sys \ 1 these V= = 3\ i> Ditiviateed d(Cambt Lakalie Bade: 2" We aso appro 9, Suidodr aivity, > 7 vis A y Ss orsand * Ae st wel;

—- > =O5) AEST VIN ES Oy rig natal d SS VOE'S BASEBALL CAPS coy 8 A 5 Stara 4 Wh in) nae give you spats lo 7 Stfetch out at tfié beach, jst yell’ |, y= *SAark!! Youll find toom soon, then.’ 4 mark your, Spot with the'smooth Camiat /-X“ Beach Towel of yout chpite BO" x60", Oy rie Bere Ne VV a sene STs ~7 7 POOLPLAER, HEM e217, {CAMEU'BEACH, ITEM ida | -“* = 8 Slevays time lor a7 7457 = ARG PACK, ITEM #30 -7 5» 1 S,Gantel, Only Question ig; > eo6)Nored 7S Which one? You picks," ote:

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0\ Vl 0'\ 0'\ '":rj trJ ti1 ~ ~...dl~ ()A.ME~ ()·~ >-j ~ -.oT~o ~~ .... ~ "CAMEL CASH SAVED. IS 0 ti1 ti1 SOMI; SMOOTH STUFF EARNED." @ () (') 0 0 3 Ultra LIGHTS HARD PACK: 6 mg. "tar". 0.5 mg. nicntine, ULTRMIGIITS, "0 LIGHTS tOO'SHARO PACK: 6 mg. "tar", 0.6 mg. nicotine.liGIITS IIARQ PACK: ULTnX·-· 63........ ?I. g. 9 mg. "tar", 0.6 mg. nicotine, LIGHTS 1oo·s. 10 mg. "tar". 0.8 mg. nicotine.l1G11TS: >-j ~ 11 mg. "tar·: 0.8 mg. nicotine, Fillers: 14 mg. "tar", 1.0 mg. nicotine. f1LIFAS loos: to (/)(/) 16 mg. "tar'', 1.0 mg. nicotine, FILTERS HARU PACK: 17 mg. "tar", 1.2 mg. r..cotine. ........ REGULAR: 22 mg. "tar", 1.4 mg. nicotine. av. per cigar tile hy FTC method. ~ '• 0 trJ (') ........ (/) .........

0z(/) R.I. REYNOLDS TOBACCO COMPANY 67 49 Complaint EXHIBIT C Direct M.;il ... 8)01<1 ~l!6P a4~ u: .a.i,noa Camel Cosh H<!odquorlers P.O. Box 3200 Winston-Salem, NC 27102 PRE S~TED 1.. 1.1•• 1.1 .. 1.111 .... 11 ..... 111 ••1.... 11 ... 111 ... 11 301424 Who says you can't have it' all? _, ____ ·awg !. . .aq6!-J . atp I · .a.o I ! Complaint 127 F.T.C. EXHIBIT C (:. I-- Get Camel Cash! ~ . We'll send you ten s ..__j/il ~amel Cash C·Notes :~ \ . good toward anything in · ~ -.\ the Camel Cash Catalog.

~ Get The Catalog! We'll send you the new Camel Cash Catalog - I packed with smooth stuH you can get from C~mel • . ..

.. ·Get ..;.:.': ..

·~"ijj· send-~~-1!9 :You - ·· , ,..':' ·· · · SURGEON GENERAL'S WARNING: Quitting Smoking Now Greatly Reduces Serious Risks to Your Health. R.J. REYNOLDS TOBACCO COMPANY 69 49 Complaint EXHIBIT D Magazine Ad Complaint 127 F.T.C. EXHIBIT E Magazine Ad R.J. REYNOLDS TOBACCO COMPANY 71 49 Complaint EXHIBIT E :II Ii l '·' 127 F.T.C. Complaint EXHIBIT F Magazine Ad R.J. REYNOLDS TOBACCO COMPANY 73 49 Complaint EXHIBIT F Complaint 127 F.T.C. EXHIBIT F "4 ...~>.:....,..· . ~?'' ' .. ·'"" ..,. ,,. , "'· R.J. REYNOLDS TOBACCO COMPANY 75 49 Complaint EXHIBIT F Statement 127 F.T.C. STATEMENT OF COMMISSIONER MARY L. AZCUENAGA Today, the Commission issues· a complaint against R.J. Reynolds Tobacco Company("Reynolds") alleging that Reynolds' "Joe Camel" advertising campaign constitutes an unfair act or practice in violation of Section 5 of the Federal Trade Commission Act. The actions alleged in the complaint are serious, and intuition suggests reason to believe they are true. Intuition alone, however, is not a sufficient basis for issuing a complaint under the statute. The Commission is an agency of limited jurisdiction and is authorized to bring a case only if certain elements of the law are satisfied.' Not having found reason to believe that the evidence supports each of those elements, I must dissent.2 .·· The issues underlying the complaint issued today differ little from those considered by the Conunission in its 1993-94 inquiry into the same advertising campaign.3 That inquiry was closed by a majority vote of the Commission without law enforcement action. I have decided to take the unusual step of writing to explain my position on the current decision despite the adjudicative status of the case. I emphasize that although as a matter of law I am unable to vote to issue a complaint, I would be free at a later stage in the proceeding to find a violation of law if the record in the upcoming adjudication so demonstrates.

When the Commission voted in 1994 to close its investigation of Joe Camel, the Commission majority issued a Joint Statement (copy attached). The Commission said then, and it is equally true now: Although it may seem intuitive to some that th~ Joe Camel advertising campaign would lead more children to smoke or lead children to smoke more, the evidence to support that intuition-is not there. Our responsibility as commissioners is not to . make decisions based on intuition but to evaluate the evidence and determine whether there is reason to believe that a proposed respondent vi~lated the law. The Statement continued:

If intuition and concern for children's health were a sufficient basis under the law for bringing a case, we have no doubt that a unanimous Commission would have I 15 U.S.C. 45(b) and (n).

2 Unlike my colleague, Commissioner Starek, I would find that the case is in the public interest, but I concur in the first paragraph of his dissenting statement. File No. 932 3162.

R.I. REYNOLDS TOBACCO COMPANY 77 49 Statement taken that action long ago. The dispositive issue here, however, was whether the record showed a link between the Joe Camel advertising campaign and increased smoking among children, not whether smoking has an effect on children or whether the health of children is important.

Like my colleagues, I always am willing to revisit past decisions in light of new evidence, particularly if that evidence might provide a basis for Commission action to protect the health ofchildren. In my view, the serious health issues concerning smoking by children mandate our utmost attention to any new information that might support a case against advertising· that can be shown to cause or increase smoking among children.

I have carefully considered the totality of the available evidence, including new material that has been presented to the Commission, and have concluded that the new information does not strengthen the case the Commission rejected in 1994. As in 1994, the available evidence does not support the specific legal requirements of a complaint under Section 5 of the Federal Trade Commission Act. ATTACHMENT JOINT STATEMENT OF COMMISSIONERS MARY L. AZCUENAGA, DEBORAH K. OWEN, AND ROSCOE B. STAREK, III Today, the Commission doses its investigation of the Joe Camel advertising campaign after voting not to issue a complaint. Although it is unusual to comment on our reasons for taking such action, we · have decided to explain our decision in light of the statements of our dissenting colleagues and the widespread public interest the matter has generated.

Although it may seem intuitive to some that the Joe Camel advertising campaign would lead more children to smoke or lead children to smoke more, the evidence to support that intuition is not there. Our responsibility as commissioners is not to make decisions based on intuition but to evaluate the evidence and determine whether there is reason to believe that a proposed respondent violated the law. · The Commission has spent a great deal of time and effort reviewing the difficult factual and legal questions raised by this case, including a comprehensive review of relevant studies and statistics. Because the evidence in the record does not provide reason to believe that the law has been violated, we cannot issue a complaint. Dissenting Statement 127 F.T.C. If intuition and conce.rn for children's health were a sufficient basis under the law for bringing a case, we have no doubt that a unanimous Commission would have taken that action long ago. The dispositive issue here, however, was whether the record showed a link between the Joe Camel advertising campaign and increased smoking among children, not whether smoking has an effect on children or whether the health of children is important. Indeed, our concern about the health of children led us to consider every possible avenue to a lawsuit before reaching today's decision.

DISSENTING STATEMENT OF COMMISSIONER ROSCOE B. STAREK, III I am very concerned about the harm that cigarette smoking poses to children, but I also take seriously the statutory limits on the Commission's authority to pursue enforcement actions against allegedly unfair practices. The evidence before us now, including the evidence obtained since the Commission considered this matter in 1994, does not convince me that there is reason to believe that the law has been violated. The issue in this ·case is whether the Joe Camel advertising campaign causes or is likely to cause children to begin or to continue smoking. As was true three years ago, intuition and concern for children's health are not the equivalent of- and should not be substituted for - evidence sufficient to find reason to believe that there is a likely causal connection between the Joe Camel advertising campaign and smoking by children. Moreover, it simply is not in the public interest to bring this case now. Before committing a vast amount of scarce agency resources to this litigation, the Commission should await the resolution of the appeal of the federal district court decision striking down the Food and Drug Administration's tobacco advertising restrictions and the outcome of widely-reported settlement discussions between tobacco companies and numerous states. Either of these developm!;!nts might result in advertising restraints that would largely duplicate any remedies the Commission might obtain.

Accordingly, I dissent from the majority's determination to issue a complaint.

R.J. REYNOLDS TOBACCO COMPANY 79 49 Final Order FfNAL ORDER ORDER DISMISSfNG COMPLAINT 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' 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 ("ALJ"), by order dated December 2, 1998, certified this motion to the Commission, and, by order dated December 7, 1998, stayed further action iii 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 <;iismiss 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.

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 ~ttached 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 AU and is, accordingly, not before the Commission. Final Order 127 F.T.C. DISCUSSION 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 accompfished without the need for further litigation in this case. Therefore, the public interest warrants dismissal of the complaint.

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. R.J. REYNOLDS TOBACCO COMPANY 81 49 Final Order 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 th;:1t 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 ofReynolds' defenses -- and the concomitant advis.~bility 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 ofPractice 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. .:rhe ALJ did, however, state in his December 7 Order Staying Proceedings that: 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 in'::estigation 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 FTC 808, 818 ( 1980); Herbert R. Gibson, Sr., 90 FTC 275 (1977).

82 FEDERAL TRADE COMMISSION.DECISIONS Final Order 127 F.T.C. [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 t}:lis 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 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 AU that proving a link between advertising and youth smoking might be accomplished by means other than a definiti~e. 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 AU 's Order Staying Proceedings as indicative of his lack of willingness to decide Respondent's Motion to Dismiss at this time and, as discuss·ed supra, the AU 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 tl:a.at 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 AU or the Commission. See, e.g., United States v. Cunan, !'56 F.3d·IIO (1st Gir. 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 ofthe instant complaint-and the possible commencement of a new proceeding would deprive respondent of an opportunity to present an effective defense. ln·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. R.J. REYNOLDS TOBACCO COMPANY 83 49 Final Order 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 opp~sition 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 F oundadon documents. The statement also asked, as related relief, that respondent "be required to (i) submit a certification c:/ 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 ofthe 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 a~e 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 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. The paragraph II 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 pa1ticularity 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 F~undation all copies of the peer review materials disseminated or disclosed contrary to the protective order's terms."

Final Order 127 F.T.C. outside of this litigation and paragraph 14 requires respondent to return the documents upon dismissal ofthe 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. r::/ - -13 The protective order, by its own· tenns, continues to bind the parties' communication and use of confidential materials after conclusion ofthe action. See paragraph 16. FIRST AMERlCAN REAL ESTATE SOLUTIONS, LLC 85 85 Complaint