Class-action suit sought against makers of American Spirit cigarettes

Santa Fe Natural Tobacco Co. has been using the terms “natural” and “additive-free” to market American Spirit cigarettes since the company was founded more than three decades ago. But the labels are coming under increased scrutiny and legal challenges as the brand’s sales grow, even while the overall U.S. cigarette market shrinks.

A Florida law firm this week filed the first attempt at a class-action lawsuit against the Santa Fe-based company and its parent, Reynolds American Inc. of Winston-Salem, N.C., claiming the cigarette maker’s packaging and advertising are intended to mislead smokers into thinking American Spirit cigarettes are healthier than other tobacco products.

The lawsuit cites a recent Food and Drug Administration warning to the company that promoting American Spirit cigarettes as “natural” or “additive free” violates federal law.

Santa Fe Natural Tobacco already is subject to a Federal Trade Commission consent order, entered in 2000, that requires the company’s advertising to include a disclosure that “No additives in our tobacco does NOT mean a safer cigarette.” Its ads also include a statement that “Organic tobacco does NOT mean a safer cigarette.”

The FDA, in an Aug. 27 letter to the company, asserted that it has authority under a 2009 law to regulate “modified risk tobacco products.” The agency directed the company to submit plans for “corrective actions.”

The Winston-Salem Journal noted that the FDA warning came about a month after the company began a national advertising campaign with full-page ads in magazines such as Sports Illustrated, Time, Field and Stream, Southern Living, Architectural Digest, Vanity Fair and US Weekly.

A spokesman for Santa Fe Natural Tobacco, Seth Moskowitz, said Friday that company policy prevented him from commenting on the lawsuit.

However, the company has submitted an explanation of its marketing strategy to the FDA and asked for a meeting to provide additional information.

Reynolds American stated in a regulatory filing posted on its website that American Spirit is the “leading super-premium cigarette brand and is a top 10 best-selling cigarette brand. It is priced higher than most other competitive brands, and is differentiated from key competitors through its use of all natural, additive-free tobacco, including styles made with organic tobacco.”

The lawsuit filed this week in U.S. District Court for the Southern District of Florida by Justin Sproule notes that American Spirit sales increased by 86 percent from 2009 to 2014, as compared to an overall 17 percent decline in cigarette sales in the United States during the same period. Just this week, Reynolds American announced that it had agreed to sell the international rights to the brand to Japanese buyers for $5 billion.

The complaint seeks damages on behalf of Sproule and others who “smoke American Spirits because they have been deceived by claims, labels and advertising into regarding them as safer than other cigarettes.”

Descriptions such as “additive-free,” “natural” and “organic,” the lawsuit says, “are patently deceptive, especially in today’s market, where these terms have a potent meaning for the health-and-environmentally-conscious consumer.”

The company also exploits its marketing message in other ways, the complaint says, by selling its cigarettes in health food stores. “And it accompanies its cigarettes with literature from ‘America’s leading natural foods teacher’ who claims that the cigarettes are medicinal and that Native Americans smoke such additive free cigarettes without developing cancer.”

Contact Howard Houghton at 986-3015 or hhoughton@sfnewmexican.com.