A federal judge in Albuquerque has dismissed more than two dozen complaints against Santa Fe Natural Tobacco Co., but allowed others to proceed against the maker of Natural American Spirit cigarettes, which is accused of purposely deceiving consumers into thinking the high-priced smokes are safer and healthier than other cigarettes by using such terms as “organic” and “additive-free” in its marketing and packaging.
Scores of plaintiffs from at least a dozen states sued after the federal Food and Drug Administration in 2015 found the terms misled consumers regarding risks associated with the products.
U.S. District Judge James Browning in a Dec. 21 ruling cited various state laws as he weeded out some of the complaints that were consolidated in his court, dismissing a number of counts involving lawsuits filed in California, Colorado, Florida, Illinois, Massachusetts, Michigan, New Jersey, New Mexico, New York, North Carolina, Ohio and Washington state.
Some rejected claims were premised on the theory that by labeling its cigarettes as “additive-free” and “natural,” the company tried to suggest that its cigarettes are less processed than other cigarettes.
However, the company, which was founded in Santa Fe more than three decades ago but was acquired by tobacco giant Reynolds American Inc. in 2002 for $340 million, still faces legal battles over marketing efforts that have grown Natural American Spirit into one of the best-selling brands in the country.
The judge approved the transfer of three of the lawsuits to a federal court in North Carolina, where the company’s operations are based.
Browning also ruled that the First Amendment does not shield the defendant from liability.
A spokesman for Santa Fe Natural Tobacco on Thursday declined to comment on the litigation.
The company earlier this year reached an agreement with the FDA to stop labeling products as “additive-free” and restrict use of the term “natural.” Santa Fe Natural had consistently used those terms along with a logo featuring a pipe-smoking American Indian in a feathered headdress.
The company since 2000 has been subject to a Federal Trade Commission consent order requiring that its ads include disclaimers that “No additives in our tobacco does NOT mean a safer cigarette” and that “Organic tobacco does NOT mean a safer cigarette.”
Nonetheless, sales have continued to climb. The Winston-Salem Journal reported that in the first half of fiscal 2017, the final reporting period before British American Tobacco acquired full ownership of Reynolds, nationwide sales of Natural American Spirit totaled $516 million, up nearly 11 percent.
Reynolds no longer gets overseas revenue from the brand. Last year it sold international rights to the brand to a Japanese buyer for $5 billion.
Santa Fe Natural maintained offices in Santa Fe after its acquisition by Reynolds, which reportedly began offering buyouts to employees in advance of its sale this year to British American Tobacco.