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Lawsuits Allege Alcohol Makers Target Youths

The first lawsuits filed against the tobacco industry in the 1950s were more or less laughed out of court. The cigarette companies had huge legal firepower, and both judges and juries weren't inclined to sympathize with smokers who had taken up the habit voluntarily.

But like asbestos and breast-implant litigation, the lawsuits began to build on each other until they reached a kind of critical mass. By 1998, the industry decided the threat was significant enough that it came to a settlement agreement with state attorneys general calling for companies to pay more than $200 billion for the first 25 years with payments of an unspecified amount to continue thereafter; another stipulation restricted the companies' marketing practices.

Now it's alcohol's turn -- maybe. In November, David Boies III, the son of famed attorney David Boies, filed a lawsuit seeking class-action status against several prominent members of the liquor industry. The allegation: The companies negligently targeted underage drinkers in their advertising. (The suit, filed in the civil division of the superior court of the District of Columbia, has since been transferred to federal court.)

On Tuesday, the advertising practices of the nation's two largest brewers, Anheuser-Busch Cos. and SABMiller PLC's Miller Brewing Co., were also targeted. A lawsuit filed in Los Angeles County Superior Court alleges that both companies are purposely wooing underage drinkers as part of a cynical marketing strategy.

"As publicly traded companies with obligations to increase firm value, Anheuser-Busch and Miller have deliberately engaged in a multifaceted campaign to encourage underage drinking," the suit alleges. At issue is everything the brewers do to promote their products, including magazine, TV and radio advertising. The complainants, Lynne and Reed Goodwin, state in their suit that their 20-year-old daughter, Casey, was killed last year by an 18-year-old drunken driver.

Both brewers have long denied that they intentionally market their products to underage drinkers. In a statement dismissing the California suit as lacking merit, Francine Katz, vice president of Anheuser-Busch, noted that the brewer has spent in excess of $465 million over more than 20 years opposing alcohol abuse. "We are deeply committed to fighting underage drinking and drunk driving," she said. A Miller statement said: "We believe this lawsuit is completely without merit."

As the suits move through the court system, they could serve as pilot fish for future litigation, exploring the outlines of how the law differentiates between booze and butts on issues such as marketing, addictiveness and class-action status.

Christine Gregoire, Washington state attorney general, says that after the master settlement agreement in 1998, she got calls from activists urging her to go after the alcohol industry for similar infractions. "I said, 'Show us the documents. Show us the evidence,' " says Ms. Gregoire, who adds that no one has come forward with the kind of paper trail that was necessary to file a case against the tobacco companies.

Mr. Boies says he possesses documents showing that the defendants knew that their advertising was reaching underage consumers, but he won't say whether he has internal company documents. "I do think the documents will play a particular role in this case," he says. "It's not the whole case, but it's always powerful when the jury and the judge see things with their own two eyes," he says.

His opponents are adamant that they have nothing to hide. "We are very sincere ... We don't want to do anything that might encourage someone underage to drink," says Peter Cressy, president of the Distilled Spirits Council, whose members include Diageo PLC and Bacardi Ltd., both named in the suit.

Even with documents, some of the conditions that threatened tobacco companies don't apply to alcohol. Although alcohol is addictive to a minority of people, the percentage is far smaller than that of tobacco users. Documents showing that tobacco executives appeared to encourage addiction without warning consumers contributed to the atmosphere that made the tobacco companies settle with the states. But that's a harder sell with alcohol.

Mr. Boies's suit instead claims unfair and deceptive trade practices and negligence in contributing to underage drinking. Under a District of Columbia consumer-protection law, Mr. Boies would need to show that there was an attempt on behalf of the spirits companies to appeal to persons under 21. Mr. Boies's suit mentions certain magazines -- Spin and Stuff among them -- that it says are disproportionately read by males under 21.

The introduction three years ago of flavored malt beverages or "alcopops" also could figure in whether underage drinkers have been targeted, says George Hacker, director of the alcohol-policies project at the Center for Science in the Public Interest. Critics charge that the sweet concoctions are by their nature kid-friendly. The manufacture and promotion of alcopops feature prominently in the suit against Anheuser-Busch and Miller Brewing.

Another issue is whether Mr. Boies's suit will be granted class-action status. Most tobacco suits ultimately have run into trouble claiming a class because of the difficulty of finding a "common class" of smokers -- different people started smoking at different times and smoke varying brands in different amounts. Alcohol suits may face similar problems.

Alcoholic-beverage companies are expected to maintain that they have always acknowledged that underage drinking is a problem and have spent millions to rectify it -- but that marketing isn't the cause. However, acknowledging the dangers of smoking didn't always shelter the tobacco companies. In one California case, a jury ruled that Philip Morris Co. and R.J. Reynolds Tobacco Holdings Inc. deliberately misled plaintiff Leslie Whiteley about the health hazards of smoking, even though she started smoking after warning labels began appearing on cigarette packs in 1966. Many suits prior to that had been on behalf of smokers who picked up the habit before that time.

Perhaps the most important difference between alcohol and tobacco is that the latter is deemed to be harmful even in small quantities. Moderate consumption of alcohol, though, is not inherently unhealthy.

"Cigarettes are the one consumer product that when used as intended, not abused, in all likelihood will make you sick and die prematurely. That is different from a firearm used negligently or alcohol you can drink to excess," says Vermont Attorney General William Sorrell.

Posted on aef.com: February 10, 2004


Christopher Lawton, The Wall Street Journal. February 5, 2004

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