What About Advertising E-Cigarettes?

Come On, Everyone Else's Doing It

It seems that not a week goes by without a call inquiring about advertising for e-cigarettes. From the intensity of the advertising campaign, America has conquered tobacco by replacing it with nicotine vapor from the electronic age. In a recent stroll through Washington's newest Costco, I was met with a giant, prominently placed display for electronic cigarettes. Tobacco-filled rolls of paper are out and electronic vapor devices, a.k.a. e-cigarettes, are in, particularly for the Millennials, a prime advertising target.

I've written about cigarette advertising and have even addressed e-cigarettes before. However, the frequency of continuing questions and unabated agency pressures create a continuing need to address the topic. Let's start with a review of the law relating to "regular" tobacco-filled cigarettes.

The short answer: Broadcasters cannot advertise actual cigarettes. Section 6 of the Federal Cigarette Labeling and Advertising Act (FCLAA) makes it unlawful to advertise cigarettes and little cigars on any medium of electronic communication subject to the jurisdiction of the Federal Communications Commission. The prohibition has also been extended to smokeless and chewing tobacco. The law does not ban the advertising of smoking accessories, cigars, pipes, pipe tobacco or cigarette-making machines.

In the 21st century, the ban on cigarette advertising over any medium of electronic communication subject to the jurisdiction of the FCC creates even newer and more esoteric questions. The FCC, so far, has disavowed regulation of the Internet, so advertising over a broadcaster's website or smartphone app would seem to fall outside the reach of the FCLAA. However, increasingly web traffic and particularly smartphone use is transmitted over FCC-regulated wireless frequencies. Could that fact be used to bring the content of cigarette advertising under the FCLAA ban? To do so would open a real "can of worms" leading to far more serious implications. But, we really don't know yet. The Supreme Court's impending decision on the FCC's net neutrality rules may offer some guidance. But, I digress!

Electronic Smokes

Advertising agencies seeking to place e-cig ads argue that since they do not burn tobacco and are not wrapped in paper, they are legal. Still, many broadcasters have been reluctant to accept their advertising where it refers to or uses the word cigarette. Indeed, can an announcer even voice an ad where the merchant's name contains the word "cigarette," even though the ad is clearly for a product not on the prohibited lis? Since the statute bans the advertising of "cigarettes," a defined term, but does not mention "tobacco" other than as part of the definition of cigarettes, can that word be used?

Until recently, it was difficult to provide any guidance at all. FCLAA compliance is not really an FCC issue. It is a criminal statute -- and jurisdiction belongs to the Department of Justice, which has the exclusive authority to enforce the legal ban within its prosecutorial discretion. It is for the Department of Justice, and ultimately the courts, to decide whether the presentation of such advertisements would be prohibited.

Despite repeated request for guidance, until recently Justice Department officials declined to offer advice on advertisements with "cigarette" in the name of the advertiser and there are no cases to guide us. Many broadcasters have accepted such advertising without adverse consequences, so a good case can be made that the advertisement of a "tobacco rolling contest," or even a tobacco rolling machine or "waterpipes" is outside the statute and therefore not proscribed. But those products do not require the use of the word "cigarette" as would be the case for e-cigarettes, or an advertiser with that word in its name.

New Guidance -- Maybe!

Opting for the "safe-side," radio stations KLAQ and KROD-A aired advertisements for The Cigarette Outlet, but intentionally omitted the sponsor of the announcements, whose name contains the word "cigarette," from the advertisements in order to avoid violating the prohibition on cigarette advertisements. The stations acknowledged the applicability of the Commission's Sponsorship ID laws to The Cigarette Outlet's advertisements but claimed there was no violation by arguing that it was unnecessary to include the advertiser's full name in the announcements because the "identity of each [a]dvertisement's sponsor and the fact of sponsorship of its business were obvious" due to the advertisements' inclusion of the address and phone number of The Cigarette Outlet as well as directions to its only store. The FCC Enforcement Bureau disagreed. To settle the matter with the FCC, KLAQ's licensee entered into a consent degree that imposed significant and costly consequences on the stations.

Essentially, the KLAQ case stands for the proposition that where the word "cigarette" is contained in an advertiser's name, even where the ad is not for a prohibited product, avoid the consequences of the FCLAA by deleting the word from the sponsor's name without violation of the Sponsorship ID rules.

Faced with this decision, and the need to use the word in advertising for e-cigarettes, counsel for National Association of State Broadcaster Associations requested guidance from the Department of Justice. The DOJ letter states that the advertising restrictions of the Cigarette Labeling and Advertising Act, and the Comprehensive Smokeless Tobacco Health Education Act apply solely to cigarettes, little cigars, and smokeless tobacco products and that a "cigarette" is defined as "any roll of tobacco wrapped in paper or in any substance not containing tobacco, and any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette."

The letter then states that none of the (e-cigarette) examples appear to describe a wrapped roll of tobacco that has the appearance of a cigarette, so they would not appear to be within the proscription.

So, is it safe to advertise e-cigs?

First, it bears noting that the letter was signed by Michael S. Blume, Director of the DoJ Consumer Protection Branch -- a branch of the Civil Division, not the Criminal Division. They are involved with cigarette advertising as a small group of DoJ litigators focused on national consumer protection statutes by litigating on behalf of four federal agencies, including the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC), and have litigated against tobacco companies under the Medical Care Recovery Act. However, the FCLAA is a criminal statute and any actions would, presumably, be the jurisdiction of the Criminal Division.

In that regard, it is important that Blume closed with this warning: "This letter represents only the views of the Consumer Protection Branch, Department of Justice, and does not represent the views of any other governmental office, agency or department," leaving the Criminal Division uncommitted. So, we really do not know what they might do about e-cigarette advertising.

Other Civil Legal Exposure

Even if the FCC and the DoJ can be counted out, broadcasters should also keep an eye on other government authorities that have addressed electronic cigarettes. Late last year, the Food and Drug Administration announced that it had taken enforcement action against five electronic cigarette companies for violations of the Federal Food, Drug and Cosmetic Act, including unsubstantiated claims and poor manufacturing practices. The FDA also sent a letter to the Electronic Cigarette Association stating that the agency intends to regulate electronic cigarettes and related products in a manner consistent with its mission of protecting the public health.

In earlier statements, the FDA had issued health warnings about this product, noting that public health experts have expressed concern that electronic cigarettes could increase nicotine addiction and tobacco use in young people and that the FDA's analyses detected diethylene glycol, a chemical used in antifreeze that is toxic to humans. In several other samples, the FDA analyses detected levels of known carcinogens, including nitrosamines and toxic chemicals, to which users could potentially be exposed.

USA Today recently reported that Georgetown University pulmonologist Nathan Cobb, who sees e-cigarettes as nicotine replacement therapy akin to gum, patches and lozenges, claims that the FDA has played its cards close to the vest." Reasonable diligence leaves open the question of how safe their use really is.

Given these discoveries, it is questionable whether advertising electronic cigarettes would be considered a good advertising practice. While it appears to be a reasonable calculated risk to take such advertising, a part of that calculation must be whether the revenue from such ads is worth the cost of legal costs of mounting a defense to a claim of injury from consumer protection agencies or viewers and listeners who might claim injury from their purchase decisions influenced by the station.

This column is provided for general information purposes only and should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.