The opinion of the court was delivered by: MATTHEWS
The matter before the Court is plaintiff's motion for a preliminary injunction. In ruling on it the Court takes into consideration the record, the points and authorities in support of and in opposition to the motion, the exhibits, the affidavits, the depositions and the argument of counsel.
1. Cigarette advertising is the subject of this litigation.
2. The plaintiff, American Brands, Inc., formerly known as the American Tobacco Company, is a leading manufacturer of cigarettes.
3. The defendants are the National Association of Broadcasters, the Columbia Broadcasting System, Inc., the National Broadcasting Company, Inc., the American Broadcasting Companies, Inc., the Federal Trade Commission and the members of that Commission.
4. One of the defendants - the National Association of Broadcasters - is a private trade association established for the purpose of serving the common needs of the broadcasting industry. Its functions include the maintenance of an entity entitled the Code Authority. The Code Authority was established in 1952, and today administers separate radio and television codes of programming and advertising standards. It attempts to establish standards pertaining to false and deceptive advertising and good taste in advertising content.
5. The three corporate defendants, Columbia Broadcasting System, Inc., National Broadcasting Company, Inc., and American Broadcasting Companies, Inc., are nationwide television networks which supply programming and advertisements to their owned and affiliated stations. They are among the subscribers to the mentioned Code authority as are approximately 65% of the television stations in the United States.
6. On September 29, 1969 the Federal Trade Commission issued a complaint charging plaintiff with false, deceptive and misleading advertising as to the tar content of certain of its cigarettes, and asserting that plaintiff's acts and practices in regard thereto were and are to the prejudice and injury of the public and of plaintiff's competitors, and constituted and now constitute unfair methods of competition and unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act. Plaintiff has filed an answer to the Commission's complaint denying that any of its advertising of its cigarettes is false or deceptive.
8. The Federal Trade Commission proceedings have not terminated.
9. On September 2, 1969 the Director of the Code Authority of the National Association of Broadcasters sent a letter to the Federal Trade Commission making inquiry, among other things, as to whether the Commission had formulated any policy regarding the use of qualifying words such as "low", "lower" and "reduced" in describing the tar and nicotine content of a cigarette in advertising copy, and advising the Commission that the Code Authority would value any guidance the Commission could offer on these points. This was before the filing by the Commission of its mentioned complaint against plaintiff.
10. By letter of October 8, 1969, the Commission responded to the Code Authority. It pointed out that the use of such adjectives as "low" and "less" when describing tar and nicotine content are imprecise and that their use, absent a full and fair disclosure of the basis of comparison, could lead to untrue conclusions by the members of the public as to the comparative tar and nicotine content of the advertised brand of cigarettes. It was also pointed out by the Commission that the degree of imprecision so created would vary according to the actual tar and nicotine content of the cigarettes advertised, but that such imprecision can almost always be avoided if the representation is accompanied by clear and conspicuous disclosure of (1) the tar and nicotine content in milligrams of the smoke produced by the advertised cigarette; (2) the tar and nicotine content in milligrams of the lowest and highest yield domestic cigarettes; and (3) if the tar and nicotine content of the advertised cigarette is compared to any other specific cigarette, the brand name and tar and nicotine content in milligrams of the smoke produced by such other cigarette.
11. On October 9, 1969, in view of the substantial public interest in the subject matter, the Commission publicly released its exchange of correspondence with ...