## Facts

- A market-research firm prepared a 1975 advertising strategy report for Viceroy cigarettes focusing on “younger smokers” and recommending associating smoking with “illicit pleasures” (e.g., “pot,” alcohol, sex) while avoiding health-related messaging.
- The advertising agency forwarded the report to Brown & Williamson (B&W).
- B&W asserted it rejected the proposed “illicit pleasure” strategy and terminated the agency relationship primarily due to dissatisfaction with that proposal.
- Years later, an FTC staff report concerning cigarette advertising suggested B&W had pursued a strategy aimed at attracting young smokers.
- Before a Chicago television broadcast, a station reporter contacted B&W for comment; B&W stated the plan had been rejected and the responsible party dismissed.
- A WBBM-TV commentary by Walter Jacobson (employed by a station owned by CBS) discussed cigarette advertising and, in context, conveyed that B&W marketed cigarettes to children under the plan described in the FTC materials.
- B&W sued Jacobson and CBS in federal court under diversity jurisdiction, alleging defamation and related Illinois statutory claims.

## Issues

1. Whether the broadcast could reasonably be understood as asserting defamatory facts that B&W deliberately targeted children with an immoral cigarette-marketing scheme, constituting libel per se under Illinois law.
2. Whether a privilege for fair and accurate reports or summaries of official proceedings/investigations barred the defamation claim as a matter of law at the pleading stage.
3. What fault standard (negligence and/or actual malice) applied under Illinois law and First Amendment limits, and whether the complaint adequately alleged the required fault for liability and damages.
4. Whether Illinois consumer-fraud and deceptive-business-practices theories were properly dismissed when the alleged injury was reputational harm from a broadcast.

## Decision

- The Seventh Circuit reversed dismissal of the defamation claim and remanded for further proceedings.
- The court held the commentary could be found libelous per se because it accused B&W of immoral, unethical conduct (pushing cigarettes on children through manipulative advertising).
- The court recognized a privilege for fair and accurate summaries of government proceedings and investigations, but held that whether the broadcast was a fair and accurate summary of the FTC staff report was a fact question not resolvable on a motion to dismiss.
- The court affirmed dismissal of the Illinois consumer-fraud and deceptive-practices claims.

## Legal Principles

- Under Illinois law, statements imputing serious immoral or unethical business conduct to a corporation may constitute libel per se when defamatory meaning appears from the statement’s face and context.
- Media defendants may be protected by a privilege to fairly and accurately report or summarize official proceedings and government investigations.
- The privilege does not apply where a purported summary materially alters the gist or adds a “greater sting” than the underlying official material; fairness and accuracy are commonly questions for the trier of fact.
- At minimum, negligence is required for defamation liability; actual malice may be required for certain damages where constitutional limits apply, and allegations that a speaker ignored contrary information can support those fault theories at the pleading stage.
- Statutory consumer-fraud/deceptive-practices claims may be dismissed when they do not fit the nature of the alleged harm and statutory elements, particularly where the gravamen is reputational injury from alleged defamation.

## Conclusion

The Seventh Circuit held that a television commentary could be actionable as libel per se for accusing a corporation of deliberately targeting children with cigarettes, and that the fair-report privilege could not defeat the claim on the pleadings because a jury could find the broadcast’s summary of FTC materials unfairly intensified the accusation beyond the official report.


Brown & Williamson Tobacco Corp. v. Jacobson, 713 F.2d 262 (7th Cir. 1983)