Jones, Day, Reavis & Pogue Draft 1: Corporate Activity Project

TOBACCO

Jones, Day, Reavis & Pogue Draft: Corporate Activity Project: Part 1

Undated. Bates # 681879254

This undated, 449-page document is a history of the tobacco wars of the last 4 decades, from a tobacco law firm's (RJR's Jones, Day, Reavis & Pogue) viewpoint. It's a fascinating, in-depth look at the crucial events-- and how they might be argued in a courtroom. The document was released in the Washington Medicaid suit June, 1998. Here's the June 11, 1998 PR from the Washington AG Office You can download the 23 Mg TIFF file (Bates # 681879254) here


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    Confidential
    Attorney Work Product
    Attorney-client Privileged
    Jones, Day, Reavis & Pogue Draft

    TABLE OF CONTENTS

    INTRODUCTION

    A. The Purpose of the Corporate Activity Project 1

    B. Sources of Information 1

    C. Scope of Corporate Activity Report 3

    D. Further Work 3

    E. Organization 4

    II. SUMMARY AND OVERVIEW 6

    A. Conspiracy Issues 6

    1 The Maintenance of the Deadly Delusion of The Open Controversy 7

    a. TIRC/CTR and TI as Agents of Tobacco Companies

    2. The Gentlemen's Agreement

    3. Corporate Awareness and Responsiveness to the Smoking and Health Controversy 12

    1 Corporate Awareness 13

    2. Corporate Responsiveness 15

    a. Individual Companies' Failure to Investigate 15

    b. TIRC/CTR's Failure to Investigate 17

    3. AMA/ERF Studies 19

    4. Other Industry-Funded Research 20

    C. Strict Liability/Negligence Issues 21

    1. The Risk/Benefit Test: Cigarettes Are Per Se Defective and Unreasonably Dangerous 21

    2. Design Defect: Cigarette Manufacturers Have Failed to Design and/or Market Safer Cigarettes 23

    a. Specific Examples of "Safer" Cigarettes 25

    (1) Charcoal Filters 25

    (2) Low Gas Cigarette -- Fact 27

    (3) Palladium Cigarettes 27

    (4) Lower Tar and Nicotine Cigarettes 31

    (5) Nicorette Gum 32

    3. Warning Defect: Cigarette Manufacturers Failed to Warn Prior to 1966 and Then Gave An Inadequate Warning :12

    4. Marketing Defect: Overpromotion 34

    a The Magnitude of Cigarette Advertising Expenditures 35

    b. Brand Advertising 36

    D. Addiction/Ability To Quit 36

    E. punitive Damages Issues 37

    1. Examples of Punitive Damages Issues 38

    a. A. Grant Clarke 38
    b. The Kent Micronite Filter . 39
    c. Deceptive Cooperation with the Surgeon General 39
    d. True Magazine 40
    e. Criticism of Adverse Reports 40
    f. Influencing the Media 41
    g. Influencing the Insurance Industry 41

    CONSPIRACY ISSUES 43

    A. The Maintenace (sic) of the Deadly Delusion of The Open Controversy 43

    B. Plaintiffs' Contentions -------- 43

    C. Supporting Evidence and Documentation-. 145

    a. TIRC/CTR and TI as Agents of Tobacco Companies 45
    b. "Open Controversy' Ads and Public Statements by TIRC/CTR and TI 47
    C. Industry "Admissions- Concerning the "Open Controversy' Position 51
    d. Reynolds Statements 58
    e. The Public Issues Campaign of Reynolds 60
    f. "Moderation" as an Admission 60

    Possible Industry Response 60

    iii
    
    B. The Gentlemen's Agreement 65
    Plaintiffs' Contentions 65
    Possible Industry Response 69

    IV. CORPORATE AWARENESS AND RESPONSIVENESS To THE SMOKING AND HEALTH CONTROVERSY 70

    A. Corporate Awareness 70
    Plaintiffs- Contentions
    Supporting Testimony and Documentation ------ 72

    a. Liggett 72
    b. Reynolds 73
    c. Philip Morris
    d, American 76
    Possible Industry Response - Corporate Awareness ----------- 78

    B. Corporate Responsiveness -------------

    1. Individual Companies' Failure to investigate 84

    Plaintiffs' Contentions

    Supporting Evidence and Documentation 86
    a. Liggett 97
    b. Reynolds
    c. Philip Morris 102
    d. Lorillard 104
    e. American 108

    iv.

    2 TIRC/CTR's Failure to Investigate 10
    Plaintiffs* Contentions 110
    Supporting Evidence and Documentation 112

    1. TIRC's Public and Private Agendas 112

    2. TIRC/CTR's Public Relations Function 117

    3. TIRC/CTR's Research Function 132

    4. LS, Inc . 140

    5. Lawyer Involvement 141

    a. Special Projects 142
    b. CNS Research 144
    c. "Legal" Review of Grant Applications 144

    Possible Industry Response
    Corporate Responsiveness 151

    a. Individual Companies* Failure to Investigate ... 151
    b. TIRC/CTR's Failure to -Investigate 158

    (1) Early Efforts: Smoke Constituent Analysis and Bioassay Systems 162
    (2) Animal Inhalation -Studies 166
    (3) Other CTR Funded Projects 172
    (4) LS, Inc . 173

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    3. AMA/ERF 173

    Plaintiffs' Contentions 173

    Supporting Testimony and Documentation 174

    Possible Industry Response to AMA/ERF Studies 182

    4. Other Industry-Funded Research 183

    Plaintiffs' Contentions 183

    Supporting Testimony and Documentation 183

    Possible Industry Response to Other Research Projects 187

    V. STRICT LIABILITY/NEGLIGENCE ISSUES 188

    A. The Risk/Benefit Test: Cigarettes Are Per Se Defective and Unreasonably Dangerous 188

    Plaintiffs' Contentions 188

    Supporting Testimony and Documentation. 190

    Possible Industry Response 194

    B. Design Defect: Cigarette Manufacturers Have Failed to Design and/or Market Safer Cigarettes 195

    Plaintiffs' Contentions 195

    Supporting Testimony and Documentation 196

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    a. Specific Examples of 'Safer" Cigarettes 197

    (i) Charcoal Filters 198

    (a) Health Claims for Charcoal Filters 200
    (b) Challenges to the Efficacy of Charcoal Filters 204
    (c) Admissions that Charcoal Filters Were not Safter (sic) 210

    Possible Industry Response Charcoal Filters.. 214

    (ii) Low Gas Cigarette Fact 214

    (iii) Palladium Cigarettes: The Development of the "XA" Cigarette 216

    Possible Industry Response -.Palladium Cigarettes 242

    (iv) Lower Tar and Nicotine Cigarettes 247

    Possible Industry Response Low Tar and Nicotine Cigarettes 248

    (v) Nicorette Gum 251

    Possible Industry Response -- Nicorette Gum 252

    C. Warning Defect: Cigarette Manufacturers Failed to Warn Prior to 1966 and Then Gave An Inadequate Warning 253

    Plaintiffs' Contentions 253

    Supporting Testimony and Documentation 254

    Possible Industry Response 261

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    D Marketing Defect: Overpromotion 264

    1. 1913-1953,. Building and Maintaining The Market 268

    Plaintiffs' Contentions 268

    Supporting Testimony and Documentation 272

    Possible Industry Responses 275

    a. In General 275
    b. Other Building and Maintaining the Market Issues 279

    (i) Creating the Cigarette Market 280
    (ii) Increased Advertising Expenditures Caused Increased Cigarette Consumption 280
    (iii) Creating the Women's Market 281
    (iv) Free Cigarettes to the Troops 282
    (v) Free Cigarettes to the White House and Congressional Delegations .- . 283

    2. 1953-64: The Advertising Response to the Health Scare 284

    Plaintiffs' Contentions 284
    Supportinq Testimony and Documentation 287

    a. Health Claims for Filters 287
    b. Television Advertising 290

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    Possible Industry Responses 291

    a. In General 291
    b. Health Claims for- Filters 292

    3. 1964 to Present: The Modern Era 293
    Plaintiffs' Contentions 293
    Supporting Evidence and Documentation 294

    a. Adoption of the Cigarette Advertising Code 294
    Possible Industry Response 300

    a. Cigarette Advertising Code Issues 302
    b. Special Modern Era Advertising Issues 305

    Plaintiffs' Contentions/Supporting testimony and Documentation 305

    (i) The Broadcast Media Advertising Ban 305
    (ii) Special Events . 307
    (iii) Stadia Bill Boards 307
    (iv) Sampling 308

    Possible Industry Response 309

    (i) Stadia Billboards 309
    (ii) Sampling 310

    4. Low Tar/Charcoal. Filters/Low Gas Cigarettes 310

    Plaintiffs' Contentions 310

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    Supporting Evidence and Documentation 310

    a. Charcoal Filter Cigarettes 313

    (i) Lark 1313
    (ii) Tempo 314

    b. Low Gas Cigarettes 315

    (i) Fact 315

    Possible Industry Response 316

    5. Cognitive Dissonance 320
    Plaintiffs' Contentions 320
    Supporting Evidence and Documentation 321

    a. Smokers as Conflicted 321
    b. Ads Rendering Warning Inadequate by Reassuring Smokers About Health Concerns 326
    c. Positioning the Warning Label 326
    d. Label as Worn-Out 327

    Possible Industry Response 327

    6. Appeals to Youth 327.
    Plaintiffs* Contentions 328
    Supporting Evidence and Documentation -328
    Possible Industry Response 332

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    IV. ADDICTION/ABILITY TO QUIT ... 335

    Plaintiffs' Contentions 335

    a. Definition of Addiction 337
    b. Corporate Responsiveness: Addiction 341

    Supporting Testimony and Documents 342

    a. Liggett 342
    b. Reynolds 343
    c. Philip Morris 354
    d. Lorillard 355
    e. American 356
    f. TIRC/CTR 356
    g. Tobacco Institute 359
    h. Tobacco Working Group 360

    Possible Industry Responses 361

    a. Definition of Addiction 361
    b. Dependency/Ability to Quit 370
    c. Addiction: A Self-Fulfilling Prophesy 377

    VII. PUNITIVE DAMAGE ISSUES 378

    A. A. Grant Clark 378
    Plaintiffs' Contentions 378
    Supporting Testimony and Documentation 378
    Possible Industry Responses 384

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    B The Kent Micronite Filter 385
    Plaintiffs' Contentions 385
    Supporting Testimony and Documentation 385
    Possible- Industry Responses 8

    C. Deceptive Cooperation with the Surgeon General Advisory Committee 1962-1963 387
    Plaintiffs' Contentions 387
    Supporting Testimony and Documentation 387
    Possible Industry Responses 393

    D. True Magazine 394
    Plaintiffs' Contentions 394
    Supporting Testimony and Documentation 395
    Possible Industry Responses 401

    a. Authorship 402
    b. The Mailing

    E. Discrediting of the Auerbach "Smoking Beagles" Experiment - 404
    Plaintiffs* Contentions 404
    Supporting Testimony and Documentations 405
    Possible Industry Responses 422

    F. Other Efforts to Discredit Prominent Smoking and Health Critics 425
    Plaintiffs' Content ions/Supporting Testimony and Documentation 425
    Possible Industry Response 425

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    G. Improper Pressue on the Media 425
    Plaintiffs' Contentions
    Supporting Testimony and Documentation 426

    a. "Motivational" Meetings and correspondence 426

    b. Informational Meetings and Correspondence 433

    c. In Intimidating the Press 436
    Possible Industry Responses 436

    H. improper Pressure on the Insurance Industry 438
    Plaintiffs' Contentions 438
    Supporting Testimony and Documentation 440
    Possible Industry Responses 447

    INTRODUCTION

    A. The Purpose of the Corporate Activity Project

    The purpose of the Corporate Activity Project was to analyze plaintiffs' theories (particularly in New Jersey) pertaining to "corporate misconduct" issues and the evidence which plaintiffs' counsel can be expected to present in support of those theories. Our discussion of plaintiffs' "misconduct" contentions is not intended to be objective; rather it is intended to present a worst case analysis colored with the adverse conclusions and inferences which plaintiffs can be expected to make. 1/ The Corporate Activity Team, therefore, made no attempt to be diplomatic or to generously characterize various issues.

    In addition to framing the specific issues of fact, which the defense must be aware, this memorandum articulates possible responses to plaintiffs' "misconduct" themes and evidence. Additional factual and strategic development on the possible industry responses is critical.

    B. Sources of Information

    In preparing this memorandum, we have relied on certain categories of information:

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    1. Occasionally, case law is cited, but only to place the plaintiffs' contentions in context not to definitively analyze the applicable law.



    1. Depositions of industry representatives taken in New Jersey, Texas and other cases
    2. Exhibits to such depositions.
    3. Approximately 900 documents specifically referred to in two sets of interrogatories served by plaintiffs on some or all defendants in the New Jersey litigation.
    4. Documents produced by Reynolds in Barnes which have been selected by plaintiffs. 2/
    5. Principal pleadings in the New Jersey cases.
    6. Materials obtained by plaintiffs (and the industry) pursuant to FOIA requests, through subpoenas on third parties, or from the National Archives.
    7. Public statements made by plaintiffs' counsel, and by likely plaintiffs' experts and advisors (e.g., Daynard, Blum. Warner, et al.).
    8. Reports and depositions of plaintiffs' designate experts.

    When this Project began, very little of this information was available in the files of Jones, Day. It was accumulated over a period of several months. While additional discovery information is available, enough evidence and

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    2. Reynolds is continuing to produce and the plaintiffs are continuing to select documents in the Barnes production. Discovery is continuing in other cases as well. Evaluation of plaintiffs' evidence should be a continuing process.

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    documents have been reviewed to Permit the identification of the significant "misconduct" theories and plaintiffs' basic evidence to support those theories which have been revealed to date.

    C. Scope of Corporate Activity Report

    The discussion which follows focuses on corporate misconduct" issues. It does not deal with issues of general causation, specific causation or any other plaintiff-specific issue. Nor does it purport to exhaust joint-industry-action issues, a project being undertaken by Mr. Johnson and others. The Project did not review foreign public domain articles which may contain admissions by affiliates of domestic tobacco companies concerning the health risks of smoking or admissions relating to the addiction issue. The Report briefly discusses polling and other public awareness issues, but does not attempt to duplicate the work being undertaken by STIC.

    D. Further Work

    Obviously much more can be done. With respect to the possible industry responses, the collective knowledge, analysis, and judgment of the entire Reynolds' defense team should be solicited and incorporated. In addition, we should solicit from each of our codefendants their concerns, their proposed approaches to 'corporate misconduct" issues, and their guidance. Because the case being developed by plaintiffs is much stronger than those presented in previous mock trials,

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    jury research based on plaintiffs' misconduct evidence and the possible strategic responses suggested and to be developed should be considered.

    E. Organization

    For purposes largely of convenience. this Report is organized into five broad sections, with principal subdivisions as indicated:

    I. Conspiracy Issues.
    A. The Maintenance of the Deadly Delusion of the Open Controversy.
    B. The "Gentlemen's Agreement".

    11. Corporate Awareness and Responsiveness to the Smoking and Health Controversy.

    III. Strict Liability/Negligence Issues.
    A. The Risk/Benefit Test: Cigarettes are Per Se Defective and Unreasonably Dangerous
    B. Design Defect: Cigarette Manufacturers Have Failed to Design and/or Market Safer Cigarettes.
    C. Warning Defect: Cigarette manufacturers Failed to warn Prior to 1966 and Then Gave an Inadequate Warning.
    D. Marketing Defect: Over-promotion.

    IV. Addiction/Ability to Quit

    V. Punitive Damages Issues.

    As will become readily apparent, much of the discussion in one section has direct applicability in others. Thus, for example, evidence about warnings has direct bearing

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    on issues II.B., III. C., IV and portions of V. and indirect bearing on issue I. To avoid repetition, a detailed table of contents is included.

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    II. SUMMARY AND OVERVIEW AND

    The key defense strategy in smoking and health litigation is (and must be) to try the plaintiff. Conversely, one should expect that a key plaintiffs' strategy would be to try the corporate defendants. "Corporate misconduct" issues. however, were not litigated in either Roysdon or Galbraith, and have received only modest attention in the mock trials which have been conducted to date. It is clear, however, that the defense will not enjoy a similar luxury in the New Jersey and Texas litigation.

    This summary is intended to be a synopsis of the theories which plaintiffs have espoused and the evidence which they have adduced, or may in the future adduce. The main portion of this memorandum treats each of these issues more expansively, and discusses the proposed industry responses.

    A. Conspiracy Issues

    Allegations of a civil conspiracy have been made in both the New Jersey and Texas litigation. Proof of this allegation requires plaintiffs to prove an agreement, express or tacit, among the defendants, and some act or acts committed one or more of the defendants is furtherance of the conspiracy, which acts are themselves torts, or are performed in pursuance of a tortious objective. W. Prosser, The Law of Torts 292-93 (4th ed. 1971).

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    1 The maintenance of the Deadly Delusion Of The Open Controversy

    In the tobacco litigation, plaintiffs have essentially asserted that the defendants have conspired to propagate "the deadly delusion of an 'open question" concerning the issue of cigarette smoking and health. (STIC Witness Book, Intro. at 1) . Stated differently, the companies sought in their own financial self-interest and with disregard for the health and to the detriment of the particular plaintiff, to "reinforce" the smoker in his or her smoking habit.

    For example, the complaint in Barnes alleges that:

    The defendants, individually and as members of the tobacco industry, conspired to misrepresent and, through their concerted action, misrepresented to users of cigarettes, and. failed to warn users of cigarettes of the dependency induced by cigarette use and adverse health consequences of cigarette use.


    Complaint, Count Six, #2. Other allegations assert that the 6 industry combined to deprive the public of certain scientific data, Count Seven, 112, and through advertising, to represent cigarette smoking as safe. Count Eight, 113.

    The origins of this conspiracy may be traced to the foundation of TIRC in 1954 in the wake of the first popularized credible information which linked smoking with disease.

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    a. TIRC/CTR and TI as Agents of Tobacco Companies

    An extensive effort was made during the depositions of those industry executives who had served on TI's governing body to detail the structure and procedures of TI. Plaintiffs have sought to establish that TI is the exclusive lobbying arm of the individual companies; that its position an smoking and health is identical to that of the companies; that no statements of TI spokesmen or publications of TI are issued without the companies' approval; and that TI evaluates smoking and health literature for the companies. This effort is designed not only to strengthen the "conspiratorial" look of the industry, but also to enable plaintiffs to impute to each company the statements and publications of TI and TI representatives, some of which are, conservatively speaking, imprudent and impolitic. No member company of TI has ever disassociated itself from TI statements. Almost all TI statements are circulated to the tobacco company executive executives advance. Similar efforts, though less extensive, have been made with respect to TIRC/CTR. Without attempting to specifically identify every fact which supports the contention that TI is the agent of member companies, the general review of plaintiffs' evidence leads to the conclusion that plaintiffs can establish the agency contention.

    In January 1954 the industry announced the "Open Question" position in 'A Frank Statement to Cigarette

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    Smokers. The four main elements of this position as it evolved in the 1950s were.

    a. It has not been scientifically established that smoking is a cause of disease, particularly lung cancer.

    b. The "solution lies in more research to which the industry is committed.

    c. Scientists have been unable to establish any ingredient as found in cigarette smoke which has produced lung cancer in animals or human beings.

    d. The industry believes that cigarettes are not injurious to health.

    The industry's public statements no longer contain the fourth element, but industry witnesses include this element in their depositions. Otherwise the 'Open Question" position has not changed.

    Even if the tobacco companies believed this statement in 1954, industry documents demonstrate that the industry has had grave doubts about its validity for over 25 years. For example, a 1967 document prepared by J. S. Dowdell (RJRT) acknowledged that "the industry has little, if any, positive evidence" to refute health charges. To a similar effect, is a 1962 letter from W. S. Crutchens (B&W) to Bowman Gray (RJRT) . Of greater concern is a 1968 memorandum, in which William Kloepfer (TI) concedes:

    2. Our basic position in the cigarette controversy is subject to the charge, and

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    may be subject to a finding, that we are making false and misleading statements to promote the sale of cigarettes.

    Nevertheless. the campaign continued. Indeed, a 1972 TI memorandum outlines a "holding' strategy as consisting of "creating doubt about the health charge without actually denying it.- The proposed strategy was to assert alternative causation theories as a mechanism to avoid addressing the primary health issues.

    Almost all of the activities discussed throughout this Report can arguably be fit under the rubric of acts taken in furtherancce [sic] of a civil conspiracy to suppress, omit, or misrepresent smoking and health information. Each statement or occurrence, standing alone, can be explained, but when the stAtemeits and occurrences are stacked seriatim, the combined effect is substantial.

    2. The Gentlemen's Agreement


    To the best of our knowledge. no documents have be produced in any litigation relating to the alleged "Gentlemen's Agreement." Nor have we been able to identify anyone knowledgeable about it, its participants, its terms, or even whether it exists in any form beyond speculation which has gained currency through repetition. There are, however, documents which record the fact or the speculation of a Gentlemen's Agreement. As best we can tell, the Gentlemen's Agreement was among all the major tobacco companies (with the

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    possible exception of Liggett) and had two principal prongs. First the industry agreed not to conduct smoking-and health research in-house, but rather to have it conducted by TIRC. Second, they agreed to share with each other any smoking and health breakthroughs.

    The testimony of various witnesses is consistent with the first prong of the Gentlemen's Agreement. Thus, the testimony of the industry witnesses is that smoking and health research was not conducted in-house but was left to TIRC. If one of the reasons for this was to avoid one company developing a competitive advantage based on health, it supports the existence of an agreement. To date, the most common reasons articulated for avoiding inhouse research are that in-house research results would lack credibility, and that the companies independently lacked the necessary resources and expertise.

    The most problematic feature of this alleged a agreement is the provision requiring the sharing of smoking and health breakthroughs. This provision erected an economic disincentive for individual companies to pursue "safer" cigarette research. Why would a company invest the millions of dollars necessary to develop a 'safer" cigarette that would give it no competitive advantage in the marketplace? Conversely, avoidance of "safer" cigarette research served to protect the market for the conventional cigarette.

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    3. Corporate Awareness And Responsiveness To The Smoking And Health Controversy

    Universal awareness and personal responsibility are twin themes of the defense strategy. In depositions, in briefs --and at trial, the defense has made these points forcefully and with considerable impact. we expect these issues to continue to be a centerpiece of the defense.

    Anticipating or reacting to this, plaintiffs' counsel have attempted to undermine the strength of these arguments by showing a low level of personal awareness among industry executives." These inquiries, which have met with considerable success, have flowed lowed naturally into inquiries about corporate responsiveness to the smoking and health controversy. In this area as well, plaintiffs have scored significantly. At risk are several key points: whether the ,Industry breached common law duties to understand its products. whether the 'Open Controversy' position is legitimate, ,whether the industry spokespersons will be credible witnesses,

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    3. The plaintiffs will also undoubtedly cite the industry's position in the early smoking and health litigation, that the defendants "could not . . . by reasonable skill and foresight, have known that users of cigarettes would be endangered by the inhalation of mainstream smoke." Green v. American Tobacco Co., 325 F.2d 673, 674 (5th Cir * 1963) . In fact, this point was recently raised in an amicus brief. See Brief of TPLP, Roysdon V. R.J. Reynolds Tobacco Co., No. 86-5072 (6th Cir.).

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    1. Corporate Awareness

    With respect to awareness, for example, Edward A. Horrigan (RJRT) testified that it was not until "[t]he early sixties' that he became award of reports linking smoking with adverse health consequences.!' This was ameliorated to some extent by other testimony, and related to a period prior to 1978 when Mr. Horrigan joined RJRT.

    During employment, one would expect a very high level of awareness by corporate executives. However, in response to inquiries seeking to ascertain the manner in which corporate executives kept themselves informed on smoking and health issues, the responses characteristically have been disappointing. For example, K.V. Dey (Liggett) testified that he was kept informed principally through his lawyers. Finally, although quite knowledgeable about smoking and lung cancer, Robert K. Heimann (American) denied awareness of. claims that smoking was associated with a variety of other diseases, including two listed on the rotating warning labels.

    Such testimony strongly suggests that senior executives have either ignored or filtered the mountain of evidence indicting cigarette smoking as a health hazard. it also suggests that the industry has breached its "expert' duty to understand and evaluate the health consequences attributed

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    4. Horrigan De wey Depo. a 16.


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    to cigarettes. Similarly, it suggests that the 'Open Controversy" position is founded on ignorance.

    While executives need not be (and are not) experts in the complex subjects at issue, those employees, such as research directors rectors, with greater knowledge and ability to evaluate the evidence have not always filled the breach. For example, William Bates (Liggett) answered "I don't know' or 'I don't recall' over 210 times in a 285-page deposition. 1

    Moreover, when asked about available evidence linking smoking and lung cancer, even "knowledgeable" industry deponents typically roll out stock answers:
  • Statistical association does mean causation.

  • The induction of malignant tumors in skin painting tests is irrelevant to the human smoking experience.

  • Although causation is accepted by every medical association, every voluntary health organization and the government, causation is established by science not by polling.

  • Finally, criticism will undoubtedly be lodged that the industry has failed to employ personnel in the disciplines most intimately involved in smoking and health issues. Thus,

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    5. These types of responses give the impression that the facts, if remembered, would be adverse. These denials are arguably a type of "spoilation" evidence whose Primary value to the plaintiffs is in darkening the atmosphere of the tobacco defendants' case. See McCormick on Evidence at 809 (3d ed. 1984) .

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    according to available testimony, no cigarette manufacturer has ever employed a physician 'to evaluate the smoking and health literature. Similarly, based on the evidence of record, neither epidemiologists nor biostatisticians have been employed.

    2. Corporate Responsiveness

    In addition to the foregoing, plaintiffs will argue that the companies have done woefully little to discharge their duty to investigate the health consequences of cigarette smoking. Thus, virtually every industry witness has vigorously denied that his employer conducted smoking and health research in-house. When challenged to explain how this duty was discharged, industry witnesses have mechanically pointed to CTR, invoking its 'independence" in the same breath. As discussed below. however, CTR's history is far from unblemished and its research efforts have from time to time drawn harsh --criticism from the industry itself. Moreover. industry 'witnesses are frequently as unfamiliar with CTR funded research results as they are with the literature generally.

    a. Individual Companies' Failure to Investigate

    Although information dating to the 1930s was sufficient to put the tobacco companies on notice (and trigger both a duty to investigate and a duty to warn), evidence linking cigarette smoking and cancer clearly existed and was universally known in scientific circles during "he period 1950-54. By that same time, credible evidence linking smoking

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    with cardiovascular and nonmalignant pulmonary diseases had emerged.

    Despite the foregoing, the record is replete with admissions that the tobacco companies failed to investigate the allegation that cigarette smoking, adversely affects health. Industry witnesses have consistently denied that their employers conducted in-house smoking and health research. They have also denied that the companies employed epidemiologists, medical doctors, or others specially suited by training and experience to investigate the health charges. The plaintiffs will thus contend that the conclusion is inescapable that the companies did not take the first step in protecting the public from a dangerous product -- they did not adequately investigate the credible health allegations against smoking.

    In fact, however, virtually every company has proprietary research. 'which in a broad sense can be characterized as smoking and health research: Liggett, Reynolds, Philip Morris and American did constituent analyses (as others undoubtedly did as well). Similarly, Liggett, Reynolds and Philip Morris (typically through contracts wit, outside entities) conducted skin-painting studies. Inhalation studies were conducted under contract by Liggett and Philip Morris, and a modest amount was conducted by Reynolds.

    Broadly speaking, this research tended either to support the contention that cigarette smoking causes adverse

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    health -consequences, or at least not to erode that contention. For example, the companies confirmed the presence in cigarette smoke of substances known to be carcinogenic and co-carinogenic [sic] to animals. They also confirmed that the application of cigarette smoke condensate caused tumors to animal skin, but..., they deny this phenomenon is relevant to human beings. In addition, none of the major epidemiological findings have ever been disproved by the companies. Finally, to this date, no industry witness can identify the quantity or quality of evidence it would take to convince him that there is a causal relationship between cigarette smoking and lung cancer or other. diseases. 6/

    b. TIRC/CTR's Failure to Investigate

    In 1954, five of the six cigarette manufacturers announced the formation of the Tobacco Industry Research Committee (-TIRC"). This entity was formed for the purpose of funding independent research into smoking and health issues/ Indeed, TIRC was the vehicle to facilitate research intended to resolve the "open questions" concerning smoking and health. To accomplish that purpose, the TIRC established an "independent 'Scientific Advisory Board ("SAB") consisting of eminent

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    6. A colloquy in the Bowling deposition indicates that Magistrate Cowen has ruled that questions seeking to determine the quantum of evidence necessary to convince an industry witness that cigarettes cause lung cancer is improper as "speculative.' Bowling Depo. at 540.

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    scientists to screen applications and recommend the funding o independent" research.

    At least that's what the tobacco companies say. in fact, TIRC's mission was more aptly described in 1954 by the first SAB Chairman, Dr. Clarence Cook Little: "[T]o build a foundation of research sufficiently strong to arrest continuing or future attacks" on tobacco. Moreover, one of TIRC's principal activities from 1954 to 1958 and thereafter was as a public relations vehicle for the tobacco industry in interviews, speeches, and testimony before Congress, the FTC, and in court.

    Nor can the activities of TIRC/CTR be fairly characterized as funding independent research into smoking and health issues. As Dr. Little confirmed in 1960 at the Lartigue trial, CTR's research grants were directed at issues remotely related to cigarette smoking. Similarly company documents explicitly challenge the relevance and quality of CTR-funded research.

    The failure to support relevant research is not surprising. SAB members were not only paid by the tobacco companies, but they (or the institutions with which they were associated) were principal beneficiaries of CTR research grants. In addition. far from being independent, CTR and SAB activities were monitored and controlled by industry representatives, including tobacco company lawyers and public

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    relations consultants. " Indeed. the lawyers stopped central nervous system research proposals, screened out "dangerous project" proposals, and funded "special projects" designed for litigation purposes

    3. AMA/ERF Studies

    In late 1963, shortly before the first Surgeon General's Report was issued, the industry and AMA agreed to fund research concerning smoking and health. Plaintiffs will argue that this was intended to silence the AMA's voice in the smoking and health area, to obtain the AMA's support in opposing the Federal Cigarette Labeling and Advertising Act, and to reassure the smoking public and mollify Congress that the AMA was studying the problem of smoking and health.

    In fact, the AMA frittered away the money. The industry's scientific directors and others at the individual tobacco companies criticized the AMA research on the basis "not more than 50 percent of the program, was relevant to smoking,' with "only 2 percent . . . allotted to carcinogenesis." Moreover, approximately -one-half of the grant money has been allotted to the five universities with -which the committee members are directly associated.

    After a decade, the AMA terminated the AMA/ERF project, and stated that the relationship had "blackened" the A.M.A's image. The industry struck back, stridently criticizing the final report of the AMA/ERF.

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    4 . Other Industry-Funded Research

    Although the industry funded a number of other "outside" research projects, it did so only when it received clear advance assurances of a "favorable" outcome. For example, Dr. Gary Huber, then of Harvard, solicited industry funds with his view that "the number of people at potential risk from tobacco consumption is extremely small relative to the very large number of people who now smoke." Dr. Huber's research led him to what plaintiffs will characterize as a ridiculous conclusion that "smoke appears to make (lung) cells more effective" rather than less. After leaving Harvard, Dr. Huber was "temporarily reassigned' from his position as Director of the University of Kentucky Tobacco and Health Research Institute "until an investigation of possible criminal charges" was completed. The charges included misuse of university money, falsified research data, and receipt of money from tobacco companies (which apparently was prohibited by the University of Kentucky program).

    Philip Morris and others in the industry, including Reynolds, contributed funds to the Sloan Kettering Institute in an attempt to partially muzzle Dr. Ernst Wynder. The industry also funded a project at UCLA Medical School, but only after the Medical School reassured the industry that nothing damaging to the industry would be discovered.

    - 20 -



    Legal counsel for some of the major tobacco companies apparently engineered a plan to fund research intended to "embarrass" Dr. E. Cuyler Hammond. A 1971 note from C.B. Wade (RJRT) notes that "Dr. Sterling is the man Shinn and Hardy were working with on this project to embarrass Hammond and raise questions in the scientific community.' Correspondence between Dr. Sterling and Dr. Hammond indicates the project was at least partially implemented.

    C. Strict Liability/Negligence Issues.

    1. The Risk/Benefit Test: Cigarettes Are Per Se Defective And Unreasonably Dangerous.

    Plaintiffs have contended with frequent emphasis that defendants are strictly liable because the risks associated with cigarette smoking outweigh the benefits. The first prong of the risk/benefit analysis asks whether the benefits or usefulness of a product outweigh the likelihood it will cause serious injury. Strict liability can be imposed without having to determine whether the product could have been rendered safer, and the presence and adequacy of a warning is irrelevant to the analysis. Besheda v. Johns-Manville Products Corp., 449 A.2d 539, 545 (N.J. 1981). Only if it is determined that a product's utility outweighs its risk, does the inquiry move to the second prong of the risk/benefit analysis: Could a warning or different design have rendered the product safer?

    - 21 -



    The "risks" of smoking are well documented. We can a expect to see plaintiffs parading evidence *that cigarette smoking causes 350,000 (or more) premature deaths per year in the United States alone, that morbidity is exceedingly high, and that the societal cost (in terms of medical care, lost work days, etc.) approaches $65 billion per year. Even without expert witnesses, plaintiffs may be able to adduce this evidence through governmental reports admitted under F.R.E. 803(8).

    The "benefits" of smoking are far less well documented, and apart from anecdotal comments in the 1964 Report of the Advisory Committee to the Surgeon General, are rarely, if ever, found in governmental reports. Nor have the companies developed a fully satisfactory strategy for articulating the benefits of smoking

    Iin addition, there have been arguably unfortunate statements by company executives that appear to concede that is it were proven that cigarettes cause lung cancer or other disease, cigarettes should not be marketed. For instance, Curtis Judge, the President of Lorillard and former marketing executive for Reynolds, testified that if it were proven that cigarette smoking caused cancer, cigarettes should not be marketed. If cigarette smoking caused cancer, he would quit his employment. Gerald Long (RJRT) stated in a recent interview:

    - 22 -



    If I ever thought there were any evidence whatsoever that conclusively proved that, in some way, tobacco was harmful to people, and I believed it in my heart and soul, then I would get out of the business and I wouldn't be involved in it.

    James Bowling (Philip Morris) made a similar statement

    Messrs. Judge, Long, and Bowling apparently concede that if smoking causes cancer, none of the benefits outweigh this risk. Because jurors are preconditioned to accept the causal hypothesis, these statements may be construed as "admissions" that the benefits of smoking do not outweigh the risks.

    2. Design Defect: Cigarette Manufacturers Have Failed To Design and/or Market Safer Cigarettes.

    Under the second prong of the risk/benefit analysis,, the plaintiffs will contend that the defendants could have reduced the "risk of' smoking to the greatest extent possible without hindering the basic utility of cigarettes, but failed to do so. Besheda, 449 A.2d at 575; Feldman v. Lederle Laboratories, Inc., 478 A.2d 374, 386 (N.J. 1984); Dawson v. Chrysler Corp. 630 F.Zd 950, 957 (3d Cir. 1980) (applying New Jersey law). Thus, the issue is: Could the defendants, considering the state of the art (or all that was known to experts in the field), develop a cigarette which would be less dangerous to smokers without changing the product so much that it would not possess, or it would be too expensive to possess, the basic characteristics that smokers desire?

    - 23 -



    Plaintiffs will contend that the companies knew or should have known of scientific data linking cigarettes and lung cancer during the 1930s or, at latest, the 1940s. In any event, the evidence is irrefutable that the companies were aware by 1954 of the early epidemiologic studies and the 1953 Wynder-Graham mouse skin-painting study. They will further contend both that the companies should have developed a "safer cigarette through testing their products and taking steps to reduce the risk. In this connection, plaintiffs will focus on (i) Liggett's "XA" selective filtration, palladium cigarette, and may focus an (ii) effective filtration, (iii) other means of selective reduction, (iv) low tar and nicotine cigarettes, and (v) tobacco/cigarette substitutes such as Nicorette gum.

    In response to plaintiffs' contentions, the companies have broadly admitted that they did not attempt to manufacture and market a "safer" cigarette. The explanation given is that no cigarette has been found 'unsafe" and, hence, 'it doesn't make sense to talk in terms of 'safer' cigarettes. Further, product modifications have generally been described as being developed in response to perceived or actual consumer demand. --- While filtration and "the development of low tar and nicotine cigarettes might properly be characterized as efforts to respond to consumer demand, the same is not necessarily true of efforts at selective filtration. It is unlikely that evidence can be adduced that consumers were clamoring for a

    - 24 -



    product (like Lark) which selectively reduced ciliastats, or for a product (like the "XA" cigarette) which selectively reduced PAHs.

    Finally, there is a tension between asserting that low tar and nicotine cigarettes are not 'safer.", and the advertising campaigns for those products which explicitly or implicitly communicated the message that such cigarettes were "safer."

    a. Specific Examples of 'Safer' Cigarettes.

    The following are brief descriptions of 'safer" cigarette evidence of which plaintiffs are aware.

    (1) Charcoal Filters

    The first "safer" cigarette was a charcoal filter cigarette (Lark) which selectively filtered hydrogen cyanide.

    Sometime after 1957, ADL/Liggett discovered the presence of hydrogen cyanide in small but detectable quantities in cigarette smoke. Hydrogen cyanide was believed to inhibit the ciliary action of the mammalian trachea and lungs which was thought to be linked to chronic obstructive lung disease, principally emphysema. In early 1962 in a 'chance event," researchers at Liggett happened on a discovery that "activated" charcoal granules filtered hydrogen cyanide. Drs. Keith and Norman, researchers at Liggett, quickly developed a filter medium consisting of activated charcoal which was developed and marketed in January 1963 as the filter on Lark cigarettes.

    - 25 -
    681879291



    The 1964 Report to the Surgeon General contained an obscure reference to the effects of hydrogen cyanide on the cilia of the trachea and lungs and the benefits of the Liggett filter.- This reference was based an material furnished to the Advisory Committee by Liggett. Liggett immediately contact I contacted medical doctors to bring the 1964 Report's reference to their attention. Liggett did not advise the American medical community that the Surgeon General's reference cited research conducted by Liggett and ADL. Liggett also attempted to promote the health benefits of Lark by planting and exploiting third party "endorsements" of charcoal filters. Third party endorsements were needed because the FTC prohibited "health claims" by the tobacco companies in their ads.

    Dr. Norman at Liggett, however, expressed doubts about the efficacy of the Lark. filter ;,because it did not filter manyconstituents of the gas phase of cigarettes which were considered to cause detrimental physiological effects in animals. The Lark filter did not remove any more effectively than conventional filters any of the components of the particulate phase of smoke suspected as causing lung cancer. Liggett did not caution users of its product that its own researcher doubted the health claims made on behalf of Lark.

    - 26 -



    (2) 'Low Gas Cigarette - Fact Brown and Williamson developed and marketed a cigarette that selectively filtered carbon monoxide. After Fact initially failed in test markets, an advertising agency developed a campaign to educate the public about the health hazards of carbon monoxide. B&W termed this campaign "appalling," and decided not to market Fact. It chose instead to wait "until the problem of gas becomes public knowledge through government investigation or media coverage." Apparently, B&W was worried that identifying carbon monoxide as a health hazard would constitute an admission that conventional, cigarettes were hazardous. An inference that may be argued is that B&W failed to market Fact to protect other brands at the "expense of the smoking public who could have benefited from 1) the knowledge of the dangers of carbon monoxide and 2) the choice of smoking a safer cigarette

    (3) Palladium Cigarettes

    The other "safer" cigarette developed but not marketed by Liggett contained palladium which reduced to almost zero the' carcinogenic effect of cigarette smoke condensate ("CSC") on the skin of animals. The Liggett palladium cigarette will be cited as a "state of the art' cigarette, and, thus, will be argued to be the relevant standard against which to measure the conduct of any tobacco company.

    - 27 -
    681879293



    Based on the evidence developed by plaintiffs, it appears that Liggett was the only member of the industry ever to undertake a sustained, much less successful, effort to develop a truly "safer" cigarette. In 1968, Liggett initiated a tobacco additive program designed to reduce or eliminate the tumorigenic activity of cigarette smoke. Liggett found that two additives, palladium and nitrate, acting in tandem, dramatically reduced or eliminated the "biological activity" in mouse-painting studies.-!' in addition, at Dr. Wynder's suggestion, Liggett performed long-term inhalation studies to verify that the addition of palladium did not adversely affect the test animals.

    Beginning in 1975, Liggett was granted a series of U.S. and foreign patents for its "safer" cigarette. Liggett prepared to market the new cigarette, and even considered, macabre advertising campaign which featured photographs of two

    7. Ironically, the Liggett/ADL 'safer" cigarette "as designed to develop a product able to satisfy the very bio-assay test which Liggett employees and other industry witnesses have consistently derided: mouse-painting. After newspapers carried headlines that Liggett was the first cigarette manufacturer to acknowledge tobacco produced cancer in laboratory animals (citing Liggett's patent applications for the palladium cigarette), Liggett issued a press release repeating the "assertion" that mouse skin painting is not relevant to cancer in human beings. In short, Liggett invested over $15 million dollars in a project to develop a cigarette capable of passing the test employed by Wynder -- the same test which it and the rest of the industry spent millions to discredit.

    - 29 -



    sets of mice -- one set with tumors on their backs and the other tumor free. However. Liggett faced three major hurdles in marketing its palladium cigarette.

    First, the FTC prohibited "health claims" in ads. In an attempt to obtain some relief from this prohibition, Liggett representatives went to the White House to meet with the assistant to President Carter's health advisor. This meeting backfired. The President's advisors did not intercede to facilitate the marketing of the XA cigarette. Instead, they contacted the Tobacco Institute, which in turn informed the other tobacco companies of Liggett's efforts. 8

    Second, at least one of the other tobacco companies, Philip Morris, allegedly threatened to do everything in its power to prevent the marketing of the new cigarette because it would have threatened PM's high selling conventional cigarettes. In addition, because the cigarette was patented, the other companies had no way of competing with the palladium cigarette. PM threatened not only to enforce the ban on health claims, but also to exercise other influence on Liggett.

    Third, the lawyers representing Liggett inflicted the final blow. From the inception of Liggett's "safer' cigarette-' project, the company required one of its lawyers to be present

    -------------

    8. Liggett also made unsuccessful attempts to market the palladium cigarette in Europe. This strategy was an attempt to create a demand to market it in the U.S.

    - 29 -



    at all meetings where the project was- discussed. Dr. Mold testified that the ultimate decision was always made by the legal department. Apparently, Liggett concluded that marketing the palladium cigarette would result in lawsuits brought against it based on the implied admission that conventional cigarettes contained something hazardous.

    The Liggett palladium cigarette story is bad on its face for three reasons, all of which were seized upon by plaintiffs during the depositions. First, it shows that, despite the industry position that the results of animal experiments are not extrapolable to humans, one tobacco company appeared to accept Wynder's premise and spent over $15 million responding to it. Marc Edell snidely noted that this was not done to spare the backs of laboratory rats. Second. it suggests that "safer cigarette' technology has been available and in the tobacco industry's patented possession for the last years . . . and, still, no 'safer" cigarette. Third, Or. Mold is the only R&D witness to testify who was not currently employed or retained by a tobacco company, the industry or its attorneys. He concedes causation and paints a damaging picture of Liggett's. and inferentially of the industry's, position on smoking and health and of its failure to market a "safercigarette.

    Moreover, the Liggett palladium, story is perplexing with respect to Reynolds' aborted work on a palladium cigarette

    - 30 -



    of its own. As reflected 'in documents being produced in Barnes, Reynolds experimented with palladium as a filter component, not as an additive to remove carbon monoxide (not PAHs). One of the reasons Reynolds has given for not pursuing the palladium filter was that "its commercial use would deplete the world's palladium supply within a year. Dr. Mold, however, indicated supply for the XA cigarette was not a problem, a conclusion which the use of palladium in the catalytic converters of automobile exhaust systems seems to confirm.

    (4) Lower Tar and Nicotine Cigarettes

    The plaintiffs have not yet asserted that the industry either should have introduced lower tar Cigarettes earlier than it did [ but see Complaint 11 8(d)-(e) in Ebert v. RJRT (defendants failed to manufacture low T&N cigarettes "for many years")], or should have ceased the manufacture of high tar cigarettes altogether in favor of low tar products. These contentions, however, are so closely related to the general "safer" cigarette contentions that plaintiffs may assert them.

    In this connection, plaintiffs may argue that the technology to manufacture low tar products was available in the -1950s (or before), or that the technology is so obvious that any effort by the industry to develop a "safer" cigarette would have led to it. In essence, the technology simply requires

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    effective filtration, porous paper, air dilution and expanded tobacco. Plaintiffs will argue that of the four means, at most, only expanded tobacco required true innovation.

    (5) Nicorette Gum

    The plaintiffs have recently contended for *the first time that the industry should have developed a safer method of delivering nicotine, such as Nicorette gum. The plaintiffs plan to support this contention with information from the United States Patent Office, Merrell Dow, Inc., and the FDA. They will also find support in documents authored by Dr. Claude Teague (RJRT).

    3. Warning Defect: Cigarette Manufacturers Failed led To Warn Prior to 1966 and Then Gave An Inadequate Warning.

    In evaluating whether cigarettes are defective based on a warning theory, the tobacco companies-will be held to the standard of experts in the field., Further for products (like. cigarettes) which impact on public health, the companies have an affirmative duty to seek out information concerning the hazards involved with use of the products. Where there is significant medical evidence of a possible health hazard, warning is required without waiting for a definitive casual connection to be established.

    -------------

    9. While le filtered red cigarettes a were introduced in the mid-1950s 19 (to allay health a 11 ay I concerns? ) , they we re often ten higher in tar deliveries than non-filtered cigarettes.

    - 32 -



    In strict liability warning cases, unlike negligence cases, the tobacco companies bear the burden of proving that the scientific and medical information was not reasonably available or obtainable and that they, therefore, lacked actual or constructive knowledge of the defect. The tobacco companies bear this burden because they are experts, they are expected to perform testing, and they are in a superior position to know the scientific and medical evidence. Feldman v. Lederle Laboratories, Inc., 479 A.2d 374 (N.J. 1984).

    It is undisputed that, prior to 1966, the tobacco companies provided no warning to consumers of the adverse health consequences of smoking which were known or should have been known to the companies. Indeed, the tobacco companies refused to honor several specific suggest-ions for the inclusion of warnings. Beginning on January 1. 1966' the companies anies iai-~included a warning on all cigarette packages, but only because they were required to do so by federal law. Since then, the tobacco companies have consistently resisted every effort to provide consumers additional information about the hazards of smoking.

    As of October 12, 1985, the companies began the use of rotating warnings, as required by 15 U.S.C. § 1333. This is the first time, however, that warning of any specific disease has ever been given by them. Even now, however, the industry consistently denies the proof supporting the causations which

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    it had been forced by Congress to display on it's packages and in its ads. Moreover, to date the companies have failed to warn that cigarette smoking is addictive. A company which does not adequately warn of addiction is liable for the injuries or death of a person who becomes addicted to its dangerous product, even if most users do not become addicted. Crocker v. Winthrop Laboratories , 514 S W. 2d 429 (Tex. 1974 see Garner , Cigarette Dependency and Civil Liability" A Modest Proposal, 53 S. Cal. L. Rev. 1423 (1980).

    4. Marketing Defect-, Overpromotion

    Plaintiffs will contend that the statutory warnings, "even if adequate when examined in isolation, have been diluted or negated by collateral efforts of the manufacturers to promote their products in a positive light.- Schwartz. The Relevance of Overpromotion in Tobacco Products Litigation,- at p. 4.41 (1986). See Cipollone v. Liggett Group Inc. 593 F. Supp. 1146, _ (D.N.J. 1984), rev'd, 789 F. 181. Ord Cir. 1986); Stevens v. Parke Davis & Co., 507 P.2d 653, 661 (Cal. 1973). Although the " overpromotion" theory has found currency in drug product liability litigation, it evidently has not been more generally applied. But see Leichtamer v. American Motors Corp., 424 N.E.2d 568, 578 (Ohio 1931) (jeep rollover case).

    Although post-1966 "overpromotion" is probably preempted by Cipollone 1 1 v. Liggett Group Inc. , 789 F. 2d 18 1 (3d

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    Cir. 1986), 986). plaintiffs will continue to urge the doctrine in at least three contexts. First, they will argue that pre-1966 overpromotion negated adverse publicity and reassured the smoker. Second, they will contend that various post-1966 a activities - -(such as Reynolds' Public Issues Campaign) are outside of the reach of preemption. Finally, they have argued that post-1966 overpromotion bears on the reasonableness of plaintiffs' conduct (as opposed to the unreasonableness of defendants' conduct), and thus remains relevant to the issue of comparative negligence.

    If allowed, overpromotion evidence will be linked with "addiction.- Plaintiffs will argue that pro-smoking and 'open controversy" messages were intended to and did dwarf in number and in imagery anti-smoking messages, thus reassuring cigarette smokers Even in smokers who admit to awareness of health claims, plaintiffs will urge. the familiar cognitive dissonance theory, arguing that the reassurance deprived smokers of sufficient incentive to overcome their addiction.

    a. The Magnitude of Cigarette Advertising Expenditures

    Cigarettes are the most heavily advertised product in the United States. Currently, the tobacco companies spend about $2 billion per year to advertise their products. The industry has defended this massive expenditure before Congress as necessary to entice current smokers to switch brands. Industry opponents effectively counter that only one percent of smokers switch brands each year.

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    b. Brand Advertising

    The twin themes of glamour and safety appeared in cigarette advertising from 1913 to 1964 with the emphasis on safety in the late 1940s, during the debut of filter cigarettes (1953-1955), and during the tar derby (1959-1960). Throughout this period, endorsements by emulatable individuals, such as movie and television stars and athletes, saturated the advertising media. The FTC found the 1930s and 1940s ads deceptive and misleading.

    When the death-knell of the use of celebrity endorsements was sounded by the Cigarette Advertising Code and with the inclusion of the warning label on cigarette packages and, later, in advertising, the industry continued the themes --of safety and glamour.. Glamour was no longer personified in identifiable movie stars or 'athletes. 'but in the" anonymous, young, healthy individuals engaged aged in I glamourous or strenuous physical activity. Safety claims were no longer overt, but implied in ads for "safer" cigarettes, i.e. low tar, low gas, charcoal filters, all-natural or ultra-low tar cigarettes. The intent and effect was to derogate from the warning or awareness of the health hazard and to reassure the smoker in his decision to continue smoking.

    D. Addiction/Ability To Quit

    "Addiction" has received little industry research attention. Nevertheless, many industry documents support the

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    contention that there are types of persons whose phychological profile and smoking behavior is' such that they*" have "great difficulty in quitting. For example, documents describe a British American Tobacco Company sponsored conference in 1978, .,attended by PM and, B&W representatives. One of the findings of that conference was: "Serious smokers smoke to prevent withdrawal symptoms.- Another study which Dr. Piehl (RJRT) cites recognizes addictive" smokers: 'People who find it unbearable to run out of cigarettes are described as using addictive-type smoking." The industry has also recognized that some smokers, especially smokers of high nicotine cigarettes "compensate" or regulate nicotine intake if it is lowered in individual cigarettes.

    E. Punitive Damages Issues

    If plaintiffs establish liability and "outrageous'. or egregious" conduct, the scope of the evidence can expand greatly to encompass a broad range of corporate conduct little relationship to the specific plaintiff. Brotherton v Celotex Corp., 493 A.2d 1337 (N.J. Super. 1985); Fischer v. Johns-Manville Corp., 472 A.2d 577 (N.J. Super. 1984), cert granted, I anted, 483 A.2d 137 (N.J. 1984); see also Hilliard v. A. H. Robbins Co., 196 Cal. Rptr. 117 (Cal. App. 1983). Punitive damages are merely incident to a claim for relief and can never, standing alone, constitute the basis for a claim.

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    b. The Kent Micronite Filter.

    The Kent "Miracle" Micronite filter was advertised as going to the extra expense to protect smokers with microscopic filtering. In fact, the Kent Miracle Micronite filter contained asbestos. This was once suggested as a basis for criminal I prosecution ion of Lori !lard executives . The danger was known but hidden from the public.

    C. Deceptive Cooperation with the Surgeon General's Advisory Committee 1962 -1963.

    From the mid-1962 formation of the Advisory Committee to the Surgeon General to early 1964, the industry issued public statements asserting that the Committee would conclude the issue was an "Open Question". The industry also "cooperated" with the Committee a fact which Liggett in particular expects to emphasize at trial.

    In fact, the industry privately forecast that Committee would conclude cigarette smoking caused lung cancer, and planned ways to discredit it, later executed through the chairman of the SAB and others. Subsequent Surgeon General Reports have also been attacked by the industry, some of them before they were issued.

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    d. True Magazine

    Frustrated by the steady drumbeat of scientific revelations adverse to smoking, the industry covertly sponsored an article which advanced its "open question" position. it paid a sportswriter, who later was hired by one-of its public relations firms, to write the article, which was then published in True magazine. The industry later reprinted and distributed the article to doctors, educators, and other opinion leaders, without attributing the industry as its source. A revised version of the article was published under an alias, in the National Enquirer. It was only through the diligent investigations of the Wall Street Journal and the FTC that this activity was brought to light.

    e. Criticism of Adverse Records

    From Wynder-Graham to Auerbach to the present, ever report linking smoking with disease has been criticized by the tobacco industry.

    Perhaps the most intensive of these was the effort to discredit the Auerbach Smoking Beagles- experiment. One of the most important gaps underlying the "Open Questionposition is that efforts to induce human-type lung cancer through inhalation of fresh, whole tobacco smoke by laboratory animals have consistently failed. In 1970, however, the ACS announced with great public fanfare Dr. Oscar Auerbach's study which showed that human-type cancers had been induced in the lungs of

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    "smoking beagles." The industry has frequently called the experiment "one of the great scientific hoaxes of our time' and continues to this day to repeat the charge that the ACS refused to permit independent pathologists to examine the pathology slides. In fact, Dr. Auerbach offered to make the original pathology slides available to Dr. Sheldon Sommers, the head of CTR.

    f. Influencing the Media.

    Through a studied investment of its advertising dollars, the industry both coerced the print media to avoid coverage of anti-smoking stories and enlisted the media's support in opposition to proposed restrictions on print advertising.

    g. Influencing the insurance Industry.

    In recognition of the actuarial differences between smokers and non-smokers, many insurance companies began to offer non-smoker discount rates on life insurance policies. Fearing the financial! detriment to the industry of the adoption by insureds of a healthier, smoke-free lifestyle, the tobacco lobby sought to intimidate insurance companies to withdraw such policies from the market.

    41

    Confidential

    Attorney Work Product

    Attorney-Client Privilege

    Jones, Day, Reavis & Pogue Draft

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    Ill. CONSPIRACY ISSUES

    Allegations of a civil conspiracy have been made in both the New Jersey and Texas litigation. Proof of this allegation requires plaintiffs to prove an agreement, express or tacit, among the defendants, and some act or acts committed by one or more of the defendants is furtherance of the conspiracy, which acts are themselves torts, or are performed in pursuance of a tortious objective. W. Prosser, The Law of Torts 292-93 (4th ed. 1971).

    A. The Maintenance of the Deadly Delusion of The Open Controversy

    Plaintiffs' Contentions


    In the tobacco litigation, plaintiffs have essentially asserted that the defendants have conspired to propagate "the deadly delusion of an 'open question" concerning the issue of cigarette smoking and health. (STIC Witness Book, Intro. at 1). For example, the complaint in Barnes alleges that:
    The defendants, individually and as members of the tobacco industry, conspired to misrepresent and, through their concerted action, misrepresented to users of cigarettes, and failed to warn users of cigarettes of the dependency induced by cigarette use and adverse health consequences of cigarette use.

    Complaint, Count Six, #2. Other allegations assert that the industry combined to deprive the public of certain scientific data, Count Seven, #2, and through advertising, to represent cigarette smoking as safe. Count Eight, #3.

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    Plaintiffs will contend that the fact that smoking causes lung cancer and other diseases has long been accepted by the World Health Organization, the Royal College of Physicians and Surgeons, the Surgeon General of the United States, the National Institutes of Health, the kmerican Medical Association, every state medical association in the country, and every voluntary health organization.

    'Incredibly,' the defendants deny this fact." Ignoring a mountain of evidence, the cigarette manufacturers merely incant that *it has not been scientifically established that cigarette smoking causes lung cancer or any other human disease.- They publicly refer to it as an "open controversy.Why? They want to discourage smokers from trying to give up this lethal product; they hope that new smokers will embrace this form of slow death; and they want to be able to escape financial responsibility to those who are the victims of this defective ant unreasonably dangerous product. In short, the tobacco industry is perpetrating a fraud of unparalleled proportions on the consuming public: the 'open controversy" is intended to reassure smokers to ignore or discount the undisputed fact that cigarette smoking kills 350,000 Americans every year.

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    10. Presentation of Alan Darnell to Middlesex Cty. Trial Lawyers Ass'n, May 30, 1984.

    - 44- Plaintiffs will. argue that the mere statement of the industry's position shows how preposterous it is. More significantly they will present evidence inconsistent with the "open controversy" Position from defendants' own documents and witnesses. Finally, almost all of the activities discussed throughout this Report can arguably be fit under the rubric of acts taken in furtherance of a civil conspiracy to suppress, omit, or misrepresent smoking and health information. Each statement or occurrence, standing alone, can be explained, but when the statements and occurrences are stacked seriatim, the co T combined d effect is substantial-. Therefore, the industry response must consider the total effect of these activities.

    Supporting Evidence and Documentation

    a. TIRC/CTR and TI as Agents of Tobacco Companies

    An extensive effort was made during the depositions of those industry executives who had served on the governing bodies of TIRC/CTR and 71 to detail the structures and procedures of those entities. Plaintiffs have sought to establish that TI is the exclusive lobbying arm of the individual companies; that TIRC/CTR's and TI's positions

    -------------

    Il. Dey Palmer Depo. at 162; Dey Cipollone Depo. at 135. American was a member of TI from 1958 until the mid-1960's, although it continued to participate in certain activities (including those of the Communications

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    on smoking and health are identical to that of the companies;"' that no statements of TIRC/CTR or TI spokesmen or their publications are issued without the companies' approval; " and that TIRC/CTR and TI evaluate smoking and health literature for the companies."

    This effort is designed not only to strengthen the "conspiratorial" look of the industry, but also to enable plaintiffs to impute to each company the statements and publications of TIRC/CTR and TI representatives, some of which are, conservatively speaking, imprudent and impolitic. No member company of these organization has ever disassociated itself from their statements, Almost all their statements are circulated to the tobacco company executives in advance.

    Without attempting to specifically identify every fact which supports the contention that TIRC/CTR and TI are the

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    Footnote Continued From Previous Page

    Committee) as a contributing nonmember. Heimann Rogers Depo. 1: at 120. It withdrew because of antitrust concerns (id.) and because TI was not effectively communicating the Industry's position on smoking and health. Id. at 131.

    12. Dey Cipollone Depo. all 276.


    13. Judge Depo. at 351, 387; Horrigan Dewey Depo. at 205; Cullman Depo. at 342-49.


    14. Dey Palmer Deco. at 163.


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    agents of member companies, the general review of plaintiffs' evidence leads to the conclusion that plaintiffs can probably establish this contention, conclusively.

    b. "Open Controversy" Ads and Public Statements by TIRC/CTR and TI

    The plaintiffs have selected and used many TI and CTR documents which present the industry position that it has not been scientifically established that smoking is a cause of disease, particularly lung cancer. These documents are collectively referred to herein as 'Open Question" documents. Virtually hundreds of then are available to plaintiffs. 15/ Dozens of TI pamphlets could be used by plaintiffs to establish "that the industry maintains that the smoking and health link is an "Open Question."

    Before the 'Open Question" was formulated in early 1954, --E. A. Darr, the President of Reynolds, reacted to Dr. Wynder's 1953 findings and a statement by d,. Ochsner. Darr was quoted as saying there has been "no real or substantiated evidence" that smoking causes lung cancer. 'The only claims have been made by just three doctors . . . . The vast body of

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    15. A 1977 TI memo reflects the difficulty in ascertaining -which Open Question ads were actually run. Memorandum from William Kloepfer to Horace Kornegay, August 1, 1977 (T 003632) , Tab 262.

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    other medical scientists do not agree with these. - 16 Darr's statements underestimated the state of medical opinion, and his position was soon changed to the stock position that has been repeated for over 30 years. The following are some of the statements plaintiffs have selected and are representative of the Open Question documents.

    In response to the undisputed industry awareness that cigarette smoking is a health hazard, the industry announced in January 1954 the "Open Question" position in a widely run ad, "A Frank Statement to Cigarette Smokers." The "Frank Statement" said:

    Distinguished authorities point out:

    1. That medical research of recent years indicates many possible causes of lung cancer.

    2. That there is no agreement among the authorities regarding that the cause is.

    3. That there is no proof that cigarette smoking is one of the causes (of lung cancer). We believe the products we make are not injurious to health.
    . . . .
    We believe the products we make are not injurious to health.

    . . .

    -------------

    16. Newspaper article, Raleigh News & Observer, "Big Tobacco Stocks Rally; Darr Disputes Cancer Talk. December 11, 1953 (50054 2656). Tat 263.

    - 48 -


    We are pledging aid and assistance to the research effort into all phases of tobacco use and health. 17

    Similarly, in the industry-wide "Statement Concerning the Origin and Purpose of the Tobacco Industry Research Committee and Its Proposed Functions," dated January 25, 1954, defendants wrote:

    Examination of all recent reports and publications, however, reveals that many factors, such as various types of air pollution, as well as tobacco smoke have been suspected as causes of lung cancer. Although much has been written concerning the incidence of lung cancer, there is still a dearth of author authoritative findings on the subject. It is safe 1.0 say that no persuasive and definitive conclusion respecting the cause of this disease or the relation of smoking thereto, has bee.. established.

    -------------

    1-7, "A Frank Statement to Cigarette Smokers.- Tab 264. Or Colby has "no quarrel" with the 'Frank Statement." Colby BarnesDepo. at 404. Also in early 1954, the industry reiterated the open question in the formation of the TIRC:

    Examination of all recent reports and publications, however, reveals that many factors, such as various types of air pollution, as well as tobacco smoke have been suspected as causes of lung cancer. Although much has beer. written concerning the incidence of lung cancer, there is still a dearth of authoritative findings on the subject. It is safe to say that no persuasive and definitive conclusion respecting the cause of this disease, or the relation of smoking thereto, has been established.

    Statement Concerning the Origin and Purpose of the Tobacco Industry Research Committee and Its Proposed Functions, January 25, 1954. See Tab 66.


    - 49 -



    The Open Question was (or may have been) repeated in "Another Frank Statement to Smokers" in 1958. The five main elements of the 1958 position were:
    a) It has not been scientifically established that smoking is a cause of disease, particularly lung cancer.

    b) The solution lies in more research to which the industry is committed.

    c) Scientists have been unable to establish any ingredient as found in cigarette smoke which has produced lung cancer in animals or human beings.

    d) The industry believes that cigarettes are not injurious to health.

    e) Moderation is the touchstone. 18/

    In an ad to be run in 1962 or 1963, the industry omitted the statement that cigarettes are not injurious. (It Is not certain that this ad actually ran.). The position became:
    " Intensive research of the past few years has not confirmed the theory that cigarette smoking may cause lung cancer " a theory suggested by statistical association studies.' 19
    -------------

    18. 'Another Frank Statement to Smokers," 1958 (1002507695). Tab 265.

    19. Advertisement entitled "Some frank words about Smoking and Research," undated. Tab 266. (emphasis added).


    -50-

    A little later the Position was modified closer to the accepted state of scientific knowledge:
    Scientific advisors inform us that until much more is known about such diseases as lung cancer, medical science probably will not be able to determine whether tobacco or any other single factor plays a 'causative role " or whether such role might be direct or indirect, incidental or important.20/

    The basic position in the ads and press releases and speeches has not changed since the industry published the first "Frank Statement" in 1954. 21

    C. Industry Admissions Concerning the "Open Controversy" Position

    Plaintiffs will argue that even if the tobacco companies believed in the "open question' position in 1954, they have known it to be untrue for almost 25 years. For example, on October 16, 1962, the President of Brown & Williamson wrote to the President of Reynolds:

    -------------

    20. "A Statement About Tobacco and Health,' c. 1963. Tab 267.

    21. See Colby Barnes Depo. at. 270-276; Hall Roysdon Depo. at 29-30; Horrigan Dewey Depo. a, 39-41; Judge Depo. at ____. See also, R. J. Reynolds Tobacco Company Mission Statement On Smoking And Health, January 1985 (not produced). Tab 263. Position Paper, 3/31/83 (50374 0595-0633; Hall Roysdon Depo. Exh. 2, and DiMarco Roysdon Depo. Exh. 2); reprinted in 1.4 T.P.L.R. 5.45 (April 1986). Tab 269. The Open Question has been repeated time and time again in public statements by members of the industry. TI and CTR documents at Tat 270.


    - 51 -

    Let me make my Position perfectly clear. if we were able to make strong, affirmative, welldocumented statements which might tend to convince the public that the charges against our industry are invalid and insupportable, I would subscribe wholeheartedly to a series of paid advertisements in which we could tell our story. But since we cannot take such a position I think it far better to continue to let the public make its own judgments which since 1953 it has done with results not wholly unfavorable to the tobacco industry. 22
    The Chairman of the Board of Lorillard agreed with the above quotation and added:
    I believe that paid advertisements which would satisfy all of us, including our respective legal counsel and litigation counsel (and which would still remain firm and positive rather 'than negative or defensive) would be almost impossible to arrive at. 23/

    About the same time, a document drafted for TI indicates even 'among friends" many believe the industry had no "adequate defense." Also in 1962, some members of the SAB of the TIRC had "mixed feelings about the industry's

    -------------

    22. Letter from W. S. Crutchens to Bowman Gray, October 16, 1962 (1002609376; Cullman Depo. Exh. 9). Tab 271.

    23. Letter from Lewis Gruber to Bowman Gray, October 19, 1962 (1002609373; Cullman Depo. Exh. 10). Tab 272 24. Undated -T. document, c. 1962 (T 27611). Tat 273.


    - 52


    Another document that is troublesome is a 1965 memorandum attached to a chronology of significant events relating to smoking and health. James Bowling, who began work for Philip Morris in 1948, referred to the document as the "chronology of confusion. 25/ In 1967, TI's public relations agency recognized the need to pursue a program that "Re-establishes the cigarette controversy.""' William Kloepfer commented in a TI memorandum in 1968:
    2. Our basic position in the cigarette controversy is subject to the charge, and may be subject to a finding that we are making false a or misleading statements to promote the sale of cigarettes . 2 7 /

    This memorandum also noted that the industry's ability to "reopen" the cigarette controversy was "reduced." 27/

    -------------

    25. Letter from James C. Bowling to Carl Thompson, June 14, 1-965 (65005 1877; 1003041092; Bowling Depo. Exh. 59). Tab 274. At his deposition, Bowling did not elaborate or this reference. Bowling Depo. at 589.

    26. "The Cigarette Controversy, An Action Program," The Tiderock Corporation, November 20, 1967 (T 13202). Tab a In 275.


    27. Memorandum from William Kloepfer to Earle C. Clements, April 15, 1968 (T T15379; Kloepfer Depo. Exh. 17). Tab 276. This document was copied to H. H. Ramm and Charles Wade at Reynolds.


    28. Id.


    -53-



    In 1971, Brown and Williamson executives criticized the Open Question and some of the industry actions used to perpetuate it:
    In defending the industry's interest, The Tobacco Institute has adopted a stance and used some methods which have led us to wonder if we are being realistic and constructive. 29/

    In 1972, Fred Panzer of TI glibly reviewed what had been the industry strategy during the first 20 years after the health scare. The document is set forth in some detail because it contains damaging admissions, provides plaintiffs with a roadmap of the Open Question strategy and reveals that the purpose of open Question strategy was to manipulate judges, juries, politicians, and public opinion. Juries are likely to react very strongly to this document:
    For nearly twenty years, this industry has employed a single strategy to defend itself on three major fronts -- litigation, politics, and public opinion.

    While the strategy was brilliantly conceived and executed over the years helping us win important battles, it is only fair to say that it is not - nor was it intended to be - a vehicle for victory. on the contrary, it has always been a holding strategy, consisting of

    -- creating doubt about the health charge without actually denying it
    -------------

    29. Memorandum 'The Tobacco Institute's Public Relations Program," from J. V. Blalock to A. Y. Yeaman, September 27, 1971. Tab 277.

    -54 -

    --advocating the public's right to smoke, without actually urging them to take up the practice

    --encouraging objective scientific research as the only way to resolve the question of health hazard

    On the litigation front for which the strategy was designed, it has been successful. While we have not lost a liability case, this is not because juries have rejected the antismoking arguments.

    On the political front , the strategy has helped make possible an orderly retreat. But it is fair to say that it has not stemmed the pressure for new legislation, despite the major concessions we have made.

    On the public opinion front, however, our situation has deteriorated and will continue to worsen. This erosion will have an adverse effect on the other fronts, because here is where the beliefs, attitudes and actions of judges, juries, elected officials and government employees are formed.

    THE STRATEGIC IMPASSE

    As an industry, therefore, we are committed to an ill-defined middle ground which is articulated by variations on the theme that, "the case is not proved.- As the recent history of U.S. involvement in Vietnam demonstrated, it is impossible to hold the public on a middle course for any length of time. There seems to be no way that mass public opinion can engage in a controversy and choose an answer that goes beyond the range of either/or.

    In the cigarette controversy, the public -- especially those who are present and potential supporters (e.g. tobacco state congressmen and heavy smokers) -- must
    - 55 -
    681879321

    perceive, understand, and believe in evidence to sustain their opinions that smoking may not be the causal factor.

    As things stand, we supply them with too little in the way of ready-made credible alternatives.

    THE ALTERNATIVES

    Two such credible alternatives exist:

    1) The Constitutional Hypothesis I.e. people who smoke tend to differ importantly from people who do not, in their heredity, in constitutional makeup, in patterns of life, and in the pressure under which then [sic] live.

    2) The Multi-factorial Hypothesis i.e. as science advances, more and more factors come under suspicion as contributing to the illnesses for which smoking is blamed -- air pollution, viruses, food additives, occupational hazards and stresses.

    Our 1970 public opinion survey showed that a majority (52%) believed that cigarettes are only one of the many causes of smokers having more illnesses. It also showed that half of the people who believed that smokers have more illness than non-smokers accepted the constitutional hypothesis as the explanation.

    Thus, there are millions of people who would be receptive to a new message, stating:

    Cigarette smoking may not be the health hazard that the anti-smoking people say it is because other alternatives are at least as probable.

    The Roper Proposal would be persuasive (if not strictly scientific) medium for this message, which we have done little to
    - 56 -

    develop in a systematic or comprehensive way. 30/

    The plaintiffs can argue that the defense strategy at trial is the same as that identified by Panzer:

    (1) Creating doubt about the health charge without actually denying it;

    (2) Suggesting alternative causes.

    Jurors are likely to resent the expressly-recognized tobacco industry intent to manipulate them. Thus, the plaintiffs can argue the industry conspired to formulate and execute " a single strategy" with the purpose of deceiving and manipulating the public, politicians and the very jury sitting in the box. The testimony of plaintiffs' experts who dispute the validity of the Open Question coupled with the industry's recognized doubts about the position, will be used in an effort establish a conspiracy to misrepresent the status of the scientific evidence regarding smoking and health. Unfortunately for the defense, Panzer included not only smokers, bull also Jurors, in the group of intended victims of the conspiracy.

    -------------

    30. Memorandum from Fred Panzer to Horace Kornegay, May 1, 1972 (TI 001-0999).Tab 96.

    -=57-



    d. Reynolds Statements

    The plaintiffs have selected a number of Reynolds Annual Reports that set forth the Open Question position. it is difficult to imagine how these documents help plaintiffs' case but an example of Reynolds' statements is set forth below.

    In 1954, Reynolds stated:
    Many eminent medical authorities have stated that claims made as to a possible causal relationship between smoking and lung cancer are lacking in any real proof. Very little is known as to the true cause or causes of any cancer, and it is to be hoped that research financed by the Committee [TIRC] will aid medical science in discovering the cause.

    Similar statements are contained in the 1965, 1966 and 1968 Annual Reports.-!--" Plaintiffs have selected some of the minutes of the annual meetings of Reynolds stockholders which contain similar Open Question statements. 3 3 1

    In 1981, the Executive Committee of the Communications Committee of TI suggested a national advertising campaign 'to reinforce the smoker, his choice to smoke and the custom of
    -------------

    31. 1954 Annual Report R. J. Reynolds Tobacco Company (50041. 41,04, at 4710). Tab 278. 32. (50043 4957. at 4958, 4992, 5050-51). Tab 279.

    33. (50043 3481, at 3482, 2499-2500. 2612-13, 2997-98). Tab 280.


    58


    smoking . 34/ - The memorandum which contains this suggestion also indicates that Mr. Horrigan agreed with it.

    In 1967, J. S. Dowdell (RJR-) acknowledged that public opinion polls showed "a majority of the people in this country - both smokers and non-smokers - believe there is a proven link between cigarette smoking and lung cancer . " The letter acknowledged, however, that "the industry has very little, if any, positive evidence upon which to base the aggressive campaign necessary at this late date to materially change public opinion." Despite that fact, Dowdell suggested "public attitudes can be changed" by "even more public

    -------------

    34 Memorandum from J. J. Morgan to H. Cullman and J. C. Bowling, March 24, 1981 (T 003572). Tab 281. The Executive Committee suggested that this could be accomplished by:

    -attacking bad research


    -attacking researchers themselves, where valuable


    -attacking the unreasonableness of legislative segregation


    -exposing the bureaucracy and personal aggrandizement of certain anti-smoking organizations.


    In effect, the Communications Committee is readying advertising to stand up to the industry's detractors and by that means support our smoking population.


    - 59 -



    relations efforts for many years to come. 35/ This memo supports an argument that "Public relations- rather than science is the only available means to create doubt in the minds of the smoking public concerning the health risks of smoking

    e. The Public Issues Campaign of Reynolds

    For the most part, the public issues campaign concerns passive smoking, social- acceptability and discouraging children from Smoking. The two ads which relate to smoking and health are, "Can we have an open debate about smoking?" and "Of cigarettes and science."", The -01 Cigarettes and Science ad relates to coronary heart disease. The ad concludes, "The controversy over smoking and health remains an open one." . Thus, the Open Question theme has continued until the present,

    f. 'Moderation" as an Admission

    Some of the Open Question ads caution moderation. The 1-958 Frank Statement contained the following cautionary note.

    Of course, we have never suggested, and do not suggest now, that excessive indulgence in any of life's pleasures is beneficial to health. As in everything else, moderation is the touchstone.

    -------------

    35 Letter -Public Opinion--Smoking and Health," from J. S. Dowdell to C. B. wade, Jr., August 10, 1967 (50000 61,92). Tab 282.

    36 Tab 283. These ads were discussed briefly in Horrigan Dewey Depo. at 287, 297.


    - 60-


    Suggestions for moderation have also been made by TI representatives in other contexts. 37/ The caution against excessive smoking could be deemed an admission that excessive smoking is harmful. Industry witnesses are likely to be cross-examined about this suggestion. The moderation suggestion was dropped in later ads, although industry representatives have suggested moderation on occasion. The reason for the eventual omission of the moderation suggestion probably came from the lawyers or Dr. Colby.

    Possible Industry Response

    The premise of the plaintiffs' contention that the industry conspired to reinforce smokers seems to be that the statements made publicly by the industry were false. Plaintiffs can use three methods of establishing such falsehood. First, plaintiffs might rely on company documents or statements that admit such falsehood or otherwise indicate the Open Question in untenable. Any such admissions or documents are extremely 'hot" and defense counsel should be aware of them. Another method of attacking the *open question" statements is to present a "state of the art" witness, such as

    -------------

    37. In 1980 Joseph Cullman, III, stated: "Obviously, there are a lot of people who shouldn't smoke and who shouldn't smoke to excess." Address to Business School of University of Virginia, 1980.

    - 61-



    Jeffrey Harris, who will testify that the statements made in 1954, 1958, 1962 and later were conclusively false. Cross examination of Harris or other 'state of the art" witnesses should be able to impeach this position. A third method, related to the second, is to attack industry research (sponsored by CTR) on its face to demonstrate its patent invalidity.

    The basic and simplest response to this issue is that in 1986 it has not been scientifically established that cigarette smoking causes disease and it was not established in 1954, 1958, 1962 or any other time. At all times, the industry recognized the allegations and has tried to find the answer. Therefore, the industry has nothing to apologize for with respect to the Open Question ads and statements. The Open Question position should be carefully distinguished from a position claiming that smoking is harmless or beneficial to health. A report conducted for TI sometime in the mid-1960s indicates smokers made this distinction: "If (smokers] want to hear anything, it is reassurance that smoking does not cause lung cancer -- not that there is a difference of opinion.' The industry did not suggest smoking is

    -------------

    38. (T 13371) (emphasis in original). See Tab 253.

    - 62 -



    beneficial to health The industry did not categorically deny not the health allegations against smoking.

    To the extent the industry Position has evolved from cigarettes are not injurious to the Open Question, the evolution occurred because the industry grew more cautious. the industry still does not believe cigarettes are injurious. but out of abundance of caution, it states its public position very carefully. Industry witnesses must avoid the trap of ran conceding either that the 1934 statement was incorrect or, that since that time, scientific evidence has become stronger that cigarettes cause disease.

    Another industry response and potential cross-examination technique is to demonstrate that the explicit or implicit premise of every industry or company Open Question statement is that a body of of. opinion exists that contends that cigarettes cause lung cancer or some other disease. The 1954 Frank Statement explicitly acknowledged reports of experiments conducted by doctors of professional standing linking ,cigarettes to lung cancer in human beings. The industry further warned warred that this "serious research" should not be disregarded or lightly dismissed. In 1962 the Open Question ads stated that industry-supported research did not "exonerate smoking." None of the ads categorically denied the charges against smoking. Reynolds' recent public issues campaign

    -61-



    concedes that there are allegations against smoking. Thus, in order to rely on the Open Question and similar pronouncements, a plaintiff must either explicitly or implicitly know of the health risks alleged to be associated with smoking. The plaintiffs should not be allowed to read the Open Question statements selectively. Reliance on the Open Question statements puts the plaintiffs just about where the defendants want them: informed of all the accusations, but choosing to smoke, nevertheless.

    A TI document indicates that TI developed guidelines encouraging truthful and intellectually honest reporting on new research in a publication, Tobacco and Health Research which was distributed to medical doctors. 19/ The guidelines provide:
    IMPORTANT : If the paper contains any conclusions or findings unfavorable to tobacco, these are reported scrupulously. The account of these findings may be terse and placed at the end of the story, but it must be there. This document detracts from the contention that TI misled medical leaders.
    -------------

    39. Memorandum " Tobacco and Health Research Procedural Memo" from Carl Thompson to William Kloepfer, Jr., October 18, 1963 (T 1-3890; 65011 9383; CT Exh. 10). Tab 284.

    - 64 -



    In dealing with moderation issues, industry witnesses should be able to articulate both that they 'do not disagree" with the 'moderation" statements and "do not disagree" with ills ultimate omission. Moderation in eating, exercise and all activities is good advice. In the final analysis, plaintiffs' reliance on any of the moderation documents establishes an awareness of the health allegations which undercuts plaintiffs' contention that they were unaware of the risks associated with smoking and, therefore, they should have been warned. Unless the industry witnesses complicate the issue by denials or untenable explanations, the moderation issue hurts plaintiffs 4 more than it does defendants. Thus, the less said the better. The point can be argued without any explanation by industry witnesses.

    B. The Gentlemen's Agreement

    To the best of our knowledge, no documents have been produced in any litigation relating to the alleged "Gentlemen's Agreement.' Nor have we been able to identify anyone knowledgeable about it, its participants, its terms, or even whether it exists in any form beyond speculation which has gained currency through repetition. There are, however, documents which record the fact or the speculation of a Gentlemen's Agreement.

    - 65 -



    Plaintiffs' Contentions

    Industry documents suggest that an informal understanding reached by all the major tobacco companies (with the possible exception of Liggett) and had two principal prongs. First the industry agreed not to conduct smoking and health research inhouse, but rather to have it conducted by TIRC. Second, they agreed to share any smoking and health breakthroughs.

    The first document mentioning the so-called "Gentlemen's Agreement" was prepared by a former Reynolds' employee in 1978. As part of a general analysis of Philip Morris, the employee notes: 40/
    R&D for international operations is totally separate from domestic efforts and engages in activities apparently not found in domestic research.
  • A wholly-owned subsidiary in Cologne, Germany engages in carcinogenic biological research, such as mouse painting, in violation of the verbal agreement among domestic companies not to perform animal testing in-house.
  • PM's German subsidiary has also engaged in product health claims considered insupportable and apparently without prior knowledge by the parent company,
  • -------------

    40. H.H. Cudd, Jr -Philip Morris U.S.A.," Feb. 17, 1978 (50394 0653, at 0669)

    - 66 -



    In the second of these documents, Dr. Colby (RJRT) wrote:
    - There is a clear-cut agreement among all U.S. cigarette manufacturers that any scientific discovery made within the companies, or otherwise sponsored by a single company, which might have a positive impact on the smoking and health without any costs to the other manufacturers. There would, therefore, be no incentive for RJR to sponsor the Cohen project. This applies to any other product development oriented research by a medical institution to be sponsored by a U.S. tobacco company.

    - At this time RJR does not fund directly in the U.S., any directly smoking and health related research. All such requests are answered by referring the applicants to CTR.

    The third document is of similar import, and states: 41/
    Through the domestic industry, two "Gentlemen's" Agreements were operative in the early days:
  • Any company discovering an innovation permitting the fabrication of an essentially "safe" cigarette would share the discovery with others in the industry.
  • No domestic company would use intact animals in-house in biological research.
  • -------------

    41. F.G. Colby to R.E. Morse, 'Research Proposal by A.B. Cohen, et al., Temple University," Oct. 26, 1981 (50053 4388). Tab

    42. F.G. Colby and A. Rodgman, "Biological/Consumer Preference Research Conducted by Philip Morris,- March 1983 (501-54 3504).


    - 67 -

    We know the latter agreement has been broken by at least two domestic companies and suspect the former agreement would not be honored today.

    In addition, the testimony of various witnesses is consistent with one prong of the Gentlemen's Agreement. Thus, the testimony of the industry witnesses is that smoking and health research was not conducted in-house but was left to TIRC."' Indeed, as early as 1963, Mr. Cullman (PM) stated. "No company is working specifically on the health question." "' He did not explain the basis for his intimate familiarity with his competitors' research activities. If one of the reasons for the limitation on research was to avoid one company's developing a competitive advantage based on health, it supports the existence of an agreement. To date, the most common reasons articulated for avoiding in-house research are that in-house research results would lack credibility,"' and that the companies lacked the necessary resources and expertise.

    The most problematic feature of this alleged agreement is the provision requiring the sharing of smoking and health

    -------------

    43. E.g., DiMarco Roysdon Depo. at 15-17; DiMarco Browner Depo. at 16.

    44. "Tobacco: More Trouble Ahead," Forbes Magazine (July 15, 1963) (50281 3811). Tat 94. 45. E.g., id. id.


    -68 -



    breakthroughs. A suggestion that such an understanding existed is a PM memorandum concerning a 1968 meeting with the Secretary of Health, Education and Welfare."' If true, this provision erected an economic disincentive for individual companies to pursue "safer" cigarette research. Why would a company invest the millions of dollars necessary to develop a "safer cigarette that would give it no competitive advantage in the marketplace? Conversely, avoidance of 'safer" cigarette research served to protect the market for the conventional cigarette.

    Possible Industry Response

    We know very little about the alleged Gentlemen's Agreement, except that (if it existed) it was honored more in the breach than in the observance. Intensive factual investigation within each company is warranted.

    -------------

    45. Tab 52.

    - 69 -



    IV. CORPORATE AWARENESS AND RESPONSIVENESS TO THE SMOKING AND HEALTH CONTROVERSY.

    Universal awareness and personal responsibility are twin themes of the defense strategy. In depositions, in briefs and at trial-, the defense has made these points forcefully and with considerable impact. We expect these issues to continue to be a centerpiece of the defense.

    Anticipating or reacting to this, plaintiffs' counsel have attempted to undermine the strength of these arguments by showing a low level of personal awareness among industry executives. These inquiries have met with considerable success. They have also flowed naturally into inquiries about corporate responsiveness to the smoking and health controversy. In this area as well, plaintiffs have scored significantly. At risk are several key points: whether the industry breached common law duties to investigate its products, whether the "Open Controversy" position is legitimate, and whether the industry spokespersons will be credible witnesses.

    A. Corporate Awareness

    Plaintiffs' Contentions

    The corporate defendants are held to the standard of "experts" in the field, and are expected to be aware of all

    - 70 -
    681879336



    reasonably available scientific and medical information pertaining to their products. In this case, evidence linking cigarette smoking and lung cancer was available in the 1930s, and in any event was universally known in scientific circles in the early 1950s. Since then, the evidence has continued to mount and is now overwhelming.

    The defendants, however, have either ignored or filtered the mountain of evidence indicting cigarette smoking as a health hazard. For example, in 1963, American convinced a federal court that it "could not . . by reasonable skill and foresight, have known that users of cigarettes would be endangered by the inhalation of the mainstream smoke.- Green v. American Tobacco Co., 325 F.2d 672, 674 (5th Cir. 1963).

    The pattern of studied ignorance continues unabated. Liggett executives are kept advised of medical. reports by their lawyers. From 1965 to 1982, Reynolds executives filtered information through an R&D employee who was, in fact, a paralegal to Reynolds' lawyers.

    Moreover, when asked about available evidence linking smoking and lung cancer, even "knowledgeable" industry deponents typically roll out stock answers:

    € Statistical association does mean causation.

    € The induction of malignant tumors in skin painting tests is irrelevant to the human smoking experience.

    -71-



    Although causation is accepted by every medical association, every voluntary health organization and the government, causation is established by science not by polling.

    Finally, the industry has failed to employ personnel in the disciplines most intimately involved in smoking and health issues. Thus, according to available testimony, no cigarette manufacture: has ever employed a physician to evaluate the smoking and health literature. Similarly, based on the evidence of record, neither epidemiologists nor biostatisticians have been employed,

    Supporting Testimony and Documentation

    a. Liggett

    At Liggett, Company lawyers played a central role in monitoring the smoking and health literature, keeping management advised, and controlling Liggett's research. Liggett's current President, K. V. Day, testified that he was the most knowledgeable person at Liggett on issues of smoking and health and that he obtained all his information on those subjects from his in-house counsel, Joseph Greer, and the company's outside lawyers at Webster & Sheffield. - 47/ It was also, of course, Liggett's General Counsel who ordered that a

    -------------

    47. Dey Depo. at 86, 109-10.

    - 72 -



    company lawyer be present at all meetings in the research department concerning the palladium cigarette and who, ultimately, vetoed Liggett's plan to market that supposedly safer product. 48/

    b. Reynolds

    With respect to awareness, Edward A. Horrigan (RJR-.) testified that it was not until "[t]he early sixties' that he became aware of reports linking smoking with adverse health consequences. 49/ This was ameliorated to some extent by other testimony, and related to a period prior to 1978 when Mr. Horrigan joined RJRT.

    According to G. R. DiMarco, Vice President of Research and Development, Reynolds relies an CTR to review the medical literature relating to tobacco, / 0 50/ although it also monitors the smoking and health literature in-house. 51/ Note, however, that Dr. Sommers denied that CTR monitors smoking and health literature for any tobacco company."52/ Reynolds has

    -------------

    48. Mold Depo. all 169-70, 182-90.

    49. Horrigan Depo. at 16.


    50. DiMarco Browner Depo. at 63.


    51. DiMarco Browner Depo. at _ (errata)


    52. Sommers Duke/Rogers Depo. at 16.


    -73-



    not employed an epidemiologist, "' and does not have any medical doctors working in the smoking and health area." Less than 10 employees have been advisors to Reynolds management on the smoking and health issue." /

    Dr. DiMarco also testified that he "(does) not feel qualified to answer" the question whether "there was or was not a real association" between smoking and human disease. L6/ indeed, he conceded that 'I don't feel that anybody at Reynolds would be qualified to answer that question." 57/

    C. Philip Morris

    The Philip Morris documents reviewed by us reveal little concerning the extent to which that its senior executives were briefed on scientific developments in the field at smoking and human disease. What is available is not impressive. A series of memoranda by J. E. ('Jet') Lincoln a man benefitting from no scientific training -- suggests that some of the advice the PM executives received was dubious. Jet Lincoln had a pet-theory, which he termed "my 'reverse

    -------------

    53. Id. at 108-09, 325; DiMarco Browner Depo. at 28.

    54. Colby Depo. all 325.


    55. Id. at 329.


    56. DiMarco Browner Depo. at 4'..


    57. Id.


    - 74 -



    hypothesis' that ' lung problems cause smoking. ' " 58/ In one such memorandum 59/ Mr. Lincoln, elaborating upon his "reverse hypothesis', wrote:
    There is no other way to explain the high incidence of smoking in certain occupations.

    Also, it seems to me this might be a good time to urge attention to additional causation theories. Unhappiness causes cancer. We've seen several foreshadowings of that one. I think dampness causes lung canceror perhaps it would be better said that dampness causes lung problems, some of which end up as cancers.

    I never cease to wonder if Philip Morris is spending enough of its own money on furthering the scientific defense of cigarette smoking. 60/

    In another memorandum to Mr. Cullman, "Jet" Lincoln offered "the comments you requested on the Hammond-Horn report," which included the following observations:
    I personally suspect that nervous tension is . . . the underlying cause of cigarette
    -------------

    58. Memorandum "The Fluorspar(??) Miners,- from J.E. Lincoln to A. Holtzman and J.C. Bowling, October I 1977 (1003040080, 65005 1860; Bowling Exh. 12) (emphasis added). Tab 59.

    59. Confidential Memorandum 'NC: Study of Occupational Cancers," from J.E. Lincoln to A. Holtzman, October 6, 1978 (1003040078). Tab 60.


    60. Id. (emphasis added).


    - 75 -

    smoking. Thus, whatever the merits of the design of this particular survey, I am afraid there is an association between cigarette smoking and slightly less than average life expectancy. In other words. the people who are tense and nervous and unable to accept the world as they find it probably are (1) more inclined to smoke cigarettes than the rest of the population, and (2) more likely to die early than the rest of the population, but their tendency to smoke cigarettes is a result of the personal characteristics that make them die early rather than a cause of death. 61/

    Philip Morris does not employ an epidemiologist, although it formerly had on its staff a veterinarian with an epidemiological bent. 62/

    d. American

    Robert K. Heimann (American) is an excellent witness on personal and corporate awareness relating to smoking and lung cancer, but is weak on other diseases associated with smoking. Thus, he was aware of the smoking and health controversy in the 1920s, and "as a growing lad" had heard both the phrase "coffin nails' and the claim that cigarettes caused tuberculosis. "' He is familiar with historic claims dating

    -------------

    61. Confidential memorandum, "Hammond-Horn Report" from J.-F. Lincoln to J. F. Cullman, 3rd, June 5, 1957 (10050391-37) (emphasis added). Tab 61.

    62. Osdene CipolloneDepo. at 157-58.


    63. Heimann FlynnDepo. at 21, 22.


    - 76 -



    from King James I in 1604 to Lucy Page Gaston* s presidential candidacy in 1920. / Prior to his employment with American in 1954, he became aware of the widespread publicity which attended Dr. Wynder's skin-painting study. / Furthermore, throughout his employment, he tried to secure through the TIRC staff or through other means copies of everything of significance published in the area of smoking and health.-"'

    Moreover, Mr. Heimann was able to offer salient criticisms of key studies, including those of Wynder and the first Hammond-Horn study. 67/ He was also able to cite favorable epidemiologic and inhalation work (including that of Microbiological Associates)."' Finally, Mr. Heimann personally participated in the last two parts of a five-part epidemiological study of American's employees. 69/

    Mr. Heimann, however, was not familiar with allegations that cigarette smoking was associated with (i) several other forms of cancer, (ii) peripheral artery disease,

    -------------

    64 . Id. at 26, 28.

    65 . Id . at 24.


    66. Id. at 107.


    67. Id . a 1. 33, 35-36.


    63. If. at 41-44, 53.


    69. Id. at 44-45, 48-51.


    -77 -



    (iii) aortic aneurisms, (iv) low birth weights in infants of smoking mothers. (v) harm to nonsmoking spouses of smokers, (vi) tobacco amblyopia, (vii) gastric ulvers, [sic] (viii) emphysema, or (ix) chronic bronchitis .-1-0' He indicated a limited awareness of claims relating to cardiovascular disease, cervical cancer, and an ancient claim concerning fertility of smokers' wives. /

    In addition. Mr. Heimann acknowledged that while American does employ physicians for industrial medicine, none of them has ever had any smoking and health responsibility.

    Possible Industry Response - Corporate Awareness

    The defense will undoubtedly stress any admission by plaintiff that he was aware of the claims of adverse health consequences attributed to smoking. To the extent a plaintiff admits something less than unequivocal awareness on his part, the defense may also seek to capitalize an such "feignedignorance. That point, however, may backfire given the industry's position in prior litigation and testimony of industry executives. If a major American tobacco company could

    -------------

    70. Heimann RogersDepo. I at 154, 158-59, 161-62, 164-65.

    71. id. at 159-160, 162.


    72. Id. at 42-43.


    - 78 -



    not in 1963 have foreseen that its product might cause disease, and if well-educated and high highly-compensated executives were not aware of specific allegations, how can they criticize someone far less sophisticated?

    During employment, one would expect a very high level of awareness by corporate executives. However, in response to inquiries seeking to ascertain the manner in which corporate executives kept themselves informed of smoking and health issues, the responses characteristically have been disappointing Such testimony strongly suggests that senior executives have either ignored or filtered *the mountain of evidence indicting cigarette smoking as a health hazard. it also undermines the "Open Controversy- position.

    It is abundantly clear that the defense has not adequately addressed the issue of corporate awareness. To overcome the problems identified above, care must be taken in the preparation of witnesses to assure their familiarity wit", certain facts. First, each company executive is undoubtedly familiar with the popularized epithets used to describe cigarettes (e.g., coffin nails, cancer sticks, nicotine fit, little white slavers, etc.). These epithets have long been used, and furnish a fundamental part of the common knowledge of the community. Industry executives should not hesitate to acknowledge their awareness of these terms. Second, and

    - 79 -



    perhaps most importantly, it is also true that no other product has received so much negative media attention. Thus, vast publicity surrounded the publication of the Wynder mouse-skin painting study in 1953, the Report of the Advisory Committee to the Surgeon General in 1964, and many other developments. Thus, awareness of smoking and health issues is self-executing. Indeed, employment in the tobacco industry heightens awareness and interest in such literature. Third, within each defendant there are undoubtedly many mechanisms by which corporate executives are kept informed. These include but are not limited to:

    1. Infolog, published by TI.

    2. Current digests published by CTR.

    3. Discussions at company board or committee meetings.

    4. Discussions at TI board or committee meetings.

    5. Discussions at CTR board or committee meetings.

    6. Discussions with counsel with respect to pending litigation.

    7. Discussions with counsel and others with respect to proposed legislation.

    8. Periodic reporting, such as monthly, quarterly or annual Research and Development Department reports.

    - 80 -



    Most of these undoubtedly are applicable to each of the corporate defendants , and witnesses should not hesitate to mention as many of these as appropriate. Among other things, such a reference list should greatly diminish the apparent impact of reliance on lawyers for smoking an d health advice.

    In addition to the foregoing, industry witnesses should be given other benchmarks to develop on deposition, including the following:

    (1) Industry witnesses should be able to identify each major disease process with which smoking has been associated, including particularly those listed on the rotating warning labels.

    (2) Industry witnesses should also have a modicum of familiarity with the principles underlying the "Open Controversy" position with respect to the major disease processes, or be able to defer to someone in the company with knowledge.

    (3) Witnesses should be aware that while CTR has some warts, it not only has accomplished its fundamental goal. but also has contributed more money to cancer research than ACS (and perhaps all voluntary health agencies combined).

    (4) The witnesses who are designated as Rule 30(b) (6) witnesses must be knowledgeable with respect to the basic information in the documents which plaintiffs have selected and should be able to present concise, knowledgeable and credible responses to the questions which plaintiffs will ask them. This Report attempts to develop some of these responses. The witnesses need not volunteer, but denying too much creates as much difficulty as admitting too much; and

    - 81 -



    (5) The industry witnesses should be given positive benchmarks or reference points for all of their testimony, including the following:

    (a) Cigarettes are a legal product with many benefits which people voluntarily choose to smoke;

    (b) Everyone has known the allegations of risks associated with smoking for many years, long before the statutory warnings;

    (c) The companies are under no duty to warn of that which is already known;

    (d) Cigarettes have been heavily taxed and regulated by the FTC and Congress;

    (e) The industry has imposed many aspects of regulation on itself which is unpresedented with any other product and unique to cigarettes;

    (f) The companies and industry have conducted health research and product research to develop and market better cigarettes that satisfy consumer demand; and

    (9) Many people including notable scientists assert a strong association between smoking and lung cancer, but if they can't tell us what causes lung cancer in non-smokers, how can they tell us what causes lung cancer in smokers?

    Witnesses must, however, be careful not to go too far in emphasizing that causation has not been established. Robert DiMarco testified on behalf of Reynolds in Browner that "Someday it will be established that cigarettes are not a

    - 82 -



    BROWN & WILLIAMSON

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    Thus, virtually every industry witness has vigorously denied that his employer conducted smoking and health research in-house. When challenged to explain how this duty was discharged, industry witnesses have mechanically pointed to CTR, invoking its "independencein the same breath. 7 7 / As discussed below, however, CTR's history is far from unblemished and its research efforts have from time to time drawn harsh criticism from the industry itself. Moreover, industry witnesses are frequently as unfamiliar with CTR funded research as they are with the literature generally.

    1. Iindividual Companies' Failure to Investigate Plaintiffs' Contentions

    Although information dating to the 1930s was sufficient to put the tobacco companies on notice (and trigger both a duty to investigate and a duty to warn), evidence linking cigarette smoking and cancer clearly existed and was universally known in scientific circles during the period 1950-54. By that same time, credible evidence linking smoking with cardiovascular and nonmalignant pulmonary diseases had emerged.

    Despite the foregoing, the record is replete with admissions that the tobacco companies failed to investigate the

    -------------

    75. See, e.g., Heimann RogersDepo. II at 16.

    - 84 -



    allegations that cigarette smoking adversely affects health. Industry witnesses have consistently denied that their employers conducted in-house smoking and health research. They have also denied that the companies employed epidemiologists, medical doctors, or others specially suited by training and experience to investigate the health charges. The plaintiffs will thus contend that the conclusion is inescapable that the companies did not take the first step in protecting the public from a dangerous product -- they did not adequately investigate the credible health allegations against smoking.

    In fact, however, virtually every company has conducted proprietary research, which in a broad sense can be characterized as smoking and health research. Liggett, American, Reynolds and Philip Morris did constituent analyses (as others undoubtedly did as well). Similarly, Liggett, Reynolds and Philip Morris (typically through contracts with outside entities) conducted skin-painting studies. Inhalation studies were conducted under contract by Philip Morris and Liggett, and a modest amount was conducted by Reynolds.

    Broadly speaking, this research tended either to support the contention that cigarette smoking causes adverse health consequences, or at least not to erode that contention. For example, the companies confirmed the presence in cigarette smoke of substances known to be carcinogenic and

    - 85 -



    co-carinogenic. [sic] They also confirmed that the application of cigarette smoke condensate caused tumors to animal skin. Beyond this, moreover, none of the major epidemiological findings have ever been disproved by the companies. Finally, to this date, no industry witness can identify the quantity or quality of evidence it would take to convince him that there is a causal relationship between cigarette smoking and lung cancer or other diseases.

    Supporting Evidence and Documentation

    a. Liggett

    Liggett reacted to the early epidemiologic and skin-painting studies by establishing a 'biological research program" at Arthur 0. Little, Inc. ('ADL') in Cambridge, Massachusetts. In a memorandum to Liggett dated January 20, 1954, ADL observed that:
    A flood of publications during the past two or three months has appeared, mostly in the popular press, reporting on the experimental work of Graham and others, which tends to prove that some substance from cigarette smoke is capable of causing abnormal growths on the skin of mice.76/
    -------------

    76. Rough Draft of Tentative Program Memorandum from ADL to Liggett, January 20, 1954 (RC 6007344; Bates Exh. 1) (emphasis added). Tab 3. In his deposition, Dr. Bates, however, said Liggett's position in 1954 was that there was no relationship between lung cancer and smoking. Bates Depo. at 70, 86.

    - 86 -



    In view of the "urgent problems now facing [Liggett]," ADL urged: "[w]e felt that, regardless of who might eventually carry out the work, it was our duty to suggest a plan which would point out all the various lines of positive action which Liggett & Myers ought to follow in strengthening their position at the present time." 77/ I/ ADL expressed the hope that its recommended course of action "will suggest a number of approaches which will have both defensive and offensive value with respect to the position of Liggett & Myers in their competitive field." 78/

    -------------

    77. id.

    78. Id. A Liggett document entitled "NOTES ON TELEPHONE CALL FROM MR. MACMANUS, WEDNESDAY, JULY 24, 1957, 8:10 a.m.' [(RC 6028614; Provost Exh. 27). Tab 4) contains a cryptic report of a conversation (apparently between Liggett's Dr. Darkis and "Mr. Macmanus") concerning statements made by the NCI's Dr. John Heller and referring the views of Liggett's President, Mr. Few:
    I think Heller's overal belief is that there is increasing evidence of a causal relationship and he is inclined to think that there is something in the tar but only a small percentage of the mass contains it and it probably in the polycyclic hydrocarbons, and that we ought not to go and get scared and what we ought [illegible] to do is concentrate on the cause. Of course, Mr. Few's belief is they shouldn't pay any attention to the cause (sic] they ought to find a cure . I don't go along with this line of reasoning, but Mr. Few is so firmly entrenched with this idea, I didn't try to disabuse him of it because it probably would take
    - 87 -



    As initially proposed to Liggett, ADL's investigation had three components:

    a. a survey of epidemiological data relating to the incidence of lung cancer, including a survey of pertinent literature as well as direct examination of clinical records';

    b. biological studies involving "the techniques of procuring smoke fractions for test, and the methods of controlling their application to animals" prior to actual "exposure of animals to certain substances-; and

    C. studies evaluating "fractions of smoke from different sources with a view to establishing differences in irritancy, as well! as differences in possible carcinogenic action," including "evaluation of the action of filters, as well as assessment of specific components of cigarettes." 79/

    -------------

    78. Footnote Continued From Previous Page
    three days. I don't think this is too sound a position. The tendency is to go slow and they have given them no encouragement at all on labeling the packages.
    (Emphasis added)


    79. Id.

    - 88 -



    Shortly thereafter, Rand Development Corporation announced that it had detected in the smoke from ordinary cigarette paper the presence of polycyclic aromatic hydrocarbons ("PAHs"), including benzo[a]pyrene ("BAP"). Rand further announced that it had developed a special polymeric cigarette paper which did not exhibit these properties. Following this announcement, Liggett and ADL met on August 6, 1954 and agreed that ADL would attempt 'at its earliest practicable date" to replicate the results described by Rand, which they agreed had made a "strong case . . . for the presence of 3,4-benzpyrene, one of the most. active carcinogens yet discovered." 80/ Liggett and ADL concluded that:
    If benzpyrene is produced by regular cigarette paper even under Rand's conditions, it may be important to (a) modify the paper so as to eliminate the production of the unwanted polynuclear substances or (b) eliminate paper from the cigarette.81/

    Liggett and ADL also agreed that:
    The results obtained and knowledge of the work should be restricted to the smallest possible group of individuals within the ADL organization. The entire program and associated exchange of knowledge between
    -------------

    80. "Statement of Program on Cigarette Paper Work by ADL as Arrived at in Conference on August 6, 1954 in Durham, N.C.," from Marcus E. Hobbs, August 13, 1954 (RC 6029330; Bates Depo. Exh. 9) (emphasis added). Tab 5.


    81. Id.


    - 89 -

    L and M and ADL should be held in strictest confidence. 82/

    Subsequently, ADL's investigation "confirm[ed] the original Rand premise that paper smoke did contain biologically active materials and did contain 3,4-benzpyrene. 83/ ADL also reported to Liggett that the same materials were present in the smoke of tobacco, not only tobacco paper. 84/

    ADL also repeated Wynder's mouse-painting studies, although at a lower level of tumorigenicity. 85/ ADL delivered its report on this work to Liggett on December 31.

    -------------

    82. Id. (emphasis in original).

    83. -Outline of Topics to be Discussed at the Research Conference in Durham, N.C., June 16 and 17, 1960," (RC 6026359; 65009 9436; Bates Depo. Exh. - ), at 73. Tab 6. For an extensive discussion of ADL's investigation of Rand's work, see "Outline of Topics To Be Discussed at Research Conference To Be Held an November 22 and 23, 1955' at 67-72 (RC 6026858; 65005 2719). Tab 7. The documents available to plaintiffs do not indicate what the other companies did with respect to the Rand study, although it was a subject of concern within TIRC. See pp. infra.


    84. Id.


    85. ADL brought Dr. Wynder to its laboratory in Cambridge to inspect its physical set-up and methodologies. Kensler Depo. at 60. Dr. Kensler described the doses used to produce the result as "horrendous, unrealistic; in fact, incredible.' (Id. at 87). For detailed discussions of ADL's early mouse-painting work for Liggett, see, 'The Biological Test Program at Arthur D. Little," undated (61,005 2906). Tab 8.


    - 90 -



    1956. 86/ Liggett did not make this work known to the public.-!-'-' It was, however, a subject of testimony in the Lartique trial in 1960. Liggett's Dr. Blount testified that Liggett's mouse-painting experiment produced far fewer tumors than had Wynder's study. 8 / ADL's Dr. Charles Kensler also testified about its efforts to replicate Wynder's results.-!- 8 / An undated (but early) Liggett document entitled 'Experimental Work in Our Laboratories on Possible Carcinogenic Substances in the Combustion Products of Paper, Tobacco and Cigarettes" reports that:
    3,4-Benzpyrene has been identified in smoke condensates from cigarette paper, from
    -------------
    86. "The Response Of CAF1 Hybrid Mice To The Repeated Application To The Skin Of Concentrated Solutions Of Cigarette Smoke Tar.' from ADL to Liggett, December 31, 1956 (65009 004; Bates Depo. Exh. _). Tab 9.

    87/ Bates Depo at 92. Dr. Bates apparently informed upper management of the report, but this is not entirely clear. Id. at 93-94.


    83. Lartique transcript at 1492. Dr. Blount's testimony was;


    Yes, they were not able to duplicate Dr. Wynder's experiment, and we had Dr. Wynder go in there and look at it and we didn't get anything near the results that Dr. [W]ynder had obtained for his experiment.

    89. Id. at 2964-74.


    90. 'Experimental Work in Our Laboratories on Possible Carcinogenic Substances in the Combustion Products of Paper, Tobacco and Cigarettes," undated (65005 2892). ,at 10.


    - 91-

    both paper and tobacco wrapped cigarettes, and in the trapped and main stream smoke of filter tipped cigarettes.

    ...

    In addition to 3,4-benzpyrene the group at Arthur D. Little, Inc. has identified the following compounds from paper smoke based on ultraviolet difference spectra:
      a. phenanthrene

      b. pyrene

      c. anthracene

      d. 1,2-benzpyrene
    The same work by Arthur D. Little indicates the probable presence of, but does not identify, the following:
      a. acenaphthalene

      b. naphthalene

      c. naphthacene

      d. benz(o)anthracene

      e. chrysene

      f. fluorene
    Work done in this laboratory has identified the following compounds in addition to 3,4benzpyrene:
      a. anthracene

      b. 1,2-benzpyrene

    Another Liggett document describes in detail a visit to Liggett's laboratory on June 25, 1959 by a senior editor of The Reader's Digest, James Monahan, during which Liggett described its research and development work and admitted that 'in principle we had no disagreement with Dr. Ernest L. Wynder's original, findings that the total tobacco smoke if applied in sufficient concentration and at short enough intervals cancers could be caused to develop on the backs of a

    91

    small percentage of susceptible mice before they would die from other causes.' 91/

    In March, 1961 ADL summarized the results of its research in a memorandum to Liggett:
    1. There are biologically active materials present in cigarette tobacco.

    These are:

    a. cancer causing

    b. cancer promoting

    c. poisonous

    d. stimulating, pleasurable, and flavorful

    2. There is no reason why the poisonous group, CO, HCN, N02, etc., cannot be reduced, even though they are not seen as a primary health hazard. Methods for removal are:

    a. filtration (treated carbon, etc.)

    b. treatment for removing precursors, CN elimination

    c. addition as a reactant (urea for Nos).

    3. Cancer promoting materials, esters, phenols, amines, can possibly be reduced by some treatment, extraction, etc.
    -------------

    91. -Memorandum Pertaining to the visit of Mr. James Monahan, Senior Editor, The Reader's Digest, on Thursday, June 25, 1959- (65005 2635). Tab 11.

    - 93 -

    4 The cancer-causing materials apparently are in many substances that are pyrolyzed but seem to be associated with tobacco in greater concentration than for primarily cellulose.

    ...

    6. There are many forces which continue to emphasize that L & M is in the tobacco business, not the pleasure business will have to be accomplished by avoiding these major pressures. A means is emerging -- is it correct? Can it be accelerated.
    92/
    "About 1963," Liggett assembled the Liggett/ADL work or, mouse-painting studies and smoke composition and submitted it on a confidential basis to the Advisory Committee to the Surgeon General.93/ By that time, according to Dr. Mold, "we

    -------------

    92. "L & M - A Perspective Review,' from ADL, March 15, 1961 (65009 9372; Mold Exh. ??) (emphasis added). Tab 12.

    93. Mold Depo. at 58. A "special conference" of senior Liggett executive and research personnel was held on February 4, 1964, shortly after issuance of the first Surgeon General's Report. The minutes of that meeting record that:
    Mr. Toms [Liggett's President] began the conference with the statement "hat Liggett and Myers Tobacco Company had decided to contribute to the American Medical Association Research Program along with a number of other tobacco companies . . . . Mr. Toms next. stated that he was being pressured by other tobacco companies to let them have a look at the material which Liggett and Myers submitted to the Surgeon General's Committee. At least they will want to see the part referred to by the Surgeon
    - 94 -



    had isolated a variety of polycyclic aromatic hydrocarbons. These were the suspect compounds in the carcinogenic action on mouse skin." 94/' Mold's request to publish this information was denied by his superior at the time, Dr. Darkis. 95/

    -------------

    93. Footnote Continued From, Previous Page
    General's Committee. Dr. Bates then stated that he had copied out portions of this report and had mailed them to Mr. Fred Haas. Mr. Haas and Dr. Bates had concurred that it was O.K. to submit this material to the interested parties. As a matter of fact, Dr. Bates stated that he feels that our agreement with the Surgeon General's Committee required this. Mr. Toms then raised the question as to whether or not the AMA would be entitled to see the full report. Dr. Bates stated that he would not recommend sending the report to the AMA unsolicited. He felt, however, that when persons requested this report and had a definite research interest in the material included in it, that they should be permitted to see it. Mr. Toms asked the question of whether or not a copyright on the material could be reserved. Dr. Bates stated that he did not feel that this would be possible since it would be too easy for reprints to be made once copies of the material were made available to AMA members.

    "Special Conference Held With Mr. Toms and Mr. Harrington on February 4, 1964" (RC 6026563; 65009 0481) (emphasis added). Tab 13.


    94. Id. at 60. 95, Id. at 61-62.
    NOTE : Mold did publish a paper concerning a technique for separating polycyclic aromatic hydrocarbons developed at Liggett and Myers entitled "Selective Separation of Polycyclic Aromatic -en, Compounds by Countercurrent Distribution with a Solvent

    - 95 -



    Although he was not expressly told so, Dr. Mold's "supposition was that, "if you have any reasonable intelligence, you understand that the company you're working for is under pressure from health authorities of one kind or another regarding the possibility of whether their product is hazardous or cancerous. The natural assumption would be that they wouldn't want to give information out that would support this public medical opinion. 96/

    Following its initial work with ADL confirming the findings of Wynder, et al., Liggett entered into a long-term collaboration with ADL, which eventually resulted in two product developments: (1) The Lark charcoal filter, and (2) the "XA" Palladium cigarette. Liggett hastened to rush the former to the market, proclaiming its purported health benefits. Prompted by the concerns of its lawyers and the retaliation which it feared by its competitors, Liggett abruptly aborted its plans to market its patented 'XA" cigarette. See pp. 216 to 247 infra.

    -------------

    95. Footnote Continued From Previous Page

    System Containing Tetramethyluric Acid" in the December 1963 issue of Analytical Chemistry. See 'Summary of Topics Discussed at February, 1964 Research Management Conference," February 5-6, 1964 (RC 6026549; 65005 2611). Tab 14 at p. 150.

    96, Id. at 62-3 (emphasis added).


    - 96 -



    b. Reynolds

    According to Mr . Horrigan, Reynolds does "no research [on tobacco and health] in-house. 97/ According to Dr. DiMarco, Reynolds has left research into the "allegations of health hazards" attributed to cigarettes entirely to CTR."' Despite this testimony, Reynolds' inhouse research activities were more extensive than these witnesses were aware of. Thus, Reynolds confirmed the presence of many constituents of smoke which are reported in the scientific literature; others it has not. I In fact, Drs. Alan Rodgman and Lawrence C. Cook carried out extensive in-house studies of the composition of tobacco smoke. They confirmed the presence of BAP in cigarette smoke as early as 1956.100/ In addition, according to an internal 1959 Reynolds memorandum:
    Some thirty-odd polycyclic hydrocarbons have since been similarly characterized in these laboratories. Of these, eight are carcinogenic to mouse epidermis. Cholanthrene, a patent carcinoqen, is one of these not yet reported by other investigators. In April of 1959, the first positive isolation and identification of
    -------------

    97. Horrigan DeweyDepo. at 111.

    98. DiMarco Browner Depo. at 32.


    99. Colby BarnesDepo. at 308-09.


    100. Memorandum. A. Rodgman to K. Hoover, October 29, 1959 (50094 5991). Tat 53.


    - 97 -

    3,4-benzpyrene, citing data similar to ours, was reported by other investigators. 101/

    Thus, Reynolds identified BAP in cigarette smoke three years before the first published confirmation of its presence, and, as of 1959, had detected 'a potent carcinogen," cholanthrene, which no other researcher has reported to date. In a later, unpublished paper, somewhat innocently entitled "The Composition of Cigarette Smoke - Some minor Components of the Neutral-Acidic Fraction."' Drs. Rodgman and Cook reported their isolation and identification of no fewer than forty-four PAHs and noted that "[j]ust under one hundred polycyclic aromatic hydrocarbons have been reported [in the literature] as components of tobacco smoke."

    Furthermore, "way way back," according to Dr. Colby, Reynolds attempted to remove from smoke certain of the substances identified as 'the precursors of the bad guys" by Dr. Wynder, but even Dr. Wynder discovered that this 'remedy of all remedies was no remedy whatsoever." 103/ The end result on the skin painting tests was the same because when he removed

    -------------
    101. Id. (emphasis added).

    102. A. Rodgman and L. Cook, 'The Composition of Cigarette Smoke - Some Minor Components of the Neutral-Acidic Fraction" (50152 5285). Tab 57.

    103. Colby BarnesDepo. at 345-46 (protected portion).

    - 98 -



    the precursors, he also removed the constitutents which are anticarcinogens. 104/

    Reynolds' precursor studies are summarized in another unpublished paper by Rodgman and Cook, in which they observed that "polycyclic aromatic hydrocarbons are not an inherent part of tobacco," and reported that their investigation had led them to conclude that 'the saturated hydrocarbons, solanesol, and 3-sitosterol in tobacco may definitely be considered as precursors of the polycyclic aromatic hydrocarbons in tobacco smoke. Further, Reynolds appears to have developed a method for removing the precursors of the PAHs from tobacco. An October 29, 1959 memorandum from Dr. Rodgman to Mr. Hoover discusses four possible techniques, and reports that one of these, an "extraction process,' "has distinct advantages over the other four approaches since it provides a scheme whereby the major polycyclic hydrocarbon precursors can be removed from the tobacco. We have, in fact, applied for a patent on the removal of the precursors. 106/ Dr. Rodgman continued:
    The scheme under consideration would greatly reduce the polycyclic hydrocarbons
    -------------
    104. Id.

    105. A. Rodgman and L. Cook, 'The Composition of Cigarette Smoke - Precursor Studies" (50152 5257). Tab at 5 8 -



    106. Memorandum. A. Rodgman to K. Hoover, Oct. 29, 1959 (500914 5991) (emphasis added), Tab 53.

    - 99 -

    in smoke. The flavor of the smoke should not be adversely affected but if it is the addition of suitable flavorants to the pretreated tobacco should restore the desired flavor. The physiological requirements of the smoker with respect to nicotine can be met by the reapplication of the optimum amount of nicotine to the extracted tobacco.107/

    Reynolds did not implement this process.

    Of the substances known to be present in cigarette smoke, Reynolds acknowledges that BAP and nitrosamines are carcinogenic to animals but believes that "that doesn't mean anything."108/ In the opinion of Dr. Colby, mice experiments "are scientifically 100% invalJd," 109/ and all the epidemiological studies flawed. 110/ While acknowledging that PAHs are carcinogenic to animals under experimental conditions, Dr. Colby is of the view that they are 'probably not" in humans. 111/

    -------------

    107. id. The cited document appears to be the only clue thus far in plaintiffs' possession concerning Reynolds' hexane-extraction process. No document produced by Reynolds alerts plaintiffs to the company's decision not to implement the process commercially and not to complete U.S. registration of the patent.

    108. Colby BarnesDepo. at 361-62.

    109. Id. at 154. 110. Id. at 172.

    111. Id. at 151.

    - 100 -



    According to Dr. Colby, Reynolds has never carried out any in-house animal research relating to issues of human disease: for a brief period of time it performed some minor animal research limited to (non-tobacco) product diversification. 112/

    Also problematic are documents which suggest that Reynolds was more concerned about fighting off adversaries than about investigating the health consequences of its product. For example, a 1978 Reynolds "Management by Objectives" lists as among the 'objectives" of its Research Department to "[p]rovide the research and services necessary to protect the Corporation against the smoking-health claims of professed enemies of the tobacco industry." 113/ Similarly, a Reynolds Analytical Research Division *Quarterly Research Report" dated March 31, 1978 states that 'Research Department Objectives" were to "[p]rovide the research and services necessary to protect the Corporation against the smoking-health claims of professed enemies of the tobacco industry" and to "[r]educe

    -------------
    112. Id. at 222-23.

    113. Mid-Year MBO - 1978 Analytical Division (50163 01-21). lab 55.

    - 101. -

    impact of health claims on effect of environmental smoke on nonsmokers . 114/

    c. Philip Morris

    Philip Morris' research activities were comparable to, but far more extensive than, those of Reynolds. In-house, Philip Morris has done research into identifying the components of smoke. On June 7, 1955, Edward R. Murrow presented a film clip shot all 'the Richmond laboratory of one of the major producers" featuring Dr. Robert N. DuPuis, chairman of TIRC's 'industry technical group.' Dr. DuPuis acknowledged PM's constituent work and offered worried smokers a comforting message:
    Our primary objective is to analyze all of the components of smoke. Of course, we do a great deal of research on analysis and technology of tobacco itself. But even if we knew all of the components of tobacco. we still would not know the components of smoke, and since smoke is what we sell, we feel that we should emphasize this phase of research.

    After we have produced the smoke and separated it into fractions, "he next step is to identify these fractions. These are then identified either photographically or on the oscilloscope.

    The oscilloscope is now demonstrating the means of identification of one of the smoke components. Using these instruments,
    -------------

    114. Quarterly Research Report, Division: Analytical Research, March 31, 1978 (50088 7556). Tat 56.

    - 101 -

    we have isolated and identified some three dozen components of smoke. Many more will be identified. As we find these components, we publish the results of our work in technical journals which are available to any scientist in any part of the world.

    So far we've found none that give us any cause for concern. If we do find any that we consider harmful, and so far we have not, we'll remove these from smoke and still retain the pleasure of your favorite cigarette.
    115/

    The evidence which plaintiffs have does not reveal the date when Philip Morris confirmed the presence of BAP in cigarette smoke. PM's efforts, however, did result in the "identification or isolation of some animal carcinogens,"' including BAP, 717/ but it has not researched whether any other components of tar are tumorigenic to the backs of mice. 118/ PM also "look[ed] at precursor relationships." 119/

    -------------

    115. Transcript Of Edward R. Murrow's Second TV Show On "Cigarettes And Lung Cancer," June 7, 1955, at p. 7 (emphasis added) (CTR 3932; 65008 3333; Gertenbach Duke/Rogers Exh. 14-C). Tab 81.

    116. Osdene CipolloneDepo. at 75.


    117. Id. at 79.


    118. Id. at 87-8.


    119. Id. at 64.


    - 103 -



    Philip Morris claims to have conducted no in-house biological research. except for some Ames mutagenicity work. 120/ it did fund outside biological research with Bioresearch Consultants (mouse painting), INBIFO (rat inhalation), IROC and Wynder's American Health Foundation (hamster inhalation), and Hazleton laboratories (monkey inhalation).121/ All animal inhalation studies sponsored by Philip Morris to date have failed to produce any lung tumors, according to Dr. Osdene. 122/

    Dr. Osdene acknowledged that cigarette smoke impairs pulmonary macrophage viability "in a transient way," but did not remember that before joining Philip Morris he had coauthored a 1969 published study entitled 'In Vitro Alveolar Macrophage Viability.' 123/ He also stated that "I really don't know the answer" concerning impairment of human macrophage activity. 124/

    d. Lorillard

    -------------

    120. Id. at 280.

    121. Id. at 124, 126-7, and 130.

    122. Id. at 130.


    123. Id. at 220-22.

    124. Id. at 224.


    - 104 -



    Like the other tobacco companies, Lorillard conducted research on the isolation and identification of the components of tobacco smoke and "probably" did this work 'because of the publications that had appeared [in the 1950's] relative to some components of tobacco smoke with respect to activity in bioassay systems . . - ." 125/ Ultimately, Lorillard . "obtained spectral properties which were consistent with those of BAP . . . "126/ Lorillard acknowledges that BAP will produce mouse skin papallomas when applied in sufficient concentration, 127/ but not in the concentration found cigarette smoke.128/

    Lorillard's early analytical work with the components of smoke related, in part, to its interest in filtration as a method of altering smoke composition because those at Lorillard responsible for research "were obviously aware of the publications . . . and one could reasonably believe that filtration in part could have had some health connotations in their minds." 129/ Specifically, Lorillard attempted to

    -------------

    125. Spears Depo. at 23. Dr. Spears is the chief scientist at Lorillard.

    126. Id. at 25.

    127. Id. at 27.


    128. Id. at 28.

    129. Id. at 47.

    - 105 -



    reduce the amount of BAP in cigarette smoke "since it had been alleged by some that this was a component of tobacco smoke that was important in the production of tumors in mouse skin. .1 1 0 130/ According to Lorillard, however, it never found a " practical" method of reducing it and became convinced that it was no. a major factor in the development of tumors on the backs of animals.'!]:/

    After its work on BAP, Lorillard studied phenols, and other components of smoke, and "how you might effect the properties of tobacco smoke with respect to the bioassay system that Wynder had talked about with respect to mouse skin." ??/ Lorillard eventually created a filtration system which removed some of the phenols in a commercial cigarette (Kent)."`/

    Lorillard also employed outside laboratories, including the Armor Research Foundation (mouse skin-painting) and Dr. Wynder's facilities (also skin-painting). 1 3 134/ I Lorillard worked with Professor Dolhamn of Sweden concerning

    -------------

    130. Id.

    131. Id. at 29-30.


    132. Id. at 104.

    133. Id. at 105-06.


    1.34. Id. at 50.


    - 106 -



    respiratory tract defense mechanisms and published a number of papers with him, I I I / and in the mid-sixties, it did mouse-skin work with Bioresearch Consultants (Dr. Homberger) in Boston.'"' It also worked with Battelle in the late sixties attempting to develop a fiberoptic "to look at ciliary activity in dogs" and to evaluate filters.'"'

    Lorillard made a submission to the original Surgeon General's Advisory Committee,"" and believes that this is a public document.'"'

    Dr. Spears testified that he does not know how to design an animal study capable of convincing him that smoking causes lung cancer, since, "if we had that information, we would probably be at the stage of curing this disease." 140/ Dr. Spears, however, elaborated on some of the elements of proof that are essential:

    1) Relevant animal studies which were free from known problems;

    2) Human type lung tumors, pathologically in numbers that are significant

    -------------

    135. Id. at 136.

    136. Id. at 147.


    137. Id. at 174-75.


    138. Id. at ISO.


    139. Id. at 151.


    140. Id. at 278-31.

    - 107 -

    3) Assurance that factors that influenced the disease, such as viruses, were not playing a role;

    4) Animal must be reasonably relevant to human beings in terms of metabolism and activation of carcinogens;

    5) Immune system that is similar to human beings;

    6) Understanding of the detailed mechanisms by which the disease occurred, including DNA damage; and

    7) Distinguish development of acute diseases in which epidemiology can be relatively convincing and chronic diseases in which it is not. 14?/

    e. American

    Very little is known about American's research activities as they may relate to smoking and health. American established a Research Department in 1911, and since 1920, its Richmond Research Laboratory has had "a continuing study of the components of tobacco and tobacco smoke.-" This research, however, was not connected with the issue of the health effects of cigarette smoking 14?/ In addition, in the early 1940s, American conducted a study of mice exposed to whole

    -------------

    141. Id.

    142. Heimann FlynnDepo. at 101. "Some" of this was published. Heimann RogersDepo. I at 137.

    143. Heimann FlynnDepo. at 101-02.


    144. Heimann RogersDepo. I at 32-33.


    - 108 -



    smoke . 1 4 5 / This may have been done at the Medical College of Virginia.146/

    Independent of its Research Department, Mr. Heimann participated in the last two parts of a five-party epidemiological study of American's own employees. The five parts were described as follows:146/

    1. Dorn and Baum (NIH) studied the mortality rates during the period 1946 to 1952 of 11,000 employees. This was published in 1955 in the Journal of Industrial Medicine and Surgery.

    2. A. Finkner (UNC) studied the smoking habits of these same employees, and published his results in the "North Carolina Mimeo Series' in the late 1950s.

    3. Haag (MCV) and Hanmer (American) updated the Dorn-Baum, study of mortality rates for the period 1953 to 1956. This was published in about 1958 in the Journal of industrial Medicine and Surgery.

    4. Cohen (American consultant) and Heimann updated the mortality rates for the period 19571960. The study was entitled 'Heavy Smokers with Low

    -------------

    145. Id. at 103. 146. Heimann FlynnDepo. 7, 45-46, 48-51.

    - 109 -



    Mortality" and was published in 1963 in the Journal of Industrial Medicine and Surgery.'

    5. Cohen and Heimann published 'Heavy Smokers with Low Mortality and the Urban Factor in Lung Cancer Mortality" in 1964.14"

    In general, it was American's policy "to leave medical research to institutions other than the company.* The evident rationale is that American's laboratory was not equipped to do such research and its personnel were not qualified.149

    2. TIRC/CTR's Failure to Investigate

    Plaintiffs' Contentions

    in 1954, five of the six cigarette manufacturers announced the formation of the Tobacco Industry Research Committee tee ( "TI RC"). This entity was formed for the purpose of funding independent research into smoking and health issues. Indeed, TIRC was the vehicle intended to facilitate research necessary to resolve the "open questions" concerning smoking and health. To accomplish that purpose, the TIRC established an "independent" Scientific Advisory Board ("SAB") consisting

    -------------

    147. Heimann FlynnDepo. Ex. RKH-2.

    148. Heimann FlynnDepo. Ex. RKH-3.


    149. Heimann RogersDepo. I at 134; Heimann RogersDepo, 11 at 16.

    - 110 -



    of eminent scientists to screen applications and recommend the funding of "independent" research.

    At least that's what the tobacco companies say. In fact, TIRC's mission was more aptly described in 1954 by the first SAB Chairman, Dr. Clarence Cook Little: "[T]o build a foundation of research sufficiently strong to arrest continuing or future attacks" on tobacco. Moreover, one of TIRC's principal activities from 1954 to 1958 and thereafter was as a public relations vehicle for the tobacco industry in interviews, speeches, and testimony before Congress, the FTC and in court.

    Nor can the activities of TIRC/CTR be fairly characterized as funding independent research into smoking and health issues. As Dr. Little confirmed in 1960 in the Lartique trial, CTR's research grants were directed at issues remotely related to cigarette smoking. Similarly, company documents explicitly challenge the relevance and quality of CTR-funded research.

    The failure to support relevant research is not surprising. SAB members were not only paid by the tobacco companies, but they (or the institutions with which they were associated) were principal beneficiaries of CTR research grants. In addition, far from being independent, CTR and SAB activities were monitored and controlled by industry

    - 111 -



    representatives, including tobacco company lawyers. Indeed, the lawyers designed "special projects" for litigation purposes, stopped central nervous system research proposals, and screened out "dangerous project' proposals.

    Supporting Evidence and Documentation

    1. TIRC's Public and Private Agendas

    Confronted with the public's alarm over the evidence tending to incriminate tobacco, the industry established the TIRC in January 1954. At the time of its formation, the publicly-avowed purpose of TIRC was 'to aid and assist research into tobacco use and health, and particularly into the alleged relationship between the use of tobacco and lung cancer, and to make available to the public factual information on this subject." 150/

    On June 15, 1954, TIRC held a press conference in New York City during which its first Scientific Director, Dr. Clarence Cook Little, issued a prepared statement and fielded questions from members of the press. In his statement, Dr. Little expounded upon his philosophy and that of TIRC's Scientific Advisory Board (-SAB"):

    -------------

    150. 'Statement Concerning The Origin And Purpose Of The Tobacco Industry Research Committee And Its Proposed Functions," January 25, 1954 (1003040088; PM 770 set). Tab 63.

    - 112 -

    (The members of the Scientific Advisory Board of the Tobacco Industry Research Committee consider the investigation of tobacco in relation to health as a non-controversial field in which the sole interest of the scientists serving an the Board is to discover facts and to utilize these facts constructively and for the purpose of increasing human welfare . . . . We have no axes to grind and do not intend to be critical of the efforts of others.

    . . .

    I hope all of you will realize that you can perform a very real service by minimizing the controversial aspects of any basic research which is attempted, and that if you maintain an inquiring and open mind - as we hope to - a great deal can be accomplished over the years.
    151/

    When answering the reporters' questions, Dr. Little revealed that he did not come to his new assignment. with an entirely open mind:
    I am ultraconservative about cause and effect relationships. I have seen too many conclusions drawn that tend to smother further study. I just want to know more about it than is now known.

    I don't feel that it is a proven cause and effect relationship. Now, whether it will be or not is in the future.
    -------------

    151. 'Statement Of Dr. Clarence Cook Little, Scientific Director, Tobacco Industry Research Committee, At Press Conference, University Club, New York City, June 15, 1954" (emphasis added). (CTR 3884; 65008 3286; Gertenbach Duke/Rogers Exh. 14). Tab 71. See also, TIRC Press Release of June 15, 1954 announcing Dr. Little's appointment as Scientific Director (CTR 3324; 65008 5008). Tat 72.

    - 113 -

    QUESTION: DO You feel that substantial evidence points to a relationship between cigarette smoking and lung cancer?

    DR. LITTLE: I am not convinced of that.

    DR. LITTLE: I am not convinced that the evidence is satisfactory to claim a cause and effect relationship.
    152/ /

    On July 1, 1954, TIRC announced appointment of its first full-time chairman, Timothy Hartnett, retired president of Brown & Williamson.153/ Although TIRC had not as yet awarded even a single grant, it nonetheless included a reassuring message to the smoking public from Mr. Hartnett in the press release announcing his appointment:
    It is an obligation of the Tobacco Industry Research Committee at this time to remind the public of these essential points:

    1. There is no conclusive scientific proof of a link between smoking and cancer.

    2. Medical research points to many possible causes of cancer.

    Statistics indicating a relationship between smoking and disease could apply with equal force to many other aspects of modern life.
    -------------

    152. Press Conference of the TIRC, June 15, 1954 (emphasis added) (CTR 3887; 65008 3288; Gertenbach Duke/Roqers Exh. 14-A). Tab 73.

    153. Hartnett was merely the first of several retired industry chief executives who received sinecures at, TIRC/CTR.

    - 114 -

    3. Full evaluation of statistical studies now under way is impossible until these studies have been completed, fully documented and exposed to scientific analysis through publication in accepted journals.

    4. In their recent preliminary report to the American medical Association, the American Cancer Society and its statistical research staff placed careful qualifications and limitations on their findings relating to this subject. These qualifying statements should not be overlooked.

    5. The millions of people who derive pleasure and satisfaction from smoking can be reassured that every scientific means will be used to get all the facts as soon as possible
    . 154/

    Few at the time would have predicted that the industry's position would remain unchanged for the next thirty years.

    TIRC issued another press release later in the same month in which Dr. Little stated that "[i]n order to find

    -------------

    154. TIRC Press Release, July 1, 1954 (emphasis added) (CTR 3328; 65008 5012; Gertenbach Duke-Rogers Ex-. 13). Tab 74.

    The TIRC had issued an even earlier press release (-Many noted doctors and cancer research authorities deny that there is any proof establishing a link between smoking and lung cancer . . ."). TIRC Press Release, April 14, 1954. (CTR 3316; 65008 5000; Gertenbach Duke/RogersExh. 13). Tab 75. This press release preceded the formation of the SAS by nearly two weeks. See TIRC Press Release, April 27, 1954 (CTR 3320; 65008 5004; Gertenbach Duke/RogersExh. 13). Tab 76.

    -115-



    conclusive facts . . . ", the SAB had adopted a three-fold research policy . . . :
      1. Study of the physical and chemical composition of tobacco and accompanying products.

      2. Study of tissue changes in humans and animals under various conditions.

      3. Study of smoking and other tobacco habits and of the emotional and physical make-up of smokers." 155/

    The "Confidential Reports" of the TIRC meetings, however, reveal an agenda altogether different from that presented to the public. On October 19, 1954, for example, Dr. Little advised TIRC's membership concerning the SAB's "viewpoint":
    He declared that both he and the members of the Board were aware of the attacks which had been made on tobacco for over 200 years, and wished to build a foundation of research sufficiently strong to arrest. continuing or future attacks. 156/

    In short, Dr. Little and his colleagues in the SAB viewed their mission as one designed to build an exculpatory record to benefit the industry's defensive efforts: to create the "open question.

    -------------

    155. TIRC Press Release, July 28, 1954 (CTR 3332; 65008 5016; Gertenbach Duke/Roqers Exh. 13) - Tab 77.

    156. Confidential Report, TIRC Meeting, October 19, 1954 (emphasis added) (CTR 6204; 65008 1364; Gertenbach Duke/RogersExh. 11C). Tab 76.


    - 116 -



    2. TIRC/CTR's Public Relations Function

    During TIRC's January 20, 1955 session, its Executive Secretary, W. T. Hoyt, presented a formal 'Statement" describing "the two major purposes for which the Committee was organized" as "the public relations phase and the research program. " 157 Mr. Hoyt repeated that characterization of TIRC's purposes in a Statement which he delivered during the TIRC's April 28, 1955 meeting and added that:
    Our job is to maintain a balance between the two, and to continue to build soundly so that at all times Research and Public Relations complement each other. In that way we intend to assume the mantle of leadership and, ultimately, to create a condition where the public will look to the TIRC for answers rather than to others. 158/

    TIRC faithfully discharged its public relations function, serving as the primary vehicle for the industry to communicate the "open controversy' position. In this effort, TIRC was assisted by Hill & Knowlton, which served as TIRC's public relations advisor from 1954 to 1964. Representatives of Hill & Knowlton attended all meetings of the SAB from its

    -------------

    157. Confidential Report, TIRC Meeting, January 20, 1955 (emphasis added) (CTR 6206-A; 65008 1367 at CTR 6211; 65008 1372; Gertenbach Duke/RogersExh. 11-0). Tab 79.

    158. Statement by The Executive Secretary, TIRC Meeting - April 23, 1955 (emphasis added) (CTR 6229; 65008 1390 at 1292; Gertenbach Duke/RogersExh. 11-E) Tab 80.

    - 117 -



    inception until 1964, as they did all sessions of the TIRC itself (and as did the industry's lawyers). At each of TIRC's sessions, Hill & Knowlton presented a written public relations report that appears to have enjoyed equal prominence with the scientific reports delivered by Dr. Little at the sessions.

    Dr. Little was TIRC's primary exponent, and delivered dozens upon dozens of speeches and written statements airing the industry's position on smoking and health issues and attacking the ever-mounting body of scientific work tending to establish the causal connection between smoking and human disease.159/ A few examples will suffice.160/ On May 16, 1955, Dr. Little met with science writers at TIRC's offices to offer a "Report on Progress". His remarks were later printed and distributed. 161/ In his report he stated:
    The facts today make clear that there is no single or simple answer to the lung cancer problem. Science has not yet found the cause or causes for lung cancer, nor indeed for any type of human cancer.
    -------------

    159. Dr. Little died in December, 1971 at the age of 83 ((see, CTR Minutes Of The Second Annual Meeting Of Members, January 28, 1972 (1002907641), Tat 87], and was still serving as Scientific Director at that time.

    160. A reasonably complete set of the public utterances by Dr. Little and his TIRC/CTR colleagues is gathered at Tab 88. All of these documents have been produced to plaintiffs by one or more defendants.

    161. "A Report of Progress" (CTR 3961; 65008 3362). Tab 89.

    - 118 -

    The time for Positive statements has not yet arrived.

    On June 7, 1955, Dr. Little appeared on Edward R. Murrow's 'See It Now' television show. 162/ He was asked: "[H]ave any cancer-causing agents been identified in cigarettes?" He replied: 'No. None whatever, either in cigarettes or in any product of smoking, as such." 163/

    Dr. Little's answer was disingenuous, at best. 164/ About a year earlier, during the July 19, 1954 SAB meeting, Dr. Little reported an Dr. Rand's recent discovery of BAP in the smoke from regular cigarette paper and the SAB urged that Dr. Rand be held in check.
    Doctor Little explained that James Rand, 3rd of Cleveland is prepared to attack cigarette paper as containing a carcinogen. The Board expressed itself as believing that full publication of data or its analysis should precede any statements in the press which may be presumed to be dependent upon scientific data. Doctor Kotin was therefore asked to personally visit with Mr. Rand at the earliest possible minute to examine his findings. Doctor Little is informing Mr.
    -------------

    162. This was the second "See III Now" program. The first was aired on May 31, 1955.

    163. Transcript Of Edward R. Murrow's Second TV Show On "Cigarettes And Lung Cancer," June 7, 1955 (emphasis added) (CTR 3932; 65008 3333; Gertenbach Duke/RogersExh. 14-C). Tab 81.

    164. BAP had been demonstrated to be carcinogenic to human beings as early as Percival Potts' English chimney sweeps.

    - 119 -

    Rand of this and asking him to refrain from any public announcement until after Doctor Kotin has explored Rand's findings. Doctor Little will contact Mr. Rand and advise him that Doctor Cattell will chairman a sub-committee to investigate Mr. Rand's data. 165/

    In addition to commenting on TIRC activities, Dr. Little also attacked industry critics. For example, or. Little authored an article appearing in The Atlantic entitled "The Public and Smoking Fear -- or Calm Deliberation," in which he attacked 'the American School of cigarette theorists,' the American Cancer Society, and "ardent laymen and some already

    -------------

    165. Confidential Report of SAB Meeting, July 19, 1954. (CTR 2621; 65008 1730;? Gertenback Duke/RogersExh. 12-A-1). Tab 82.

    At the next meeting of the SAB, held on August 16, 1954, Dr. Cattell reported briefly on his investigation into Rand's work. Confidential Report SAB Meeting, August 16, 1954 (CTR 2625; 65008 1784 [?); Gertenbach Duke/RogersExh. 12-A-2). Tab 83. During the SAB's October 17-18, 1954 meeting, or. Cattell presented his conclusion (shared by Drs. Kotin and Reimann) that "the temperatures and the amount of air used by the Rand scientists in their studies was subject to severe criticism and they would expect benzpyrene would be produced by the use of such methods." Confidential Report SAB Meeting, October 17-18, 1954 (CTR 2634; 65008 1793; Gertenbach, Duke/RogersExh. 12-A-4). Tab 84. The Rand report was later "briefly" discussed during the SAB's meeting of June 26, 1955, the minutes of which report that "Dr. Cattell. declared it is not a scientific report and therefore he is unable to judge whether it contains sound subject matter or not.' Confidential Report SAB Meeting. June 26, 1955 (CTR 2664; 65008 1823; Gertenbach Duke/RogersExh. 12-B-5 at 4). Tab 85.

    - 120 -



    convinced scientists (attempting] to activate debate and controversy with those who desire further information before they feel ready to take the trip to Canosa." 166/

    Others also helped execute the public relations function.167/ In July, 1957 the Surgeon General announced that BAP had been found in cigarette smoke. The TIRC responded with a Press release setting forth a statement by Dr. Hockett:
    The question of the presence of benzpyrene in tobacco smoke has been under investigation for a number of years, and it has been widely discounted as a significant factor in connection with lung cancer by scientists familiar with the work.

    ...
    -------------

    166. C. Little, The Atlantic, 'The Public and Smoking,' undated (CTR 4015; 65008 3416; Gertenbach Duke/RogersExh. 14-M). Tab 90.

    167. E.g.: TIRC Press Release, April 14, 1954 (CTR 3316; 65008 5000; Gertenbach Duke/RogersExh. 13); Tab 107; TIRC Press Release, undated (CTR 3345; 65008 5028). Tab 108. (denouncing book as "just another propaganda device in the anti-tobacco crusade which the author has been carrying on for years') Tab 108; TIRC Press Release, " DOCTOR'S SURVEY TERMED 'BIASED, ' SAYS HARNETT", - June 6, 1955 (CTR 3371; 65008 5054; Gertenbach Duke/RogersExh. 13). Tab 109. TIRC Press Release, " HARNETT ALERTS BURLEY MEN TO CHALLENGE TOBACCO ATTACKS," June 13, 1955 (CTR 3374; 65008 5057; Gertenbach Duke/RogersExh. 13). Tab 110. TIRC Press Release, " BRIGHT BELT WAREHOUSEMEN TOLD FACTS CHALLENGE CRITICS." June 27, 1955 (CTR 3376; 65008 5059; Gertenbach Duke/RogersExh. 13). Tab 111. TIRC Press Release, " TOBACCO SPOKESMAN SAYS FACTS AND POSITION ARE UNCHANGED," July 31, 1958 (CTR 3480; 65008 11-62). Tab 112.

    - 121. - Dr. E. L. Wynder of Sloan-Kettering Institute, a leading proponent of the cigarette theory of lung cancer, reported only this year that 'The benzpyrene content of tobacco tar is not more than 2 parts per million which, according to our experience, is not sufficient to produce the type of activity noted in our animals painted with tobacco tar."

    This substance, in its pure form, has never been shown to be cancer-causing to man, and it induces cancer only on certain types of laboratory animals, such as mice, and not on others.

    The substance frequently is produced in minute quantities in the burning of any organic compound and is present in varying degrees in city air. Recent reports in England show that the daily intake of benzpyrene from breathing London air is equivalent in total volume to the intake from smoking about 100 cigarettes a day. 168/

    The public relations function of TIRC/CTR extended to its professedly sacrosanct Scientific Advisory Board. During the SAB's meeting of August 20-21, 1957, for example, "[i]t was suggested . . . that consideration should be given to a broadening of studies to determine other factors which might be suspected to have a role in the pathogenesis of lung cancer ant' perhaps the enlistment of other industries thus

    -------------

    168. TIRC Press Release, "Scientists Comments On Benzpyrene Report,- July 15, 1957 (CTR 3442; 65008 5124; Gertenbach Duke/RogersExh. 13). Tab 113.

    - 1 7 2 -



    involved . . . . 169/ The SAS arranged for Or. Cattell to coordinate and assemble information concerning tobacco and health so that the SAS "would be more adequately fortified" to deal with an *undue emphasis . . . frequently placed on statements concerning tobacco and health" 169 and "expressed the opinion that the information policy of the Advisory Board should be amended from one of avoiding public utterances to one of issuing positive information.- 170/

    What did the SAS learn in its search for "positive information-? A few months later, the SAS met with a group of foreign scientists and "engaged in a lively discussion". A .confidential, informational memorandum" attached to the minutes of the SAB's November 9, 1957 meeting 'outline[d] some of the thinking expressed," by the foreign visitors, to wit:
    [T]hey seemed in agreement in believing that tobacco smoke. particularly that of cigarettes, contains cancer-inducing elements for humans and that increasing effort should be devoted toward modifying or eliminating these substances . . . .

    ...
    -------------

    169. Confidential Report SAS Meeting, August 20-21, 1957 (CTR 2722; 65007 1881); Gertenbach Duke/RogersExh. 12-0-3) (emphasis added). Tab 114.

    170. Id.


    171. Id. at 2 (emphasis added).


    - 123 -

    Three groups of substances suspect as cancer-causing have been identified in tobacco smoke. They are the aromatic hydrocarbons, the aliphatic hydrocarbons and the poly-mers. The presence of and biologic effect of some of these substances could explain why smokers have a larger incidence of all tumors than the non-smokers.

    The factor of smoking in lung cancer is " undeniably true" but the influence of place of residence also is important.

    . . .

    Cigarette paper contains 100 times the amount of 3, 4-benzpyrene than does the equivalent amount of tobacco. Tobacco may contain some inhibitors to benzpyrene. The "Rand method" of adding ammonium sulfamate reduced benzpyrene production in cigarette paper burning from 250 micrograms to 2-5 micrograms.

    . . .

    As a chemist. he is upset because the tobacco industry knows "so very littleabout what it is selling. He considers the search for a single carcinogen "not a very fruitful effort, since a number of polynuclear aromatic hydrocarbons have been identified in smoke and all of them. may have an effect. He believes there can be a reduction in the production of these substances to an extent that would delay carcinogenesis among tobacco users "until they reach the age of about 160, " at which time it wouldn't matter.

    . . .

    The French have done a number of statistical inquiries that show a correlation between tobacco consumption in definite relation to the increase of lung cancer, to an increase of cancer of all sites and to other

    124 -

    ailments . They see no alternative to giving these a causative interpretation. 172/

    Needless, perhaps, to say, TIRC did not issue a press release concerning this meeting.

    By February 1958, if not earlier, SAB's public relations function was causing dissent within the SAB. That month, a member of the SAB wrote the Board a letter in which, according to Dr. Hockett, he "objected to public statements which had been issued, and indicated that unless a more distinct divorce could be established between the SAB and TIRC the member felt he could not continue to serve an the Board. He was joined in this by two other Board members."173/

    This disquiet may have contributed, along with the need demonstrated during the 1957 hearings before the Blatnik Committee, to the formation of the Tobacco Institute in January 1958. During the SAB's February 14-15, 1958 meeting, the SAB was informed by Mr. Hartnett of the purposes of the newly-formed Tobacco Institute. According to the minutes of that meeting, 'Mr. Hartnett explained that Hill and Knowlton, Inc. is acting as public relations counsel for both

    -------------

    172. Confidential Report SAB Meeting, November 9-10, 1957 (CTR 2726; 65008 1885; Gertenbach Duke/RogersExh. 12-D-4 at 4 and attachment) (emphasis added). Tab 115.

    173. Confidential Report TIRC Meeting, May 8, 1958 (CTR 6329; 65008 1490; Gertenbach Duke/RogersExh. ll-L) . Tab 104.


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    organizations. He pointed out the desirability of this from both organizations ' standpoint . " I 1 4 174/

    Whatever Mr. Hartnett's reasons for regarding as "desirable" Hill & Knowlton's role as public relations counsel for both organizations, it is clear that the TIRC continued its public relations activities. The minutes of the Tobacco Institute's Executive Committee meeting of July 8, 1958, for example, record that Bowman Gray, its Chairman, announced "a tentative decision to let the matter of " the respective functions of the two organizations (The Tobacco Institute and the TIRC] be decided upon a case by case basis under the guidance of public relations counsel..175/

    Even after TI's formation, the tobacco industry continued to exploit TIRC/CTR at every turn in its campaign to keep the "controversy" alive.176/ The Tobacco Institute, for example, urged CTR to distribute to "scientific advisory groups and to their research granteesreprints of industry

    -------------

    174. Confidential Report SAB Meeting, February 14-15, 1958 (CTR 2733; 65008 1892; Gertenbach Duke/RogersExh. 12-E-1, at 2). Tab 116.

    175. TI Minutes of the Second Meeting of the Executive Committee, July 8, 1958 (04209323). Tab 118.

    176. E.g.: Memorandum from William Kloepfer, Jr. to Members of the Communications Committee, November 5, 1920 (T 26750); "Ad #1 January 4, 1954 (71 25918), Tab 103,

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    advertisements.177/ The TI Board of Directors also agreed to investigate the "possibility of a film of Dr. Clarence Cook Little discussing tobacco and health." 178/

    In 1960 the Chairman of TIRC reported to members of the industry: The staff of TIRC is constantly in touch with Hill and Knowlton, Inc., and consults on every phase of activity relating to health matters. For example, it provides speakers for platforms, helps analyze both scientific papers and charges against smoking which appear in the public press, and consults on statements which are issued to inform the public.179
    On April 28, 1960, Dr. Little addressed the Monroe County (New York) Cancer Association, and TIRC printed and distributed copies of his speech. 180/Once more he

    -------------

    177. Memorandum from William Kloepfer, Jr. to Horace R. Kornegay, December 8, 1970 (T 26829). Tab 105.

    178. Minutes of the Tenth Meeting of the (T.I.] Board of Directors, January 25, 1962 (04209026). Tab 106.

    179. Memorandum from T. V. Hartnett to Members of TIRC, November 7, 1960 (1002607666; Cullman Depo. Exh. 6). Tat 117.

    180. -A Brief Review of the Smoking-Lung Cancer Theory" by Clare-ice Cooke Little, April 28, 1960 (CTR 1303; 65009 7364; Gertenbach Duke/RogersExh. 8-B). Tab 92,

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    proclaimed 'the failure of all efforts to detect in tobacco smoke any substance known to be carcinogenic to man." 181/

    After Hill & Knowlton ceased to serve as the SAB's public relations counsel, one of its former employees, Leonard S. Zahn, was appointed as the SAB's 'Public Relations Consultant" in September 1969 182/ and thereafter attended its meetings.

    Throughout TIRC's history, smoking critics accused it and the industry of conducting a sideshow with smoke and mirrors. In the March-April, 1958 issue of its "CA Bulletin of Cancer Progress," the ACS commented on Dr. Little's (and the industry's) tactics:
    Dr. Little . . . is executing an ordered delaying action in the cigarette-lung cancer 'controversy'

    This tactical maneuver, which is apparently agreeable to other members of the Scientific
    -------------

    181. NOTE: it is also the case, however, that in a 1957 article, E. Wynder and G. Wright. Cancer, "A Study of Tobacco Carcinogenesis, 1. The Primary Fractions" (vol. 2, MarchApril 1957) (65009 1338; Spears Exh. 1), Dr. Wynder acknowledged that: 'The benzpyrene content of the total tar as well as of the active fractions is far too low to account for the positive [mouse-painting] results.' Indeed, according to Dr. Wynder, "So far, no carcinogens have been identified in large enough quantity in tobacco tar or its fractions to account for the observed activity." Tab 93.

    182. Confidential Report SAB Meeting, September 12-14, 1969 (CTR 2933; 65008 2902; Gertenbach Duke/Rogers, Exh. 12-0-3). Tab 119.

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    Advisory Board, is to deny repeatedly . . . to mislead the public . . . and to convince the trusting tobacco "consuming public of the industry's eleomosynary, 'lasting interest in people's health' . . .

    Commenting specifically on Dr. Little's Atlantic article, the ACS pointedly urged that ". . . [a] concerted educational attack (is needed) that will rout the formidable force executing the delaying action and speed its spokesman on his prophesied, [sic.) inevitable, penitential "trip to Canossa." 183/

    In 1960, the American Heart Association came out against smoking. In an article entitled 'Tobacco: More Trouble Ahead," Forbes magazine discussed the industry's response to this development:
    [T]obacco men themselves concede nothing. Research results they don't happen to agree with can touch off feelings of persecution that literally approach paranoia.

    . . .

    Bitter Blow. More publicly, however, the industry's chief tactic has been to turn away sharp attacks with soft words " to profess an open mind and to proffer a hearty welcome to all researchers in the field. Beyond question the American Heart Association's decision to join the anticigarette crusade, without waiting for
    -------------

    183. Quoted in attachments to Letter from Richard Darrow [H&KI to James P. Richards [TI], August 1.5, 1958 (1005 036761) (emphasis in original). Tab 91. See text accompanying note_____, supra.

    -129-

    further evidence, was a bitter blow. Yet the Tobacco Industry Research Committee reacted to the news in much the same way it has reacted to all such developments in the past decade with a press release. Dr. . Clarence Cock Little, scientific director of the TIRC since the industry set it up in 1953, issued yet another statement pointing out once again, in temperate language, that "the question of what actually causes the origin or development of heart disease is a mystery to scientists.'

    What the TIRC can afford ford to say publicly is immeasurably complicated by a factor that has nothing to do with sales strategy or scientific bias. At present, about 20 law suits involving damage claims totalling millions of dollars are being pressed against U.S. cigarette makers. The suits have been brought by smokers and the heirs of deceased smokers claiming that regular use of cigarettes had caused permanent disability or death. Thus, any TIRC spokesman who conceded the slightest possibility that the product may be harmful risks being hauled into court to testify against the industry that _pays his salary.

    . . .

    Negative Thinking. What can an industry do when growing numbers of people persist in saying that its chief product kills its best customers? Two rather obvious things, some observers say. First, it could spend heavily on pure research to find out what, if anything, is in the smoke that is harmful to health and then devise ways to filter it out. Second, while the researchers are at work, and as a hedge against the possibility that there is a risk and that nothing can be devised to reduce it significantly, the tobacco companies might look for alternative ways to make a living. Thus far, the industry in general has shown little interest in doing much about either.
    - 130 -
    681879396

    As for pure research, no one knows for sure what individual companies are doing on their own. Beyond question, cigarette makers know much more about the product than they did ten years ago. They now know, for example, that there are at least 337 separately identifiable chemical elements and compounds, from acenaphtene to zinc, in the mainstream of cigarette smoke.

    But traditionally, tobacco research staffs have devoted their time to such bread-andbutter tasks as crop analysis and quality control. With the important exception of work on new filters, however, they seem to be doing pretty much the same things today. "No company is working specifically on the health question," says President Joseph Cullman III of Philip Morris. "We're trying to make a cigarette that smokes mild and tastes good.

    Collectively, the tobacco industry is supporting some pure research. It is using the TIRC to bankroll independent cigarette-and-health research by others. But few outsiders are impressed by the energy of the TIRC effort to date. In the nine years since it was formed, TIRC has given a little over S6 million in research grants. A single cigarette company can easily spend twice that amount in a year just to launch one new brand in the national market 184/

    A more recent student of the industry concluded that:
    The Tobacco Research Council and its grants to medical researchers was to be a linchpin in the industry's strategy to delay substantive regulatory actions based on the argument that conclusive evidence did not
    -------------

    184. Forbes, 'Tobacco: More Trouble Ahead' (July 15, 1963) (Barnes-Selected RJRT document; 50281 3822) (emphasis added). Tab 94.

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    exist linking cigarettes with disease, and that further evidence was needed.' 185./ The industry, moreover, has admitted as much. in a memorandum from Fred Panzer to Horace Kornegay, may 1, 1972, the 'holding strategy' is discussed. 186/

    3. TIRC/CTR's Research Function

    In his Lartique testimony in 1960, Dr. Little described TIRC's research agenda. He testified that TIRC had conducted no studies of tobacco smoke because it had never been proven to be carcinogenic. He viewed such a study a waste of time. Similarly, Dr. Little refused to conduct animal experimentation because he believed that it was only relevant for animals, not human beings. Finally, TIRC did not sponsor epidemiological studies." 187/

    -------------

    185. J.B. Tye, 'A Note an Public Policy Issues in the Cigarette Industry,- April 15, 1985, p. 5 (emphasis added). Tab 95.

    186. Memorandum from Fred Panzer to Horace R. Kornegay, "The Roper Proposal," May 1, 1972 (T 0020999). Tab 96. This memorandum is discussed more fully in the Overpromotion section of this Report.

    187. See Summary of Trial of Lartique at 38-39, September 18, 1985; Lartique transcript at 2755, 2856 and 2865. Note, however, that TIRC's first major study was a dog inhalation study. See SAB meeting, January 16, 1955 (CTR 2644; 65008 1803). Tab 69. See also Gertenbach Duke/RogersExh. 12-B-1. Tab 70

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    TIRC's tunnel vision may have contributed to Liggett's resistance to the repeated efforts by others in the industry to enlist its support, although Liggett was a member of CTR for approximately four years." 188/ At the time that Liggett joined TIRC/CTR, ADL's Dr. Kensler advised Liggett that "I hope that you will encourage them to encourage their grantees to look beyond the convenient negatives." 189/ William Bates, Jr., who was employed by Liggett from June 1950 until 1975 and who eventually served as its Director of Research, and his predecessor, Dr. Darkis, both believed that CTR work with respect to cancer was ineffective: '(A] directed problem solving research program is more effective than making many small individual grants to people." "0/ Dr. Bates' colleague at Liggett, Dr. James Mold, was also critical of the usefulness of CTR's work, feeling that "this was a wasteful expenditure of money, as the grants were on rather specific small kinds of topics,- rather than focused upon finding "a solution' to "the

    -------------

    188. From March, 1964 until approximately January, 1968. See, March 5, 1964 (1002608401) and Confidential Report CTR, January 24, 1968 (1002608337). Tab 100.

    189. Letter from C. Kensler to W. Bates, Jr., May 25, 1964 (Kensler Cipollone Exh. 22 (NOT in JDR&P's possession]).


    190. Bates Depo. at 67.


    - 1-33 -



    problem of whether cigarette smoking was contributing to cancer in man." 191/

    Dr. Little himself faulted the CTR grantee system as early as 1958. 192/ And the TIRC members were at times critical of CTR/TIRC's research program. On June 1, 1970, for example, Addison Yeaman, general counsel of Brown & Williamson, complained to his counterpart at Reynolds, Mr. Ramm, that
    [O]lver the years the CTR's grants have produced some 'good science,- but science which has not provided us with either much material useful on the offensive, nor much that was very meaningful on the defensive . . . . We have long felt that we are less well served by the existing system of making grants upon unsolicited application over a very wide field than we would be were we to determine the specific areas relating to tobacco and health toward which meaningful research projects might be directed . . . . 193/

    In response, Mr. Ramm agreed that "it was important for the CTR to formulate a research program more directly *targeted on the problems that we in our industry need to have

    -------------

    191. Id. at 112-13 ("Do you scatter it to the winds, or do you direct it to the goal you're after?-).

    192. See Letter from T. V. Hartnett to J. F. Cullman, 3rd, April 1, 1958 (1002607596; 65005 1870; Cullman Exh. 4B). Tab 99.

    193. Letter from A. Yeaman to H. H. Ramm, June 1, 1970 (PM 1003040097). Tab 97.

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    solved.-194/ Both Messrs. Yeaman and Ramm doubted that CTR could accomplish its objectives without hiring a qualified Scientific Director.

    The correspondence between Messrs. Yeaman and Ramm may have been intended to promote proposals for additional contract research as a further supplement CTR's historical provision of grant-in-aid to researchers upon voluntary application. As early as 1965, Dr. Little had encouraged CTR's Board 'to consider expanding the inspiration and initiation of research projects in order to fill gaps in information or to achieve specific research goals which are not satisfied through the process of voluntary applications for grants-in-aid by individual investigators."195/ Similarly, in 1968 Dr. Little urged "a change in emphasis" to more contract research. 196/

    Alternatively, the correspondence may have been intended to promote a far more radical restructuring of CTR. As summarized in a 1972 PM document, the proposals were as follows:

    -------------

    194. Letter from H.H. Ramm to A. Yeaman. June 16, 1970 (PM 1003040101; 65005 1867; Bowling Exh. 32). Tab 98.

    195. Confidential Report, CTR Minutes, June 8, 1965 (00002608392, at 395).

    196. Confidential Report, CTR Minutes, Jan. 3, 1968 (00002608336, at 338)_

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    It appears now that Brown & Williamson has modified its earlier suggestions that CTR (a) be subordinated to Channing Laboratories, with Channing responsible for cancer, emphysema, and heart disease and CTR responsible for motivational aspects, (b) give up its investigations of the biological effects of msoke [sic] on the human system, and (c) coordinate its research through a formal committee comprised of the Scientific Directors of Channing and CTR and industry representatives.

    The present B&W proposals are reflected in the attached memorandum from Add Yeaman describing the meeting held on October 30 with representatives of CTR. Essentially, the major changes now proposed are:

    (a) CTR should abandon its historic declared commitment to the 'study of the disease entity' in favor of investigations of the relationship of tobacco smoke to certain human diseases;

    (b) The Scientific Director and Staff will review the existing state of knowledge and formulate a program as well as specific research projects aimed at filling the gaps in knowledge;"

    (c) The Scientific Director (with the advice of the SAB) will find researchers to carry out the projects and will have control of the budget;

    (d) The Scientific Director will have the responsibility to coordinate, to the extent possible, the work of CTR and other smoking and health research agencies such as Channing Laboratories.

    The likelihood is that Reynolds and Lorillard will support the B&W position. Lorrilard, [sic] however, has said that regardless of the changes in CTR procedures, it is considering the larger question of whether the benefits of continuing CTR are worth the cost.
    - 136 -



    Available documents do not disclose what became of these discussions, if anything.

    In any event, CTR's increasing emphysis [sic] on contract research drew the wrath of at least one company. In strident language, Robert K. Heiman (American) wrote to Mr. Yeaman (CTR) in 1977 as follows.197/
    Following our discussion of December 5, 1 should like to summarize our Company's position with respect to The Council for Tobacco Research. For many years after the T.I.R.C. was established in 1954 we were able to say that "all grants are made upon recommendation of an advisory board of independent doctors, scientists and educators. Recipients of grants are assured complete scientific freedom in conducting their investigations.* Indeed, this point was made a part of our pledge to the public in full-page advertisements headlined 'A Frank Statement to Cigarette Smokers' and "Nine important Facts about Smoking and Your Health.- The latter ad specifically said: "A Scientific Advisory Board of outstanding doctors, scientists and educators has complete and free rein in directing the research program and awarding the money for grants.*

    This we can no longer say since what is called "directed" or 'Contract' research has been brought into the picture. As I remarked at the September 1976 meeting, the original concept of T.I.R.C. did not embrace the idea of contract research but envisioned industry support of research on a pro bono publico, arms'-length basis. I believe the current movement toward contract research is a violation of our advertised pledges to the public and I also believe industry support of objective and
    -------------

    197. Letter from R.K. Heiman to A.H. Yeaman, Dec. 6, 1977 (0000255934-36) (emphasis in original).

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    independent scientific research is of cardinal importance in maining [sic] a statesman-like stance. I do not think it would be an exaggeration to say that the current shift to contract research bastardizes a fine concept of objectivity which many good people in past years worked long and hard to establish.

    Mr. Yeaman responded that Mr. Heiman was "completely mistaken, and invited further discussion.198/

    In addition to other matters discussed above and below, plaintiffs may also argue that the SAB's decision-making processes were rigged from the start. For example, while the industry will argue the alleged 'independence" of the SAB by pointing to the fact that the Board selects its own members, the original Board was, in major part chosen by the tobacco companies' own directors of research."" Moreover, no person known to favor the cigarette/disease hypothesis has ever sat on the SAB. 200 The selection process of SAB members

    -------------

    198. Letter from R.K. Heiman to A.H. Yeaman, Dec. 6, 1977 (0000255934-36) (emphasis in original). 199. See pp. _ to -__ infra.

    200. But see, Memorandum from W. Kloepfer, Jr. to Earle C. Clements, August 26, 1968 (T 12834), Tab 101 (reporting conversation with Dr. Robert Huebner, "NIH's famous cancer virologist," shortly after he joined the SAB: "he hoped the tobacco industry would prove to be more interested in putting funds into disease causation than in 'trying to prove cigarettes aren't a cause.* . . . He said he is convinced cigarette smoke combines in some way with a virus to cause lung cancer . . . . He said he


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    appears to be clouded by the role of lawyers and public relations representatives. Finally, a significant amount of money disbursed by the SAS went to either CTR's Scientific Director, its own members and/or the institutions with which they were affiliated. Indeed, this concern drew the fire of American's Mr. Heiman 201/
    Another side result of our new direction is that we seem to be combining in one person a Scientific Director and a quasi-grantee, a combination which is hardly compatible with the administration of an objective and independent grant program. Without entering in any way into a personality question, it seems to me that no single individual can properly discharge both functions at the same time.

    With respect to the SAS, one member, Richard J. Bing, has sat on the Board every year since 1957 and has received grant funds each of those years. Another SAB member, H. Meier, served on the Board from 1972 until 1981 and like Dr. Bing, received CTR

    -------------

    200. Footnote Continued From Previous Page

    believes cigarettes help to trigger 80 percent of lung cancer, but that he is far more interested now in the other 20 percent, and that even if everybody stopped smoking it would eliminate only 4 percent of all cancer. He is quite worried about the charcoal-steak problem . . .").


    201. Letter from R.K. Heiman to A.Y. Yeaman, Dec. 6, 1977 (0000255334 and 335-36).


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    funds throughout his period of service. Other SAB members awarded CTR funds while sitting on the Board were J. H. Comroe (I year out of 4), W. A. Gardner (1 year out of 12), C. G. Loosli (4 years out of 9), H. T. Lynch (4 years out of 10), K. M. Lynch (8 years out of 15), S. C. Sommers (2 years out of 16) and L. W. Wattenberg (3 years out of 4). 202/

    4. LS, Inc.

    In 1966, Covington & Burling contracted with 3i Company/International Information Incorporated (late.- known as Information Interscience Incorporated ("3i')) to provide confidential, automated litigation support services to the law firms representing cigarette manufactures in products liability litigation. in 1971, 3i was in severe financial trouble, and a decision was made to transfer its operations to CTR.

    Initially, the CTR operation was known as 'Information Systems,- and it functioned as 'an information and retrieval system relating to medical literature concerned with tobacco use and health," the expenses of which were borne by the participating tobacco companies. 203 The name of this entity was changed to the Literature Retrieval Division ("LRD"). The

    -------------

    202. See "SAB Members & Staff Charts' (no document production numbers). Tab 102.

    203 . Confidential Report CTR Minutes of First Annual Meeting of Members, January 29, 1971 (1002907662) - Tab 122.


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    681879406



    minutes of the meeting of CTR's board of directors on November 10, 1972 contains an ominous reference to 'a safe deposit box containing certain records of the Literature Retrieval Division, currently leased in the name of the Executive Vice President By the time of the Board of Directors' January 30, 1981 meeting, the mysterious safe-deposit box had become "the Literature Retrieval Division's safe deposit boxes."205/

    LRD was a division of CTR from 1971-1983, and continued to perform ;Its functon [sic] of analyzing, summarizing, indexing and retrieving scientific and medical literature at the direction of litigators. In 1983, LS, Inc. was created to be the successor of LRD.

    5. Lawyer Involvement

  • Part 2
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