STATE OF MINNESOTA

COUNTY OF RAMSEY

DISTRICT COURT

SECOND JUDICIAL DISTRICT

The State of Minnesota By Hubert H. Humphrey, III, Its Attorney General, and Blue Cross and Blue Shield of Minnesota,

Plaintiffs,

v.

Philip Morris Incorporated, R.J. Reynolds Tobacco Company, Brown and Williamson Tobacco Corporation, B.A.T. Industries, p.l.c., British-American Tobacco Company Limited, BAT (U.K. & Export) Limited,

Lorillard Tobacco Company, The American Tobacco Company, Liggett Group, Inc., The Council For Tobacco Research - U.S.A., Inc., and The Tobacco Institute, Inc.,

Defendants.

File # C1-94-8565

REPORT OF SPECIAL MASTER:
FINDINGS OF FACT, CONCLUSIONS OF LAW AND RECOMMENDATIONS REGARDING NON-LIGGETT PRIVILEGE CLAIMS

Hearings on the above-named matter took place on October 15, 1997 through October 18, 1997, before Special Master Mark W. Gehan. Roberta Walburn, Esq., Michael Ciresi, Esq., and Corey Gordon, Esq., appeared and argued on behalf of Plaintiffs. Noel Clinard, Esq., William Allinder, Esq., William Plesec, Esq., James Goold, Esq., George Anhang, Esq., Leslie Wharton, Esq. Craig Proctor, Esq., Philip Cohen, Esq., John Getsinger, Esq., Tom McCormack, Esq., David Martin, Esq., Steve Klugman, Esq., Michael Corrigan, Esq., Ann Walker, Esq., Cheryl Ragsdale, Esq., Cynthia Cecil, Esq. and James Munson, Esq. appeared and argued on behalf of their respective clients, Defendants herein, with the exception of Liggett Group, Inc.

Members of the public and media also attended and observed the proceedings.

The hearings of October 15th t 1. Product liability litigation involving more than one of the major cigarette manufacturers began in March, 1954 when the smoking and health lawsuit, Lowe v. R.J. Reynolds, et al., was filed. See Affidavits of James W. Dobbins, ¶ 8 (6/20/96). The defendants have engaged in a joint defense effort and share information in furtherance of common legal interests since at least 1954. See Affidavits of James W. Dobbins, ¶ 15 (6/20/96); Denise F. Keane, ¶ 6 (6/20/96); Ronald F. Bianchi, ¶ 15 (4/7/97); Arthur J. Stevens, ¶ 14 (4/7/97); Lawrence E. Savell, ¶ 14 (6/20/96); Susan B. Saunders, ¶ 10 (6/19/96); William Adams, ¶ 9 (6/19/96); and Declaration of Alexander Holtzman, ¶ 4 (5/15/96). The defendants' coordinated defense efforts have included meetings among counsel, exchanging materials prepared in anticipation of litigation, and identifying and consulting with potential expert witnesses. Id. In 1964, the first smoking and health lawsuit involving the Council for Tobacco Research - U.S.A., Inc. ("CTR") and the Tobacco Institute, Inc. ("TI") as co-defendants, Fine v. Philip Morris Inc., et al., was filed. See Affidavit of Lawrence E. Savell, ¶ 13 (6/20/96). Since 1954, smoking and health litigation has been pending continuously against one or more of the major cigarette manufacturers, CTR and TI. Id. at ¶ 9; Affidavits of James W. Dobbins, ¶ 8 (6/20/96); Ronald F. Bianchi, ¶ 8 (4/7/97); and Arthur J. Stevens, ¶ 8 (4/30/96). Such litigation has raised recurring factual and legal issues common to the defendants, including allegations of injury from smoking and the use of false statements in cigarette advertising, among others. See Declaration of Alexander Holtzman, ¶ 5 April, 1997 and Declaration of Philip H. Cohen, Liggett Exhibits A, B and M, May 23, 1997.

1. In the 1950's, regulatory activities (apart from continuing antitrust scrutiny) affecting the cigarette industry as a whole began to accelerate. Such activities have continued unabated from the 1950's to the present and have occurred on a federal, state, local and international level. These activities have involved a wide variety of federal regulatory agencies including the Federal Trade Commission ("FTC"), the Federal Communications Commission ("FCC"), the Food and Drug Administration ("FDA"), the Civil Aeronautics Board ("CAB") and the Environmental Protection Agency ("EPA") among others. See, e.g., Defendants' Liggett Exhibit 37. The activities have covered a wide range of issues, including cigarette advertising; placement and use of health warning notices on cigarette packages and in cigarette advertising; placement and use of tar and nicotine yields on cigarette packages and in cigarette advertising; restriction and prohibition of broadcast cigarette advertising; testing of cigarettes for tar, nicotine and carbon monoxide yields; excise taxes; reporting of ingredients used in cigarette manufacturing; restriction and prohibition of smoking aboard commercial aircraft, interstate buses and interstate trains; and, smoking in public place, among others.
2. A review of the documents at issue and exhibits submitted by defendant establishes that federal regulatory activities since the 1950's involving the cigarette industry have included disputes between federal regulatory agencies (predominantly the FTC) and the major cigarette manufacturers. These disputes have involved a variety of issues such as cigarette advertising content and placement, broadcast cigarette advertising, the authority of the FTC to issue orders to file special reports and authority of the FTC to promulgate regulations.
3. Legislative activities on the federal level affecting the cigarette industry began in at least 1957 with the "Blatnik hearings," which addressed the disclosure of tar and nicotine yields in advertising. Since 1965, the defendants have monitored proposed legislation raising issues of common interest to the industry and have attended and testified at hearings regarding a wide variety of proposed and existing legislation. See, e.g., Defendants' Liggett Exhibit 38.
4. Plaintiffs' request that I find Defendants to have waived their joint defense/common interest claims to their documents because Plaintiffs claimed Defendants have violated my orders requiring the production of joint defense agreements upon which Defendants rely or which are relevant to the documents at issue. On October 27, 1997, I filed an Order with Judge Fitzpatrick (CLAD 1588) in which I recommended that he consider the imposition of sanctions, and in the absence of judicial direction, I do not consider it appropriate at this time to impose the remedy which Plaintiffs have requested.
5. Defendants are not relying on their written joint defense agreements as support for the assertion of their joint defense/common interest claims.
6. The joint defense/common interest privilege does not require a written agreement. As long as parties are "allied in a common legal cause," shared communications and work product are protected by the privilege. In re Regents of the University of California, 101 F.3d 1386, 1389, 1390-91 (Fed. Cir. 1996), cert. denied, 117 S. Ct. 1484 (1997). The joint defense/common interest privilege also covers legal advice and strategy relating to regulatory or legislative proceedings. See In Re Sealed Case, 107 F.3d 46 (D.C. Cir. 1997). When, as in this case, joint defense efforts have been undertaken by the parties and their respective counsel, work product exchanged between counsel and confidential communications related to that common interest are protected from disclosure by the privilege. E.g., United States v. Schwimmer, 892 F.2d 237, 243 (2d Cir. 1989), on remand, 738 F.Supp. 654 (E.D.N.Y. 1980), aff'd, 924 F.2d 443 (2d Cir. 1991), cert. denied, 502 U.S. 810 (1991). This presupposes, of course, that the communications and work product are privileged in the first place.
7. By an order dated May 9, 1997, Judge Fitzpatrick of the Ramsey County Minnesota District Court concluded that plaintiffs had established a prima facie case of crime-fraud in this case, sufficient to permit an in camera inspection of documents and to create the need for additional proceedings to permit the defendants an opportunity to rebut plaintiffs' evidence. At hearings which occurred on October 15 through October 18, 1997, the defendants offered evidence to respond to plaintiffs' prima facie showing. During these hearings, some evidence and argument was offered on an in camera basis, i.e., plaintiffs and other defendants were excluded from the proceedings.
8. In the early 1950's, several researchers reported the results of laboratory and epidemiological studies that, they claimed, linked smoking to disease. See Affidavit of Kenneth M. Ludmerer, M.D., February 12, 1997.
9. On January 4, 1954, in response to widespread publicity generated by these studies, the major cigarette manufacturers (except Liggett) and other tobacco-related organizations caused "A Frank Statement to Cigarette Smokers" to be published in numerous newspapers. The "Frank Statement" stated that these companies were forming a "joint industry group," to be known as the Tobacco Industry Research Committee ("TIRC"), 1954 Frank Statement, Pl. Ex. 2(1).
10. Because of concerns relating to a long history of antitrust difficulties and litigation dating back to at least 1911, representatives of the tobacco industry invited the United States Department of Justice ("DOJ") to meet with them to discuss the formation of TIRC. Although DOJ declined to attend this meeting, the tobacco companies kept DOJ advised as to the industry's joint research efforts through CTR and in January 1954 provided DOJ with a copy of CTR's "Statement of Purpose." See Affidavit of Irwin Tucker, January 28, 1997 ¶ 4; In Camera and Ex Parte Affidavit of Edwin J. Jacob, ¶¶ 48-51. (2/15/97)
11. In 1964, TIRC changed its name to The Council for Tobacco Research -- U.S.A. In 1971, The Council for Tobacco Research -- U.S.A., Inc. was incorporated. See Affidavit of Glenn, ¶ 6. These organizations collectively are referred to herein as "CTR."
12. The uncontroverted evidence before the Court establishes that: (1) the major U.S. tobacco companies, other than Liggett, have been members of CTR since 1954, See Affidavit of Glenn, ¶¶ 6, 8.
13. Continuously since 1954, CTR has acted as a joint industry group for the tobacco companies that are its members. (CTR's principal function throughout that time has been to fund scientific research by receiving monies from the tobacco companies and providing them to scientific investigators.) See Affidavit of Glenn, ¶¶ 6-9; See Affidavit of McAllister, ¶ 7.
14. Plaintiffs have produced evidence that the defendants have acted in concert for their mutual benefit and defense, at least since 1954, when each of the defendants with the exception of Liggett (the "defendants" or the "non-settling defendants"), published a document under the name Tobacco Industry Research Committee, now the defendant The Counsel for Tobacco Research - U.S.A., Inc. ("CTR"). This document, entitled "A Frank Statement to Cigarette Smokers" ("Frank Statement"), challenged the "theory that cigarette smoking is in some way linked with lung cancer in human beings." Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 1, Plaintiffs' Ex. 2(1) (CTR MN 11309817).
15. In the "Frank Statement," the non-settling defendants made the following statements, among others:
    • We accept an interest in people's health as a basic responsibility, paramount to every other consideration in our business.
      
    • We always have and always will cooperate closely with those whose task it is to safeguard the public health.
      
    • We are pledging aid and assistance to the research effort into all phases of tobacco use and health.
      

The "Frank Statement" also made three specific promises:

1. We are pledging aid and assistance to the research effort into all phases of tobacco use and health. This joint financial aid will of course be in additional to what is already being contributed by individual companies.
   
2. For this purpose we are establishing a joint industry group consisting initially of the undersigned. This group will be known as TOBACCO INDUSTRY RESEARCH COMMITTEE.
   
3. In charge of the research activities of the Committee will be a scientist of unimpeachable integrity and national repute. In addition there will be an Advisory Board of scientists disinterested in the cigarette industry. A group of distinguished men from medicine, science, and education will be invited to serve on this Board. These scientists will advise the Committee on its research activities.

1. In December 1970, the Tobacco Institute ran a statement declaring that "[f]rom the beginning, the tobacco industry has believed that the American people deserve objective scientific answers." Plaintiffs' Tab 3, Plaintiffs' Ex. 5(1), TIMN 0081352. The statement also represented that "in the interest of absolute objectivity, the tobacco industry has supported totally independent research with completely non-restricted funding" and that "the findings are not secret." Id.
2. In 1971, the Tobacco Institute in a press release stated, in reference to finding the "keys" which might unlock the door between statistical evidence and causation:

Any organization in a position to apply resources in the search for those keys - and which fails to do so - will continue to be guilty of cruel neglect of those whom it pretends to serve.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 4, Plaintiffs' Ex. 6(1), LG 0069275 at 0069279.

1. In a 1972 Wall Street Journal article, James Bowling, a Vice President of Defendant Philip Morris, Inc., ("PM") was quoted as saying:

If our product is harmful. . . we'll stop making it. We now know enough that we can take anything out of our product, but we don't know what ingredients to take out.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 5, Plaintiffs' Ex. 7(1), RJR 500324162 at 500342163.

1. In 1982, the Tobacco Institute published a pamphlet in which it wrote:

Since the first questions were raised about smoking as a possible health factor, the tobacco industry has believed that the American people deserve objective, scientific answers. The industry has committed itself to this task.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 49, Plaintiffs' Ex. 8(1), B&W 670500617.

1. In 1990, a public relations employee of Defendant R.J. Reynolds Tobacco Company ("RJR") wrote a letter to a person by the name of Rook in Minnesota, apparently in response to a letter from Rook. The public relations employee asserted in that letter that ". . . scientists do not know the cause or causes of the chronic diseases reported to be associated with smoking." The letter went on:

Our company intends, therefore, to continue to support [research] in a continuing search for answers.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Ex. 9(1), RJR 507703861-03862.

1. One way in which the industry publicly stated that it would fulfill this promise to conduct and disclose objective research was through the auspices of the CTR (originally named the Tobacco Industry Research Council, or TIRC). Internal documents, however, imply that top officials from the tobacco industry privately acknowledged that, contrary to the public representations, CTR was meant to serve primarily a public relations function and that CTR scientific research was of little value in addressing issues relating to the causal link between smoking and health. For example:
2. In May 1958, a BAT scientist (and others from the British tobacco industry) visited representatives of the U.S. industry and found that:

Liggett & Meyers stayed out of T.I.R.C. originally because they doubted the sincerity of T.I.R.C.'s motives and believed that the organization was too unwieldy to work efficiently. They remain convinced that their misgivings were justified. In their opinion T.I.R.C. has done little if anything constructive, the constantly reiterated "not proven" statements in the face of mounting contrary evidence has thoroughly discredited T.I.R.C., and the S.A.B. of T.I.R.C. is supporting almost without exception projects that are not related directly to smoking and lung cancer.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 7, Plaintiffs' Ex. C(2), p. 5, BAT 105408490 at 8494.

• In another trip report written in 1964 by British scientists, it was stated:

[B]oth L&M and Lorillard scientists told us quite bluntly that they considered TRC [the British trade group] research was on the correct basis and CTR largely without value.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 11, Plaintiffs' Ex. 23(3), p. 17, PM 1003119099 at 9115.

• In 1967, W.W. Bates, Jr., Liggett's director of research, wrote to the president of the Tobacco Institute that the smoking and health problem "is basically a scientific one." Plaintiffs' Tab 12, Plaintiffs' Ex. 12(3), LG 0208295. Bates stated, however, that "So far...the major efforts of the industry have been other than scientific." Id. Bates further stated that:

The CTR and AMA programs suffer from almost the same fault. Most of their projects have only a peripheral connection to tobacco use.

Id. at LG 0209296.

• In 1970, Helmut Wakeham, head of research and development of Philip Morris, wrote a memorandum to the president of Philip Morris, Joseph Cullman. In this memorandum, Wakeham discussed the raison d'etr of CTR. Wakeham wrote:

It has been stated that CTR is a program to find out 'the truth about smoking and health.' What is truth to one is false to another. CTR and the Industry have publicly and frequently denied what others find as 'truth.' Let's face it. We are interested in evidence which we believe denies the allegations that cigarette smoking causes disease.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 14, Plaintiffs' Ex. 14(3) (PM 2022200161, 2022200162).

• A 1970 document discloses that another top Philip Morris scientist also questioned the worth of CTR research:

Osdene's view (Philip Morris' view?) was that C.T.R. did apparently no useful work and cost a vast amount of money.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 13, Plaintiffs' Ex. 13(3), p. 2, BAT 110316203 at 204. (Thomas Osdene was a senior research and development scientist at Philip Morris.)

• After a 1973 trip to the U.S., scientists from England wrote that:

It is difficult to avoid the sad conclusion that C.T.R. has become a backwater of little significance in the world of smoking and health.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 15, Plaintiffs' Ex. 15(3), p. 28, BAT 100226995 at 7022.

• Alexander Spears, research director at Lorillard Tobacco Company ("Lorillard"), explained to Curtis H. Judge, the chief executive officer, in a 1974 memorandum:

Historically, the joint industry funded smoking and health research programs have not been selected against specific scientific goals, but rather for purposes such as public relations, political relations, position for litigation, etc....In general, these programs have provided some buffer to public and political attack of the industry, as well as background for litigious strategy.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 16, Plaintiffs' Ex. 34(1), p. 3, Lor 01421596 at 598.

• A memorandum written in November 1978 from Philip Morris executive Robert Seligman contained the following historical account showing that CTR was not set up to conduct objective research:

...Bill Shinn [attorney at Shook, Hardy] described the history, particularly in relation to the CTR. CTR began as an organization called Tobacco Industry Research Council (TIRC). It was set up as an industry "shield" in 1954....CTR has helped our legal counsel by giving advice and technical information, which was needed at court trials. CTR has provided spokesmen for the industry at Congressional hearings. The monies spent on CTR provides a base for introduction of witnesses.

. . .

Getting away from the historical story, Bill Shinn mentioned that the "public relations" value of CTR must be considered and continued.... A very interesting point, made by Bill Shinn, is the opposition's, "the case is closed with regard to smoking and disease."...It is extremely important that the industry continue to spend their dollars on research to show that we don't agree that the case against smoking is closed....There is a 'CTR' basket that must be maintained for PR purposes.

• One handwritten note, believed to be written by Addison Yeaman, the chairman of CTR, summed up the fact that CTR was created to protect the industry, not the public health. These notes, entitled "CTR Meeting," state:

CTR is best and cheapest insurance the tobacco industry can buy, and without it the industry would have to invent CTR or would be dead.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 17, Plaintiffs' Ex. 16(3), Lor 03539541.

• There also is evidence that for years the industry acted in concert to suppress or eliminate internal research on smoking and health, notwithstanding the industry's public representations to conduct research into "all phases of tobacco use and health" and report all facts to the public. Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 1, Plaintiffs' Ex. 2(1), CTR MN 11309817.
• In 1968, Philip Morris director of research Wakeham described a "gentlemans agreement" under which the companies had agreed to refrain from conducting in-house biological experiments on tobacco smoke. Wakeham stated:

We have reason to believe that in spite of gentlemans agreement from the tobacco industry in previous years that at least some of the major companies have been increasing biological studies within their own facilities.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 18, Plaintiffs' Ex. G(2), p. 4, PM 1001607055 at 058.

• A 1970 memo by D.G. Felton, a BAT senior scientist, also referenced this "tacit agreement" not to conduct in-house biological research. Plaintiffs' Tab 19, Plaintiffs' Ex. 24(3), p. 2, BAT 110315968 at 969. This memo further described how this "tacit agreement" led one company -- Philip Morris -- to direct another company -- RJR -- to shut down its in-house biological work. After learning that RJR was conducting biological studies, Philip Morris president Cullman lodged a complaint with RJR president Galloway. The result was a "sudden reorganization at Reynolds, resulting in the closure of the biological section." Id., pp. 2-3. This later became known as the "mouse house" incident.
• An April 1980 letter from Robert Seligman, a top executive in research and development at Philip Morris, to Alexander Spears, a senior scientist at Lorillard, listed potential areas of scientific research for the industry. Seligman included a list of "subjects which I feel should be avoided." Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 20, Plaintiffs' Ex. 20(3), p. 1, Lor 01347175. The list entitled "Subjects To Be Avoided" included:

1. Developing new tests for carcinogenicity.

2. Attempt to relate human disease to smoking.

Id., p. 3 (emphasis added).

• Plaintiffs have presented substantial evidence showing involvement in scientific research and other scientific matters by attorneys for the tobacco industry, and that industry attorneys were a driving force behind the direction of and the suppression of scientific research. For example:
• In 1978, Sheldon Sommers, M.D., who was then Chairman of the CTR Scientific Advisory Board, complained to William Gardner, who was then the Scientific Director for CTR, that he [Sommers] was unable to understand the legal counsel he was being given. The import of Sommers' letter was that the CTR lawyers were controlling tobacco research by CTR based upon legal considerations. Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 27, Plaintiffs' Ex. 33(1), CTR SF 0800031. Sommers also stated:

I think CTR should be renamed Council for Legally Permitted Tobacco Research, CLIPT for short.

Id.

• A hand-written memorandum dated April 21, 1978, produced from the files of defendant Lorillard, complains that:

We have again abdicated the scientific research directional management of the Industry to the "Lawyers" with virtually no involvement on the part of the scientific or business management side of the business.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 28, Plaintiffs' Ex. 25(3), LOR 01346204.

1. A 1976 internal memo by a tobacco scientist at BAT, S.J. Green, also discusses the extent to which "legal considerations" dominated scientific research:

The public position of tobacco companies with respect to causal explanations of the association of cigarette smoking and diseases is dominated by legal considerations. . . By repudiation of a causal role for cigarette smoking in general they [the companies] hope to avoid liability in particular cases. This domination by legal consideration thus leads the industry into a public rejection in total of any causal relationship between smoking and disease and puts the industry in a peculiar position with respect to product safety discussions, safety evaluations, collaborative research etc.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 35, Plaintiffs' Ex. 39(1), BAT 109938433.

1. A 1964 trip report by English scientists described how a powerful committee of U.S. lawyers was dominant in the smoking and health arena:

This Committee is extremely powerful; it determines the high policy of the industry on all smoking and health matters - research and public relations matters, for example, as well as legal matters - and it reports directly to the presidents.

. . .

The lawyers are thus the most powerful group in the smoking and health situation.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 11, Plaintiffs' Ex. 23(3), p. 7, PM 1003119099 at 105, 106. This Committee, later known as the Committee of Counsel, also was involved in "clearing papers (e.g. Dr. Little's annual report)." Id. Dr. Little was the first director of CTR; thus, a powerful committee of lawyers was involved in "clearing" CTR's annual reports on scientific research.

1. In his in camera and ex parte affidavit, Edwin Jacob, long-time counsel for CTR writes:

The decision to fund research created the related questions of whether that research should be performed internally or by outside researchers and, if the research was to be performed by outside researchers, whether the companies should direct the research or have it directed by others. The companies concluded that internal research or research conducted by outside researchers under industry contracts would not be given proper credit if, as they expected, it supported their belief regarding causation. Conversely, if the results were equivocal, the parts suggesting causal possibilities would be exaggerated. Further, the companies were concerned that, if the companies conducted research only internally, some would claim that they were pursuing the research half-heartedly, pursuing it improperly, or suppressing the results. Accordingly, the companies determined that the most effective and efficient way for the companies to conduct this research was to fund outside researchers selected by a board of eminent, independent scientists.

42. It appears that one method by which attorneys may have controlled research is through maneuvers intended to "create" privileges. In November, 1979, the corporate counsel for B&W, Kendrick Wells, wrote a memorandum to Ernest Pepples, B&W's vice president of law. Plaintiffs' Ex. 43(1), PM 2048322229. In this memorandum, Wells outlined a plan to wrap scientific information in attorney-client privilege. Mr. Wells' proposal specifically provided that ". . . in the operational context BAT would send documents without attempting to distinguish which were and which were not litigation documents." PM 20483222230.

1. Defendants also presented evidence at the three days of Liggett hearings showing that scientific research is directed into different classifications, with some scientific research being withheld on the basis of privilege. Defendants' Liggett Exhibit 41 depicts how "Industry Counsel" directed three categories of research: "Special Account Recipients (Confidential Consultants)," "Special Account Recipients" and "Special Projects Recipients."
2. The defendants and their representatives have, in fact, been aware that cigarette smoking is probably hazardous to the health of the smoker. A statistical association between smoking and illness has been conceded by the defendants, but there has been a long-standing scientific and public relations dispute as to whether one can infer "causation" from such an association.
3. For example, in April and May of 1958, three British scientists (including at least one from BAT, D.G. Felton) visited top officials and scientists in the U.S. tobacco industry, including those at TIRC, Liggett, Philip Morris and the American Tobacco Company. Plaintiffs' Tab 7, Plaintiffs' Ex. C(2), p. 1, BAT 105408490. One object of the visit was to find out "the extent in which it is accepted that cigarette smoke 'causes' lung cancer." Id., p. 2. The British scientists reported widespread acceptance of causation:

With one exception (H.S.N. Greene) [not formally affiliated with any tobacco company] the individuals with whom we met believed that smoking causes lung cancer if by "causation" we mean any chain of events which leads finally to lung cancer and which involves smoking as an indispensable link. In the U.S.A. only Berkson, apparently, is prepared now to doubt the statistical evidence and his reasoning is nowhere thought to be sound.

Id., p. 2. The authors concluded that there was no serious dispute that the statistical associations constituted a "cause and effect" phenomenon:

Although there remains some doubt as to the proportion of the total lung cancer mortality which can be fairly attributed to smoking, scientific opinion in the U.S.A. does not now seriously doubt that the statistical correlation is real and reflects a cause and effect relationship.

Id., p. 8.

• In 1959, an RJR scientist, Alan Rodgman, concluded that there is a "distinct possibility" that substances in cigarette smoke could have a carcinogenic effect. Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Ex. 21(1), RJR 500945942.
• In 1962, Rodgman wrote:

The amount of evidence accumulated to indict cigarette smoke as a health hazard is overwhelming, [while] the evidence challenging the indictment is scant.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 32, Plaintiffs' Ex. 22(1), p. 4, RJR 504822847 at 504822850.

• In 1964, Philip Morris scientist Wakeham examined the first Surgeon General's Report -- which found that smoking was causally related to lung cancer in men -- and found that "little basis for disputing the findings at this time has appeared." Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 33, Plaintiffs' Ex. 24(1), p. 1, PM 1000335612. Wakeham commented on "[t]he professional approach" of the Surgeon General's committee. Id., p. 2.
• In 1967, G.F. Todd of the Tobacco Research Council [the British counterpart to TIRC/CTR] wrote a letter to Mr. Addison Yeaman, the vice president and general counsel of Brown & Williamson Tobacco Corporation. In his letter, Todd observed:

The only real difficulties that we encountered arose out of the unavoidable paradox at the centre of our operations - namely that, on the one hand the manufacturers control TRC's operations and do not accept that smoking has been proved to cause lung cancer while, on the other hand, TRC's research program is based on the working hypothesis that this has been sufficiently proved for research purposes. In addition, the Council senior scientists accept that causation theory . . . We have not yet found the best way of handling this paradox.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 34, Plaintiffs' Ex. 26(1), LG 298942 at 298943.

• In October 1976, BAT scientist S.J. Green criticized the industry's public position on causation:

The problem of causality has been inflated to enormous proportions. The industry has retreated behind impossible demands for 'scientific proof' whereas such proof has never been required as a basis for action in the legal and political fields. Indeed if the doctrine were widely adopted the results would be disastrous.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 35, Plaintiffs' Ex. 39(1), p. 1, BAT 109938433. Dr. Green concluded that "It may therefore be concluded that for certain groups of people smoking causes the incidence of certain diseases to be higher than it would otherwise be." Id., p. 4.

• In 1979, P.N. Lee of BAT expressed his impressions of a 1979 Surgeon General's report dated January 11, 1979. In this memorandum, Lee considered at length the Tobacco Institute publication entitled "The Continuing Controversy," also identified as TA73. Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 48, Plaintiffs' Ex. 28(1), BAT 100214029, beginning at 100214045. That document itself is identified as TIMN 84430. Lee characterized the report as "misleading." He wrote that the report did not appear to understand what causation is. Lee wrote:

Discussion of the role of other factors can be particularly misleading when no discussion is made of relative magnitudes of effects. For example, heavy smokers are observed to have 20 or more times the lung cancer rates of non-smokers. Sure, this does not prove smoking causes lung cancer, but what it does mean, and TA73 never considers this, is that for any other factor to explain this association, it must have at least as strong an association with lung cancer as the observed association for smoking (and be highly correlated with the smoking habit).

. . .

TA73 seems ready to accept evidence implicating factors other than smoking in the aetiology of smoking associated disease without requiring the same stringent standards of proof that it requires to accept evidence implicating smoking. This is blatantly unscientific.

BAT 100204046.

1. In fact, in 1980 BAT considered breaking ranks with the industry and admitting that smoking causes disease because BAT acknowledged that the "no causation" position was not credible:

The company's position on causation is simply not believed by the overwhelming majority of independent observers, scientists and doctors. The industry is unable to argue satisfactorily for its own continued existence because all the arguments eventually lead back to the primary issue of causation, and on this point, our position is unacceptable.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 36, Plaintiffs' Ex. 30(1), p. 2, BAT 109881322 at 323. The countervailing interest to this break from the industry's public dogma was the "severe constraint of the American legal position." Id., p. 10.

• In 1982, a BAT consultant, Francis Roe, found the industry position on causation "short of credibility," noting that "[i]t is not really true, as the American Tobacco industry would like to believe, that there is a raging worldwide controversy about the causal link between smoking and certain disease." Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 37, Plaintiffs' Ex. 79(3), BAT 100432193.
• Notwithstanding these internal documents, the industry's public relations strategy has been to deny causation and to keep the controversy alive.
• Over the years, tobacco industry spokespersons made many comments clearly intended to create doubt as to a connection between smoking and illness. For example:
• In 1962, the Tobacco Institute issued a press release stating that:

The causes of cancer are not now known to science. Many factors are being studied along with tobacco. The case against tobacco is based largely on statistical associations, the meanings of which are in dispute.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 2, Plaintiffs' Ex. 4(1), PM 1005136953.

• In 1969, a CTR press release stated:

There is no demonstrated causal relationship between smoking and any disease....If anything, the pure biological evidence is pointing away from, not toward, the causal hypothesis.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 40, Plaintiffs' Ex. 12(1), B&W 670307882.

• In 1970, a CTR press release said:

The deficiencies of the tobacco causation hypothesis and the need of much more research are becoming clearer to increasing numbers of research scientists.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 41, Plaintiffs' Ex. 13(1), RJR 50001 5901.

• In 1970, a Tobacco Institute advertisement stated:

After millions of dollars and over 20 years of research: The question about smoking and health is still a question.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 3, Plaintiffs' Ex. 5(1), TIMN 0081352.

• In 1972, a Tobacco Institute press release, stated:

The 1972 report of the Surgeon General...'insults the scientific community'...[T]he number one health problem is not cigarette smoking, but is the extent to which public health officials may knowingly mislead the American public."

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 44, Plaintiffs' Ex. 14(1), TIMN 012062.

61. In 1977, a Tobacco Institute pamphlet stated:

Has the Surgeon General's report established that smoking causes cancer or other disease? No.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 45, Plaintiffs' Ex. 25(1), TIMN 0055129.

1. In 1978, a Tobacco Institute pamphlet stated:

The flat assertion that smoking causes lung cancer and heart disease and that the case is proved is not supported by many of the world's leading scientists.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 44, Plaintiffs' Ex. 14(1), TI 120602.

• In 1979, the Tobacco Institute circulated a report entitled "Smoking and Health 1964-1979: The Continuing Controversy." This report, which followed the 1979 Surgeon General's Report, stated that:

The American public would be better served if high government health officials and private interest groups which encourage them abandoned the myth of waging war against diseases and their alleged causes.... Indeed, many scientists are becoming concerned that preoccupation with smoking may be both unfounded and dangerous. Unfounded because evidence on many critical points is conflicting. Dangerous because it diverts attention from other suspected hazards.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 47, Plaintiffs' Ex. 29(1), TIMN 0084430. (Internally, however, the tobacco industry acknowledged that the 1979 Surgeon General's report was "no doubt...an impressive document" and that "[t]he way in which the information was presented was on the whole sound, scientific and emotive." Plaintiffs' Tab 48, Plaintiffs' Ex. 28(1), at 2, BAT 100214029 at 030.)

• In 1983, an RJR advertisement said:

It has been stated so often that smoking causes cancer, it's no wonder most people believe this is an established fact. But, in fact, it is nothing of the kind. The truth is that almost three decades of research have failed to produce scientific proof for this claim...in our opinion, the issue of smoking and lung cancer is not a closed case. It's an open controversy.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Ex. 16(1), RJR 504638051.

• On February 2, 1984, the chairman of the board of RJR made the following comments as part of a panel discussion on the Nightline television program:

It is not known whether cigarettes cause cancer. RJR 502371216.

Despite all the research to date, there has been no causal link established [between smoking and emphysema]. RJR 502371217.

...as a matter of fact, there are studies that while we are accused of being associated with heart disease, there have been studies conducted over ten years that would say, again, that science is still puzzled over these forces. RJR 502371217.

Hearings before Judge Fitzpatrick, April 8 and April 15, 1997; Plaintiffs' Tab 50, Plaintiffs' Ex. 17(1), RJR 502371216.

• These types of repeated statements by the tobacco industry denying or diminishing the health effects of smoking also were published in Minnesota. For example, the St. Paul Pioneer Press published the following articles:
• On October 13, 1954, the Pioneer Press quoted Timothy Hartness, chairman of TIRC, as stating that "no clinical evidence has yet established tobacco to be the cause of human cancer." Plaintiffs' Ex. 395.
• On November 24, 1954, the Pioneer Press quoted E. A. Darr, president of RJR, as stating that "there still isn't a single shred of substantial evidence to link cigarette smoking and lung cancer directly." Id.
• On April 19, 1963, the Pioneer Press quoted the director of the CTR scientific advisory board, C.C. Little, as stating:

It is at present scientifically unwise and indeed may be harmful to attribute a simple definitive causative role to any one of them or to attempt to assign them relative degrees of importance.

Id.

• On February 7, 1965, the Pioneer Press quoted a tobacco industry spokesman saying that the link between smoking and disease is still unproved despite the Surgeon General's report. Id.
• On August 17, 1968, the Pioneer Press quoted the Tobacco Institute as attacking a Surgeon General's task force for a "shockingly intemperate defamation of an industry which has led the way in medical research to seek answers in the cigarette controversy." Id.
• On January 4, 1971, the Pioneer press quoted Joseph Cullman III, the CEO of Philip Morris, as reiterating the industry position that cigarettes" have not been proved to be unsafe" to human health. Id.
• On January 11, 1979, the Pioneer Press quoted the Tobacco Institute as stating that the "preoccupation with smoking may be both unfounded and dangerous. . . because evidence on many critical points is conflicting. . . (and it) diverts attention from other suspected hazards." Id.
• Since 1954, one of CTR's principal activities has been to fund scientific research by independent scientists through its grant-in-aid program, under the supervision of its Scientific Advisory Board (SAB) supplemented on occasion by research contracts. See Affidavit of Glenn, ¶ 7; Affidavit of McAllister, ¶ 7. CTR itself has not conducted any scientific research. See Affidavit of Glenn, ¶ 9. Through this research program, from 1954 through 1996 CTR has provided approximately $282 million to fund over 1,500 research projects by approximately 1,100 independent scientists. See Id., ¶ 16; 1996 Report of The Council for Tobacco Research -- U.S.A., Inc. p. 5.
• The researchers who have received CTR grant funding have been affiliated with approximately 300 medical schools, universities, hospitals and other research institutions, including such prestigious institutions as Harvard Medical School, Yale School of Medicine, Stanford University, numerous institutions in the University of California system, Johns Hopkins School of Medicine, the University of Chicago Medical Center, the Scripps Research Institute, the Mayo Clinic and the Salk Institute. See Affidavit of Glenn, ¶ 9& Ex. B. The researchers who have received this funding have not been employees of the tobacco companies or CTR. The researchers who have received this funding have not been employees of the tobacco companies or CTR. CTR's grantees have included many distinguished scientists, three of whom have won Nobel Prizes. See Id., ¶ 10; See Affidavit of Rubin, ¶ 8 (4/25/96).
• The evidence presented included an affidavit by Dr. Emanuel Rubin, the Chairman of the Department of Pathology at Jefferson Medical College, who has reviewed CTR's grant-in-aid program. Dr. Rubin concluded that "CTR funded excellent research by well-qualified scientists that was relevant to the scientific issues associated with tobacco use and health." See Affidavit of Rubin, ¶ 6 (2/10/97).
• CTR's written policy provides that SAB grant-in-aid recipients are to "work with the greatest freedom," and are allowed to publish their results in scientific journals. See Affidavit of McAllister, ¶ 16 & Ex. A. CTR encourages such publication. See Affidavit of Glenn, ¶ 14. Since 1956, research projects funded by CTR grants and contracts have resulted in approximately 6,100 scientific publications, many of which have been in highly respected, peer-reviewed scientific journals that are frequently cited in the scientific literature. See Affidavit of Glenn, ¶ 16; 1996 Report of the Council for Tobacco Research -- U.S.A., Inc. p. 5; See Affidavit of McAllister, ¶¶ 19-21.
• Each year since 1956, CTR has made available to the scientific community an Annual Report containing abstracts of reports of research by CTR grant-in-aid requests that have been published in scientific journals, and a list of the research projects being funded by CTR SAB grantees. Report of the Council for Tobacco Research -- U.S.A., Inc. (1956-1996); See Affidavit of Glenn, ¶ 15; See Affidavit of McAllister; ¶ 8; Sommers Cipollone Tr. 8587-88; See Affidavit of Rubin, ¶ 7 (4/25/96). In this way, the research results from CTR's SAB grant-in-aid program have been shared with the scientific community.
• There is no evidence in the record before the Court that, over the course of CTR's 43 years, CTR has prevented any of its over 1,100 SAB grantees from publishing their research findings. See Affidavit of McAllister, ¶ 18.
• There is no evidence in the record before the Court that, over the course of CTR's 43 years, any scientific research by CTR SAB grantees has been tainted by scientific impropriety, such as the falsification of data or improper reporting of research results.
• Some of the research funded through CTR grants has led to reported findings that have linked smoking with diseases including lung cancer and emphysema, and that have supported the view that cigarettes are addictive. The evidence presented included the affidavits of Dr. Rubin, who stated that "[n]umerous publications from CTR-funded research provide important information indicating adverse effects of cigarette smoking." See Affidavit of Rubin, ¶ 6 (2/10/97). Some of these research findings have been reported in the general media. See Affidavit of McAllister, ¶ 22 & Ex. O; 10/22/66 Article of the N.Y. Times (Ex. 46). Over 250 of the scientific articles published by CTR grantees have been cited in reports relating to smoking and health of the U.S. Surgeon General (or his advisory committee), and 75 were cited in the 1996 report by the Food and Drug Administration on nicotine. See Affidavit of McAllister, ¶¶ 19, 23, 24.
• Many of the researchers who have received CTR SAB grants have also received co-funding for their research from organizations such as the American Cancer Society, the National Cancer Institute and the National Institutes of Health. See Affidavit of Glenn, ¶¶ 11.
• The research conducted by CTR SAB grantees has been directed to matters concerning tobacco use and health, and in particular to the causation of diseases associated with smoking. See Affidavit Rubin, ¶ 6 (2/20/97); See Affidavit of Glenn, ¶¶ 17, 19; See Affidavit of McAllister, ¶¶ 26-28; See Affidavit of Lisanti ¶ 22 (4/11/97). The focus of that research has shifted over the years, since 1954, in accord with changes in scientific research generally. See Affidavit of Rubin, ¶¶ 14-15 (2/10/97); See Affidavit of Glenn, ¶¶ 18, 19; See Affidavit of McAllister, ¶¶ of McAllister, ¶¶ 27, 28.
• In 1954, CTR appointed as its Scientific Director Dr. Clarence Cooke Little, a nationally known scientist. See Affidavit of Glenn, ¶ 8. Dr. Little was the founder and director of the Jackson Memorial Laboratory in Bar Harbor, Maine. He had been the President of the University of Michigan and the University of Maine, and had been the managing director of the forerunner of the American Cancer Society. See Affidavit of Glenn, ¶ 8. As Scientific Director of CTR, Dr. Little was responsible for CTR's scientific program. See Affidavit of Lisanti, ¶ 7 (4/11/97). Dr. Little served as CTR's Scientific Director from 1954 until 1971. See Affidavit of Glenn, ¶ 8. He was succeeded as Scientific Director of CTR by other prominent scientists. See Affidavit of Lisanti, ¶ 9 (4/11/97).
• The appointment of Dr. Little as the Scientific Director of CTR was consistent with the statement in the 1954 Frank Statement that a scientist of "unimpeachable integrity and national repute" would be in charge of CTR's research activities.
• In 1954, CTR formed a Scientific Advisory Board ("SAB") to guide its grant-in-aid program by evaluating applications for funding received by CTR. See Affidavit of Glenn, ¶ 12; In Camera and Ex Parte Affidavit of Edwin J. Jacob, ¶¶ 27-29. The SAB originally consisted of seven members, and that number has gradually increased to 15. See Affidavit of Glenn, ¶ 12; See Affidavit of McAllister, ¶ 15; 1996 Report of the Council for Tobacco Research -- U.S.A., Inc.
• The members of the SAB have not been CTR employees (except for CTR's Scientific Director, who has been both a CTR employee and a member of the SAB). See Affidavit of Glenn, ¶ 12. The members of the SAB have been employees of universities, medical schools and research institutions such as Harvard, the University of Chicago, Stanford, Johns Hopkins, the University of Southern California and Duke. See Affidavit of McAllister, ¶ 15; Report of the Council for Tobacco Research -- U.S.A., Inc. (1956-1996). Several current SAB members are also members of the National Academy of Science. See Affidavit of McAllister, ¶ 15. The members of the SAB have been, and are, outstanding scientists in a number of fields, including cancer research, cardiology, pulmonology, immunology and pathology. See Affidavit of Glenn, 12; Affidavit of McAllister, ¶ 15; Affidavit of Rubin, ¶ 8 (2/10/97).
• Since 1954, the SAB has advised CTR on the awarding of research grants-in-aid. The SAB reviews and evaluates grant proposals by a peer review process that is standard in the scientific community. See Affidavit of Glenn, ¶ 13. Grants that are approved by the SAB are evaluated and given a numerical score by each SAB member; the scores are compiled and the applications are ranked. See Affidavit of Lisanti, ¶ 4 (7/11/97); Affidavit of McAllister ¶ 13; Sommers Cipollone Tr. 8580-83. CTR's scientific staff has the actual decision-making authority to award CTR grants-in-aid. Sommers Cipollone Tr. 8583; See Affidavit of Lisanti, ¶¶ 4-6 (7/11/97); Affidavit of McAllister ¶ 13. These decisions about the award of grants have adhered closely to the SAB's ranking of grant applications. See Affidavit of Lisanti ¶ 4 (7/11/97); Affidavit of McAllister ¶ 13.
• CTR's procedure for evaluating and awarding research grants is similar to the procedures used by organizations that fund scientific research. Sommers Cipollone Tr. 8589; See Affidavit of Lisanti, ¶ 13 (4/11/97); Affidavit of McAllister, ¶ 11.
• The tobacco company representatives constitute CTR's Board of Directors. See Affidavit of Glenn, ¶ 20; Sommers Cipollone Tr. 8594; Affidavit of Lisanti, ¶¶ 17, 18 (4/11/97). However, the tobacco companies deny that they have participated in or controlled the SAB's evaluations of grant proposals, or that they have participated in or controlled CTR's decisions to award research grants-in-aid. See Affidavit of Glenn, ¶¶ 20, 23; Sommers Cipollone Tr. 8595; Affidavit of Lisanti, ¶ 19 (4/11/97); Affidavit of McAllister, ¶ 14.
• The evidence in the record before the Court included the affidavit of Dr. Vincent F. Lisanti, a scientist who was employed by CTR from 1964 until 1994 and attended over 90 SAB meetings. See Affidavit of Lisanti, ¶¶ 15 (4/11/97). Dr. Lisanti stated:

I do not believe that the SAB ever rejected a grant application because it proposed research the results of which might be detrimental to the tobacco industry. The SAB members cared about promoting science and making a contribution to scientific knowledge, not about the potential impact of any scientific research on the interests of the tobacco companies.... [M]embers of the SAB were scientists and persons of great integrity. Any statement or suggestion that the evaluations and recommendations of the SAB were controlled or influenced by tobacco company lawyers is simply false.

See Affidavit of Lisanti, ¶¶ 15016 (¶¶ 4/11/97)

1. The evidence in the record before the Court also included the affidavit of Dr. James F. Glenn, CTR's Chairman and CEO (and formerly the Scientific Director of CTR), who is a professor of surgery and a former medical school dean. Dr. Glenn stated:

I am not aware of any instance during the ten years in which I have been affiliated with CTR in which any of the member companies, or any of their attorneys, have attempted in any way to influence decisions on what research will be funded as part of CTR's grant-in-aid program.

The fact is that CTR, continuously from the time that I became affiliated with it in 1987 through today, has maintained a thoroughly independent SAB and grant-in-aid program. While our members may have opinions regarding CTR's research program and are certainly entitled to express them if they wish, I can say categorically that throughout my [ten year] tenure at CTR, the grant-in-aid program has been operated independently of industry influence.

See Affidavit of Glenn, ¶¶ 23, 25 (2/12/97).

1. The evidence in the record before the Court also included an affidavit from Dr. Harmon C. McAllister, the Scientific Director and Vice President for Research of CTR, in which Dr. McAllister stated:

In my 14 years of experience with CTR, I have attended 28 SAB meetings at which grants were evaluated, at which more than three thousand grant-in-aid proposals have been considered. I have also attended dozens of meetings of CTR's scientific staff where grants were awarded. Throughout that time, neither the SAB nor the scientific staff of CTR has ever considered in evaluating grant applications whether the proposed research would be likely to establish connections between smoking and disease or whether the proposed research will be favored or disfavored by the tobacco industry. Throughout that time, to the best of my knowledge there has been no participation by the tobacco companies, their employees, or their lawyers in any decisions to grant or deny funding to any investigator, to any institution, or to any research area.

See Affidavit of McAllister, ¶ 14 (2/12/97).

• The evidence in the record before the Court also included testimony at a 1988 trial by former Scientific Director of CTR, Sheldon C. Sommers, who testified as follows about how he would have reacted to the tobacco companies' playing a role in the SAB grant approval process: "[I]f it had happened at the time I was invited to join [the SAB] I would certainly not have joined and if I saw it happen or knew it was happening I would resign [from the SAB]." Sommers Cipollone Tr. 8595. Dr. Sommers was a member of the SAB for 23 years, from 1966 until 1989. See Affidavit of Glenn, Ex. D.
• With the exception of certain legal advice, and the evidence offered by Defendants as referred to below, the record does not contain evidence that lawyers determined what research would be funded by the CTR SAB grant program. See Affidavit of Lisanti, ¶¶ 77 (2/14/97); In Camera and Ex Parte Affidavit of Edwin J. Jacob.,¶ 41.
• From 1978 until 1982, lawyers for CTR reviewed grant proposals to CTR that related to the effects of nicotine on the central nervous system. See Affidavit of Lisanti, ¶ 27, 29 (2/14/97); In Camera and Ex Parte Affidavit of Edwin J. Jacob, ¶ 41. During that period, CTR's lawyers provided legal advice about the funding by CTR of those proposals. The Court has reviewed in camera privileged information about the substance of that legal advice. See Affidavit of Lisanti, ¶¶ 29-31 (2/14/97); In Camera and Ex Parte Affidavit of Edwin J. Jacob, ¶¶ 41, 53-63.
• The Jacob and Lisanti affidavits state that the advice given to CTR by its lawyers related to the antitrust laws. Concern about a possible violation of the antitrust laws by this "joint industry group" had existed since the formation of TIRC in 1954. See Affidavit of Tucker, ¶ 4. In 1954, TIRC advised DOJ in writing that it would conform to the requirements of the antitrust laws and the consent decrees affecting the tobacco industry, that it would not "give consideration to any matters affecting the business conduct or activities of its members," and that it would be "proceeding under the advice of legal counsel selected from among the counsel or nominees of its members." See Affidavit of Jacob, Ex. B. The Court has reviewed in camera privileged information about this antitrust concern on the part of counsel. See Affidavit of Jacob, ¶¶ 43-54.
• Other than providing the legal advice referred to above, there is no evidence in the record before this Court that lawyers influenced the selection of research to be funded through CTR's SAB grant-in-aid program.
• Defendants contend that it has long been a matter of common knowledge that there are health risks associated with smoking. Forster v. R.J. Reynolds Tobacco Co., 437 N.W.2d 655 (Minn. 1989) (quoting Roysdon v. R.J. Reynolds Tobacco Co., 623 F.Supp. 1189, 1192 (E.D. Tenn. 1985), aff'd, 849 F.2d 230 (6th Cir. 1988), remanded in part on other grounds); see also Cameron v. American Legion Post 435, 281 N.W.2d 720, 722 (Minn. 1979); Paugh v. R.J. Reynolds Tobacco Co., 834 F.Supp. 228, 231 (N.D. Ohio 1993); Allgood v. R.J. Reynolds Tobacco Co., 80 F.3d 168, 172 (5th Cir. 1996), cert. denied, 117 S. Ct 599 (1996); Lonkowski v. R.J. Reynolds Tobacco Co., No. 96-1192, 1996 WL 888182, at *7 (W.D. La. Dec. 10, 1996); American Tobacco Co. v. Grinnell, No. 94-1227, 1997 WL 33658, at *5-6 (Tex. June 20, 1997); Consumers of Ohio v. Brown & Williamson Tobacco Corp., No. 94-3574, 1995 WL 234620, at *1 (6th Cir. Apr. 19, 1995); Varga v. Brown & Williamson Tobacco Corp., No. G88-568 CA6, 1988 WL 288977, at *3 (W.D. Mich. Nov. 7, 1988); Austin v. State, 48 S.W. 305, 306 (Tenn. 1898), Aff'd as modified sub nom., Austin v. Tennessee, 179 U.S. 343 (1900).
• The Surgeon General issued its first smoking and health report in 1964. The Surgeon General has subsequently issued 22 additional reports on smoking and health which discuss tens of thousands of publications in the smoking and health field.
• Defendants also contend that Minnesotans and the State of Minnesota itself have long been aware of the risks of smoking. (See Affidavit of Michael E. Parrish, ¶¶ 8 and 9, April 14, 1997 (awareness of Minnesota Legislature), ¶¶ 9 - 11 and 20-24 (awareness of Minnesota's education leaders), and ¶¶ 13-17 (Minnesota newspaper articles) and Berman Expert Report, ¶ 23 ("The State of Minnesota has been aware of the health risks associated with cigarettes and smoking as early as the 1800's. . . Over the last century and a half, the State of Minnesota has claimed leadership in smoking prevention and control.")
• I have previously found that there was no evidence that "defendants companies conducted significant independent research, i.e., that which was not jointly sponsored through CTR." Special Master Report, at ¶ 140. I also concluded that the "failure on the part of defendants individually to investigate the safety of their product, coupled with their ongoing assurances that causation of illnesses was unproved and speculative, necessarily implicates the holding of Levin v. C.O.M.B., 469 N.W.2d 512, 515 (Minn. App. 1991). . . ." Id. at ¶ 146. Defendants have appealed these findings to Judge Fitzpatrick.
• In their written submissions and presentations during the four days of hearings, defendants submitted evidence of scientific research conducted or sponsored by the industry, apart from CTR. Plaintiffs, in turn, submitted additional evidence of suppression of in-house smoking and health research.
• Plaintiffs have presented additional substantial evidence showing that, for many years, the U.S. manufacturing defendants failed to perform in-house smoking and health research, including biological research. Biological research is research "relating to biology or to life and living processes." Webster's New Collegiate Dictionary 152 (1990). Thus, biological research is the type of research a company would undertake to examine the safety of its products with respect to humans and, in this case, to determine whether smoking causes disease. Helmut Wakeham, a senior research official at Philip Morris, defined the type of research prohibited at the tobacco companies: "[s]tudying a relationship which might exist between smoking and diseases such as were tabulated in the Surgeon General's report." Plaintiffs' Tab 3, Wakeham Depo., p. 91.
• Plaintiffs also presented additional substantial evidence that for years the industry acted in concert to suppress in-house biological research on smoking and health, notwithstanding the industry's public promise in the Frank Statement to conduct research into "all phases of tobacco use and health" and report all facts to the public. CTR MN 11309817. Moreover, the Frank Statement promised that joint research would be "in addition to what is already being contributed by individual companies." Id.

SUPPRESSION OF RESEARCH

• American counsel represented to Judge Fitzpatrick, during a hearing on American's failure to produce scientific research in the possession of its affiliates, that American did not perform in-house smoking and health research:

  [I]t was the policy of The American Tobacco Company not to itself conduct smoking and health research, instead it relied on CTR and the Scientific Advisory Board. So that is an explanation for why the documents they are finding from the American Tobacco Company are what they are.

Plaintiffs' Tab 1, Transcript of June 17, 1997 Hearing, p. 23.

• American's Rule 30.02(f) designee on scientific research, Byron F. Pryce, testified during his deposition that American failed to conduct in-house biological research:

  Q. During the time period that you have had a biological division, do you know what kind of work was done in that biological division?
  

  A. Reading literature.
  

  Q. Is that it?
  

  A. That's about all I remember.
  

  Q. So, it would be your testimony that at no time during your tenure from 1965 to 1994 did American Tobacco Company or its parent, American Brands, ever undertake biological research in the United States; correct?
  

  A. We did not have any in­house biological research program at the American Tobacco research facility.
  

  · · ·
  

  Q. Actually, my question is: Did you do in­house research on the health aspects of tobacco?
  

  A. No, sir.

Plaintiffs' Tab 5, Pryce Depo., pp. 45, 164.

1. Mr. Pryce, American's 30.02(f) designee on research, did not know whether any of the research sponsored by American at the Medical College of Virginia related to smoking and health:

Q. As best you recall, the Medical College of Virginia Research did not involve specific research concerning whether cigarette smoke caused cancer?


A. I don't know specifically whether it had a direct link to the direct work on cancer causation. Some of the research may have been, but it was a wide spectrum of work. All has been published, to my knowledge.


Q. Did American ask the Medical College of Virginia to look specifically at the issue of whether cigarette smoking causes emphysema?


A. I don't know that.


Q. Did American as the Medical College of Virginia to determine whether or not cigarette smoking causes heart disease?


A. I don't believe -- I don't know that for sure.

Plaintiffs' Tab 6, Pryce Depo., p. 166-167.

1. On December 17, 1997, Plaintiffs took the deposition of Dr. Frank Colby. Colby has a PhD in Chemistry. (Colby Depo. Trans. p. 8). Colby began working at Defendant RJR in 1951. (Colby Depo. Trans. p. 15). Colby continues to consult on the subjects of smoking and health for RJR and its law firms as the sole shareholder of Frank G. Colby & Associates. (Colby Depo. Trans. pp. 9-13).
2. In 1964 or 1965, Colby assumed responsibility at Defendant RJR for analyzing smoking and health research. (Colby Depo. Trans. pp. 56-57). Prior to Dr. Colby, this function was performed by Allen Rodgman, another long-time RJR scientist whose name also appears on thousands of privileged documents.
3. On direct examination by RJR, Dr. Colby testified that he kept his facilities relating to smoking and health from the lawyers separate from the rest of the research department. (Colby Depo. p. 236).
4. On cross examination, however, Dr. Colby testified that the literature analyses which he conducted were widely available to non-lawyers of RJR but were only "channeled through the lawyers.":

Q: Now I believe you agreed with me earlier that a company such as R.J. Reynolds has a duty to understand any dangers associated with its products; correct?

. . .

A: Understand, yes.


Q: They need to have people such as yourself analyze that literature; correct?


A: Correct.


Q: And that's a duty the company has in order to adequately warn the public of any dangers associated with its products; correct?

. . .

A: I would say inform.


Q: Right. And you would also agree with me, would you not, that when you conducted your analyses of this literature after 1964, that your analysis was really done for the entire company of R.J. Reynolds, not just for the lawyers; correct?


A: It was channeled through the lawyers. The smoking and health analysis was channeled through the lawyers mostly.


Q: Okay. It was channeled through the lawyers, but your analysis was widely available to management and research scientists; --


A: Correct.

. . .

Q: So in other words, even though you channeled your research through the lawyers, that - that analysis of research that you did was widely available to the other scientists in R.J. Reynolds; correct?

. . .

A: Yes.


Q: It was available to the public affairs department, correct?

. . .

A: Yes.


Q: And it was available to top management; correct?

. . .

A: Yes.


Q: And the same was true for Dr. Rodgman's analysis of the literature when he did it; correct?


A: Yes.

. . .


Q: ...So the lawyers basically were used to funnel and shield this analysis you did of the research, but it was widely spread throughout the company; correct?

. . .

A: I wouldn't - I don't - I think I don't like the - the term "shield." It was simply a distribution system...."Shield" implies something which I don't think is correct.


Q: Okay. So it was a distribution system that started with the lawyers but eventually went throughout the company.

. . .

A: Was available. Was also of interest, yes.

PP. 242-45 (emphasis added).

1. Defendant RJR argues in correspondence dated December 31, 1997, (CLAD 1919) that Colby and Rodgman generated and received thousands of documents and that most of these documents have been produced to Plaintiffs during discovery. The language quoted above from Colby's deposition, pp. 242-245, however, leads to precisely the inference which Plaintiffs urge the Court to make: smoking and health analysis was channeled through the lawyers, although it was also available to management and scientists.
2. During the 1950's, Reynolds scientists tried to convince Reynolds management to conduct in-house biological testing. In 1967, some 14 years after the Frank Statement, Reynolds opened the Biological Research Division, the BRD, also known as "The Mouse House." The BRD was a sophisticated in-house lab for conducting biological research, including inhalation tests, on animals, including rats, rabbits, mice and gerbils. Alan Rodgman, senior Reynolds scientists from the early 1950s, testified in his deposition:

Q. . . . . this is a recommendation to do internal research; correct?


A. Uh-huh.


Q. You said this recommendation has been made previously by Teague in 1953, by yourself in 1954, by yourself in 1955, by yourself in 1956, by yourself in 1957 -- '59 and by yourself and Dr. Nielson in 1962; correct?


A. Yes.


Q. Each of those times R.J. Reynolds turned down your request; correct?


A. That's right, then did accede to eventually.


Q. Are you talking now about that three-year period in '67 to '70 when they had the Mouse House?


A. Yeah. Well it took a little while to get the staff. That's I guess when the actual research was done, but it started before then.


Q. And then they terminated that abruptly in 1970; correct?


A. Yeah, but there were reasons for that.

Plaintiffs' Tab 17, Rodgman Depo., p. 335.

• After only three years of operation, Reynolds shut down the BRD. Preliminary results from mouse inhalation tests demonstrated emphysema. This information on emphysema was shared with Philip Morris (see paragraph below). There is no evidence, however, that this information was disclosed to the public.
• A 1969 memorandum written by a Philip Morris scientist, and copied to senior Philip Morris scientists, Tom Osdene and Helmut Wakeham, entitled "R.J. Reynolds Biological Research Program" states:

I met Dr. Price from R.J. Reynolds at the CTR-USA meeting of December 11 and 12, 1969. He mentioned doing chronic cigarette smoke exposure studies with rats. The animals received up to 500 cigarettes and emphysema was produced.

Plaintiffs' Tab 17, PM 1001882748 (emphasis added).

• Similarly, a 1968 Reynolds research report, from the director of the mouse house, to the Murray Senkus, Reynolds' research director, states:

  Smoking Rats
  

  The chronic exposure of rats to smoke is continuing. The number of exposures was increased to two a day on July 16, 1968. Three rats were lost after bleeding tissues were taken for histology. No gross pathology was noted.
  

  The histology of the tissues from the rat which had smoked TEMPO cigarettes via an indwelling tracheal cannula has been completed with the results given on the following page.
  

  A diffuse, marked emphysema throughout the lungs. . .

Plaintiffs' Tab 18, Reynolds 515596269 (emphasis added).

1. A deposition of Reynolds' Rule 30.02(f) designee on research revealed that these test results showing emphysema were never followed up by Reynolds:

Q. The fact is, though, you never followed up on this study, did you?


A. We did not do inhalation ex -- chronic inhalation exposures in these animals, no.

Plaintiffs' Tab 19, Simmons depo., p. 163.

1. Rather than conduct further in-house inhalation tests, Reynolds, in 1970, shut down the Biological Research Division and fired 26 scientists. A presentation on the closing of the BRD states:

We are here today to inform you about a significant reorganization of the Research Department and a reorientation of research programs. . . .


In-house biological testing in the smoking health area such as work we have been doing for the Scientific Advisory Board of the Council for Tobacco Research has been terminated. Any further biological testing that may be needed in further developing smoking machines, etc. will be referred to qualified independent research organizations. . . .

The Biological division is being dissolved. . . .

· · ·

Altogether, 26 staff people are being terminated.

Plaintiffs' Tab 20, Reynolds 503950745.

1. In his deposition, Reynolds' research director, Murray Senkus, confirmed the abruptness of the closing of the mouse house:

Q. Okay. So you basically called the people together that were in your biological testing program and said, "This is it, we're shutting it down"; correct?


A. That's what we did.


· · ·


Q. At this meeting you told your employees that all your in-house biological testing in the smoking-and-health area was being terminated; correct?


A. That's what the report says.


Q. And that's your recollection; correct?


A. Yes.

Plaintiffs' Tab 21, Senkus Depo., pp. 138-139.

1. An employee of Reynolds' Biological Research Division testified in his deposition that he was "shocked" by the abrupt closure of the BRD:

Q. That research was suddenly terminated in 1970, was it not?


A. In March of 1970, the -- the division, the biological research division, was dissolved, yes.


Q. And I believe you've testified in previous depositions that you were rather shocked by that; it came as a surprise.


A. It came as -- "shocked" is a good -- is a good expression. I was all of a sudden with three young children and no job. Right, I was quite shocked.

Plaintiffs' Tab 22, Simmons Depo., p. 149.

1. A 1970 memo by D.G. Felton, a BATCo senior scientist, described how the shutdown of the BRD was related to the industry's "tacit agreement" not to conduct in-house biological research. This agreement led one company, Philip Morris, to request that another company, Reynolds, shut down the Biological Research Division. Plaintiffs' Tab 23, BAT 110315968 at 969. After learning that Reynolds was conducting biological studies, Philip Morris president Cullman lodged a complaint with Reynolds president Galloway. The result was a "sudden reorganization at Reynolds, resulting in the closure of the biological section." Id., pp. 2-3.
2. The above conversation, Philip Morris CEO to Reynolds CEO, was described by Helmut Wakeham, a senior Philip Morris research official, to Felton. Id. Felton is now deceased. Wakeham, in his deposition in this action, stated that he had met with Felton but that he did not remember the conversation described in the BATCo document. Plaintiffs' Tab 24, Wakeham Depo., pp. 113-16. Wakeham, however, did not deny the conversation. Id., p. 116. In addition, as noted below, Wakeham also confirmed in his deposition that there was an agreement among the tobacco companies not to conduct in-house research on smoking and health.
3. Reynolds contended during the hearings that the BRD was closed because of reasons relating to, inter alia, the company's decision not to enter the pharmaceutical or starch business. This does not explain, however, why Reynolds would terminate research specifically relating to the health effects of cigarettes, including inhalation tests on rats, which were demonstrating emphysema, or why the BRD was shut down literally overnight, with no warning to the scientists who worked there.
4. Reynolds commissioned a third-party report on the closing of the BRD. This report is known as the Brubaker Report and is being withheld on a claim of privilege. RJR 515597275.
5. I have reviewed the Brubaker report, Bates No. 5072 8500-8691. This report was commissioned by the law firm of Jones, Day, Reavis & Pogue in 1985. Paul Brubaker, PhD, was a consultant retained to report to Jones, Day on the goals and objectives of the RJR Biological Research Division (BRD). At section 10.0 of that report, a description of the operations of the division, including Brubaker's rather brief explanation of why the division was closed. Brubaker writes:

We are also not convinced after all of the research we reviewed in the Smoking and Health area that BRD was closed because of unfavorable results from their Smoking and Health research activities. Simply stated, the Smoking and Health research program had not fully matured and was only in its infancy when the doors closed.

At 50792 8507.

Brubaker also writes:

A further review of other BRD's research program [sic], especially its' [sic] Smoking and Health research effort, its' [sic] planning documents, there was no substantial evidence that the research results carried sufficient weight to warrant closing down operations, as stated earlier.

We are not convinced that the BRD research program, however, was a well managed and administered program, based upon the planning documents reviewed to date. This could have been a signal relative to the collapse of the program in 1970. A $1 million capital expenditure could have been the straw that broke the camel's back. We remain convinced that the BRD research program was closed for economic reasons rather than for any scientific discoveries of [sic] findings.

At 50792 8655.

Brubaker's report does not contain a direct statement of his methodology in compiling the report. Specifically, there is no indication that Brubaker actually interviewed scientists involved in the BRD operations.

1. The closing of the BRD was described by the attorney for RJR during the hearings which began on October 17, 1997. Transcript pp. 569-577. RJR's explanatory narrative during the hearing is neither entirely consistent nor entirely inconsistent with that of Dr. Brubaker. This is perhaps not surprising, considering the difficulty in explaining events which occurred 27 years earlier. However, this explanation did not suggest that the BRD was badly managed, or that its research was suspect.
2. I cannot conclude that the BRD facility was closed down simply for business reasons. It seems to me unlikely that a facility employing so many persons would simply shut down without warning in the fashion which Plaintiffs have demonstrated. The inference of a "gentlemen's agreement" has been fairly presented and not rebutted.
3. Murray Senkus, former research director at Reynolds, testified that in his 28 years with the company Reynolds, performed in-house biological testing for only three years:

Q. From the time that the Mouse House was shut down in 1970 until the time you left RJR in 1979, did RJR undertake any biological work in-house?


A. Not that I can recall.


Q. So from 1951 to 1979, a period of approximately 28 years, RJR only did in-house biological testing for 3 of those 28 years; correct?


A. Yes.

Plaintiffs' Tab 2, Senkus depo., pp. 179-180.

1. Helmut Wakeham, senior Philip Morris research official, testified during his deposition that there was an agreement that the tobacco manufacturers would not conduct smoking and health research:

Q. What's the type of research that you understood that there was an understanding that the cigarette companies would not be doing in-house?


A. Studying a relationship which might exist between smoking and diseases such as were tabulated in the Surgeon General's report.

Plaintiffs' Tab 3, Wakeham depo., p. 91.

1. Within Philip Morris, Wakeham advocated that the company abandon its refusal to conduct in-house biological research. In 1964, in response to the Surgeon General's report, Wakeham wrote a report stating that "Competitive pressures suggest a breakup of the common front approach of the industry through the Tobacco Institute and TIRC." Wakeham also recommended that "[t]he industry should abandon its past reticence with respect to medical research," noting that "failure to do such research could give rise to negligence charges." Plaintiffs' Tab 25, PM 1000335612 at 622.
2. In a 1968 memorandum, Wakeham again advocated establishment of in-house biological research facilities at Philip Morris:

We have reason to believe while this proposal to carry out biological research and testing may seem a radical departure from previous policy and practice, we are in fact only advocating that which our competitors are also doing.

Plaintiffs' Tab 26, PM 100039670 at 671. In an earlier draft of this memorandum, Wakeham described the existence of a "gentleman's agreement" prohibiting biological research:

We have reason to believe that in spite of the gentleman's agreement from the tobacco industry in previous years, that at least some of the major companies have been increasing biological studies within their own facilities.

Plaintiffs' Tab 27, PM 1001607055 at 058. (The "increasing biological studies" referenced by Wakeham included the Reynolds BRD.)

1. Wakeham confirmed that a "gentlemans agreement" existed during his deposition:

I may have coined the word "gentlemans agreement" in writing this document. But it, in my mind, was a term I used to express this understanding between the companies that the company laboratories in general were not qualified or capable of carrying out research of the kind that was necessary to address the question of smoking and health, and that the industry had set up the Tobacco Research Council to bring together experts who would address this question and who would be supported by the industry for whatever researches they deemed desirable to do in this field.

Plaintiffs' Tab 28, Wakeham Depo., pp. 89-90.

1. Wakeham also confirmed that, as of 1968, 14 years after the Frank Statement, Philip Morris was not conducting any in-house biological research related to smoking and health:

Q. Philip Morris wasn't doing any animal testing as of 1968.


A. Absolutely not. Not in house. We were -- we were doing tests on some animals, again related to the irritation problem, not regarding -- not relating to cancer or anything else of that nature.

Plaintiffs' Tab 29, Wakeham Depo., p. 86.

1. In a 1969 memo, Wakeham acknowledged the scientific expertise of the tobacco industry to conduct smoking and health research and lamented the fact that this expertise was not being utilized because of the legal situation:

Unfortunately. . . the scientific expertise of the industry, because of the liability suit situation, has not been permitted to make a contribution to the problem, a contribution which I believe was and is vital. . . .

Plaintiffs' Tab 30, PM 1001609594. This contemporaneous memorandum contradicts Wakeham's deposition statement (years later) that the tobacco companies were not "qualified or capable" of conducting in-house research on smoking and health. See ¶ 52, above.

1. Plaintiffs presented evidence that Philip Morris turned to Europe for smoking and health research. A 1970 memorandum from Joseph Cullman, the president of Philip Morris, discusses the benefits of conducting research overseas:

The possibility of getting answers to certain problems on a contractual basis in Europe appeals to me and I feel presents an opportunity that is relatively lacking in risk and unattractive repercussions in this country.

Plaintiffs' Tab 31, PM 1000216742.

1. In 1970, Philip Morris purchased a research facility in Cologne known as INBIFO. A 1970 memo from Wakeham states:

Since we have a major program at INBIFO, and since this is a locale where we might do some of the things which we are reluctant to do in this country, I recommend that we acquire INBIFO either in toto or to the extent of controlling interest.

Plaintiffs' Tab 32, PM 2022244451.

1. One perceived value of INBIFO was that Philip Morris could control the results:

Experiments can be terminated at will as required without delay.

Plaintiffs' Tab 33, PM 1003123058.

1. After Philip Morris acquired INBIFO, there is evidence that Philip Morris tried to avoid any direct contact with the research results that emanated from INBIFO.
2. A 1977 memorandum from a Philip Morris research official, Robert Seligman, describes the elimination of written contact between INBIFO and Philip Morris:

We have gone to great pains to eliminate any written contact with INBIFO, and I would like to maintain this structure.

Plaintiffs' Tab 34, PM 2000512794.

1. Handwritten notes from Thomas Osdene, another Philip Morris scientist, describes methods for handling documentation concerning INBIFO:

1. Ship all documents to Cologne. . .


2. Keep in Cologne


3. OK to phone & telex (these will be destroyed)


4. Please make available file cabinet. Jim will put into shape by end of August or beginning Sept.


5. We will monitor in person every 2-3 months.


6. If important letters have to be sent please send to home - I will act on them & destroy.

Plaintiffs' Tab 35, PM 1000130803.

1. The "Jim" referenced in the above document was James Charles, another Philip Morris scientist. Plaintiffs' Tab 36, Charles Depo., p. 48. Charles confirmed in his deposition that Philip Morris did not retain in its files INBIFO research results:

Q. Philip Morris didn't retain its own study -- retain its own copies of the INBIFO studies?


· · ·


A. Philip Morris U.S.A. would receive from INBIFO reports of work they conducted for us at our direction. We -- we have them guidance with what -- respect to what kind of a study we wanted hem to do. They conducted the studies. They would send us the results. We evaluated the results and return the document to INBIFO.


· · ·

Q. Wouldn't it have been easier to just simply keep the documents in a file cabinet in an office -- in a room in Richmond, Virginia, instead of sending them back to Cologne?

A. Yes, it probably would have been easier.


Q. Did you ever express that to anyone?


A. I don't remember.

Plaintiffs' Tab 37, Charles Depo., pp. 50, 59.

• These unusual arrangements for handling scientific research at INBIFO have had an effect in thwarting the discovery proceedings in this case. Judge Fitzpatrick concluded that Philip Morris's failure to search the files of Philip Morris International, Inc. and other subsidiaries (which include INBIFO) in this action was "an egregious attempt to hide information relevant to this action. . . . ." Order Granting Plaintiffs' Motion to Compel Regarding Philip Morris International, March 25, 1997, p. 9 (CLAD #826). Judge Fitzpatrick further stated that Philip Morris's "attempts at hiding documents in the morass of interlocking related organizations shall not be tolerated by this Court. Nor will the Court countenance Philip Morris's self-selected and voluntarily provided set of documents from selected sources." Id., p. 16.
• Although Lorillard implied in Defendants' Joint Brief that it had conducted significant smoking and health research, Lorillard subsequently stated that that was not exactly the case. In a subsequent letter, Lorillard stated, "[A] large proportion of the internal research projects listed in our brief represented product design or product development research as opposed to research into the physiological or psychological effects of cigarette smoking or nicotine." In other words, a "large proportion of the internal research" was not related to smoking and health. Plaintiffs' Tab 9, CLAD # 1497.
• A 1978 memo written by Curtis Judge, former CEO of Lorillard, indicates that scientific research was controlled by attorneys:

We have again "abdicated" the scientific research directional management of the Industry to the "Lawyers" with virtually no involvement on the part of scientific or business management side of the business.

Plaintiffs' Tab 11, Lor 01346204.

• Brown & Williamson's former research director, Robert Sanford, admitted that B&W did not conduct any in-house biological research:

  Q. Brown & Williamson did not do any biological testing in-house, did it, sir?
  

  A. Correct.

Plaintiffs' Tab 12, Sanford Depo., p. 112.

1. Another former Brown & Williamson research director, Earl Kohnhorst, also admitted that B&W did not conduct any in-house smoking and health research:

Brown & Williamson did not have information that was being developed on -- on smoking and -- and health and disease in-house. It was being executed through The Council for Tobacco Research, through this independent scientific group that I have mentioned.

Plaintiffs' Tab 13, Kohnhorst Depo., p. 350.

1. Brown & Williamson did co-sponsor research through the BAT Group in England. In 1985, however, the BAT Group terminated in-house biological research:

Biological Research

All animal work to be terminated a.s.a.p. Finish current work on animal tissues (inc. tissues from animals just killed) and report within 3 months.

Plaintiffs' Tab 14, BATCo 100593368.

• At the same time the BAT Group terminated all in-house biological research, the BAT Group increased research into product modification, in particular nicotine manipulation:

All in-house animal work will cease and future studies involving animals will be done externally under contract. . . . More resources will be provided for research into means of enhancing nicotine transfer to smoke and experimental combustion research, including cigarette paper effects.

Plaintiffs' Tab 15, BAT 301122597 at 607.

• This failure to conduct in-house biological research was not restricted to one tobacco company. As detailed above, this failure was industry-wide. I find this fact significant, as the members of this industry have portrayed the companies as being fiercely competitive.
• Defendants directed my attention to research sponsored by defendants at Harvard University. The funding of this research was controlled by the Committee of Counsel and executives of the companies. A 1976 letter from senior industry counsel, David Hardy, states that:

In Bill Shinn's letter to you of May 21, he solicited at my request, any observations or comments that you may have with regard to the renewal of the Harvard University project. This project has been handled in the past by the Committee of Counsel and the executives of the companies, but I wanted to find out if any member of the Research Liaison Committee had any observations.

Plaintiffs' Tab 44, Lor 03748208.

• The defendants terminated sponsorship of the Harvard University research in 1979. The chief scientist on the project, Gary Huber, in a letter to Shook, Hardy & Bacon, stated his disagreement with the termination decision:

How can a research program that has been productive of good research in an important area where good research is vitally needed now be terminated? How can four major NIH research grants on smoking and health that were awarded under the most competitive of circumstance in areas of crucial national importance now be terminated? How can a program that again has been favorably reviewed by an advisory committee of Harvard Professors now be terminated?

Plaintiffs' Tab 46, LG 0194500 at 01.

• On January 19, 1998, Plaintiffs' counsel sent me correspondence (CLAD 2087) in which they asked me to consider a deposition taken of Dr. Gary Huber on September 20, 1997. This deposition was taken in the case of The State of Texas v. American Tobacco Company, et. al., US District Court, Eastern District of Texas.
• Dr. Huber was the principal investigator in charge of the research program at Harvard University relating to smoking and health. The program was funded in part by a five-year grant, and a three-year extension of that grant, from the tobacco industry.
• Plaintiffs direct my attention to the following excerpts from the Huber transcript:

  Q. Were the [Harvard] studies important information, in your opinion, when you reported those findings to scientists?
  

  A. Yes.
  

  Q. An did you stress their importance to industry officials?
  

  A. Very much so.
  

  Q. And did you want to go forward and do further studies with animals?
  

  A. Absolutely.
  

  Q. Why?
  

  A. Well, we found -- we found very important results and we felt that they should be pursued and they had impact on a number of very serious and important considerations that deserved answers.
  

  Q. Was money forthcoming from the cigarette company sponsors later for you to complete your animal studies after Harvard?
  

  A. It was promised, but it never came.
  

  Q. Were you, in fact, ever able to finish your experiments?
  

  A. No.
  

Transcript, pp. 40-41.

Q. Did you ever have a meeting in a hotel in Boston with industry officials who expressed concern that your research was, quote, "getting too close to some things, end of quote?


A. Yes.


Q. And who was that, sir?


A. It was with industry attorneys.


* * *


Q. Can you tell us approximately when that happened, Doctor?


A. I would anticipate it was in 1980. But I would have to check the records to be sure.

Transcript, pp. 46-47.

Q. Were the implications of your work at Harvard on human subjects with nicotine, with respect to such issues as whether or not nicotine may be a dependent-producing substance or addictive substance?


A. It would support -- it would support the concept that it was a dependent-producing substance.


Q. Did you tell officials of the cigarette companies that, the implications of what you had proved?


A. We presented it to them in great detail.


Q. And was your funding reviewed to continue that study?


A. No.

Transcript p. 56.

Q. Doctor, with respect to your study of nicotine titration or compensation, did your results provide any insight into the question of whether low tar, low nicotine cigarettes were healthier or safer than high tar cigarettes like Marlboro?


A. It raised, I think, extremely important questions and issues that we never got a chance to answer.

Transcript, p. 57.

Q. Now, Dr. Huber, do you believe, sir, that if you had been able to continue your experiments with rats with respect to the rats breathing smoke and developing emphysema, do you believe that you would have been able many years ago to have found the exact way that cigarette smoke causes emphysema?


A. Yes.


Q. Why do you say that sir?


A. We had important information on -- that was advancing science on the mechanisms by which these processes could occur.


Q. And you requested funding from the cigarette companies to continue it?


A. Yes.


Q. It was not forthcoming?


A. Correct.

Transcript, p. 97.

1. In a responsive letter, CLAD 2098, Defendants direct my attention to portions of the Huber deposition which reflect the following testimony by Huber:

The responsibility to design and conduct the research program was the exclusive province of Dr. Huber; there was no research product suppressed.

(Huber Dep. at 139:11-16.)

1. Defendants have also directed my attention to the following testimony:

Q. Okay. And all of the funding and the related research was actually carefully reviewed by an elite Harvard advisory committee, wasn't that correct? Didn't they review what you did?


A. Most of it, not all of it.


Q. Okay. And did the committee ever find any suggestion of any Tobacco Industry influence on any of your research or any of your publications?


A. No.


(Id. at 138:15-23)


***


Q. Now, was your research done at Harvard, though paid for by the cigarette companies, was it a policy of full and open disclosure; that is, were you free to publish your findings?


A. Yes, we had what we called an open door policy: people could at any time, see what research work we were doing, and we were free to pursue any direction or publish any results.

(Huber Dep. at 22: 16-22)

***


Q. Was there any publication that you wanted to make that you were not allowed to make while you were at Harvard, by the Tobacco Industry?


A. No, sir.

(Id. at 139: 17-20)

***


Q. Now did you publish your findings about nicotine compensation?


A. Some yes. Or we presented them -- presented and/or published them.


Q. And were you free to publish?


A. Yes.

(Id. at 17:10-15)

***


Q. Dr. Huber, were your findings regarding -- some of your findings regarding nicotine titration or compensation reported to scientific peers of yours?


A. Yes.


Q. And was it also reported in the newspaper article, in the Boston Globe.


A. Probably.

(Id. at 19: 15-21)

***


Q. Did you publish, in any fashion, to scientists your findings about the rats and emphysema?


A. Yes.

(Huber Dep. at 17: 16-18)

***

Q. Did you personally, also, present these emphysema findings to a group of scientists in an audience?


A. Yes, on several different occasions.

(Huber Dep. at 17: 24-25, 18:1)

• Plaintiffs urge that I infer that the funding of the Harvard Research Program directed by Dr. Huber was discontinued because his research was reaching "dangerous" conclusions. Defendants in their submissions contend that the research was discontinued because of an attitude by Harvard University that was antagonistic to the tobacco industry. In support of this contention, Defendants submitted as attachments to CLAD 2098, tabs D, E, and F. Tab D is a memorandum by Dr. Huber dated May 24, 1979 which fairly could be characterized as a contemporaneous account of a meeting between Dr. Huber and Dean Daniel Tosteson of the Harvard Medical School. Huber is evidentially frustrated that Harvard University did not display an appropriately conciliatory and grateful attitude toward the tobacco industry, and that this perceived deficiency had jeopardized the funding of Huber's program.
• The attachment at Tab E is a second memorandum by Dr. Huber dated May 11, 1979 in which Huber describes a meeting involving himself, a Dr. First, Dean Meadow, and a Ms. Joyce Brinton. In this memorandum, it is apparent that Huber knows that the funding by the tobacco in