Back to Missouri STIC LibraryIN THE CIRCUIT COURT OF THE CITY
OF ST. LOUIS, MISSOURI
STATE OF MISSOURI, ex rel.
JEREMIAH W. (JAY) NIXON,
Attorney General,
Plaintiff,
v.
AMERICAN TOBACCO COMPANY, INC.;
AMERICAN BRANDS, INC.; BROWN AND
WILLIAMSON TOBACCO CORP; B.A.T.
INDUSTRIES, P.L.C.; BATUS HOLDINGS
INC.; BRITISH AMERICAN TOBACCO
HOLDINGS, LTD.; BRITISH AMERICAN
TOBACCO COMPANY, LTD.; LIGGETT &
MYERS, INC.; LIGGETT GROUP, INC.;
THE BROOKE GROUP, LTD; LORILLARD
TOBACCO COMPANY, INC.; LORILLARD
CORPORATION; LOEWS CORPORATION;
PHILLIP MORRIS, INC.; PHILLIP
MORRIS COMPANIES, INC.; R.J.
REYNOLDS TOBACCO COMPANY; R.J.R.
NABISCO, INC.; UNITED STATES
TOBACCO COMPANY; THE COUNCIL FOR
TOBACCO RESEARCH U.S.A., INC.; THE
TOBACCO INSTITUTE, INC.; SMOKELESS
TOBACCO COUNCIL, INC.; and HILL
AND KNOWLTON, INC.,
Defendants.
Case No. 972-1465
PETITION FOR PERMANENT INJUNCTION, COMPENSATORY
AND PUNITIVE DAMAGES, CIVIL PENALTIES,
RESTITUTION AND OTHER COURT ORDERS
Comes now the State of Missouri, at the relation of Attorney General Jeremiah W. (Jay) Nixon, and for its cause of action states:
1. The State of Missouri brings this action pursuant to the State's statutory, common law, and equitable authority to protect the public interest and the public health of the citizens of Missouri, for the purposes of obtaining damages, restitution, civil penalties, punitive damages, declaratory and injunctive relief and other equitable relief against the Defendants for their unlawful actions in connection with the marketing and sale of tobacco products to Missouri citizens.
2. The State of Missouri through this action seeks restitution and damages from the Defendants for all of the expenses and costs that the State has incurred, and continues to incur, in providing health care and other services to the citizens and employees of the state who suffer, who have suffered, and who will suffer in the future, from tobacco related injuries, diseases and illnesses as a result of the Defendants' wrongful conduct and unlawful activities. Such sums have been expended and will continue to be expended in the future in order to pay for health care costs and other related services resulting, in whole or in part, from use by Missouri citizens of tobacco products. The State of Missouri has expended, continues to expend, and will expend in the future, such sums pursuant to various State programs. Additionally, the State of Missouri, pursuant to the Missouri Merchandising Practices Act, Chapter 407, RSMo and other statutory, common law and equitable remedies, seeks to disgorge from the Defendants all monies which they acquired through their unlawful practices and to restore said monies to the consumers of Missouri from whom it was unlawfully acquired. Finally, the State of Missouri by this action seeks, through various forms of equitable relief, including without limitation, injunctive relief to curtail the promotion and sale of tobacco products to minors in Missouri.
PARTIES
3. This action is brought for and on behalf of the State of Missouri at the relation of Jeremiah W. (Jay) Nixon, the duly elected, qualified and acting Attorney General of Missouri.
4. Defendant American Tobacco Company, Inc. ("American Tobacco") is a Delaware corporation whose principal place of business is Six Stamford Forum, Stamford, Connecticut 06904. American Tobacco, sometimes hereinafter referred to as "ATC," manufactures, advertises and sells Lucky Strike, Pall
Mall, Tareyton, American, Malibu, Montclair, Newport, Misty, Iceberg, Silk Cut, Silva Thins, Sobrania, Bull Durham, and Carlton cigarettes and/or other tobacco products throughout the United States. In 1994, American Tobacco was sold to British American Tobacco Co., parent of defendant Brown & Williamson.
5. American Brands, Inc. ("American Brands" but occasionally, collectively as "American Tobacco" or "ATC") is a Delaware corporation whose principal place of business is located at 6 Stamford Forum, Stamford, Connecticut 06904. Defendant American Brands is the parent corporation of, or successor in interest to, American Tobacco. American Brands individually and/or through it's agent, alter ego, subsidiary and/or division, Defendant American Tobacco, manufactures, advertises and sells cigarettes and/or other tobacco products throughout the United States and/or materially participated, conspired, assisted, encouraged and otherwise aided and abetted one or more of the Defendants in doing so.
6. Defendant Brown & Williamson Tobacco Corporation ("Brown & Williamson") is a Delaware corporation whose principal place of business is 1500 Brown & Williamson Tower, Louisville, Kentucky 40202. Brown & Williamson manufactures, advertises and sells Kool, Pall Mall, Carlton, Lucky Strike, Raleigh, Barclay, BelAir, Capri, Richland, Laredo, Eli Cutter, Tareyton and
Viceroy cigarettes and/or other tobacco products throughout the United States.
7. Defendant B.A.T. Industries, P.L.C. ("B.A.T. Industries" but occasionally, collectively as "Brown and Williamson") is a British corporation whose principal place of business is Windsor House, 50 Victoria St., London. Through a succession of intermediary corporations and holding companies, B.A.T. Industries is the sole shareholder of Brown & Williamson.
Through Brown & Williamson, B.A.T. Industries has placed cigarettes into the stream of commerce with the expectation that substantial sales of cigarettes would be made in the United States and in the State of Missouri. B.A.T. Industries is a participant in the conspiracy described herein and has caused harm and affected commerce in Missouri.
8. Batus Holdings, Inc. ("Batus" but occasionally, collectively as "Brown & Williamson"), is a Delaware corporation whose principal place of business is located at 1500 Brown & Williamson Tower, Louisville, Kentucky 40202. Defendant Batus is or was an agent, alter ego, subsidiary and/or division of Defendant B.A.T. Industries, Defendant British-American Tobacco (Holdings), Ltd., and/or Defendant British American Tobacco Company, Ltd. Defendant Batus is a parent corporation of Defendant Brown & Williamson. Batus individually and/or through it's agent, alter ego, subsidiary and/or division, Defendant Brown & Williamson, manufactures, advertises and sells cigarettes throughout the United States and/or materially participated, conspired, assisted, encouraged and otherwise aided and abetted one or more of the Defendants in doing so.
9. Defendant British American Tobacco Company, Ltd. ("BATCO", but occasionally, collectively as "Brown and Williamson"), is a British Corporation whose registered office is at Milbank, Knowle Green, Staines, Middlesex, England TW18 1DY. British American Tobacco Company, Ltd., is or was a related corporation of defendant Brown & Williamson Tobacco Corporation. Both are owned by B.A.T. Industries. BATCO, individually or through its affiliate, alter ego, subsidiary and/or division, defendant Brown & Williamson Tobacco Corporation, manufactures, advertises and sells cigarettes and/or other tobacco products throughout the United States. BATCO is a participant in the conspiracy described herein and has caused harm and affected commerce in the State of Missouri.
10. British-American Tobacco (Holdings) Ltd. ("British Holdings" but occasionally, collectively as "Brown & Williamson"), is a British corporation whose registered office is a Millbank, Knowle Green, Staines, Middlesex TW18 1DY, United Kingdom. Defendant British Holdings is or was a parent corporation of Defendant Brown & Williamson and Defendant Batus. British Holdings individually and/or through its agents, alter egos, subsidiaries and/or divisions, Defendants Brown & Williamson and Batus, manufactures, advertises and sells cigarettes and/or other tobacco products throughout the United States and/or materially participated, conspired, assisted, encouraged and otherwise aided and abetted one or more of the Defendants in doing so.
11. Defendant Liggett & Myers, Inc. ("Liggett") is a Delaware corporation whose principal place of business is Main and Fuller Street, Durham, North Carolina. Liggett manufactures, advertises and sells Chesterfield, Decade, L&M, Pyramid, Dorado, Eve, Stride, Generic and Lark cigarettes and/or other tobacco products throughout the United States.
12. Liggett Group, Inc. ("Liggett Group" but occasionally, collectively as "Liggett"), is a Delaware corporation whose principal place of business is located at 300 North Duke Street, Durham, North Carolina 27701. Defendant Liggett is the parent corporation of Defendant Liggett & Myers. Liggett Group individually and/or through its agent, alter ego, subsidiary and/or division, Defendant Liggett & Myers, manufactures, advertises and sells cigarettes and/or other tobacco products throughout the United States and/or materially participated, conspired, assisted, encouraged and otherwise aided and abetted one or more of the Defendants in doing so.
13. The Brooke Group, Limited ("Brooke Group" but occasionally, collectively as "Liggett"), is a Delaware corporation with its principal place of business located at 300 North Duke Street, Durham, North Carolina. Brooke Group is the parent corporation of Defendant Liggett. Brooke Group individually and/or through its agent, alter ego, subsidiary and/or division, Defendant Liggett, or Liggett Group manufactures, advertises and sells cigarettes and/or other tobacco products throughout the United States and/or materially participated, conspired, assisted, encourage and otherwise aided and abetted one or more of the Defendants in doing so.
14. Defendant Lorillard Tobacco Company, Inc. ("Lorillard"), is a Delaware corporation whose principal place of business is 1 Park Avenue, New York, New York 10016. Lorillard manufactures, advertises and sells Old Gold, Kent, Triumph, Satin, Max, Spring, Newport and True cigarettes and/or other tobacco products throughout the United States.
15. Defendant Lorillard Corporation (Lorillard Corp. but occasionally, collectively as Lorillard) is a Delaware corporation whose principal place of business is located at 1 Park Avenue, New York, New York 10016 Lorillard Corporation is wholly-owned or division of Loews Corporation. Lorillard Corporation individually and/or through its agent, alter ego, subsidiary and/or Division, manufactures, advertises and sells cigarettes and/or other tobacco products throughout the United States both individually and through its agent or alter ego, Lorillard Tobacco Company, Inc.
16. Defendant Loews Corporation (Loews, but occasionally, collectively as Lorillard) is a Delaware Corporation whose principal place of business is located at 1 Park Avenue, New York, New York 10016. Defendant Loews is the parent corporation of defendant Lorillard. Loews individually and/or through its agents, alter egos, subsidiaries and/or divisions Lorillard or Lorillard Corp. manufactures, advertises and sells cigarettes and/or other tobacco products throughout the United States and/or materially participated, conspired, assisted, encouraged and otherwise aided and abetted one or more of the defendants in doing so.
17. Defendant Philip Morris Inc. ("Philip Morris U.S.A", but occasionally, collectively "Phillip Morris"), is a Virginia corporation whose principal place of business is 120 Park Avenue, New York, New York 10017. Philip Morris U.S.A. manufactures, advertises and sells Philip Morris, Merit, Cambridge, Marlboro, Benson & Hedges, Virginia Slims, Alpine, Dunhill, English Ovals, Galaxy, Players, Saratoga and Parliament
cigarettes and/or other tobacco products throughout the United States.
18. Philip Morris Companies, Inc. ("Philip Morris"), is a Virginia corporation whose principal place of business is located at 120 Park Avenue, new York, New York 10016. Defendant Philip Morris is the parent corporation of Defendant Philip Morris USA. Philip Morris individually and/or through its agent, alter ego, subsidiary, and/or division, Defendant Philip Morris USA, manufactures, advertises and sells cigarettes and/or other tobacco products throughout the United States and/or materially participated, conspired, assisted, encouraged and otherwise aided and abetted one or more of the Defendants in doing so.
19. Defendant R.J. Reynolds Tobacco Company ("Reynolds" or "RJR") is a New Jersey corporation whose principal place of business is Fourth & Main Streets, Winston-Salem, North Carolina 27102. Reynolds manufactures, advertises and sells Camel, Vantage, Now, Doral, Winston, Sterling, Magna, More, Century, Bright Rite and Salem cigarettes and/or other tobacco products throughout the United States.
20. R.J.R. Nabisco, Inc. (hereinafter generally "Nabisco" but occasionally, collectively as "Reynolds"), is a Delaware corporation whose principal place of business is 1301 Avenue of the Americas, new York, New York 10015. Nabisco is the parent corporation of R.J. Reynolds. Nabisco individually and/or through its agents, alter ego, subsidiary, and/or division, Defendant R.J. Reynolds, manufactures, advertises and sells cigarettes throughout the United States and/or participated, conspired, assisted, encouraged and otherwise aided and abetted one or more of the Defendants in doing so.
21. Defendant United States Tobacco Company ("U.S. Tobacco") is a Delaware corporation whose principal place of business is 100 West Putnam Avenue, Greenwich, Connecticut. U.S. Tobacco manufactures, advertises and sells Sano cigarettes. U.S. Tobacco also manufactures, advertises and sells approximately 88 percent of the smokeless tobacco (snuff and chewing tobacco) sold in the United States under various brand names including
Happy Days, Skoal, Red Seal, Bruton, WB Cut and Copenhagen.
22. Each of the defendant cigarette and tobacco manufacturers advertised, sold and promoted their tobacco products in Missouri.
23. Defendant The Council for Tobacco Research U.S.A., Inc. (the "CTR"), successor in interest to Tobacco Industry Research Committee (TIRC), is a New York nonprofit corporation with its principal place of business at 900 3rd Avenue, New York, New York 10022. At all relevant times, the CTR and the TIRC operated as public relations and lobbying arms of the Tobacco Companies and as agents and employees of the
Tobacco Companies. They also acted as facilitating agencies in furtherance of Defendants' combination and conspiracy as described in this petition. In doing the acts alleged, the CTR and the TIRC acted within the course and scope of their agency and employment, and acted with the consent, permission and authorization of each of the Tobacco Companies. All actions
of the CTR and the TIRC alleged were ratified and approved by the officers or managing agents of the Tobacco Companies. The CTR and the TIRC have been involved continuously in the conspiracy described, and the actions of the CTR and the TIRC have affected commerce and caused harm in Missouri.
24. Defendant The Tobacco Institute, Inc., ("Tobacco Institute" or "TI") is a New York nonprofit corporation with its principal place of business at 1875 I Street NW, Suite 800, Washington, D.C. 20006. At all relevant times, the Tobacco Institute operated as a public-relations and lobbying arm of
the Tobacco Companies and was an agent and employee of the Tobacco Companies. It also acted as a facilitating agency in furtherance of the combination and conspiracy of Defendants described in this petition. In committing the acts alleged, the TI acted within the course and scope of its agency and employment, and acted with the consent, permission and
authorization of each of the Tobacco Companies. All actions of the TI alleged in this complaint were ratified and approved by the officers or managing agents of the Tobacco Companies. The TI has been involved in the conspiracy described in this complaint, and the actions of the TI have affected commerce and caused harm in Missouri.
25. Smokeless Tobacco Council, Inc. ("STC"), is a New York non-profit corporation whose principal place of business is 1627 K Street Northwest, Washington, D.C. STC ostensibly was formed for reasons of supporting objective research into the biologic consequences of the use of smokeless tobacco. Like CTR, it was used to further the goals of the conspiracy. Dominated by U.S. Tobacco, STC also included as members several small producers of smokeless tobacco and was financially supported by several of the Big Six Tobacco Companies, including at least Brown & Williamson, Lorillard and Reynolds. Personnel from the Tobacco Companies actively participated in STC activities. At all relevant times, STC operated as a public relations and lobbying arm of the Tobacco Companies and as agent and employee of the Tobacco Companies. It also acted as a facilitating agency in the furtherance of Defendants' combination and conspiracy as described in this Petition. In doing the things alleged, STC acted within the course and scope of its agency and employment, and acted with the consent, permission and authorization of each of the Tobacco Companies. All actions of STC alleged were ratified and approved by the officers of managing agents of the Tobacco Companies. STC has been involved continuously in the conspiracy described and its actions have affected commerce and caused harm in Missouri.
26. Defendant Hill & Knowlton, Inc. ("Hill & Knowlton"), is an international public-relations firm with offices located in major American cities and whose principal place of business is 420 Lexington Avenue, New York, New York. Hill & Knowlton played an active and knowing role in the conspiracy complained of, aiding the circulation and/or publication of many of the false statements of the tobacco industry attributable to TIRC and CTR. Hill & Knowlton has been the primary advertising agency responsible for disseminating the false and misleading information in question, in its capacity as the advertising and public-relations agency for The Tobacco Institute, the CTR and several members of the Tobacco Industry, including Liggett, Philip Morris, Reynolds, American Tobacco and Lorillard. In the
course of such representation, Hill & Knowlton aided these Defendants in creating and issuing false information and covering up the truth concerning the Tobacco Industry, the link between smoking and cancer or other health hazards, the addictive nature of smoking, and the true nature of the activities of the TIRC/CTR and its relationship to the industry. Hill & Knowlton has been involved in the wrongful conduct and conspiracy since its creation.
27. The above-named Defendants are sometimes collectively referred to herein as "Tobacco Industry," "Tobacco Companies" or "Tobacco Cartel."
JURISDICTION
28. Defendants have transacted business in the State of Missouri and in the City of St. Louis, directly and through their servants, agents, employees and representatives by advertising and selling cigarettes and/or other tobacco products.
29. This Court has jurisdiction over the subject matter of this action pursuant to, among other authorities, the Missouri Merchandising Practices Act § 407.100, the Missouri Antitrust Act, 416.061, § 478.070, § 527.010,and § 27.060, RSMo 1994. The Court has personal jurisdiction over the non-resident Defendants pursuant to, among other authority, § 506.500, RSMo 1994.
VENUE
30. Venue is proper in the City of St. Louis, pursuant to, among other authorities, the Missouri Merchandising Practices Act § 407.100, the Missouri Anti-Trust Act § 416.131 and § 508.010, RSMo 1994. The Defendants have advertised and sold their products in the City of St. Louis, and, in addition, are non-resident organizations without a principal office in the State of Missouri.
COMMON FACTUAL ALLEGATIONS
A. Background
31. Today, some 50 million Americans smoke and, according to current trends, 22 percent of adult Americans will still be smokers in 2000. In the latter half of the 20th century, some 10 million Americans have been killed by smoking-related disease. This year (and every year into the foreseeable future), nearly half a million Americans will die prematurely due to disease caused by cigarette smoking. Based upon current smoking trends, of the American children alive today, more than 5 million will be killed by cigarette disease during the 21st century.
32. Cigarette and smokeless-tobacco diseases share a common root cause: a highly addictive product that has been fraudulently and falsely promoted by the corporations comprising the Tobacco Cartel. Smoking causes lung cancer. It is also virtually the only cause of throat cancer and emphysema. Smoking-caused heart disease actually results in more deaths every year than lung cancer. Smoking is responsible for approximately one-fourth of all cancer deaths as well as one-third of all heart-disease deaths.
33. Several factors account for the persistence of cigarette smoking. First, partly as a result of the Tobacco Industry's false and fraudulent advertising, consumers began to smoke before it was proven that smoking is a cause of lung cancer and other diseases. Second, the long latency period
between smoking initiation and disease contraction masked the causal relationship for decades. Third, cigarettes contain large amounts of nicotine, an addictive substance, which makes it difficult for a person to stop smoking. Fourth, the Tobacco Industry has conspired not to compete on the basis of relative health risk, to restrict output in safer and alternate products, and to create confusion as to whether smoking is really harmful and to make it appear that there is a legitimate, good-faith scientific dispute over the health impact of smoking, while presenting cigarette smoking in an attractive, youthful and positive way; concealing all the while that the product is, in fact, highly addictive and dangerous.
34. Despite their knowledge that cigarette smoking is extremely addictive, the Tobacco Companies to this day, pursuant to their conspiracy, deny that smoking is addictive or the cause of disease. Recently, and in furtherance of the conspiracy, each of the CEOs of the defendant Tobacco Companies testified under oath before Congress that smoking was not addictive.
B. The Cartel's Pre-Conspiracy Advertising and
Promotional Activities: False Claims
of Health and Safety
35. The promotional activities and conduct of the Tobacco Industry, after the conspiracy (which is described below) was agreed to and implemented, can only be understood in the context of the fraudulent and false claims they had engaged in preconspiracy regarding cigarette smoking and health. Until the mid-1950s, explicit or implied health claims and/or medical
endorsement for smoking were major advertising-campaign themes for many cigarette brands and in the public statements issued by the Tobacco Industry.
36. Cigarette smoking increased dramatically in the first half of the 20th century. With the increase of cigarette smoking came an increase in lung cancer. Dr. Alton Ochsner, a New Orleans surgeon and regional medical director of the American Cancer Society, told an audience at Duke University on October 23, 1945, that "there is a distinct parallelism between the incidence of cancer of the lung and the sale of cigarettes . .
. . [T]he increase is due to the increased incidence of smoking and . . .smoking is a factor because of the chronic irritation it produces."
37. In 1946, Tobacco Company chemists themselves reported concern for the health of smokers. A 1946 letter from a Lorillard chemist to its manufacturing committee states that "[c]ertain scientists and medical authorities have claimed for many years that the use of tobacco contributes to cancer development in susceptible people. Just enough evidence has been
presented to justify the possibility of such a presumption."
38. Despite evidence showing their cigarettes caused lung disease and cancer, the Tobacco Companies chose sales over public health and safety. Starting in the 1930s and continuing until the mid-1950s, the Tobacco Companies made express claims and warranties as to the healthiness of their products with reckless disregard of the falsity of their claims and the
consequential adverse health impact on consumers. Examples of these health warranties include the following: Old Gold: "Not a cough in a Carload"; Camel: "Not a single case of throat irritation due to smoking Camels"; Philip Morris: "The Throat-tested cigarette."
39. One of the key themes used to promote cigarette smoking during this period was a promise that individual cigarette brands were either "less irritating" or that "harmful irritants" had been removed. At one point or another during this period every major cigarette brand made a false claim regarding health and/or irritation. These pre-1954 advertisements and presentations demonstrate Defendants' understanding that consumers wanted safer products and, as a result, the Tobacco Companies engaged in vigorous competition on the basis of claims of health and safety as detailed above and elsewhere in this complaint.
C. The 1953 "Big Scare" and Beginning of the
Industry Conspiracy to Suppress the
Truth and Curtail Competition
40. The Defendants and their co-conspirators knew that published information about health risks would (i) increase consumer demand for safer tobacco products, (ii) induce some competitors to promote their own brands or denigrate competing brands on the basis of relative health risk, (iii) materially reduce their profits and market shares, and (iv) increase the
likelihood of government regulation and decrease the likelihood that they could shift to the public and public agencies the health costs caused by use of tobacco products. Armed with this knowledge, and as set forth below, Defendants ultimately agreed not to compete in the market based on health claims or in the market for "safer" or alternative products and agreed to
suppress adverse information concerning health risks and addiction.
41. In the early 1950s, scientists published two significant scientific studies warning of the health hazards of cigarettes. The first was published in 1952 by Dr. Richard Doll, a British researcher, who found that lung cancer was more common among people who smoked and that the risk of lung cancer was directly proportional to the number of cigarettes smoked. A
second study was published in December 1953 by Dr. Ernest Wynder and others of the Sloan-Kettering Institute, whose experiments with mice confirmed the cancer-causing properties of cigarettes. The widespread reporting of these studies caused what cigarette company officials called the "Big Scare."
42. The cigarette industry responded quickly to the Big Scare, which by late 1953 had caused a decrease in consumption of tobacco products and in the stock prices of many of the Tobacco Companies. Thus, on December 14, 1953, in the direct aftermath of the Wynder study and the public concern over it, Brown & Williamson president Timothy V. Hartnett circulated a
memorandum to his counterparts at other defendant Tobacco Companies and set out his proposals on how the industry should collectively deal with the "health issue."
43. Hartnett proposed a two-pronged collective response to his competitors "to get the industry out of this hole": (a) "unstinted assistance to scientific research," and the most difficult part of this effort was the group's deciding "how to handle significantly negative research results if, as, and when they develop"; and (b) "the best obtainable" public-relations
counsel since none "has ever been handed so real and yet so delicate a multimillion dollar problem."
44. Hartnett's actions were an invitation to his competitors to agree to restrain independent economic best interest in favor of collusion.
45. The next day, December 15, 1953, accepting Hartnett's offer to conspire, the presidents of the leading Tobacco Companies met at an extraordinary gathering in the Plaza Hotel in New York City. Present were the presidents of American Tobacco, Brown & Williamson, Lorillard, Philip Morris, R.J. Reynolds and U.S. Tobacco. This gathering was unprecedented because it was the first time the Tobacco Companies had met together outside occasional dinners. Also in attendance was Hill & Knowlton, which coordinated the meeting and was to play a major role in formulating and executing the industry's response.
46. According to a Hill & Knowlton memorandum summarizing the meeting, the companies exchanged proprietary information and "voluntarily admitted" that "their own advertising and [past] competitive practices have been a principal factor in creating a health problem," and acknowledged that they had "informally talked over the problem and will try and do something about
it." Defendants realized that the subject of doing something collectively about competitive advertising practices "is one of the important public relations activities that might very clearly fall within the purview of the antitrust act." To conceal their intentions collectively to restrain competition, they concluded, "it is doubtful that we will be able to make any formal recommendation with regard to the
advertising or selling practices and claims."
47. At the Plaza Hotel meeting, the Defendants entered into a combination and conspiracy to cease to compete on the basis of relative health risks, an agreement that violates Missouri's prohibitions on unreasonable restraints of trade.
48. At the time of the December 15, 1953 meeting, the cigarette industry did not have a trade association, and cigarette manufacturers had never before met in a formal business meeting or discussed business because, according to the Hill & Knowlton memorandum, the Tobacco Companies were prevented by a 1911 dissolution decree and criminal convictions for price
fixing in 1939 from carrying on many group activities.
49. Despite the dangers, the competitors met because they viewed the current problem "as being extremely serious and worth of drastic action." An indication of the seriousness of the problem was "that salesmen in the industry are frantically alarmed and that the decline in tobacco stocks on the stock exchange market has caused grave concern."
50. The agreement reached at the Plaza Hotel, to conceal adverse information and not compete on the basis of health, was to be a permanent fixture of Defendants' future relationship. According to the Hill & Knowlton memorandum, "[e]ach of the company presidents attending emphasized the fact that they consider the program to be a long term one," and the meeting participants were "emphatic in saying that the entire activity is a long-term, continuing program, since they feel the problem is one of promoting cigarettes and protecting them from these and other attacks that may be expected in the future."
51. Thus, at the December 15, 1953 meeting, the course of conduct agreed to included but was not limited to:
a. "The chief executive officers of all the leading companies R.J. Reynolds, Philip Morris, Benson & Hedges, U.S. Tobacco Company, Brown & Williamson have agreed to go along with a public relations program on the health issue."
b. "Because of the antitrust background, the companies do not favor the incorporation of a formal association. Instead, they prefer strongly the organization of an informal committee which will be specifically charged with the public relations function and readily identified as such."
c. Hill & Knowlton, a public relations firm, was to play a central role in the industry association. "The current plans are for Hill & Knowlton to serve as the operating agency of the companies, hiring all the staff and disbursing all funds."
d. All of the leading manufacturers, except Liggett, agreed to join in the public-relations strategy. Liggett decided not to participate at that time "because that company feels that the proper procedure is to ignore the whole controversy."
52. In furtherance of the conspiracy, nine days later, Hill & Knowlton presented a detailed recommendation to the Tobacco Companies and their co-conspirators. The recommendation recognized the importance of gaining public trust, and avoiding the appearance of bias, if the industry's "pro-cigarette" public-relations strategy was to succeed. According to the
memorandum:
a. "[T]he grave nature of a number of recently highly publicized research reports on the effects of cigarette smoking . . . have confronted the industry with a serious problem of public relations."
b. "It is important that the industry do nothing to appear in the light of being callous to considerations of health or of belittling medical research which goes against cigarettes."
c. "The situation is one of extreme delicacy. There is much at stake and the industry group, in moving into the field of public relations, needs to exercise great care not to add fuel to the flames."
53. John Hill suggested that the word "research" be included in the name of the Committee. The suggestion was apparently taken and, thus, an organization designed to pursue a very delicate "public relations function" was given the intentionally misleading name of the "Tobacco Industry
Research Committee."
54. Five of the "Big Six" cigarette manufacturers were original members of the TIRC. Liggett did not join until 1964. In 1964, the TIRC changed its named to the Council for Tobacco Research (the "CTR"). The industry formed equivalent organizations in other countries as well, including the Tobacco
Advisory Committee, formerly Tobacco Research Council in the United Kingdom, and Verbrand der Cigarettenindustrie in Germany. The U.S. companies, either directly or through affiliates, are members of the other organizations.
55. The agreement that the industry would not compete based on claims of health was documented and communicated in a number of ways. One example is a June 21, 1954 Hill & Knowlton memorandum: Early in the life of the Tobacco Industry Research Committee, it was accepted as a basic principle that every effort should be made to avoid stimulating more adverse publicity and controversy on the subject of tobacco and health.
The principle has been and will continue to be carefully adhered to in the work carried on for the committee.
56. The "every effort" referred to the agreement not to compete on the basis of health claims for fear of stirring up any controversy regarding health and safety.
57. A July 31, 1954 Hill & Knowlton "Confidential Memorandum" acknowledges that the formation of the TIRC was the result of a decision that "joint action" was imperative.
58. Defendants were keenly aware that the agreement creating the TIRC was a restraint on competition: "On the Continent individual companies and monopolies have agreed to pool research on the health question, thereby reducing it as a basis for competition."
59. British research conducted by the Tobacco Manufacturers' Standing Committee ("TMSC"), an equivalent organization to the TIRC (and including companies, such as British American Tobacco, which were affiliated with U.S. companies) had known competitive impacts. B.A.T.'s Chairman, Sir
Charles Ellis, said, "The Board has decided that if this Company [B.A.T.] makes any significant scientific discovery clearly relevant to health it will share its knowledge with its co-members of TMSC and not seek to obtain competitive commercial advantage."
60. In compliance with the noncompetition conspiracy, at least one of the companies, American Tobacco, did nothing on its own to evaluate the risks of use of its products: "The Council for Tobacco Research was the source of expertise on that."
61. To further the existing conspiracy, a second trade group, the Tobacco Institute, was formed by cigarette manufacturers in 1958. It performs a variety of functions and provided opportunities for the conspirators to exchange information, to police the agreement and otherwise to coordinate
activities.
D. Representations and Special Undertakings
by the Industry
62. The cigarette industry announced the formation of the TIRC on January 4, 1954, with newspaper advertisements placed in virtually every city with a population of 50,000 or more, reaching a circulation of more than 43 million Americans. The advertisement was captioned "A Frank Statement to
Cigarette Smokers" and was run under the auspices of the TIRC with, inter alia, five of the Big Six manufacturers listed by name. The advertisement stated as follows:
"A Frank Statement to Cigarette Smokers"
Recent reports on experiments with mice have given wide publicity to a theory that cigarette smoking is in some way linked with lung cancer in human beings.
Although conducted by doctors of professional standing, these experiments are not regarded as conclusive in the field of cancer research. However, we do not believe that any serious medical research, even though its results are inconclusive should be disregarded or lightly dismissed.
At the same time, we feel it is in the public interest to call attention to the fact that eminent doctors and research scientists have publicly questioned the claimed significance of these experiments.
Distinguished authorities point out:
a. That medical research of recent years indicates many possible causes of lung cancer.
b. That there is no agreement among the authorities regarding what the cause is.
c. That there is no proof that cigarette smoking is one of the causes.
d. That statistics purporting to link cigarette smoking with the disease could apply with equal force to any one of many other aspects of modern life. Indeed the validity of the statistics themselves is questioned by numerous scientists.
We accept an interest in people's health as a basic responsibility, paramount to every other consideration in our business.
We believe the products we make are not injurious to health.
We always have and always will cooperate closely with those whose task it is to safeguard the public health.
For more than 300 years tobacco has given solace, relaxation and enjoyment to mankind. At one time or another during these years critics have held it responsible for practically every disease of the human body. One by one of these charges have been abandoned for lack of evidence. Regardless of the record of the past, the fact that cigarette smoking today should even be suspected as a cause of a serious disease is a matter of deep concern to us.
Many people have asked us what we are doing to meet the public's concern aroused by the recent reports. Here is the answer:
a) 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 addition to what is already being contributed by individual companies.
b) 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.
c) 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.
This statement is being issued because we believe the people are entitled to know where we stand on this matter and what we intend to do about it.
Listed as sponsors of this announcement were, inter alia, the American Tobacco Company, Brown & Williamson Tobacco Corporation, P. Lorillard Company, Philip Morris Co. Ltd., Inc., R.J. Reynolds Tobacco Company and United States Tobacco Company.
By issuing this publication and others that followed, the industry undertook a special and continuing duty to protect the public health by representing that it would conduct and disclose unbiased and authenticated research on the health risks of cigarette smoking. When they made this representation, Defendants intended that the public and government regulators believe and rely upon it, and knew or should have known that
consumers would consider the representation material to their decisions to purchase and smoke cigarettes, and that government regulators would consider the representation material to their decisions to regulate cigarettes. At that time, and continuing to the present, Defendants intended and/or knew or should have known that their failure to fulfill the duty they undertook would directly increase the health-care costs to the State of Missouri. The issuance of this statement and others that have
followed was also intended by Defendants to assure public health officials that the industry would respond to health issues in an honest manner so that no government regulation was necessary. The issuance of this publication was an integral step in the conspiracy to suppress and conceal information that might reduce the Cartel's sale of tobacco products.
E. Repeated False Promises to the Public
63. Despite increasing internal knowledge of the undisclosed dangers of cigarette smoking, Defendants continued, renewed and repeated the representations and undertakings of the 1954 "Frank Statement to Cigarette Smokers." The cigarette industry continued to pursue its two-pronged strategy of falsely representing the objectivity of industry research to the public to gain credence, and then misrepresenting, distorting and
suppressing information to support its pro-cigarette position.
64. Other public statements issued by the Tobacco Industry through the TIRC/CRT or the Tobacco Institute repeated several themes: (1) that the industry was working to report the full and complete truth concerning tobacco and health, (2) that those working on reporting the truth were "independent" scientists and (3) that the results of this independent research cast grave doubt on any study linking tobacco use with health problems. These statements include but are not limited to the following:
a. On June 4, 1955, the TIRC issued a release entitled "Antismoking Theories Not Based on Scientific Knowledge." The release represented that according to the TIRC's associate scientific director, "little is established scientifically about tobacco effects on the heart"; tobacco has "even been reported as killing various harmful bacteria." The release represented that the TIRC "is supporting scientific investigation into many phases of tobacco use and human health in order to get the facts."
b. On December 16, 1957, the TIRC issued a release representing that "Extensive scientific research now underway into tobacco use does not substantiate generalized charges against smoking as a cause of cancer." Reporting on the findings of Dr. Clarence Cook Little, "Scientific Director" of the TIRC, the release represented that "no substance has been found in tobacco smoke known to cause cancer." According to Dr. Little, the research program was designed "solely to obtain new information and to advance human knowledge in every possible phase of the tobacco and health relationship."
c. On or about December 27, 1958, the TIRC issued a release representing that "during the past year many scientists of high professional standing have produced additional evidence and opinions that challenge the validity of broad charges made against tobacco use." According to the TIRC, its research had developed several "essential facts," including that "the cause or causes of lung cancer remain undetermined" and that "compelling doubts have been raised about statistics and their interpretations involving smoking and health." The release concluded with the following promise:
At its formation in January 1954, the Tobacco Industry Research Committee stated its fundamental position: "We believe the products we make are not injurious to health. We are providing aid and assistance to research efforts into all phases of tobacco use and health."
That statement and pledge are reaffirmed today by members of the Tobacco Industry Research Committee.
d. On March 28, 1960, the TIRC issued a release challenging any link between smoking and lung cancer. In the release the TIRC repeated that "we have frankly accepted a responsibility for financing independent research into health problems, including lung cancer, in an effort to get needed facts and evidence."
e. George Allen, president of the Tobacco Institute, issued a report pledging that the TI, for the benefit of the "public interest," would "encourage the kind of research that will provide the necessary facts." Further, Allen promised that this type of research "is what the industry has tried to do in the past" and "is what we shall do in the future, until enough facts are known to provide solutions to the health questions involved."
f. In 1962, the TIRC issued a release announcing it was in its ninth year of supporting research by independent scientists relevant to questions about tobacco and health. The release represented that "the tobacco industry continues its support of the search for truth and knowledge."
g. On May 28, 1962, the TIRC in a release confirmed that its purpose was to "make the facts known to the public."
h. In 1964, the TIRC issued a "year end statement" representing that its research "will intensify," that $7.25 million had been apportioned to date involving 125 grants, and that the TIRC "is dedicated to support its program of research by independent scientists until all the answers are known."
i. In 1979, the Tobacco Institute issued a document entitled "Tobacco Industry Research on Smoking and Health." In it, the TI represented that "[t]here are still eminent scientists who question whether a causal relationship has been proven between cigarette smoking and human disease." The report went on to claim that the industry had a great desire to "learn the truth":
[A] major portion of this scientific inquiry has been financed by the people who knew the most about cigarettes and have a great desire to learn the truth ù the tobacco industry.
The industry has committed itself to this task in the most objective and scientific way possible.
The report describes how the industry spent $82 million in research "into all phases of tobacco use and health." Further the report proclaimed that "the findings are not secret" and reaffirmed the commitment to the tobacco industry:
From the beginning the tobacco industry has believed the American people deserve objective, scientific answers.
With this credo in mind, the tobacco industry stands ready today to make new commitments for additional valid scientific research that may shed light on the question of smoking and health.
65. Additional representations were made by the Tobacco Companies themselves repeating the promise that they would investigate and report all facts relating to smoking and health. For example:
a. On February 28, 1956, the president of ATC issued a release indicating that "many highly respected medical scientists challenge the anti-tobacco claims."
b. On November 14, 1957, ATC issued a release representing that its own research produced "evidence directly contradicting the theory that smoking causes lung cancer or heart disease."
c. On April 9, 1962, ATC issued a release indicating that research contradicting any statistical association between cigarettes and higher death rates was "very difficult to refute."
d. On June 4, 1963, ATC issued a release, quoting Dr. Robert Heiman, assistant to the president and prime author of studies refuting any link between smoking and health. In the release, Heiman claimed that workers for the company smoked twice as much as the average person while having a mortality rate of 29 percent below average.
e. On October 3, 1963, ATC again issued a release, this time citing Heiman for proof that the statistical association between smoking and lung cancer is "fallacious" and leads to "absurd consequences."
f. In 1967, ATC issued a release describing a 46-page booklet prepared by the Tobacco Industry which "refutes anticigarette charges." ATC called the evidence on smoking and health "an open one," refuted the studies linking smoking with cancer in mice, and claimed that "no one does more" about smoking and health than "The Tobacco People."
No one does more. The tobacco industry supports more scientific research into the problems than any other source. . . .
The release went on to claim, "The tobacco industry continues to endure unfair and unjustified harassment from government and private sources." ATC also claimed that "the cold hard fact remains that no clinical or biological evidence has been produced which demonstrates how cigarettes relate to cancer or any other disease in human beings."
66A Additional representations were made in 1970 when the cigarette industry, through its lobbying group, the Tobacco Institute, placed a number of announcements similar to the 1954 "Frank Statement." For example, on or about December 1, 1970, the TI issued a release entitled "The question about smoking and health is still a question." According to the release, "eminent scientists" question "whether any causal relationship has been proven between cigarette smoking and human disease." With respect to research, the release represented that "a major portion of this scientific inquiry has been financed by people who know the most about cigarettes and have a great desire to learn the truth . . . the tobacco industry. And the industry has committed itself to this task in the most objective and scientific way possible." The release went on to describe the CTR and its support for research by "independent scientists." According to the release, all of their work has been published. The release concluded with the following promises:
From the beginning the tobacco industry has believed that American people deserve objective scientific answers.
With this credo in mind, the tobacco industry stands ready today to make commitments for additional valid scientific research that offers to shed light on new facets of smoking and health.
67A Far from being independent, scientists often had grants reviewed by counsel for the Tobacco Companies before their approval. So entwined were the Tobacco Company lawyers in the "independent" work of the CTR that the CTR set up a storage and retrieval system for the lawyers of five companies.
68A Another industry publication in 1970 stated that the industry believed the American public is "entitled to complete, authenticated information about cigarette smoking and health. The tobacco industry recognizes and accepts a responsibility to promote the progress of independent scientific research in the field of tobacco and health."
69A Yet another announcement co-sponsored by the TIRC and the Tobacco Industry, called "A Statement about Tobacco and Health," stated:
We recognize that we have a special responsibility to the public, to help scientists determine the facts about tobacco and health, and about certain diseases that have been associated with tobacco use.
We accepted this responsibility in 1954 by establishing the Tobacco Industry Research Committee, which provides research grants to independent scientists. We pledge continued support of this program of research until the facts are known.
* * *
Scientific advisors inform us that until much more is known about such diseases as lung cancer, medical science probably will not be able to determine whether tobacco or any other single factor plays a causative role, or whether such a role might be direct or indirect, incidental or important.
We shall continue all possible efforts to bring the facts to light. In that spirit we are cooperating with the Public Health Service in its plan to have a special study group review all presently available research.
70A In 1972, Tobacco Institute president Horace Kornegay testified before Congress:
Let me state at the outset that the cigarette industry is as vitally concerned or more so than any other group in determining whether cigarette smoking causes human disease, whether there is some ingredient as found in cigarette smoke that is shown to be responsible and if so what it is.
That is why the entire tobacco industry . . . since 1954 has committed a total of $40 million for smoking and health research through grants to independent scientists and institutions.
71A Reynolds chairman Bowman Gray told Congress in 1964: "If it is proven that cigarettes are harmful, we want to do something about it regardless of what somebody else tells us to do. And we would do our level best. It's only human."
72A In 1984, Reynolds placed an editorial-style announcement in the New York Times stating:
Studies which conclude that smoking causes disease have regularly ignored significant evidence to the contrary. These scientific findings come from research completely independent of the tobacco industry.
73A Each of the representations to the public that defendant Tobacco Companies were sponsoring independent objective research, that they were endeavoring to bring the truth to light, and that the public could therefore rely upon the statements made, were false and deceptive. These misrepresentations were designed to gain the trust of the public and public-health authorities to better distort and suppress substantive information about smoking and health.
74A In addition to the campaign of disinformation perpetrated by TIRC, CTR and the Tobacco Institute, defendant companies disseminated their own misinformation. For example, Brown & Williamson was responsible for Project Truth, an operation consisting of articles and releases about the "smoking/health controversy." Project Truth took issue with reports linking tobacco use and smoking, in part because certain of these studies use laboratory techniques such as painting the backs of mice with nicotine concentrates. While Project Truth was ongoing, internally BATCO was conducting a project confirming the validity of linking smokers and cancer through the use of skin-painting tests, as set forth below.
F. The True Nature of the TIRC: A "Front"
for the Tobacco Cartel
75A The TIRC was an agent of the conspirators and operated, among other things, to facilitate their implementation of the Plaza Hotel agreement/conspiracy to suppress and/or misrepresent information and not to compete in the development of a "safer" cigarette. Its acts were the acts of Defendants in furtherance of their covenant not to compete.
76A The TIRC was physically established in the Empire State Building, one floor below the Hill & Knowlton offices. Internal documents confirm that Hill & Knowlton, and not independent scientists as represented, actually ran the TIRC.
77A In 1954, the TIRC's first year of operation, 35 staff members of Hill & Knowlton worked full or part time for the TIRC. In that year, the TIRC spent $477,955 on payments to Hill & Knowlton, over 50 percent of the TIRC's entire budget.
78A The sham nature of the TIRC is revealed by a series of Hill & Knowlton reports to the TIRC. Those reports reveal that the true nature of the TIRC was to influence media and scientific reports to cloud the issue of smoking and health and to suppress all harmful information. These reports all reveal that Hill & Knowlton not the independent scientists actually ran the Tobacco Industry Research Committee, "provided assistance in selecting" the Scientific Advisory Board, "proposed" Dr. Little for the Scientific Director, and "handled liaison, agendas, organizational plans, business affairs, reports, and materials for meetings of the TIRC [and] the
Scientific Advisory Board, . . . in addition to developing operating procedures for the research program."
79A By the spring of 1955, the unlawful strategy recommended by Hill & Knowlton and implemented by the industry through the "Frank Statement" was largely successful. Hill & Knowlton reported to the TIRC:
a. [P]rogress has been made . . . The first big scare continues on the wane.
b. The research program of the TIRC has won wide acceptance in the scientific world as a sincere, valuable and scientific effort.
c. Positive stories are on the ascendancy.
Other internal documents admit to the sham nature of the CTR. For example, in 1977, Addison Yeaman, chairman and president of CTR, stated during a speech that "[CTR] has no propaganda function of any kind or any degree." Internal documents demonstrate, however, that the Tobacco Companies' joint efforts undertaken through TIRC, and later through CTR, were not disinterested or objective. Rather, they were designed and used to promote favorable research, to suppress negative research when possible, and to attack negative research where it could not be suppressed, all in order to convince the public that the "case against smoking is [not] closed."
80A A 1974 report to the CEO of Lorillard from a research executive described CTR's scientific projects as having not been selected against specific scientific goals, but rather for various purposes such as public relations, political relations and position for litigation. Thus, reviews of such programs for scientific relevance and merit in the smoking and health field are not likely to produce high ratings.
81A A 1972 internal document from a Tobacco Institute official to the group's president described the importance of using joint industry research to maintain public doubt about the link between smoking and disease:
For nearly twenty years, this industry has employed a single strategy to defend itself on three major fronts; litigation, politics, and public opinion. While the strategy was brilliantly conceived and executed over the years helping us win important battles, it is only fair to say that it is not, nor was it ever intended to be, a vehicle for victory. On the contrary, it has always been a holding strategy, consisting of
* creating doubt about the health charge without actually denying it
* advocating the public's right to smoke, without actually urging them to take up the practice
* encouraging objective scientific research as the only way to resolve the question of the health hazard.
As an industry, therefore, we are committed to an ill-defined middle ground which is articulated by variations on the theme that, the case is not proved.
In the cigarette controversy, the public, especially those who are present and potential supporters (e.g. tobacco state congressmen and heavy smokers) must perceive, understand, and believe in evidence to sustain their opinions that smoking may not be the causal factor. As things stand, we supply them with too little in the way of ready-made credible alternatives.
82A A 1978 memo addressed to the CTR file from a Philip Morris official characterized CTR as "an industry shield." The memorandum goes on to state: "the public relations value of CTR must be considered and continued . . . 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 for PR purposes . . . ."
83A In 1993, a former 24-year employee of CTR confirmed publicly that the joint industry research efforts were not objective: "When CTR researchers found out that cigarettes were bad and it was better not to smoke, we didn't publicize that. The CTR is just a lobbying thing. We were lobbying for cigarettes."
84A This and other evidence demonstrates that the role and purpose of TIRC and CTR in the Tobacco Companies' strategy were to seek to use the public's trust to propagate "pro-tobacco" propaganda. An industry official described in his personal notes a meeting that included high level officials from various Tobacco Companies: "CTR is the best & cheapest insurance the tobacco industry can buy and without it the Industry would have to invent CTR or would be dead."
85A Nonetheless, in its annual reports published between 1985 and 1992, CTR stated that its Scientific Advisory Board funded peer-reviewed research projects "judging them solely on the basis of scientific merit and relevance." In 1994, Dr. James F. Glenn, CEO of CTR, submitted testimony to a Congressional Subcommittee chaired by Representative Henry Waxman of
California:
a. The Council . . . sponsors research into questions of tobacco use and health and makes the results available to the public.
b. [G]rantees are assured complete scientific freedom in conducting these studies . . . [P]ublication [of research results] is encouraged in every instance.
86A In fact, CTR-sponsored research projects were directed away from research that might add to the evidence against the use of tobacco products. When CTR-sponsored research did produce unfavorable results, the information was distorted or simply suppressed. For example, Dr. Freddy Homburger, a researcher in Cambridge, Massachusetts, undertook a study of smoke exposure on hamsters. According to Dr. Homburger, he received a grant from CTR that was changed half-way through the study to a contract "so they could control publication; they were quite open about that." Dr. Homburger has testified that when the study was completed in 1974, the scientific director of CTR and a CTR lawyer "didn't want us to call anything cancer" and that they threatened Dr. Homburger with "never get[ting] a penny more" if his paper were published without deleting the word cancer.
87A An internal CTR document describes how Dr. Homburger attempted to call a press conference about the incident and how CTR stopped it:
He . . . was to tell the press that the tobacco industry was attempting to suppress important scientific information about the harmful effects of smoking. He was going to point specifically at CTR . . . . I arranged later that evening for it to be canceled. Homburger was given a cordial welcome and nicely hastened out the door. P.S. I doubt if you or Tom will want to retain this note.
G. Role of the CTR as a "Front" for
Disseminating False Information
88A In 1964, the year of the first Surgeon General's report on smoking, the CTR formed a "Special Projects" division to assist the industry in concealing unfavorable information. A series of research grants designated as CTR Special Projects were developed by Defendants in a manner to appear to receive the protection of the attorney-client or attorney-work- product privilege. The Special Projects division was under the auspices of the CTR.
89A The true purpose of the Special Projects division was to concoct research regarding the links between smoking and disease to develop a number of expert witnesses for defense purposes in tort suits against the Tobacco Industry. Consistent with this purpose, the Tobacco Industry's counsel were substantially involved in strategic and specific decision-making within the Special Projects division to withhold dangerous evidence from the public. For example, the notes of one CTR meeting, written in 1981, state, "When we started the CTR Special Projects, the idea was that the scientific director of CTR would review a project. If he liked it, it was a CTR special project. If he did not like it, then it became a lawyers' special project." Another memorandum from 1981 explained, "Difference between CTR and Special Four (lawyers' projects). Director of CTR reviews special projects if project was problem for CTR, use Special Four."
90A The industry has been successful in using the CTR Special Projects division to conceal harmful information. Research from the Special Projects division remains shielded from public scrutiny. Individual companies furthered the conspiracy by shielding company documents with claims of attorney-client privilege and through tactics such as that undertaken by Brown & Williamson, which over the years has transferred documents described as "deadwood" to its British parent company, B.A.T. Industries, so that they would not be discovered in legal proceedings in the United States.
91A Other internal industry documents also shed light on the true nature of the conspirators' associations, as the following quotations demonstrate by way of example:
a. "CTR began as an organization called Tobacco Industry Research Council (TIRC). It was set up as an industry shield in 1954. That was the year statistical accusations relating smoking to diseases were leveled at the industry; litigation began; and the Wynder/Graham reports were issued. CTR has helped our legal counsel by giving advice and technical information, which was needed at court trials . . . . [T]he public relations value of CTR must be considered and continued . . . . It is very 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."
b. "CTR is best & cheapest insurance the tobacco industry can buy and without it the Industry would have to invent CTR or would be dead."
c. "Historically, the joint industry funded smoking and health research programs have not been selected against specific scientific goals, but rather for various 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 (sic) strategy."
d. "Historically, it would seem that the 1954 emergency was handled effectively. From this experience there arose a realization by the tobacco industry of a public relations problem that must be solved for the self-preservation of the industry."
e. "To date, the TIRC program has carried its fair share of the public relations load in providing materials to stamp out brush fires as they arose. While effective in the past, this whole approach requires both revision and expansion. The public relations program . . . was like the early symptoms of diabetes, certain dietary controls kept public opinion reasonably healthy. When some new symptom appeared, a shot of insulin in the way of a news release . . . kept the patient going."
f. "When the products of an industry are accused of causing harm to users, certainly it is the obligation of that industry to endeavor to determine whether such accusations are true or false. Money spent for such purpose should not be regarded as a charitable contribution but as a business expense, an expense necessary to keep that industry alive. In view of the billions of dollars of annual sales of our industry our expenditures for health research has been of a minimal order."
g. "For nearly twenty years, this industry has employed a single strategy to defend itself on three major fronts litigation, politics, and public opinion. While the strategy was brilliantly conceived and executed over the years helping us win important battles, it is only fair to say that it is not, nor was it intended to be, a vehicle for victory. On the contrary, it has always been a holding strategy, consisting of creating doubt about the health charge without actually denying it. . . . In the cigarette controversy, the public, especially those who are present and potential supporters (e.g. tobacco state congressmen and heavy smokers) must perceive, understand, and believe in evidence to sustain their opinions that smoking may not be the causal factor."
92A Despite overwhelming scientific evidence, and the confirmation of this evidence by their own internal research, the cigarette manufacturers and their trade associations continue to deny uniformly that there is a causal connection between cigarette smoking and adverse health effects, or that nicotine is addictive. As one industry representative testified: "[A company can't represent that] smoking doesn't cause cancer. You can't say that. But you can say it is a risk factor, and scientifically it hasn't been established. And that's what the research is for. . . . I don't agree [that nicotine is addictive]. From what I've read on nicotine is that it contributes to the flavor, the taste of the product." These representations are intentionally misleading, unfair and deceptive. They are, moreover, a result of the industry's ongoing conspiracy and combination arising from the Plaza Hotel agreement, and are done to maintain its market and profits from a deadly and addictive product.
93A Special Projects was not the only instance where the industry used lawyers to shield the truth. For example, in 1984, B.A.T. began internally plotting how to shield documents produced by scientists from discovery. This plan included having B.A.T.'s "scientific literature review publication . . . set up as a Law Department function." B.A.T. internally noted that "Direct lawyer involvement is needed in all B.A.T. activities pertaining to smoking and health from conception through every step of the activity." This is a direct admission of B.A.T.'s efforts to shield adverse scientific information from seeking the light of day. This goal was being frustrated because "[t]he problem posed by BAT scientists and frequently used consultants who believe cause is proven is difficult."
94A Lawyers played a critical role in furthering the conspiracy to suppress and conceal information about the adverse health effects caused by the use of tobacco products. The lawyers' strategy was to attempt to protect damaging tobacco-related documents from disclosure under the attorney-client or work-product privileges regardless of whether such documents were prepared in anticipation of litigation or represented confidential communications made between lawyer and client for the purpose of rendering legal advice. Lawyers routinely provided a number of non-legal services to Defendants such as deciding which CTR "special projects" should receive funding, dispensing funding to the "scientists" involved in such projects, and designing the scope and approach of the special project. Shook, Hardy & Bacon also undertook to coordinate the Tobacco Companies' CTR "special projects" subterfuge.
95A For example, in 1976, a lawyer representing the tobacco industry wrote to in-house lawyers at the various Tobacco Companies that a study to measure environmental tobacco smoke should be modified so that the study would yield more favorable results for the Tobacco Companies' position. The study was subsequently modified to de-emphasize the role of second-hand tobacco smoke relating to indoor environmental quality.
96A In 1972, another lawyer representing the industry wrote to Tobacco Company officials that a potentially favorable study should be secretly funded by the Tobacco Companies as a "special project (non-CTR)" to make the study appear independent of the industry and thus heighten its perception as unbiased and reliable.
97A By becoming intimately involved in the funding and design of these scientific studies, these lawyers attempted to further the conspiracy and fraud of the Tobacco Companies and CTR by (1) clothing such studies in the attorney-client or work- product privilege to protect them from disclosure if their results were unfavorable, and (2) by creating the perception that CTR and the Tobacco Companies were fairly and appropriately fulfilling their obligations and promises to the public that they would, in a vigorous and unbiased manner, investigate and report to the public the link between their products and human disease.
98A At least one Tobacco Company used similar tactics in-house to suppress and avoid disclosure of its internal research on smoking and disease. At a time when the company was resisting discovery in a number of personal injury lawsuits, Brown & Williamson's general counsel, J. Kendrick Wells, recommended in a memorandum dated January 17, 1985, that most of the company's biological research be declared "deadwood" and shipped to England. He recommended that no notes, memoranda or lists be made about these documents. Wells stated, "I had marked certain of the document references with an X . . . which I suggested were deadwood in the behavioral and biological studies area. I said that the "B" series are "Janus" series studies and should also be considered as deadwood." ("Janus" was a name of a project that attempted to isolate and remove the harmful elements of tobacco.) Wells further recommended that the research, development and engineering department also should undertake "to remove the deadwood from the files."
99A Thus, the Tobacco Companies and their lawyers have misused claims of attorney-client privilege to insulate CTR-funded research projects and internal documents from disclosure to the public and to government officials. This conduct demonstrates the falsity of the Tobacco Companies' representations that they would jointly fund objective research and report the results of that research to the public.
H. Beyond 1953: The Continuing Conspiracy
to Restrain Trade
1) The "Gentlemen's Agreement"
100A The industry's 1953 combination and conspiracy were supplemented and aided by a commitment jointly to conduct research because of "a general feeling that an industry approach as opposed to an individual company approach was highly desirable." This approach was desirable to prevent, among other things, competition on the basis of health-risk comparisons.
101A As part and in furtherance of the agreement not to compete to develop a "safer" cigarette, there was a "gentlemen's agreement" among the manufacturers to suppress independent research on the issue of smoking and health, for the purpose of and with the effect of restricting output. Despite increasing market demand, the Tobacco Companies agreed not to market any safer or alternative products. This output-reduction conspiracy was effected by suppressing independent research and policing violators, as described below. This conspiracy was referenced in a 1968 internal Philip Morris draft memo, which stated, "We have reason to believe that in spite of gentlemans (sic) 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." This memo also acknowledged that cigarettes are inextricably intertwined with the health field, stating, "Most Philip Morris products both tobacco and non-tobacco are directly related to the health field."
102A As indicated by this memo, it was believed within the industry that individual companies were performing certain research on their own, in addition to the joint industry "research." Some companies viewed the strengthening demand for safer and alternative products as a potential future marketing opportunity. But the fundamental understanding and agreement remained: That information and activities deemed harmful to the unified, defensive posture of the industry or inconsistent with the non-competition conspiracy would be restrained, suppressed, and/or concealed. No company or industry trade organization stood behind the "promise" Defendants had made. As American Tobacco's CEO testified, "[If the health studies are correct], consumers have the right to know whatever is affecting their health. I think that's what, the public health agencies and the government have that responsibility."
103A The agreement not to compete was explicitly referenced in an October 1964 memorandum entitled "Reports on Policy Aspects of the Smoking and Health Situation in U.S.A.":
The informal agreement between TRC members not to make health claims was explained to Philip Morris.
104A Defendants' activities in furtherance of the
output-restriction/non-competition combination included restraining, suppressing and concealing research on the health effects of smoking, including the addictive properties of tobacco products, and restraining, concealing and suppressing the research and marketing of "safer" cigarettes. Despite the ability to produce "safer" cigarettes, the Defendants did not market such products, except in limited test markets because it was understood within the combination that no company would characterize or promote a product as biologically "safer."
105A Like all classic cartels, Defendants policed their conspiracy internally and externally. One member of the conspiracy, U.S. Tobacco, went so far as to terminate an employee and apologize to the Big 6 cigarette companies when the employee was quoted in a New York Post article referring to smokeless tobacco as less dangerous than smoking. Ernest Pepples of Brown & Williamson reported this in a memo, where he wrote that he had been called by UST's general counsel, Jim Chapin. Pepples stated, "Chapin says the statements quoted were unauthorized and do not represent his company's views. He has asked me to extend U.S. Tobacco's apology to each of the cigarette companies and advised me that the individual quoted in the article is no longer employed at U.S. Tobacco. Chapin says U.S. Tobacco has instituted smoking and health seminars throughout the company." This action is totally contrary to the self-interest of U.S. Tobacco and is consistent with the conspiracy among Defendants not to compete on the basis of safety and health.
2) Suppression of Liggett's "Safer" Cigarette
106A In response to perceived growing demand, several companies researched the possibility of marketing "safer" (less harmful to humans) cigarettes. One of the ways in which Defendants acted in concert to exclude the products from the market and further excluded potential new entrants was by patenting the processes for these less harmful products, which they neither marketed nor licensed to any other actual or potential competitor.
107A In response to demand, Liggett was one of the Defendants successful in researching and actually developing a less-biologically-active cigarette. However, in response to retaliation and threats from co-conspirators, Liggett agreed not to market this product after an apparent threat of retaliation by another manufacturer.
108A Liggett initiated its "safer" cigarette project, called XA, in 1968. After a minimal expenditure of only $14 million, Liggett was able, internally, to proclaim the project a success in 1979. By applying an additive of palladium metal and magnesium nitrate to tobacco to act as a catalyst in the burning process, Liggett found that "[c]igarette tar has been neutralized," and that there was "[n]o evidence for new or increased hazard . . . ."
109A Using this process, Liggett was able to produce cigarettes "which are believed to be of commercial quality." These cigarettes, however, were never marketed.
110A Liggett abandoned its XA project for the reason, among others, that it faced retaliation from industry leader Philip Morris if Liggett broke ranks. Another reason for abandoning the project was fear that the marketing of a "safer" cigarette would be, in essence, a confession that its (and the industry's) other cigarettes were not safe. Thus, one Liggett executive wrote that, "Any domestic activity will increase risk of cancer litigation on existing products."
111A James Mold, who was assistant director of research at Liggett during the development of the "safer" cigarette, the XA project, has provided testimony including the following overview of the XA project and its abandonment:
a. Mold stated that the XA project produced a safer cigarette. He stated, "We produced a cigarette which was, we felt, commercially acceptable as established by some consumer tests, which eliminated carcinogenic activity. . . ."
b. Mold testified that after 1975, all meetings on the project were attended by lawyers, lawyers collected all notes after the meetings, and all documents were directed to the law department to maintain the attorney-client privilege. He stated, "Whenever any problem came up on the project, the Legal Department would pounce upon that in an attempt to kill the project, and this happened time and time again."
c. Mold testified that he was at a conference of scientists in Buenos Aires prepared to present his research regarding a less harmful cigarette when he received a "frantic call" from legal counsel and was told not to present the paper or issue the press release. He was instructed not to publish his results in the Journal of Preventative Medicine.
d. Mold was asked why Liggett didn't market a safer cigarette. He answered, "Well, I can't give you, you know, a positive statement because I wasn't in the management circles that made the decision, but I certainly had a pretty fair idea why. . . . [T]hey felt that such a cigarette, if put on the market, would seriously indict them for having sold other types of cigarettes that didn't contain this, for example." Also, there was a meeting we held in . . . New Jersey at the Grand Met headquarters . . . at which the various legal people involved and the management people involved and myself were present. At one point Mr. Dey who at that time, and I guess still is the president of Liggett Tobacco, made the statement that he was told by someone in the Philip Morris company that if we tried to market such a product that they would clobber us."
3) Brown & Williamson's Efforts to Develop
a "Safer" Cigarette
112A Brown & Williamson also developed "safer" cigarettes, which it did not market despite promising test results because, among other reasons, such efforts would violate the output-restriction conspiracy. Jeffrey Wigand, a former vice president for research and development for Brown & Williamson, has stated that he was instructed by the company president to abandon all efforts to develop a safer product. He has testified that he was told, generally, "That there can be no research on a safer cigarette. Any research on a safer cigarette would clearly expose every other product as being unsafe and, therefore, present a liability issue in terms of any type of litigation." Brown & Williamson's Project "Ariel" used a heating, as opposed to burning, system. Its Project "Janus" was intended to identify hazardous components of cigarette smoke so they could be removed.
113A Brown & Williamson also conducted research on tobacco substitutes or analogues, as did a number of the other companies. These substitutes were sought as a means to duplicate some of the effects of nicotine without toxic or harmful effects. For example, Brown & Williamson's parent B.A.T. developed "Batflake," a tobacco substitute. Laboratory tests showed that use of "Batflake" reduced a number (though not all) of the harmful effects of smoking in direct proportion to the amount used in a cigarette. So far as is known, none of the substitute products was ever marketed in the United States. In 1980, B.A.T. and Brown & Williamson abandoned the "safer" product search: "Dangerous area [research into irritation and smoke inhalation]. Please do not publish or circulate. No more work is needed on biological side."
114A Despite increasing market demand, such innovative products were not marketed because of the agreement not to compete; i.e. to restrict output of alternative or safer products. No other member of the conspiracy broke ranks by competitively marketing products with improved biological performance despite individual competitive reasons for marketing such product: "Within B & W, we have rarely attempted to develop new products specifically designed to deliver low CO [carbon monoxide], except perhaps a prototype of FACT that was kept ready on a turn-key basis in the event of a marketing need for such product. This was done through a combination of filter ventilation, cigarette paper permeability, and appropriate cigarette paper additive. Needless to say, such need did not arise."
4) Philip Morris: Avoiding an Industry War
115A Philip Morris also explored research to develop cigarettes that were "safer" or, in the words of one memorandum to the board of directors, had "superior physiological performance." This memorandum noted competitive pressures to produce "less harmful" cigarettes. However, the memorandum was careful to state that, "[o]ur philosophy is not to start a war, but if war comes, we aim to fight well and to win." Philip Morris never broadly marketed such a safer cigarette. Its documents recognize the strong market demand and state that "after much discussion we decided not to tell the physiological story which might have appealed to a health conscious segment of the market. The product as test marketed didn't have good taste and consequently was unacceptable to the public ignorant of its physiological superiority." Subsequently, taste was improved, and Philip Morris attempted to promote the product. However, "The imposition of FTC rules and the industry advertising code took the starch out of the program . . . ."
5) Reynolds's "Safer" Product
116A Reynolds also developed an alternative product that had reduced physiological consequences (see below). Except for a brief test in several cities, Reynolds did not market its safer product, "Premier," because of the conspiracy.
6) The Industry Position on "Safer" Cigarettes
117A In furtherance of their illegal combination and conspiracy, Defendants collectively denied that a "safer" cigarette could be produced.
118A A memorandum authored by an attorney representing the tobacco industry confirmed that there was an industry-wide position regarding the issue of a safer cigarette.
119A The 1987 memorandum was written in the context of the marketing by R.J. Reynolds of a smokeless cigarette, Premier, which heated rather than burned tobacco. The attorney wrote that the smokeless cigarette could "have significant effects on the tobacco industry's joint defense efforts" and that "[t]he industry position has always been that there is no alternative design for a cigarette as we know them." The attorney also noted, "Unfortunately, the Reynolds announcement . . . seriously undercuts this component of industry's defense." This fundamental position of the "industry" defense had been identified much earlier. In 1970, another industry attorney wrote to DeBaun Bryant, general counsel at Brown & Williamson, expressing concerns about some of the industry research into alternative products. In critiquing the minutes of a conference, he stated: "It is our opinion that statements such as [references to research into safer products, products which are less biologically active, and to healthy cigarettes] constitute a real threat to the continued success in the defense of smoking and health litigation. Of course, we would make every effort to explain such statements if we were confronted with them during a trial, but I seriously doubt that the average juror would follow or accept the subtle distinctions and explanations we would be forced to urge. . . . [E]mployees in both companies [Brown & Williamson and British American Tobacco] should be informed of the possible consequences of careless statements on this subject."
120A All Defendants were keenly aware of the risk to the industry if any of them sought a competitive advantage by developing and marketing a "safer" product. The risk was avoided by agreeing not to compete on that basis. As one industry representative testified: "[A]s a company, we cannot position our products as being healthy. We've already agreed that they are a risk factor [the agreement referenced is the industry's acceptance of the warning labels on cigarette packages]. [W]e wouldn't run any advertising that positions any of our products as being healthier than others."
7) Suppression of the R.J. Reynolds
"Mouse House" Research
121A For a period of time in the late 1960s, R.J. Reynolds had a state-of-the-art laboratory in Winston-Salem nicknamed "the mouse house." Here, scientists conducted research with mice, rats, and rabbits and began to uncover promising avenues of investigation into the mechanisms of smoking-related diseases. In 1970, this entire research division was disbanded in one day, and all 26 scientists were fired without notice. Months before the firings, company attorneys had collected dozens of research notebooks, still undisclosed, from the biochemists.
8) Suppression of Philip Morris Research
on Nicotine Analogues
122A In the early 1980s, researchers working at a Philip Morris laboratory in Richmond worked to develop a synthetic form of nicotine that would avoid its cardiovascular complications. However, in April 1984, the company abruptly shut the laboratory, fired the researchers and threatened legal action if they published their work.
123A The research was conducted by Victor J. DeNoble and his colleague Paul C. Mele, who remained silent about their work under confidentiality agreements imposed by Philip Morris until testifying in 1994 before a congressional committee in Washington.
124A The research was so secretive that laboratory animals were brought in at night, under cover. The researchers discovered that nicotine demonstrated addictive qualities, and that the animals self-administered the substance, pressing levers to obtain nicotine. The researchers also discovered nicotine analogues, which are artificial versions of nicotine. These analogues affected the brain much like nicotine. But the analogues did not seem to produce the harmful cardiovascular effects of nicotine. Thus, rats using the analogue behaved as if they had a nicotine "high" but did not show signs of heart distress such as rapid heart beat.
125A By 1983, the research was becoming particularly problematic. A number of personal-injury cases had been filed against the industry, with nicotine dependence a critical issue. In June 1983, DeNoble was called to the Philip Morris headquarters in New York to brief top executives. Following the meeting, company lawyers visited the lab and reviewed research notebooks. There were discussions of shifting the research out of the company, perhaps to DeNoble and Mele as outside contractors or to a lab in Switzerland, to distance Philip Morris from the results.
126A Finally, in April 1984, the researchers were abruptly told to halt their work, kill all rats and turn in their security badges. The researchers also were forced to withdraw a paper on the addictive qualities of nicotine, even after it had been accepted for publication by a scientific journal.
I. History of Industry Knowledge
that Smoking is Harmful
127A Even before Defendants represented in the "Frank Statement" that "there is no proof that cigarette smoking is one of the causes" of lung cancer, an industry researcher had reported the contrary.
128A As early as 1946, Lorillard chemist H.B. Parmele, who later became vice president of research and a member of Lorillard's board of directors, wrote to his company's manufacturing committee:
Certain scientists and medical authorities have claimed for many years that the use of tobacco contributes to cancer development in susceptible people. Just enough evidence has been presented to justify the possibility of such a presumption.
129A After the 1954 Frank Statement, the Tobacco Industry promptly breached its assumed duty to report objective facts on smoking and health. As evidence mounted that cigarette smoking causes cancer and other diseases both through industry research and truly independent studies the Tobacco Industry continued publicly to represent that nothing was proven against smoking. Internal documents, however, show that the truth was very different. The Tobacco Companies knew and acknowledged among themselves the veracity of scientific evidence of the health hazards of smoking, and at the same time suppressed such evidence where they could and attacked it when it did appear.
130A Internal cigarette industry documents reveal, for example:
a. A 1956 memorandum from the vice president of Philip Morris's research-and-development department to top executives at the company regarding the advantages of ventilated cigarettes stated: "Decreased carbon monoxide and nicotine are related to decreased harm to the circulatory system as a result of, smoking. . . . Decreased irritation is desirable . . . as a partial elimination of a potential cancer hazard."
b. A 1958 memorandum from a Philip Morris researcher to the company's vice president of research, who later became a member of its board of directors, stated "the evidence . . . is building up that heavy cigarette smoking contributes to lung cancer either alone or in association with physical and physiological factors. . . ."
c. A 1961 document presented to the Philip Morris research-and- development committee by the company's vice president of research and development included a section entitled "Reduction of Carcinogens in Smoke." The document states, in part:
To achieve this objective will require a major research effort, because Carcinogens are found in practically every class of compounds in smoke. This fact prohibits complete solution of the problem by eliminating one or two classes of compounds.
The best we can hope for is to reduce a particularly bad class, i.e., the polynuclear hydrocarbons, or phenols. . . .
Flavor substances and carcinogenic substances come from the same classes, in many instances.
d. A 1963 memorandum to Philip Morris's president and CEO from the company's vice president of research describes a number of classes of compounds in cigarette smoke which are "known carcinogens." The document goes on to describe the link among smoking, bronchitis and emphysema:
Irritation problems are now receiving greater attention because of the general medical belief that irritation leads to chronic bronchitis and emphysema. These are serious diseases involving millions of people. Emphysema is often fatal either directly or through other respiratory complications. A number of experts have predicted that the cigarette industry ultimately may be in greater trouble in this area than in the lung cancer field.
e. A 1961 "Confidential" memorandum from the consulting research firm hired by Liggett to do research for the company states:
There are biologically active materials present in cigarette tobacco.
They are:
a) cancer causing
b) cancer promoting
c) poisonous
d) stimulating, pleasurable, and flavorful.
f. A 1963 memorandum from Liggett's consulting research firm states:
Basically, we accept the inference of a causal relationship between the chemical properties of ingested tobacco smoke and the development of carcinoma, which is suggested by the statistical association shown in the studies of Doll and Hill, Horn, and Dorn with some reservations and qualifications and even estimate by how much the incidence of cancer may possibly be reduced if the carcinogenic matter can be diminished, by an appropriate filter, by a given percentage.
131A These internal Liggett documents sharply contrast with the information Liggett provided to the Surgeon General in 1963. Liggett withheld from the Surgeon General the views of its researchers and consultants that the evidence shows cigarette smoking causes human disease. A "Draft of an Outline for a Background Paper on the Smoking Problem to be Used in Connection with a Presentation of Arguments Before the Surgeon General's Committee" states:
a. "All Types of Smoking are Associated with Increased Mortality from all causes combined. . . ."
b. "For cigarette smokers who smoke regularly, excess mortality increases with current number of cigarettes smoked. . . ."
c. "Lung cancer extremely rare among nonsmokers . . . ."
d. As "reported by Hammond . . . Excess Mortality [is] (1) higher for cigarette smokers than others and (2) increases with daily cigarette consumption."
e. "For both sexes, all chronic respiratory diseases, chronic bronchitis, irreversible obstructive lung diseases . . . increased in prevalence with increasing current amount of smoking."
132A The report Liggett presented to the Surgeon General did not contain any of these conclusions and instead focused on alternative causes of disease, such as air pollution, coffee and alcohol consumption, diet, lack of exercise and genetics. Liggett criticized the known statistical association between smoking and mortality and various diseases as based upon "unreliably conducted" studies and "inadequately analyzed" data. The Liggett report concluded that the association between smoking and disease was inconclusive and due to other factors coincidentally associated with smoking.
133A Philip Morris also concealed from the public its actual views of the research conducted outside the influence of the industry. A 1971 memorandum written by Dr. H. Wakeham, then vice president of research and development, discussed a recent study that found cigarette-smoke inhalation caused lung cancer in beagles:
1970 might very properly be called the year of the beagle. Early in the year, the American Cancer Society announced that they had finally demonstrated the formation of lung cancer in beagles by smoke inhalation in the now infamous Auerbach and Hammon study. I am sure all of you have read extensively about this in the newspapers, how the industry asked to have independent panel of pathologists review the histological sections showing cancer, how the Society refused, how generally the ACS was put on the defensive, how publication was refused by two medical journals and how the story was changed somewhat by the time it was published . . . .
134A The memorandum goes on to describe how the industry publicly dismissed the mice cancer studies, such as the 1953 Wynder research. Dr. Wakeman explained that "mouse skin is not human lung tissue," "smoke condensate has different chemical composition from inhaled smoke," and "painting is not the method of application practised by human smokers."
135A In contrast to the mice studies, however, Dr. Wakeman continued:
The logical extension of these objections is that an inhalation test in which an animal breathed smoke like a human would be a better model system. Presumably, in such a test, the formation of lung cancers in the test animal would be strong evidence for the cigarette causation hypothesis. That is why the beagle test was a critical one. . . . So the test was not conclusive. But it was a lot closer than skin painting.
The strong opposition of the industry to the beagle test is indicative of a new more aggressive stance on the part of the industry in the smoking and health controversy. We have gone over from what I have called the "vigorous denial" approach, the take it on the chin and keep quiet attitude, to the strongly voiced opposition and criticism. I personally think this counter-propaganda is a better stance than the former one.
136A Taken together with the internal acknowledgments of cigarette smoking as a cause of human disease, this memorandum from a senior Philip Morris researcher demonstrates that the 1954 Frank Statement representations were deceptions, and that the cigarette industry promptly breached the duties it had undertaken. Far from "accept[ing] an interest in people's health as a basic responsibility, paramount to every other consideration in our business" and "cooperat[ing] closely with those whose task it is to safeguard the public health," the cigarette industry approach was to deny and attack with "counter-propaganda" the mounting evidence that smoking caused human disease evidence that the industry plainly viewed internally as accurate.
137A Recently, a series of Brown & Williamson documents was publicly disclosed that set forth the far-ranging deceptions of that company in particular, and of the industry in general with respect to the harmful effects of smoking.
138A Brown & Williamson, like the other manufacturers, was aware early on published statistical research, including the 1952 report by Dr. Doll, noted that the studies offered "frightening testimony from epidemiological studies."
139A By 1957, one of Brown & Williamson's British affiliates, which conducted much of the health research for the U.S. company, was using the code-name "zephyr" for cancer. For example, in a March 1957 report, the British affiliate stated, "As a result of several statistical surveys, the idea has arisen that there is a causal relation between zephyr and tobacco smoking, particularly cigarette smoking."
140. In 1962, Brown & Williamson's London-based parent company conducted a meeting of its worldwide subsidiaries in Southampton, England. A transcript of the meeting reveals the following remarks:
a. One researcher stated that "smoking is a habit of addiction" and that "[n]icotine is not only a, very fine drug, but the technique of administration by smoking has considerable psychological advantages." (Several years later, in 1967, the researcher admitted that the company "is in the nicotine rather than the tobacco industry.")
b. Another research executive "thought we should adopt the attitude that the causal link between smoking and lung cancer was proven because then at least we could not be any worse off."
c. Another researcher stated that "no industry was going to accept that its product was toxic, or even believe it to be so, and naturally when the health question was first raised, we had to start denying it at the P.R. level. But by continuing that policy, we had got ourselves into a corner and left no room to maneuver. In other words, if we did get a breakthrough and were able to improve our product, we should have to about-face, and this was practically impossible at the P.R. level."
d. The chairman of Brown & Williamson's British affiliate stated that it "was very difficult when you were asked as chairman of a tobacco company to discuss the health question on television. You had not only your own business to consider but the employees throughout the industry, retailers, consumers, farmers growing the leaf, and so on. And you were in much too responsible a position to get up and say, I accept that the product which we and all our competitors are putting on the market gives you cancer, whatever you might think privately."
e. The chairman also stated that if the company manufactured safer brands, "how to justify continuing the sale of other brands? . . . It would be admitting that some of its products already on the market might be harmful. This would create a very difficult public relations situation."
141. The next year, 1963, Brown & Williamson engaged in an internal debate over whether to disclose what it knew about the adverse effects of smoking to the Surgeon General, who was preparing his first official report on cigarettes. It was decided that its information would not be disclosed. Some of the documents generated by Brown & Williamson as part of this process were shared with its London-based parent company, as well as other cigarette manufacturers and the TIRC/CTR. Addison Yeaman, who was then general counsel at Brown & Williamson and who authored some of the most critical memoranda from this time, subsequently became a director of the CTR.
142. Yeaman wrote in a 1963 analysis that:
a. "[N]icotine is addictive."
b. "We are, then, in the business of selling nicotine, an addictive drug . . ."
c. Cigarettes "cause, or predispose, lung cancer . . ."
d. "They contribute to certain cardiovascular disorders . . ."
e. "They may well be truly causative in emphysema, etc."
143. Yeaman suggested that Brown & Williamson "accept its responsibility" and disclose the hazards of cigarettes to the Surgeon General. He noted that this would allow the company to openly research and develop a safer cigarette.
144. Yeaman warned, however, that one danger of candid disclosure was that jurors would learn that the cigarette companies knew of the hazards of their products and had the means to make safer cigarettes but didn't. Yeaman noted that this might cause an "emotional reaction" in jurors. Ultimately, Yeaman's suggestion for full disclosure was rejected.
145. Subsequently, Brown & Williamson continued to conduct and conceal biological research. Some of these research projects confirmed causation between tobacco use and health hazards.
146. The more sensitive research was often undertaken by Brown & Williamson's British affiliate, acting on behalf of both companies. Much of the work was performed at a British laboratory called Harrogate, which performed work for a number of cigarette manufacturers, and some of this research was shared with these other companies and the Tobacco Institute.
147. From 1965 to 1978, Battelle Memorial Laboratory conducted experiments for BATCO under the code name "Project Janus" The Battelle lab experiments used mouse skin paintings to determine the carcinogenicity of tobacco. These reports repeatedly found that tobacco caused tumors when painted on the skin of mice:
a. A 1971 "Survey of the Janus Mouse Skin Painting Experiments" reported that more than 80 percent of the mice exposed to a blend of flue core tobacco developed tumors.
b. A 1973 Janus Report shows 50 percent or more of the mice developing tumors.
c. While publicly belittling the use and importance of mouse skin painting, BATCO in a 1970-71 "Project Janus Annual Report" conceded that mouse skin painting is likely to remain an important recognized test of carcinogenesis.
148. Brown & Williamson also attempted to develop a safer cigarette or, in the words of an internal document, "a device for the controlled administration of nicotine." There were at least two safer cigarette projects, Project Ariel, which focused on heating rather than burning tobacco; and Project Janus, which focused on isolating and removing the harmful elements of tobacco. At least some of the work was performed by Battelle Laboratories in Frankfurt. By the end of the 1970s, however, in a pattern that was repeated throughout the industry, Brown & Williamson closed its research labs and halted work on a safer cigarette.
J. Industry Knowledge of the Addictive
Nature of Nicotine
1) Industry Statements and Documents Reveal
the Tobacco Companies' Long-Standing
Knowledge that Nicotine is a Powerful
and Addictive Drug
149. As alleged above, the Defendants continue to deny and conceal that tobacco products are addictive while secretly manipulating levels of nicotine to increase or maintain addiction. The evidence is clear that the Tobacco Industry has known and hidden for decades that tobacco products are addictive.
150. Numerous Tobacco Company documents contain statements by company researchers and executives acknowledging that nicotine is, in fact, addictive. For example, more than thirty years ago, a report was completed for BATCO that specifically addressed the mechanism of nicotine addiction in smokers. The researchers concluded that chronic intake of nicotine, such as that which occurs in regular smokers, creates a need for ever-increasing levels of nicotine to maintain the desired action: "[u]nlike other dopings, such as morphine, the rate of increasing demand for greater dose levels is relatively slow for nicotine." The report continues:
A body left in this unbalanced state craves for renewed drug intake in order to restore the physiological equilibrium. This unconscious desire explains the addiction of the individual to nicotine.
151. Internal Tobacco Company documents reveal that all of this research has convinced company researchers and executives that nicotine in tobacco functions as a drug with powerful psychoactive effects. For example, in 1962, even before much of this research had been completed, Charles Ellis, of BATCO, expressed his view that nicotine in tobacco functions as a drug much like stimulants and tranquilizers:
It is my conviction that nicotine is a very remarkable beneficent drug that both helps the body to resist external stress and also can as a result show a pronounced tranquilizing effect. You are all aware of the very great increase in the use of artificial controls, stimulants, tranquilizers, sleeping pills, and it is a fact that under modern conditions of life people find that they cannot depend just on their subconscious reactions to meet the various environmental strains with which they are confronted: they must have drugs available which they can take when they feel the need. Nicotine is not only a very fine drug, but the techniques of administration by smoking has considerable psychological advantages and a built-in control against excessive absorption.
152. In the decades that followed this statement, BATCO and Brown & Williamson held many research conferences, some of which were devoted entirely to discussing nicotine's pharmacological effects. The records of these conferences demonstrate that, at almost every conference, Tobacco Company officials from around the world discussed the results of research on nicotine pharmacology and agreed that nicotine had been shown to have pharmacological effects on tobacco users.
153. Researchers and executives from the other major Tobacco Companies and associated with the CTR have also made statements revealing their knowledge that nicotine is a psychoactive drug. For example, the authors of a research paper funded by the CTR reporting on the "beneficial" pharmacological effects of nicotine in cigarettes said that "[n]icotine is recognized as the primary psychoactive compound in cigarette smoke."
154. More than 30 years ago, in 1962-63, BATCO received the results of its Project HIPPO study (HIPPO I and HIPPO II), the aim of which was to "understand some of the activities of nicotine those activities that could explain why smokers are so fond of their habit." A second purpose of the Project HIPPO study was to compare the effects of nicotine with those of then-new tranquilizers, "which might supersede tobacco habits in the near future." Thus, these researchers believed that nicotine-containing tobacco and tranquilizers were used for the same purposes by consumers.
155. The Project HIPPO reports were disseminated to Brown & Williamson officials. The exchange of information between BATCO and Brown & Williamson is important because it demonstrates B&W's awareness of the results of studies such as Project HIPPO, which was just one of a number of studies commissioned by BATCO to study nicotine's physiological and pharmacological effects. For example, a 1980 report addresses the critical role of nicotine's drug effects:
Nicotine is an extremely biologically active compound capable of eliciting a range of pharmacological, biochemical, and physiological responses . . . . In some instances, the pharmacological response of smokers to nicotine is believed to be responsible for an individual's smoking behavior, providing the motivation for and the degree of satisfaction required by the smoker.
156. The BATCO documents include not only some of the research reports themselves, but also summaries or minutes of numerous BATCO research and development ("R&D") meetings at which nicotine's drug effects and importance to the industry were discussed. These papers demonstrate both the consistency and the extent of the industry's interest in and knowledge of nicotine as the primary pharmacological agent in tobacco. For example, at a 1974 BATCO Group R&D Meeting, it was noted that:
Nicotine (which has been assumed to be the main pharmacologically active component in smoke) may act in a bi-phasic manner, either as a stimulant (CNV increase) or depressant (CNV decrease).
157. Subsequent BATCO research conferences offer equally revealing statements about the drug effects of nicotine. A BATCO Group R&D Smoking Behavior-Marketing Conference held in 1984 focused almost entirely on the role of nicotine pharmacology in smoking. Summaries of the presentations at that conference include numerous references to the pharmacological effects of nicotine and the importance of these effects in maintaining tobacco use. For example, one presentation included the following observation:
Smoking is then seen as a personal tool used by the smoker to refine his behavior and reactions to the world at large.
It is apparent that nicotine largely underpins these contributions through its role as a generator of central physiological arousal effects which express themselves as changes in human performance and psychological well-being.
158. Another BATCO conference focusing on nicotine was held in 1984. One of the presentations was characterized by a Brown & Williamson official:
The presentation was concerned with summarizing and outlining the central role of nicotine in the smoking process and our business generally. . . . There are two areas of nicotine action that are of primary importance: (i) to identify to what extent the pharmacological properties or responses to nicotine are influenced by blood and tissue levels of nicotine. (ii) what is the significance and role of nicotine in eliciting the impact response and upper respiratory tract responses. . .
159. Philip Morris researchers conducted extensive research on nicotine pharmacology from the late 1960s until at least the mid-1980s. The nature and magnitude of the research, as well as statements made in internal documents, show that the Philip Morris researchers strongly believed that nicotine has potent psychoactive effects and that these effects provide a primary motivation for smoking. In 1974, Philip Morris researchers began a study designed to test their theory that hyperkinetic children take up smoking in adolescence because nicotine may perform the same pharmacological function as prescription medications used to treat hyperkinesis:
It has been found that amphetamines, which are strong stimulants, have the anomalous effect of quieting these children down . . . Many children are therefore regularly administered amphetamines throughout grade school years. . . . We wonder whether such children may not eventually become cigarette smokers in their teenage years as they discover the advantage of self-stimulation via nicotine. We have already collaborated with a local school system in identifying some such children in the third grade.
160. More than three decades ago, in 1961, a presentation by Dr. Helmut Wakeham, a senior Philip Morris research scientist, to the company's Research and Development Committee noted that:
Low nicotine doses stimulate, but high doses depress functions . . . It is also recognised that smoking produces pleasurable reactions or tranquility, and that this is due at least in part to nicotine. . . .
161. Dr. Wakeham also noted that "nicotine is believed essential to cigarette acceptability," a view later restated by William Dunn, Jr., another high-ranking Philip Morris official. In summarizing a 1972 conference sponsored by the Council for Tobacco Research, Dr. Dunn reported:
Most of the conferees would agree with this proposition: The primary incentive to cigarette smoking is the immediate salutary effect of inhaled smoke upon body function.
162. After describing "the physiological effect" as "the primary incentive" for smoking, Dr. Dunn continued:
The majority of the conferees would go even further and accept the proposition that nicotine is the active constituent of cigarette smoke. Without nicotine, the argument goes, there would be no smoking. Some strong evidence can be marshalled to support this argument:
1) No one has ever become a cigarette smoker by smoking cigarettes without nicotine.
2) Most of the physiological responses to inhaled smoke have been shown to be nicotine-related.
3) Despite many low nicotine brand entries in the market place, none of them have captured a substantial segment of the market . . .
163. A 1971 secret internal report distributed to Philip Morris executives showed that tobacco executives knew the powerfully addictive nature of nicotine in cigarettes. The report studied persons who had tried to stop smoking and concluded that only 28 percent of those who tried to quit were still non-smokers eight months later:
Even after eight months quitters were apt to report having neurotic symptoms, such as feeling depressed, being restless and tense, being ill-tempered, having a loss of energy, being apt to doze off. They were further troubled by constipation and weight gains which averaged about five pounds per quitter . . . This is not the happy picture painted by the Cancer Society's anti-smoking commercial which shows an exuberant couple leaping into the air and kicking their heels with joy because they've kicked the habit. A more appropriate commercial would show a restless, nervous, constipated husband bickering viciously with his bitchy wife who is nagging him about his slothful behavior and growing waistline.
164. In a research paper funded by the CTR, reporting on the "beneficial" pharmacological effects of nicotine in cigarettes, the authors said:
Nicotine is recognized as the primary psychoactive compound in cigarette smoke.
165. Many other industry documents refer to the central role of nicotine's drug effects for smokers and, therefore, for the industry. Nicotine is repeatedly identified as a primary reason consumers smoke or use other nicotine-containing products. A "Proposal for Low Delivery Project for B&W" prepared by a Brown & Williamson marketing firm in the late 1970s contained the following statement that a sufficient dose of nicotine is essential to sell cigarettes and, implicitly, to maintain market share based on nicotine addiction:
Current market trends clearly indicate a major trend toward low-tar brands although current "ultra" low "tar" brands have had limited success because of their failure to deliver in that if a satisfying, low-nicotine cigarette were to be developed, it could represent an effective means of withdrawal. . . with severe implications for long-term market growth.
166. A 1976 BATCO Conference on Smoking Behavior further underscores tobacco industry researchers' awareness of the fundamental importance (to the huge majority of smokers) of nicotine's effects on the brain:
Some insight into the likely benefits of smoking follows from a consideration of the properties of nicotine, which is considered to be the reinforcing factor in the smoking habit for at least 80% of smokers. . .
167. In 1988, during the case Cipollone v. Liggett, Joseph Cullman III, former CEO of Philip Morris, testified as follows:
Q: Let me ask you the question, then, Mr. Cullman. Is nicotine a drug?
A: Well it's so described in every book on pharmacology.
Q: So then you agree that it's a drug?
A: I have no reason to disagree with books on pharmacology.
168. A memorandum from a Philip Morris official in 1980 confirms the company's view that nicotine's pharmacological effects on the central nervous system are critical to the tobacco industry's success:
Nicotine is a powerful pharmacological agent with multiple sites of action and may be the most important component of cigarette smoke. Nicotine and an understanding of its properties are important to the continued well being of our cigarette business since this alkaloid has been cited often as the reason for smoking and theories have been advanced for nicotine titration by the smoker. Nicotine is known to have effects on the central and peripheral nervous system as well as influencing memory, learning, pain perception, response to stress and level of arousal.
169. Despite the 1994 sworn testimony of tobacco CEOs that nicotine is not addictive, it is clear that high-ranking Tobacco Company officials have repeatedly acknowledged that nicotine is addictive and that this is the reason why people use tobacco.
170. The smokeless tobacco industry also recognizes that almost all consumers use tobacco products to obtain the pharmacological effects of nicotine. The senior vice-president for marketing of U.S. Tobacco wrote in a 1981 letter on new product development:
Flavorwise we should try for innovation, taste and strength, nicotine should be medium . . . Virtually all tobacco usage is based upon nicotine, "the kick," satisfaction.
171. In contrast, Thomas E. Sandefur, former CEO of Brown & Williamson, testified before Congress that nicotine was not addictive and that B&W scientists had concluded that none of B&W's research indicated that nicotine was addictive. These statements were false as decades of BATCO and Brown & Williamson research indicated exactly the opposite. Sandefur further testified that "nicotine is a very important constituent in the cigarette smoke for taste." In fact, nicotine tastes bad, and the industry has conducted hundreds of tests to find a method of increasing nicotine without injecting a bad taste. Sandefur, by making this statement, was continuing the industry's misrepresentation concerning nicotine.
2) Long-Standing Industry Awareness of
the Difficulty Smokers Have in
Quitting Underscores the Tobacco
Industry's Knowledge of Addiction
172. The strongest evidence of the addictive power of nicotine is the fact that a substantial majority of smokers (75 percent to 85 percent in most surveys) say they would like to quit, and that they are concerned for their health, yet a vast majority of those who attempt to quit are unable to do so. The failure rate of people who attempt to stop or reduce smoking is dramatic, even in the face of life-threatening, tobacco-related illnesses.
Thus, even after a heart attack or lung cancer surgery, approximately one-half of survivors return to smoking within one year. A study of drug use by high school seniors conducted annually by the University of Michigan shows that of high school seniors who smoke, more than half have tried unsuccessfully to quit. Follow-up surveys show that eight years later three of four are still smoking, and those still smoking are smoking more heavily. As a result of these characteristics and others, the federal Food and Drug Administration in 1995 found that "nicotine satisfies the classic criteria for an addictive substance."
173. The Tobacco Companies are aware of the large number of smokers who have tried to quit using tobacco, and of the very small number who actually succeed. The evidence known to the Tobacco Companies about smokers' unsuccessful attempts to quit shows that the Tobacco Companies know that a large percentage of their market consists of people who demonstrate one of the characteristic features of addiction.
174. The great difficulty smokers experience when they try to quit was conceded by Joseph F. Cullman III, the former Philip Morris CEO. Mr. Cullman was called as a witness in the Cipollone lawsuit and gave the following answers in response to questions from one of the plaintiff's attorneys:
Q: But it is difficult [to quit]?
A: That's what it says here and I'm not disagreeing with it.
Q: They said it was very difficult. Do you agree with that?
A: I would say it's difficult.
Q: And it's difficult for the vast majority of smokers, you would agree with that, too, would you not?
A: That's a question of semantics. What's the vast majority? A lot of smokers have a hard time quitting.
Q: Let's see, most smokers have a tough time giving up cigarettes?
A: Well, if they didn't, there would be many fewer smokers than there are today.
175. A presenter responsible for summing up the results of cessation studies at a 1984 BATCO conference agreed that, while a large percentage of smokers do not want to smoke, most of those smokers feel compelled to continue to smoke:
Although intentions and attempts to quit are relatively high (30-40% of smokers [in a given year]), the actual success rate of quitting is relatively low and stable.
It was thus well known to the participating companies that a very large percentage of their customers were smoking not out of choice but because they could not quit.
176. Other Defendants also understand that many of their consumers would like to quit but are unable to do so. A Philip Morris researcher who studied a "cold turkey" campaign in the small town of Greenfield, Iowa, in 1969 reported that those who successfully quit smoking over the long term are a much smaller group than those who would like to quit and who attempt to quit. The researcher cited the findings of Hunt and Matarazzo in proposing that most attempts to quit smoking are not long-lasting: "[I]n summarizing many reports of long-term quitting using various techniques, [the authors] show that the percentage of nonrecidivists [successful quitters] decreases as a function of time . . . in a negatively accelerated fashion." The Philip Morris researcher found that in Greenfield only 28 percent of those smokers who agreed to quit as part of the cold turkey campaign were still not smoking after 7 months. The researcher then observed that the small number of Greenfield residents who managed to stay off cigarettes for more than 7 months was, based on other published reports of success rates for quitting smoking, about average.
177. The researcher also described findings that revealed in part why it is so hard for smokers to quit. He reported that smokers who quit for more than 7 months continued to suffer a variety of adverse effects related to quitting, including weight gain, restlessness, depression, ill-temper, constipation, nervous mannerisms, and loss of energy. These are some of the classic symptoms of nicotine withdrawal, described earlier.
178. Market-research documents also show that the Tobacco Companies have conducted research in quitting behavior and have documented the reasons why people quit and why they fail to quit, despite a desire to do so. A market research firm reporting on a survey of smokers' views about the health implication of smoking observed: a minority expresses a resentment about the addictive aspects of smoking. Being "out of control," unable to quit causes them to feel somehow unworthy. . . . Nicotine is usually singled out as the culprit here. However, even these smokers would be reluctant to give up the satisfaction elements in smoking. So they are in a quandry [sic].
Another market-research firm reported its findings about the inability of young smokers to quit when they want to:
However intriguing smoking was at 11, 12 or 13, by the age of 16 and 17 many regretted their use of cigarettes for health reasons and because they feel unable to stop smoking when they want to.
179. The fact that many smokers smoke even though they do not enjoy smoking is conceded in a candid marketing research document prepared for Imperial Tobacco Ltd., which reported that it is particularly difficult to sell cigarettes by "trading on the positives" because the industry is "vexed by the unique problem that users of the category do not necessarily like the product." Another document reports that many smokers of ultra-low-tar-and-nicotine cigarettes want to quit and "refer to their behavior in terms of satisfying a craving while smokers of stronger cigarettes talk about taste and satisfaction."
180. In summary, the Tobacco Companies' data show that users find it extremely difficult to quit smoking and that many tobacco users would quit if they could. Their data also show that, of those smokers who try to quit, only a small percentage succeed permanently. Consequently, tobacco manufacturers are aware that, of the customers who try to quit, a large percentage are unsuccessful and continue to buy and use tobacco products, in large part to satisfy their dependence on nicotine-containing tobacco. Despite this overwhelming knowledge, the Defendants have misrepresented and suppressed the truth regarding nicotine and addiction. Instead, they have falsely claimed that this is simply a matter of individual choice.
K. Suppression and Concealment of Research
on Nicotine Addiction
181. Defendants, rather than fulfilling their promise to the public to disclose material information about smoking and health, chose a course of suppression, concealment, and disinformation about the true properties of nicotine and the addictiveness of smoking.
182. For example, Philip Morris hired Victor DeNoble in 1980 to study nicotine's effects on the behavior of rats and to research and test potential nicotine analogues. DeNoble, in turn, recruited Paul C. Mele, a behavioral pharmacologist. DeNoble and Mele discovered that nicotine met two of the hallmarks of potential addiction, self-administration (rats would press levers to inject themselves with a nicotine solution) and tolerance (a given dose of nicotine over time had a reduced effect).
183. However, Philip Morris instructed DeNoble and Mele to keep their work secret, even from fellow Philip Morris scientists. Test animals were delivered at dawn and brought from the loading dock to the laboratory under cover.
184. DeNoble was later told by lawyers for the company that the data he and Mele were generating could be dangerous. Philip Morris executives began talking of killing the research or moving it outside of the company so Philip Morris would have more freedom to disavow the results. DeNoble recalled that Philip Morris discussed several possible scenarios, including having DeNoble and Mele leaving the company payroll and continuing as contractors, and shifting their work to a lab in Switzerland.
185. In August 1983, Philip Morris ordered DeNoble to withdraw from publication a research paper on nicotine that had already been accepted for publication after full peer review by the journal Psychopharmacology. According to DeNoble, the company changed its mind because it did not want its own research showing nicotine was addictive or harmful to compromise the company's defense in litigation recently filed against it. DeNoble subsequently told Jack Heningfield, Ph.D., chief of the Clinical Pharmacology Branch of the National Institute on Drug Abuse's Addiction Research Center, that Philip Morris officials had rightly interpreted the suppressed nicotine studies as showing that, in terms of addictiveness, "nicotine looked like heroin."
186. In April 1984, Philip Morris told DeNoble and Mele that the lab was being closed, apparently to ensure that DeNoble and Mele's nicotine research remained suppressed and concealed. DeNoble and Mele were forced abruptly to halt their studies, turn off their instruments, and turn in their security badges by morning. Philip Morris executives threatened them with legal action if they published or talked about their nicotine research. According to DeNoble, the lab literally vanished overnight. The animals were killed, the equipment was removed, and all traces of the former lab were eliminated. DeNoble recalled, "The lab was gone, everything was gone. The cages were gone, the animals were all gone, all the data was gone. It was empty rooms."
187. DeNoble testified to the Waxman Subcommittee that "senior research management in Richmond, Virginia, as well as top officials at the Philip Morris Company in New York continually reviewed our research and approved our research." DeNoble also stated that these officials were specifically told about nicotine's addictiveness.
L. The Industry's Secret Manipulation
of Nicotine Levels
188. Not content to conceal the addictive nature of nicotine, the industry has developed sophisticated technology to control the levels of nicotine to maintain its market and guarantee that its customers become and remain addicted. David A. Kessler, M.D., commissioner of the FDA, recently testified before a congressional committee that cigarette manufacturers can manipulate precisely nicotine levels in cigarettes, manipulate precisely the rate at which the nicotine is delivered in cigarettes, and add nicotine to any part of cigarettes.
189. Dr. Kessler testified that "the cigarette industry has attempted to frame the debate on smoking as the right of each American to choose. The question we must ask is whether smokers really have that choice." Dr. Kessler stated:
a. "Accumulating evidence suggests that cigarette manufacturers may intend this result that they may be controlling smokers' choice by controlling the levels of nicotine in their products in a manner that creates and sustains an addiction in the vast majority of smokers."
b. "We have information strongly suggesting that the amount of nicotine in a cigarette is there by design."
c. "The public thinks of cigarettes as simply blended tobacco rolled in paper. But they are much more than that. Some of today's cigarettes may, in fact, qualify as high technology nicotine delivery systems that deliver nicotine in precisely calculated quantities, quantities that are more than sufficient to create and to sustain addiction in the vast majority of individuals who smoke regularly."
d. "The history of the tobacco industry is a story of how a product that may at one time have been a simple agricultural commodity appears to have become a nicotine delivery system."
e. "[T]he cigarette industry has developed enormously sophisticated methods for manipulating nicotine levels in cigarettes."
f. "In many cigarettes today, the amount of nicotine present is a result of choice, not chance."
g. "[Since] the technology apparently exists to reduce nicotine in cigarettes to insignificant levels, why, one is led to ask, does the industry keep nicotine in cigarettes at all?"
190. The Tobacco Industry has used techniques such as adding chemicals to increase nicotine potency. In general, by increasing the alkalinity, or smoke pH, of tobacco blends, the industry can deliver an enhanced "nicotine kick."
191. Particularly instructive on the issue of nicotine manipulation was the following FDA finding published in the FDA's August 1995 report Nicotine In Cigarettes and Smokeless Tobacco Products:
The information in the preceding sections demonstrates that cigarette manufacturers manipulate and control the delivery of nicotine in marketed products. Cigarettes are designed to supply nicotine at consistent levels despite the wide variations in the nicotine levels of the raw materials, the immensely complicated combustion chemistry, and the complex chemical flow properties of a modern cigarette.
Manufacturers use many techniques to control nicotine deliveries. The application of these modifications in cigarette design and their interactive nature pose complex problems in maintaining brand uniformity and consistency regarding nicotine delivery. Yet, the nicotine content and delivery of each brand of cigarettes is remarkably consistent from batch-to-batch and year-to-year. This level of control is analogous to that of the pharmaceutical industry in the production of prescription drugs. In fact, to determine how well nicotine content is controlled in cigarettes, FDA laboratories compared the content uniformity of drugs in tablet or capsule form to the content uniformity of nicotine in cigarettes. The results showed that nicotine content varies from cigarette to cigarette no more than the content of active ingredients in marketed pharmaceuticals.
FDA's investigation has also disclosed that the tobacco industry uses a number of methods to boost nicotine delivery in low-yield cigarettes. The cigarette industry has successfully used these methods to maintain adequate nicotine delivery from low-yield products. Without the independent manipulation of nicotine, many of the techniques used to reduce tar would also substantially reduce nicotine. Instead, regardless of differences in labeled/advertised FTC nicotine yields and manufacturers' claims of low-nicotine delivery for certain brands, all cigarettes contain approximately the same amount of nicotine in the rod, and deliver about 1 mg of nicotine, enough to produce pharmacological effects. Moreover, studies by FDA and others have demonstrated that the lowest-yield cigarettes have the highest concentrations of nicotine, demonstrating that nicotine delivery has been independently manipulated.
The tobacco industry's control and manipulation of nicotine delivery from cigarettes provides additional evidence of the industry's intent to deliver pharmacologically satisfying levels of nicotine to smokers.
192. In particular, the FDA based its findings, in part, on the following:
a. The first manufacturing step in nicotine control is the development and selection of raw materials. The Tobacco Industry has, through breeding and cultivation practices, developed high-nicotine tobacco plants that provide higher-potency raw material, giving manufacturers greater flexibility in blending and in providing uniform and sufficient nicotine deliveries.
b. Even without the selective breeding and cultivation of plants for nicotine content, careful tobacco leaf purchasing plans permit the manufacturers to control nicotine content in their products. For example, nicotine content varies among types of tobacco and from one crop year to the next. Awareness of these basic differences and monitoring of the nicotine levels in purchased tobacco allows the companies to produce cigarettes with nicotine deliveries consistent to a tenth of one percent, despite variations as high as 25 percent in the nicotine content of the raw material originating in the same area, from year to year.
c. The primary control of nicotine delivery (the amount received by the smoker), however, is in the design and careful, sophisticated manufacture of the cigarette to ensure that the smoker obtains the precise amount of nicotine intended by the manufacturer. According to the FDA's investigation, despite reductions in the amount of tar delivered by cigarettes over the past several decades, nicotine delivery in low-yield cigarettes has not fallen proportionately with the reductions in tar. Instead, nicotine delivery has apparently risen over the last decade, a result that confirms that nicotine delivery is being independently and carefully manipulated by tobacco manufacturers. The FDA specifically found that "this newly gathered information, together with the other evidence of the industry's breeding, purchasing, blending, and manufacturing practices, reveals that the tobacco manufacturers control the amount of nicotine that is delivered to the consumer from cigarettes." Such manipulation is accomplished, in part, as set forth below.
1. Leaf Growing
d. The industry's control and manipulation of nicotine in the production of cigarettes begin long before the cured tobacco leaf reaches the manufacturing plant. The characteristics of leaf tobacco, including nicotine content, are established by the genetic makeup of the plant, developed during growing, and fixed by post-harvest handling. Like other raw agricultural commodities, tobacco has physical and chemical properties, including nicotine, that can vary widely, depending on genetic differences, growing season conditions, and soil type. The tobacco industry uses these differences to control and manipulate nicotine through careful genetic breeding and agronomic practices.
e. Modern types of cultivated tobacco (Nicotiana tabacum L) have been selected for a relatively high level of nicotine. Five major types of tobacco make up nearly all tobacco products marketed in the United States: Burley, flue-cured, Maryland, the Dark tobaccos, and Oriental. These tobaccos vary both in nicotine levels and in pH. The pH of a tobacco can have a significant influence on the amount of nicotine, and the rate at which it is absorbed into the tobacco user's bloodstream and delivered to the brain.
f. American tobaccos of all types have undergone cumulative increases in total nicotine levels since the 1950s. Nicotine levels in the most widely grown American tobaccos increased almost 10 percent for Burley and more than 50 percent for flue-cured between 1955 and 1980.
g. According to the FDA, two Tobacco Industry activities over the last several decades appear to be responsible for this increase: (1) the industry's active and controlling participation in the Minimum Standards Program, which ensures that nicotine levels of U.S.-grown-and-marketed tobacco are maintained within specified ranges; and (2) the industry's control over which varieties are suitable for growing in the United States and thereby eligible for federal price support.
h. One key objective of the Tobacco Industry's involvement in the Minimum Standards Program appears to be to ensure that nicotine levels in marketed tobacco do not fall below specified levels. The program was initiated in response to the emergence in the 1950s of several so-called "discount" varieties of tobacco (e.g., "Coker 139," "Coker 187-Golden Wilt," "Coker 282," "Coker 140," "Coker 316," and "Reams 64") that failed to meet current industry specifications established, among other things, to control the amount of nicotine delivery when used in manufacturing filtered cigarettes. To insure the elimination of "discount" or low-nicotine varieties from the market, the industry obtained the necessary cooperation from USDA to eliminate these varieties from the price-support program. In fact, to be eligible under this program, growers must certify, even to this day, that "discount" varieties are not being grown.
i. While the Minimum Standards Program ensured that nicotine levels in marketed tobaccos did not fall, breeding and cultivation initiatives undertaken by the industry caused nicotine levels to increase. In the 1960s and 70s, the industry turned to tobacco breeders to develop tobacco varieties that produced less tar. Breeders found that without intervention in the breeding of these varieties, nicotine levels were reduced along with tars. Thus, the industry has long been able to grow low-tar and low-nicotine varieties of tobacco for use in manufacturing cigarettes.
j. By 1978, however, the industry had abandoned its interest in the development of low-tar/low-nicotine varieties of tobacco for manufacturing low-yield cigarettes, and instead turned to the development of higher-nicotine varieties.
k. In addition to breeding high-nicotine tobacco varieties, the Tobacco Industry engages in a number of agronomic practices that increase nicotine levels in tobacco. Heavy application of nitrogen fertilizers, early topping, and tight control of bud growth at the junction of stalk and leaves (known as the "sucker") have all acted in concert to push nicotine levels upward. In addition, tobacco varieties have been selected for tolerance to brown spot, a leaf disease that makes early harvest necessary. Leaves of disease-resistant varieties tend to remain in the field longer, resulting in maximum nicotine accumulation. Since the introduction in 1965 of the acreage-poundage control system, farmers have reduced the number of harvestable leaves per plant and have tended to increase plant spacing. Both of these practices tend to increase nicotine content in the leaf. Finally, tobacco growers are transplanting tobacco crops earlier, which, coupled with the widespread use of pesticides in the soil, often results in slow early season growth, and also tends to increase nicotine content in the leaves.
l. The foregoing facts has led the FDA to conclude that:
These nicotine-raising agronomic practices have been adopted by U.S. growers in recent years, even though over 50% of the U.S. cigarette market is now characterized as low delivery. Thus, the tobacco industry has developed a number of sophisticated methods for manipulating nicotine levels through breeding and cultivation of tobacco plants and has used these methods to maintain and increase concentrations of nicotine in tobacco leaves. These methods enable the industry to use high-nicotine leaf in low-tar cigarettes, so that, paradoxically, certain low-tar cigarettes now contain more of the higher nicotine tobacco in their blend than cigarettes with higher tar deliveries. The use of these methods demonstrates that the industry manipulates nicotine independently of other tobacco components to ensure that cigarettes contain sufficient nicotine to satisfy smokers.
2. Leaf Purchasing
m. Another method of nicotine manipulation occurs as follows: The key factor related to nicotine in leaf purchasing is stalk position. The concentration of nicotine is lowest at the bottom of the plant and highest in the top leaves of flue-cured tobacco. Thus, the position of the leaf on the stalk determines how much nicotine the leaf will contain. In fact, "stalk position" is an industry euphemism for nicotine content. The stalk position of a leaf can be determined by its appearance, shape, color, and thickness, even after harvest. Therefore, an experienced buyer, whose instructions are dictated by the manufacturer's chemists, need only be concerned with these physical characteristics in identifying leaves of varying nicotine content.
n. Representatives of the Tobacco Industry described to FDA investigators the significant role that nicotine plays in the purchase of tobacco leaf. Brown & Williamson informed the FDA that stalk position is the "first thing" they look for during leaf purchasing.
3. Leaf Blending
o. After purchase, tobacco leaves are blended to attain target levels of nicotine and tar in the smoke. FDA's investigation noted particular attention on the part of manufacturers to the nicotine content of the leaf in the blending operation. As noted above, blending practices by manufacturers are designed to: (1) control the naturally occurring variations in nicotine and other components caused by genetics, growing-season conditions, and soil type within a given type and grade; and (2) particularly for low-tar cigarettes, to increase nicotine concentrations and thereby maintain an acceptable nicotine level in the cigarettes.
p. The pH of cigarette smoke directly affects the delivery of nicotine because it alters the amount of nicotine that is absorbed in the mouth or lungs. pH is controlled by the manufacturer in the selection of the type of tobacco used and blended. For example, smoke-condensate pH is higher from certain tobacco varieties as well as from leaves at upper stalk positions.
q. According to the FDA, blending techniques have been used to finely control nicotine concentrations in marketed cigarettes.
r. The foregoing led the FDA to conclude that: Significant evidence also demonstrates that tobacco manufacturers have used blending techniques to increase nicotine concentrations in low-tar cigarettes and thereby maintain nicotine delivery while reducing tar delivery. FDA has observed the industry's use of proportionately greater amounts of higher nicotine-containing Burley tobacco in the tobacco blends of the lowest-tar varieties of cigarettes. In fact, Thomas Sandefur, the chief executive officer of Brown and Williamson, admitted to Congress that nicotine levels can be adjusted "up or down" depending on the blend of tobaccos used in a particular cigarette. Industry scientists have also acknowledged that tobacco manufacturers blend high-nicotine tobaccos to compensate for the reductions in nicotine caused by innovations in cigarette design and manufacturing to reduce tar delivered. These examples demonstrate that tobacco manufacturers deliberately increase the proportion of high-nicotine delivery that would otherwise result in these products. (Emphasis added.)
4. Additional Evidence of Nicotine Manipulation
193. Reconstituted tobacco is made from stalks and stems and other waste that cigarette companies used to discard and now use to make cigarettes more cheaply. Reconstituted tobacco ordinarily contains 25 percent or less of the nicotine in regular tobacco. A former Reynolds manager who demanded anonymity told the ABC news program "Day One," that on the average, currently marketed brands contain about 22 percent reconstituted tobacco and that cut rate or generic brands typically contain about double that amount.
194. A laboratory analysis commissioned by "Day One" and conducted by the American Health Foundation confirmed the industry's heavy use of reconstituted tobacco. One Reynolds brand had 25 percent and another had about 33 percent reconstituted tobacco. Yet, tested samples of the reconstituted tobacco implanted in Reynolds brands Winston, Salem, Magna and Now had up to 70 percent, rather than the expected 25 percent, of the nicotine that would be found in regular tobacco, indicating that Reynolds had fortified the reconstituted tobacco with additional nicotine.
195. Reconstituted tobacco has inferior taste and less nicotine, so the cigarette manufacturers or their agents apply a powerful tobacco extract either alone or as part of a solution of flavorings to the reconstituted tobacco. Reynolds and the other cigarette manufacturers have the technology to add flavorings with or without nicotine, so the addition of nicotine to reconstituted tobacco is purely at the manufacturer's discretion.
196. The Kimberly-Clark tobacco reconstitution process is believed to be used throughout the Tobacco Industry in a number of countries. A Kimberly-Clark advertisement published in tobacco industry trade publications states:
Nicotine levels are becoming a growing concern to the designers of modern cigarettes, particularly those with lower "tar" deliveries. The Kimberly-Clark tobacco reconstitution process used by LTR INDUSTRIES permits adjustments of nicotine to your exact requirements. These adjustments will not affect the other important properties of customized reconstituted tobacco produced at LTR INDUSTRIES: low tar delivery, high filling power, high yield and the flexibility to convey organoleptic modifications. We can help you control your tobacco.
197. Furthermore, the Tobacco Industry's own trade literature explains that the Kimberly-Clark process enables manufacturers to triple or even quadruple the nicotine content of reconstituted tobacco, thereby increasing the nicotine content of the final manufactured product.
198. Another enterprise quite explicitly specializes in the manipulation of nicotine and its use as an additive. This company does business under the name "The Tobacco Companies of the Contraf Group." An advertisement run by the Contraf Group in the international trade press states: "Don't Do Everything Yourself! Let us do it More Efficiently!" Calling itself "The Niche Market Specialists," Contraf lists among its areas of specialization "Pure Nicotine and other special additives."
199. The cigarette industry has also used a process called "denaturing" to add nicotine to cigarettes. Nearly-pure nicotine is combined with alcohol and then applied to tobacco during the manufacturing process. Trucking records show that Philip Morris, for example, received thousands of gallons of this nicotine/alcohol mixture during the 1980s.
200. Against this mounting body of evidence that the cigarette industry manipulates and controls nicotine levels in cigarettes, the cigarette manufacturers continue to deny to the public, and recently denied to Congress under oath, that they manipulate and control nicotine levels:
a. William I. Campbell, president and CEO of Philip Morris, told Congress on April 14, 1994, "Philip Morris does not manipulate nor independently control the level of nicotine in our products. . . . Cigarettes contain nicotine because it occurs naturally in tobacco."
b. James W. Johnston, president and CEO of RJR Nabisco, told Congress, "We do not add or otherwise manipulate nicotine to addict smokers."
c. Andrew J. Schindler, president and CEO of R.J. Reynolds Tobacco Company, told Congress, "We do not restore any nicotine anywhere in our process. . . . We lose nicotine, for example, in the reconstituted sheet process. . . . [N]owhere in that process is any nicotine being incrementally added into the process." Contradicting Johnston's and Schindler's statements, Dr. Robert Suber, a toxicologist with Reynolds, admitted that Reynolds controls the nicotine in its products. He told CNN, "In order to deliver to the consumer a product that he wants, a consistent level of nicotine, we have to blend the tobaccos accordingly. So we do control it."
d. Andrew H. Tisch, chairman and CEO of Lorillard, told Congress that "Lorillard does not take any steps to assure a minimum level of nicotine in our products. Lorillard does not add nicotine to cigarette tobacco for the purpose of manipulating or spiking the amount of nicotine received by the smoker."
e. Edward A. Horrigan, Jr., chairman and CEO of Liggett Group, Inc., told Congress that "In all my years in this business worldwide, I have never known of a product-designed objective or goal that included even the notion of spiking the amount of nicotine in a cigarette to achieve a level that would hook or addict smokers." Horrigan, however, as former chairman and CEO of Reynolds through the late 1980s, participated in developing and marketing Premier and other Reynolds cigarette brands whose manufacturing process included manipulating nicotine content and delivery.
f. Thomas E. Sandefur, Jr., CEO of Brown & Williamson, in the face of overwhelming evidence to the contrary, denied secretly growing Y-1 in sworn testimony before Congress on June 23, 1994, and stated that his company was being "set up." He admitted that the company controlled nicotine, but in a shop-worn and now familiar refrain, stated that the company did so only for "taste."
g. T.F. Riehl, vice president for research and development at Brown & Williamson, denied that the company mixed the tobacco for the Barclay cigarette to have a higher concentration of nicotine, and told Congress, "No, sir. We blend for taste, not nicotine." However, internal documents from Brown & Williamson indicate that Riehl himself conducted research focusing on the adjustment of nicotine and tar levels without regard to taste. In fact, at the 1984 Smoking Behavior-Marketing Conference, Riehl gave a presentation on Project Aries, Brown & Williamson's safer cigarette project, which emphasized tar reduction and nicotine enrichment in later puffs, but never addressed the issue of taste.
201. The cigarette industry's "taste" argument is belied by the testimony of health policy expert, Clifford E. Douglas, testifying before the FDA's Drug Abuse Advisory Committee, who asked "why so many smokers who have endured tracheostomies due to throat cancer find it necessary to continue to smoke through the holes in their throats, where they cannot taste a thing."
202. The newly discovered evidence of nicotine manipulation by the cigarette industry and the recent disclosures about nicotine addiction and manipulation made before Congress have not deterred the industry from its campaign of concealment and disinformation. As recently as April 1994, the cigarette industry placed advertisements across the country denying that it "spikes" cigarettes with nicotine, denying that it believes cigarette smoking is addictive, and misleading the public about whether the cigarette companies deliberately control nicotine levels in their products.
203. An advertisement by Philip Morris in newspapers across the country in April 1994 denied that Philip Morris manipulates nicotine levels and stated that "nicotine level in the finished cigarette is lower than the nicotine level of the original, natural tobacco leaf."
204. Reynolds placed a similar advertisement in newspapers across the United States in 1994 mischaracterizing the "recent controversy" as focusing on Reynolds' various techniques that "help us reduce the tar (and consequently the nicotine) yields of our products."
205. These advertisements deliberately create the false impression that the "recent controversy" they refer to is about whether reconstituted and reduced-tar tobacco have less nicotine than the original tobacco leaf. The Tobacco Companies can legitimately claim that their finished cigarettes have less nicotine. The real controversy, however, which these advertisements so carefully avoid, stems from the discrepancy between actual nicotine levels of the industry's tar-reduced and reconstituted tobacco and the claimed "essentially perfect" correlation between nicotine and tar levels. In fact, the nicotine levels have proven to be consistently higher than what the correlation would predict. The inaccuracy lies not in the correlation, but in the story the industry has told the public about how it manufactures cigarettes. That story has carefully and deliberately omitted the industry's addition of nicotine in the form of an extract to these tobaccos to keep them at addictive levels.
M. Maintaining the Market through Sales to Minors
1) The Increasing Addiction of Minors:
A Predicate to Continuing
Industry Profits
206. In addition to ensuring a captive market through the addiction of its customers, the cigarette industry has maintained its sales and replaced the hundreds of thousands of smokers who die each year by intentionally targeting marketing and promotional efforts at children and adolescents.
207. Every day, more than 1,200 cigarette smokers die of disease caused by smoking. To prevent a precipitous decline in cigarette sales, the big cigarette companies must attract new smokers. Children and teenagers became the main target and as a result of the Tobacco Companies' unfair and deceptive marketing programs and advertising, over 3,000 of them begin smoking everyday.
208. The use of tobacco by minors continues to rise. The Centers for Disease Control and Prevention ("CDC") announced on May 24, 1996, that a study of high school students showed a 35 percent higher incidence of tobacco use among high school students in 1995 than in 1993. The prevalence of cigarette smoking in recent years among 8th and 10th grade students has risen significantly. For example, among 8th grade students, 14.3 percent in 1991 and 18.6 percent in 1994 were current smokers; among 10th grade students, 20.8 percent in 1991 and 25.4 percent in 1994 were current smokers.
209. The 1994 Surgeon General's Report reviewed several different surveys and found that the estimated percentage of adolescents who have ever smoked cigarettes ranged up to approximately 42 percent (as reported by the 1991 Youth Risk Behavior Survey). The 1994 Surgeon General's Report also found that 28 percent of high school seniors were current smokers. Further, the 1994 Surgeon General's Report states that seven to 13 percent of adolescents were frequent or heavy smokers, consuming at least one-half pack daily or smoking 20 days or more of the 30 days in a survey period.
210. Approximately 3 million children under the age of 18 are daily smokers. One study found that children between the ages of 8 and 11 who are daily smokers consume an average of four cigarettes daily, and those who are between the ages of 12 and 17 average nearly 14 cigarettes daily. The study also estimated that adolescents consume an estimated 947 million packs of cigarettes and 26 million containers of smokeless tobacco annually and account for annual tobacco sales of $1.26 billion. Another study estimates that teenagers in 1991 smoked 516 million packs of cigarettes and spent $962 million purchasing them. As stated previously, these figures are especially significant given that all states prohibit the sale of tobacco to persons under the age of 18 (with some states prohibiting sales to persons under the age of 19 and one state, Pennsylvania, prohibiting cigarette sales to persons under the age of 21). Unfortunately, few states can successfully enforce their laws restricting tobacco sales to minors given the tobacco industry's intense efforts to lure minors into smoking.
211. Studies have also suggested that the age someone begins smoking can greatly influence the amount of smoking one will engage in as an adult and will ultimately influence the smoker's risk of tobacco related morbidity and mortality. More than 80% of adult smokers had their first cigarette before they were 18-years old. Those who started smoking by early adolescence were more likely to be heavy smokers than those who began smoking as adults. Another study found that high school students who smoked their first cigarette during childhood smoked more often and in greater amount that those who first tried smoking during adolescence.
212. The escalating use of smokeless-tobacco products by underage persons presents an additional and growing public health problem. Smokeless-tobacco products include chewing tobacco and snuff and are also known as "spit tobacco" or "spitting tobacco." In 1970, the prevalence of snuff use among males was lowest in those 17 to 19 years of age and the highest use was by men aged 50 or more. By 1985, a dramatic shift had occurred, and males between 16 and 19 were twice as likely to use snuff as men aged 50 and over. An estimated 3 million users of smokeless tobacco products were under the age of 21 in 1986, when Congress enacted the Comprehensive Smokeless Tobacco Health Education Act (the "Smokeless Act") (15 U.S.C. § 4401). The Smokeless Act required the Secretary of Health and Human Services ("Secretary") to inform the public of the health dangers associated with smokeless-tobacco use, required warning labels on packages, banned advertising on electronic media subject to the Federal Communications Commission's jurisdiction (such as television and radio), and encouraged States to make 18 years the minimum age for purchasing smokeless tobacco products. Despite the Smokeless Act and State laws prohibiting sales to minors, a high percentage of persons under the age of 18 use smokeless-tobacco products. For example:
• 1991 school-based surveys estimated that 10.7 percent of U.S. high school seniors and 19.2 percent of male 9th to 12th grade students use smokeless tobacco.
• A 1992 national household-based survey of U.S. children found that 11.0 percent of males 12-17 years of age were using smokeless tobacco.
•
• Among high school seniors who had ever tried smokeless tobacco, 73 percent did so by the ninth grade.
213. The recent and very large increase in the use of smokeless-tobacco products by young people and the addictive nature of these products have persuaded the Secretary that these products must be included in any regulatory approach that is designed to help prevent future generations of young people from becoming addicted to nicotine-containing tobacco products.
214. Despite the best efforts of parents, educators, and the medical profession, smoking among young people has increased since the 1970s. This is because cigarette company advertising is used to create a mental image associating smoking with healthy, glamorous and athletic lifestyles, with success and sexual attractiveness and success. This increases demand for cigarettes among young people. Within a short period of time, the young smoker becomes physiologically and emotionally dependent upon i.e., addicted to tobacco. Later, as the maturing smoker begins to wish he or she could quit, advertising reinforces the practice and seeks to minimize health concerns, creates doubt, confusion and mistake, which are used by smokers as an excuse to avoid the pain and discomfort of attempting to break their addiction to nicotine. This is the vicious cycle created by Defendants.
215. The cigarette companies sell more than one billion packs of cigarettes per year to minors under the age of 18. In 1988, these sales accounted for about $1.25 billion. Approximately 3 percent of the total tobacco-industry profits ($221 million in 1988) are derived directly from the sale of cigarettes to children under the age of 18, an activity that is illegal in 47 states, including Missouri. Marlboro and Camel cigarettes, produced, respectively, by Philip Morris and Reynolds dominate the teenage-smoking market.
216. Sales to minors is no accident, it is the intended result of a carefully orchestrated scheme. For example, despite the fact it is illegal to sell to minors in Missouri, each of the Tobacco Companies' studies how to attract minors and engages in conduct to accomplish that goal. Illustrative is Reynolds, which repeatedly has conducted reports "relating to teenage smokers," including an analysis of Reynolds' share of teenage smokers, defined as "14-17."
2) The Use of Appealing Images
217. Defendants have engaged in a course of conduct designed to promote cigarette smoking among young people by appealing particularly to those with low self- esteem and emotional insecurity. Once the young person has been predisposed toward smoking, a variety of factors can precipitate actual experimentation. For many young people, the precipitating factor is being given a free pack of cigarettes by a Tobacco Company representative, or purchasing cigarettes to obtain an attractive t-shirt, baseball cap, or other gimmick used to promote cigarette smoking.
218. One of the best examples was the transformation of Marlboro cigarettes from a red-tipped cigarette for women to the cigarette for the macho cowboy. By changing imagery, Philip Morris was able to tap into a wholly new and different market. In 1950, Reynolds was the king of the cigarette business. It sold more cigarettes than any other company. Philip Morris, though doing well on the basis of its fraudulent health-oriented advertising, was still far behind. In 1981, Philip Morris passed Reynolds in market share and each year has extended its lead by developing an effective marketing campaign for recruiting new young smokers to its brands. The wild spirit of the Marlboro man captured the adolescent imagination. Also, Philip Morris's representatives fanned out to colleges across the country, giving free cigarettes to incoming freshmen to get them hooked. The children and teenagers who started smoking Marlboro became tenaciously loyal customers. Soon, Marlboro became the gold standard of cigarettes among teenagers. Up until 1988, nearly three-fourths of teenage smokers used Marlboro.
219. At about the time it lost market leadership to Philip Morris, Reynolds dedicated itself to a ruthless advertising campaign encouraging children and teenagers to smoke. One of the key elements of the R.J. Reynolds's strategy for attracting children was to reposition many of its cigarette brands to younger audiences.
220. Reynolds's Vantage cigarettes entered the 1980s as a brand targeted at the health conscious adult smoker. Advertisements were intended to assuage fears of lung cancer and other diseases, and give concerned smokers arguments for rationalizing their continuation of the addiction. Through multiple advertising transmogrifications, Vantage cigarettes have been progressively repositioned to ever-younger audiences. During the mid-1980s this advertising campaign featured young successful professionals (including architects, fashion designers, lawyers, etc.) with the slogan "The taste of success." These campaigns promote the implication that smoking is helpful if not essential to social success or prominence. This is an image designed to appeal to underage smokers who dream of becoming successful professionals. In the late 1980s the advertising theme for Vantage cigarettes began to feature professional-caliber athletes like wind surfers, aerobic dancers, downhill ski-racers, and auto-racers. This theme depicts physical activity requiring strength or stamina beyond those of everyday activity, clearly suggesting that smoking is not harmful.
221. During the 1980s, as intended by the manufacturer, the theme for Salem cigarettes also became more youth-oriented. Whereas the dominant theme for Salem cigarettes used to be clean fresh country air, during the 80s the theme was conveyed through the use of Salem ads populated by muscular surfers and beach bunnies, fun-loving party animals, and other attractive adolescent role models. Another successful advertising campaign targeted at young people is the Lorillard Tobacco Company campaign promoting Newport cigarettes. The theme links Newport with men and women in sexually suggestive positions, always having fun, using the slogan "Alive with pleasure."
222. Another successful campaign was the "You've come a long way baby" campaign promoting Virginia Slims cigarettes. One of the most important psychological needs of most adolescent girls is to become independent from their parents. By associating smoking with women's liberation, Philip Morris hoped to create in the minds of these teenage girls the vision of smoking as a symbol of autonomy and independence. The theme created for Virginia Slims and other "feminine" cigarettes prey upon the natural and widespread insecurity and sense of inferiority experienced by adolescents by portraying the cigarette as a crutch and a symbol of superiority. Perhaps the most acute psychological need of adolescence is to fit in, to be accepted, to be popular.
223. A status symbol and secret desire of many teenage boys is a powerful motorcycle. For this reason, many cigarette brands have used motorcycle imagery to encourage teenage boys to smoke. To target young boys, the industry uses images of such high-risk activities as hang gliding, motorcycle racing and mountain climbing. Cigarette makers do this deliberately to undermine awareness that smoking is dangerous. In its campaign to attract adolescent boys to become smokers, the R.J. Reynolds cigarette company has made extensive use of risk-taking and danger in its advertising. By glorifying risk-taking, these ads have a more insidious purpose. How a person estimates the magnitude and likelihood of a risk can be significantly affected by what it is compared against. By portraying extremely dangerous activities like hang-gliding, mountain climbing, and stunt motorcycle riding, Reynolds minimizes the dangers of smoking in adolescent minds.
224. The greatest success that Reynolds had in its effort to gain on Philip Morris in the youth market is the "Joe Camel" cartoon character. This campaign was inaugurated in the United States in 1987 to commemorate the 75th anniversary of Camel cigarettes. In the first ads, the camel leered out over the pack saying, "75 years and still smoking." The implication is obvious. It soon became evident that "Joe Camel" would strike a responsive chord among children and teenagers, and has been used by Reynolds to target young persons, even children, to get them to start smoking at an early age. Reynolds has more than tripled its advertising expenditures for Camel cigarettes after 1988, utilizing themes like "Joe Camel" guaranteed to be attractive to young people at high risk of becoming smokers.
3) Use of Youth-Oriented Locations for
Promotional and Advertising
Materials
225. It is not just the themes within cigarette advertising that betray the real target, it is also the location of those themes. During the 1980s there was a steady migration of cigarette advertising into youth-oriented publications. Magazines with sexually oriented themes, and those concerning entertainment and sporting activities, had the highest concentration of cigarette ads. For many of these magazines, teenagers comprise a quarter or more of the total readership. Cigarette ads in these youth-oriented magazines were frequently multi-page, pop-up ads. News magazines like Time and Newsweek, which have older audiences, had few cigarette ads, and those tended to emphasize implicit health promises concerning tar and nicotine rather than glamorous images.
226. In tests all across the country, it has been demonstrated that children as young as 12 years old can buy cigarettes in three out of four retail outlets. A study by the Inspector General's Office of the Department of Health and Human Services concluded that, while there are laws prohibiting the sale of tobacco to minors, they are almost uniformly unenforced. The risk of a merchant being punished for selling cigarettes to minors is about one in 33 million. Cigarettes are available in unlimited quantities to children through vending machines as well.
227. A particularly successful element of the industry's campaign has been aimed at young girls. Nearly every issue of magazines for young girls like Teen and Young Miss includes a statement by Reynolds urging children not to smoke. But the reasons given for refraining are designed to conceal, i.e., the reasons are not that smoking is addictive, that it can harm or kill the infants of pregnant women, or that it causes cancer and other awful diseases. Rather, the reason given is that it is an "adult custom."
228. This message, rather than discouraging children from smoking, plants in impressionable young girls' minds the notion that smoking is something to do to show one's independence and to act grown-up. This notion is, of course, reinforced by the ubiquitous cigarette ads depicting glamorous young adult women smoking as a way of demonstrating their independence.
4) Reynolds: "Old Joe Camel"
229. The most notorious recent example of the industry targeting of minors is the "Joe Camel" advertising campaign conducted by Reynolds, in observance of the Camel brand's 75th anniversary. As part of the initiation of the promotion, Reynolds included singing birthday cards in Rolling Stone magazine, a publication particularly popular with young people, and offered premiums such as t-shirts, party mugs and wall posters. When Reynolds began this cartoon campaign in 1988, Camel's share of the children's (under 18 years of age) market was only 0.5 percent. In just a few years, Camel's share of this illegal market has increased to 32.8 percent, representing sales estimated at $476 million per year. Another indication of the phenomenal success of this marketing campaign is the fact that in a recent survey of six year-olds, 91 percent of the children could correctly match "Old Joe" with a picture of a cigarette, and the silhouette of Mickey Mouse and the face of "Old Joe" were nearly equally well recognized by almost all children.
230. All Defendants are aware that tobacco use begins primarily among youth who are not yet 18 years of age. Among minors, the three most used brands of cigarettes are the most advertised. Reynolds studied the attributes of an advertising campaign that would most appeal to the group it carefully identified as "21 and under." Those attributes directly coincide with the "Joe Camel" campaign. Several years later, again addressing those attributes, this startling statement was made: "Young people will continue to become smokers at or above the present rates during the projection period. The brands which these beginning smokers accept and use will become the dominant brands in future years. Evidence is now available to indicate that the 14 to 18 year old group is an increasing segment of the smoking population. RJR must soon establish a successful new brand in the market if our position in the industry is to be maintained over the long term."
231. Reynolds continues to use the "Old Joe" character in conjunction with other offers attractive to minors. Recently, for example, it began an advertising campaign offering concert tickets in return for redemption of a number of Camel coupons, again in Rolling Stone magazine.
232. Reynolds has made other premiums available in exchange for coupons included in packages of Camel cigarettes. These premiums are deliberately designed to appeal primarily to minors.
233. Reynolds has expressly encouraged minors to circumvent laws related to tobacco use by minors. For example, in one coupon offer for a free package of Camels, "Joe Camel" advised individuals that it would be a "smooth move" to have someone else redeem the coupon, thus suggesting the means to overcome prohibitions of sales to minors of tobacco products. Other Reynolds campaigns have targeted stores and advertising locations close to high schools and other areas frequented by minors, and Reynolds concentrates advertising in publications read by large numbers of minors.
5) U.S. Tobacco: "Old Enough to Chew"
234. U.S. Tobacco has engaged in an ongoing campaign to induce individuals to become users of smokeless tobacco, and its efforts find particular success among minors, as intended by the company.
235. U.S. Tobacco designs its products to introduce the "new user" to smokeless tobacco products, and as addiction grows, "graduate" users to higher nicotine content products: "Skoal Bandits [a mild, low-nicotine product, packaged in individual-use packets] is the introductory product, and then we look towards establishing a normal graduation process [to higher nicotine content products]." The introductory products are aimed at new users between ages 15 and 35.
236. A U.S. Tobacco employee, Bill Falk, who was apparently terminated for some other comments in the article told a New York Post reporter: "A lot of young people are getting into it [smokeless-tobacco use] . . . It's become a status thing. When a kid gets a new pair of jeans, he puts the snuff can in the back pocket and rubs it till the outline shows. It shows he's old enough to chew."
6) Philip Morris: Competing
for the Minor Market
237. All Defendants promote and market their products to minors. At least one company, Philip Morris, tracked hyperactive children in grade school to research whether they would become smokers. Philip Morris apparently conducted market research concerning minors who smoke or are apt to smoke. In a 1969 presentation to the Board of Directors by the Philip Morris Research Center, W.L. Dunn, Jr. and F.J. Ryan talked about the future of the "psychology department," noting that more attention was being paid to the reasons why people smoke; "there is general agreement on the answer to [why people begin to smoke]. The 16 to 20 year old begins smoking for psychosocial reasons. The act of smoking is symbolic; it signifies adulthood, he smokes to enhance his image in the eyes of his peers." Philip Morris, having apparently studied the minor market for tobacco, has recently begun a program characterized as "Marlboro Unlimited," which is a program offering premiums for coupons from cigarette packages. This program is a direct response to Reynolds success in the minor market, is designed to appeal to minors, and is an effort by Philip Morris to maintain Marlboro's dominance of that illegal market.
238. Each defendant Tobacco Company engages in various advertising and promotional activities to develop a "minor" market. These activities include pervasive sponsorship of various sporting events, concerts and other events likely to attract extensive youth interest. Another means of appealing to youth used by the companies is paying for promotional appearances in movies which, because of the subject matter or the actors in the films, are most likely to appeal to youth. For example, Brown & Williamson agreed with the actor Sylvester Stallone that he would use the former's products in at least five feature films, in exchange for $500,000. Philip Morris paid for the promotion of Marlboro in "Superman II," "Risky Business," and "Crocodile Dundee" and for promotion of Lark in "License to Kill." It paid for or otherwise provided promotional material for 56 films in 1987-88. Liggett paid for promotion of Eve [its brand designed especially to appeal to young women] in "Supergirl." American Tobacco promoted Lucky Strike in "Beverly Hills Cop." Reynolds paid for the promotion of Camel in "Who Framed Roger Rabbit," "Desperately Seeking Susan," and "Honey, I Shrunk the Kids."
7) Philip Morris's Admission that
it has Targeted Minors
239. The Tobacco Cartel is currently under intense scrutiny from state and federal officials. In a blatant attempt to stave off FDA regulations, Philip Morris has proposed a series of changes to their marketing practices. In a recent letter to several state attorneys general, Philip Morris announced a "blue print which directly addresses the issue of youth smoking." Among its proposals are the following:
• Ban tobacco ads near schools and playgrounds and in youth oriented publications;
• Prohibit tobacco brand names, logos and characters on promotional items like t-shirts and caps;
• Ban cigarette vending machines;
• Limit tobacco brand name sponsorship to events with primarily adult audiences;
• Ban tobacco advertising in video arcades and family-oriented centers.
•
240. These proposals constitute an admission that the industry has attempted to attract minors, when it: (1) places tobacco ads near schools, playgrounds, and in youth oriented publications; (2) uses logos and characters that are intended to appeal to minors; (3) sponsors events that have primarily youth audiences; (4) places ads in places likely to reach minors such as video and family oriented centers. These admissions are powerful evidence that the Tobacco Industry has knowingly and intentionally targeted minors. Further evidence in this regard is the fact that two industry leaders, Reynolds and Philip Morris, repeatedly used third parties to survey the attitudes and likes and dislikes of children and teenagers. These surveys would not have been commissioned if Reynolds and Philip Morris had not intended to target minor children.
N. Smokeless-Tobacco Products: Addiction
Through the "Graduation Process"
241. Defendants Brown & Williamson and R.J. Reynolds also manufacture and distribute loose tobacco used in the "roll your own" process of cigarette-making.
242. Even though the medical evidence regarding the hazards of cigarette smoking and addiction have been known to the Defendants for many years, the packages and containers of the "roll your own" tobacco bear no warning regarding such hazards.
243. Despite their knowledge that smokeless tobacco is extremely addictive, the Tobacco Companies continue to deny that smoking, "dipping," or "chewing" tobacco is addictive. Through their individual advertising and public relations campaigns, and collectively, through the Tobacco Institute, the Tobacco Companies have successfully promoted and sold tobacco products by concealing and misrepresenting the highly addictive nature of cigarettes and smokeless tobacco.
244. Defendant U.S. Tobacco Company makes approximately 90 percent of the oral snuff and chewing tobacco sold in the United States. As alleged above, smokeless tobacco delivers a similar amount of nicotine as cigarettes and is equally as addictive. Plaintiff is informed and believes that smokeless tobacco manufacturers intend to cause nicotine dependence among consumers through a strategy that involves promoting lower-nicotine brands with the intent of moving users up to higher, more addictive brands over time. The "graduation" strategy calls for three different brands of low, medium, and high nicotine content. The strategy is based on the premise that new users of smokeless tobacco are most likely to begin with products that are milder tasting, more flavored and lighter in nicotine content. After a period of time, there is a natural progression to products that are more full-bodied and have more concentrated tobacco taste, with more nicotine, than the entry brand. This graduation strategy is supported by the manufacturers' advertising practices, which indicate the manufacturers intend to have consumers experiment with low-nicotine brands and graduate to higher-nicotine brands over time. The FDA's 1995 investigation into nicotine and tobacco products found that, with respect to smokeless products, "tobacco manufacturers control the delivery of nicotine," so that products that deliver lower doses of nicotine are provided to "new users" who are then encouraged by tobacco marketing to "graduate" to products that deliver "higher doses of nicotine."
O. The Human Toll of Cigarette Smoking
1) Health Effects of Cigarette Smoking
245. Over 400,000 Americans die each year from tobacco-related illnesses. This equates to more than one of every five deaths in the United States. If an adolescent's tobacco use continues for a lifetime, there is a 50 percent chance that the person will die prematurely as a direct result of smoking. Moreover, the earlier a young person's smoking habit begins, the more likely he or she will become a heavy smoker and therefore suffer a greater risk of smoking-related diseases. Smoking is responsible for about 90 percent of all lung cancer deaths; 87 percent of deaths from chronic obstructive pulmonary diseases; 21 percent of deaths from coronary heart disease; and 18 percent of deaths from stroke. Further, a causal relationship exists between cigarette smoking and cancers of the larynx, mouth, esophagus, and bladder; and atherosclerotic peripheral vascular disease, cerebrovascular disease (stroke), and low-birth-weight babies. Cigarette smoking is also a probable cause of infertility and peptic ulcer disease and contributes to, or is associated with, cancers of the pancreas, kidney, cervix and stomach.
246. Epidemiologic studies provide overwhelming evidence that smoking causes lung cancer. The risk of getting lung cancer may be more than 20 times greater for heavy smokers than nonsmokers. The relationship between smoking and lung cancer is due to the numerous carcinogens in cigarette smoke. Cigarette smoking caused an estimated 117,000 deaths from lung cancer in 1990.
247. The risk of getting lung cancer increases with the number of cigarettes smoked and the duration of smoking, and decreases after cessation of smoking. Starting smoking at an earlier age increases the potential years of smoking and increases the risk of lung cancer. Studies have shown that lung-cancer mortality is highest among adults who began smoking before the age of 15.
248. Cigarette smoking also causes cancer of the larynx, mouth, and esophagus. According to current estimates, 82 percent of laryngeal cancers are due to smoking and about 80 percent of the 10,200 deaths from esophageal cancer in 1993 can be attributed to smoking. The risk of oral cancer among current smokers ranges from 2.0 to 18.1 times the risk in people who have never smoked and can be reduced more than 50 percent after quitting. The risk of esophageal cancer among current smokers ranges from 1.7 to 6.4 times the risk in people who have never smoked and can also be reduced by about 50 percent after quitting.
249. Epidemiological studies demonstrate that cigarette smoking contributes to the development of pancreatic cancer. The reason for this relationship is unclear, but may be due to carcinogens or metabolites present in the bile or blood. In 1985, the proportion of pancreatic cancer deaths in the United States attributable to smoking was estimated to be 29 percent in men and 34 percent in women.
250. Cigarette smoking accounts for an estimated 30 to 40 percent of all bladder cancers and is a contributing factor for kidney cancer. The increased risk of kidney and bladder cancer may be related to the number of cigarettes smoked per day, and the risk decreased following smoking cessation.
251. Smoking is a contributing factor for cancer of the cervix. The association between cigarette smoking and cervical cancer persists after control is made for risk factors, such as age at first intercourse and the number of sexual partners, that predispose a woman to developing sexually-transmitted diseases. The inclusion of these risk factors, however, may not completely rule out confounding by sexually-transmitted diseases. The findings that components of tobacco smoke can be found in the cervical mucus of smokers, and the mucus of smokers is mutagenic, and that former smokers have a lower risk of getting cervical cancer than current smokers are consistent with the hypothesis that smoking is a contributing cause of cervical cancer.
252. The 1982 Surgeon General's Report concluded that stomach cancer is associated with cigarette smoking.
253. Smoking is a leading cause of heart disease. The 1964 Surgeon General's Report noted that male cigarette smokers had higher death rates from coronary heart disease than nonsmokers. Subsequent reports have concluded that cigarette smoking contributes to the risk of heart attacks, chest pain, and even sudden death. Overall, smokers have a 70 percent greater death rate from coronary heart disease than nonsmokers.
254. Ischemic heart disease resulting from cigarette smoking claimed nearly 99,000 lives in 1990. One study estimates that smoking causes 30 to 40 percent of all deaths due to coronary heart disease. Smokers between the ages of 40 and 64 who smoked more than one pack a day were shown to have a risk of coronary heart disease that is 3.2 times higher than people who do not smoke.
255. Smoking also increases a person's risk of atherosclerotic peripheral vascular disease, especially if the smoker is diabetic. Complications of this disease include decreased blood delivery to the peripheral tissues, gangrene, and ultimately loss of the affected limb. Smoking cessation is the most important intervention in the management of peripheral vascular diseases.
256. Smoking is a cause of stroke. Stroke is the third leading cause of death in the United States. The association of smoking with stroke is believed to be mediated by the mechanisms responsible for atherosclerosis (narrowing and hardening of the arteries), thrombosis, and decreased cerebral blood flow in smokers. Female smokers who use oral contraceptives are at an increased risk of having a stroke.
257. Cigarette smoking is the leading cause of chronic obstructive pulmonary disease ("COPD") in the United States. Approximately 84 percent of the COPD deaths in men and 79 percent of the COPD deaths in women are attributable to cigarette smoking. The risk of death from COPD may depend on how many cigarettes a person smokes daily, how deeply the person inhales, and the age when the person began smoking. The number of cigarettes smoked per day is a strong indicator for the presence of the principal symptoms of chronic respiratory illness, including chronic cough, phlegm production, wheezing, and shortness of breath.
258. Smoking's detrimental effect on lung structure and function appear within a few years after cigarette smoking begins. Children who smoke are more likely to suffer from respiratory illnesses than children who do not smoke. Adolescents who smoke may experience inflammatory changes in the lung, reduced lung growth, and may not achieve normal lung function as an adult.
259. Cigarette smoking is a probable cause of peptic ulcer disease. Peptic ulcer disease is more likely to occur in smokers than in nonsmokers, and the disease is less likely to heal, and more likely to cause death, in smokers than nonsmokers. Quitting smoking reduces the chances of getting peptic ulcer disease and is an important component of effective peptic ulcer treatment.
260. Studies also show that women who smoke have reduced fertility. One study showed that smokers were 3.4 times more likely than nonsmokers to take more than 1 year to conceive.
261. Smoking's severe detrimental effects during pregnancy are well documented. Women who smoke are twice as likely to have low birth weight infants as women who do not smoke. Smoking also causes intrauterine growth retardation of the fetus. Mothers who smoke also have increased rates of premature delivery.
262. Smoking may lead to premature infant death. Babies of mothers who smoke are more likely to die than babies born to nonsmoking mothers. A recent meta-analysis reported that use of tobacco products by pregnant women results in 19,000 to 141,000 miscarriages per year, and 3,100 to 7,000 infant deaths per year. In addition, the meta-analysis attributed approximately two-thirds of deaths from sudden-infant-death syndrome to maternal smoking during pregnancy. By another estimate, if all pregnant women stopped smoking, there would be 4,000 fewer infant deaths per year in the United States.
2) Health Effects of Smokeless-Tobacco Products
263. Smokeless-tobacco use can cause oral cancer. The risk of oral cancer increases with increased exposure to smokeless tobacco products, particularly in those areas of the mouth where smokeless tobacco products are used. The risk of cheek and gum cancers is nearly 50 times greater in long-term snuff users than in nonusers. Snuff and chewing tobacco contain potent carcinogens, including nitrosamines, polynuclear aromatic hydrocarbons and radioactive polonium.
264. Smokeless-tobacco use can cause oral leukoplakia, a precancerous lesion of the soft tissue that consists of a white patch or plaque that cannot be scraped off. One study of 117 high school students who were smokeless-tobacco users revealed that nearly 50 percent of these students had oral tissue alterations. There is a 5 percent chance that oral leukoplakia will transform into malignancies in 5 years. The leukoplakia appears to decrease or resolve upon cessation of smokeless-tobacco use.
265. Smokeless-tobacco use causes oral cancer and oral leukoplakia and may be associated with an increased risk of cancer of the esophagus. Smokeless-tobacco use has been implicated in cancers of the gum, mouth, pharynx and larynx. Snuff use also causes gum recession and is associated with discoloration of teeth and fillings, dental cavities and abrasion of the teeth.
P. The Injury to the State of Missouri as
a Direct and Foreseeable Consequence
of Defendants' Unlawful Conduct
266. In addition to the human toll, the economic costs of tobacco use and, in particular, health-care expenditures from tobacco-attributable diseases, amount to an unacceptable burden on society and the State of Missouri.
267. The State spends millions of dollars each year to provide or pay for health care and other necessary facilities and services on behalf of state employees, the needy, indigents and other eligible residents. Increased health-care costs for those individuals are directly caused by tobacco-induced cardiovascular disease, lung cancer, emphysema, respiratory and other diseases.
268. In fulfilling its statutory duties, the State of Missouri has expended and will expend substantial sums of money due to the increased cost of providing health-care services to treat tobacco-caused diseases. These increased expenditures have been caused by the unlawful actions of the Tobacco Industry.
269. Missouri expends funds in several areas that include significantly increased charges attributable to tobacco usage and exposure. These include but are not limited to:
a. Medical payments: Pursuant to Chapter 208 RSMo, 1994 and other State statutory provisions, Missouri makes payments for medical-care services provided to recipients of public assistance. The amount paid for Medicaid is higher than it would be otherwise due to payment for tobacco-related illnesses;
b. Health Care: Missouri purchases health-care insurance for public employees and dependents. The premiums paid for all employees and dependents are higher than they would be otherwise due to the potential of payments for tobacco-related illnesses for some employees and dependents.
270. The Centers for Disease Control have developed information on smoking-attributable deaths and diseases and the economic impact of smoking. Their study demonstrates that there is a direct and substantial cost to Missouri taxpayers of increased health care attributable to use of tobacco. Nationwide, the CDC data show that the estimated health-care costs for smoking-attributable diseases are $50 billion. These costs have been increasing at a precipitous rate, more than doubling in the period from 1987 to 1993.
CAUSES OF ACTION
COUNT I: MISSOURI MERCHANDISING PRACTICES ACT
MISREPRESENTATIONS AND OMISSIONS
COMES NOW the State of Missouri and, for Count I of its claim against the Defendants and each of them, states as follows:
271. Paragraphs 1 through 270 are incorporated by reference as if fully set forth herein.
272. The Missouri Merchandising Practices Act, Section 407.020, RSMo 1994, provides as follows:
(1) The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce or the solicitation of any funds for any charitable purpose, as defined in section 407.452, in or from the state of Missouri, is declared to be an unlawful practice. The use by any person, in connection with the sale or advertisement of any merchandise in trade or commerce or the solicitation of any funds for any charitable purpose, as defined in section 407.453, in or from the state of Missouri of the fact that the attorney general has approved any filing required by this chapter as the approval, sanction or endorsement of any activity, project or action of such person, is declared to be an unlawful practice. Any act, use or employment declared unlawful by this subsection violates this subsection whether committed before, during or after the sale, advertisement or solicitation.
273. Section 407.010, RSMo 1994 defines "merchandise" as any object, wares, goods, commodities, intangibles, real estate or service.
274. Section 407.100, RSMo 1994 authorizes the Attorney General to seek injunctive relief, restitution, civil penalties and other relief against persons who have engaged in or are engaging in violations of the Missouri Merchandising Practices Act.
275. Section 407.130, RSMo 1994 provides that the Attorney General may recover as costs, in addition to normal Court costs, the cost of the investigation and prosecution of any action brought pursuant to the Missouri Merchandising Practices Act.
276. The Defendants have violated and continue to violate the Missouri Merchandising Practices Act by engaging in the unlawful practices specified in § 407.020 in connection with the advertisement and sale of cigarettes and other tobacco products, including, but not limited to, the following acts and practices:
a. Misrepresenting, directly or by implication, their ability to manipulate nicotine levels in cigarettes and other tobacco products;
b. Misrepresenting, directly or by implication, their manipulation of nicotine levels in cigarettes and other tobacco products;
c. Falsely promising to provide to governmental authorities and the public scientific information regarding their studies of cigarettes and other tobacco products, when, in fact, they went to great lengths to misrepresent or prevent dissemination of their findings;
d. Misrepresenting, directly or by implication, the addictive nature of nicotine;
e. Misrepresenting, directly or by implication, the adverse health consequences of tobacco use;
f. Misrepresenting, directly or by implication, the sponsorship, approval, status, affiliation or connection of the Tobacco Industry Research Committee/Council for Tobacco Research, including, but not limited to, misrepresenting that the TIRC would be run by a scientist of unimpeachable integrity and be advised by a board of distinguished scientists disinterested in the tobacco industry when, in fact, the TIRC was controlled by the tobacco companies and used to promote the sale of their tobacco products;
g. Concealing and/or omitting to disclose material facts to consumers, including, but not limited to, facts relating to the harmful health effects of smoking and the addictive properties of nicotine;
h. Misrepresenting, directly or by implication, that they do not target, direct or seek to focus their tobacco product marketing effort on minors and actively discourage sale of these products to minors, when, in fact, they market and sell cigarettes and other tobacco products in a manner that targets minors and knowingly attracts them to begin or continue to use cigarettes and other tobacco products;
i. Misrepresenting, directly or by implication, that they were conscientiously undertaking joint and individual research efforts involving disinterested, independent researchers intending to discover the truth about the health consequences of smoking, when, in fact, they were not making such represented efforts;
j. Omitting to disclose to consumers, the ingredients added to cigarettes and the known health risks associated with such additives;
k. Suppressing the material fact that they halted efforts to develop safer cigarettes.
277. Plaintiff has no adequate remedy at law.
WHEREFORE, the State asks this Court for the following relief:
A. For entry of judgment, jointly and severally, against each and every Defendant;
B. Issue a permanent injunction, pursuant to § 407.100 enjoining Defendants and their officers, directors, agents, employees, contractors, representatives, successors, assigns and all other persons acting in concert with or at the direction of the Defendants who have actual or constructive notice of the injunction, from violating the Missouri Merchandising Practices Act in connection with the sale of cigarettes and other tobacco products and, in particular, from engaging in any of the unfair, unlawful and deceptive practices alleged herein;
C. Order Defendants, jointly and severally, to provide full restitution to all consumers to whom they have sold any merchandise and who have been aggrieved by the unfair, unlawful and deceptive practices alleged herein;
D. Issue an Order awarding the State a civil penalty from each Defendant of up to one thousand dollars (1,000.00) for each violation of the Missouri Merchandising Practices Act that the Court finds to have occurred;
E. Issue an Order awarding the State an amount of money equal to ten percent (10%) of the total restitution ordered against Defendants, or such other amount as the Court deems fair and equitable;
F. Issue an Order, pursuant to § 407.130, requiring Defendants, jointly and severally, to pay reasonable attorneys' fees, and all Court, investigative and prosecution costs of this case;
G. Award such further relief as is warranted by the facts and the law; and
H. Issue any other order this Court deems just and equitable in this action.
COUNT II: MISSOURI MERCHANDISING PRACTICES ACT
UNFAIR PRACTICE TARGETING MINORS
COMES NOW the State of Missouri and, for Count II of its claim against the Defendants and each of them, states as follows:
278. Paragraphs 1 through 277 are incorporated by reference as if fully set forth herein.
279. The State of Missouri has declared that it is the public policy of this State to prohibit minors access to tobacco products. Section 407.931, RSMo 1994 makes it unlawful for any person to engage in tobacco product distribution to any person under age 18 or to sell or distribute any tobacco product to a minor.
280. Defendants have engaged, and continue to engage in a course of conduct designed to deceptively, unfairly and unlawfully encourage minors to violate the declared public policy of the State of Missouri.
281. Specifically, Defendants have encouraged the sale of tobacco products to minors. As part of their course of conduct, Defendants have concealed that their marketing is designed to encourage minors to use tobacco in violation of State law. Further, Defendants have publicly proclaimed that they are against encouraging minors to use tobacco while secretly they have launched a course of conduct designed to accomplish exactly the opposite.
282. Defendants' marketing efforts and course of conduct unfairly encourage minors to violate the declared public policy of the State of Missouri.
283. Tobacco sales to minors and/or use by minors of tobacco products has remained steady or increased in Missouri as a result of Defendants' practices.
284. Defendants' course of conduct in targeting minors, as described in this petition, violates the expressed public policy of the State of Missouri, and as such is an unfair practice in violation of Section 407.020, RSMo 1994.
WHEREFORE, the State prays this Court to order the following relief:
A. Enter Judgment, jointly and severally, against each and every Defendant;
B. Issue a permanent injunction, pursuant to § 407.100 enjoining Defendants and their officers, directors, agents, employees, contractors, representatives, successors, assigns and all other persons acting in concert with or at the direction of the Defendants who have actual or constructive notice of the injunction, from engaging in any of the unfair, unlawful and deceptive practices alleged herein;
C. Order Defendants to cease all marketing and sales practices that encourage children or adolescents to begin or continue to use tobacco products or facilitate their opportunity to do so;
D. Order Defendants, jointly and severally, to provide full restitution to all consumers to whom they have sold any merchandise and who have been aggrieved by the unfair, unlawful and deceptive practices alleged herein;
E. Order Defendants to disgorge all unjust profits from tobacco sales to minors;
F. Issue an Order awarding the State a civil penalty from each Defendant of up to one thousand dollars (1,000.00) for each violation of the Missouri Merchandising Practices Act that the Court finds to have occurred;
G. Issue an Order awarding the State an amount of money equal to ten percent (10%) of the total restitution ordered against Defendants, or such other amount as the Court deems fair and equitable;
H. Issue an Order, pursuant to § 407.130, requiring Defendants, jointly and severally, to pay reasonable attorneys' fees and all Court, investigative and prosecution costs of this case;
I. Award such further relief as is warranted by the facts and the law; and
J. Issue any other order this Court deems just and necessary in this action.
COUNT III: ANTITRUST
COMES NOW the State of Missouri and, for Count III of its claim against the Defendants and each of them, states as follows:
285. Paragraphs 1 through 284 are incorporated by reference as if fully set forth herein.
286. Section 416.031, RSMo 1994 provides in part:
1. Every contract, combination or conspiracy in restraint of trade or commerce in this State is unlawful.
2. It is unlawful to monopolize, attempt to monopolize, or conspire to monopolize trade or commerce in this State.
287. Section 416.061, RSMo 1994 authorizes the Attorney General to enforce the provisions of the Missouri Antitrust Act and to institute civil proceedings to prevent and restrain violations of the Act.
288. The Defendants have violated and continue to violate the Missouri Antitrust Act by engaging in the unlawful practices specified in § 416.031, including, but not limited to, the following acts and practices:
289. Beginning at least as early as the 1950s, and continuing until the present date, Defendants entered into a contract, combination and conspiracy in unreasonable restraint of trade and commerce in the market for cigarettes in Missouri.
290. This contract, combination or conspiracy had the purpose and effect of:
a. Restraining competition in the market for cigarettes in the United States, including in Missouri;
b. Restraining and suppressing research on the health effects of smoking;
c. Restraining and suppressing the dissemination of information on the harmful effects of smoking;
d. Restraining and suppressing the research, development, production and marketing of so-called "safer" cigarettes that resulted in reduced harmful biological activity in humans;
e. Preventing loss of sales revenues that would have resulted if information on the harmful effects of cigarettes and the addictive effects of nicotine had been made public; and
f. Preventing expensive and costly competition among the defendant Tobacco Companies for sales and marketing of so-called "safer" cigarettes.
291. In furtherance of their conspiracy, Defendants did the following that they conspired to do including, without limitation:
a. Creation by the Defendant Tobacco Companies of the Tobacco Industry Research Committee (later known as the Council for Tobacco Research), charged with the task of disseminating false and misleading information regarding the health risks of cigarette smoking;
b. Agreement among Defendants to suppress independent research regarding the health risks of cigarette smoking and the addictive nature of nicotine;
c. Destruction and concealment of evidence by Defendant Tobacco Companies of research and information revealing the health dangers of cigarette smoking and the addictive nature of nicotine;
d. Joint sponsorship by Defendant Tobacco Companies of mass media articles and advertisements intended to deceive governmental entities and the public about the health risks of cigarette smoking;
e. False representations concerning the commitment of Defendant Tobacco Companies to sponsor and make public "objective" scientific information regarding these risks;
f. The joint and collective making of false and misleading representations to Congress, other governmental entities and the public regarding the addictive nature of nicotine and the manipulation of nicotine levels in cigarettes by Defendant Tobacco Companies; and,
g. Agreements, some obtained by coercion, among Defendant Tobacco Companies to halt research, development, marketing and sales of so-called "safer" cigarettes.
292. The aforesaid combination and conspiracy consisted of an agreement, understanding and concert of action among Defendants, the substantial terms of which were:
a. Withholding of information to governmental entities and the citizens of Missouri about the harmful effects of cigarettes and the addictive effects of nicotine;
b. Support of public relations campaigns that falsely promoted cigarettes as harmless;
c. Suppression of sponsorship of independent research on the issues of smoking and health;
d. Destruction or concealment of documents relating to the health effects of cigarettes and the addictive nature of nicotine;
e. Intimidation of persons with information about the negative health effects of cigarettes, and the addictive qualities of nicotine;
f. Termination of research and development programs seeking to develop so-called "safer" cigarettes; and
g. Suppression of sales and marketing of so-called "safer" cigarettes.
293. This unlawful conspiracy and the effects thereof are continuing and will continue unless the injunctive relief sought by the State is granted. Plaintiff has no adequate remedy at law.
WHEREFORE, the State asks this Court for the following relief:
A. For an entry of judgment, jointly and severally, against each and every Defendant;
B. To issue a permanent injunction, pursuant to § 416.071 to prevent and restrain violations of § 416.031 and for other relief as is necessary to restore or preserve fair competition;
C. For such mandatory relief as is reasonably necessary to restore or preserve fair competition, including, but not limited to, monetary damages;
D. For reasonable attorneys' fees and costs of this action including the costs of investigation and prosecution;
E. For the granting of such other legal or equitable relief to the State as the Court deems just and equitable; and
F. For such further relief as is warranted by the facts and the law.
COUNT IV: UNJUST ENRICHMENT/RESTITUTION
COMES NOW the State of Missouri and, for Count IV of its claims against the Defendants and each of them, states as follows:
294. Paragraphs 1 through 293 are incorporated by reference as if fully set forth herein.
295. Defendants, through their wrongful conduct, as described in the foregoing allegations and all of the Counts of this Petition, have reaped substantial and unconscionable profits from the sale of tobacco products in Missouri. Further, in addition to reaping unjust rewards for their wrongful conduct, the Defendants have caused the State, as a result of the sale of tobacco products to consumers, to suffer substantial health care and other costs directly attributable to diseases caused by the use of tobacco products.
296. In equity and good conscience, it would be unjust for Defendants to enrich themselves at the expense of the State and its citizens. Further, in equity and in fairness, the Defendants, and not the State, should bear the cost of tobacco related diseases and have a duty to do so. By avoiding their own duties to stand financially responsible for the harm done by their tobacco products, Defendants have wrongfully forced the State to perform such duties and pay the health care costs of tobacco-related disease.
297. Defendants' unlawful conduct will continue unless the relief prayed for is granted.
WHEREFORE, the State asks this Court for the following relief:
A. Enter judgment, jointly and severally, against each and every Defendant;
B. Order the Defendants to disgorge all unjust amounts retained by the Defendants through the sales of cigarettes and smokeless tobacco in Missouri and pay such amounts to the State as damages for their wrongful conduct;
C. Provide restitution to the State of all amounts expended in the past and to be expended in the future by the State as a result of tobacco related illnesses and Defendants' wrongful conduct;
D. Order Defendants to pay the costs of this action, including, reasonable attorneys' fees;
E. To provide such other and further relief as is warranted by the facts and the law; and
F. For such additional relief as the Court deems equitable.
COUNT V: INDEMNITY
COMES NOW the State of Missouri and, for Count V of its claim against the Defendants and each of them, states as follows:
298. The State realleges paragraphs 1 through 297 of this Petition as if fully set forth herein.
299. As a direct and proximate result of the breaches of duty and omissions of the Defendants as alleged above and described in the Counts of this Petition, the State was obligated to pay and has paid hundreds of millions of dollars in the past for the provision of necessary medical care, facilities and services for certain of those aforementioned citizens and/or employees of the State injured by Defendants' tobacco products.
300. The State was legally obligated to pay the aforementioned sums and did not conduct itself in any wrongful manner in being so obligated to pay and in paying the aforementioned sums.
301. Defendants have been unjustly enriched as a result.
302. In all fairness and justice and to prevent unjust enrichment, Defendants should indemnify the State for the provision of necessary medical care, facilities and services for those aforementioned citizens and employees injured by Defendants' tobacco products.
WHEREFORE, the State asks this Court for the following relief:
A. To enter a judgment, jointly and severally, against each and every Defendant, awarding damages in an amount equal to the costs of all medical care, facilities, and services paid for by the State as a result of injuries caused by the Defendants' tobacco products;
B. To enter a declaratory judgment that the Defendants, jointly and severally, are liable through indemnity to the State for the costs of all future medical care, facilities and services provided to citizens of Missouri and employees of the State as a result of injuries caused by Defendants' tobacco products;
C. For the costs of this action, including reasonable attorneys' fees;
D. For such further relief as is warranted by the facts and the law; and
E. For such additional relief as the Court deems equitable.
COUNT VI: CIVIL CONSPIRACY
COMES NOW the State of Missouri and, for Count VI of its claims against the Defendants and each of them states as follows:
303. The State realleges paragraphs 1 through 302 above, as if fully set forth herein.
304. The Defendants intentionally and willfully combined, conspired and agreed with one another for the purpose of accomplishing the unlawful ends alleged or accomplishing lawful ends unlawfully as alleged in all other Counts of this Petition, all of which are incorporated by this reference, and for the purposes of performing the acts, among others, set forth above in the Conduct Allegations.
305. In addition, the Defendants intentionally and willfully combined, conspired and agreed with one another for the purpose and effect of, but not limited to:
a. Suppressing scientific, medical and other information concerning the harmful health effects of smoking cigarettes and the addictive effect of nicotine;
b. Creating doubt about the scientific studies linking smoking to adverse health consequences and the addictive nature of nicotine and creating a false controversy regarding the health hazards of tobacco use;
c. Manipulating and concealing the tobacco industry's manipulation of the level of nicotine in cigarettes;
d. Avoiding competition based on the development, production, sale and marketing of a safer cigarette;
e, Asserting false statements concerning the safety of cigarettes and the adverse health effects of smoking and tobacco and the addictive effect of nicotine;
f. Preventing the loss of sales revenues that would have resulted if the information on the harmful effect of cigarette use and the addictive effects of nicotine had been made public;
g. Preventing the assumption by the tobacco industry of the health care costs associated with tobacco use; and
h. Shifting the costs of health care and medical services and products associated with the adverse health effects from the use of tobacco products and the addictive nature of nicotine to the State, which costs would otherwise have to be borne by the tobacco industry as a cost of the tobacco products market.
306. The acts alleged above in the Conduct Allegations, among others, were intentionally committed by or participated in by the Defendants in furtherance of the purposes of the conspiracy.
307. As a direct result of the Defendants' conduct, the State has suffered and will continue to suffer injury and damages as set forth above.
308. The Defendants acted with malice and with willful, wanton, and reckless disregard for the rights or safety of others to the extent that punitive damages are justified and appropriate.
WHEREFORE, the State asks this Court for the following relief:
A. For entry of judgment, jointly and severally, against each and every Defendant;
B. For an award of damages as may be shown by the evidence, including, but not limited to, health care expenditures paid by the State which were caused by Defendants' unlawful actions;
C. For punitive damages;
D. For such further relief as is warranted by the facts and the law;
E. For the costs of this action, including reasonable attorneys' fees; and
F. For such additional relief as the Court deems equitable.
COUNT VII: AIDING AND ABETTING
COMES NOW the State of Missouri and, for Count VII of its claim against the Defendants and each of them, states as follow: 309. The State realleges paragraphs 1 through 308 as if fully set forth herein.
310. The Defendants knowingly aided and abetted each other in the law violations described in all other counts of this Petition.
311. The State has been damaged by the conduct of the Defendants.
312. The actions of the Defendants were intentional and in reckless disregard of the rights of the State and its citizens.
WHEREFORE, the State asks this Court for the following relief:
A. For entry of judgment, jointly and severally, against each and every Defendant;
B. For an award of damages as may be shown by the evidence, including, but not limited to, health care expenditures paid by the State which were caused by Defendants' unlawful actions;
C. For punitive damages;
D. For the costs of this action, including reasonable attorneys' fees;
E. For the granting of such other legal or equitable relief to the State as the Court deems just and equitable; and
F. For such further relief as is warranted by the facts and the law.
COUNT VIII: STRICT LIABILITY
COMES NOW the State of Missouri and, for Count VIII of its claim against the Defendants and each of them, states as follows:
313. The State realleges paragraphs 1 through 312 as if fully set forth herein.
314. At all relevant times, Defendants manufactured, supplied and/or sold cigarettes and other tobacco products.
315. Defendants' cigarettes and other tobacco products were expected to and did reach the citizens of the State of Missouri without substantial change in condition from their manufacture, supply and/or sale by Defendants.
316. At the time of their manufacture, supply and/or sale, Defendants' cigarettes and other tobacco products were in a condition that is unreasonably dangerous because they were designed in a defective manner. Defendants' cigarettes and other tobacco products were defective because they, when used in the manner in which they were intended to be used or for the purpose that it was reasonably foreseeable they may have been used, caused addiction and cancer or other disease.
317. The addictive, carcinogenic and pathologic nature of Defendants' cigarettes and other tobacco products was beyond that which would be contemplated by the ordinary consumer who purchased them, with the ordinary common knowledge to the community as to their characteristics. Additionally, and alternatively, the addictive, carcinogenic and pathologic nature of Defendants' cigarettes and other tobacco products was beyond that which would be contemplated by the youthful and inexperienced ordinary consumer to whom they were illicitly marketed, supplied and sold.
318. Defendants have the ability to design, test, manufacture, market and sell non or less addictive, carcinogenic and pathologic cigarettes and other tobacco products.
319. Defendants thus are liable for tobacco related injuries under Missouri law.
320. As a direct and proximate cause of Defendants' manufacture, supply and sale of their defectively designed cigarettes and other tobacco products, Missouri citizens have suffered injuries in the form of addiction, cancer and other illness and disease. Many of these citizens are Medicaid or other publicly funded healthcare recipients. The State of Missouri thus has borne the massive costs of these illnesses and diseases by providing necessary medical care, facilities and services for certain of those aforementioned citizens of Missouri and employees of the State injured by Defendants' cigarettes and other tobacco products.
321. As a direct and proximate result of Defendants' conduct, the State of Missouri has suffered and will continue to suffer substantial injuries and damages for which the State of Missouri is entitled to relief.
WHEREFORE, the State asks this Court:
A. For entry of judgment, jointly and severally, against each and every Defendant;
B. For an award of damages as may be shown by the evidence, including, but not limited to, health care expenditures paid by the State which were caused by Defendants' unlawful actions;
C. For punitive damages;
D. For such further relief as is warranted by the facts and the law;
E. For the costs of this action, including reasonable attorneys' fees; and
F. For such additional relief as the Court deems equitable.
COUNT IX NEGLIGENCE
COMES NOW the State of Missouri and, for Count IX of its claim against the Defendants and each of them, states as follows:
322. The State realleges paragraphs 1 through 321 as if fully set forth herein.
323. The Defendants had a duty to exercise reasonable care in the manufacture, sale and/or distribution of Defendants' cigarettes and other tobacco products.
324. The Defendants through their own actions have voluntarily assumed the duty to report honestly and completely on all research regarding smoking and health through their public pronouncements.
325. The Defendants breached their duties by the conduct alleged above in this Petition.
326. The citizens of the State of Missouri have, for many years, consumed and used the Defendants' cigarettes and other tobacco products in the manner in which the cigarettes and other tobacco products were intended to be used, without any substantial alteration or change in the product.
327. As a direct and proximate result, cigarettes and other tobacco products were manufactured, sold and distributed to Missouri citizens and Missouri citizens, including Medicaid recipients, employees of the State and other publicly funded healthcare recipients have suffered injuries including, but not limited to contracting cancer and other deseases and illnesses as a direct and proximate result of the intended and foreseeable use of Defendants' cigarettes and other tobacco products. The State was required to provide medical assistance to these Medicaid recipients and other publicly funded healthcare recipients and has thus borne the costs of treating these illnesses.
WHEREFORE, the State asks this Court:
A. For entry of judgment, jointly and severally, against each and every Defendant;
B. For an award of damages as may be shown by the evidence, including but not limited to, health care expenditures paid by the State which were caused by Defendants' unlawful actions;
C. For punitive damages;
D. For such further relief as is warranted by the facts and the law;
E. For the costs of this action, including reasonable attorneys' fees; and
F. For such additional relief as the Court deems equitable.
COUNT X FRAUDULENT MISREPRESENTATION AND OMISSION
COMES NOW the State of Missouri and, for Count X of its claim against the Defendants and each of them, states as follows:
328. The State realleges paragraphs 1 through 327 as if fully set forth herein.
329. Defendants through their public pronouncements and communications, made material representations to State regulators and citizens of the State of Missouri that cigarettes and other tobacco products are not addictive, carcinogenic and pathologic.
330. Defendants knew that these material representations to State regulators and citizens of the State of Missouri were false when made.
331. Defendants intended that State regulators and citizens of the State of Missouri rely upon these material representations. State regulators and citizens of the State of Missouri had a right to rely thereon, and actually did rely upon these material representations.
332. Additionally, Defendants had sole access to material facts regarding the addictive, carcinogenic and pathologic nature of cigarettes and other tobacco products, yet affirmatively concealed these material facts from State regulators and citizens of the State of Missouri who were thus ignorant of the falsity of Defendants' representations.
333. Defendants' acts constitute fraudulent misrepresentations and omissions.
334. As a direct and proximate cause of Defendants' fraudulent misrepresentations and omissions, State regulators were unable to undertake appropriate regulatory action and citizens of the State of Missouri have suffered injuries in the form of addiction, cancer and other illness and disease. Many of these citizens of Missouri are Medicaid or other publicly funded healthcare recipients. The State of Missouri has thus borne the massive costs of these illnesses and diseases by providing necessary medical care, facilities and services for certain of those aforementioned citizens of the State of Missouri injured by Defendants' cigarettes and other tobacco products.
335. As a direct result of Defendants' conduct, the State of Missouri has suffered and will continue to suffer substantial injuries and damages for which the State of Missouri is entitled to relief.
WHEREFORE, the State asks this Court:
A. To enter a judgment, jointly and severally, against each and every Defendant, awarding damages in an amount equal to the costs of all medical care, facilities and services paid by the State as a result of injuries caused by the Defendants' cigarettes and other tobacco products;
B. For any further award of damages as may be shown by the evidence;
C. For punitive damages;
D. For such further relief as is warranted by the facts and the law;
E. For the costs of this action, including reasonable attorneys' fees; and
F. For such additional relief as the Court deems equitable.
COUNT XI: PUBLIC NUISANCE
COMES NOW the State of Missouri and, for Count XI of its claim against the Defendants and each of them, states as follows:
336. The State realleges paragraphs 1 through 335 as if fully set forth herein.
337. The repeated unlawful, antisocial, and unreasonable conduct of the Defendants has been injurious to the health of substantial numbers of Missouri citizens.
338. The conduct of the Defendants involves significant interference with the public health.
339. As a proximate result of Defendants' conduct, the State has been damaged as a result of the expenditure of hundreds of millions of dollars for medical services, facilities, and services provided to citizens and/or employees of the State injured through use of the Defendants' tobacco products.
340. The conduct of the Defendants was willful and in reckless disregard of the rights of the State and its citizens.
WHEREFORE, the State asks this Court for the following relief:
A. To enter a judgment, jointly and severally, against each and every Defendant, awarding damages as a result of the nuisance in the amount of all of the costs the State has expended as a direct result of injuries caused by the Defendants' tobacco products;
B. To award punitive damages against the Defendants;
C. To enter an injunction prohibiting the Defendants from engaging in activities harmful to the public health through the sale of tobacco products;
D. To issue an injunction enjoining Defendants and their officers, directors, agents employees, representatives, successors, assigns, and all other persons acting in concert with or participating with Defendants, who have actual or constructive notice of the Court's injunction, from engaging in any unfair or unlawful practices with respect to the sales of tobacco products to minors;
E. To issue an injunction enjoining the Defendants and their officers, directors, agents, employees, representatives, successors, assigns and all other persons acting in concert with or participating with Defendants, who have actual or constructive notice of the Court's injunction, from engaging in any of the unlawful practices alleged in all other counts of this Petition;
F. For the costs of this action, including reasonable attorneys' fees;
G. For such further relief as is warranted by the facts and the law; and
H. For such additional relief as the Court deems equitable.
COUNT XII: INJUNCTION
COMES NOW the State of Missouri and, for Count XII of its claim against the Defendants and each of them, states as follows:
341. The State realleges paragraphs 1 through 340 as if fully set forth herein.
342. The State will suffer irreparable injury as a direct and proximate result of the wrongful conduct detailed in the foregoing allegations and Counts of this Petition in that the children of the State will start using tobacco products without adequate knowledge of these products' harmful and addictive effects. Thus, the children will become addicted to cigarettes and then to tobacco products and subsequently will become ill and in need of treatment for tobacco-related illnesses and diseases. Many of these addicted children will become Medicaid- and/or otherwise publicly-funded health care recipients, thereby causing the State to bear the massive costs related to their illnesses and diseases.
343. There is no adequate remedy at law which will protect the State from this irreparable injury.
344. As a result of the Defendants' conduct, the State has suffered and will continue to suffer substantial injuries and damages for which the State is entitled to relief.
WHEREFORE, the State asks the Court for the following relief:
A. Issue an injunction enjoining Defendants and their officers, directors, agents, employees, representatives, successors, assigns and all other persons acting in concert with or participating with Defendants, who have actual or constructive notice of the Court's injunction from engaging in any unfair or unlawful practices with respect to the sales of tobacco products to minors;
B. Issue an injunction enjoining the Defendants and their officers, directors, agents, employees, representatives, successors, assigns and all other persons acting in concert with or participating with Defendants, who have actual or constructive notice of the Court's injunction, from engaging in any of the unlawful practices alleged in all other counts of this Petition;
C. Award the costs of this action, including reasonable attorneys' fees;
D. Award such further relief as is warranted by the facts and the law; and
E. Order such additional relief as the Court deems equitable.
ADDITIONAL RELIEF
In addition to the relief requested in Counts I through XII, the State asks this Court for the following additional relief:
A. That as to all Counts, order the Defendants publically to disclose, disseminate and publish all research previously conducted directly or indirectly by themselves and their respective agents, affiliates, servants, officers, directors, employees and all persons acting in concert with them that relates to the issue of smoking and health;
B. That as to all Counts, order Defendants to publically disclose, disseminate and publish the specific ingredients of each of their products and the nicotine-delivering levels of each of their products.
JURY DEMAND
The State of Missouri hereby demands a trial by Jury on all issues triable or right by a Jury.
Respectfully submitted,
JEREMIAH W. (JAY) NIXON
Attorney General
Douglas M. Ommen
Missouri Bar No. 35301
Chief Counsel
Stewart M. Freilich
Assistant Attorney General
Missouri Bar No. 36924
P.O. Box 899
Jefferson City, MO 65102
(573) 751-7007
ATTORNEYS FOR PLAINTIFF