U.S. v. Philip Morris USA, Inc.

• Decision Date: 17 August 2006
• Docket Number: No. CIV.A. 99-2496(GK).,CIV.A. 99-2496(GK).
• Citation: U.S. v. Philip Morris USA, Inc., 449 F.Supp.2d 1 (D. D.C. 2006)
• Parties: UNITED STATES of America, Plaintiff, and Tobacco-Free Kids Action Fund, American Cancer Society, American Heart Association, American Lung Association, Americans for Nonsmokers' Rights, and National African American Tobacco Prevention Network, Intervenors, v. PHILIP MORRIS USA, INC., (f/k/a Philip Morris, Inc.), et al., Defendants.
• Court: U.S. District Court — District of Columbia

Page 1

449 F.Supp.2d 1

UNITED STATES of America, Plaintiff, andTobacco-Free Kids Action Fund, American Cancer Society, American Heart Association, American Lung Association, Americans for Nonsmokers' Rights, and National African American Tobacco Prevention Network, Intervenors, v.PHILIP MORRIS USA, INC., (f/k/a Philip Morris, Inc.), et al., Defendants.

No. CIV.A. 99-2496(GK).

United States District Court, District of Columbia.

August 17, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Sharon Y. Eubanks, Director, Tobacco Litigation Team, Stephen D. Brody, Deputy Director, Tobacco Litigation Team, Renée Brooker, Assistant Director, Tobacco Litigation Team, Bruce G. Ohr, Chief, Organized Crime and Racketeering Section, Criminal Division, Carolyn Clark, Michelle Gluck, Russell B. Kinner, Senior Trial Counsel, Tobacco Litigation Team, Meredith L. Burrell, Allison Cendali, Daniel K. Crane-Hirsch, Elizabeth C. Crocker, James D. Gette, Andrew N. Goldfarb, Michele S. Greif, Carolyn I. Hahn, Shannon T. Kelley, Patrick M. Klein, David S. Klontz, Noelle M. Kurtin, Jason Laeser, Siobhan Madison, Brian J. McCabe, Linda M. McMahon, Mary Jo Moltzen, Stasia M. Mosesso, James T. Nelson, Joel D. Schwartz, Gregg M. Schwind, Don G. Scroggin, Kenneth E. Sealls, Andrew A. Steinberg, Ina Strichartz, Armelle Van Dorp, Robert P. Williams, Trial Attorneys, Tobacco Litigation Team, United States Department of Justice, Washington, DC, for United States of America.

FINAL OPINION

KESSLER, District Judge.

TABLE OF CONTENTS
                  I. INTRODUCTION.............................................................. 26
                     A. Overview............................................................... 26
                     B. Preliminary Guidance for the Reader.................................... 29
                 II. PROCEDURAL HISTORY........................................................ 31
                III. CREATION, NATURE, AND OPERATION OF THE ENTERPRISE......................... 34
                     A. Pre-1953 Overview—The Rise in American Smoking and the Status of
                         Scientific Research on Smoking and Health............................. 35
                     B. Creation of the Enterprise............................................. 36
                     C. TIRC/CTR—Tobacco Industry Research Committee/Council for
                          Tobacco Research-USA................................................. 41
                        1. Selection and Approval of TIRC's Scientific Advisory Board
                             Members and Scientific Director................................... 46
                        2. Research Activities of TIRC/CTR..................................... 49
                        3. Public Relations Activities of TIRC/CTR............................. 53
                        4. Publications and Public Statements of TIRC/CTR...................... 56
                           a. TIRC/CTR Annual Reports.......................................... 56
                           b. TIRC/CTR Newsletters............................................. 58
                           c. TIRC/CTR Press Releases and Other Public Statements.............. 60
                D. Tobacco Institute........................................................... 62
                   1. Formation of the Tobacco Institute....................................... 62
                   2. Relationship Between the Tobacco Institute and TIRC/CTR.................. 66
                   3. Tobacco Institute Press Releases, Public Statements
                        Advertisements, Brochures, and Other Publications...................... 70
                   4. Tobacco Institute Committees............................................. 77
                      a. Committee of Counsel and Outside Counsel.............................. 77
                      b. Tobacco Institute Executive Committee................................. 80
                      c. Tobacco Institute Communications Committee............................ 81
                   5. Tobacco Institute College of Tobacco Knowledge........................... 82
                   6. Tobacco Institute Testing Laboratory..................................... 86
                E. Joint Research Activity Directed by Defendants' Executives and
                     Lawyers................................................................... 87
                   1. Witness Development...................................................... 87
                   2. CTR Special Projects..................................................... 91
                      a. Nature of CTR Special Projects........................................ 91
                      b. Lawyers' Involvement with CTR Special Projects........................ 94
                      c. Scientists Funded Through CTR Special Projects....................... 100
                   3. Lawyers' Special Accounts............................................... 100
                      a. Special Account No. 3................................................ 101
                      b. Special Account No. 4................................................ 101
                      c. Special Account No. 5................................................ 106
                      d. Institutional Grants................................................. 107
                F. Committees................................................................. 108
                

     1. Research Review Committee, Research Liaison Committee, and
                         Industry Research Committee.......................................... 108
                     2. Industry Technical Committee.......................................... 110
                     3. Tobacco Working Group................................................. 112
                G. Coordinated Smoking and Health Literature Collection and Retrieval......... 115
                H. Defendants' Organizations Focused on ETS Issues............................ 118
                I. International Organizations, Committees, and Groups........................ 119
                   1. Overview................................................................ 119
                   2. TMSC—Tobacco Manufacturers' Standing Committee.................... 123
                   3. TRC—Tobacco Research Council...................................... 125
                   4. TAC—Tobacco Advisory Council...................................... 126
                   5. ICOSI—International Committee on Smoking Issues................... 129
                   6. INFOTAB—International Tobacco Information Center.................. 132
                   7. TDC—Tobacco Documentation Centre.................................. 135
                   8. CORESTA—Center for Cooperation in Scientific Research Relative
                        to Tobacco/Centre de Cooperation pour les Recherches Scientifiques
                        Relatives au Tabac.................................................... 136
                   9. Tobacco Institute Interaction with Overseas and International
                        Groups................................................................ 137
                J. Dissolution of CTR and the Tobacco Institute............................... 141
                   1. CTR..................................................................... 142
                   2. Tobacco Institute....................................................... 143
                IV. THE DEFENDANTS ARE ENGAGED IN AND THEIR ACTIVITIES
                     AFFECT INTERSTATE AND FOREIGN COMMERCE................................... 143
                    A. Philip Morris Companies................................................ 143
                    B. Philip Morris.......................................................... 143
                    C. R.J. Reynolds.......................................................... 144
                    D. Liggett................................................................ 144
                    E. Lorillard.............................................................. 144
                    F. BATCo.................................................................. 144
                    G. Brown & Williamson..................................................... 144
                    H. American............................................................... 144
                    I. Tobacco Institute...................................................... 144
                    J. TIRC/CTR............................................................... 145
                V. DEFENDANTS DEVISED AND EXECUTED A SCHEME TO
                    DEFRAUD CONSUMERS AND POTENTIAL CONSUMERS OF
                    CIGARETTES IN MOST, BUT NOT ALL, OF THE AREAS ALLEGED
                    BY THE GOVERNMENT......................................................... 146
                   A. Defendants Have Falsely Denied, Distorted and Minimized the Significant
                        Adverse Health Consequences of Smoking for Decades ................... 146
                      1. Cigarette Smoking Causes Disease..................................... 146
                      2. Scientific Research on Lung Cancer up to December 1953............... 148
                         a. Scientists Investigating the Rise in the Incidence of Lung
                              Cancer Linked Smoking and Disease before 1953................... 148
                         b. By 1953, Defendants Recognized the Need for Concerted
                              Action to Confront Accumulating Evidence of the Serious
                              Consequences of Smoking......................................... 153
                     3. Developments Between 1953 and 1964.................................... 155
                        a. Between 1953 and 1964, the Evidence Demonstrating that
                            Smoking Causes Significant Adverse Health Effects Grew
                            Although No Consensus Had Yet Been Reached........................ 155
                        b. Before 1964, Defendants Internally Recognized the Growing
                             Evidence Demonstrating that Smoking Causes Significant
                             Adverse Health Effects........................................... 164
                        c. In the 1950s, Defendants Began. Their Joint Campaign to
                             Falsely Deny and Distort the Existence of a Link Between
                

             Cigarette Smoking and Disease, Even Though Their Internal
                             Documents Recognized Its Existence............................... 168
                    4. The 1964 Surgeon General Report Represented a Scientific
                         Consensus that Smoking Causes Disease................................ 174
                       a. The Process and Methodology of the Surgeon General's Report......... 174
                       b. The

...