United States v. Philip Morris USA, Inc.

Decision Date27 November 2012
Docket NumberCivil Action No. 99–2496 (GK).
Citation907 F.Supp.2d 1
PartiesUNITED STATES of America, Plaintiff, v. PHILIP MORRIS USA, INC., et al., Defendants.
CourtU.S. District Court — District of Columbia

OPINION TEXT STARTS HERE

Daniel K. Crane–Hirsch, Linda Margaret McMahon, Renee Brooker, U.S. Department of Justice, Washington, DC, for Plaintiff.

Alfred McDonnell, Arnold & Porter, Denver, CO, Amy Elizabeth Ralph–Mudge, Amy L. Rohe, Duane J. Mauney, Floyd E. Boone, Jr., James Miller Rosenthal, Jonathan Louis Stern, Kevin M. Green, Leslie Wharton, Michael R. Geske, Ryan David Guilds, Sharon L. Taylor, Arnold & Porter LLP, Anastasia G. Weis, Christopher J. Cullen, Jay L. Levine, Matthew A. Campbell, Robert M. Rader, Timothy M. Broas, Winston & Strawn LLP, Beth A. Wilkinson, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Murray R. Garnick, Altria Corporate Services, Inc, Noel John Francisco, Patrick Lee Hubbard, Paul Sommer Ryerson, Peter Biersteker, Robert Francis McDermott, Jr., Jones Day, Thomas M. Stimson, Cadwalader, Wickersham & Taft LLP, Miguel A. Estrada, Gibson, Dunn & Crutcher, LLP, Dawn D. Marchant, Karen McCartan DeSantis, Kirkland & Ellis LLP, William Charles Hendricks, III, King & Spalding, Michael Asher Schlanger, James Alexander Goold, Joseph Andrew Kresse, Keith Allen Teel, Covington & Burling LLP, Arnon D. Siegelm Dechert, LLP, Lawrence Saul Robbins, Roy T. Englert, Jr., Alan Untereiner, Benjamin C. Rubinstein, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, William S. D'Amico, Chadbourne & Parke LLP, Bruce G. Merritt, Steven Klugman, Debevoise & Plimpton, Judah Best, Steven S. Michaels, Leboeuf, Lamb. Greene & MacRae LLP, Jessica L. Zellner, William M. Bailey, Kevin C. Lombardi, U.S. Department of Justice, Washington, DC, Ashley Cummings, Hunton & Williams, Bank of America Plaza, Dan H. Willoughby, Leign Ann Dowden, King & Spalding, Atlanta, GA, Ben M. Germana, Herbert M. Wachtell, Jeffrey M. Wintner, Steven M. Barna, Wachtell, Lipton, Rosen & Katz, Bradley E. Lerman, Lauren J. Bernstein, David E. Mollon, Winston & Strawn, C. Ian Anderson, Bruce G. Sheffler, Garyowen P. Morrisroe, Timothy M. Hughes, Chadbourne & Parke LLP, James Lewis Brochin, Theodore V. Wells, Jr., Paul, Weiss, Rifkind, Wharton & Garrison, Lawrence Edward Savell, David L. Wallace, Herbert Smith New York LLP, Harold K. Gordon, Jones, Day, Reavis & Pogue, John Kevin Dolan Crisham, Kirkland & Ellis LLP, Demetra Frawley, Mary Elizabeth McGarry, Michael V. Corrigan, Simpson Thatcher & Barlett, David Runtz, Joseph P. Moodhe, Debevoise & Plimpton, Dennis H. Hranitzky, Dechert, LLP, Guy Miller Struve, Davis Polk & Wardwell LLP, New York, NY, Cindy L. Gantnier, Patricia M. Schwarzschild, Richard H. Burton, Cheryl Grissom Ragsdale, Christy L. Henderson, Michele B. Scarponi, Jason T. Jacoby, Hunton & Williams, Richmond, VA, Dan K. Webb, Elizabeth D. Jensen, Jeffrey Wagner, Kevin J. Narko, Ricardo E. Ugarte, Thomas J. Frederick, Winston & Strawn, Renee D. Honigberg, David M. Bernick, Douglas G. Smith, Michelle H. Browdy, Steven D. McCormick, Andrew P. Bautista, Kirkland & Ellis, LLP, Paul Lamont McDonald, Valorem Law Group, Chicago, IL, Daniel C. Jordan, Hunton & Williams, Peter Thomas Grossi, Jr., Arnold & Porter, McLean, VA, Jeanna Maria Beck, Arnold & Porter, LLP, Los Angeles, CA, Melissa Marglous Merlin, Husch Blackwell Sanders LLP, Michael B. MintonBruce D. Ryder, J. William Newbold, James M. Cox, Ann Elizabeth Blackwell, Thompson Coburn, LLP, St. Louis, MO, David B. Alden, Paul Crist, Randal S. Baringer, Robert C. Weber, Jones, Day, Reavis & Pogue, Cleveland, OH, Elizabeth P. Kessler, Ivan C. Smith, Scott C. Walker, Jones, Day, Reavis & Pogue, Columbus, OH, Geoffrey Kres Beach, Lisa M. Sheppard, R. Michael Leonard, Womble, Carlyle, Sandridge & Rice, LLP, Winston-Salem, NC, Nicholas N. Nierengarten, Gray, Plant, Mooty, Mooty & Bennett, PA., Minneapolis, MN, F. John Nyhan, Fredericks Peebles & Morgan LLP, Sacramento, CA, for Defendants.

MEMORANDUM OPINION

GLADYS KESSLER, District Judge.

Back in 2006, the Court issued its Final Judgment and Remedial Order # 1015 [Dkt. No. 5733], mandating that Defendants publish corrective statements on each of five topics on which the Court found they had made false and deceptive statements. These topics are: (a) the adverse health effects of smoking; (b) the addictiveness of smoking and nicotine; (c) the lack of any significant health benefit from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild,’ and ‘natural,’ cigarettes; (d) Defendants' manipulation of cigarette design and composition to ensure optimum nicotine delivery; and (e) the adverse health effects of exposure to secondhand smoke.” United States v. Philip Morris USA, Inc., 449 F.Supp.2d 1, 938–39 (D.D.C.2006) ( “Original Opinion”). Upon consideration of the briefs, the oral argument, and the entire record herein, the Court herein finalizes the text of the corrective messages to be published. See infra Section II.A–E.

I. Background

On September 22, 1999, the United States filed this civil suit against Defendants pursuant to the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961–1968. After nearly five years of discovery, motions, and other pretrial proceedings, trial began in September 2004. The bench trial lasted nine months and on August 17, 2006, this Court issued a lengthy opinion finding that all Defendants (1) have conspired together to violate the substantive provisions of RICO, pursuant to 18 U.S.C. § 1962(d), and (2) have in fact violated those provisions of the statute, pursuant to 18 U.S.C. § 1962(c).” Original Opinion, 449 F.Supp.2d at 26. In particular, the Court concluded that Defendants “knowingly and intentionally engaged in a scheme to defraud smokers and potential smokers, for purposes of financial gain, by making false and fraudulent statements, representations, and promises.” Id. at 852.

A. Factual Findings

The Court made detailed Findings of Fact on each of the various topics on which Defendants made their false, deceptive, and misleading public statements. Id. at 146–839. First, the Court found that “each and every one of these Defendants repeatedly, consistently, vigorously—and falsely—denied the existence of any adverse health effects from smoking,” despite “the massive documentation in their internal corporate files from their own scientists, executives, and public relations people that confirmed that there was little evidence supporting their claims. Id. at 208. Specifically, Defendants “knew there was a consensus in the scientific community that smoking caused lung cancer and other diseases” by at least January 1964. Id. at 180. Despite this internal knowledge, the Defendants embarked on a “campaign of proactive and reactive responses to scientific evidence that was designed to mislead the public about the health consequences of smoking.” Id. at 187–88.

Second, the Court found that Defendants “have publicly denied and distorted the truth as to the addictive nature of their products for several decades.” Id. at 209. Defendants “knew and internally acknowledged that nicotine is an addictive drug,” id. at 218, but “publicly made false and misleading denials of the addictiveness of smoking, as well as nicotine's role in causing that addiction.” Id. at 271. The Court found that this conduct was continuing, observing that “no Defendant accepts the Surgeon General's definition of addiction, no Defendant admits that nicotine is the drug delivered by cigarettes that creates and sustains addiction, and no Defendant acknowledges that the reason quitting smoking is so difficult, and not simply a function of individual will power, is because of its addictive nature.” Id. at 286.

Third, the Court found that Defendants have designed their cigarettes to precisely control nicotine delivery levels and provide doses of nicotine sufficient to create and sustain addiction.” Id. at 309. Specifically, most cigarettes are “manufactured using reconstituted tobacco material, additives, burn accelerants, ash conditioners, and buffering substances, all of which affect nicotine levels and delivery.” Id. “Other cigarette design features used by Defendants to control nicotine delivery include filter design, paper selection and perforation, ventilation holes, leaf blending, and use of additives (such as ammonia) to control the PH of cigarette smoke.” Id. However, the Defendants “denied, repeatedly and publicly, that they manipulate nicotine content and delivery in cigarettes in order to create and sustain addiction.” Id. at 374.

Fourth, the Court found that, for several decades, Defendants marketed and promoted “low tar brands” as less harmful than conventional cigarettes. Id. at 430. Defendants knew that “smokers of low tar cigarettes modify their smoking behavior, or ‘compensate,’ for the reduced nicotine yields by taking more frequent puffs, inhaling smoke more deeply, holding smoke in their lungs longer, covering cigarette ventilation holes with fingers or lips, and/or smoking more cigarettes.” Id. at 431. Based on their sophisticated understanding of compensation, Defendants understood that low tar/light cigarettes offered no clear health benefits. Id. at 456–75. However, they “concealed that knowledge and disseminated false and misleading statements to downplay its existence and prevalence.” Id. at 500. Defendants “continue to make[ ] false and misleading statements regarding low tar cigarettes in order to reassure smokers and dissuade them from quitting.” Id. at 507–08.

Fifth, the Court found that Defendants crafted and implemented a broad strategy to undermine and distort the evidence indicating passive smoke as a health hazard.” 1Id. at 693. Research funded by Defendants provided evidence confirming that “nonsmokers['] exposure to cigarette smoke was a health hazard.” Id. at 709. However, Defendants made “numerous public statements denying the linkage” between secondhand smoke and disease in nonsmokers....

To continue reading

Request your trial
6 cases
  • Grocery Mfrs. Ass'n, Snack Food Ass'n, Int'l Dairy Foods Ass'n, & Nat'l Ass'n of Mfrs. v. Sorrell
    • United States
    • U.S. District Court — District of Vermont
    • April 27, 2015
    ...common law of property and its constitutional guarantors”) (internal quotation marks omitted); see also United States v. Philip Morris USA, Inc., 907 F.Supp.2d 1, 17–18 (D.D.C.2012) (explaining that “controversy must mean more than the fact that some people may be highly agitated and be wil......
  • Bifolck v. Philip Morris USA Inc.
    • United States
    • U.S. District Court — District of Connecticut
    • May 12, 2020
    ...in the corrective statements.Judge Kessler began drafting the corrective statements in 2012. See United States v. Philip Morris USA, Inc., et al. , 907 F. Supp. 2d 1, 8–9 (D.D.C. 2012). At that point, the corrective statements regarding the tobacco companies’ manipulation of cigarette desig......
  • United States v. Philip Morris USA Inc.
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • November 1, 2016
    ...an order setting forth the final text of the corrective statements, which the manufacturers appealed. See United States v. Philip Morris USA, Inc. , 907 F.Supp.2d 1, 27 (D.D.C. 2012). While that appeal was pending, the parties began to negotiate how the statements would be disseminated. Alt......
  • United States v. Philip Morris USA Inc.
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • May 22, 2015
    ...severe asthma, and reduced lung function.• There is no safe level of exposure to secondhand smoke.United States v. Philip Morris USA, Inc., 907 F.Supp.2d 1, 8–9 (D.D.C.2012) ; see also United States v. Philip Morris USA Inc., No. 99–CV–2496, 2014 WL 2506611, at *1 (D.D.C. June 2, 2014) (sli......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT