United States v. Philip Morris USA Inc.: Amended Final Opinion

Contents

• UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA p. 1 Read →
• Defendants Researched, Developed, and Utilized Various p. 12 Read →
• Despite Their Internal Knowledge, Defendants' Marketing p. 18 Read →
• Tracking Youth Behavior and Preferences Ensures that p. 20 Read →
• Defendants Undertook Joint Efforts to Undermine p. 23 Read →
• INTRODUCTION p. 32 Read →
• Preliminary Guidance for the Reader p. 36 Read →
• PROCEDURAL HISTORY p. 41 Read →
• Pre-1953 Overview–The Rise in American Smoking and the Status of Scientific p. 47 Read →
• TIRC/CTR – Tobacco Industry Research Committee/Council for Tobacco p. 57 Read →
• Selection and Approval of TIRC's Scientific Advisory Board Members p. 68 Read →
• Research Activities of TIRC/CTR p. 74 Read →
• Geoffrey F. Todd, Executive Director of the Tobacco Research Council, a British p. 78 Read →
• Public Relations Activities of TIRC/CTR p. 81 Read →
• In the June 1954 "Public Relations Report and Recommendations for Tobacco p. 83 Read →
• Publications and Public Statements of TIRC/CTR p. 86 Read →
• Section V: (A)(3)(c), infra). Brandt WD, 79:6-8, 90:20-92:5; see, e.g., 500518759-8761 (US 20636) (1958 year-end Hill & Knowlton/TIRC press release in which TIRC Chairman Timothy Hartnett asserts that "scientists of high professional standing have produced additional evidence and opinions that challenge the validity of broad charges against tobacco use"); 503283464-3467 (US 22981) (TIRC's Clarence Cook Little's November 1959 response to Surgeon General Burney's statement that begins, "Today, more than ever before, scientific evidence is accumulating that conflicts with or fails to support the tobacco-smoking theories of lung cancer."); 500518873-8875 (US 63601) (1960 Hill & Knowlton/TIRC press release quoting Little and titled "New Evidence Shows Complexities of Lung Cancer, Scientist [Little] Says"); 00552685-2690 (US 47724) (1970 Leonard Zahn/CTR press release quoting Little that begins, "A considerable number of studies by independent scientists raise questions as to whether smoking has actually been shown to be a health hazard"); 60028206-8210 (US 53301); 670307882-7891 (US 21867); 670307882-7883 (US 63574) (1969 CTR press release quoting Little that begins, "The scientist [Little] who has been associated with more research in tobacco and health than any other person declared today that 'there is no demonstrated causal relationship between smoking and any disease. The gaps in knowledge are so great[.]'"); CTRPUBLICSTMT001241-1545 at 1265 (JD 043276) (1970 Leonard Zahn/CTR press release quoting Little on genetic and environmental factor theories); 500518873-8875 (US 20635); p. 94 Read →
• Formation of the Tobacco Institute p. 96 Read →
• Relationship Between the Tobacco Institute and TIRC/CTR p. 104 Read →
• Tobacco Institute Committees p. 124 Read →
• Tobacco Institute College of Tobacco Knowledge p. 134 Read →
• Witness Development p. 141 Read →
• CTR Special Projects p. 150 Read →
• Lawyers' Special Accounts p. 167 Read →
• Elliott; Engineered Energy Mgt. Inc.; Environmental Policy Institute; J. Earle Estes; Frederick p. 175 Read →
• Research Review Committee, Research Liaison Committee, and Industry p. 180 Read →
• Industry Technical Committee p. 185 Read →
• Tobacco Working Group p. 188 Read →
• Coordinated Smoking and Health Literature Collection and Retrieval p. 194 Read →
• Defendants' Organizations Focused on ETS Issues p. 199 Read →
• International Organizations, Committees, and Groups p. 201 Read →
• TMSC – Tobacco Manufacturers' Standing Committee p. 207 Read →
• TRC – Tobacco Research Council p. 211 Read →
• TAC -- Tobacco Advisory Council p. 213 Read →
• ICOSI – International Committee on Smoking Issues p. 218 Read →
• INFOTAB – International Tobacco Information Center p. 224 Read →
• TDC – Tobacco Documentation Centre p. 229 Read →
• Tobacco Institute Interaction with Overseas and International Groups p. 232 Read →
• CTR p. 242 Read →
• R.J. Reynolds p. 245 Read →
• Tobacco Institute p. 247 Read →
• TIRC/CTR p. 249 Read →
• Cigarette Smoking Causes Disease p. 250 Read →
• Developments Between 1953 and a. Between 1953 and 1964, the Evidence Demonstrating that p. 267 Read →
• The 1964 Surgeon General Report Represented a Scientific Consensus p. 300 Read →
• Post-1964 Research on the Adverse Health Effects of Smoking and p. 309 Read →
• As of 2005, Defendants Still Do Not Admit the Serious Health Effects of p. 355 Read →
• The Addictive Properties of Nicotine p. 363 Read →
• Cigarette Smoking Is Addictive and Nicotine Is the Primary Element of p. 364 Read →
• Defendants Were Well Aware that Smoking and Nicotine Are Addictive p. 381 Read →
• Physiological Strength or Potency p. 454 Read →
• MANNER p. 460 Read →
• Defendants Publicly Denied that Nicotine Is Addictive and Continue to p. 476 Read →
• "CLAIMS THAT CIGARETTES ARE ADDICTIVE IRRESPONSIBLE AND SCARE TACTICS." p. 499 Read →
• Defendants Concealed and Suppressed Research Data and Other p. 510 Read →
• Why Was Research Stopped p. 522 Read →
• Nicotine "Manipulation": Defendants Have Falsely Denied That They Can and p. 546 Read →
• For Decades, Defendants Have Recognized that Controlling Nicotine p. 548 Read →
• Defendants Researched, Developed, and Utilized Various Designs and p. 598 Read →
• Defendants Have Made False and Misleading Public Statements p. 667 Read →
• Defendants Have Long Acknowledged Internally the Existence of a p. 687 Read →
• Defendants Received Conflicting Messages From the Government and the Public Health Community About Their Efforts to Create and Market p. 689 Read →
• As Part of the Effort to Make Less Hazardous Cigarettes, Defendants p. 694 Read →
• TOBACCO PRODUCTS ARE ADDICTIVE AND POSE p. 761 Read →
• The Government Has Not Proven by a Preponderance of the Evidence p. 765 Read →
• Section V: (B)(3), supra (addiction)). Defendants' internal documents demonstrate their understanding that, in order to obtain an amount of nicotine sufficient to satisfy their addiction, 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. See Section V(E)(2)(b), infra (smoker compensation). As a result of this nicotine-driven smoker behavior, smokers of light cigarettes boost their intake of tar, thus negating what Defendants have long promoted as the primary health-related benefit of light cigarettes: lower tar intake. 2027. Defendants did not disclose the full extent and depth of their knowledge and understanding of smoker compensation to the public health community or to government regulators. 2028. Defendants' conduct relating to low tar cigarettes was intended to further their overarching economic goal: to keep smokers smoking; to stop smokers from quitting; to encourage people, especially young people, to start smoking; and to maintain or increase corporate profits. p. 772 Read →
• Defendants Internally Recognized that Smokers Switch to Low p. 850 Read →
• Despite Their Internal Knowledge, Defendants Publicly Denied that p. 895 Read →
• Despite Their Internal Knowledge, Defendants' Marketing and Public p. 908 Read →
• WHEN IT COMES TO THE LOWEST IN TAR, ONLY ONE p. 956 Read →
• PEOPLE WHO SMOKE FILTER CIGARETTES . . . ARE MORE CONSCIOUSLY IN CONFLICT ABOUT SMOKING . . . . THEY CAN'T COMPLETELY ENJOY SMOKING BECAUSE THEY KNOW IT IS NOT HEALTHY. . . . THEY MAY BE RECEPTIVE TO ADVERTISING WHICH HELPS THEM ESCAPE FROM p. 967 Read →
• The Defendants Need Youth as Replacement Smokers p. 1004 Read →
• Defendants' Marketing Is a Substantial Contributing Factor to Youth p. 1011 Read →
• Tracking Youth Behavior and Preferences Ensures that Marketing and p. 1037 Read →
• Defendants' Marketing Successfully Reaches Youth p. 1153 Read →
• Defendants' Youth Smoking Prevention Programs Are Not Designed to p. 1195 Read →
• Despite the Overwhelming Evidence to the Contrary, Defendants' Public p. 1204 Read →
• The Consensus of the Public Health Community Is that ETS Causes p. 1242 Read →
• Internally, Defendants Recognized That ETS is Hazardous to p. 1270 Read →
• OBJECTIVE p. 1287 Read →
• Internally, Defendants Expressed Concern that the Mounting Evidence p. 1290 Read →
• Defendants Made Public Promises to Support Independent Research on the Link Betwen ETS and Disease p. 1295 Read →
• Defendants Undertook Joint Efforts to Undermine and Discredit the p. 1297 Read →
• IN CONTRAST, THE INTERNAL PAPERS -- OF WHICH THIS INTRODUCTION IS ONE -- ARE FOR USE INSIDE THE INDUSTRY ONLY AND SHOULD BE TREATED AS CONFIDENTIAL. FOR THIS REASON, THE INTERNAL PAPERS HAVE BEEN PRODUCED IN A FORM WHICH IS INAPPROPRIATE FOR PUBLIC USE AND ARE CLEARLY p. 1313 Read →
• PASSIVE SMOKING DOES CAUSE LUNG CANCER; DO NOT LET THEM FOOL YOU p. 1348 Read →
• (IAPAG) p. 1359 Read →
• JAPANESE SPOUSAL STUDY IEMC PAPERS p. 1398 Read →
• Defendants Made False and Misleading Public Statements Denying that p. 1415 Read →
• Suppression and Concealment of Scientific Research p. 1439 Read →
• Document Destruction Policies p. 1463 Read →
• Liggett's Settlement Agreement with Various States p. 1509 Read →
• The Master Settlement Agreement p. 1512 Read →
• Developments Since the MSA p. 1523 Read →
• DEFENDANTS HAVE VIOLATED 18 U.S.C. 1962(c) p. 1529 Read →
• Defendants Engaged in a Scheme to Defraud Smokers and Potential Smokers p. 1532 Read →
• Defendants Falsely Denied the Adverse Health Effects of Smoking p. 1536 Read →
• Defendants Falsely Denied that Nicotine and Smoking Are Addictive p. 1539 Read →
• Defendants Falsely Denied that They Manipulated Cigarette Design and p. 1543 Read →
• Defendants Falsely Represented that Light and Low Tar Cigarettes p. 1545 Read →
• Defendants Falsely Denied that They Market to Youth p. 1549 Read →
• Section V: (F)(4) (discussing internal research examining what causes adolescents to smoke and whether their marketing effectively associates cigarette brands with youth-appealing themes and imagery). Defendants have also positioned their marketing to reach the maximum number of youth viewers. See Findings of Fact Section V(F)(5). Defendants claim that the MSA fundamentally changed their marketing practices and prevents them from marketing to youth. While the Findings of Fact demonstrate that Defendants' practices have changed to some degree, their fundamental interest in recruiting new youth smokers, however, has not. Indeed, Defendants' marketing expenditures have increased substantially since signing the MSA. See Findings of Fact Section V(F)(5)(a). The 2005 Cigarette Report from the FTC shows that advertising and promotional spending increased by over 21% from 2002 to 2003, rising to a staggering $15.15 billion. FTC Cigarette Report for 2003 (2005) (available at http://www.ftc.gov/opa/2005/08/cigreport.htm). Spending on magazine advertising, including several magazines with substantial youth readership, increased by 46.4%, more than twice the increase in total advertising expenditures, from 2002 to 2003. Id. at 3. Defendants have not abandoned or altered the youth-appealing themes and images they use in their marketing campaigns. Philip Morris continues to utilize the same Marlboro brand imagery, particularly the rugged, masculine Marlboro man, in its direct mail marketing, at point of sale, and on Marlboro cigarette packs, where it has been so phenomenally successful in the past. LeVan PD, U.S. v. Philip Morris, 6/25/02, 124:14-17, 221:10-221:14; Biglan TT, 1/10/05, 9530:6-9533:3. p. 1552 Read →
• Defendants Falsely Denied that ETS Causes Disease p. 1553 Read →
• Defendants Suppressed Documents, Information, and Research p. 1557 Read →
• Applicable Legal Standards p. 1559 Read →
• Defendants' Enterprise Had a Common Purpose p. 1561 Read →
• The Enterprise Has Functioned as a Continuous Unit p. 1565 Read →
• The Enterprise Engaged in and Its Activities Affected Interstate and Foreign p. 1567 Read →
• Each Defendant Is Associated with the Enterprise p. 1570 Read →
• The Government Has Proven that Defendants Caused Mailings and p. 1579 Read →
• The First Amendment Does Not Protect Defendants' False and p. 1592 Read →
• Defendants Acted with the Specific Intent to Defraud or Deceive p. 1601 Read →
• Defendants' False and Fraudulent Statements, Representations, and p. 1614 Read →
• DEFENDANTS HAVE VIOLATED 18 U.S.C. §1962(d)1818 Defendants assert that the statements of their C.E.O.s before the Waxman Subcommittee in 1994 constitutes petitioning activity protected from any imposition of liability under the Noerr-Pennington doctrine. See, Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961) and United Mine Workers v. Pennington, 381 U.S. 657 (1965). This legal issue is addressed fully in the Conclusions of Law. The facts, as recounted herein, speak for themselves. -637-Show full note U.S.C. § 1962(d) provides in part: "It shall be unlawful for any person to conspire to violate any of the provisions of . . . Subsection (c) of this Section." p. 1618 Read →
• Applicable Case Law p. 1619 Read →
• Each Defendant39 Is Liable for the RICO Conspiracy Charge Because Each p. 1622 Read →
• Liggett Withdrew from the Conspiracy p. 1628 Read →
• ALTRIA IS LIABLE FOR ITS VIOLATIONS OF 18 U.S.C. §1962(c) AND (d) p. 1630 Read →
• Applicable Law p. 1632 Read →
• The Enterprise's Scheme to Defraud Presents Continuing Opportunities for p. 1636 Read →
• The MSA Has Not Sufficiently Altered Defendants' Conduct to Justify Not p. 1640 Read →
• CTR p. 1644 Read →
• The Tobacco Institute p. 1646 Read →
• Legal Standards Governing Remedies p. 1651 Read →
• Section V: (E). Defendants know that health concerns are the primary motivation for smokers' attempts to quit. They have conducted extensive research on quitting to help them identify, understand, and deter potential quitters. Defendants' internal documents show that they were confident that if they could convince potential quitters that low tar cigarettes were a healthier choice p. 1658 Read →
• Section V: (C)(3), supra (public statements on nicotine manipulation); Section V(F)(7), supra (public statements on youth marketing); Section V(E)(4), supra (statements on "light" and "low tar" cigarettes). Evidence in the record also amply demonstrates that certain of Defendants' public statements communicating their positions on smoking and health issues continue to omit material information or present information in a misleading and incomplete fashion. For example, Reynolds's current website statement on the health effects of smoking continues to insist that smoking "causes disease in some individuals" only "in combination with other factors." (JD 068012); see also Schindler TT, p. 1662 Read →
• Disclosure of Documents and Disaggregated Marketing Data p. 1667 Read →
• Youth Smoking Reduction Targets p. 1676 Read →
• Corporate Structural Changes p. 1678 Read →
• Public Education and Countermarketing Campaign p. 1681 Read →

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