Reports that Matter

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

As of 2005, Defendants Still Do Not Admit the Serious Health Effects of

Section 47 of 129

As of 2005, Defendants Still Do Not Admit the Serious Health Effects of

Smoking Which They Recognized Internally Decades Ago 796. More than forty years after Defendants issued the Frank Statement and created TIRC,

Defendants' essential position on the relationship of smoking and health remains virtually unchanged. In April 1994, in the now-famous congressional hearings before the United States House of Representatives' Subcommittee on Heath and the Environment, Defendants' executives asserted yet again that the causal relationship of smoking and cancer had not been proven: the CEOs of Defendants B&W, Liggett, Lorillard, Philip Morris USA, and RJR publicly denied that smoking caused cancer. TLT0730001-0850 (US 77011); TLT0730851-1975 (US 77012); Brandt WD, 128:14-131:4; (no bates) (US 20468) (Cimons, Marlene, Cigarette Chiefs Steadfastly Deny Smoking Kills, Los Angeles Times, April 15, 1994, at A1.

  1. The statements of the CEOs were restatements of positions the companies continued to take publicly and uniformly at that time. For instance, in 1991, Charles Wall of Philip Morris Companies sent a letter to international competitors discussing unified industry language to deny that cigarette smoking had been proven to "cause" lung cancer. 2023235511-5512 (US 22725).

  2. Thomas Sandefur, CEO of B&W from 1993-1996, stated in 1994 that "there's a health risk with smoking and disease," but that it "hasn't been proven that it [smoking] causes lung cancer." Sandefur PD, Broin v. Philip Morris, 7/13/94, 84:22-86:5.

  3. Sandefur also stated that he did not agree with the Surgeon General's conclusion that smoking causes cancer, heart disease, and other diseases because, as he stated, "[t]hey're not dealing with whole smoke. They're dealing with painting of mice and that kind of thing. I don't think that's valid in terms of human practices of smoking whole smoke." Id.

355

  1. Sandefur admitted that he was unaware of any studies showing that whole smoke does not cause disease, and he was unable to name one scientist or medical doctor totally unconnected with the tobacco industry who said that it had not been established that cigarette smoking causes cancer. Id. at 86:6-87:4, 89:11-17, 125:13-16, 144:15-145:9.

  2. In April 1995, B&W informed B&W Japan to answer inquiries about smoking and health by reassuring the person making the inquiries that whether or not smoking cause diseases "is still [an] inconclusive matter." 450180143-0143 (US 21885).

  1. As of the early 1990s, Lorillard's position on causation was: Lorillard does not and will not authorize the use of the Risk Factor formulation for causation for public relations purposes. We wish to maintain the traditional articulation: unproven, statistical, lack of mechanism. Risk Factor discussion is for scientists only and only in the courtroom and its controlled circumstances.

92348935-8936 (US 57176); Stevens WD, 47:21-48:13.

  1. Michael Prideaux, a spokesperson for BAT, stated in 1994 that BAT's current position was that there was no causal link between smoking and cancer. 502576028-6030 at 6028 (US 86882).

  2. Martin Broughton, Chairman of BAT plc, the corporate parent of BATCo, stated in opening remarks to analysts, investors and journalists at a briefing held at Windsor House on October 30, 1996, that "We have no internal research which proves that smoking causes lung cancer or other diseases or, indeed that, smoking is addictive." 800113810-3812 at 3810 (US 85343).

  3. In 1994, Philip Morris ran a paid newspaper statement about smoking, nicotine and addiction. It said: "Both smokers and nonsmokers deserve to know facts, not innuendo, about cigarettes." The statement also said "Philip Morris does not believe cigarette smoking is addictive.

356

People can and do quit smoking all the time." 2023011263-1263 (US 20371); Keane WD, 36:21806. In 1997, Philip Morris Companies' Chief Executive Officer and Chairman, Geoffrey Bible, took the position that cigarettes were not a cause of lung cancer, but asserted that if they were shown to be, "[he'd] probably . . . shut [the] company down instantly to get a better hold of things." He made this statement four decades after Philip Morris USA recognized the carcinogenic and disease-causing nature of cigarettes in internal documents. Bible PD, Florida v. American Tobacco, 8/21/97, 27:1-24. In 1997, Bible also voiced his disagreement with an Australian cigarette label warning that stated: "Smoking causes lung cancer." Id. at 32:16-33:8.

  1. Bible stated in 2002 that he did not know if Philip Morris cigarettes had ever caused disease in any individual. Bible PD, United States v. Philip Morris, 8/22/02, 63:19-64:5.

  2. Although Philip Morris expressed "differences" in opinions between it and the public health authorities, Senior Vice President and General Counsel Denise Keane could not, while testifying in this litigation, cite any peer-reviewed article, study, or consensus report from 1977-1997 that disputes the scientific conclusion that smoking causes lung cancer. Keane WD, 16:18-17:12.

  3. Prior to October 1999, Philip Morris's public position on disease causation was that smoking cigarettes was a risk factor for many diseases, but may or may not cause them. Steve Parrish admitted that Philip Morris's "risk factor" position was at odds with the position of the public health authorities who had stated for decades that smoking was not merely a risk factor for certain diseases, but caused these diseases as well. Parrish WD, 15:11-16:14.

  4. Finally, on October 13, 1999, when Philip Morris launched a corporate website, it changed its public position on smoking and health issues. The website stated: "There is an overwhelming medical and scientific consensus that cigarette smoking causes lung cancer, heart disease, emphysema, and other serious disease in smokers." Steve Parrish, Senior Vice President of Corporate Affairs for Altria Group, acknowledged that the overwhelming scientific consensus referenced in the October 1999 statement had existed for decades. Parrish further conceded that Philip Morris's refusal to acknowledge prior to October 1999 that smoking caused disease had damaged the company's credibility because there was no support for Philip Morris's view outside of the tobacco industry. 2085240087-0089 at 0087 (US 45673); Parrish WD, 9:20-12:3, 15:5-10; Keane WD, 24:21-25:28:8.

357

  1. Although Philip Morris recognized the "overwhelming medical and scientific consensus," regarding the causation of disease by cigarette smoking in 1999, it did not state its agreement with that consensus until October 2000. Keane WD, 27:11-28:11. Parrish acknowledged that Philip Morris changed its position on causation in 2000 because of criticism from the public health community, and that Philip Morris's decision to state its agreement with the "overwhelming medical and scientific consensus" was not based on any new scientific evidence. The scientific basis for the "overwhelming medical and scientific consensus" had existed for decades prior to Philip Morris's decision to state its agreement with it. Parrish WD, 19:13-21:21.

  2. Although Philip Morris is free to voluntarily change the information it includes on its cigarette warning labels, it has chosen not to change those labels even though in October 2000, the company changed its public position to admit that smoking causes disease and is addictive. Bible PD, United States v. Philip Morris, 8/22/02, 112:12-113:17.

358

  1. Philip Morris has never told its customers on its cigarette packaging or in onserts that it agrees that smoking causes cancer and other diseases in smokers. Its packages merely direct smokers to its website address. Keane WD, 35:10-22.

  2. Speaking on behalf of RJR, Chairman Andrew Schindler, who received between $44 and $45 million in compensation in 2004, has refused to admit that smoking causes disease, as the following colloquies demonstrate: (1) When asked, "you won't say sitting here today that cigarette smoking causes disease, right?," he responded: "Well, my testimony and what's on our Website today is cigarette smoking [has] inherent health risks [and] may contribute to causing certain diseases in some people." Schindler TT, 1/24/05, 10811:11-19; (2) when asked again, "So you say it's possible, it's likely, but you don't say it does, do I have that right?," Mr. Schindler admitted, "Yes." Id. at 10812:20-22; (3) RJR's website, like its Chairman, does not admit that smoking is a cause of disease. Instead, it states: "We produce a product that has significant and inherent health risks for a number of serious diseases and may contribute to causing these diseases in some individuals." Id. at 10814:11-15.

  3. As late as 2004, Lorillard CEO Martin Orlowsky refused to admit the full extent of smoking's harm. He was specifically asked: "Why hasn't Lorillard specifically stated publicly that smoking causes any diseases other than smoking [sic] emphysema, COPD or heart disease?" He responded:

We have -- in certain instances, we do not know if in fact the evidence, the scientific evidence is such that it warrants saying it does cause. However, Lorillard's longstanding position, as long as I've been with the company, is that certainly smoking can, and is a risk factor for those diseases.

Orlowsky TT, 10/13/04, 2303:7-15.

359
  1. Arthur Stevens, former Senior Vice President and General Counsel of Lorillard responded in 2000 to the question of whether smoking causes disease:

I am aware that the company and others are of the position and the view, and I embrace that, that cigarette smoking is a risk factor for disease and I have no argument with the public health and the medical and other authorities taking that position.

Stevens WD, 47:1-11.

  1. The risk factor language was not and is not the position of the scientific community and Stevens knew that. When questioned regarding the distinction, Stevens said: "Q: Were you aware, Mr. Stevens, that the risk factor formulation you stated was not the position of public health authorities? A: Yes I was." Stevens WD, 47:12-14.

  2. Lorillard continues to issue public statements on smoking and health issues through PR Newswire. Press releases are sent by interstate wire transmission by PR Newswire, which in turn sends the releases out to news media so that Lorillard can "get the message out." Milstein TT, 1/7/05, 9261:8-18, 9271:7-17.

  3. Press releases are also kept on Lorillard's website, where they can be accessed and reviewed by the public. Id. at 9272:12-20.

  4. Lorillard General Counsel Ronald Milstein admitted that the content of recent Lorillard press releases on smoking and health issues, including addiction and the health effects of exposure to ETS, is similar to statements that Defendants have made for decades. Id. at 9264:11-24, 9266:6-16, 9277:23-9278:12; TLT0961610-1610 (US 86693); USX5710001-0002 (US 89303); USX5710005-0006 (US 89305).

360
  1. Two years after the effective date of the Master Settlement Agreement, in 2000, B&W told visitors to its website: "We know of no way to verify that smoking is a cause of any particular person's adverse health or why smoking may have adverse health effects on some people and not others." (no bates) (JD 012645).
  1. Conclusions 822. Defendants have been aware since the late 1950s of substantial evidence

demonstrating that smoking causes significant adverse health effects, in particular, lung cancer. The evidence was presented by practicing physicians, such as Michael DeBakey, Alton Oschner, and Richard Overholt, by academic scientists, such as Evarts Graham and Ernst Wynder, and by government officials such as Surgeon General Leroy Burney in his 1959 JAMA article.

  1. By 1964, when the Surgeon General of the United States, Luther Terry, issued his ground-breaking Report considering some 7,000 scientific articles on the relationship between smoking and health, there could no longer be any question that there was a consensus in the American scientific community "that cigarette smoking contributes substantially to mortality from certain specific diseases and to the overall death rate," that "[c]igarette] smoking is associated with a 70 percent increase in the age-specific death rates of males," that "[c]igarette smoking is causally related to lung cancer in men," and that the "data for women, though less extensive, point in the same direction." In 1968, the Surgeon General concluded that "cigarette smoking can contribute to the development of cardiovascular disease and particularly to death from coronary heart disease."

  2. From at least 1953 until at least 2000, each and every one of these Defendants repeatedly, consistently, vigorously -- and falsely -- denied the existence of any adverse health effects from smoking. Moreover, they mounted a coordinated, well-financed, sophisticated public relations campaign to attack and distort the scientific evidence demonstrating the relationship between smoking and disease, claiming that the link between the two was still an "open question." Finally, in doing so, they ignored the massive documentation in their internal corporate files from their own scientists, executives, and public relations people that, as Philip Morris's Vice President of Research and Development, Helmut Wakeham, admitted, there was "little basis for disputing the findings [of the 1964 Surgeon General's Report] at this time."

361

  1. Indeed, as far back as 1968, William Kloepfer, Vice President of Public Relations for the Tobacco Institute recognized that "[o]ur basic position in the cigarette controversy is subject to the charge, and may be subject to a finding, that we are making false or misleading statements to promote the sale of cigarettes." Mr. Kloepfer was both correct and prescient.

  2. For more than forty years after issuance of the Frank Statement in 1954, and for more than thirty years after issuance of the Surgeon General's first Report on smoking and health, Defendants maintained their position denying the causal relationship between smoking and disease. Finally, in 1999, Philip Morris launched a corporate website acknowledging the "overwhelming medical and scientific consensus that cigarette smoking causes lung cancer, heart disease, emphysema, and other serious disease in smokers." Despite this acknowledgment of the "overwhelming medical and scientific consensus," Philip Morris could not bring itself to clearly state its agreement with that consensus until October 2000. Philip Morris still does not include the information on its cigarette packaging that it agrees that smoking causes cancer and other diseases in smokers.

  3. Neither RJR, Lorillard, nor B&W, have openly admitted that smoking causes cancer. Indeed, in 2000, two years after the effective date of the Master Settlement Agreement, B&W was putting the following message on its website: "We know of no way to verify that smoking is a cause of any particular person's adverse health or why smoking may have adverse health effects on some people and not others."

362