Based on Their Sophisticated Understanding of Compensation, Defendants Internally Recognized that Low Tar/Light Cigarettes Offer No Clear Health Benefit28

Based on Their Sophisticated Understanding of Compensation, Defendants Internally Recognized that Low Tar/Light Cigarettes Offer No Clear Health Benefit28

Defendants Internally Recognized that Low Tar Cigarettes Are Not Less Harmful Than Full-Flavor Cigarettes

Philip Morris

¶2146. A March 1, 1977 Philip Morris memorandum by industry-funded scientist Stanley Schachter to Thomas Osdene, Director of Research, concluded that low tar/low nicotine cigarettes are not less harmful:

[I]t would certainly seem that the campaign for low nicotine cigarettes is misguided and rests on a set of fallacious premises. . . . The question is crucial and particularly so in light of . . . Ross's evidence that carbon monoxide, hydrogen cyanide, and nitrogen oxide delivery is considerably greater in most of the popular brands of low nicotine filter, [sic] cigarettes than in high nicotine, non-filter cigarettes. . . . It is . . . clear . . . that the major body of data that has been used to justify the campaign for low nicotine cigarettes does nothing of the sort.

¶1000046626-6661 at 6655, 6660 (US 20074).

¶2147. Dr. Farone stated that Philip Morris's Marlboro full-flavor and Marlboro Lights cigarettes are "essentially identical except for dilution" -- i.e., that Marlboro Lights have more dilution, dilution referring to ventilation that dilutes the smoke, particularly when machine-smoked by the FTC method, with ambient air. "[A]s you increase dilution, the toxicity in [the Ames] test increases, which is more likely than not associated with a toxicity increase in smokers." Farone TT, 10/7/04, 1888:2-1889:5; 1891:17-19.

817

¶2148. In fact, Dr. Farone explained that the very Ames mutagenicity testing that Philip Morris has conducted for the past 25 years, and that "Philip Morris has concluded . . . predicts carcinogenicity" has indicated that Philip Morris's Marlboro Lights cigarettes are, as designed, more mutagenic than Marlboro full-flavor cigarettes:

[I]n the case of Marlboro Lights, the Philip Morris test data that I have reviewed on that level of dilution for equivalent blends indicated that the product design for their Light cigarettes was more mutagenic than the full flavor Marlboro, Marlboro Reds, and therefore predictive of more potential cancer risk. These studies were repeated multiple times over the past 20 years and continue to be repeated to this day. The Philip Morris data, as was used by Philip Morris, was a strong warning that their product design change between a Marlboro Red and a Marlboro Light -- increased ventilation -- resulted in a potentially more dangerous product.

¶Farone WD, 119:7-120:15; Farone TT, 10/7/04, 1866:2-17. Philip Morris has not "changed the design of 'Light' cigarettes in response to its studies and knowledge concerning mutagenicity." Farone WD, 121:3-9.

¶2149. Philip Morris consultant and former employee Dr. Whidby agreed with Dr. Farone's basic analysis and acknowledged that "increased filter dilution," one of the techniques Philip Morris uses to lower the FTC tar yield of its cigarettes, "is associated with increased biological activity." Dr. Whidby explained that biological activity in the context of Philip Morris's biochemical testing reports generally refers to biological reactions such as tumor growth, cell mutations, and toxic reactions, and that it was "a bad thing" that should be reduced. Whidby TT, 2/22/05, 13964:18-25; 13967:22-13968:19. Helmut Wakeham, of Philip Morris, acknowledged the same phenomenon as far back as March 1, 1974. 1003293476-3493 at 3492 (US 85073).

818

¶2150. A November 1977 Philip Morris memorandum to Dr. Robert Pages from J. Booker and S. Drew about Ames testing stated: "The take home lesson from this experiment is that dilution of a cigarette appears to increase the activity of the WSC [whole smoke condensate] (more dramatically for some cigarettes than for others)." 1002978361-8363 at 8362 (U.S. 35635).

¶2151. By 1978, Philip Morris had substantial evidence that "filter dilution [which Philip Morris used to reduce FTC tar and nicotine yields] was somehow acting to increase" the "activity" of the whole smoke condensate ("WSC") collected from its cigarettes. Further experiments confirmed that the tar from ventilated low tar reference cigarettes, i.e., cigarettes used for research purposes and not actually sold in stores, measured higher on mutagenicity tests than non-ventilated products. Additional research conducted in 1979 yielded the same result. 2001243600-3673 at 3610-11 (US 20298); accord 2022180219 (US 21479).

¶2152. A May 11, 1982 Philip Morris document from INBIFO (Philip Morris's overseas research facility in Switzerland) revealed that Philip Morris learned from its testing of low tar reference laboratory cigarettes in Europe that these cigarettes registered higher in standard biological tests than the full-flavor delivery reference cigarettes -- i.e., were "more active" -- and thus were more likely to cause cancer: "Low tar reference cigarette . . . [m]ay be slightly more active than [the regular delivery reference cigarette] as a complete carcinogen." 1003121638-1643 at 1638 (US 20153).

¶2153. A January 28, 1994 report from INBIFO to Philip Morris in Richmond, Virginia stated that increased cigarette filtration, porosity, and ventilation (primary methods used by Philip Morris to reduce the FTC Method tar and nicotine yields in its cigarettes) would result in an increase in the degree to which cigarette smoke was toxic to living cells (i.e., cytotoxicity), the irritation it caused to smokers, and the likelihood that the smoke would generate mutations such as tumors and/or cancer (i.e., mutagenicity). The document stated: "Increased filtration will result in a relative enrichment of gas phase constituents, leading to increased cytotoxicity and irritancy. . . . Increased porosity and ventilation will . . . increase the specific mutagenicity." 2024005509-5512 at 5509-5510 (US 20399); Farone WD, 122:1-14 (citing to, and agreeing with, INBIFO conclusions).

819

¶2154. In this case, A. Clifton Lilly, Senior Vice President of Technology, confirmed that data from tests run at Philip Morris's INBIFO facility showed that the Ames test for mutagenicity from Marlboro Lights produces significantly higher results than the tar from Marlboro full flavor products. 2001243600-3673 at 3610-11 (US 20298); 2022180219-0219 (US 21479); 1000135419- 5439 (US 20078); Lilly PD, United States v. Philip Morris, 5/14/02, 229:17-231:21.

¶2155. A 2001 document about Ames mutagenicity testing from Philip Morris's INBIFO laboratory in Germany demonstrated that, in every case, the mutagenicity of Marlboro Lights is higher than the mutagenicity of Marlboro full-flavor. 2505913831-3836 (US 46079).

¶2156. James Morgan, former President and CEO of Philip Morris, conceded in 2002 that, in his opinion, lower tar cigarettes are not any safer than higher tar cigarettes. Morgan PD, Price v. Philip Morris, Inc., 6/5/02, 75:3-15.

¶2157. According to Nancy Brennan-Lund, Philip Morris Senior Vice President of Marketing, "what we say on our web site we believe to be true." Philip Morris's position is that low tar cigarettes are no less harmful than full-flavor cigarettes, "based on what the Monograph 13 came out with." Lund later qualified her statement: it has "not been proven" that light cigarettes are less harmful, so one cannot assume they are less harmful. Brennan-Lund PD, Price v. Philip Morris, Inc., 9/20/02, 107:22-108:14; 109:16-110:22; 114:9-114:10.

820

¶2158. Ellen Merlo, then Philip Morris USA Senior Vice President of Corporate Affairs, agreed that in 2002 that Philip Morris's policy at the time was that lights or low tar cigarettes are not safe or safer than any other cigarettes. Merlo PD, Price v. Philip Morris, Inc., 10/2/02, 80:3-80:15.

R.J. Reynolds

¶2159. RJR's internal documents show that it, like the other Defendants, has long known that it has evidence that low tar cigarettes are no safer than regular cigarettes.

¶2160. In May 1980, RJR scientist C.T. Mansfield performed the Ames test for mutagenicity "on the tars from twenty-four domestic brands of cigarettes with various [FTC] 'tar' deliveries," and found "a trend for low 'tar' cigarettes to show higher numbers per mg [of] 'tar,'" indicating that the low 'tar' cigarettes caused more mutations. 514903578-3610 at 3579 (US 20863).

¶2161. A September 29, 1992 RJR internal presentation reported that lower tar cigarettes were more likely to cause mutations such as tumors and cancer than higher tar cigarettes. The presentation stated: "Higher tar cigarettes tend to have lower Ames activity . . . than lower tar cigarettes." 509643825-3832 at 3825 (US 20830).

¶2162. In 2003, Arnold Mosberg, an RJR scientist, and other RJR scientists (Doolittle and Morgan) reviewed "data [they] have had for decades" (some for more than two decades) to conduct a comparison of the relative harmfulness of lights and full flavor cigarettes, using various tests, including animal skin painting tumorgenicity, rodent inhalation, and Ames mutagenicity studies. The results of these studies indicated that low tar cigarettes do not reduce risk relative to full-flavor cigarettes. Mosberg PD, Turner v. R.J. Reynolds, 8/19/03, 2:12-16, 6:7-12:4, 14:21-15:19, 15:24- 16:1, 16:13-24, 19:3-5, 21:20-22:10, 22:19-26:8, 55:1-11, 57:15-58:16, 97:15-100:12, 103:23-104:1 (discussing in part Deposition Exhibit 2).

821

Brown & Williamson

¶2163. A February 4, 1976 memorandum from Ernest Pepples, B&W Senior Vice President, titled "Industry Response to Cigarette/Health Controversy," reveals Defendants' knowledge that the low tar and filter cigarettes they were marketing as less harmful were not producing less tar and less nicotine to the smoker and were not likely to actually be less harmful:

The industry has moved strongly toward filtered cigarettes, which have increased from 0.6% in 1950 to 87% in 1975. . . . This became known as the 'tar derby' of the late 1950's. It was characterized by sharply intensified advertising competition. . . . The new filter brands vying for a piece of the growing filter market made extraordinary claims. . . . It was important to have the most filter traps. Some claimed to possess the least tars. In most cases, however, the smoker of a filter cigarette was getting as much or more nicotine and tar as he would have gotten from a regular cigarette. He had abandoned the regular cigarette, however, on the ground of reduced risk to health. . . . The manufacturers' marketing strategy has been to overcome and even to make marketing use of the smoking/health connection. . . . Thus the 'tar derby' in the United States resulted from industry efforts to cater to the public's concern and to attract consumers to the new filtered brands. . . . The current duel between True and Vantage and between Carlton and Now are other examples of competitive efforts to capitalize on the smoking/health controversy.

¶170042567-2574 at 2568, 2574 (US 20292); Smith WD, 79:5-22.

¶2164. An August 5, 1980 B&W document signed by J. Kendrick Wells III, B&W Assistant General Counsel, acknowledged that "[t]here was question about the degree of support . . . at the present time" for the "scientific opinion that certain low levels of 'tar' consumption are relatively safe to the smoker," and that "for the longer term the support may be quickly eroding." 680050983-1001 at 0990 (US 20981).

822

¶2165. An October 31, 1989 B&W internal memorandum, titled "Objections to Product Innovation Strategy," from Wells to RJ Pritchard, B&W executive and member of the Tobacco Institute's Executive Committee, conceded that "it is not established that the reduction or removal of specific smoke constituents or of smoke constituents across the board, such as in low tar cigarettes, is significant for smoking and health." 680701034-1038 at 1035 (US 21010); Wells WD, 60:3-61:10.

¶2166. Sharon Blackie Boyse, Director of Scientific Communications and a spokesperson for B&W on scientific issues as late as 1998, acknowledged that, "based on [her] experience as an employee within the cigarette industry, [she has] been aware for some time that some smokers believe that low tar cigarettes are less hazardous to their health [and that] some smokers believe that by switching to low tar cigarettes, they will achieve a health benefit." From at least as early as 1998, B&W acknowledged that the company "did not know whether low tar cigarettes were, in fact, less hazardous," and "was not confident that the science showed any health benefit from low tar cigarettes." Blackie WD, 184:22-185:5.

¶2167. As of 2005, B&W's website admits that low tar cigarettes are not safer than regular cigarettes. It states that "despite a dramatic lessening of tar yields, the hoped-for reduction of smoking-related illnesses has not been conclusively demonstrated." Furthermore, the website directs the reader to the National Cancer Institute's Monograph 13, citing its conclusions that "[e]pidemiological and other scientific evidence, including patterns of mortality from smoking-caused diseases, does not indicate a benefit to public health from changes in cigarette design and manufacturing over the last fifty years," and that "[w]idespread adoption of lower-yield cigarettes in the United States has not prevented the sustained increase in lung cancer among older smokers." The website further states: "[W]e continue to believe that smokers should rely on the public health authorities' views on low tar cigarettes and other smoking issues." Ivey WD, 63:9-16; (no bates) (US 86656).

823

BATCo

¶2168. A 1976 BATCo document from S.J. Green to P.L. Short and P. Sheehy revealed both that BATCo planned to market low tar cigarettes as safer and that BATCo did not have a sufficient basis to believe that low tar cigarettes were safer, stating: "Before we do work aimed to sell low delivery cigarettes, unless we are already satisfied, we should do some work to establish that in fact they are safer." 110076428-6432 at 6430 (US 34957).

¶2169. A June 9, 1982 BATCo document, "Technical Exchange Meeting," noted that Ames testing revealed that "[t]he specific activity [a measure of mutagenicity] of a plain cigarette was found to be lower than that of a ventilated filter cigarette." 109883189-3192 at 3191 (US 20265).

¶2170. A February 18, 1988 BATCo study of cigarette mutagenicity from the B&W Research & Development Library's E.D. Massey found that the "lighter" the purported delivery of the cigarette, the higher the mutagenicity. Using Philip Morris cigarettes as an example, Merit cigarettes had higher mutagenicity than Marlboro Lights, which in turn had more mutagenicity than regular Marlboro cigarettes. 620000021-0032 at 0027, 0030 (US 20944).

Lorillard

¶2171. Asked whether low tar/low nicotine cigarettes are any safer than conventional, full-flavor cigarettes, Christopher Coggins, Senior Vice President of Science and Technology at Lorillard, stated: "[O]ur policy is that cigarettes can cause cancer and that goes for all cigarettes." Coggins PD, United States v. Philip Morris, 8/16/01, 115:22-116:4.

824

Liggett

¶2172. Comments by Liggett scientists on a "Memorandum of June 13, 1966; C.F. Woodward and C.L. Ogg to P.A. Wells" acknowledged that there was no basis to conclude that reductions in tar and nicotine and/or the use of filters reduced the harmfulness of cigarettes:

Although the public does have a right to know what it is buying, extreme care must be exercised to avoid leading a non-technically oriented public to erroneous conclusions regarding the relative merits of one brand versus another based on minimal differences in "tar" or nicotine -- to neither of which can be attached any quantitative measure of health hazard. . . . We would question if any differences between any filter brands would show correlation with tumorgenicity. We know of no correlation of tar delivery among filter brands with tumor production in mice -- or for that matter, even among non-filter cigarettes. The level of uncertainty in current biological testing is so great that distinction between cigarettes is not possible on this basis.

¶LWDOJ00068944-8949 at 8944-45 (US 21214) (emphasis in original).

Internally, Defendants Had an Extensive and Sophisticated Understanding of Smoker Compensation

¶2173. Defendants have known since at least the 1950s that the central component that drives the smoking habit is nicotine, an addictive substance. Accordingly, Defendants also have long been aware that the reason people smoke cigarettes is to obtain a sufficient "dose" of nicotine to sustain their addiction. 1003287880-7890 at 7884 (US 20163); accord 500380562-0564 (US 20630); 100515899-5910 (US 20230); 1003285403-5416 (US 20159); 500917468-7476 at 7474-76 (US 20660); 105553905-3914 (US 34799).

¶2174. Defendants also have known since the 1960s and 1970s that, because smokers smoke to obtain the desired effects of nicotine, smokers of lower-yield cigarettes tend to adjust their smoking behavior to titrate (i.e., control) their nicotine intake of nicotine to achieve the necessary levels of nicotine. That adjustment or titration of nicotine levels is called compensation. Defendants' internal understanding of compensation was decades ahead of that of employees and scientists of the Government and the scientific community. See Section V(B)(2)(b), supra. According to Dr. William Farone, Philip Morris employee from 1976 to 1984, who served as Director of Applied Research, and was accepted as an expert in "the chemistry and biochemistry of alkaloids and addictive drugs, the chemistry and physics of cigarette smoke, cigarette design and technology, and the chemistry and biochemistry of toxic substances and how they interact with living systems," during his employment at Philip Morris, the company had "a greater understanding of compensation than the outside scientific community," and, in his expert opinion, "the same is true for the other tobacco company Defendants." In 1966, when the FTC was considering the FTC Method, Defendants knew "that smokers smoked for nicotine" and "that smokers alter their smoking behavior to get nicotine." Farone WD, 2:2-8, 2:15-19, 117:15-118:8; Farone TT, 10/12/04, 2169:18-22, 2170:5-11, 2171:25-2172:8, 2182:11-2190:7; Wigand WD, 8:11-17; 120:5-17.

825

¶2175. When Dr. Farone was Director of Applied Research, Philip Morris's own research found that "if we adjusted the design to reduce the nicotine delivery, or if people were given a cigarette of lower nicotine delivery than their usual brand, smokers would 'compensate' -- change how they smoked -- to get the amount of nicotine they need." Farone WD, 102:2-14; see also Farone WD, 104:7-15 (testifying that he knows Philip Morris was aware of compensation for nicotine "[f]rom conversations that I had with many of my colleagues at Philip Morris while I was working there, including people working under Dr. Dunn in his behavioral research group," and that this knowledge "is evident from the company's own documents").

826

Philip Morris

¶2176. In a March 24, 1961 Philip Morris memorandum from Wakeham to Hugh Cullman, "Trends of Tar and Nicotine Deliveries over the last 5 Years," Wakeham stated: "As we know, all too often the smoker who switches to a hi-fi cigarette winds up smoking more units in order to provide himself with the delivery which he had before." 1000861953-1953 (US 35484); see also Farone WD, 104:16-105:9 ("[T]his research into and understanding of compensation influence[d] how Philip Morris designed cigarettes").

¶2177. As Philip Morris marketing researcher Myron E. Johnston noted in a June 1966 Philip Morris report titled "Market Potential for a Health Cigarette":

[A]ny health cigarette must compromise between health implications on the one hand and flavor and nicotine on the other. It seems clear from the performance of existing health cigarette entries that flavor and nicotine are both necessary to sell a cigarette. A cigarette that does not deliver nicotine cannot satisfy the habituated smoker and cannot lead to habituation, and would therefore almost certainly fail.

¶1001913853-3878 at 3860 (US 20123).

¶2178. A July 28, 1967 Philip Morris USA memorandum from W.L. Dunn, Jr., then Associate Principal Scientist, to R.B. Seligman, Director of Development, discussed ventilation holes and compensation:

An earlier study (Memo of June 27, 1967) established that lip contact with the tipping paper extended to 9.96 mm from the outer end of the tipping paper for the average smokers. Since the air dilution holes are located in a band from 8.0 to 9.7 mm from the outer end of the tipping paper, it follows that some of these holes are likely to be occluded under normal smoking conditions, whereas no occlusion is likely to occur when the cigarettes are machine smoked for analysis.

827

¶The memorandum also documents that "[s]mokers adjust puff intake in order to maintain TPM [total particulate matter] and/or nicotine constancy." 1003295500-5502 at 5500, 5502 (US 88627).

¶2179. An August 11, 1967 Philip Morris USA document from Helmut Wakeham, Vice President of Corporate Research and Development, to Paul D. Smith, Vice President and General Counsel, stated that human smokers increased their smoke intake when switching from non-filter to filter cigarettes:

Two tests conducted at Product Opinion Laboratories demonstrate that in smoking a dilution filter cigaret [sic], the smoker adjusts his puff to receive about the same amount of "undiluted" smoke in each case. . . . In the smoking machine the puff volume is constant so that with dilution the quantity of "equivalent undiluted smoke" delivered to the Cambridge filter is reduced. Not so with the human smoker who appears to adjust to the diluted smoke by taking a larger puff so that he still gets about the same amount of equivalent undiluted smoke. . . . The smoker is, thus, apparently defeating the purpose of dilution to give him less "smoke" per puff. He is certainly not performing like the standard smoking machine; and to this extent the smoking machine data appear to be erroneous and misleading. It has probably always been so for diluted smoke cigarettes, whether dilution is obtained by porous paper or holes in the filter.

¶1000322554-2555 (US 35224) (emphasis in original); see also Dr. Jerry Whidby WD, 17:16-19:11 (testifying that "Product Opinion Laboratories was a facility established by Philip Morris to evaluate smokers' reaction to the cigarette brands Philip Morris was selling, as well as to Philip Morris's prototype cigarettes," and that he is not "aware of any instance, at any time between when Dr. Wakeham wrote this document in 1967 and when [Dr. Whidby] left the company in 1998, in which Philip Morris informed the American public directly of Wakeham's conclusions that the FTC tar and nicotine yields are apparently 'erroneous and misleading,'" and "dilution filter cigarettes generated lower FTC yields than non-dilution cigarettes, but delivered about the same amount of smoke to smokers").

828

¶2180. Dr. Farone explained the extraordinary significance of Wakeham's statements in this document:

It shows that Philip Morris understood the puff compensation phenomenon. This document shows that by 1967, Philip Morris recognized that when you have dilution or ventilation, the mechanism for compensation is puff adjustment . . . this document [also] shows that Philip Morris knew in 1967 that human smokers compensated by increasing their smoke intake when switching from non-filter to filter cigarettes, and in doing so, smokers received the same amount of tar and nicotine from their filter cigarettes as from non-filter cigarettes. It also shows Wakeham's understanding that the FTC tar and nicotine yields for low tar cigarettes are erroneous and misleading.

¶Farone WD, 111:5-112:15.

¶2181. Since roughly the mid-1970s, the "vast majority of the low tar and ultra-low tar cigarettes sold by Philip Morris in the United States . . . are dilution cigarettes." Whidby WD, 19:16- 18.

¶2182. In an August 25, 1967 Report on Project 1600, William Dunn, Senior Scientist, outlined an additional study performed by Philip Morris on puffing, with findings that provided "further support to the postulate that smokers adjust puff intake in order to maintain constant smoke intake." 1003288337-8338 at 8337 (US 85049).

¶2183. In a Fall 1969 speech, William Dunn reported to the Board of Philip Morris: "It would appear that smokers do modify their smoking habits in order to obtain a preferred [nicotine] intake level." 1003287880-7890 at 7884 (US 20163).

829

¶2184. Helmut Wakeham presented a November 26, 1969 internal industry paper, titled "Smoker Psychology Research," to the Philip Morris Board of Directors stating:

This great variability among smokers results from the fact that a smoker tends to seek his own level of intake. Even while smoking a single cigaret [sic], he adjusts the volume of his puff as he goes down to the rod, compensating for the change in the density of the available smoke. . . . A smoker's intake level is determined by the smoker himself, not by the manufacturers of the cigarettes.

¶1000273741-3771 at 3748 (US 26080).

¶2185. A September 2, 1970 Philip Morris memorandum from Ray Fagan to Wakeham confirmed Philip Morris's understanding that smokers compensated for lower deliveries by smoking more cigarettes:

In the last 15 years particulates in cigarette smoke have declined by 33%; however, the number of cigarettes per smoker has increased. Furthermore, experimental studies have shown that a smoker will increase the number of cigarets he smokes if the cigaret he is offered contains less particulates and less nicotine.

¶2022244449-4450 at 4449-4450 (US 36855); Farone WD, 110:6-14; 118:9-23.

¶2186. A November 1971 Philip Morris Special Research Report written by Tom Schori also addressed compensation by increasing the number of cigarettes smoked. The last sentence of the abstract of this report stated: "These findings support the hypothesis that the smoker does have daily intake quotas for tar and/or nicotine and that he titrates his smoke intake to meet these quotas." 1000350158-0188 at 0161-0162 (US 20176).

¶2187. A January 1972 document from Philip Morris Research Center, written by Tom Schori and William Dunn, reviewed Philip Morris's evidence indicating that smokers compensated when smoking brands supplying less nicotine in order to receive their "daily nicotine intake quota," stating:

830

Cigarette consumption rate, i.e., number of cigarettes smoked per day, was found to vary as a function of the nicotine delivery of these cigarettes. Specifically, as nicotine increased, cigarette consumption decreased. These findings support the notion that smokers develop a daily nicotine intake quota and that when smoking cigarettes differing in nicotine delivery from that which they are accustomed they tend to modify their consumption rate in order to maintain their normal quota. No support was found for the analogous notion of a daily tar intake quota, however.

¶1003285403-5416 at 5403 (US 20159); 2062951266-1279 at 1266 (US 39723); Farone WD, 111:1-4 (referring to US 20159); Henningfield WD, 94:14-21 (referring to US 39723 as "significant in terms of Defendants' knowledge and understanding of the addictiveness of nicotine from the 1970s").

¶2188. A May 14, 1975 Philip Morris memorandum from William Dunn to Robert Seligman, Vice President for Tobacco Science and Research, stated:

Underlying all of our work in this area is the conviction what the smoker gets in the way of smoke is independent of smoke concentration levels as delivered within the range of commercially available cigarettes. He has a variety of regulatory maneuvers at his disposal for accommodating supply to a fairly constant need [for nicotine]. To monitor all of these maneuvers simultaneously is a major objective of our behavioral research program.

¶1000024914-4920 at 4915 (US 26072).

¶2189. An August 19, 1977 Special Report from the Philip Morris USA Research Center written by Barbara Goodman, a Research Scientist, described Philip Morris's "Human Smoker Simulator," a mechanism the company used to replicate human smoking behavior. The Simulator recorded how smokers smoked particular cigarettes by measuring their puffing behavior, then played back the recording into a smoking machine so the machine could replicate -- and then measure -- the amount of smoke constituents and the chemical composition obtained from a cigarette when smoked the same way the human had smoked it. The document states: "The Smoker Simulator program has the instrumentation to measure those smoker variations that constitute a smoker's puffing profile and a programmable smoking machine to measure the resulting tar, nicotine, and water deliveries." 1003728025-8039 at 8027 (US 20179); Whidby WD, 21:19-28:9; Whidby TT, 2/22/05, 13989:19- 13991:6; see also 1003293476-3493 at 3484 (US 85073) ("The cassette tape impulses an electronic smoking machine which duplicates exactly the smoking behavior of a given individual with a given cigarette. Delivery of tar, nicotine, and other smoke components can then be determined at the same conditions.").

831

¶2190. A Philip Morris Report dated July 20, 1981, written by Frank Gullotta and J.A. Jones and sent to William Dunn and 40 others, including Dr. Whidby, described Philip Morris's Human Smoker Simulator program as "a system . . . which permits relatively unobtrusive monitoring of a smoker's inhalation patterns outside the laboratory setting," and indicated that "the system's accuracy was highly satisfactory throughout the experiment" and had "a mean accuracy reading of 96% . . . for 70 experimental sessions." The Report also indicated:

A major barrier to investigations on smoke-laden inhalation patterns has been the lack of instrumentation which would accurately measure inhalation parameters, and yet be unobtrusive to the smoker. The system we have acquired breaks this barrier by permitting accurate and relatively unobtrusive monitoring of inhalation patterns under natural smoking conditions.

¶2025986350-6401 at 6352-6353, 6382 (US 87080).

¶2191. The July 20, 1981 Report includes a number of statements reflecting Philip Morris's understanding of smoker compensation:

832

That roughly 20% or less of smokers take puffs equal to or smaller to those taken by the FTC Method machine smoking protocol.

"The varying puff sizes in turn also give increased deliveries above those of" the FTC Method.

"Smoker profile characteristics have been found to be affected by the cigarette design parameters to varying degrees."

"A cigarette designed such that it causes the smoker to take larger puffs than the compared model could easily be perceived as having more impact (desirable or undesirable as the case may be)"

Lists low resistance to draw and "high filter dilution" as the top two "physical cigarette designs that have the effect of increasing a smoker's puff volumes."

"In conclusion, when a smoker is presented with a cigarette other than his normal brand, it is possible to estimate the maximum flow rate to a certain degree. The puff duration will increase with increasing RTD [resistance to draw] and/or filter dilution. Since the volume is based on both flow and duration, the puff volume will change accordingly."

Test results showing that smokers of full-flavor, light and ultra light cigarettes all took larger puffs than in the FTC Method, and that the smokers' puffs were increasingly large for lower tar cigarettes, so that, for full-flavor smokers, "average tar deliveries were 45% higher than" the FTC yields, low tar smokers' "showed a higher rate of increase, 81%," and, for ultra light cigarettes, "[t]he average tar delivery" was "more than three times that of" the FTC yield.

¶1003728025-8039 at 8027, 8028, 8032, 8034, 8036, 8037 (US 20179); Whidby WD, 22:18-23:9, 23:17-21, 24:6-13, 25:14-18, 26:21-27:5, 27:15-28:9; see also 2025986350-6401 at 6353, 6384 (US 87080); Whidby WD, 53:10-55:21 ("Preliminary results suggest that inhalation patterns are modified in response to changes in the available nicotine in the cigarette smoked. . . . The results from studies which analyze blood plasma and urine nicotine concentrations . . . suggest that nicotine compensation is fairly complete.").

833

¶2192. A September 17, 1975 Philip Morris document from Goodman to Leo F. Meyer, Philip Morris Director of Research, reflecting results of Philip Morris's studies with its Human Smoker Simulator, reported that, due to compensation, smokers got as much tar and nicotine from Marlboro Lights as from full-flavor Marlboros:

Marlboro Lights cigarettes were not smoked like regular Marlboros. There were differences in the size and frequency of the puffs, with larger volumes taken on Marlboro Lights by both regular Marlboro Smokers and Marlboro Lights smokers. . . . The panelists smoked the cigarettes according to physical properties; i.e., the dilution and the lower RTD of Marlboro Lights caused the smokers to take larger puffs on that cigarette than on Marlboro 85's. The larger puffs, in turn, increased the delivery of Marlboro lights proportionally. In effect, the Marlboro 85 smokers in this study did not achieve any reduction in smoke intake by smoking a cigarette (Marlboro Lights) normally considered lower in delivery.

¶The report's "Conclusions" section noted that "[t]he smoker data collected in this study are in agreement with results found in other project studies." 2021544486-4496 at 4486-4488 (US 20348); see also Whidby WD, 45:11-12 (noting, in the context of this exhibit, that "Marlboro 85's" refers to Marlboro Reds, a full-flavor cigarette brand).

¶2193. As Dr. Burns explained, "there are three things that are powerfully significant in this document":

(1) It "very clearly demonstrates that, in contrast to what we believed six years later when we wrote the 1981 Surgeon General's Report, smokers who smoked brands of cigarettes on the market in 1975 were not getting different yields when they smoked those products. We [in the public health community] believed they were."

(2) "[T]his is dated 1975, six years prior to the time the [1981] Surgeon General's Report reached its conclusion. And we did not have access to this information or comparable information."

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(3) "[T]his study was done on a machine that mimicked actual smoking behaviors, that actually matched the behavior of the individual when the machine smoked the cigarette. In 1981, one of the recommendations that we made . . . was that this type of machine should be developed so that we could develop a better understanding of the relationship between delivery of tar and nicotine of these cigarettes when they were actually smoked. So . . . six years prior to the time we were reviewing that evidence for the Surgeon General, this information was available to Philip Morris."

¶Burns WD, 52:15-53:12.

¶2194. One other Philip Morris Human Smoker Simulator report compared the deliveries of the full flavor and light versions of brands Philip Morris was selling. That report, dated September 23, 1976, measured the smoking behavior -- and resulting tar and nicotine deliveries -- of 150 full-flavor cigarette smokers for several years. This Human Smoker study's results revealed that, while Marlboro 100s are both full-flavor cigarettes and longer in length than Marlboro Lights, "the tar and nicotine yields for these two brands are basically identical." Whidby TT, 2/22/05, 14099:12- 14106:6, 14106:15-14107:1; 1003727277-7298 at 7280, 7281, 7290 (JD 040539).

¶2195. Philip Morris stopped all testing with the Human Smoker Simulator in 1981. Whidby TT, 2/22/05,13991:15-13992:13.

¶2196. A March 1, 1977 Philip Morris memorandum from Stanley Schachter to Thomas Osdene, Director of Research, concluded: "Serious smokers smoke to prevent withdrawal. Smokers regulate nicotine intake . . . . The smoker who fails to regulate suffers withdrawal." 1000046626- 6661 at 6654-6655 (US 35105).

¶2197. An October 16, 1981 memorandum from Jan Jones to William Dunn, titled "Nicotine Retention Research Proposal," stated:

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Research on smoke-laden inhalation patterns, using the ambulatory monitoring instrumentation, has provided preliminary evidence that inhalation behavior is modifiable, and is altered as a function of changes in the nicotine delivery of the cigarette. We are observing changes in inhalation parameters in the direction which would suggest compensation for increases or decreases in nicotine relative to the subject's usual brand.

¶1000136372-6373 at 6372 (US 35162).

¶2198. In a November 29, 1982 report, "The Effect of Cigarette Nicotine Content on Smoker Puff Parameters and Deliveries," Philip Morris scientists reported the results of their study of "puff number, puff volumes, puff durations, flow rates and puff intervals," which showed smokers "generally tended to decrease puff duration, puff number and puff volume and increase puff interval as the nicotine level of the cigarette increased." 1000408760-8809 at 8762, 8764, 8771 (US 35272).

¶2199. Carolyn Levy, a research scientist for Philip Morris in its Behavioral Research Group from 1975-1980, testified that she "worked on the issue of whether individuals regulated the amount of nicotine they obtained from smoke," and as part of that work she "monitored how smokers inhaled smoke from cigarettes with varying tar and nicotine deliveries." Levy further testified that, as a result of this research, she was able to "gather evidence that some people change their smoking behavior in response to cigarettes with differing tar and nicotine deliveries." When Levy requested publication, she "was told not to publish or was not given approval to publish by the manuscript review board." Levy WD, 10:16-11:15.

¶2200. A November 1999 presentation, titled "PM USA Discount Brands," given to Geoffrey Bible, Chairman of the Board and CEO of Philip Morris Companies, noted in a Product Comparison chart that Ultra Light products have a higher puff count than Full Flavor products. 2070662118-2389 at 2176 (US 87914*).

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R.J. Reynolds

¶2201. In a March 28, 1972 memorandum marked "RJR SECRET" from Claude Teague to E.A. Vassallo and Murray Senkus, titled "A Gap in Present Cigarette Product Lines and an Opportunity to Market a New Type of Product," Teague stated: "I believe that for the typical smoker nicotine satisfaction is the dominant desire, as opposed to flavor and other satisfactions." The document went on to state:

Given a cigarette that delivers less nicotine than he desires, the smoker will subconsciously adjust his puff volume and frequency, and smoking frequency, so as to obtain and maintain his per hour and per day requirement for nicotine (or, more likely, will change to a brand delivering his desired per cigarette level of nicotine).

¶Teague further stated:

[R]egardless of which cigarette the smoker chooses, in obtaining his daily nicotine requirement he will receive about the same daily amount of tar. If, as claimed by some anti-tobacco critics, the alleged health hazard of smoking is directly related to the amount of tar to which the smoker is exposed per day, and the smoker bases his consumption on nicotine, then a present "low tar, low nicotine" cigarette offers zero advantage to the smoker over a regular filter cigarette, but simply costs him more money and exposes him to substantially increased amounts of allegedly harmful gas phase components in obtaining his desired daily amount of nicotine.

¶The document ends with the statement that "[t]he thoughts and philosophies expressed above come from many sources and certainly are not solely those of the writer." 500790776-0784 at 0778, 0782-0784 (US 29473).

¶2202. A document titled "Smoking Satisfaction" and labeled as a "[t]alk delivered to RJR Tobacco Company management, June 23, 1974 and RJR Tobacco International management, August 4, 1976" by Murray Senkus, Director of Scientific Affairs for RJR until 1979, stated

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[T]he amount of nicotine that one can get in the lungs from low tar cigarettes is much less. So the smoker then resorts to other means to get the nicotine he needs in the blood from low tar cigarettes by longer puffs, by bigger puffs, by more frequent puffs, and also by smoking more cigarettes each day. It has been observed that as one switches from a non-filter to a filter, one smokes more cigarettes per day. But eventually one can change his style of smoking so one can get enough nicotine in the blood during the inhaling step by changing the smoking style; i.e. longer puffs, bigger puffs, and more frequent puffs. Surveys have shown that in switching to lower tar cigarettes, smokers have not necessarily increased the number of cigarettes per day.

¶501525355-5366 at 5360-5361 (US 29531).

¶2203. Senkus, in a speech he gave at RJR in both late 1976 and early 1977, "Some Effects of Smoking," demonstrated RJR's knowledge that smokers compensate for lower delivery cigarettes to obtain their required nicotine level, and confirmed that the other Defendants also knew this:

[T]here are ways to increase or decrease the amount of nicotine one can obtain by smoking a single cigarette: One can take a deeper puff or shallower puff. . . . One can puff more frequently or less frequently. . . . One can take a deeper puff and hold the smoke in the lungs longer before exhaling to assure complete transfer of nicotine into the body fluids. Without any question, the desire to smoke is based on the effect of nicotine on the body. . . . [T]he amount of nicotine that one can get in the lungs from low tar cigarettes is much less. So the smoker then resorts to other means to get the nicotine he needs in the blood from low tar cigarettes, by longer puffs, by larger puffs, by more frequent puffs, and also by smoking more cigarettes each day. One can get enough nicotine into the blood during the inhaling step by changing the smoking style; i.e., longer puffs, bigger puffs, and more frequent puffs. . . . It is worth noting that our competitors are aware of the significance of the quality and quantity attributes of nicotine. Moreover, they are fully aware of the advisability of maintaining a low tar value and also maintaining the nicotine as high as possible [referring to Philip Morris's Marlboro and Merit, and Lorillard's True brand].

¶500251711-1722 at 1714,1718, 1720 (US 48076).

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¶2204. In an April 5, 1982 RJR report from J.H. Robinson and J.H. Reynolds to Dr. D. Werner, the authors admitted that the nicotine delivered under human smoking conditions was "more than 200%" of that advertised, stating that "the smoker can adjust his puffing characteristics to obtain the same level of nicotine from different cigarettes. This represents the first concrete evidence that smokers compensate to obtain a consistent amount of nicotine. Relevant to this, it should be noted that all cigarettes experienced a marked reduction in nicotine filter efficiency under human smoking conditions compared to the nicotine filter efficiencies obtained under standard FTC conditions." 508028982-8984 at 8983 (US 85053).

¶2205. John Robinson, RJR's Principal Scientist in psychopharmacology, wrote a July 25, 1983 memorandum to Alan Rodgman, titled "Critique of Smokers of Low-Yield Cigarettes Do Not Consume Less Nicotine," which essentially agreed with the conclusions in an article written by Dr. Neal Benowitz showing that smokers compensate to obtain a stable nicotine dose in their bloodstream. The article stated:

The paper itself expresses what we, in behavioral, have "felt" for quite some time. That is, smokers smoke differently than the FTC machine and may very well smoke to obtain a certain level of nicotine in their bloodstream. If a given level of nicotine in the blood is the final goal of a smoker, one would predict that he would smoke an FFT [full-flavor tar] and ULT [ultra low tar] cigarette differently. If the smoker could obtain the same nicotine in his bloodstream from an FFT and ULT cigarette by modifying his puffing/inhaling pattern, it would be expected that the blood cotinine level would be the same after smoking either cigarette on a regular basis . . . the data reported in this paper remind us of the HMSM experiment done with the German Camel and Marlboro cigarettes. While there were certain imperfections in this experiment, you may recall that the smokers apparently obtained almost exactly the same amount of nicotine no matter which of the four cigarettes they smoked. This was one of the first indications that smokers may, in fact, smoke to obtain a certain

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level of nicotine in their bloodstream. Data like these made me feel that the data reported in this current publication are probably correct.

¶502680871-0871 (US 49198); see also 508978013-8025 at 8014 (US 20819) (acknowledging that smokers who switched to low-tar products typically "compensated," and indicating that a smoker "has his or her own nicotine requirement from each cigarette" and "adjusts [his/her] smoking maneuver" to obtain the desired level of nicotine").

Brown & Williamson

¶2206. Minutes from a January 12-18, 1974 B&W/BATCo conference stated: "[W]hatever the characteristics of cigarettes as determined by smoking machines, the smoker adjusts his pattern to deliver his own nicotine requirements." 109882674-2679 at 2675 (US 21507).

¶2207. B&W's scientific research on compensation was confirmed by its consumer research on low tar cigarettes, in which smokers reported compensating for the reduced deliveries. For instance, a February 23, 1977 consumer research report, "Consumer Discussions of Low Delivery Cigarettes," written by R.F. Brotzge and W.H. Deines, demonstrates B&W's awareness that low tar smokers were compensating by smoking more cigarettes, stating:

Findings, in order of importance, to participants in the five focus groups were: 1. Health -- Participants expressed general fears about cancer, emphysema, other lung diseases, etc. Despite these fears, they stated their determination to continue smoking. . . . 5. Compensation -- Participants noted they smoked more low tar cigarettes and received less satisfaction.

¶679009843-9867 at 9843 (US 85055).

¶2208. Similarly, a July 25, 1977 B&W Internal Marketing Study, titled "Low 'Tar' Satisfaction, Step 1 Identification of Perceived and Underperceived Consumer Needs," analyzed smokers' satisfaction with low tar cigarettes with regard to switching behavior, and stated: "It was noted earlier that new arrivals to the Hi-Fi category realize that they are smoking more cigarettes [quoting a study participant]: 'You can also go down to the lower tar, but increase your smoking. So you're right back where you were.'" The study further noted that "Cigarette consumption, as reported in a 1976 Consumption Study, increases as nicotine (satisfaction per cigarette) decreases." 775036039-6067 at 6050 (US 21053).

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¶2209. A report bearing the stamp "Brown & Williamson June 24, 1980 R&D Library" prepared by BATCo on April 23, 1980, titled "Compensation: A Review [of] the Relationship Between Compensation and Changes in Cigarette Design," stated that studies indicated that compensation was a permanent phenomenon: "On the basis of the German studies, compensation would therefore be seen as a long-term tendency to permanently adjust towards some preferred (or minimum) level [of nicotine]." 650032329-2385 at 2356 (US 53429); Ivey WD, 68:1-10.

¶2210. A July 1983 B&W report by W. Wiethaup and W. Schneider, "Filter effects on smoke and smoke effects," stated:

One factor, which may be responsible for a relatively intensive "strength" impression within a given tar segment, is the "smoke elasticity." The smoke elasticity describes the potential of a cigarette, to provide the smoker with more smoke, if he draws harder. This becomes relevant at least for the first few puffs of a low tar cigarette, as all recent investigations show.

¶512107109-7120 at 7110 (US 85056).

¶2211. A March 26, 1999 e-mail from Hugh Honeycutt to Mike Dixon and numerous other BATCo employees referenced B&W's "Atlanta Study," which was conducted by scientist Kelly St. Charles, to examine smoking behavior and puffing profiles for low tar cigarettes. Honeycutt's email expressed concern that "B&W had just made a big splash in the US touting Carlton as the '1' for you," -- a marketing slogan indicating that Carlton delivered only one milligram of tar -- in light of research finding that "smokers of ultra low tar brands like our Carlton 1 mg appeared to actually get 3 mg." of tar. 321155579-5580 at 5579 (US 46683); 2073168412-8414 (US 22024). As of June, 2004, B&W admits that smoker compensation causes Carlton 1 mg smokers, on average, to inhale 5 to 6 times the amount of tar that B&W has advertised. (no bates) (US 88628) (stating "a Carlton 1 mg. smoker will, on average, get 5 to 6 milligrams of tar").

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BATCo

¶2212. A BATCo document from the late 1970s, "Why do People Smoke?," reflects BATCo's understanding of compensation, stating that "[n]icotine sustains smoking behaviour," that "smoking behaviour is highly responsive to cigarette design," and that "[a] key determinant of product preference will be the design 'Effort-Reward Gradient,'" i.e., elasticity of delivery. The document added: "Increase in Cigarette Consumption [is] Related to Change in Nicotine Yields," noting that "[m]ost compensation must occur at the individual cigarette level." 403626692-6802 at 6729, 6731, 6734, 6762, 6768 (US 85018*).

¶2213. An undated BATCo document by Dr. S.J. Green, a Senior Scientist for BATCo Research and Development, titled "Ranking Cigarette Brands on Smoke Deliveries," discussed compensation to equalize nicotine intake in several contexts, including smokers "increas[ing] puff volume to receive the same nicotine" when smoking a lower tar cigarette and smokers "adjust[ing] their smoking behaviour on the basis of nicotine intake." 110077247-7268, at 7247-7250 (US 88643).

842

¶2214. A March 11, 1971 report written by D. Creighton, BATCo R&D Research Scientist, and L.M. McGillivray, titled "The Effect of Changed Deliveries at Constant Pressure Drop on Human Smoking Pattern," stated:

It was found that there is indeed a degree of compensation for the reduced delivery. The panel as a whole took larger puffs from the lower delivery cigarette, inhaled the smoke more deeply and held the smoke in the lungs for a longer time. The six individual panel members compensated for changed delivery in different ways, some by increased volumes, and others by increased number of puffs on the lower delivery cigarette.

¶The report also stated: "An increase in puff volume, but not puff duration, means that subjects must have drawn harder on the lower delivery cigarettes, and that the flow rate was greater during puffing. This implies that smokers are willing to work harder to achieve an optimum delivery from a lower delivery cigarette." The report further stated:

The fact that the panel compensated for the lower delivery by increasing the depth of inhalation, the depth of exhalation and the total time for which the smoke was held within the body is of particular interest in the light of the finding that more is retained from a puff of smoke that is inhaled deeper, and held within the lungs longer.

¶757001173-1185 at 1174, 1180 (US 85058); see also 102793967-3980 at 3969 (US 34698).

¶2215. A June 17, 1975 BATCo document, "Compensation for Changed Delivery," sent to several BATCo employees, including David Geoff Felton, Senior Scientist for BATCo Ltd.'s Research and Development Department, acknowledged that smokers compensate to achieve a stable dose of nicotine:

A number of experiments . . . have been interpreted as showing that compensation for changed delivery does occur. . . . Our own results showed that when the [tar] to nicotine ratio was changed more smoke was taken from the lower delivery cigarette. . . . My own view is that

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compensation for changed delivery of nicotine does occur. . . . The weight of evidence at present available is for nicotine compensation [referring to several studies].

¶105658168-8179, 8168, 8178 (US 85418).

¶2216. A June 1, 1976 BATCo report, also titled "Compensation for Changed Delivery," written by D. Creighton, R&D Research Scientist, concluded that

the evidence is strongly in support of the hypothesis that many smokers do change the way they smoke in response to cigarette design changes that affect nicotine delivery. . . . The tendency amongst the majority of established smokers is to attempt to equalise nicotine delivery if the cigarette design allows them to do so.

¶The study further concluded that "[d]ue to the differences in the delivery of individual cigarettes from the same brand . . . and the differences between subjects and within a subject" "[e]qualisation [of nicotine levels] within the range + 20%" was expected. The report stated that "there are eight suggested methods by which a subject may regulate his nicotine intake; any number of which may be used simultaneously or at different times," namely by varying puff volume, puff number, puff distribution, cigarette butt length, puff interval, puff profile, inhalation pattern, and number of cigarettes smoked. 650008449-8480 at 8470, 8460-8462, 8469, 8464 (US 76192).

¶2217. A June 27, 1978 BATCo memorandum, also titled "Compensation for Changed Delivery," written by Creighton, confirmed BATCo's knowledge that compensation is not temporary, and occurs as a result of a need for nicotine, and contradicted "the advice of Health Authorities" that smokers who would not or could not quit should switch to a lower delivery cigarette:

It is difficult to ignore the advice of Health Authorities who advise smokers to give up smoking or change to a lower delivery brand but there is now sufficient evidence to challenge the advice to change to a lower delivery brand, at least in the short-term. Numerous experiments have been carried out in Hamburg, Montreal, and

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Southampton within the company as well as many other experiments by research workers in independent organizations, that show that generally smokers do change their smoking patterns in response to changes in the machine smoked deliveries of cigarettes. . . . Further findings from these results were that the modified smoking patterns used to smoke the changed delivery brands were maintained for the month during which they were smoked. This shows that there was no adaptation during that time. . . . In general, a majority of habitual smokers compensate for changed delivery, if they change to a lower delivery brand than their usual brand. . . . If they choose lower delivery brand which has a higher tar to nicotine ratio than their usual brand (which is often the case with lower delivery products) the smokers will in fact increase the amounts of tar and gas phase that they take in, in order to take the same amount of nicotine.

¶105553905-3914 at 3905, 3907, 3913 (US 34799); Ivey WD, 69:14-70:1.

¶2218. A June 29, 1979 study written by Creighton, "A Comparison of Smoking Surveys Separated by Four Years," compared the smoking behavior of a group of smokers in 1974 of a cigarette with 1.7 mg nicotine and 27 mg TPM to their behavior in 1978 when smoking a cigarette with a slight reduction in nicotine (by 17% to 1.4 mg) and virtually identical TPM delivery (26 mg). The study found that the group smoked the reduced nicotine cigarette "more intensely" (i.e., increased their puff volume), which likely "equalised" the nicotine delivery of the two cigarettes. The study concluded that "it is probable that as a result of the changes in smoking behaviour observed in this study, subjects took about the same amount of nicotine from the two different cigarettes but, because of changes in TPM to nicotine ratios, received more TPM from the [reduced nicotine cigarette]." The study further found that

[t]he fact that smokers have changed their smoking patterns to take more smoke from a cigarette with lower nicotine delivery but similar TPM delivery adds support to the contention that nicotine is a major determinant of smoking behavior, and that TPM, as long as it is delivered in sufficient quantity, plays a lesser role.

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¶650008946-8960 at 8948, 8953-8955 (US 85059).

¶2219. An April 27, 1981 memorandum by Martin Oldman, an employee in BATCo's Research & Development department, to L.C.F. Blackman, Director of BATCo, stated that "[s]ome people appear to smoke for nicotine, others don't . . . nicotine dependent smokers. . . are more likely to compensate for nicotine than others." 105399692-9693 at 9693 (US 85060).

¶2220. A July 9, 1984 document by Imperial Tobacco Limited, sister company to B&W, was distributed to various B&W and BATCo employees, including: Blackman; A.M. Heath, BATCo Executive Director of Marketing; Erhard Koehn, BATCo Manager of Product Development; Rainier Wernitz, BATCo Manager, Market Research; Tilford Riehl, B&W Division Head of Product Development; A. Mellman, B&W Director of Marketing Research; T. Wilson; Brennan; C.I. Ayers; and G.O. Brooks, BATCo scientist. It acknowledged that smokers who switch to low tar brands increase the number and intensity of puffs taken and number of cigarettes smoked to achieve a higher dose of nicotine: "BRANDS SWITCHING DOWN DELIVERY: increase in puffing parameters -- increase in numbers of cigs. smoked -- more puffs taken means to achieve a higher dose." 536000000-0090 at 0050 (US 22338).

¶2221. A January 24, 1985 BATCo letter from Charles H. Keith to Lance Reynolds stated:

[H]uman smokers, even though they ingest much more Nicotine and Tar than is indicated by the FTC values, get about the same amount of Tar and one and a half times the Nicotine from Barclay, Carlton and Cambridge. . . . [I]t is clearly apparent that the human smokers are ingesting much more nicotine and tar than the nominal values obtained by FTC tests. The human levels are six to eight times higher than the normal values.

¶621096298-6300 at 6298, 6300 (US 76191).

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¶2222. A BATCo document dated October 12, 1987 sent by M.L. Reynolds to H.F. Dymond (researcher) and H. Ibig, under the heading "Easily Achieved Tar Deliveries from Low Tar Cigarettes," displays a chart depicting the increased tar deliveries of RJR's Now cigarette, and Philip Morris's Merit and Merit Ultra cigarettes, caused by the compensatory behaviors of vent hole blocking, taking more puffs, and taking bigger puffs. This chart shows that these behaviors in combination caused a thirteen-fold increase of tar inhaled for Now cigarettes, a nearly three-fold increase for Merit, and a four-fold increase for Merit Ultima. 400015695-5696 at 5696 (US 85063).

¶2223. A December 21, 1987 BATCo document with subject heading "Notes on Meeting With Dr. Eicher" written by "HFD" (H.F. Dymond, researcher) and sent to Nick Cannar and several B&W and BATCo personnel, stated: "BAT acknowledged the discussion on compensation and described how channel ventilation was an alternative form of ventilation, both systems could be manipulated by a consumer. Other companies were also beginning to acknowledge compensation, but they were reluctant to debate the issue in public." 400015634-5635 at 5634 (US 85064).

¶2224. A May 6, 1992 BATCo report, titled "Topics In Smoking and Health 'Bible'" stated:

[T]he expression of product smoke deliveries in the form of a league table, while understandable, can be misleading. There can be no guarantee that a smoker who switches from one product to another delivering a lower "tar" value will thereby reduce his intake of "tar." He may well alter the way he smokes the second product in some subtle fashion and so adjust his intake of smoke to fit his needs. In this way, he may inadvertently increase his intake of other substances in the smoke. League tables and delivery data on products may, therefore, be misleading to the consumer, who will be unaware of the sub-conscious ways in which he manipulates his own behaviour . . . smokers of higher delivery cigarettes may find that they need to smoke more low delivery cigarettes to achieve the same satisfaction. . . . Increasingly smokers will accept the alleged harmfulness of smoking, and while wishing to continue will look for health reassurance brands. . . . Smoking behaviour is also of

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importance. For example research into the effects of low tar and nicotine cigarettes on ease of quitting smoking will be undertaken.

¶500887584-7709 at 7606-7607, 7614, 7679, 7704 (US 20656).

American Tobacco

¶2225. A November 11, 1976 report prepared by Fay Ennis Creative Research Services for F. William Free & Company, an advertising agency used by American, demonstrates American's awareness that smokers of low tar cigarettes employed several different methods of smoker compensation. The report summarized focus group sessions relating to low tar cigarettes. When asked about Now and Carlton cigarettes, the panelists "concluded that you would smoke twice as much of this type of cigarette in order to get any satisfaction. One man said that he didn't like the draw on these cigarettes because he had to puff so hard, his throat tickled." When asked to define a low tar cigarette, some panelists stated: "You have to drag on the cigarette 'real' hard to get any satisfaction out of it." ATC0137310-7324 at 7319-7320 (US 87916).

Lorillard

¶2226. A July 16, 1976 Lorillard memorandum from M.S. Ireland to H.J. Minnemeyer on the subject of "Research Proposal -- Development of Assay for Free Nicotine" revealed Lorillard's awareness of smoker compensation:

Cigarette sales are made for one reason. The customer is satisfied with the product either from the taste or the physiological satisfaction derived from the smoke. The consensus of opinion derived from a review of the literature on the subject indicates the most probable reason for the addictive properties of the smoke is the nicotine. Indications are that the smoker adjusts his smoking habits to satisfy the desire for nicotine either by frequent or large puffs on the cigarette, or smoking a large number of cigarettes.

¶00044522-4523 at 4522 (US 22012); 94937037-7038 at 7037 (US 56775).

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¶2227. A December 10, 1976 document by H.S. Tong, which included a review of the scientific literature, reached several conclusions confirming Lorillard's understanding that smokers compensate to receive their desired level of nicotine:

It seems that, within limits, smokers can and do control their nicotine intake from smoke by varying their smoking techniques. . . . Smokers were known to smoke more when offered low nicotine cigarettes. . . . It would seem desirable to have a low tar cigarette with a nicotine content between the threshold and optimum doses level.

¶00045061-5071 at 5061-5063, 5068 (US 34210).

¶2228. A July 30, 1980 Lorillard memorandum, "A Review of Behavioral and Psychopharmacological Factors in Smoking," from S.T. Jones (Product Design), included conclusions by Lorillard personnel based on review of scientific articles in the literature, including the following: "The evidence to date clearly indicates that smokers titrate or regulate their intake of nicotine, e.g. smokers of cigarettes which deliver large amounts of nicotine will adjust -- when given low nicotine cigarettes -- their smoking to get a larger nicotine dose than the machine determined values indicate." Lorillard also independently acknowledged that, in the 1980s, it knew that smokers of low tar/low nicotine cigarettes would compensate by altering their smoking habits in order to obtain a higher level of nicotine. 01105000-5021 at 5010 (US 20030); Spears PD, State of Minnesota v. Philip Morris Inc., 9/23/97, 62:29-65:11.

¶2229. An August 21, 1984 Lorillard memorandum from E-Chung Wu to W.R. Deaton, reporting on a "puff profile study of 15 brands of cigarettes . . . with 5 smoking panel members" acknowledged smoker compensation: "The general trend shows that puff volume increases with the decrease of both TPM or nicotine. . . . Obviously, the higher dilution of smoke needs larger volume to compensate for the decrease of the flavor or nicotine." 89213491-3501 at 3491 (US 56466).

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