Reports that Matter

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

Defendants Researched, Developed, and Utilized Various Designs and

Section 59 of 129

Defendants Researched, Developed, and Utilized Various Designs and

Methods of Nicotine Control to Ensure that All Cigarettes Delivered Doses of Nicotine Adequate to Create and Sustain Addiction 1508. Nicotine delivery levels are not a matter of random variation. Rather, cigarettes are

specifically designed to deliver a range of nicotine doses so that a smoker can obtain her optimal dose from virtually any cigarette on the market, regardless of that cigarette's nicotine delivery level as measured by the FTC method. Farone WD, 99:10-12; Henningfield WD, 36:8-16.

  1. Defendants' control of nicotine has not focused simply on delivering as much nicotine as possible, because delivery of large amounts of nicotine can make cigarettes harsh and unpalatable to the smoker. Farone WD, 85:7-16. In addition, an unsmoked cigarette already contains much more nicotine than a smoker will inhale because, as mentioned, supra, at ¶1368, not all of the nicotine present in tobacco is transferred to cigarette smoke. Typically, a cigarette that delivers approximately one milligram of nicotine in smoke, as measured by FTC testing, retains "about 14-20 milligrams of nicotine in the unsmoked rod." Farone WD, 86:10-12. Therefore, it is simplistic to consider only "spiking" of cigarettes by adding extraneous nicotine when determining Defendants' control of nicotine delivery. Rather, their control of nicotine must include consideration of the myriad design parameters Defendants have used to control the dose and form of nicotine delivered to mainstream cigarette smoke. As explained by Dr. Farone, who had extensive personal experience with Philip Morris's cigarette design efforts and objectives as Director of Applied Research from 1977 to 1984, nicotine control -- or manipulation -- means doing something
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to change the amount of nicotine that comes off a burning cigarette to make it different than what it would be if you just took tobacco, wrapped it up, put it in a rod, lit that up, and let the nicotine go where it may. . . . [N]icotine manipulation deals with making specific changes in that design to make nicotine go where you want it to go as opposed to where it would go by itself without changing the design.

Farone TT, 10/7/04, 2021:6-13.

  1. As the following Findings of Fact demonstrate, Defendants have used a variety of physical and chemical design parameters to manipulate the nicotine delivery of their commercial products. For example, while Dr. Farone was at Philip Morris, researchers identified fifty-seven different parameters that influence the quality and content of smoke delivery by a burning cigarette. Farone WD, 48:7-22. Physical design parameters include cigarette length, circumference, and density; filter composition and design; air dilution or ventilation; and cigarette paper composition and porosity. Chemical design parameters include tobacco blend selection, the chemical composition of tobacco filler, and the choice of additives, including additives such as ammonia and ammonia compounds to influence smoke pH and the amount of free nicotine. Farone WD, 85:3-6. Defendants' goal to ensure that their products deliver sufficient nicotine to create and sustain addiction influences their selection and combination of design parameters. No single design parameter is responsible, on its own, for the level of nicotine delivered by a particular cigarette.
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Rather, Defendants combine design parameters to ensure that any particular cigarette delivers a sufficient level of nicotine. Id. at 48:2-6, 84:16-85:6; Henningfield WD, 49:8-53:5, 54:7-15, 55:13- 56:7, 66:14-67:12.

  1. Defendants' claims that their control of nicotine in their products is strictly for quality control measure are without factual support. See, e.g., 2023011263-1263 (US 20371).

Cigarettes are designed to give a desired tar and nicotine level for each member of any brand family. They are designed into the product and they are not a matter of random variation. . . . [Defendants' control of nicotine] starts at the design stage and then it is maintained.

Farone WD, 99:10-12.

  1. Defendants have long claimed that pressure from public health authorities motivated their efforts to manipulate the design of their cigarettes in order to control nicotine delivery. The record does not support those claims. What is true is that in the 1970s, public health groups, such as the Tobacco Working Group in 1976, suggested that Defendants create less hazardous cigarettes by lowering the amount of tar while maintaining the amount of nicotine. Farone TT, 10/7/04, 2022:13-2023:2; 11/29/04, 7154:24-7155:25. However, many of Defendants' internal documents on the issue of nicotine delivery control predate the 1976 recommendations of the Working Group. In addition, even during the limited window of time in which the public health community was encouraging high nicotine/low tar cigarettes, Defendants did not disclose how sophisticated their understanding of nicotine manipulation was or how much they understood about the process of compensation. Finally, even today, long after the Tobacco Working Group and other members of the public health community have acknowledged that such efforts were counterproductive and would not benefit the public, Defendants continue to research and employ techniques to control nicotine delivery in their commercial cigarettes.
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  1. Defendants also claim unpersuasively that their research into methods to control nicotine delivery never translated into any commercially successful products. They also challenge the scientific basis for some of the design parameters discussed, i.e., whether such a change in design actually had an effect on nicotine delivery and, correspondingly, addiction. While most of the physical and chemical design parameters discussed below were used in the manufacture of Defendants' commercial cigarettes and did have an effect on nicotine delivery to the smoker, that issue is not, in an of itself, relevant. In the context of these fraud claims, what is relevant is that Defendants firmly believed, as demonstrated by their internal documents, that they could -- and did -- control nicotine delivery to the smoker by manipulating the design of their cigarettes, and then lied about their knowledge and conduct to the American consumer.

a. Defendants Recognized the Need to Design Cigarettes that Would Produce Low Nicotine and Tar Measurements under the FTC Method While Also Delivering the Minimum Nicotine Levels to Create and Sustain Addiction 1514. Defendants began to anticipate in the 1950s and 1960s, as the relationship between

smoking and health was becoming a more prominent subject of public concern, that public interest in less harmful cigarette products could ultimately require reduced levels of nicotine and tar in conventional commercial cigarettes. Harris WD, 139:15-140:10 & Dem. 5. Defendants also recognized that if they addressed smokers' concerns about the health effects of smoking by reducing the levels of tar in their cigarettes, they might also effect a proportional drop in nicotine. They also recognized that a reduction in nicotine delivery levels which was no longer sufficient to sustain smokers' addiction could devastate their industry. Defendants therefore set out to design commercial cigarettes that were capable of delivering nicotine across a range of doses that would keep smokers addicted. Henningfield WD, 54:7-15, 55:13-56:7, 66:23-67:12; Farone WD, 72:10-13, 86:18-89:13.

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  1. As discussed earlier, see generally Section V(E)(2)(b), infra, Defendants have known since the 1960s that individuals smoke to obtain the desired effects of nicotine, and that smokers of lower nicotine yield cigarettes tend to adjust their smoking behavior to titrate (i.e., control) their intake of nicotine to achieve desired levels. This behavioral adaptation is referred to as smoker "compensation." By puffing lower yield cigarettes more frequently and/or more intensively, by blocking ventilation holes in the cigarette filter, and/or by smoking more cigarettes in a day, smokers are able to "compensate" for the lower nicotine deliveries of low nicotine/low tar cigarettes. Id. Defendants used this knowledge in their research on nicotine manipulation and the manufacture of cigarettes. Benowitz WD, 55:17-56:2, 56:22-57:14; Burns WD, 36:3-15, 36:20-37:6, 44:4-32; NCI Monograph 13 (US 58700); 1003286580-6581 (US 85415); 1000405641-5689 (US 85416); 002545364544 (US 21747); 775036039-6067 (US 21053); 83250863-0873 (US 55673).

  2. The primary means by which Defendants have ensured that their low delivery products will sustain smoking addiction is by incorporation of physical design characteristics and ingredients that enable the human smoker to easily obtain his or her reinforcing level of nicotine, regardless of the cigarette's nominal FTC machine-measured yield. Farone WD, 105:10-106:6; Henningfield WD, 66:3-13, 66:23-67:7. Internal documents reveal that Defendants designed their cigarettes to increase the flexibility of their nicotine and tar dosing capacity to smokers even as they reduced nicotine and tar yields as determined by the FTC machine method. Henningfield WD, 48:17-23; 49-8-53:5.

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b. Leaf Blend and Filler: Defendants Controlled the Amount and Form of Nicotine Delivery in Their Commercial Products by Controlling the Physical and Chemical Make-Up of the Tobacco Blend and Filler 1517. Nicotine delivery can be controlled through variation of the amount and type of

tobacco used to manufacture commercial cigarettes. It can also be controlled through adding, eliminating, or reducing particular substances from a tobacco blend before it is used as a filler. Farone WD, 37:8-21; 39:11-16; 89:1-23. The tobacco blend is the main component of a cigarette that contributes to nicotine delivery because the blend determines how much nicotine will be in the unsmoked rod. Farone WD, 86:1-7; 107472304-2464 (US 20254); Henningfield WD, 65:22-66:8; Farone WD, 49:6-13; 52:15-23.

  1. There are three main varieties of tobacco that have been used in the production of commercial cigarettes in the United States -- Bright tobacco, Burley tobacco and Oriental tobacco. Each of these types of tobacco has a different chemical composition and different nicotine concentration that occurs naturally. Farone WD, 42:15-22; (no bates) (US 58700) (NCI Monograph 13, Ch. 5). Because of these variations, Defendants blend across types of tobacco and parts of the tobacco leaf, as well as across crop years, to compensate for the year-to-year variations in the tobacco crop. Farone WD, 43:9-14.

  2. Bright tobacco is generally grown in Southern Virginia and the Southeastern United States. It is also referred to as flue-cured tobacco. This term refers to the process by which the tobacco leaves are dried by being stored in a hothouse where either hot gases or heat is applied to the tobacco prior to its being used in the cigarette manufacturing process. Flue-curing has been one of the main methods used to cure tobacco in American-style commercial cigarettes over the years.

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Farone WD, 44:2-13. Burley is a strain of tobacco with a higher alkaloid content than Bright, which means that it naturally has more nicotine than Bright tobacco. Burley tobacco is air-cured, which means that it is hung inside a shed to dry where no sunlight will hit it. Id. at 44:14-20, 46:16-20. Oriental tobacco, also referred to as Turkish, is imported and cured through a process called fermentation, meaning that the leaves are packed into moist stacks and fermented. Id. at 44:19-20, 47:8-17.

  1. Each of these types of curing -- flue curing, air curing, and fermentation -- causes different chemical reactions within the tobacco and therefore results in smoke that has different chemical properties, including different nicotine levels. Farone WD, 47:18-21.

  2. In addition to naturally-occurring variations across different strains of tobacco, the nicotine content of tobacco leaves in a single plant can also vary based on the age of the plant and their position on its stalk. Nicotine is synthesized in the root of the plant and, generally, leaves located at the top of a plant's stalk have a higher nicotine content than those located at the bottom. Because they have lost most of their nicotine to air, leaves at the bottom of the plant are generally dried out and deliver little nicotine to the smoker. At the top of the living plant, by contrast, the leaves have not yet reached maximum nicotine or alkaloid content and can deliver comparatively greater nicotine when smoked. Defendants recognize these variations and monitor and record the stalk position of the tobacco leaves they purchase. Farone WD, 37:11-18, 43:15-44:1.

  3. In addition to the cut tobacco leaves, Defendants' commercial cigarettes contain a variety of other materials, including parts of the tobacco plant that have been altered from their natural state. One such material is reconstituted tobacco, also referred to as blended leaf or reconstituted leaf, which is manufactured out of stems and other small pieces of tobacco that have been removed from the tobacco leaves. Farone WD, 38:18-39:6. In the process of making reconstituted tobacco, water is applied to pieces of stem material so that water-soluble materials, including nicotine, can be removed from the stem and form a sheet. The nicotine and other water soluble materials are treated with various chemicals and additives and added back to the stem material after it has formed a sheet. Schindler WD, 58:12-59:4. The sheet is then chopped into small pieces and put in cigarette filler.

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  1. Defendants also alter natural tobacco through the use of expanded tobacco, which is tobacco that has been impregnated with liquid that eventually evaporates. Farone WD, 39:7-10. This impregnation and evaporation process causes tobacco leaves to shrink when they are dried or cured, after which a chemical such as carbon dioxide or freon is added and causes the tobacco pieces to expand. When this material is heated and expanded, it puffs back up to about the size of the chunk of tobacco when it was originally on the plant. Farone WD, 39:11-16.

  2. Defendants can change the cut width of the filler material, which also has an effect on nicotine delivery. As a matter of aerosol chemistry, burning materials that are of a finer cut creates an aerosol with smaller particle size than materials that are larger. Farone WD, 50:20-51:5. Particle size affects the rate and location of nicotine absorption. The cut width of the filler also influences how much nicotine from the filter will be delivered to the smoke, thereby affecting the nicotine to tar ratio of the smoke. Farone WD, 91:12-92:1.

  3. Defendants are keenly aware of how the combination of different blend components will affect the nicotine delivery of their final products. See Farone WD, 89:16-23; Farone TT, 10/6/04, 1596:16-1597:6. Some Defendants, including Philip Morris and BATCo, developed sophisticated computer modeling systems to determine exactly what effect each component of the blend would have on nicotine delivery, and then used those systems to design and create their blends. Farone WD, 48:7-18, 53:4-9; 105425765-5818 (US 85493).

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(1) Philip Morris 1526. Philip Morris has been altering the blend of its tobacco filler to obtain desired levels

of nicotine since at least 1954. In a document titled "An Outline of Current and Proposed Quality Control, Development and Research for Benson and Hedges," circulated in 1954, Philip Morris explained that comparisons of "analytical data for the blend with estimates of nicotine, tar and pH of the smoke should enable us to set up certain limits or norms within which the chemical composition of the blend must be controlled in order to achieve desired smoking quality." The document recommended:

enlarg[ing] the scope of our present analytical program to secure estimates of nicotine, nornicotine, total volatile bases, ether solubles and ash, not only for the blend but also for all the grades and types of tobaccos which go into the blend. There is no reason why such data cannot be used as a guide to purchasing. Once norms can be established for the composition of grades and types, samples falling outside the range of desirability can automatically be rejected by the buyers. In this way, the adverse effects of fluctuations in the blend originating in wide differences in leaf composition due to cultural and climatic conditions and crop year can be minimized.

1001761472-1484, 1474 (US 35556).

  1. In an outline of a presentation to the Philip Morris Products Committee, dated February 27, 1961, Helmut Wakeham, Philip Morris's Vice President and Director of Research and Development, described under the heading "Data on Experimental Defensive Cigarettes" a "low nicotine" and a "high nicotine" cigarette, which differed from each other only in the blend of the cigarette. This difference in blends resulted in a .9 mg difference in the amount of nicotine per cigarette. 1000277448-467 at 7458 (US 85479).
606

  1. By 1960, Philip Morris was studying the effects of adding nicotine maleate to blended leaf tobacco to determine if the nicotine content of cigarettes could be increased. 1001919941-9941 (US 21753).

  2. In an internal research document dated November 18, 1963, presented to Hugh Cullman, Vice President and Assistant Chief of Operations for Philip Morris USA, Robert Seligman, Manager of Philip Morris's Research and Development Division, described Philip Morris's ability to construct a plant to produce "all tobacco formulated product (TFP)" to replace blended leaf tobacco product. Seligman pointed out that a TFP product would enable " [m]aterials [to] be added to or removed from the formulated product so that predetermined chemical specifications can be met . . . as dictated by the requirements of the marketplace." The research department recommended that Philip Morris "consider this TFP plant as a vital addition to our defensive and offensive armament in the tobacco and health situation which we believe will remain turbulent for many years." Seligman warned, "Our chief competitors either already have the potential to make a tobacco formulated product by a similar process or are building it." 0000334739-4762 at 4742, 4751, 4755, 4759, 4761 (US 85480).

  3. A 1976 Philip Morris Special Report, titled "Manipulating Smoke Impact in Very Low (Less than 8 mg Tar) Delivery Cigarettes," described Philip Morris's study of relative influences of blend, Burley spray, and filter systems to produce "acceptable" impact, finding that a "50% [B]urley blend with a CA [cellulose acetate] filter would be the model of choice." 1000360937-0955 at 0939, 0947 (US 35250); Henningfield WD, 67:13-23.

607

  1. In 1982, the Biochemical Research Division undertook studies of the composition of Bright and Burley cigarettes with "varying levels of added nicotine to determine the relationship, if any, between nicotine, nicotine pyrolysis products and in vitro biological activity." 1002978092- 8098 at 8095 (US 85481).

  2. In 1991, Philip Morris studied the differences between Bright tobacco and Burley tobacco, which has a higher alkaloid content and therefore a higher pH level. Researchers specifically raised the question "Can pH affect the chemical nature (gas versus particulate phase form) of nicotine in cigarette smoke?" An October 30,1991 to 1995. This program studied the correlation between lifestyle and environmental exposures and major chronic illnesses, and the role of diet in cancers of the lung, oral cavity and bladder. 2046988683-8683 (US 85673); 2021630974-0975 (US 87371); 2046988682-8682 (US 85674). -1358- memorandum by D.C. Watson on the subject "Gas Phase Nicotine" concluded that "[r]elatively large proportions of vapor phase nicotine can, in fact, be swept from Burley using only warm air while Bright tobacco releases very little nicotine but measurable amounts of acetic acid under the same conditions." 2047348210-8218 at 8173-8178 (US 38596) (emphasis in original).

  3. According to former Philip Morris scientist Ian Uydess, Philip Morris "routinely targeted and adjusted" nicotine levels in its cigarettes, through blend changes and blend design. Udyess stated that this was true of the overall nicotine found in the blends, as well as the "deliverable" nicotine found in the smoke. "Both of these sources . . . were[] considered by Philip Morris' development scientists when formulating a new or modified product." Udyess also explained that "Philip Morris routinely applied this knowledge of selective tobacco blending to achieve desired nicotine . . . levels in the products that it designed and marketed." 521102262-2286 at 2269, 2271 (US 30497).

  4. On April 14, 1994, William I. Campbell, then CEO of Philip Morris, testified under oath before Congress regarding the tobacco blend used in the production of its Merit Ultima cigarette, which was the lowest tar cigarette in Philip Morris's Merit brand family. Campbell admitted that Philip Morris used a tobacco blend in the production of Ultima that had a higher concentration of nicotine than it used in producing Merit cigarettes. TLT0730001-0850 at 0766, 0767, 0768 (US 77011).

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(2) R.J. Reynolds 1535. RJR experimented with adding nicotine to the tobacco stem as early as 1956.

501052852-2856 (US 20671).

  1. Reynolds used leaf blending as a method for controlling the nicotine content of its cigarettes long before consumers began demanding cigarettes that delivered less tar. Dr. Murray Senkus wrote Divisional Monthly Research Reports in 1964 and 1965, discussing the blend changes tested by the company in response to the significant increases in the nicotine contents of Burley and flue-cured tobacco crops. 502805188-5195 at 5193 (US 50114); 502805205-5212 at 5210 (US 50116).

  2. In 1977, RJR embarked on a search for "new means for control of nicotine, tar to nicotine ratio, and satisfaction." 502740087-0087 (US 86978). Reynolds studied the nicotine delivery of individual blend components and the transfer of nicotine from individual blend components. 504423322-3327 at 3323 (US 50614).

  3. As part of its effort to learn how to control the nicotine content of tobacco independently of other components, Reynolds studied agricultural variables that might influence nicotine content in flue-cured and Burley tobaccos. Researchers examined: (1) how variables such as climate, fertilizer, and the height of the tobacco plant affect the amount of nicotine in smoke, and

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(2) how to develop flue-cured and Burley tobacco with higher nicotine content. 508799518-9519

  1. A September 8, 1980 internal memorandum by scientist Alan Rodgman outlined the types of nicotine technology Reynolds had studied and also compared, over a decade, nicotine levels in Reynolds's Winston cigarettes and Philip Morris's Marlboro cigarettes. Rodgman's analysis of this comparison concluded that, as a result of Reynolds's research efforts "since mid-1977, we have 'caught up' to PM insofar as its current use in the Marlboro of nicotine technology is concerned; our approach has been primarily one of controlling the smoke parameters noted above by blend formulation and denicotinization rather than by addition or transposition of nicotine." 501522719- 2726 at 2720 (US 48913).

  2. RJR also tracked the year-to-year variations in the nicotine content of various Bright and Burley tobacco crops in order to "provide background information for nicotine control and grade substitution projects." An October 19, 1982 memorandum written by E.H. Villegas summarized and analyzed the nicotine content of various crops of tobacco from 1977 to 1981 and concluded:

These graphs and tables provide an easy guide to grade, crop and belt comparison and may provide a new perspective on grade substitution. . . . From a nicotine control point of view, substituting adjacent grades with a given crop year is more logical than substituting a different crop year of the same grade/belt.

510723285-3286 at 3286 (US 88090).

  1. In an August 18, 1983 memorandum from G.M. Stewart to J.D. Frederickson, Stewart reported the results of Reynolds's research concerning the modification of tobacco blends, stating:

[T]obaccos [] with varied levels of ammoniation products, nicotine and expansion can be produced in pilot plant quantities for evaluation as components of new and existing blends. Such modified tobaccos

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may provide new ways to control nicotine delivery and modify smoking characteristics.

504140118-0127 at 0118 (US 85495).

  1. In 1985, RJR planned to develop "NOW-type cigarettes with increased nicotine." An October 9, 1985 internal memorandum outlined two approaches to the development of such cigarettes, including increasing the nicotine content of a low tar cigarette through blend modifications, i.e., the use of high nicotine tobaccos, and through addition of a "nicotine salt complex . . . to increase the nicotine delivery." 509108038-8040 at 8039, 8040 (US 85496).

  2. An October 17, 1985 internal invention disclosure prepared by Dwo Lynm and Carl Morrison and addressed to Grover Myers of RJR's Legal Department, described a new proposed method for developing a cigarette that "will meet most of the consumers' needs" by delivering a "high impact of nicotine with low tar delivery." Lynm and Morrison wrote that "the amount of nicotine required for smokers to get an appropriate 'kick' has been calculated to be 10 mg per cigarette in addition to the endogenous nicotine content." Lynm and Morrison proposed adding carbonized flue-cured [CFC] tobacco impregnated with 10 milligrams of nicotine to "the end or in the middle of the hollow tobacco rod in order to deliver more nicotine . . . This additional nicotine would lower the T/N ratio drastically." 505624894-4898 at 4894 (US 85497).

(3) Brown & Williamson and BATCo 1544. B&W's most senior executives took a great interest in the company's nicotine delivery

research. A June 5, 1974 memorandum from R.M. Irby, Jr., Manager of New Products Division, Research and Development, to J.B. McCarthy, Executive Vice President, and copied to J.H. Hager, Executive Vice President, outlined B&W's research and knowledge on "increasing the nicotine content of reconstituted tobacco." The methods for accomplishing this included: adding nicotine to reconstituted tobacco base sheets, replacing current leaf blends with higher nicotine tobacco, cast- sheeting tobacco "dust" that is high in nicotine content, altering filters, and changing smoke content. Irby discussed studies done to raise the nicotine delivery of Pall Mall and Lucky Strike cigarettes and to raise nicotine delivery in low tar cigarettes. MNAT00533225-3228 (US 85492).

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  1. It was known within BATCo that blended cigarettes, which included higher nicotine Burley tobacco in the cigarette, were more alkaline and less acidic, and had a "greater proportion of free nicotine present in the smoke . . . which explains why these types of cigarettes tend to have higher impact than a flue-cured cigarette with the same nicotine delivery." 400132742-2776 at 2769 (US 88084).

  2. The tobacco companies also spent substantial resources researching the nicotine delivery strategies of their competitors in order to perfect their own methodologies. For example, in a January 22, 1974 report, titled "A Chemical Examination of B&W and Competitive Reconstituted Tobacco," B&W researcher R.R. Johnson found that reconstituted tobaccos were in use by B&W, Philip Morris, RJR, American, Lorillard, and Liggett. The report acknowledged that "[m]ost reconstituted tobaccos gain significantly in nicotine content during cigarette manufacture," and pointed out that the nicotine transfer for Philip Morris cigarette products was "massive." 650106026-6042 at 6028 (US 86979).

  3. In 1976, BATCo developed a "Total Product Design" to allow its product designers to use a computer program to create product specifications to meet design criteria and minimize cost. The product designer was instructed to input target values for tar and nicotine delivery, along with other specifications, and the program would "calculate the required blend nicotine." This information would then be calculated with further specifications to determine other materials required to produce a cigarette providing the desired nicotine delivery. 105425765-5818 (US 85493).

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  1. Tommy Sandefur, Chairman and CEO of B&W, stated that in 1984 or 1985, when he "became responsible for [B&W's] domestic business," he directed the Research and Development Department to reverse engineer the Marlboro product. He explained that "I wanted to find out how they were doing that because it was important if I was going to compete to improve the quality of my products." The B&W scientists reported to him that Philip Morris had used ammonia in the reconstituted sheet. Sandefur admitted that B&W then began using the same technology, and applying the same technique, as Philip Morris in order to add ammonia to the reconstituted tobacco in its cigarettes. TLT0730851-1975 at 1620 (US 77012).

  2. At an experimental farm in North Carolina during the 1980s, BATCo and B&W developed a tobacco that the companies referred to as "Y-1." The tobacco was genetically engineered to have a nicotine content approximately twice the nicotine content of conventional tobacco. B&W used seeds from the genetically-engineered strain to grow artificially high nicotine tobacco in Brazil. This nicotine-enhanced tobacco was blended with other tobaccos in order to alter nicotine to tar ratios in commercial cigarettes sold in the United States. 510003880-3882 (US 20831). B&W claims it was encouraged to pursue Y-1 technology by the public health community to develop a less hazardous cigarette.

  3. B&W filed two patents relating to the Y-1 tobacco, patent application #761,312, filed on September 17, 1991, and Brazilian Patent P1 9203690A, filed on September 16, 1992.

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682515783-5803 (US 88089); 2072566619-6619 (US 88087). The Brazilian patent was never disclosed to the FDA.

  1. B&W's U.S. patent application described Y-1 as "a new and genetically stable variety of tobacco plant" engineered to have a nicotine content "which is significantly higher than any standard commercially grown tobacco variety." 682515783-5803 at 5786 (US 88089).

  2. B&W found the taste of Y-1 unacceptable to consumers when used alone. Nevertheless, Tommy Sandefur admitted that B&W incorporated millions of pounds of the Y-1 leaf into its Viceroy and Richland style cigarettes, using Y-1 "as a blending tool." 682637648-7650 (US 21027); 500004560-4580 (US 20607). Sandefur also admitted that the company attempted to use as much as 30% Y-1 in a blend, but that it ultimately reduced this percentage to 10% because consumers rejected that large amount of nicotine in the cigarettes. TLT0730851-1975 at 1619 (US 77012). Although B&W only used Y-1 for a short period of time, Kessler TT, 9/22/04, 522:21, 524:14, its use as a blending agent is significant because the blend is the most significant contributor of nicotine to an unsmoked cigarette and an important determinant of how much nicotine can be transferred to mainstream cigarette smoke. Farone WD, 86:1-7.

(4) American 1553. American actively studied blending as a method of increasing the nicotine yield in

its low tar cigarettes. Company researchers investigated the effect of increasing the Burley tobacco in its Lucky Strike tobacco blend in 1963 as part of its low tar cigarette studies. The objective of the research "was to determine the effect of increasing the Burley Tobacco in a blend on the yield of nicotine." MNAT00316738-6748 at 6738 (US 21226).

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  1. In 1963, American also experimented with adding commercial nicotine to its reconstituted tobacco. In an October 8, 1963 document titled, "The Effect of the Addition of 1% Nicotine on the Quality of RC Tobacco," American revealed that it bought commercial nicotine in the form of nicotine citrate, to increase the nicotine content of its reconstituted tobacco. X003371- 3376 (US 85482); MNAT00316688-6693 (US 21219); see also MNAT00316683-6684 (US 21670).

  2. According to a June 21, 1963 memorandum concerning tobacco blends for filter cigarettes, American researchers increased the amount of Burley tobacco in a blend to determine the effect the addition of the Burley tobacco had on the "nicotine yield." One of the research findings was that the addition of Burley tobacco "increased the volatile bases, including nicotine, in the smoke. . . ." X003421-3431 at 3421, 3424 (US 34158).

  3. Later, in 1967, American investigated the production of nicotine from tobacco plants (N. Rustica) with almost double the concentration of nicotine. MNAT00881318-1323 (US 21221); see also, MNAT00316688-6693 (US 21219).

  4. In 1968, American's researchers prepared four lots of Lucky Strike tobacco blend and directed that twenty-five cartons of cigarettes be made from each lot. All four lots were "made up with a leaf blend to increase the nicotine level of this cigarette." MNAT00316699-6700 at 6699 (US 21616); X003382-3383 (US 34156). The company increased the nicotine content of Lucky Strike Menthol Leaf Blend by .2% and tested the product with smoke panels. X003388-3388 (US 34157). Also in 1968, American studied adding nicotine maleate in the finishing flavor of Pall Mall cigarettes and successfully increased nicotine by .5%. X003365-3366 (US 34155).

  5. Another American research memorandum from 1968 reported on the effects of adding reconstituted tobacco to leaf blends containing varying levels of nicotine. At all levels of reconstituted tobacco, a panel of 40 individuals preferred those cigarettes with the highest nicotine levels, around 2.5%. X003363-X003364 (US 34154). In early 1969, the company reported the anticipated costs of large scale orders to increase the nicotine content of reconstituted tobacco. MNAT00367431-7431 (US 85483); MNAT00367429-7430 (US 85484). Studies of Pall Mall cigarettes with increased nicotine in the reconstituted tobacco continued throughout 1969. MNAT00367486-7486 (US 85489); MNAT00367423-7424 (US 85486); MNAT00367422-7422 (US 59799); MNAT00367420-7420 (US 85485); MNAT00367418-7418 (US 85487); MNAT00367417-7417 (US 85488).

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  1. In 1969, American test-marketed Lucky Strike cigarettes in which nicotine maleate was added to the blend in order to increase nicotine levels. MNAT0533253-3253 (US 21673); MNAT00740105-0105 (US 21674); ATX140008085-8087 (US 21676).

  2. In a May 7, 1969 American memorandum from Timothy Mann to Preston Leake, scientist and eventual Director of Research and Development, regarding the panel studies already completed on the reconstituted tobacco with higher amounts of nicotine, Mann stated:

Taking the proposition of higher nicotine cigarettes in general, I think that this is an area we are going to be most interested in. Because of that, I would recommend to you that we consider testing additional ways of adding nicotine to cigarettes such as, as you suggested, in the form of a salt during the overshot process.

MNAT00367425-7425 (US 85490).

  1. Many top-level executives met with and requested information from the company's scientists on the topic of nicotine research. MNAT00117626-7627 (US 59786). In 1974, American Executive Vice President J.B. McCarthy requested that the R&D department outline the company's "current knowledge regarding increasing the nicotine content of reconstituted tobacco." In a fourpage response memorandum to McCarthy, dated June 5, 1974, researchers discussed: (1) adding nicotine to reconstituted tobacco; (2) replacing "the lower nicotine-containing leaf components such as Turkish . . . with high nicotine tobacco such as Malawi sun-cured scrap (5% nicotine)"; (3) keeping tobacco stem from being put into reconstituted tobacco "so that the reduction of the nicotine content of the ingoing components is decreased"; and (4) "increasing nicotine transfer to the smoke [by] dilution and/or additives to the filter." MNAT00316695-6698 at 6695, 6696, 6697 (US 21509). McCarthy responded, endorsing raising nicotine levels as "very beneficial" and directing the researchers to continue their studies, even though some of the studies would be "slow and costly." McCarthy emphasized that this was "an important project." MNAT00367409-7409 (US 85491).
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  1. According to Robert Sprinkle, an American scientist who worked extensively on product development and eventually became American's Executive Vice President of Research and Quality Assurance, American had target nicotine delivery levels for its products and designed its products to achieve those targets. Specifically, Sprinkle explained that American achieved the desired target amount of nicotine by knowing "what the nicotine content of each of the tobacco components is that makes up the cigarette. . . . We keep an inventory of tobacco,24 The Research Policy Group ("RPG") was comprised of the scientists from each of the BAT Group cigarette companies. The RPG set strategic priorities for BAT Group research and development. -726- months on average, and we know what the nicotine content of each type of tobacco we use by the stalk position by the crop year" and blended to achieve the desired level. Sprinkle PD, Carter v. American (sub. nom. Brown & Williamson), 1/19/96, 94:22-96:19, 99:1-15; see also, Sprinkle PD, Small v. Lorillard Tobacco Co., Inc., 10/16/97, 29:13-30:23, 71:11-14. Sprinkle also related that American measured the nicotine content in tobacco after it was purchased, during the manufacturing process, and in the finished cigarette, and that if the measurement revealed that nicotine content was too low,
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American would "bury [its] mistakes," i.e., it would "throw it away and start again with a new blend." Sprinkle PD, Small, 10/16/97, 33:8-34:23.

(5) Lorillard 1563. Lorillard knew in 1971 that the industry's top sellers at the time, i.e., Marlboro,

Camel, and Newport, shared two common traits: high nicotine content and a high nicotine to tar ratio. With this knowledge, Lorillard blended different tobaccos in an effort to generate a high nicotine to tar ratio blend. By 1973, the company's one-, three-, and five-year research plans included research to modify tobacco in order to control the delivery of nicotine. 00776195-6201 (US 34293); 526321304-1310 (US 85414); Farone WD, 86:20-87:12; Spears PD, Minnesota v. Philip Morris, 9/23/97, 98:5-100:7.

  1. A July 22, 1976 memorandum from J.P. Morgan to H.J. Minnemeyer disclosed that Lorillard added nicotine to several samples of the blend it used to produce Kent Gold Light cigarettes and periodically monitored the nicotine content of the blend in order to determine the "shelf life of added nicotine on the Kent Gold Light blend." 83250849-0851 at 0850 (US 55671).
  1. A November 22, 1976 memorandum from M.S. Ireland to H.J. Minnemeyer reported: Since the initiation of the nicotine addition project was begun, a number of samples have been made which have added impact but with reduced tar levels. . . . Experiments have indicated that free nicotine can be added at almost any place in the manufacturing process, or in the RL [reconstituted leaf] with no appreciable loss and that said nicotine will be delivered into the smoke in the same manner as naturally occurring nicotine. The addition of free nicotine has a direct effect on the pH of the leaf and the smoke.
618
  1. In an April 13, 1977 Lorillard memorandum, Minnemeyer reported to Alexander Spears on several approaches to the development of "low tar, enriched nicotine products" and concluded, among other things, that

nicotine can be added to the RL [reconstituted leaf] slurry to give predictable levels of nicotine in the final product. . . . The addition of nicotine to the RL slurry appears to overcome many of the problems associated with earlier work involving the spray application of nicotine solutions.

00044787-4799 at 4787, 4789 (US 34196).

  1. In an April 12, 1977 report investigating the "Enrichment of Reconstituted Leaf Nicotine by Direct Addition of Nicotine Alkaloid to the RL Slurry," Lorillard researchers concluded the "[n]icotine content of the final product can easily be controlled by the addition of predetermined amounts of nicotine alkaloid." 00398474-8484 at 8474 (US 20025), Farone WD, 96:7-19; see also 81090368-0380 (US 85457); 83251170-1192 (US 55726).

  2. On June 30, 1977, R.S. Marmor reported on Lorillard's "Danville Flavor Enriched RL Experiment of May 17, 1977 and Subsequent Research." In this project, Lorillard studied the potential for using waste from tobacco processing that was high in nicotine, referred to as "black water," as an additive to reconstituted tobacco to increase nicotine delivery. 00118797-8807 (US 34268).

  3. On April 14, 1994, Alexander Spears, then Vice Chairman and Chief Operating Officer of Lorillard, confirmed in testimony before Congress that cigarette makers could adjust the level of nicotine in their products by blending different types of tobacco to create a blend with a higher nicotine concentration. TLT0730001-0850 at 0722 (US 77011).

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(6) Liggett 1570. Liggett's control of nicotine delivery through leaf blending and other alterations of

tobacco filler continues to the present. Timothy Jackson, Chief Operating Officer of Vector Tobacco, a Liggett Group Inc. subsidiary, wrote in an August 27, 2001 e-mail: "We are still considering altering the flue cured mix, without changing the total input ratios, to try and moderately increase nicotine. The hesitancy to do this, however, is the potential resultant increase in nitrosamines." VDOJ25348-5248 (US 64735) (Confidential).

  1. With regard to Liggett's Quest product, developed in 2001-2002, Vector blended genetically modified reduced nicotine tobacco with conventional tobacco "to achieve specific nicotine levels." Jackson PD, Philip Morris, 3/21/03, 54:9-54:13, 57:11-57:15 (Confidential).

  2. Jackson acknowledged that he was aware of cigarette design methods that would allow the same blend of cigarettes to be altered to deliver varying amounts of nicotine and tar under the FTC testing method. Id. at 95:3-98:3, 100:16-100:21 (Confidential).

c. Nicotine to Tar Ratio: Defendants Have Used Physical Design Parameters to Increase the Nicotine to Tar Ratio of Their Cigarettes 1573. As the cigarette market increasingly shifted to products marked as "low tar/low

nicotine" cigarettes, Defendants undertook extensive efforts to control the ratio of nicotine to tar in order to deliver more nicotine despite the decrease in tar.

  1. The nicotine to tar ratio is a numerical expression of the proportion of nicotine and tar in cigarette smoke. It is calculated by dividing the milligrams of measured nicotine by the milligrams of measured tar. Defendants' documents discussing increases in the nicotine to tar ratio
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(or, alternatively, reductions in the tar to nicotine ratio) are, in actuality, referring to increasing the amount of nicotine relative to the amount of tar in cigarette smoke.

  1. When there is a decrease in the amount of tar delivered by a cigarette, the nicotine to tar ratio will stay roughly the same only if there is a proportional decrease in the amount of nicotine delivered. If a decrease in tar delivery is not accompanied by a similar decrease in nicotine, the nicotine to tar ratio will rise. This can be illustrated by a simple mathematical comparison of two cigarettes with equal nicotine deliveries, one of which delivers sixteen milligrams of tar and the other of which delivers ten milligrams of tar. If these cigarettes deliver two milligrams of nicotine, their nicotine to tar ratios will be .125 (or 1/8) and .2 (or 1/5) respectively. The ten milligram cigarette will have a higher proportion of nicotine relative to tar in its smoke, and its nicotine to tar ratio will be higher than the sixteen milligram cigarette. Defendants' documents refer, confusingly, to both the nicotine to tar ratio and its mathematical inverse, the tar to nicotine ratio. For ease of understanding and consistency, these Findings of Fact will refer, wherever feasible, to the nicotine to tar ratio rather than to the tar to nicotine ratio.

  2. Defendants have consistently taken the position that "nicotine levels follow tar levels," i.e., as tar goes up or down, nicotine automatically goes up or down proportionately. Townsend WD, 83:22-84:3; (no bates) (US 17380); Sales-Weighted Tar and Nicotine Values for US Cigarettes as Measured Using the FTC Method. The facts do not support this claim.

  3. First, as shown, supra, Defendants possessed and exercised the ability to precisely control the amount of nicotine in any particular brand, whether full-flavor or light.

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  1. Second, as tar levels decreased, nicotine levels either remained steady or increased;

even if the nicotine levels remained steady, the nicotine to tar level ratio would actually increase as tar levels decreased. See 1989 Surgeon General's Report at 85:

Since 1981, the tar delivery of U.S. cigarettes has averaged between 13.0 and 12.7 mg, while nicotine delivery has remained stable at 0.9 mg per cigarette. . . . In the smoke of popular U.S. low-yield cigarettes, the reduction of nicotine, the primary pharmacologic factor in tobacco addition (US DHHS 1988), has not occurred to the same extent as has the reduction of tar. The same development has been observed with cigarette in the United Kingdom (Jarvis and Russell 1985).

  1. Finally, if, in making the claim that nicotine follows tar, Defendants are relying on nicotine and tar values measured by the FTC method, they have long acknowledged that those values do not accurately reflect the actual nicotine and tar delivered to the smoker. Section V(E)(2)(a-b), infra.

  2. As already demonstrated, supra, Defendants can precisely control the nicotine and tar yields of their cigarettes. As Lorillard CEO Andrew Tisch has stated:

The tar and nicotine yields of our products are determined by a combination of the tobacco blends and the physical characteristics which constitute the construction of the cigarette, namely length, circumference, paper porosity, filter tip ventilation, and tobacco density.

Despite numerous public statements that "nicotine follows tar," i.e., that the amount of nicotine delivered by a cigarette automatically follows the amount of tar in a fixed ratio, and that smokers would therefore get less nicotine as tar levels dropped, Defendants conducted years of research to develop methods of changing the ratio of nicotine to tar in tobacco smoke.

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(1) Filter Design 1581. Defendants researched, designed, and incorporated filters into their light/low tar

products in such a way as to allow smokers to determine the amount of nicotine they inhale and increase the nicotine to tar ratio in that inhaled smoke. Henningfield WD, 43:15-20. As researchers inside the industry explored potentially effective filters for tars, they well understood that if nicotine delivery was affected it could reduce the addictive properties of their product. Industry researchers exploring potentially effective filters for tar understood that affecting nicotine delivery could reduce the addictive properties of their product. Accordingly, cigarette company Defendants took steps to design a filter that would register a lower tar level according to the FTC method but would not reduce nicotine transfer into the body. Their goal was to create a filter that, while lowering tar, would deliver a sufficient dose of nicotine to the lungs in order to sustain a smoker's addiction. Id. at 43:15-44:13.

  1. In the 1950s, when filters were beginning to be used on more and more cigarettes, many in the public health community believed that they trapped some of the suspected toxins that otherwise were ingested by smokers. The effectiveness of a filter with respect to any particular substance depends on what the filter is designed to screen, the design of the filter, and the size of the particles that attempt to pass through it. Henningfield WD, 43:15-44:13.

  2. The particular design factors which influence how well the filter does its job include: its physical design, the density of the filter packing, the length of the filter, the porosity of the filter wrapper, ventilation holes and channels, and various potential ingredients. By varying these factors, Defendants control a cigarette's nicotine yield as well as its taste, palatability, and absorption of nicotine. For example, the nicotine concentration of the puffs can be influenced by the design of the filter. Henningfield WD, 43:23-44:8; Farone WD, 49:14-50:11.

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  1. Tobacco manufacturers also use filters to control the particle size entering the body. The density, length, and ventilation of the filter can alter the ability of the smoke particles to coagulate and form particles in the brief transit from the tobacco column of the cigarette to the smoker's mouth. If the particles are too big, they cannot efficiently get into smokers' lungs; if they are too small, they may not be transferred across membranes before exhalation. Physiologically, particles that are too large cannot efficiently get into the deep alveoli of the lung regardless of how hard the smoker sucks or smokes a cigarette. (Alveoli are thin-walled, small sacs located at the end of the smallest airways of the lungs where the exchange of oxygen and carbon dioxide takes place.) The importance of absorption of particles deep into the lungs is that, as with most addictive drugs in general, the faster the particles are delivered from the lungs to the brain, the stronger their effect. As discussed above, Defendants knew that the fastest way to get nicotine to the brain is through the lung. Henningfield WD, 44:14-45:22; see also Farone WD, 50:7-8; 58:20-59:14.

(2) Ventilation and Air Dilution 1585. Ventilation holes are small perforations in cigarette paper that dilute mainstream

cigarette smoke with air during inhalation. Henningfield WD, 46:11-22; Farone WD, 42:11-14. Ventilation holes are created by perforation that can be done with lasers, mechanically, or electrostatically. Henningfield WD, 46:4-7.

  1. By diluting mainstream cigarette smoke with air, ventilation holes can reduce the concentration of tar and nicotine in the smoke and result in a decrease in the tar and nicotine ratings generated by FTC machine testing. Henningfield WD, 46:11-22. However, ventilation holes are generally placed on the cigarette filter at a distance beyond which they would by covered by the orifice of the FTC smoking machine, and therefore the reductions in FTC measurements caused by filter ventilation do not necessarily translate fully or accurately to reductions in nicotine delivery under human smoking conditions, where ventilation holes are frequently blocked by smokers' lips or fingers. Henningfield WD, 47:7-10. Defendants have long been aware that the use of ventilation holes accentuates the differences in tar and nicotine yields observed under standard FTC smoking conditions and human smoking conditions. Henningfield WD, 61:1-62:6.
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  1. Ventilation holes also change the chemistry of smoke by adding air to the smoke. Since the air enters closer to the filter end, it also slows down the smoke behind it, giving that smoke more time to undergo further chemical changes and become more mutagenic. Farone WD, 57:6-9.

(3) Paper Porosity and Composition 1588. Defendants also have altered paper porosity and paper composition to affect the

nicotine to tar ratio in smoke. Henningfield WD, 63:19-64:4, 64:8-18. The paper used for cigars and hand-rolled cigarettes does not burn well and evenly, and it often self-extinguishes. Cigarette paper used on manufactured cigarettes is different. It is treated with chemicals that can affect nicotine delivery and burn accelerant chemicals that make the cigarettes burn hotter and faster. Some of the chemical additives that affect nicotine delivery in commercial cigarettes are buffering compounds, including alkaline compounds. They make the paper white, keeping the ashes a relatively attractive light grey color, and burn accelerants, such as sodium and potassium citrate. Henningfield WD, 64:5-18.

  1. The porosity of cigarette paper refers to the relative amount of air that can permeate or pass through the paper. Air fuels the burning and smoldering tobacco. Henningfield WD,
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62:23-63:3. The cigarette paper used by Defendants to manufacture their commercial products is of controlled porosity. Controlling porosity is a means of controlling the composition and lowering the amount of nicotine in smoke measured by the FTC smoking machine by altering the mix of gases, temperature of the burning tobacco, and the speed at which the cigarette is burned. Henningfield WD, 62:22-63:18.

  1. Another feature of cigarette paper that can affect the nicotine to tar ratio of smoke delivered to human smokers is the filter overwrap. The filter overwrap is a layer of tough, glued paper that attaches the filter to the tobacco rod and is composed of materials that resist decomposition when held in the lips. Farone WD, 42:10-11; Henningfield WD, 64:22-65:3. The filter overwrap typically extends beyond the filter from a range of a few millimeters to nearly one centimeter. Henningfield WD, 65:1-3. The parameters of FTC testing require the machine to stop smoking at a point that is 3 millimeters beyond the filter overwrap, which means that the smoking machine does not burn all of the tobacco in a cigarette. Id. at 65:4-10.

  2. Human smokers, of course, can and often do smoke cigarettes all the way to the filter overwrap, thereby obtaining a few extra puffs of nicotine and tar. These puffs contain greater nicotine and tar than puffs of tobacco that are farther away from the filter overwrap for two reasons. First, with each successive puff on a cigarette, the remaining tobacco in the rod and the filter collect nicotine and tar, making the later puffs on a cigarette the richest in those substances. Second, because the filter loses efficiency with each successive puff, nicotine and tar are able to enter the smoker's mouth in greater amounts in the later puffs than in the earlier. Accordingly, the few extra puffs beyond those measured in FTC testing represent disproportionately large increases in nicotine and tar exposure. Henningfield WD, 65:11-21.

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d. Smoke pH and Ammonia: Defendants Altered the Chemical Form of Nicotine Delivered in Mainstream Cigarette Smoke for the Purpose of Improving Nicotine Transfer Efficiency and Increasing the Speed with Which Nicotine Is Absorbed by Smokers (1) Scientific Overview 1592. Defendants have used chemical additives in order to modify the form of nicotine

delivered to the smoker and enhance its speed of absorption in the body. Alteration of the pH of cigarette smoke was one of the primary areas of research they pursued for this purpose.

  1. In order to understand the manner in which pH and ammonia intensify and speed the absorption of nicotine it is necessary to set forth a fairly detailed description, or overview, of the "science" involved. Virtually all of this description, which sets forth the basic chemical principles and how they affect the operation of drug delivery systems, is based on the testimony of three Government expert witnesses: Drs. Henningfield, Farone, and Benowitz. Their professional and academic credentials are set forth at great length below, and all three were accepted as experts in their fields, without opposition from the Defendants.

  2. Dr. Henningfield is an expert in psychopharmacology including the areas of health and medical issues related to the development of treatment for medical disorders, tobacco dependence and other drug addictions, and the design and effect of drug delivery systems for addictive drugs; he has a Ph.D. in experimental psychology with an emphasis on behavioral psychopharmacology, which is the study of drugs that affect the brain and the interaction between drugs and addictive behavior. Beginning in 1980, Dr. Henningfield began working at the Addiction Research Center of the National Institute of Drug Abuse ("NIDA") and went on to serve as NIDA's chief scientific advisor to the Federal Drug Administration during its development and consideration of its Tobacco Rule. Henningfield TT, 6786:12-19, 7594:7-8; Henningfield WD, 29:7-30:9, 33:71595. Dr. Farone is an expert in the chemistry and biochemistry of alkaloids and addictive drugs, the chemistry of physics and cigarette smoke, cigarette design and technology, and the chemistry and biochemistry of toxic substances and their interactions with living systems; he has a Ph.D. in chemistry and physical chemistry, and is specifically trained, both through formal education and long employment as Director of Applied Research at Philip Morris, in the study of colloidal systems (i.e., chemical aerosols and smoke). Farone WD, 6:1-8.

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  1. Dr. Benowitz received his medical degree with distinction in research from the University of Rochester, is Board Certified in Internal Medicine, Medical Toxicology, and Clinical Pharmacology, and is an expert in nicotine toxicology and nicotine pharmacokinetics. All three were extensively cross-examined by Defendants. For more detail about Dr. Benowitz's extensive credentials, see Section V(F)(3)(c)(¶2705), infra. The Court credits their testimony, as cited and discussed in this Section, as accurate, comprehensive, and reliable.

  2. The acidity or alkalinity of a substance is commonly expressed as a measure of pH. Most substances have pH measurements ranging from zero to fourteen, with a pH below seven representing an acidic substance, and a pH measurement above seven representing an alkaline, or basic, substance. Farone WD, 8:20-9:3. The pH scale is logarithmic, meaning that as pH rises, the alkaline (or basic) nature of a substance increases exponentially by a magnitude of 10 between each unit of measurement on the scale.

  3. For example, a substance with a pH measurement of 6 is ten times more basic than a substance with a pH measurement of 5, while a substance with a pH measure of 7 is 100 times more basic than one with a pH measurement of 5. Henningfield WD, 68:16-69:1. Increasing the pH by a small percentage can double, triple, or quadruple the amount of free nicotine available for inhalation in cigarette smoke. Even a small amount of free nicotine yields a discernible effect for the smoker. Henningfield WD, 68:16-69:1, 86:5-14.

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  1. The pH of tobacco smoke is significant because it affects the chemical form of nicotine delivered in mainstream smoke, which in turn affects the rate and amount of nicotine delivery and the speed of absorption of nicotine over certain biological membranes. Henningfield WD, 69:2-9. Nicotine in cigarette smoke is found primarily in two different chemical states: either the protonated "bound" form or the unprotonated "free" form. At any given pH level, there is a ratio of free to protonated nicotine. As cigarette smoke becomes more basic -- that is, as the smoke pH rises -- more of the nicotine is delivered in its "free," unprotonated chemical form. As more nicotine is delivered in the free, unprotonated form, a greater proportion of the nicotine is also delivered in the gas phase of smoke. Farone WD, 93:22-94:7.

  2. Molecule for molecule, the pH of tobacco smoke is an important determinant of how much nicotine reaches a person's bloodstream through cigarette smoking. Creation of more free nicotine by increasing the pH level of cigarette smoke increases "the amount of nicotine that can be readily released from the tobacco rod of a cigarette and, in turn, readily absorbed into the body of the cigarette smoker." Henningfield WD, 68:16-69:12, 69:19-70:2. A number of the Defendants' internal research documents refer to the measurement of the amount of nicotine transferred from the original unsmoked tobacco rod to the cigarette smoke (where it is available for inhalation) as "nicotine transfer efficiency" or "NTE." Farone WD, 101:19-22; Henningfield WD, 72:22-73:14;

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103281081-1112 (US 34706); 599003691-3695 (US 22077); 103281081-1112 at 1082, 1099 (US

  1. Free nicotine is more volatile and more physiologically active than bound nicotine. Farone TT, 10/6/04, 1609:21-1610:6; Farone WD, 95:8-12; 00776238-6250 (US 21477). Consequently, it transfers more rapidly across the biological membranes of the mouth and lungs, and then to the brain, than bound nicotine. Henningfield WD, 69:2-9; Henningfield TT, 12/01/04, 7517:24-7518:8; Farone TT, 10/6/04, 1610:10-20; Farone TT, 10/7/04, 2015:8-11. Even with increased amounts of free nicotine, very little of the nicotine taken in by a smoker is absorbed in the mouth or throat. Usually, about 90% passes on to the lungs where it is absorbed. Benowitz TT, 4800:23-4802:16. Because free nicotine transports across cells more rapidly, the presence of more free nicotine in cigarette smoke also increases nicotine's effect on the central nervous system. By producing an increased and more rapid effect on the central nervous system, free or unbound nicotine gives the smoker a faster and more intense "kick." Farone WD, 76:11-77:1; Farone TT, 10/7/04, 2015:1-8, Farone TT, 10/12/04, 2126:10-12. The speed with which a drug is delivered to the body influences its addictive potential. The speed of delivery can be influenced by factors such as: where the drug is targeted, the pH, and the concentration of the drug in vapor form. Henningfield WD, 32:6-12, 33:20-21.

  2. There are greater physiological effects, and therefore "impact" on the sensory nerves in the back of the throat and "satisfaction" of the brain receptors, with cigarettes that have a greater percentage of the nicotine in the free form. Farone WD, 76:18-19; 96:7-97:14; Farone TT, 10/12/04, 2126:8-2127:8. Two cigarettes with identical nominal machine-measured nicotine yields may give the smoker different pharmacological experiences. 506236904-6907 at 6905 (US 88059);

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1000048537-8552 at 8539 (US 35106). This difference is due not to the amount of nicotine but to the form of the nicotine and its availability for absorption in the mouth and lungs. Henningfield WD, 68:2-9; Dixon WD, 13:17-20; 400993160-3331 at 3320 (US 75975*); see also, 500378383- 8386 at 8385 (US 85467).

  1. It is well established in the scientific community that the freebase forms of other drugs of abuse, such as freebase cocaine, are more reinforcing and addicting than their non-freebase counterparts because of the speed with which they reach the brain. Farone TT, 10/7/04, 2012:20-22, 2015:1-2017:5; Henningfield WD, 34:14-17, 85:23-86:4, 86:9-11. The effects of pH on changing the chemical form of alkaloids like cocaine have been discussed in scientific literature for decades. Farone WD, 94:22-93:3; Farone TT, 10/7/04, 2012-2017. Similarly, alteration of pH is a well established, scientifically-effective means of dose control for certain substances, in particular substances in which variation of pH within physiologically tolerable parameters affects the fraction of drug transferred across membranes of the mouth and throat. Henningfield WD, 75:9-12. Techniques to alter pH so as to change the proportion of free and bound molecules of a substance are understood and employed by pharmaceutical companies to control the bioavailability of many drugs, including nicotine in nicotine-delivering medications. Id. at 75:7-9.

  2. According to Dr. Michael Dixon, a BATCo scientist, ammonia and ammonia-forming compounds, such as DAP and urea, do not increase the amount of nicotine going into the bloodstream or the speed at which nicotine enters the blood. Dr. Dixon relied on a study he coauthored in 2003 which measured, among other things, nicotine blood levels during smoking. Dixon TT, 3/9/05, 15032:8-15033:18; (no bates) (JD 031612). Dr. Dixon was offered as an expert in "smoking behavior." His conclusion is not persuasive because his study measured the amount and speed of nicotine uptake into venous blood. That is not the path by which nicotine is delivered to the brain. After inhalation, nicotine is rapidly absorbed in the lung where it enters the bloodstream and quickly moves into the heart. From the heart, nicotine travels through arterial blood, not venous blood, to the brain and other organs. Benowitz WD, 16:4-10.

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  1. There are several methods by which the pH level of cigarette smoke can be altered. One method is the choice of tobacco blend used to make the cigarette. For example, Burley tobacco is naturally higher in alkaloids and nitrates than other tobaccos, and therefore, yields a higher smoke pH. Farone WD, 94:8-12.

  2. Another effective method for altering pH is by using additives in the manufacturing process, such as ammonia or ammonia-based compounds, or other compounds that create ammonia when burned. Farone WD, 94:8-12; Henningfield WD, 69:13-18; Rodgman PD, United States v. Philip Morris, 6/26/02, 155:15-156:6, 157:7-13. Ammonia compounds are basic substances that may raise the pH level and convert bound nicotine to free nicotine. Farone WD, 94:11-12, 16-18.

  3. Defendants were well aware of the particular chemical characteristics and effects of free nicotine, and undertook efforts to exploit these features. Internal research at Philip Morris confirmed that cigarette smoke that is more basic increases nicotine's effects on the central nervous system, and that the "rate of entry [of nicotine into the bloodstream] is pH dependent." 2025986551- 6553 at 6552 (US 37312); 2025986931-6935 at 6934 (US 37314); 2056128345-8379 (US 20496). As one Reynolds document explained:

In essence, a cigarette is a system for delivery of nicotine to the smoker in attractive, useful form. . . . As the smoke pH increases above about 6.0, an increasing proportion of the total smoke nicotine occurs in "free" form, which is volatile, rapidly absorbed by the smoker, and believed to be instantly perceived as nicotine "kick."

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  1. While some ammonium compounds occur naturally in tobacco, Farone TT, 10/7/04, 1986:6-12, Defendants have attempted to alter the pH of cigarette smoke through the addition of ammonia compounds directly to the filler material as well as through the use of ammonia compounds in the process of making reconstituted tobacco. Henningfield WD, 69:13-18. Because they are not as bitter as nicotine, ammonia compounds also alter the impact and taste of smoke and nicotine, making them more palatable to the smoker. Farone WD, 94:15-16.

  2. Defendants have added ammonia compounds in order to enhance consumer use of cigarettes by: (1) increasing the amount of nicotine that is transferred from the tobacco to the smoke; (2) improving the sensory response to nicotine in the mouth and oral mucosa; and (3) increasing the speed of delivery of nicotine to the bloodstream and possibly to the brain. 511223463-3484 (US 20840); Henningfield WD, 69:2-18, 74:21-75:13; 85:12-86:14; "Nicotine in Cigarettes and Smokeless Tobacco Products Is a Drug and These Products Are Nicotine Delivery Devices Under the Federal Food, Drug, and Cosmetic Act: Jurisdictional Determination," 61 Fed. Reg. 44619 (August 1996) (jurisdictional determination annex) at 44974-44975 (US 61237); see also Townsend WD at 169:22-170:5; Technology: Ammoniation, at 8864-65 (US 20820).

  3. Ammonia compounds are among the most frequently used additives, measured by volume, in the industry. 566408585-8587 (US 21999). A B&W document concluded: "RJR alone has ammonia emissions of 900,000 lbs./year in North Carolina. . . . [T]he U.S. cigarette industry uses about ten million pounds of ammonia compounds a year," and industry ammonia usage "corresponds to about 10 mg of ammonia compounds per cigarette produced." 508104011-4164 at

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  1. By 1993, all the cigarette company Defendants used some form of ammonia technology in some of their cigarette products. For example, an April 12, 1994 list of "Ingredients Added to Tobacco in the Manufacture of Cigarettes" by the six largest U.S. manufacturers states that the companies added ammonia and other ammonium compounds to their cigarettes during the manufacturing process. 508104011-4164 (US 20807); 681001134-1139 (US 21016); LG2018563- 8563 (US 21190); 606000841-0889 at 0842 (US 53325). Since 1986, Defendants have annually disclosed, in statutorily mandated reports to the Department of Health and Human Services, the additives employed in the production of their cigarettes. Appleton TT, 3/24/05, 16958:12-18; see also (no bates) (US 21990 at 23). However, they have not disclosed the quantity or purpose of such additives.

  2. For decades, Defendants have conducted their research and developed their manufacturing processes on the basis of the scientific principles set forth above. In reliance on those principles, they have incorporated the use of ammonia technology in their commercial products with the intent to alter the pH of cigarette smoke and thereby affect nicotine delivery and absorption. In recent years, Defendants have publicly questioned these scientific principles, the validity of which they have acknowledged for decades in their internal documents. The evidence in this case simply does not support the current effort by Defendants to minimize the significance of their use of ammonia technology in commercial products.

  3. First, the internal research documents of Defendants, discussed in the Findings of Fact, infra, show that: (1) the cigarette company Defendants have been aware at least since the 1960s of their ability to alter the amount and form of nicotine delivered to smokers by using cigarette design techniques intended to raise the pH of cigarette smoke; (2) they have incorporated design techniques -- including, but not limited to, the use of ammonia technology and alterations to the tobacco blend -- to raise the pH of the smoke in their commercial products with the purpose and intent of creating cigarettes that would deliver a greater amount of free nicotine and faster absorption of nicotine than cigarettes with lower smoke pH; (3) they took these actions in order to assure that their low tar products would deliver doses of nicotine sufficient to create and sustain addiction in cigarette smokers; and (4) their extensive research on the methods and effects of altering the pH of cigarette smoke demonstrates that their own scientists accepted and operated on the same basic principles of chemistry concerning alteration of smoke pH as those already set forth. Farone WD, 75:1-6, 93:12-15, 94:4-98:8

634

  1. Second, the facts do not support Defendants' claim that the pH of cigarette smoke has not, on average, increased over the years. Before Defendants started using ammonia technology in their products, the pH for cigarette smoke averaged 5.2-5.7. Farone TT, 10/7/05, 1995:24-1996:16, 2010:19-22. Since the late 1960s, the pH of cigarette smoke has risen slowly, but steadily, and has recently been tested at one full pH unit higher -- 6.3-6.5 -- than its level in the 1960s. Farone TT, 10/7/04, 1995:6-23, 2010:18-2011:2; DXA1200008-0012 (US 88093); Farone WD, 98:2-8, 100:15- 101:6. As already noted, an increase in one unit of pH represents a ten-fold increase in pH. See discussion, supra, at ¶1597. Even a small increase in smoke pH can cause significant chemical and biological effects by substantially increasing the amount of free nicotine delivered to the smoker. Henningfield WD, 68:23-69:1, 69:21-23; 500606138-6153 (US 48334 at 614).

  2. Finally, there is also substantial documentary evidence set forth below, that Defendants' scientists internally found even "small" increases in pH and free nicotine delivery to significantly increase their ability to deliver an "optimum" dose of nicotine, i.e., one that was capable of creating and sustaining addiction in cigarette smokers.

635

(2) Individual Defendants' Documents (a) Philip Morris 1616. Philip Morris attempted to control the pH of tobacco to enhance the psychoactive

effects of nicotine on the brain. 500606138-6153 (US 48334); 509314122-4154 (US 51456); Farone WD, 94:4-7, 97:9-21.

  1. Philip Morris appears to have been the first tobacco manufacturer to use the ammonia process in the United States, and started using it in the 1950s. At that time, Philip Morris ranked far behind RJR in domestic cigarette sales. Farone TT, 10/7/04, 1999:9-15, 2002:25-2003:19; 500990999-1004 (US 20666); 500540827-0832 (US 20639).

  2. A March 31, 1966 "Progress Report" on "Nicotine and Smoke pH" to R.N. Thomson, Philip Morris's Director of Development, stated that nicotine delivery "varies with filler (smoke) pH -- the higher the pH the higher the nicotine delivery and vice versa." The report concluded that "nicotine delivery can be controlled via filler or smoke pH adjustment." 2051205600-5605 at 5600 (US 85461). According to a 1970 inter-office memorandum from Jim Charles, Associate Professional who would later become Vice President of Research and Development, to Thomson, the company had developed a method for determining the pH of whole smoke on a puff-by-puff basis. Using that method, it was analyzing per-puff pH content of its biggest selling cigarette, Marlboro, of its competitor, Winston, and of other cigarettes and tobacco blends. 2028812066-2067

636

  1. By 1974, Philip Morris was conducting experiments to increase levels of free nicotine in smoke through pH levels, so as to affect both smoke impact and satisfaction. One of the experiments varied the amounts of nicotine salts added to the tobacco and another altered the tobacco blend and the carbohydrate concentration in the smoke, with the results of both showing higher pH levels. In an October 1974 report, Philip Morris behavioral researcher T.R. Schori concluded, "The amount of free nicotine in the smoke depends upon . . . total nicotine[] and pH of the smoke." Schori also noted that machine measured nicotine yields could be misleading because, depending on pH, a smoker could obtain different levels of free nicotine from two cigarettes with identical machine-measured yields, or similarly could obtain the same amount of free nicotine from two cigarettes with different machine-measured yields. 2047113252-3267 at 3264-66 (US 85462).

  2. Schori also wrote, in an October 22, 1979 document titled, "Free Nicotine: Its Implication of Smoke Impact," that "we should be able to increase smoke impact by increasing the total free nicotine potential (i.e. by using high nicotine blends and/or nicotine additives) in the smoke." Schori identified Burley blend tobacco and ammonia as two methods for increasing pH in tobacco smoke. 542001986-1996 at 1993 (US 53135).

  3. In the same 1979 paper, Schori again explained the misleading nature of machine-measured nicotine yields with respect to free nicotine:

The way in which nicotine is typically reported can be misleading. This is due to the manner in which nicotine determinations are made. For instance, cigarettes X and Y may both be reported to deliver (based upon the standard smoking machine test)2 It would appear this situation continues even to the present. For example, in this very litigation, a former long-time career government lawyer was so intent on representing a company (continued...) -4- mg. nicotine/cigt. However, a given smoker may actually inhale much more free nicotine from cigarette X than from cigarette Y. Likewise, cigarette W may deliver 1 mg. nicotine/cigt. while cigarette Z delivers 2 mg. nicotine/cigt. Yet a given smoker may inhale equal amounts of free nicotine from cigarettes W and Z. This paradox results from the fact

637

that in making the nicotine delivery determinations strong bases are employed to free or release the nicotine from its bonds with other elements. . . . Thus, the amount of free nicotine available to the smoker is determined by the degree of alkalinity (or pH) of the smoke as well as his own degree of alkalinity.

542001986-1996 at 1988-1989 (US 53135).

  1. Philip Morris's testing of the effect of ammonia on nicotine delivery continued throughout the 1970s. As summarized in a November 8, 1971 Special Report of the Research Center, titled "Effects of Ammonia - Odor and Smoke," and distributed to, among others, F.E. Resnick, then Director of the Research Center and later Chairman and CEO of Philip Morris USA, scientists measured the differences in the impacts of nicotine levels in Marlboro cigarettes versus competitor brands. The study concluded that, for competitor brands containing less ammonia than Marlboro, addition of ammonia increased the "desirability" of the brands. 1000349937-9947 at 9943 (US 85463).

  2. A June 18, 1975 Special Report, titled the "Manipulation of Nicotine Delivery by Addition of Acids to Filler," prepared by scientist Joseph J. Cipriano and distributed widely through the Research Center, further demonstrates Philip Morris's knowledge of the significance of free nicotine in mainstream cigarette smoke. The Report discussed control of nicotine in the smoke through the use of acid, and found that although the acid increased nicotine delivery to mainstream smoke, it also lowered pH and therefore delivered the additional nicotine in the protonated form. Because this approach reduced the pH and therefore the amount of free nicotine in mainstream smoke, Cipriano recommended against its use, stating that "the increased nicotine delivery at a lower pH seems to lower rather than increase response." 1000051227-1240 at 1235 (US 85502); Farone

638

  1. Philip Morris's nicotine-enhancing techniques have been studied by other tobacco companies, including B&W. In 1984, R.R. Johnson wrote a report titled, "The Unique Differences of Philip Morris Cigarette Brands," that was sent to numerous B&W executives, including C.E.O. I.W. Hughes, in which Johnson stated: "Ammonia treatments appear to be the most important aspect of PM's blend uniqueness. It is definitely used in making one of the two types of reconstituted tobacco and one of the two types of puffed tobacco in these blends. Results from a Marlboro matching project at R.J.R. provide strong evidence that they also treat their lamina with ammonia." Johnson went on to state that B&W's research department had reason to believe that Philip Morris began to develop some of their techniques in the early 1960s, and had spent the time since then optimizing their methods. 570322550-2583 at 2552, 2568 (US 53186); 103281081-1112 at 1082, 1098 (US 20234). In an October 26, 1992 report written by B&W's Research and Development Department, titled "PM's Global Strategy: Marlboro Product Technology," B&W points to Philip Morris's "[a]mmonia technology [as] critical to the Marlboro character, taste and delivery," in part because of the smoke pH increase it produced and the "free nicotine/nicotine transfer" that occurred through its usage. 570399133-9370 at 9183 (US 88083); 304569591-9595 (US 46615*).

  2. At the same time, Philip Morris also engaged in its own research regarding its competitors' methods of nicotine manipulation. As noted, supra, Philip Morris extensively studied the ingredients and make-up of Winston cigarettes, particularly to discover tar and nicotine levels. Ellis PD, Mississippi, 3/20/97, 131:1-132-3.

  3. On August 26, 1986, Philip Morris applied for a patent on a process using ammonia to increase the nicotine delivery of Bright tobacco. 2026526349-6353 at 6349 (US 86964). Philip Morris acknowledged, "Ammonia treatment of tobacco has been employed in the past, principally as a means to displace and effect release of nicotine." 2026526349-6353, at 6350 (US 86964);

639

  1. On August 2, 1989, scientists Gullotta, Hayes and Martin reported to H.L. Spielberg on a Philip Morris study comparing the effect on the central nervous system of cigarettes made from filler that had been oversprayed with nicotine as an acid (i.e., "the citrate") and as a base. "Cigarettes made from filler oversprayed with nicotine as the citrate . . . produce CNS effects which are approximately half the magnitude of those obtained with the [filler oversprayed with nicotine as a base]." 2025986931-6935 at 6934 (US 37314).

  2. By 1990, Philip Morris's research efforts included producing low tar cigarettes with more nicotine impact. As scientists Gulotta, Hayes, and Martin explained in a December 14, 1990 memorandum to R.D. Kinser, one study found " that one could produce a low nicotine delivery cigarette with a higher proportion of free to protonated nicotine. Such a cigarette would be analytically similar to other cigarettes at comparable nicotine deliveries, but would be judged to have much more impact." 2023107993-7999 at 7993 (US 85465); 2022262774-2775 at 2774 (US 36876); 2023105617-5617 (US 85464).

  3. Others in the industry closely studied and duplicated Philip Morris's use of ammonia. Minutes of an Ammonia Technology Conference, sponsored by B&W on May 18-19, 1989, and attended by representatives of Defendants, concluded that ammonia technology "is the key to competing in smoke quality with PM worldwide." It was noted that all U.S. manufacturers except Liggett were using some form of ammonia technology on their commercial projects at the time of the conference. 508104012-4164 at 4016 (US 53249*).

640

(b) R.J. Reynolds 1630. RJR conducted multiple studies regarding the impact of smoke pH on nicotine

delivery. For example, a December 16, 1971 report written by D.P. Johnson discusses RJR's efforts to develop a method "to increase the free nicotine content of the VANTAGE smoke by adding selected salts to the VANTAGE blend." Although Johnson recommended that the costs of adding the salts outweighed the benefits, Reynolds continued its study of various methods for delivering more nicotine to the mainstream cigarette smoke of its products. 504414205-4211 at 4205 (US 50608); Henningfield WD, 78:2-16.

  1. In 1973, RJR conducted an extensive study of the design of Philip Morris's Marlboro cigarettes in an attempt to discover the reason for its competitor's sharp increase in sales. In a 1973 memorandum, titled "Implications and Activities Arising from Correlation of Smoke pH with Nicotine Impact, Other Smoke Qualities, and Cigarette Sales," Claude Teague, Reynolds's Director of Research and Development, reported that the pH of Marlboro was consistently and significantly higher than Reynolds's brands. Because Marlboro contained more free nicotine, it "would be expected to show more instantaneous nicotine 'kick' than our brands." The amount of free nicotine in Marlboro was found to be almost three times that found in the smoke of Reynolds's Winston brand. Reynolds concluded that other popular brands -- for example, B&W's Kool – also had an increased smoke pH and increased amounts of "free nicotine." The smoke pH as measured by Reynolds in 1973 of Marlboro and Kool was found to typically range from 6.8-7.3 and 6.4-6.6 respectively. Reynolds concluded that the high smoke pH attained by Philip Morris and B&W was "deliberate and controlled." 511223463-3484 at 3465-3466 (US 20840); see also 500990999-1004
641
  1. In the same 1973 memorandum, Teague outlined the various methods the industry had already identified to alter the pH of cigarette smoke:

Methods which may be used to increase smoke pH and/or nicotine "kick" include: (1) increasing the amount of (strong) burley in the blend, (2) reduction of casing sugar used on the burley and/or blend, (3) use of alkaline additives, usually ammonia compounds, to the blend, (4) addition of nicotine to the blend, (5) removal of acids from the blend, (6) special filter systems to remove acids from or add alkaline materials to the smoke, and (7) use of high air dilution filter systems. Methods 1-3, in combination, represent the Philip Morris approach, and are under active investigation.

511223463-3484 at 3468 (US 20840).

  1. Teague further reported on the significance of smoke pH to the amount of free nicotine in Marlboro cigarettes: "As a result of its higher smoke pH, the current Marlboro, despite a two-thirds reduction in smoke 'tar' and nicotine over the years, calculates to have essentially the same amount of 'free' nicotine in its smoke as did the early WINSTON." Teague also reported on other benefits of altering the pH of cigarette smoke:

In addition to enhancing nicotine "kick," increasing the pH (increasing alkalinity) of smoke above about 6.0 causes other changes, particularly when the increase in smoke pH is achieved by adding ammonia to the blend. As smoke pH increases, in general, stemmy taste, mouth irritation, flue-cured flavor and Turkish flavor are diminished and burley flavor and character are enhanced. . . . It should be noted, however, that if the smoke pH goes much above 7 at normal total smoke nicotine levels . . ., the amount of 'free' nicotine becomes high, and this may cause harshness to the throat.

511223463-3484 at 3466 (US 20840).

  1. Another 1973 RJR study found that the smoke pH for the Marlboro and Kool cigarettes had been steadily increasing since 1964, while the pH for Reynolds's products had remained almost constant. At the same time, the FTC nicotine and tar levels for Marlboro and Kool had decreased. The study also showed that the Marlboro and Kool brands had higher levels of ammonia than the other cigarettes studied. The researchers concluded that controlling smoke pH would be extremely important to the successful performance of Reynolds's cigarettes. 500606138-6153 at 6138, 6140, 6144, 6145 (US 48334).
642

  1. Reynolds soon developed a cigarette design similar to Philip Morris's. In a December 4, 1973 memorandum to R. Blevins, Director of Marketing and Planning for Reynolds, from Frank Colby, RJR scientist, titled "Cigarette Concept to Assure R.J.R. a Larger Segment of the Youth Market," Colby stated that, in developing a low tar cigarette to appeal to the youth market, "any desired additional nicotine 'kick' could be easily obtained through pH regulation." 501166152-6153 at 6152 (US 23051). By 1974, Reynolds had "introduced ammoniated sheet filler in the Camel filter cigarette . . . . Better market performance was indicated in the subsequent years." 509018864- 8865A at 8864 (US 20820).

  2. An undated RJR document discussing the technology of ammoniation reveals that Reynolds "introduced ammoniated sheet material in the Camel filter product in 1974. . . . Low 'tar' products at R.J. Reynolds were designed with ammoniated sheet material beginning in 1974. . . . Ammoniated sheet was introduced into the Winston KS product in 1979." The document described two of the characteristics of products that incorporate ammoniation technology as "cleaner taste with more free nicotine" and "stronger physiological impact with less harshness." 509018864-8865A at 8864, 8865 (US 20820); see also 510983376-3380 (US 20833).

  3. A January 15, 1975 paper by John D. Woods and Sue H. Sheets, of RJR's Chemical Research Division, concluded: "With only a few exceptions, brands with high smoke pH performed better than those with low smoke pH. Correlations were also observed between calculated free nicotine and sales trends and total sugar in the blend and sales trends." 500615944-5960 at 5944 (US

643

  1. In talks delivered to RJR's management on June 25, 1974, and to Reynolds's international management on August 4, 1976, Murray Senkus, Vice President of R&D, recommended development of a low tar product with a specific nicotine to tar ratio and stated that "[it] is worth noting that our competitors are fully aware of the significance of pH with respect to smoking satisfaction and taste. Moreover, they are fully aware of the advisability of maintaining a low tar value and also maintaining the nicotine as high as possible." 50152 5355-5366 at 5359, 5364 (US 29531). As an example, Senkus pointed to a commercial Lorillard product, the True cigarette: "the old True has 11 mg. tar [and] .6 mg. nicotine -- the new True is 5 mg. tar [and] .5 mg. nicotine. So although the tar was reduced 6 mg. . . . nicotine was dropped only .1 . . . The tar to nicotine ratio was dropped from 18.3 to 10," however, the nicotine to tar ratio increased from .05 to .1 -- a 100% increase." Thus, Senkus identified that Lorillard had achieved a roughly 55 percent reduction in tar delivery accompanied by only a 16 percent decrease in nicotine delivery. 50152 5355-5366 at 5364 (US 29531). This data directly contradicts the cigarette companies' persistent claim that "nicotine follows tar."

  2. By 1976, RJR was aware that the inhalation of cigarette smoke was the most effective method of administering nicotine to smokers. The company emphasized research to determine the "minimum level of nicotine required for smoker satisfaction," and the particular chemical form of nicotine, i.e., whether "nicotine in smoke was 'free' or 'bound' or some mixture of these two forms." 504424968-4976 at 4976(US 86968).

644

  1. In a September 21, 1976 memorandum from John L. McKenzie to A.P. Ritchy, McKenzie stated that "[t]he pH also relates to the immediacy of the nicotine impact. As the pH increases, the nicotine changes its chemical form so that it is more rapidly absorbed by the body and more quickly gives a 'kick' to the smoker." The document also noted that the typical range of cigarette smoke pH was from 5.5 to 7.0. 500378383- 8386 at 8385 (US 85467); Henningfield WD, 75:22-76:1, 78:17, 79:21-80:2.

  2. An October 12, 1979 report written by Calvin L. Neumann and M.D. Wallace to D.H. Piehl, Manager of Reynolds's Chemical Research Division, regarding "Nicotine Satisfaction, Consumer Test 2740," shows that Reynolds conducted research regarding the minimum and optimum nicotine delivery required to "maximize[] consumer acceptance," and concluded that "[c]igarette strength is nicotine and pH dependent, increased with both increasing nicotine and increasing pH." 5009069450-9466 at 9450, 9452-53 (US 85468).

  3. In a September 8, 1980 internal memorandum, scientist Alan Rodgman stated that Reynolds had "'caught up' to PM insofar as its current use in the Marlboro of nicotine technology is concerned." Rodgman's memorandum indicates that, in 1980, the pH of Reynolds's Winston measured 6.4, the same level as its measurement of Marlboro's pH that year. 501522719-2726 at 2720 (US 48913). As discussed earlier, a pH of 6.4 is four times greater than the pH of 6. Townsend WD, 173:21-174:4.

  4. An August 9, 1982 draft paper sent to G.R. DiMarco from E. Bernasek and C.W. Nystrom set forth Reynolds's "position papers describing our rationale for using the following additives in RJRT tobacco flavor formulations: ammonia, sclareol, sclareolide, glucose tetraisovalerate." The paper revealed that "[a]mmonia in smoke is one of the major pH controlling components" and that "[s]tudies of the effect of ammonia on smoke composition showed . . . an increase in physiological satisfaction with increasing ammonia content." 504438506-8512 at 8506, 8509 (US 21386).

645
  1. A January 10, 1990 research report written by W.M. Coleman, III, discusses RJR's efforts to control the delivery of nicotine "through the regulation of the pH of the dense fluid process stream." The memorandum concluded:

Evidence has been presented which confirms a novel process for the control and manipulation of the level of nicotine in tobacco and tobacco extracts. The process makes use of the chemistry of tobacco by extracting the available nicotine through a minor but subtle adjustment of the pH. . . . The full range of nicotine control can be realized. The process possesses many variables, among them being 1) pressure, 2) temperature, 3) NH3 concentration, 4) flow rate, 5) flow volume, etc. With this number of degrees of freedom it is possible to dictate the level of nicotine in the extract as well as the tobacco.

508381102-1112 at 1102, 1103, 1105 (US 85469).

  1. RJR continued to conduct studies comparing the nicotine content of its cigarettes to the content of nicotine in cigarettes manufactured by other Defendants in the 1990s. For example, an October 1,1991 to 1995. This program studied the correlation between lifestyle and environmental exposures and major chronic illnesses, and the role of diet in cancers of the lung, oral cavity and bladder. 2046988683-8683 (US 85673); 2021630974-0975 (US 87371); 2046988682-8682 (US 85674). -1358- memorandum written by Kenneth A. Beard reported on the results of studies conducted to determine the amount of "volatile nicotine," i.e., free nicotine, in RJR's Winston and Winston Light as compared to Philip Morris's Marlboro and Marlboro Light. The study compared the brands in terms of the amounts of "volatile nicotine," total nicotine, and volatile nicotine as a percentage of total nicotine. 508257695-7696 (US 86983).

  2. RJR continues to incorporate into a wide variety of its commercial products tobacco blends and reconstituted tobaccos that have been treated with ammonia or to which extracts treated with ammonia were applied. Schindler WD, 56:9-51:18; 508062474-2493 (US 51299); 512337856- 7859 (US 51628). In particular, Reynolds refers to its reconstituted tobacco internally as G-7, and has developed numerous formulations of G-7 that are designed for particular blends, brands, and brand styles. The formulations are identified internally using specific numbers, such as G7-1, G7-2, G7-3, etc. Schindler WD, 56:17-22. Internal Reynolds's documents reveal that G7 is a large blend component in many of its commercial products, that numerous formulations of G7 are ammoniated, and that the ammoniated formulations of G7 are used in Reynolds's full flavor, light, and ultra light commercial products. 508062474-2493 (US 51299); 512337856-7859 (US 51628); Schindler WD, 56:9-51:18; Rodgman PD, United States v. Philip Morris, 6/26/02, 169:1-21.

646

  1. An RJR document confirms that as late as February 11, 1998 Reynolds was using ammonium hydroxide to adjust the pH level of its reconstituted sheet tobacco. The document stated that "[a]mmonium hydroxide is applied to the G7 sheet via extract application. Ammonium hydroxide is applied to the extract to achieve a 6.3 pH prior to DAP addition." 521484265-4265 (US 86969) (Confidential).

  2. These Reynolds's internal research documents demonstrate clearly that Reynolds incorporated ammonia technology into its commercial products to design products that would deliver nicotine to smokers in a form that would be more rapidly absorbed than cigarettes without ammonia technology. These documents directly contradict the claim, made by Dr. David Townsend, that the only reasons for Reynolds's incorporation of ammonia technology into its commercial products were to improve taste and to increase the "tensile strength" of reconstituted tobacco sheet. Townsend WD, 169:22-170:5. While some of Reynolds's documents, like those of the other Defendants, do discuss the effect of ammonia technology on the taste or flavor of cigarette smoke, those documents show that the major purpose of RJR's incorporation of ammonia technology into its commercial products is to affect nicotine delivery to the smoker.

647

(c) Brown & Williamson and BATCo

  1. On March 11, 1964, BATCo published a report on the "Release During Smoking of

Nicotine Added as Various 'Salts' to Extracted Tobacco Cigarettes," which concluded that

the transfer of nicotine, and thus the delivery per cigarette, is dependent upon the extent to which the nicotine is present as "freebase" (which in turn is controlled by pH). . . . [I]t appears possible to control nicotine transfer and this has some implications in the production of cigarettes giving a smoke of a low tar to nicotine ratio.

The report described the freebase nicotine as having a transfer three times greater than that of nicotine citrate, a salt. 400722326-2343 at 2327 (US 21577).

  1. In 1964, a BATCo researcher recognized the effect that adding potassium carbonate -a base -- to tobacco could have on pH and, as a result, on the nicotine "kick" a smoker receives:

There seems no doubt that the "kick" of a cigarette is due to the concentration of nicotine in the blood-stream which . . . is a product of the quantity of nicotine in the smoke and the speed of transfer of that nicotine from the smoke to the blood-stream.

The researcher came to the important conclusion that

it is almost certain that the free nicotine base is absorbed faster into the blood stream. Thus [the] effect of this potassium carbonate treatment, even though it does reduce the total quantity of nicotine in the smoke, may be to enhance the effect of what is left until it is equal or may be greater in psychological effect than the original smoke.

100059066-9067 at 9067 (US 20102).

  1. In 1964, BATCo data reported that nicotine transfer from the tobacco to the smoke was directly related to the relative degree to which the nicotine in the tobacco was in the "free" form.
648

The results show that the transfer of nicotine, and thus the delivery per cigarette, is dependent upon the extent to which the nicotine is present as "freebase" (which in turn is controlled by pH), e.g. as base the transfer is three times greater than that of the salt, nicotine citrate.

689201723-1770 at 1758, 1760 (US 31049).

  1. In 1965, a BATCo research report titled, "The Effect of Additives on Smoke Chemistry: Action of Gaseous Ammonium Flue-Cured Tobacco," noted the main effect of "treatment of flue-cured tobacco with ammonia" would be a 30% increase in delivery of nicotine. 570538281-8295 at 8283 (US 20941). This conclusion was confirmed during a subsequent Technical Development Meeting in September 1965. 689201723-1770 at 1761, 1734, 1735 (US 31049).

  2. A September 30, 1966 document titled, "Further Work on Extractable Nicotine," issued by I.W. Hughes and distributed widely, including to Sir Charles Ellis, R.B. Griffith and the Research and Development Library, confirms a finding in an earlier report that "the reaction of a smoker to the strength of the smoke from a cigarette could be correlated to the amount of 'extractable' nicotine in the smoke, rather than to the total nicotine content." The report also notes that "[i]t would appear that the increased smoker response is associated with nicotine reaching the brain more quickly." 83916527-6596 at 6530 (US 55968).

  3. A B&W document titled, "Use of Ammonia/Ammonium Compounds/Urea," stated that "reasons for use" of ammonia included, "[r]ais[ing] the pH of smoke and increas[ing] impact through increased levels of free form, vapour phase nicotine," and "[i]ncreas[ing] the efficiency of transfer of nicotine from tobacco to smoke." 303636914-6922 at 6914 (US 46608).

649

  1. M. Lance Reynolds, a chemist who worked for B&W from 1968 to 1991 and eventually became Director of Product Development and then Director of Research, stated that, during his entire tenure with B&W he had a working hypothesis that, as a 1979 Philip Morris document acknowledged, smoke impact is not determined by "the amount of nicotine in the smoke per se but rather it is the amount of free nicotine in the smoke." Reynolds PD, Minnesota, 6/4/97, 103:3-12; 542001985-1986 (US 86973).

  2. In a July 30, 1969 file note titled, "Added Ammonium Salts in Marlboro and Philip Morris Cigarettes," B&W research scientist C.J. Rosene reported that in a comparison of cigarettes manufactured by Philip Morris (including Marlboro) with Viceroy, "the [Philip Morris] tobaccos showed higher ammonia values than are normally encountered in U.S. blends." Dr. Rosene inferred that the higher ammonia values were due to ammonium salts, and speculated that "these compounds may contribute to physiological impact if free ammonia [sic] is released into the smoke." Accordingly, Dr. Rosene wrote, "[w]e recommend that the effect of ammonium salts on B&W brands be studied." 100025331-5331 (US 34585). M. Lance Reynolds acknowledged that this was B&W's "earliest indication" that "ammonia chemistry was involved in Philip Morris cigarettes." Reynolds PD, Minnesota, 6/4/97, 217:12-15.

  3. In a January 4, 1980 document, a B&W scientist spoke about the varying levels of nicotine delivery through the use of smoke pH and free nicotine:

[t]hese relationships are not unknown to those persons developing new products in the tobacco industry. We have seen many changes in these relationships at B&W, e.g., through filter technology, use of chemicals, as well as conversion products formed from using tobaccos treated with microorganisms, to yield smoke with both increases and decreases in the free nicotine levels.

650

  1. In a January 4, 1980 file note recounting an "Observation of Free Nicotine Changes in Tobacco Smoke," C.F. Gregory wrote: "It appears that we have sufficient expertise available to 'build' a lowered mg tar cigarette which will deliver as much 'free nicotine' as a Marlboro, Winston or Kent without increasing the total nicotine delivery above that of a 'Light' product." 510000667- 0670 at 0669 (US 51496). 654005805-5807 (US 85446).

  2. Gregory reasoned that "[i]n theory, a person smoking these [Merit and Marlboro] cigarettes would not find an appreciable difference in physiological satisfaction from either based on the amount of free nicotine delivered." He then gave other examples where cigarette manufacturers could maintain "free" nicotine despite reducing machine-measured nicotine yield. Gregory suggested this information could be used to gain B&W a competitive advantage in marketing "Light" cigarettes:

Is there not some way open now to use the knowledge we have gained in this area of tobacco and smoke research to give B&W a competitive advantage over its competition? It appears that we have sufficient expertise available to "build" a lowered mg tar cigarette which will deliver as much "free nicotine" as a Marlboro, Winston, or Kent without increasing the total nicotine delivery above that of a "Light" product.

65005805-5807 at 5806 (US 85446).

  1. B&W scientist Tilford Riehl, who later became Vice President of Research and Development, received Gregory's "file note" and commented on an alternative to Gregory's proposal to increase "free" nicotine to boost "physiological satisfaction." Riehl's suggestion, while accepting Gregory's data and concept, proposed maximizing the effects of nicotine on smokers in a different way. Riehl wrote in the margin:
651

Several of us have proposed an alternative (almost opposite) approach -- design a low tar cig with high total nicotine / low to moderate % free nic. Theory: provide cig with "appropriate" level of sensory satisfaction/higher than usual "pharmacological" satisfaction.

510000667-0670 (US 51496) (emphasis in original).

  1. Under a cover memorandum dated May 2, 1980, BATCo's W.B. Fordyce circulated a report written by company scientist Terry Mitchell to BATCo directors. 110088143-8143 (US 34965). In his report, Mitchell discusses three means of intentionally increasing the nicotine content of cigarettes, including the use of specialized high nicotine tobaccos (such as N. rustica), direct addition of nicotine/nicotine extracts, and the chemical "augmentation of smoke nicotine." Mitchell noted that smoke nicotine could be augmented by improving the nicotine transfer to smoke and by increasing the alkalinity/pH of smoke. 110088144-8155 (US 34966).

  2. A January 20, 1981 B&W Research Department file note reported on the pH and extractable nicotine content of several commercial cigarette brands studied by B&W. B&W found that "[w]ithout exception, there is an inverse relationship between pH and tar delivery," i.e., commercial cigarettes designed to deliver less tar showed higher pH values when tested. This study measured the pH of the total particulate matter of the cigarettes and found the pH measures for the low delivery cigarettes tested ranged from 6.76 to 7.23, more than one full pH unit higher than the intermediate delivery pHs of 5.68 and 6.40. The percentage of extractable nicotine in the cigarettes with higher TPM pH values was significantly higher for the low delivery cigarettes. 620676643- 6651 at 6643, 6647 (US 53345). In the same 1981 "File Note," the researchers recognized that traditional FTC testing methods do not detect nicotine in the gas (or vapor) phase. 620676643-6651

652

  1. Minutes of a September 1984 Joint Research and Development/Marketing Session held during an R&D Conference in Marlow, U.K., reveal that discussions took place regarding the various ways in which BATCo was able to increase the level of nicotine transferred in smoke. According to the meeting minutes, "[a] direct method of enhancing nicotine in tobacco smoke is through additions of nicotine oxide or nicotine salts." 109872430-2447 at 2439 (US 23340).

  2. Like RJR, B&W had long analyzed and evaluated Philip Morris's use of ammonia and other methods to affect nicotine transfer. B&W reverse engineered Philip Morris's Marlboro to learn how it could develop its own commercially successful products. Appleton TT, 3/24/05, 16883:25- 16884:4. B&W's internal research shows that the focus of this work was on the alkalinity of Marlboro. In 1984, a B&W researcher drafted a report on "The Unique Differences of Philip Morris Cigarette Brands" describing the way that Philip Morris achieved "lower blend alkaloids than competition brands [i.e., less total nicotine in the unsmoked rod], yet deliver[ed] the same smoke nicotine." The researcher concluded that "[a]mmonia treatments appear to be the most important aspect of Philip Morris's blend uniqueness," resulting in "a mild and natural tasting smoke . . . favorable . . . for nicotine transfer." 103281081-1112 at 1082, 1112 (US 20234). The report found that Marlboro and other Philip Morris brands "clearly contain very high ammonia levels" and that Philip Morris brands "get more of their nicotine delivered in mainstream smoke than brands of other domestic manufacturers." B&W's research into Philip Morris brands stated that the process used by Philip Morris to create its reconstituted sheet creates a "reconstituted tobacco [that] efficiently scavenges nicotine from other blend components." The B&W researchers also concluded that Philip Morris had been able to accomplish increases in nicotine transfer efficiency without substantial increases in smoke pH. 103281081-1112 at 1099-1100, 1104 (US 20234).

653
  1. At a "Nicotine Conference," held in Southampton from June 6-8, 1984, participants concluded:

If we are to make better use in product terms of the levels of nicotine in smoke currently available -- and even more so if we are forced to market cigarettes with reduced levels of nicotine -- then it is important to significantly increase our understanding of impact/satisfaction. There is an urgent need for experimental cigarettes in which the levels of nicotine in smoke (and smoke pH) are carefully controlled.

602759-2759 (US 53297); see also 401020175-0181 (US 47529).

  1. In 1984, B&W studied the effects of varying the smoke pH of Kool cigarettes. The results of B&W's study showed that increasing the smoke pH of Kool KS increased consumer acceptance. 510004186-4190 (US 20832).

  2. A 1986 BATCo report, titled "Group R&D Programme Group Projects" disclosed, among other things, that BATCo Group companies sought to determine nicotine-carrying capacity of aerosols in cigarette smoke and the effect of nicotine enhancement on human smoking behavior. The results from one such project found that the "impact" of the cigarette was a function of the aerosol pH, for which "optimal" levels were possible. 107472128-2302 at 2142, 2146, 2203-2204 (US 85472). Accordingly, BATCo sought to "evolve ways and means of ensuring that smaller amounts of nicotine continue to give the satisfactory 'reward' to the smoker." 103498901-8902 at 8901 (US 21384).

  3. In a 1988 document titled, "The Significance of pH in Tobacco and Tobacco Smoke," D.E. Creighton, a BATCo employee, wrote that "[f]ree base nicotine is the most chemically and physiologically active form because it is most rapidly absorbed." 500104403-4424 at 4408 (US 47966); see also 400132742-2776 (US 88084).

654
  1. B&W's internal documents demonstrate that, contrary to its assertions that ammonia serves to simply improve taste, ammonia technology improves nicotine transfer. Id. at 112:3-10; 570353434-3770 (US 53243). Minutes of a B&W Ammonia Technology Conference held on May 18-19, 1989, show that Dr. Baran Chakraborty presented his research on ammonia technology and listed the main effect as:

• Enhanced natural flavor/body via. formation of volatile nitrogen flavorants. • Improved nicotine transfer. • Reduced irritation via. scavenging of irritants and buffering. • Superior paper recon (sensory/physical) by urea addition.

508104012-4164 at 4017 (US 53249*) (emphasis in original) . The report of this conference also noted that "[a]ll U.S. manufacturers except Liggett use some form of AT [Ammonia Technology] on some cigarette products." Id. at 4016.

  1. B&W's efforts to understand ammonia technology included: analyzing the product design of the leading cigarette brands, reverse engineering Marlboro, and holding two ammonia conferences, the 1989 conference described supra, and one in 1990, which were attended by representatives of all BAT Cigarette Affiliated Companies. 508104012-4164 (US 53249*); 570353434-3770 (US 53243). Ultimately, these efforts culminated in preparation of the 1991 handbook, "Root Technology: A Handbook for Leaf Blenders and Product Developers," created by B&W and other BAT Group company scientists to provide ammonia technology information "for the . . . product developer who is looking for ways to incorporate [ammonia] technology . . . in a cigarette design." 621800840-0899 at 0843, 0862-63, 0869 (US 86908).
655

  1. The Handbook provided a history of the use of ammonia by the tobacco industry. It referred to ammonia technology as "a relatively new technology at B&W and within the BAT Group of companies," and went on to list the five types of ammonia technology "currently used in production" by BAT Group companies: CPCL, EBR, DiAmmonium Phosphate (DAP), Emerge, and Ansiro. 621800840-0899 at 0844, 0855 (US 86908); see also 599003691-3695 (US 22077).

  2. The Handbook also examined the methods employed by Defendants Philip Morris, RJR, Lorillard and American to use ammonia technology, noting that B&W and Philip Morris used ammonia technology in almost all of their brands, and that it was heavily used by other companies as well. A particular type of ammonia technology, involving reconstituted sheet, was referred to by the scientists as "the soul of Marlboro." The objective in B&W's "CPCL [a band-cast reconstituted tobacco] development was to match PM's RCB [reconstituted sheet] in all important characteristics except for nitrate removal." The scientists observed, "[t]his objective has been met." 621800840- 0899 at 0853-0854, 0849, 0851 (US 86908).

  3. The Handbook sets forth the purposes for which Defendants used ammonia technology. For example, "[the ammonia in cigarette smoke] can liberate free nicotine from the blend, which is associated with increases in impact and 'satisfaction' reported by smokers." As the Handbook explained:

Ammonia, when added to a tobacco blend, reacts with the indigenous nicotine salts and liberates free nicotine. As a result of such change, the ratio of extractable nicotine to bound nicotine in the smoke may be altered in favor of extractable nicotine. As we know, extractable nicotine contributes to impact in cigarette smoke and this is how ammonia can act as an impact booster.

656

In discussing diammonium phosphate ("DAP") as an additive, the Handbook states that "[s]ince DAP can only provide ammonia, it can act only as an ameliorant, an impact booster, and satisfaction promoter." 621800840-0899 at 0845 (US 86908).

  1. The Handbook also described, in detail, how B&W used ammonia technology to enhance the impact of nicotine. In Table 2, the Handbook notes that, as the percentage of ammonia- treated tobacco increased in the blend, the efficiency of the cigarette's ability to transfer nicotine to smoke increased. 621800940-0899 at 0872 (US 86908).

  2. B&W attempted to discredit this information. According to Dr. Michael Dixon, a Senior Scientific Advisor to BATCo, the researchers misinterpreted the data and the error was pointed out to them "very shortly after the manual was circulated." Dixon WD, 58:8-12, 59:22-23. This testimony is not believable. Dr. Dixon could not recall ever giving such testimony in any of his many earlier court appearances on behalf of BATCo, nor was this information mentioned in his lengthy expert report. Dixon TT, 3/9/05, 14012:1-15013:15. There were no contemporaneous written reports demonstrating that the "error" was called to the attention of any B&W employees. Perhaps most importantly, there were never any follow-up written instructions given by B&W to its scientists or its leaf blenders to disregard the Handbook's conclusion that increased use of ammonia- treated reconstituted tobacco leads to greater nicotine transfer efficiency. Appleton TT, 3/24/05, 16894:12-18.

  3. In a March 1,1991 to 1995. This program studied the correlation between lifestyle and environmental exposures and major chronic illnesses, and the role of diet in cancers of the lung, oral cavity and bladder. 2046988683-8683 (US 85673); 2021630974-0975 (US 87371); 2046988682-8682 (US 85674). -1358- document to employees in the research department, A.L. Heard informed the employees that the "Tobacco Strategy Review Team has identified a need to add greater confidentiality to our use of ammonia technology throughout the BAT Group. They have asked that for commercial confidentiality, we substitute a code word in place of the expression 'ammonia technology.'" The memorandum further stated that existing code words for ammonia-related processes such as "ammonia treatment of stems or lamina" would continue to carry code names already in existence. The new code word for ammonia technology was to be transmitted via separate cover. 400182372-2372 (US 47487).

657
  1. B&W and BATCo continued to study and monitor nicotine transfer delivery throughout the 1990s. The effectiveness of the delivery is usually expressed as a percentage of the tobacco nicotine that is released into the cigarette smoke, or "nicotine transfer efficiency." 689201723-1770 at 1758, 1760 (US 31049).

(d) American 1678. American also investigated the effects of using nicotine in a freebase form. A June

30, 1980 American memorandum from N.L. Bodenhamer to Eugene Glock on "Increasing Nicotine Transfer in Smoke" stated:

There has been an interest in increasing the amount of nicotine that is transferred from the tobacco to the mainstream smoke while leaving the "tar" level unchanged. Since most nicotine in tobacco is a non-volatile salt, it was thought that a greater transfer would take place if the tobacco was made basic causing the nicotine to volatilize when the cigarette is smoked.

To test this hypothesis, researchers conducted an experiment in which they added 2% or 5% potassium carbonate to American's Tareyton tobacco blend. Taste tests "suggested that more nicotine had transferred to the smoke, with the 5% being more harsh than the 2%." ATC2570157- 0157 (US 66272); Henningfield WD, 68:23-69:1, 69:21-70:16.

  1. In a follow-up memorandum between the same American employees a month later, it was reported that using nicotine in a freebase form could
658

volatilize and thereby increase the amount of nicotine in the smoke. Some further work planned in this area is the addition of sodium carbonate, treatment of stems with alkali base, and treatment of CARLTON blend to possibly increase smoke taste since cigarettes treated thus far have been much stronger than the control.

X003498-3506 at 3497 (US 86972).

(e) Lorillard 1680. Lorillard also studied ways to alter the pH of its cigarette products. In 1973, Lorillard

sought to improve the smoking quality of its reconstituted tobacco. Lorillard believed its research at that time demonstrated that the amount of free nicotine contained in mainstream smoke increased with higher pH, and that higher pH increased impact. Lorillard also studied how the Marlboro reconstituted leaf achieved a higher pH while maintaining a good flavor. Using different additives, types of leaf, and added nicotine, Lorillard tested numerous ways to increase the smoke pH in its reconstituted leaf. 00044833-4841 (US 47324); see also 87644269-4277 (US 56273*).

  1. A November 2, 1973 memorandum, titled "Research 1-3-5 Year Projection of Major Projects," outlines Lorillard's research goals for "Tobacco Modification." The memorandum discussed a research program designed "to explore the possibilities of modifying various physical and chemical properties of tobacco by means of chemical treatments or additives." One of the areas of interest in this regard was the "control of nicotine delivery." The memorandum noted that the ability to control nicotine and other parameters "will permit the design of low tar products with acceptable burning rates having specified nicotine deliveries." 83250679-0693 at 0683 (US 55641).

  2. Several Lorillard studies reiterate the connection between smoke pH and nicotine delivery. For one, a May 4, 1976 memorandum concerning the "Nicotine Augmentation Project" noted, "It is known that the higher the pH of the smoke is (i.e. the more basic), the more nicotine exists in the free form. Free nicotine has a greater physiological effect . . . ." 00050444-0450 at 0448 (US 47721). A July 12, 1976 Lorillard study by Leighton Chen provided an extensive review of "input variables affecting the pH of smoke" and the "effect of pH on smoke delivery." Chen reported, among other things, that

659

[t]he market leaders appear to have the higher pH's, and hence the higher concentration of freebase nicotine. If the desired goal is defined to be increased nicotine yield in the delivered smoke . . . increase the pH, which increases the "apparent" nicotine content without changing the absolute amount.

00044921-4938 at 4922, 4933-4934 (US 34203). See also 00778258-8265 (US 34295*); 00121921- 1942 (US 85476); 00778109-8113 (US 22930); 83250763-0765 (US 55655).

  1. In an April 13, 1977 memorandum to Harry Minnemeyer, titled "Gas Phase Ammoniation of Tobacco," P.D. Schickedantz recognized that the addition of bases such as ammonia to tobacco might result in "a greater efficiency of nicotine delivery or in an increased smoke pH. An increased smoke pH would liberate nicotine freebase from its salts to give a greater chest impact." Schickedantz also reported on several techniques to more accurately estimate the amount and form of ammonia that could be added without resulting in "the undesirable taste previously associated with ammoniated tobacco." 00778451-8457 at 8451, 8456 (US 34299).

  2. Lorillard conducted research on ammonia and smoke pH well into the 1990s. In 1995, the company investigated the ability of diammonium phosphate to increase the level of nicotine delivery and smoke pH. 96522458-2467 at 2461 (US 21973). A September 18, 1996 memorandum, titled "Summary of the Effects of Ammonium Carbonate, Ammonium Bicarbonate, Urea and Diammonium Phosphate on Smoke pH, Smoke Data and Leaf Chemistry," concluded: "A positive trend was observed between increasing levels of urea and increases in the percent transfer of nicotine from the leaf to the smoke on a per cigarette basis." Although this trend was not observed with the addition of other additives, the researchers found that smoke pH increased with the addition of ammonium carbonate and ammonium bicarbonate, and that the addition of diammonium phosphate led to increased puffs, thereby increasing the nicotine delivery. 83502523- 2535 at 2525, 2531 (US 55858). In a related memorandum examining the addition of urea, ammonium carbonate, and ammonium bicarbonate, the researchers concluded that "[f]or all three additives, as the amount of the additive applied to the tobacco was increased, the smoke pH increased. Increased smoke pH results in increased calculated levels of unprotonated, or free, nicotine." 93848806-8818 at 8809 (US 56687). See also 96522506-2542 (US 21822).

660

  1. In 1996, Lorillard researchers issued a report which stated that cigarette additives, such as urea, diammonium phosphate (DAP), ammonium carbonate and ammonium bicarbonate, increased the smoke pH and "the nicotine transfer from leaf to smoke." 88029439-9460 at 9439, 9449 (US 22048).

  2. As late as October 2000, Lorillard continued to use additives to affect smoke pH and produce ammonia. An October 3, 2000 Lorillard memorandum disclosed the concerns of Lorillard's then-CEO, Alexander Spears, concerning the use of ammonium carbonate to change pH balance: "[Spears] had a big concern about using ammonium carbonate to change the pH. His point was that much of the pH changes reported have shown that when the ammonia is generated is just as, if not more, important than the amount. He would like us to use urea instead, since it will allow ammonia to be generated at a more even rate and at higher temperatures than with the use of ammonium carbonate." 97014099-4099 (US 21853) (emphasis in original).

661

(f) Liggett 1687. Liggett also aggressively pursued designing a cigarette with increased smoke pH. A

1971 progress report on project TE-5001 reported that "[i]ncreasing the pH of a medium in which nicotine is delivered increases the physiological effect of the nicotine by increasing the ratio of freebase to acid salt form, the freebase form being more readily transported across physiological membranes." The importance of this finding was explained: "[w]e are pursuing this project with the eventual goal of lowering the total nicotine present in smoke while increasing the physiological effect of the nicotine which is present, so that no physiological effect is lost on nicotine reduction." LG0262125-2126 at 2126 (US 59994).

  1. By early 1972, Liggett had achieved its goal of increasing the smoke pH: "The original purpose of this development was to increase the smoke pH through the addition of a basic material to the tobacco in order to achieve a higher physiologic effect from the nicotine in the smoke. This has been accomplished." Liggett's researchers found related results from the study encouraging, reporting "[t]he above-observed facts would seem to present intriguing possibilities in the development of new products, particularly in the development of low yield cigarettes where it is desirable to obtain a higher physiologic effect from a cigarette yielding relatively small amounts of nicotine." The report set forth various ways Liggett would improve "taste" for commercialization of the product. LG0262506-2508 at 2506-2507 (US 36263).

  2. Liggett continued its work on the TE-5001 throughout the 1970s. Company scientists advised management of the perceived benefits of increasing smoke pH, writing: "[a] low smoke solids, low nicotine cigarette with an increased smoke pH would then have relatively more free nicotine in its smoke. Consequently, a higher nicotine impact would result producing a more satisfying smoke." This January 22, 1974 report, and others, discuss methods, including filters, blends, and additives, by which the smoke pH could be altered. It was reported that "all the increased smoke pH cigarettes generally exhibited an increased physiological impact." LG0262127- 2129 at 2127, 2128, 2129 (US 21185).

662

  1. In a January 29, 1974 report concerning the progress made by Liggett in 1973 on Project TE 5001, James R. Newsome, an attorney with Shook, Hardy & Bacon, explained: "[f]uture plans on this project will consist of screening a number of basic materials on both the cigarette filter and blend in an attempt to find which additive is most effective in producing a smokeable increased smoke pH cigarette." LG 0262130-2131 at 2130, 2131 (US 21596). Liggett continued its work on Project TE-5001 through at least 1978. It was only one of the methods of altering pH that Liggett employed. Other methods that Liggett believed could alter pH were: changing the tobacco blend, adding additives to the tobacco, or adding additives to the filter. LG0262155-2155 (US 21428); LG0262149-2151 (US 21186); LG0262152-2153 (US 21187); LG0262509-2512 (US 36264).

  2. Liggett was aware decades ago of the basic science surrounding pH and the freebase form of nicotine. Dietz PD, Minnesota v. Philip Morris, 9/29/97, 22:15-24:1, 25:23-27:5. Since 1971, Liggett has hypothesized that the effect of increasing the pH of nicotine, and hence increasing the ratio of freebase nicotine to salt form, increases the physiological effect of the nicotine. Id. at 28:1-32:3.

  3. Liggett was aware that adding calcium hydroxide to tobacco makes the tobacco more basic, thus raising the pH and increasing the amount of freebase nicotine relative to the salt form of nicotine. Liggett added calcium hydroxide to the L&M blend. LG0262506-2508 (US 36263); Dietz PD, Minnesota, 9/29/97, 35:17-41:11.

663

  1. Liggett also experimented with increasing the smoke pH by making the filter more basic and thereby increasing the physiological impact of the nicotine. Dietz PD, Minnesota, 9/29/97, 41:12-43:24; LG0262127-2129 at 2128 (US 21185).

  2. In 1976, Liggett continued its research into the modification of smoke pH, and noted that a smoke pH of 6 resulted in the nicotine in smoke taking on a salt form, while a pH of 11 resulted in the nicotine in smoke being almost entirely in freebase form. The most dramatic shift from salt form to freebase form occurred between pH 6 and pH 9. Dietz PD, Minnesota, 9/29/97, 44:21-50:4.

  3. Between 1993 and 1996, Liggett added diammonium phosphate (DAP) to its cigarettes. Id. at 61:7-19; see also LG2018563-8563 (US 21190). As discussed supra, other Defendants have concluded that DAP increases nicotine transfer.

e. Other Additives: Defendants Researched the Use of Other Additives to Control Nicotine Delivery 1696. Internal documents show that Defendants researched various additives, in addition

to ammonia, which facilitate nicotine delivery. Cigarette smoke contains chemicals that can act synergistically to produce effects that might be even more addicting than nicotine alone. Farone WD, 74:4-9. For example, studies by Philip Morris have indicated that levels of acetaldehyde (a chemical involved in alcohol dependence) in smoke can be manipulated through additives so as to produce a mixture of acetaldehyde and nicotine that would be more addictive than either drug alone. DeNoble WD, 31:5-32:15; 1000413881-3964 (US 20100); 1003060443-0503 (US 87091).

  1. Philip Morris started studying the compound acetaldehyde in 1980, because it had been shown to have positive reinforcing effects, i.e., enhancing a smoker's desire to continue to ingest nicotine. DeNoble WD, 29:16-33:5; 1002973586-3615 at 3598 (US 35633); 10003906481698. On January 30, 1981, Thomas Osdene, then Director of Research and later Vice President of Science and Technology, received a letter from Philip Morris consultant Leo Abood, informing Osdene of research showing that acetaldehyde was self-administered by rats and that it could reinforce smoking behavior. Abood postulated that acetaldehyde may "enhance" the behavioral effects of nicotine and suggested that further studies be done to see how acetaldehyde interacts with nicotine. 2058212035-2036 (US 64776).
664

  1. In 1982, Dr. DeNoble reported that preliminary studies showed that acetaldehyde readily penetrated the blood-brain barrier. 1003198459-8461 (US 20156). DeNoble's studies on acetaldehyde revealed a "synergistic effect" with nicotine. In other words, "the combination of nicotine with low doses of acetaldehyde caused more powerful results than either one of the drugs acting alone." DeNoble WD, 31:11-12; Mele WD, 18:18-19:1; 2048376436-6437 (US 85503).

  2. Also, in 1982, DeNoble presented his acetaldehyde research to Philip Morris corporate officers in meetings in Richmond and at Philip Morris headquarters in New York. Subsequent to his presentations, Philip Morris executives expressed interest in finding the ratio of the acetaldehyde-nicotine combination that would be optimally reinforcing. 1000413881-3964 at 3883-3884, 3908 (US 20100). DeNoble recounted that Philip Morris considered the acetaldehyde work "very sensitive and that [the company] did not want it to be misinterpreted if it got out." DeNoble WD, 11:8-10, 32:18-33:1, 33:18-35:4, 36:14-18. Philip Morris scientists also charted the effect of the presence of acetaldehyde in cigarettes upon sales. 2022261214-1225 (US 20364).

665

  1. Philip Morris recognized "[t]here was a practical aspect of the super-additive quality of the reinforcing effects of nicotine and acetaldehyde." According to Paul Mele, a scientist in DeNoble's lab, their supervisor in the Biochemical Research Division, Jim Charles, "discussed with us the importance of finding the optimum ratio of nicotine and acetaldehyde that was reinforcing in the self-administration test." Mele WD, 19:14-19:16.

  2. BATCo researchers were aware as early as 1968 of the importance of nicotine and of the potential value of a product that combined nicotine with some other chemical to increase its pharmacological effects. Minutes written by S.J. Green from a BATCo conference held in Hilton Head, South Carolina, on September 24-30, 1968, included the following conclusion:

In view of its pre-eminent importance, the pharmacology of nicotine should continue to be kept under review and attention paid to the possible discovery of other substances possessing the desired features of brain stimulation and stress-relief without direct effects on the circulatory system. The possibility that nicotine and other substances together may exert effects larger than either separately (synergism) should be studied and if necessary the attention of Marketing Departments should be drawn to these possibilities.

682633150-3156 at 3152 (US 54206).

  1. By 1978, Lorillard was studying means by which nicotine migration -- the redistribution of nicotine within a cigarette from the tobacco to the outer periphery for the purpose of increasing the amount of nicotine in mainstream smoke -- could be maximized. In a February 23, 1978 memorandum to Harry Minnemeyer, Manager of the Research Department, M.S. Ireland, Manager of Analytical Development, set forth the "steps which are planned in the nicotine migration project," including maximizing migration through the addition of acids or other compounds and determining the maximum amount of nicotine that can be migrated. 82514702-4703 (US 55517).
666

Researchers for Lorillard studied possible cigarette additives that would facilitate the migration of nicotine from other parts of the cigarette to the cigarette paper, recognizing that "the major portion of the mainstream smoke is generated from the outer periphery of the cigarette." 83896877-6879 at 6878 (US 55922). A 1980 report likewise stated that "[i]t has been demonstrated that the impregnation of cigarette paper with acid can cause migration of nicotine to the periphery. This in turn elevates delivery of nicotine in mainstream smoke." 00114987-4996 at 4987 (US 34264). Lorillard conducted further studies on migration and confirmed these results. 00114962-4975 at 4962 (US 34263); see also 00041734-1735 (US 34189); 000115023-5025 (US 34265); 83896952- 6954 (US 55925).

  1. A December 6, 1983 Lorillard memorandum by J.M. Johnson described the purpose of another study of filter additives being "to increase smoke pH and therefore increase free nicotine in smoke by adding an aryl alkyl amine to the filter." The results of the study revealed "increased smoke pH and a six-fold increase in free nicotine." 87632595-2598 (US 56265*); Henningfield WD, 75:22-76:1, 77:8-14.