Defendants Were Well Aware that Smoking and Nicotine Are Addictive

The wealth of documentary evidence examined in this Section, as well as Sections V(C) and (D), reveals that for decades Defendants knew and internally acknowledged that nicotine is an addictive drug, that cigarettes are a nicotine delivery device, and that addiction can be enhanced and perpetuated through manipulating both the amount of nicotine and the method of nicotine delivery. Much of Defendants' knowledge of nicotine was obtained from in-house and industry-funded research into the pharmacological effects of the drug.
For example, internal documents reveal that Philip Morris researchers knew in 1969 that nicotine was "a powerful pharmacological agent" and that the company operated on the "premise that the primary motivation for smoking is to obtain the pharmacological effect of nicotine."

¶1003033413-3417 at 3413 (US 20143); 1003287836-7848 at 7837 (US 22848). RJR's lead nicotine researcher stated in 1972 that nicotine is the "sine qua non of smoking" and that the industry was based on the sale of "attractive dosage forms of nicotine." 500915683-5691 at 5684-5685 (US 20659). BATCo's sophisticated research from the early 1960s demonstrated that "smokers are nicotine addicts." 301083862-3865 at 3863 (US 20577). B&W, BATCo's American subsidiary, possessed the BATCo data and marketed cigarettes with the understanding that they "must provide the appropriate levels of nicotine." 501011512-1515 at 1513 (US 85309). Lorillard researchers accepted the scientific consensus in the 1970s that "the most probable reason for the addictive properties of the smoke is the nicotine." 82396938-6939 (US 22012). Liggett, like its larger cigarette manufacturer counterparts, was actively seeking ways to manipulate the nicotine delivery to smokers. LG0262125-2126 (US 59994).

Defendants have studied nicotine and its effects since the 1950s. The documents describing their research into and resulting knowledge of nicotine's pharmacological effects on smokers -- whether they characterized that effect as "addictive," "dependence" producing or "habituating," -- demonstrate unequivocally that Defendants understood the central role nicotine plays in keeping smokers smoking, and thus its critical importance to the success of their industry.
Defendants' internal records also demonstrate that they knew that cigarette smoking, and tobacco in particular, were the vehicles for delivering nicotine -- the critical component in maintaining the addiction necessary to sustain and enhance their profits. Indeed, Defendants purposefully designed and sold products that delivered a pharmacologically effective dose of nicotine in order to create and sustain nicotine addiction in smokers. Henningfield WD, 87:19-103:13.

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Other documents demonstrate Defendants' understanding and acceptance of nicotine's role in maintaining cigarette smoking by showing their recognition that smokers adjust their smoking behavior in order to obtain their necessary nicotine intake. This behavioral adaptation of smokers is known as "compensation," or "titration," a concept Defendants have been well aware of for many years. Henningfield WD, 49:14-55:5; Section V(E)(2)(b), infra.
These industry documents also support the conclusion that Defendants knew early on in their research that if a cigarette did not deliver a certain amount of nicotine, new smokers would not become addicted, and "confirmed" smokers would be able to quit.
The evidence set forth in this Section demonstrates the extensive knowledge Defendants have had since the 1950s about nicotine's addictive effects on smokers, their use of that knowledge to maintain and increase the sale of cigarettes, and their decades-long efforts both to deny the truth about the addictive nature of nicotine and to conceal their own internal research which generated that information.

a. Philip Morris 889. In a September 22, 1959 memorandum, Philip Morris's Vice President for Research

¶and Development, Hugh Wakeham, emphasized the importance of nicotine to smoking, stating: "One of the main reasons people smoke is to experience the physiological effects of nicotine on the human system." 10005039423-9424 (US 21657).

In a November 15, 1961 presentation, Wakeham addressed the company's ability to control the nicotine content of its cigarettes. He stated that "low nicotine does stimulate, but high doses depress functions," and "continued usage develops tolerance." Wakeham further stated that:

383

¶"Even though nicotine is believed essential to cigarette acceptability, a reduction in level may be desirable for medical reasons." 1000277423-7447 at 7438, 7441 (US 20088).

On March 5, 1964, William L. Dunn, a Philip Morris scientist/psychologist who later became the Principal Scientist for the company, commented at length on the possibility of developing a "surrogate" for cigarettes based on the importance of nicotine. He wrote:

The pharmacological need [for cigarettes] is readily definable. The smoker seeks the subjective state that results from the introduction of nicotine into the bloodstream. There are some specifiable, some not specifiable changes in the physiological state accruing from the presence of nicotine. . . . There are undoubtedly other physiological reactions which are responsible for the sense of euphoria, or well-being, that the novice smoker experiences in the exaggerated form of dizziness. Without belaboring a most complex and little understood set of phenomena, suffice it to say that it is this subjective state which is sought by the smoker as he lights up.

¶1003700128-0133 at 0129 (US 20177).

In the same document, Dunn also stated that any less hazardous cigarette product developed by Philip Morris "must induce the psychopharmacological state now induced by nicotine absorption into the bloodstream." 1003700128-0133 at 0132 (US 20177).
A handwritten summary by Philip Morris researcher Ronald Tamol of a February 1, 1965 brand development meeting/presentation recorded the conclusion that the cigarette manufacturer who could come up with a "flavorful" low tar cigarette with "enough nicotine to keep smokers hooked . . . will reap huge benefits." 0002862-2867 at 2867 (US 88761).
In a June 1966 report titled "Market Potential of a Health Cigarette," Philip Morris researchers Dunn and Myron Johnston stated that without nicotine, a health cigarette would not sell:

[A]ny health cigarette must compromise between health implications on the one hand and flavor and nicotine on the other. . . . Flavor and

384

nicotine are both necessary to sell a cigarette. A cigarette that does not deliver nicotine cannot satisfy the habituated smoker and cannot lead to habituation, and therefore would almost certainly fail.

¶1001913853-3878 at 3860 (US 20123).

In a May 7, 1968 Philip Morris memorandum titled "TPN Intake by Smokers," Dunn wrote that "since there is evidence that the smoker adapts his puff, it is reasonable to anticipate that he adapts to maintain a fairly constant daily dosage." Thus, Philip Morris has known for over thirty-five years that smokers would "compensate" in order to maintain a constant intake, or dosage, of nicotine. 1003293548-3555 (US 35743).
Philip Morris was well aware that nicotine shared many attributes of an addictive drug. In a February 19, 1969 memorandum from Dunn to Wakeham, Dunn cautioned that nicotine was a drug with FDA implications. He also discussed the "dual action" of nicotine as a drug with pharmacological "stimulant-tranquilizer" effects that caused a "pleasant state of dizziness so clearly experienced by the beginning smoker and by the habituated smoker following abstention." 1003289921-9922 at 9921 (US 20167).
In a Fall 1969 draft of the annual report titled "Why One Smokes," and presented to the Philip Morris Board of Directors, Wakeham emphasized the role of nicotine in smoking. He flatly stated:

We share the conviction with others that it is the pharmacological effect of inhaled smoke which mediates the smoking habit. . . . We have then as our first premise, that the primary motivation for smoking is to obtain the pharmacological effect of nicotine. In the past we at R & D have said that we're not in the cigarette business, we're in the smoke business. It might be more pointed to observe that the cigarette is the vehicle of smoke, smoke is the

385

vehicle of nicotine, and nicotine is the agent of a pleasurable body response. . . .

This primary incentive to smoking gets obscured by the overlay secondary incentives, which have been superimposed upon the habit. Psychoanalysts have speculated about the importance of the sucking behavior, describing it as oral regression. Psychologists have proposed that the smoker is projecting an ego-image with puffing and his halo of smoke. One frequently hears "I have to have something to do with my hands" as a reason. All are perhaps operative motives, but we hold that none are adequate to sustain the habit in the absence of nicotine. . . .

We are not suggesting that the effect of nicotine is responsible for the initiation of the habit. To the contrary. The first cigarette is a noxious experience to the noviate. To account for the fact that the beginning smoker will tolerate the unpleasantness, we must invoke a psychosocial motive. Smoking for the beginner is a symbolic act. The smoker is telling the world, "This is the kind of person I am. . . ."

As the force from the psychosocial symbolism subsides, the pharmacological effect takes over to sustain the habit . . . .

¶1003287836-7848 at 7837-7839 (US 22848) (emphasis added).

In the final version of Wakeham's presentation, dated November 26, 1969, he largely restated material from the draft quoted above. In explaining that nicotine serves as both a stimulant and depressant, Wakeham stated that smoking maintenance depended solely on the pharmacological effects on smokers:

We are of the conviction, in view of the foregoing, that the ultimate explanation for the perpetuated cigarette habit resides in the pharmacological effect of smoke upon the body of the smoker, the effect being most rewarding to the individual under stress.

¶1000273741-3771 at 3752 (US 26080).

Philip Morris also produced a February 16, 1970 Research and Development report titled "Some Methods Notes on the Past Research on Cigarette Smoker Motivation" which acknowledged that the smoking "pattern is strongly resistant to extinction." The report referred to the "puffing act" as an "injection of nicotine." 1003287849-7856 at 7849, 7853-7854 (US 85246).

386

Philip Morris's awareness of nicotine as the crucial ingredient in cigarettes was also made plain in a November 1, 1971 research report written by Thomas Schori and approved by Dunn. The report accepted a 1943 scientific study's results which suggested that a habitual smoker continues to smoke because of the pharmacological effects of nicotine in cigarettes. 1000350158- 0188 (US 20176).
Notwithstanding its longtime public denials that smoking cessation induces withdrawal -- one of the classic hallmarks of addiction -- Philip Morris knew the extreme difficulty of quitting and the physical and mental effects of cessation attempts on the smoker. Scientists Dunn and Frank Ryan described some of the withdrawal effects of nicotine in a 1971 study on cessation in the following graphic terms:

Even after eight months quitters were apt to report having neurotic symptoms, such as feeling depressed, being restless and tense, being ill-tempered, having a loss of energy, being apt to doze off. They were further troubled by constipation and weight gains which averaged about five pounds per quitter. . . . This is not the happy picture painted by the Cancer Society's anti-smoking commercial which shows an exuberant couple leaping into the air and kicking their heels with joy because they have kicked the habit. A more appropriate commercial would show a restless, nervous, constipated husband bickering viciously with his bitchy wife who is nagging him about his slothful behavior and growing waistline.

¶1000348671-8751 at 8676, 8708 (US 20097).

With respect to the phenomenon of nicotine "compensation," Schori and Dunn wrote in a January 1972 Report titled "Tar, Nicotine, and Cigarette Consumption" that their research

387

supports the notion that smokers develop a daily nicotine intake quota and that when smoking cigarettes differing in nicotine delivery from that to which they are accustomed they tend to modify their consumption rate in order to maintain their normal quota. No support was found for the analogous notion of a daily tar intake quota, however.

¶1003285403-5416 at 5403 (US 20159).

In a 1972 "Confidential" research report titled "Motives and Incentives in Cigarette Smoking," Dunn asserted that people smoke in order "to obtain nicotine," and that nicotine "is the industry's product," adding that "without nicotine, the argument goes, there would be no smoking." In the report, Dunn summarized a 1972 CTR-sponsored conference held on the Caribbean island of St. Martin. More commonly known as St. Martin Conference, the meeting was not a secret. Some scientists unconnected to the tobacco industry attended and the proceedings of the conference were published shortly thereafter. (no bates) (JD 040795). Dunn wrote:

The majority of the conferees would go even further and accept the proposition that nicotine is the active constituent of cigarette smoke.

Without nicotine, the argument goes, there would be no smoking. Some strong evidence marshaled to support this argument: 1) No one has ever become a cigarette smoker by smoking cigarettes without nicotine. 2) Most of the physiological responses to inhaled smoke have been shown to be nicotine-related.

¶2023193286-3304 at 3289 (US 22967); 503654881-4885 (US 88413); 105394371-4388 (US 88414).

Most graphically, Dunn urged the industry to adopt the following approach: Think of the cigarette pack as a storage container for a day's supply of nicotine. . . .

388

Think of the cigarette as a dispenser for a dose unit of nicotine: it is readily prepped for dispensing nicotine. . . . Think of a puff of smoke as the vehicle of nicotine. . . . Smoke is beyond question the most optimized vehicle of nicotine and the cigarette the most optimized dispenser of smoke.

¶2023193286-3304 at 3290-3291 (US 22967).

During a presentation of his paper delivered at St. Martin and at the 1972 CORESTA/TCRC Joint Conference, Dunn summarized his conclusions from current research on why people smoke. Dunn wrote that, "It is contended in this paper that nicotine, specially packed, is the cigarette industry's product." Dunn added that, "The smoker takes nicotine into his system in order to obtain the salutory effects of nicotine upon body function." 1001820498-0500 at 0498 (US 26121); 2021423403-3497 at 3484 (US 36743); 89285181-5188 at 5181 (US 23583).
Philip Morris also documented compensation as further evidence of addiction. A March 1973 Philip Morris Research Report titled "Smoking Behavior: Real World Observations," written by Philip Morris scientists Dunn, Thomas Schori and Janet Duggins, reported that a Philip Morris in-house study had shown that, "the smokers in this study are now smoking cigarettes delivering less tar and nicotine than those they smoked in 1968 and that they are smoking both more rod per cigarette and more cigarettes." 1000353355-3410 at 3361 (US 35242).
In a May 8, 1974 presentation to Philip Morris USA President Clifford Goldsmith, Dunn explained how in-house research suggested that smokers titrate or regulate their smoke intake to get what they want out of the smoke:

I'm sure you are aware of our belief that people smoke for rewards they get from smoke at the pharmacological level. . . . It's simply not an adequate explanation to say that smoking is a habit, or that it is

389

social behavior. A smoker is introducing something into his system that he wants. Certain components of smoke, most likely nicotine, act upon his system in some undetermined way to give him some undetermined pleasure. If this is true, then we expect the smoker to seek to take in that amount of smoke that does the job best for him. He is going to regulate his intake to suit his need. . . We are hypothesizing that the smoker titrates (regulates) his smoke intake to suit his dosage needs.

¶100324972-4976 at 4972-4973 (US 85248).

Research conducted at the Philip Morris Research Laboratory in June 1974 using high nicotine and low nicotine cigarettes "showed the existence of a definite compensation mechanism" among smokers. According to the report, titled "Human Smoking Habits," these findings were consistent with:

evidence in literature that the nicotine of cigarette smoke exerts a distinct pharmacological effect on the smoker which reinforces the smoking behavior. The smoker doses himself with nicotine according to his personal needs which depend on the level of arousal, external stress, his personality and, possibly, a number of other factors.

¶1001812883-2903 at 2883 (US 85249).

In an undated handwritten memo, probably written in the 1970s, Dunn voices his surprise that the industry could not fully separate nicotine from tar, given what the company knew of nicotine at that time:

It is also remarkable that nicotine delivery has not been liberated from tar delivery, particularly in view of the importance of nicotine as the significant, if not the primary gratification component of the smoke. This is not to say that the task is simple: it is not simple. Consider the ways currently available for altering the nicotine delivery level, with accompanying reasons why these ways do not readily permit independent nicotine variation.

¶1003285420-5424 at 5420 (US 85250); 2021423403-3497 at 3464 (US 36743).

390

Dunn then listed the methods at Philip Morris's disposal to manipulate nicotine delivery in its products, including air dilution, filtration, nicotine extraction/addition, leaf selection, and base additives to increase pH. 1003285420-5424 at 5421-5422 (US 85250).
In March 1975, Helmut Wakeham proposed an industry scientific conference on "The

¶Regulatory Influence of Smoking Upon Human Behavior" to discuss research ideas into the effects of stimulant and calming effects of smoking. LWODJ9056332-6332 (US 87072*);

¶LWODJ9056318-6323 (US 87071).

In a May 14, 1975 report evaluating the relationship between a steep short-term decline in sales of Marlboro to a concurrent decline in nicotine, Dunn wrote:

Nicotine has been singled out for attention because many investigators of smoking behavior, including some P.M. R&D people, have contended that the seasoned cigarette smoker smokes for the nicotine in the smoke. In view of that contention, the question has been raised as to whether the declining nicotine delivery values reported for Marlboro Red could be responsible for the declining sales increment.

¶0000024914-4920 (US 26072).

In a September 8, 1975 letter to long-time Philip Morris-funded researcher Stanley

¶Schachter, a psychology professor at Columbia University, Dunn discussed a reduction in nicotine in Marlboro cigarettes and acknowledged the existence of smoker's compensation to obtain more nicotine, which he referred to as "the goodies":

Thus to accommodate to the 15% reduction in available Marlboro nicotine, the smoker who was getting 50% of the available nicotine into his blood from the Marlboro delivering 1.3 mg of nicotine into a smoking machine and now must get 59% of what the current Marlboro offers him. He can take bigger puffs, or inhale more from the supply drawn into the mouth (we have varying quantities of residual smoke in the mouth at the end of an inhalation) or for more

391

efficient extraction of the goodies, he can draw it in deeper or hold it in longer.

¶1000738509-8510 at 8510 (US 85251).

Philip Morris funded Schachter's research for many years. However, his studies of nicotine and human behavior led him to eventually conclude that smoking was indeed addictive. He reported to Philip Morris in 1977 that, "We propose instead that virtually all long-time smokers, heavy or light, are addicted and suggest that many, perhaps all, exceptions to the addiction model can be understood in terms of such notions as self-control, concern with health, restraints, etc." 1003291155-1191 at 1189 (US 87074); 1003291151-1153 (US 87075).
An October 1, 1975 Philip Morris research memorandum titled "Smoke Impact, Part I: Cigarette Smoking and Heart Rate" stated that: "Nicotine is the main determinant for sustaining the smoking habit" and "there is an optimal dose of nicotine, too little or too much is rejected by tobacco smokers." 1003294245-4261 at 4246 (US 20170).
In approximately 1976, Philip Morris researcher Frank Ryan explained why people smoke in terms of habit versus need. In Ryan's view, the habit of smoking was very distinct from the smoker's need for nicotine. In a November 11, 1977 memorandum titled "Smoker Psychology," Ryan described nicotine intake as the "critical mainstay of tobacco consumption," and provided the following background for research to be carried out at Virginia Commonwealth University:

Many of [a smoker's] cigarettes will be smoked out of habit (i.e., will be conditioned responses triggered by external cues) rather than out of any nicotine need (i.e., will be conditioned responses triggered by internal cues). All these cigarettes contribute to the total nicotine in the system, so that a cigarette smoked out of habit will delay the time until a cigarette is smoked out of need.

¶1003287995-7995 (US 35702) (emphasis in original).

392

In a March 1, 1977 memorandum, Schachter described a smoker as an "addict" who smokes to maintain his nicotine levels:

To the extent that [he is] an addict, he is probably smoking to keep nicotine or one of its active metabolites at some optimal level. If, then, the heavy smoker does switch to low nicotine brands, he may very well end up smoking more cigarettes and taking more puffs of each.

¶1003724353-4387 at 4353 (US 21887).

In a November 29, 1977 memorandum, Philip Morris Director of Science and Technology, Thomas Osdene, discussed his concerns about a presentation made by Dr. Donald H. Ford, a new CTR staff member, which acknowledged that "Opiates and nicotine may be similar in action"; "We accept the fact that nicotine is habituating"; and "There is a relationship between nicotine and the opiates." 1005045000-5000 (US 20194).
In a December 19, 1977 interoffice memorandum sent to Osdene, titled "Behavioral Research Accomplishments -- 1977," Dunn acknowledged the importance of nicotine for the smoker when he listed as one of Philip Morris's 1977 successes the fact that the company had "shown that [it] can distinguish between regulator and nonregulator smokers and that after being deprived, the regulators do indeed try to make up for lost intake." "Regulators" were defined as smokers who "smoke for nicotine." 1003293322-3330 at 3322, 3324-3325 (US 35741).
Aware of nicotine's importance to the company and the industry, Osdene voiced concerns at a meeting with the scientific director of CTR in New York on January 5, 1978. Philip Morris had sent Osdene and Robert B. Seligman, Vice President of Research and Development, to CTR to discuss several contract research programs. One of those programs concerned nicotine antagonists -- i.e., drugs which oppose or block the pharmacological and chemical effects of nicotine as opposed to nicotine analogs, which are substitutes for nicotine and interact with the body in the same pharmacological and chemical way. Seligman's comments revealed the importance of nicotine to the future of cigarette manufacturing. According to Osdene's memorandum of the meeting:

393

Dr. Seligman brought up the grant by Dr. Abood in which one of the stated aims was to make a clinically acceptable antagonist to nicotine. This goal would have the potential of putting the tobacco manufacturers out of business.

¶1000286213-6214 at 6213 (US 35204); see also 1000041904-1905 (US 35103).

In a March 1978 report titled "Exit-Brand Cigarettes: A Study of Ex-Smokers," scientist Frank J. Ryan of the Philip Morris Research Center in Richmond revealed Philip Morris's substantial understanding of the role of nicotine in tobacco use at that time: "We think that most smokers can be considered nicotine seekers, for the pharmacological effect of nicotine is one of the rewards that come from smoking. When the smoker quits, he foregoes his accustomed nicotine. The change is very noticeable, he misses the reward, and so he returns to smoking." 1000368057-8080 at 8060 (US 20098*).
In the same March 1978 report, Ryan stated that, "If the industry's introduction of acceptable low-nicotine products does make it easier for dedicated smokers to quit, then the wisdom of the introduction is open to debate." 1000368057-8080 at 8060 (US 20098*) (emphasis in original).
In the late 1970s and well into the 1980s, Philip Morris carried out the "Nicotine Program." This major research initiative studied nicotine's effects on the central and peripheral nervous systems, nicotine analogs, and "behavioral effects" of nicotine. 1003033413-3417 (US

394

Wakeham, having apparently read a review of the Philip Morris Nicotine Program by Dunn, wrote a memorandum of concern to Seligman dated February 22, 1979. While Wakeham disagreed with the program's primary focus on nicotine, he admitted that, "I do not deny that many smokers maintain the habit for psychopharmacological reasons." 1003293238-3239 at 3238 (US 26150).
In a February 3, 1979 letter to Philip Morris President and CEO Hugh Cullman titled "The Slow Motion Self-Suicide of the Tobacco Industry," D. Todorovic, a retired Philip Morris International researcher, stressed the negative impact of "cigarette substitutes" on conventional cigarette sales and recommended against their development:

It is obvious that such a tremendous sales gain of "cigarette substitutes" is done at the expense of normal, conventional cigarettes, and there lies all the danger in the near future for the very survival of [the] Tobacco Industry, because these "cigarette substitutes" are unable to make smokers addicts to tobacco. The present smokers of "cigarette substitutes" are the future smoker quitters.

¶2010064696-4699 at 4697 (US 20303).

Ian Uydess, a Philip Morris scientist from 1977 until 1989, stated that Philip Morris knew that a cause and effect relationship existed between market performance and nicotine delivery levels. The declaration also makes clear that nicotine was distinct from taste:

This belief . . . was reflected in many of the comments made at a number of internal meetings at which zero and "ultra low" delivery products were being discussed. Some scientists even predicted that products made with "no" or "too low" a level of nicotine would probably fail in test markets, "no matter what they tasted like."

395

There can be no question taste was not the reason that nicotine was used as a necessary component of cigarettes. Philip Morris scientists understood very well that, as far as

¶"taste" was concerned, nicotine, standing alone, had an "acrid burning taste." 2060537042-7045 (US

¶87077).

In a March 21, 1980 memorandum to Dr. Seligman, Dunn described in detail the

¶Philip Morris-directed "Nicotine Receptor Program," a research initiative aimed at "understanding the specific action of nicotine which causes the smoker to repeatedly introduce nicotine into his body." However, Dunn stated cautiously that, "Any action on our part, such as research on the psychopharmacology of nicotine, which implicitly or explicitly treats nicotine as a drug, could well be viewed as a tacit acknowledgment that nicotine is a drug," and, therefore, subject to FDA regulation. 0000127789-7790 at 7789 (US 21794); 2022249518-9518 at 9518 (US 35152);

¶1000127789-7790 (US 34422).

Dr. Dunn also revealed the concerns of the industry's attorneys that the issue of nicotine addiction could enhance the claims of smokers' lawsuits:

The psychopharmacology of nicotine is a highly vexatious topic. It is where the action is for those doing fundamental research on smoking, and from where most likely will come significant scientific developments profoundly influencing the industry. Yet it is where our attorneys least want us to be, for two reasons. It is important to have these two reasons expressed and distinguished from one another. The first reason is the oldest and most implicit in the legal strategy employed over the years in defending corporations within the industry from the claims of heirs and estates of deceased smokers: "We within the industry are ignorant of any relationships between smoking and disease. Within our laboratories no work is being conducted on biological systems." That posture has moderated considerably as our attorneys have come to acknowledge that the original carte blanche

396

avoidance of all biological research is not required in order to plead ignorance about any pathological relationship between smoke and smoker.

¶1000127789-7790 (US 34422).

Dunn pointed out to Seligman that "the acute, transient, short-lived effects of nicotine upon a physiological system" were the "effect sought by the smoker." In the attachment to his memo, Dunn summed up the relationship between his company and nicotine as follows: "PM sells cigarettes. Cigarettes deliver nicotine." 0000127789-7790 at 7789 (US 21794); 1000127791-7792 (US 34422); 2022249518-9518 at 9518 (US 35152).
Dunn's memorandum to Seligman was preceded by that of another Philip Morris scientist, James L. Charles, who also provided Seligman an assessment of the "Nicotine Receptor Program" on March 18, 1980. Charles opened his memorandum with the following observations:

Nicotine is a powerful pharmacological agent with multiple sites of action and may be the most important component of cigarette smoke. Nicotine and an understanding of its properties are important to the continued well-being of our cigarette business since this alkaloid has been cited often as "the reason for smoking" and theories have been advanced for "nicotine titration" by the smoker.

¶100328974-8975 at 8974 (US 87078).

Charles had made similar observations about nicotine in an earlier memorandum outlining the Philip Morris Nicotine Program dated December 1, 1978. He stated that his views had not changed in the intervening years. 1003033413-3417 (US 20143).
Dunn wrote another memorandum dated March 24, 1980 to Seligman relating to a parallel effort at Philip Morris to create cigarettes with even higher nicotine to tar ratios, stating:

If even only some smokers smoke for the nicotine effect (I personally believe most regular smokers do) then in today's climate we would do

397

well to have a low TPM [total particulate matter, or tar] and CO [carbon monoxide] delivering cigarette that can supply adequate nicotine.

¶1003285586-5586 (US 22029).

In an August 12, 1980 memorandum to the Vice President of Research and company Directors, Thomas Osdene ranked nicotine research -- and specifically the Philip Morris Nicotine Program -- as one of the company's top Research and Development priorities because "the thing we sell most is nicotine":

Nicotine Program. This program includes both behavioral effects as well as chemical investigation. My reason for this high priority is that I believe the thing we sell most is nicotine.

¶1003030124-0125 at 0124 (US 26132).

Philip Morris's nicotine research program included studies which began before 1980 and continued until 1984 to develop nicotine analogs as part of a purposeful effort to find a nicotine- equivalent drug that would retain nicotine's effects on the brain without nicotine's known adverse cardiovascular and carcinogenic effects. DeNoble WD, 5:7-11; 7:8-13; 1003033413-3417 (US 20143); 1003289974-9975 (US 21553); 1000127789-7790 (US 34422); 2022150943-0951 (US 85254); 2020154437-4437 (US 85266).
The premise of the research was that "people smoke primarily because of nicotine's rewarding effects on the brain." This research could then, in theory, assist Philip Morris in removing nicotine from tobacco, substituting the analog that lacked nicotine's adverse cardiovascular effects, and thus produce a "safer" cigarette that still possessed nicotine's reinforcing effects on the smoker. DeNoble WD, 8:10-13; 9:13-16. As Dr. William Farone, who worked for Philip Morris from 1976 to 1984 and was Director of Applied Research, explained, this was the second part of a "two-step process" of internal research, neither of which was pursued by Philip Morris to commercialization. See, Farone TT, 10/7/04, 2023:10-17. (Farone's background is discussed at ¶ 1594, infra.)

398

Philip Morris shared its extensive nicotine and smoking behavior knowledge with BATCo. According to an October 12, 1979 "RESTRICTED" report from BATCo scientist L.C.F. Blackman, he accepted Philip Morris's invitation to visit the Philip Morris Research Center, and was briefed by scientists Osdene, Seligman, and Levy on the company's work, including the development of nicotine alternatives, nicotine discrimination studies, and EEG research. 109877492-7499 (US 87079*).
With respect to tolerance, a March 16, 1983 memorandum from Dr. Charles to Dr. Osdene stated that, "We can successfully defend the absence of withdrawal under controlled experiments, but we cannot defend tolerance. Tolerance to nicotine is a well-established fact." 1005061346-1346 (US 20199); 2022252680-2680 (US 36873).
Philip Morris's sales director in the United Kingdom, George Mackin, wrote an article for a British tobacconist magazine, dated December 4, 1981, in which he admitted that cigarettes were addictive and that smokers developed tolerance. Mackin wrote that cigarettes were important to overall sales at British convenience stores because:

Cigarettes are not just habit forming -- the body builds up a requirement for them. Twenty million smokers cannot do without their weed. Take the example of a man going to work in the morning. It's pouring with rain. There are six cars already parked outside the shop. So, there are at least 90 yards to walk back. Would he stop for a newspaper? Would he get out for a Kit Kat? The answer is probably No, but he would stop for his fags, because he is addicted to cigarettes. And while he is buying a pack, he takes a morning paper and a Kit Kat.

399

The Mackin article caused a stir among several cigarette manufacturers, as well as Shook, Hardy & Bacon, when news of his statements became known. However, none of the lawyers who commented on the article disagreed with it. For example, one Philip Morris attorney in Switzerland noted that the Mackin's admissions were only "very unfortunate" and "could cause a lot of problems for us." Another attorney wrote more to the point that "in the product liability context these concepts are important, particularly as regards issues of risk assumption." 024950721-0721 (US 20404); 2501013567-3568 (US 27920); 2024950723-0723 (US 37175); 501626662-6662 (US 85264).
Philip Morris knew a significant portion of its customers wanted to quit but could not do so. A March 29, 1985 presentation at a "meeting of top management" was titled "The Perspective of PM International on Smoking and Health Issues." In this presentation, management was told that:

There are some 50 million smokers today in the U.S. I realize that research tells us that the majority of smokers wished they did not smoke and are, therefore, unlikely to be of much help to the industry.

¶2023268329-8337 at 8331 (US 26784).

According to Dr. William Farone, "Defendants have long understood that cigarettes are addictive and that nicotine is the agent in cigarette smoke primarily responsible for addiction. . . ." Farone WD, 72:10-11; Farone TT, 10/07/04, 1984:19-24.
Farone stated that "when I was at Philip Morris, there was widespread acceptance internally throughout the company -- among executives, scientists, and marketing people -- that nicotine was the primary component of tobacco and cigarette smoke responsible for smoker's addiction to smoking." Farone WD, 72:21-73:1.

400

Dr. Farone discussed with other Philip Morris scientists whether smoking was addictive. These discussions revealed "widespread agreement among scientists in R&D that smoking is addictive," id. at 74:10-23, and "a widespread conviction that nicotine is the chemical agent delivered by cigarettes that is primarily responsible for addiction to smoking," id. at 75:1-6. This widespread agreement on the addictiveness of smoking came from "both internal and external research, about nicotine and its primary role in keeping people smoking." Id. at 75:17-23.
Philip Morris's intensive internal research on nicotine continued into the 1990s. For example, a May 22, 1990 report stamped "PERSONAL AND CONFIDENTIAL" to scientific director Richard Carchman from company chemists/scientists Frank Gullotta, C.S. Hayes, and B.R. Martin reported on the "Stereospecific Effects of Nicotine and Electrophysiological and Subjective Responses." This research contrasted the physiological effects of two forms of nicotine, "d-nicotine" and "l-nicotine," using human smokers. 2025986606-6612 (US 20421).
Many other Philip Morris documents reveal the company's in-depth knowledge of nicotine and a desire to exploit nicotine's effects on the human body. 2025986350-6401 (US 87080); 1000385483-5522 (US 87311); 1000221722-1726 (US 87081); 1003290519-0531 (US 87082); 1003287880-7890 (US 20163); 2023069596-9604 (US 87083); 1003294165-4180 (US 87084); 2062951465-1477 (US 87312); 1003292806-2811 (US 87086); 1003295309-5310 (US 87087); 1000128672-8672 (US 87088); 2022163557-3560 (US 87089).
A November 8, 1990 Philip Morris memorandum to Research and Development Vice President Cathy Ellis from Frank Gullotta titled "Raison d'etre" stated: "We have shown that there are optimal cigarette nicotine deliveries for producing the most favorable physiological and behavioral responses. Our laboratory has demonstrated that all forms of nicotine are not behaviorally or physiologically equal. This observation is important for evaluating research cigarettes where the addition of nicotine is necessary." 2028813366-3368 at 3366 (US 20430).

401

The Philip Morris Nicotine Program was described in detail in a lengthy 1992 review prepared by outside counsel Shook, Hardy & Bacon titled "Philip Morris Behavioral Research Program." In this review, counsel summarized many aspects of the company program, directed by Dunn, and cited specific documents showing a major internal research initiative that began in 1969 and ended abruptly in 1984. 2021423403-3461 at 3408-3409 (US 36743).
The Shook, Hardy & Bacon document described how Philip Morris Nicotine Program scientists demonstrated tolerance to nicotine, behavioral effects, nervous system effects, and other results consistent with dependence and addiction. 2021423403-3461 at 3440-3443 (US 36743).
The 1992 report also made clear that the program generated results and was still generating data in 1984 related to nicotine receptors, analogs, peripheral nervous system effects, central nervous system effects, effects on animal behavior, and differences between high nicotine delivery and low nicotine delivery cigarettes. With respect to the reasons why the Nicotine Program was ended in 1984, the report simply states that: "For reasons never stated in any internal documents, Philip Morris cancelled the Nicotine Program in spring 1984. The decision to cancel the program may have been the result of outside counsel's legal advice." 2021423403-3461 at 3408 (US 36743).
A similar 1994 Shook, Hardy & Bacon report titled "Philip Morris Research on Nicotine Pharmacology and Human Smoking Behavior" reviewed and detailed much of the material described in the 1992 review. For example, the 1994 report summarized Dr. DeNoble's research showing that nicotine and acetaldehyde were synergistically reinforcing: "It was DeNoble's experience with acetaldehyde that it condensed in the brain to form Dopamine-like compounds and made the animal somewhat 'euphoric.'" 2046819241-9265 at 9249 (US 85265*). See extended discussion of this topic in Sections V(B)(5)(a)(¶¶1299-1301) and V(C)(2)(e)(¶¶ 1695-1700).

402

The 1994 report also described how DeNoble was able to demonstrate both "behavioral tolerance" and "metabolic tolerance" to nicotine, other important aspects of addiction. 2046819241-9265 at 9250-9251 (US 85265*).
The report later noted that "additional research on nicotine/acetaldehyde synergism may have shown that cigarettes were in fact addictive." The Shook, Hardy & Bacon lawyers who prepared this report after reviewing their client's documents wrote: "Laboratory Shutdown [CAVEAT: Significance is self-evident.]" 2046819241-9265 at 9254, 9256-9258 (US 85265*). Drs. DeNoble and Mele described the research objectives and projects undertaken by the Philip Morris Behavioral Research Program in the 1970s and 1980s. DeNoble WD; Mele WD. In addition, the planning, findings, and significance of Dr. DeNoble's research in particular are described in numerous Philip Morris documents. 1002973585-3615 (US 35632*); 2056145924-5927 (US 87090); 1003293284-3293 (US 85252); 1003060443-0503 (US 87091); 1003582081-2082 (US 35826); 1002973179-3180 (US 87092); 1001894698-4705 (US 87093); 1000052405-2413 (US 87094); 1000017985-8021 (US 87095); 1003293138-3144 (US 87096); 1000017375 (US 85258); 1003060638-0643 (US 87099); 1003186849-6854 (US 87101); 1000128665-8667 (US 87102); 1000128662-8663 (US 87103); 1000128664-8664 (US 87104); 1000128668-8671 (US 87105); 1003293241-3243 (US 87106); 1003293216-3217 (US 87107); 1000413881-3964 (US 20100);

¶2022955358-5361 (US 87110); 2022955501-5502 (US 87111); 2057069742-9769 (US 88762).

403

Philip Morris Planning Director Barbara Reuter prepared an analysis of the company's plans to market an alternative nicotine delivery product under the code name "TABLE" in 1993. The

¶20-page plan, dated October 1992 and stamped "CONFIDENTIAL," stated the following in the

¶"Background" section:

Different people smoke cigarettes for different reasons. But, the primary reason is to deliver nicotine into their bodies. Nicotine is an alkaloid derived from the tobacco plant. It is a physiologically active nitrogen containing substance. Similar organic chemicals include nicotine, quinine, cocaine, atropine, and morphine. While each of these substances can be used to affect human physiology, nicotine has a particularly broad range of influence.

During the smoking act, nicotine is inhaled into the lungs in smoke, enters the bloodstream and travels to the brain in about eight to ten seconds. The nicotine alters the state of the smoker by becoming a neurotransmitter and a stimulant. Nicotine mimics the body's most important neurotransmitter, acetylcholine (ACH), which controls heart rate and message sending within the brain. The nicotine is used to change psychological states leading to enhanced mental performance and relaxation. A little nicotine seems to stimulate, while a lot sedates a person. A smoker learns to control the delivery of nicotine through the smoking technique to create the desired mood state. In general, the smoker uses nicotine's control to moderate a mood, arousing attention in boring situations and calming anxiety in tense situations. Smoking enhances the smoker's mental performance and reduces anxiety in a sensorially pleasurable form.

¶2020154466-4486 at 4467 (US 26722); 2020154437-4437 (US 85266).

Altria General Counsel Murray Bring acknowledged the addictiveness of smoking in a July 31, 1992 internal memo on PMC letterhead to William Campbell and Bill Murray which discussed recent research on cocaine, and posed these questions from then-PM CEO Michael Miles:

¶"First, how do we stay up to date on the state of smoking cessation technology; second, what effect would a reliable, readily available "habit breaker" have on our business; and third, what -- if any -- contingency plans should we be making now?" 2074091232-1232 (US 27480).

404

An October 2, 1992 memorandum from Philip Morris scientist Dr. Carolyn Levy to William Campbell reviewed the efficacy of nicotine patches coupled with behavioral therapy to achieve smoking cessation success. Levy stated that the company was almost ready with an alternative nicotine delivery device. She concluded that, "This suggests that at the very least we should have contingency plans for a change in the predominant form of nicotine usage. . . . If these circuits do mediate nicotine intake and they could be blocked, then it is possible that cigarettes' appeal would decline." 2023012974-2975 (US 36943).

b. R.J. Reynolds 957. Many documents indicate that R.J. Reynolds also had a sophisticated understanding

¶of nicotine's role in smoking. For example, on November 16, 1967, RJR scientist Eldon D. Nielson responded to an inquiry about a nicotine inhibitor patent saying that the tobacco companies would not want such an item, as they were "selling a nicotine effect, not fighting it." 502001177-1177 (US 29547).

In 1971, RJR scientist Anders H. Laurene internally proposed that the company undertake research into determining more precisely the "habituating level of nicotine." Laurene asked the question, "How low can we go?" 504210018-0018 (US 50577); 522598277-8277 (US 80744).
In a March 28, 1972 memorandum regarding the development of new products, RJR scientist Claude Teague stated that for the typical smoker, "nicotine satisfaction is the dominant desire" and that "[i]n designing any cigarette product, the dominant specification should be nicotine delivery." 5002504536-4544 at 4538 (US 21747); Langenfeld TT, 3/14/05, 15309:20-15310:4.

405

Claude Teague was the RJR equivalent/counterpart to William Dunn at Philip Morris.

¶In an April 14, 1972 report titled "Research Planning Memorandum on the Nature of the Tobacco

¶Business and the Crucial Role of Nicotine Therein," Teague stated:

In a sense, the tobacco industry may be thought of as being a specialized, highly ritualized and stylized segment of the pharmaceutical industry. Tobacco products, uniquely, contain and deliver nicotine, a potent drug with a variety of physiological effects. . . . Nicotine is known to be a habit-forming alkaloid, hence the confirmed user of tobacco products is primarily seeking the physiological "satisfaction" derived from nicotine - and perhaps other active compounds. His choice of product and pattern of usage are primarily determined by his individual nicotine dosage requirements and secondarily by a variety of other considerations including flavor and irritancy of the product, social patterns and needs, physical and manipulative gratifications, convenience, cost, health considerations and the like. Thus a tobacco product is, in essence, a vehicle for delivery of nicotine, designed to deliver the nicotine in a generally acceptable and attractive form. Our industry is then based upon design, manufacture and sale of attractive dosage forms of nicotine, and our Company's position in our Industry is determined by our ability to produce dosage forms of nicotine which have more overall value, tangible or intangible, to the consumer than those of our competitors.

¶500915683-5691 at 5684-5685 (US 20659).

Teague later stated in his report that:

If nicotine is the sine qua non of tobacco products and tobacco products are recognized as being attractive dosage forms of nicotine, then it is logical to design our products -- and where possible, our advertising -- around nicotine delivery rather than 'tar' delivery or flavor. To do this we need to develop new data on such things as the physiological effects of nicotine, the rate of absorption and elimination of nicotine delivered in different doses at different

406

frequencies and by different routes, and ways of enhancing or diminishing nicotine effects and "satisfactions."

¶500915683-5691 at 5685-5686 (US 20659) (emphasis in original).

Teague also answered the industry's often-heard "nicotine is for taste" argument by stating that, "I believe that for the typical smoker nicotine satisfaction is the dominant desire, as opposed to flavor and other satisfactions." 500915683-5691 (US 20659).
Later in the same report, Teague noted the vital role of nicotine to the fundamental existence of the cigarette industry:

If, as proposed above, nicotine is the sine qua non of smoking, and if we meekly accept the allegations of our critics and move toward reduction or elimination of nicotine from our products, then we shall eventually liquidate our business. If we intend to remain in business and our business is the manufacture and sale of dosage forms of nicotine, then at some point we must make a stand.

¶500915683-5691 at 5688 (US 20659) (emphasis in original).

At the close of his April 14, 1972 memorandum on nicotine, Teague recommended the following courses of action for RJR:

Recognize the key role of nicotine in consumer satisfaction, and design and promote our products with this in mind.

More precisely define the minimum amount of nicotine required for 'satisfaction' in terms of dose levels, dose frequency, dosage form, and the like. This would involve biological and other experiments.

Sponsor in-depth studies of the physiological, psychological and other effects of nicotine, aimed at demonstrating the beneficial effects of nicotine and at disproving allegations that nicotine produces major adverse effects.

Study, design and evaluate new or improved systems for delivery of nicotine which will provide the minimum

407

satisfying amount of nicotine in attractive form, free of allegedly harmful combustion products.

Study means for enhancing nicotine satisfaction via synergists, alteration of pH, or other means, to minimize dose level and maximize desired effects.

Monitor developments in materials and products which may compete with nicotine products or which might be combined with nicotine products to provide added advantages or satisfactions.

Monitor work by others which might be aimed at improved nicotine delivery systems of the type proposed here.

Search for and evaluate other physiologically active components of tobacco or its smoke which may provide desired effects to the smoker.

¶500915683-5691 at 5690-5691 (US 20659).

In 1973, at the request of RJR President William D. Hobbs, Teague prepared a

¶"SECRET" report titled "Implications and Activities Arising From Correlation of Smoke pH with

¶Nicotine Impact, Other Smoke Qualities, and Cigarette Sales." Teague reiterated to company executives RJR's knowledge of the importance of effective nicotine delivery in its competition with

¶Marlboro and Kool:

In essence, a cigarette is a system for delivery of nicotine to the smoker in attractive, useful form. At "normal" smoke pH, or at below about 6.0, essentially all of the smoke nicotine is chemically combined with acidic substances, hence is non-volatile and relatively slowly absorbed by the smoker. 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". . . .

As a result of its higher smoke pH, the current Marlboro, despite a two-thirds reduction in smoke "tar" and nicotine over the years,

408

calculates to have essentially the same amount of "free" nicotine in its smoke as did the early WINSTON. . . . 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.

¶509314122-4148 at 4125 (US 20828*).

Teague wrote a "Confidential" memorandum, dated February 2, 1973, titled "Some Thoughts About New Brands of Cigarettes for the Youth Market." In this memorandum, Teague contrasted novice smokers with "confirmed" smokers. He stated that while "pre-smokers" and "learners" start smoking for psychological reasons (fitting in with the crowd, self-image, boredom relief), "once the 'learning' period is over, the physical effects become of overriding importance and desirability to the confirmed smoker, and the psychological effects, except the tension-relieving effect, largely wane in importance or disappear." 502987357-7368 at 7359 (US 21475).
In an August 4, 1976 speech to RJR's international division, Director of Research, Murray Senkus, affirmed the indispensable role of nicotine, stating, "In smoking the effect produced on the human body is ascribable to nicotine" and "Without any question, the desire to smoke is based on the effect of nicotine on the body." 501525355-5366 at 5356, 5358 (US 29531).
In a RJR August 1976 "Three-Year Action Plan for New Products," nicotine was described as a "traditional need," and "very basic to the cigarette industry's existence." 500672011- 2172 at 2078-2105, 2107 (US 20645).
In a September 21, 1976 internal RJR memorandum from John L. McKenzie to A.P. Ritchy titled "Product Characterization Definitions and Implications," nicotine was defined as "the psychopharmacological agent in tobacco which is one of the key factors in satisfaction. . . ."

409

A November 9, 1976 memorandum on nicotine circulated among RJR scientists reviewed the known physiological effects of nicotine on the body and acknowledged the company's ongoing desire to increase or hold steady the nicotine content of its cigarettes while reducing tar. The memo, titled "Nicotine Research," also acknowledged tolerance to nicotine: "Habituated smokers, both male and female, metabolize nicotine more rapidly than non-smokers, indicating the bodily metabolic acclimation to nicotine." The memo contradicted industry claims that smokers seek nicotine only as a matter of "taste": in-house studies concluded that detectable nicotine produced the taste described as "foul, rotten rubber" and that "Nicotine is definitely an irritant in smoke and its taste must be blended out or modified by other constituents in the TPM to make smoke acceptable." 509078812-8820 at 8814-8815 (US 85271).
In a February 7, 1978 memorandum titled "Nicotine Satisfaction – Consumer Test," RJR researchers C.L. Neumann and J.P. Dickerson stated that the focus of the consumer satisfaction program would be on nicotine, as it was "probably the most important satisfaction variable," and because nicotine had "known physiological activity." 504479948-9954 at 9549 (US 20729).
In another example, a February 5, 1980 interoffice memorandum from H.E. Guess stated the concern that the reduced level of nicotine in RJR's Winston B Cigarettes would make them less attractive to Winston smokers. 504675307-5307 (US 21549).
RJR scientist D.H. Piehl reviewed the scientific literature on nicotine and maintenance of the smoking habit in a "Confidential" internal paper for the company titled "Smoking Behavior -- A Review." In his paper, Piehl summarized with approval many studies which described the preeminent importance of nicotine to smokers, the various "need" levels of nicotine, nicotine dependence, and addiction. 504972347-2362 at 2362 (US 50710).

410

Scientists at RJR had known for years that most smokers get "hooked" and are unable to quit. Teague wrote a memorandum dated December 1, 1982 to Research and Development Vice President Robert DiMarco in which he stated that RJR needed to tailor its marketing to the reality that "most of those who have smoked for any significant time would like to stop," and most smokers "would stop using if they could." Teague also stated that RJR needed to contemplate the future scenario where smokers who want to stop can stop; if this happened, he wrote, RJR would "go out of business." Therefore, RJR "cannot be comfortable marketing a product which most of our consumers would do without if they could." 500898255-8257 at 8256 (US 48652).
An undated RJR document, written after 1984, titled "R&D Outline" listed "Nicotine as a drug" as a topic for departmental discussion. The outline provided for a "discussion of a string of industry memos and reports, dating back to at least the early 1970's, in which industry scientists and execs seem to admit to nicotine's qualities as a drug." The document described several examples, including a 1971 B&W letter, a 1972 RJR report and a 1972 Philip Morris summary of a meeting of industry scientists. 522606315-6317 at 6316 (US 85273).
Like Philip Morris, RJR documented smoker compensation. An April 15, 1983 RJR draft document titled "Smoker Compensation Review" reiterated the company's knowledge that smokers of low tar/nicotine products compensated to obtain more nicotine, and that the FTC method of measuring nicotine was flawed. The document included the following in a section titled "Impact of Known Compensatory Behavior On Cigarette Rankings":

411

Based on the results of studies similar to those summarized above, it has been stated that low -- "tar" smokers use their cigarettes differently than smokers of higher -- "tar" products. Different "usage" includes propensity to block vents or otherwise manipulate the cigarette, increasing the number of puffs and the number of cigarettes smoked, puffing more frequently or with larger volumes and inhaling more deeply or holding smoke in the lungs longer. These usage patterns are consistent with the theory that low -- "tar" smokers seek to maintain a given nicotine level in the body, regardless of the cigarette. The patterns cited are instances which would tend to increase the "dosage" of nicotine to the smoker.

¶This statement reveals both RJR's continuing view of smokers as "nicotine seekers" who alter their smoking method to obtain the necessary "dosage" of nicotine, as well as its comprehensive understanding of the compensation phenomenon. 501524500-4514 at 4506 (US 85272).

In another undated RJR document written sometime after 1978, a Biobehavioral

¶Department presentation titled "Biobehavioral Aspects of Smoking," the speaker discussed how

¶"maintenance" of the smoking habit for 80% of smokers was related to the "tranquilizing effects" of nicotine. The speaker emphasized at various points that "nicotine is the substance people desire in their use of tobacco," "animals will self-administer nicotine in a laboratory setting," evidence that

¶"smokers smoke to maintain a constant level of nicotine in the body," and that "the fact remains that smokers do not continue to smoke unless their cigarettes contain nicotine." 517214547-4557 (US

¶87113*).

After Dr. Benowitz published his 1983 groundbreaking paper on compensation by smokers of low nicotine yield products, see Benowitz WD, 67:10-18, RJR scientist John Robinson wrote a critique of the paper to Dr. Alan Rodgman in which he stated:

The paper itself expresses what we in Biobehavioral have felt for quite some time. That is, smokers smoke differently than the FTC machine and may very well smoke to obtain a certain level of nicotine

412

in their bloodstream. If a given level of nicotine in the blood is the final goal of a smoker, one would predict that he would smoke an FFT [full flavor tar] and ULT [ultra low tar] cigarette differently.

¶510994429-4429 (US 85274).

Robinson wrote that the Benowitz paper brought to mind a past industry study comparing German Camel cigarettes with Marlboro cigarettes, where "smokers apparently obtained almost exactly the same amount of nicotine no matter which of the four cigarettes they smoked." Robinson recalled that the study "was one of the first indications that smokers may in fact smoke to obtain a certain level of nicotine in their bloodstream." 510994429-4429 (US 85274).
In preparation for an RJR "brainstorming session" at the company's Flavor and Biobehavior Divisions, Donald L. Roberts told employees in an October 13, 1983 memorandum that, "The functions a cigarette serves are many fold involving social, psychological and physiological. A short definition is that a cigarette supplies nicotine to the consumer in a palatable and convenient form." Roberts clearly distinguished nicotine from taste, stating that, "The cigarette's taste is a relatively unimportant benefit of smoking. Its taste is primarily a delivery vehicle[.]" 503602711- 2714 at 2712 (US 85275).
In a June 3, 1985 RJR document titled "Report on Medical and Scientific Issues -- Addiction," the scientist authors attempted to examine current scientific literature to assist the industry with respect to the scientific consensus on nicotine addiction. As part of their review, the scientists reviewed literature compiled by the tobacco law firms of Jacob, Medinger & Finnegan, Shook, Hardy & Bacon, and Jones Day. The scientists wrote in their report that, "Both Mr. Wrobleski [Jacob, Medinger & Finnegan] and Mr. Sirridge [Shook, Hardy & Bacon] warned, however, that there is very little literature favorable to the industry's position on addiction." 515878492-8522 at 8494. (US 30251).

413

RJR's R&D department embarked on a large-scale nicotine research program in 1988, described in a lengthy October 7, 1988 project report titled "An Integrated Research Program for the Study of Nicotine and Its Analogs." Its purpose was to continue looking into the "pharmacological potency," "biological activity," and central nervous system effects of nicotine and nicotine analogs. The researchers posited that:

What is known about nicotine is that it elicits the typical consequences of sympathoadrenal activation when administered in doses that produce plasma concentrations similar to those achieved during smoking. Among these are tachycardia, increases in blood pressure, cardiac output, and stroke volume . . . . In addition, there is a fair amount of tolerance induced with regard to sympathetic activation by smoking or chronic nicotine administration.

¶514894567-4676 at 4586-4587 (US 20862).

A May 3,¹⁹⁹¹¹⁹⁹¹ 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- RJR Research and Development report described a tobacco modification and nicotine manipulation project code-named the "REST Program." One key objective of the Program was to "Independently control nicotine delivery, from very low to elevated levels, to address consumer wants and as a research tool." The basis for the Controlled Nicotine Process component of "REST" was that

We are basically in the nicotine business. It is in the best long term interest for RJR to be able to control and effectively utilize every pound of nicotine we purchase. Effective control of nicotine in our products should equate to a significant product performance and cost advantage.

414

According to the Wall Street Journal, former RJR Nabisco CEO F. Ross Johnson candidly admitted during a 1994 interview that, "Of course it's addictive. That's why you smoke the stuff." Wall Street Journal, Big Spender Finds a New Place to Spend, October 6, 1994.

¶WAS0491982-1985 (US 61440).

In a 1998 memorandum titled "ECLIPSE Taste and Satisfaction Improvements," D.E. Townsend stated that R&D staffs were "encouraged to pursue diligently Eclipse designs with increased nicotine yield in an effort, in part, to increase consumer acceptance of the product." He later added: "If increased nicotine yield helps give improved consumer acceptance in the market, then possible benefits of this potentially reduced risk product would be greater." 526013569-3569

¶(US 85276); 700245849-5849 (US 85277).

In an August 10, 1985 memorandum titled "Smoking and Health Litigation, Tactical

¶Proposals," RJR's lawyers at Jones Day recognized that their client had long since acknowledged the addictiveness of nicotine and smoking. 680712261-2337 at 2308 (US 87114). They also observed that:

"Addiction" has received little industry research attention. Nevertheless, many industry documents support the contention that there are types of persons whose psychological profile and smoking behavior is such that they have great difficulty in quitting. For example, documents describe a British American Tobacco Company sponsored conference in 1978, attended by PM and B&W representatives. One of the findings of the conference was: "Serious smokers smoke to prevent withdrawal symptoms. Another study which Dr. Piehl (RJRT) cites recognizes "addictive" smokers: "People who find it unbearable to run out of cigarettes are described as using addictive-type smoking." The industry has also recognized that some smokers, especially smokers of high nicotine cigarettes "compensate" or regulate nicotine intake if it is lowered in individual cigarettes.

415

In the same Jones Day memorandum, the authors provide examples from Defendants' files where the companies (with emphasis on RJR) and their employees admit the primacy of nicotine to cigarettes and the addictiveness or dependence-producing quality of their products. 681879254-9715 at 9601-9643 (US 21020).

c. BATCo 988. Many documents disclose that BATCo had an intimate understanding of nicotine's

¶role in smoking, as well as its effects on smokers long before the medical and public health community reached a similar level of sophistication. Moreover, many BATCo documents disclose how BATCo and other Defendants, in particular B&W, used BATCo's knowledge of nicotine for commercial gain.

BATCo knew that nicotine was an essential component of cigarettes as early as the 1950s. A June 1959 BATCo internal document pointed out that the company must consider "the question of nicotine and its effect on the smoker." The author stated that the company had to choose between maintaining current nicotine content "in order to maintain the firmly entrenched nicotine habit developed by the majority of smokers," or reducing the nicotine content to meet consumer demand for lower nicotine products. However, the writer cautioned that

To lower nicotine too much might end up destroying the nicotine habit in a large number of consumers and prevent it from ever being acquired by new smokers.

¶100099115-9117 at 9117 (US 20112); Henningfield WD, 88:21-89:10.

416

In a November 15, 1961 memorandum reviewing secret nicotine research and development projects, Sir Charles Ellis, scientific advisor to the BAT Board of Directors, acknowledged BATCo's understanding that nicotine is addictive:

Experiments of Hippo have led to a great increase in our knowledge of the effects of nicotine. . . . Smoking demonstrably is a habit based on a combination of psychological and physiological pleasure, and it also has strong indications of being an addiction. It differs in important features from addiction to other alkaloid drugs, but yet there are sufficient similarities to justify stating that smokers are nicotine addicts.

¶301083862-3865 at 3863 (US 20577).

In the same 1961 internal document reviewing BATCo's secret nicotine research, Ellis emphasized the company's need to determine exactly what made smoking and nicotine addictive:

If the competition is to be met successfully, it must be important to know how the tranquilizing and stimulating effects of nicotine are produced and the relation of addiction to the daily nicotine intake. These are the reasons for proposing that Project Hippo be continued with the particular object of finding the causes of the pleasurable physiological effects and the causes of addiction.

¶301083862-3865 at 3863 (US 20577).

As early as February 13, 1962, Sir Charles Ellis provided an overview of the company's massive nicotine research program in a "Private and Confidential" memorandum titled

¶"The Effects of Smoking." Ellis recited in his memorandum that BATCo research into the

¶"physiological and psychological effects of smoking" being conducted by Battelle Laboratories began in 1959, and was carried out in the intervening years under various project "code names" including "MAD HATTER I," "MAD HATTER II," "MAD HATTER III," "HIPPO I," "HIPPO II," and "ARIEL." 301083820-3835 at 3820-3824 (JE 46579).

417

In the February 13, 1962 memorandum, Ellis devoted a lengthy section to the commercial importance of the company's nicotine research objectives. He explained that the reason

¶BATCo commissioned the "MAD HATTER" and "HIPPO" research projects was "to understand addiction . . . [and to] appreciate the strength and vulnerability of our position." Ellis wrote further in detail:

However, the force of the habit or the strength of addiction is not such as to give any grounds for complacency in the face of alternative methods of stimulating the body to meet stress, and that is just where the danger lies since alternatives are becoming available. In the last few years there has been a quite remarkable increase in the production of tranquilliser drugs, and while most of these need a doctor's prescription there is already one on free sale in Switzerland (Librium made by Hoffman LaRoche). If such drugs become more freely available they will compete with nicotine, which is a natural tranquilliser, and will leave smoking primarily dependent on its psychological effects for the maintenance of the habit.

What we need to know above all things is what constitutes the hold of smoking, that is, to understand addiction. . . .

These are the reasons for the study of the physiological effects of nicotine carried out under the MAD HATTER and HIPPO contracts, and they have sufficient force alone to justify this expenditure. . . .

¶301083820-3835 at 3826-3827 (JE 46579).

Ellis described in another section of his memorandum the outcome of BATCo's efforts to learn about nicotine and its role in smoking. He further delineated some of the concrete conclusions which the BATCo research had reached, reiterating unequivocally that BATCo believed nicotine was addictive and explaining graphically the relationship of the research to addiction:

As a result of these various researches we now possess a knowledge of the effects of nicotine far more extensive than exists in published scientific literature. It is indeed so extensive and represents so much

418

new thought that it is not easy to condense the material of these several reports and working papers without over-simplification.

Nicotine, however administered, rapidly gets into the blood stream and the lymph system, and once there has a number of varied effects. . . . By far the most important effect is that of mobilising the resources of the body to resist stress. That this occurs has been known from the earliest days of smoking but no explanation exists in the published literature. Battelle [Laboratories] have now carried out experiments which are beginning to show how nicotine enters into the mechanism of this vital reaction. . . .

The stimulation to resist stress occurs almost immediately on absorption of nicotine, and the effect -- that is, the extra supply of cortico steroids in the blood -- falls off markedly within a matter of thirty minutes. Addiction is something quite different from this since it is well known that the craving for nicotine in a confirmed smoker who stops smoking persists for ten, twenty or thirty days.

We believe that we have found possible reasons for addiction in two other phenomena that accompany steady absorption of nicotine.

¶301083820-3835 at 3828-3829 (JE 46579).

The two additional "phenomena" that Ellis referred to in his February 1962 memorandum were responsible for nicotine addiction were tolerance and withdrawal:

Experiments have so far only been carried out with rats, but with these it is found that certain rats become tolerant to repeated doses and after a while show the usual nicotine reactions but only on a very diminished scale. The interesting point is that these tolerant or nicotine-conditioned rats are found to have a greatly enhanced power of detoxification of nicotine in their liver. Crudely put, they can stand up to high continuous doses of nicotine just because their liver has developed the ability to dispose of it more rapidly and efficiently. . . . As long as the smoker keeps to his normal regime and the nicotine level in his blood remains high there is a steady job for these [liver] enzymes, and the whole situation is normal and under control. But if now the smoker stops smoking and there is no longer nicotine in his blood then in the liver there is this supply of enzymes with nothing to work on. In fact, they proceed to work on other material passing through the liver, with consequent disturbance of the body's working

419

and with all sorts of alarm signals sent back to the brain. The effects of unbalanced enzymes is not unlike unbalanced nicotine, and the abstaining smoker experiences physiological reactions as acute as a novice who starts smoking. When to this one adds the longing for that immediate stimulation to resist stress that comes from smoking a cigarette it would appear that we are making progress towards understanding addiction. . . . Thus we have already greatly increased our knowledge of the manifold ways in which nicotine affects the body and, in particular, have identified and studied separately the stress resisting mechanism and the other effect on the liver which we believe is responsible for addiction.

¶301083820-3835 at 3829-3830 (JE 46579).

In the final section of his paper, Ellis discussed some particulars of the nicotine projects code-named "PROJECT HIPPO II" and "PROJECT ARIEL." He stated that the secret "physiological and biochemical" PROJECT HIPPO research "should lead to an understanding of the mechanism which creates addiction" and confirm that "addiction depended on the enzymes involved in the metabolism of nicotine in the liver." 301083820-3835 at 3832 (JE 46579). While BATCo did not submit this work to the 1964 Surgeon General's Advisory Committee, some Battelle research, on dependence to nicotine developing in stressed but not unstressed rats, was submitted and cited in the 1964 Report. (no bates) (JD 032048); (no bates) (US 64591 at 125). See also Section V(B)(5)(f).
"PROJECT ARIEL" was a secret project to develop an alternative nicotine delivery device to compete with work that Ellis believed was being carried out at the American Tobacco Company and RJR. Ellis also justified the project with his concern that the "drug industry" could "at any time attempt to invade the cigarette smoke field by alternative drugs." He stated that the final product "must have within it the ultimate possibilities of meeting the psychological demands of smokers as well as the physiological ones." 301083820-3835 at 3833-3835 (JE 46579).

420

The concluding section of Ellis' memorandum revealed the high level of secrecy accorded the company's nicotine research:

FUTURE POLICY. For good reasons the results of Battelle's work have been kept at a high level of secrecy, but they are now building up to such a comprehensive picture of the action of nicotine that I suggest they should soon be made available in detail to a few of our top scientists.

¶301083820-3835 at 3835 (JE 46579).

Thus, as early as 1962, BAT had reached the internal corporate conclusion that smoking was an addiction produced by nicotine, and met the requisite criteria in terms of cravings, compulsive use, physiological effects on the body, tolerance, and withdrawal. In a paper presented to a 1962 BAT conference in Southampton, England, attended by B&W representatives, Sir Charles Ellis openly stated that "smoking is a habit of addiction." Ellis's presentation was preceded by an introduction from the chairman of BAT, A.D. McCormick. The substance of the conference was included in a BAT conference report titled, "Smoking and Health - Policy on Research," produced from B&W files. 650344433-4493 (US 53468).
McCormick told attendees at the 1962 conference that the "best way to deal with the [smoking and health] matter was on an industry rather than an individual company level." He then introduced Ellis. In his presentation, Ellis stated:

Smoking is a habit of addiction that is pleasurable; many people, therefore, find themselves sub-consciously prepared to believe it must be wrong.

421

Ellis later added:

One result of the recent public discussions on smoking and health must have been to make each of us examine whether smoking is just a habit of addiction or has any positive benefits. It is my conviction that nicotine is a very remarkable beneficent drug that both helps the body to resist external stress and also can as a result show a pronounced tranquillising effect. . . . Nicotine is not only a very fine drug, but the techniques of administration by smoking has considerable psychological advantages and a built-in control against excessive absorption.

¶110070785-0842 (US 20270); 650344433-4493 at 4450-51 (US 53468).

In January 1962, Battelle scientists working for BATCo submitted their "Final Report on Project HIPPO I." The purposes of the project were to study: (1) the action of nicotine in the diuresis mechanism; (2) the possible interference of nicotine in the "stress" mechanism; (3) the inhibiting effect of nicotine on body weight; and (4) the possible activity of nicotine on other hypothalamic functions. The report stated in the introduction the working question: "It is an everyday experience to each smoker that smoking a cigarette helps mastering the numerous stressful stimuli of modern life. This effect is probably one of the most powerful reasons which make one smoke. How does nicotine exert this action?" 105620620-0683 at 0622-0625 (US 20247).
The "HIPPO I" researchers concluded that:

From all our data it seems that the effect of nicotine in the "stress reaction" is a very prominent and very complicated one. The understanding and thorough investigation of this effect seems of the greatest importance: it is by this very effect that nicotine acts as a "tranquilliser."

422

At about this same time, Battelle drafted a January 3, 1962 research proposal regarding "Project Ariel" for BATCo in London. According to the proposal, the proposed new smoking device would administer nicotine while "avoiding the well-known disadvantages inherent in actual cigarette smoking," but it needed to resemble a tobacco smoking product "to avoid interference with the legislation in force about drugs," and "it should also create addiction in the same relative amounts." 100335808-5816 at 5811, 5814 (US 20173).
Throughout the 1960s, BATCo continued to discuss and research the Ariel product that was known simply as a nicotine delivery device that would allow the smoker to "obtain a satisfying dose of nicotine" without any of the harmful effects from smoke. 100335894-5918 at 5897 (US 20174).
By 1964, BATCo had developed the prototype of Ariel which allowed for "a reasonably even release of nicotine" for the smoker. 100175613-5617 at 5616 (US 20115).
BATCo continued its Project HIPPO for several years. In a March 1963 study titled "Final Report on Project HIPPO II," scientists C.H. Kaselbach and O. Libert reported the results of their sophisticated comparison of nicotine to tranquilizers, a comparison that built on the earlier findings of HIPPO I. Their report to BATCo stated at the outset that:

The aim of the whole research "HIPPO" was to understand some of the activities of nicotine -- those activities that could explain why cigarette smokers are so fond of their habit. It was also our purpose to compare these effects with those of the new drugs called "tranquillizers," which might supercede tobacco in the near future. . . . The reasons for the "pleasure of smoking" must be found partly in the relief of anxiety that cigarette smoking brings so constantly, and in such a very short time.

423

Later in the "Final Report on Project HIPPO II," the researchers revealed their conclusion that while nicotine differs in some respects from tranquilizers, nicotine causes both tolerance and addiction, and is in fact addictive:

A quantitative investigation of the relationship with time of nicotine -- and of some possible brain mediators -- on adreno-corticotropic activity could give us the key to the explanation of both phenomena of tolerance and of addiction, in showing the symptoms of withdrawal.

¶105620569-0605 at 0575 (US 20246).

Having obtained a clear understanding of the fundamental issue that nicotine was addictive, BATCo researchers targeted and sought to understand the actual mechanism of addiction.

¶In a May 30, 1963 report titled "A Tentative Hypothesis on Nicotine Addiction," Dr. G. Haselbach and Dr. O. Libert, scientists performing work for BATCo, discussed nicotine's ability to produce tolerance and postulated a sophisticated explanation for nicotine addiction:

The hypothalamo-pituitary stimulation of nicotine is the beneficial mechanism which makes people smoke; in other words, nicotine helps people cope with stress. In the beginning of nicotine consumption, relatively small doses can perform the desired action. Chronic intake of nicotine tends to restore the normal physiological functioning of the endocrine system, so that ever-increasing dose levels of nicotine are necessary to maintain the desired action. Unlike other dopings, such as morphine, the demand for increasing levels is relatively slow for nicotine.

In a chronic smoker the normal equilibrium in the corticotropin releasing system can be maintained only by continuous nicotine intake. . . . If nicotine intake, however, is prohibited to the chronic smokers, the corticotropin-releasing ability of the hypothalamus is greatly reduced, so that these individuals are left with an unbalanced endocrine system. A body left in this unbalanced status craves for renewed drug intake in order to restore the physiological equilibrium. This unconscious desire explains the addiction of the individual to nicotine. . . .

424

In conclusion, a tentative hypothesis for the explanation of nicotine addiction would be that of an unconscious desire to restore the normal physiological equilibrium of the corticotropin-releasing system in a body in which the normal functioning of the system has been weakened by chronic intake of nicotine.

¶536480912-0914 at 0912, 0914 (US 20928).

In a 1963 research report titled "The Fate of Nicotine in the Body," BATCo researchers reported their conclusions as to nicotine pharmacology and mechanisms of tolerance and addiction. The scientists emphasized that nicotine was a key part of "tobacco habituation and/or addiction" and that the tobacco industry should focus its future research on the effects of nicotine in the bodies of smokers:

There is increasing evidence that nicotine is the key factor in controlling, through the central nervous system, a number of beneficial effects of tobacco smoke, including its action in the presence of stress situations. In addition, the alkaloid appears to be intimately connected with the phenomenon of tobacco habituation (tolerance) and/or addiction. Detailed knowledge of these effects of nicotine in the body of smokers is therefore of vital importance to the tobacco industry, not only in connection with their present standard products, but also with regard to future potential uses of tobacco alkaloids.

¶501012199-2255 at 2202 (US 21562).

BATCo also participated in the nicotine research carried out at the Huntington

¶Research Centre in Huntington, England. A scientific study prepared by Huntington for either

¶BATCo or Imperial Tobacco is described in an undated report from the late 1960s titled "Effects of

¶Nicotine on Electrocortical Activity and Acetylcholine Release from the Cerebral Cortex of the

¶Squirrel Monkey." In this report, researchers stated at the outset that, "The habitual use of tobacco may be related to numerous factors amongst which the pharmacological effects of nicotine on the central nervous system figure dominantly." The report then went on to describe the complex and significant effects of nicotine on acetylcholine release in animal brains, and stated that "The doses of nicotine used in these experiments are based on the reported smoking dose." 680050472-0485 (US 53985).

425

Another "Confidential" Huntington in-depth study focusing on nicotine's drug-like effects on the primate brain was titled "Effects of Nicotine on the Central Nervous System." This study was addressed to Imperial Tobacco, and a copy was forwarded to BATCo. The authors of this study explained the tests they planned to conduct to understand how nicotine affects "physiological processes and behavioural functions of the central nervous system of the primate" and described some preliminary results 680050504-0521 (US 53986).
BATCo was also provided nicotine research funded by its Australian affiliate, BATAS. For example, BATCo had knowledge of a 1970 University of Melbourne study titled "The Absorption and Effects of Nicotine from Inhaled Tobacco Smoke." The Australian study program assessed nicotine blood levels and physiological effects, the transfer of nicotine to the blood, and the absorption of nicotine in the mouth. 680050575-0589 (US 53987).
BATCo scientists understood that the addictive impact and potential of nicotine is enhanced by the speed at which, and form in which, it reaches the brain. An August 7, 1964 memorandum from H.D. Anderson, Vice President of Research and Development, to BATCo President, Sir Richard P. Dobson, discussed the enhancement of nicotine "kick" through the addition of potassium carbonate to tobacco:

There seems no doubt that the "kick" of a cigarette is due to the concentration of nicotine in the blood-stream which it achieves and

426

this 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.

Nicotine is in the smoke in two forms as free nicotine base (think of ammonia) and as a nicotine salt (think of ammonium chloride) and 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 maybe greater in physiological effect than in the original smoke.

¶100059066-9067 at 9067 (US 20102).

A 1966 internal tobacco industry report issued by BATCo scientist I.W. Hughes also emphasized that the effects of nicotine on the human body were a function of the speed at which nicotine reaches the brain and the form it takes:

It would appear that increased smoker response is associated with nicotine reaching the brain more quickly. . . . On this basis, it appears reasonable to assume that the increased response of a smoker to the smoke with a higher amount of extractable nicotine may be either because the nicotine reaches the brain in a different chemical form or because it reaches the brain more quickly.

¶00039304-9490 at 9306, 9310 (US 34187).

In a March 2, 1967 memorandum from BATCo Chief Scientist S.J. Green to Deputy

¶Chairman Desmond Hobson, Green broadly evaluated BATCo scientific research. With respect to nicotine, he reported the following:

Work on the psychopharmacology and pharmacology of nicotine is accelerating. There is now no doubt that nicotine plays a large part in the action of smoking for many smokers. It may be useful, therefore, to look at the tobacco industry as if for a large part of its business is the administration of nicotine (in the clinical sense). . . . The main objective of our research is to make the administration of nicotine better by . . . making the administration pleasanter or more convenient.

427

¶WAS0433494-3500 at 3497 (US 86690).

In a March 20, 1967 document titled "First Meeting with U.S. Company Lawyers," R.M. Macrae, Tobacco Research Council assistant director and BATCo employee, recalled that at the March 8, 1967 meeting, representatives from the United Kingdom made the point that "the major section in the U.K. industry believes that nicotine content of cigarettes should not be greatly lowered if consumer acceptance is to be maintained." 301080659-0662 at 0661 (US 22896).
In fact, "consumer acceptance" was tied to addiction, a word that company executives and directors continued to use internally to describe the necessity of nicotine to smokers. According to the report of the October 1967 BATCo (Group) Research and Development Conference in Montreal, one of the company's research "assumptions" was that, "[t]here is a minimum necessary level of nicotine. Smoking is a habit attributable to nicotine. The form of nicotine affects the rate of absorption by the smoker." And later in the conference report, the BATCo R&D department stated the following as research objectives:

The development of low T.P.M. [total particulate matter, or tar], normal nicotine cigarettes should continue. In this connection, the use of filter additives . . . might be helpful since it might render the nicotine more available to the smoker. The development of a low T.P.M., low nicotine cigarette should be expanded. This raises the question of the level of nicotine required. . . .

¶100051950-1963 at 1952, 1957 (US 85279).

The BATCo R&D Conference report also acknowledged that the department's general objectives included "insur[ing] the continuation of the industry and the prosperity of the company within the industry," and "sustaining and increasing the profits of the company." Thus, even the scientists realized and accepted the link between nicotine and the future of both the company and the industry. 100051950-1963 at 1955 (US 85279).

428

The minutes of a BAT Group Research Conference held at Hilton Head, South

¶Carolina, from September 24-30, 1968, recorded similar statements. The conference group, which included representatives of B&W as well, noted that:

In view of its pre-eminent importance, the pharmacology of nicotine should continue to be kept under review and attention should be 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 the Marketing Departments should be drawn to these possibilities.

¶682633150-3156 at 3152 (US 54206).

The recognition of nicotine's singular importance in smoking was the basis for an

¶October 1969 BATCo report titled "Future Work on Nicotine and Compounds With Related

¶Pharmacology," in which J.G. Underwood detailed company efforts to search for compounds that would mimic the pharmacological effects sought by smokers with fewer toxic properties, and foresaw that questions might be raised about the health effects of nicotine. The introduction states:

At the physiological level the major part of the satisfaction of smoking is derived from nicotine and the first section of this note is concerned with optimising nicotine usage, increasing the delivery of smoking mixtures deficient in nicotine, and attempting to anticipate some "health" problems that may arise with changes in current practices.

At present the cigarette industry depends on nicotine as the principal pharmacological agent in confirming the smoking habit. This could be dangerous commercially, since it may well be that legal restrictions are imposed on the nicotine delivery of cigarettes if the medical evidence shows beyond reasonable doubt that the long-term

429

effects of nicotine are harmful. The industry is far more vulnerable to restrictions on the use of nicotine, than attempts at restricting, say, carcinogens or "tar." Consequently, the second sections considers some possibilities of finding alternatives to nicotine that could supplement or replace nicotine in a cigarette.

¶680050592-0608 at 0593 (US 85280).

In 1969, BATCo researcher D.J. Wood gave a presentation for company executives in which he described the company's pharmacological research focusing on nicotine. He stated that BATCo researchers believed that nicotine was responsible for the "satisfaction of smoking," and that future research was aimed at finding out more about how the human body absorbed nicotine. 322043204-3207 at 3207 (US 20592).
BATCo's acknowledgment of nicotine and addiction continued into the 1970s. In a June 30, 1971 memorandum titled "Comments on Nicotine," BATCo scientist R.R. Johnson reported on a Research & Development meeting held to discuss the results of nicotine research on "Project MAD HATTER" and "Project HIPPO." BATCo director Sir Charles Ellis led the meeting. According to Johnson:

The purpose of the meeting was to discuss the results from Projects MAD HATTER and HIPPO, and to stimulate further discussion of the importance of nicotine to the industry. Sir Charles started the meeting by saying that he had first brought out the concept that we are in a nicotine rather than a tobacco industry and then set up the above projects to sell this concept to management.

¶2065128907-8909 at 8908 (US 85281) .

In a November 9, 1972 report titled "Preparation and Properties of Nicotine Analogues," BAT Group scientists K.D. Kilburn and J.G. Underwood recommended, for commercial reasons, that work continue into finding nicotine analogs, or substitutes. The basis for this recommendation, the researchers stated, was that, "Should nicotine become less attractive to smokers, the future of the tobacco industry would become less secure." Specifically:

430

It has been suggested that a considerable proportion of smokers depend on the pharmacological action of nicotine for their motivation to continue smoking. If this view is correct, the present scale of the tobacco industry is largely dependent on the intensity and nature of the pharmacological action of nicotine. A commercial threat would arise if either an alternative product became acceptable or the effect of nicotine was changed.

¶750009046-9098 at 9049 (US 88066).

An undated BATCo document, probably from the 1970s from scientist D.G. Felton titled "Smoking and Health Research in the U.S.A.," summarized some internal industry positions on scientific research and nicotine. The report noted that American Tobacco Company's Scientific Director, Dr. H.R. Hanmer, stated that it was "important to keep up the nicotine content of the smoke, while reducing anything that ought to be reduced," that RJR's scientific director Dr. Galloway stated that "a reasonable amount of nicotine was necessary in a cigarette," and that Liggett's position was that "people smoked because of the nicotine." 105407187-7190 (US 34738).
In an undated document, S.J. Green, one of BATCo's top scientists in its Research & Development Department, provided advice to the corporate leadership as to the future direction the company should take with respect to smoking and disease, research, and even addiction. The presentation was delivered at the October 1972 BAT Group R&D Conference where B&W representatives were also in attendance. 680048899-8903 at 8903 (US 85284).
In his presentation, Dr. Green stated that BATCo was aware that smokers compensated for lower nicotine products "by increasing the number of cigarettes smoked" and by

431

¶"changing the way they smoked." He then discussed the "health conscious smokers who chose the low delivery cigarettes," frankly telling the BAT Group executives (including B&W) that:

A suggestion is made both for the health conscious smoker and the smoker whose prime smoking requirement is physiological satisfaction. Surely many nicotine-dependent smokers are health conscious. . . .

Smoking is fairly irrational like other drug dependencies. If there is a positive side to smoking, and I think there is, it is not easy for the smoker to articulate. He "votes with his feet" and continues with this irrational act.

¶110069983-9987 at 9985 (US 20269).

BAT scientists published the results of a study titled "The Effect of Smoking

¶Deprivation on Smoking Behaviour," written by D.E. Creighton, in a report dated September 11,

Both BATCo and B&W had copies of the report in their files. In assessing the behavior of the subjects, the research assumed that smokers need nicotine, that smokers experience withdrawal symptoms without it, and that smokers compensate to obtain the nicotine they need:

It is probable that interference with an established behavioural pattern would cause different effects on different subjects according to their need for the stimulation of nicotine or suppression of the withdrawal symptoms that accompany a lack of nicotine. . . . If the subject is smoking for the pharmacological effects of nicotine he would be expected to take more smoke in a shorter time. He may do this by taking larger puffs, taking more puffs, reducing the interval between them or smoking more of the butt where the nicotine delivery is higher. He might also draw harder on the cigarette or for longer.

¶650014873-4901 at 4881 (US 53405).

¶In the discussion section of the report, the authors stated:

These results may be interpreted on the basis that some subjects have a greater demand for nicotine than others. It is also clear that the dose of nicotine required per unit of time is very variable. Some subjects

432

require a small intake of nicotine taken frequently . . . others require a large amount but infrequently. . . . These differences in nicotine demand and the pattern of nicotine intake may reflect metabolic differences between smokers.

¶650014873-4901 at 4885-86 (US 53405).

BATCo, like the other cigarette company Defendants, undertook research in the 1970s and 1980s to manipulate or maintain nicotine delivery while reducing the tar in its cigarettes. This research was based on the corporate knowledge that nicotine delivery above some minimum level was an essential part of cigarette smoking for smokers. For example, the basis for studies carried out in 1973 to assess the use of additives to reduce tar but actually increase nicotine to smokers was stated, in a research report on additives' effect on smoke chemistry, as follows: "The increased importance being placed on the lowering of TPM [total particulate matter, or tar] and the controlling of nicotine delivery has made it necessary to investigate the different methods available for producing these changes in smoke." 402390265-0282 at 0268 (US 85288). For a more in-depth discussion of this subject. See Section V(C), infra.
The 1973 study also utilized "ADDITIVES FOR NICOTINE CONTROL," including nicotine tartrate, sodium bicarbonate, and diammonium hydrogen phosphate to increase the "extractable nicotine" in the smoke. The researchers found that certain combinations of additives successfully reduced tar while "maintaining the impact and physiological strength levels" of nicotine. 402390265-0282 at 0280 (US 85288).
As another example, BATCo's W.B. Fordyce circulated a report called "The Addition of Nicotine to Tobacco Products," written by company scientist Terry Mitchell, to BATCo Directors under cover memo dated May 2, 1980. In his paper, Mitchell discusses three methods for intentionally increasing the nicotine content of cigarettes, including the use of specialized high nicotine tobaccos (such as N. rustica), direct addition of nicotine and 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. 110088143-8155 (US 34965).

433

In 1975, BATCo Research Scientist A. Kay (Kinnard) Comer acknowledged that only those within the industry disputed the label addiction as applied to smoking and nicotine, and that the evidence showed the industry's denials were wrong. Comer stated that:

In summary, it appears that most workers who are not directly concerned with the tobacco industry use the terms addiction or dependence rather than habituation and can be considered quite correct in doing so. If cigarette smoking is as addictive as the evidence suggests, it is not surprising that antismoking campaigns are so ineffective. . . .

¶105392361-2368 at 2366 (US 22038).

BATCo's D.E. Creighton performed a "Restricted" written review of BAT's own "Group" research in January 1976, in order to evaluate the concept of compensation. The review found that compensation occurred -- for example, by taking larger puffs or inhaling the smoke deeper into the lungs -- when smokers of high-nicotine cigarettes smoked low-nicotine products and vice versa. Creighton found that, "On balance, it is concluded that many established smokers do compensate for changed delivery in an attempt to equalise nicotine delivery, when this is possible." 650008449-8480 at 8451 (US 76192).
Creighton stated that compensation for reduced nicotine delivery was evidence that smokers smoked for nicotine, and evidence that regular smokers are "nicotine dependent":

434

[T]he majority of smokers who actually buy cigarettes and smoke them regularly are directly or indirectly seeking the effects of the nicotine content of the smoke . . . . The majority of smokers who are smoking for the nicotine content of smoke may still be smoking for different effects of nicotine. They may seek the pharmacological stimulation of nicotine which has both peripheral and central stimulating effects or to allay the uncomfortable effects of not having nicotine in the system, which Russell describes as relief from or avoidance of withdrawal effects. Most smokers when deprived of nicotine for a period of time during the day feel an increase in stress, tension, restlessness and irritability. A cigarette quickly restores the equilibrium.

A subject who does not suffer the mild withdrawal symptoms, when unable to smoke and only seeks the occasional stimulation of nicotine, or some other attribute of smoking, is less likely to compensate for changed nicotine delivery than a subject who is more nicotine dependent.

¶650008449-8480 at 8462-8464 (US 76192).

Other sections of Creighton's 1976 report discussed an "estimation of self dosing with nicotine" and various factors that influence "the daily dose of nicotine taken by a nicotine dependent smoker." 650008449-8480 at 8465, 8468 (US 76192).
In a memorandum dated March 29, 1976, BATCo scientist S.J. Green set forth his forecast for "The Product in the Early 1980s." In this document, Green addressed "the main threats to the smoking habit." One major threat to smoking was that lower nicotine products would lead to more smokers being able to quit: "Taking a long-term view, there is a danger in the current trend of lower and lower cigarette deliveries -- i.e. the smoker will be weaned away from the habit. . . . [W]e should be aware of the long-term dangers of following the crowd into ultra-low nicotine deliveries."

435

Green then evaluated "potential rivals," that is, "cigarettes in which nicotine has been replaced by an alternative pharmacological agent." In this context, he referred to smokers as

¶"members of the nicotine-dependent majority." 110069974-9982 at 9975, 9977 (US 20268).

In 1976, BATCo held a conference on smoking behavior. Its central theme was the pharmacological importance of nicotine on the central nervous system as the basis for smoking. In a conference report, Kay Comer wrote that tobacco is only used in ways that delivered unmetabolized nicotine to the brain:

[C]igarette smokers who are forbidden to smoke, for instance in a lumber mill or down in a mine, will resort to chewing tobacco instead of smoking.

The common factor in all the types of tobacco usage mentioned is nicotine, either absorbed through the lungs or the lining of the nose or mouth. Taken in these ways nicotine will quickly enter a direct route, in the blood, to the brain. Tobacco has never been used as a substance of ingestion. The probable reason for this is that when it is absorbed in the stomach or intestines, nicotine travels in the blood to the liver, where it is metabolised to cotinine before passing to the brain. It would therefore be surprising if nicotine, which is known to be pharmacologically active in the brain (unlike cotinine), and which is obtained in the ways most likely to enable it to reach the brain unchanged, were not involved in the reasons why people smoke.

¶650376684-6703 at 6694 (US 85289); 100430004-0005 (US 87115).

BATCo also produced a November 24, 1977 report titled "A Note on Smoker

¶Motivation and Dependency." In the introductory section of the report, the author stated that smoking can be characterized by "a dependency factor which is, in a restricted sense, independent of other motivational influences" that would keep a smoker smoking who desires to quit. The motivation to smoke even when one desires to quit "more closely resembles an urge or drive and might be described as an addictive behaviour beyond cognitive control and likely to be associated with pharmacological dependency." 102698343-8361 at 8343 (US 85290).

436

BATCo held an "International Smoking Behaviour Conference" from November 27- 30, 1977 at Chelwood, England. The company invited its own scientists and executives, along with representatives of its affiliate companies (B&W, Imperial Tobacco, Gallaher Limited, Souza Cruz, Rothmans, BAT-Germany and others), industry trade groups, and industry-funded researchers to exchange information. Dr. Green, from BATCo, delivered the introduction, followed by presentations to the conference over the next several days about the central nervous system effects of nicotine, nicotine's impact on human attention span, the role of nicotine in maintaining smoking, and many other topics directly related to the central importance of nicotine to smoking behavior. 103505372-5399 (US 87116); 103505453-5513 (US 87117); 103518290-8401 (US 87118).
A document by BATCo's P.L. Short dated February 22, 1978, titled "Product and Process Innovation," recognized that "the problem of addiction via nicotine [is] increasing." Two days later, his meeting notes recorded that, "Those seeking nicotine gratification where smoking is banned and the subsequent risk of purchasing tobacco by prescription or registration of addicts in the future, will lead to greater use of smokeless tobaccos . . . " He also wrote that there was a segment of smokers "wanting to quit but unable to, hooked onto cigarettes at present but seeking a cigarette/nicotine substitute." 100566925-6926 at 6926 (US 88765); 100566919-6924 (US 88766).
In a June 27, 1978 document titled "Compensation for Changed Delivery," BATCo scientist D.E. Creighton stated that:

Numerous experiments have been carried out in Hamburg, Montreal, and Southampton within the company as well as many other experiments by research workers in independent organizations, that

437

show that generally smokers do change their smoking patterns in response to changes in the machine smoked deliveries of cigarettes. . . . In general, a majority of habitual smokers compensate for changed delivery, if they change to a lower delivery brand than their usual brand. If they choose lower delivery brand which has a higher tar to nicotine ratio than their usual brand (which is often the case with lower delivery products) the smokers will in fact increase the amounts of tar and gas phase that they take in, in order to take in the same amount of nicotine.

¶10553905-3915 at 3906, 3913 (US 76170).

BATCo keenly appreciated the connection between addiction and profitability. In an August 28, 1979 memorandum titled "Key Areas -- Product Innovation Over Next 10 Years for Long-term Development," BATCo scientific director L.C.F. Blackman stated that nicotine dependence was the key to the company's future viability and profitability. In coming to this conclusion, Dr. Blackman charted the stages of smoking from "starting the habit" (Stage 1) to "acknowledgment of pleasure" (Stage 2) to "dependence on the smoking habit" (Stage 3). He flatly stated that nicotine "initiates a dependence in the confirmed smoker" and that "the high profits additionally associated with the tobacco industry are directly related to the fact that the customer is dependent upon the product." 109872505-2508 at 2508 (US 21530).
BATCo continued its search for nicotine substitutes into the 1970s. A November 30, 1978 BATCo report titled "Alkaloids That Have a Pharmacology Like Nicotine" reviewed all relevant research in depth and concluded that, "For smoking products, nicotine is the alkaloid of choice." The BATCo scientists reached this conclusion by comparing the known physiological qualities of nicotine to other alkaloids, including nicotine's effect on the central nervous system, respiration, blood pressure, and heart rate. 680009683-9700 at 9684 (US 53979).

438

The Appendix to the 1978 BATCo report, titled "The Effects of Nicotine," described nicotine as "the most abundant and potent of the several alkaloids present in tobacco." The

¶Appendix also contained the following section:

¶The Pharmacological Mechanisms of Nicotine

The mode of action through which nicotine achieves its effects on the body is very complex. The complexity arises from nicotine's simultaneous and varying degree of activity on the different nerve centers, organs and muscles of the body. Nicotine causes its effects not only by central and peripheral stimulation (i.e., at the brain and spinal cord, and nerve organ or nerve muscle junctions, respectively), but also by the stimulation of intermediate nerve ganglia. . . .

While smokers describe the effects of nicotine as calming and relaxing, all the accumulated evidence indicates that it causes physiological excitation and stimulation. One theory that attempts to explain this paradox suggests that the smoker becomes accustomed to the stimulated condition that nicotine produces; he then uses this condition as the norm from which to judge his well being. If the condition is not maintained, discomfort and anxiety are felt.

¶680009683-9700 at 9697-9698 (US 53979).

In an undated BATCo document, probably created in the 1970s, an executive summarized the "usable data" on smoking and nicotine addiction and connected addiction to marketing plans for BATCo and the industry. The memorandum concluded that smokers are dependent on the pharmacological effects of nicotine, that smokers develop tolerance to and dependency on nicotine, and that smokers deprived of nicotine experience withdrawal symptoms:

¶SUMMARY and IMPLICATIONS to the INDUSTRY

The rush of nicotine into the blood stream and nervous system is short-lived; therefore, reducing consumption would cause withdrawal and all of its unpleasant side effects so long as the smoker is restricted from smoking. Nicotine vacates the system in 30 minutes or so and at that time withdrawal starts. . . .

439

The sensorimotor manipulation aspect of smoking is important to people but perhaps not as important as nicotine. . . . Cigarettes allow people to self-administer nicotine at a self-determined rate.

¶680096095-6110 at 6096 (US 53993).

¶Later in the paper, when describing children and adults who were "regular smokers," the author wrote:

Only an exceptional 2% smoke occasionally and intermittently. Nearly all regular smokers are nicotine dependent. . . . As the novice acquires tolerance to the irritation of the smoke over a period of two or three years, he becomes conditioned to a high and regular intake of nicotine.

¶680096095-6110 at 6099, 6101 (US 53993).

One section of the BATCo memorandum was subtitled "Physical Dependence," in which the author described the process by which a smoker becomes addicted:

Physical dependence involves changes which are physiological. Firstly, this is shown by the smoker's tolerance to the effects of nicotine. This is due to changes at the synapses. The smoker also has an increased capacity to metabolise and excrete the drug, mainly in the liver. . . .

Secondly, when the intake of nicotine is reduced or discontinued, the smoker may experience withdrawal symptoms, resulting from the lessening of overactivity at the synapses. . . . Thus, withdrawal of cigarettes from heavy smokers may reduce them to a subjectively distressed state, with symptoms of anxiety, depression, irritability, restlessness, intense craving as well as difficulty in concentration. More will be discussed about the addictive quality of nicotine in the following section. . . .

Research has shown that stimulation of the medial forebrain bundle of the hypothalamus can pleasurably occupy an animal to the exclusion of all other basic activities, e.g., eating, drinking, sexual activities. It seems likely that nicotine and other dependence-producing drugs owe part of their effectiveness to influencing this centre. . . .

440

The blood-brain barrier is no barrier to nicotine which reaches the brain within a minute of a person lighting up. Its effect is short lived. In twenty to thirty minutes after the smoker has finished his cigarette, most of the nicotine has left his brain for other organs -- stomach, liver and kidneys -- and this is just about the time that the heavily dependent smoker needs his next cigarette.

¶680096095-6110 at 6103-6104 (US 53993).

The BATCo memorandum once again documented the company's knowledge and acceptance of "compensation," that is, the means employed by smokers of lower nicotine cigarettes to obtain higher doses of nicotine:

If the nicotine level of cigarettes fails to completely achieve the desired mood change, that cigarette will be drawn on deeper, the smoke held longer, and consumption will rise. . . . Reductions in nicotine are therefore compensated for by consumers but the limit to which they can compensate for the diminished nicotine/diminished therapeutic efficacy is unknown. R&D is studying this subject at the present time.

¶680096095-6110 at 6095 (US 53993).

Like Philip Morris and R.J. Reynolds, BATCo internally acknowledged and understood smoker compensation. BATCo knew from scientific studies using its own employees that smokers smoked for nicotine and compensated, or changed their smoking behavior, when smoking lower nicotine cigarettes. Two such studies carried out by BATCo in 1974 and 1978, respectively, using reduced nicotine cigarettes demonstrated these conclusions. D.E. Creighton's report of these studies stated that smokers compensated for reductions in nicotine yield by smoking more intensely:

Comparison of the two data sets shows that the lower delivery cigarette has been smoked more intensively. . . . It can be reasonably inferred that the smokers in this panel received similar amounts of nicotine from both cigarettes. . . .

441

The fact that smokers have changed their smoking patterns to take more smoke from a cigarette with lower nicotine delivery but similar TPM [total particulate matter, or tar] delivery adds support to the contention that nicotine is a major determinant of smoking behaviour. . . .

¶650008946-8960 at 8948, 8954 (US 85318).

A March 1, 1979 "Restricted" BAT report written by Creighton summarized a collaborative scientific study between BATCo and British scientist M.A.H. Russell at the "Addiction Research Unit." The research project studied smoker compensation to obtain more nicotine, and utilized a standard low nicotine/low tar cigarette and a modified high nicotine/low tar cigarette. BATCo and Russell determined that smokers compensate less when given high nicotine/low tar cigarettes, and compensate more when given low nicotine/low tar cigarettes. According to the report, while Dr. Russell's interest in the study was "from the health point of view," BATCo participated in the work "from a commercial point of view." 650010157-0193 at 0174, 0183 (US 85292).
The BATCo/Russell study also reported that the high nicotine cigarettes produced "giddiness," a reflection of the intoxicating properties of nicotine:

Some smokers, in fact, felt giddy while smoking the [high nicotine/ low tar] cigarette, presumably because they used the mouth sensations as cues to estimate their smoke intake. As a result of taking sufficient smoke to cause acceptable mouth sensations, they would receive nearly twice as much nicotine as usual, resulting in the feeling of giddiness.

¶650010157-0193 at 0179 (US 85292).

In an April 11, 1980 BATCo document titled "What Three Radical Changes Might, Through the Agency of R & D, Take Place in this Industry by the End of the Century," a team of

442

¶BATCo scientists (composed of Crellin, Ferris, Greig, and Milner) forecast what the industry would have to cope with in the near future. The scientists stated that:

B.A.T. should learn to look at itself as a drug company rather than as a tobacco company. The mood affecting drug requirements of the population will in the future increase but the range of requirements will encompass tranquillisers e.g. valium, endorphin/enkephalin (brain opiates), marijuana, nicotine analogues, etc. At present, the taking of many of these drugs is either medically prescribed or regarded as deviant behaviour, but could be "socialized" like alcoholic drinking and tobacco smoking.

¶109884190-4191 at 4190 (US 21557).

According to the April 1980 typed notes of BATCo scientist Dr. Lionel Blackman, the company needed to address the anticipated issue that, "Although nicotine will be considered by some doctors to be less harmful than tar, there will be increasing recognition by some medical authorities that smoking is a nicotine dependent activity." 301140125-0128 at 0126 (US 85294).
In a "Strictly Private and Confidential" document written in May 1980 by T.W. Kidd, a public relations officer at BATCo from 1948-1983, Kidd provided the following information to assist the company in formulating a new company position on smoking and health:

¶Addiction/Habituation

This is another aspect of the smoking and health issue which cannot be overlooked. Unlike dangerous sports and other high risk activities (except the drinking of alcohol) smoking is addictive/habituative in addition to being an additional risk and many smokers would like to give up the habit if they could. This does not mean that we must contribute to health education or to "quitting clinics" but it does mean we have to act even more responsibly than if the consumption of our products were purely involving a minority of consumers in an additional risk.

443

¶109881332-1335 at 1335 (US 34929). Despite Mr. Kidd's recommendations for a corporate position that reflected the addictiveness of cigarettes, no new company position was ever announced.

A March 31, 1981 "Restricted" research report titled "Nicotine Studies: A Second Report, Estimation of Whole Body Nicotine Dose by Urinary Nicotine and Cotinine Measurement" documented BATCo's research into accurately measuring nicotine intake by rats forced to inhale cigarette smoke. The authors, BATCo scientists G. Read, I.G.M. Anderson, and R.E. Chapman, wrote that the studies were "particularly relevant to the development of an understanding of an individual smoker's daily nicotine requirement and the relationship between nicotine dose and smoking behaviour under conditions of brand switching/delivery modification." 650030769-0802 at 0779-0780 (US 53428). The March 31, 1981 report built on an earlier BATCo scientific study into "nicotine dose" dated May 21, 1980, titled "Method for Nicotine and Cotinine in Blood and Urine," written by the same scientists. In this earlier study into methods to measure nicotine in humans, the authors stated that "the pharmacological response of smokers to nicotine is believed to be responsible for an individual's smoking behaviour, providing the motivation for and the degree of satisfaction required by the smoker." 650032386-2428 at 2389 (US 87119).
Under cover letter dated April 7, 1982, BATCo's G. O. Brooks forwarded an internal nicotine study by Creighton titled "Human Smoking Behaviour" to researchers at B&W. In Creighton's report, he restated the "sine qua non" role of nicotine in smoking and discussed withdrawal and compensation:

Nicotine is the most pharmacologically active constituent in tobacco smoke and is probably the most usual factor responsible for maintaining the smoking habit. . . .

444

Nicotine has pharmacological effects both in the brain and other parts of the body. Some of these effects are due to nicotine itself whereas others are due to nicotine causing a release of other substances within the body such as adrenaline. . . .

The smoker . . . who smokes to maintain a constant blood level of nicotine is most likely trying to avoid the unpleasant sensations that he feels when he is not smoking. Without a cigarette he will become nervous, irritable and likely to make mistakes in his work. Such a smoker is likely to compensate for changed delivery if given a cigarette with different standard machine smoked deliveries to his usual brand so that as far as possible he maintains a constant blood level of nicotine. . . .

It is possible to consider nicotine as the component of cigarette smoke that controls the amount of smoke that a smoker takes from a cigarette.

¶660913609-3633 at 3616-3618 (US 22763).

Brooks's April 7, 1982 memorandum and the attached report also show the in-depth knowledge that both BATCo and B&W had of compensation as well as their goal to maintain addiction by maintaining a minimum delivery or "dose" of nicotine in their products:

The simple answer would seem to be to offer the smoker a product with comparatively high nicotine deliveries so that with a minimum of effort he could take the dose of nicotine suitable to his immediate needs. . . . If delivery levels are reduced too quickly or eventually to a level which is so low that the nicotine is below the threshold of pharmacological activity then it is possible that the smoking habit would be rejected by a large number of smokers.

¶660913609-3633 at 3619-3620 (US 22763).

The paper attached to Brooks's 1982 letter resembled and borrowed from the 1978 paper by Dr. Creighton titled "Compensation for Changed Delivery." See Section V(B)(3)(c)(¶¶

¶1042), supra, and Section V(E)(2)(b)(¶2215), infra. In this earlier paper, Dr. Creighton stated that the company's knowledge of compensation by smokers of low nicotine yield cigarettes came from research "carried out in Hamburg, Montreal, and Southampton within the company," research showing that "smokers do change their smoking patterns in response to changes in the machine smoked deliveries of cigarettes." 105553905-3915 at 3906 (US 34799).

445

In a March 25, 1983 memorandum titled "Project Recommendations," which described the relationship of nicotine level to switching behavior, BATCo researcher Andrew J. Bellman stated that "nicotine is the addictive agent in cigarettes." 514110006-0009 at 0007 (US 21745).
In a January 26, 1984 research paper, BATCo researcher Colin C. Greig stated that because nicotine "is the major or sole pharmacologically active agent in smoke, it must be presumed that this is the preferred method of absorption and thus why people inhale smoke." 650547777-7787 at 7786 (US 20950).
A March 22, 1984 report titled "Receptors for Nicotine in the Central Nervous System," written by BATCo scientist W. W. Templeton, documented the company's research into the psychoactive effects of nicotine and specific sites (receptors) in the brain where nicotine binds within the central nervous system. The study "confirm[ed] the existence of specific binding sites for nicotine in the CNS" and speculated that the results "may help to explain the development of tolerance to nicotine." The Executive Summary described the research and its link to the design and manufacture of cigarettes:

This report is the first in a series of studies designed to identify and characterize how nicotine derived from cigarette smoke can interact with the body, and in particular the active centres of the brain. This specific interaction is believed to form an essential element of a smoker's satisfaction. . . .

446

The report describes in detail the development and application of techniques to identify and characterise regions within brain tissue where nicotine can bind and elicit a pharmacological response. . . .

The findings will be used as appropriate in the process of developing lower delivery products with full smoking characteristics.

¶650000996-1034 at 0998, 1011, 1014 (US 53388).

Later in the 1984 report, the author reviewed the evidence on smoking "motivation" and concluded:

Taken together, the evidence suggests that self-administration of nicotine may be the primary motivation for smoking. While this may not be true for every smoker, each smoker (who inhales the smoke) absorbs a quantity of nicotine during each puff sufficient to have extensive physiological and pharmacological effects, regardless of the motivation for smoking. . . .

Primarily, nicotine is taken for its effects on the CNS, the peripheral consequences of nicotine administration, such as increased heart rate and blood pressure, being unwanted side effects.

¶650000996-1034 at 1001-1002 (US 53388).

In June 1984, BATCo held a three-day Nicotine Conference attended by representatives of BATCo and B&W. According to the conference agenda, one topic for discussion was "A Smoker's Requirement for Nicotine - A Smoking Behaviour and Marketplace View." The accompanying conference notes stated that

Considerable indirect evidence has been accumulated that suggests inhaling cigarette smokers smoke for nicotine and presumably the pharmacological effects of nicotine.

¶512106427-6437 at 6428, 6433 (US 20846).

Another topic at the BATCo Nicotine Conference was called "Product Modification for Maximal Nicotine Effects." Under this heading, the authors stated that in order to "maximise nicotine effects," the company must understand "what constitutes an adequate and suitably 'packaged' dose of nicotine to satisfy a smoker's 'requirements.'" 512106427-6437 at 6435 (US 20846).

447

BATCo prepared a final report on the Nicotine Conference. It contained summaries of many of the presentations made by BATCo researchers and executives to conference attendees. These summaries revealed BATCo's intimate knowledge of smoker regulation of nicotine (compensation), smokers' "threshold requirement" of nicotine, "product elasticity," "nicotine dose" measurements, "pharmacokinetics of nicotine," "the sensory and psychological effects of nicotine," central nervous system effects of nicotine, and "smoke manipulation involving pH modification" and other product design modifications. 101234971-5018 (US 21645).
One month after its Nicotine Conference, BATCo held a conference on smoking behavior and marketing. In Session III of the July 1984 conference, again attended by B&W representatives, C. Ian Ayres, a BATCo Research Advisor, summarized information from the earlier nicotine conference, including the following:

Many smokers appear to smoke to a constant intake of nicotine. As yet, however, we do not know whether most smokers are aiming to achieve a "satisfactory" average level of nicotine circulating in the body, or whether they are seeking an optimum peak nicotine level after each cigarette. . . . The presentation was concerned with summarising and outlining the central role of nicotine in the smoking process and our business generally. . . . The extent to which smokers smoke for nicotine was discussed and it was agreed that it is unlikely that all smokers smoke for nicotine. However, only products containing nicotine have widespread use. . . .

¶536000308-0507 at 0330-0332 (US 85298); 109869361-9369 (US 87120).

448

Attendees at the July Conference were informed that, "[a]lthough intentions and attempts to quit are relatively high (30-40% of smokers) the actual success rate is relatively low and stable." 402426650-6677 at 6676 (US 87121).
Nicotine was a major component of nearly every presentation and discussion. For example, BATCo Group Leader Graham Read delivered a presentation titled "Current Status and Future Direction of Smoking Behaviour Research." In his presentation, Read observed the "strong indirect evidence of smokers smoking for nicotine" as representing a "cause and effect" relationship. Read stated that the significance of his observation was that "smoking maintenance" is accomplished through nicotine, and that "in its simplest sense puffing behaviour is the means of providing nicotine in a metered fashion." 536000000-0090 at 0045-0063 (US 22338).
A BATCo report on the company's Research and Development conference in September 1984, prepared by BATCo Scientist/Director Dr. Lionel Blackman, emphasized the need for further research related to smoker behavior and nicotine. The report advised that BATCo needed to research whether smokers smoked for the "transient peak effects" of nicotine or instead sought "threshold base-line levels throughout the day." The report also recommended research into means of "influencing nicotine transfer from the product to the smoker -- and the commercial viability of such means." According to the R&D conference report, "Nicotine remains a top priority." 109872430-2447 at 2439, 2443 (US 23340).
A September 1984 BATCo document titled "Research Conference, GR&DC Research Programme" stated some objectives of BATCo's in-house behavioral/nicotine research. For example, the memorandum summarized planned nicotine/pH modification experiments, research focusing on the "mechanisms of nicotine interaction with the central nervous system," and human studies to better determine "the minimum dose of smoke nicotine that can provide pharmacological satisfaction for the smoker." 109869520-9522 at 9521 (US 87122).

449

All the evidence presented shows that BAT Group research was premised on the position that nicotine was the critical component of cigarettes that kept smokers smoking. In an October 15, 1985 memorandum from German BAT scientist E. Kausch to B&W's Vice President of Research and Development, Kausch followed up on a recent "Oxford Conference" with the statement: "There is no daupt [sic] that nicotin is the compound which makes tobacco use to [sic] such a widespread habit. This means that nicotin research should be a central part of BAT's research efforts.[sic]" 510000642-0644 at 0643 (US 85300).
A June 1988 internal BATCo report titled "The Significance of pH in Tobacco and Tobacco Smoke" summarized BATCo's in-depth knowledge with respect to manipulating smoke pH and increasing "free base" nicotine in order to increase the nicotine delivery to smokers in the mouth and lungs. 500104402-4424 (US 21492).
A 1988 BATCo document titled "A Meeting of Scientific Research Group, Montreal, August 6th-8th 1988" reported on the results of a U.S. smoking behavioral study that "strongly point[ed] to nicotine as the basis of the smoking habit." The document also demonstrated the existence of compensation, reporting that "plasma nicotine levels were almost constant, regardless of measured nicotine delivery levels, as were the number of cigarettes smoked per day". 100993169- 3173 at 3169 (US 34677).
A January 15,¹⁹⁹¹¹⁹⁹¹ 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- BATCo document titled "BATCo Operating Group Five Year Plan 1991-1995" contained a section on "The Fundamental Research Centre." In this section, when discussing key research projects regarding "tar/nicotine ratio reduction," the plan stated that:

450

Basic research will continue into products delivering adequate levels of nicotine with minimum levels of other components, focusing on: tobacco treatments leading to reduced tar formation; novel sheet materials capable of controlled release of nicotine/flavourants; and enhancement of the transfer of nicotine/flavourants of smoke.

¶201752783-2899 at 2838 (US 85452).

In an undated 1992 marketing document titled "Structured Creativity Group," BATCo's Product Developer, Colin Greig, described cigarettes as a "'drug' administration system for public use" with "very very significant advantages over other drugs." Because "nicotine is the lowest dose 'common' drug available," it compared favorably to other "slower" drugs such as marijuana, amphetamines, and alcohol." Greig wrote that, "Within 10 seconds of starting to smoke, nicotine is available in the brain." The memorandum also notes BATCo's acceptance that smokers of low tar products "compensate," or modify their smoking behavior, in order to obtain more nicotine. 100503495-3506 at 3496, 3499 (US 76168) (emphasis in original).
Greig described tobacco as "a fast, highly pharmacologically effective and cheap 'drug'" contained within a "relatively cheap and efficient delivery system." At the close of his memorandum, Greig observed that because cigarettes leave smokers unsatisfied and always craving more, "all we [BATCo] would want then is a larger bag to carry the money to the bank." 100503495-3506 at 3497, 3505 (US 76168).
An undated BATCo memorandum written by D.E. Creighton, titled "Structured Creativity Group Presentation," listed the following as one of smokers' needs:

High on the list of consumer needs is nicotine, which I believe to be the main motivator and sustainer of smoking behaviour. Without nicotine in sufficient quantity to satisfy the needs of the smoker, the smoker can (a) give up altogether, (b) cut back to a low purchase level, (c) keep switching brands.

451

In his memorandum, Creighton was careful to distinguish the need for nicotine from the importance of flavor and quality to cigarette consumers. At the close, he noted that BATCo had "tried the low [nicotine] delivery product route with limited success. This might be because the nicotine in such products is below the pharmacological threshold of effectiveness." 102690336-0350 at 0345, 0350 (US 21681).
BATCo conduct and/or funded voluminous internal studies on nicotine and its effect on the human body. The clear import of these studies, taken as a whole, was that BATCo knew that nicotine was essential to smoking cigarettes, essential to addiction, and therefore essential to its business of selling cigarettes. Many of these reports bear stamps indicating they were shipped to B&W. Such reports include: "Nicotine in Smoke and Human Physiological Response," dated March 26, 1970, 682638843-8864 (US 25454); "Relative Contributions of Nicotine and Carbon Monoxide to Human Physiological Response," dated November 15, 1971, 682638479-8516 (US 25451); "The Transfer of Nicotine From Smoke Into Blood Using a Perfused Canine Lung," dated February 28, 1967, 750003524-3551 (US 87125); "Subjective Evaluation of Select Flue-Cured Tip Grades," dated August 20, 1968, 750067063-7084 (US 87126); "The Absorption of Nicotine Via the Mouth: Studies Using Model Systems," dated May 9, 1965, 750004644-4702 (US 87127); "The Effect of Puff Volume on 'Extractable Nicotine' and the Retention of Nicotine in the Mouth," dated August 21, 1969, 750040142-0159 (US 87128); "Further Studies on the Effect of Nicotine on Human Physiological Response," dated June 5, 1973, 750009778-9808 (US 87129); "Acute Effect of Cigarette Smoke on Brain-Wave Alpha Rhythm - First Report," dated October 31, 1974, 750055087- 5106 (US 87130); "Interaction of Smoke and the Smoker Part 3: The Effect of Cigarette Smoking on the Contingent Negative Variation," dated December 12, 1974, 750012293-2319 (US 87131); "Some 'Benefits' of Smoking," dated January 26, 1977, 750016323-6339 (US 87132); "Further Work on 'Extractable' Nicotine," dated September 30, 1966, 83916527-6596 (US 55968); 650010113-0156 (US 53397); 566632813-3254 (US 87134); 110083654-3673 (US 87135).

452

d. Brown & Williamson 1080. Like the other cigarette company Defendants, B&W was also well aware of the

¶addictive quality of smoking and nicotine. Despite the company's public denials, it has consistently admitted internally that smoking is an addiction, smokers need nicotine, and smokers suffer withdrawal when deprived of nicotine.

Much of B&W's knowledge of nicotine and its addictive qualities originated with its parent company, BATCo, which, as has already been noted, regularly communicated its research results to B&W and other BAT Group affiliates. One of the earliest examples of the trans-Atlantic exchange of knowledge, was the forwarding, by Sir Charles Ellis of both BATCo's "Project HIPPO" results and the BATCo report titled "The Fate of Nicotine in the Body" to B&W's chief executives Bill Cutchins and Ed Finch under cover letter stamped "Received" on July 1, 1963. 689033419-3419 (US 87136).
Shortly thereafter, B&W Executive Vice President and General Counsel Addison Yeaman commented in writing on the BATCo nicotine research carried out in England under the code names HIPPO I and HIPPO II, as already discussed. In a July 17, 1963 memorandum marked "Strictly Private and Confidential," Yeaman was persuaded by the findings of the research, in particular the researchers' conclusions on the "tranquillising" effects of nicotine. Most significantly, Yeaman also concluded that, "nicotine is addictive." He further wrote, as has been quoted many times, in many places: "We are, then, in the business of selling nicotine, an addictive drug effective in the release of stress mechanisms." 689033412-3416 at 3415 (US 22034).

453

B&W intentionally concealed Yeaman's conclusions, and the sophisticated nicotine research in the possession of both BATCo and B&W was not disclosed to the Surgeon General's Advisory Committee which was then in the process of writing the early drafts of the 1964 Surgeon General's Report. See Section V(A)(4), supra.
On September 13, 1963, B&W scientist Robert B. Griffith wrote a letter to BATCo's John Kirwan responding to his questions about the importance of nicotine. Dr. Griffith wrote:

[N]icotine is by far the most characteristic single constituent in tobacco and the known physiological effects are positively correlated with smoker response. . . . [W]e have a research program in progress to obtain, by genetic means, any level of nicotine desired.

¶102630333-0336 (US 23000).

B&W participated in a Tobacco Chemists Conference in October 1964. According to the "CONFIDENTIAL" report of the conference, tobacco company scientists delivered a number of papers to conference attendees. One paper called "Do We Know What We Are Talking About?" was presented by W. S. Paige of the Imperial Tobacco Company.15 In his presentation, Paige described the "Physiological Strength or Potency" of tobacco, suggesting very early knowledge among tobacco industry scientists of nicotine's psychoactive effects, and the connection to "subconscious" smoker compensation: