Each Defendant Is Associated with the Enterprise

Each Defendant Is Associated with the Enterprise

¶To prove a defendant's association with an association-in-fact enterprise, it is not necessary to prove that the defendant had a formal position in the enterprise, participated in all the activities of the enterprise, "had full knowledge of all the details of" its activities, or even knew about the participation of all the other members in the enterprise. Rather, it is sufficient that the defendant "know the general nature of the enterprise and know that the enterprise extends beyond his individual role." United States v. Rastelli, 870 F.2d 822, 828 (2d Cir. 1989) (collecting cases); see also United States v. Marino, 277 F.3d 11, 33 (1st Cir. 2002) ("Association may be by means of an informal or loose relationship. To associate has its plain meaning. . . . 'Associated' means to be joined, often in a loose relationship, as a partner, fellow worker, colleague, friend, companion or ally. Thus, although a person's role in the enterprise may be very minor, a person will still be associated with the enterprise if he knowingly joins with a group of individuals associated in fact who constitute the enterprise."); United States v. Zichetello, 208 F.3d 72, 99 (2d Cir. 2000); United States v. Tocco, 200 F.3d 401, 425 (6th Cir. 2000); United States v. Console, 13 F.3d 641, 653 (3d Cir. 1993); United States v. Martino, 648 F.2d 367, 394 (5th Cir. 1981).

¶Moreover, "[a] defendant is considered to have 'associated with' a RICO enterprise if he engages in the predicate act violations with other members of the enterprise, even if he is not an actual 'insider' of the enterprise," Blue Cross & Blue Shield of N.J., Inc. v, Philip Morris, Inc.,113 F. Supp. 2d 345, 366 (E.D.N.Y. 2000), or otherwise commits racketeering acts in the conduct of the enterprise's affairs. See, e.g., United States v. Watchmaker, 761 F.2d 1459, 1476 (11th Cir. 1985); United States v. Swiderski, 593 F.2d 1246, 1248-49 (D.C. Cir. 1978). In addition, a defendant "associates with" an enterprise when he conducts business with or through the enterprise, or otherwise has an effect on its activities, including its unlawful activities. United States v. Mokol, 957 F.2d 1410, 1417 (7th Cir. 1992).

¶The extensive Findings of Fact establish that not only did each Defendant know the general nature and purpose of the Enterprise, and that it extended beyond any one Defendant's individual role, but each Defendant also knew that all the other Defendants were participating in the Enterprise to achieve their shared objective. Defendants formed numerous entities -- both formal and informal -- to achieve their shared objective, as summarized above and set forth in great detail in the Findings of Fact. For example, decades after they had internally recognized that smoking caused disease, all Defendants publicly maintained that the link between smoking and disease remained an "open question." See Findings of Fact Section V(A)(5)(c).

¶Defendants Liggett and Altria were also associated with the Enterprise. Liggett shared and supported the common objectives of TIRC/CTR with the other Defendants. See generally Findings of Fact Section III. Defendant Altria also shared and supported the common objective of CTR. Altria employees not only knew about the activities of CTR, but were involved in them as well, attending CTR Board of Director meetings and CTR Annual Member meetings and participating in the approval and funding decisions related to CTR Special Projects. Pollice WD, 6:1-12:12; Pollice TT, 10/04/04, 1526:22-1527:14, 1528:19-1529:1. See Findings of Fact Section III(C). Similarly, Defendant BATCo shared and supported the common objectives of TIRC/CTR. Communications and contact between high level smoking and health research scientists at BATCo and scientists affiliated with TIRC/CTR were frequent and direct. TIRC/CTR employees also traveled to England to attend meetings with BATCo employees and other members of international tobacco organizations. BATCo was a critical participant in worldwide efforts to deny or distort the health risks of ETS exposure, though organizations such as IEMC, INFOTAB, CORESTA, the Verband der Cigaretteindustrie (VdC) (the German trade association of cigarette manufacturers including German and Austrian manufacturers as well as Philip Morris, R.J. Reynolds, and BATCo), and others, and its participation included coordination with CIAR. See Findings of Fact Section III(I).

¶Throughout the life of the Enterprise, Defendants have coordinated their fraudulent activities through other formal entities, such as TI, CTR, CIAR, and ICOSI as well. See Findings of Fact Section III (C, D, H, I). In addition, Defendants' use of informal organizations such as the Ad Hoc Committee (which was comprised of tobacco industry lawyers and advised Defendants on matters affecting the tobacco industry), the Research Liaison Committee (which was also comprised of lawyers who reviewed, directed and coordinated joint research activity by Defendants), the ETS Advisory Committee (which dealt with issues related to environmental tobacco smoke and led to the formation of CIAR), and the Industry Technical Committee (which was comprised of the scientific directors of the cigarette company Defendants and assisted TIRC/CTR on technical issues related to cigarette design and other matters), allowed the Enterprise to direct the conduct of its members by providing mechanisms for quickly responding to areas of common concern and develop coordinated strategies for responding to them. See Findings of Fact Sections III(F) and V(G)(a).

¶The documentary and testimonial evidence of direct communications among Defendants -- phone calls, meetings, and correspondence at the highest levels of their respective corporate, scientific, and legal hierarchies -- is overwhelming. This evidence establishes that each Defendant knew that (and in innumerable instances, knew how) other Defendants were acting to further the common purpose of the Enterprise. See generally Findings of Fact. Moreover, all Defendants maintained their association with all the formal and informal activities comprising the Enterprise through periodic meetings, scientific symposia, correspondence and conversations regarding, inter alia, research projects, public statements, and advertising. Again, all these efforts were designed to advance the primary objective of the Enterprise: to maximize profits by acting in concert to preserve and enhance the market for cigarettes, to avoid legal liability that could result in large damage awards and increase public recognition of the harmful effects of smoking and its addictiveness, and to deflect efforts to make smoking socially unacceptable. In addition, as discussed in Section VII(G)(3)(a), infra, all of the Defendants committed racketeering acts in furtherance of the shared objectives of the Enterprise.

¶Thus, each Defendant has been proven to be associated with the Enterprise and its ongoing activities.

Each Defendant is Distinct from the Enterprise

¶This Court has already held:

Regardless of how the enterprise is defined (if at all), the Government has proven the distinctness element in this case. This Court has already held that an "association-in-fact" enterprise can be a group of corporations. See Philip Morris, 116 F. Supp. 2d at 152-53. Moreover, there is no dispute that each individual Defendant is a separate legal entity. Thus, if this Court should find an enterprise comprised of at least two of the Defendants, the individual Defendants will be distinct from the enterprise itself.

¶United States v. Philip Morris USA, 327 F. Supp. 2d 13, 18 (D.D.C. 2004).