Reports that Matter

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

TIRC/CTR – Tobacco Industry Research Committee/Council for Tobacco

Section 10 of 129

TIRC/CTR – Tobacco Industry Research Committee/Council for Tobacco

Research-USA 21. With the creation of TIRC in January 1954, the Defendants established a

sophisticated public relations vehicle -- based on the premise of conducting independent scientific research -- to deny the harms of smoking and reassure the public. That essential strand of their long-range strategy was developed and implemented in 1953-54, and guided their activities for more than forty years. Brandt WD, 61:23-62:7.

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  1. In response to an inquiry by Stanley Barnes, Assistant Attorney General, United States Department of Justice on January 21, 1954, TIRC Chairman Paul Hahn sent a letter to Barnes dated January 26, 1954, enclosing a statement of the origin, purpose, and proposed functions of TIRC. The purposes and objectives of TIRC as recorded in the Statement Concerning the Origin and Purpose of TIRC were

to aid and assist research into tobacco use and health, and particularly into the alleged relationship between the use of tobacco and lung cancer, and to make available to the public factual information on this subject.

508775382-5382 (JD 090191); 70103754-3761 (JD 000294); MTD0030448-0455 (US 21218); 70103755-3761 (JD 043064); HT0072119-2125 (US 21175); TIMN0116378-6384 (US 21277); TLT0901026-1035 (US 88181); McAllister WD, 28:14-29:1; Zahn PD, Cipollone v. Liggett, 12/16/86, 51:24-52:6, 53:9-12 at 0005-0007 (US 89555).

  1. The statement of origin and purpose was signed in the name of TIRC by Chairman Paul Hahn, was ratified and adopted by TIRC, and attached as Exhibit A to the Bylaws of the Tobacco Industry Research Committee. CW00787817-7842 (US 21420); CTRBYL000001-0014 (US 21138); 70103754-3761 (JD 000294); MTD0030448-0455 (US 21218); 70103755-3761 (JD 043064); HT0072119-2125 (US 21175), (US 54357); TIMN0116378-6384 (US 21277); TLT0901026-1035 (US 88181). All of the bylaws could be altered and repealed by a majority vote of TIRC's corporate members, except "Article I. Purposes and Objectives" which could only be altered with the unanimous consent of all the corporate members. CW00787817-7842 at 7817, 7822 (US 21420); CTRBYL000001-0014 at 0001,6 See United States' Preliminary Proposed Findings of Fact at 14. -11- (US 21138).
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  1. The statement of origin and purpose stated that TIRC had engaged the public relations firm of Hill & Knowlton to assist TIRC in effectuating its purpose. CW00787817-7842 (US 21420); CTRBYL000001-0014 (US 21138); 70103754-3761 (JD 000294); MTD0030448-0455 (US 21218); 70103755-3761 (JD 043064); HT0072119-2125 (US 21175); TIMN0116378-6384 (US 21277); TLT0901026-1035 (US 88181); TLT0900723-0728 (US 88179); see also USX6390001-0400 at 0012 (US 89555).

  2. The TIRC bylaws stated that each corporate member of the TIRC "shall from time to time appoint an individual to serve as the personal member of the Committee representing such corporate member" and that a majority of the personal members of TIRC would select such officers, agents, and employees as they deemed necessary, including a Chairman to serve for a term of one year and until his successor is elected and qualified. CW00787817-7842 (US 21420); CTRBYL000001-0014 (US 21138).

  3. The first officers selected by TIRC members were: Paul Hahn of American as temporary Chairman; J. Whitney Peterson of United States Tobacco as Vice Chairman; Joseph Cullman of Benson & Hedges as Treasurer; and Wilson Thomas ("W.T.") Hoyt of Hill & Knowlton as Secretary. CW00787817-7842 (US 21420); CTRBYL000001-0014 (US 21138); 70103754-3761 (JD 000294); MTD0030448-0455 (US 21218); 70103755-3761 (JD 043064); HT0072119-2125 (US 21175); TIMN0116378-6384 (US 21277); TLT0901026-1035 (US 88181).

  1. TIRC bylaws described the method of funding TIRC as follows: Each of the cigarette manufacturing corporate members has pledged to the Committee for payment before or during 1954 an amount equal to 1/4 of a cent for each one thousand of tax-paid cigarettes produced by such company in 1953 as estimated by Harry M. Wootten and published under the date of January 15, 1954, and has pledged to the
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Committee for payment during 1954 an additional amount equal to one-half of the amount originally pledged.

CW00787817-7842 at 7819 (US 21420); CTRBYL000001-0014 at 0003 (US 21138).

  1. At its January 29, 1964 meeting, the TIRC Executive Committee agreed to change the name of the organization to the Council for Tobacco Research-U.S.A. ("CTR"). 93218985-8986 (US 21116). The organization bylaws were amended February 1, 1964, to reflect the name change. Although the name changed, the purposes, objectives, and functions of the organization did not. According to the amended bylaws, the purposes and objectives of CTR remained the same, i.e.

to aid and assist research into tobacco use and health, and particularly into the alleged relationship between the use of tobacco and lung cancer and to make available to the public factual information on this subject.

682631364-1368 (US 21024); CW00787817-7842 at 7831-7835 (US 21420); see also USX6390001- 0400 at 0002 (CTR Response to Request for Admission No. 82). Timothy Hartnett announced the organization name change in a March 1964 press release. 508775085-5088 (US 20815); HK1865014-5017 (US 77847).

  1. Robert Heimann, Chairman and Chief Executive Officer of American, commented upon the TIRC's name change in a December 6, 1977 letter to Addison Yeaman, CTR's Chairman and President and formerly the General Counsel of B&W:

[W]e decided some years ago to rename T.I.R.C. "The Council for Tobacco Research" because "Tobacco Industry Research Committee" sounded too much like industry-directed, as distinct from independent, research.

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  1. In 1971, CTR changed from an unincorporated association to a corporation pursuant to the laws of the State of New York. CTR's Certificate of Incorporation was filed with the Department of State of the State of New York on January 8, 1971. The bylaws of the newly-formed corporation were adopted at the first meeting of CTR's Board of Directors on January 13, 1971. CTRMIN-BD000001-0303 at 0002 (JD 093208); CTRINC000001-0019 (JD 090053); McAllister WD, 10:7-14.

  2. Following incorporation, CTR was divided into two classes of members, Class A and Class B. Class A members were: (1) designated by the Board of Directors; (2) domestic persons who sold cigarettes in the United States; and (3) manufacturers of their own brand of cigarettes. Class A members included American Tobacco, B&W, Lorillard, Philip Morris, Reynolds, and United States Tobacco. Class B members were: (1) designated by the Board of Directors; and (2) a person, corporation, association, or partnership not eligible for Class A membership but involved in the production, manufacturing, and distribution of cigarettes. Class B members included Bright Belt Warehouse Association, Burley Auction Warehouse Association, Burley Tobacco Growers, Imperial Tobacco, Tobacco Associates, and United States Tobacco. CTRBYL000031-0049 (JD 090055); CTRMIN-BD000001-0303 at 0003 (JD 093208); 512678857-8863 (US 30046).

  3. In 1963, Clarence Cook Little and W.T. Hoyt invited Liggett to join TIRC in order to secure complete industry cooperation in dealing with the 1963 Surgeon General's Advisory Committee. Liggett declined the invitation but, in its response, assured its cooperation: "[T]he aims of all of us are the same and the path that we [Liggett] have followed has been similar to that of the Committee in may respects." RC6007182-7183 (LI 142).

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  1. Liggett became a member of CTR in 1964 and resigned in 1968, but continued to participate in CTR activities for decades. In its January 1968 resignation letter, Liggett's President stated "we will continue to participate in defraying the cost of [CTR] Special Projects sponsored by the Council after evaluation of each Project on an individual basis." CTR-TIRC-MIN000238-0244 at 0241 (US 33023). Liggett made contributions to CTR's Special Projects fund from 1966 through 1975 and to CTR's Literature Retrieval Division from 1971 through 1983. DXA0630917-1033 at 1024-1025 (US 75927). Liggett was also asked to attend scientific meetings at CTR. 044227839-7842 (US 20066); LWDOJ9055586-5587 (US 26007) (Confidential).

  2. Representatives of Liggett attended CTR meetings at which CTR Class A members, CTR Class B members, CTR officers, CTR public relations counsel, tobacco industry attorneys, and other representatives of cigarette manufacturers and the Tobacco Institute were present. CTRMIN-MOM000001-0015 (US 21145); CTRMIN-MOM000053-0069 (US 32617).

  3. Although Defendant BATCo was not a member of TIRC or CTR, communication and contact between high level smoking and health research scientists at BATCo and scientists at TIRC/CTR was frequent and direct. BATCo scientists, including David G. Felton, Lionel C.F. Blackman, and R.E. Thornton, visited TIRC/CTR several times over the years. TINY0003106-3116 (US 21369); 105408490-8499 (US 21135); 517002090-2091 (US 66527).

  4. For example, in 1958, three British scientists, D.G.I. (David) Felton of BATCo, W.W. Reid of BATCo-Australia, and H.R. (Herbert) Bentley of Imperial Tobacco, visited the United States for four weeks and met with members of TIRC's Scientific Advisory Board, as well as with representatives of Defendants TIRC/CTR, American, Liggett, and Philip Morris. TINY0003106- 3116 (US 21369); 105408490-8499 (US 21135), (US 76169); Brandt WD, 94:8-95:3.

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  1. In October 1979, David Felton of BATCo went on a month-long "fact-finding mission to a number of laboratories engaged in research relating to smoking and health" in the United States. Felton was accompanied by two lawyers for most of his visits, either Patrick Sirridge of Shook, Hardy & Bacon or Timothy Finnegan of Jacob & Medinger. Near the end of the trip, Felton met with CTR executives and employees, including Addison Yeaman, CTR President; William Gardner, CTR Scientific Director; W.T. Hoyt, CTR Executive Vice President; Robert Hockett, CTR Research Director; Vincent Lisanti, CTR Associate Research Director; and David Stone and Donald Ford, members of CTR's scientific staff. Discussions included CTR contract research, nitrosamines, smoking and stress, and nicotine research. During his visit, Felton also met with Tobacco Institute representatives Horace Kornegay, President, and Marvin Kastenbaum, Director of Statistics. 109879229-9295 (US 34923); 109879296-9308 (US 86063).

  2. Defendants met frequently to discuss issues facing the Enterprise. Beginning in 1954 and until 1970, representatives of member companies met regularly with TIRC/CTR staff. After CTR's incorporation, in 1971 and until 1999, the Enterprise met annually at CTR's meetings of members. At these meetings, representatives of the Enterprise discussed activities of CTR which furthered their goals such as Special Projects, the Literature Retrieval Division, contract research, public relations, the TIRC/CTR Scientific Advisory Board, and scientific conferences. CTR-TIRC- MIN000001-0252 (JD 093292); CTR-TIRC-MIN000033-0052 (US 33006); CTR- TIRC-MIN000174-0186 (US 33016); CTR-TIRC-MIN000224-0231 (US 33021); CTR- TIRC-MIN00023-0244 (US 33023); CTR-TIRC-MIN000245-0255 (US 33024); 1002608337-8339 (US 85989); MM0010053-0056 (US 85990); CTRMIN-MOM000001-000015 (US 21145); CTRMIN-MOM000016-0034 (US 21170); CTRMIN-MOM000035-0052 (US 32616);

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CTRMIN-MOM000053-0069 (US 32617); CTRMIN-MOM000070-0087 (US 32618); CTRMIN-MOM000088-0089 (US 32619); CTRMIN-MOM000090-0104 (US 32620); CTRMIN-MOM000105-0117 (US 32621); CTRMIN-MOM000129-0142 (US 32623); CTRMIN-MOM000143-0154 (US 32624); CTRMIN-MOM000155-0167 (US 32625); CTRMIN-MOM000168-0181 (US 32626); CTRMIN-MOM000182-0195 (US 32627); CTRMIN-MOM000210-0221 (US 32629); CTRMIN-MOM000222-0233 (US 32630); CTRMIN-MOM000234-0244 (US 32631); CTRMIN-MOM000245-0255 (US 32632); CTRMIN-MOM000256-0268 (US 32633); CTRMIN-MOM000269-0280 (US 32634); CTRMIN-MOM000281-0294 (US 32635); CTRMIN-MOM000295-0306 (US 32636); CTRMIN-MOM000307-0318 (US 32637); CTRMIN-MOM000319-0331 (US 32638); CTRMIN-MOM000332-0334 (Ex. 32639); 70000261–0274 (US 31078); 70005388-5408 (US 31104); CW00800809-0811 (US 31368); TLT0901390-1393 (US 88186); TLT0901400-1410 (US 88187); JH000395-0400 (US 21178); TLT0901411-1414 (US 88188).

  1. Members of the Enterprise also convened regularly between 1971 and 1998 at CTR's Board of Directors meetings. CTR's Board of Directors was made up of representatives from the member companies. At these meetings the CTR Board of Directors discussed and passed resolutions regarding issues such as CTR's budget, the status of grants and contract research, the election of officers, payment of dues, and amendments to the bylaws. In addition to Board members, attendees at the meetings included other corporate offices and executives from the tobacco companies, Defendants' legal counsel and public relations counsel, and representatives from the Tobacco Institute. CTRMIN-BD000017-0020 (US 32572); CTRMIN-BD000021-0025 (US 32573); CTRMIN-BD000026-0029 (US 32574); CTRMIN-BD000030-0034 (US 32575);
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CTRMIN-BD000035-0038 (US 32576); CTRMIN-BD000039-0044 (US 32577); CTRMIN-BD000045-0049 (US 32578); CTRMIN-BD000050-0054 (US 32579); CTRMIN-BD000055-0059 (US 32580); CTRMIN-BD000060-0109 (US 32581); CTRMIN-BD000110-0115 (US 32582); CTRMIN-BD000116-0121 (US 32583); CTRMIN-BD000122-0125 (US 32584); CTRMIN-BD000126-0129 (US 32585); CTRMIN-BD000135-0135 (US 32586); CTRMIN-BD000136-0140 (US 32587); CTRMIN-BD000141-0144 (US 32588); CTRMIN-BD000145-0146 (US 32589); CTRMIN-BD000147-0152 (US 32590); CTRMIN-BD000153-0157 (US 32591); CTRMIN-BD000158-0162 (US 32592); CTRMIN-BD000163-0165 (US 32593); CTRMIN-BD000172-0178 (US 32595); CTRMIN-BD000179-0182 (US 32596); CTRMIN-BD000187-0191 (US 32597); CTRMIN-BD000192-0194 (US 32598); CTRMIN-BD000200-0229 (US 32600); CTRMIN-BD000230-0235 (US 32601); CTRMIN-BD000236-0237 (US 32602); CTRMIN-BD000238-0245 (US 32603); CTRMIN-BD000246-0247 (US 32604); CTRMIN-BD000248-0251 (US 32605); CTRMIN-BD000252-0255 (US 32606); CTRMIN-BD000256-0260 (US 32607); CTRMIN-BD000261-0262 (US 32608); CTRMIN-BD000263-0267 (US 32609); CTRMIN-BD000268-0270 (US 32610); CTRMIN-BD000271-0275 (US 32611); CTRMIN-BD000276-0277 (US 32612); CTRMIN-BD000278-0283 (US 32613); CTRMIN-BD000284-0285 (US 32614); CTRMIN-BD000286-0291 (US 32615); 70000636–0638 (JE 31084); 70000275-0279 (US 31080); 70001297-1298 (US 31095); 70005382-5387 (JE 31103); 70005409-5416 (JE 31106); CTRMIN-BD000001-000303 (JD 093208); ARU1130828-0904 (US 86773); Kornegay PD, Cipollone v. Liggett, 8/17/84, 195:21-196:7.

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  1. While Philip Morris Companies was not a Class A member of CTR, Philip Morris Companies executives attended and participated in meetings of the CTR Board of Directors from 1985 to 1992. These executives included Thomas Ahrensfeld, Senior Vice President and General Counsel; Murray Bring, Senior Vice President and General Counsel; Hugh Cullman, Vice Chairman of the Board; Alexander Holtzman, Vice President and Associate General Counsel; John Murphy, President and CEO; and R. William Murray, President, CEO, and Vice Chairman of the Board. CTRMIN-BD000001-000303 at 0187, 0192, 0195, 0200, 0230, 0236, 0238, 0246, 0248, 0252, 0256, 0261, 0263, 0268 (JD 093208).

  2. Lorraine Pollice, CTR Corporate Secretary and Treasurer for over twenty years, attended CTR Board of Directors Meetings and CTR Annual Member Meetings, and personally prepared minutes of those meetings. Pollice WD, 6:14-7:22; 7:23-12:12. Although the minutes of meeting after meeting show participation by Altria representatives, Pollice expressed confusion and uncertainty about the precise corporate affiliation of particular participants. See, e.g., CTRMIN- BD000187-0191 (US 32597); CTRMIN-BD000200-0229 (US 32600); CTRMIN-BD000230-0235 (US 32601); CTRMIN-BD000236-0237 (US 32602); CTRMIN-BD000238-0245 (US 32603); CTRMIN-BD000246-0247 (US 32604); CTRMIN-BD000248-0251 (US 32605); CTRMIN- BD000252-0255 (US 32606); CTRMIN-BD000256-0260 (US 32607); CTRMIN-BD000261-0262 (US 32608); CTRMIN-BD000263-0267 (US 32609); CTRMIN-BD000268-0270 (US 32610); CTRMIN-MOM000222-0233 (US 32630); CTRMIN-MOM000234-0244 (US 32631); CTRMIN- MOM000245-0255 (US 32632); CTRMIN-MOM000256-0268 (US 32633); CTRMIN- MOM000269-0280 (US 32634); CTRMIN-MOM000281-0294 (US 32635); CTRMIN- MOM000295-0306 (US 32636); CTRMIN-MOM000307-0318 (US 32637). Her testimony is simply not credible since it was directly contrary to the documents themselves, which were never corrected by Pollice herself or by former CTR presidents or by outside counsel for CTR who reviewed and finalized the minutes. Pollice WD, 6:1-25; Pollice TT, 10/04/04, 01526:22-01527:14; Pollice TT, 10/04/04, 01528:19-01529:1.

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  1. From 1954 through October 31, 1999, payments to CTR's General Fund from Defendants totaled $473,369,512.22; $31,928,239.26 from American; $67,666,080.25 from B&W; $40,747,457.89 from Lorillard; $189,506,678.86 from Philip Morris; $141,890,169.04 from Reynolds; and $721,868.85 from Liggett. DXA0630917-1033 at 1017-1023 (US 75927); USX6390001-0400 at 0008 (US 89555).

  2. From 1966 through October 31, 1990, payments to CTR's Special Projects fund (discussed at Section III(E)(2), infra) totaled $18,270,623.65, which included: $29,665.00 from American; $2,571,345.40 from B&W; $144,254.75 from Liggett; $1,638,490.68 from Lorillard; $5,837,923.49 from Philip Morris; and $6,029,255.33 from Reynolds. DXA0630917-1033 at 1024 (US 75927) (CTR Response to First Set of Interrogatories, Schedule C).

  3. From 1971 through April 15, 1983, payments to CTR's Literature Retrieval Division (discussed at Section III(G), infra) totaled $16,870,480.00, which included: $2,214,135.00 from American; $2,681,358.00 from B&W; $606,043.50 from Liggett; $811,840.50 from Lorillard; $4,813,415.50 from Philip Morris; and $5,743,687.50 from Reynolds. DXA0630917-1033 at 1025 (US 75927) (CTR Response to First Set of Interrogatories, Schedule C).

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