Tracking Youth Behavior and Preferences Ensures that

Marketing and Promotion Reach Youth . . . . . . . . . . . . . . . . . . . . . . . 1006 a. Defendants Track Youth Behavior and Preferences . . . . . . . . 1006 (1) Philip Morris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1007 (2) Lorillard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031 (3) American Tobacco, BATCo, and Brown & Williamson . . . . . . . . . . . . . . . . . . . . . . . . . . 1039 (4) R.J. Reynolds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1054 b. Defendants' Marketing Employs Themes Which Resonate with Youth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1071 (1) Philip Morris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1072 (2) Lorillard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1082 (3) Brown & Williamson . . . . . . . . . . . . . . . . . . . . . . . . . . 1087 (4) R.J. Reynolds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1096 c. Defendants Continue Price Promotions for Premium Brands Which Are Most Popular with Teens . . . . . . . . . . . . . 1112 (1) Philip Morris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1114

¶-xviii-

(2) Liggett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1119 (3) Lorillard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1119 (4) Brown & Williamson . . . . . . . . . . . . . . . . . . . . . . . . . . 1120 (5) R.J. Reynolds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1120 5. Defendants' Marketing Successfully Reaches Youth . . . . . . . . . . . . . 1122 a. Defendants' Spending on Marketing and Promotion Has Continually Increased . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1122 b. Defendants Advertise in Youth-Oriented Publications . . . . . . 1125 (1) Philip Morris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1126 (2) Liggett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1134 (3) Lorillard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1135 (4) Brown & Williamson . . . . . . . . . . . . . . . . . . . . . . . . . . 1137 (5) R.J. Reynolds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1139 c. Defendants Market to Youth Through Direct Mail . . . . . . . . . 1143 (1) Philip Morris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1143 (2) Lorillard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1146 (3) Brown & Williamson . . . . . . . . . . . . . . . . . . . . . . . . . . 1148 (4) R.J. Reynolds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1149 d. Defendants Market to Youth Through an Array of Retail Promotions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1149 e. Defendants' Promotional Items, Events and Sponsorships Attract Youth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1156 (1) Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1156

¶-xix-

(2) Sponsorships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1158 (3) Promotional Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1163

Defendants' Youth Smoking Prevention Programs Are

Not Designed to Effectively Prevent Youth Smoking . . . . . . . . . . . . . 1164 7. Despite the Overwhelming Evidence to the Contrary, Defendants' Public Statements and Official or Internal Corporate Policies Deny that Their Marketing Targets Youth or Affects Youth Smoking Incidence . . . . . . . . . . . . . . . . . . . . 1173 a. Defendants Claim They Restrict Their Marketing to People Twenty-one and Older . . . . . . . . . . . . . . . . . . . . . . . . . 1173 (1) The 1964 Advertising Code . . . . . . . . . . . . . . . . . . . . . 1174 (2) Official Corporate Policies . . . . . . . . . . . . . . . . . . . . . 1177 b. Defendants Deny Their Marketing Influences Youth Smoking Initiation; Defendants' Explanation for Their Marketing Practices Is Not Credible . . . . . . . . . . . . . 1180 (1) Tobacco Institute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1181 (2) Philip Morris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1190 (3) Liggett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1195 (4) Lorillard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1195 (5) BATCo and Brown &Williamson . . . . . . . . . . . . . . . . 1198 (6) RJ Reynolds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1202 8. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1207

Defendants Have Publicly Denied What They Internally

Acknowledged: that ETS Is Hazardous to Nonsmokers . . . . . . . . . . . . . . . . . 1210 1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1210

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The Consensus of the Public Health Community Is that

¶ETS Causes Disease in Nonsmokers . . . . . . . . . . . . . . . . . . . . . . . . . . 1211 a. The Development of the Consensus . . . . . . . . . . . . . . . . . . . . 1215 b. The Consensus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1230

Internally, Defendants Recognized that ETS Is Hazardous

¶to Nonsmokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1239

a. ETS Research at Philip Morris's Institut für Biologische Forschung (INBIFO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1240

b. Defendants' Recognition of the Validity of the Hirayama Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1253

c. Other Internal Research and Statements Revealing Defendants' Knowledge of the Health Risks of Passive Smoking . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1255

Internally, Defendants Expressed Concern that the Mounting

¶Evidence on ETS Posed a Grave Threat to Their Industry . . . . . . . . . 1259

Defendants Made Public Promises to Support Independent

¶Research on the Link Betwen ETS and Disease . . . . . . . . . . . . . . . . . 1264