Reports that Matter

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

Witness Development

Section 22 of 129

Witness Development

  1. Defendants Philip Morris, Reynolds, Lorillard, Liggett, B&W, American, CTR, and the Tobacco Institute developed a variety of joint research projects that were dubbed Special Projects. These projects assumed numerous forms and names, including CTR Special Projects,
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Lawyers Special Projects (projects paid through Lawyers Special Accounts), and Tobacco Institute Special Projects. These projects were exclusively funded by these particular Defendants. The main purpose of these projects, which were primarily lawyer-developed, directed, and supervised, was to obtain and develop witnesses favorable to Defendants for testimony before Congress and other regulatory bodies, for use in litigation, and for support of industry public statements.

  1. TIRC/CTR through its "Special Projects" allocated funding on a non-peer reviewed basis for research projects associated with litigation and witness preparation, Brandt WD, 127:20-22, and were not designed to address smoking and health issues in a way that would be helpful to increasing public knowledge about smoking and disease.

  2. Special Projects were overseen by the main members of the Committee of Counsel, i.e., the General Counsels of Defendants Philip Morris, Reynolds, Lorillard, Liggett, B&W, and American. Stevens WD, 6:13-21; 2045752106-2110 at 2107 (US 20467); 1003718428-8432 at 8429 (US 35902); 01124376-4421 (US 26394); 01124445-4445 (US 26400).

  3. The Committee of Counsel received frequent updates on Special Projects. 1005061626-1626 (US 35960); 1005061615-1615 (US 35958); 1005061616-6125 (US 35959); 1005061626-1626 (US 35960); 680305856-5858 (US 30887); 2501190758-0759 (US 20562).

  4. Special Projects were often managed by yet another committee called the Ad Hoc Committee. The Ad Hoc Committee consisted of in-house counsel, litigating lawyers, and other agents such as public relations and research representatives of Defendants directed to conduct long range policy planning with respect to research and witness development. 2045752106-2110 (US 20467); 1003718428-8432 at 8429 (US 35902).

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  1. The focus on witness development, as opposed to scientific research, is illustrated in a letter dated October 28, 1966, where attorney Francis Decker advised David Hardy of Shook, Hardy & Bacon on the status of certain Ad Hoc matters. He stated,

Dr. Pratt is presently only available on a limited basis. However, we intend to try to develop him as a possible witness. . . . Dr. Soloff made the remark about the finding that the non-smoker and ex- smoker have the same incidence of heart disease. Nonetheless, I think he could be an excellent witness. To begin with, I think he might be persuaded that the validity of the above statement is questionable.

1005105988-5990 (US 36020).

  1. In January 1967, the Ad Hoc Committee was comprised of: (1) Janet C. Brown, Chadbourne & Parke, counsel to American and CTR; (2) Kevin L. Carroll, White & Case, counsel to B&W; (3) Donald J. Cohen, Webster, Sheffield, Fleischmann, Hitchcock & Chrystie, counsel to Liggett; (4) Edward J. Cooke, Jr., Davis, Polk & Wardell, counsel to Reynolds; (5) Francis Decker, Webster, Sheffield, Fleischmann, Hitchcock & Chrystie, counsel to Liggett; (6) Alexander Holtzman, Conboy, Hewitt, O'Brien & Boardman, counsel to Philip Morris; (7) Edwin J. Jacob, Jacob, Medinger & Finnegan, counsel to CTR, B&W, and Reynolds; and (8) William W. Shinn, Shook, Hardy, Ottman, Mitchell & Bacon (later "Shook, Hardy & Bacon"), counsel to Philip Morris, Lorillard, B&W, and Reynolds. 2015059690-9697 (US 20309).

  2. At times, members of the Ad Hoc Committee and the Committee of Counsel held joint meetings to keep Defendants informed as to the status of joint research matters related to the enterprise, particularly "industry legislative" and litigation positions. BWX0000007-0007 (US

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  1. On December 17, 1965, at a meeting of the "Committee of Six [i.e., the Committee of Counsel]," representatives of at least CTR, B&W, and Reynolds, and outside counsel met to discuss CTR and Ad Hoc special projects in relation to the need for industry witness development. 95522182-2185 (US 56821); RC6033491-3496 (US 86225); 01124441-4444 (US 20034).

  2. In a follow-up letter dated January 4, 1966, attorney John Russell of Perkins, Daniels & McCormack informed J.E. Bennett, President of Lorillard:

As you are aware, the lawyers have, together with the staff of Council for Tobacco Research, been reviewing our industry's research program with a view toward developing some sort of a master plan.

Russell advised that there were three categories of research: "A. Adversary needs (Congress, litigation, etc.); B. Defensive needs; and C. Basic research." He further advised that some projects would be paid through Lawyers' Special Accounts and some out of CTR. 01124445-4445 (US 26400).

  1. An April 12, 1966 Reynolds document describing the mission of the Tobacco Institute discussed Defendants' goals including witness development in upcoming health litigation. The document stated that the authorization and purpose of CTR Special Projects and Ad Hoc Committee lawyer projects was to assure efficient handling of medical evidence and to provide the industry with witnesses for health litigation. 502645038.S-5038.Z (US 23053).

  2. David Hardy, partner at Shook, Hardy & Bacon, played a major role in Defendants' witness development plans to perpetuate the Enterprise's "open question" position. Hardy worked to secure possible witnesses for future litigation throughout the 1960s. For example, in a January 12, 1967 letter to the Ad Hoc Committee, he requested evaluations of potential industry witnesses. In the same letter, Hardy asked Ad Hoc Committee members to analyze the value of various CTR and Ad Hoc projects in an effort to get practical use out of them in time for expected Congressional hearings. 2015059690-9697 (US 20309).

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  1. A February 8, 1967 letter to Hardy from Donald Cohen and Francis Decker, attorneys with Webster, Sheffield, Fleischmann, Hitchcock & Chrystie, responded to Hardy's request for comments and evaluations of potential industry witnesses. It addressed many areas of possible testimony in great detail and provided names of doctors and scientists, many of whom were CTR Special Projects recipients and funded by various Defendants in later years. Cohen and Decker stated that Defendants' witnesses

should describe the unexplained paradoxes in the cigarette smoke theory of disease causation. [They] should present the idea that the statistics are as consistent, if not more so, with the constitutional theory as with the cigarette smoking theory.

  1. William Shinn of Shook, Hardy & Bacon also responded to Hardy's request, with copies to members of the Ad Hoc Committee, regarding potential witnesses for Defendants in upcoming congressional hearings. 1005154472-4479 (US 20229); 2015059690-9697 (US 20309).

  2. Similarly, on March 31, 1967, Robert Hockett, on behalf of CTR, sent a memorandum to Hardy describing Adolphe D. Jonas, a psychiatrist who had worked on the psychology of smoking. In this memorandum, Hockett mentioned Jonas as a potential industry witness. 2015034120-4121 (US 20319).

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  1. When a scientist was willing to act as a witness in litigation or before congressional hearings on behalf of the Enterprise, her work was often funded by CTR Special Projects. For example, on October 3, 1968, in an attempt to funnel names to Hardy as potential witnesses before awarding industry funding to scientists, Alexander Holtzman, General Counsel of Philip Morris, wrote a letter proposing CTR Special Project funding for Richard Hickey. Hickey's application to CTR for $30,000 had previously been turned down, but Holtzman stated that

Dr. Hickey is willing to prepare a statement for Congress provided that he is put in a position to complete the analysis of data which he has in-hand and he would, in my opinion, make an excellent witness.

1005084784-4786 at 4784 (US 22988). Holtzman also wrote that

I think we might be able to persuade him to make additional observations in these papers concerning the implications of his data in relation to the Public Health Service view on the smoking question.

Id.

  1. Similarly, a November 17, 1978 Philip Morris memorandum noted that "CTR has supplied spokesmen for the industry at Congressional hearings. The monies spent at CTR provides a base for introduction of witnesses." 2045752106-2110 at 2107 (US 20467); 1003718428-8432 at 8429 (US 35902).

  2. An industry document written by "A.H." (very likely Alexander Hotzman), describing what transpired at a General Counsels' meeting at the offices of Philip Morris on January 4, 1978, at which representatives from B&W, Liggett, Reynolds, the Tobacco Institute, and Philip Morris were present, demonstrated the development of Special Account No. 4 (a specific type of Lawyers Special Accounts, discussed at Section III(E)(3)(b), infra) to address Defendants' need for witnesses. The Enterprise used Special Account No. 4 to fund researchers and scientists and to pay fees to consultants who could offer expert knowledge to Defendants and act as witnesses on their behalf. Recipients of such funding were sought out by Defendants' attorneys based on how helpful they would be in future litigation and congressional hearings. Funds were allocated accordingly. Discussions and details of the lawyers' special projects were to be kept confidential. In this same document describing what occurred at the January 4, 1978 meeting, attendees were advised not to discuss the details of Special Account No. 4 in writing, and instead discuss any questions on the matter in a phone call. No response to a letter within a given date was assumed to mean that "the matter [was] agreeable." BWX0004364-4375 (US 36228); 03658901-8901 (US 20061); LG2024193-4196 at 4196 (US 21212).

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  1. In a February 9, 1978 letter to Thomas F. Ahrensfeld, General Counsel for Philip Morris; Max H. Crohn, Jr., General Counsel for Reynolds; Joseph Greer, General Counsel for Liggett; Arnold Henson, an attorney with Chadbourne & Parke; Ernest Pepples, General Counsel for B&W; and Arthur J. Stevens, General Counsel for Lorillard, William Shinn of Shook, Hardy & Bacon wrote of the

need for special areas of research with due regard for the politics of science, the importance of developing witnesses and the need for a responsive mechanism to meet unfounded claims made about tobacco.

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  1. By at least the late 1970s, the Tobacco Institute and its agents became coordinators in Defendants' efforts to develop a group of witnesses for future litigation and hearings. An August 30, 1978 letter from Ernest Pepples of B&W to Richard Maddox of BATCo discussed the request of Horace Kornegay, President of the Tobacco Institute, that the Committee of Counsel be involved in selecting and providing scientific witnesses and documentary testimony for use in hearings before Congress and elsewhere. During its years as an active trade association, the Tobacco Institute prepared or provided over 100 witnesses for testimony before Congress, courts or state legislatures. 681725305-5307 (US 21019); USX6390001-0400 at 0335 (US 89555).

  2. A March 11, 1980 document drafted by Max Crohn of Reynolds acknowledged that longtime CTR Special Project and Special Account No. 4 recipient Theodor Sterling was "one of our industry's most valuable outside assets." In addition to numerous publications and studies, Crohn noted that "[Sterling] has continued to be one of the primary scientists available for consultation with Shook Hardy & Bacon in Kansas City." 503645463-5463 (US 29696).

  3. A 1983 letter from Ernest Pepples of B&W to Jim Bowling of Philip Morris and Alexander Spears of Lorillard attached "a paper proposing recommendations which we might make to the [Tobacco Institute] Executive Committee." 80419202-9202 (US 21061). The attached paper titled "Industry Research Support – Recommendations" listed the following among its considerations for upcoming scientific funding:

Be prepared to increase scientific funding of special projects to resolve scientific problems and develop witnesses. . . . Maintain company cooperation – philosophies about research may differ at times, but goals should be the same. . . . Improve cooperation between industry mechanisms such as CTR and TI.

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  1. In a February 2, 1984 memorandum written by Arthur Stevens, General Counsel for Lorillard, to Alexander Holtzman, General Counsel for Philip Morris; Ernest Pepples, General Counsel for B&W; Josiah Murray, General Counsel for Liggett; and Samuel Witt, General Counsel for Reynolds, Stevens discussed the intent of the Ad Hoc Committee to "propose a witness development plan" to assist the litigation and regulatory efforts of the member companies. 85687269-7270 at 7269 (US 21081).

  2. An April 7, 1986 letter from Patrick Sirridge, Shook, Hardy & Bacon, to Alexander Holtzman, General Counsel for Philip Morris; Wayne W. Juchatz, General Counsel for Reynolds; Josiah J. Murray, III, General Counsel for Liggett; Ernest Pepples, General Counsel for B&W; Paul A. Randour, General Counsel for American; and Arthur J. Stevens, General Counsel for Lorillard, informed CTR Board members that Shook, Hardy & Bacon would take over both the administration of Special Account No. 4 from Jacob, Medinger & Finnegan and the submission of research proposals for CTR Special Projects. According to this letter, Shook, Hardy & Bacon anticipated higher funding requests for "certain witness development expenses incurred by national litigation counsel." 507877173-7174 at 7173 (US 20800).

  3. Another long-time industry law firm involved in witness development was Wachtell, Lipton, Rosen & Katz. An April 28 memorandum from attorney David Murphy to attorneys Herbert Wachtell, Paul Vizcarrondo, Jr., and John Savarese described an issue that had arisen at Lorillard. Arthur Stevens and William Allinder of Lorillard wanted to know if Lorillard could "participate in funding through a Shook, Hardy special account the work of a Georgetown pathologist, Bennett Jensen." Murphy reported that he had been advised that Jensen had received CTR Special Project funding in 1988, and now faced problems at Georgetown because of his ties to the tobacco industry. Shook, Hardy & Bacon proposed to

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"give him" $40,000 -- not for specific research . . . or with an eye to publication but solely in order to maintain a good relationship with him and secure his continued help in making contact with other scientists.

Murphy also reported that "Allinder admits that Shook, Hardy wants to give Jensen money to keep him happy and that there is no immediate value to his research." Jensen, however, was a potential witness in the Haines litigation and his contacts "could lead to legislative witnesses." 87715635- 5636 (US 21101). Indeed, Robert Northrip, an attorney with Shook, Hardy & Bacon, acknowledged that one of the benefits of Special Projects was preserving the good will of former witnesses. Northrip WD, 10:6-11:2; Northrip TT, 9/30/04, 01366:7-01367:25; ATX9275490271-0280 at 0273 (US 36231).