211 F.R.D. 86 (E.D.N.Y. 2002)
See generally In re Julie Anne, 121 Ohio Misc.2d 20, 2002-Ohio-4489, 780 N.E.2d 635 (Com.Pl.2002), Court of Common Pleas, Juvenile Division, Lakewood, Ohio, August 27, 2002 (collecting extensive literature on harm caused by secondhand smoke, including studies by the Surgeon General, the World Health Organization, and the Environmental Protection Agency); Editorial, Smoking Looks Even Worse, New York Times, June 24, 2002, at 18 (citing reports and studies); Chicago Tribune, Secondhand Smoke Sharply Increases Risk of Stroke, Chicago Tribune, August 18, 1999, at 19 (citing study that secondhand smoke can increase chances of stroke by 82%); “Passive Smoking May Harm Fertility,” BBC, Sept. 29, 2000, available online at http://news.bbc.co.uk/hi/health/947246.stm. Tobacco smoke has similar deleterious effects on many kinds of animals. See, e.g., Vicki Croke, Where There’s Smoke, There’s Danger for Kitty, Boston Globe, Aug. 24, 2002, at C1 (reporting on study linking secondhand smoke to feline cancer).
Econometric and other models which satisfied Daubert requirements introduced at the Blue Cross trial demonstrated that the health care costs to treat illness associated with smoking are huge. According to plaintiffs’ witness Dr. Wendy Max, one plaintiff alone, Empire Blue Cross, incurred some $750 million in added costs from treating smoking caused disease since 1994. Dr. Glenn Harrison testified that the figure is even higher when the costs associated with treating smokers for non-smoking caused illness were taken into account. Using an econometric model, he testified that the total economic damages to Empire since 1994 were almost one billion dollars. (The jury, however, only found damages under twenty million). His calculations showed that a person whose respiratory or cardiovascular system is weakened by smoking would, in general, respond less readily to treatment for other diseases. The fact that a particular smoker might heal more readily than a particular nonsmoker is not decisive; the law of large numbers eliminates the effect of such discrepancies or anomalies. See also K.E. Warner, T.A. Hodgson, & C.E. Caroll, Medical Costs of Smoking in the United States: Estimates, Their Validity, and Their Implications, 9 Tobacco Control, 290-300 (1999) (applying econometric model); J.C. Bartlett, L.S. Miller, D.P. Rice, W. Max, Medical Care Expenditures Attributable To Smoking: United States, 43 Morbidity and Mortality Wkly. Rep. 469-72 (1994) (applying econometric model).
The introduction of such statistical models is proper even when all models do not provide exactly the same result. See Blue Cross & Blue Shield of N.J. v. Philip Morris Inc., No. 98 CV 3287, 2000 WL 1738338 at *1-*3 (E.D.N.Y. Nov. 1, 2000) (finding both models comply with Daubert); cf. Girden v. Sandals Int’l, 262 F.3d 195, 199 (2d Cir. 2001) (“For purposes of admissibility it is not required that a witness’s account of an event be consistent with the same witness’s other accounts of the same event.”).
The evidence supports the conclusion that extra costs result from treating smokers for diseases not caused directly by smoking. Supporting testimony in Empire Blue Cross was based on reliable medical records. Experts were highly qualified to testify; their models were subject to extensive Daubert hearings and determined to be consistent with sound scientific norms. See Blue Cross v. Philip Morris, 178 F. Supp. 2d 198, 247-49 (discussing appropriateness of statistical evidence for trial). While the court was in a position to consider a subclass for this kind of claim, the plaintiffs did not seek such compensation.
The court suggested that the class not be divided into subclasses for passive smokers or to cover those who would suffer diseases in the future. These groups would have complicated the case. The plaintiffs’ class definition excludes these possible subclasses.
While the most persuasive evidence of defendants’ wrongdoing pertains to years up to the early 1990s, evidence of its illegal activities continued well beyond any statute of limitations bar. This was particularly true with respect to misleading smokers about the favorable effects of smoking “light” cigarettes. Many smokers who switched to lighter tar and nicotine cigarettes changed their smoking habits to obtain the amount of nicotine they were used to. This resulted in deeper and more dangerous inhaling of cigarette smoke. The earlier illegal activities were evidence of later continuing conspiracies and misleading practices.
Plaintiffs allege, and can provide supporting evidence, that, beginning with a clandestine meeting in December 1953 at the Plaza Hotel in New York City among the presidents of Philip Morris, R. J. Reynolds, American Tobacco, Brown & Williamson, Lorillard and U.S. Tobacco, tobacco companies embarked on a systematic, half-century long scheme to (according to the complaint and evidence in the Blue Cross litigation):
(a) stop competing with each other in making or developing less harmful cigarettes; (b) continue knowingly and willfully to engage in misrepresentations and deceptive acts by, among other things, denying knowledge that cigarettes caused disease and death and agreeing not to disseminate harmful information showing the destructive effects of nicotine and tobacco consumption; (c) shut down research efforts and suppress medical information that appeared to be adverse to the Tobacco Companies’ position that tobacco was not harmful; (d) not compete with respect to making any claims relating to the relative health-superiority of specific tobacco products; and (e) to confuse the public about, and otherwise distort, whatever accurate information about the harmful effects of their products became known despite their “[efforts to conceal such information.]”
Blue Cross Compl. ¶ 1104; see also Falise v. American Tobacco Co., 94 F. Supp. 2d 316, 329-33 (E.D.N.Y. 2000).
This meeting was called in response to a series of epidemiological and toxicological reports linking tobacco consumption with lung cancer. See also Kenneth R. Foster, David E. Bernstein, & Peter W. Huber, Phantom Risk: Scientific Inference and the Law 4 (1994) (“Epidemiologic studies by Doll and Hill (1952) conducted in the early 1950s strongly indicated that a pack-a-day smoker has a tenfold higher chance of developing lung cancer than a nonuser.”); see generally David L. Faigman, David H. Kaye, Michael J. Saks, & Joseph Sanders, 2 Modern Scientific Evidence: The Law and Science of Expert Testimony §§ 27-1.0 to 28-2.4 (1997) (epidemiological studies and toxicological studies); Linda A. Bailey, Leon Gordis and Michael Green, Reference Guide on Epidemiology, in Federal Judicial Ctr., Reference Manual on Scientific Evidence 121 (1994) (hereinafter Reference Manual 1994); Bernard D. Goldstein and Mary Sue Henifin, Reference Guide on Toxicology, in Reference Manual 1994, supra, at 181. These studies threatened dramatic reduction in tobacco product sales and industry stock prices.
To carry out their conspiracy to mislead as to health risks of smoking, Philip Morris, R.J. Reynolds, Brown & Williamson, American Tobacco, Lorillard and U.S. Tobacco—with the assistance of the New York-based public relations firm of Hill and Knowlton—formed the Tobacco Industry Research Committee (“TIRC”) in January 1954. Renamed the Council for Tobacco Research (“CTR”) in 1964 when Liggett became a member, it was designed and operated to create the false impression that defendants were carrying out “objective, independent, and unbiased” research into the health effects of tobacco consumption, all the while actually “conducting] a campaign of deceit, misrepresentation and misinformation ... about the [real] health risks of smoking.”
In support of their claims that the TIRC, and later the CTR, were integral to the alleged conspiracy to deceive the public, plaintiffs in other trials relied heavily on the “Frank Statement to Cigarette Smokers,” a joint statement by five of the tobacco manufacturers. It was published in newspapers in virtually every city with a population of 50,000 or more, reaching more than 43 million Americans out of a population at the time of approximately 150 million. Signed by the presidents of the defendant tobacco manufacturers, it denied that cigarette smoking was hazardous to health and promised that the tobacco industry would conduct independent research to address questions surrounding smoking and disease. It explicitly announced that:
— Recent reports on experiments with mice have given wide publicity to a theory that cigarette smoking is in some way linked with lung cancer in human beings. Although conducted by doctors of professional standing these experiments are not regarded as conclusive in the field of cancer research.
— [T]here is no proof that cigarette smoking is one of the causes of lung cancer.
— [Tobacco companies] always have and always will cooperate closely with those whose task it is to safeguard the public health.
— [Tobacco companies are] pledging aid and assistance to the research effort into all phases of tobacco [product] use and health.
— For this purpose [tobacco companies are] establishing a joint industry group____This group will be known as “TOBACCO INDUSTRY RESEARCH COMMITTEE.” (capital letters in original).
— In charge of the research activities of the Committee will be a scientist of unimpeachable integrity and national repute. In addition there will be an Advisory Board of scientists disinterested in the cigarette industry.
It is plaintiffs’ contention, supported by evidence, that tobacco companies intended the public to rely upon the reports, research, and communications of the TIRC—and the companies generally—in assessing the dangers of tobacco use. As support for their allegation that the TIRC was never intended as the objective research council advertised, plaintiffs have relied on disclosures in internal documents such as the following:
— [TIRC] was set up as an industry shield in 1954. That was the year statistical accusations relating smoking to diseases were leveled at the Industry; litigation began; and the Wynder/Graham reports were issued. [TIRC] has helped out legal counsel by giving advice and technical information, which was needed at trials .... [T]he public relations value of [TIRC] must be considered and continued____ It is very important the industry continue to spend their [sic] dollars on research to show that we don’t agree that the case against smoking is closed.;
— Historically, the joint industry funded smoking and health research programs have not been selected against specific scientific goals, but rather for various purposes such as public relations, political relations, position for litigation, etc____ In general, these programs have provided some buffer to public and political attack of the industry, as well as background for litigious [sic] strategy.;
— To date, the TIRC program has carried its fair share of the public relations load in providing materials to stamp out brush fires as they arose. While effective in the past, this whole approach requires both revision and expansion. The public relations program ... was like the early symptoms of diabetes — certain dietary controls kept public opinion reasonably healthy. When some new symptom appeared, a shot of insulin in the way of a news release ... kept the patient going.; and
— For nearly twenty years, this industry has employed a single strategy to defend itself on three major fronts—litigation, politics, and public opinion. While the strategy was brilliantly conceived and executed over the years helping us win important battles, it is only fair to say that it is not — nor was it intended to be — a vehicle for victory. On the contrary, it has always been a holding strategy, consisting of creating doubt about the health charge without actually denying it.
To complement the fraudulent efforts of the TIRC and CTR, defendants in 1958 formed The Tobacco Institute (“TI”)—a New York non-profit corporation that operated in New York and Washington, D.C.—as a lobbying arm for the industry. In 1969, U.S. Tobacco, the largest manufacturer of smokeless tobacco products in the United States, formed a third organization, The Smokeless Tobacco Council, Inc. (“STC”), as a propaganda and lobbying agent. Though ostensibly focused on protecting the interests of smokeless tobacco manufacturers, plaintiffs allege, with supporting evidence, that STC operated in conjunction with the tobacco industry generally, receiving financial support from Brown & Williamson, Lorillard and R. J. Reynolds.
When significant medical research indicated a statistical relationship between smoking and cancer in the early 1940s and 1950s, defendants embarked on a campaign to discredit this research and reassure the public that their products were safe. Defendants recognized that the publication in the early 1950s of retrospective epidemiological studies showing a link between smoking and lung cancer, as well as mouse skin painting studies that confirmed the results of earlier research, and threatened cigarette sales and tobacco stock prices. See generally David L. Faigman, David H. Kaye, Michael J. Saks, & Joseph Sanders, 2 Modern Scientific Evidence: The Law and Science of Expert Testimony §§ 27-1.0 to 28-2.4 (1997) (epidemiological studies and toxicological studies); Michael D. Green, D. Michal Freedman, & Leon Gordis, Reference Guide on Epidemiology, in Federal Judicial Ctr., Reference Manual 333 (2000); Bernard D. Goldstein and Mary Sue Henifin, Reference Guide on Toxicology, in Reference Manual 1994 at 181. Documents prepared by Hill & Knowlton, a representative of the tobacco industry, reveal:
As another indication of how serious the problem is, the officials stated that salesmen in the industry are frantically alarmed and that the decline in tobacco stocks on the stock market has caused grave concern
This is, of course, the most challenging problem our organization has ever faced—and perhaps the most challenging problem that ever faced a great industry, one with annual sales of almost 5 billions [sic] at retail, and with economic roots that reach clear back to the farm.
To meet the “grave nature” of this threat, the evidence suggests, defendants developed a joint plan to rebut the mounting proof indicating that cigarettes were hazardous and to reassure the American public that the defendants would assume responsibility for bona fide research to determine whether smoking was dangerous to health:
The underlying purpose of any activity at this stage should be reassurance of the public through wider communication of facts to the public. It is important that the public recognize the existence of weighty scientific views which hold there is no proof that smoking causes cancer.
Statements of defendants’ good faith were belied by internal documents from the defendants’ own scientists suggesting that they possessed significant proof of the causal relationship between smoking and disease, contradicting their denials. The incongruity between defendants’ public statements and internal documents lasted from the 1950s into the late 1990s.
The evidence supports the inference that in public speeches, press releases, stockholder reports, television interviews, scientific studies, and letters to consumers and potential smokers, the defendants consistently denied the causal relationship between smoking and disease and argued to the public that more research was needed before a finding of danger was justified. In May 1957, George Weissman, vice president of Philip Morris, stated:
Being as close to the picture as we are, we know that most of the attack is a lot of sound and fury. Without rehashing the arguments I’ll merely assert that there’s not one shred of conclusive evidence to support the link between cigarette smoking and lung cancer, certainly a lot less than the evidence concerning the inhalation of exhaust fumes from the automobiles driven around New York City and the smog fumes in Los Angeles.
The Tobacco Information Committee, an arm of the TIRC, issued bi-monthly newsletters and press-releases to doctors, public health officials and members of the public. Early resulting publicity by tobacco companies in the 1950s and 1960s included statements that cast doubt on ties between smoking and cancer. Statements included: “Six experts state doubts on smoking-cancer theory” (1957); “Study suggests that bronchitis may be the prime factor in lung cancer” (1958); “Many Scientific Reports Show Uncertainties, Doubts About Causation of Lung Cancer” (November-December 1959); “Smoker’s Personality Key To Cancer” (October 1960); “Lung Cancer Rare in Bald Men” (March-April 1964); “Genetic Factors Affect Heart, Lung Syndromes. Smoking Is Probably Not Associated With Coronary Disease.” (Winter 1967-68).
Deliberately misleading materials promulgated by tobacco companies appeared all over the country in various forms. In a 1964 press release, George Allen on behalf of the defendants stated:
If there is something in tobacco that is causally related to cancer or any other disease, the tobacco industry wants to find out, what it is and the sooner the better
Research to date has not established whether smoking is or is not causally involved in such diseases as lung cancer and heart disease, despite efforts to make it seem otherwise. The matter remains an open question—for resolution by scientists.
In 1969, the American Tobacco Company mailed to more than 140,000 of its shareholders a booklet entitled “The Cigarette Controversy.” The accompanying press release concluded:
Despite the volume and virulence of anti tobacco propaganda, the cold fact remains that no clinical or biological evidence has been produced which demonstrates how cigarettes relate to cancer or any other disease in human beings.
In 1969, representatives of the defendants published “The Cigarette Controversy Eight Questions and Answers,” which stated in part:
For many adults, cigarette smoking is one of life’s pleasures. Does it cause a difference—even death. No one knows.
The case against smoking is based almost entirely on inferences drawn from statistics and no causal relationship has actually been established. Many respected scientists find that cigarette smoking has not been shown to cause any human disease.
From these developments have come many public warnings:
“Don’t smoke.” “Stop smoking.” A concerned public needs the truth about smoking and health. This requires that both sides of the controversy must be known. Statistics are not enough. If smoking does cause disease, “why has it not been proved, after 15 years of intensive research, how this occurs?”
Does smoking cause disease? That question is still an open one.
That same year, representatives of Brown & Williamson stated in the advertising copy for “Project Truth”:
Ten years ago, there was a cancer scare over the wax in milk cartons. And over using iodine to get a suntan. These theories are about as valid as the one that says toads cause warts.
And they’re about as valid as today’s scare tactics surrounding cigarettes. Because no one has been able to produce conclusive proof that cigarette smoking causes cancer. Scientific, biological, clinical or any other kind.
According to an internal document produced from the files of defendant Liggett Group that discusses the defendants’ response to the 1964 Surgeon General report critical of smoking, the approach of the tobacco industry was to speak on these issues in a united voice:
It is considered to be of prime importance that the industry maintain a united front and that if one or more companies were to conduct themselves as a matter of self interest, particularly in advertising, obvious vulnerability would be the result.
Public pronouncements continued into the 1970s, 1980s, and 1990s. In anticipation of the 1979 Surgeon General Report on Smoking and Health, which defendants knew would be adverse to them, representatives of the defendants released, “Smoking and Health: The Continuing Controversy.” The 168 page text included the following statements:
Indeed, many scientists are becoming concerned that the preoccupation with smoking may be both unfounded and dangerous. Unfounded because evidence on many critical points is conflicting. Dangerous because it diverts attention from other suspected hazards ...
Scientists have not proven that cigarette smoke or any of the thousands of constituents as found in cigarette smoke cause human disease....
Examples of such post 1980 denials also included statements widely disseminated through television, conferences, and letter campaigns. Among them are the following material submitted in the Blue Cross case:
— On October 20, 1983, Tobacco Institute spokesperson, Anne Browder, referring to smoking causation, told a national audience on the ABC program “20/20”: “The case is still open. The jury has not come in.”
— The next year, the Tobacco Institute published a pamphlet, entitled, “The Cigarette Controversy: Why More Research Is Needed,” which stated: There is a cigarette controversy. “The causal theory — that cigarette smoking causes or is the cause of the various diseases with which it is reported to be related statistically — is just that, a theory.”
— On May 16, 1988, the Tobacco Institute published a press release titled, “Claims That Cigarettes Are Addictive Contradict Common Sense,” which stated: “Smoking is a truly personal choice which can be stopped if and when a person decides to do so.”
— In a January 11, 1989 interview on the ABC program, “Good Morning America,” Tobacco Institute representative Brennan Dawson stated the following on behalf of the tobacco industry: “[T]he causative relationship has not been established ... I can’t allow the claim that smoking is addictive to go unchallenged.... It’s a matter of willpower.”
— Walker Merryman, Vice President of Tobacco Institute, wrote the following in an article published on April 27, 1989, in the Washington Times: “The difference between cigarette smoking and true addictions to hard drugs is stark and compelling.”
— In 1992, Philip Morris published a pamphlet entitled, “Tobacco Issues and Answers,” that stated: “Those who term smoking an addiction do so for ideological, not scientific reasons.”
— On April 15, 1994, the day after its and other CEOs from the industry testified before Congress that smoking was not addictive, Philip Morris placed an advertisement in the New York Times that stated: “Fact: Philip Morris does not believe smoking is addictive.”
Letters were sent to consumers all across the country, including many New York residents. Articles like the “Continuing Controversy” written in the 1970s denying causal connection between smoking and cancer were re-circulated in mailings after 1980. Letters included the following statements:
— Despite all the research going on, medical science has not found any conclusive evidence that any element in cigarettes, tobacco, or tobacco smoke causes human disease.
— We firmly believe that cigarettes have been unfairly blamed as a cause of human disease.
— With the numerous attacks being made on smoking, it is indeed refreshing to read a letter such as yours and to be reassured that not everyone has accepted without question the adverse publicity the tobacco industry has received ... Throughout the years, the public has received a largely one-sided view of the questions that have arisen about tobacco ... Through a series of messages appearing in national newspapers and magazines, we are attempting to provide our side of such public issues as ... passive smoking, smoking courtesy and smoking and health.
— [I]n the absence of the identification of the processes or mechanisms involved in cancer causation, together with experimental animal evidence which raises questions regarding causation, we believe that scientific proof that cigarette smoking causes chronic diseases in humans is still lacking.
Communications reached elementary school teachers and principals. A 1990 form letter responding to inquiries from fifth grade students at a New York elementary school reads in relevant part:
[T]he simple and unfortunate fact is that scientists do not know the cause or causes of the chronic diseases reported to be associated with smoking. The answers to many unanswered smoking and health questions—and the fundamental causes of the diseases often statistically associated with smoking—we believe can only be determined through much more scientific research.
These communications were part of a general policy for the 1980s and beyond. A summary of plans in conference titled “Marketing in the 80’s” stated “Overall marketing policy will be such that we maintain faith and confidence in the smoking habit, whether brand choice is traditional or not in particular markets. This means that B.A.T. [a British holding company] will not remain on the defensive, by simply reacting to alleged ‘health’ hazards and related competitive challenges: instead we shall actively seek out all worthwhile prospects for brand and product reassurance in marketing throughout the world.”
Although the representatives of the defendants continued to release public statements and reports suggesting that smoking neither caused adverse health effects nor was addictive—as well as to finance purported research to support these inappropriate claims—evidence demonstrated that defendants knew the contrary to be true: that smoking is both lethal and addictive.
Internal documents from defendants indicate that through independent company research and the sharing of this research through the TIRC and CTR, each of the major tobacco product manufacturers was aware that tobacco contributed to lung cancer. For example, a 1956 confidential memorandum from a Philip Morris Vice President of Research and Development to top executives at the company regarding the advantages of “ventilated cigarettes” stated: “Decreased carbon monoxide and nicotine are related to decreased harm to the circulatory system as a result of smoking .... [D]ecreased irritation is desirable ... as a partial elimination of a potential cancer hazard.”
Similarly, a British American Tobacco Company (BATCo) document produced in 1958 following a series of meetings between BATCo representatives and twenty American scientists and researchers—including at least nine representatives of the tobacco companies and the Scientific Advisory Board of TIRC—stated that all of the tobacco company researchers with whom they met in the United States (and all but one of the outside people) “believed that smoking causes lung cancer” and noted that there was “general acceptance [among the group] that the most likely means of causation is that tobacco smoke contains carcinogenic substances present in sufficient quantity to promote lung cancer when acting for a long time in a sensitive individual.” That same year, a Philip Morris Vice President of Research, who later joined its Board of Directors, stated in a confidential internal memorandum that “the evidence ... is building up that heavy cigarette smoking contributes to lung cancer either alone or in association with physical and physiological factors.” A 1963 confidential internal memorandum from Liggett’s research consulting firm admitted: “Basically we accept the inference of a causal relationship between the chemical properties of ingested tobacco smoke and the development of carcinoma ...”
In addition to knowing that smoking is linked to lung cancer, it can be concluded that defendants were aware of other major deleterious health effects caused by smoking, including bronchitis, emphysema, and cardiovascular disease. Supporting this contention, plaintiff in Blue Cross introduced among other documents the following excerpts from internal company materials:
— A 1963 confidential memorandum to Philip Morris’s President and CEO describes components of cigarette smoke as “known carcinogens” and states: “Irritation problems are now receiving greater attention because of the general medical belief that irritation leads to chronic bronchitis and emphysema. Emphysema is often fatal either directly or through other respiratory complications. A number of experts have predicted that the cigarette industry ultimately may be in greater trouble in this area than in the lung cancer field.”
— An internal memo produced for a B.A.T. Group Conference (e.g., BATCo, Brown & Williamson, and other subsidiaries of B.A.T. Industries) in November 1970 that states “nicotine may be implicated in the aetiology of cardiovascular disease.”
Defendants understood at least for the past four decades that many smokers continue to smoke not by choice, but because of nicotine addiction. The evidence includes confidential BATCo documents related to BATCo’s “Project Hippo” that indicate that at least as early as 1962 defendants were aware of the physiological and pharmacological effects of nicotine. Copies of Project Hippo reports were circulated to TIRC, BATCo, Brown & Williamson, and R.J. Reynolds.
A 1963 memorandum written by Addison Yeaman, General Counsel at Brown & Williamson, concludes by stating that the company is “in the business of selling nicotine, an addictive drug.” Similarly, a 1978 internal Brown & Williamson memorandum acknowledges that “very few consumers are aware of the effects of nicotine, i.e., its addictive nature and that nicotine is a poison.” Evidence that tobacco companies were aware of nicotine’s addictive properties is incorporated in a 1972 report by Philip Morris presented at a CTR conference; it states:
— [N]icotine is the active constituent of cigarette smoke;
— Without nicotine ... there would be no smoking.;
— Why then is there not a market for nicotine per se, to be eaten, sucked, drunk, injected, inserted or inhaled as a pure aerosol? The answer, and I feel quite strongly about this, is that the cigarette is in fact among the most awe-inspiring examples of the ingenuity of man.;
— The cigarette should be conceived not as a product but as a package. The product is nicotine ...;
— Think of the cigarette pack as a storage container for a day’s supply of nicotine____;
— Think of the cigarette as a dispenser for a dose unit of nicotine.
Other internal memoranda suggest that the defendants knew that nicotine addiction could lead smokers of low-tar cigarettes to compensate, that is take longer and deeper puffs of cigarettes or to smoke more until the health benefits of these marketed products became negligible. A 1976 Lorillard memorandum stated:
The consensus of opinion derived from a review of the literature on the subject indicates the most probable reason for the addictive properties of smoke is nicotine. Indications are that the smoker adjusts his smoking habits to satisfy the desire for nicotine, either by frequent or large puffs on the cigarette, or smoking a large number of cigarettes.
Another inside document says, “given a cigarette that delivers less nicotine than he desires, the smoker will subconsciously adjust his puff volume and frequency, so as to obtain and maintain his per hour, per day requirement for nicotine____”
All the while the TIRC, CTR, and TI continued to release public statements and reports indicating smoking neither caused adverse health effects nor was addictive—as well as to finance research to support these claims—defendants in fact knew that the contrary was true: that smoking is both lethal and addictive, that it contributed not only to lung cancer but to harm to the circulatory system.
Despite knowing that tobacco use is injurious and addictive, evidence suggests that defendants—in part through the efforts of the TIRC, CTR, TI and STI—intentionally engaged in a campaign of deceit, misrepresentation and misinformation directed at misleading the public about the health risks and addictiveness of smoking.
Efforts undertaken by defendants to hide this information include what is suggested as the termination and destruction of Philip Morris research regarding nicotine’s addictive properties. For example, in the early 1980s researchers working at a Philip Morris laboratory in Richmond confirmed that nicotine demonstrated addictive qualities and that the laboratory research animals self-administered the substance by pressing levers to obtain nicotine. Less than a year after a briefing to top Philip Morris executives on these findings by the director of the research, Dr. Victor J. DeNoble, Philip Morris representatives instructed the researchers to stop work, to kill all the laboratory animals, to turn in their security badges, and to withdraw a paper on the addictive qualities of nicotine that had been accepted for publication by a scientific journal. Philip Morris then closed the laboratory, and discharged the researchers, requiring them to agree to remain quiet about their work with the sanction of legal action if they published their findings.
Plaintiffs can also point to confidential research conducted by Brown & Williamson’s British affiliate on behalf of Brown & Williamson. In the course of this research, Brown & Williamson suppressed confidential findings of a “causal relation” between ZEPHYR, Brown & Williamson’s code name for cancer, and tobacco smoking.
As part of the central role the TIRC and CTR played in defendants’ deceptive coverup, TIRC established a “Special Projects” division where research revealing the dangers and addictiveness of smoking was secreted from the public and concealed from discovery in litigation. A 1970 advertisement placed in newspapers around the nation by the TIRC at the direction of tobacco companies claimed that there was no known link between cigarettes and disease despite, according to the advertisement, decades of “totally independent research.” A public statement in 1982 by Edward A. Horrigan, Jr., then Chairman of the Executive Committee of the TI, claimed:
After three decades of investigation and millions of dollars invested by the government, the Tobacco Industry and private organizations, the smoking and health controversy remains unresolved. The net result of all of this effort has been that no causal link between smoking and disease has been established. That is not merely the opinion of Tobacco Industry executives. That is scientific fact readily available to anyone willing to make an objective, unemotional study of the existing evidence.
Defendants funded scientific studies to discredit scholarship demonstrating causation. Evidence at the Blue Cross trial also suggested that defendants never intended to fund and produce the objective research it had advertised. Internal documents such as the following acknowledged that research grants and studies sponsored by TIRC and CTR were intended to reassure the public, driven by litigation, and designed to sow doubts about the hazards associated with smoking:
It has been stated that CTR is a program to find out “the truth about smoking and health.” What is truth to one is false to another. CTR and the Industry have publicly and frequently denied what others find as “truth.” Let’s face it. We are interested in evidence which we believe denies the allegation that cigarette smoking causes disease ... [A]ll caveats and platitudes aside, we must assume that CTR exists for the good of the [tobacco] industry.
Defendants deliberately refrained from conducting in-house biological research demonstrating the causal relationship between smoking of commercially produced cigarettes and cancer. They agreed to refrain from conducting biological testing, of its products as marketed, on animals, allegedly in order to suppress research that was expected to lead to scientific confirmation that cigarettes being smoked by the public were hazardous. Internal memoranda referred to a “gentlemen’s agreement” not to conduct animal laboratory experiments. An internal document, written by Associate Director of Scientific Issues for R.J. Reynolds, Frank G. Colby, dated December 9, 1981, states: Information was obtained that Philip Morris U.S.A. does not live up to the alleged “gentlemen’s agreement” of not having animal laboratory facilities on their premises in this country.
Evidence also showed the tobacco industry purposefully concealed research in the United States. As one industry document stated, “[t]he burden of proof has shifted. It is no longer up to the scientists to prove that cigarettes cause lung cancer. It is the duty of all concerned to prove that they do not.” (internal quotations omitted). Other documents reveal members of the industry diverted correspondence through lawyers that contained “contentious information”—i.e., adverse health information sought to be covered up. There was a “mechanism for [] sending scientific information to B & W. In principle it will mean [ ] mailing contentious information to a legal man called Maddox ... with a covering letter ... saying that Millbank has asked that [Maddox] receive it.”
Documents directed subordinates to “root out” adverse information that would generate negative implications and to produce information that would encourage consumers to continue to smoke. One reads: “RD & E is interested in information pertaining to the role of nicotine in the smoker’s subjective perception of smoke quality. If the reports stick to research data, the reports would be interesting. However, if the reports include discussions of pharmacological effects of nicotine, the information will not be interesting and would be helpful to the plaintiff. RD & E will begin receiving reports from this activity and be prepared to inform BAT to cease sending the data to B & W if the science is not interesting.”
Some reports were to be withheld from the United States Surgeon General as well as from TIRC members if one of the defendants was disturbed at the report’s “implications [regarding] cardiovascular disorders.” “TIRC agreed to withhold disclosure [of] Battelle Reports to TIRC members or SAB until further notice ... [and submission of] Battelle or Griffith Developments to [the] Surgeon General [is] undesirable and ... continuance of Battelle work [is] useful but [the company is] disturbed at its implications [regarding] cardiovascular disorders.” Information pertaining to the “carcinogenicity” of tobacco smoke was vetted from reports.
In addition to covering up the health risks and addictiveness of smoking, defendants are alleged to have intentionally enhanced nicotine concentration in cigarettes to increase smoker-addiction. They misled the public to believe smoke from “lighter” cigarettes contained reduced levels of tar and nicotine relative to that released by conventional cigarettes, and suppressed research into less harmful cigarettes. By now almost all smokers have switched to “lighter” cigarettes on the premise that they are not substantially dangerous to health, when in fact defendants withheld their knowledge that such cigarettes as actually used were lethal.
Supporting their contention that tobacco companies manipulated nicotine levels, the plaintiffs can identify various patents filed by defendants that provide the technological capability to manipulate nicotine levels in cigarettes “to an exacting degree.” Examples include the following:
— A Philip Morris patent application for an invention that “permits the release ... in controlled amounts and when desired, of nicotine in tobacco smoke.”;
— Another Philip Morris patent application explaining that the proposed invention is “particularly useful for the maintenance of the proper amount of nicotine in tobacco smoke” and noting that “previous efforts have been made to add nicotine to Tobacco Products when the nicotine level in the tobacco was undesirably low.”; and
— A 1991 R.J. Reynolds patent application stating that “processed tobaccos can be manufactured under conditions suitable to provide products having various nicotine levels.”
In addition to covering up the health risks and addictiveness of smoking, evidence can be introduced to show that defendants misled the public into believing that smoke from “lighter” cigarettes, containing reduced levels of tar and nicotine relative to that released by conventional cigarettes, would result in substantially less danger. The defendants suppressed research into less harmful cigarettes allegedly as part of the cover-up of the continuing danger from low tar cigarettes.
Evidence can be used to demonstrate that defendants fraudulently promoted filtered and low-tar cigarettes as safer or healthier cigarettes than conventional ones. “Light” cigarettes, the evidence showed, often lacked significant health benefits over conventional cigarettes, and in many instances may have increased the risk of emphysema, heart disease, and other diseases caused by smoking. This is because of an effect called compensation: smokers of light cigarettes tend to smoke more, inhale more deeply, and hold the smoke in their lungs longer, in order to maximize their absorption of nicotine. A jury could find that any real health benefit was far less than defendants led the public to believe and that their conduct was particularly insidious and effective in misleading smokers.
One goal in designing new products was, plaintiffs’ evidence could show, to “intercept” quitters. As a 1978 Brown and Williamson internal memorandum put it: “Perhaps answers to another question ‘How do people stop smoking?’ could lend insight into the creation of new products. Having answers to this latter question, we might then design products to ‘intercept’ people who are trying to give up smoking.” Another internal memorandum stated:
All work in this area should be directed towards providing consumer reassurance about cigarettes and the smoking habit. This can be provided in different ways, for example, by claimed low deliveries, by the perception of low deliveries and by the perception of mildness. Furthermore, advertising for low delivery or traditional brands should be constructed in ways so as not to provoke anxiety about health but to alleviate it and enable the smoker to feel assured about the habit and confident in maintaining it over time.
Advertisements for low tar cigarettes had express or implied health messages. It was not seriously disputed at a prior trial that defendants failed to inform the public about their knowledge of the limited health benefits of low tar cigarettes and their knowledge of smoker compensation by a change in the smoker’s habits.
The evidence in Blue Cross could be found to have demonstrated that a second reason to delay the development of “safer” cigarettes stemmed from a general fear by defendants that over-aggressive marketing of low-tar products would alert the public to the dangers of stronger cigarettes. For example, documents from B.A.T. Industries, the parent company of Brown and Williamson, revealed that in 1978 Chairman Sir Patrick Sheehy, warned its affiliates against attempting to develop truly safer products:
I thought I should write to explain why it is that I cannot support your contention that we should give a higher priority to projects aimed at developing a “safe” cigarette (as perceived by those who claim our product is unsafe), by either eliminating, or at least reducing to acceptable levels, all components claimed by our critics to be carcinogenic ...
[I]n attempting to develop a safe cigarette you are, by implication, in danger of being interpreted as accepting that the current product is “unsafe” and this is not a position that I think we should take.
Documents illustrated that this practice of delaying attempts to improve cigarette safety could be traced back to the 1950s. For example, a 1953 Hill and Knowlton memorandum to defendants’ representatives entitled “Some Things To Do” states:
Develop some understanding with companies that, on this problem, none is going to seek a competitive advantage by inferring to its public that its product is less risky than others. No claims that special filters or toasting, or expert selection of tobacco, or extra length in the butt, or anything else, makes a brand any less likely to cause you-know-what. No “Play Safe with Luck-ies” idea—or with Camels or with anything else.
The tactic of broad denials of knowledge of harm by the industry could be found to have been reflected in its research strategy. Evidence revealed that despite the continuing growth of each defendants’ in-house research efforts, the defendants as a whole continued throughout the 1980s and 1990s to adhere to a “gentlemen’s agreement” to avoid actual marketing of any significant risk reducing innovation that would redound to one defendant’s benefit. Potentially innovative risk reducing products were actually developed, but never, it might be argued, seriously marketed. Others were introduced but without much attention to the fact that they might reduce health risks.
Testimony through depositions confirmed that through defendants’ misstatements and omissions, defendants were successful in influencing some people to purchase and smoke low tar cigarettes (rather than quitting) in reliance upon the supposed health benefit communicated by defendants. A jury could conclude that this strategy had a misleading “informational effect” on emerging markets of tobacco consumers. It could have misled more “health conscious” consumers to continue to smoke a product just about as dangerous as regular tar brands, while limiting the total information available to the public about the relative risks of smoking.
Plaintiffs can contend that tobacco companies knowingly designed so-called “light” products so that advertised tar and nicotine levels understate the amounts of tar and nicotine actually ingested by human smokers. It has already been noted that such design features include a technique called filter ventilation in which nearly invisible holes are drilled in the filter paper, or the filter paper is made more porous. Many smokers of advertised low-tar and nicotine cigarettes block the tiny, laser generated perforations in ventilated filters with their fingers or lips, thereby resulting in greater tar and nicotine yields to those smokers than those measured by the Federal Trade Commission’s smoking testing machines.
It can be claimed by plaintiffs that tobacco companies knew that the ability to block ventilation holes allows smokers to “compensate” for nicotine losses that would otherwise be caused by tar-reducing modifications. Tobacco companies allegedly studied smoker behavior in order to design cigarettes that allow smokers to compensate for lower nicotine yields while appearing to deliver less nicotine in FTC tests. To support this contention, a research study presented at a 1974 BATCO conference concluded that “ ‘whatever the characteristics of cigarettes as determined by smoking machines, the smoker adjusts his pattern [of smoke inhalation] to deliver his own nicotine requirements (about 0.8 mg. per cigarette).’ ”
Rather than actually develop a less-harmful cigarette, as light cigarettes were advertised to be, defendants may be shown to have conspired by way of a “gentlemen’s agreement” to suppress independent research, development and marketing of such a cigarette. According to plaintiffs’ theory, defendants recognized a difference between “health-oriented” cigarettes, which were never marketed on a wide basis, and “health-image” cigarettes, such as low-tar and low-nicotine products. The latter were arguably only a marketing tool to give the illusion of a safer product.
As plaintiffs may describe it, the situation among the six major tobacco manufacturers represented a dilemma: no company wanted a “safer” cigarette, but any company, by being the first to produce such a cigarette, stood to gain substantial market share. Lorillard’s Director of Research and Development wrote to Lorillard’s president in 1966 regarding the development of a safer cigarette: “if we fail to pursue this research and/or a competitor marketed a cigarette whose smoke condensate gives little tumorigenic response, ... a significant sales loss could result.” This is a variant of the classic prisoner’s dilemma.
Production of such a “safer” cigarette by even one manufacturer would have represented an indictment of the whole industry, potentially unleashing litigation for earlier injuries and illnesses due to conventional cigarettes. As Jeffrey Wigand, a former Vice President for Research and Development for Brown & Williamson testified at a prior trial, “ ‘[a]ny research on a safer cigarette would clearly expose every other product as being unsafe and, therefore, present a liability issue in terms of any type of litigation.’ ”
Allegedly faced with the choice between abandoning the conspiracy and developing a less harmful cigarette on the one hand, or maintaining the conspiracy and avoiding potential liability for injuries resulting from conventional cigarettes on the other, the major tobacco manufacturers arguably opted to maintain the scheme, aided in part by the highly concentrated industry market structure. Such a conscious decision to trade-off decreased public injury from smoking for maintenance of its corporate profits could be inferred from a confidential internal Philip Morris memorandum regarding its decision not to market a less harmful cigarette:
[A]fter much discussion we decided not to tell the physiological story [regarding the health effects and addictiveness of conventional cigarettes] which might have appealed to a health conscious segment of the market. The product as test marketed ... was unacceptable to the public ignorant of its physiological superiority.
Plaintiffs may identify two additional areas of deceptive conduct central to the conspiracy: the target marketing of cigarettes and other tobacco products to children; and the intentional deflecting of tobacco-related healthcare costs to smokers and their health plan providers. Plaintiffs can contend that defendants—with the use of sophisticated marketing tools such as Joe Camel—“systematically targeted” youth to encourage them to purchase cigarettes in violation of various state laws, including New York’s, in order to replace dying adult smokers. Support for this contention can come from a 1974 R.J. Reynolds marketing plan that highlighted as an “opportunity area” a plan to “increase our young adult franchise,” with “young adults” described as including those children 14 to 17 years of age. This evidence was excluded at the Blue Cross trial on grounds that it was too prejudicial under Rule 403 of the Federal Rules of Evidence, but it may have more salience in computing punitive damages.
Recent media reports suggest that tobacco companies also opposed marketing of drugs designed to help smokers stop smoking. See Kenneth Chang, Tobacco Industry Fought Drugs’ Marketing, New York Times, August 14, 2002, at A17.
Evidence has been found to demonstrate that defendants knew such deceptive practices would cause—and that their practices did cause—plaintiffs’ harm.
The tobacco industry can be charged with knowing that the consequences of prolonging the debate over the adverse effects of smoking would be to reassure addicted consumers in order to induce them to continue using their products. Documents substantiate this view of defendants’ program designed to mislead and string along smokers. Proof includes such defendants’ statements as follows:
— The CTR (then TIRC), was formed in the early 1950’s in response to published reports linking cigarette smoking with various diseases. The primary purpose for the initial formation was a public relations one____ The CTR, with the help of others, has kept certain questions open when a large body of anti-tobacco scientists claimed the easy answers had been found.
— The long established policy of CTR, carried out through [the Scientific Advisory Board is to] ... maintain the position that the existing evidence of a relationship between the use of tobacco and health is inadequate to justify research more closely related to tobacco; and ... the study of the disease keeps constantly alive the argument that, until basic knowledge of the disease itself is further advanced, it is scientifically inappropriate to devote the major effort to tobacco.
— The BAT objective is and should be to make the whole subject of smoking acceptable to the authorities and to the public at large since this is the real challenge facing the Industry. Not only ... is [this] the right objective but ... it is an achievable one.
A public relations campaign was suggested to “describe more or less truthfully the dramatic efforts” of Philip Morris to safeguard the public. The company also sought to take steps so that the public could be
Assured that Parliament (Marlboro) would immediately bring them any tar and nicotine reducing innovations that were consistent with good smoking and that [Philip Morris] would do this no matter how much effort and expense were required____ [T]he attempt would be made to build an image of the brand as a brand that was made and sold by people who were genuinely concerned about the health of their customers and did not believe in taking chances with the health of their customers.
Evidence in the form of documents, lay and expert testimony, and depositions may establish that plaintiffs will meet their burden of proving that defendants’ deceptive practices caused them injury. A key question was whether plaintiffs’ smoking behavior would have been different if defendants had been truthful rather than deceitful.
Expert witnesses in a prior trial testified that: (1) members of the American public underestimated the health risks of smoking at the time they started smoking and afterward; and (2) early public acknowledgment by the tobacco companies that they believed smoking causes lung cancer and other diseases would have led the American public not to start smoking, or to smoke less, or to quit smoking earlier.
Defendants’ objections to plaintiffs experts’ testimony in the Blue Cross litigation was ruled on repeatedly at that trial. Critical aspects need only be summarized here. The legal basis for utilizing the statistical analysis of plaintiffs and defendants’ experts is set out in Part V.E., infra. Plaintiffs in the instant case may provide different types of statistical and other analysis to support their claim.
The testimony of Dr. Jon Krosnick, a behavioral scientist and leading expert on survey methodology, at the Blue Cross trial was to the effect that defendants’ misrepresentations affected subscribers of that insurer plaintiff. Dr. Krosnick presented detailed empirical data that smokers significantly underestimated the health risks and addictiveness of smoking, that the misrepresentations of the tobacco companies had a substantial impact on smokers’ perceptions of these risks, and that if the defendants had not engaged in deceptive conduct fewer would have started to smoke and more would have quit sooner. Dr. Krosnick was qualified by training, experience, and his published studies supporting his views. He employed standard survey procedures and analysis.
Dr. Krosnick’s conclusions were based on statistical analysis of three types of data. First, he supervised a two thousand person telephonic survey conducted by an independent national survey research firm, Schulman, Ronca, Bucuvalis, Inc., to assess the impact of smoking related information on consumers. This survey was conducted according to acceptable survey techniques. Second, he compared these results with a comprehensive literature review of pre-existing surveys and articles assessing people’s perceptions and attitudes concerning the health risks of smoking. Third, he relied on a randomized sample of 156 Empire Blue Cross’s subscriber depositions, and over three hundred depositions of other Blue Cross plan members, to extrapolate statistically meaningful inferences about the population as a whole. Depositions were taken in person for up to three hours, with standardized questions, and without witness preparation to preserve the integrity of the sample. Subscribers were either current or former smokers in plaintiff or other Blue Cross plans, all of whom had submitted health care costs to these plans. The sampling procedure conformed to standard practice.
Dr. Krosnick had each of the relevant depositions reviewed by neutral coders who were appropriately selected, instructed and supervised. They coded the transcripts according to set instructions and inquiries.
These questions, which were divided into five groups, focused on (1) what deponents now believed about the health risks and addictiveness of smoking regularly; (2) what deponents believed about the health risks and addictiveness of smoking at any other time after they had become regular smokers; (3) the deponents’ beliefs about their exposure to statements made by the tobacco companies about the health risks of smoking; (4) the deponents’ beliefs about their exposure to statements made by the tobacco companies concerning the addictiveness of smoking; and (5) the deponents’ beliefs about how certain tobacco company statements would have affected their smoking behavior if they had been made to the public prior to, or during, the time that the witness smoked regularly.
The analysis of the depositions and the jury’s view on a large screen of videos of the witnesses being deposed, as well as their own analysis of transcripts of relevant depositions, could lead the jury to find that: (1) a substantial percentage of smokers believed that, at the time they started smoking regularly, smoking was not risky to their health or addictive; and (2) many would have changed their smoking behavior if the tobacco companies had made timely candid statements about what defendants knew were the health risks and addictiveness of smoking.
The results obtained from analyzing the plaintiffs members’ depositions were confirmed by the results of the depositions taken of members of plans other than Empire Blue Cross. Dr. Krosnick also relied upon other surveys that had been conducted by reputable survey and polling organizations. Employing different methodological approaches to reach like results alleviated the potential limitations of any one approach. See David H. Kaye and David A. Freedman, Reference Guide on Statistics, Reference Manual, supra, at 97 (“Sometimes several experiments or other studies, each having different limitations, all point in the same direction ... Such convergent results strongly suggest the validity of the generalization.”); Hans Zeisel & David Kaye, Prove It With Figures: Empirical Methods in Law and Litigation 68-78 (1997) (“Still more powerful support comes when studies based on distinct research approaches (or employing the same general research approach but having differing strengths and weaknesses) reach comparable results____”); Shari S. Diamond, Exploring Sources of Sentencing Disparity, The Trial Process 387 (1981) (comparing simulated methods and actual case analysis to determine disparities among federal sentences); Harry Kalven & Hans Zeisel, The American Jury (1966) (separate approaches to assess impact of unanimity requirement on hung juries).
Dr. Krosnick concluded that smokers underestimate the relative risks of smoking, and that but for the misleading misrepresentations of the tobacco industry in the 1980s and afterward, more smokers would have changed their smoking behavior. He provided quantitative bases for his opinion.
Dr. Jeffery Harris, a medical doctor and an economist, provided statistical evidence about the effect of the defendants’ misleading statements on smoking behavior. Tracing populations of smokers around the country exposed to different levels of information, Dr. Harris modeled the impact of the defendants’ misrepresentations on smokers. He traced the effects of two types of misconduct: 1) the health consequences which resulted from defendants’ misrepresentations (an “information effect”); and 2) the consequences of defendants’ “gentlemen’s agreement” not to compete to produce less hazardous products or to delay their introduction (an “innovation effect”).
Dr. Harris’s opinion and analyses and the bases for his conclusions were sufficient to allow a jury to find that smokers relied on publicly available information in deciding whether to start and stop smoking and that the smoking behavior of Blue Cross members would have been different had it not been for defendants’ fraud. His study showed how information “moves smoking rates,” demonstrating that as consumers were exposed to different information about smoking, their smoking behavior changed. Empirical evidence further demonstrated that, according to this witness, consumption of cigarettes has historically decreased after significant disclosure about the dangers of smoking. He testified that based upon data from many peer reviewed studies, accurate and timely information increased smokers “quit rates” and reduced teenage “initiation rates.”
Using economic and statistical tools, Dr. Harris created a counterfactual model to graph what smoking patterns would have looked like had the industry not misrepresented the hazards of its product to the public. He then calculated a “conduct attributable fraction” for each year—one based on the “informational effect” and the other on the “innovation effect” representing the portion of medical costs due to smoking related illnesses resulting from defendants’ fraud. Under this information effect, Dr. Harris found that the rate of smokers quitting smoking would have increased by 4.5% per year (as opposed to a rate approximating 3% per year) in the absence of a conspiracy to deceive the public. He reported that his 4.5% figure was conservative, and that had he mechanically relied upon the results of the underlying studies, quit rates could have increased to as high as 10%.
Dr. Harris used a separate model to determine the effects that resulted from defendants’ attempt to suppress the introduction of safer cigarettes into the market. To measure this “innovation” effect, Dr. Harris consulted surveys, studies, and epidemiologic data to determine the rate at which the health risks of smoking had actually declined since the 1950s. He then measured how much faster the risks of smoking would have declined with the use of a safer technologically available cigarette. His measurements were also based on case-studies of risk reducing technologies that were never marketed, as well as defendants’ rate of spending on research and development compared with those in other benchmark industries.
Dr. Harris’s reliance on a combination of research techniques—mathematical models, statistical regression analysis methods, analysis of data from relevant benchmark industries, and reasoned judgments based upon available data—were consistent with data and research methods of other professional economists.
The smoking attributable costs calculated by other experts were utilized in combination with Dr. Harris’s calculations to determine damages on a per annum basis. Several thorough and prolonged hearings (in this case and in related actions) established that these statistical models and the experts who developed them satisfied Daubert and could be used in combination with individualized evidence to satisfy each element of the plaintiffs’ claims.
Videotaped depositions of smoker subscribers in the Blue Cross case substantiated the effect defendants’ misstatements had on consumers. Relevant portions of 71 depositions relied upon in Dr. Krosnick’s study were played to the jury. Some of these depositions showed that plaintiffs members underestimated the health risks of smoking at the time they started smoking (and afterward) and that public acknowledgment by the tobacco companies that they believed smoking causes lung cancer and other diseases would have led them not to start smoking, to smoke less, or to quit smoking earlier.
Many testified that the misrepresentations created doubt in the consumers’ minds about the effects of tobacco use and reassured addicted users that it was safe to continue smoking. See, e.g.:
A: But at the time that these warnings came out is the same time the advertisement came out saying there was no proof____So we’re trying to weigh it on our own.
Q: Understanding that, what was it about the statement from the tobacco industry that you believe influenced you away from quitting?
A: Probably that tests weren’t conclusive.
Q: And having seen this warning, the warning didn’t make you stop smoking, did it?
A: No, I was very healthy. You know, we all thought, everyone really, I can’t speak for the whole world, but ... my circle of friends all thought that ... they [the public health community] don’t know what they’re talking about. They’re just doing this to get on a bandwagon of some sort.
A: ... I remember watching on television. It was [an] R.J. Reynolds ... CEO type ... saying that he smoked, you know, and that he sees nothing wrong with it and it doesn’t impact his health at all.
Q: Did you take the same comfort?
A: Yes, I did.
Other testimony indicated that subscribers were affected by defendants’ failure to fund and produce the objective research it advertised it would:
Q: Did you know that as of February 2nd, 1953, that R.J. Reynolds had indicated in its documents ... that studies of clinical data tend to confirm the relationship between heavy and prolong tobacco smoking and the incidence of cancer of the lung?
A: Absolutely not.
Q: And if R.J. Reynolds had disclosed to you and to the public that studies of clinical data tend to confirm the relationship between heavy and prolonged tobacco smoking and the incidence of cancer of the lungs, do you think that would have affected you?
A: Very much so.
Q: How so.
A: It would have scared me to death.
Other deposition statements included such statements as the following:
“They were making available to us teens other information. I don’t understand if it was available why we wouldn’t have seen stuff like this on TV. If they were showing one part, and this indeed was available to the public, why weren’t we seeing this part of it? ... I can honestly say if I had this in front of me, I think I would have chosen not to smoke. If they would have came forward to say that the product had some bad effects, long term effects, I would have probably looked upon it as that ... in ... [the] long term that it would be bad for me.”
Many testified that they were reassured by the non-verbal messages associated with smoking, while others verified the supposed effect of low tar products on intercepting quitters. Examples include:
Q: Do you recall any statements or ad by the tobacco companies that provided some reassurance to you that smoking might not be bad for you?
A: Well, like I said earlier before when the guy — I believe the guy is carrying the girl and they look like they’re happy, it’s like the guy can smoke and he still has his — he is giving the girl a piggyback ride and I guess he smokes, like hey you know, if smoking was bad for you you wouldn’t be able to do this. You know.
Q: Any statement from the tobacco industry that you believe influenced you not to quit?
A: I would say when they started to come out with the light cigarettes, low tar cigarettes.
This deposition testimony in the Blue Cross case was far from universal, but it was nonetheless probative, and subject to skilled cross examination. The jury could find that significant portions of the deposition testimony corroborated statistical studies, extrapolations, and the conclusions of experts.
Surveys and literature were also provided to the jury in the Blue Cross litigation. These included studies from the American Cancer Society, studies published in established psychological and medical journals, and Surgeon General reports. These documents would support plaintiffs’ contention about the kind of impact defendants’ misrepresentations had on the population as a whole. See, e.g., Reducing the Health Consequences of Smoking: A Report of the Surgeon General 345 (1989) (“Another possible reason for some smokers’ insensitivity to smoking risks is that they have not always been given the full message, or they have been given mixed messages from the cigarette industry. Factors that impede public awareness and acceptance of the health hazards of smoking include cigarette advertising and promotion and cigarette companies’ public relations and lobbying activities.”).
It was only during the last few years that defendants through advertising and electronic access to internet statements began to concede that serious diseases were caused by cigarettes in their light form. Even then, the advertising campaigns and other activities were arguably continuing to mislead smokers and potential smokers. As a result, more people continued to start smoking, become addicted, and not quit than would have been the case absent defendants’ misleading activities.
While information divulged by public and private groups about continuing smoking dangers has reduced the harm caused by defendants’ conduct, arguably it has not eliminated it. Enforcement of no smoking bans in public and private places and universal higher taxes and charges per pack have been particularly effective in reducing smoking. Substantial damages may still be shown by those with an appropriate theory and procedure for compelling legal compensation.
Most of the damages that might have been uncovered had appropriate suits been brought at an earlier date are no longer available. In many respects this is almost the end-of-the-line for viable anti-tobacco suits of any significance.
Defendants strongly deny the conclusions sought to be drawn by plaintiffs. In fact they have succeeded in defending against most suits by smokers or third party payers of medical expenses. Nevertheless, there still remains a large residuum of possibly valid claims that can still be prosecuted with some hope of plaintiffs for success. While the sun is setting on the battlefield of tobacco litigation, and it is unlikely that anyone can successfully implore a higher authority to stay its apparent movement across the sky, much might be accomplished on behalf of injured plaintiffs by this class action in the lingering twilight.
Set out below is a brief procedural history of related cases brought in this litigation.
Sturgeon v. Philip Morris, 99 CV 01988, was filed on April 9, 1999 on behalf of cigarette smokers with personal injury claims. The magistrate judge provided a motion schedule and organization for pretrial adjudication. An amended complaint was filed on October 15, 1999. The amended complaint changed the name from Sturgeon to Simon. In addition, the nature of the class changed. Simon I was a national class action on behalf of:
All persons residing in the United States, or who were residents of the United States at the time of their deaths, who have a 20 pack-year history of smoking Defendants’ cigarettes and who, individually or through an estate or other legal representative, had a timely claim as of April 9, 1999 for personal injury damages or wrongful death arising from cancer of the lung. A pack-year is one package of cigarettes consumed per day per year.
A series of dispositive and discovery motions were then decided.
In April 2000, the court met with the parties and settlement negotiations between plaintiffs and one defendant took place. While these parties appeared close to a settlement, ultimately no agreement could be reached.
The court issued an order on May 9, 2000, presenting the parties with various questions including whether or not punitive damages for a class should be handled on a non-opt-out basis. On September 6, 2000, the plaintiffs filed the related Simon II complaint to determine liability for punitive damages. Further briefing and oral argument followed.
On November 6, 2000, the court denied class certification in Simon I. It stated, “even though Simon I is a viable class action, the motion for certification in Simon I is denied because it would better preserve court resources to certify the broader Simon II class for trial.”
William Decie, et al. v. American Tobacco, et al., 2000 CV 02340, was filed on April 21, 2000. It sought class action treatment of claims by smokers for personal injury, plus punitive damages, medical monitoring, and recovery of insurance premiums.
It has not proceeded. Punitive damage aspects were stayed pursuant to an order in Simon II. In its Memorandum of April 23, 2002, the court suggested that Decie be realigned within Simon II. In a conference on April 30, 2002, the plaintiffs agreed with that suggestion and stated that they would omit increased premium and insurance claims to permit that integration of cases. Transcript of May 1, 2002, at 35. Subsequent filings have included Decie as part of Simon II.
James Ebert v. Philip Morris, Inc. et al., 2000 CV 04632, was filed on August 9, 2000. That case sought class treatment for product liability, fraud, conspiracy, RICO, and unjust enrichment. It has not proceeded appreciably. Punitive damage aspects were stayed pursuant to a Simon II order. In its Memorandum of April 23, 2002, the court suggested that Ebert be realigned within Simon II. This was agreed upon in a conference of April 30, 2002. Transcript of May 1, 2002, at 37. Subsequent filings have included Ebert as part of Simon II.
Clara Browne v. Philip Morris et al., 02 CV 599, was filed pursuant to the court’s suggestion that “test cases” might be appropriate for resolving some questions in the litigation. It was filed on behalf of thirteen injured persons from the state of Florida on January 28, 2002.
The court did not find the Browne case helpful. See Tr. of May 1, 2002; see also discussion of Simon II, below. On May 31, 2002, the plaintiffs stipulated to discontinue the action without prejudice, but to include the claims in Simon II.
Simon et al. v. American Tobacco, 2000 CV 05332 (Simon II) was filed on September 6, 2000, and included as subclasses all the tobacco cases pending. It sought both compensatory and punitive damages.
On December 7, 2000, the court issued an order anticipating that trials would take place in Simon II, and suggesting that choice-of-law analysis indicated “tentatively, that it is the unitary and substantive law of New York and the unitary federal procedure that will govern much of Simon II.” Simon II, 124 F. Supp. 2d at 77.
On December 22, 2000, plaintiffs filed a motion for class certification and suggested the trial of certain “test cases.” See discussion of Browne v. Philip Morris, ¶ 4, supra.
In April 1998, numerous Blue Cross health plans from across the nation, including New York’s Empire Blue Cross and Blue Shield (“Empire”) filed suit against the major tobacco companies to recover the extra money they were forced to spend on patients harmed by tobacco as a result of alleged fraud by defendants. Blue Cross and Blue Shield of N.J., et al. v. Philip Morris Inc., et al., 98 CV 03287.
Litigation was extensive, lasting over three years. The trial consumed 44 trial days. It required 34 witnesses, 10 of whom were Daubertized—Daubert screened experts; there were 1,632 demonstratives and exhibits, and over 100 depositions utilized in court. Over 300 video depositions of subscribers and others were taken; many were heard at trial. Twenty-nine defendants’ executives and employees were also deposed. The parties filed over 150 legal memoranda and argued many applications. The docket sheet contains over 1400 entries. Computer technicians were able to quickly access data, diagrams, charts and depositions and display them on a huge screen for the jury. The parties used questionnaires, surveys, statistical evidence and modeling, and other advanced and often novel but appropriate statistical techniques. Reproduction of hundreds of thousands of pages of documents from Empire’s files for the many defense counsel and the court was needed.
Plaintiff made a number of claims including antitrust, conspiracy, RICO, New York Consumer Protection Act (“Act”), and common law fraud. A continuing conspiracy was proved for evidentiary purposes, warranting evidence both before and after 1980—the effective date for the litigation of the Consumer Protection Act—with damages based solely on post 1980 actions of defendants and reliance by smokers. The jury verdict established, apparently for the first time, that the tobacco industry had engaged in deceptive practices banned by New York statutes harming a third party payor and its subscribers. The jury returned a verdict of $17 million for the plaintiff on the claim under section 349 of the General Business Law and just over $11 million on a subrogated claim under section 349. The other claims were unsuccessful.
On September 19, 2001, plaintiffs counsel Dewey Ballantine filed a motion for award of attorney’s fees under section 349(h) of the New York General Business Law, seeking $39,086,223 in attorneys fees. On February 28, 2002, the court awarded $37,841,054.22 in attorneys fees.
Both the trial verdict and the fee award have been appealed.
The other twenty-five Blue Cross health care plans located across the country had claims similar to Empire’s. Those plans have expressed a desire to wait until the court of appeals for the Second Circuit answers the question of whether section 349 may be used in these cases before proceeding.
At the request of the plaintiffs the court stayed further proceedings in the cases on July 16, 2002 pending the appeal in Empire. Defendants did not object. Nevertheless, the court indicated that it was dubious about continuing any but the claims of New York Blue Cross cases. In its July 16, 2002 memorandum, it wrote:
It should be noted that the New York Court of Appeals has recently ruled that section 349 cannot be relied upon by plaintiffs injured in other states. Goshen v. The Mutual Life Insurance Company of New York, 98 N.Y.2d 314, 746 N.Y.S.2d 858, 774 N.E.2d 1190 (2002). Counsel for plaintiffs concede that the out-of-state Blues cannot rely on section 349, but will have to plead the statutes and common law of the states where they and their smokers were injured. This court will almost certainly not want to try these non-New York cases: the laws involved are, in general, not clear; certifications for clarification of state law may be required; and convenience of witnesses will suggest transfer to a more appropriate district court. Upon completion of the pending appeal a motion for dismissal or transfer of these non-New York Blues will be entertained.
In re Simon II Litigation, 212 F. Supp. 2d 56, 57 (E.D.N.Y. 2002).
National Asbestos Workers Medical Fund v. Philip Morris, Inc., et al., 98 CV 01492, 2001 WL 477256, was filed on February 27, 1998. It was brought as a class action on behalf of some four thousand “collectively-bargained” health and welfare trust funds. The putative class members are “all self insured, multi-employer benefit plans ... in the building trades and their trustees” seeking to recover money expended for health and welfare benefits for fund beneficiaries injured by tobacco.