Bliley PM
Philip Morris Companies Inc. and Philip Morris Incorporated, Plaintiffs vs. American Broadcasting Companies, Inc., Forrest Sawyer, John Martin, Walt Bogdanich, and John/Jane Doe(s) I-IV, Defendants
Abstract
Moves for legal judgment against ABC Television and employees for "[t]he harm caused to Philip Morris by defendants' false and defamatory statements" aired on its Day One newsmagazine broadcast asserting "tobacco companies...are artificially 'spiking' and 'fortifying' their cigarettes sold in the United States with extraneous nicotine for the express purpose of keeping smokers 'hook[ed]'". Quotes from broadcast and follow-up media coverage, summarizes events related to broadcast, and describes manufacturing processes to refute nicotine spiking allegations. Indicates "privileged and confidential attorney-client work product, draft 3/22/94" and relates to Bates 2022813241, 2022813330, 2500119949.
Fields
- Company
- Philip Morris Cos., Inc.
- Type
- Draft material
- Fax
- Legal- Brief
- Fax
- Author
- Booker, L.T.
- Author (Organization)
- Wachtell, Lipton, Rosen & Katz
- Recipient (Organization)
- Philip Morris U.S.A.
- Named Person
- Assuras, T.
- Bogdanich, W.
- Booker, L.T.
- Bury
- Campbell, W.
- Connelly, G. Dr.
- Doe, J.
- Douglas, C.
- Downs, H.
- Durbin, R., Rep.
- Feder, M.
- Hunton
- Jennings, P.
- Katz
- Kessler, David A., M.D., J.D. (Former FDA Commissioner)
appointed FDA Commissioner by President George Bush in December 1990.- Koppel, T.
- Lipton
- Martin, J.
- Myers, M.
- Redlich, N.
- Robbins, B.
- Rosen
- Sawyer, F.
- Synar, M. Rep.
- Wachtell, H.M.
- Williams
- Bogdanich, W.
- Named Organization
- American Broadcasting Companies, Inc.
- American Cancer Society
- Bureau of Alcohol, Tobacco and Firearms
- Capital Cities/ABC, Inc.
- Coaltion on Smoking OR Health
- Day One
- FDA
- Food and Drug Administration
- Hunton & Williams (Counsel for Philip Morris)
Counsel for Philip Morris, located in Richmond, VA.- Kraft Foods
- Miller Beer
- New York Stock Exchange
- Nightline
- R.J. Reynolds Tobacco Co.
- R.J. Reynolds Tobacco Co. (Cigarette manufacturer (Camel, Winston, Doral))
Cigarette manufacturer (Camel, Winston, Doral)- Wachtell Lipton
- World News This Morning
- World News Tonight
- ABC News
- American Cancer Society
- Keyword
- Defamation
- Denatured alcohol
- Flavor packages
- John Marshall Courts Building
- Nicotine spiking
- Punitive damages
- Denatured alcohol
- Subject
- Additives
- cigarette design
- Cigarettes
- Coalitions
- Federal level
- Government agencies
- Health advocacy groups
- industry sponsored research
- Lawsuits
- legislation
- Legislatures
- mass media
- National level
- nicotine
- Regulations
- Research studies
- State level
- addiction
- cigarette design
- Brand
- Marlboro (PM)
Document Images
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PRIVILEGED AND CONFIDENTIAL
ATTORNEY - CLIENT WORK PRODUCT
DRAFT 3/22/94
CIRCUIT COURT,
COMMONWEALTH OF VIRGINIA
-X
PHILIP MORRIS COMPANIES INC. and
PHILIP MORRIS INCORPORATED,
Plaintiffs,
vs.
AMERICAN BROADCASTING COMPANIES,
INC., FORREST SAWYER, JO~ MARTIN, :
WALT BOGDANICH, and JOHN/JANE :
DOE(S) I-IV, :
:
Defendants. :
COMPLAINT
Plaintiffs Philip Morris Companies Inc. and Philip
Morris Incorporated, by and for their Complaint against deZen-
dants0 allege:
I. Plaintiff Philip Morris Companies Inc. ("Philip
Morris Companies") is a publicly held corporation organized and
existing under the laws of the Commonwealth of Virginia, with
its principal place of business in New York, New York. Philip
Morris Companies is a holding company whose stock is publicly
traded on the New York Stock ExchanGe. Its subsidiary compa-
nies are primarily enGaGed in the tobacco, food and beer busi-
nesses, and own many of the best-known brand names in the
world, including Marlboro cigarettes, Kraft food products, and
Miller beer.
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2. Plaintiff Philip Morris Incorporated ("Philip
Morris U.S.A.") is a corporation organized and existing under
the laws of the Cor~uonwealth of Virginia, with its principal
place of business in New York, New York. Philip Morris U.S.A.
is a wholly owned subsidiary of Philip Morris Companies, is
engaged in the domestic tobacco business and is the largest
tobacco company in the United States. As is hereinafter set
forth, the defamatory statements made by defendants were made
without sDeclfication as between Philip Morris Companies and
Philip Morris U.S.A. and "Philip Morris" was used indiscrim-
inately by defendants to refer both to Philip Morris Companies
and Philip Morris U.S.A. Accordingly, except as otherwise
indicated, the term "Philip Morris" is used in this Complaint
interchanqeably to refer to both Philip Morris Companies and
Philip Morris U.S.A.
3. Defendant American Broadcasting Companies, Inc.
("ABC") is a corporation organized and existing under the laws
of the State of Delaware, with its principal place of business
in New York, New York. ABC, a wholly owned subsidiary of Capi-
tal Cities/ABC, inc., operates the ABC Television Network, a
major American broadcast network with seven owned and operated
and over 200 affiliated stations reaching 99.9% of all United
States television households. ABC's telecasts are regularly
broadcast in and into the Commonwealth of Virginia by numerous
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stations, including bu~ not limited to ABC affiliate Stations
WRIC in Richmond, WJLA in the District of Colkh~bia, WVEC in
Hampton, WSET in LynchberG, WHSV in Harnsburg, WEPT in
KingsDort, Tennessee, and ABC's owned and operated Station WTVD
in Raleigh-Durham, North Carolina. ABC'S telecasts are widely
viewed in the Commonwealth o£ virginia and throughout the
United States and ABC derives substantial revenue from its
broadcasts and other activities in virginia. A/aong programs
produced by ABC News for broadcast on the ABC Television
Network is the news magazine program "Day One" launched last
year.
4. Defendant Forrest Sawyer is the anchor of "Day
One" and was the anchor for the Day One segments on cigarettes
and nicotine on February 28 and March 7, 1994. [Upon informa-
tion and belief, he is employed by ABC.]
5. Defendant John Martin is a "Day One" reporter,
led Day One's "investigation" into nicotine in cigarettes, and
appeared on the February 28 and March 7, 1994 broadcast seg-
ments of Day One regarding cigarettes and nicotine. [Upon in-
formation and belief, he is emp!oysd by ABC.]
6. Defendant Walt BoGdanich is the producer of the
February ~8, and co-producer of the March 7, 1994 Day One seg- ~
ments on cigarettes and nicotine. [Upon information and be- ~
-3-
llef, he is employed by ABC.]
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7. [Possible other individual defendants]
8. Defendants John and Jane Doe are persons who
gathered information, investigated and participated in the
preparation of the February 28 and March 7, 1994 Day One ciga-
rettes and nicotine segments.
~URISDICTIONAND VENU~
9. This Court has jurisdiction over this action
pursuant to va. Code ~ 8.01-328.1(a) (4).
i0. Venue is proper in this Court pursuant to Va.
Code § 8.01-262.
~TJ/R~ OF THE ACTION
11. This is an action uo redress the massive harm
caused to plaintiffs by the Za!se and defamatory statements
made by defendants on ~he nationally televised news magazine
show "Day One" on February 28 and Marc~ 7, 1994 as well as on
other ABC News programs. Announcing tha~ they had "uncovered"
the tobacco industry's "last best secret" "never before dis-
closed to consumers or the government", and asserting that
their "investigation" "could change the tobacco industry for-
ever", defendants, through the use of sensationalized false and
reckless allegations, told viewers across the nation that to-
bacco companies, including Philip Morris, are artificially
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"spiking" and "fortifyinq" their ciqarettes sold in the United
States with extraneous nicotine for the express purpose of
keeping smokers "hook[ed]".
!2. Following this Day One broadcast, Zoreseeably,
the national networks and press accepted as true Day One's sup-
posed "revelation" that the tobacco industry "spikes" its ciga-
rettes with extra nicotine, and repeated these charges vir~u-
ally daily. In what can only be described as a public frenzy,
reporters, the public, government regulators and Congressmen,
"astonished" and "shocked" by Day One's "revelation", called
for governmental and congressional investigation and possible
new regulation. And the s~ock oZ plaintiff Philip Morris Com-
panies and other companies having businesses engaged in the
tobacco industry fell dramatically in reaction to Day One's
charges and the regulators' reaction Khereto. But the frenzy
whipped up by Day One is based on a totally false and defama-
tory premise made up of whole cloth: that Philip Morris inten-
tionally adds extraneous nicotine to the tobacco used in its
cigarette manufacturing process expressly in order to "hook"
smokers. As detailed below, Philip Morris does no such thing.
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~.he Def~natorv D~y One Broadcasts
13. On February 28, 1994, ABC-TV aired the televi-
sion program "Day One" from 8:00 p.m. to 9:00 p.m. (EST). An-
chor Forrest Sawyer opened the program with great fanfare, an-
nouncing: "Tonight, a Day One investigation that could change
the tobacco industry forever". He wen~ on to say, "C±gare~Kes
-- they'll hook you fast and i~ is not Just an accident of na-
ture", and accused the cigarette companies oZ "artificially
spiking [their] cigarettes with nicotine". He told the audi-
ence that for nearly a year, Day One had been investigating
nicotine, and that when word of Day One's "investigation" got
out, the "Food and Drug Administration announced that it is now
considering whether to regulate cigarettes as dru~s". Then,
expos~ style, John Martin, the Day One reporter who led the
nicotine "investigation", told the television audience that Day
One was about to reveal the tobacco Industry's "last best se-
cret" "never before disclosed". That "secret" turned out to be
the false and defamatory claim -- knowingly and/or recklessly
made by defendants -- that Philip Morris (as well as other
cigarette manufacturers) intentionally "spikes" and
"fortiZ[ies]" its cigarettes with extra nicotine durin~ the
man~fact~rlng process to keeD smokers hooked.
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14. False and defamatory statements knowingly and/or
recklessly made or endorsed by defendants during the course o~
the February 28, 1994 Day One segment included the following:
(b)
Unidentified ABC Voice-over: TheE@ is something
the tobacco companies don't want vou.~...know.
UnidentlfiedABC Voice-over: Cigarettes --
they'll hook. you fast and it iS,.not jUSt @m
acciden~..of n~r~,
(c)
(d)
Unidentified ABC Voice-over: A Day One investl-
~ation that_could chan~e the tobacco..imdustry
forever,.
Why are you artificially sDikin~ your ~Igaret~e8
with nicotine?
Co)
Martin: Now, a lengthy Day One investigation
has uncovered perhaps the ~obacco industry*s
last best secret -- how it artificially
nicotine to cluare~s to keep DooDle smokin~
and boos~ D~ofits
Unidentified ABC Voice-over: The methQCs ~he
ci~aret~e~.comDanies use to precisely ¢on~Q.l the
levels of nicotln@, is somethin~ that has never
before_been disclosed to consur~ers or th~
~overnment.
Martin: It was here in Winston-Salem, North
Carolina that the manufacturing process began to
change. The RJ Reynolds Tobacco Company pio-
neered a two-step process to make cigarettes
more cheaply and_.t0.,~rol ~he level QZ niqo-
%ine, Step one: it developed reconstituted
tobacco, which is made from stalks and s~ems and
other waste that it used to throw away.
• Even though reconstituted tobacco allows
the companies to produce cigarettes more
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cheaply, there are problems -- poor taste and
less nicot±ne. So here's what the companies do
in step two -- they aDDIv a Powerful tobacco
extract containing nicotine and flavor to
reconstituted tobacco. This. process, too. is
meant to be secret.
Martin: -. He told us how they make this
concentrated extract that is rich in nicotine,
ao
Martin: Why would the tob.acco q~mD~ni@s
use this nicotine rich syrup?
Unidentified Former RJR Manager: Thev.,..Dut
nicotine in the form.of tobacco extract
into a product to keep the co~.sttmer happy,
Martin: TheY're fortifying the product
with nicotine. is that correct?
A. Unidentified Former RJR Manager: The
waste-filler -- yes they are.
(J)
Martin: Why are you addina ni~Q.t.~ne tO yOUr
(k)
Martin: But how much nicotine I~. added?
The companies c~n~rol the dosage mrecisel~
~ccordin~ to this former_RJR manager,. [To
manager) En commercially sold cigarettes,
what percentage of tobacco extract is nico-
tine?
Unidentified Former RJR Manager: That re-
ally depends on what level the process
calls for. In other words, I can say to
you, ! wan~ it at one percent, I want it at
five percent, I want it at ten percent, I
want it at fifty percent.
Martin: Et's this ability to control the_exact
dosaqe of nicotine wiuh ~Qb~c.co extract that is
so alarming to Dr. Greg Connelly, a Massachu-
setts health official,
8
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Cliff Douglas (American Cancer Society): The
public do.@sn't know that.the industry ~anIou-
la~@s nicotipe, takes it out, Outs i~ back. in.
uses it as..If it w@r¢ s~q~r being out i~_candy.
They don't have a clue.
Martin:
gress.
Neither, apparsntly, do members oZ Con-
(n)
Martin: Ther@'s another way nicotine is ~dded
to ci~arette.s. And it begins, perhaps surpris-
ingly, at docks like this one in Newark, New
Jersey. It is here ~hat nearly pure nicotine is
brought ashor@ to be cor~blned with alcohol.
It's called denaturing. ~he mixture ca~...then be
aDDli@~ to tobacg~, during the manufacturin~ pro-
cess for ...... amon~ other thi.nGs, flavQrinw. As
~hese truckln~ recQrds show. Philip Morris~..for
exaraDle. ;eceived ShQusands of ~a~.lon~ of this
alcohol mixture durin~ the 1980s. The cigarette
makers sam this mixture leaves only a tiny
amount of nicotine on the tobacco. Still, ~
kind of niGotine manipulation disturbs critics
like Cliff Douglas, of the American Cancer Soci-
Co)
Martin: Were you aware of
Representative Mike Synar (Democrat,
Oklahoma): No, ! wasn't. They don't want
anybody looking at their product, and the
reason is exactly what you just went
through. So th@t they .can doc.~or it, they
g~D alter it, they can do an~thlng with i~,
and ~hey ~an li~erally ~e~a~dize the
health of the American p~blic without
having any consequences.
(Emphasis added.)
15. on March 7, 1994, Day One again aired on the
ABC-Televlsion Network from 8:00 p.m. to 9:00 p,m. (EST).
Anchor Forrest Sawyer, opened the show with the comment, "We
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begin tonight with our continuing investigation into cigarettes
and what's inside them". False and defamatory statements
knowingly and/or recklessly made or endorsed by defendants
during the course of the March 7, 1994 Day One segment included
the Zollowing :
(a)
Unidentified ABC Voice-over: Last week, we
brouqht you new evidence ~bQ~t [hQwl tobacco
comoanles.are maninulatina nlc~tine in ~iq-
~rettes .tO keeo smokers smQ~in~,
(b)
Martin: Last week, Day One reDorted....for the
Z~rst time evidence that ciaarette comDanie~
manipulate levels of nicotine, a highly addi~.-
tire drus. to keem people smoking. _ We foun4
manufacturers add nicotine in carefully cali-
brated dose~.to fortify the tobacco W~D~ prod-
ucts they insert in ci~are.ttes and to reolenisb
nicotine .lost in processing.
(c)
ClIZf Douglas American Cancer Society: It]he
oublic doesn't know that the iA~Strv meniD~-
l.ates nicotine -- takes it out, outs it back ~n,_
uses..it as if it were sugar being out into
candy._ They don't have a clue.
(d)
Martin: Day One has learne~...that two of those
thirteen additives should have riDDed off
~overrament to the tobacco indus~rv's_~aniDu-
lation of nicot~.e in cigarettes. Those tw~
!P~redients are tobacco ~xtracts, which fr@-
c~/en~lv:~s rich in nicotine, and_n~¢otine sul-
fate, or salt~
(Emphasis added.)
16. These knowingly and/or recklessly Zalse and
defamatory statements o£ and concerning plaln~Iffs made during
the February 28 and March 7, 1994 Day One broadcasts were in-
tended to be undersuood to mean, and were understood to mean,
£hat ~urinG the manufacturing process Philip Morris (as well as
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other cigarette manufacturers) "manipulates", "spik[es]" and
"Zorti[fies]" its cigarettes by adding signiZicant amounts of
extraneous nicotine to its products, and that the magnitude and
seriousness of this offense was such that Day One's "revela-
tion" of this "secret" "could change the tobacco industry for-
ever" by bringing uDon the industry draconian regulatory or
congressional action.
17. Defendants' accusations that Philip Morris "ma-
nipulates", "fortif[ies] and "spik[es]" its tobacco by adding
nicotine during the manufacturing process are entirely Zalse.
Philip Morris does not do that.
18. As set forth above, Day One on its programs re-
ferred to reconstituted tobacco, the adding of tobacco extract,
and the use of denatured alcohol as supposedly being implicated
in the "manipulating", "fortifying" and "spiking" of cigarettes
with nicotine:
(a)
The production of rec0n$$iSuted tobacco -- This
process, which developed in the years after
World War II and is widely used throughout the
cigarette manuZacturing industry, involves the
utilization of the stem portion of the large
tobacco leaf as well as small pieces of the lea~
itself broken off during the s~emming process.
These natural tobacco materials are recon£igured
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into uobacco sheets capable of being used in the
cigarette manufacturing process.
In order to form these tobacco materials into
sheets, it is necessary first to temporarily
separa%e out the solubles, which would otherwise
interfere with the sheet-making process. Those
solubles include nicotine. Separation of the
solubles is accomplished by adding large quan-
tiSies of water in order to dissolve the
solubles and separate them from the fibrous part
of the tobacco. The fiber consists largely
cellulose. The fiber is refined, diluted with
water and made into a sheet of tobacco paper.
The solubles (minus potassium nitrate and excess
water which has been removed, and plus certain
DQn-nicotine containing flavors which have been
added) are rec~blned with the sheets. The
process is an entirely closed one: ~_~.nlcotlne
whatsoever not found in ~he orisinal natural
~obacco ma%~rials is introduced in the
tloA. oZ the reconstitu~e~__tobacco sheetS,~ In-
deed, the reconstituted tobacco sheets contain
approxlma~ely 20-25% less nicotine than the
natural uobacco materials which are ~sed in the
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process because substantial nicotine is lost in
the process and is Dgt replaced.
Upo~ emerging from the process, the reconsti-
tuted tobacco shmmts are chopped into small
pieces and transported to the cigarette manufac-
turing plant to be blended with natural tobacco
leaves in the production of cigarettes. Because
stems naturally contain only approximately 25%
of the nicotine contained in the leaf portion of
the tobacco plant, and because, as set forth
above, substantial nicotine is lost in the
reconstitution process, reconstituted tobacco
sheets contain far less nicotine than natural
tobacco leaf and the use of such reconstituted
tobacco sheet in the ultimate tobacco blend
serves slgniZicantly to lower the nicotine
content oZ cigarettes. And contrary to Day
One's claims, no "powerful extract containin~
nicotine and flavor" or any other nicotine
substance is added in the process. Nor is there
anything at all "secret" about the reconstltu-
tion process: it has long been widely used in
the industry, publicly known and described in
publlca~ions about cigarette manufacturing going
at least as far back as 1967, [and indeed, is
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Cb)
even described in [the Surgeon General's Report
in ].
Tobac¢.Q extract -- During the course of the
cigarette manufacturing process, certain flavors
are sprayed onto the cu~ tobacco -- which con-
sists o£ a blend of predominantly natural leaf
with some reconstituted tobacco mixed in. The
particular flavors used are distinctive for each
cigarette brand. Prior to the end of 1993, with
respect to a single domestic brand only -- Merit
Ultra Light menthol, a low-nicotlne brand con-
raining 12 mg. nicotine per cigarette -- one
such flavor used by Philip Morris was tobacco
extract [to be verified], contrary to Day One's
claim, this tobacco extract was not "nicotine
rich" at all. Indeed, the nicotine in tobacco
extract increased the nicotine content in one
Merit Ultra Light menthol cigarette by 0.0011 --
from 12 mg.(±l) to 12.0011 mg., or by 0.009%.
[Fill in. new sentence re: (±!)] Thus, the
addition of tobacco extract flavoring to Merit
Ultras resulted in only an infinitesimal
increase in the amount of nicotine otherwise
naturally in the cigarette's tobacco blend, and
did not constitute "spiking", "fortifying" or
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(c}
"manipulation" of the nicotine contact of these
cigarettes.
Moreover, Philip Morris no longer uses any
tobacco extract at all in any of its domestic
brands. And as before, the fact that cigarette
companies have used tobacco extrac~ during the
manufacturing process of cigarettes has long
been a matter of public record: it is no "se-
cret" at all.
Denatured_~_ICohol -- Certain flavors that are
not soluble in water must be dissolved in alco-
hol in order to be sprayed onto the cut tobacco
blend during the cigarette manufacturing pro-
cess. Because pure alcohol is subject to strin-
gent and cumbersome regulations by the Bureau of
Alcohol, Tobacco and Firearms, Philip Morris
uses alcohol which has been denatured with
minute amounts oZ nicotine to render it L~drink-
able. Such denatured alcohol is purchased by
Philip Morris from outside suppliers. The
amount of nicotine contained in such denatured
alcohol is minute -- only 0.02% by weight, ~_@_~,
2/100 of one percent. The flavors that axe dis-
solved in this denatured alcohol themselves
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contain no nicotine, and the combination of
these flavors with the denatured alcohol further
dilutes the minute amount of nicotine present.
The amoun5 of additional nicotine that results
from the spraying of the alcohol-dissolved
flavors on the blended tobacco is again
InZiniteslmal, and does not constitute
"spiking", "fortifying" or "manipulation" of the
nicotine content of the cigarettes. Thus, by
way of exaumple, the calculated amount of nico-
tine increase in a 12 mg. Merit Ultra Light
menthol cigarette from denatured alcohol is
0.0024 mg. The nicotine content in the
cigarette is thus increased ~rom 12 mg.(±l) to
12.0024 mg., or by 0.02%.
And once again, there is nothing "secret"
here. It has long been a matter of p~blic
record that the Bureau of Alcohol, Tobacco and
Firearms has approved the use of nicotine in
denatured alcohol for this purpose, see 27 Code
oZ Federal ~egulat~ons ~ 21.141, and ~ndeed, al-
cohol denatured with nicotine is the only form
of denatured alcohol approved by ~he federal
government for use in the manufacture of ciga-
rettes.
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19. Thus, contrary to the false and defamatory
statements by defendants except for the infinitesmal trace
amounts of nicotine resulting from the processes described in
Paragraph 18(b) and (c) above, Philip Morris never has, and
does not now add any nicotine whatsoever in the process oZ
manufacturing cigarettes. By no stretch of the imagination
does this process involve the "spiking" or "fortifying" of
cigarettes with nicotine to "hook" smokers, to "keep people
smoking". To the contrary, between the arzival of tobacco at
Philip Morris" plants and its departure from the plants as
packaged cigarettes, there is a very substantial loss in the
percentage of nicotine in the tobacco. Thus, the only adjust-
ment of the nicotine content of cigarettes that is involved in
the manufacturing process is the z@~uc~ion of nicotine levels.
20. The false and defamatory statements contained in
Day One's broadcasts were made knowingly, recklessly, and with
malice. Among other things, defendants first published, and
then republished these defamatory accusations notwithstanding
having been expressly advised by members of the tobacco indus-
try, including Philip Morris, oZ their falsity.
21. These false and defamatory statements were
broadcast and published in and into the Commonwealth of Vir-
ginia'and throughout the United States on ~he ABC Telev±slon
Network.
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Additional ABC Dublications_Q.~....defamatory statement~
22. On Friday, February 25, 1994, on the ABC Televl-
sion Network program World News Tonight, aired from 6:30 - 7:00
~.m. (EST), anchor Peter Jennings previewed Day One's Zalse and
defamatory purported expos~ and promised viewers "a good deal
more" "this Monday evening". Jennings introduced John Martin,
the featured reporter on the February 28 and March 7 Day One
programs
Jennings: The U.S. government is considering a major
frontal assault on the Kobacco industry. The Commis-
sioner of the Food and Drug Ad~Inlstratlon said today
that he is looking into whether cigarettes might be
regulated as an addictive drug. Here is what's
chan~ed~ There is now evidence that cigarette
manufacturers carefully manipulate the n$~q~n~gQ.~z
E~_DJ~ of their product to assure each cigarette DaGks
a certain punch. The evidence has been ~ by
John Martin, who's been investigating the story for
the ABC news prosram Day One.
Martin: The investigation found that tobacco
companies are addin~ to cigarettes waste products
Zoztified with an extract that contains nicotine. As
a result, the companies are able to manipulate the
nicotine levels in ci~arett#8. The Surgeon General
has determined ~hat nicotine is a highly addictive
drug. A former R.J. Reynolds manager, who requested
anonymity, explained why the companies control the
amount of nicotine in cigarettes.
R.J. Reynolds Manager (unidentified): They put nico-
tine in the ~or~o~..~ob&¢co extract, into the product
to keep the_.._.~ns~2aer haooV.
Martin: They're fortifying, the Droduc~.~ith nico-
tine, is that correct?
Manager: The waste Ziller: Yes, they are.
(Emphasis added.)
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23. On February 25, 1994, on the ABC Television Net-
work program "20/20", aired from 10:00 - Ii:00 p.m. (EST), co-
host Hugh Downs introduced Forrest Sawyer, the host of Day One:
Sawyer: You'll be surprised when you learn what
tobacco companies are doing with the nicotine in your
cigarette.
Representative Mike Synar (Democrat, Oklahoma): Th@y
c~/~..doctor it, they can alter it. and they can liter-
ally Jeopardize the health of the American public
without having any consequence.
Sawyer: A "Day One" investigation Monday.
Downs: "Day One" Mondays at eight.
(EmDhasls added.)
24. On February 28, 1994, the ABC Television Network
program World News Tonight, aired from 6:30 - 7:00 p.m. (EST),
was once again the vehicle for attracting an audience to that
evening's Day One program. Jennlngs introduced John Martin:
Martin: Th@ "D~V One" investigation_Shows.tobacco
companies ma~n.iDiLl.ate nicotine, strongly su~estin~
they want smokers to uet the druu in controlled
doses~ ......... ~e FDA said Friday thi~ m~y be Just the
@vidence it needs_.~_o_r~ulaEe..ciuaret~es. On Wall
Street today, four major tobacco company stocks all
lost value. RJ Reynolds and Philip Morris were the
two most heavily traded stocks of all those bought
and sold.
(Emphasis added.)
25. On March 9, 1994, on the ABC Television Network
program "Nightline", hosted by Ted Koppel from 11:35 p.m. to
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12:00 a.m. (EST), additional false and defamatory suatemenus
were made and endorsed by defendants as follows:
(a) Koppel: ~ It]here's new evidence that the
tobacco indus~,~,mavbe chemicaliV.Sta~k!D~._the deck
(b) Bury (an ABe reporter): An investigation by the
ABC News Broadcast Day One found that cigarette ~Q~-
panies carefully control Sh@ ~mQDn$ Qf niGQ$in@ in
~h@Ir ciGarettes_bV adding precise amOkLnd~S Qf_~0bacco
extract which contains nicotine.
[a) Unidentified Former RJR ManaGer: Thev~Dut ~ico-
~De in the form of tobacco extract into a product to
keep the constnmer haoov.
(b) Cliff Douglas (American Cancer Society): Th@
public doesn't know that the industry m~D~D~lates
nicotine -- it takes out, Buts it back in. uses it as
(c) Koppel: Our sister-program, Day One, a couple
days ago, did a report on the tobacco industry and
the revelation of that ~rouram -- and, I must say it
astonished me..c?__and that is that you folks have
actually been adding nicotine to the oroduct0 to...the
tobacco aS a means of causinu oeoole tq_~ecome more
addicted to the Product.
(d) Matthew Myers (Coalition on Smoking or Mealth):
The recen$ ABe D~y Qne re~ort reve~led..substa/%tlal
new information that, combiDe~._~ith FDA's own inves-
tIGatlo~ .... has brought the whole issue into a n~w fo-
~S-, ....... ~.W¢.,now know that the tobacco industry con-
sciouslv manipulates the le~.!_of nicotine in tobacco
DrO4DC~ to insure that th@y're addictive.
(e) Bury: The revelation that cigarette companies
manioulate the nicotine in their oroducts has led FDA
Commissioner Kessler to conclude that cigarette manu-
facturers may intend that their products contain
nicotine to satisfy an addiction on the part of some
of ~heir customers.
(Emphasis added.)
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26. These knowingly and/or recklessly false and
defamatory statements of and concerning plaintiffs set forth in
Paragraphs 22 through 25, were intended to be understood to
mean, and were understood to mean that during the manu£acturing
process Philip Morris (as well as other cigarette manufactur-
ers) "fortified" its cigarettes by adding significant amounts
of extraneous nicotine to its Droduct, and that the magnitude
and seriousness of this offense was such that Day One's "rev-
elation" of this "secret" would be "just the evidence [the FDA]
needs to regulate cigarettes" and would subject the industry to
draconian regulatory or congressional action.
27. These false and defamatory statements were made
knowingly, recklessly and wi~h malice. Among other things,
defendants published and republished these statements notwith-
standing having been exDressly adv&sed by members of the to-
bacco industry, ±ncluding Philip Morris, of their falsity.
28. These false and defamatory statements were
broadcast and published in and into the Commonwealth of Vir-
gin±a and throughout the Un±ted States on the ABC Television
Network.
The March 17 ABC World N@~$...b;Qadcast
29. On March 17, 1994, John Martin appeared on ABC
Television Network program, World News This Morning, which
SENTBY:WAOHTELL LIPTON NY ; 3-22-94 ; 2:14PNI ; WAGHTELL LIPTON~
96871438;#25
aired at 5:45 a.m. (EST), discussing the FDA and the tobacco
i~dustry. During nhe broadcast, Mr. Martin stated:
Commissioner Kessler told the sub-committee he cannot
regulate cigarettes unless investigators prove to-
bacco companies purposely manipulate nicotine levels.
But, sub-committee chairman Richard Durbin said proof
was at hand. He read a letter from Philip Morris
President William Campbell who said his company does
not add nicotine but has actually lowered it more
than 50% in the last 40 years. That in itself, said
Congressman Durbin, shows cigarettes are not a so-
called natural product and that the nicotine level in
~hem can and has been manipulated.
Representative Durbin replied:
I think the statement that Mr. Campbell is making in
his defense, in fact, is enough to convict him. They
have, with the tobacco and their process, the ability
to set the level of nicotine in the cigarette.
After Representative ~uzbin's remark, Thalia Assuras, anchor,
sta~ed:
Asked for comment bv ABC News. Philip Morri~ had no
immediate response.
(Emphasis added.)
30. This last-quoted statement was knowingly and
recklessly false and defamatory. Only the previous afternoon,
John Martin had spoken with a senior officer of PhiliD Morris
U.S.A. At that time Mr. Martin asked the senloz officer, among
other things, for a reaction to the statements made earlier in
the day by Rep. Durbln and FDA COmmissioner David Kessler
relating to Philip Morris U.S.A. President William Campbell's
March 3, 1994, letter to Congress. The Philip Morris senior
officer expressly responded -- on the r~cord -- reaffirming ~he
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accuracy of Mr. Campbell's letter and viqorously disputing the
comments of Rep. Durbin and Commissienez Kessler. Nonetheless,
ABe anchor Assuras, with Mr. Martin sitting by, falsely claimed
exactly the opposite -- that Philip Morris, "when asked fez
comment", "had no immediate response". Th±s statement was
knowingly false and defamatory in that it was intended to be
understood, and was understood, to mean that Philip Morris was
not in a position to deny the charges against it.
31. This false and defamatory statement was broad-
cast and published in and into the Commonwealth of Virginia and
throughout the United States on the ABC Television Network.
The harm caused uo Dlaintiffs by defendants"
false and defamatory statements
32. All of the defamatory statements speclfled in
Paragraphs 13 through 15, 22 through 25, and 29 above were made
and broadcast with actual malice by defendants inasmuch as de-
fendants knew of their falsity or had a reckless disregard for
their truth or falsity.
33. A substantial portion of the po~ulation, includ-
ing the investment community, tmderstood defendants' statements
referring to "~he tobacco comDanles", "cigarette manufactur-
ers", or "Philip Morris" to be statements of and concerning
Philip Morris Companies. [All acts, statements and omissions
of ABC employees in connection with the preparation and
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broadcast of these programs weze in the course o£, and within
the scope of, their e~ployment by ABC.]
34. A substantial portion of the population, includ-
ing government xegulators and members of Congress, understood
defendants" statements referring to the "tobacco companies",
"cigarette manufacturers", or "Philip Morris" to be statements
of and concerning Philip Morris U.S.A.
35. As a direct and p~oximate result of the publica-
tion of the knowingly and/or recklessly false and defamatory
statements se~ forth above, plaintiffs have suffered great harm
to their reputations, trade and business. That hazm is con-
tinuinq. These defamatory statements:
As to plaintiff Philip Morris Companies, have
resulted in the stock of such plaintiff falling
sharply and have otherwise damaged plaintiff in
the conduct of its trade or business, causing it
injury in an amount not presently accurately
ascertainable but belleved to be not less than
$2 billion.
As to plaintiff Philip Morris U.S.A., have pre-
cipitated and fueled a climate of public, media,
regulatory and congressional reaction against
the tobacco companies, including such plaintiff,
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which threatens to embroil plaintiff in regula-
tory and congressional inqulr~es, heightens the
prospect of regulatory or congressional action
severely detrimental to plaintiff's business,
heightens the prospect of passage by Congress of
major increases in tobacco taxes severely detri-
mental to plaintiff's business, will tend to
spawn additional litigation against plaintiff,
and have otherwise damaged plaintiff in the con-
duct of its trads and business -- all causing it
injury In an a~ount not presently accurately
ascertainable but believed to be not less than
[83] billion.
COU~. ONE - DEFAMATEON
36. Plain£iffs repeat and reallege each and every
allegation ±n paragraphs 1 through 35 hereof.
37. Defendants, on the February 28, 1994 Day One
broadcast segment on nicotine in tobacco, made and endorsed
false and defamatory statements as set forth above in Para-
graphs 13 and 14 hereof of and concerning plaintiffs, and en-
gaged in the publication of those statements.
38. Such statements were made and endorsed by defen-
dants wlth knowledge of their falsity and/or reckless disregard
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for the truth and have caused damage to plaintiffs as set foruh
~bove.
39. Defendants' conduct, as aforesaid, constituted
defamation as against plaintiffs.
COUNT TWQ - DEFAMATION
40. Plaintiffs repeat and reallege each and every
allegation in paragraphs 1 through 39 hereof.
41. Dm£endan~s, on uhe March 7, 1994 broadcast of
Day One, made and endorsed false and defamatory statements as
set forth above in ParaGraph 15 hereof of and concerning plain-
tiffs, and engaged in the publication of those statements.
42. Such statements were made and endorsed by defen-
dants with knowledge of their falsity and/or reckless disregard
for the tr~h and have caused damage to plaintiffs as set forth
above.
43. Defendants' conduct, as aforesaid, constituted
defamation as against plaintiffs.
COUNT THREE - DEF2d~kTION
44. Plaintiffs repeat and reallege each and every
allegation in paraGzaphs i through 43 hereof.
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45. Defendants, on the February 25, 1994 broadcast
of World News Tonight, made, caused to be made, and endorsed
false and defamatory statements as set forth above in Paragraph
22 hereof of and concerning plaintiffs, and engaged in the pub-
!icatlon oZ those statements.
46. Such statements were made, caused to be made,
and endorsed by defendants with knowledge of their falsity and/
or reckless disregard for the truth and have caused damage to
plaintiffs as set forth above.
47. Defendants' conduct, as aforesaid, constituted
defamation as against plaintiffs.
COUNT FOUR - DEFAMATION
48. Plaintiffs reDeat and reallege each and every
allegation in paragraphs I through 47 hereof.
49. Defendants, on the February 25, 1994 broadcast
of 20/20, made, caused to be made, and endorsed false and defa-
matory statements as set forth above in Paragraph 23 hereof of
and concerning plaintiffs, and engaged in the publication of
those statements.
50. Such statements were made, caused to be made,
and endorsed by defendants with knowledge oZ their falsity and/
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or reckless disregard for the truth and have caused damage to
plaintiffs as set forth above.
51. Defendants' conduct, as aforesaid, constituted
defamation as against plaintiffs.
COUNT FIVE - DEFAMATION
52. Plaintiffs repeat and reallege each and every
allegation in paragraphs 1 through 51 hereof.
53. Defendants, on the February 28, 1994 broadcast
of World News Tonight, made, caused to be made, and endorsed
false and defamatory statements as set forth above in Paragraph
24 hereof of and concerning plaintiffs, and engaged in the pub-
licatlon of those statements.
54. Such stauements were made, caused to be made,
and endorsed by defendants with knowledge of their falsity and/
or reckless disregard for the truth and have caused damage to
plaintiffs as set forth above,
55. Defendants' conduct, as aforesaid, constituted
defamation as against plaintiffs.
~OUNT_SIX - DEFAMATION
56. Plaintiffs repeat and realleGe each and every
allegation in paragraphs i through 55 hereof.
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57. Defendants, on the March 9, 199~ broadcast of
Nightline, made, caused to be made, and endorsed false and
defamatory statements as set forth above in Paragraph 29 hereof
of and concerning plaintiffs, and en~a~ed in the publication of
those statements.
58. Such statements were made, caused to be made,
and endorsed by defendants with knowledge o~ their falsity and/
or reckless disxegard for the truth and have caused damage to
plaintiffs as set forth above.
59. Defendants" conduct, as aZoresald, constituted
defamation as against plaintiffs.
COUNT SEVEN - DEFAMATION
(as against defendanUs ABC an~.J~n Martin)
60. Plaintiffs repeat and reallege each and every
allegation in paragraphs 1 through 59 hereof.
61. On March 17, de£endan~s ABC and John Martin, on
ABC World News, made, caused to be made, and endorsed a know-
ingly and/or recklessly Zalse and defamatory statement as set
forth above in Paragraph 29 hereoZ.
62. Such statement was made, caused to be made, and
endorsed by such defendants with knowledge of their falsity
and/or reckless disregard for the truth.
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63. SUch defendants' conduct, as aforesaid, consti-
tuted defamation as against plaintiffs.
COUNT EI.C4!~_T PUNITIVE DAMAGES
64. Plaintiffs repeat and reallege each and every
allegation in paragraphs 1 through 63 hereof.
65. Defendants conduct as a£oresaid was malicious
and affected the public generally. Defendants are therefore
liable Eor ~unit!ve damages.
WHEREFORE, plaintiZ£s Philip Morris Companies Inc.
a~d Philip Morris Incorporated demand Judgment agains~ defen-
dants:
III.
TV.
In favor of plaintiff Philip Morris Companies
Inc. for compensatory damages in an amount not
less than $2 billion;
In favor of plaintiff Philip Morris Incorporated
for compensatory damages in an amount not less
than IS3] billion;
in favor of both plaintiffs for punitive damages
in the amount of [SS] billion;
FOr attorneys' fees and the costs of this suit;
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For such other relief as the Court may deem just
and equitable.
Dated:
Richmond, Virginia
March 24, 1994
HUNTON & WILLIAMS
By:
By:
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219
Telephone: (804) 788-8200
of Counsel:
WACHTELL, LIPTON, ROSEN & KATZ
Herbert M. Wachtell
Norman Redlich
Barbara Robbins
Meir Feder
51 WeSt 52nd Strmet
New York, New York 10019
Telephone: (212) 403-i000
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~URY DEMAND
OCR for 2048188197 does not yet exist
