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Memorandum From Philip Morris Employee to Philip Morris Counsel and Philip Morris Employee Containing Information Requested by Philip Morris Counsel Regarding Joint Defense Research.

Abstract

These are notes from a secret meeting among officials from the major tobacco companies of Brown & Williamson, Philip Morris, R.J. Reynolds, Lorillard and American Tobacco. The document was recently presented in closing arguments for the plaintiff in the Boeken Trial in Los Angeles, the case that resulted in a $3 billion punitive damages verdict against the Philip Morris Tobacco Company. The jury found against the tobacco maker on all six counts of fraud, negligence and making a defective product.

Some key quotes:

"At the outset, Arnold Henson reminded all participants of the meeting that there should be no written record of what transpired issued for distribution...

As a means of introduction, Bill Shinn described the history, particularly in relation to CTR. CTR began as an organization called Tobacco Industry Research Council (TIRC). It 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. CTR has helped our legal counsel by giving advice and technical information, which was needed at court trials...

Bill Shinn feels that "special projects" are the best way that monies are spent. On these projects, CTR has acted as a "front";

..It is extremely important that the industry continue to spend their dollars on research to show that we don't agree that the case against smoking is closed.

Bill Shinn mentioned that the "public relations" value of CTR must be considered and continued.

A very interesting point, made by Bill Shinn, is the opposition's, "the case is closed with regard to smoking and disease." Therefore, they will not spend any more money on health research, but will be willing to spend dollars on education to prevent youngsters from smoking and to discourage current smokers from continuing to smoke. It is extremely important that the industry continue to spend their dollars on research to show that we don't agree that the case against smoking is closed.

The lawyers quickly commented that keeping negative results "quiet" would cause tremendous problems in court actions should the fact come to light that negative data was supressed.

Fields

Notes

Original document code was 20896.

Quotes

TO: CTR File FROM: R.B. Seligman SUBJECT: Meeting in New York - November 17, 1978

Those present:

Ernie Pebbles - General Counsel, Brown and Williamson Mr. Tucker - General Counsel, R. J. Reynolds Tim Fennig - Retained Counsel Bill Shinn - Shook, Hardy, Bacon Arnold Henson - General Counsel, American Tobacco Janet Brown - Retained Counsel, CTR Wally Hughes - Vice President, Brown & Williamson Alex Spears - Vice President, Lorillard Jim Bowling - Senior Vice President, Corporate Affairs Philip Morris Inc. Bob Seligman - Vice President Research & Development Philip Morris U.S.A. Tom Osdene - Director of Research Philip Morris,U.S.A.

At the outset, Arnold Henson reminded all participants of the meeting that there should be no written record of what transpired issued for distribution. It was perfectly all right to take notes, which you would keep in your own personal file.

The current meeting was called to help an ad hoc committee, selected by the chief executives of the tobacco industry, do long-range policy planning in regard to smoking and health. On the ad hoc committee are revresentatives of legal, public,relations, and research executives of variouis companies. Any long-range plans which are developed are to be made known to the individual companies through their chief counsel. The ad hoc committee is to consider policy questions in general and particularly grants, contracts, the fate of CTR, etc. As a means of introduction, Bill Shinn described the history, particularly in relation to CTR. CTR began as an organization called Tobacco Industry Research Council (TIRC). It 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. CTR has helped our legal counsel by giving advice and technical information, which was needed at court trials. CTR has supplied spokesmen for the industry at Congressional hearings. The monies spent at CTR provides a base for introduction of witnesses.

Bill Shinn feels that "special projects"' are the best way that monies are spent. On these projects, CTR has acted as a "front"; however, there are times when CTR has been reluctant to serve in that capacity and in rare instances, they have refused to serve in that capacity. CTR began to lose their luster in the mid-60's and the tobacco industry looked around for more beneficial ways to spend their research dollars on smoking and health. It was at this time that special projects were instituted at Washington, University, Harvard University, and UCLA. Bill Shinn noted that the industry received a major public relations "plus" when monies were given to Harvard Medical School. He noted the First and Hind publication on the exposure of the nonsmoker to tobacco smoke was beneficial to the industry as was Lacy's (Washington University) letter to Senator Morse commending the tobacco industry for its support of basic cancer research at Washington University.

Major problems exist today because of the advanced ages of most members of CTR's Scientific Advisory Board (SAR). It is felt that they would be of little use as witnesses today because they could not withstand the rigors of cross-examination. Getting away from the historical story, Bill Shinn mentioned that the "public relations" value of CTR must be considered and continued. Also product liability has to be defended, therefore, the industry should not take any-action which will dilute the caution label on cigarette packages. A very interesting point, made by Bill Shinn, is the opposition's, "the case is closed with regard to smoking and disease." Therefore, they will not spend any more money on health research, but will be willing to spend dollars on education to prevent youngsters from smoking and to discourage current smokers from continuing to smoke. It is extremely important that the industry continue to spend their dollars on research to show that we don't agree that the case against smoking is closed. During the course of his remarks, Bill Shinn said we might need to have "baskets"'into which research projects can be categorized and supported. There is a "CTR basket" which must be maintained for "PR" purposes. There are projects to be funded on research aimed at understanding the nature of various diseases. There are projects which deal more directly with the diseases purported to be caused by smoking and there are projects which must be done for specific obligations. It is interesting that this proposal by Shinn is somewhat in line with the thinking we had planned to present to the Committee later on in the day.

Janet Brown felt that there were, and still are, benefits from CTR being able to claim they are doing "free research," even though it is clearly recognized their support comes from the tobacco industry. Jim Bowling added a bit to the history. The TIRC was first established at Hill and Nolton PR when the government began to take action against the industry; i.e, the Blatnik Committee hearing. The Tobacco Institute was split out of the TIRC each to handle its own function - science versus public opinion. Jim noted that in the past the industry has been very, successful because it has been able to recognize and anticipate trends of both the government and the public; thus, when government action activity takes place, the industry was prepared to react immediately. Ernie pebbles noted that in the deliberations of the ad hoc committee, the needs of TI have to be met. Arnold Henson remarked that suits have been renewed against the tobacco industry but the thrust of the claims are now, toward addiction and drug dependence. Bill Shinin comments that the ad hoc committee should be a broad policy making committee and not just a smoking and health committee. At this point, the writer discussed the recommendations Philip Morris had for research by the tobacco industry and the assumptions made in generating this proposal. The lawyers quickly commented that keeping negative results "quiet" would cause tremendous problems in court actions should the fact come to light that negative data was supressed. In general, the ad hoc committee was favorable to our suggestions and plan to hear the other tobacco companies in the near future.

Ernie Pebbles questioned whether there is need for research funds for TI. It was thought that such funds could be used by Horace Kornegay for political reasons. The writer felt that the use of such funds for research should not be a unilateral decision to be made at Kornegay's discretion. The legal counsel, in general, agreed. Pebbles then discussed the need for expert witnesses; bearing in mind the members of SAB no longer qualify. It was questionied whether or not such witnesses should be from TI. It was concluded that they should not be supplied from TI, but TI people should find these expert witniesses. The writer mentioned the impending problems with regard to cigarette additives. Alex Spears countered by saying we should consider the technical problems which we can envision as a result of future protocols imposed on the tobacco industry because of OSHA regulations, etc. Finally, those present at the meeting were asked to keep the dates of December 13, 14, and 15 open for the next meeting.

Company

Philip Morris Cos., Inc.

Author

Seligman, R.B.

Recipient

Holtzman, A.

Type

Memorandum