Jump to:

Anne Landman's Collection

PROJECT RAINBOW

Date: 24 Jan 1991
Length: 4 pages
2025772542-2025772545
Jump To Images
snapshot_pm 2025772542-2025772545

Abstract

This confidential internal Philip Morris memo marked "attorney work product" shows that in all likelihood Philip Morris (PM) masterminded the 1997 and 1998 Master Settlement Agreement proposals. PM lawyers first came up with the idea of voluntarily accepting a total ban on tobacco advertising and event promotions ("Project Rainbow") in return for immunity from personal-injury lawsuits involving their products around 1990--many years before the attorneys general of 46 states ever thought of suing the tobacco industry.

The memo reveals that that the industry considers some types of limitations on their advertising and promotion to be quite minor, but perceives they are of great importance to the anti-tobacco community. These concessions are valuable bargaining chips to the industry because they can give away something of little value to them and in doing so, avoid more serious restrictions:

"Some concessions that may not be very important to us are probably important to our antagonists (e.g. bans on vending machines and sampling.) Therefore, we may be able to achieve a compromise without offering the most we are willing to concede."

Clearly the Cipollone case "rattled Philip Morris' cage," as it seems to have triggered them to start thinking about how they could manipulate the U.S. Congress into protecting them by enacting the "mother of all preemption"--the assurance of blanket immunity from future lawsuits.

It is also amazing to see that PM was fully prepared a full decade ago to voluntarily agree to severe restrictions on advertising and promotion--and yet so little has been achieved towards that end by the government and public health officials. Indeed, when people try to ban their advertising and promotion for public health reasons without handing them a "plum," the industry cries that this is a violation of their first amendment rights.

If government officials, attorneys general and health groups only knew back in 1991 how much Philip Morris was prepared to give up, perhaps we would have some more meaningful restrictions on their promotional activities in place today.

Fields

Quotes

To: Messrs. H. Maxwell R.W. Murray

From: Murray H. Bring

SUBJECT: PROJECT RAINBOW

This memorandum and the attachment are being sent to you in anticipation of our mee3ting on February 4 to discuss Project Rainbow. The working group...has had two meetings, and we have developed a concensus about how we should proceed. A proposed plan of action is set forth in the attached memorandum...

Essentially, we have agreed to recommend to you that we initiate steps to explore with appropriate Congressional leaders the possiblity of achieving a legislative compromise in this Session which would, with out acquiescence, impose significant further restrictions on cigarette advertising and event promotions, in return for which Congress would, in the same legislation, reaffirm the preemption of alleged tort claims relating to smoking. We would also anticipate a five-year period of "legislative peace" with respect to marketing issues. This recommendation is conditioned on our first being able to persuade Reynolds to join us in this effort. Accordingly, if you concur, the next step in the process should be for us to contact Reynolds at a very high level...to determine whether they are prepared to cooperate with us in this undertaking.

For reasons detailed in Greenber's memorandum, time is of the essence since the strategy, if it is to be successful, would require passage of the legislation prior to an antifcipated Supreme Court decision on preemption toward the end of this year, assuming that the Court agrees to review the Cipollone case. (If the Court should deny reveiw in Cipollong, the time pressure would be relieved and we would probably be focusing on a two-year legislative time frame. We should know whether the Court will review Cipollone by mid-March. However, because we cannot affort to waste approximately two months until the court acts, we should make the contact with Reynolds as quickly as possible, assuming you decide that we should go forward at all).

By way of background, the following is a brief summary of the principal conclusions we have reached thus far:

I. Underlying Considerations

A. Although the social and political environment with respect to smoking is still hospitle, the situation does not appear to be quite as bleak as it did a year ago when consideration of Project Rainbow was initiated. Nevertheless, we recognize that we are facing a volatile situation and that the environment could deteriorate more rapidly almost any time.

B. The industry probably has more political leverage than we previously thought with respect to some of the concessions we are considering. Some concessions that may not be very important to us are probably quite important to our antagonists (e.g., bans on vending machines and sampling). Therefore we may be able to achieve a compromise without offering the most we are willig to concede.

C. Image advertising and some event promotions are extremely important to our marketing plans and capabilities...Accordingly, we should be willing to make significant concessions in these areas only if we get something equally significant in return, such as a reaffirmation of preemption.

II. Possible Ojectives of Project Rainbow

We have identified four possible objectives of Project Rainbow; they are listed below in descending order of importance and priority:

A. Reaffirmation of Preemption -- we believe that this is the most important objective and the only one which would justify making significant advertising and promotion concessions...

B. To forestall legislative action that would be at least as bad or worse than the concessions we are contemplating...

C. To secure a competitive advantage. --...

D. To reduce the level of criticism directed toward Philip Morris and the rest of the industry. -- We do not believe that a legislative compromise involving significant advertising and promotion restrictions is likely to make us more popular either in Congress or in the country generally. However, the elimination or severe restriction of cigarette advertising would diminish one of the principal focal points of our antagonists' criticism. This could lead to a diminution of the attacks against us and of the level of hostile rhetoric...

III. Recommendation

Attached to David Greenberg's memorandum is an appendix which sets for three possible scenarios, including a description of the specifi concessions that will likely be required under each scenario. The working group has reached a consensus as to the concessions we should be willing to amke in return for a reaffirmation of preemption and a five-year period of "legislative peace" with respect to advertising and marketing restrictions. The working group is not unanimous in its recommendation. One member, Guy Smith, believes it would be a mistake for us to offer any concessions that are not absolutely necessary at this time. In addition, Bill Campbell has some concerns about agreeing to major concessions that might hamper our marketing efforts. nevertheless, he and the other members of the working group are prepared to recommend all of the concessions set forth on the attachment, including a total ban on advertising and event promotions -- provided that any ban be phased in over a five-year period....

Company
Philip Morrris Cos.
Author
Bring, Murray H. (PM Attorney, Sr. VP & Counsel, Board of Directors)
Senior Vice President and General Counsel of PM, 1994; former partner of Arnold & Porter in Washington, D.C. Defended PM in the Cipollone case.
Recipient
Maxwell, H
Murray, R.W.
Region
United States
Type
Memorandum
Operation/Project
Project Rainbow (bargaining for marketing freedoms)
Plans on what marketing freedoms the industry would be willing give up in exchange for weak or no legislation
Subject
Advertising regulations
Ban
Government officials
industry response
Industry strategies
Lawsuits
legislation
Legislatures
preemption
Restrictions
Sponsorship
Sports events
Strategies
Supreme Court decisions
Voluntary agreements
advertising

Document Images

Text Control

Highlight Text:

OCR Text Alignment:

Image Control

Image Rotation:

Image Size:

Document Navigation

View Range: - of 4

Page 1: cpd87e00
JAN 31 '91 13:20 P.MORRIS EXEC. FLR PHIUP MORRIS COMPANIES INC. PRIVILEGED AND CONFIDENTIAL TO: Messrs. H. Maxwell R. W. Murray FrtoM: Murray H. Bring -VA SuB1ECT: PROJECT RAINBOW P.2 INTER-OFFICE CORRESPONDENCE 120 PARKAVENiJF, NEW YORK N.Y. 10017-Sb92 DATE: January 24, 1991 This memorandum and the attachment are being sent to you in anticipation of our meeting on February 4 to discuss Project Rainbow. The working group, consisting of Messrs. Campbell, Goldberg, Greenberg, Smith and myself, has had two meetings, and we have developed a consensus about how we should proceed. A proposed plan of action is set forth in the attached memorandum that has been prepared by David Greenberg. Essentially, we have agreed to recommend to you that we initiate steps to explore with appropriate Congressional leaders the possibility of achieving a legislative compromise in this. Session which would, with our acquiescence, impose significant future restrictions on cigarette advertising and event promotions, in return for which Congress would, in the same legislation, reaffirm the preemption of alleged tort claims related to smoking. we would also anticipate a five-year period of "legislative peace" with respect to marketing issues. This recommendation is conditioned on our first being able to persuade Reynolds to join us in this effort. Accordingly, if you concur, the next step in the process should be for us to contact Reynolds at a very high level (e.g., Maxwell to Gerstner), to determine whether they are prepared to cooperate with us in this undertaking. For reasons detailed in Greenberg's,memorandum, time is of the essence, since the strategy, if it is to be successful, would require passage of the legislation prior to an anticipated Supreme Court decision on preemption toward the end of this year, assuming that the Court agrees to review the Cipollone case. (If the Court should deny review in Cinollone, the time pressure would be relieved, and we would probably be focusing on a two-year legislative time frame. We should know whether the Court will review Cibollone by mid-March. However, because we cannot affor to waste approximately two months until the Court acts, we shoul make the contact with Reynolds as quickly as possible, assuming you decide that we should go forward at all.) By way of background, the following is a brief summary of the principal conclusions we have reached thus far:
Page 2: cpd87e00
JAN 31 '91 13:21 P.MORRIS EXEC. FLR P.3 Messrs. H. Maxwell R. W. Murray January 24, 1991 Page - 2 - I Underlying Considerations 17 . ,, 1" A. Although the social and po tical environment with respect to smoking is st stile, the situation does not appear to be quite a bleak as it did a year ago when consideration of Proj ct ainbow was initiated. Nevertheless, we recogni2e at we are facing a volatile situation and that the environment could deteriorate more rapidly almost any time. B. The industry probably has more political leverage than we previously thought with respect to some of the concessions we are considering. Some concessions that may not be very important to us are probably quite important to our antagonists (e.g., bans on vending ~V.r".L ~ machines and sampling). Therefore, we may be able to r achieve a compromise without offering the most we are willing to concede. C. Image advertising and some event promotions are extremely important to our marketing plans and capabili may be more important to us than to our cc(mpetitors. ' ) Accordingly, we should be willing to make ~ concessions in these areas only if we get something equally significant in return, such as a reaffirmation of preemption. D. We must assess any possible concession in terms of the international implications it may have. II. Possible Objectives of Project Rainbow We have identified four possible objectives of Project Rainbow; they are listed below in descending order of importance and priority: A. Rea firmation of Preem tio -- We believe that this is the most important objective and the only one which would justify making significant advertising and promotion concessions. David Greenberg believes that we stand at least a 50/50 chance of accomplishing this objective if we move quickly and are prepared, along with Reynolds, to make major concessions.
Page 3: cpd87e00
JFiN 31 '91 13:21 P.MORRIS EXEC. FLR P.4 Messrs. H. Maxwell R. W. Murray January 24, 1991 Page - 3 - B. To forestall leaislative action that would be at least as bad or worse than the concessions we are contemplatina. -- Clearly, if we felt it was inevitable that Congress is likely to pass an ad ban or other major restrictions on advertising in the future, then, it would make sense to seek a legislative compromise now while we still have bargaining power and leverage. However, David Greenberg does not believe that Congress is likely to adopt an ad ~ ban or impose other onerous advertising limitations within the next few years. Accordingly, this objective is presently of limited importance . C. To secure a competitive advantaae. -- it is difficult to assess whether a legislative compromise involving significant restrictions on advertising and promotions is likely to provide Philip Morris with a competitive advantage. That might be the case if we thought that Congress might impose those restrictions in any event ~ before we had fully implemented a competitive strategy designed to combat the threat from Camel and to bolster the growth of Marlboro. However,,Bill Campbell believes that we should be able to implement such a strategy within the time frame that David Greenberg thinks Congress is likely to take such action. Moreover, if it were obvious that the concessions we are proposing would result in a significant competitive advantage for Philip Morris, then, it is extremely unlikely that Reynolds would be willing to join with us in the project. Accordingly, we do not believe that this objective would justify undertaking this project. D. To reduce the level of criticism directed toward Philin_ O Morris and the rest of the industry. -- We do not N believe that a legislative compromise involving ~ significant advertising and promotion restrictions is ~ likely to make us more popular either in Congress or in ~ the country generally. However, the elimination or N severe restriction of cigarette advertising would CA diminish one of the principal focal points of our ~, antagonists' criticism. This could lead to a diminution OpIl of the attacks against us and of the level of hostile rhetoric. However, we believe that any such result is too speculative to warrant, by itself, the initiation of Project Rainbow.
Page 4: cpd87e00
JAN 31 '91 13:22 P.MORRIS EXEC. FLR Messrs. H. Maxwell R. W. Murray January 24, 1991 Page - 4 - P.5 Accordingly, we conclude that the only objective which is specific and tangible enough to justify our going forward is the first objective of trying to obtain a reaffirmation of preemption. III. Recommendation Attached to David Greenberg's memorandum is an appendix which sets forth three possible scenarios, including a description of the specific concessions that will likely be required under each scenario. The working group has reached a consensus as- to the concessions we should be willing to make in return, for a reaffirmation of preemption and a five-year period of "legislative peace" with respect to advertising and marketing restrictions. The working group is not unanimous in its recommendation. One member, Guy Smith, believes it would be a mistake for us to offer any concessions that are not absolutely necessary at this time. In addition, Bill Campbell has some concerns about agreeing to major concessions that might hamper our marketing efforts. Nevertheless, he and the other members of the working group are prepared to recommend all of the concessions set forth on the attachment, including a total ban on advertising and event promotions -- provided that any ban be phased in over a five-year period. __- It will not be possible to determine whether a compromise can be achieved, and on what basis, until discussions with key congressional leaders are initiated. However, because it may be necessary early in those discussions to advise Congressmen such as Dingle and Rose of how far we are prepared to go, we are all of the opinion that we should not embark on this exercise unless a firm decision is made by you that we would be willing to make major concessions, including a total ad ban if that is necessary to achieve our objective. In any event, the entire working group is of the opinion that, once we have decided whether we are prepared to go forward, should take the next step promptly of contacting Reynolds determining whether they are willing to join with us. ?V CJ1 ~ ~ N C!1 Attachments oA cc: W. Campbell C!1 M. Goldberg D. Greenberg G. Smith

Text Control

Highlight Text:

OCR Text Alignment:

Image Control

Image Rotation:

Image Size:

Document Navigation

View Range: - of 4