Anne Landman's Collection
FDA Regulation Legislative Strategy Development in Anticipation of A U.S. Supreme Court Decision
Abstract
This October 22, 1999 memo by John F. Scruggs (Vice President of Federal Government Affairs at Philip Morris Management Corporation) and John Hoel (Director of Federal Tobacco Issues at PM Management Corporation) shows PM's strategic preparations for both win and lose scenarios resulting from the Supreme Court's 1999 ruling on whether FDA can regulate tobacco. It lays out PM's objective of developing an alternative FDA legislative strategy and discusses the inclusion of elements from PM's "Must Have" and "Must Not Have" list (a version of which, a "Should and Should Not Have" list, can be seen at http://legacy.library.ucsf.edu/tid/kxb22c00).
From the list it appears that PM seeks FDA regulations that:
1) do not interfere with tobacco marketing or promotions; 2) enshrine in federal law the tenets of the Master Settlement Agreement, an already-existing and mostly unenforced voluntary agreement drawn up largely by PM to get out from under multiple state lawsuits in 1997-98; 3) reinforces the public perception that smoking is a youth problem, not a societal problem; 4) Places the burden of informing the public about the hazards of smoking onto the FDA, thus removing substantial liability from the tobacco companies; 5) officially sanctions the current toxicity level of cigarettes; 6) Forces FDA to put its resources into manipulating cigarette ingredients and designing safer cigarettes, instead of allowing FDA the unfettered freedom to consider and implement a far wider range of innovations to reduce morbidity and mortality from smoking; 7) Forces FDA to place a high priority on the economic impact of tobacco, rather than making public health its highest concern regarding its actions dealing with tobacco, 8) Prevents FDA from requiring that cigarettes be made less appealing to smokers in any way; 9) Gives the industry a way to escape a regulation by claiming it causes or exacerbates a black market in tobacco (which history shows that tobacco companies create and stimulate at will to defeat legislation they don't like, like taxes) 10) Preserves the industry's freedom to manufacture and export domestic cigarettes to the extent they wish; 11) Helps slow the decline in domestic farm production of tobacco plants. PM's strategy in the lead up to the Supreme Court Decision consisted of developing two teams: one that would work on a plan to be pursued if the court ruled in the industry's favor, and the other to develop a scheme to pursue if the court ruled against the industry. The court eventually ruled in the industry's favor, concluding that only Congress could delegate the authority to FDA to regulate cigarettes.
The Scruggs-Hoel memo and PM's "Should Have/Should Not Have" list together describe the beginning of PM's FDA Regulatory Strategy Project to drive the enactment of FDA regulations favorable to the company. The scenario is being played out today as the U.S. House and Senate both consider simultaneous bills (S. 625 and H.R. 1108) that largely deliver to PM it core principles.
Fields
- Author
- Hoel, John (PM Federal Tobacco Issues, c.1990s)Dir., Federal Tobacco Issues, PM Mgmt. Corp. in 1990s; Washington Relations Office, c. 1997-9
- Scruggs, John F. (PM Mgmt Corp. Federal Government Affairs Office)VP Federal Government Affairs (Tobacco) PM Management Corp.cc. 2/2000, Alexandria, Virginia (2085318084-Fax letterhead 2001)
- Recipient
- Liebengood, Howard S. (PM vice President of Gov't Affairs, c. 1997)Former TI Executive Vice President (per letterhead at PM 282110894)
- Parrish, Steven C. (PM, Sr. VP, General Counsel)Partner of industry law firm Shook Hardy and Bacon before going to work for PM. Was VP of PM Corporate Scientific Affairs in 1990. Defends PM on television.
- Wall, Charles R. (PM VP & Assoc. Gen. Counsel, c. 1994)Vice President and Associate General Counsel for Philip Morris 1994-94 (may have been longer; this info was gleaned from documents); formerly worked for Shook, Hardy and Bacon.
- Named Person
- Berlind, Mark (PM Worldwide Regulatory Affairs, Ass't General Counsel)Philip Morris
- Castellano, A.
- Desel
- Han, Victor (PM Worldwide Reg. Affairs, Dir. of Communcations c. 1993)Director of Communcations for Philip Morris Worldwide Regulatory Affairs office circa 1993-95. Directed strategy and implementation of internal and external communications. Also worked for PM Corporate Affairs. Vigorously defends company's sale of tobacco products but refuses to smoke around his two young daughters saying "Certainly I don't want my kids to smoke. As a parent I want to take as many risks out of their lives as I possibly can." (Washington Post National Weekly Edition, January 13, 1997, pg. 9)
- Harris, P.
- Hoel, John (PM Federal Tobacco Issues, c.1990s)Dir., Federal Tobacco Issues, PM Mgmt. Corp. in 1990s; Washington Relations Office, c. 1997-9
- Holleran, Jack (PMMC Legal Department c. 1998)Philip Morris Management Corporation Legal Department 1998, PM USA Legal 2001
- Nicoli, David P. (PM Washington Relations Office, c. 1992-94)PM Legislative Council, 1992. PM Washington Relations Office, 1994.
- Pfeil, Michael E. (PM Section Sales Mgr)Defense
- Slaiman, G.
- Named Organization
- 4th Circuit Court Appeals
- Bergner Bockorny
- Black Kelly
- Burson Marsteller (Tobacco industry PR firm)Tobacco Industry public relations firm.
- Bozell Worldwide (Marketing Analyst in New York)
- Congress
- United States Food and Drug Administration
- House
- Philip Morris
- Philip Morris Team
- Pmusa, Philip Morris Usa
- Senate
- Swindler Berlin
- Team 1
- Team 2
- US Supreme Court
- Litigation
- Feda/Produced
- Type
- MEMO, MEMORANDUM
- AGEN, AGENDA
- REPT, REPORT, OTHER
- Subject
- FDA jurisdiction over tobacco
Document Images
November 1: Schedule team presentations to senior management
November ?: Earliest date for oral argument
Please let us know as soon as possible your views regarding this plan and
whether we should proceed with this initiative.
cc. Nicoli
Han
Merlo
Keane
Berlind
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Recommended PM Team
We recommend the following Philip Morris components be brought together to
work on this project:
Issues Management: IM will provide the polling and research overview and
help manage each of the teams as well as assist in facilitating strategy
discussions. (Nicoli)
Worldwide Regulatory Affairs: WRA will provide and manage the initial legal
and substantive briefings. (Berlind)
Legal: Legal will provide oversight, ensure confidentiality of the process and
provide legal briefings in conjunction with WRA. (Desel)
PM-USA: USA will assist in communications development, legal aspects and
determine acceptability parameters of legislative proposals. (Holloran, Pfeil)
Communications: Communications will assist in coordinating the teams and
provide necessary contract support through current agreements. (Han)
Washington Relations Office: WRO will chair the process and be responsible
for completion pursuant to following timetable and a quality work product. WRO
will also draft goals and requirements for teams and facilitate initial strategy
sessions. (Hoel)
Tentative Timetable
August 31:
September 6:
September 27:
October 4:
October 4:
October 8:
October 15:
October 15:
October 29:
IM research briefing and presentation to PM team
Teams identified, agreement on timetable and requirements
Requisite briefings completed
Supreme Court session begins
New baseline research results presented to teams
Facilitated strategy sessions completed
Initial plan outlines due from teams
Pre-oral argument / pre-decision communications plan due
Target Adjournment of Congress
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decision. Earlier concerns that legislative amendments would be attached to the
Agriculture, FDA appropriations bill remain, but have lessened significantly since
both bills have passed their respective bodies. However, the issues surrounding
FDA funding and tobacco remain a concern at conference and the opportunity
still exists to attach FDA language to other appropriations bills in the Senate.
On July 12, the Food and Drug Administration filed its brief with the Supreme
Court arguing against the Fourth Circuit Court of Appeals decision that the
agency does not have jurisdiction over tobacco products. One of the major
reasons the Fourth Circuit rejected FDA's assertion of jurisdiction over tobacco
products was that if tobacco was regulated as a drug or device under the Food
Drug and Cosmetic Act (FDCA), the logical outcome would be a total ban of
tobacco products, which would be contrary to Congressional intent. In its brief,
FDA argues that it has the authority under the FDCA to weigh the risks
associated with tobacco products against the damage that may result from
removal of the product from the marketplace. FDA's brief specifically states that,
"[f]rom a public health perspective, it would make no sense to require removal of
a product from the market when that would cause more harmful health
consequences than leaving the product on the market." Interestingly, FDA then
argues that if the Court disagrees with this interpretation, then the Act requires
tobacco products to be banned and it would be the responsibility of Congress to
amend the Act to prevent outright prohibition.
The industry is scheduled to submit its brief to the Supreme Court on September
10, 1999. The FDA must file its response by October 12, with oral arguments
possibly coming in late fall or early 2000. A decision will be announced no later
than July 2000.
Objective
The objective is to develop alternative FDA legislative and communications
strategies for consideration and decision-making by senior management. These
alternatives will be developed well in advance of a decision by the Supreme
Court and differ based on known variables, such as the alternative decisions that
could be rendered by the Court, and informed speculation about the 2000
political situation. This process is further designed to allow senior management
to consider a communications plan in the time period leading up to oral
arguments and preceding the Court's decision.
Recommended Process
The WRO recommends the establishment of two separate and distinct teams
that will work independently to develop legislative and communications strategies
based on different variables. Team One will assume the Supreme Court holds in
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our favor and be charged with constructing a plan that addresses opposition
attempts to undo the Court's decision through legislation. Team Two will assume
a loss and the need for remedial legislation advocated by Philip Morris. Both
teams will be charged with developing a "middle ground" strategy should the
primary objective of the team be unattainable.
Each team will be lead by a legislative firm capable of fully developing a
comprehensive legislative strategy that will drive the communications plan.
Team One will be comprised of Black, Kelly, Scruggs & Healey for the legislative
component; Burson-Marsteller, Washington for public relations and media
strategy; and Alex Castellanos for advertising. Team Two will consist of Bergner
& Bockorny joined by Gary Slaiman of Swindler & Berlin for legislative strategy;
Bozell, Sawyer, Miller Group for public relations and media; and Peter Harris for
advertising. While the teams will not be in direct competition, the appearance of
competition will serve to enhance creativity and the quality of the final work
product.
To ensure that each team starts from the same knowledge base each will receive
the following briefings. The first will be on the history of the FDA Rule, the
industry's legal challenges and a legal explanation of the issues before the Court.
This will include timing for argument and decision, followed by a description of
possible outcomes. Second will be a briefing on the substantive issues
associated with FDA regulation of tobacco. This will include a discussion of what
has commonly been called the "must have" and "must not have" list. The final
briefing will detail FDA-related research and polling findings to date.
After baseline briefings are completed, the WRO will facilitate an offsite strategy
session individually with each team. The purpose will be to fully explore
strengths, weaknesses, opportunities and threats. Thereafter, each team, led by
its respective legislative group, will develop and write its assigned strategic plan.
Upon completion of the strategy development effort, each team will make a
presentation to senior management. Importantly, each team will make
recommendations on a strategy based on different outcomes in the Supreme
Court while both will make recommendations on the most likely scenario, which
is the need to find a middle ground approach, whatever the Court's holding.
Each team's presentation will include a thorough explanation of the legislative,
public relations, media and advertising strategies. This also will include an
interim communications plan from each team for the pre-oral arguments and pre-
announcement periods. The goal is to provide senior management with the
ability to choose from a well-informed, comprehensive menu of options as the
judicial and legislative process proceeds.
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PRIVILEGED AND CONFIDENTIAL
ATTORNEY WORK PRODUCT
PHILIP MORRIS MANAGEMENT CORP. INTER-OFFICE CORRESPONDENCE
1341 G STREET, N.W., SUITE 900, WASHINGTON, DC 20005
To : Steven C. Parrish Date: October 22, 1999
Howard S. Liebengood
Charles R. Wall
From: John F. Scruggs
John Hoel
Subject: FDA Regulation Legislative Strategy Development in Anticipation of a
U.S. Supreme Court Decision
This memo presents a process for developing a legislative strategy that drives a
communications strategy in anticipation of a Supreme Court ruling in Food and
Drug Administration v. Brown and Williamson Tobacco Corp. sometime in the
spring of 2000. WRO begins with the premise that whether the Court holds in
our favor or against us, a fully developed legislative and communications strategy
needs to be in place well in advance of the Court's announcement of the
decision. Intense political pressure for legislative action by Congress is virtually
assured, either by Philip Morris or the opposition, whatever the Court decides.
This process needs to begin now to allow for the development and
implementation of alternative strategies, notwithstanding the decision of the
Court. Additionally, WRO recommends a distinct communications strategy be
considered and implemented in the period before oral argument and between
oral argument and announcement of the decision. After announcement, the
communications and legislative strategy developed by this process will be
initiated.
Situation Analysis
The topic of FDA repulation has received surprisingly little attention in the first
session of the 106t Congress. Despite the Administration's rhetoric in its
FY2000 budget and its request for a 100 percent funding increase to $68 million,
FY 2000 appropriations for FDA's tobacco related activities are held at $34
million in the House and Senate bills, the same as the two previous fiscal years.
Since the Supreme Court granted the government's petition for certiorari, there
has been a consensus among both proponents and opponents of FDA regulation
that Congress should withhold action until the Supreme Court announces its
