Tobacco Documents Online

HIGHLY CONFIDENTIAL ATTORNEY WORK PRODUCT

The threat of the smoking and health litigation, once confined to the United States, is now a real and present danger to the tobacco industry throughout the world. These lawsuits have forced each cigarette manufacturer to constantly assess the legal ramifications of its past and future conduct, with particular scrutiny given to research and public statements on the smoking and health controversy. To date, these lawsuits have been uniformly unsuccessful, largely because of plaintiffs' inability to prove causation and because of the widespread knowledge about the potential hazards of smoking. Careful consideration should be given to the adoption of a course of conduct which will Jeopardize these, or any other, defenses. Brown & Williamson's position on the smoking and health controversy to date has been that although certain studies have associated smoking with certain diseases, it has not yet been proven that smoking causes disease. Brown & Williamson has recognized the reported association between smoking and disease as an indication that more research on the smoking and health controversy is necessary and, as a responsible manufacturer, Brown 1 & Williamson has supported such research. After evidence of an association between smoking and disease was reported in the scientific and medical literature in 2 the early 1950's, Brown & Williamson and the other major American cigarette companies responded by forming the Tobacco Industry Research Council, later the Council for Tobacco Research, a funding organization for independent research on the smoking and 6S9102114

health controversy. Brown & Williamson later directly funded research by various institutions, including the American Medical Association Education and Research Foundation, and Harvard University, the University of California at Los Angeles, Washington University, and others.3 Brown & Williamson has also relied on BAT to conduct smoking and health research under a 4 series of research pooling and cost-sharing agreements. BAT's response to the smoking and health controversy initially paralleled Brown & Williamson's efforts. When the Medical Research Council issued a statement in 1954 suggesting that smoking was a possible cause of lung cancer, the British manufacturers approached the Minister of Health, who recommended that they donate 1/4 million pounds over seven years to smoking and health research. In June of 1956, the Tobacco Manufacturers' Standing Committee ("T.M.S.C."), a continuing organization, was set up to assist research into the question of smoking and health. Under the British approach to the smoking and health controversy, the T.M.S.C. carried out all biological research on smoking and health. The indiv£dual companies, including BAT, conducted research on the physical and chemical properties of smoke.5 By 1965, BAT began actively conducting biological research on its own and f9nding biological research at institutions other than T.M.S.C. Notable among this research was the B-series experiments, a research program from 1965 until 1978 which included various forms of research (e.g., mouse skin paintings, inhalation experiments, etc.) performed at the Group Research and Development Center in Southampton and at institutions -2-

such as the Battelle Memorial Institute in Frankfurt.6 Many of the reports of the biological testing were made available to Brown & Williamson under the various research pooling and cost-sharing agreements. Throughout this period of time, BAT, like Brown & Williamson, has maintained that smoking has not been proven to cause disease. The importance of consonance between the positions of Brown & Williamson and BAT is essential because, in certain contexts, statements by BAT personnel can be deemed to be admissions against Brown & Williamson in the pending litigation. As a result, BAT and Brown & Williamson have worked together at various times to coordinate their positions on smoking and health.7 For example, a 1980 BAT proposed a "Change of Stance on Smoking and Health."8 At the time, certain BAT employees felt that BAT's stance on smoking and health - that BAT is not made up of doctors and therefore cannot make a Judgment on the smoking and health controversy - was no longer credible. As a result, BAT wanted to establish a new stance which was not legally compromising and which would provide a basis for pre~enting BAT's position more effectively. The proposed new stance was~ We recognize that there is a growing body of responsible medical/scientific opinion which believes that smoking (either on its own or in combination with other environmental or genetic factors) can cause or can contribute to various diseases in a minority of smokers. These views are shared by a number of governments of the countries in which we operate. However, the medical/ scientific view is by no means unanimous on this issue, and therefore, a genuine controversy continues. To help resolve this question, BAT has been carrying out an extensive scientific research program for many years. -3- &S'3102116

As a responsible manufacturer we must respect the views of the medical/scientific fraternity and Governments, and respond to the consumer demand that such views have created. We, therefore, consider it our duty to provide the consumer with the widest possible range of products so that in the light of the evidence that is freely and widely available he can choose how to regulate his smoking habit. Brown & Williamson has responded to the proposed new stance by pointing out that the new stance was capable of two different meanings. One interpretation of the new stance was that BAT should reduce tar deliveries in direct response to government and scientific opinions and in reliance on scientific opinions that low deliveries percent reduced health risks. An equally plausible interpretation was that BAT should manufacture a range of products, including low tar delivery cigarettes, so that the consumer could choose a cigarette for himself with full knowledge of government positions and scientific opinions. While both interpretations, concession to medical and government positions and response to consumer demand, result in the production of low delivery products, their respective impact on the smoking and health litigation were quite different. Brown & Williamson pointed out that adopting a new stance which states that BAT produces low delivery c£garettes as a response to government and medical positions that smoking is hazardous could be deemed a concession that smoking causes disease, which would have serious ramifications on the smoking and health litigation. Brown & Williamson's input into BAT's employee position in "Change of Stance" is typical of its role in suggesting changes in BAT 9 handbooks and and position pap@rs. -4- 6S9102117

Brown & Williamson has similarly attempted to temper any effort by BAT to implement a moderation campaign with implicit or express health claims.10 The impact of such statements on the smoking and health litigation in undermining the general causation and consumer awareness defenses was deemed so important that a legal opinion was drafted recommending that any change in BAT Group strategy on smoking and health not be made without agreement within the Group. It was recommended that the BAT Group should continue to espouse the industry's position on smoking and health -- that smoking may be responsible for the alleged smoking associated diseases, but on the other hand it may not -- nobody knows for certain, and indeed the factual state of science on the subject is not conclusive one way or another. Brown & Williamson and BAT have also worked together to monitor and control statements by BAT employees that may have detrimental effects on the smoking and health litigation. In 1984, a conference was held with BAT's counsel to discuss the ramifications of statements by employees of BAT, now Brown & Williamson's affiliate.II Also discussed were the legal ramifications of certain testing programs such as the low sidestream project, cohort analysis, and Project Rio, among others. To curb the potential detrimental legal impact of such projects, Brown & Williamson suggested increased lawyer involvement in these activities. It is quite important that Brown & Willlamson have continued input into the issuance of official statements or the conduct of biological research by BAT. Plaintiffs in the U.S. -5-

smoking and health litigation have shown a desire to request documents concerning a manufacturer's position on smoking and health as well as a desire to depose senior executives on this subject. Less official statements by BAT employees on the smoking and health controversy can be equally as important. Where Brown & Williamson exercises some control or where there is a close functional relationship between B&W and BAT on a general business level or on a specific project basis, statements or actions by BAT, as a parent company or as an affiliate, can be imputed to Brown & Williamson. As a result, any change in BAT's posture on policy or research on the smoking and health issue at the Chairman's Advisory Committee Meeting should be made only after full consideration of the legal implications. -6-

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ATTORNEZ-CLIZNT PRIVILEGE ATTORNET WORK PRODUCT _CHRONQL~T OF BROWN & WILLIAM$ON SMOXIN~. AND HEALTH RESE.ARCH 1906 1927 1954 1954 Prior to 1958 1958 1961 1962 1962 1964- 1973 1965 1966 1966 Brown & Williamson Tobacco Company is formed. Brown & williamson TobacGo Company is purchased by British-American Tobacco Company ("BAT') and incorporated in Delaware under the name of Brown williamson Tobacco Corporation ("B&W"). B&W and the other major cigarette companies form the Tobacco Industry Research Committee ("T.I.R.C.") to sponsor independent research into questions on the relationship between smoking and disease. Brown & Willlamson's contributions to T.I.R.C. and later from 1953-1987 total $24,197,602.11. B&W publishes and distributes pamphlet reporting recent studies of menthol. Brown & Williamson and BAT pool research and share costs under informal agreements. Brown & Williamson and BAT agree on April 15, 1958, to pool research and share costs according to ratio of Brown & Williamson sales to BAT sales. Brown & Williamson and BAT agree on October i, 1961, to pool research results but to bear their own research costs. Brown & Williamson and BAT agree on March 6, 1962, to pool research free of charge. Battelle begins work in Project ~d~IEL to develop an alternative smoking device. Broom & Williamson begins annual funding of American Medical Association Education and Research Foundation. Project JANUS, mouse skin painting experiments, begins at Batelle. "" Brown & Willlamson funds research at Spindletop Research, Inc. entitled, "Analysis and Control of the Products of Pyrolysis of Tobacco." B series short-term hyperplasia tests begin at BAT.

1966 1968 1968 1968 1968 1969 1969 1969 1969 1969 1969 1969 1970 1971 Project CONQUEROR, goblet cell tests in rat tracheas, is begun. Brown & Williamson funds general research at Spindletop Research, Inc. Studies begun on smoke retention in the mouth and smoke deposition in the upper respiratory tract. Work is discontinued on smoke retention in the lung. Brown & Williamson contracts with Battelle to design, construct and operate a smoking machine to expose mice in an acute toxicity study, projects Boston HILTON and Atlanta HILTON. In v~ro bioassays on a routine basis are established. Brown & Williamson funds project entitled, "Protocol for Investigation of Chemosol" at Hazleton Laboratories, Inc. A research program on the relevance of free radicals is begun. Phenol is removed by the use of PEG as a filter additive. Fractionatlon work to identify specific initiators and promoters begins. Coumarln is voluntarily removed from a German cigarette in the face of a ban. Paramecia toxicity and ciliastasis tests are conducted. An agreement dated July 9, 1969, is signed by BAT and Brown & Williamson under which BAT and Brow~l & Williamson agree to pool mechanical and product development research and share costs (for a period of five years). According to a ratio of Brown & Williamson sales to BAT sales it is made retroactively effective to January i, 1969. Filter research using thiol compounds and thlol ion exchange resin shows reduced toxicity to paramecia. Project MAD HATTER which seeks to maximize desirable constituents of smoke and to minimize the undesirable ones is conducted. 6~102122