Tobacco Documents Online

Subject to Claims of Privilege and Confidentiality: Produced pursuant to Court Orders in State of Minnesota, et aL v. Philip Mor#s, et aL

COHTXDE1/T~AL/A'F,~0RNET-CLTENT PRIV~LZGE/ATTOI~t.'~ET WORK PRODUCT GENERAL INTRODUCTION ................ A1 1. Scope of Notebook ............... AI 2. Background ................ ~ . . AI 3. Organization of Notebook ............ A3 4. Sources .................... A4 THE LAW OF CONSPIRACY AND CONCERT OF ACTION IN TOBACCO CASES .................. i.. Civil Conspiracy and Concer~ of Action: General Principles ............... a. Civil Conspiracy Defined ......... b. Concer~ of Action Defined ......... 86 c. Join~ Consideration of Conspiracy and Concer~ of Action ............. 2. The Potential Scope of Liability Arising From Claims of Conspiracy and Concert of Action ..................... 3. Eviden~iary Issues in Conspiracy and Concer~ of Action ............... BI0 a. Proof of Conspiracy ............ B11 b.' Co-Conspirauors' Declarations or Actions .................. B12 c. Order of Proof .............. B12 d. Privileged Documents and Communications. 4. Possible Defenses ............... B15 a. Preemption ................ -I- BATCO MINNESOTA TOBACCO LITIGATION

C0~"ID£HTZA,T./ATTORi',~-CLZENT PRZVZI2:GE/A~'~OH.NE~Z HOHK PHODUCT Co b. Mere Presence/Mere Association/ Mere Knowledge .............. c. Withdrawal, or Termlnatlon/$ta~ute of Limitatlons~ ............... d. No Unlawful Conduct or Purpose ...... e. Failed Purpose/No Causation ........ f. No Local Effec~ from International Activities ................ g. Legitimate Group Governmental Action . . . 5. Legal Considerations Regarding the B&W/BAT Relationship .................. a. General Considerations .......... b. Defenses ................. ISSUES AND ALLEGATIONS WHIC~ ARE OR MAT BE THE BA3IS OF A CONSPIRACY OR CONCERT OF ACTION CLAIM . o 1. Legal Issues .................. 2. Factual Allegauions in Conspiracy Complaints ................... ANALYSIS OF POSSIBLE CLAII~S AGAINST B&W AND TOBACCO INDUSTRY MEMBERS (Including descriptions of Possible Claim; Response/Defense; Summary of Pertinent Documents; and Summary of Key Players and Potential Witnesses} ................ i. Executive Summary ............... Do ao Introduction ............... Agreement ................. Unlawful Acts Or Unlawful Means ...... Causation ................. Analysis of Possible Specific Claims ...... a. Industry-Wide Cooperation/ The Tobacco Institute ........... b. Industry-wide Cooperation/ The Council for Tobacco Research ..... -£I- B22 B24 B24 B24 B26 CI C1 C2 DI D1 D1 D1 D2 D4 D5 D5 DI7 BATCO MINNESOTA TOBACCO LITIGATION

CONT~DENT~AL/ATTORRE~CL~ENT PR~V~LECE/ATTORNE~ WORK PHODUCT c. International Industry Cooperation/ INpOTAB .................. D31 d. A "Gentlemen's Agreement" Regarding Health Research .............. D45 e. Concerted Efforts to Oppose Federal Legislation and Regulation ........ D53 f. Opposition to State Publlc Smoking Initiatives, Other Legislations The TI State Activities Pollcy Co~ittee ................. D6~ g. AMA-ERF/Research Arrangement With the American Medical Association ..... h. CTR Funded Speclal Projects to Conduct Studies and Research Which were Made Public Only on a Selective Basis .............. D84 i. True Magazine Article and Related Publlc Relations Activities ........ J. Hazleton Research on Efficacy of Chemosol ................ DI00 k. Attack on Auerbach/Hammond Beagle Study ............... DI08 I. Opposition to Proposed FTC Carbon Monoxide Testing Program ...... Dll4 m. Attack on American Cancer Society Target 5 AcUivitles ............ DI21 n. Oppositlon to Proposed Oral Contraceptive Warnings .......... D125 o. The Industry's *Social Costs of Smoking" ProJec~ ............. D128 p. ChalZenge to Advertisement for Stresstabs 600 .............. D138 q. Attack on Mortality Research Conducted By State Mutual Life Assurance Company ............. DI40 r. Unfounded Attack on Hlrayama Study .... D142 $. Monltorlng Fifth world Conference on Smoking and Health, Winnipeg, Canada . . . D151 BATCO MINNESOTA =fOBACCO LITIGATION

COH¥'ZD~A~'~IAL/A'Z~0~E~-C~IEH~ PRIVII,~GE/A~OI~3~E~ HO~ PRODUC~ ANALYSIS OF POSSIBLE CLAIMS INVOLVING B&WAND BAT (Including descriptions of Possible Claim; Response/Defense; Summary of Pertinent Documents; and Summary of Key Players and Potential Witnesses) ..................... 1. Executive Summary ............... a. Introduction ............... Agreement c. Underlying Wrong or Unlawful Act ..... d. Causation ................. 2. Analysis of Possible Specific Claims ...... a. Industry-wide Cooperation ......... b. BAT and B&W Shared Research ........ c. Refusal to Publish Tar and Nicotine Contents or to Admit Connection Between Smoking and Disease ........... d. The Phenol Issue . : ........... e. Attempt to Suppress Information About Carcinogenic Effects of MH-30 f. Attempted Suppression of Ha~rogaue Research on Tar and Nicotine ....... g. "Research~ Was Conducted and Used Only For Public ~el~tions ......... h. Attempt to Influence or Suppress Report of S.S.L.C ............. Opposition to Creation of Independent Committee by DHSS ............. Attempts to Encourage Smoking ....... k. The Social Smoking Project ........ 1. Efforts to Encourage Smoking ~n Face of Information Tha~ I~ Is Harmful ...... m. Efforts to Evade Governmental Controls .................. -iv- E1 E1 E1 E4 E8 Ell E25 E30 E33 E37 E40 E44 E47 ESO BATCO MINNESOTA TOBACCO LITIGATION

CONI~IDE'~TTAL/ATTORNEY-CL'~ENT PR'rVILECE/ATTORNE~ WORK PRODUCT CH~0NOLOG~ . At~emp~ to Infl~ence Content o£ Panorama Program ....... • . . . . . A~ack on Hirayama $~udy ......... Causing ~he Hoffmann Paper ~o be Pulled .................. E64 ¥I O BATCO MINNESOTA TOBACCO LITIGATION

NO. 7 ~ove~ Hh£~e Du~an~ KING & SPALDING BATCO MINNESOTA TOBACCO LITIGATION

Subject to Claims of Privilege and Confidentiality: Produced pursuant to Court Orders in State of Minnesota, et al. v. Philip Mords, et aL

CON~IDENTIAL/2tTTORNEY-CLIENT PRIVILEGE/ATTORNEYWORK ~RODUCT A. GENERAL INTRODUCTION I. Scope of Notebook. The preparation of this Notebook was undertaken by King & Spalding at the request of Brown & Williamson as one of the "Litigation" Strategic Assignments. Specifically, the assignment was.to prepare a Notebook ".. • on major issues included in the subject of conspiracy, including conspiracy alleg,tlons pertaining to BATCo as well as B&W and the competitors."I This Notebook concentrates on the subject of civil conspiracy and a related concept, "concerted action", which will generally be referred to as the "conspiracy issues". The purpose of this Notebook is to identify conspiracy issues which have been or might be raised in complaints in which Brown & Williamson Tobacco Corporation ('B&W") or British-American Tobacco Company, Ltd. ("BAT") are or might be named as defendants. It reviews and analyzes the relationship between such allegations and documents from B&W's files, and sets out possible legal and factual defenses. Conspiracy issues are inevitably mixed in with the usual substantive issues which appear in smoking and health cases, such as "failure to warn", "express warranty", "fraudulent misrepresentation", strict liabilityunder various provisions of the Restatement (Second) of Torts, and contributory or comparative negligence. To the extent it is possible, this Notebook will deal solely with conspiracy issues and leave an in-depth treatment of the substantive issues to o~hers. In so doing, however, it must be recognized that in the real world of litigation it is often difficu1~ to separately analyze conspiracy and substantive issues. 2. Backqround. B&W is currently a defendant in five cases which contain conspiracy allegations. All are in Texas.2 Numerous other "conspiracy" cases have been filed, both in Texas and in other Jurisdictions, but have been dismissed either through summary Judgment or voluntarily by the plaintiffs. The relationship between B&W and BAT naturally raises concern about the possibillty of BAT becoming a defendant in a conspiracy lawsuit. To date, this has not occurred. In successfully defending a conspiracy claim, it is important to understand its nature and limits in relations to the underlying facts. REVISED: 8/21/90 -AI- BATCO MINNESOTA TOBACCO LITIGATION

CONF~DENTIAL/AZTORNET~CL~'ENT I~H'rVILE~E~ATTORNE~ WORK PRODUCT There is increasing attention and concern regarding the conspiracy claims in lawsuits against members of the tobacco industry. A conspiracy claim figured strongly in the Cipol~one case and went to the ~u~. The ~ury found for the defendant on the facts of that case. Plaintiffs use conspiracy claims, and the related concept of ~olnt and several llabillty, to seek to impose llabillty upon tobacco companies other than those whose product the plaintiff smoked, as well as upon tobacco industry organlzatlons such as the Tobacco Institute ('TI'} and ~he Council for Tobacco Research Conspiracy claL~s have been used to in~ect new theories of liability which would increase chances of recovery in today's antl-tobacco environment. Courts in Texas, where all of B&W's conspiracy cases are currently pending, are particularly receptive to this notion. In ~oqers v. R. J. Reynolds TobacCo Co.,4 the Texas Court of Appeals, in reversing summary Judgment for defendant tobacco companies, recently signlficantly broadened the concept of conspiracy to cover negligence claims. The Rocers court defined the concept of "conspiracy" to mean that -- conspirators must intend onZ~ "to engage in a course of conduct that results in the injury'.~ The court stated: ".... cigarette smoking and resulting h~alth problems are a separate, special unique type of case, sometimes referred to as sui ene~."6 It remains to be seen whether courts in other states will follow the path of ~ in broadening the concept of conspiracy in tobacco cases. The fact that various members of the tobacco industry have cooperated to some extent in addressing various smoking and health issues over the years make industry members obvious targets for conspiracy claims. The existence of what plaintiffs define as "tobacco industry organizations', such as the Tobacco institute and the Council for Tobacco Research, adds to the surface logic of a conspiracy claim. All of this is further reinforced by the intensi~y that has often characterized the debate/conflic: between the tobacco industry and the anti-tobacco forces. Typically the existence of an unlawful conspiracy is no~ established from documents alone. Plaintiffs use a company's documents {l] in discovery ~o provide leads for further investigation, including depositions of key people, and (2) a~ trial as cumulative evidence of ~he conspiracy itself and as evidence that actions were taken in furtherance of an alleged conspiracy. The "agreement" element of a conspiracy, including its nature and aims, is most often proven by verbal ~estimony. -A2 o BATCO MINNESOTA TOBACCO LITIGATION