Tobacco Documents Online

VIRGINIA: IN THE CIRCUIT COURT FOR THE CITY OF RICHMOND John Marshall Courts Building ~ PHILIP MORRIS COMPANIES INC. ) ~ and ) ) PHILIP MORRIS INCORPORATED, ) Plaintiffs, ) ) ~ v. ) AT LAW NO. 760CL94X00816-00 ( AMERICAN BROADCASTING COMPANIES, ) INC., ) ) JOHN MARTIN, ) ; ) ~ and ) WALT BOGDANICH, ) ~j ---- - - : :.:_.::--.:~.. ) ~I Defendants. ) I AMENDED MOTION FOR IUDGMENT Plaintiffs Philip Morris Companies Inc. and Philip Morris Incorporated, move for judgment against defendants by reason of the following: PARTIES 1. Plaintiff Philip Morris Companies Inc. (Philip Morris Companies) is a publicly held corporation organized and existing under the laws of the Commonwealth of Virginia, with its principal place of business in New York, New York. Philip Morris Companies is a holding company whose stock is publicly traded on the New York Stock

Exchange. Its subsidiary corporations are primarily engaged in the tobacco, food and beer businesses, and own many of the best-known brand names in the world, including Marlboro cigarettes, Kraft food products, and Miller beer. 2. Plaintiff Philip Morris Incorporated (Philip Morris U.S.A.) is a corporation organized and existing under the laws of the Commonwealth of Virginia, with its principal place of business in New York, New York. Philip Morris U.S.A. is a wholly owned subsidiary of Philip Morris Companies, is engaged in the domestic tobacco business and is the largest tobacco company in the United States. As is hereinafter set forth, the defamatory statements made by defendants were made without specification as between Philip Morris Companies and Philip Morris U.S.A. and "Philip Morris" was used indiscriminately by defendants to refer both to Philip Morris Companies and Philip-Mofris.: U.S.A. Accordingly, except as otherwise"indicated, the term "Philip Morris", is used in this ' Motion for Judgment interchangeably to refer to both Philip Morris Companies and Philip Morris U.S.A. - " 3. Defendant American Broadcasting Companies, Inc. (ABC) is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business in New York, New York. ABC, a wholly owned subsidiary of Capital Cities/ABC, Inc., operates the ABC Television Network, a major American broadcast network with seven owned and operated and over 200 affiliated stations reaching 99.9% of all United States television households. ABC's telecasts are regularly broadcast in and into the Commonwealth of Virginia by numerous stations, including but not limited to ABC ~ 2 ~ -..~ ~ ~ ~ Cb

affiliate affiliate stations WRIC in Richmond, WJLA in the District of Columbia, WVEC in Hampton, WSET in Lynchburg, WHSV in Harrisonburg, WKPT in Kingsport, Tennessee, and ABC's owned and operated station WTVD in Raleigh-Durham, North Carolina. ABC's telecasts are widely viewed in the Commonwealth of Virginia and throughout the United States, and ABC derives substantial revenue from its broadcasts and other activities in Virginia. Among programs produced by ABC News for broadcast on the ABC Television Network is the news magazine program Day One launched last year. Upon information and belief, Day One has not been a successful program; its ratings have been deteriorating. With its program on Monday evening, February 14, 1994, only two weeks before the first program complained of herein, Day One's ratings fell to an all-time low. 4. Defendant John Martin.is a Day_ One.-reporter; led.D.ay One's "inv..estigation"~, : into nicotine in cigarettes, and appeared on the February -28 and March, :7, 199.4.;:broadcast segments of Day One regarding cigarettes and nicotine. 5. Defendant Walt Bogdanich is the producer of the February 28, and co- II producer of the March 7, 1994, Day One segments on cigarettes and nicotine. NATURE OF ACTION 6. This is an action to redress the massive harm caused to plaintiffs by the false and defamatory statements made by defendants on the nationally televised news magazine show Day One on February 28 and March 7, 1994, as well as on other ABC News programs. Announcing that they had "uncovered" the tobacco industry's "last best secret" "never before disclosed to consumers or the government," and asserting that their -3-

"investigation" "could change the tobacco industry forever," defendants, through the use of sensationalized false and reckless allegations, told viewers across the nation that tobacco companies, including Philip Morris, are artificially "spiking" and "fortifying" their cigarettes sold in the United States with extraneous nicotine for the express purpose of keeping smokers "hook[ed]." 7. Following the February 28, 1994, Day One broadcast, foreseeably, the national networks and press accepted as true Day One's supposed "revelation" that the tobacco industry "spikes" its cigarettes with extra nicotine and repeated these charges virtually daily. In what can only be described as a public frenzy, reporters, the public, government regulators and Congressmen, "astonished" and "shocked" by Day One's "revelation," called for governmental and congressional investigation and possible new regulation. Even the President of the United States :-was : misled and stated on : an ABC Television Network program on March 19, 1994, "[T]hat really bothered me when I heard that more nicotine was going in to make sure that people were hooked." And the stock of plaintiff Philip Morris Companies and other companies having businesses engaged in the tobacco industry fell dramatically in reaction to Day One's charges and the regulators' reaction thereto. But the frenzy whipped up by Day One is based on a totally false and defamatory premise made up of whole cloth: that Philip Morris intentionally adds extraneous nicotine to the tobacco used in its cigarette manufacturing process expressly in order to "hook" smokers. As detailed below, Philip Morris does no such thing. ~ ~ ~ ~

I~ The Defamatory Day One Broadcasts 8. On February 28, 1994, ABC-Television aired the television program Day One from 8:00 p.m. to 9:00 p.m. (EST). Anchor Forrest Sawyer opened the program with great fanfare, announcing: "A Day One investigation that could change the tobacco industry forever." He went on to say, "Cigarettes - they'll hook you fast and it is not just an accident of nature," and accused the cigarette companies of "artificially spiking [their] cigarettes with nicotine." He told the audience that for nearly a year, Day One had been investigating nicotine, and that when word of Day One's "investigation" got out, the "Food and Drug Administration announced that it is now considering whether to regulate cigarettes as drugs." Then, expos6 style, John Martin, the Day One reporter who led the nicotine "investigation," told the television audience that Day One was-about .to reveal 'the tobacco - industry's "last best secret" ". never before..disclosed." 'Th'at ."secret" :turned out to be the false and defamatory claim - knowingly and/or recklessly made by defendants - that Philip Morris (as well as other cigarette manufacturers) intentionally "spik[es]" and "fortif[ies]" its cigarettes with extra nicotine during the manufacturing process to keep smokers hooked. ~i 9. False and defamatory statements knowingly and/or recklessly made or ~ endorsed by 'defendants during the course of the February 28, 1994, Day One segment included the following: a. Unidentified ABC Voice-over: There's something tobacco companies don't want you to know. 5 ~ ~ ~ ~ ® ~ -z ~

b. Cliff Douglas (American Cancer Society): The industry manipulates nicotine, takes it out, puts it back in, uses it as if it were sugar being put in candy. I c. Martin: Why are you artificially spiking your cigarettes with nicotine? d. Unidentified ABC Voice-over: Cigarettes - they'll hook you fast and it is not just an accident of nature. e. Representative Mike Synar (Democrat, Oklahoma): They don't want anybody looking at their product so that they can doctor it, they can alter it. f. Unidentified ABC Voice-over: A Day One investigation that could change the tobacco industry forever. g. Martin: Now, a lengthy Day One investigation has uncovered perhaps the tobacco industry's last best secret - how it artificially adds nicotine to cigarettes to keep =Dle smoking and boost Frofits. . . _ - h. Unidentified ABC Voice-over: The methods the cigarette companies use to precisely control the :levels of nicotine is something that has never before been disclosed to consumers or the government. i. Martin: It was here in Winston-Salem, North Carolina that the manufacturing process began to change. The R. J. Reynolds Tobacco Company pioneered a two-step process to make cigarettes more cheaply and to control the level of nicotine. Step one: it developed reconstituted tobacco, which is made from stalks and stems and other waste that it used to throw away. * * * j• ... Even though reconstituted tobacco allows the companies to produce cigarettes more cheaply, there are problems - poor taste and less nicotine. So here's what the companies do in step two - thv apply a nowerful tobacco extract containing nicotine and flavor to the reconstituted tobacco This process too is meant to be secret. Martin: . . . He told us how they made this concentrated extract that is rich in nicotine. 6

i k. Q. Martin: Why would the tobacco companies use this nicotine rich s,vrup? I A. Former R. J. Reynolds Manager (unidentified): They put nicotine in the form of tobacco extract into a product to keeQ the consumer happv. Martin: They're fortifying the product with nicotine. Is that correct? A. Former R. J. Reynolds Manager (unidentified): The waste- 1i filler - yes they are. 1. Martin: Why are you adding nicotine to your cigarettes? m. Q. ii n. il 0. „ Martin: But how much nicotine is added? The companies control the dosage precisely according to this former R. J. Reynolds mana er. (To manager) In commercially sold cigarettes, what percentage of tobacco extract is nicotine? A. Former R. J. Reynol_ds Manager. .(unidentified):.. That really,. depends on what level the process calls .for. In other words, I can say to you, I want it at one _percent, I want it at. five percent, I want it at ten percent, I want it at fifty percent. Martin: It's this ability to control the exact dosage of nicotine with tobacco extract that is so alarming to Dr. Greg Connelly, a Massachusetts health official. Martin: There's another way nicotine is added to cigarettes. And it begins, perhaps surprisingly, at docks like this one in Newark, New Jersey. It is here that nearly ! pure nicotine is brought ashore to be combined with alcohol. It's called denaturing. The mixture can then be applied to tobacco during the manufacturing process for, among other things. flavoring. As these trucking records show, Philip Morris, for example. received thousands of gallons of this alcohol mixture during the 1980s, The cigarette makers say this mixture leaves only a tiny amount of nicotine on the tobacco. Still, n kin of nicotine manipulation disturbs critics like Cliff Douglas, of the American Cancer Society. (Emphasis added.) ~ ~ 7 - ~. ~ .-~ ~ ~ ~ ~

10. On March 7, 1994, Day One again aired on the ABC-Television Network from 8:00 p.m. to 9:00 p.m. (EST). Anchor Forrest Sawyer opened the show with the comment, "We begin tonight with our continuing investigation into cigarettes and what's inside them." False and defamatory statements knowingly and/or recklessly made or endorsed by defendants during the course of the March 7, 1994, Day One segment included the following: I a. Unidentified ABC Voice-over: Last week, we brought you new i evidence about fhowl tobacco companies are manipulating nicotine in cigarettes to keep smokers smoking_ ; b. Martin: Last week, Day One rer>orted for the first time evidence that i mnanies maninulate levels of nicotine, a highly addictiv drug to kea2 oeople smoking We found manufacturers add nicotine I in carefully calibrated doses to fortify the tobacco waste products thev ; insert in ciearettes and to replenish nicotine lost I c. Cliff Douglas (American Cancer Society): The public doesn't know ~ that the industry manipulates nicotine - takes it out: puts it back in: ; uses it as if it were sugar being put in candy. They don't have a clue. d. Martin: Day One learried that two of those 'thirteen additives should have tipped off the government to the tobacco industry's manipulation of nicotine in cigarettes Those two ingredients are tobacco extracts, which frf4uently is rich in nicotine and nicotine sulfate, or salt. (Emphasis added.) 11. ' These knowingly and/or recklessly false and defamatory statements of and concerning Philip Morris made during the February 28 and March 7, 1994, Day One broadcasts were intended to be understood to mean, and were understood to mean, that during the manufacturing process Philip Morris (as well as other cigarette manufacturers) "manipulates," "spik[es]" and "forti[fies]" its cigarettes by adding significant amounts of ~ 8- ~ ~ © ~ ~

extraneous nicotine to its products, and that the magnitude and seriousness of this offense was such that Day One's "revelation" of this "secret" "could change the tobacco industry forever" by bringing upon the industry draconian regulatory or congressional action. 12. Defendants' accusations that Philip Morris "manipulates," "fortif[ies]" and "spik[es]" its tobacco by adding nicotine during the manufacturing process are entirely false. i~ Philip Morris does not do that. ~ 13. As set forth above, Day One on its programs referred to "reconstituted ~ i I tobacco," the adding of "tobacco extract," and the use of "denatured alcohol" as supposedly being implicated in the "manipulating," "fortifying" and "spiking" of cigarettes with nicotine. The true facts with respect to these processes are as follows: a. The production of reconstituted -tobacco = This process.__was developed decades ago and is widely used throughout the cigarette manufacturing industry. It involves the utilization of the stem portion of the large tobacco leaf as well as small pieces of the leaf itself broken off during the stemming process. These natural tobacco materials are reconfigured into tobacco sheets capable of being used in the cigarette manufacturing process. In order to form these tobacco materials into sheets, it is necessary first temporarily to separate out the solubles, which would otherwise interfere with the sheet-making process. Those solubles include nicotine. Separation of the solubles is accomplished by 9

adding large quantities of water in order to dissolve the solubles and separate them from the fibrous part of the tobacco, which consists largely of cellulose. The fiber is then pulped with water and, using standard paper-making process, milled out as sheets. The solubles - minus potassium nitrate and excess water which have been removed, and plus certain non-nicotine containing flavors, preservatives and moisturizers which have been added - and the sheets are then recombined. The process is an entirely closed and continuous one: no nicotine whatsoever not found in the original natural tobacco materials is introduced in the production of the reconstituted tobacco sheets. Indeed, the reconstituted tobacco. sheets :: contain approximately 20-25% le.ss nicotine than the natural tobacco materials which are used in the process because substantial nicotine is 1= in the process and is not replaced. Upon emerging from the presses, the reconstituted tobacco sheets are chopped into small pieces to be blended with natural tobacco leaves and transported to the cigarette manufacturing plant. Because stems naturally contain only approximately 25% of the nicotine contained in the leaf portion of the tobacco plant, and because, as set forth above, substantial nicotine is lost in the reconstitution process, reconstituted tobacco sheets contain far less nicotine than natural tobacco leaf and the use of such reconstituted ~ -10- ~ ~ ~ ~ ~ ~ ~a