Tobacco Documents Online

AUG. -28' 96 (WED) 10 :14 VMS NYC NEWS V1DE0 MONITOR/NG SEHV10E5 OFIIMER/G1. LF. 23OWnOlMSawr NewYp,t NeunYV[ /87J6 QILTi68796 TEL:212 736 8396 P.002 LcrRngdis Gy.vgc ibi/ahlphn Smfiic6rci DmvR 121L9•77-0III R796CB1111 QJ93&9+W N/9f13J361 (e1Ql7fi7.9Ze Ynean OeNir j Wir6aglWr Rcasmn N:.m! 161A702/2/ 12745M9696 Qe71=711o QI.D7S167f (jpy L7$m Oomw HIMaM singilpo K+aL881J1F1 QOL9S}1Bl9 12/951s196o ~ Tiaescript DATE August 26, 1996 TIMS 12:00-12:30 PM (ET)t NETWORB CNBC : PROGRAM Inside Opinion • • I Ron Insana, anchor: , Well, tobacco c~ompanies may be breathing a sigh of relief. On Friday, i,a jury found in favor of tobacco companies in the Ro~~rs case tried in Indiana. And the wall Street Journal is reporting that a legislative proposal aimed at solving the tobacco dilemma is circulating these days on Capital Hill. It would protect cigarette companies from liability suits and federal regulation for fifteen years. In return, the tobacco industry would give billions of dollars, some estimate more than one hundred billion, to a special fund that would reimburse states from tobacco-related health problems. It is unclear however, if the White House or the Food and Drug Administration wouldlagree to terms of this particular proposal. ; Joining us now fo discuss the latest developments in the tobacco patch, Diana Temple who follows the industry at Salomon Brothers. Slue joins us from Salomon Brothers trading floor in NewlYork. Martis Ann Bract4tl partner at Goodkind, Labaton, she has filed some five suits in New York against tobacco companies. She joins us from mid-town Manhattan. And from Washington is Roger Pilon, he is of the CATO Institute. I thank you alllfor being with us. Diana Temple, i4 I may start with you first, the tobacco companies on Wall Street, their stocks obviously responding positively, as you suggested last week they might in the wake of Ithe Rogers decision. Does this counter notion amongUnvestors that the Grady Carter case, the one in which the ~laintiff actually won, represents a sea change in the way tobacco liability cases will be decided going £orwardl? i Diana Temple (Salomon4 Brothers): I think this was a major victory and I think t e defense was a lot stronger, focusing on simple ch~ice. It was interesting that Mrs. Ivan Rogers had quit 'smoking during each of her three pregnancies. And thie was a jury ot five women and one man, and I wonder if they did debate the question if she could quit, why couldn't he? I think this is a very i Pora videocasrenelM graodfo cassette(iad1ol af ~brs newrsegmeat cantaet yooreeaarertYMS office. Mla+#b+Da1+~dY6rtlro.km~lcin9sx'sonul4+Yuwd xNtewnraw,.wyakw,u~xA. MvAdLCafia ndmMnMwpbRStpBylarpm(rtalwDFld.c 1

AUG,-28'96(WED) 10:14 VMS NYG NEWS TEL:212 736 8396 P.003 VIDEO MONITORING SERVICES OF AMERICA, INC • • • Page: 2 important win. I'mjstill concerned about the Florida cases because you can be pne percent guilty in states like Florida. Insana: Alright, Me. Brachtl, what's your take on all this. You as I said, have five suits that will be filed in New York state. Wh4t did you make the of the Rogers decision on late Friday? Martis Ann nrachtl (Goodkind, Labaton): I, too, am very pleased about the Rdgers decision. I think it's a very good sign for the cases by injured people against the tobacco companies arid I'll tell you why. The big difference between t-+he Florida case and the Rogers case is this: in Florida, for the very first time, the jury was allowed to see thos~ internal secret tobacco documents that talk about the addi'qtive nature of tobacco. And that jury came back with an awllard against the tobacco companies. Now, the Rogers jury was not allowed because of certain procedural r~asons, to see any of those internal incriminating docume ts. Nonetheless, that jury came back and while they did find that the tobacco companies were not liable, they did a v) pry very unusual thing: they made a public statement in the open court room that was repeated in press reports tha~ said they wanted to be very sure that nobody construed the~r verdict as supporting the tobacco companies. In fact,,they said, that they found that the tobacco companies were negligent. However, they were required under India law, t not find the tobacco companies liable bec~use in Io ndiana the comparative negligence law is such that unless a defendant is more than fifty percent liable'•,they have to be found not liable-- Insana: Alright, let me stop you there and I'll go back to Diana for a minute. iDiana, clearly, the statutes from state to state and 14 all the various interpretations differ widely. Given that Florida is going to be home to at least two hundredlcases going forward, could that be a more problematic env~'lronment for tobacco companies than Indiana. ; Temple: I think the;core issue here is the societal warning against smoking. There's really no other product like it where one's parents, one's teachers, one's physician, warns one about the dangers of the product, and then people are now claiming that they did not know that 0 the product was dangeirous. v v Insana: Alright, Mr.1 Pilon, can I get you in on this? 2 p know you have a slighply different point of view than both ~ our other guests. Wh~t do you make of all the hubbub 0') that's going on rightinow? .P i Roger Pilon (The CATOlInstitute): Well, I think that Diana early on put her finger on precisely the issue, namely the

AUG. -28' 96 (WED) 10:15 VMS NYC NEWS VIDEO MONITORING SERVICES OF AMERICA, INI • • • issue of individua Mr. Rogers as a c cigarette butts. They were smoking. companies are to be to a person who vol at the heart of the turned on its head for engaging in vol individuals. TEL:212 736 8396 P. 004 Page: 3 responsibility. In the Rogers case, i.ld began smoking his parents unused here were his parents in all of this? This idea that the companies, tobacco held liable because they sell a product ntarily buys that product, is precisely problem today. Our tort law has been nd we have companies being held liable ntary contractual relationships with Insana: Now, Mr. ilon there's also, though, the notion that they withheld ritical information that they themselves culled o er years of research and then hid that from the public, ma ing it less than an equal contractual relationship betweei} two consenting parties. Pilon: This line o people did not beli from time immemoria in this society? D General's warning fo continue to smoke. their bodies that ma mistakes in life. argument invites us to believe that ve that smoking was potentially harmful I mean, really, are we all children we have--we have had the Surgeon r how long? Since the '60s, and people eople will continue to put things into or may not be good for them. In a free society, they o ght to have a right to do that. This is precisely what th's kind of litigation and the kind of legislation with whi h you led off this show is all about. It is about preventi g people from being free and making Insana: Ms. Brachtl, your take on that? Brachtl: Yes, thanklyou. it's interesting to me what both of the other guests say about choice. They say it's a matter of choice and it's an issue of choice. Tell me, what kind of choice an a twelve year old child exercise about whether or not to smoke something that is presented as being sophisticat d and cool, and nowhere are they told that it's addictive. Temple: I think the are. They are warned-- Pilon: This is absol te nonsense. A twelve year old child can make that kind of choice. erachtl: Oh, really? Pilon: Yeah, really. I have an eleven year old child; he makes that kind of ch ice. I mean really, are we to suppose that people, ven--but of course you're not limiting it to childr n, you're going right up to adults. You would have the FD regulate all of this I expect, and you would hold adults as immune from responsibility for their own actions in order to reach the deep pockets of the tobacco company_ ~

AUG. -2B' 96 (WED) 10 :15 VMS NYC NEWS TEL:212 736 8396 P.G05 VIDEO MONITORING SERVICES OF AMERICA, INC aage:4 • • Insana: Alright, M I s. Brachtl-- Brachtl: Let me fifnish this. Ninety percent of people that smoke start wh(en they are teenagers. The tobacco companies to this d~Ly, if you ask them, they will say what they said in 1994 that-- Temple: People also engage in sex at a very young age-- Brachtl: Nicotine is not addictive. And in the face of the tobacco compani'es, representations that nicotine is not addictive, people cannot make a free choice. And a ten year old, and an eleven year old, and a twelve year old, cannot exercise free choice-- ~ Insana: That is th4 nanny state run amok-- Brachtl: Especiall~ when the tobacco companies have that knowledge, have theltests, and conceal it. Insana: Diana Temp]ie, you were saying, we did not quite hear you. corporation. Temple: Well, peopl engage in all sorts of risky activities at a youn age, including sex. And people are warned about the danlers, but-- Insana: Sex isn't exactly a product, though, Diana, is it? Temple: It's a risky behavior. i Insana: I mean it can be in some places, I guess, but it is not a risky behavior that is being sold to you by a I pilon: There are all kinds of risky behavior that are being sold to you by~ski companies, by hang gliding companies, by bungy-iumping companies. And of course, the risk free mind set w uld have a11 of that regulated so that the government would~tell you when you can and when you cannot take those ki~ds of risks. I mean this is a flight from individual respqnsibility of monumental proportions. i Insana: Okay, I hav' to take a break on that note_ When we come back, a little more smoke, a little more fire. On Inside Opinion. Stayl with us. (Commercial break) I t t~ t x+ t Insana: We're back on Inside Opinion. Talking about tobacco and some legi6lation that could be coming from Capital Hill that mig~t give tobacco companies immunity from lawsuits and federal regulations for fifteen years. Mr. Pilon, befo're we get to that, I just want to ask

• AUG. -28' 96 (WED) 10:15 VMS NYC IdE4YS VIDEO MONITORING SERVICES OF AMERICA, iNC I • TEL:212 736 8396 P. 006 Page: 5 you a quick questi4n. You had argued rather stridently for freedom of choice.i Other people wonder why they should be forced vis-a-vis their insurance premiums to pay for the voluntarily contrac~ted illnesses of others. They don't really have much of, a say in it but they have to pay higher insurance premiums"t least some assert that--because people contract lunl cancer from activities like smoking. why should other pePple be subjected to those freedoms that you hold dear? Pilon: Well, first;of all I don't think that I argued rather stridently a$ you put it, for freedom of choice. I think I argued rather forcefully for freedom of choice. And indeed, that one should have one's defense of freedom of choice characterized as strident, is a mark of the current debate going on in the country today over this issue. Now, with resp ct to the issue that you have just raised, people shou~dn't be forced to do so. Indeed, in a free society, we wo~ld have much freer insurance arrangements than we have today in the kind of socialized insurance arrangeme s that every state regulates across this country. You iuld have companies pricing themselves so that you could harre much more for example of a selection with respect to companies insuring non-smokers versus smokers, and so on an,d so forth, and the premium structure to reflect that. I am not a smoker. And I am not here to promote smoking. I am here ~o smoke freedom of choice. And if people want to smoke; that is their business. It is not my business. It is notithe government's business. And they should pay the consequences for it, not asking me or the government to pay the consequences for that choice. Insana: Alright, speaking of government, Diana Temple, Wall Street Journal eporting today that there are circulating on Capit~l Hill some pieces of a draft legislation that woul~d grant immunity for fifteen years to the tobacco companier for further liability lawsuits and such, providing that they pay back the states, I guess up to a hundred billion dollars to cover health-related illnesses associated ~ith smoking. How likely is that trial balloon to go fprther than just the morning newspapers? ~ Temple: I think it c happen eventually but right now President Clinton it' my understanding, is fairly opposed to that sort of propo'sal. The key thing is the comprehensiveness of it, and whether it would encompass all litigation. If it doesn't include all litigation, I think the industry will have a very difficult time with it. Insana: Ms. Brachtl~l there's some discussion that even if it didn't cover past lawsuits, the legislation would cap the damage awards to ~hose who are currently litigation

P. 007 TEL:212 736 8396 AUG.-28'96(WED) 10:16 VMS NYC NEWS VIDEO MONITORING SERVICES OF AMERICA, INC ! i ~ Page: 6 against the tobacco~companies. Probably wouldn't please you too much. Brachtl: No, no it;sure wouldn't. I'm tremendously concerned about thejprospect of this legislation. I mean, look at it really. 'Look at the timing of it. We're at an unprecedented cross-roads in American history. The tobacco companies are so vuinerable right now. There are class actions pending against them in ten states; the first jury ever that was ever e.llowed to see those secret internal documents came backiwith a verdict against the tobacco companies; you have Attorney General lawsuits; you have President Clinton'sibill that hopefully will limit advertising to children; you look at the vulnerable position that the tqbacco companies are in and now we have this legislation. A'nd who's sponsoring this legislation? The Republicans. And who are the Republicans? The single largest source of Re ublican campaign funding comes from the tobacco company ~nd that worries me. And the other thing that concerns me-- Temple: And the tobacco companies get money from the Trial Lawyers Association-- Insana: Alright, excuse me, Ms. Brachtl, I just need to switch gears here. I've got about fifty seconds left. Diana, I just need to come back to you for the money side to this. The stocksiare up today; you said they'd bounce if the Rogers case went the way it did. What happens now? Temple: Well, I thi~'k we're in for a period of volatility. we've got four trials between now and year end, so I think it's choppy seas for'.~a while. I'm neutral on Philip Morris and Reynolds. Tnsana: Alright. ijhave to stop there. Diana Temple thanks for being with us. Thanks also to Martis Ann Brachtl, partner at Goodkind, Labaton, and also Roger Pilon of the CATO Institute.- Thank you for joining us as well. # # # !v O V ~ - O O W _. 7 O) O E-