Tobacco Documents Online

0 6 Corp N I Page 1 of 6 BBN 8/23 Indiana Jury Finds for Tobacco Firms in Smoker's Suit (Upda.te2) Indiana Jury Finds for Tobacco Firms in Smoker's Suit (Vpdate2) (Adds statements by attorneys for R.J. Reynolds and Philip Morris, head of Action on Smoking and Health.) Indianapolis, Aug. 23 (Bloomberg) -- An Indiana jury ruled for tobacco companies in a widely-watched liability suit, rejecting the claims of an attorney's widow that the cigarettes he smoked were defective and that the companies selling them were negligent. The case is the first tobacco smoker's liability suit to reach a verdict since a Jacksonville, Florida, jury on Aug. 9 ordered ~ American Tobacco Co. to pay $750,000 to Grady Carter, a smoker who developed cancer. Tobacco stocks may rise on_the news Monday, reversing some of the beating they took after the Florida verdict, analysts said. A loss in the Rogers trial could have sent tobacco stocks tumbling even further. - - - - " If (the tobacco companies) win, it would emphasize the fact that the Carter decision was an exception in a long string of victories, " Merrill Lynch & Co. analyst Allan Kaplan said before the decision. eloomberg-a11 rights reserved. Frankfurt:69-920410 Hong Kong:2-521-3000 London:l'/1-330-']500 New York:212-318-2000 Princeton:609-279-3000 Singapore:226-3-000 -Sydney:2--'/99-8600 Tokyo:3-3201-8900 Washington DC:202-434-1800 G164-434-14 26-Aug-96 7:56:04 ~

0 Story 1 of 20; 3 <GO> for next; 4 <GO> for previous. Corp N I Page 2 of 6 The verdict comes the same day President Bill Clinton approved Food & Drug Administration regulation of tobacco designed to curb advertising and sales of cigarettes to teenagers. The president had been expected to approve the regulations for a year and one analyst, Gary Black of Sanford C. Bernstein & Co., thought having the regulations approved the same day as the verdict may not have been a coincidence. - Black said in a report that Clinton strategist Dick Morris worked for leading antitobacco attorney Richard Scruggs as recently as July 1995. Administration officials haven't commented on the timing of their announcement; Black had said he was concerned the regulations might affect the jury's decision. 'Individual Responsibility' Charles Blixt, general counsel for RJR Nabisco Holdings Corp.'s R.J. Reynolds tobacco unit, said the company was encouraged by the decision. "The fundamental reason for their verdict was that there are risks associated with smoking, and that those risks are well known, " he said in an interview from Indianapolis. "This shows that juries will continue to affirm that people have the right to make choices. " Bloomberg-all rights reserved. Frankfurt:69-920410 Hong Kong:2-521-3000 London:191-330-V500 New York:212-318-2000 Princeton:609-2"/9-3000 Singapore:226-3000 Sydney:2-777-8600 Tokyo:3-3201-8900 Washington DC:202-434-1800 G164-434-14 26-Aug-96 7:56:05

0 Story 1 of 20: 3<GO> for next; 4 <GO> for previous. Corp N I Page 3 of 6 The tobacco companies also pointed to the jury's unusual decision to hold a post-trial press conference this evening to explain that their ruling was based on beliefs that people should have the right to choose whether they'll smoke. "When all was said and done, common sense prevailed, just as it should, " Charles Wall, senior vice president for litigation at Philip Morris Cos., said in a statement. Some tobacco foes said the Rogers verdict doesn't change their belief that plaintiffs will start winning more liability cases, especially if tobacco companies' internal_documents are permitted as evidence. "While any one plaintiff cannot be reasonably sure of a victory, the six major-tobacco companies can be absolutely certain _ that there will be jury losses in the future,'' said John Banzhaf, ~ head of Washington-based tobacco opponent Action on Smoking and Health. Two Days of Deliberations The Indianapolis jury deliberated two days before reaching its decision this evening. it was the second trial for the Rogers vs R.J. Reynolds Tobacco suit. The first ended in a 5-1 hung jury in February 1995. eloomberg-all rights reserved. Prankfurt_69-920410 Hong P.ong:2-521-3000 London:l'l1-330-]500 New York:212-318-2000 Princeton:609-279-3000 Singapore:226-3b00 Sydney:2-V99-8600 -Tokyo:3-3201-8900 Washington OC:202-434-1800 G164-434-14 26-Aug-96 '/:56:05

0 Story 1 of 20: 3 <GO> for next; 4 <GO> for previous. Corp N I Page 4 of 6 Marion County Superior Court Judge Kenneth Johnson yesterday afternoon gave final instructions to the jury -- five women and one man -- who were deciding on whether cigarette makers knowingly sold an"unreasonably dangerous " product or neglected to make consumers aware of risks associated with smoking. Defendants in the case included industry leader Philip Morris, R.J. Reynolds, Brooke Group Ltd.'s Liggett unit, and Brown & Williamson Tobacco Corp. and American Tobacco, both part of B.A.T Industries Plc. Death From Cancer The suit was brought by Yvonne Rogers of Indianapolis on ~ behalf of her husband Richard, who died of lung cancer in 1987 at age 52. The retrial began Aug. 5. Before the verdict in the Jacksonville case -- Carter vs American Tobacco -- the industry hadn't lost a tobacco liability case since a jury awarded $400,000 in Cipollone vs Liggett Group in 1988. The Cipollone case was later overturned on appeal. Some investors have been concerned that the loss in the Carter case in Florida reflects a sea change in public opinion against the industry. Since the first Rogers trial last year, the industry has been rattled by the publication of internal company documents, some Bloomberg-all rights reserved. FrankEUrt:69-920410 Hong Kong;2-521-3000 London:171-330-7500 New York:212-318-2000 Princeton:609-2'/9-3000 Singapore:226-3000 Sydney:2-']'/7-8600 Tokyo:3-3201-8900 Washington DC:202-434-1800 G164-434-14 26-Aug-96 7:56:D6 ~

0 11 Story 1 of 20: 3 <GO> for next; 4 <GO> for previous. Corp N I Page 5 of 6 of which suggest tobacco companies may have known more about nicotine addiction than they claim. In addition, the Clinton administration's new tobacco regulation plan may be affecting public opinion as well. One of the more memorable moments of the trial was the showing of a deposition taken before-Rogere' death, in which the bald, overweight attorney said he made numerous attempts to quit smoking before he finally succeeded with hypnosis treatment in 1986. That was just weeks before he was diagnosed with lung cancer. Yvonne Rogers was seeking unspecified_damages, citing $71,000 in health-care expenses, lost earnings_and_loss of love and affection. Richard Rogers had three children. Defense Argument Defense attorneys, led by long-time tobacco attorney David Hardy, argued that manufacturers can be held liable for defective products only if they cause more danger than an average consumer would expect. Since cigarette packs have carried the Surgeon General's health warnings since the 1960s, Rogers must have known the risks he was incurring, Hardy said. The prosecution in this case, unlike that in the Carter trial, couldn't use internal tobacco company documents to help sway the 9loomberg-all rights reserved. Frankfurt:69-920410 Hong Kong:2-521-3000 London:171-330-7500 New York:212-318-2000 Princeton:609-279-3000 Singapore:226-30D0 Sydney:2-"/T/-6600 Tokyo:3-3201-8900 Washington DC:202-434-1800 G164-434-14 26-Aug-96 'l:56:06 O V V O . O V - W 0 . x`_

0 Story 1 of 20: 3 <GO> for next; 4 <GO> for previous. Corp N I Page 6 of 6 jury. Brown & Williamson documents, obtained through a paralegal and publicized heavily in the media, indicated that the company knew nicotine was addictive -- something the industry has long denied. He started smoking at age 5, when he would take butts from his father's ashtray. By the time he finished college, he was smoking two to three packs a day. -- Leslie Hillman in Princeton (609) 279-4065 with reporting by Heather Landy in Chicago lbl/jpw /ag (Story illustration: To graph Standard & Poor's index of tobacco companies, type SPTOBC <Index> GPO <Go>. ~ For company news and stock information: MO US, RN US, BTI US, UST US, LTR US, BGL US <Equity> CN, BQ, RV. For industry news: NI TOB. For legal news: NI LAW. For regional news: NI IN, NI FL, NI US, NI UK.) 22:44 -0- (BBN) Aug/23/96 22:45 Bloomberg-all rights ;eserved.- Frankffirt:69-920410 Hong Kong:2-521-3000 London:171-330-7500 New Yoxk:212-318-2000 - Princeton:609-279-3000 Singapore:226-3000 8ydney:2-T/7-8600 Tokyo:3-3201-8900 Washington DC:202-434-1600 G164-434-14 26-Aug-96 7:56:07 0