Tobacco Documents Online

PRIVILEGED AND CONFIDENTIAL ATTORNEY - CLIENT' WORM PRODUCT DRAFT 3/20/94 [COURT'] COMMONWEALTH OF V~RGI.NIA PHILIP MORRIS. COMPANIES INC. a~nd : PHILIP MORRIS. INCORPORATED, : Plaintiffs, vs. AMERICAN BROADCASTING COMPANIES, COMPLK~NT INC., FORREST SAWYER, JOHN~ MARTIN, : WALT BOGDANICH, and JOHN/JANE : DOE(S) I-~V, : : Defendants. : Plaintiffs Philip Morris Companies Inc. and Philip Morris Incorporated, by and for their Complaint against defendants, allege: PARTIES ]~. Plaintiff Philip Morris Compan~ies Inc. ("Philip Morrls Companies")i is a publicly held: corporation organized and existing under the laws of the Commonwealth of Virginia, with its principal p~ace 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 c~mpa- nies a~e primarily engaged in the £obacco, food and beer busi- nesses, and own many of the bes~-known brand names in the world, ~nclud:ing Marlboro cigarettes, Kraft food products, and: Miller beer.

2. Plaintiff Philip Morris Incorporated ("Philip Morris USA") ~s 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 USA is a wholly-owned subsidiary of Philip, Morris ~ompan%es, ~s engaged in the domestic tobacco business and is ~he ~arge~t tobacco company ~n the United States. As. is hereinafter set forth, the defamatory sta~tements made by defendants were made without specification as between PhilipMorris Companies and Philip Mor~s USA and "P~.ilip Morris" was used ind~iscrim.inately by defendants to. refer both to Philip. Morris Companies and Philip Morris USA. ~ccordingly, except as otherwise indicated, the term "Philip Morris,' is use~ in this Complaint in£erchangeably to refer to bot~ Philip Morris Companies and Philip Merr~s USA. 3. Defendant American Broadcasting Companies, Inc. (~"ASC") ~s a corporation organized~ and existing umder the laws of the State of Delaware, with its principal place of business ~n ~ew York, New York. AHC, a wholly-owned subsidiary of Capi- tal Cities/ABC, Inc., operates the ABC Television Network, a maj.or Amer~ca:m~ broadcast network with. over 2~80 affiliated sta- tions reaching 99.9% of all United States television house- holes. ABC's ~elecasts are regu,larly broadcast in a:nd into the Commonwealth of Virginia by numerous stations, ~ncluding but ~o~ limited to ABC affil~ate Stations in, R~chmond, --2¸--

Virgin~ia, and WJLA in, the District of Colu~bia, and [ABC"s owned and operated station in. Raleigh-Durham, North Carolina]. ABC's telecasts are widely viewed in the Commonwealth of Virginia and throughout the United~ States and ABC derives s~bstantial revenue from its broadcasts and other activities in Virginia. Among programs produced by ABC News for broadcast on ABC owned and operated and affiliated stations is the news magazine program '"Day One". 4. De~endant Forrest Sawyer is the anchor of "Day One" a:nd was the anchor for the Day One segments on cigarettes and nicotine on February 28 and March 7, 1994. [Upon information and belief, he is a citizen of .] 5. Defendant J~ohn Martin is a "Day One" reporter, led Day One's "investigation" into nicotine in cigarettes, and appeared on the February 28~ and March 7, 1994 broadcast segments of Day One regarding cigarettes and nicotine. [~on Information and belief, he ~s a citizen o~ .] 6. Defendant Walt Bogdanich is the producer or co- producer of the February 28 and March 7, 1994 Day One segments on cigarettes and n~c~tine. [Upon information and belief, he i~s a citizen, of .] 7. [Possible other individual defendants] -3-

8. De~endants John and Jane Doe are persons who g~t~ere~ information, investigated and participated in the preparation of the February 28 and March 7, 1994 Day One cigarettes and nicotine segments. JURISDICTION AND VENUE 9. This Court has j:urisdiction over this action pursuant to Va. Code § 8. O~-328.1(a) (4).. i0. Venue i.s proper in, this Court pu,rsuant to Va. Code § 8.01-2.6.2. NATURE OF THE ACTION ii. This is an action to redress the massive harm caused to plaintiffs by the knowingly and/or recklessly false and defamatory, statements made by defendants on the nationally televised maga.zine format news show "Day One" on, February 28 and March, 7, 1994 as well as on other ABC News programs. Announcing tha.t they had "uncovered" the tobacco indastry's "las~ best secret" "never before disclosed to consumers or the government", and asserting that their discoveries "could compl~etely cha~nge the tobacco ~nd~stry", defendants, ~hrough the ~se of sensationalized false and reckless allegatio~s, told vlewers across the ~ation, that tobacco companies, including Phililp Morris, are artifZcially "spiking" their cigarettes sold

in the United: States with extraneous nicotine for the purpose o.f keeping: smokers hooked. 12. Following this Day One b~oadcast, foreseeably, the national networks and ~!9~s ~ccepted as true Day One's supposed "revelation" that the tobacco industry "spikes" its cigarettes with extra n~co~ine, and repeated these cha;ges virt~ally daily. In what can only be described as a public ~renzy, reporters, the public, government regu,la.tors and Congressmen, "aston,ished" and "shocked" by Day One's "revelation", called for investigation and possible new regulation. Andl th__e___s~o~ 9~.pl@~D~i~ Phi~i~ Morris Companies and other companies having businesses engaged in ~he tobacco industry ~ell dramatically in reaction ~o Day One's charges and the regulators' reaction, thereto. But ~he frenzy whipped up by Day One is based~ on, a. totally false and ~efamatory premise made sp of whole cloth: that Philip Morris and other ~obacco companies intentionally add extra,aeous nicotine to the tobacco used in the c~garette manufa~ct~ring process in order to. keep smokers hooked. As set forth below, Phil~p Morris does no such thing and, upon infoz-mation and belief, neither do the other American, tobacce companies. ~

The Defaaatory. Day One Broadcasts 13. On February 28, 1994, ABC-TV aired the televi- sion program "-Day One" from 8:80 p.m. to 9:00 p.m. (ESTg. An- chor Forrest Sawyer opened the program with great fan,are., announcing: "Tonight, 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", a6cusing the cigarette companies of "artificially spik~ng: [their]l cigarettes with nicotine". H~ told the audience that for nearly, a year, Day One had been inves£igating nicotine, and that when. word of Day One's "investigation" got out, the "Food and Drug Administration announced that it ~s now considering whether to regulate cigarettes as drugs". Then, expose 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". That "secret" turned out to be the false and defamatory claim - - k~owing~y and/or recklessly made by defendants -- that Philip Morris and: other ciga.ret~e manufacturers intent~onally spike their c~garettes w~th extra n,i~otine during the manufacturing -6- process to keep smokers hooked.

14. False and defamatory statements knowingly and/or recklesslly made or endorsed by defendants during the course of the February 28, 1994 Day One segment included the following: (a) A Day One ~nvestigat~on that oou~d change the tobacco industry ~orever. (b) ciqarettes -- they'l~ hook you fas~ and it is not just an, accident o~ nature. (c) Why are you. artificially spikinq you,r ciq~rettes with nicotine? (d) Now, a lengthy Day One bnvestigation has uncovered perhaps the tobacco industry's last best secret -- how it artificially adds n~cotine to ciqarettes to keep people smok~nq and boost profits .... The methods the cigarette companies use to control the me~hods of n~cotine is something that ~as never before been disclosed to consumers or the government. (e) Martin.: It was here in Winston-Salem NDrth Carol~na that the manufacturing: process began to change. The RJ Reynolds Tobacco Company p~oneered a two-step process to make cigarettes more cheaply and to control the leve~ of nicotine. Step one: it developed: reconstituted tobacco, wh~ch~ is made of stalks and stems and other waste that it used to throw away. • Even though reconstituted tobacco allows the companies to produce cigarettes more cheaply, there are problems -- poor taste and less ndcotine, so here's what the companies do in step two -- they apply a powerful tobacco extrac~ containinq nicotine and flavor to ~he reconstituted tobacco. This process, too,. is meant %o be secret. -7-

(:g) (J) (k) Martin.: . H~ told us how they make this concentrated extrac~ that is r~ch in nicotine. Ao Martin: Why would the tobacco companies use th~is nicotine rich syrup? Unidentified Former RJR Manager: They put nicotine in the form. of tobacco extract eo Ao into a~ product to keep the consumer Nappy. Martin: They're fort~fyinq the product witN nicotine. Is that correct? Unidentified Former RJR Manager: The waste-filler -- yes they are. Martin: Why are you addinq nicotine to your ci, qarettes? Martin: But how much nicotine is added? The compan~ies control the dosaqe preci.sely accordinq to th,is former ~TR manaqer. (.To manager) In commercially sold cigarettes, what percentage of tobacco extract is nicotine? Unidentified Former RJR Manager: 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 wan~ it at five percent, I want it at ten percent, I want it at fifty percent. Mart~n: ~t's this ability to control the exact dosaqe of nicotine wi, th tobacco extract that is so alarming to Dr. Grog Connelly, a Massachusetts health official. c~iff Douglas {American Cancer Society): Th___~e publZc doesn't know that the industry -8-

manipulates n~icotine, takes it out, puts it back in, uses it as if it were sugar beinq put in, candv. They don't have a clue. Martin.: Neither, apparently, do: members of Congress. (i)~ 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 n.ico~ine is brought ashore to be combined with alcohol. ~t's cal~ed denaturing. The m~xture can then be applied to tobacco during the manufacturing prg~ess for, among other things, flavoring. As these truckinq records show, Philip Morris, fgr example, received thousands qf.qallons of this alcohol mixture durinq the 1980s. The cigarette makers say this m~xture Leaves only a tiny amount of nicotine on. the tobacco.. Still, any kind of nicotZne manipulation disturbs critics like Cliff Douglas, of the American Cancer Society. (m) Martin: Were you aware of that? Synar: No, I wasn't. They don't want anybody ~ooking a~ their product, an~ the reason is exactly what you just went through. So that they can doctor it, theY ~ alter it, they can do aaythinq with it, and they can literally j,eopardize the health of t~e American public without having any consequences. (,Emphasis added.) 15. ~n March 7., 1994, Day One again aired on ABC-TV from 8:00 p.m. to 9~:00, p.m. (EST). Anchor Forrest Sawyer, opened the show with the comment, "We begin, tonight with ou~ continuing inv~stigatiion inae cigarettes and what's inside ~ them". Fallse and defamatory statements knowingly and/or ~ -9-

recklessly made or endorsed by defendants during the course of ~he March 7, 1994 Day One segment included the following: (a) Last week, we brought you new evidence about [howl tobacco companies are manipulating nicotine in cigarettes to keep smokers smoking. (b) Martin.: Last week, Day One reported for the first time evidence that cigarette companies manipu.late levels of nicotine, a highly add~ictive drug, to keep people smoRinq. We found manufacturers add nicotine ~n carefully calibrated doses to. fortify the tobacco waste products they insert in cigarettes and to re- plenish n.icoti, ne lost in processing. (c) Cliff Douglas: [tllhe public doesn't know that the industry manipulates nicotine -- takes ~t out, puts it back in, uses it as if it were sugar being put into candy. They don.'t have a clue. (d), Martin: Day One has learned that £wo of those thirteen additives should have tipped off the qovernmen£ to the tobacco industry's manipu- lation of nicotine in cigarettes. Those two ingredients are tobacco extracts, which frequently is rich in nicetine, and n,i~ot~ne sulfate., or salt. (:Emphasis added. 16. These knowingly and/or recklessly false and defamatory statements o~ and concerning plaintiffs made during the February 28 and March 7, 1994 Day One broadcasts were in~ended to be understood to mean, and were understood to mean., thaz during the manufacturiing process Philip Morris and other c~ga~ette manufa.cturers spike their cigarettes by adding s~gnificant and extraneous nicotine to their product, and: that magnitude and seriousness of this offense was such that Day -10-