Intervenors: Health Groups File Motion to Intervene

July 11, 2005 11:32 am by Gene Borio

Claiming that “the organizations’ interests are no longer being adequately represented” by the DOJ, Tobacco-free Kids Action Fund, American Cancer Society, American Heart Association, Americans for Nonsmokers’ Rights, and National African American Tobacco Prevention Network have filed a motion with the court seeking “only the opportunity to submit a brief and reply brief concerning the issue of permissible and appropriate remedies . . . , a post-trial brief on August 24, 2005, and a reply brief on September 19, 2005 - and to be heard on this issue should the Court entertain further argument on it.”

The Texts and Links to the Health Groups’ June 29 Motion as well as the Defense’s July 11 objections follow:

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Text of June 29, 2005 Motion to Intervene by CTFK, ACS, AHA, ALA, ANR, NAATPN

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

PHILIP MORRIS USA INC.,

f/k/a PHILIP MORRIS INC., et al.,

Defendants.

Civil Action No. v. : 99-2496 (GK)

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MOTION TO INTERVENE BY THE TOBACCO-FREE KIDS ACTION FUND, AMERICAN CANCER SOCIETY, AMERICAN HEART ASSOCIATION, AMERICANS FOR NONSMOKERS’ RIGHTS, AND NATIONAL AFRICAN AMERICAN TOBACCO PREVENTION NETWORK

Pursuant to Rule 24 of the Federal Rules of Civil Procedure, the following organizations seek to intervene in this litigation for the very limited purpose of being heard on the issue of the permissible and appropriate remedies that the Court should order in this case, should the Court find the defendants liable for the unlawful activities alleged in the Amended Complaint by the plaintiff United States: The Tobacco-Free Kids Action Fund. American Cancer Society. American Heart Association, American Lung Association, Americans for Nonsmokers’ Rights, and the National African American Tobacco Prevention Network.

As demonstrated in the accompanying memorandum of law, the proposed intervenors meet all of the criteria for intervention of right under Rule 24(a), and their intervention solely on the remedy issue is particularly appropriate now that the federal Government has made clear its intention to seek extremely reduced remedies from those recommended by the Department

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throughout the trial as reflected by the recommendations of the Department’s own witness. Thus, not only do the proposed intervenors have the requisite Article III standing to intervene in this case, but the actions of the government clearly demonstrate that the organizations’ interests are no longer being adequately represented here. Alternatively, the proposed intervenors seek permissive intervention pursuant to Rule 24(b).

As the proposed intervenors also explain, they do not seek to present any additional evidence in this case, nor do they seek to test any of the evidence that has already been produced. Rather, at this juncture, they seek only the opportunity to submit a brief and reply brief concerning the issue of permissible and appropriate remedies, pursuant to the same schedule that now applies to the government plaintiff- j, a post-trial brief on August 24, 2005, and a reply brief on September 19, 2005 - and to be heard on this issue should the Court entertain further argument on it. The proposed intervenors are also willing to limit the number of pages in their opening brief and reply brie, as the Court deems appropriate. Hence their participation in the case should not prejudice any of the existing parties. Counsel for the United States has represented that the United States presently takes no position on the motion to intervene, but may take a position after further review of the motion. Counsel for the defendants have represented that they oppose the motion to intervene.

In support of this motion, and in accordance with the Local Rules, the proposed intervenors submit the accompanying memorandum of law, the Declarations of William Corr, Cynthia Hallett, Sherri Watson Hyde, John L. Kirkwood, Daniel E. Smith, Sue Nelson and Ursula Bauer, a Proposed Complaint, and a Proposed Order.

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Respectfully submitted,

Katherine A. Meyer

(D.C. Bar No. 244301)

Howard M. Crystal

(D.C. Bar No. 446189)

Ethan Carson Eddy

(California Bar No. 237214)

MEYER GLITZENSTE[N & CRYSTAL

1601 Connecticut Avenue, Suite 700

Washington, DC 20009

202-588-5206

OF COUNSEL:

David C. Yladeck

(D.C. Bar No. 945063)

Georgetown University Law Center

600 New Jersey Avenue. N.W.

Washington, D.C. 20001

202 - 662-9535

June 29, 2005

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

PHILIP MORRIS USA INC.,

f/k/a PHILIP MORRIS INC., et al.,

Defendants.

Civil Action No. v. : 99-2496 (GK)

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MEMORANDUM IN SUPPORT OF MOTION TO INTERVENE BY THE TOBACCO-FREE KIDS ACTION FUND, AMERICAN CANCER SOCIETY, AMERICAN HEART ASSOCIATION, AMERICAN LUNG ASSOCIATION, AMERICANS FOR NONSMOKERS’ RIGHTS, AND THE NATIONAL AFRICAN AMERICAN TOBACCO PREVENTION NETWORK

Introduction

Pursuant to Rule 24 of the Federal Rules of Civil Procedure, six national nonprofit public health organizations- the Tobacco-Free Kids Action Fund, the American Cancer Society, the American Heart Association, the American Lung Association, the Americans for Nonsmokers’ Rights, and the National African American Tobacco Prevention Network - respectfully request leave to intervene in this case under the Racketeer Influenced and Corrupt Organizations provisions (”RICO”), concerning the defendants’ unlawful marketing practices, for the sole purpose of advocating remedies that are necessary to redress the defendants’ wrongful conduct, as alleged in the Complaint filed by the United States Government. See First Am. Compl. (February 28, 2001) (”Amended Complaint”).

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These groups seek to intervene at this stage of the litigation because the Government recently announced that it has drastically reduced the relief it sought to protect the public health and welfare. As the actions of the government demonstrate, the interests represented by the proposed intervenors are no longer being adequately represented within the meaning of Rule 24(a). See Fed. R. Civ. p. 24(a) (intervention of right is appropriate “unless the applicant’s interest is adequately represented by existing parties”) (emphasis added).

Therefore, the prospective intervenors seek party status in this matter for a limited, yet critical, purpose -, to present to the Court arguments solely on the issue of the appropriate and necessary remedies that should be imposed in this case should the Court find the defendants liable for the unlawful conduct alleged in the Government’s Amended Complaint. Thus, the proposed intervenors do not seek to enter new evidence into the record, nor will they challenge the admission of evidence already before the Court, or otherwise burden the Court or the existing parties with undue delay.

Rather, these groups seek only to present arguments to the Court, based on the evidence that has already been presented, and in light of the Court of Appeals decision, United States v Philip Morris USA Inc. 396 F.3d 1190 (D.C. Cir. 2005), as to the scope of remedies that remain permissible and are necessary to redress and prevent the defendants’ unlawful practices. Specifically, granting intervention would allow these groups to submit post-trial opening and reply briefs as to the scope of permissible and appropriate remedies, pursuant to the same schedule that now applies to the Government - i.e., on August 24 and September 19, 2005, respectively - and to be heard on this issue should the Court entertain further argument on it.

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As demonstrated below, the proposed intervenors easily satisfy the standards for both intervention of right under Rule 24(a) and permissive intervention under Rule 24(b). Accordingly, they should be allowed to participate as a party in this matter for the purpose of assisting the Court in fashioning remedies that are appropriate to this case.

BACKGROUND

The factual background and procedural posture of this matter are reflected in papers already filed with the Court by the existing parties, and will not be repeated here. The proposed intervenors will simply highlight the recent developments that are most pertinent to the request for intervention.

On March 21, 2005 - subsequent to the Court of Appeals’ February 4, 2005 decision concerning the scope of permissible remedies in this case, Philip Morris USA Inc. 396 F.3d 1190 the United States indicated that it would request the Court to order the defendants to fund a smoking cessation program of nationwide scope for twenty-five years, at a cost of $130 billion. See Expert Report of Michael C. Fiorc. M.D.. M.P.H. PP 5, 6, 12. In support of this request, the United States presented evidence to this Court that a program of such duration and scope was necessary to alleviate the tobacco addiction of all Americans who ‘wish to quit [smoking but are unable to do so.” Written Direct Examination of Michael C. Fiore, M.D., M.P.H. at 17. 22. Indeed, as recently as May 12, 2005, the Government affirmed its reliance on the testimony of Dr. Fiore with respect to the $130 billion remedies model, which the Government characterized as “forward- looking and aimed at future violations” and “offer[ingl a meaningful way for the Court to prevent and restrain future wrongful conduct by defendants. Reply in Opp’n to Defs.

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Objections to the Written Direct Examination of Michael C. Fiore at 1-2 (emphasis added).

Nevertheless, during its closing argument in this case on June 7, 2005, the United States abruptly changed course on this issue and instead informed the Court that it seeks only $10 billion for an industry-funded cessation program. See Transcript of Closing Arguments (June 7, 2005) at 23097 - 98. In fact, at the Court’s direction, the United States has now filed a ‘Proposed Remedies Order” in which it makes absolutely clear its decision to reduce the scope of the remedy requested for a cessation program to $10 billion. See Government’s Proposed Remedies Order (June 27, 2005) at 6-10. 1

ARGUMENT

I.

THE PROPOSED INTERVENORS ARE ENTITLED TO INTERVENE AS A MATTER OF RIGHT.

Prior to Congress’s 1966 amendments to Rule 24, courts had applied stringent criteria in determining whether seemingly affected parties should be allowed to intervene in ongoing litigation as a matter of right. See Nuesse v Camp 385 F.2d 694, 701 (D.C. Cir. 1967). The 1966 amendments relaxed the intervention standards considerably. Rule 24(a)(2) now provides:

[u]pon timely application anyone shall be permitted to intervene in an action. when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.

As explained in Nuesse the D.C. Circuit’s seminal opinion on intervention, the 1966 revision was “obviously designed to liberalize the right to intervene in federal actions.” Id. Accordingly,

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1 The Proposed Remedies Order also requests $4 billion for public education and countermarketing efforts. See id.

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an applicant is entitled to intervene under Rule 24(a)(2) by demonstrating “(i) an interest in the transaction, (ii) which the applicant may be impeded in protecting because of the action, (iii) that is not adequately represented by others,” and that the motion to intervene is timely. Id. at 699. As demonstrated below, the proposed intervenors easily satisfy each of these standards.

A. The Proposed Intervenors Motion Is Timely.

Whether a motion to intervene is timely is a matter left to the Court’s discretion. to be “determined from all the circumstances.” NAACP v New York 413 U.S. 345, 366 (1973). More specifically, the Court of Appeals for this Circuit has held that:

the amount of time which has elapsed since the litigation began is not in itself the determinative test of timeliness. Rather, the court should also look to the related circumstances, including the purpose for which intervention is sought . . and the improbability of prejudice to those already in the case.

Natural Res. Def. Council v Costle 561 F.2d 904, 907 (D.C. Cir. 1977) (emphasis added), quoting Hodgson v United Mine Workers of Am. 473 F.2d 118, 129 (D.C. Cir. 1972).

Here, the proposed intervenors could not have requested leave from this Court to intervene any earlier in the proceedings, since their interests had been adequately represented by the Government until the filing of the Government’s Proposed Remedies Order less than two days ago, when the Government unambiguously stated that, contrary to what it had previously informed the Court was necessary to fund an effective cessation program, the Government now only seeks $10 billion for this purpose. Compare Plaintiff’s Written Direct Examination of Michael C. Fiore, M.D., M.P.H. at 17, 22, with Proposed Remedies Order (June 27, 2005) at 610. Therefore, the intervenors - who fervently believe that the original sum of money requested by the Government is far more reflective of what is needed to make this particular remedy

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effective - have acted as quickly as possible to intervene in this action. Indeed, the Court of Appeals has held that a motion for intervention - post-judgment - is “timely” within the meaning of Rule 24. under appropriate circumstances. See, e.g., Paisley v Central Intelligence Agency. 724 F.2d 201, 203-04 (D.C. Cir. 1984) (permitting intervention on appeal because applicant for intervention may have been misled by ambiguities in previous rulings). Accordingly, here, where the proposed intervenors seek to intervene before judgment, and solely to advocate the imposition of remedies, the motion to intervene is certainly timely. See Hodgson 473 F.2d at 129 (allowing intervention seven years after the case was filed when the applicant did not seek to reopen the settled issues in the case but sought to participate in an upcoming, remedial phase of the litigation).

B. The Proposed Intervenors Assert Legally Cognizable Interests in This Case

The proposed intervenors clearly have an “interest” in this litigation that is protectable within the meaning of Rule 24(a). In this regard, the appropriate inquiry “is not whether the applicable law assigns the prospective intervenor a cause of action,” Jones v Prince George’s County. Maryland 348 F.3d 1014, 1018 (D.C. Cir. 2003), but rather, whether the intervenor can demonstrate a protectable interest in the proceedings. See also Trbovich v United Mine Workers of Am. 404 U.S. 528, 531-37 (1972) (finding no bar to intervention where the statute at issue vested the sole right of action with the Government, as long as the intervenor did not assert any additional claims).

The D.C. Circuit Court of Appeals has construed the protectable “interest” requirement of Rule 24(a)(2) to mean that the proposed intervenors must demonstrate that they have Article III

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standing. Mova Pharm Corp. v Shalala 140 F.3d 1060, 1074 (D.C. Cir. 1998); see also Fund for Animals Inc. v Norton 322 F.3d 728. 732-33 (D.C. Cir. 2003). Here, as demonstrated below, the proposed intervenors easily satisfy the requirements for Article III standing injury in fact, causation, and redressability. See Lujan v Defenders of Wildlife 504 U.S. 555. 560-61 (1992).

1. The Membership Organizations Have Standing To Sue On Behalf Of Their Members

It is well established that an organization seeking to establish standing on behalf of its members must demonstrate that at least one of its members would otherwise have standing to sue in their own right, that the interests the organization seeks to protect are “‘germane” to its overall purpose, and that neither the claim asserted nor the relief requested requires the participation of individual members. Hunt v Wash State Apple Adver. Comm’n 432 U.S. 333. 343 (1977).

Here, as demonstrated in the attached Declarations, the Tobacco-Free Kids Action Fund, the Americans for Nonsmokers’ Rights, and the National African American Tobacco Prevention Network are all membership organizations, whose members and their children include representatives of minority communities, are harmed by the defendants’ tortious conduct, false and misleading statements and deceptive marketing practices, all of which place them at an increased risk for addiction to tobacco, illness, and death, and also make it difficult for those who are already addicted, and those who will become addicted, to end their addiction. See Declaration of William Corr PP 4. 6-15; Declaration of Cynthia Hallett PP 4-11; Declaration of Sherri Watson Hyde PP 10-16. Moreover, this harm is concrete and particularized, see Sierra Club v Morton 405 U.S. 727, 740 n. 16 (1972), because it directly threatens the health and safety

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of both the individual members and their children. , Corr Decl. PP 6-16; Hallett Decl. PP 4-l1; Hyde Decl. PP 10-16; see also Declaration of Ursula Bauer P 13 (”[t]he more I know about tobacco products and how they are marketed, the more worried I am that my children are at risk for starting to smoke because of the deceptive marketing practices, false and misleading statements, and tortious conduct of defendants”).

Thus, as the D.C. Circuit has recognized, “even beyond the injuries to children that can pass indirectly to parents, a parent has his or her own direct. legally cognizable interest in preserving the highest level of health for his or her child.” Public Citizen v Fed Trade Comm. 869 F.2d 1541, 1550 (D.C. Cir. 1989). Indeed, “the parents of at-risk children are the ones that we might otherwise expect to bring suit.” Id. Accordingly, when a child’s health is placed at risk, as here, the parents suffer concrete and particularized injuries of their own. Id.

The harm to the organizations’ members is also both presently occurring and imminent, as required under Article III. See Whitmore v Arkansas 495 U.S. 149, 155 (1990). Thus, as alleged in the Government’s Amended Complaint and the accompanying Declarations, the deceptive and fraudulent practices that form the predicate to the Government’s RICO claims continue to this day. See e.g., Am. Compl. PP 114-125 (”The Present and Continuing Threat”); see also Corr Decl. PP 6-13; Hallett Decl. PP 4-1l; Hyde Decl. PP 10-16; Bauer Decl. P 13 (noting her daughter’s routine and ongoing exposure to “advertisements for cigarettes that she sees on her bike ride to school, when she visits stores and when she reads magazines and watches movies”). Therefore, the organizations’ members have the requisite concrete, particularized and imminent injury-in-fact required under Article Ill, and, accordingly, the organizations may assert those interests on their behalf. Sec Hunt, 432 U.S. at 343.

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The interests sought to be protected are also clearly “germane to the organization’s purpose.” Id. Indeed, this lawsuit is pertinent to the goals of all three of the membership organizations, which are:

to free America’s youth from tobacco addiction and thereby protect children and adults from the serious and debilitating health problems caused by tobacco addiction. (Tobacco-Free Kids Action Fund);

to protect nonsmokers’ rights to breathe smoke-free air in enclosed public places and workplaces …. (Americans for Nonsmokers’ Rights); and

to facilitate the development and implementation of comprehensive and communitycompetent tobacco control programs to benefit communities and people of African descent (National African American Tobacco Prevention Network).

See Corr Decl. P 3; Hallett Decl. P 2; Hyde Decl. P 7. Accordingly, the organizations’ members’ interests in this matter are entirely consistent with each of the respective organizations’ overall purposes.

The final requirement for associational standing - that “neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit,” Hunt, 432 U.S. at 343 - is also easily met here, since injunctive and monetary relief of the type sought by the government does not require “individualized proof’ to apportion any award, and therefore is “properly resolved in a group context.” Id. at 344. Indeed, the Government has not requested specific damages based on injury to any particular individuals, but rather has requested broadbased relief that would prevent, restrain, and redress the ongoing illegal conduct of the defendants. Accordingly, the participation of individuals, including members of all three of the membership organizations that seek to intervene, is unnecessary for the resolution of this lawsuit.

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The organizations’ members also readily satisfy the causation prong of Article III standing, since their injuries are “fairly traceable” to the defendants’ unlawful actions, Simon v Eastern Ky. Welfare Rights Org. 426 U.S. 26, 41-42 (1976)—i.e.. the unlawful practices complained of by the government in turn lead to more children becoming addicted to tobacco products. See, Am. Compl. PPJ 94-103; Bauer DecI. PP 13, 17, 18; Corr Decl. PP 9, 13-16; Hyde DecI. PP 10-16. Accordingly, it is indisputable that the members’ injuries are “fairly traceable” to the alleged unlawful acts at issue here for purposes of causation.

The redressability prong of Article HI is also met because it is certainly “likely” that the relief sought will redress the asserted injuries, to some degree, either by enjoining defendants from engaging in the acts that cause the members’ injuries, or providing resources to treat those who have become addicted to tobacco as a result of these continuing unlawful practices. See Lujan 504 U.S. at 561 (setting forth redressability standard); see also Larson v Valente 456 U.S. 228, 243 n.15 (1982) (parties satisfy the redressability requirement when they show that a favorable decision will relieve some of their injuries, and “need not show [it] will relieve [] every injury”) (emphasis in original); Friends of the Earth Inc. v Laidlaw Environmental Services 528 U.S. 167, 185-86 (2000) (holding that the plaintiffs’ injuries would be redressed even where the relief sought merely deterred the conduct in question). 2

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2 Moreover, as the Court observed in Public Citizen the injuries complained of by parents whose children are exposed to the defendants’ deceptive marketing practices and false and misleading public statements are no less redressable simply because the parents “have told their children of the risks associated with [j tobacco,” if, as demonstrated in the accompanying declarations, “their children pick up conflicting messages from other sources including [tobacco industry] promotional messages.” 869 F.2dat 1552 n.23. See also, gg. Bauer DecI. PP 16 (’[e]ven for my children, who are well informed on the topic, the existence of tobacco advertisements in their community and in their lives sows confusion and doubt about the dangers of smoking. As my daughter pointed out at the age often: if we’re not supposed to smoke, why

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2. Prospective Intervenors American Cancer Society, American Heart Association, and American Lung Association Have Standing to Sue on Their Own Behalf.

Prospective intervenors American Cancer Society, American Heart Association, and American Lung Association seek to intervene in this matter on their own institutional behalf, because the defendants’ conduct harms them directly as organizations. See Declaration of Daniel E. Smith PP 4-7; Declaration of Sue Nelson PP 5-10; Declaration of John L. Kirkwood PP 3-14. Here, as demonstrated by the attached declarations, all three organizations devote substantial resources toward educating the public about the true health risks of tobacco and counteracting the deceptive and fraudulent marketing practices of the defendants. See Smith DecI. PP 4-7; Nelson DecI. PP 5-10; Kirkwood Decl. PP 3-14,

Specifically, the organizations have spent considerable resources, including, but not limited to, research and public education on the ill effects of smoking, in order to:

warn their supporters, volunteers, and the general public about the dangers inherent in the defendants’ products - dangers about which the defendants had a duty to warn the public but failed to do so;

counter the adverse public health effects of the defendants’ deceptive marketing practices, which target children. induce smokers not to quit by marketing ’slow-tar” cigarettes, and induce consumers to smoke by convincing them that it will be easy for them to quit;

correct erroneous information conveyed to the public by the defendants’ false and misleading statements; and

implement cessation programs at their own expense, to relieve the addiction of teen and adult smokers who seek to quit.

Smith DecI. PP 4-7; Nelson DecI. PP 5-10; Kirkwood DecI. PP 3-14. Each of these “devot[ions]

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are there so many signs all around us telling us to smoke?”).

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of significant resources” drains the fisc and otherwise frustrates the purposes of these organizations, which could have instead directed these resources to the advancement of the public health or their other institutional goals and programs. Therefore, since the defendants’ conduct has “perceptibly impaired” the organizations’ mission to promote the public health, “there can be no question that the organization[s] [have] suffered injury in fact.” Havens Realty Corp. v Coleman 455 U.S. 363, 378-79 (1982).

These injuries - like those of the membership organizations - are also “fairly” traceable to the defendants’ unlawful actions, Simon 426 U.S. at 41-42, and hence these organizations can demonstrate the causation required by Article III. Indeed, as illustrated in the Government’s Amended Complaint, the defendants have made, and continue to make, false and deceptive statements and to engage in other deceptive marketing practices that mislead the public as to the dangers of tobacco addiction and tobacco-caused illness. See, Am. Compl. 37-91, 114-125. As a result, the proposed intervcnors’ have had to undertake public education, research, clinical programs, and outreach - at their own expense - to counteract the defendants’ fraudulent and harmful messages. See Smith DecI. PP 5-6; Nelson DecI. PP 5-10; Kirkwood DecI. PP 7-11. Therefore, since the organizations would not have had to divert as many, if any, institutional resources toward such projects absent the defendants’ unlawful conduct, the organizations’ injuries arc”fairly” traceable to this conduct. Simon 426 US. 41-42; see also Havens Realty, 455 U.S. at 379-80 (organizational plaintiff has standing where it must devote significant resources to counteracting allegedly unlawful practices).

For similar reasons, the proposed intervenors can demonstrate that the relief sought in this case would “likely” redress their injuries, Lujan 504 U.S. at 561, since a favorable ruling will

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enjoin and restrict the unlawful conduct that compels the organizations to divert their scarce resources toward counteracting and correcting the defendants’ deceptive and erroneous statements concerning the harm to the public health from tobacco products.

Therefore, because all six of the proposed intervenors clearly satisfy the requirements for Article Ill standing. they have demonstrated a protectable “interest” within the meaning of Rule 24(a). 3

C. Disposition of the Matter Will Impair the Ability of the Proposed Intervenors to Protect Their Interests

As demonstrated above, it is also clear that the proposed intervenors are “so situated that the disposition of the action may as a practical matter impair or impede [their] ability to protect that interest” within the meaning of Rule 24(a). See Fed, R. Civ. P. 24(a). Indeed, for example, in light of the Government’s very recent decision to seek only a fraction of the funding that, according to the Government’s own expert, is required to maintain an effective tobacco cessation program, see Written Direct Examination of Michael C. Fiore, M.D., M.P.H. at 17, 22, having an opportunity - as parties to this action - to advocate adherence to the government’s prior position

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3 The interests sought to be protected by the proposed intervenors also fall well within the applicable zone of interests for purposes of prudential standing. See Ass’n of Data Processing Serv. Orgs. Inc. v Camp 397 U.S. 150, 153 (1970) (the court must ascertain “whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute”). Here, the government alleges numerous violations of the wire and mail fraud provisions of the criminal code by defendants in their efforts to deceive the public, particularly children, about the dangers of tobacco products. See Am. Compl. PP 20406. Accordingly, because each of the organizations seeks to protect the public, particularly children, from such dangers, the organizations’ interests fall squarely within the pertinent zone of interest. See also Holmes v Sec Investor Prot Corp. 503 U.S. 258, 288 (1992) (Scalia, J., concurring) (noting that “the zone-of-interests test that will be applied to the various causes of action created by [RICO] . . . . vary according to the nature of the criminal offenses upon which those causes of action are based”).

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may be the only way the proposed intervenors can adequately protect their interests. Accordingly, the organizations also amply meet this requirement for intervention of right. Cf United States v LTV Corp. 746 F.2d 51, 54 11.7 (D.C. Cir, 1984) (private party may intervene to prevent impairment of its own interests where the “government is not vigorously and faithfully representing the public interest”), quoting United States v Hartford-Empire Co. 573 F.2d 1, 2 (6th Cir. 1978).

D. The Federal Government No Longer Adequately Represents the Interests of the Proposed Intervenors

The final criterion for intervention of right - a demonstration that the applicants’ interests are not “adequately represented by existing parties” - is also easily shown here. Fed. R. Civ. P. 24(a). Indeed, it is well established that this requirement “is not onerous.” Dimond v Dist of Columbia 792 F.2d 179, 192 (D.C. Cir. 1986). Rather, *[t]he requirement of the Rule is satisfied if the applicant shows that representation of his interest ‘may be inadequate,” moreover, “the burden of making that showing should be treated as minimal. Trbovich 404 U.S. at 538 n. 10 (emphasis added); see also Nuesse 385 F.2d at 703. Moreover, the interests asserted by the applicants “need not be wholly ‘adverse’ before there is a basis for concluding that existing representation of a ‘different’ interest may be inadequate.” Nuesse 385 F.2d at 703.

Particularly in light of the Proposed Remedies Order filed by the Government less than two days ago, the Court need not speculate as to whether the Government may continue to adequately represent the interests of the proposed intervenors - it is evident that the Government’s continued representation is now manifestly inadequate. Indeed, for example, when the Government confirmed in its Proposed Remedies Order that it would no longer seek

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more than ninety per cent of the original remedy it had urged throughout this case - as recently as May 12, 2005 - it no longer adequately represented the interests of the proposed intervenors.

Therefore, although the Government continues to pursue this matter as a whole, its lack of diligence with respect to the particular remedies needed to redress and enjoin the unlawful activities of the defendants fails to protect the interests of the proposed intervenors and those they represent. Indeed, as a result of the government’s recent announcement that it will not pursue a fully funded cessation program, which, according to its own expert witness, is necessary to redress the defendants’ ongoing illegal acts, members of Congress have expressed their own doubts concerning the government’s representation of the public’s interests in this case. Thus, in a letter sent to the Attorney General of the United States on June 24, 2005, five Senators expressed concern that the Department of Justice’s “apparent intention to seek $10 billion in remedies for smoking cessation is woefully inadequate to meet the needs of the 45 million Americans who currently smoke and those who will become addicted in the future due to the companies ongoing efforts to obtain new consumers of their deadly products.” Letter to Attorney General Alberto Gonzales from Senators Richard Durbin, Jack Reed, Frank Lautenberg, Tom 1-larkin, Edward Kennedy (June 24, 2005) (attached as Proposed Intervenors’ Exhibit A) (emphasis added); see also United States v Associated Milk Producers Inc. 534 F.2d 113, 117 (D.C. Cir. 1976) (”[c]ertainly, . . . the government’s virtual abandonment of the relief originally requested [j was a sufficient showing that the public interest was not being adequately represented”) (citing Cascade Natural Gas Corp. v El Paso Gas Co. 386 U.S. 129, 147-49 (1967)).

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Moreover, the six public health organizations that seek to intervene have a clear incentive and particular aptitude for “mak[ingj a more vigorous presentation” of the arguments previously made to this Court by the government, but now abandoned - concerning the scope of remedies necessary to frilly redress and prevent the ongoing harms that flow from the defendants’ unlawful activities. See Natural Res. Def. Council v Costle 561 F.2d 904, 912 (D.C. Cir. 1977) (internal citations omitted). Therefore, as the Supreme Court stated in Trbovieh “[s]ince the court is not limited.. to consideration of remedies proposed by the [Government], there is no reason to prevent the intervenors from assisting the court in fashioning a suitable remedial order.” 404 U.S. at 537 n.8 (emphasis added).

Accordingly, because the proposed intervenors meet all of the requirements for intervention as of right, they “shall” be permitted to intervene at this stage of the litigation for purposes of presenting to the Court their arguments in support of “a suitable remedial order” that will effectively ameliorate the consequences of defendants’ continuing unlawful practices. See Rule 24(a); Trbovich 404 U.S. at 537 n.8.

II. IN THE ALTERNATIVE, THE PROPOSED INTERVENORS SHOULD BE GRANTED PERMISSIVE INTERVENTION.

Although the proposed intervenors amply satisfy the criteria for intervention as of right under Rule 24(a), in the alternative, this Court should exercise its discretion by allowing the applicants to intervene in this action as a permissive matter under Rule 24(b). Rule 24(b) provides for permissive intervention when “an applicant’s claim or defense in the main have a question of law or fact in common,” and further provides that “‘[i]n exercising its discretion the Court shall consider whether the intervention will unduly delay or prejudice the adjudication of

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the rights of the original parties.” Here, the prospective intervenors’ limited purpose for intervention ensures not only that they present common questions of law and fact, but also that their participation will not unduly delay the proceedings or prejudice the existing parties.

Thus, in their proposed Complaint filed concurrently with their motion to intervene, the proposed intcrvenors do not allege any new legal claims or any additional facts, other than those necessary to identify their interests in this litigation. See Proposed Intervenors’ Compl. P 9. Instead, the proposed intervenors simply incorporate by reference - paragraph by paragraph - the same factual contentions and claims alleged by the Government in its Amended Complaint. $g. Id. As the proposed intervenors have further explained, they seek only to participate in this case for the limited purpose of ensuring that the scope of remedies considered by the Court will fully address the harm to their protectable interests and those of their members. As they have also made clear, the proposed intervenors will abide by the same schedule for post-trial briefs that currently applies to the government, and they are willing to substantially limit the length of those submissions. See Mot. to Intervene; Proposed Order.

Therefore, since the proposed intervenors’ claims present questions of law and fact that are common to those already before the Court, and their participation will neither prejudice the existing parties nor cause any undue delay, this Court should exercise its discretion and grant permissive intervention in this case.

CONCLUSION

For all of the foregoing reasons, the proposed intervenors’ Motion to Intervene should be granted.

17

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Katherine A. Meyer

(D.C. Bar No. 244301)

Howard M. Crystal

(D.C. Bar No. 446189)

Ethan Carson Eddy

(California Bar No. 237214)

MEYER GLITZENSTEIN & CRYSTAL

1601 Connecticut Avenue, Suite 700

Washington, DC 20009

202-588-5206

OF COUNSEL:

David C. Vladeck

(D.C. Bar No. 945063)

Georgetown University Law Center

600 New Jersey Avenue, N.W.

Washington. D.C. 20001

202 - 662-9535

June 29, 2005

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7/11/05 Defense Opposition to Motion to Intervene

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

PHILIP MORRIS USA INC.,

Formerly Known As Philip Morris Incorporated

Defendants.

Civil Action No. v. : 99-2496 (GK)

Next Scheduled Court Date: None Scheduled

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JOINT DEFENDANTS’ OPPOSITION TO MOTION TO INTERVENE BY THE TOBACCO-FREE KIDS ACTION FUND, ET AL.

Six non-profit organizations1 (“Applicants”) known for activism on tobacco issues seek to be added as parties to this action after more than six years of litigation and a nine-month trial.

They seek to intervene “for the sole purpose of advocating remedies,” simply because they disagree with the Government’s litigation decision to “reduce[] the relief it sought,” in an effort to comply with the governing law. The law does not permit intervention under these circumstances, however. As an initial matter, the Motion should be denied because Applicants do not meet either of the two threshold requirements for intervention, whether permissive or of right – timeliness and standing. Under the law, Applicants’ untimeliness and their lack of standing are independently sufficient grounds to deny both intervention of right and permissive intervention.

——-

1 The six organizations are: Tobacco Free Kids Action Fund, Inc.; Americans for Nonsmokers’ Rights; American Cancer Society; American Heart Association; American Lung Association; and National African American Tobacco Prevention Network.

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2

Further, even apart from their failure to satisfy the timeliness and standing requirements, the proposed intervenors’ request should be denied because they fail to meet the remaining requirements of Rule 24(a) and (b). First, under Rule 24(a), intervention of right is not permitted unless the applicant shows that its interest is not being adequately represented by any of the existing parties. No such showing was made here. Indeed, where, as here, the Government is the party whose representation is at issue, the law imposes a presumption of adequacy, which may be overcome only by a strong showing of inadequacy, such as a showing of bad faith, gross negligence or collusion. Applicants have not even alleged, much less shown, such conduct by the Government. Second, intervention of right requires that the applicant have “a direct, substantial, legally protectable interest” “relating to the property or transaction which is the subject of the action.” The type of interests asserted here – an organization’s generalized interest in the subject of the litigation, or its mere expectation of some indirect economic benefit as a result of the litigation – are insufficient. Third, to be entitled to intervention of right, the applicant must show that its interest may be “impair[ed] or impede[d]” by disposition of the action. This requirement is not satisfied by the mere fact that the applicant’s interest may not be advanced to the extent he or she would like.

Finally, under Rule 24(b), permissive intervention requires that the applicant has asserted a claim or defense that has an issue of fact or law in common with one asserted in the main action. Applicants here do not meet that requirement. In addition, permissive intervention should be denied because intervention would delay the case and prejudice the existing parties.

Because the would-be intervenors fail to meet the requirements for either intervention of right or permissive intervention, their Motion to Intervene should be denied.

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ARGUMENT

I. THE REQUEST TO INTERVENE SHOULD BE DENIED AS UNTIMELY.

Timeliness is required for both intervention of right and permissive intervention. See Fed.R.Civ.P. 24(a), (b). Here, Applicants’ Motion fails to meet this threshold requirement and the Court should deny their request for either form of intervention on that basis alone.

As the United States Court of Appeals for the D.C. Circuit has explained: Timeliness is to be determined from all the circumstances. Of particular importance are the time elapsed since the inception of the suit, the purpose of the intervention, the degree to which intervention is necessary to preserve the applicant’s rights, and the probability of prejudice from the intervention to those already parties.

Southern Christian Leadership Conference v. Kelley, 747 F.2d 777, 779 (D.C. Cir. 1984) (internal quotations and citations omitted). Consideration of these factors compels a finding that the applicants’ motion is untimely.

Time elapsed since inception of the suit. More than six years have elapsed since the inception of this lawsuit, and a nine-month trial has been completed. Intervention is properly denied as untimely under such circumstances. See Iowa State Univ. Research Foundation, Inc. v. Honeywell, Inc., 459 F.2d 447, 449 (8th Cir. 1972) (upholding denial of motion to intervene as untimely when it “was filed more than four years after the commencement of the action and after extensive discovery had been completed, and after the trial on the merits had proceeded for one and one-half months.”). Indeed, this Court denied, as untimely, a motion to intervene filed after only five weeks of the nine-month trial had been completed. See Nov. 5, 2004 Order denying Crew Motion to Intervene (“[This] case is now five weeks into trial, and is scheduled to go

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4

another four to five months. The Motion is clearly untimely and without merit.”). With trial now completed, the untimeliness here is even more pronounced.

Virtually all of the arguments set forth in support of the motion to intervene could have been made years ago. In particular, the proposed intervenors’ asserted “interest” in the outcome of this litigation is no stronger – and not different – than it was more than six years ago when this lawsuit was filed. If the Applicants felt that it was important that they personally appear in this case in order to vindicate these supposed interests, they should have moved to intervene years ago.

Applicants’ sole attempt to excuse the untimeliness of their request is their claim that they only learned that the Government was “inadequately” representing their interests when it submitted its proposed order on remedies after trial. They disagree with the Government’s decision to scale back the $130 billion smoking-cessation program advocated by Dr. Fiore to a $10 billion program that the Government asserts could comply with the Court of Appeals’ decision in United States v. Philip Morris USA, Inc. This Court should not countenance a situation where potential intervenors sit on their rights (and on the sidelines) for years and then belatedly move to intervene only when the Government makes a post-trial tactical decision with which they disagree. Otherwise, intervention motions could become a tool for third-party activist organizations to second-guess the trial strategy of the Government.

Moreover, the issue of what limitations RICO’s “prevent and restrain” proviso would have on any remedies to be imposed has always existed as an issue in this case. That fact was starkly illuminated early this year when the Court of Appeals issued its ruling in United States v. Philip Morris USA, Inc. This Court promptly responded by requesting briefing on the impact that the Court of Appeals’ decision would have on the other remedies requested by the

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5

Government. After the conclusion of that briefing, the Court expressed skepticism that many of the Government’s remedies – including cessation – could pass muster under the governing legal standard as set forth by the Court of Appeals. See Order #886 at 4. Nevertheless, these eleventh-hour Applicants chose not to come forward at that time. The mere fact that the Government has now responded to the Court of Appeals ruling by modifying its prior cessation request in an attempt to persuade this Court that it can sustain analysis under the governing law is plainly insufficient ground for labeling government counsel “inadequate.”2

Purpose of the intervention. The “purpose of the intervention” similarly weighs against intervention. According to the Applicants, they “seek only to present arguments to the Court … as to the scope of remedies that remain permissible and are necessary to redress and prevent the defendants’ unlawful practices.” Mem. in Support of Motion to Intervene at 2. As an initial matter, briefing on “remedies … necessary to redress” Defendants’ past conduct will be of no help to this Court. As the Court of Appeals’ ruling, and the language of Section 1964(a) make clear, only remedies designed to “prevent and restrain” future violations, not remedies intended to “redress” past conduct are available under Section 1964(a).

Moreover, the purpose of the intervention highlights its untimeliness. The proposed intervenors hope to inject their own proposed remedies into this case long after the court-ordered date for submission of the Government’s remedies and long after the evidentiary record has closed. Indeed, none of the parties will even know what specific remedies the intervenors are seeking until after the parties exchange their Final Proposed Findings of Fact.

——

2 As Defendants have elsewhere explained, no cessation remedy – including the $10 billion remedy now proffered by the Government – can satisfy the Court of Appeals’ decision because, like disgorgement, the remedy is inherently designed to ameliorate effects of smoking, rather than to “prevent and restrain” violations of RICO. See, e.g., Defendants’ Memorandum Regarding Non-Disgorgement Remedies Pursuant to Order #875 at 9 et seq.

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6

Necessity of Intervention to Protect Rights. Intervention by these Applicants is unnecessary to protect their asserted rights. Applicants apparently wish to file two briefs arguing that the “sustained” smoking cessation program initially requested by the Government is “permissible” and “necessary,” even after the Court of Appeals’ February 4, 2005 decision. See generally Mem. in Support of Motion to Intervene. Such briefing is unnecessary to protect Applicants’ asserted interests as this Court has already received briefing on that very point. Indeed, the Government submitted briefing supporting the “necessity” and “permissibility” of its originally proposed smoking-cessation program in response to Order #875. See Order #875 (ordering the parties to brief “the scope and meaning of the Court of Appeals’ decision regarding non-disgorgement remedies in a civil RICO case”), and briefing submitted pursuant to Order #875.3 Additional briefing on the point is unnecessary to protect Applicants’ rights.

Probability of Prejudice. Allowing the proposed intervention would prejudice the parties. The Government has filed its Proposed Final Judgment and Order, and the parties are in the midst of preparing their Post-Trial Proposed Finding of Fact and Trial Brief which will be directed to, among other things, those requested remedies. Applicants seek to interject their new alternative set of proposed remedies on August 24th, approximately three weeks after the parties have filed their Final Proposed Findings of Fact. See Motion to Intervene at 2. Depriving Joint

—– 3 See United States’ Memorandum Regarding Non-Disgorgement Equitable Remedies Pursuant to Order #875 at 9 (“As one major equitable remedy, the United States seeks an order requiring Defendants to fund sustained smoking cessation programs…”) (emphasis added); Defendants’ Memorandum Regarding Non-Disgorgement Remedies Pursuant to Order #875 at 9 (“The Government’s proposed ‘smoking cessation programs’ are barred by the Court of Appeals’ decision. A smoking cessation program is aimed at ameliorating the effects of past violations…”); United States’ Reply Memorandum Regarding Non-Disgorgement Equitable Remedies Pursuant to Order #875 at 3 (arguing that the proposed sustained smoking-cessation program is “a forward-looking remed[y]”).

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7

Defendants of an opportunity to identify and propose factual findings necessary to respond to whatever remedies the applicants may deem “appropriate and necessary” would be prejudicial.

Because the motion to intervene is untimely, Applicants are not entitled to intervention of right or permissive intervention. Their Motion should be denied.

II. NONE OF THE APPLICANTS HAVE STANDING TO INTERVENE.

Applicants’ lack of Article III standing is a separate and independently sufficient basis to deny their motion to intervene. According to the United States Court of Appeals for the D.C. Circuit, “prospective intervenors in this circuit must possess standing under Article III of the Constitution.” Jones v. Prince George’s County, Maryland, 348 F.3d 1014, 1017 (D.C. Cir. 2003). Here, none of the Applicant organizations has standing and their motion to intervene should be denied.

A. The Membership Organizations Lack Standing.

Of the six Applicants here, the three membership organizations4 assert associational standing to sue on behalf of their members. Mem. in Support of Motion to Intervene at 7. According to the Supreme Court: “An association has standing to bring suit on behalf of its members when its members would otherwise have standing to sue in their own right, the interests at stake are germane to the organization’s purpose, and neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 181 (2000) (emphasis added). Because the members of the three Applicant membership organizations do not “have standing to sue in their own right,” these three Applicants’ request to intervene must be denied.

——-

4 They are: Tobacco Free Kids Action Fund, Inc.; Americans for Nonsmokers’ Rights; and National African American Tobacco Prevention Network.

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8

1. Applicants’ Members Lack Standing Because They Have No “Injury in Fact”

“[T]o satisfy Article III’s standing requirements, a plaintiff must show (1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Friends of the Earth, 528 U.S. at 180-81 (citations omitted). The “harms” or “injuries” alleged by Applicants’ members in their Declarations fall far short of the type of harms necessary to meet the “injury in fact” requirement for Article III standing.

Indeed, in their Declarations, the members claim only hypothetical, conjectural injuries that are neither actual nor imminent. For example, Ursula E. Bauer – a member of the Tobacco Free Kids Action Fund, a Ph.D. in epidemiology, the Director of the Tobacco Control Department of the New York Department of Health, and a self-proclaimed “activist” – alleges: “[M]y children and I have been harmed and will continue to be harmed by [defendants’ actions] … because my children and I are at constant risk of being induced to smoke by these actions.” Bauer Decl. at ¶ 18. Ms. Bauer also asserts: “My children and I will also be injured if fewer cessation programs are available … should we become smokers.” Id. Similarly, Sherri Watson Hyde, of the National African American Tobacco Prevention Network (“NAATPN”) that “NAATPN’s members and their children and families are harmed by the defendants’ ongoing tortious conduct because they are at risk for being induced to smoke…” Hyde Decl. at ¶ 10. Likewise, William V. Corr, of the Tobacco-Free Kids Action Fund, asserts that “children and families are harmed by the defendants’ ongoing false and misleading public statements because such statements and actions increase the members’ and their families’ risk of smoking….” Corr Decl. at ¶ 9. Finally, Cynthia Hallett, of the Americans for Nonsmokers’ Rights (“ANR”),

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9

asserts that its members’ injury is an “increase[d] … risk that ANR’s members will be exposed to environmental tobacco smoke … and hence, will suffer an increased risk of tobacco related illness.” Hallett Decl. at ¶ 5.

The members’ mere assertion that they are at an increased risk of being induced to smoke or exposed to smoking by others in the future does not meet the “injury in fact” requirement for Article III standing. Certainly, it does not give them standing to seek greater smoking cessation remedies (which obviously are directed to smokers, not those who may be tempted to pursue smoking in the future). When assessing the “injury in fact” requirement, the “focus is on past and present injury; possible future injury is insufficient to create standing.” Smith v. Figa, 69 Fed. Appx. 922, 925 (10th Cir. 2003) (emphasis added) (quoting Keyes v. School Dist. No. 1, 119 F.3d 1437, 1445 (10th Cir. 1997)). Further, the members’ alleged possible future injuries do not confer standing as “imminent” injuries. As the Supreme Court has explained:

Although “imminence” is concededly a somewhat elastic concept, it cannot be stretched beyond its purpose, which is to ensure that the alleged injury is not too speculative for Article III purposes – that the injury is “‘certainly impending.”’ It has been stretched beyond the breaking point when, as here, the plaintiff alleges only an injury at some indefinite future time, and the acts necessary to make the injury happen are at least partly within the plaintiff’s own control.

Lujan v. Defenders of Wildlife, 504 U.S. 555, 564 n.2 (1992) (citations omitted). Applicants’ members assert only the possibility of “injury at some indefinite future time,” and “the acts necessary to make the injury happen” (the decision to start smoking) “are at least partly within [their] control.”

Because they lack an “injury in fact,” as required for Article III standing, Applicants’ members lack standing to sue in their own right. Accordingly, the three membership

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10

organizations lack standing to sue on behalf of those members. Their request to intervene must be denied.

B. The Three Remaining Applicants Lack Standing.

The three remaining applicants assert standing to sue in their own right. Mem. in Support of Motion to Intervene at 11. They claim as injury their allocation of resources to “educating the public about the true health risks of tobacco.” Id. These Applicants also claim that, as a result of Defendants’ conduct, “the proposed intervenors’ (sic) have had to undertake public education, research, clinical programs, and outreach – at their own expense – to counteract the defendants’ fraudulent and harmful messages.” Id. at 12. They claim that these expenditures “drain[] the fisc and otherwise frustrate the purposes of these organizations, which could have instead directed these resources to the advancement of the public health or their other institutional goals and programs.” Id. at 11-12 (emphasis added). Applicants’ assertions are insufficient to establish standing, as a matter of law. Indeed, the Court of Appeals for the D.C. Circuit has directly held that “[f]rustration of an organization’s objectives ‘is the type of abstract concern that does not impart standing.’” National Treasury Employees Union v. United States, 101 F.3d 1423, 1429 (D.C. Cir. 1996) (quoting National Taxpayers Union, Inc. v. United States, 68 F.3d 1428, 1433 (D.C. Cir. 1995)).

In fact, an organization lacks standing to sue on its own behalf unless it can show concrete and demonstrable injury to discrete programmatic interests, not merely a generalized5 “setback” to the organization’s social interests:

——

5 “Standing … inquires as to whether the plaintiff has alleged such a personal stake in the outcome of the controversy as to warrant his invocation of federal court jurisdiction and to justify exercise of the court’s remedial powers on his behalf.” United States v. Microsoft Corp., 2003 WL 1191451, at *3 (D.D.C. Feb. 7, 2003). Where, as here, “the harm asserted is a ‘generalized grievance’ shared in substantially equal measure by all or a large class of citizens,

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11

In those cases where an organization is suing on its own behalf, it must establish “concrete and demonstrable injury to the organization’s activities – with [a] consequent drain on the organization’s resources – constituting … more than simply a setback to the organization’s abstract social interests…. Indeed, [t]he organization must allege that discrete programmatic concerns are being directly and adversely affected by the challenged action.

Common Cause v. Federal Election Comm’n, 108 F.3d 413, 417 (D.C. Cir. 1997) (quoting National Taxpayers Union, Inc. v. United States, 68 F.3d 1428, 1433 (D.C. Cir. 1995)).

Applicants’ asserted “inchoate plans for future programs are insufficient to demonstrate injury for purposes of Article III.” Fair Housing Council of Suburban Philadelphia v. Montgomery Newspapers, 141 F.3d 71, 77 (3rd Cir. 1998). The Supreme Court has explained:

Such “some day” intentions – without any description of concrete plans, or indeed even any specification of when the some day will be – do not support a finding of the “actual or imminent” injury that our cases require.

Lujan v. Defenders of Wildlife, 504 U.S. at 564.

Further, Applicants’ generalized claim that Joint Defendants’ conduct causes them to divert expenditures to inform the public about the hazards of smoking is insufficient. To satisfy the requirements of Article III standing, Applicants were required to show that they “would have never engaged in such efforts had it not been for the actions of the Defendants.” North Dakota Fair Housing Council, Inc. v. Allen, 319 F.Supp.2d 972, 978 (D. N.D. 2004). Advertisements, public service announcements and the distribution of educational materials that “were not targeted solely at the Defendants, but are designed to benefit the community as a whole” are insufficient to satisfy the “injury-in-fact” requirement for Article III standing. Id. Because the that harm alone normally does not warrant exercise of jurisdiction.” Warth v. Seldin, 422 U.S. 490, 499 (1975).

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three remaining Applicants lack standing to sue in their own right, their request to intervene should be denied.

III. APPLICANTS DO NOT MEET THE OTHER REQUIREMENTS FOR INTERVENTION.

Even if Applicants satisfied both the timeliness and standing requirements, which they do not, their motion still should be denied, because they fail to meet the additional requirements for intervention, as shown below.

A. Applicants Fail to Prove Representation by the Government Is “Inadequate.”

To be entitled to intervention of right, Applicants also were required to prove inadequate representation of their interests by the Government. Fed.R.Civ.P. 24(a)(2). Applicants utterly failed to make this required showing. Indeed, Applicants have failed even to identify the correct “inadequate representation” standard, much less explain how they could possibly meet it. In their brief, Applicants claim they need only show the representation of their interest “may be inadequate” to carry their burden on the “inadequacy of representation” requirement.

Memorandum in Support of Motion to Intervene at 14. They are incorrect.

There is a strong judicial policy against intervention in government enforcement litigation when an adequate private remedy is available. United States v. Allegheny-Ludlum Industries, Inc., 517 F.2d 826, 844 (5th Cir. 1975) (there is a “strong judicial policy against nonexpress private intervention in government enforcement litigation when an adequate private remedy is freely accessible” and this policy applies “to applications for intervention by right under Rule 24(a)(2), and applications for permissive intervention under Rule 24(b)”).

A governmental entity that is asserting its status as a guardian or representative of all of its citizens deserves special consideration when a court is determining whether it is an adequate representative of the interests of would-be intervenors….Acting in a type of representative capacity is a basic governmental function,

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and the business of government could hardly be conducted if, in matters of litigation, individual citizens could always intervene and assert individual points of view.

6 Moore’s Federal Practice § 24.03[4][a] at 24-48 thru 24-49. Thus, “a presumption of adequate representation generally arises when the representative is a governmental body or officer charged by law with representing the interests of the absentee.” Commonwealth of Pennsylvania v. Rizzo, 530 F.2d 501, 505 (3rd Cir. 1976) (cited with approval in Environmental Defense Fund, Inc. v. Costle, 79 F.R.D. 235, (D.D.C. 1978)). Further, “[t]here may be no intervention unless the presumption is rebutted.” 6 Moore’s Federal Practice § 24.03[4][a] at 24-50.

To overcome this presumption, a “very strong showing of inadequate representation” is required. Washington v. Keller, 479 F.Supp. 569, 572 (D. Md. 1979) (“‘The very rare cases in which a member of the public is allowed to intervene in an action in which the United States, or some other governmental agency, represents the public interest are cases in which a very strong showing of inadequate representation has been made.’”) (quoting 7A C. Wright and Miller, Federal Practice and Procedure § 1909, at 530-31 (1972)). The minimal showing suggested by Applicants, that the representation “may be” inadequate, is insufficient. Environmental Defense Fund, Inc. v. Higginson, 631 F.2d 738, 740 (D.C. Cir. 1979) (where government is a party, an applicant “must overcome [a] presumption of adequate representation. A minimal showing that the representation may be inadequate is not sufficient.”).

Indeed, in some cases the courts have held that would-be intervenors must show bad faith, gross negligence or collusion on the part of the Government to overcome the presumption of adequate representation. See, e.g., Hobson v. Hansen, 44 F.R.D. 18, 30 (D.D.C. 1968) (“‘[R]epresentation by the governmental authorities is considered adequate in the absence of gross negligence or bad faith on their part.’”) (quoting 4 Moore, Federal Practice ¶ 24.08, at 43

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14

(2d ed. 1963)); United States v. South Bend Community School Corp., 692 F.2d 623, 628 (7th Cir. 1982) (inadequate representation by the government was not shown where “[t]here was no showing of gross negligence or bad faith on the part of the Government or collusion between the parties to overcome the presumption of adequate representation”). Applicants do not even allege such conduct by the Government.

Further, the grounds Applicants assert for finding their interests are not being adequately represented are insufficient as a matter of law. Applicants allege inadequacy based solely on litigation decisions by the Government regarding what remedies it would seek, in light of the evidence and governing law. See Mem. in Support of Motion to Intervene at 14-15 (“when the Government confirmed in its Proposed Remedies Order that it would no longer seek more than ninety per cent of the original remedy it had urged throughout this case… it no longer adequately represented the interests of the proposed intervenors”). That is, Applicants disagree with a litigation decision made by the Department of Justice lawyers:

At the trial, Michael C. Fiore testified that a smoking-cessation program that would enable smokers who wished to quit to do so would cost $130 billion and take 25 years. However, the legal requirements that the appeals court established for the case said specifically that any remedy must be limited to addressing future violations of the law by the tobacco companies and may not seek to address the injuries caused by their past fraudulent conduct.

I was concerned that a reviewing court might conclude that Dr. Fiore’s proposal would not satisfy that standard, so I recommended that the department present to the court a modified program designed to comply with the appeals court’s decision. My recommendation was adopted.

See Frank J. Marine’s June 15, 2005 Washington Post editorial, “Behind the Justice Department’s Shift on Tobacco” (attached as Exhibit A). See also June 9, 2005 Trial Tr. at

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23385-86 (counsel for the Government stating that cessation remedy was reduced in an effort to comply with the Court of Appeals’ decision and “concern” expressed by this Court).

Applicants’ disagreement with the Government’s litigation decisions fails to establish “inadequate” representation. “‘A mere difference of opinion concerning the tactics with which litigation should be handled does not make inadequate the representation of those whose interests are identical with that of an existing party or who are formally represented in the lawsuit.’” Jones v. Prince George’s County, Maryland, 348 F.3d 1014, 1020 (D.C. Cir. 2003) (citations omitted); see also Commonwealth of Pennsylvania v. Rizzo, 530 F.2d 501, 505 (3rd Cir. 1976) (“That (intervenors) would have been less prone to agree to the facts and would have taken a different view of the applicable law does not mean that the (defendants) did not adequately represent their interests in the litigation.”) (quoting United States v. Board of School Commissioners, 466 F.2d 573, 575 (7th Cir. 1972)). Indeed, “‘[i]f disagreement with an existing party over trial strategy qualified as inadequate representation, the requirement of Rule 24 would have no meaning.’” Jones, 348 F.3d at 1020 (citation omitted). In short, Applicants are not entitled to intervention of right because they have not made the “strong showing” required to overcome the presumption of adequacy.

Finally, Applicants’ desire for remedies they believe will be even more beneficial to their interests than those sought by the Government also fails as a matter of law. Massachusetts School of Law at Andover, Inc. v. United States, 118 F.3d 776, 781 (D.C. Cir. 1997) (“[W]e do not think representation is inadequate just because a would-be intervenor is unable to free-ride as far as it might wish – a well-nigh universal complaint.”). In short, Applicants have failed to allege, much less establish, the facts necessary to support a finding that their interests are inadequately represented by the Government in this case.

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B. Applicants Lack a Direct, Substantial, Legally Protectable Interest.

“[I]ntervention [of right] still requires a ‘direct, substantial, legally protectable interest in the proceedings’.” New Orleans Public Service, Inc. v. United Gas Pipe Line Co., 732 F.2d 452, 463 (5th Cir. 1984). The interest asserted must be “a litigable interest.” Nuesse v. Camp, 385 F.2d 694, 700 (D.C. Cir. 1967) (noting requirement of a “a litigable ‘interest’ for purposes of standing and intervention under Rule 24(a).”). Applicants here attempt to assert an interest in the equitable remedies sought by the Government. See, e.g., Mem. in Support of Motion to Intervene at 1 (seeking “leave to intervene … for the sole purpose of advocating remedies that are necessary to redress the defendants’ wrongful conduct”); id. at 2 (“these groups seek only to present argument to the Court … as to the scope of remedies”).

As an initial matter, Applicants do not claim any direct interest in the remedies this Court might order. Nor could they. Private RICO plaintiffs have no right to injunctive relief under the RICO statute. Religious Technology Center v. Wollersheim, 796 F.2d 1076, 1088 (9th Cir. 1986) (“Thus we conclude that Congress did not intend to give private RICO plaintiffs any right to injunctive relief.”). See also In re Fredeman Litig., 843 F.2d 821, 830 (5th Cir. 1988) (reserving ruling but stating “[w]e find the analysis contained in the Wollersheim opinion persuasive”); Price v. Pinnacle Brands, Inc., 138 F.3d 602, 605 n.5 (5th Cir. 1998) (“there is some question whether RICO affords private litigants the option of equitable remedies”); Dan River, Inc. v. Icahn, 701 F.2d 278, 290 (4th Cir. 1983) (“There is substantial doubt whether RICO grants private parties such as Dan River a cause of action for equitable relief. Section 1964(c) grants private parties a right of action for treble damages against the RICO offender, but the section has nothing to say about injunctive relief.”); cf. United States v. Philip Morris USA, Inc., 396 F.3d 1190, 1200 (D.C. Cir. 2005) (“In a civil [RICO] case the Government may request limited

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17

equitable relief under § 1964(a). Individual plaintiffs are made whole … through treble damages under 18 U.S.C. § 1964(c).”).

Applicants’ mere expectation that they might benefit indirectly from the remedies ordered by the Court is inadequate to satisfy the “interest” requirement as a matter of law. “The speculation that petitioners may be benefited in the trial of their respective cases if the Government is forced to litigate its case certainly does not give them an ‘interest’ in the Government’s case sufficient to support the motions to intervene.” United States v. Blue Chip Stamp Company, 272 F.Supp. 432, 438 (C.D. Cal. 1967). Rather, “[w]hat is required is that the interest be one which the substantive law recognizes as belonging to or being owned by the applicant. This is reflected by the requirement that the claim the applicant seeks intervention in order to assert be a claim as to which the applicant is the real party in interest.” New Orleans Public Service, Inc. v. United Gas Pipe Line Co., 732 F.2d 452, 464 (5th Cir. 1984). Applicants here assert no such interest. Accordingly, their request for intervention should be denied.

C. Applicants’ Interests Are Not “Impaired or Impeded.”

In addition, Applicants are not entitled to intervention of right because they have not shown that their interests are “impaired or impeded” by this litigation. To be entitled to intervention of right, applicants were required to show that “the disposition of [this] action may as a practical matter impair or impede the applicant’s ability to protect” their “interest relating to the property or transaction which is the subject of [this] action.” Fed.R.Civ.P. 24(a)(2). Of course, to the extent that the Applicants had any claim to pursue equitable relief under RICO – and, as noted, they do not – that interest is not impaired by the Government’s conduct.

In any event, the case law in this Circuit is clear: “[M]ere failure to secure better remedies for a third party (whether because of litigative sloth or some more sinister reason) is not

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a qualifying impairment.” Massachusetts School of Law at Andover, Inc. v. United States, 118 F.3d 776, 780 (D.C. Cir. 1997); see also United States v. Microsoft, 2003 WL 1191451, at *3 (D.D.C. Feb. 7, 2003) (same). Thus, the Government’s alleged failure to provide a desired benefit to the would-be intervenors does not constitute an impairment of their asserted interests for purposes of intervention. In short, failing to promote an interest is not the legal equivalent of impairing or impeding an interest. See Massachusetts School of Law at Andover v. United States, 118 F.3d 776, 780 (D.C. Cir. 1997) (“To be sure, we may assume arguendo that the more zealously the Department had pursued its antitrust claims, the greater the resulting advance in the [applicant’s] interest in being free of anticompetitive behavior. But [the applicant] points to no case equating the failure to promote an interest with its impairment.”) (emphasis added).

The request for intervention of right fails for this reason also.

III. APPLICANTS ALSO FAIL TO MEET THE OTHER REQUIREMENTS FOR PERMISSIVE INTERVENTION.

Permissive intervention may be granted, in the Court’s discretion, only where all of the requirements of Rule 24(b)(2) – including standing and timeliness – are satisfied. As shown above, Applicants fail to meet the timeliness and standing requirements for intervention and their motion fails for those reasons alone. However, even if Applicants had met all the requirements of permissive intervention, which they did not, their request for permissive intervention still should be denied. Rule 24(b) states: “In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.” Id. As shown above, granting the requested intervention at this stage of the litigation would prejudice the parties. Permissive intervention should be denied for that reason as well.

In any event, Applicants here have failed to assert any viable claim or defense and, thus, cannot meet the threshold requirement for permissive intervention. Permissive intervention may

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be granted “when an applicant’s claim or defense and the main action have a question of law or fact in common.” Fed.R.Civ.P 24(b)(2).6 In their proposed Complaint, Applicants here have attempted to assert claims under “the Medical Care Recovery Act, 42 U.S.C. §§ 2651, et seq., (Count One), the Medicare Secondary Payer provisions of the Social Security Act, 42 U.S.C. §§ 1395y(b)(2)(B)(ii) and (iii) (Count Two), and the civil provisions of Title 18 of the United States Code, sections 1961 through 1968, entitled Racketeering Influenced and Corrupt Organizations (“RICO”). See Plaintiff-Intervenors’ Complaint for Damages and Injunctive and Declaratory Relief at ¶ 2.

In their words: “[T]he proposed intervenors simply incorporate by reference – paragraph by paragraph – the same factual contentions and claims alleged by the Government in its Amended Complaint.” Memorandum in Support of Motion to Intervene at 17. On this basis, they then conclude that “the proposed intervenors’ claims present questions of law and fact that are common to those already before the Court. Id.

Even if Applicants were entitled to assert the alleged Medical Care Recovery Act and Medicare Secondary Payer claims, those claims would not support permissive intervention as the Government’s identical claims have been dismissed. See Sept. 28, 2000 Order (dismissing Counts One and Two).

The only claims the Government has remaining are its claims for equitable relief brought under 18 U.S.C. § 1964(a) and (b) for alleged violation of the RICO statute. And, though Applicants attempt to assert the identical claims, claims for equitable relief under the RICO statute can only be brought by the Government. See 18 U.S.C. § 1964(b) (“The Attorney

—–

6 Federal Rule of Civil Procedure 24(c) states, in relevant part: “A person desiring to intervene shall serve a motion to intervene upon the parties as provided in Rule 5. The motion shall state the grounds therefore and shall be accompanied by a pleading setting forth the claim or defense for which intervention is sought.” Fed.R.Civ.P. 24(c) (emphasis added).

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General may institute proceedings under this section.”); Religious Technology Center v. Wollersheim, 796 F.2d 1076, 1088 (9th Cir. 1986) (“Thus we conclude that Congress did not intend to give private RICO plaintiffs any right to injunctive relief.”). In short, Applicants have not asserted any viable claims7 and, thus, they fail to meet the requirement that their “claim or defense and the main action have a question of law or fact in common.” Fed.R.Civ.P 24(b)(2). Their request for permissive intervention should be denied for this additional reason.

CONCLUSION

Applicants cannot satisfy the requirements for intervention of right or permissive intervention. Accordingly, their motion to intervene should be denied.

Dated: July 11, 2005

Respectfully submitted,

/s/ Richard P. Cassetta

Edward C. Schmidt, Esq., (D.C. Bar No. 199315)

Matthew D. Schwartz, Esq., (D.C. Bar No. 436619)

THOMPSON COBURN LLP

1909 K Street, N.W.

Suite 600

Washington, D.C. 20006

(202) 585-6900 – phone

(314) 552-7597 – fax

J. William Newbold, Esq.

Michael B. Minton, Esq.

Richard P. Cassetta, Esq., (D.C. Bar No. 457781)

A. Elizabeth Blackwell, Esq.

THOMPSON COBURN LLP

One US Bank Plaza, Suite 3500

St. Louis, Missouri 63101-1693

(314) 552-6000 – phone

(314) 552-7597 – fax

7 Applicants do not even attempt to assert a claim under 18 U.S.C. § 1964(c), which provides the private right of action for “any person injured in his businesses or property” by reason of a RICO violation.

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Gene E. Voigts, Esq.

Richard L. Gray, Esq.

SHOOK, HARDY & BACON L.L.P.

2555 Grand Blvd.

Kansas City, Missouri 64108-2613

(816) 474-6550 – phone

(816) 421-2708 – fax

Attorneys for Defendant

Lorillard Tobacco Company

/s/ Richard P. Cassetta for_______________

Robert F. McDermott, Jr. (D.C. Bar No. 261164)

Peter J. Biersteker (D.C. Bar No. 358108)

Jonathan M. Redgrave (D.C. Bar No. 474288)

JONES DAY

51 Louisiana Avenue, N.W.

Washington, D.C. 20001-2113

Telephone: (202) 879-3939

Facsimile: (202) 626-1700

Robert C. Weber

Paul G. Crist

David B. Alden

JONES DAY

North Point, 901 Lakeside Avenue

Cleveland, Ohio 44114-1190

Telephone: (216) 586-3939

Facsimile: (216) 579-0212

Attorneys for Defendant

R.J. Reynolds Tobacco Company

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/s/ Richard P. Cassetta for___________________

Timothy M. Broas (D.C. Bar No. 391145)

WINSTON & STRAWN LLP

1700 K Street, N.W.

Washington, D.C. 20006-3817

Telephone: (202) 282-5000

Dan K. Webb

Thomas J. Frederick

WINSTON & STRAWN LLP

35 West Wacker Drive

Chicago, Illinois 60601-9703

Telephone: (312) 558-6700

Theodore V. Wells, Jr. (D.C. Bar No. 468934)

James L. Brochin (D.C. Bar No. 455456)

PAUL, WEISS, RIFKIND, WHARTON

& GARRISON LLP

1285 Avenue of the Americas

New York, New York 10019-6064

Telephone: (212) 373-3000

Attorneys for Defendants

Philip Morris, Inc. and Altria Group, Inc.

/s/ Richard P. Cassetta for___________________

David E. Mendelson (D.C. Bar No. 471863)

KIRKLAND & ELLIS LLP

655 15th Street, N.W., Suite 1200

Washington, D.C. 20005

Telephone: (202) 879-5000

Douglas G. Smith (D.C. Bar No. 461586)

David M. Bernick

Stephen R. Patton

Renee D. Honigberg

KIRKLAND & ELLIS LLP

200 East Randolph Drive, Suite 5900

Chicago, Illinois 60601

Telephone: (312) 861-2000

Attorneys for Defendant

Brown & Williamson Holdings, Inc.

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/s/ Richard P. Cassetta for___________________

David Wallace

Jessica L. Zellner

CHADBOURNE & PARKE LLP

30 Rockefeller Plaza, 34th Floor

New York, New York 10112-0219

Telephone: (212) 408-5100

Attorneys for Defendant

British American Tobacco (Investments)

Limited (f/k/a British-American Tobacco

Company Limited)

/s/ Richard P. Cassetta___________________

J. William Newbold, Esq.

Michael B. Minton, Esq.

Richard P. Cassetta, Esq., (D.C. Bar No. 457781)

Jason A. Wheeler Esq.

THOMPSON COBURN LLP

One US Bank Plaza, Suite 3500

St. Louis, Missouri 63101-1693

(314) 552-6000 – phone

(314) 552-7597 – fax

Steven Klugman

Steven S. Michaels

DEBEVOISE & PLIMPTON LLP

919 Third Avenue

New York, New York 10022

(212) 909-6000 – phone

Attorneys for Defendant

The Council for Tobacco Research-U.S.A, Inc.

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/s/ Richard P. Cassetta for___________________

James A. Goold

COVINGTON & BURLING

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2401

Telephone: (202) 662-6000

Attorneys for Defendant

The Tobacco Institute, Inc.

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