Tobacco On Trial

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EXCERPT:

NOTICE

Defendant R.J. Reynolds Tobacco Company hereby gives notice that it has deposited its payment of $200,000 due by December 31, 2011 pursuant to Order #27-Remand into the Registry of the Court.

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EXCERPT:

Upon consideration of the Joint Motion for Consent Order Between the United States, the Public Health Intervenors (hereafter “Plaintiffs”), and Lorillard Tobacco Company (hereafter “Lorillard”) Concerning Document Disclosure Obligations Under Order #1015, and the entire record herein, it is hereby ORDERED that: . . .

II. Monetary Terms

A. Lorillard will deposit, on or before the dates indicated below, the amounts indicated below with the Registry of the Court:

Friday, January 13, 2012 $217,000

Monday, December 31, 2012 $217,000

Tuesday, December 31, 2013 $216,000

Total: $650,000

B. The Registry of the Court will, upon receipt of each of these installments, disburse the funds to the University of California, San Francisco (hereafter “UCSF”).

C. Lorillard will make these payments primarily in lieu of its prior obligations under Order #1015 to code the person mentioned, organization mentioned, and brand mentioned fields and as part of a resolution of the scope of Lorillard’s coding obligations for documents posted on its public document websites as a result of production in court or administrative actions in the United States concerning smoking and health, marketing, addiction, low-tar or low-nicotine cigarettes, or less hazardous cigarette research both prior to November 15, 2011, and on or after that date.

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EXCERPT:

By Orders dated February 25, 2011 (DN 5878) and March 24, 2011 (DN 5895), this Court referred to mediation several matters related to Defendants’ document disclosure obligations under Order #1015 (DN 5733, Aug. 17, 2006), published as United States v. Philip Morris USA Inc., 449 F. Supp. 2d 1, 940-44 (D.D.C. 2006), aff’d in part & vacated in part, 566 F.3d 1095 (D.C. Cir. 2009) (per curiam), cert. denied, 561 U.S. ___, 130 S. Ct. 3501 (2010). Lorillard Tobacco Company (hereafter “Lorillard”) and the United States and the Public Health Intervenors (hereafter “Plaintiffs”) have successfully concluded that mediation. Subject to the Court’s approval, the attached (proposed) Consent Order resolves the issues referred for mediation, including the scope of Lorillard’s coding obligations for documents posted on its public websites maintained as a result of production in smoking and health litigation both prior to November 1, 2011, and on or after that date.

WHEREFORE, Plaintiffs and the specified Defendant respectfully ask the Court to enter the attached (proposed) Consent Order.

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EXCERPT:

We submit this Notice to certify that:

1. UCSF is aware of and consents to the terms that refer to the university in the (proposed) consent order;

2. UCSF voluntarily submits itself to the personal jurisdiction of the Court concerning any disputes about UCSF’s obligations under the (proposed) consent order;

3. UCSF agrees to use the moneys disbursed to it by the Registry of the Court under the (proposed) consent order to improve access to and functionality of the Legacy Tobacco Documents Library, e.g., through coding documents and providing enhanced search capabilities (with the understanding that the university may assess some percentage for indirect costs), and not for any other purpose.

4. As a condition for receipt of the payments provided under the (proposed) consent order, UCSF agrees to file through the ECF system, by December 31 of each year (beginning in 2012) and up to and including the final year in which these funds are spent, a certification confirming that these funds have been used only for the purposes described in Paragraph (3) and not for any other purpose.

5. UCSF agrees that if it spends any of these funds in a manner inconsistent with Paragraph (3), it will refund any such funds to the Registry of the Court.

6. UCSF understands that under the (proposed) consent order, it may allocate the monies received for the purposes specified in Paragraph (3) through December 31, 2025. UCSF will have until that date to spend all the funds provided by the (proposed) consent order, and agrees to continue filing annual certifications until all funds are spent. UCSF agrees that if any of the funds remain unspent by that date, it will refund any remaining funds to the Registry of the Court.

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EXCERPT:

it is hereby

ORDERED that:

Defendants’ document disclosure obligations under Order #1015 (DN 5733, Aug. 17. 2006), published as United States v. Philip Morris USA Inc., 449 F. Supp. 2d 1, 940-44 (D.D.C. 2006), aff’d in part & vacated in part, 566 F.3d 1095 (D.C. Cir. 2009) (per curiam), cert. denied, 561 U.S._, 130 S. Ct. 3 501 (2010), are MODIFIED as set forth below.
. . .

II. Monetary Terms

A. Philip Morris USA Inc. and Altria Group, Inc. (collectively, hereafter “PM”) and R.J. Reynolds Tobacco Company (hereafter “RJR”‘) will each deposit, on or before the dates indicated below, the amounts indicated below with the Registry of the Court:

Friday, December 30, 2011 $200,000

Wednesday, February 15, 2012 $750,000

Friday, February 15, 2013 $750,000

Friday, February 14, 2014 $750,000

Monday, February 16, 2015 $675,000

Total (PM and RJR each): $3.125 million

Total (combined): $6.25 million

B. The Registry of the Court will, upon receipt of each of these installments, disburse the funds to the University of California, San Francisco (hereafter “UCSF”).

C. PM and RJR will make these payments in lieu of their prior obligations under Order #1015 to code person mentioned, organization mentioned, and brand mentioned fields, and as part of a resolution of the scope of their coding obligations for documents posted on their public document websites as a result of production in court or administrative actions . . .

III. Monetary Conditions and Technical Meetings with UCSF

A. The funds deposited with the Registry of the Court will be used by UCSF to improve access to and functionality of the Legacy Tobacco Documents Library, e.g., through coding documents and providing enhanced search capabilities (with the understanding that the university may assess some percentage for indirect costs). UCSF will not use these funds for any other purpose.

B. As a condition for receipt of the payments provided in Paragraph A above, UCSF will file through the ECF system, by December 31 of each year (beginning in 2012) and up to and including the final year in which these funds are used, a certification confirming that these funds have been used only for the purposes described in the preceding paragraph and not for any other purpose.

C. If UCSF uses any of these funds in a manner inconsistent with Paragraph B, any such funds will be refunded to the Registry of the Court. In that event, the parties will have thirty (30) days to apply to the Court requesting that the funds either be refunded to Defendants, or used in some other manner related to document coding and/or document websites.
. . .

c. The technical requirements for documents posted to Defendants’ Internet Document Websites are as follows:

i. Posting Requirements for Hardcopy and Electronic Documents

A. For scanned hard-copy documents, Defendants will post to their websites searchable PDFs of the documents, with Optical Character Recognition (OCR) search capability, and will include OCR text in a separate text file.

B. For electronic-source documents (both email and non-email), Defendants will post to their websites searchable PDFs of the documents, with OCR search capability, and will provide the extracted electronic text in a separate text file, unless those documents are redacted, in which case OCR text will be provided.

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EXCERPT:

NOTICE

Defendants Altria Group, Inc. and Philip Morris USA Inc. hereby give notice that they have deposited their payment of $200,000 due by December 31, 2011 pursuant to Order #27- Remand into the Registry of the Court.

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EXCERPT:

The Court has already correctly determined that the remedies imposed in this case remain necessary and appropriate irrespective of the Family Smoking Prevention Act. See United States v. Philip Morris USA, Inc., 787 F. Supp. 2d 68 (D.D.C. 2011) (denying Defendants’ motion for vacatur). This is particularly true with regard to the corrective statements remedy, which the Court of Appeals explained will “prevent and restrain [Defendants] from making fraudulent public statements on smoking and health matters in the future.” In short, while litigation over the Family Smoking Prevention Act is likely to continue for years, corrective statements are needed now to prevent and restrain Defendants from their continuing misconduct, which the Court has already found – and the Court of Appeals affirmed – is likely to continue. 566 F.3d at 1134 (the record “amply support[s]” the “conclusion that Defendants ‘continue to make false and misleading statements . . . .”) (other citations omitted); see also, e.g., United States v. Philip Morris USA, Inc., 449 F. Supp. 2d 1, 910 (D.D.C. 2006) (“As Defendants’ senior executives took the witness stand at trial, one after another, it became increasingly clear that these Defendants have not, as they claim, ceased their wrongdoing or, as they argued throughout the trial, undertaken fundamental or permanent institutional change”). . . .

Finally, the mere fact that First Amendment arguments are being raised against both this Court’s corrective statement remedy and the FDA Act certainly does not counsel in favor of delaying resolution of corrective statements until such matters have been completely resolved (including on appeal) in the other case pending in this Circuit. Should any future decisions regarding that case – such as, for example, a ruling in the Court of Appeals – become relevant to any issues remaining before this Court, they can be taken into account at that time, just as the ultimate resolution of the issues this Court is considering regarding the corrective statement remedy may inform the resolution of the challenge to the FDA Act (which has not yet even been heard on summary judgment). Accordingly, the mere fact that both cases involve the First Amendment issues is not a reason to delay the corrective statements remedy in this case.

Conclusion

For the foregoing reasons, the Court should not delay resolution of the corrective statements remedy in light of the ongoing litigation under the FDA Act and its implementing regulations or for any other reason. Rather, to prevent and restrain further misconduct, the Court should order Defendants to issue corrective statements without delay.

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EXCERPT:

UNITED STATES’ RESPONSE TO ORDER SEEKING VIEWS ON DEFERRING CONSIDERATION OF RECOMMENDED CORRECTIVE STATEMENTS

On November 17, 2011, the Court directed the parties to submit their views on whether the Court should defer considering the issue of corrective statements and point-of-sale placement of the corrective statements within retail stores; and if so, for how long. The United States urges the Court to continue to move forward on this remedy expeditiously. The time that the Court originally contemplated for the Defendants to make the required corrective statements has long since passed. Waiting for further events in other cases is unnecessary, as future appellate decisions will not assist the Court in resolving the issues before it here, and delay is not in the public interest. What is more, the Court has already addressed—and explicitly rejected—the arguments that Defendants are most likely to muster in favor of further waiting.

ARGUMENT

1. POSTPONING DECISION ON CORRECTIVE STATEMENTS WILL NOT CONSERVE JUDICIAL RESOURCES, BUT WILL GIVE DEFENDANTS INDIRECTLY WHAT THE COURT REFUSED TO GIVE THEM DIRECTLY . . .

2. POSTPONING DECISION ON THE CORRECTIVE STATEMENTS WOULD BE CONTRARY TO THE PUBLIC INTEREST, AS THIS COURT HAS PREVIOUSLY FOUND . . .

When denying Defendants’ vacatur motion in this case nearly six months ago, the Court observed that “[i]t has been well over eleven years since this case was filed and nearly five years since this Court found that Defendants ‘knowingly and intentionally engaged in a scheme to defraud smokers and potential smokers, for purposes of financial gain, by making false and fraudulent statements, representations, and promises.’ ” US v. PM Vacatur Decision, 787 F. Supp. 2d at 82 (internal citation omitted). It is now more than twelve years since this case was filed, and over five years since the Court found Defendants liable and ordered a corrective- statement remedy. The corrective-statement remedy should be implemented now.3

CONCLUSION

For the reasons stated above, the United States respectfully urges the Court not to defer its consideration of this important remedy.

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EXCERPT:

DEFENDANTS’ RESPONSE TO ORDER OF NOVEMBER 17, 2011

Defendants respectfully submit this response to this Court’s Order of November 17, 2011, which directed the parties “to submit their views on the following questions: (1) should this Court defer consideration of the issue of corrective action statements (as well as the issue of retail store advertising placement), (2) if so, for how long should such consideration be deferred?” D.E. 5950 at 2 (Nov. 17, 2011). In Defendants’ view, this Court should defer its resolution of the pending corrective-statement and point-of-sale issues until the conclusion of the ongoing appellate proceedings in the D.C. Circuit, and any subsequent proceedings in the U.S. Supreme Court, in R.J. Reynolds Tobacco Co. v. United States FDA, _ F. Supp. 2d _, 2011 WL 5307391 (D.D.C. Nov. 7, 2011), appeal pending No. 11-5332 (D.C. Cir.). That appeal from Judge Leon’s order preliminarily enjoining the FDA’s graphic-warnings rule raises several issues that overlap with those before this Court, and is currently proceeding on an expedited briefing schedule. In the interests of judicial economy, this Court should therefore await the resolution of that appeal before deciding the pending corrective-statement and point-of-sale issues.

In R.J. Reynolds, Judge Leon issued a preliminary injunction against the implementation of an FDA rule that requires cigarette manufacturers to display a series of nine rotating graphic- warning labels on the top 50% of the front and back of every cigarette package and the top 20% of advertisements. . . .

Deferring resolution of the corrective-statement and point-of-sale issues until the D.C. Circuit rules is unlikely to generate significant delay. After noticing an appeal on November 29, 2011, the Government filed an Unopposed Motion to Set Expedited Briefing Schedule. Pursuant to that request, the D.C. Circuit expedited briefing of the appeal: The Government has already filed its opening brief and all briefing in the appeal will be completed by February 13, 2012; oral argument is scheduled for April 10, 2012. It is therefore possible that the D.C. Circuit will be in a position to issue an opinion in the spring of 2012. See also 28 U.S.C. § 1657(a) (requiring “each court of the United States” to “expedite the consideration of . . . any action for temporary or preliminary injunctive relief”).

Deferring resolution of the pending corrective-statement and point-of-sale issues would therefore constitute a sound case-management decision that is likely to conserve this Court’s resources without engendering significant delay.

CONCLUSION

This Court should defer resolution of the pending corrective-statement and point-of-sale issues until the conclusion of appellate proceedings in the D.C. Circuit, and any subsequent proceedings in the U.S. Supreme Court, in R.J. Reynolds Tobacco Co. v. United States FDA.

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Date Filed: 09/22/1999

Jury Demand: Both

Nature of Suit: 890 Other Statutory Actions

Jurisdiction: U.S. Government Plaintiff

Date Filed # Docket Text

12/13/2011 5951 Consent MOTION Concerning Document Disclosure Obligations under Order #1015 by ALTRIA GROUP, INC., AMERICAN CANCER SOCIETY, AMERICAN HEART ASSOCIATION, AMERICAN LUNG ASSOCIATION, AMERICANS FOR NONSMOKERS’ RIGHTS, NATIONAL AFRICAN AMERICAN TOBACCO PREVENTION NETWORK, PHILIP MORRIS USA INC., R.J. REYNOLDS TOBACCO COMPANY, TOBACCO-FREE KIDS ACTION FUND, UNITED STATES OF AMERICA (Attachments: # 1 Text of Proposed Order)(Crane-Hirsch, Daniel) (Entered: 12/13/2011)

12/13/2011 5952 NOTICE OF AGREEING TO BE SUBJECT TO CONSENT ORDER by REGENTS OF THE UNIVERSITY OF CALIFORNIA re 5951 Consent MOTION Concerning Document Disclosure Obligations under Order #1015 (Leff, Peter) (Entered: 12/13/2011)

12/15/2011 5953 ORDER #27-REMAND: Consent Order Between the United States, the Public Health Intervenors, Philip Morris USA Inc., Altria Group, Inc., and R.J. Reyonlds Tobacco Company Concerning Document Disclosure Obligations Under Order #1015. Signed by Judge Gladys Kessler on 12/14/2011. (tth) (Entered: 12/15/2011)

12/20/2011 5954 RESPONSE TO ORDER OF THE COURT re 5950 Order, filed by ALTRIA GROUP, INC., LORILLARD TOBACCO COMPANY, PHILIP MORRIS USA INC., R.J. REYNOLDS TOBACCO COMPANY. (Estrada, Miguel) (Entered: 12/20/2011)

12/20/2011 5955 RESPONSE TO ORDER OF THE COURT re 5950 Order, Seeking Views on Deferring Consideration of Recommended Corrective Statements filed by UNITED STATES OF AMERICA. (Crane-Hirsch, Daniel) (Entered: 12/20/2011)

12/20/2011 5956 MEMORANDUM by TOBACCO-FREE KIDS ACTION FUND. (Attachments: # 1 Exhibit, # 2 Exhibit, # 3 Exhibit)(Meyer, Katherine) (Entered: 12/20/2011)

12/20/2011 5957 NOTICE by ALTRIA GROUP, INC. (Campbell, Matthew) (Entered: 12/20/2011)

12/20/2011 DEPOSIT of Funds into registry of the Court in the amount of $ 200,000.00, Receipt Number 4616044564, by PHILIP MORRIS/ALTRIA (dr) (Entered: 12/21/2011)

12/21/2011 5958 Joint MOTION for Order Concerning Document Disclosure Obligations under Order #1015 by AMERICAN CANCER SOCIETY, AMERICAN HEART ASSOCIATION, AMERICAN LUNG ASSOCIATION, AMERICANS FOR NONSMOKERS’ RIGHTS, LORILLARD TOBACCO COMPANY, NATIONAL AFRICAN AMERICAN TOBACCO PREVENTION NETWORK, TOBACCO-FREE KIDS ACTION FUND, UNITED STATES OF AMERICA (Attachments: # 1 Text of Proposed Order)(Crane-Hirsch, Daniel) (Entered: 12/21/2011)

12/21/2011 5959 NOTICE OF AGREEING TO BE SUBJECT TO CONSENT ORDER by REGENTS OF THE UNIVERSITY OF CALIFORNIA re 5958 Joint MOTION for Order Concerning Document Disclosure Obligations under Order #1015 (Leff, Peter) (Entered: 12/21/2011)