KESSLER ORDERS SUBMISSIONS ON CORRECTIVES

October 23, 2006 9:55 pm by Gene Borio

On Oct. 19, 2006, Judge Kessler ordered both parties to submit memoranda or praecipes on the proposed corrective statements. Both sides’ previous submissions, she writes, “have raised new issues which have not been addressed before.”

The proposals from the DOJ and the Intervenors, in particular, would require vetting of the correctives by public health experts, and so would necessitate an extended period of time to imlement. The proposals also would require a “hands-on” approach from the court–down to approving font characteristics–that Kessler apparently finds troubling.

Considering the tight schedule for implementation of the corrective statements (Defendants have asked for a finalized ruling by Nov. 6), Kessler has ordered the memoranda to be submitted by Oct. 30, 2006.

Text follows of:

Kessler Order #1025 on Correctives October 19, 2006

**———————————————————

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

and

TOBACCO-FREE KIDS ACTION FUND,

AMERICAN CANCER SOCIETY,

AMERICAN HEART ASSOCIATION,

AMERICAN LUNG ASSOCIATION,

AMERICANS FOR NONSMOKERS’ RIGHTS

and NATIONAL AFRICAN AMERICAN

TOBACCO PREVENTION NETWORK,

Intervenors,

v.

PHILIP MORRIS USA, INC.,

(f/k/a Philip Morris, Inc.), et al.,

Defendants.

Civil Action No. 99-2496 (GK)

**———————————————————

ORDER #1025

The Court has received, pursuant to the Final Judgment and Remedial Order (“Remedial Order”), Order #1015, paragraph II.B.5., the parties’ submissions of proposed language for “corrective statements” on five issues. The parties, in particular the Government and the Plaintiff-Intervenors, have raised new issues which have not been addressed before in this lengthy litigation.

Most significantly, the proposals of the Government and the Plaintiff-Intervenors, if adopted, would require a substantial extension of the deadlines set in paragraph II.B for issuance of corrective statements.

**———————————————————

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Defendant, Philip Morris USA (“PM USA”) has requested, for understandable logistical reasons, that the Court rule as to the substance of the final corrective statements by November 9, 2006, so that it can meet the deadlines imposed in the Remedial Order. Other Defendants have also requested prompt rulings from the Court.

In light of the parties’ submissions filed October 16, 2006, the Court hereby

ORDERS that all parties respond by Memorandum or Praecipe to the following issues raised by the submissions of the Government and the Plaintiff-Intervenors:

1. The practical impact of adopting the proposals contained in the submissions of the Government and Plaintiff-Intervenors, including that the Court consult with appropriate independent experts, to be paid by Defendants, to evaluate any proposed corrective statements, and that the Court undertake basic market testing research to evaluate the effectiveness of such statements;

2. Whether the corrective statements should indicate that they are being issued pursuant to Court Order;

3. Whether the Court should approve all relevant details of such corrective statements, such as print size, colors, spacing and format, voice-over in television advertisements, etc.

The Court is extremely concerned about the delay which would be necessitated by adoption of the proposals put forth by the Government and the Plaintiff-Intervenors, and the appropriateness and propriety of the Court adopting such a “hands-on” approach.

**———————————————————

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WHEREFORE, it is this ____ day of October, 2006, hereby

ORDERED, that the submissions are to be filed by October 30, 2006.

/s/

Gladys Kessler

United States District Judge

Copies via ECF to all counsel of record

RICO SHOULD APPLY WORLDWIDE TO ALL AMERICANS LIVING ABROAD, HONG KONG NGO CLAIMS

October 19, 2006 4:13 pm by Gene Borio

Defendant tobacco companies in countries with American populations may have to abide by Judge Kessler’s Aug. 17, 2006 ruling on descriptors if she gives weight to a unique amicus brief filed by a foreign NGO.

In early October, Annelise Connell of Hong Kong’s “Clear the Air” filed an amicus brief opposing Defendants’ motion to delay or amend Judge Kessler’s Order regarding “lights” descriptors..

Clear the Air argued in its request to file that “it is important that you be fully aware of the nature of the deception that US citizens in Hong Kong are facing from the marketing practices of the defendants.” (On Oct. 10, Judge Kessler, in a handwritten note on Clear the Air’s motion, granted the organization leave to file.)

In its brief, Clear the Air states that:

1. In Hong Kong it is illegal to register a trademark that is “likely to deceive” the public;

2. Under the FCTC, which China has ratified, deceptive labeling is forbidden;

3. Clear the Air earlier this year filed an application with Hong Kong’s Intellectual Property Department (IPD) to revoke the “Marlboro Lights” trademark;

4. Defendants have apparently failed to alert the IPD of Judge Kessler’s ruling;

In light of the above, Clear the Air asks of Judge Kessler ” that you do not exempt the Hong Kong Special Administrative Region of the People’s Republic of China, in your ruling on remedies.”

Defendants’ brief in opposition notes that Clear the Air’s amicus filing is not only a year late but introduces evidence not established at trial.

Addressing the brief’s most wide-ranging implicaitons, Defendants argue that:

[F]ar from supporting application of this Court’s Order to the sale of cigarettes in Hong Kong, Clear the Air’s proposed brief highlights why overseas application of the Order would interfere with the sovereignty of other nations. For example, Clear the Air suggests that the use of the trademark “lights” violates Hong Kong law and the Framework Convention on Tobacco Control signed by China. . . . These obviously are legal issues that should be resolved by the Hong Kong or Chinese courts, not by this Court in the context of a federal RICO lawsuit. . . . [A]pplication of this Court’s Order to cigarette sales in Hong Kong or other overseas locations would not only extend RICO beyond its jurisdictional limits but would also violate principles of comity by usurping any ongoing or future examination of the lights issue by foreign sovereigns or entities.

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Texts follow of:

Clear the Air Motion to appear as Amicus (granted), September 27, 2006

Clear the Air Amicus Brief, September 27, 2006

Clear the Air/Hong Kong Intellectual Property Department Trademarks Letter, March 8, 2006

Defendants’ Opposition to Clear the Air’s Brief, October 12, 2006

Also Proveded is:

Clear the Air’s Application to Revoke Marlboro Lights Trademark, September 22, 2006

**———————————————————

Clear the Air Motion to appear as Amicus (granted), September 27, 2006

**———————————————————

UNITED STATES OF AMERICA,

Plaintiff,

V.

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

Defendants.

C.A. No. 99-CV-02496 (GK)

MOTION BY CLEAR THE AIR TO APPEAR AS AMICI CURIAE IN OPPOSITION TO CERTAIN DEFENDANTS’ MOTION FOR CLARIFICATION OR IN THE ALTERNATIVE FOR RELIEF UNDER RULES 52, 59 AND 60 WITH RESPECT TO THE COURT’S AUGUST 17, 2006 ORDER

Clear The Air respectfully requests that this Court grant it leave to appear as amicus curiae in opposition to the motion by the defendants for

“clarification that the Court does not intend that certain aspects of the Order - i.e., those provisions prohibiting the use of descriptors and the se requiring corrective statements at retail point-of-sale - apply to sales wholly outside the United States.”

A description of Clear The Air and the bases for granting it leave to appear as amicus curiae are set forth below. The Amicus brief is attached hereto as Exhibit 1.

Description

Clear The Air is an anti-air pollution non-profit group in Hong Kong, a Special Administrative Region of the People’s Republic of China. Clear The Air is committed to the introduction and implementation of measures to significantly reduce air pollution in Hong Kong.

Clear The Air has identified tobacco smoke as one of the major causes of air pollution that is making people sick in Hong Kong, including US citizens. This pollution harms people through both active and passive smoking.

[stamped:

RECEIVED

OCT 2 - 2006

NANCY MAYER Wittington, CLERK

U.S. DISTRICT COURT]

[handwritten:

Leave to file granted–10/10/06]

**———————————————————

How many people die of tobacco smoke in Hong Kong? 1

• Smoking kills 5,700 persons per year, 19% by passive smoking.

• Smoking accounts for 90% of lung cancer deaths in men, and more than 30% of all cancer deaths.

• In 2000, almost 34,500 people required hospitalization due to illnesses from smoking.

Our Chairperson and many Clear The Air members are US citizens and therefore members of the US public. Any decision by a US court that withholds protection from US citizens visiting and living abroad is of particular interest to us.

There are over 50,000 US citizens living in Hong Kong 2

Over a million US residents arrived in Hong Kong as tourists in 2005. 3

US citizens abroad are entitled to protection by the US Government. 4

“Americans at home and abroad face threats to their physical and economic well-being. The State Department protects our nation, its people, and our prosperity by helping to:

• Protect and assist American citizens who travel, conduct business, and live abroad.”

To effectively reduce air pollution you must do so at the source. If fewer children start smoking, and more children and adults stop smoking because they no longer believe that they are smoking “healthy” cigarette, then we believe we will reduce tobacco smoke pollution and the health impact on US citizens in Hong Kong.

—–

1 Hong Kong Council on Smoking and Health

hp//www.srnokefree.hk’cosh/ccs/detaiI.xmt?Iaen&11drid= 19

2 Trade and Industry Department, The Government of the Hong Kong SAR

www.tid.gov.hk!english/ab… I

3 Legislative Council Secretariat FSO1/05-06 jegco.ov.hk/yrO5O6/engIish/sec/1ibrary/QOffsOiçpff

4 US Department of State

future.state.gov/why/prot…

**———————————————————

CONCLUSION

We believe it is important that you be fully aware of the nature of the deception that US citizens in Hong Kong are facing from the marketing practices of the defendants to US citizens living and visiting Hong Kong.

For the foregoing reasons, Clear The Air respectfully requests that we be granted leave to appear as amicus curiae in this action.

Respectfully submitted,

Annelise Connell

Chairperson

Clear The Air

8/F Eastwood Centre, 5, A Kung Ngam Village Rd, Shaukeiwan, Hong Kong

Phone: Country Code (852) 2886-2655

DATED: September 27, 2006

**———————————————————

Clear the Air Amicus Brief, September 27, 2006

**———————————————————

Exibit 1.

BRIEF OF AMICUS CURAE BY CLEAR THE AIR

IN OPPOSITION

TO CERTAIN DEFENDANTS’ MOTION FOR CLARIFICATION

**———————————————————

UNITED STATES OF AMERICA,

Plaintiff,

V.

PHILIP MORRIS USA, INC. f/k/a

PHILIP MORRIS INCORPORATED, et al.,

Defendants.

C.A. No. 99-CV-02496 GK)

BRIEF OF AMICUS CURAE BY CLEAR THE AIR IN OPPOSITION TO CERTAIN DEFENDANTS’ MOTION FOR CLARIFICATION OR IN THE ALTERNATIVE FOR RELIEF UNDER RULES 52,59 AND 60 WITH RESPECT TO THE COURT’S AUGUST 17, 2006 ORDER

1. US citizens have a right to be protected from dangers known by the US Government to the health and safety of their families even if they live or travel outside the United States. We note from the “US Department of State for Youth” website that one of the duties of the US Government is to “Protect and assist American citizens who travel, conduct business, and live abroad.” 1

2. There are about 54,000 US citizens living in Hong Kong Special Administrative Region of the People’s Republic of China. 2

3. 1,143,089 US residents arrived in Hong Kong as tourists in 2005. 3

4. A major outlet for deception of US citizens in Hong Kong by the defendants is the duty free tobacco concession at the Hong Kong International Airport. Here, the defendants attempt to deceive over one million members of the US public and their children every year as they return by air to the United States and pass by or enter this outlet. 4

—–

1 4 Protect America

future.state.gov/why/prot…

2 Trade and Industry Department, The Government of the Hong Kong SAR

www.tid.gov.hk/english/ab…

3 Legislative Council Secretariat FSO 1/05-06

http://www Iegco.gov.hk/yr05-06/english/sec/Iibrary/O5O6fs01e.pdf

4 BAT “Note for the Tobacco Executive Committee” dated 14 Nov 1991; Philip Morris “Worldwide Duty Free” Executive Biographies

**———————————————————

5. The 7-11 and Circle-K retail chains are distributors of the defendants deceptively labeled tobacco products in Hong Kong. They have stores in 90% of the mass transit railway (MTR) stations. All US citizens using the MTR and entering these stores are exposed to the deceptively labeled tobacco products because the products are shown at eye level behind he cashier to all customers.

6. It is illegal in Hong Kong to register a Trade Mark that is “likely to deceive” the public. 6

7. The People’s Republic of China has ratified the Framework Convention on Tobacco Control. 7 Article 11 of the FCTC requires measures so that

(a) tobacco product packaging and labelling do not promote a tobacco product by any means that are false, misleading, deceptive or likely to create an erroneous impression about its character characteristics, health effects, hazards or emissions, including any term, descriptor, trademark, figurative or any other sign that directly or indirectly creates the false impression that a particular tobacco product is less harmful than other tobacco products. These may include term such as “low tar”, “light”, “ultra-light”, or “mild”;

8. The Hong Kong Government Intellectual Property Department (IPD), which is responsible for granting Trade Marks, had not by February, 2006 when Clear The Air contacted them, been informed by the defendant of the deceptive nature of descriptors on existing registered Trade Mark or pending Trade Mark applications. 8

9. The current court ruling in this case states that

“All Defendants, Covered Persons and Entities are permanently enjoined from making, or causing to be made in any way, any material false, misleading, or deceptive statement or representation, or engaging in any public relations or marketing endeavor that is disseminated to the United States public and that misrepresents or suppresses information concerning cigarettes.”

In March 2006 it was Clear The Air, not the defendants, that took the initiative to inform the IPD of the deceptive nature of certain descriptors included in pending and registered trademarks resulting in changes to the IPD Trade Mark Work Manual. 8

We believe that the defendants continued failure to inform the IPD of the deceptive nature of certain of their existing trademarks and pending Trade Mark applications is in contravention of your order and is an attempt to suppress information that would then be disseminated to US citizens n Hong Kong.

10. On 22 September 2006 an objection was filed with the IPD in Hong Kong to the registered Trade Mark “Marlboro Lights” as “likely to deceive” the public. Your ruling will help determine if the Trade Mark owner wil be compelled to provide information or believe they are entitled to suppress information that would be disseminated to US citizens in Hong Kong regarding this deceptive Trade Mark.

CONCLUSION

US citizens have a right to be protected when living abroad. It is not lawful in Hong Kong to have a Trade Mark that is “likely to deceive”. US citizens visiting and living abroad are entitled to the same protection as those living in the U as we continue to be members of the US public. Therefore, we ask that you do not exempt the Hong Kong Special Administrative Region of the People’s Republic of China, in your ruling on remedies.

Respectfully submitted, A I

Annelise Connell Chairperson Clear The Air

8/F Eastwood Centre, 5, A Kung Ngam Village Rd, Shaukeiwan, Hong Kong Phone: Country Code (852) 2886-2655

DATED: September 27, 2006

8 lbid.

**———————————————————

Clear the Air HK IP Dept Trademarks Letter, March 8, 2006

**———————————————————

Exhibit 2

Letter from Hong Kong Government Intellectual Property Department regarding deceptive descriptors on Trade Marks

**———————————————————

peter.cheung@ipd.pov.hk wrote on 3/812006, 5:51 PM:

Dear Miss ConnelL

Thank you for your mail dated 1 March.

We have again taken note of the issues raised in your previous emaiLs.

The working practice of trademark examiners under the Trade Marks Ordinance Cal 559 has been set out in the Trade Mark Work Manual, a public document published here www.ipd .gov hk/eri/inteLLectuaL_property/trademarks registry/AbsoLute%20grounds%20for%20refusat pdf

Regarding the paragraphs on “Section 11 (4)(b) - marks that are likely to deceive”, we have inserted a new paragraph, which will bring the relevant matters in the FCTC to the attention of our examiners when they exercise their discretion in deciding whether any given mark is misleading. Such discretion is based on established trademark law practice, and has regard to the particular circumstances of each case.

Regards

Yours sincerely

Peter Cheung

for Director of Intellectual Property

**———————————————————

JD Opposition to Clear the Air, October 12, 2006

**———————————————————

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

and

TOBACCO-FREE KIDS ACTION FUND,

et al.,

Plaintiff-Intervenors,

v.

PHILIP MORRIS USA INC. (f/k/a

PHILIP MORRIS INCORPORATED),

et al.,

Defendants.

Civil Action No. 99-CV-2496 (GK)

Next Scheduled Court Appearance: None

CERTAIN DEFENDANTS’ OPPOSITION TO MOTION BY CLEAR THE AIR TO APPEAR AS AMICI CURIAE IN OPPOSITION TO CERTAIN DEFENDANTS’ MOTION FOR CLARIFICATION OR IN THE ALTERNATIVE FOR RELIEF UNDER RULES 52, 59 AND 60 WITH RESPECT TO THE COURT’S AUGUST 17, 2006 ORDER

The undersigned defendants respectfully oppose the request of Clear the Air — a non-profit corporation devoted to fighting air pollution in Hong Kong — to submit an amicus brief.1

First, notwithstanding the rule that an amicus brief focus on the “legal principles of the case,”2 the proposed brief submitted by Clear the Air contains no legal analysis that would be helpful to the Court. Defendants’ previous submission has outlined the limits upon

—–

1 Defendants note that they were not served with the motion by Clear the Air and learned of its filing only upon receiving electronic notification on October 10 of this Court’s order granting leave to file.

2 Russell v. Bd. of Plumbing Examiners, 74 F. Supp. 2d 349, 351 (S.D.N.Y. 1999); see also New England Patriots Football Club, Inc. v. Univ. of Colorado, 592 F.2d 1196, 1198 n.3 (1st Cir. 1979) (amicus brief should provide information “of some matter of law” and not a “highly partisan…account of the facts”).

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application of RICO to overseas conduct. E.g., Certain Defendants’ Reply Memorandum In Support of Motion for Clarification or in the Alternative for Relief Under Rules 52, 59, and 60 with Respect to the Court’s August 17, 2006 Order (“Reply Mem.”), at 8-9; see also North South Fin. Corp. v. Al-Turki, 100 F.3d 1046, 1052 (2d Cir. 1996). By contrast, the proposed amicus submission fails to mention RICO at all. Instead, it is premised upon the generic argument that “U.S. citizens have a right to be protected when living abroad.” (p. 3). The only citation for this proposition — which has nothing to do with RICO — is a reference to a statement on the “U.S. Department of State for Youth” website that it is a duty of the State Department to “protect and assist American citizens who travel, conduct business, and live abroad.” ¶ 1. Obviously, this statement about the duties of the U.S. State Department has no relevance to the issue of whether RICO has worldwide application or governs the sale of cigarettes in Hong Kong.

Second, the amicus submission consists almost entirely of factual assertions that are not part of the record in this case and that were never the subject of an evidentiary hearing.3 It is inappropriate for an amicus to interject new factual assertions or evidence into a case, particularly — as here — long after the trial has concluded. See, e.g., Ministry of Def. of the Islamic Republic of Iran v. Gould, Inc., 969 F.2d 764, 773 (1992) (“declin[ing] to go outside the record to consider new facts submitted by a non-party [amicus]”); Smith v. United States, 343 F.2d 539, 541 (5th Cir. 1965) (court may not “consider the new factual material included in the brief of the amicus”); Gandee v. Glaser, 785 F. Supp. 684, 686 (S.D. Ohio 1992) (amici “ought

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3 For example, the motion for leave to appear as amicus curiae states that “Clear the Air has identified tobacco smoke as one of the major causes of air pollution” in Hong Kong. (Motion at 1). But Clear the Air’s website includes a pie chart purporting to identify the “sources of air pollution,” which indicates that 50% of air pollution comes from power plants, 25% from vehicles, and 15% from building dust. www.cleartheair.org.hk. The chart does not even mention cigarettes, which presumably are lumped together with various other sources of air pollution in the 3% “other” category.

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not to be allowed to enter evidence into the record at this stage of the litigation [i.e., after trial].”) Indeed, allowing amici unilaterally to interject new fact assertions into the case long after the trial has concluded would violate the “cardinal principle of our system of justice that factual disputes must be heard in open court and resolved through trial-like evidentiary proceedings.” United States v. Microsoft, 253 F.3d 34, 101 (D.C. Cir. 2001).

Third, far from supporting application of this Court’s Order to the sale of cigarettes in Hong Kong, Clear the Air’s proposed brief highlights why overseas application of the Order would interfere with the sovereignty of other nations. For example, Clear the Air suggests that the use of the trademark “lights” violates Hong Kong law and the Framework Convention on Tobacco Control signed by China. ¶¶ 6-7. These obviously are legal issues that should be resolved by the Hong Kong or Chinese courts, not by this Court in the context of a federal RICO lawsuit. The proposed brief also emphasizes a proceeding that Clear the Air has initiated before the Intellectual Property Department of Hong Kong contending that the “Marlboro Lights” trademark is “likely to deceive.” ¶ 10; Ex. B. But application of this Court’s Order to cigarette sales in Hong Kong or other overseas locations would not only extend RICO beyond its jurisdictional limits but would also violate principles of comity by usurping any ongoing or future examination of the lights issue by foreign sovereigns or entities. See generally Certain Defendants’ Memorandum of Law In Support of Motion for Clarification or in the Alternative for Relief Under Rules 52, 59, and 60 with Respect to the Court’s August 17, 2006 Order, at 9-12; Reply at 8-9; McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U.S. 10, 21-22 (1963) (applying principles of comity).

Finally, Clear the Air’s submission violates this Court’s Order No. 1004, which required all prospective amici to submit their requests for leave to file by noon on September 12,

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2005. Clear the Air’s filing is over a year past this deadline and comes only in connection with a motion for clarification or, in the alternative relief under Rules 52, 59, and 60. There has already been a surfeit of amicus filings in this case (50 amici and six briefs in all) and there is no need for an additional submission at this late date.

Respectfully submitted,

/s/ Jane E. Chang 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

Fax: (202) 282-5100

Dan K. Webb

Thomas J. Frederick

WINSTON & STRAWN LLP

35 West Wacker Drive

Chicago, Illinois 60601-9703

Telephone: (312) 558-5600

Fax: (312) 558-5700

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

Fax: (212) 757-3990

Attorneys for Defendants

Altria Group Inc. and Philip Morris USA Inc.

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/s/ Jane E. Chang for

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

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

JONES DAY

51 Louisiana Avenue, N. W.

Washington, D.C. 20001-2113

Telephone: (202) 879-3939

Fax: (202) 626-1700

Paul G. Crist

JONES DAY

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114-1190

Telephone: (216) 586-3939

Fax: (216) 579-0212

Attorneys for Defendant

R. J. Reynolds Tobacco Company

/s/ Jane E. Chang 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

Fax: (202) 879-5200

David M. Bernick

Stephen R. Patton

Renee D. Smith

KIRKLAND & ELLIS LLP

200 East Randolph Drive, Suite 5900

Chicago, Illinois 60601

Telephone: (312) 861-2000

Fax: (312) 861-2200

Attorneys for Defendant

Brown & Williamson Tobacco Holdings, Inc.

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/s/ Jane E. Chang for

J. William Newbold

Michael B. Minton

THOMPSON COBURN LLP

One US Bank Plaza, Suite 3500

St. Louis, Missouri 63101-1693

Telephone: (314) 552-6000

Fax: (314) 552-7597

Gene E. Voigts

SHOOK, HARDY & BACON LLP

2555 Grand Blvd.

Kansas City, Missouri 64108-2613

Telephone: (816) 474-6550

Fax: (816) 421-2708

Attorneys for Defendant

Lorillard Tobacco Company

/s/ Jane E. Chang for

Bruce G. Sheffler

David L. Wallace

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)

DOJ Files Notice of Appeal

October 18, 2006 3:29 am by Gene Borio

Text follows of:

DOJ Appeal Notice, October 16, 2006

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA _________________________________________

UNITED STATES OF AMERICA,

Plaintiff,

and

Civil Action TOBACCO-FREE KIDS ACTION FUND, et al.,

No. 99-CV-02496 (GK)

Plaintiff-Intervenors,

v.

PHILIP MORRIS USA INC.,

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

Defendants.

__________________________________________

NOTICE OF APPEAL

Notice is hereby given this 16th day of October, 2006, that the United States hereby appeals to the United States Court of Appeals for the District of Columbia Circuit from the judgment of this Court entered on the 17th day of August, 2006.

Appeal from this judgment includes any and all orders antecedent and ancillary thereto, including any and all interlocutory judgments, decrees, decisions, rulings, and opinions that merged into and became part of the judgment, that shaped the judgment, that are related to the judgment, and upon which the judgment is based.

Dated: October 16, 2006

Washington, DC

Respectfully submitted,

PETER D. KEISLER

Assistant Attorney General

/s/ Stuart Schiffer

STUART SCHIFFER

Deputy Assistant Attorney General

/s/ Linda M. McMahon

LINDA M. McMAHON (DC Bar No. 446130)

MARK B. STERN

ALISA B. KLEIN

MARK R. FREEMAN

SARANG V. DAMLE

Attorneys, Appellate Staff

United States Department of Justice

Post Office Box 14524

Ben Franklin Station

Washington, DC 20044-4524

(202) 616-4185

United States of America

Intervenors File Proposed Corrective Statements

October 18, 2006 3:13 am by Gene Borio

Text for Adverse Health Effects of Exposure To Secondhand Smoke

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We denied the harms of secondhand smoke. xxvii Here’s the truth:

Secondhand smoke contains 4,800 chemicalsxxviii…

Including more than 50 cancer-causing substances. xxix

Secondhand smoke kills more than 38,000 Americans each year. xxx

Paid for by [Company Name] under order of a Federal District Court.

**———————————————————

Text of:

Intervenors Correctives, October 16, 2006

**———————————————————

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

____________________________________

UNITED STATES OF AMERICA,

Plaintiff,

Civil Action No.

and

99-CV-2496 (GK)

TOBACCO-FREE KIDS ACTION FUND,

AMERICAN CANCER SOCIETY,

AMERICAN HEART ASSOCIATION,

AMERICAN LUNG ASSOCIATION,

AMERICANS FOR NONSMOKERS’

RIGHTS, and NATIONAL AFRICAN

AMERICAN TOBACCO PREVENTION

NETWORK,

Intervenors,

v.

PHILIP MORRIS USA, INC.,

f/k/a PHILIP MORRIS INCORPORATED,

et al.,

Defendants.

____________________________________

PLAINTIFF-INTERVENORS’ PROPOSED CORRECTIVE STATEMENTS AND SUPPORTING MEMORANDUM

October 16, 2006

Howard M. Crystal

D.C. Bar No. 446189

Katherine A. Meyer

D.C. Bar No. 244301

MEYER GLITZENSTEIN & CRYSTAL

1601 Connecticut Avenue, Suite 700

Washington, DC 20009

202-588-5206

TABLE OF CONTENTS

PAGE

INTRODUCTION . . . . . . . . . . 1

BACKGROUND . . . . . . . . . . . 3

DISCUSSION . . . . . . . . . . . .. 5

I. PUBLIC HEALTH INTERVENORS’ PROPOSED CORRECTIVE STATEMENTS . . . . . . . .. . . . . . . . . . . . . . . 5

A. Recommended Newspaper Text . . . . . . . .. . . 6

B. Recommended Text For Television Ads . . . .. . . . . . . . . . . 7

C. Recommended Onsert Text By Topic . . . .. . . . . . . . . . . . . 9

D. Recommended Text For Counter and Header Displays . . . 13

E. Recommended Text For Websites . . . .. . . . . . . . . . . . . . . 16

II. THIS PRECISE WORDING IS NECESSARY AND APPROPRIATE TO CORRECT DEFENDANTS’ SUCCESSFUL MISINFORMATION CAMPAIGNS CONCERNING EACH OF THESE ISSUES . . . .18

A. Overall Considerations For These Corrective Statements . 18

B. The Rationale For The Corrective Statements Public Health Intervenors Propose . . . . . . . .. . . . . 24

C. Additional Factors to Consider For Particular Media . . . .29

1. Onserts . . . . . . . .. . . . . . . . . 29

2. Counter-Top and Header Displays . . . .. . . . . . . . . 37

3. Television Ads . . . . . . . .. . . 37

4. Websites . . . . . . . .. . . . . . . . 38

5. Newspapers . . . . . . . .. . . . . 38

ii

III. THE COURT SHOULD ESTABLISH THE CRITERIA FOR THE DEVELOPMENT AND EXECUTION OF THE CORRECTIVE STATEMENTS . . . . . . . .. . . . . . . . . . . . . . 39

IV. THE COURT SHOULD ALSO ESTABLISH THE CRITERIA BY WHICH THE CORRECTIVE STATEMENTS ARE DEVELOPED AND DISPLAYED BY CONSULTING WITH EXPERTS AND REQUIRING APPROPRIATE

MARKET TESTING . . . . . . . .. . . . . . . . . . 41

CONCLUSION . . . . . . . . . . . 44

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ____________________________________

UNITED STATES OF AMERICA,

Plaintiff,

Civil Action No. 99-CV-2496 (GK)

and

TOBACCO-FREE KIDS ACTION FUND,

et al.

Plaintiff-Intervenors

v.

PHILIP MORRIS USA, INC., et al.,

Defendants.

____________________________________


PLAINTIFF-INTERVENORS’ PROPOSED CORRECTIVE STATEMENTS AND SUPPORTING MEMORANDUM

INTRODUCTION

Plaintiff-Intervenors – Tobacco-Free Kids Action Fund, American Cancer Society, American Heart Association, American Lung Association, Americans for Nonsmokers’ Rights, and National African American Tobacco Prevention Network (hereinafter “the Public Health Intervenors”) – hereby submit proposed corrective statements on (i) the adverse health effects of smoking, (ii) the addictiveness of smoking, (iii) the lack of health benefits from “light” cigarettes, (iv) defendants’ manipulation of cigarettes for nicotine delivery, and (v) the adverse effects of secondhand smoke. Order # 1015, at 4. The Court has made overwhelming findings that, as to each of these issues, although Defendants were fully aware of the true facts, they nevertheless “consistently, repeatedly, and with enormous skill and sophistication, denied these facts to the public, to

the Government, and to the public health community.” Final Opinion (“Op.”) at 3-4. In light of these findings, the Court has directed Defendants to make corrective statements in the five media that “Defendants have themselves historically used to promulgate false smoking and health messages.” Id. at 1636.

The Court has recognized the Public Health Intervenors’ “clear interest in advancing the public health and in the remedies proposed in this case.” Op. at 14. As regards these corrective statements in particular, the Public Health Intervenors are particularly well-suited to propose appropriate corrective statements in light of their substantial experience in crafting public health messages designed to counter the very misinformation that these corrective statements are designed to address.

As directed by the Court, Part I of this submission contains the Public Health Intervenors’ proposal for the exact language of the corrective statements for all five topics in the five media that the Court has identified. In Part II, we will explain the factors the Court should consider in evaluating the proposed corrective statements, and explain why the specific wording we are proposing is critical to correcting Defendant’s long history of deliberate misinformation concerning each of these topics.

In Part III, we further explain that, in addition to the directing the precise language of the corrective statements, it is imperative that the Court also establish the specific criteria governing the execution of the corrective statements in each of the five media. In particular, in light of the Court’s specific findings regarding Defendants’ long and well-established history of manipulating these media to communicate the very misinformation the Court is striving to correct, in order for these to be truly “corrective” statements the Court must approve all aspects of the message, including, inter alia, the

2

print sizes and colors, the voices, and the use of graphics and other images to accompany the text. Indeed, as we will explain, were the Court to permit the Defendants free reign over these elements of the corrective statements, there is a serious risk that the statements will prove ineffective in accomplishing their stated purpose.

Finally, in Part IV, we will explain that, to make the corrective statements as effective as possible, the Court should also consult with appropriate independent experts to evaluate the proposed messages, and undertake basic market testing research to evaluate their effectiveness. Indeed, since this is the very industry-standard process that Defendants undertook to insure that their prior advertising effectively misinformed the public about each of these issues, only by utilizing the same kind of market testing can the Court be assured that the corrective statements will actually correct those misstatements, and meaningfully inform the public of the truth about addictiveness, smoking’s adverse health effects, nicotine manipulation, “light” cigarettes, and the dangers of secondhand smoke.

BACKGROUND

After a nine month trial, on August 17, 2006 this Court issued its Memorandum Opinion and Order finding Defendants liable for massive violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”). 18 U.S.C. § 1961, et seq.. Among myriad other unlawful activities, the Court found that Defendants had engaged in a deliberate, decades-long campaign to deceive the public concerning the adverse health effects of smoking, cigarette addictiveness and Defendants’ manipulation of cigarette contents to enhance addictiveness, the effects of secondhand smoke, and the true health effects of “light” cigarettes. Thus, the Court found that “each and every one of these

3

Defendants repeatedly, consistently, vigorously – and falsely – denied the existence of any adverse health effects from smoking,” Op. at 330, and made similar findings on each of these other matters.1 In light of the Court’s findings that “Defendants have made false, deceptive, and misleading public statements about cigarettes and smoking from at least January 1954, when the Frank Statement was published up until the present,” id. at 1632, among other remedies the Court has ordered:

Defendants to make corrective statements about addiction (that both nicotine and cigarette smoking are addictive); the adverse health effects of smoking (all the diseases which smoking has been proven to cause); the adverse health effects of exposure to ETS (all the diseases which exposure to ETS has been proven to cause); their manipulation of physical and chemical design of cigarettes (that Defendants do manipulate design of cigarettes in order to enhance the delivery of nicotine); and light and low tar cigarettes (that they are no less hazardous than full-flavor cigarettes).

Id. at 1636. Before deciding the specific parameters of these statements, the Court directed that the parties “submit a proposal for the exact wording of such corrective statements, with any supporting materials deemed necessary.” Order # 1015, at 4.

—–

1 E.g. Id. at 445 (“Despite the extensive and detailed knowledge possessed by Defendants for decades about the addictive qualities of nicotine and smoking, Defendants have publicly made false and misleading denials of the addictiveness of smoking, as well as nicotine’s role in causing that addiction”); 636 (“Despite the overwhelming evidence of their research into and utilization of methods to control the amount and delivery of nicotine in cigarettes, Defendants have denied, repeatedly and publicly, that they manipulate nicotine content and delivery in cigarettes in order to create and sustain addiction”); 971 (although “Defendants have known for decades that there is no clear health benefit from smoking low tar/low nicotine cigarettes . . . Defendants extensively – and successfully – marketed and promoted their low tar/light cigarettes as less harmful alternatives to full-flavor cigarettes”); 1384 (“[D]espite their own internal recognition of the link between ETS and disease in nonsmokers, Defendants made numerous public statements denying the linkage”).

4


DISCUSSION

I. PUBLIC HEALTH INTERVENORS’ PROPOSED CORRECTIVE STATEMENTS

Below are the Public Health Intervenors’ proposed corrective statements organized by the five media in which the Court has Ordered that these statements be made. As directed by the Court, one complete text containing all five corrective statements is proposed for the newspaper advertisements and websites. For the countertop and header displays, onserts, and television advertisements, the Public Health Intervenors are proposing a separate corrective statement for each of the five topics identified by the Court.

As noted, immediately following these proposals the Public Health Intervenors will explain why the specific wording proposed here is critical to correcting Defendants’ long-standing efforts to deliberately mislead the public on each of these topics. See Part II, infra. We will then explain why, in order to make these corrective statements as effective as possible, the Court should establish specific criteria for their execution, including consultation with independent experts and basic market research. See Parts III and IV, infra.

5


A. Recommended Newspaper Text*

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We told you that smoking and secondhand smoke were not dangerous and that smoking was not addictive. We falsely marketed “light” and “low-tar” cigarettes as less harmful than regular cigarettes to keep smokers from quitting – even when we knew they were not.i

Here’s the truth….

• Smoking kills 1200 Americans every dayii from cancer, heart attacks, and many other illnesses. It damages almost every organ in the body. iii

• Smoking is very addictiveiv and therefore very hard to quit.v We even manipulated cigarettes by adding things like ammonia to make them more addictive. vi,vii,viii,ix

• There is no health benefit from smoking “light”, “low-tar”, “ultra-light” , “mild”, or “natural” cigarettes.x

• Secondhand smoke is a proven cause of cancer, heart attacks, and other illness. xi It kills more than 38,000 Americans each year. xii

Paid for by [Company Name] under order of a Federal District Court.

—–

* For the Court’s convenience, the Public Health Intervenors are providing, in endnotes, the evidence supporting each of the elements in their proposed corrective statements. To be clear, the Public Health Intervenors are not suggesting that the Court require that these endnotes be included in the corrective statements themselves.

6

B. Recommended Text for Television Ads

(Each line of text should be on-screen separately)


Text for Adverse Health Effects of Smoking

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We told you that smoking wasn’t dangerous. xiii But here’s the truth:

Smoking kills 1200 Americans every dayxiv from cancer, heart attacks, and many other illnesses.

That’s more deaths than from murder, AIDS, suicide, drugs, car crashes and alcohol combined. xv

Paid for by [Company Name] under order of a Federal District Court.

________________________________________________________________________


Text for Addictiveness of Smoking and Nicotine

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We told Congress under oath that we believed smoking is not addictive.

We told you that it’s easy to quit. xvi

Here’s the truth:

Smoking is very addictivexvii and therefore very hard to quit. xviii

7

We even manipulated cigarettes to make them more addictive. xix


Paid for by [Company Name] under order of a Federal District Court.

Text for Lack of Any Significant Health Benefit from Smoking “Low-tar,” “Light,” “Ultra light,” “Mild,” and “Natural” Cigarettes

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We falsely marketed “low tar” and “light” cigarettes as less harmful than regular cigarettes to keep people smoking…

Even though we knew they were NOT less harmful. xx

Here’s the truth:

ALL cigarettes cause cancer, lung disease, heart attacks and premature death—lights, low-tar, ultra lights and naturals.xxi

Paid for by [Company Name] under order of a Federal District Court.

_____________________________________________________________________


Text for Manipulation of Cigarette Design and Composition To Ensure Optimum Nicotine Delivery

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We denied we controlled the level of nicotine delivered in cigarettes. xxii Here’s the truth:

8

Cigarettes are a finely-tuned nicotine delivery device. xxiii

We research and develop methods, such as adding ammonia…

So cigarettes deliver doses of nicotine that create and sustain addiction. xxiv,xxv,xxvi

Paid for by [Company Name] under order of a Federal District Court.

________________________________________________________________________


Text for Adverse Health Effects of Exposure To Secondhand Smoke

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We denied the harms of secondhand smoke. xxvii Here’s the truth:

Secondhand smoke contains 4,800 chemicalsxxviii…

Including more than 50 cancer-causing substances. xxix

Secondhand smoke kills more than 38,000 Americans each year. xxx


Paid for by [Company Name] under order of a Federal District Court.

C. Recommended Onsert Text by Topic

(all text should be in English, followed by Spanish)

Text for Adverse Health Effects of Smoking

Front Cover (visible on front of cigarette pack)


For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

See inside for the truth.

[Graphic visual regarding adverse health effects of smoking placed here]

9

Inside Panel(s) (visible when onsert is unfolded)


We told you that smoking wasn’t dangerous. We even paid scientists to raise doubts about the health effects of smoking. xxxi

Here’s the truth:

• 1200 Americans die every day from smokingxxxii–it harms almost every organ in the body, causing heart attacks, strokes, emphysema and almost one third of all cancers.xxxiii

• More people die from smoking than from murder, AIDS, suicide, drugs, car crashes and alcohol combined.xxxiv

• In fact, cigarettes kill one half of all lifelong smokersxxxv That means, if you, your spouse, and your parents are lifelong smokers, the chances are that two of you will die from it.

• For every death from smoking, there are another 20 people living with at least one serious illness from smoking. That’s over 8 million Americans at any given time.xxxvi


Paid for by [Company Name] under order of a Federal District Court.

Text for Addictiveness of Smoking and Nicotine

Front Cover (visible on front of cigarette pack)


For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

See inside for the truth.

[Graphic visual addressing smoking and nicotine placed here]

Inside Panel(s) (visible when onsert is unfolded)

We told Congress under oath that we believed smoking is not addictive. xxxvii We told you that it’s easy to quit.

Here’s the truth:

• Smoking is very addictive. xxxviii And it’s not easy to quit. xxxix

• We manipulated cigarettes to make them more addictive. xl

• When you smoke, the nicotine actually changes the brain—that’s why quitting is so hard.xli

10

Paid for by [Company Name] under order of a Federal District Court.

________________________________________________________________________

Text for Lack of Any Significant Health Benefit from Smoking “Low-tar,” “Light,” “Ultra light,” “Mild,” and “Natural” Cigarettes

Front Cover (visible on front of cigarette pack)


For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

See inside for the truth.

[Graphic visual regarding lack of health benefit from smoking lights, low tars placed here]

Inside Panel(s) (visible when onsert is unfolded)


We falsely marketed low tar and light cigarettes as less harmful than regular cigarettes to keep people smoking and sustain our profits.

We knew that many smokers switch to low tar and light cigarettes rather than quitting because they believe low tar and lights are less harmful. They are NOT. xlii Here’s the truth:

• Just because lights and low-tar cigarettes feel smoother, that doesn’t mean they are any better for you. Light cigarettes can deliver the same amounts of tar and nicotine as regular cigarettes.xliii

• ALL cigarettes cause cancer, lung disease, heart attacks and premature death— lights, low-tar, ultra lights and naturals.xliv


Paid for by [Company Name] under order of a Federal District Court.

________________________________________________________________________

Text for Manipulation of Cigarette Design and Composition To Ensure Optimum Nicotine Delivery

Front Cover (visible on front of cigarette pack)

For decades, we deliberately misled the American Public about the health effects of smoking.

11

A Federal District Court is requiring us to make this statement.

See inside for the truth.

[Graphic visual regarding manipulation of design and composition placed here] Inside Panel(s) (visible when onsert is unfolded)

For decades, we falsely denied that we controlled the level of nicotine delivered in cigarettes.xlv Here’s the truth:

• Cigarettes are a finely-tuned nicotine delivery device designed to addict peoplexlvi.

• We control nicotine delivery to create and sustain smokers’ addiction, because that’s how we keep customers coming back. xlvii

• We also add chemicals, such as ammonia, to enhance the impact of nicotine and make cigarettes taste less harsh.xlviii,xlix

• When you smoke, the nicotine actually changes the brain—that’s why quitting is so hard.l

Paid for by [Company Name] under order of a Federal District Court.

_____________________________________________________________________

Text for Adverse Health Effects of Exposure To Secondhand Smoke

Front Cover (visible on front of cigarette pack)


For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

See inside for the truth.

[Graphic visual regarding adverse health effects of secondhand smoke placed here] Inside Panel(s) (visible when onsert is unfolded)


For decades we denied the harms of secondhand smoke.

We joined with other tobacco companies to undermine and discredit the scientific consensus that secondhand smoke causes disease. li

But here’s the truth from the U.S. Surgeon General and National Cancer Institute:

12

• Secondhand smoke contains 4,800 chemicalslii and more than 50 cancer-causing substances. liii Chemicals include formaldehyde, benzene, vinyl chloride, arsenic, ammonia, and hydrogen cyanide.liv

• Secondhand smoke has been proven to cause lung cancer and heart attackslv, and kills over 38,000 Americans each year.lvi

• There is no risk-free exposure to secondhand smoke.lvii

• Separating smokers from nonsmokers, cleaning the air, and ventilating buildings cannot eliminate exposures of nonsmokers to secondhand smoke.lviii


Paid for by [Company Name] under order of a Federal District Court.

D. Recommended Text for Counter and Header Displays

(Translated to Spanish for Appropriate Markets)


Text for Adverse Health Effects of Smoking

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We told you smoking wasn’t dangerous. We even paid scientists to raise doubts about the health effects of smoking. lix Here’s the truth:

Smoking kills 1200 Americans every day from cancer, heart attacks, and many other illnesses. lx

That’s more deaths than from murder, AIDS, suicide, drugs, car crashes and alcohol combined.lxi

[Graphic visual regarding adverse health effects of smoking placed here]

Paid for by [Company Name] under order of a Federal District Court.

________________________________________________________________________

13


Text for Addictiveness of Smoking and Nicotine

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We told Congress under oath that we believed smoking is not addictive. We told you it’s easy to quit. lxii Here’s the truth:

Smoking is very addictivelxiii and therefore very hard to quit.lxiv

[Graphic visual addressing smoking and nicotine placed here]

Paid for by [Company Name] under order of a Federal District Court.

________________________________________________________________________


Text for Lack of Any Significant Health Benefit from Smoking “Low-tar,” “Light,” “Ultra light,” “Mild,” and “Natural” Cigarettes

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We marketed “low tar” and “light” cigarettes as less harmful than regular cigarettes to keep people smoking, knowing they were NOT less harmful. lxv Here’s the truth:

ALL cigarettes cause cancer, lung disease, heart attacks and premature death—lights, low-tar, ultra lights and naturals.lxvi

[Graphic visual regarding lack of health benefit from smoking lights, low tars placed here]

Paid for by [Company Name] under order of a Federal District Court.

________________________________________________________________________

14


Text for Manipulation of Cigarette Design and Composition To Ensure Optimum Nicotine Delivery

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We falsely denied that we controlled the level of nicotine delivered in cigarettes. lxvii

Here’s the truth:

Cigarettes are a finely-tuned nicotine delivery device. lxviii

We research and develop methods so cigarettes deliver doses of nicotine that create and sustain addiction. lxix,lxx,lxxi

[Graphic visual regarding manipulation of design and composition placed here]

Paid for by [Company Name] under order of a Federal District Court.

________________________________________________________________________


Text for Adverse Health Effects of Exposure To Secondhand Smoke

For decades, we deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

We denied the harms of secondhand smoke. lxxii Here’s the truth:

Secondhand smoke contains 4,800 chemicalslxxiii, including more than 50 cancer-causing substances.

15

Secondhand smoke causes lung cancer, heart attacks, and other illnesslxxiv, and kills more than 38,000 Americans each year. lxxv

[Graphic visual regarding adverse health effects of secondhand smoke placed here]

Paid for by [Company Name] under order of a Federal District Court.

E. Recommended Text for Websites

(On the site, there should be one option to click on for English text; another option to click on for Spanish text)


We deliberately misled the American Public about the health effects of smoking.

A Federal District Court is requiring us to make this statement.

For decades, we told you that smoking wasn’t dangerous. We even paid scientists to raise doubts about the health effects of smoking. lxxvi Here’s the truth:

• 1200 Americans die every day from smokinglxxvii–it harms almost every organ in the body, causing heart attacks, strokes, emphysema and almost one third of all cancers.lxxviii

• More people die from smoking than from murder, AIDS, suicide, drugs, car crashes and alcohol combined.lxxix

• In fact, cigarettes kill one half of all lifelong smokers.lxxx That means if you, your spouse, and your parents are lifelong smokers, the chances are that two of you will die from it.

• For every death from smoking, there are another 20 people living with at least one serious illness from smoking. That’s over 8 million Americans at any given time.lxxxi

We told Congress under oath that we believed smoking is not addictive. We told you that it’s easy to quit. lxxxii Here’s the truth:

• Smoking is very addictive.lxxxiii And it’s not easy to quit.lxxxiv

• We manipulated cigarettes to make them more addictive.

• When you smoke, the nicotine actually changes the brain—that’s why quitting is so hard.lxxxv

16


We falsely marketed low tar and light cigarettes as less harmful than regular cigarettes to keep people smoking and sustain our profits.

We knew that many smokers switch to low tar and light cigarettes rather than quitting because they believe low tar and lights are less harmful.lxxxvi They are NOT. Here’s the truth:

• Just because lights and low-tar cigarettes feel smoother, that doesn’t mean they are any better for you. Light cigarettes can deliver the same amounts of tar and nicotine as regular cigarettes.lxxxvii

• ALL cigarettes cause cancer, lung disease, heart attacks and premature death— lights, low-tar, ultra lights and naturals.lxxxviii

For decades, we falsely denied that we controlled the level of nicotine delivered in cigarettes.lxxxix Here’s the truth:

• Cigarettes are a finely-tuned nicotine delivery device designed to addict peoplexc.

• We control nicotine delivery to create and sustain smokers’ addiction, because that’s how we keep customers coming back.

• We also add chemicals, such as ammonia, to enhance the impact of nicotine and make cigarettes taste less harsh.xci,xcii

• When you smoke, the nicotine actually changes the brain—that’s why quitting is so hard.xciii


For decades we denied the harms of secondhand smoke. We joined with other tobacco companies to undermine and discredit the scientific consensus that secondhand smoke causes disease.xciv

But here’s the truth from the U.S. Surgeon General and National Cancer Institute:

• Secondhand smoke contains 4,800 chemicalsxcv and more than 50 cancer-causing substances. xcvi Chemicals include formaldehyde, benzene, vinyl chloride, arsenic, ammonia, and hydrogen cyanide.xcvii

• Secondhand smoke has been proven to cause lung cancer and heart attacksxcviii and kills over 38,000 Americans each year.xcix

• There is no risk-free exposure to secondhand smoke.c

• Separating smokers from nonsmokers, cleaning the air, and ventilating buildings cannot eliminate exposures of nonsmokers to secondhand smoke.ci

17


II. THIS PRECISE WORDING IS NECESSARY AND APPROPRIATE TO CORRECT DEFENDANTS’ SUCCESSFUL MISINFORMATION CAMPAIGNS CONCERNING EACH OF THESE ISSUES.

A. Overall Considerations For These Corrective Statements

The Court-Ordered corrective statements must correct decades of disinformation and misinformation propagated by the Defendants as a central element of their fraud.

This Court has documented in meticulous detail the effective public relations, marketing and advertising efforts of the Defendant tobacco companies over the past fifty years that are at the very heart of their fraudulent enterprise. These efforts began in 1953 with the issuance of the “Frank Statement to Cigarette Smokers,” described by the Court as “an effective public relations step.” Op. at 26. The Court went on to describe the Defendants’ ensuing half century of lucrative efforts to sell their deadly products as, by way of just a few examples, “highly sophisticated,” 991, 1208, 1514, 1645, “intense,” id. at 1506, “massive,” id. at 980, 998, 1514, and most important, “effective,” passim, and “phenomenally successful.” Id. at 1521. Moreover, these campaigns were executed against a backdrop of nearly limitless resources, rising to almost $12 billion of marketing and promotional expenditures in 2001, the most recent year for which there is evidence in the record. Id. at 1122. 1

For these statements to prevent and restrain future RICO violations, they must be crafted taking into account the best available scientific knowledge about how to communicate effectively to the public, as the Defendants have done for so many years to sow confusion, disparage mainstream scientific consensus and sell their products. The corrective statements must take into account the lessons of public persuasion, honed to

—–

1 As subsequent Federal Trade Commission reports make clear, these expenditures have continued to rise, reaching $15.15 billion in 2003. Op. at 1521.

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new levels by the tobacco industry, so that they effectively communicate the required messages to the American public.2 It is also important to evaluate the proposed communications to insure that they are not crafted in such a way that they do more to enhance the image of the Defendants than to inform and educate the public. See opinion at 1636. Similarly, care must be taken to insure that the statements do not unintentionally serve the same role as the industry’s ineffective, so-called “youth smoking prevention” campaigns. Op. at 1164.

In fact, in the Court’s final Opinion, it detailed the ways in which the Defendants Youth Smoking Prevention programs are not designed to effectively prevent youth smoking. Op. at 1164-1173. Internal industry documents suggest that Defendants designed their Youth Smoking Prevention programs for public relations rather than efficacy in youth smoking prevention. Id. at 1172.

When Defendants have had control over the development and production of public health or public education campaigns in the past, numerous studies have concluded that these campaigns were ineffective. More specifically, when the “We Card” program, promoted by the tobacco industry as a voluntary means by which they were helping keep underage kids from purchasing tobacco products, was evaluated, it was found to have no impact. The rate of illegal underage sales for stores with “We Card” and other tobacco industry signs was the same as for stores with no signs at all and much higher than stores with government signs prohibiting illegal sales to minors.

Compliance increased only when the tobacco industry signs were coupled with

—–

2 Arens, Contemporary Advertising, 10th edition, 2005, also available at the website of the Advertising Educational Foundation, www.aef.com/on_campus/cla…

19

government signs.3 Numerous studies found the Philip Morris youth prevention campaign, “Think. Don’t Smoke” to be ineffective.4 In several of these studies, the ads were found to have no effect on youth, and in one study, youth who had been exposed to the ads were actually more open to smoking. A qualitative research study in Scotland found that a European youth smoking prevention ad campaign sponsored by several tobacco companies was deemed “unrealistic and lacking credibility.”5 Furthermore, a 2006 study found not only that exposure to tobacco company youth-targeted smoking prevention advertising generally had no beneficial outcomes for youths, but that exposure to tobacco company parent-targeted advertising may have harmful boomerang effects on youths, especially in grades 10 and 12.6

The literature includes numerous examples of corrective advertising, as well of advertising generally, which shed light on the key questions before this Court. The analyses of corrective communications, principally in the context of Federal Trade Commission orders, confirm that the questions raised in crafting effective corrective communications are no different from the questions routinely asked in connection with

—–

3 Cowling, D.C. & Robins, D.G. “Rate of Illegal Tobacco Sales to Minors Varies by Sign Type in California”, Research Letters, American Journal of Public Health, November 2000, Vol. 90, No. 11.

4 Farrelly M. et al. Getting to the Truth: Evaluating National Tobacco Countermarketing Campaigns. Am J Public Health. 2002;92:901–907; American Legacy Foundation. Getting to the Truth: Assessing Youths’ Reactions to the truth(sm) and “Think. Don’t Smoke” Tobacco Countermarketing Campaigns. First Look Report 9, June 2002, accessed October 5, 2006 at www.americanlegacy.org/Fi…; Pechmann C, Zhao G, Goldberg ME, Reibling ET. What to convey in anti-smoking ads for adolescents? The use of protection motivation theory to identify effective message themes. J Marketing 2003; 67: 1-18; Counter-Tobacco Advertising Exploratory Summary Report. Northbrook, Ill: Teenage Research Unlimited; 1999. Accessed October 5, 2006 at tobaccofreekids.org/repor….

5 Devlin et al., 2002, excerpted from CDC’s Tobacco Use Prevention Media Campaigns: Lessons Learned from Youth in Nine Countries, 2006, accessed October 6, 2006 at www.cdc.gov/tobacco.

6 Wakefield, M. et al., “Impact of Tobacco Industry Anti-Tobacco Advertising on Youth Smoking Attitudes and Behaviour.” Paper presented at the Society for Research on Nicotine and Tobacco (SRNT) Conference, February 15-18, 2006.

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advertising. Just as with any other advertising campaign, corrective communications must take into account the inherent complexity of communicating with consumers.7 As one article succinctly explains, consumers’ “attention must be captured, their interest in the message sustained, their beliefs altered, and the new cognitions retained.”8 Of course, to be effective, the intended consumer must understand the message. “It is only after information has been comprehended that one can reasonably expect it to influence beliefs, attitudes, intentions and behavior.”9 But assuring consumer comprehension of a message is neither an easy nor obvious task. It is a communications truism that “the advertiser (and the creative team) must be concerned about how the actual consumer will decode, or interpret, the message.”10 Specifically with regard to remedial messages, studies show that they are often misunderstood and “may be at least as confusing and misleading as the” original false advertising.11 Accordingly, “just like the advertising they are designed to counteract, [corrective communications] need to be empirically evaluated before being mandated and implemented.”12

In constructing an effective corrective communication, basic principles regarding advertising more generally control. As one primer explains, the successful advertiser will recognize that “[r]eaders will decide in a second or two – or perhaps even a split second – whether or not an ad is worth their time”; “understand what [their] objective is before

—–

7 Wilkie, McNeill, & Mazis, “Marketing’s ‘Scarlett Letter’: The Theory and Practice of Corrective Advertising”, 48 Journal of Marketing 11, 27 (Spring, 1984)

8 Id.

9 Jacoby, Nelson, & Hoyer, “Corrective Advertising and Affirmative Disclosure Statements: Their Potential for Confusing and Misleading the Consumer”, 46 Journal of Marketing 61 (Winter, 1982)

10 Arens at 5

11 Jacoby et al. at 62. See also id. at 68 (“Are corrective advertising or affirmative disclosure statements subject to being miscomprehended, just as are the advertising messages they are designed to remedy? From the data obtained, the answer would appear to be a resounding ‘yes.’”)

12 Id. at 62. See also Mazis, “FTC v. Novartis: The Return of Corrective Advertising?”, 20 Journal of Public Policy & Marketing 114, 120, 121 (Spring 2001)(noting with approval the Commission’s consideration of the effectiveness of proposed corrective advertising).

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putting words and images on a page”; “present one central proposition . . . [and] stick to it”; “avoid cluttering up [the] message (or the page) with additional information that isn’t germane to the objective”; and “[s]ince the ad must support a central proposition, . . .

[assure that] all elements with the ad . . . support that proposition”. 13 Studies of corrective communications find that basic advertising wisdom applies equally to these communications. They, too, report, for example, that consumer comprehension decreases as the number of concepts being communicated increases14; it is harder to communicate a message in a cluttered environment15; typeface, fonts, and layout matter16; and in television ads, there are time frames for written information to remain on screen and words per minute at which text should be read, in addition to colors, contrast and text size that should be used, to optimize comprehension.17

Because clearly “there is more to remedial advertising than developing statements that one thinks will do the job”18 (emphasis original), and because of the enormous importance of assuring that these communications are effective, the Public Health Intervenors urge the Court to carefully take into consideration the objectives against which these communications should be evaluated. These most importantly include the intended audience, the intended message, and the desired response of those receiving the communication. The Public Health Intervenors submit the following recommendations for each:

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13 Blom, “Principles of Effective Print Advertising”, www.marketingpower.com/co… (website of the American Marketing Association).

14 Jacoby et al. at 63.

15 Mazis at 120.

16 Blom at 4.

17 Hoy and Andrews, “Adherence of Prime-Time Televised Advertising Disclosures to the “Clear and Conspicuous” Standard: 1990 versus 2002”, 23 Journal of Public Policy & Marketing 170, 172 (Fall, 2004).

18 Jacoby et al. at 70.

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First, the Defendants’ frauds have been perpetrated on the American public as a whole, over more than half a century, so the intended audience must be the entire American public, except for the corrective statements contained in onserts that are affixed to cigarette packaging where the intended audience must be smokers.

Second, the underlying purpose of these communications is to prevent and restrain future violations, so for the reasons we will explain in more detail below, the intended message must incorporate three basic elements: 1) that the Defendants have defrauded the American public; 2) that these communications have been ordered by the Court (and are not reflective of the Defendants’ corporate responsibility); and 3) basic, accurate information regarding, in rotation: the adverse health effects of smoking; the addictiveness of smoking and nicotine; Defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery; the lack of any significant health benefit from smoking “low tar,” “light,” “ultra light,” “mild,” and “natural” cigarettes; the adverse health effects of exposure to second hand smoke.

Third, the desired response, or “take away” as marketers would call it, which is essential to the prevention of future fraudulent behavior is: “we are finally getting real information about cigarettes from the industry because a court has ordered them to provide it and has overseen the content of what is being provided; we now better understand the key dangers of cigarettes; we now know that we need to carefully evaluate future public communications from the tobacco industry for accuracy and completeness.” Determining the appropriate audience, the intended message and the desired takeaway is the first part of the inquiry. As we have seen, it is also essential that each of the proposed communications be evaluated as to how well they will communicate the

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intended message to the intended audience. Understanding the efficacy of a public communication is both an art and a science; as the literature demonstrates, it calls for expert testing and analysis. Accordingly, as explained in section IV below, the Public Health Intervenors urge the Court to retain an independent communications firm skilled in developing and pre-testing communications campaigns on similar health topics to assist the Court in determining how well the corrective statements communicate their intended messages before they are approved for circulation. In addition, the United States and Public Health Intervenors should be allowed a period of time to analyze the corrective statements developed and the pre-testing results, and provide their findings and analysis to the Court. If the corrective statements developed have shortcomings that would hinder their corrective effect, those shortcomings can be addressed prior to Court approval for circulation.

In sum, by taking these steps, the Court will substantially increase the likelihood that the ordered corrective communications will, indeed, be an effective remedy in this case.

B. The Rationale For The Corrective Statements Public Health Intervenors Propose

As we next explain, the specific language Public Health Intervenors are proposing will most effectively correct the public’s misunderstandings about smoking and its adverse health effects on smokers and non-smokers. The proposed text corrects the misperceptions created by the Defendants that were identified by the Court on all five specific topics, and for each topic, the specific selected language will most clearly address the misunderstandings and effectively communicate the accurate facts.

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Our proposed text will be most effective because it is designed with three key components, each of which is essential to correcting the Defendants’ incorrect information over the last several decades.

The first essential component of the communication is found in the first part of the headline which states each Defendant’s admission that they misled the public about the dangers of smoking. As the D.C. Circuit has explained, such a headline is appropriate where the corrective statements are being required to address an “an egregious case of deliberate deception . . . .” Warner-Lambert Co. v. FTC, 562 F.2d 749, 763 (D.C. Cir. 1977). **

This standard is amply satisfied in this case, in light of the Court’s overwhelming findings that Defendants knew that their prior misstatements were false, and that they were engaged in a pattern of deliberate deception. See supra at 4, n.1 (summarizing findings); see also id. at 1501-1526 (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”). It is particularly appropriate and necessary in this case because the court has found that the Defendants misled the public repeatedly, even after they promised to tell the truth in paid advertisements, and even after they entered into a Settlement with the states to stop doing so. Accordingly, the Court should require that the corrective statements include headline language explaining that Defendants have previously provided the public with misinformation concerning these five subjects.

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** In Warner-Lambert the Court rejected the FTC’s proposed headline because the record supported a finding that the prior misstatements were not deliberate, but rather were made in good faith. 562 F.2d at 763.

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This first part of the headline will serve at least three key purposes: 1) it will alert the public that they have been misled for decades by the tobacco companies, which will better prepare them to receive the accurate information that is forthcoming; 2) because the headline will be consistent in all executions on each topic, it will provide clear overall communication across all media; and 3) it will help inoculate the public against future misleading communications. Using a headline for a communications campaign is standard practice in the advertising industry because it gets the attention of the audience and engages them to continue reading. As one primer for effective public service advertising recommends, “Write headlines that offer a reason to read more…State a benefit, arouse interest or break news.”19 Gaining and keeping the audience’s attention is particularly important in the case of these corrective statements, where only a minimum level of media presence is available to offset decades of misinformation.

The second essential component of the communication is notifying the public that the Defendants are being ordered by the Court to make these corrective statements. This particular language is found in the latter part of the headline (second bolded statement) and at the bottom of each set of corrective text where it states that the particular Defendant is paying for the corrective statement, and it is important for several reasons.

First, it will help ensure that the corrective statements are believed by the public. Literature related to the Defendants’ past public health and education campaigns indicates that when they sponsor such campaigns, audiences do not find them credible.20

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19 Goodman A. Why Bad Ads Happen to Good Causes. Cause Communications, 2002.

20 Hendricksen L and Fortmann TC. Young adults’ opinions of Philip Morris and its television advertising, Tobacco Control, 2002; 11:236-240; see also Devlin et al., 2002, excerpted from CDC’s Tobacco Use Prevention Media Campaigns: Lessons Learned from Youth in Nine Countries, 2006, accessed October 6, 2006 at www.cdc.gov/tobacco

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In addition, an October 2005 Harris poll21 revealed that only 4% of Americans felt that the tobacco industry was “generally honest and trustworthy — so that [they] normally believe a statement by a company in that industry.” This percentage is lower than all of the other 16 industries included in the poll except the oil industry. This distrust is also why the Public Health Intervenors recommend not including the Defendant companies’ logos in the corrective statements, but instead just their names in regular type. If the Defendants’ corporate logos are included, viewers eyes will be drawn to them, and the corrective statements might not be read or not believed because they may be perceived as yet another public relations effort on the part of the Defendants.

In addition, the fact that the Court is requiring the corrective statements is critical for the public to know in order to properly evaluate the corrective statements. This will help convey that accurate information is being provided by the Defendant cigarette companies because the Court has ordered it, and the Defendants are not now, on their own, a trusted source of accurate information. The absence of these facts about the source of the corrective statement would increase the likelihood that Defendants could again successfully mislead the public in the future. The goal of the corrective statements is to provide the public with information that will help correct decades of deception, but without falsely giving the Defendants the kind of credibility for telling the truth with the public that will enable them to mislead the public in the future.

Finally, this information will help insure that the public carefully scrutinizes future statements by the Defendants for truthfulness, including other “public education” campaigns done by the Defendants simultaneously with these court-ordered corrective

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21 Nationwide Harris Poll of 1,833 U.S. adults surveyed online by Harris Interactive® between October 11 and 17, 2005. Accessed at www.harrisinteractive.com…

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statements or in the near future, thereby making it harder for the Defendants to engage in future violations.

The third essential component of each corrective statement is the heart of the communications—the specific misinformation spread by the Defendants’ on each topic, and then the corrective facts. The juxtaposition of the prior misinformation with accurate facts is critical, so that the public will recognize the misinformation and will be able to contrast that with the reality of the accurate dangers of smoking. The proposed text is concise because communications literature emphasizes the importance of focusing on a few key facts rather than overwhelming people with too much information that they cannot adequately internalize. 22

The text is also simple for several reasons. Communications manuals emphasize that complex presentations of information are not well understood by the public.23 This is especially true for those with language or literacy challenges. Fourteen percent of adult Americans have a below basic literacy level, and 29% have a basic literacy level.24 In addition, people with lower education are significantly more likely to be smokers (in 2004, 40% of adults with a GED were smokers; 34% of adults with a 9th-11th grade education were smokers; and only 8% of those with graduate degrees were smokers).25

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22 Blom, “Principles of Effective Print Advertising”, www.marketingpower.com/co… (website of the American Marketing Association); see also American Marketing Association. Writing Copy That Sells. Accessed October 13, 2006 at www.marketingpower.com/co….

23 National Cancer Institute. Developing and Pre-testing Concepts, Messages and Materials. Making Health Communication Programs Work. Page 6. U.S. National Institutes of Health. Accessed October 13, 2006 at www.cancer.gov/pinkbook/p…

24 National Assessment of Adult Literacy, 2003. Accessed October 11, 2006 at nces.ed.gov/NAAL/index.as…

25 Centers for Disease Control and Prevention. Cigarette Smoking Among Adults—United States, 2004. MMWR 2005; 54: 1122 accessed October 12, 2006 at www.cdc.gov/mmwr/PDF/wk/m….

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For each of the five topics, we have developed text that can be communicated clearly in each of the five proposed media, given their individual strengths and constraints. For example, the text for in-store displays focuses on just one or two key facts because these displays will be reviewed very quickly by passersby. Likewise, the text for the 15-second TV ads is brief, to maximize the viewers’ comprehension of the messages. Onserts and websites, by contrast, provide more space and more audience attention opportunities, permitting the corrective statements to effectively communicate a greater number of facts.


C. Additional Factors to Consider For Particular Media

1. Onserts

For the onserts, Public Health Intervenors strongly recommend supplementing the factual text with graphic visuals that illustrate the health risks to the public and particularly to smokers who will be most likely to see the onserts. Because the corrective statements onserts will be very similar to cigarette package health warning labels, existing findings about package warning labels provide a benchmark to evaluate the effectiveness of the onserts the Court will require here, and how those onserts should be developed and produced. Three studies, one from New Zealand26, one from Australia27,

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26 BRC. (2004) Smoking health warnings study: The effectiveness of different (pictorial) health warnings in helping people consider their smoking-related behaviour. Wellington: BRC Marketing & Social Research. Error! Main Document Only.http://www.ndp.govt.nz/publications/healthwarnings.html accessed October 2, 2006.

27 Elliott & Shanahan Research. (2003) Developmental research for new Australian health warnings on tobacco products stage 2. Canberra: Commonwealth of Australia.

Error! Main Document Only.http://www.health.gov.au/internet/wcms/publishing.nsf/Content/healthpubhlth- strateg-drugs-tobacco-warnings.htm accessed October 2, 2006.

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and an international study28, demonstrated that pictorial cigarette package warnings were more effective than text warnings. Pictorial warnings can increase the effectiveness of communications campaigns. As pictorial warnings are visual, they can be linked to visual media, such as newspaper and television messages, thereby increasing the effectiveness of overall communication.29 Due to their effectiveness at communicating health messages, pictorial-based cigarette package health warning labels have been implemented in Canada (2000), Brazil (2002), Singapore (2003), European Union (2004), Venezuela (2004), Thailand (2005), Australia (2006), and Uruguay (2006). In 2006, Chile, Peru, Belgium and the United Kingdom also passed legislation to require pictures or images on cigarette packs. New Zealand, Jordan, Romania, India and other countries are also considering implementing cigarette pack warnings as a way to educate smokers about the risks of continuing to smoke. According to Hammond et al (Tobacco Control, 2006), “Large, graphic warnings on cigarette packages are an effective means of increasing health knowledge among smokers [and] may also help to reduce the disparities in health knowledge by providing low-income smokers with regular access to health information.”30 Examples of recommended graphic visuals can be found at the end of this section.

Another reason to include graphic visuals in onserts is that they effectively communicate with people who have low literacy and/or have limited fluency in English.

As noted earlier, 14% of adults have a below basic literacy level and 29% have a basic

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28 Hammond D, Fong GT, McNeill A, Borland R, and Cummings KM. Effectiveness of cigarette warning labels in informing smokers about the risks of smoking: findings from the International Tobacco Control (ITC) Four Country Survey. Tobacco Control. 2006; 15(suppl_3):iii19-iii25.

29 Canadian Cancer Society (2001). Controlling the Tobacco Epidemic: Selected Evidence in Support of Banning All Tobacco Advertising and Promotion, and Requiring Large, Picture-Based Health Warnings on Tobacco Packages Ottawa: Canadian Cancer Society, International Union Against Cancer.

30 Hammond et al, 2006.

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literacy level.31 People with lower education are significantly more likely to be smokers.32 Furthermore, 18% of U.S. adults speak a language other than English at home,33 and for those who do not understand English well, the graphic visuals will be much more effective in communicating the adverse health effects than will be the text alone.

The final rationale for inclusion of graphic visuals in the onserts is that in order to counter the previous misinformation, the same marketing approaches should be used as have previously been employed by the Defendants. All of the Defendants have relied on attractive and persuasive images (Joe Camel, Marlboro Man, attractive images of young people enjoying life, etc.) to market their products, so it is critical to counter those messages with equally persuasive visuals. The companies have used imagery to communicate much more than facts about their products through their sophisticated marketing campaigns. These campaigns further counter the truthful health information about these products and create a positive aura around smoking to make it attractive to those looking to fulfill certain needs like rebellion and acceptance.

On the following pages are some example graphic visuals for four of the five topics of the corrective statements. “Cigarettes Cause Strokes,” “Cigarettes Cause Mouth Diseases,” “Tobacco Use Can Make You Impotent,” “Cigarettes Are Highly Addictive,” and “You’re Not the Only One Smoking This Cigarette” have been used by Health

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31 National Assessment of Adult Literacy, 2003. Accessed October 11, 2006 at nces.ed.gov/NAAL/index.as…

32 Centers for Disease Control and Prevention. Cigarette Smoking Among Adults—United States, 2004. MMWR 2005; 54: 1122 accessed October 12, 2006 at www.cdc.gov/mmwr/PDF/wk/m….

33 Department of Commerce Bureau of the Census. united States Census, 2000 accessed October 12, 2006 at en.wikipedia.org/wiki/Lan…(United_States_Census).

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Canada. These and similar graphic visuals have been used on Canada’s cigarette packages since 2000.

“Smoking Causes Lung Cancer,” “Smoking Causes Mouth and Throat Cancer,” “Tobacco Smoke is Toxic,” and “Don’t Let Your Children Breathe Your Smoke” have been used on cigarette packages by the Australian Commonwealth Department of Health and Ageing since March 2006.

These visuals have proven effective in communicating health risks to smokers, but could be altered to insure effective corrective statements onserts. In addition, visuals addressing misperceptions about Light, Natural, Mild and Low-Tar cigarettes could be recommended but would need to be developed.

Public Health Intervenors recommend that the onserts, when affixed to the cigarette packages, take up 50% of the package front, and include the headline, one fact and a graphic image. This is the recommended size of cigarette pack health warnings proposed by the Framework Convention on Tobacco Control and is the size that has been used by Canada since 2000. The onsert should then be expandable by unfolding it, and should include more of the corrective facts on the inside.

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1. Adverse Health Effects of Smoking

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2. The addictiveness of smoking and nicotine.

3. Manipulation of design and composition to enhance nicotine delivery.

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4. Adverse Health Effects of Secondhand Smoke

One final consideration for execution of the corrective statements onserts is that the text should be bilingual (in English and Spanish). Many companies, including the Defendants, have developed marketing materials in Spanish, as the clear second language

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in the U.S., or in English and Spanish. In addition, to be effective onsert text should not be simply translated word for word to Spanish, but should be appropriately translated to Spanish to clearly communicate the corrective facts.

2. Counter-Top and Header Displays

Many of the same considerations apply to the executions of the corrective statements for counter-top and header displays as for onserts. Graphic visuals should be used to enhance the comprehension of the corrective statements. In fact, graphic visuals may be even more important for the displays, since they will be reviewed very quickly and thus cannot effectively communicate more than a headline and a key fact. Visuals can re-enforce the facts and help viewers internalize them. Similarly, bilingual (Spanish and English) or Spanish only displays should be used in locations where the tobacco companies provide or distribute their marketing and promotional materials in both Spanish and English or exclusively in Spanish.

3. Television Ads

Considerations for the television ads include the importance of having a credible, authoritative announcer speak the text that should also be super-imposed on the TV screen. The audio and video should be in sync to ensure as clear communication as possible. See Warner-Lambert, 562 F.2d at 763 (approving requirement for television commercials containing corrective statement to “be presented simultaneously in both audio and visual portions”).34 If it is not possible to clearly communicate the necessary corrective information in 15 seconds, then TV ads of sufficient length to communicate the correction should be required by the Court. The text should be black on a white

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34 See also Hoy MG and Andrews JC. Adherence of Primetime Televised Advertising Disclosures to the “Clear and Conspicuous” Standard: 1990 versus 2002. Journal of Public Policy and Marketing. Fall 2004.

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screen, and should be large enough and on the screen long enough to be effectively read by those with a basic reading level since over 40% of the U.S. population reads at a basic level or below.35

4. Websites

Considerations for the websites include the importance of having the corrective information (or a clear link that takes the viewer to it on another page of the site) prominently displayed on the home page of each Defendant’s website. If the corrective information is on another page of the site, it must be clearly and prominently displayed there. The corrective statements text should be in English and appropriately translated Spanish, to aid Spanish-speaking consumers in understanding the facts. In addition, Defendants should not be allowed to undermine the corrective statements in any other part of their websites.

5. Newspapers

Exhibit A includes an example of a corrective statement full-page newspaper ad that takes into account the important considerations of newspaper advertising/ communications. It takes into account the audience of this medium, which is the general public, as distinguished from the audience of smokers who will primarily see the onserts.

For example, the headline should be a significantly larger font than the body copy in order to ensure that it catches the attention of the public, and the layout should include enough white space to make it inviting to read, rather than being cluttered with too much information or unnecessary visuals. See Warner-Lambert, 562 F.2d at 763 (approving of

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35 National Assessment of Adult Literacy, 2003. Accessed October 11, 2006 at nces.ed.gov/NAAL/index.as…

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requirements for corrective print ads to be displayed so that the corrective statement “can be readily noticed”).

III. THE COURT SHOULD ESTABLISH THE CRITERIA FOR THE DEVELOPMENT AND EXECUTION OF THE CORRECTIVE STATEMENTS.

In order for the statements to have the intended corrective effect, it is also important to look beyond the specific language used to how the language and any other visuals are displayed and the background against which it is displayed. By altering how the language is displayed, the background against which it is displayed and other factors, an advertiser can greatly influence whether an ad is effective. Therefore, it is appropriate and necessary for the Court to evaluate these aspects of the corrective statements here as well. See Warner-Lambert, 562 F.2d at 763 (approving of the FTC’s corrective statements requirements – e.g., print sizes, text separation requirements, audio and visual requirements – because they were “well calculated to assure that the disclosure will [ ] attract the notice of readers, viewers, and listeners, and will be plainly conveyed”).36 Exhibit A, as mentioned, provides an illustration of how choices made about layout, font, text size, etc. can facilitate effective communication. Exhibit B illustrates how other choices could be made to undermine the intended effect, hindering the effectiveness of the corrective statements. For example, Exhibit A is direct and organized into readable components by topic, while Exhibit B is extremely text-heavy and does not organize the language into readable groups which would make it difficult

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36 See also In the Matter of Bristol-Myers Co., et al., 102 F.T.C. 21, 790 (F.T.C. 1983) (”To increase the chances for successful communication, the corrective message should employ persuasive communication techniques similar to those used to create the beliefs initially. . . . [T]he corrective message will be more successful if the other messages in the advertisements do not contradict, conflict, or obscure the corrective message in any way.” (citations omitted)).

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for many people to understand or too time-consuming to keep their attention. Exhibit A uses a 2-part headline that clearly states the issue, that the Defendants have misled the public and that they are being required to make the corrective statements, followed by a summary statement about the specific misinformation and a brief statement with the corrective fact(s), and an endline that reconfirms that the Defendants are being ordered to make the statements. While the newspaper version, under the order, must address all five topics, brief representative statements will communicate much more effectively than would a litany of information. Exhibit B, by contrast, includes a headline that implies corporate goodwill rather than a mandate by the Court and a visual that distracts from the serious nature of the communications. These are just some of the many examples of choices that could be made by the Defendants to either hinder or enhance communication of the corrective statements. As noted earlier when Defendants have developed public health or public education campaigns, those campaigns have been proven ineffective.

Given the Court’s finding that Defendants’ ads and public communications have been misleading, and in order to ensure that the corrective statements have their intended corrective effect, the Court should determine not only the “exact wording of [the] corrective statements,” (Order at 4) but also all other aspects of the corrective statements involving the content and presentation of the corrective statements.

The variables in production/execution of the corrective statements include, but are not limited to, the elements below, listed by medium/communications vehicle. As mentioned earlier, there are many, many elements that can either increase or decrease the likelihood that the information presented is effectively corrective.

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a. Onserts: Important executional variables for cigarette package onserts include the size, font, and color of the headline; the size, quality and content of graphic visuals; the placement of facts on the front cover versus inside a folded onsert; the ease with which consumers can access, unfold and review the onsert; the size of the onsert (unfolded and folded); the size, color and font of the text on the inside panel(s); color of background; and any other visual elements that can either inhibit or enhance clear communication.

b. Counter and Header Displays: Important executional variables for in-store displays include the overall size, material, layout and configuration of the display boards; the size, font, and color of the headline; the size, quality and content of graphic visuals; the color of background; and any other visual elements that can either inhibit or enhance clear communication.

c. Television Ads: Important executional variables for television ads include the size, color and font of the on-screen text; the background color; how much text is shown on-screen at a time; the length of time each set of text stays on the screen; the quality and volume of the announcer’s voice; the rate at which he/she speaks; the length of the ad; and any other elements, visual or auditory, that can either inhibit or enhance clear communication. See Exhibit C for example of appropriately designed television ad.

d. Websites: Important executional variables for websites include size, color and font of the on-screen text; the background color; how much text is on each page of the site; where the corrective statements are displayed on the site; and any other elements, visual or auditory, that can either inhibit or enhance clear communication.

e. Newspapers: Important executional variables for full-page newspaper ads include size, color and font of the text; the relative sizes of the headline, body text and tagline; the background color; the layout; and any other visual elements that can either inhibit or enhance clear communication. As noted earlier, Exhibit B indicates how executional decisions can be made which hinder communication and overall effectiveness. Exhibit A, in contrast, illustrates choices made which enhance communication of the key information.

IV. THE COURT SHOULD ALSO ESTABLISH THE CRITERIA BY WHICH THE CORRECTIVE STATEMENTS ARE DEVELOPED AND DISPLAYED BY CONSULTING WITH EXPERTS AND REQUIRING APPROPRIATE MARKET TESTING.

As the foregoing discussion demonstrates, in order for the Court’s corrective statements to be effective, the Public Health Intervenors urge that, at minimum, the Court’s order should cover all aspects of the statements and how and where they are

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presented. In order to maximize the likelihood that the corrective statements are as effective as Defendants’ prior misstatements and to minimize the burden on the court, Public Health Intervenors also recommend that the Court retain an independent communications/ advertising firm to make recommendations about the content and execution of the Court ordered statements. By doing so, the court will further insure that the corrective statements are developed and executed with the same degree of expertise that Defendants have traditionally taken in their advertising efforts. Thus, since the prior misstatements were developed by communications and advertising experts, and were likely pre-tested for effectiveness, the Court should require that these corrective statements be developed and tested in the same manner.

Thus, Public Health Intervenors propose a procedure for developing and approving the many versions of the corrective statements in order to ensure consistent decision-making and the highest likelihood that the corrective statements will achieve their goal of correcting previous misinformation. This procedure would involve a Courtappointed independent expert firm, paid for by the Defendants, which would develop corrective statements that incorporate Court-approved text and directions regarding all other aspects of the corrective statements; and would test the various executions of the corrective statements before they are put into circulation to ensure clear communication and credibility. Key measures for pre-testing include communication of main message(s), engagingness, believability, and increases in knowledge on the key information points included in each execution. The Communications Firm(s) would retain the services of a professional research agency to conduct the testing.

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Once the corrective statements are pre-tested, Public Health Intervenors recommend that the results be analyzed by the communications firm(s), the Court, and the parties, who can then provide comments and analysis. If the corrective statements are found to have shortcomings that inhibit clear and credible communication, they should then be revised to address the shortcomings before they are finally approved and circulated.

Obviously, it is imperative that the communications firm(s) selected do not have tobacco companies as clients (currently or in the recent past). Ideally, the communications firm(s) selected to develop and pre-test the corrective statements would have a record of developing and conducting effective tobacco health education campaigns. As examples, the U.S. advertising agencies with the most experience on tobacco health education campaigns are: Arnold Worldwide (Boston office); Crispin Porter Bogusky (Miami office); Ground Zero (Los Angeles office); Clarity Coverdale Fury (Minneapolis office). Any of these agencies would be well equipped to deliver effective corrective statements messaging in all of the media prescribed by the Court.

While the tobacco companies may argue that having these agencies produce the corrective statements would increase the cost of production, the Defendants customarily work with top national or international advertising agencies whose ad development and production is as costly as that of the agencies listed above, if not more costly.

Finally, involving independent communications experts in the development and testing of the corrective statements will not only ensure that the corrective statements are effective, but will be the least burdensome for the Court because 1) the executional decisions about font size, color, layout etc. will be left to professionals, acting pursuant to

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the Court’s direction; and 2) having experts develop and test the corrective statements will avoid the Court having to conduct multiple hearings to allow the parties to critique each others’ recommendations.

CONCLUSION

For the foregoing reasons, Public Health Intervenors respectfully request that the Court adopt this proposed approach toward the wording, development, and execution of the corrective statements

Respectfully submitted,

/s/____________

Howard M. Crystal

(D.C. Bar No. 446189)

Katherine A. Meyer

(D.C. Bar No. 244301)

MEYER GLITZENSTEIN & CRYSTAL

1601 Connecticut Avenue, Suite 700

Washington, DC 20009

202-588-5206

October 16, 2006

ENDNOTES

i The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at 234, 255-257, 319-320, 330-331, 332-333, 740-741, 447-448, 452, 459-461, 463, 514, 636-637, 654, 828, 971, 1359, 1384, 1407.

ii CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs—United States, 1997-2001. MMWR 2005; 54(25): 625-628. See also Opinion at 1505.

iii U.S. Department of Health and Human Services. The Health Consequences of Smoking: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2004.

iv Fiore MC, Bailey WC, Cohen SJ, et al. Treating Tobacco Use and Dependence. Clinical Practice Guideline. Rockville, MD: U.S. Department of Public Health and Human Services. Public Health Service. June 2000. See Opinion at 332.

v CDC. Cigarette Smoking Among Adults- United States, 2000. MMWR 2002; 51(29): 642-645. See Opinion at 347.

vi See Opinion at 332, 334-335, 347, 654, 1512.

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vii NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

viii Pankow, JF. Et al. Conversion of Nicotine in Tobacco Smoke to Its Volatile and Available Free-Base Form Through the Action of Gaseous Ammonia. Environ. Science & Technology 1997; Vol 31 No 8, 2428-2433.

ix Wells, K. Technology Handbook. Legacy Tobacco Documents Library. Brown and Williamson. August 22, 1995. Access Date: June 4, 2003. Bates No. 505500002/0060.

x NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001. See also Opinion at 219-222, 971, 1515, 1516.

xi U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006.

xii CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628.

xiii The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at 234, 255-257, 319-320, 330-331.

xiv CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628. See also Opinion at 221 and 1505.

xv CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628. CDC. National Vital Statistics Reports Volume 52, Number 21. “Deaths: Injuries, 2001.” www.cdc.gov/nchs/products… See also Opinion at 1505.

xvi The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at.332-333, 447-448, 452, 459-461, 463, 514, 1359, 1364.

xvii Fiore MC, Bailey WC, Cohen SJ, et al. Treating Tobacco Use and Dependence. Clinical Practice Guideline. Rockville, MD: U.S. Department of Public Health and Human Services. Public Health Service. June 2000. See also Opinion at 332 and 347.

xviii CDC. Cigarette Smoking Among Adults- United States, 2000. MMWR 2002; 51(29): 642-645. See also Opinion at 347.

xix Opinion at 653-654, 1512-1513.

xx The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at.740-741, 828, 971.

xxi NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

xxii The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at. 636-637, 654.

xxiii Opinion at 653-654, 1512-1513.

xxiv NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

xxv Pankow, JF. Et al. Conversion of Nicotine in Tobacco Smoke to Its Volatile and Available Free-Base Form Through the Action of Gaseous Ammonia. Environ. Science & Technology 1997; Vol 31 No 8, 2428-2433.

xxvi Wells, K. Technology Handbook. Legacy Tobacco Documents Library. Brown and Williamson. August 22, 1995. Access Date: June 4, 2003. Bates No. 505500002/0060.

45

xxvii The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at. 1384 and 1407.

xxviii NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

xxix U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006.

xxx CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628.

xxxi The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at 234, 255-257, 319-320, 330-331.

xxxii CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628. See also Opinion at 1505.

xxxiii U.S. Department of Health and Human Services. The Health Consequences of Smoking: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2004.

xxxiv CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628. CDC. National Vital Statistics Reports Volume 52, Number 21. “Deaths: Injuries, 2001.” www.cdc.gov/nchs/products… See also Opinion at 1505.

xxxv U.S. Department of Health and Human Services. The Health Consequences of Smoking: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2004. p 873.

xxxvi CDC. Cigarette Smoking Attributable Morbidity - United States, 2000. MMWR 2003; 52(35) 842- 844.

xxxvii The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at.332-333, 447-448, 452, 459-461, 463, 514, 1359, 1364.

xxxviii Fiore MC, Bailey WC, Cohen SJ, et al. Treating Tobacco Use and Dependence. Clinical Practice Guideline. Rockville, MD: U.S. Department of Public Health and Human Services. Public Health Service. June 2000. See also Opinion at 332 and 347.

xxxix CDC. Cigarette Smoking Among Adults- United States, 2000. MMWR 2002; 51(29): 642-645. See also Opinion at 347.

xl Opinion at 653-654, 1512-1513.

xli Fiore MC, Bailey WC, Cohen SJ, et al. Treating Tobacco Use and Dependence. Clinical Practice Guideline. Rockville, MD: U.S. Department of Public Health and Human Services. Public Health Service. June 2000. See also Opinion at 334-335.

xlii The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at.740-741, 828, 971.

xliii NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

xliv NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

xlv The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at. 636-637, 654.

46

xlvi NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

xlvii Opinion at 653-654, 1512-1513.

xlviii Pankow, JF. Et al. Conversion of Nicotine in Tobacco Smoke to Its Volatile and Available Free-Base Form Through the Action of Gaseous Ammonia. Environ. Science & Technology 1997; Vol 31 No 8, 2428-2433.

xlix Wells, K. Technology Handbook. Legacy Tobacco Documents Library. Brown and Williamson. August 22, 1995. Access Date: June 4, 2003. Bates No. 505500002/0060.

l Fiore MC, Bailey WC, Cohen SJ, et al. Treating Tobacco Use and Dependence. Clinical Practice Guideline. Rockville, MD: U.S. Department of Public Health and Human Services. Public Health Service. June 2000. See also Opinion at 334-335.

li The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at. 1384 and 1407.

lii NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

liii U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006.

liv NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

lv U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006. See also Opinion at 1234.

lvi CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628.

lvii U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006.

lviii U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006.

lix The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at 234, 255-257, 319-320, 330-331.

lx CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs—United States, 1997-2001. MMWR 2005; 54(25): 625-628. See also Opinion at 221 and 1505.

lxi CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628. CDC. National Vital Statistics Reports Volume 52, Number 21. “Deaths: Injuries, 2001.” www.cdc.gov/nchs/products… See also Opinion at 1505.

lxii The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at.332-333, 447-448, 452, 459-461, 463, 514, 1359, 1364.

lxiii Fiore MC, Bailey WC, Cohen SJ, et al. Treating Tobacco Use and Dependence. Clinical Practice Guideline. Rockville, MD: U.S. Department of Public Health and Human Services. Public Health Service. June 2000. See also Opinion at 332 and 347.

47

lxiv CDC. Cigarette Smoking Among Adults- United States, 2000. MMWR 2002; 51(29): 642-645. See also Opinion at 347.

lxv The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at.740-741, 828, 971.

lxvi NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001. See also Opinion at 219-222.

lxvii The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at. 636-637, 654.

lxviii Opinion at 514, 1512-1513.

lxix NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

lxx Pankow, JF. et al. Conversion of Nicotine in Tobacco Smoke to Its Volatile and Available Free-Base Form Through the Action of Gaseous Ammonia. Environ. Science & Technology 1997; Vol. 31 No. 8, 2428-2433. See also Opinion at 514, 612, 653, 1512-1513.

lxxi Wells, K. Technology Handbook. Legacy Tobacco Documents Library. Brown and Williamson. August 22, 1995. Access Date: June 4, 2003. Bates No. 505500002/0060.

lxxii The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at. 1384 and 1407.

lxxiii NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

lxxiv U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006. See also Opinion at 1234.

lxxv CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628.

lxxvi The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at 234, 255-257, 319-320, 330-331.

lxxvii CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628

lxxviii U.S. Department of Health and Human Services. The Health Consequences of Smoking: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2004.

lxxix CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628. CDC. National Vital Statistics Reports Volume 52, Number 21. “Deaths: Injuries, 2001.” www.cdc.gov/nchs/products… See also Opinion at 1505.

lxxx U.S. Department of Health and Human Services. The Health Consequences of Smoking: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2004. p 873.

lxxxi CDC. Cigarette Smoking Attributable Morbidity - United States, 2000. MMWR 2003; 52(35) 842-844.

lxxxii The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at.332-333, 447-448, 452, 459-461, 463, 514, 1359, 1364.

lxxxiii Fiore MC, Bailey WC, Cohen SJ, et al. Treating Tobacco Use and Dependence. Clinical Practice Guideline. Rockville, MD: U.S. Department of Public Health and Human Services. Public Health Service. June 2000.

48

lxxxiv CDC. Cigarette Smoking Among Adults- United States, 2000. MMWR 2002; 51(29): 642-645.

lxxxv Fiore MC, Bailey WC, Cohen SJ, et al. Treating Tobacco Use and Dependence. Clinical Practice Guideline. Rockville, MD: U.S. Department of Public Health and Human Services. Public Health Service. June 2000.

lxxxvi The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at.740-741, 828, 971.

lxxxvii NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

lxxxviii NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

lxxxix The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at. 636-637, 654.

xc NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

xci Pankow, JF. Et al. Conversion of Nicotine in Tobacco Smoke to Its Volatile and Available Free-Base Form Through the Action of Gaseous Ammonia. Environ. Science & Technology 1997; Vol 31 No 8, 2428-2433.

xcii Wells, K. Technology Handbook. Legacy Tobacco Documents Library. Brown and Williamson. August 22, 1995. Access Date: June 4, 2003. Bates No. 505500002/0060.

xciii Fiore MC, Bailey WC, Cohen SJ, et al. Treating Tobacco Use and Dependence. Clinical Practice Guideline. Rockville, MD: U.S. Department of Public Health and Human Services. Public Health Service. June 2000.

xciv The Court has made numerous factual findings substantiating that Defendants deliberately and continuously made these statements. See e.g. Op. at. 1384 and 1407.

xcv NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

xcvi U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006.

xcvii NCI. Risks Associated with Smoking Cigarettes with Low Machine-Measured Yields of Tar and Nicotine. Smoking and Tobacco Control Monograph No. 13. Bethesda, MD: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, NIH Pub. No. 02-5074, October 2001.

xcviii U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006.

xcix CDC. Annual Smoking-Attributable Mortality, Years of Potential Life Lost and Economic Costs— United States, 1997-2001. MMWR 2005; 54(25): 625-628.

c U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006.

ci U.S. Department of Health and Human Services. The Health Consequences of Involuntary Exposure to Tobacco Smoke: A Report of the Surgeon General. Atlanta, GA: U.S. Department of Health and Human

49

Services, Center for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Office on Smoking and Health, 2006.

50

DOJ Files Proposed Corrective Statements

October 18, 2006 3:09 am by Gene Borio


THE FOLLOWING IS A STATEMENT BY [TOBACCO COMPANY DEFENDANT] :

Despite our prior denials:

C Secondhand smoke causes death and disease in children and in adults.

C In children, secondhand smoke damages the lungs and causes sudden infant death syndrome (SIDS), respiratory and ear infections, and more severe asthma.

C In adults, secondhand smoke causes heart disease and lung cancer.

C Only eliminating smoking in indoor spaces fully protects people from secondhand smoke.

**———————————————————

Texts follow of:

DOJ Correctives, October 16, 2006

DOJ Corrective Statements Text, October 16, 2006

**———————————————————

DOJ Correctives, October 16, 2006

**———————————————————

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA _________________________________________

UNITED STATES OF AMERICA,

Plaintiff,

and

TOBACCO-FREE KIDS ACTION FUND, et al.,

Plaintiff-Intervenors,

v.

PHILIP MORRIS USA INC.,

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

Defendants.

Civil Action No. 99-CV-02496 (GK)

Next scheduled appearance: None Scheduled

________________________________

UNITED STATES’ NOTICE OF COMPLIANCE WITH ORDER #1015

The United States files this notice in compliance with this Court’s Order #1015, ¶ 5. Along with this notice, the United States is filing proposed language for scientifically accurate concepts on (a) the adverse health effects of smoking; (b) the addictiveness of smoking and nicotine; (c) the lack of any significant health benefit from smoking “low tar,” “light,” “ultra light,” “mild,” and “natural” cigarettes; (d) defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery; and (e) the adverse health effects of exposure to secondhand smoke (also know as environmental tobacco smoke, or ETS) that should be communicated by corrective statements that are developed and tested by an independent third party retained by the United States. Also accompanying this filing are declarations from several expert witnesses who were qualified by this Court in their respective fields. The witnesses

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include Jonathan Samet, M.D., Jack Henningfield, Ph.D, Dean Krugman, Ph.D, Paul Slovic, Ph.D, and Michael Eriksen, Sc.D.

As this Court recognized, the purpose of the corrective statements issued by Defendants pursuant to Order 1015 is to correct Defendants’ false, deceptive, and misleading public statements abut cigarettes and smoking. See Final Opinion at 1632-1637 (August 17, 2006); Warner-Lambert Co. v. FTC, 562 F.2d 749, 769-70 (D.C. Cir. 1977). As the Court found, “the trial record amply demonstrates that Defendants have made false, deceptive, and misleading public statements about cigarettes and smoking” for more than 50 years. Final Opinion at 1632.

The Court ordered corrective communications in order to prevent ongoing and future consumer deception or confusion arising from these decades of false statements, and recognized that future statements made by Defendants on the subject of smoking and health do not issue in a vacuum, but rather, draw from a “large reservoir of erroneous consumer belief[.]” Id. at 1633-34 (citing Warner-Lambert, 562 F.2d at 756.).

As several expert witnesses testified at trial, ongoing planning and prospective research and market testing of mandated messages are necessary to help ensure the success of mandated messages. See, e.g., Declaration of Dean Krugman, PhD at ¶¶ 6-7, 9-12 (Att. 1); Written Direct Testimony of Dean Krugman, 189:8-191:22; 193:19-195:11; Declaration of Paul Slovic, PhD, at ¶¶ 8-11 (Att. 2); Written Direct Testimony of Paul Slovic, 34:7-39:7; Declaration of Michael Eriksen, Sc.D at ¶¶ 4-5, (Att. 3); Written Direct Testimony of Michael Eriksen (Remedies),11:1- 12; 23:6-15. The testimony of the United States’ experts adduced at trial demonstrates that it is not sufficient to mandate a single set of fixed, black and white text statements to be communicated through all the media ordered by the Court. As but a few examples of factors that

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will determine the effectiveness of the corrective statements, messages communicate differently in print than on television; younger viewers or readers can be reached more effectively in some media than older viewers or readers, and vice versa; and messages communicating health risks tend to “wear out” over time, reducing or eliminating their effectiveness in communicating the information the Court intends the public to receive from these statements. See, e.g., Krugman Decl. at ¶¶ 11-12. In order to ensure that the Court’s order has the intended effect of correcting the 50-plus year reservoir of deceptive and misleading statements by Defendants, the statements mandated by the Court should be tested for effectiveness before they are finalized for dissemination, and tested after dissemination for actual and continuing effectiveness. Id.; Slovic Decl. at ¶¶ 8-11. Such development and testing should be implemented by independent, thirdparty professionals qualified to test and devise the corrective statements required by the Court. Eriksen Decl. at ¶ 5; Slovic Decl. at ¶ 11; Krugman Decl. at ¶¶ 9-10.

The United States emphasizes that while the language included in its proposal is scientifically accurate, see Declaration of Jonathan Samet (Att. 4) and Declaration of Jack Henningfield (Att. 5), the overwhelming evidence adduced at trial and supporting this Court’s factual findings makes clear that communication research and other developmental components are necessary to make the statements effective in achieving their remedial purpose. The testimony at trial conclusively established that mandated text warnings, standing alone, do not effectively communicate a corrective message. Krugman Decl. at ¶¶ 6-10; Written Direct Testimony of Dean Krugman at 187:13-197:4. The United States therefore respectfully requests that the Court’s order mandating corrective communications include provisions for independent third-party application of strategic research techniques and development of meaningful design

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characteristics utilizing ongoing testing and adjustment of the corrective statements to ensure their continuing effectiveness. Krugman Decl. at ¶¶ 6-12; Slovic Decl. at ¶¶ 8-11; Eriksen Decl. at ¶¶ 4-5.

Dated: October 16, 2006

Washington, DC

Respectfully submitted,

PETER D. KEISLER

Assistant Attorney General

STUART SCHIFFER

Deputy Assistant Attorney General

/s/ Michelle Gluck

MICHELLE GLUCK

Senior Trial Counsel

/s/ Linda M. McMahon

LINDA M. McMAHON

DC Bar No. 446130

Trial Attorney

United States Department of Justice

Post Office Box 14524

Ben Franklin Station

Washington, DC 20044-4524

(202) 616-4185

Attorneys for Plaintiff

United States of America

**———————————————————

DOJ Corrective Statements Text, October 16, 2006

**———————————————————

THE FOLLOWING IS A STATEMENT BY [TOBACCO COMPANY DEFENDANT] :

Despite our prior denials:

C Smoking now kills more than 400,000 Americans a year.

C Smoking harms nearly every organ of the body and causes many diseases.

C Smokers are not as healthy as non-smokers.

C Smoking shortens life. On average, smokers lose about 8 to 10 years of life.

C Smoking causes cancer throughout the body.

C Smoking causes heart disease and stroke.

C Smoking causes lung disease.

C For pregnant women who smoke, smoking causes birth problems, and sudden infant death syndrome (SIDS).

C Smoking causes low bone density, hip fractures, cataracts, and peptic ulcers.

C Quitting smoking improves health.


THE FOLLOWING IS A STATEMENT BY [TOBACCO COMPANY DEFENDANT] :

Despite our prior denials:

C Secondhand smoke causes death and disease in children and in adults.

C In children, secondhand smoke damages the lungs and causes sudden infant death syndrome (SIDS), respiratory and ear infections, and more severe asthma.

C In adults, secondhand smoke causes heart disease and lung cancer.

C Only eliminating smoking in indoor spaces fully protects people from secondhand smoke.


THE FOLLOWING IS A STATEMENT BY [TOBACCO COMPANY DEFENDANT] :

Despite our prior denials:

C There is no health benefit of smoking cigarettes labeled as “low tar”, “light”, “ultra light”, “mild” and “natural.” Smoking cigarettes with these labels is not a safe alternative to quitting.

C Smokers of cigarettes with these labels do not receive lower amounts of toxins.

C The nicotine and tar levels on cigarette packages are not related to the risks to health.


THE FOLLOWING IS A STATEMENT BY [TOBACCO COMPANY DEFENDANT] :

Despite our prior denials:

C Cigarette smoking is highly addictive and most smokers are addicted.

C Nicotine is the addictive drug in tobacco.

C Nicotine addiction causes powerful cravings and makes it hard to quit.

C Every year, more than one-third of smokers try to quit. Less than one in ten are successful.

C Most smokers become addicted as teenagers.

C Addiction can start within weeks of starting to smoke.


THE FOLLOWING IS A STATEMENT BY [TOBACCO COMPANY DEFENDANT] :

Despite our prior denials:

C [Tobacco Company Defendant] manipulates the design of its cigarettes to enhance addiction.

C [Tobacco Company Defendant] designs its cigarettes so that almost all of them provide an addictive dose of nicotine. This includes “light” and “ultra-light” cigarettes.

Lorillard Files Proposed Corrective Statements

October 18, 2006 2:50 am by Gene Borio

The following statement is made by Lorillard Tobacco Company pursuant to a Court Order in United States of America, et al. v. Philip Morris USA, Inc., et al., Civil Action No. 99-2496 (GK) (Order #1015, Aug. 17, 2006, at 4; Final Op. at 1636) (on appeal).

The Surgeon General has concluded:

The evidence is sufficient to infer a causal relationship between exposure to secondhand smoke and sudden infant death syndrome; and a lower level of lung function during childhood.

The evidence is sufficient to infer a causal relationship between maternal exposure to secondhand smoke during pregnancy and a small reduction in birth weight; and persistent adverse effects on lung function across childhood.

The evidence is sufficient to infer a causal relationship between secondhand smoke exposure from parental smoking and lower respiratory illnesses in infants and children; middle ear disease in children, including acute and recurrent otitis media and chronic middle ear effusion; cough, phlegm, wheeze, breathlessness and ever having asthma among children of school age; and the onset of wheeze illnesses in early childhood.

The evidence is sufficient to infer a causal relationship between exposure to secondhand smoke and lung cancer among lifetime nonsmokers; increased risks of coronary heart disease morbidity and mortality among both men and women; odor annoyance; nasal irritation; atherosclerosis in animal models; endothelial cell dysfunctions; a prothrombotic effect; and tumors in laboratory animals.

These conclusions are contained in the 2006 Surgeon General’s Report. Lorillard encourages consumers to rely upon the conclusions of the Surgeon General in making decisions about smoking.

Text of:

Lorillard Correctives, October 16, 2006

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

And

TOBACCO-FREE KIDS ACTION FUND,

et. al.,

v.

PHILIP MORRIS USA INC. (f/k/a PHILIP MORRIS INCORPORATED), et al.,

Defendants.

Civil Action No. 99-CV-2496 (GK)

Next Scheduled Court Appearance: None

LORILLARD TOBACCO COMPANY’S PROPOSED CORRECTIVE STATEMENTS REQUIRED BY ORDER #1015

This Court’s August 17, 2006 Final Judgment and Remedial Order (“Order”) states that “[e]ach Defendant shall be required to make separate corrective statements about: (a) the adverse health effects of smoking; (b) the addictiveness of smoking and nicotine; (c) the lack of any significant health benefit from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild,’ and ‘natural,’ cigarettes; (d) Defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery; and (e) the adverse health effects of exposure to secondhand smoke (also known as environmental tobacco smoke, or ETS).” Order at II.B.5. The Order further requires that each party “submit a proposal for the exact wording of such statements, with any supporting materials deemed necessary.” Order at II.B.5. In its Final Opinion, the Court noted parenthetically the nature of the content that it would require for each of the statements. See Final Op. at 1636-37.

In light of the Court’s Order, and the notations in the Final Opinion, Lorillard Tobacco Company (“Lorillard”) submits the following proposed corrective statements and supporting materials.1


I. Proposed Statements

A. Adverse Health Effects of Smoking

The following statement is made by Lorillard Tobacco Company2 pursuant to a Court Order in United States of America, et al. v. Philip Morris USA, Inc., et al., Civil Action No. 99-2496 (GK) (Order #1015, Aug. 17, 2006, at 4; Final Op. at 1636) (on appeal).

The Surgeon General has concluded that the evidence is sufficient to infer a causal relationship between cigarette smoking and the following:

Bladder cancer, cervical cancer, cancers of the esophagus, renal cell and renal pelvis cancers, cancer of the larynx, acute myeloid leukemia, lung cancer, cancers of the oral cavity and pharynx, pancreatic cancer, gastric cancers, abdominal aortic aneurysm, subclinical atherosclerosis, stroke, coronary heart disease, chronic obstructive pulmonary disease morbidity and mortality, acute respiratory illnesses, including pneumonia, in persons without underlying smoking-related chronic obstructive lung disease, impaired lung growth during childhood and adolescence, early onset of lung function decline during late adolescence and early adulthood, respiratory symptoms in children and adolescents, including, coughing, phlegm, wheezing, and dyspnea, asthma-related symptoms (i.e., wheezing) in childhood and adolescence, premature onset of and an accelerated age-related decline in lung function in adults, all major

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1 This submission is made subject to and without waiving Lorillard’s objections to the Court’s Order requiring corrective statements on each of the five subjects identified above. Lorillard continues to object to the corrective statements remedy for reasons set forth in Joint Defendants’ Proposed Findings of Fact, and the Corrected Post Trial Brief of Joint Defendants, that the corrective statements remedy is not supported by the factual record and the law. Lorillard also objects to the imposition of the corrective statements remedy, because in the remedies expert disclosures required under Order 894, the government did not disclose its intent to seek corrective statements, and did not elicit testimony from those experts in support of the specific remedies it proposed. Moreover, even when, after the trial, the Government disclosed its intent to seek specific corrective statements, it did not seek a corrective statement concerning alleged “nicotine manipulation.” Thus the Court failed to hold an evidentiary hearing as required under United States v. Microsoft, 253 F.3d 34 (D.C. Cir. 2001). Lorillard has appealed and both its appeal and its motion for stay of the judgment await resolution by the D.C. Circuit. This submission is made pursuant to the Court’s Order and its directives regarding the required content of the proposed corrective statements, and nothing in this submission is intended to waive Lorillard’s objections to the corrective statements remedy, or to the final content of any required statements, whatever they may be. 2 This Court’s Final Judgment and Remedial Order provides: “The statements shall identify the Defendant making the corrective statements.” Order at II.B.7.c. Lorillard specifically objects to such attribution, but has included it pursuant to the Court’s Order.

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respiratory symptoms among adults including coughing, phlegm, wheezing, and dyspnea, poor asthma control, nuclear cataract, diminished health status that may manifest as increased absenteeism from work and increased use of medical care services, increased risks for adverse surgical outcomes related to wound healing and respiratory complications, hip fractures, low bone density in postmenopausal women, peptic ulcer disease in persons who are Helicobacter pylori positive, and periodontitis.3 The Surgeon General has also concluded that the evidence is sufficient to infer a causal relationship between maternal smoking during pregnancy and the following:

Fetal growth restrictions and low birth weight, premature rupture of the membranes, placenta previa, placental abruption, and preterm delivery and shortened gestation.

The Surgeon General has also concluded that the evidence is sufficient to infer a causal relationship between maternal smoking during and after pregnancy and sudden infant death syndrome.

These conclusions are contained in the 2004 Surgeon General’s Report. Lorillard encourages consumers to rely upon the conclusions of the Surgeon General in making decisions about smoking.

B. Addictiveness of Smoking and Nicotine

The following statement is made by Lorillard Tobacco Company pursuant to a Court Order in United States of America, et al. v. Philip Morris USA, Inc., et al., Civil Action No. 99-2496 (GK) (Order #1015, Aug. 17, 2006, at 4; Final Op. at 1636) (on appeal).

The Surgeon General has concluded:

Cigarettes and other forms of tobacco are addicting. Nicotine is the drug in tobacco that causes addiction.

These conclusions are contained in the 1988 Surgeon General’s Report. Lorillard encourages consumers to rely upon the conclusions of the Surgeon General in making decisions about smoking.

C. “Low-Tar” and “Lights” Descriptors

The following statement is made by Lorillard Tobacco Company pursuant to a Court Order in United States of America, et al. v. Philip Morris USA, Inc., et al., Civil Action No. 99-2496 (GK) (Order #1015, Aug. 17, 2006, at 4; Final Op. at 1636-37) (on appeal).

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3 The Surgeon General’s Report includes both specific and general characterizations of the diseases and adverse health effects found to be caused by smoking. Lorillard’s proposed statement utilizes the more specific characterizations of each disease or adverse health effect.

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The Surgeon General has concluded: Smoking cigarettes with lower machine-measured yields of tar and nicotine (including those that have been labeled “low tar,” “light,” “ultra light, “mild” and “natural”) provides no clear benefit to health in comparison to smoking cigarettes with higher machine-measured yields of tar and nicotine. This conclusion is contained in the 2004 Surgeon General’s Report. Lorillard encourages consumers to rely upon the conclusions of the Surgeon General in making decisions about smoking.

D. Nicotine Manipulation

The following statement is made by Lorillard Tobacco Company pursuant to a Court Order in United States of America, et al. v. Philip Morris USA, Inc., et al., Civil Action No. 99-2496 (GK) (Order #1015, Aug. 17, 2006, at 4; Final Op. at 1636) (on appeal).

Cigarette manufacturers “controlled the amount and form of nicotine delivery in their commercial products by controlling the physical and chemical make-up of the tobacco blend and filter.”

E. Environmental Tobacco Smoke

The following statement is made by Lorillard Tobacco Company pursuant to a Court Order in United States of America, et al. v. Philip Morris USA, Inc., et al., Civil Action No. 99-2496 (GK) (Order #1015, Aug. 17, 2006, at 4; Final Op. at 1636) (on appeal).

The Surgeon General has concluded:

The evidence is sufficient to infer a causal relationship between exposure to secondhand smoke and sudden infant death syndrome; and a lower level of lung function during childhood.

The evidence is sufficient to infer a causal relationship between maternal exposure to secondhand smoke during pregnancy and a small reduction in birth weight; and persistent adverse effects on lung function across childhood.

The evidence is sufficient to infer a causal relationship between secondhand smoke exposure from parental smoking and lower respiratory illnesses in infants and children; middle ear disease in children, including acute and recurrent otitis media and chronic middle ear effusion; cough, phlegm, wheeze, breathlessness and ever having asthma among children of school age; and the onset of wheeze illnesses in early childhood.

The evidence is sufficient to infer a causal relationship between exposure to secondhand smoke and lung cancer among lifetime nonsmokers; increased risks of coronary heart disease morbidity and mortality among both men and women;

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odor annoyance; nasal irritation; atherosclerosis in animal models; endothelial cell dysfunctions; a prothrombotic effect; and tumors in laboratory animals.

These conclusions are contained in the 2006 Surgeon General’s Report. Lorillard encourages consumers to rely upon the conclusions of the Surgeon General in making decisions about smoking.

II. Supporting Material

This Court has ordered Lorillard to submit five proposed corrective statements, and appears to have largely dictated the content of all five of those submissions. Lorillard believes no corrective statements should be ordered, in part because Lorillard has been denied the opportunity to litigate the specific content of any corrective statement, has been ordered to “propose” statements the content of which Lorillard believes cannot survive First Amendment scrutiny, and because an order requiring Lorillard to make any public statements on the subjects identified by the Court – regardless of their content – will violate Lorillard’s First Amendment rights.4 Nonetheless, as it is compelled to do under this Court’s Order, Lorillard has submitted the foregoing proposed corrective statements, and has included, as best it can discern, the Court-mandated content in each of its five proposed statements.

A. Overview

This Court has found that “each Surgeon General’s Report is intended to represent and, as a result of an extensive peer-review process, does represent the scientific consensus on smoking and health topics.” Final Op. at ¶ 3355. Lorillard believes the public should be guided by and rely upon the Surgeon General in making decisions regarding smoking. Accordingly,

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4 It is well established that “the right of freedom of thought protected by the First Amendment … includes both the right to speak freely and the right to refrain from speaking at all.” Wooley v. Maynard, 430 U.S. 705, 714 (1977) (citing Board of Education v. Barnette, 319 U.S. 624, 633-34 (1943)). “The right not to speak inheres in political and commercial speech alike, and extends to statements of fact as well as statements of opinion.” Int’l Dairy Foods Assoc. v. Amestoy, 92 F.3d 67, 71 (2nd Cir. 1996) (internal citations omitted).

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where possible, Lorillard has relied on the conclusions of the Surgeon General for the content of its proposed corrective statements, as they are phrased by the Surgeon General.5

In each of its proposed statements, Lorillard has identified the source of the proposed statement, and the reason (this Court’s Order) it is being provided. The First Amendment requires that such attribution be included in any statement ordered by the Court.6 See Avocados Plus, Inc. v. Johanns, 421 F.Supp.2d 45, 57 (D.D.C. 2006) (quoting Johanns v. Livestock Marketing Assn., 544 U.S. 550, 568 (Thomas, J., concurring)) (“the government may not … associate individuals or organizations individually with speech by attributing an unwanted message to them”); Planned Parenthood Minnesota v. Rounds, 375 F.Supp.2d 881, 887 (D.S.D. 2005) (granting a preliminary injunction against enforcement of state’s informed consent abortion amendments because “[t]he requirement that doctors create a statement in writing that includes the State’s message without a provision allowing the doctor to disassociate himself or herself from the materials, leads to a conclusion that [these] informed consent provisions of the statute are unconstitutional compelled speech”). Lorillard cannot be compelled to espouse government viewpoints as its own. See Wooley v. Maynard, 430 U.S. 705, 715 (1977) (“The First Amendment protects the right of individuals to hold a point of view different from the majority…”); Planned Parenthood, 375 F.Supp.2d at 886-87 (“South Dakota may not, however,

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5 The strongest statement about a causal relationship endorsed by the Surgeon General is that “[t]he evidence is sufficient to infer a causal relationship between smoking and [various diseases].” See 8/10/04 Carmona Dep. at 199:16-200:7 (attached at tab 1). 6 While necessary, including appropriate attribution is not sufficient to avoid violation of Lorillard’s First Amendment right to be free of compelled speech.

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violate the First Amendment rights of abortion providers by compelling them to espouse the State’s ideology.”).7


B. Specific Proposed Statements

1. Adverse Health Effects of Smoking

According to this Court’s Final Opinion, the corrective statement regarding the adverse health consequences of smoking must communicate “all the diseases which smoking has been proven to cause.” Final Op. at 1636. Lorillard’s proposed statement lists all of the diseases for which the 2004 Surgeon General’s Report concludes “the evidence is sufficient to infer a causal relationship” between that disease and smoking. See 2004 Surgeon General’s Report Executive Summary, Table 1.1, at 4-8 (attached at tab 3); id at Chapter 1 (excerpt attached at tab 4). Lorillard believes that its statement will need to be shortened for certain media, and proposes the following:

The following statement is made by Lorillard Tobacco Company pursuant to a Court Order in United States of America, et al. v. Philip Morris USA, Inc., et al., Civil Action No. 99-2496 (GK) (Order #1015, Aug. 17, 2006, at 4; Final Op. at 1636) (on appeal).

The Surgeon General has concluded that the evidence is sufficient to infer a causal relationship between cigarette smoking and numerous diseases, including lung cancer, several other cancers, coronary heart disease, and several respiratory diseases and conditions.

These conclusions are contained in the 2004 Surgeon General’s Report. Lorillard encourages consumers to rely upon the conclusions of the Surgeon General in making decisions about smoking.

2. Addictiveness of Smoking and Nicotine

This Court’s Final Opinion indicates that the statement on addiction must state not only

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7 Further, attribution to the Surgeon General serves an additional purpose. The record evidence demonstrates that the public considers governmental sources more credible than tobacco companies on issues relating to the health consequences of smoking. See, e.g., Viscusi WD at 107-111 (attached at tab 2).

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that cigarette smoking is addictive, but also that nicotine is addictive. Final Op. at 1636. Two of the major conclusions of the 1988 Surgeon General’s Report are: “1. Cigarettes and other forms of tobacco are addicting. 2. Nicotine is the drug in tobacco that causes addiction.” 1988 Surgeon General’s Report at 9 (attached at tab 5). Lorillard proposes use of these Surgeon General’s conclusions for the corrective statement on addiction.

3. “Low-Tar” and “Lights” Descriptors

The Court’s Order requires a corrective statement regarding “the lack of any significant health benefit from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild,’ and ‘natural,’ cigarettes.” Order at II.B.5. The Court’s Final Opinion indicates that the statement should state that these cigarettes “are no less hazardous than full-flavor cigarettes.” Final Op. at 1636-37. Lorillard’s proposed corrective statement tracks the language of the 2004 Surgeon General’s Report. See 2004 Surgeon General’s Report Executive Summary, at 25 (“Smoking cigarettes with lower machine-measured yields of tar and nicotine provides no clear benefit to health.”) (attached at tab 6). Lorillard’s proposed statement also identifies the particular product descriptors this Court intended the corrective statement to address.

4. Nicotine Manipulation

This Court concluded that “Defendants controlled the amount and form of nicotine delivery in their commercial products by controlling the physical and chemical make-up of the tobacco blend and filler.” Final Op. at 572. This is the corrective statement Lorillard proposes.8

5. Environmental Tobacco Smoke

The Court’s Final Opinion indicates that the corrective statement regarding

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8 Lorillard continues to object to the Court’s factual findings regarding nicotine manipulation, and objects because the government did not even seek a corrective communication on this issue. See Proposed Final Judgment and Order, Appendix A, filed June 28, 2005.

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environmental tobacco smoke should list “all the diseases which exposure to ETS has been proven to cause.” Final Op. at 1636. As this Court noted in its Final Opinion: “Although it is not in the record because it was issued this year, and accordingly, the Court does not rely upon it, the 2006 Surgeon General Report, titled ‘The Health and (sic) Consequences of Involuntary Exposure to Tobacco Smoke’ contains noteworthy conclusions” regarding the health effects of exposure to environmental tobacco smoke. Final Op. at 1522-23. Lorillard’s proposed statement lists the diseases for which the 2006 Surgeon General’s Report concludes “the evidence is sufficient to infer a causal relationship” between that disease and exposure to environmental tobacco smoke. (Excerpts attached at tab 7.)

III. Conclusion

Lorillard submits the foregoing proposed corrective statements pursuant to, and as required by, this Court’s August 17, 2006 Final Judgment and Remedial Order.

Dated: October 16, 2006 Respectfully submitted,

By /s/

Michael B. Minton

Richard S. Cornfeld

A. Elizabeth Blackwell

THOMPSON COBURN LLP

One US Bank Plaza, Suite 3500

St. Louis, Missouri 63101-1693

(314) 552-6000 – phone

(314) 552-7597 – fax

Kamran Q. Khan

SHOOK, HARDY & BACON L.L.P.

2555 Grand Blvd.

Kansas City, Missouri 64108-2613

(816) 474-6550 – phone

(816) 421-5547 – fax

Attorneys for Defendant

Lorillard Tobacco Company

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RJR Files Proposed Corrective Statements

October 18, 2006 2:46 am by Gene Borio

Defendants propose the following as a corrective statement on environmental tobacco smoke:

The Surgeon General has concluded:

Exposure to environmental tobacco smoke has been proven to cause premature death and disease in children and in adults who do not smoke. Children exposed to secondhand smoke are at an increased risk for sudden infant death syndrome (SIDS), acute respiratory infections, ear problems, and more severe asthma.

Smoking by parents causes respiratory symptoms and slows lung growth in their children. Exposure of adults to secondhand smoke has immediate adverse effects on the cardiovascular system and causes coronary heart disease and lung cancer. The scientific evidence indicates that there is no risk-free level of exposure to secondhand smoke.

This message is furnished by [Defendant] pursuant to a Court Order and is taken from the 2006 Surgeon General’s Report.

You should rely upon your medical provider and the Surgeon General in making decisions regarding smoking.

Text of:

RJR Correctives, October 16, 2006

**———————————————————

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

And

TOBACCO-FREE KIDS ACTION FUND,

et. al.,

Plaintiff-Intervenors,

v.

PHILIP MORRIS USA INC. (f/k/a

PHILIP MORRIS INCORPORATED),

et al.,

Defendants.

Civil Action No. 99-CV-2496 (GK)

Next Scheduled Court Appearance: None

Certain Joint Defendants’ Submission of Proposed Corrective Statements Pursuant to Order #1015

Defendants R.J. Reynolds Tobacco Company and Brown & Williamson Holdings, Inc.,1 (collectively “Defendants”) pursuant to Order #1015, § II.B.5 hereby submit proposed corrective

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1 Effective July 30, 2004, Brown & Williamson Tobacco Corporation’s United States cigarette and tobacco business was merged with R.J. Reynolds Tobacco Company. Contemporaneously, Brown & Williamson Tobacco Corporation changed its name to Brown & Williamson Holdings, Inc. (See Notice of Name Change [Dkt. No. 3860].) Although still remaining as a Defendant in this case, Brown & Williamson Holdings, Inc. (“B&W Holdings”) no longer manufactures, researches, sells, distributes, advertises, markets, or promotes cigarettes in the United States for domestic consumption. Because B&W Holdings no longer operates a United States tobacco business, it does not have retail merchandising contracts, it no longer maintains a website containing public positions on smoking and health issues or cigarette marketing, nor does it otherwise engage in communications with the U.S. public regarding tobacco or cigarette issues. However, the District Court’s Final Judgment and Remedial Order applies to “each of the Defendants,” [Dkt. No. 5733, p.2], including “Brown & Williamson Tobacco Co.” (See Final Opinion, Dkt. No. 5732, p. 10 n.4). To the extent the Final Order and Opinion is construed as imposing liability on or otherwise applying to and/or requiring affirmative actions in connection with the ongoing conduct of tobacco business in the United States, B&W Holdings no longer conducts any tobacco business in the United States; such business has been acquired by R.J. Reynolds Tobacco Company.

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statements on the five topics identified in the Court’s Order and supporting materials.2 Each proposed corrective statement is set forth below along with a brief explanation of the basis upon which the Defendants formulated the proposed text.

A. Background

The Court has ordered the submission of one corrective statement for each of five topics (for a total of 5 statements): “(a) the adverse health effects of smoking; (b) the addictiveness of smoking and nicotine; (c) the lack of any significant health benefit from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild’ and ‘natural,’ cigarettes; (d) Defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery; and (e) the adverse health effects of exposure to secondhand smoke (also known as environmental tobacco smoke, or ETS).” Order #1015 at § II.B.5.

Defendants looked to the Court’s Amended Opinion for guidance as to what those statements should include, particularly pages 1635 and 1636 where the Court provided parenthetical descriptions of each corrective statement. Defendants then looked to the major conclusions of several Surgeon General’s Reports in formulating the specific text of the proposed corrective statements. To the extent Defendants’ proposals depart from the language of

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2 This submission is made subject to and without waiving Defendants’ objections to the Court’s Order. Defendants object to the corrective statements remedy for reasons set forth in Joint Defendants’ Proposed Findings of Fact, and the Corrected Post Trial Brief of Joint Defendants. Defendants also object on the basis of the holding in United States v. Microsoft, 253 F.3d 34 (D.C. Cir. 2001). Defendants have also objected to the imposition of this remedy in the Motion to Stay the Final Judgment and Remedial Order Pending Appeal and the Memorandum of Points and Authorities in Support thereof. Nothing in this submission is intended to waive Defendants’ objections to the corrective statements remedy, or to the final content of any required statements.

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the Surgeon General, as occurs in a few instances, the reasons for those departures are set forth below.3


B. The Proposed Corrective Statements

1. Adverse Health Effects of Smoking

Defendants propose the following corrective statement regarding the “adverse health effects of smoking”:

The Surgeon General has concluded that cigarette smoking causes the following diseases and adverse health effects:

Bladder cancer, cervical cancer, cancers of the esophagus, renal cell and renal pelvis cancers, cancer of the larynx, acute myeloid leukemia, lung cancer, cancers of the oral cavity and pharynx, pancreatic cancer, gastric cancers, abdominal aortic aneurysm, atherosclerosis, stroke, coronary heart disease, chronic obstructive pulmonary diseases such as emphysema and chronic bronchitis, pneumonia, respiratory effects in utero, respiratory effects in children, adolescents, and adults, respiratory symptoms among adults including coughing, phlegm, wheezing, and dyspnea, poor asthma control, fetal death and stillbirths, reduced fertility in women, fetal growth restrictions and low birth weight, pre-mature rupture of the membranes, placenta previa, placental abruption, preterm delivery and shortened gestation, cataracts, diminished health status/morbidity, hip fractures, low bone density in postmenopausal women, and peptic ulcer disease.

This message is furnished by [Defendant] pursuant to a Court Order and is taken from the 2004 Surgeon General’s Report.

You should rely upon your medical provider and the Surgeon General in making decisions regarding smoking.

* * * *

The Court’s Amended Opinion regarding the corrective statement addressing the “adverse health effects of smoking” requires that the statement set forth “all the diseases which

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3 As indicated in Order #1015, § II.B.5, Defendants acknowledge that there also may need to be “[s]light variations in the corrective communications” to “accommodate the media or format utilized,” depending on the content of the statements actually adopted by the Court.

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smoking has been proven to cause.” Amended Opinion at 1635. The 2004 Surgeon General’s Report’s Executive Summary identifies the diseases which the Surgeon General had concluded were “caused”4 by smoking. 2004 Surgeon General’s Report Executive Summary, Table 1.1, at 2-6 (attached at Exhibit 1). Defendants note that the Court’s Amended Opinion concludes that smoking causes uterine cancer and liver cancer. Amended Opinion at ¶¶ 531-32 (citing to Samet WD at 104:10-106:9). These diseases are not presently among those the Surgeon General has concluded are caused by smoking. 5 Defendants, therefore, omitted these two diseases from the proposed corrective statement but they can be added if the Court so directs.6

2. Addictiveness of Smoking and Nicotine

Defendants propose the following corrective statement on the addictiveness of smoking and nicotine:

The Surgeon General has concluded:

Cigarettes and other forms of tobacco are addicting. Nicotine is the drug in tobacco that causes addiction.

This message is furnished by [Defendant] pursuant to a Court Order and is taken from the 1988 Surgeon General’s Report.

You should rely upon your medical provider and the Surgeon General in making decisions regarding smoking.

* * * *

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4 The Surgeon General’s exact phraseology is that “[t]he evidence is sufficient to infer a causal relationship between smoking and [disease or adverse health effect].” Based on statements in the Court’s Opinion, Defendants propose substituting the word “cause” for the wording the Surgeon General employs.

5 Dr. Samet testified that the Surgeon General had not concluded that cigarette smoking causes liver cancer. Samet WD at 105:16-21. Defendants could not locate evidence in the record that cigarette smoking causes uterine cancer. The Surgeon General states that “current smoking reduces the risk of endometrial cancer in postmenopausal women.” 2004 Surgeon General’s Report at Chapter 1, page 26.

6 Defendants note that the list of diseases and conditions contained in this proposed corrective statement is substantively the same as those submitted by Lorillard, although there are variations in the manner in which each party summarized Table 1.1 from the 2004 Surgeon General’s Report’s Executive Summary from which these lists were derived.

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Defendants turned to the 1988 Surgeon General’s Report, for the language proposed above. One of the 1988 Surgeon General’s Report’s major conclusions is that “[c]igarettes and other forms of tobacco are addicting. Nicotine is the drug in tobacco that causes addiction.” 1988 Surgeon General’s Report at 9 (attached at Exhibit 2).

3. Low-Tar/Lights

Defendants propose the following corrective statement regarding the lack of any significant health benefit from smoking “low tar,” “light,” “ultra light, “mild” and “natural” cigarettes:

The Surgeon General has concluded:

Smoking cigarettes with lower machine-measured yields of tar and nicotine (including those that have been labeled “low tar,” “light,” “ultra light, “mild” and “natural”) provides no clear benefit to health in comparison to smoking cigarettes with higher machinemeasured yields of tar and nicotine.

This message is furnished by [Defendant] pursuant to a Court Order and is derived from the 2004 Surgeon General’s Report.

You should rely upon your medical provider and the Surgeon General in making decisions regarding smoking.

* * * *

Defendants turned to the 2004 Surgeon General’s Report for the language proposed above. That report compares lower and higher yield cigarettes and reaches a conclusion that “[s]moking cigarettes with lower machine-measured yields of tar and nicotine provides no clear benefit to health.” 2004 Surgeon General’s Report Executive Summary, at 8 (attached at Exhibit 3). However, this statement, when repeated apart from the context of the 2004 Surgeon General’s Report, may not be entirely clear. In keeping with the Court’s directive that it be apparent that the referenced comparison is to full-flavor cigarettes – i.e., those with higher

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machine-measured levels of tar and nicotine – additional language has been added to the Surgeon General’s conclusion to make such a comparative statement. Finally, given the Court’s Order that the use of the terms “low tar,” “light,” “ultra light, “mild” and “natural” be discontinued, Defendants included a reference to those terms in the proposed corrective statement as well believing that to be the Court’s preference.

4. Nicotine Manipulation

Defendants propose the following as a corrective statement on nicotine manipulation:

A United States District Court has found that:

“Cigarettes are specifically designed to deliver a range of nicotine doses so that a smoker can obtain her optimal dose from virtually any cigarette on the market, regardless of that cigarette’s nicotine delivery level as measured by the FTC method.” “Cigarette manufacturers controlled the amount and form of nicotine delivery in commercial products by controlling the physical and chemical make-up of the tobacco blend and filler.” This message is furnished pursuant to a Court Order by [Defendant].

You should rely upon your medical provider and the Surgeon General in making decisions regarding smoking.

* * * *

Defendants were unable to identify a comparable conclusion in any recent Surgeon General’s Report. Accordingly, Defendants looked to the Court’s Amended Opinion, at pages 567 and 572, for the specific content of this proposed corrective statement.

5. Environmental Tobacco Smoke

Defendants propose the following as a corrective statement on environmental tobacco smoke:

The Surgeon General has concluded:

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Exposure to environmental tobacco smoke has been proven to cause premature death and disease in children and in adults who do not smoke. Children exposed to secondhand smoke are at an increased risk for sudden infant death syndrome (SIDS), acute respiratory infections, ear problems, and more severe asthma.

Smoking by parents causes respiratory symptoms and slows lung growth in their children. Exposure of adults to secondhand smoke has immediate adverse effects on the cardiovascular system and causes coronary heart disease and lung cancer. The scientific evidence indicates that there is no risk-free level of exposure to secondhand smoke.

This message is furnished by [Defendant] pursuant to a Court Order and is taken from the 2006 Surgeon General’s Report.

You should rely upon your medical provider and the Surgeon General in making decisions regarding smoking.

* * * *

The Court’s Amended Opinion regarding the corrective statement addressing the “the adverse health effects of exposure to secondhand smoke” requires that the statement set forth “all the diseases which exposure to ETS has been proven to cause.” Amended Opinion at 1635.

Defendants turned to the 2006 Surgeon General’s Report for the requested list of diseases and conditions caused by exposure to ETS. That report identifies six major conclusions, four of which directly address the health effects of ETS and the diseases the Surgeon General has concluded are caused by exposure to ETS. 2006 Surgeon General’s Report at 11 (attached at Exhibit 4).7

C. Compliance with the February, 2007 Deadline

The Court’s Order requires that Reynolds present the corrective statements through onserts starting in February, 2007. As Reynolds has already advised the Court, the placement of onserts on the packaging imposes significant costs and presents logistical challenges and cannot

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7 The remaining two major conclusions do not directly address the health effects of exposure to ETS and were omitted from the proposed corrective statement for that reason.

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be fully implemented by the February deadline. See Declaration of J. Brice O’Brien, at ¶ 29.

Nonetheless, to maximize Reynolds’ ability to comply with the Court’s February, 2007 deadline for shipment of cigarettes with package onserts for retail distribution and to minimize the disruption of Reynolds’ business operations, Reynolds respectfully requests that the Court advise the Defendants of the content of the corrective statements as soon as possible.

D. Conclusion

The foregoing proposed corrective statements are submitted pursuant to, and as required by, Order #1015. For the reasons set forth above, Defendants believe the proposed corrective statements comply with the requirements of the Court’s Order.

Dated: October 16, 2006

Respectfully submitted,

/s/ Geoffrey K. Beach

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

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

Geoffrey K. Beach (D.C. Bar No. 439763)

JONES DAY

51 Louisiana Avenue, N.W.

Washington, D.C. 20001-2113

Telephone: (202) 879-3939

Fax: (202) 626-1700

Paul G. Crist

JONES DAY

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114-1190

Telephone: (216) 586-3939

Fax: (216) 579-0212

Attorneys for Defendant

R.J. Reynolds Tobacco Company

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/s/ Geoffrey K. Beach for

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

KIRKLAND & ELLIS LLP

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

Washington, D.C. 200005

Telephone: (202) 879-5000

Fax: (202) 879-5200

David M. Bernick

Stephen R. Patton

Renee D. Smith

KIRKLAND & ELLIS LLP

200 East Randolph Drive, Suite 5900

Chicago, Illinois 60601

Telephone: (312) 861-2000

Fax: (312) 861-2200

Attorneys for Defendant

Brown & Williamson Holdings, Inc.

BAT FILES PROPOSED CORRECTIVE STATEMENTS

October 18, 2006 1:56 am by Gene Borio

1. There are adverse health effects from cigarette smoking. For a list of health effects from smoking and a discussion of the relevant science, see the 2004 Report of the Surgeon General “The Health Consequences of Smoking.”

2. Cigarette smoking and nicotine are addictive.

3. There is no significant health benefit from smoking “low tar,” “light,” “ultra light,” “mild,” or “natural,” cigarettes.

4. BATCo manipulates the design of its cigarette brands to ensure that every cigarette of a particular brand or style will deliver the amount of nicotine (within 0.1 mg.) advertised for that brand, according to the test for nicotine in cigarette smoke adopted by the International Standards Organization.

5. There are adverse health effects from exposure to second hand smoke (also known as environmental tobacco smoke or ETS). For a list of health effects and a discussion of the relevant science, see the 2006 Report of the Surgeon General “The Health Consequences of Involuntary Exposure to Tobacco Smoke.”

**———————————————————

Text follows of:

BAT Proposed Corrective Statements October 16, 2006

**———————————————————

NY3 - 423672.01 UNITED STATES DISTRICT COURT DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

-against-

PHILIP MORRIS USA, INC., et al., Defendants.

99 Civ No. 02496 (GK)

No court appearance scheduled

SUBMISSION OF BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED (”BATCo”) PURSUANT TO ORDER #1015, II.B, 5

On August 17, 2006, the Court issued Order #1015 which requires “[e]ach Defendant to make separate corrective statements concerning each of the following: (a) the adverse health effects of smoking; (b) the addictiveness of smoking and nicotine; (c) the lack of any significant health benefit from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild,’ and ‘natural,’ cigarettes; (d) Defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery; and (e) the adverse health effects of exposure to secondhand smoke (also known as environmental tobacco smoke, or ETS).” Order #1015, II.B, 5. Order #1015 also requires the parties “[w]ithin sixty days of the date of this Final Judgment and Remedial Order [to] each submit a proposal for the exact wording of such corrective statements, with any supporting materials deemed necessary.” Id.

2

Pursuant to Order #1015, II.B, 5, British American Tobacco (Investments) Limited (”BATCo”) makes the following submission: 1

1. There are adverse health effects from cigarette smoking. For a list of health effects from smoking and a discussion of the relevant science, see the 2004 Report of the Surgeon General “The Health Consequences of Smoking.”

2. Cigarette smoking and nicotine are addictive.

3. There is no significant health benefit from smoking “low tar,” “light,” “ultra light,” “mild,” or “natural,” cigarettes.

4. BATCo manipulates the design of its cigarette brands to ensure that every cigarette of a particular brand or style will deliver the amount of nicotine (within 0.1 mg.) advertised for that brand, according to the test for nicotine in cigarette smoke adopted by the International Standards Organization.

5. There are adverse health effects from exposure to second hand smoke (also known as environmental tobacco smoke or ETS). For a list of health effects and a discussion of the relevant science, see the 2006 Report of the Surgeon General “The Health Consequences of Involuntary Exposure to Tobacco Smoke.”

—–

1 BATCo makes this submission subject to and without waiving any of its rights to challenge the Court’s Final Judgment and Remedial Order.

3

Dated: October 16, 2006

New York, New York

Respectfully submitted,

CHADBOURNE & PARKE LLP

By /s/

Bruce G. Sheffler

A Member of the Firm

Attorneys for British American Tobacco

(Investments) Limited

30 Rockefeller Plaza

New York, New York 10112

(212) 408-5100

PM USA FILES PROPOSED CORRECTIVE STATEMENTS UNDER PROTEST; ALTRIA “SUPPORTS” STATEMENTS, BUT DISTANCES ITSELF FROM VERDICT

October 18, 2006 1:36 am by Gene Borio

Philip Morris USA and its parent Altria filed an extraordinary pair of documents on Oct. 16, 2006.

PM laid out its proposed Corrective statements “as compelled by the final judgment and remedial order” of Judge Kessler, while insisting that “the corrective statements remedy imposed by the Court is not supported by the factual record and the law.”

The corrective statements address 5 issues:

“(a) the adverse health effects of smoking; (b) the addictiveness of smoking and nicotine; (c) the lack of any significant health benefit from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild,’ and ‘natural,’ cigarettes; (d) defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery; and (e) the adverse health effects of exposure to secondhand smoke.”

PM demonstrates its expertise and attention to verbal detail in its proposal, an indication that all PM says is subject to the same expertise, and that all its communications are at least as verbally and psychologically savvy.

“PM USA’s proposed statements are deliberately short and to the point. They are designed to maximize the effectiveness of the communication by making it likely that consumers will read and understand them in the media the Court has specified”

The wordplay involved in PM’s’s filing is astonishing. PM claims to base many of its statements on various Surgeon General’s Reports and Monograph 13. Yet its statement on secondhand smoke hedges its bet in classic fashion, though PM claims the statement “reflects the conclusions of the 2006 Surgeon General’s Report.” The proposed statement reads:

” Public health officials have concluded that secondhand smoke from cigarettes causes disease, including lung cancer and heart disease, in non-smoking adults, as well as causes conditions in children such as asthma, respiratory infections, cough, wheeze, otitis media (middle ear infection) and Sudden Infant Death Syndrome.”

While PM argues that its statements much be kept short in order to best communicate their messages, PM insists on keeping an extra 6 words here: “Public health officials have concluded that.” The statement gives no indication of the Surgeon General’s conclusion that “the debate is over.”

On the same day, Altria filed a submission stating that,

“defendant Altria Group, Inc. hereby supports the corrective statements proposed by defendant Philip Morris USA, Inc”

Yet Altria continues to argue against Kessler’s verdict in a footnote which states,

“Altria is a holding company which does not manufacture, sell, or distribute cigarettes. For the reasons set forth in defendants’ post-trial briefs and post-trial proposed findings of fact, Altria submits that the record does not support a finding of RICO liability on the part of Altria, and establishes no basis for injunctive relief against Altria. In particular, there is no legal or factual basis for requiring Altria to make “corrective statements.” Nothing in this submission constitutes a waiver of these positions.”

**———————————————————

Texts follow of:

Philip Morris USA Proposed Corrective Statements, October 16, 2006

ALTRIA SUBMISSION REGARDING PROPOSED CORRECTIVE STATEMENTS, October 16, 2006

**———————————————————

Philip Morris USA Proposed Corrective Statements, October 16, 2006

**———————————————————

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

And

TOBACCO-FREE KIDS ACTION FUND,

et al.,

Plaintiff-Intervenors,

v.

PHILIP MORRIS USA INC. (f/k/a

PHILIP MORRIS INCORPORATED),

et al.,

Defendants.

Civil Action No. 99-CV-2496 (GK)

Next Scheduled Court Appearance: None

PHILIP MORRIS USA’S PROPOSED CORRECTIVE STATEMENTS AS COMPELLED BY THE FINAL JUDGMENT AND REMEDIAL ORDER

Philip Morris USA, Inc. (“PM USA”) makes this submission in response to this Court’s August 17, 2006 Final Judgment and Remedial Order (“Order”) compelling defendants to make “corrective statements” on five issues. Order II.B.5. The Order directs the parties to submit proposed corrective statements within 60 days. See Order II.B.5.1

—–

1 Notwithstanding that it is making this submission, PM USA reiterates, for reasons set forth in Joint Defendants’ Proposed Findings of Fact, and the Corrected Post Trial Brief of Joint Defendants, that the corrective statements remedy imposed by the Court is not supported by the factual record and the law. As such, PM USA has appealed, and both its appeal and its motion for a stay of the judgment pending appeal await resolution by the D.C. Circuit. Similarly, PM USA continues to object to the Court’s imposition of this remedy without holding an evidentiary hearing pursuant to United States v. Microsoft. 253 F.3d 34 (D.C. Cir. 2001). Nothing in this submission is intended to waive PM USA’s objections to the corrective statements remedy.

2

I. PM USA’s Proposed Corrective Statements

The Court has directed the parties to submit proposed corrective communications on the following topics: “(a) the adverse health effects of smoking; (b) the addictiveness of smoking and nicotine; (c) the lack of any significant health benefit from smoking ‘low tar,’ ‘light,’ ‘ultra light,’ ‘mild,’ and ‘natural,’ cigarettes; (d) defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery; and (e) the adverse health effects of exposure to secondhand smoke.” Order at II.B.5.

PM USA’s proposed statements are derived in substance from and accurately reflect the conclusions of public health authorities, particularly the Surgeon General reports. Relying on the conclusions of the consensus of public health authorities helps to ensure that the public receives a consistent message regarding the risks associated with smoking.

In addition, PM USA’s proposed statements are deliberately short and to the point. They are designed to maximize the effectiveness of the communication by making it likely that consumers will read and understand them in the media the Court has specified. As both Houses of Congress have recognized, in connection with cigarette health warnings, “cautionary statement(s) should be short and direct.” H.R. Rep. No. 89-449 at 4 (1965), Report on the Federal Cigarette Labeling and Advertising Act, June 8, 1965 (Exhibit A); S. Rep. No. 89-195 at 4 (1965), Report on the Cigarette Labeling Act, May 19, 1965 (Exhibit B). Long or wordy statements are less likely to be effective. Accordingly, PM USA’s proposed statements are short, succinct and easily understandable in the contexts in which they have been ordered to be presented.

For each corrective statement on which it offers a proposal, PM USA sets forth PM USA’s proposed language for the statement and identifies the public health authority from which the proposed content is derived.

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A. The Adverse Health Effects of Smoking

PM USA proposes the following corrective statement:

Cigarette smoking causes lung cancer, heart disease, emphysema, and other serious diseases in smokers. Smokers are far more likely to develop serious diseases, like lung cancer, than non-smokers. Smoking by pregnant women increases the risks for fetal injury, premature birth, and low birth weight. There is no safe cigarette.

PM USA’s proposed statement summarizes the conclusions of the 2004 Surgeon General’s Report, The Health Consequences of Smoking (“2004 Surgeon General’s Report”) (Exhibit C). The Surgeon General’s Report finds that “[t]he evidence is sufficient to infer a causal relationship between smoking” and the following diseases: “lung cancer, bladder cancer, larynx cancer, oral cavity cancer, stomach cancer, cervical cancer, esophageal cancer, kidney cancer, pancreatic cancer, cardiovascular diseases such as heart attacks, coronary heart disease, and atherosclerosis, pneumonia, chronic obstructive pulmonary diseases such as emphysema and chronic bronchitis, cerebrovascular diseases, peptic ulcers, aortic aneurysms, cataracts, low bone density in menopausal women, reduced fertility, problems with pregnancy such as premature rupture of the membranes, placenta previa, placental abruption, pre-term delivery and shortened gestation, fetal growth restriction and low birth weight, acute myeloid leukemia, respiratory effects in children, adolescents and adulthood and hip fractures.” See id. at 4-8.

Although derived directly from the Surgeon General’s statement, PM USA’s proposed statement does not list each and every one of the diseases set forth in the 2004 Surgeon General’s Report. Doing so would dilute the message by making it a laundry list that will be long, complex, and less understandable in the required media. Moreover, including such a list would make the statement far too long to include in the media specified by the Court. See infra Section II.

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B. The Addictiveness of Smoking and Nicotine

PM USA proposes the following corrective statement:

Cigarette smoking is addictive. The nicotine in cigarette smoke is addictive. It can be difficult to quit smoking, but this should not deter smokers who want to quit from trying to do so.

PM USA’s statement tracks the language of the 1988 Surgeon General’s Report, The Health Consequences of Smoking: Nicotine Addiction (Exhibit D) at 9, which concludes that “cigarettes and other forms of tobacco are addicting.” PM USA’s proposed corrective statement even more forcefully emphasizes the addictive nature of smoking and nicotine. PM USA has added an additional statement to help ensure that its warning does not have the unintentional consequence of deterring smokers from attempting to quit.

C. The Lack Of Any Significant Health Benefit From Smoking “Low Tar,” “Light,” “Ultra light,” “Mild,” and “Natural,” Cigarettes

PM USA proposes the following corrective statement:

There is no safe cigarette. “Low tar,” “light,” “ultra light,” “medium,” and “mild” brands are no exception. You should not assume that these brands are safe or safer than full flavor brands or that smoking these brands will help you quit. If you are concerned about the health risks of smoking, you should quit.

PM USA’s proposed statement incorporates the conclusions embodied in the 2004 Surgeon General’s Report, NCI Monograph 13: Risks Associated with Smoking Cigarettes with Low Tar Machine-Measured Yields of Tar and Nicotine (2001) (“Monograph 13”) (Exhibit E), and the FTC Consumer Alert, Up In Smoke: The Truth About Tar and Nicotine Ratings, (May 2000) (“2000 FTC Consumer Alert”) (Exhibit F). Specifically, PM USA’s proposed statement is based on the following conclusions of the public health community:

• “There is no convincing evidence that changes in cigarette design between 1950 and the mid 1980s have resulted in an important decrease in the disease burden caused by cigarette use either for smokers as a group or for the whole population.” NCI Monograph 13 at 146.

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• “Widespread adoption of lower yield cigarettes by smokers in the United States has not prevented the sustained increase in lung cancer among older smokers.” Id.

• “Smoking ‘low tar’ or ‘light’ cigarettes does not eliminate the health risks of smoking.” 2000 FTC Consumer Alert.

• “Smoking cigarettes with lower machine-measured yields of tar and nicotine provides no clear benefit to health.” 2004 Surgeon General’s Report at 25.

• “If you’re concerned about the health risks of smoking, stop smoking.” 2000 FTC Consumer Alert.

• “There’s no such thing as a safe smoke.” Id.

Additionally, because PM USA does not use the “natural” descriptor, but does use the “medium” descriptor, PM USA proposes including “medium” but deleting “natural” from the list of descriptors.

D. Exposure to Environmental Tobacco Smoke

PM USA proposes the following corrective statement:

Public health officials have concluded that secondhand smoke from cigarettes causes disease, including lung cancer and heart disease, in non-smoking adults, as well as causes conditions in children such as asthma, respiratory infections, cough, wheeze, otitis media (middle ear infection) and Sudden Infant Death Syndrome.

PM USA’s proposed statement reflects the conclusions of the 2006 Surgeon General’s Report, The Health Consequences of Involuntary Exposure to Tobacco Smoke (Exhibit G) — the most recent authoritative statement regarding the adverse consequences of exposure to environmental tobacco smoke. This report concludes that:

• “The evidence is sufficient to infer a causal relationship between secondhand smoke exposure and lung cancer,” id. at 15;

• “The evidence is sufficient to infer a causal relationship between exposure to secondhand smoke and increased risks of coronary heart diseases, morbidity and mortality among both men and women,” id.;

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• “The evidence is sufficient to infer a causal relationship between parental smoking and middle ear disease in children, including acute and recurring otitis media and chronic middle ear effusion,” id. at 14;

• “The evidence is sufficient to infer a causal relationship between parental smoking and ever having asthma among children of school age” id.;

• “The evidence is sufficient to infer a causal relationship between exposure to secondhand smoke and sudden infant death syndrome” id. at 13;

• “The scientific evidence indicates that there is no risk-free levels of exposure to secondhand smoke,” id. at 11.

E. Statement Regarding Defendants’ Purported Manipulation of Cigarette Design

The Court has directed defendants to submit a statement indicating that they manipulate the design of cigarettes to ensure optimum nicotine delivery. As reflected in Joint Defendants’ Proposed Findings of Fact, which PM USA incorporates here by reference, PM USA believes that the Court’s findings underlying this topic are factually incorrect. Accordingly, PM USA cannot submit a truthful “corrective” statement that completely meets the Court’s apparent objective, particularly if the Court is requiring the statement to appear as an admission of PM USA rather than as a statement attributed to the Court’s findings. We therefore urge the Court not to require a corrective statement on this issue until PM USA’s appeal is decided. Compelling PM USA to make such a statement now could cause irreparable consequences if the statement is in the interim attributed to PM USA by the public, the press, and other litigants. See Defendants’ Emergency Motion To Stay The Final Judgment And Remedial Order Pending Appeal.2

—–

2 The Corrective Statements are all subject to strict scrutiny, as are most of the limitations on speech embodied in other aspects of the Court’s August 17 Order. See Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 66-67 (1983); Riley v. Nat’l Fed’n of the Blind of N.C., 487 U.S. 781, 795-97 (1988); United States v. United Foods, 533 U.S. 405, 409 (2001).

7

Moreover, at a minimum, if the Court requires PM USA to make a statement with which it disagrees, it should allow it to disassociate itself from the assertion by, for example, attributing the statement to the Court. See United States v. Nat’l Soc. of Professional Engineers, 555 F.2d 978, 984 (D.C. Cir. 1977) (where court strikes professional society’s rule that competitive bidding was unethical, and requires the society to state that the rule has been judicially invalidated on antitrust grounds, it was improper for a district court to require the society to state that “in its view” competitive bidding was ethical); Planned Parenthood Minnesota v. Rounds, 375 F.Supp.2d 881, 886-87 (D.S.D. 2005) (striking down legislation requiring compelled speech where no opportunity for speaker to disassociate him or herself from content of speech); see also Prune Yard Shopping Center v. Robins, 447 U.S. 74 (1980) (upholding law requiring shopping mall owner to permit petitioning on its property because no risk existed that the speech would be attributed to property owner).

In the alternative, if the Court nevertheless adheres to its requirement that defendants make corrective statements on this topic, PM USA proposes the following:

Cigarettes deliver tar and nicotine. Well known design features affect the delivery of tar and nicotine. The amount of tar and nicotine you inhale will vary, depending upon how you smoke. Generally speaking, the more intensely you smoke a cigarette, the more tar and nicotine you will inhale.

This statement, which is derived from Monograph 13, see NCI Monograph 13 at 34, 60, and the 2000 FTC Consumer Alert, both reflects what PM USA believes to be true and responds to the Court’s directive to submit a corrective statement on the “[d]efendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery.”

II. Dissemination of the Corrective Statements:

The Court should consider the length of the Corrective Statements as it prepares to issue its Order. The length of the ordered Corrective Statement will directly impact both their impact

8

on observers and PM USA’s ability to comply with the requirements of the Court’s August 17 Order.

First, as the Court considers the content of corrective communications it must consider the effectiveness of the communication in terms of reaching consumers. Congress has long recognized that overly long health warnings may not be effective. Indeed, to be effective, smoking and health “cautionary statement(s) should be short and direct.” H.R. Rep. No. 89-449 at 4 (1965); Report on the Federal Cigarette Labeling and Advertising Act, June 8, 1965; S. Rep. No. 89-195 at 4 (1965), Report on the Cigarette Labeling Act, May 19, 1965. See also Comprehensive Smoking Education Act of 1981: Hearing on S. 1929 Before the S. Comm. On Commerce, Science, and Transportation, 97th Cong. 80 (1982) (statement of Charles Crenshaw Sharp, President, Charles Sharp & Associates) (“To be easily understood, a health warning also must be short and concise. Longer health warnings containing numerous facts are more difficult to comprehend and less likely to be read.”) (Exhibit H); id at 3 (statement of Senator Ford) (“Advertisers follow a simple creed . . . ‘Keep it simple, keep it clear . . .’” ).

The statements previously submitted by the Department of Justice are long, wordy, and on their face time consuming to read in the manners prescribed by the Court. For example, the Justice Department’s previous submission on the adverse health effects associated with smoking contained 117 words and listed dozens of potential diseases that may be contracted as a result of smoking. By contrast, PM USA proposes short, pithy statements that are more likely to be read, understood and remembered in the contexts of the required media vehicles.

Second, each form of media specified by the Court carries with it some limitations regarding space. The most space constrained media is the television commercial. A 15-second commercial cannot accommodate an unlimited stream of words. For example, none of the

9

Justice Department’s previously submitted statements on adverse health effects could be read and scrolled comprehensibly in a 15-second television commercial. By contrast, each of the statements submitted by PM USA constitutes just about the maximum that can be communicated in full across each of the media identified by the Court.

III. Compliance with the Court’s Deadlines

The Court’s corrective statements remedy imposes extensive obligations on defendants. As explained in the August 31, 2006 Declaration of David Beran, which PM USA filed as an exhibit to Certain Defendants’ Motion For Stay Pending Appeal, and which was not disputed by the government, implementation of the corrective statements in accordance with the Court’s schedule presents significant logistical challenges. See August 31 Declaration of David Beran, ¶¶ 24-37. Based on further investigation, it now appears that because of the logistics required, PM USA would, at a minimum, need to know the content of the communications by November 9, 2006 in order to have a realistic chance of meeting the Court’s February 2007 deadline for shipment of onserts for retail distribution. October 16, 2006 Declaration of David Beran ¶¶ 5-6 (Exhibit I). Even then, PM USA will only be able to meet the Court-ordered deadline if it can execute a highly accelerated production and implementation schedule without any interruptions or delays. October 16 Beran Decl.¶ 6. Accordingly, PM USA respectfully requests that the Court approve the final corrective statements by November 9, 2006, or, in the alternative, modify the deadlines imposed in the Order to adjust each of the deadlines by at least as much time beyond November 9, 2006 as the Court needs to resolve the issue of the content of the Corrective Statements.

CONCLUSION

WHEREFORE, Philip Morris USA respectfully requests that the Court adopt its proposed corrective statements.

10

DATED: October 16, 2006 Respectfully submitted,

/s/ Matthew A. Campbell 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

Fax: (202) 282-5100

Dan K. Webb

Thomas J. Frederick

WINSTON & STRAWN LLP

35 West Wacker Drive

Chicago, Illinois 60601-9703

Telephone: (312) 558-5600

Fax: (312) 558-5700

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

Fax: (212) 757-3990

Attorneys for Defendant Philip Morris USA Inc.

**———————————————————

ALTRIA SUBMISSION REGARDING PROPOSED CORRECTIVE STATEMENTS, October 16, 2006

**———————————————————

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

And

TOBACCO-FREE KIDS ACTION FUND,

et al.,

Plaintiff-Intervenors,

v.

PHILIP MORRIS USA INC. (f/k/a

PHILIP MORRIS INCORPORATED),

et al.,

Defendants.

Civil Action No. 99-CV-2496 (GK)

Next Scheduled Court Appearance: None

ALTRIA GROUP, INC.’S SUBMISSION REGARDING PROPOSED CORRECTIVE STATEMENTS

This Court’s Final Judgment and Remedial Order of August 17, 2006 ordered defendants to publish corrective statements on various issues, and to submit proposed statements within 60 days. Pursuant to the Court’s Order, defendant Altria Group, Inc. hereby supports the corrective statements proposed by defendant Philip Morris USA, Inc., for the reasons set forth in the submission of Philip Morris USA.1

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1 Altria is a holding company which does not manufacture, sell, or distribute cigarettes. For the reasons set forth in defendants’ post-trial briefs and post-trial proposed findings of fact, Altria submits that the record does not support a finding of RICO liability on the part of Altria, and establishes no basis for injunctive relief against Altria. In particular, there is no legal or factual basis for requiring Altria to make “corrective statements.” Nothing in this submission constitutes a waiver of these positions.

2

Dated: October 16, 2006 Respectfully submitted,

/s/ Matthew A. Campbell 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

Fax: (202) 282-5100

Dan K. Webb

Thomas J. Frederick

WINSTON & STRAWN LLP

35 West Wacker Drive

Chicago, Illinois 60601-9703

Telephone: (312) 558-5600

Fax: (312) 558-5700

Guy Miller Struve (D.C. Bar No. 388733)

DAVIS POLK & WARDWELL

450 Lexington Avenue

New York, NY 10017

Telephone: (212) 450-4192

Fax: (212) 450-3192

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

Fax: (212) 757-3990

Counsel for Defendant/Appellant

Altria Group, Inc.

Judge Allows Distribution of McCallum Deposition

October 17, 2006 2:04 pm by Gene Borio

On Oct. 5, 2006, Citizens for Ethics for Responsibility and Ethics in Washington (CREW) won a major battle over the DOJ when Columbia District Court Judge Emmet G. Sullivan granted its request to distribute the videotape of CREW’s deposition of Associate Attorney General Robert McCallum, and denied DOJ’s request for emails that are in CREW’s possession. CREW lost its request to be able to ask McCallum “about his role in general in the tobacco litigation [and] whether Mr. McCallum’s files had notes from conversations with tobacco industry representatives.”

Here is the 154-page McCallum Deposition July 18, 2006

Text follows of:

Judge Sullivan Order on McCallum Deposition and Emails October 5, 2006

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1

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

_________________________________

CITIZENS FOR RESPONSIBILITY AND AND ETHICS IN WASHINGTON

Plaintiff,

v.

U.S. DEPARTMENT OF JUSTICE,

Defendant.

Civil Action No. 05-2078 (EGS)

Memorandum Opinion and Order

On June 1, 2006, the Court granted plaintiff Citizens for Responsibility and Ethics in Washington’s (“CREW”) motion for discovery, and permitted CREW to depose Robert McCallum, Associate Attorney General; Daniel Metcalfe, Director of the Office of Information and Privacy (“OIP”); Steve Brody; and James Kovakas 1. The Court also requested Magistrate Judge Alan Kay to supervise the taking of these depositions and to resolve any issues that may arise. On July 17, 2006, Judge Kay granted defendant Department of Justice’s (“DOJ”) Motion for a Protective Order Regarding Depositions, and ordered CREW to show good cause why the videotaped deposition of Mr. McCallum should be made public. See Judge Kay’s Order, July 17, 2006 (Doc. No. 21).

—–

1 Steve Brody and James Kovakas are involved in processing CREW’s FOIA requests.

**———————————————————

2

Pending before the Court are plaintiff’s Motion for Reconsideration of Judge Kay’s Order Granting Defendant’s Motion for a Protective Order (Doc. No. 22); Defendant’s Motion for a Protective Order and Return of Federal Documents (Doc. No. 32); and Plaintiff’s Motion for Reconsideration of Judge Kay’s Order Limiting the Scope of Examination (Doc. No. 31). A hearing on these pending motions was held on September 8, 2006. Upon careful consideration of the parties’ respective motions, responses and replies thereto, their counsels’ arguments at the hearing, and the entire record herein, the Court GRANTS plaintiff’s Motion for Reconsideration of Judge Kay’s Order Granting Defendant’s Motion for a Protective Order (Doc. No. 22),

DENIES Defendant’s Motion for a Protective Order and Return of Federal Documents (Doc. No. 32), and DENIES Plaintiff’s Motion for Reconsideration of Judge Kay’s Order Limiting the Scope of Examination (Doc. No. 31).

I. Standard of Review

A party may invoke Federal Rule of Civil Procedure 72(a) and Local Civil Rule 72.2 to seek reconsideration of a magistrate judge’s determination in a discovery dispute. See Fed. R. Civ. P 72(a); L.Cv.R. 72.2. On review, the magistrate judge’s decision is entitled to great deference and will be upheld unless it is found to be “clearly erroneous or contrary to law.” Boca Investerings Partnership v. U.S., 31 F. Supp. 2d 9, 11 (D.D.C.

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3

1998). See Neuder v. Battelle Pacific Northwest Nat. Laboratory, 194 F.R.D. 289, 292 (D.D.C. 2000) (the Court should affirm the magistrate judge’s determination unless “on the entire evidence” the court “is left with the definite and firm conviction that a mistake has been committed.”).

II. Plaintiff’s Motion for Reconsideration of Judge Kay’s Order Granting Defendant’s Motion for a Protective Order

CREW argues that Judge Kay’s decision to limit use of Mr. McCallum’s videotape deposition absent a showing of good cause by CREW is unsupported by either fact or law, and therefore, must be set aside. In response, defendant argues that although it does not oppose written publication of the deposition, it does oppose public dissemination of the deposition videotape because Mr. McCallum’s testimony may be distorted or used out of context to cause him annoyance or embarrassment. 2

Federal Rule of Civil Procedure 26(c) provides that a Court may issue a protective order when, for good cause shown, the order is required by justice to protect the party from annoyance, embarrassment or oppression. Fed. R. Civ. P 26(c). Under the Rule, the movant has the burden to show good cause for barring public dissemination of discovery materials. Id. Accordingly, in this case, the defendant bears the burden to show good cause, not

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2 As an illustration, the defendant showed a clip from “The Daily Show,” a popular comedic talk show, where comedian and host Jon Stewart poked fun at a top counterterrorism official’s videotaped deposition statements.

**———————————————————

4

the plaintiff. Therefore, the Court respectfully disagrees with the opinion of Judge Kay when he placed the burden on CREW, the plaintiff.

Turning to the issue of whether the videotape of Mr. McCallum’s deposition should be made available to the public, the Court finds that the defendant has not shown good cause to prevent public dissemination of the videotape. At the motions hearing, the Court asked the defense counsel why the defendant opposed the public disclosure of the deposition videotape but not the deposition transcript when they are both easily susceptible to distortion and manipulation. After all, Mr. McCallum’s statements could be taken out of context and satirized to cause him annoyance or embarrassment both in print and via audiovisual media. The defense counsel replied that a videotape is capable of engendering a “public spectacle,” whereas a transcript would not. In essence, the embarrassment or annoyance cited by the defendant is the deposition videotape’s effectiveness as a tool for political satire.

Misrepresentation by the media through the use of sound bites is a recognized “Achilles’ heel of videotaped depositions.” Condit v. Dunne, 225 F.R.D. 113, 118 (S.D.N.Y. 2004). Regardless, courts have regularly permitted videotape depositions of public officials, and have refused to apply a protective order, particular when there is strong public interest in a case that

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involves public officials and/or matters of public concern. See Condit, 225 F.R.D. at 116-18 (in a case where defendant accused a public official of wrongdoing, the court denied a motion for protective order barring public dissemination of a deposition videotape, stating that potential media misrepresentation of the deposition by use of sound bites does not alone warrant a protective order); Flaherty v. Seroussi, 209 F.R.D. 295 (N.D.N.Y. 2001) (although the plaintiff openly admitted that he wanted to use the deposition videotape to embarrass the mayor, the court denied a motion for protective order stating that some level of embarrassment or discomfort are not in and of itself sufficient to establish good cause, particularly in view of public interest in the conduct of public officials, which outweighs the minimal harms tendered to the deponent).

This case involves issues of public interest. In fact, the Court granted limited discovery because CREW raised legitimate questions about the conduct of a government agency concerning a matter of public interest. The potential threat of annoyance and embarrassment alleged here to Mr. McCallum, a public official, does not rise to the level of good cause sufficient to justify barring public dissemination of the videotape. Therefore, Judge Kay’s July 17, 2006 Order is reversed in part, and CREW need not demonstrate good cause as to why the videotaped deposition of Mr.

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McCallum should be made public prior to doing so. 3

II. Defendant’s Motion for a Protective Order and Return of Federal Documents

Defendant requests that the Court prohibit CREW from further disseminating two sets of emails 4 that were generated between DOJ employees, that these emails be returned to DOJ, and that CREW explain how it acquired these government emails, which constitute government property.

During the motions’ hearing, the defense counsel clearly stated that the government is not alleging that CREW unlawfully or inappropriately came into possession of these emails. In fact, the defense counsel stated that the government has no evidence that CREW misappropriated or stole these emails from the government. Further, defense counsel stated that the government

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3 Defendant cites to Westmoreland v. CBS, 584 F. Supp. 1206, 1213 (D.D.C. 1984) to argue that discovery should not be used as a vehicle for gathering information for use in venues and proceedings other than the pending suit. The Court is not persuaded that CREW, a non-profit organization whose purpose is to inform the public about governmental actions and proceedings, is trying to garner notoriety for itself or financial gain from the dissemination of the videotape. Therefore, the Court adopts CREW’s reasons articulated in open court on September 8, 2006, and in its motion, see Pl.’s Mot. for Reconsideration of Judge Kay’s Order Granting Def.’s Mot. for a Protective Order at 4-5, as to why Westmoreland is inapposite.

4 The first set of emails contain successive drafts of an editorial circulated on June 8, 2005 among DOJ officials for comment. This set of emails are referred to as “McCallum Exhibit 2″ by the parties. See Def.’s Mot. for a Protective Order and Return of Fed. Docs. at 3. The second email consists of a July 21, 2005 message from Sharon Eubanks to Stephen Brody. This email is referred to as “McCallum Exhibit 3.” Id.

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is not asserting any privilege over the emails. She argued that invocation of privilege is unnecessary at this juncture because the government is trying to physically recover what is its property and was once in its possession, as opposed to trying to withhold any information from another.

Moreover, the defendant argues that DOJ never authorized the release of the emails in question to anyone and that until the July 20, 2006 Associated Press article, which mentioned the contents of McCallum Exhibit 2, these emails were never in the public domain. See Def.’s Mot. for a Protective Order and Return of Fed. Docs. at 5. The defendant, however, acknowledged at the motions hearing that the Senate Foreign Relation Committee, as early as June 28, 2006, had access and possession of the McCallum Exhibit 2. Senator Biden, the Ranking Member of the Senate Foreign Relation Committee, mentioned McCallum Exhibit 2 in a follow-up written question to Mr. McCallum during his confirmation process to be an Ambassador to Australia.

In view of the fact that the defendant has not demonstrated that the emails in question were improperly misappropriated from DOJ by the plaintiff and because the defendant is not claiming that the emails are privileged, the Court finds that the defendant has not offered legally cognizable justifications as to why the Court should compel CREW to return all copies of the

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emails to DOJ. 5 Further, contrary to the defendant’s initial contention, the emails were already in the public domain prior to the publication of the Associated Press article and the deposition of Mr. McCallum. 6 Accordingly, because there is no basis for compelling CREW to return the emails to DOJ or to enter a protective order as requested by the defendant, the Court vacates Magistrate Judge Kay’s Order that prohibits further dissemination of the emails in questions pending ruling by this Court. Further, the Court unseals McCallum Exhibits 2 and 3 and all portions of the deposition transcript that contain information from these emails.

III. Plaintiff’s Motion for Reconsideration of Judge Kay’s Order Limiting the Scope of Examination

A. Mr. McCallum’s Deposition

Plaintiff argues that Judge Kay’s limitations on the scope

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5 The defendant argues that the Court has authority to order the return of the emails under Fed. R. Civ. P. 26(c) and the All Writs Act, 28 U.S.C. § 1651(a). Defendant’s requested relief is plainly not encompassed within the categories of relief expressly authorized by Rule 26(c), therefore, Rule 26(c) is inapplicable. Further, the “remedy of mandamus is a drastic one, to be invoked only in extraordinary circumstances.” Power v. Barnhart, 292 F.3d 781, 784 (D.C. Cir. 2002). Mandamus is available only if: (1) the movant has a clear right to relief; (2) the movee has a clear duty to act; and (3) there is no other adequate remedy available to appellant. Id. The defendant does not have a clear right to relief in this case and the plaintiff does not have a clear duty to act, therefore, the All Writs Act is not applicable.

6 The Senate Foreign Relations Committee had possession of the McCallum 2 emails, and the defense counsel conceded at the motions hearing that DOJ has not asked that Committee to return those emails.

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of Mr. McCallum’s depositions precluded CREW from asking him questions that bear directly on his veracity. Specifically, Judge Kay prohibited CREW from questioning Mr. McCallum on the contents of the McCallum Exhibits 2 and 3.

It is well settled that a party may not present extrinsic evidence to impeach a witness on collateral issues. Patterson v. United States, 580 A.2d 1319, 1322 (D.C. 1990). See also U.S. v. Tarantino, 846 F.2d 1384, 1409 (D.C. Cir. 1988). Testimony is excludible on this ground if it would not have been admissible independently for any purpose other than contradiction. Patterson, 580 A.2d at 1322. While certain types of testimony are allowed for impeachment, it is generally held that facts showing misconduct of the witness are collateral, and if denied on cross-examination cannot be proved to contradict. Id

Here, plaintiff would like to use McCallum Exhibit 2 to impeach Mr. McCallum on a collateral issue. During his deposition, when Mr. McCallum denied any implication of wrongdoing, plaintiff wanted to use extrinsic evidence, the emails, to contradict his responses. 7 The plaintiff shall not be

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7 In response to a written question of Senator Biden as to whether Mr. McCallum had discussed any aspect of the tobacco litigation, including any public statements or articles thereon, with any person working in the White House, Mr. McCallum responded that he “can not recall ever discussing any public statements or articles about the case with anyone at the White House.” Questions for the Record Submitted to Ambassador- Designate Robert McCallum, Senate Foreign Relations Committee, June 19, 2006 at 21.

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permitted to do this in view of the fact that the issue of whether Mr. McCallum’s responses to the Senate Committee is wholly consistent with certain emails exchanged between other DOJ employees 8 is collateral to the primary issue before this Court,

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Later, Senator Biden asked a follow-up question. He informed Mr. McCallum that the Committee had received a copy of internal DOJ emails about the drafting of an article which indicated that White House personnel had a role in editing the final text of the article. In view of the email, Senator Biden asked whether Mr. McCallum recall the involvement of the White House in the approval of this article and whether his position that no one at the White House ever tried to influence his decision in the tobacco litigation has been altered. Mr. McCallum responded in writing, “My answer remains the same relating to my public statements, specifically the op-ed piece below, in that I don’t recall ever discussing it with anyone at the White House. Nor do I recall the involvement of the White House in the review or approval of this op-ed. Once my decision [about the remedies] was made and announced in the closing argument, I likely would have informed the White House of any op-ed to be published under my name so that the White House would be aware of it and have the opportunity to comment.” See Robert McCallum Answer to SFRC Question, June 28, 2006.

During his deposition, plaintiff counsel’s asked Mr. McCallum, in light of McCallum Exhibit 2, whether he felt the need to correct his written response to Senator Biden. He responded, “I sent back to them a clarification, not a correction, but a clarification based upon my understanding of what they had meant, what Senator Biden had meant, about public statements and articles to inform them that, yes, indeed, once I made the decision and I knew that there was going to be a firestorm of criticism and that I was going to be making public statements about it, I wanted to alert anyone that would have to deal with that political issue and that certainly included the White House.” Not satisfied with that answer, plaintiff counsel requests that she be permitted to ask Mr. McCallum further questions using McCallum Exhibit 2. McCallum Deposition, July 18, 2006, at 42-43.

8 In fact, Mr. McCallum was not even an active participant in these email exchanges. He did not initiate or respond to any of them. Rather, he was merely copied to these emails in the

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namely whether the government acted in bad faith by delaying the processing of plaintiff’s FOIA requests.

Further, despite plaintiff’s argument that Mr. McCallum’s answer at the deposition is indicative of him either not testifying truthfully in his deposition or failing to respond truthfully to Senator Biden, the Court finds that those are not the only reasonable conclusions. Mr. McCallum’s written statements to Senator Biden’s questions and his answer in the deposition are not necessarily contradictory. Mr. McCallum states that he does not recall speaking to the White House prior to his decision about the remedies, but that once he made the decision, he did speak with the White House. Therefore, any value of reopening Mr. McCallum’s deposition, as requested by the plaintiff, is outweighed by considerations of its relevance. 9

B. Mr. Brody’s Deposition

Plaintiff asserts that Mr. Brody’s counsel, Robert Weinberg’s speaking objections impeded CREW’s fair examination of Mr. Brody, therefore, CREW should be permitted to serve Mr. Brody

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“cc” line.

9 Plaintiff also contends that Judge Kay deprived it of an opportunity to probe into Mr. McCallum’s veracity by not permitting CREW to question Mr. McCallum about his role in general in the tobacco litigation, whether Mr. McCallum’s files had notes from conversations with tobacco industry representatives, and about the content of McCallum Exhibit 3. The Court finds that the scope of the deposition was properly limited and affirms Judge Kay’s decision not to permit questioning in the areas noted.

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with written questions. Having examined the deposition transcript, the Court concludes that plaintiff’s opportunity to depose Mr. Brody was not unfairly impeded by the conduct of Mr. Weinberg, therefore, plaintiff’s request that it be allowed to re-depose Mr. Brody by written questions is denied.

C. Mr. Metcalfe’s Deposition

Plaintiff alleges that defense counsel coached its witness, Mr. Metcalfe prior to his cross-examination, therefore, his cross-examination should be stricken from the record. Plaintiff has presented no evidence to demonstrate that defendant counseled Mr. Metcalfe about the substance of his testimony during a short break between his direct testimony and cross-examination. Defense counsel concedes that she spoke with Mr. Metcalfe during the brief break, however, she asserts that nothing improper occurred. Therefore, plaintiff’s request is denied.

IV. CONCLUSION

For the foregoing reasons, the Court hereby

ORDERS that plaintiff’s Motion for Reconsideration of Judge Kay’s Order Granting Defendant’s Motion for a Protective Order (Doc. No. 22) is GRANTED; and it is

FURTHER ORDERED that Judge Kay’s July 17, 2006 Order is reversed in part, and that CREW is not required to demonstrate good cause why the videotaped deposition of Mr. McCallum should be made public; and it is

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FURTHER ORDERED that Defendant’s Motion for a Protective Order and Return of Federal Documents (Doc. No.32) is DENIED; and it is

FURTHER ORDERED that the Court vacates Magistrate Judge Kay’s Order that prohibits the dissemination of the video tape deposition and the emails, and the Court unseals McCallum Exhibits 2 and 3 and all portions of the deposition transcript that contain information from these emails; and it is

FURTHER ORDERED that Plaintiff’s Motion for Reconsideration of Judge Kay’s Order Limiting the Scope of Examination (Doc. No. 31) is DENIED; and it is

FURTHER ORDERED that the parties are to abide by the following briefing schedule:

(1) Parties’ cross-motions for summary judgment on the issue of whether the government acted in bad faith in processing plaintiff’s FOIA request are due no later than November 10, 2006; and

(2) Oppositions are due no later than December 1, 2006.

IT IS SO ORDERED.

Signed: Emmet G. Sullivan

United States District Judge

October 5, 2006