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SIMON v. PHILIP MORRIS

March 3, 2000

ELLIS SIMON ET AL., PLAINTIFFS
V.
PHILIP MORRIS, INC. ET AL., DEFENDANTS.



The opinion of the court was delivered by: Weinstein, Senior District Judge.

  AMENDED MEMORANDUM AND ORDER

I. INTRODUCTION

This case poses the question: can a foreign national holding company always shield itself against a mass tort suit in New York? In this instance it cannot. It may not hide behind narrow jurisdictional concepts created for another day when its own acts and those of its co-conspirators have allegedly caused great harm in this state.

Plaintiffs sue various tobacco companies and affiliated organizations in a nationwide smoker personal injury class action. They allege that for decades the tobacco industry, in the face of what it knew was overwhelming evidence of the addictiveness of nicotine and of the adverse health consequences of smoking, has conspired to deceive the American public, including the plaintiffs.

B.A.T. Industries, p.l.c. ("BAT"), the British holding company parent of United States defendant, Brown & Williamson Tobacco Corp. ("B & W"), has moved to dismiss for lack of personal jurisdiction. It claims that it is a passive stockholding parent corporation with no connection to the fraud and conspiracy alleged by the plaintiffs. BAT's motion was denied by order dated July 19, 1999. This amended memorandum explains the basis for the denial.

BAT is a quintessential example of a sophisticated holding company presiding over a multinational corporate empire whose operations span the globe. Through the promulgation of binding company-wide policies and long distance active participation in the large-scale marketing, research, and development of cigarettes, it is regnant in the cigarette industry in the United States and throughout the world. Its sway is an aspect of today's global technological-commercial community, in which the click of a mouse may affect events unfolding thousands of miles away and concepts of sovereignty for jurisdictional purposes have eroded. BAT's conduct has supranational effects. It must accept the price of its international ascendancy by defending suits here in the United States, where it has allegedly been responsible for massive damage.

II. STANDARD OF PROOF

Predicating subject matter jurisdiction on diversity of citizenship, plaintiffs' Amended Complaint alleges causes of action sounding in negligence, strict product liability, fraudulent concealment and civil conspiracy.

The instant motion challenging personal jurisdiction was filed pursuant to Rule 12(b)(2). Plaintiffs presented over five hundred exhibits from prior litigations in opposition. BAT responded with more documents. Given the voluminousness of the submissions, the motion was converted to one for summary judgment with the parties' consent.

The burden of establishing personal jurisdiction is on the plaintiffs. The extent of this obligation depends both upon whether discovery has taken place and upon the nature of the jurisdictional challenge. See Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.), cert. denied, 498 U.S. 854, 111 S.Ct. 150, 112 L.Ed.2d 116(1990). "Prior to discovery, a plaintiff challenged by a jurisdiction testing motion may defeat the motion by pleading in good faith legally sufficient allegations of jurisdiction." Id. (citation omitted). Where relevant discovery has been extensive, the plaintiff's allegations must be supported by "an averment of facts that if credited by the trier, would suffice to establish jurisdiction over the defendant." Id.

If personal jurisdiction is, as here, contested via a summary judgment motion, "the court proceeds, as with any summary judgment motion, to determine if undisputed facts exist that warrant the relief sought." Id.; see also Fed.R.Civ.P. 56. Ultimately, the plaintiff bears the burden of establishing personal jurisdiction over the defendant by a preponderance of the evidence, either at an evidentiary hearing or at trial. See, e.g., Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 154 (2d Cir. 1999); CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986). Short of such a hearing or a trial, plaintiff's burden remains to establish a prima facie case. See Tilyou v. Carroll, No. 92 CV 0750, 1992 WL 170916, at *3 (E.D.N Y July 2, 1992).

Since there has been neither a factual hearing nor a trial, but discovery has been substantial, plaintiffs must establish a factually supported prima facie case of jurisdiction. They have done so, as the following discussion demonstrates.

III. FACTS

A. BAT's Organization

BAT is a holding company based in London, England and incorporated under the laws of England and Wales. Its existence dates to 1976, when it became the controlling parent corporation of the British American Tobacco Company, Ltd. ("BATCo"). BAT currently has over five hundred subsidiaries in some forty countries primarily engaged in the tobacco and financial services businesses. The majority of its revenues derive from its tobacco-related activities. See, e.g., Pls.' Ex. 165 at 14 (BAT Directors' Report and Accounts 1995).

BAT bills itself as "the world's most international cigarette manufacturer" owning the leading cigarette brand in over thirty different markets. See, e.g., Pls.' Ex. 167 at 2 (Facts and Figures 1996). In 1995, it sold 670 billion cigarettes, achieving a 12.4 percent share of the world market. See id. A substantial percentage of these cigarettes were purchased by United States smokers.

In public filings and promotional documents, BAT sometimes refers to itself as the "BAT Group," the "B.A.T. Industries Group," or "the Group." This term is used by BAT to collectively describe the entire family of its affiliated companies.

BATCo is a United Kingdom-based corporation that sells tobacco products and conducts tobacco-related scientific research. From 1902 until its 1976 acquisition by BAT, it was the controlling parent company of the BAT Group, which consisted of hundreds of tobacco subsidiaries. It acquired the stock of B & W in 1927. At the time of its acquisition by BAT, BATCo produced over 300 cigarette brands worldwide and produced the leading cigarette in forty countries. See Pls.' Ex. 25 at 15. Its most profitable area of operation was North America. Id. BATCo also "devote[d] considerable resources to research and development relating to tobacco" and "played a prominent part in research associated with problems of smoking and health." Id. at 16. Since 1976, BATCo has continued to operate as a BAT Group tobacco company. In 1998, BATCo changed its name to British American Tobacco (Investments) Limited.

BATUS, a Delaware corporation based in Louisville, Kentucky, is a wholly owned subsidiary of BAT. It holds the shares of B & W and BAT's other United States interests.

B. The 1976 "Scheme of Arrangement"

On July 23, 1976, as part of what is known in the United Kingdom as a "Scheme of Arrangement," the Tobacco Securities Trust Company ("TST") became the sole ordinary shareholder of BATCo. TST then changed its name to B.A.T. Industries Limited, which was ultimately changed to B.A.T. Industries, p.l.c. in 1981. The Scheme of Arrangement was undertaken to "facilitate the development of the divisional organization begun by BAT in 1973." Pls.' Ex. 24 at 1 (Joint Statement by British American Tobacco Co., Ltd. and Tobacco Securities Trust Co., Ltd.).

C. BAT'S New York Contacts

BAT has no New York office, mailing address, phone' listing, or bank account and pays no New York taxes. It does not directly own, use or possess any New York real estate.

BAT neither manufactures nor sells cigarettes. These functions are carried out by its tobacco subsidiaries, one of which is B & W. B & W currently has a United States market share of eighteen percent. See Pls.' Ex. 167 at 13. Since 1987 the BAT Group has earned billions in pre-tax dollar profits from its United States tobacco operations. See Plaintiffs' Proffer of Facts at B-2. While the percentage of these profits ultimately traceable to New York is unclear, B & W's strong market presence and the size of the New York population strongly support the inference of substantial New York cigarette sales roughly proportional to the percentage of New York residents in the total United States population — somewhere in the neighborhood of seven percent. Thus, for purposes of this jurisdiction motion, it can be inferred that BAT's earnings in New York through B & W in the last decade were many millions of dollars.

Some of BAT's major institutional investors have been based in New York. See, e.g., Pls.' Ex. 207 (listing Oppenheimer Capital Management, Chancellor Capital Management and Manufacturers Hanover Trust, all New York-based among the largest American Depositary Receipt owners of BAT). BAT Board Members and other representatives have visited New York frequently in connection with BAT's solicitation of investors. See, e.g., Pls.' Ex. 204 (suggested program for June 1990 visit to United States featuring group and one-on-one investor meetings in New York and a Dinner for "Friends of B.A.T." in New York); Pls.' Ex. 213 (report on October 1990 meetings in New York with six or seven key investors); Pls.' Ex. 226 (itinerary for BAT Chairman's visit to New York in August 1991); Pls.' Ex. 241 (invitation to BAT luncheon hosted by First Boston Corp. on October 1, 1992 in New York).

D. Tobacco Industry Conspiracy

Plaintiffs allege that BAT participated in a conspiracy to manufacture hazardous products and, deceive American consumers about the adverse health consequences of using them. The available evidence of such a conspiracy is substantial.

The exhibits. submitted in opposition to BAT's motion to dismiss focus largely on the conduct of BAT itself. For purposes of this memorandum, they are supplemented by widely publicized B & W documents — now posted on the website of the University of California at San Francisco's Library and Center for Knowledge Management — demonstrating the existence of an industry-wide conspiracy with significant links to New York. See http://www.library.ucsf.edu/tobacco; see also transcript of hearing in Brown & Williamson Tobacco Corp. v. Regents of University of California, No. 96-7298 (Cal.Super.Ct. May 25, 1995) (B & W was not entitled to return of company documents or other relief in view of strong public interest in the information they contained, most of which was already in the hands of the media and known to the public); Stanton A. Glantz et al., The Cigarette Papers (1996); Lisa Bero, et al., Lawyer Control of the Tobacco Industry's External Research Program: The Brown and Williamson Documents, 274 JAMA 241(1995). Documents from this website are referred to by document number using the notation, "Doc. No." Any objection to the court's reliance on them has been waived by BAT. See transcript of hearing dated Dec. 23, 1999.

B & W, BAT's United States subsidiary, objects to the use of a number of these documents as well as to some of the plaintiffs' exhibits relied upon in the discussion which follows. B & W is, however, not a party to the instant motion. It has not waived any right or privilege in connection with the use of the documents in question, but it must postpone its objections until it can appropriately raise them on its own behalf.

The modern era of smoking and health research is generally said to have begun around 1900 with observations by vital statisticians of an increased incidence of lung cancer. See Susan Wagner, Cigarette Country 68 (1971). Yet, it was not until the early to mid-1950's, when a series of important studies linking smoking to cancer in humans and animals was published, that the health consequences of smoking became a public issue in the United States. See id. at 76-78 (citing articles). Reacting, the United States tobacco companies jointly formed the Tobacco Industry Research Committee ("TIRC"). A January 1954 newspaper advertisement published nationwide announced TIRC's formation. Entitled "A Frank Statement to Cigarette Smokers," the advertisement was signed by the heads of most of the major tobacco companies, including B & W. See Pls.' Ex. 1. This original tobacco industry "position paper" playing down the connection between cigarettes and disease is worth quoting at length:

Recent reports on experiments with animals have given wide publicity to a theory that cigarette smoking is in some way linked with lung cancer in human beings.
Although conducted by doctors of professional standing these experiments are not regarded as conclusive in the field of cancer research. However, we do not believe that any serious medical research, even though its results are inconclusive should be disregarded or lightly dismissed.
At the same time, we feel it is in the public interest to call attention to the fact that eminent doctors and research scientists have publicly questioned the claimed significance of these experiments. Distinguished authorities point out:
1. That medical research of recent years indicates many possible causes of lung cancer.
2. That there is no agreement among the authorities regarding what the cause is.
3. That there is no proof that cigarette smoking is one of the causes.
4. That statistics purporting to link cigarette smoking with the disease could apply with equal force to any one of many other aspects of modern life. Indeed the validity of the statistics themselves is questioned by numerous scientists
We accept an interest in people's health as a basic responsibility paramount to every other consideration in our business.
We believe the products we make are not injurious to health.
We always have and always will cooperate closely with those whose task it is to safeguard the public health.
For more than 300 years, tobacco has given solace; relaxation and enjoyment. . . . At one time or another . . . critics have held it responsible for practically every disease of the human body. One by one these charges have been abandoned for lack of evidence.
Regardless of the record of the past, the fact that cigarette smoking today should even be suspected as a cause of serious disease is a matter of deep concern for us.
Many people have asked us what we are doing to meet the public's concern aroused by the recent reports. Here is the answer:
1. We are pleading aid and assistance to the research effort into all phases of tobacco use and health. This joint financial aid will of course be in addition to what is already being contributed by individual companies.
2. For this purpose we are establishing a joint industry group consisting initially of the undersigned. This group will be known as Tobacco Industry Research Committee.
3. In charge of the research activities of the Committee will be a scientist of unimpeachable integrity and national repute. In addition there will be an Advisory Board of scientists disinterested in the cigarette industry. A group of distinguished men from medicine, science and education will be invited to serve on this Board. These scientists will advise the Committee on its research activities.
This statement is being issued because we believe the people are entitled to know where we stand on this matter and what we intend to do about it.

Pls.' Ex. 1 (emphasis added).

The documents reveal that TIRC was the product of the tobacco industry's public relations, legal and political needs rather than of any concern for public health. A 1973 memorandum by B & W's general counsel, Ernest Pepples, describes the multiple functions of TIRC, later renamed the Council for Tobacco Research ("CTR"):

Originally CTR was organized as a public relations effort. The industry told the world CTR would look at the diseases which were being associated with smoking. There was even a suggestion by our political spokesmen that if a harmful element turned up the industry would try to root it out. The research of CTR also discharged a legal responsibility. The manufacturer has a duty to know its product. The Scientific Advisory Board composed of highly reputable independent scientists constitute a place where the present state of the art is constantly being updated. Theoretically SAB is showing us the way in a highly complex field. There is another political need for research. Recently it has been suggested that CTR or industry research should enable us to give quick responses to new developments in the propaganda of the avid anti-smoking groups. For example, CTR or someone should be able to rebut the suggestion that smokers suffer from a peculiar disease, as widely alleged in the press some few months ago.

Doc. No. 2010.02 at 2 (emphasis added); see also Doc. No. 2010.03 (memorandum by Mr. Pepples to B & W's then Chairman and CEO discussing "two aspects of particular value in CTR: (1)the direct legal protection derived by Brown & Williamson and (2) the political and public relations advantage accruing to the industry"). In another memorandum, Mr. Pepples elaborated on the "litigation value" of CTR:

[CTR] avoids the research dilemma presented to the responsible manufacturer of cigarettes, which on the one hand needs to know the state of the art and on the other hand can not afford the risk of having in-house work turn sour.
The point here is the value of having CTR doing work in a nondirected and independent fashion as contrasted with work ether in-house or under B & W contract which, if it goes wrong, can become the smoking pistol in a lawsuit.

Four years after it created TIRC, the tobacco industry established the Tobacco Institute ("TI") as its lobbying and public relations arm. TI has served as the industry's "focal point for criticism of research that indicates a connection between smoking and health." Pls.' Ex. 22 (Industry Response to Cigarette/Health Controversy). The New York public relations firm of Hill & Knowlton ("H & K") appears to have been instrumental in the formation of TIRC and TI and to have played a dominant role in both organizations. An undated memorandum characterizes H & K as "so intimately involved in the affairs of both [TI and TIRC] that a proper separation of functions . . . is virtually impossible in this brief summary." Doc. No. 1902.05 at 1, quoted in Glantz, supra, at 39-40. The memorandum also discusses staff overlap between TIRC, TI and H & K and states that an H & K employee served as both the executive director of TIRC and the executive secretary of its Scientific Advisory Board, making him "without question . . . the administrative head of TIRC." Id.

During the early 1960's, both the British Royal College of Physicians and the United States Surgeon General published reports identifying cigarette smoking as a cause of lung cancer. The British report was issued in 1962. See Glantz, supra, at 46-47. The Surgeon General's report on smoking and health followed two years later. See Public Health Service, U.S. Department of Health, Education and Welfare, Pub. No. 1103, Smoking and Health: Report of the Advisory Committee to the Surgeon General of the Public Health Service (1964) ("Surgeon General's Report"). It concluded that

smoking is causally related to lung cancer in men; the magnitude of the effect of smoking far outweighs all other factors. The data for women, though less extensive, "point in the same direction.

Id. at 37. The report also named cigarette smoking as the prime cause of chronic bronchitis in the United States. See id. at 38.

Available documents indicate that the industry, acting as a whole and with the implicit cooperation of all its members, reacted to the, rising tide of public concern resulting from the issuance of these reports by embarking on an advertising campaign designed, among other things, to discredit the evidence of a causal link between smoking and disease. In 1967, for example, TI reprinted as an advertisement an editorial that had appeared on the front page of Barron's several weeks before. See Glantz, supra, at 176. The advertisement characterized the Surgeon General's Report as "a seemingly well-intentioned, if disturbing, effort to brainwash the citizenry into kicking the habit" and of seeking to condemn smoking by "a kind of guilt by statistical association." Id. at 177. It stated:

"Smoking and Health" failed to prove that cigarets [sic] cause lung cancer or any other of the many ills to which the flesh is heir. With the passage of time, its findings have grown increasingly suspect.

Id. In a letter to the public relations firm which prepared the Barron's advertisement, B & W's president expressed satisfaction with the result and stated that "perhaps the most important thing about this ad was that for the first time we have gotten the industry to take a step forward together, and it was a great opportunity to get them together." Doc. No. 2101.06 (emphasis added).

Individual companies participated in the public relations effort to undermine the scientific evidence on causation. In 1969, for example, a series of advertisements was developed for B & W focusing on the lack of proof of causation and the individual's right to smoke. See Doc. No. 2110.01-05. One of these advertisements belittles the evidence of a causal link by equating it with other supposed "cancer scares":

Ten years ago, there was a cancer stare over the wax in milk cartons. And over using iodine to get a suntan. These theories were about as valid as the one that says toads cause warts.
And they're about as valid as today's scare-tactics surrounding cigarettes. Because no one has been able to produce conclusive proof that cigarette smoking causes cancer. Scientific, biological, clinical, or any other kind.

Doc. No. 2110.01.

Additional B & W documents refer to "Project A" and "Project B," two "public issue" advertising campaigns developed in 1970. See Doc. No. 1001.01 at 12 (Definition of the Brown & Williamson Subjective Coding Taxonomy). "Project A," apparently proposed by R.J. Reynolds but ultimately rejected by the networks, consisted of three television advertisements on smoking' and health which were to have been produced and supplied to the six tobacco companies through TI and substituted for the companies' own prime time commercials. See Doc. No. 2112.04, at p. 1. "Project B" was comprised of two short advertisements seeking to undercut evidence of the health dangers of cigarettes by portraying it as overblown and exaggerated. The first, for example, declared:

You've seen the anti-smoking commercials. Dramatic and frightening, they do not appeal to your reason, but rather to your emotions. The fact is, a clear and consistent picture does not emerge from research findings concerning smoking and health. Many statistical connections have been cited against smoking — but these figures work both ways. Some figures which are as questionable as any others, for instance, indicate that people who smoke moderately are actually healthier than non smokers.

Doc. No. 2112.02 (emphasis added); see also Doc. No. 2112.05 (comments by B & W executives on Project B).

In addition to research grants awarded by its Scientific Advisory Board, the CTR funded "special projects" designed largely to generate research data and witnesses for use in defending lawsuits and opposing tobacco regulation. See Doc. No. 2010.02 at 2 (memorandum by Mr. Pepples to B & W's chairman and CEO; "the industry research effort has included special projects designed to find scientists and medical doctors who might serve as industry witnesses in lawsuits or in a legislative forum"); see also, e.g., Doc. Nos. 2048.13-2048.23 (Special Project Lists from 1978-80 and 1983-84).

Many CTR "special projects" appear to have been intended either to refute evidence of the health consequences of smoking or to divert attention from this evidence by providing alternate explanations for tobacco-related diseases. Research conducted by "special projects" grantees included: "A Study of the Models Used in the Analysis of Certain Medical Data" (review of the appropriateness of treating biomedical data with the multivariate techniques of assumed normality)," see Doc No. 2048.13 at 4, "(1) `Preliminary Study of Interrelationships and Causal Paths Linking Smoking, Personality, and Health Variables,'" and "(2) `Assessment of the Relationship Between Methodological Quality of Previous Smoking and Health Studies and Their Results,'" see Doc. No. 2048.29 at 5, "The Study of Architectural, Ventilation and Lighting Factors in Relation to Office Building Illness," see Doc. No. at 2048.23 at 4, "Genetic Aspects of Lung Cancer" see Doc. No. 2048.23 at 2, "Retrospective Analysis of Environmental Contacts of Patients with Respiratory Cancer, Other Cancers, and Other Diseases," see Doc. No. 2048.14 at 6, and "Autopsy Study Designed to Examine Accuracy of Lung Cancer Diagnoses (Investigators Checking Autopsy Records of University Hospitals for Period Extending from 1948 to 1974 for Errors in. Diagnoses)," see Doc. No. 2048.13 at 6.

The documents reveal that tobacco industry lawyers were heavily involved in the selection and funding of CTR "special projects." Timothy Finnegan of the New York law firm of Jacob Medinger & Finnegan ("JM & F") appears to have played a particularly prominent role. For example, in a letter dated July 2, 1985, Mr. Finnegan recommended approval of a $275,000 grant to Doctors Seltzer and van den Berg, whose prior CTR-funded work had focused on "various characteristics of children prior to their making a decision of whether or not to smoke" and was thus "directly related to the constitutional or genetic hypothesis." Doc. No. 2004.29; see also Doc. No. 2031 at 3 (Dr. Carl Seltzer listed as "special project" grant recipient for "Continuation of Work on Constitutional Differences Between Smokers and Nonsmokers"); Doc. No. 2034.02 at 2 (letter from Mr. Finnegan dated May 16, 1983 recommending funding Dr. Henry Rothschild's research into possible genetic markers associated with lung cancer as a CTR special project); Doc. No. 2034.01 (letter from B & W agreeing with [Mr. Finnegan's] recommendation); Doc. No. 2015.02 at 2 (letter from Mr. Finnegan dated Feb. 15, 1982 recommending awarding a CTR "special project" grant of $25,000 to Dr. Rothschild for research on genetic aspects of lung cancer); Doc. No. 2034.06 (letter from B & W agreeing with Mr. Finnegan's recommendation); Doc. No. 2031.01 at 2 (Special Projects List showing $25,000 grant to Dr. Rothschild for work on "Genetic Aspects of Lung Cancer"); Doc. No. 2024.02 (letter from Mr. Finnegan, dated June 29, 1981 recommending a $20,000 grant to Dr. Schrauzer for research on the concentration of selenium — a possible anticarcinogen — in tobacco products).

Mr. Finnegan's involvement appears to have gone well beyond funding recommendations to monitoring ongoing research. See, e.g., Doc. No. 2017.07 (letter dated June 16, 1981 from Dr. Blass of the Burke Rehabilitation Center reporting to Mr. Finnegan that "we now have evidence that appropriate doses of nicotine can benefit animals with experimental diseases affecting the brain"); Doc. No. 2034.18 (letter dated April 17, 1979 from Dr. Rothschild to Mr. Finnegan enclosing a draft of a paper for submission to the New England Journal of Medicine and requesting his comments prior to submission; "I would appreciate if you could let us have your comments by the 24th or 25th so that we can send it off before the end of the month."); Doc. No. 2017.06 (internal B & W memorandum to B & W's general counsel; "At your request, Tim [Finnegan] visited Dean Sullivan. It was a cordial meeting and Tim believes he has persuaded them to take a new thrust with their research. The new thrust will have questionable value but no negative.").

The Kansas City firm of Shook, Hardy & Bacon ("SH & B") was also active in the "special projects" area. See, e.g., Doc. No. 2022.03 (letter dated April 22, 1981 from William Shinn of SH & B recommending funding of Drs. T.D. and Elia Sterling for investigation of "Office Building Syndrome," which "could be useful with respect to the controversial issue of restriction of smoking in the workplace"); Doc. No. 2004.01 (letter dated April 15, 1976 from Donald K. Hoel of SH & B stating firm's view that Dr. Seltzer's "contributions to the world literature merit continued support as a CTR Special Project.").

Such extensive lawyer involvement is in sharp contrast to the tobacco industry's announcement at CTR's inception that its research activities would be overseen by an advisory board of "disinterested scientists." See Doc. No. 1903.03 at 1 ("Tobacco Industry Research Committee, Organization and Policy"; "The Scientific Advisory Board has full responsibility for research policy and programming.").

Many "special projects" recipients were also awarded funds through "Special Account 4." See Doc. No. 2042.01 (listing as "Special Account Number 4 Recipients" Drs. Rothschild, Seltzer, Sterling and Schrauzer). This account, administered by JM & F, was apparently one of two "special accounts" devoted to such matters as witness preparation and funding of research by expert witnesses. See Doc. No. 2010.01 (letter dated Feb. 9, 1973 from SH & B to general counsel of tobacco companies); Doc. No. 1000.01 at 54 (Master Summary for B & W Subjective Document Review). Some of these "special projects" and "special accounts" scientists appear to have had retainer-like relationships with their tobacco industry sponsors. The tobacco companies' investment in the work of Dr. Carl Seltzer, whose view was that a causal connection between smoking and coronary heart disease had not been established, seems to have been particularly fruitful. For example, in 1979, Dr. Seltzer traveled to Australia and New Zealand, where he related his views on smoking and heart disease to tobacco industry representatives and science writers. See Doc. No. 2004.12 (letter dated May 17, 1979 from SH & B to general counsel of tobacco companies pronouncing Dr. Seltzer's visit a success). After an interview on the Framingham heart study was aired on the MacNeil/Lehrer News Hour, Dr. Seltzer was requested to and did write a letter to Mr. MacNeil taking issue with the interviewee's presentation of the data linking smoking to heart disease and stating his own position that causation had not been proved. See Doc. No. 2004.23 (letter dated Feb. 20, 1984 from B & W general counsel noting request and enclosing copy of Dr. Seltzer's letter to Mr. MacNeil); Doc. No 2004.25 (Dr. Seltzer's letter dated January 31, 1984 to Mr. MacNeil); See also Doc. No. 2004.21 (letter dated April 4, 1983 recommending "special projects" funding for Dr. Seltzer and listing the preparation of a statement on smoking and heart disease for a congressional subcommittee and meetings with smoking and health researchers among his activities during the previous year).

A 1980 letter to the general counsel of the tobacco companies from SH & B discusses the helpfulness of Dr. Sterling, another "special projects" and "special account 4" recipient:

Dr. Sterling has continued to be helpful in frequent consultations about the smoking and health controversy. He testified at congressional hearings on public smoking in October, 1978; he has given several technical papers at professional meetings recently; and has prepared a number of manuscripts, some of which have been published.

Doc. No. 2020.06 at 1-2; see also Doc. No. 2022.06 (1981 letter from SR & B to tobacco companies' general counsel; "As in. the past, Dr. Sterling has used the support received from his grant to develop proposals for other projects. The flexibility inherent in the current arrangement has also provided Dr. Sterling with the ability to respond quickly to new scientific developments."); see also Doc. No. 2022.03 at 2 (letter dated April 22, 1981 recommending funding for Dr. Sterling's research on "Office Building Syndrome" and noting Dr. Sterling's other activities, including a presentation entitled "Job Discrimination Based on Exposure Considerations and Smoking" at an occupational health meeting).

E. New York as a Situs of the Tobacco Industry Conspiracy

Multiple events and actors link the tobacco industry conspiracy alleged by the plaintiffs to New York: First, Philip Morris, Inc. and Lorillard Corp., co-defendants and alleged co-conspirators of BAT, have their principal places of business in New York City. See Amended Complaint at ¶¶ 20, 25. Both companies have apparently been headquartered in New York for many years. See, e.g., Doc. No. 2017.04 (letter dated Oct. 13, 1980 on Lorillard letterhead bearing a New York City address); Doc. No. 1905.01 (letter from CTR dated December 28, 1970 addressed to, among others, Philip Morris, Inc. in New York).

The available evidence implicates Lorillard and Philip Morris in industry activities aimed at promoting the deceptive notion of a smoking and health scientific "controversy." Both companies have been members of CTR from its' inception. See Pls.' Ex. 1; Doc. Nos. 1902.02-03. Over the years, numerous law firm letters seeking approval for CTR "special projects" and reporting on grant recipients' activities were directed to Arthur J. Stevens and Thomas F. Abrensfeld general counsel of Lorillard and Philip Morris, respectively. See, e.g., Doc. No. 2004.01 (seeking approval of "special project" funding for Dr. Seltzer s work on "constitution and disease"); Doc. No. 2004.05 (letter dated Aug. 7, 1978 recommending that a study of former smokers' coronary heart disease rates be funded as a "special project"); Doc. No. 2022.03 (letter dated April 22, 1981 requesting "special project" funds for study of "Office Building Syndrome"); Doc. No. 2004.12 (letter dated May 17, 1979 enclosing newspaper articles on Dr. Seltzer's trip to Australia and New Zealand to discuss his views on smoking and heart disease); Doc. No. 2007.05 (status report dated Oct. 24, 1979 on Dr. Domingo Aviado); Doc. No. 2034.09 (letter dated Aug. 4, 1980 enclosing progress report on work of Dr. Rothschild); Doc. No. 2009.05 (letter dated Oct. 31, 1978 enclosing copy of Dr. Rothschild's article entitled "The Bandwagons of Medicine"). These documents support an inference of ongoing New York activities in furtherance of the alleged conspiracy.

CTR and TI, major vehicles for perpetuating the tobacco industry's stance on smoking and health, were both incorporated in New York. CTR's offices in New York City generated critical data with which to dispute and deflect attention from the evidence linking smoking to lung cancer, heart disease and other illnesses.

H & K, the public relations firm instrumental in the formation of both CTR and TI, was as already discussed deeply involved in the operation of both these organizations. H & K is a New York corporation with its principal place of business in New York.

JM & F, the law firm which administered "special account 4" and played an important role in CTR "special projects" is located in New York City. Many "special projects" and "special account 4" funding recommendations were written on JM & F's New York letterhead. Approvals of funds were transmitted to the firm in New York. See, e.g., Doc. No. 2040.02 (letter dated July 9, 1985 from B & W's general counsel to JM & F in New York approving "special project" funding for Dr. Seltzer); Doc. No. 2034.06 (letter dated March 10, 1982 from B & W's general counsel to JM & F in New York approving "special project" funding for Dr. Rothschild).

The activities of CTR, JM & F and H & K further root the alleged tobacco industry ...


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