The opinion of the court was delivered by: Weinstein, Senior District Judge.
AMENDED MEMORANDUM AND ORDER
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.
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
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.
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
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
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
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
We always have and always will cooperate closely with
those whose task it is to safeguard the public
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
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
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
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
"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).
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.
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
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
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
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 ...