Big Tobacco Threatened by New Disclosures

The nation’s major cigarette companies are waging a ferocious rear-guard action in courts around the country to keep yet another wave of potentially damning internal documents from coming to light while Congress and the White House are considering the proposed $368.5-billion tobacco settlement.

Judges in five states have called for the release of industry documents, with jurists in three states saying the papers show evidence of crime or fraud by tobacco companies and their use of attorneys in a 40-year effort to suppress information about the hazards of smoking.

If the industry fails in what has become an all-out effort to reverse these rulings, the disclosure of documents described by one official as “smoking howitzers” could damage the industry’s prospects in tobacco litigation in all 50 states and lead to stiffer terms against the industry in the pending nationwide settlement.

“If truly outrageous documents come out, it will make the price of the settlement higher--in dollars and in other ways,” said professor Richard Daynard, director of the Tobacco Products Liability Project at Northeastern University in Boston.

Daynard predicted that recent rulings in Florida, Kansas, Minnesota, Mississippi and New York will pave the way for significant revelations about the role played by some company lawyers in the industry’s decades-long legal battles.

That issue is a matter of concern to federal grand juries in Washington and New York that are investigating possible criminal charges against cigarette companies. Helmut Wakeham, the former research director of Philip Morris Inc., said in a brief interview that he was questioned extensively about the relationship of industry lawyers to scientists when he testified before the New York grand jury last year.

Several judges who have reviewed some of the internal documents in chambers have said they show evidence of serious misdeeds. Four of the five decisions involve what have come to be known as “the Liggett documents”--material that was turned over to judges in 20 states after the cigarette-maker Liggett Group reached a settlement with those states in March.

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The cases all involve allegations that the industry in 1954 hatched a conspiracy to deceive the public about the hazards of smoking and, as a key element of this effort, created a nonprofit research arm, the Council for Tobacco Research, that served as a “front” group.

A 160-page log of the Liggett documents, obtained by The Times, shows that it includes letters, memos and notes made by Liggett attorneys during meetings of the Committee of Counsel, a lawyers’ group that played a key role in formulating legal strategy for the industry.

The recent rulings being fought by tobacco forces:

* Five judges in Florida have issued three separate rulings in recent months that eight industry documents should be made public because they contain evidence that the tobacco companies “utilized attorneys in carrying out and planning fraudulent activities and undertook to misuse the attorney-client relationship to keep secret research . . . related to the true dangers of smoking.” Those rulings came in Florida’s suit seeking $2.7 billion to compensate the state for expenses incurred in treating sick smokers.

* A federal judge in Uniondale, N.Y., ruled earlier this year that 305 previously withheld documents dealing with “special projects” of the Council for Tobacco Research--scientific studies conducted under the supervision of lawyers “solely to further the economic interests of the industry,” in the judge’s words--have to be made public. That decision came in a personal-injury case filed by former Lucky Strike model Janet Sackman, who developed throat cancer.

* In St. Paul, the judge in Minnesota’s massive suit against the industry has made several rulings that the state has shown sufficient probable cause that industry documents contain evidence of a crime or fraud and should be turned over to the plaintiffs. The judge said the cigarette companies should not be allowed to conceal scientific research that they have touted in advertising campaigns but now want to keep secret.

* In Laurel, Miss., a judge said 10 of the Liggett documents he reviewed showed signs of fraudulent activity. In that suit, the widow of a barber who did not smoke is claiming that her husband’s 1994 death from lung cancer was caused by exposure to smoke from his customers’ cigarettes.

* In a suit in Kansas City, Kan., by David Burton, who suffers from vascular disease, a federal magistrate in February ordered R.J. Reynolds Tobacco Co. to turn over 32 “special projects” documents. Company lawyers contended that all the documents are privileged because they contain confidential attorney-client communications. But the judge ruled that none of the documents was entitled to such protection, and he noted that three of them “may contain evidence that RJR knew during the relevant time period that nicotine was addictive.”

Every ruling is being appealed by the industry, virtually all on grounds that judges have incorrectly interpreted prior cases on the protections accorded by the attorney-client privilege, or related doctrines that normally confer confidentiality on materials revealing an attorney’s thought process or documents dealing with strategy among joint defendants.

“There have been indications in tobacco cases” that those well-rooted privileges are being eroded, “which has not occurred in other types of litigation,” said Daniel W. Donahue, R.J. Reynolds’ senior vice president and deputy general counsel. “It is a matter that ought to be of significant concern to the legal community as a whole because we have this erosion occurring in the context of litigation that has a lot of political and social overtones.”

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But plaintiffs’ lawyers who have engaged in protracted legal battles to get the documents unearthed see it differently.

Usually, said Roberta Walburn, a Minnesota special counsel, the plaintiffs learn of the existence of the documents from sketchy “privilege logs.” These lists of material that the companies want to keep confidential are generally produced in response to a court order during the pretrial discovery process. Such logs normally provide a bare-bones description of the subject of the document, as well as its date, author and recipient.

Kenneth B. McClain, an Independence, Mo., attorney who got the favorable ruling in New York after an 18-month battle, said the documents in his case “are at the heart of the whole issue as to whether the Council for Tobacco Research was set up to be a ‘front organization’ ” to protect the industry’s interests rather than do independent scientific research.

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“These documents should have been produced a long time ago,” McClain said.

Judges in several other states, including California, Connecticut, Illinois and Texas, will be asked to rule on the Liggett documents in coming months.

Though numerous sensational documents showing the tobacco industry’s awareness of the hazards of smoking have already come to light, some plaintiffs’ lawyers believe that they are nowhere near the bottom of the iceberg.

For example, Minnesota already has obtained 33 million pages of industry documents in its case, but the vast majority have not become public because of judicial protective orders.

Minnesota Atty. Gen. Hubert H. Humphrey III, a vocal critic of the proposed nationwide settlement, says some of these documents are “smoking howitzers” and has urged members of Congress and the White House not to make a final decision on the settlement without reviewing at least some of them. Humphrey has urged two Senate committees to subpoena the key Minnesota documents--about 500,000 pages--and has told the senators that his attorneys could provide a road map to the key documents.

In response, Senate Judiciary Committee Chairman Orrin G. Hatch (R-Utah) said it is common knowledge that the tobacco industry has withheld damaging information and that it was infeasible for the committee to review 33 million pages of documents. He is considering Humphrey’s proposal.

Several Democratic senators, while acknowledging that they could not plow through millions of pages, have embraced the thrust of Humphrey’s position.

“Right now, we don’t have nearly enough knowledge” to diligently evaluate the settlement, said Sen. Patrick J. Leahy of Vermont. “To the extent the tobacco companies are unwilling to share information, my suspicions are aroused.”

It’s not just the industry that is concerned about Humphrey’s proposal. The state attorneys general and private lawyers who are advocates of the $368.5-billion settlement are worried that if Congress gets bogged down in reviewing documents, it could further delay legislative approval of the accord.

Mississippi Atty. Gen. Michael Moore has told a score of senators that they will not find anything more disturbing in still-secret documents than they already know. Moore noted that the settlement would create a panel of judges to review future industry claims of confidentiality. Such a procedure, says Charleston, S.C., attorney Ronald L. Motley, a veteran of many document battles with the industry, would provide “a means to quickly and freely gain access to tobacco industry documents.”

To buttress this point, the Castano group of 65 plaintiffs’ lawyers--who also favor quick approval of the settlement--have assembled for members of Congress a thick dossier of key internal industry documents meant to illustrate that enough negative evidence about the industry is already available.

But those documents contain such previously undisclosed items as a 1956 memo by Alan Rodgman, an R.J. Reynolds chemist, which indicates recognition that smoking causes cancer--something the companies continue to deny in court.

“Since it is now well-established that cigarette smoke does contain several polycyclic aromatic hydrocarbons and, considering the potential and actual carcinogenic activity of a number of these compounds, a method of either complete removal or almost complete removal of these compounds from cigarette smoke is required,” Rodgman wrote 41 years ago.

“We keep being surprised as we go along . . . so we keep digging,” said Philadelphia attorney Stephen A. Sheller, one of the plaintiffs’ lawyers who recently conducted a deposition of Rodgman.

The recent adverse rulings against the industry are the latest stage of a process that began a decade ago when lawyer Marc Edell, representing the heirs of dead smoker Rose Cipollone, made the first significant breakthroughs by a plaintiff’s lawyer in obtaining industry documents.

Since that time, reams of damaging internal documents have been unearthed. But more than 1,000 of the potentially most incriminating ones have not seen the light of day.

In 1992, after reviewing in chambers a selected sample of 1,500 confidential memos of the Council for Tobacco Research, U.S. District Judge H. Lee Sarokin in New Jersey said the documents show that in marketing cigarettes the companies chose “sales over safety, money over morality,” leading him to conclude that the tobacco industry “may be the king of concealment and disinformation.”

He ordered the documents surrendered. But later that year, a federal appeals court reversed his order, saying that Sarokin’s harsh language was a sign that he had failed to act impartially. Nonetheless, the appeals court said another judge should review the material, and now, nearly five years later, the once-dormant case has been reopened and that document review is about to begin in Newark, N.J.

Some of the same documents that Sarokin reviewed are at issue in Florida’s lawsuit against the industry, which hopes that the state Supreme Court will reverse an appeals court decision and keep the documents from public view.

W.C. Gentry, a Jacksonville attorney who is one of Florida’s special counsels in its suit against the industry, said the fact that the cigarette companies are having to defend so many document challenges at once makes it possible that “the floodgates are about to open.”

As a sign of how fiercely the industry is resisting, lawyers for Florida have had to file 75 separate motions to compel the production of documents after its initial requests were rebuffed by industry attorneys.

It had been anticipated that the industry would reach a separate settlement with Florida, as it did with Mississippi, to avoid possible negative publicity while the national settlement is pending in Congress. But both sides said last week that they were far apart, and Florida Atty. Gen. Robert Butterworth said he would not settle the case unless the cigarette companies turn over the eight documents addressed by the five Florida judges.

Jury selection in the case began Friday and opening statements are scheduled for September.