Full opinion text
FINAL OPINION KESSLER, District Judge. TABLE OF CONTENTS I. INTRODUCTION.........................................................26 A. Overview.............................................................26 B. Preliminary Guidance for the Reader....................................29 II. PROCEDURAL HISTORY.................................................31 III. CREATION, NATURE, AND OPERATION OF THE ENTERPRISE..........34 A. Pre-1953 Overview — The Rise in American Smoking and the Status of Scientific Research on Smoking and Health.............................35 B. Creation of the Enterprise .............................................36 C. TIRC/CTR — Tobacco Industry Research Committee/Couneil for Tobacco Research-USA..............................................41 1. Selection and Approval of TIRC’s Scientific Advisory Board Members and Scientific Director...................................46 2. Research Activities of TIRC/CTR....................................49 3. Public Relations Activities of TIRC/CTR..............................53 4. Publications and Public Statements of TIRC/CTR......................56 a. TIRC/CTR Annual Reports.....................................56 b. TIRC/CTR Newsletters........................................58 c. TIRC/CTR Press Releases and Other Public Statements............60 D. Tobacco Institute......................................................62 1. Formation of the Tobacco Institute ..................................62 2. Relationship Between the Tobacco Institute and TIRC/CTR.............66 3. Tobacco Institute Press Releases, Public Statements, Advertisements, Brochures, and Other Publications..................70 4. Tobacco Institute Committees.......................................77 a. Committee of Counsel and Outside Counsel.......................77 b. Tobacco Institute Executive Committee ..........................80 c. Tobacco Institute Communications Committee.....................81 5. Tobacco Institute College of Tobacco Knowledge.......................82 6. Tobacco Institute Testing Laboratory................................86 E. Joint Research Activity Directed by Defendants’ Executives and Lawyers...........................................................87 1. Witness Development..............................................87 2. CTR Special Projects ..............................................91 a. Nature of CTR Special Projects.................................91 b. Lawyers’ Involvement with CTR Special Projects..................94 c. Scientists Funded Through CTR Special Projects.................100 3. Lawyers’ Special Accounts.........................................100 a. Special Account No. 3.........................................101 b. Special Account No. 4.........................................101 c. Special Account No. 5.........................................106 d. Institutional Grants...........................................107 F. Committees .........................................................108 1. Research Review Committee, Research Liaison Committee, and Industry Research Committee....................................108 2. Industry Technical Committee .....................................110 3. Tobacco Working Group...........................................112 G. Coordinated Smoking and Health Literature Collection and Retrieval.....115 H. Defendants’ Organizations Focused on ETS Issues .......................118 I. International Organizations, Committees, and Groups.....................119 1. Overview........................................................119 2. TMSC — Tobacco Manufacturers’ Standing Committee.................123 3. TRC — Tobacco Research Council...................................125 4. TAC — Tobacco Advisory Council ...................................126 5. ICOSI — International Committee on Smoking Issues..................129 6. INFOTAB — International Tobacco Information Center................132 7. TDC — Tobacco Documentation Centre ..............................135 8. CORESTA — Center for Cooperation in Scientific Research Relative to Tobaceo/Centre de Coopération pour les Recherches Scienti-fiques Relatives au Tabac........................................136 9. Tobacco Institute Interaction with Overseas and International Groups........................................................137 J. Dissolution of CTR and the Tobacco Institute............................141 1. CTR............................................................142 2. Tobacco Institute.................................................143 IV. THE DEFENDANTS ARE ENGAGED IN AND THEIR ACTIVITIES AFFECT INTERSTATE AND FOREIGN COMMERCE...................143 A. Philip Morris Companies..............................................143 B. Philip Morris........................................................143 C. R.J. Reynolds........................................................144 D. Liggett.............................................................144 E. Lorillard............................................................144 F. BATCo .............................................................144 G. Brown & Williamson..................................................144 H. American ...........................................................144 I. Tobacco Institute.....................................................144 J. TIRC/CTR..........................................................145 V. DEFENDANTS DEVISED AND EXECUTED A SCHEME TO DEFRAUD CONSUMERS AND POTENTIAL CONSUMERS OF CIGARETTES IN MOST, BUT NOT ALL, OF THE AREAS ALLEGED BY THE GOVERNMENT.......................................146 A. Defendants Have Falsely Denied, Distorted and Minimized the Significant Adverse Health Consequences of Smoking for Decades.............146 1. Cigarette Smoking Causes Disease..................................146 2. Scientific Research on Lung Cancer up to December 1953..............148 a. Scientists Investigating the Rise in the Incidence of Lung Cancer Linked Smoking and Disease before 1953 ...............148 b. By 1953, Defendants Recognized the Need for Concerted Action to Confront Accumulating Evidence of the Serious Consequences of Smoking ...................................153 3. Developments Between 1953 and 1964 ...............................155 a. Between 1953 and 1964, the Evidence Demonstrating that Smoking Causes Significant Adverse Health Effects Grew Although No Consensus Had Yet Been Reached................155 b. Before 1964, Defendants Internally Recognized the Growing Evidence Demonstrating that Smoking Causes Significant Adverse Health Effects......................................164 c. In the 1950s, Defendants Began Their Joint Campaign to Falsely Deny and Distort the Existence of a Link Between Cigarette Smoking and Disease, Even Though Their Internal Documents Recognized Its Existence ......................168 4. The 1964 Surgeon General Report Represented a Scientific Consensus that Smoking Causes Disease ..........................174 a. The Process and Methodology of the Surgeon General’s Report.....174 b. The Conclusions..............................................178 5. Post-1964 Research on the Adverse Health Effects of Smoking and Defendants’ Persistent Denials Thereof............................179 a. Following Publication of the 1964 Report, the Scientific Community Continued to Document the Link Between Smoking and an Extraordinary Number of Serious Health Consequences..............................................179 b. Defendants’ Internal Documents and Research from the 1960s, 1970s, and Beyond Reveal Their Continued Recognition that Smoking Causes Serious Adverse Health Effects and Then-Fear of the Impact of Such Knowledge on Litigation............180 c. Despite Their Internal Knowledge, Defendants Continued, From 1964 Onward, to Falsely Deny and Distort the Serious Health Effects of Smoking...................................187 6. As of 2005, Defendants Still Do Not Admit the Serious Health Effects of Smoking Which They Recognized Internally Decades Ago....................................... 204 7. Conclusions......................................................207 The Addictive Properties of Nicotine....................................208 1. Introduction.....................................................208 2. Cigarette Smoking Is Addictive and Nicotine Is the Primary Element of that Addiction .......................................209 a. How Nicotine Operates within the Body.........................209 b. Evolving Definitions of “Addiction” and Classification of Nicotine...................................................211 c. Consequences of the Addictiveness of Nicotine ...................216 d. Conclusion...................................................218 3. Defendants Were Well Aware that Smoking and Nicotine Are Addictive......................................................218 a. Philip Morris.................................................219 b. R.J. Reynolds................................................231 c. BATCo......................................................237 d. Brown & Williamson..........................................258 e. Lorillard....................................................266 f. American Tobacco Company...................................269 g. CTR........................................................270 4. Defendants Publicly Denied that Nicotine Is Addictive and Continue to Do So..............................................271 a. Philip Morris.................................................272 b. R.J. Reynolds................................................274 c. BATCo......................................................277 d. American Tobacco Company...................................278 e. Brown & Williamson..........................................278 f. Lorillard ....................................................279 g. Liggett......................................................280 h. Tobacco Institute.............................................281 i. CTR........................................................286 j. Defendants’ Conduct Continues.................................286 5. Defendants Concealed and Suppressed Research Data and Other Evidence that Nicotine Is Addictive...............................289 a. Philip Morris.................................................290 b. BATCo......................................................297 e. Brown & Williamson..........................................298 d. American Tobacco Company...................................303 e. Tobacco Institute.............................................303 f. CTR and Other Defendant Funded Research Groups..............303 6. Conclusions......................................................307 C. Nicotine “Manipulation”: Defendants Have Falsely Denied that They Can and Do Control the Level of Nicotine Delivered In Order to Create and Sustain Addiction........................................308 1. For Decades, Defendants Have Recognized that Controlling Nicotine Delivery, in Order to Create and Sustain Smokers’ Addiction, Was Necessary to Ensure Commercial Success............309 a. Defendants Recognized the Need to Determine “Minimum” and “Optimum” Nicotine Delivery Levels in Order to Provide Sufficient “Impact” and “Satisfaction” to Cigarette Smokers...................................................309 (1) Philip Morris.............................................311 (2) R.J. Reynolds ............................................312 (3) Brown & Williamson and BATCo............................314 (4) Lorillard.................................................315 (5) Liggett..................................................315 b. Defendants Have Long Recognized that Controlling the Nicotine to Tar Ratio Would Enable Them to Meet Minimum and Optimum Nicotine Delivery Levels...................315 (1) Philip Morris.............................................315 (2) R.J. Reynolds ............................................319 (3) Brown & Williamson and BATCo............................325 (4) American................................................328 (5) Lorillard.................................................329 (6) Liggett..................................................333 c. Defendants Understood the Correlation Between Nicotine Delivery and Cigarette Sales.................................334 (1) Philip Morris.............................................334 (2) R.J. Reynolds ............................................334 (3) Brown & Williamson and BATCo............................335 (4) Lorillard.................................................336 2. Defendants Researched, Developed, and Utilized Various Designs and Methods of Nicotine Control to Ensure that All Cigarettes Delivered Doses of Nicotine Adequate to Create and Sustain Addiction......................................................337 a. Defendants Recognized the Need to Design Cigarettes that Would Produce Low Nicotine and Tar Measurements under the FTC Method While Also Delivering the Minimum Nicotine Levels to Create and Sustain Addiction................338 b. Leaf Blend and Filler: 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....................................339 (1) Philip Morris.............................................341 (2) R.J. Reynolds ............................................343 (3) Brown & Williamson and BATCo............................344 (4) American................................................345 (5) Lorillard.................................................347 (6) Liggett..................................................348 c. Nicotine to Tar Ratio: Defendants Have Used Physical Design Parameters to Increase the Nicotine to Tar Ratio of Their Cigarettes.................................................349 (1) Filter Design.............................................350 (2) Ventilation and Air Dilution................................351 (3) Paper Porosity and Composition............................351 d. Smoke pH and Ammonia: Defendants Altered the Chemical Form of Nicotine Delivered in Mainstream Cigarette Smoke for the Purpose of Improving Nicotine Transfer Efficiency and Increasing the Speed with Which Nicotine Is Absorbed by Smokers................................................352 (1) Scientific Overview........................................352 (2) Individual Defendants’ Documents ..........................357 (a) Philip Morris .........................................357 (b) R. J. Reynolds.........................................360 (e) Brown & Williamson and BATCo........................364 (d) American.............................................369 (e) Lorillard.............................................370 (f) Liggett...............................................371 e. Other Additives: Defendants Researched the Use of Other Additives to Control Nicotine Delivery.........................372 3. Defendants Have Made False and Misleading Public Statements Regarding Their Control of the Nicotine Content and Delivery of Their Products.................................................374 a. The Waxman Hearings........................................374 b. Defendants’ False and Misleading Public Statements Continued After the Waxman Hearings........................380 c. Testimony Consistent with Fraudulent Public Statements..........383 4. Conclusions......................................................383 D. The Government Has Failed to Prove by a Preponderance of the Evidence that Defendants Deliberately Chose Not to Utilize or Market Feasible Designs or Product Features that Could Produce Less Hazardous Cigarettes..........................................384 1. Introduction.....................................................384 2. Defendants Have Long Acknowledged Internally the Existence of a Market for a Genuinely Less Hazardous Cigarette..................385 3. Defendants Received Conflicting Messages From the Government and the Public Health Community About Their Efforts to Create and Market Less Hazardous Cigarettes............................386 4. As Part of the Effort to Make Less Hazardous Cigarettes, Defendants Experimented with General and Selective Reduction.....389 a. General Reduction............................................389 b. Selective Reduction...........................................391 (1) Defendants’ Efforts to Reduce Benzo(a)pyrene................392 (2) Defendants’ Efforts to Reduce Phenols Through Use of Charcoal Filtered Cigarettes .............................392 (a) Philip Morris .........................................393 (b) R J Reynolds..........................................395 (c) Lorillard’s York Cigarette..............................395 (3) Defendants’ Efforts to Reduce Ciliastats.....................396 (4) Defendants’ Efforts to Reduce Delivery of Tobacco-Specific Nitrosamines....................................396 5. Defendants’ Efforts to Develop/Market Potentially Less Hazardous Non-Conventional Products......................................399 a. Philip Morris.................................................399 (1) Accord...................................................399 (2) Next....................................................400 (3) Nicotine Analogue Program................................401 b. RJ Reynolds.................................................402 (1) The Multijet Filter........................................402 (2) Heated Tobacco Products..................................403 (a) Premier..............................................403 (b) Eclipse...............................................410 (3) EW/Winston Select........................................415 e. BATCo and Brown & Williamson...............................420 (1) FACT Cigarette..........................................420 (2) Project Ariel .............................................421 (3) Project Airbus............................................422 (4) Advance.................................................423 d. Lorillard’s Zero Tar and PMO Projects..........................426 e. Liggett’s Project XA..........................................426 6. The Government Has Not Proven by a Preponderance of the Evidence that Defendant Had a “Gentleman’s Agreement” Not to Develop a Less Hazardous Cigarette and Not to Do In-House Biological Research on the Hazards of Smoking.....................427 7. Conclusions......................................................429 E. Defendants Falsely Marketed and Promoted Low Tar/Light Cigarettes as Less Harmful than Full-Flavor Cigarettes in Order to Keep People Smoking and Sustain Corporate Revenues......................430 1. Low Tar/Light Cigarettes Offer No Clear Health Benefit over Regular Cigarettes .............................................431 a. History of Health Claims......................................431 b. The FTC Method.............................................433 c. The FTC Method Does Not Measure Actual Tar and Nicotine Delivery...................................................435 d. The Public Health Community Has Concluded that Low Tar Cigarettes Offer No Clear Health Benefit......................444 2. Based on Their Sophisticated Understanding of Compensation, Defendants Internally Recognized that Low Tar/Light Cigarettes Offer No Clear Health Benefit....................................456 a. Defendants Internally Recognized that Low Tar Cigarettes Are Not Less Harmful Than Full-Flavor Cigarettes ............456 (1) Philip Morris.............................................456 (2) R J Reynolds .............................................458 (3) Brown & Williamson.......................................459 (4) BATCo..................................................460 (5) Lorillard.................................................460 (6) Liggett..................................................460 b. Internally, Defendants Had an Extensive and Sophisticated Understanding of Smoker Compensation.......................461 (1) Philip Morris.............................................461 (2) R J Reynolds .............................................467 (3) Brown & Williamson.......................................469 (4) BATCo..................................................470 (5) American Tobacco.........................................474 (6) Lorillard.................................................474 3. Defendants Internally Recognized that Smokers Switch to Low Tar/Light Cigarettes, Rather than Quit Smoking, Because They Believe They Are Less Harmful..................................475 a. Defendants Recognized that Smokers Choose Light/Low Tar Cigarettes for a Perceived Health Benefit......................476 (1) Philip Morris.............................................477 (2) R.J. Reynolds ............................................481 (3) Brown & Williamson.......................................483 (4) BATCo..................................................485 (5) American Tobacco.........................................487 (6) Lorillard.................................................487 b. Defendants Internally Recognized that Smokers Rely on the Claims Made for Low Tar/Light Cigarettes as an Excuse/ Rationale for Not Quitting Smoking...........................488 (1) Tobacco Institute .........................................488 (2) Philip Morris.............................................488 (3) R.J. Reynolds ............................................492 (4) Brown & Williamson.......................................495 (5) BATCo..................................................497 (6) American Tobacco.........................................499 (7) Lorillard.................................................499 (8) Liggett..................................................500 4. Despite Their Internal Knowledge, Defendants Publicly Denied that Compensation Is Nearly Complete and that the FTC Method is Flawed...............................................500 a. Tobacco Institute.............................................504 b. Philip Morris.................................................504 e. RJ Reynolds.................................................506 d. Brown & Williamson..........................................506 e. BATCo......................................................507 f. American Tobacco............................... 507 g. Lorillard ....................................................507 5. Despite Their Internal Knowledge, Defendants’ Marketing and Public Statements About Low Tar Cigarettes Continue to Suggest that They Are Less Harmful than Full-Flavor Cigarettes.....................................................507 a. Philip Morris.................................................513 (1) Philip Morris’s Low Tar Cigarette Marketing Techniques.....513 (2) Philip Morris’s Research on the Low Tar Cigarette Category...............................................524 (3) Philip Morris’s Public Statements About Low Tar Cigarettes..............................................527 b. R.J. Reynolds................................................529 (1) R.J. Reynolds’s Low Tar Marketing Techniques...............529 (2) R.J. Reynolds’s Research on the Low Tar Cigarette Category...............................................535 (3) RJR’s Public Statements About Low Tar Cigarettes...........537 c. Brown & Williamson..........................................537 (1) Brown & Williamson’s Marketing of Low Tar Cigarettes.....537 (2) Brown & Williamson’s Research on the Low Tar Cigarette Category...............................................540 (3) Brown & Williamson’s Public Statements About Low Tar Cigarettes..............................................545 d. BATCo......................................................546 (1) BATCo’s Research on the Low Tar Cigarette Category........546 (2) BATCo’s Public Statements About Low Tar Cigarettes ........549 e. American Tobacco Marketing of Low Tar Cigarettes..............549 f. Lorillard ....................................................554 (1) Lorillard’s Marketing of Low Tar Cigarettes..................554 (2) Lorillard’s Research on the Low Tar Cigarette Category.....558 g. Liggett......................................................560 6. Conclusions......................................................560 From the 1950s to the Present, Different Defendants, at Different Times and Using Different Methods, Have Intentionally Marketed to Young People Under the Age of Twenty-One in Order to Recruit “Replacement Smokers” to Ensure the Economic Future of the Tobacco Industry..................................................561 1. Definition of Youth................................................561 2. The Defendants Need Youth as Replacement Smokers ................561 3. Defendants’ Marketing Is a Substantial Contributing Factor to Youth Smoking Initiation........................................565 a. Development of the Link Between Marketing and Youth Smoking........................_...........................565 (1) No Single-Source Causative Factor Can Describe the Complex Link Between Marketing and Youth Smoking.....565 (2) Public Health Authorities Have Found that Marketing Is a Substantial Contributing Factor to Youth Smoking Initiation...............................................566 (3) Independent Studies Have Found that Marketing Is a Substantial Contributing Factor to Youth Smoking Initiation...............................................569 (4) Credible Expert Witnesses Have Found that Marketing Is a Substantial Contributing Factor to Youth Smoking Initiation...............................................570 b. The Ubiquity of Defendants’ Marketing Normalizes and Legitimizes Smoking for Youth...............................575 c. Risk Perception: The Inability of Youth to Grasp the Full Implications of Smoking.....................................576 4. Tracking Youth Behavior and Preferences Ensures that Marketing and Promotion Reach Youth .....................................580 a. Defendants Track Youth Behavior and Preferences...............580 (1) Philip Morris.............................................580 (2) Lorillard.................................................594 (3) American Tobacco, BATCo, and Brown & Williamson..........598 (4) R.J. Reynolds ............................................607 b. Defendants’ Marketing Employs Themes Which Resonate with Youth.....................................................616 (1) Philip Morris.............................................617 (2) Lorillard.................................................622 (3) Brown & Williamson.......................................625 (4) R.J. Reynolds ............................................630 c. Defendants Continue Price Promotions for Premium Brands Which Are Most Popular with Teens..........................639 (1) Philip Morris.............................................641 (2) Liggett..................................................643 (3) Lorillard.................................................643 (4) Brown & Williamson.......................................643 (5) R.J. Reynolds ............................................644 5. Defendants’ Marketing Successfully Reaches Youth...................645 a. Defendants’ Spending on Marketing and Promotion Has Continually Increased.......................................645 b. Defendants Advertise in Youth-Oriented Publications.............646 (1) Philip Morris.............................................647 (2) Liggett..................................................651 (3) Lorillard.................................................651 (4) Brown & Williamson.......................................653 (5) R.J. Reynolds ............................................654 c. Defendants Market to Youth Through Direct Mail................656 (1) Philip Morris.............................................656 (2) Lorillard.................................................658 (3) Brown & Williamson.......................................659 (4) R.J. Reynolds ............................................659 d. Defendants Market to Youth Through an Array of Retail Promotions................................................659 e. Defendants’ Promotional Items, Events and Sponsorships Attract Youth................................ 663 (1) Events...................................................663 (2) Sponsorships.............................................664 (3) Promotional Items ........................................667 6. Defendants’ Youth Smoking Prevention Programs Are Not Designed to Effectively Prevent Youth Smoking....................667 7. Despite the Overwhelming Evidence to the Contrary, Defendants’ Public Statements and Official or Internal Corporate Policies Deny that Their Marketing Targets Youth or Affects Youth Smoking Incidence..............................................672 a. Defendants Claim They Restrict Their Marketing to People Twenty-one and Older.......................................672 (1) The 1964 Advertising Code.................................672 (2) Official Corporate Policies..................................674 b. Defendants Deny Their Marketing Influences Youth Smoking Initiation; Defendants’ Explanation for Their Marketing Practices Is Not Credible....................................676 (1) Tobacco Institute .........................................676 (2) Philip Morris.............................................682 (3) Liggett..................................................684 (4) Lorillard.................................................684 (5) BATCo and Brown & Williamson............................686 (6) RJ Reynolds .............................................688 8. Conclusions......................................................691 G. Defendants Have Publicly Denied What They Internally Acknowledged: that ETS Is Hazardous to Nonsmokers ...............................692 1. Introduction.....................................................692 2. The Consensus of the Public Health Community Is that ETS Causes Disease in Nonsmokers...................................693 a. The Development of the Consensus.............................695 b. The Consensus...............................................703 3. Internally, Defendants Recognized that ETS Is Hazardous to Nonsmokers...................................................708 a. ETS Research at Philip Morris’s Instituí fiir Biologische Forschung (INBIFO).......................................709 b. Defendants’ Recognition of the Validity of the Hirayama Study.....716 c. Other Internal Research and Statements Revealing Defendants’ Knowledge of the Health Risks of Passive Smoking.....718 4. Internally, Defendants Expressed Concern that the Mounting Evidence on ETS Posed a Grave Threat to Their Industry.....720 5. Defendants Made Public Promises to Support Independent Research on the Link Betwen ETS and Disease....................722 6. Defendants Undertook Joint Efforts to Undermine and Discredit the Scientific Consensus that ETS Causes Disease..................723 a. Defendants Acted Through a Web of Coordinated and Interrelated International and Domestic Organizations..........724 (1) 1975-1980: The Tobacco Institute ETS Advisory Group........724 (2) 1977-1991: “Operation Berkshire” ..........................727 (3) 1987: Operation Downunder................................732 (4) 1988-1999: The Center for Indoor Air Research (CIAR).....735 (a) CIAR Applied Projects.................................739 (b) Defendants Cultivated CIAR’s Apparent Independence.....742 (c) The Demise of CIAR...................................746 (5) PosW.991: IEMC.........................................746 (6) The Global ETS Consultancy Program.......................752 (a) Establishment and Goals of the ETS Consultancy Program ...........................................752 (b) Implementation of the ETS Consultancy Program: Recruiting, Training, and Educating the Consultants.........................................753 (c) The Indoor Air Pollution Advisory Group (IAPAG).........757 (d) The Appearance of “Independence”......................759 (e) Defendants’ Use of Consultants .........................760 (f) ARIA and IAI ........................................762 (g) The Industry’s ETS Consultants Cited and/or Published Without Disclosure of Tobacco Industry Ties ...............................................764 (h) ACVA/HBI...........................................766 (7) ETS Symposia............................................767 (a) The 1974 Bermuda (Rylander) “Workshop”...............768 (b) The Geneva (Rylander) Conference......................769 (c) The Vienna Conference.................................771 (d) The 1987 Tokyo Conference.............................772 (e) The 1989 McGill “Symposium” ..........................774 b. Defendants and Their Paid Consultants Controlled ETS Research Findings.............. 777 (1) The 1995 Japanese Spousal Study...........................777 (2) The 1989 Malmfors/SAS Airline Study.......................781 (3) The 1992 HBI 585 Building Study...........................784 (4) The 2003 Enstrom/Kabat Study.............................786 7. Defendants Made False and Misleading Public Statements Denying that ETS Is Hazardous to Nonsmokers............................788 8. Defendants Continue to Obscure the Fact that ETS is Hazardous to Nonsmokers...................................................795 a. Websites and Other Public Statements..........................795 b. The Philip Morris External Research Program (PMERP)..........798 c. Other Initiatives..............................................799 9. Conclusions......................................................800 H. At Various Times, Defendants Attempted to and Did Suppress and Conceal Scientific Research and Destroy Documents Relevant to Their Public and Litigation Positions .................................801 1. Suppression and Concealment of Scientific Research..................801 a. R.J. Reynolds................................................802 b. BAT Group..................................................804 c. Philip Morris.................................................810 d. Lorillard ....................................................814 2. Document Destruction Policies.....................................814 a. BAT Group..................................................815 b. R.J. Reynolds................................................831 3. Improper use of Attorney-Client and Work Product Privileges.........832 a. BAT Group..................................................832 b. R.J. Reynolds................................................836 c. Liggett......................................................836 d. Findings by Other Courts......................................836 4. Conclusions......................................................839 VI. THE PROVISIONS AND IMPLICATIONS OF SETTLEMENT AGREEMENTS BY DEFENDANTS.....................................839 A. Liggett’s Settlement Agreement with Various States......................839 B. The Master Settlement Agreement.....................................841 1. Provisions of the MSA.........................................841 2. Enforcement of the MSA......................................844 3. Developments Since the MSA..................................848 VII. DEFENDANTS HAVE VIOLATED 18 U.S.C. 1962(c)........................851 A. Introduction.........................................................851 B. Defendants Engaged in a Scheme to Defraud Smokers and Potential Smokers..........................................................852 1. Defendants Falsely Denied the Adverse Health Effects of Smoking.....854 2. Defendants Falsely Denied that Nicotine and Smoking Are Addictive......................................................856 3. Defendants Falsely Denied that They Manipulated Cigarette Design and Composition so as to Assure Nicotine Delivery Levels Which Create and Sustain Addiction........................858 4. Defendants Falsely Represented that Light and Low Tar Cigarettes Deliver Less Nicotine and Tar and, Therefore, Present Fewer Health Risks than Full-Flavor Cigarettes............859 5. Defendants Falsely Denied that They Market to Youth................861 6. Defendants Falsely Denied that ETS Causes Disease..................864 7. Defendants Suppressed Documents, Information, and Research.........866 C. Defendants Established an Enterprise..................................867 1. Applicable Legal Standards........................................867 2. Defendants’ Enterprise Had a Common Purpose......................869 3. The Enterprise operated through both formal and informal organization....................................................870 4. The Enterprise Has Functioned as a Continuous Unit.................871 D. The Enterprise Engaged in and Its Activities Affected Interstate and Foreign Commerce.................................................872 E. Each Defendant Was Associated with, but Distinct from, the Enterprise.....873 1. Each Defendant Is Associated with the Enterprise....................873 2. Each Defendant is Distinct from the Enterprise......................875 F. Each Defendant Participated in the Conduct of the Enterprise.............875 G. Each Defendant Carried Out Its Participation in the Conduct of the Enterprise by Engaging in a Pattern of Racketeering Activity...........878 1. The Government Has Proven that Defendants Caused Mailings and Wire Transmissions, in Furtherance of the Scheme to Defraud, in Violation of 18 U.S.C. §§ 1341 and/or 1343 .........................878 a. Defendants’ Routine Mailing Practices ..........................881 (1) Philip Morris.............................................881 (2) Lorillard.................................................881 (3) Liggett..................................................881 (4) R. J. Reynolds ............................................881 (5) The Tobacco Institute .....................................882 (6) Council For Tobacco Research..............................882 b. Prior Stipulations and Admissions Establish the Mailings and Wire Transmissions Underlying 79 of the Alleged 145 Racketeering Acts..........................................882 c. The Mailings and Wire Transmissions Underlying the Alleged Racketeering Acts Which Involve Defendants’ Press Releases and Advertisements Were Disseminated to the Public Via the United States Mails and Wire Transmissions................882 d. Defendants Caused Wire, Radio, and Television Transmissions Underlying the Racketeering Acts............................883 e. The Mailings and Wire Transmissions Involving Communications Were Sent or Received by Defendants or their Representatives............................................884 f. The Cigarette Company Defendants Are Liable for the Mailings and Wire Transmissions Underlying the Racketeering Acts Committed By Defendants CTR and TI...................885 2. The First Amendment Does Not Protect Defendants’ False and Misleading Public Statements....................................886 a. Noerr-Pennington Protects Only Those Defendants’ Statements Made in the Course of Petitioning the Legislature; It Does Not Immunize Statements Made with the Purpose of Influencing Smokers, Potential Smokers, and the General Public.....................................................886 b. The Government Has Met the Necessary Standard of Proof to Show that Defendants’ Actions Are Fraudulent.................887 3. Defendants Engaged in a Pattern of Racketeering Activity in Furtherance of the Scheme to Defraud............................889 a. Each Defendant Committed at Least Two Racketeering Acts, the Last One of Which Occurred Within Ten Years from the Commission of the Prior Racketeering Act.....................889 b. The Racketeering Acts Are Related and Continuous...............889 (1) The Racketeering Acts Are Related.........................890 (2) The Racketeering Acts Have Been Continuous................890 4. Defendants Acted with the Specific Intent to Defraud or Deceive.....891 a. Defendants Are Liable for the Acts of Their Officers, Employees, and Agents......................................892 b. Defendants Are Deemed to Possess the Collective Knowledge of Their Officers, Employees, and Agents......................893 c. Specific Intent May Be Established by the Collective Knowledge of Each Defendant and of the Enterprise as a Whole.....895 5.Defendants’ False and Fraudulent Statements, Representations, and Promises Were Material.....................................898 VIII.DEFENDANTS HAVE VIOLATED 18 U.S.C. § 1962(d)......................901 A. Applicable Case Law.................................................901 B. Each Defendant Is Liable for the RICO Conspiracy Charge Because Each Entered into the Requisite Conspiratorial Agreement..............903 C. Liggett Withdrew from the Conspiracy .................................906 IX. ALTRIA IS LIABLE FOR ITS VIOLATIONS OF 18 U.S.C. § 1962(c) and (d)....................................................................907 X. THERE IS A LIKELIHOOD OF PRESENT AND FUTURE VIOLATIONS OF RICO................................................908 A. Applicable Law......................................................908 B. The Enterprise’s Scheme to Defraud Presents Continuing Opportunities for Defendants to Commit Violations of 18 U.S.C. § 1962(c) and (d) ...............................................................911 C. The MSA Has Not Sufficiently Altered Defendants’ Conduct to Justify Not Imposing Appropriate Remedies .................................913 D. As to Certain Defendants, There is Not a Reasonable Likelihood of Future Violations of 18 U.S.C. § 1962(c) and (d)........................915 1. CTR............................................................915 2. The Tobacco Institute.............................................916 3. Liggett..........................................................918 XI.REMEDIES...............................’.............................919 A. Legal Standards Governing Remedies ..................................919 B. Specific Remedies....................................................923 1. Prohibition of Brand Descriptors ...................................923 2. Corrective Communications........................................925 3. Disclosure of Documents and Disaggregated Marketing Data...........928 a. Depositories .................................................929 b. Websites ....................................................930 c. Privilege Claims..............................................931 d. Disaggregated Marketing Data.................................932 4. General Injunctive Provisions......................................932 5. National Smoker Cessation Program................................933 6. Youth Smoking Reduction Targets..................................933 7. Corporate Structural Changes......................................934 8. Public Education and Countermarketing Campaign...................936 9. Costs ...........................................................937 I. INTRODUCTION A. Overview On September 22, 1999, the United States brought this massive lawsuit against nine cigarette manufacturers of cigarettes and two tobacco-related trade organizations. The Government alleged that Defendants have violated, and continue to violate, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968, by engaging in a lengthy, unlawful conspiracy to deceive the American public about the health effects of smoking and environmental tobacco smoke, the addictiveness of nicotine, the health benefits from low tar, “light” cigarettes, and their manipulation of the design and composition of cigarettes in order to sustain nicotine addiction. As Justice O’Connor noted in Food and Drug Administration, et al. v. Brown & Williamson Tobacco Corporation, et al., 529 U.S. 120, 125, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000), “[t]his case involves one of the most troubling public health problems facing our Nation today: the thousands of premature deaths that occur each year because of tobacco use.” In particular, the Government has argued that, for approximately fifty years, the Defendants have falsely and fraudulently denied: (1) that smoking causes lung cancer and emphysema (also known as chronic obstructive pulmonary disease (“COPD”)), as well as many other types of cancer; (2) that environmental tobacco smoke causes lung cancer and endangers the respiratory and auditory systems of children; (3) that nicotine is a highly addictive drug which they manipulated in order to sustain addiction; (4) that they marketed and promoted low tar/light cigarettes as less harmful when in fact they were not; (5) that they intentionally marketed to young people under the age of twenty-one and denied doing so; and (6) that they concealed evidence, destroyed documents, and abused the attorney-client privilege to prevent the public from knowing about the dangers of smoking and to protect the industry from adverse litigation results. The following voluminous Findings of Fact demonstrate that there is overwhelming evidence to support most of the Government’s allegations. As the Conclusions of Law explain in great detail, the Government has established that Defendants (1) have conspired together to violate the substantive provisions of RICO, pursuant to 18 U.S.C. § 1962(d), and (2) have in fact violated those provisions of the statute, pursuant to 18 U.S.C. § 1962(c). Accordingly, the Court is entering a Final Judgment and Remedial Order which seeks to prevent and restrain any such violations of RICO in the future. In particular, the Court is enjoining Defendants from further use of deceptive brand descriptors which implicitly or explicitly convey to the smoker and potential smoker .that, they are less hazardous to health than full flavor cigarettes, including the popular descriptors “low tar,” “light,” “ultra light,” “mild,” and “natural.” The Court is also ordering Defendants to issue corrective statements in major newspapers, on the three leading television networks, on cigarette “onserts,” and in retail displays, regarding (1) the adverse health effects of smoking; (2) the addictiveness of smoking and nicotine; (3) the lack of any significant health benefit from smoking “low tar,” “light,” “ultra light,” “mild,” and “natural” cigarettes; (4) Defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery; and (5) the adverse health effects of exposure to secondhand smoke. Finally, the Court is ordering Defendants to disclose their disaggregated marketing data to the Government in the same form and on the same schedule which they now follow in disclosing this material to the Federal Trade Commission. All such data shall be deemed “confidential” and “highly sensitive trade secret information” subject. to the protective Orders which have long been in place in this litigation. Unfortunately, a number of significant remedies proposed by the Government could not be considered by the Court because of a ruling by the Court of Appeals in United States v. Philip Morris, USA Inc., et al., 396 F.3d 1190 (D.C.Cir.2005). In that opinion, the Court held that, because the RICO statute allows only forward-looking remedies to prevent and restrain violations of the Act, and does not allow backward-looking remedies, disgorgement (i.e., forfeiture of ill-gotten gains from past conduct) is not a permissible remedy. Applying this same legal standard, as it is bound to do, this Court was also precluded from considering other remedies proposed by the Government, such as a comprehensive smoker cessation program to help those addicted to nicotine fight their habit, a counter marketing program run by an independent entity to combat Defendants’ seductive appeals to the youth market; and a schedule of monetary penalties for failing to meet pre-set goals for reducing the incidence of youth smoking. The seven-year history of this extraordinarily complex case involved the exchange of millions of documents, the entry of more than 1,000 Orders, and a trial which lasted approximately nine months with 84 witnesses testifying in open court. Those statistics, and the mountains of paper and millions of dollars of billable lawyer hours they reflect, should not, however, obscure what this case is really about. It is about an industry, and in particular these Defendants, that survives, and profits, from selling a highly addictive product which causes diseases that lead to a staggering number of deaths per year, an immeasurable amount of human suffering and economic loss, and a profound burden on our national health care system. Defendants have known many of these facts for at least 50 years or more. Despite that knowledge, they have consistently, repeatedly, and with enormous skill and sophistication, denied these facts to the public, to the Government, and to the public health community. Moreover, in order to sustain the economic viability of their companies, Defendants have denied that they marketed and advertised their products to children under the age of eighteen and to young people between the ages of eighteen and twenty-one in order to ensure an adequate supply of “replacement smokers,” as older ones fall by the wayside through death, illness, or cessation of smoking. In short, Defendants have marketed and sold their lethal product with zeal, with deception, with a single-minded focus on their financial success, and without regard for the human tragedy or social costs that success exacted. Finally, a word must be said about the role of lawyers in this fifty-year history of deceiving smokers, potential smokers, and the American public about the hazards of smoking and second hand smoke, and the addictiveness of nicotine. At every stage, lawyers played an absolutely central role in the creation and perpetuation of the Enterprise and the implementation of its fraudulent schemes. They devised and coordinated both national and international strategy; they directed scientists as to what research they should and should not undertake; they vetted scientific research papers and reports as well as public relations materials to ensure that the interests of the Enterprise would be protected; they identified “friendly” scientific witnesses, subsidized them with grants from the Center for Tobacco Research and the Center for Indoor Air Research, paid them enormous fees, and often hid the relationship between those witnesses and the industry; and they devised and carried out document destruction policies and took shelter behind baseless assertions of the attorney client privilege. What a sad and disquieting chapter in the history of an honorable and often courageous profession. B. Preliminary Guidance for the Reader Courts must decide every case that walks in the courthouse door, even when it presents the kind of jurisprudential, public policy, evidentiary, and case management problems inherent in this litigation. From the day this lawsuit was filed, it has garnered much media attention. Recognizing this, the Court hopes to assist the intrepid reader with her task by explaining certain principles and procedures that it has followed. First and foremost, the Court has decided that, as fact finder, its obligation is to present to the appellate courts, the parties, and the public all the relevant facts which have been proven by a preponderance of this massive body of evidence consisting of testimony (including written direct examination, in-court cross examination, and re-direct examination of witnesses in this trial, as well as deposition and trial testimony of witnesses in related cases), and thousands of exhibits. By virtue of this procedure, the appellate courts will have before them all the factual determinations they need to decide the numerous legal issues which will unquestionably be raised. Certain consequences flow from the decision to present the most complete factual picture possible. Even though this Opinion is unusually long and detailed, on occasion, there are very few facts presented on important issues and questions leap off the page to the reader. In those instances, it should be understood that the parties presented no further evidence and the Court has stated whatever Findings can be appropriately made on whatever evidence does exist; the record must remain bare as to the unanswered questions and the gaps in the evidence. On other occasions, some individual factual-findings may appear unclear or inconsistent with other factual findings. In those instances, the Conclusion to that Section will contain the Court’s final Findings, and its reasons for reaching them. Second, in an effort to make the substance of the Opinion as accessible as possible, almost every Section of the Opinion in both the Findings of Fact and the Conclusions of Law contains an Introduction that provides an overview of the subject matter to be covered and a Conclusion that summarizes what has been found in that Section; the extensive detailed Findings between the Introduction and the Conclusion provide the factual “meat” between the two. In a few instances, Sections are so brief or so self-evident that no Introduction or Conclusion was necessary. Finally, Appendix I contains a Glossary of frequently used terms and concepts; Appendix II contains the relevant Surgeon Generals’ Reports and their major findings; and Appendix III contains all the Racketeering Acts charged by the Government. Third, every effort has been made to make each Section self-contained so that it is complete and understandable in and of itself. Thus, a reader who is interested in only a particular topic, such as youth marketing, can pick up that Section, and obtain the information he needs without having to read the entire Findings of Fact. However, it has been virtually impossible to totally segregate the Findings presented in each Section. At times, the historical data, the scientific data, and the relevant documentary materials overlap subject matter areas and therefore must be repeated in order to ensure that a Section can be read and understood by itself. By the same token, many individuals are identified numerous times in the text in an effort to make it easier for the reader to follow the narrative rather than having to search through many pages to re-familiarize himself with a person’s position within either a Government agency or one of the Defendant corporations. Fourth, specific record citations have been given whenever possible. Many times an individual Finding of Fact is either a direct quote from a witness’s written or oral testimony or is taken directly from a proposed finding submitted by one of the parties and supported by the record and proved by at least a preponderance of the evidence, Vast amounts of testimony were given — by eminent and respected scientists, government officials and corporate executives. Only the portions of their testimony specifically cited in the Opinion were affirmatively credited and relied on by the Court. The Court has made it very clear when specific evidence referred to is being rejected or discredited. Fifth, parties should understand that every Exhibit and Prior Testimony cited in the Findings of Fact is deemed admitted into evidence. A formal Order, accompanying this Opinion, will be entered listing those hundreds (perhaps thousands) of Exhibit numbers and Prior Testimonies, overruling any objections made thereto. Sixth, several observations need be made about witness bias and credibility. For the most part, each individual Chapter in the Findings of Fact explains why certain facts were found, why certain witnesses were credited, and why the testimony of certain witnesses was either discredited as just plain not believable or, in most instances, outweighed by other more convincing and credible evidence. Most of the witnesses whose testimony was most vehemently attacked by the Defendants (such as Dr. David R. Kessler, Dr. Michael C. Fiore, Dr. Jeffrey Wigand, and Dr. Cheryl Healton) were only relied upon for undisputed or relatively insignificant background facts (as with Dr. Kessler and Dr. Wigand), or testified about remedies which this Court could not consider on the merits under the Court of Appeals decision discussed above (as in the case of Dr. Fiore and Dr. Healton). Much of the Defendants’ criticisms of Government witnesses focused on the fact that these witnesses had been long-time, devoted members of “the public health community.” To suggest that they were presenting inaccurate, untruthful, or unreliable testimony because they had spent their professional lives trying to improve the public health of this country is patently absurd. It is equivalent to arguing that all the Defendants’ witnesses were biased, inaccurate, untruthful, and unreliable because the great majority of them had earned enormous amounts of money working and/or consulting for Defendants and other large corporations, and therefore were so devoted to the cause of corporate America that nothing they testified to, even though presented under oath in a court of law, should be believed. Such simplistic attacks on the credibility of the sophisticated and knowledgeable witnesses who testified in this case are foolish. All of this is not to deny that there were significant differences in the overall quali-fieations of the Government’s witnesses and the Defendants’ witnesses. There were. The Government’s witnesses, viewed as a whole, were far more experienced, credentialed, and active in the area of smoking and health, whatever their particular area of specialty, than were the Defendants’. Many of the Government experts had participated extensively, over many years, in the long and drawn-out process of ascertaining the consensus of scientific opinions embodied in each Surgeon General’s Report. Virtually every one had taught at a well-regarded academic institution and written numerous peer-reviewed articles in their particular area of specialty. Many of the Government witnesses continued “hands on,” clinical work in their fields despite heavy commitments for research, writing, teaching, and lecturing to their peers. The Defendants’ witnesses were obviously well educated in.their areas of specialty. Indeed, as was mentioned on many occasions, Defendants even presented the testimony of an impressive Nobel Prize winner. However, rarely did these witnesses have the depth and breadth of experience of the Government witnesses. Many had worked only in large corporations, and many for only one or two such employers. Many — although not all — had written relatively few peer-reviewed articles. Many of the highest paid experts of Defendants, while well credentialed in their particular fields, such as economics, presented relatively narrow testimony tailored to the particular problem or issue they were retained to opine on for purposes of this litigation. A few of Defendants’ experts had done virtually no individual research and written virtually no peer-reviewed articles, and a few were unfamiliar with the relevant facts and/or the major scientific literature on the issue about which they testified. While the testimony of each person— expert or fact witness — was evaluated on its own merits, there can be no denying that,as a group, the Government’s witnesses were far more kno