Read What the Judge Ruled, Then See The Docs Themselves

ash.org

THIS MATTER came before the undersigned Special Master for hearing on April 21, 1997 as a result of Plaintiffs' March 21, 1997 Motion to Compel Production by Defendant, Tobacco Institute of Certain Documents Relating to Defendant, Tobacco Institute's Youth Programs Being Withheld Under Claims of Attorney-Client Privilege. After having considered argument of counsel, the motion and exhibits attached thereto and having reviewed in-camera the documents which are the subject matter of the motion, the following Report and Recommendation is hereby submitted:

Page 1

Plaintiffs' argument was two-fold. First, Plaintiffs argue that because the avowed purpose of the Tobacco Institute was public relations and lobbying, the documents therefore do not involve attorneys rendering legal advice, but rather involve lawyers in lobbying, public relations and general business activities. Second, Plaintiffs argue that if some of the documents actually contain legal opinions of counsel in connection with litigation, then the crime-fraud exception applies. Plaintiffs' argument here is that the Tobacco Institute sought to portray a public position that was contrary to the individual defendant tobacco companies' private, internal position. More specifically, Plaintiffs argue ( and attached persuasive exhibits to its motion) that the Tobacco Institute sought to create a public perception of not wanting youth to smoke in order to:

1. obtain a public relations benefit, and

2. to prevent or delay further regulation of the tobacco industry, while at the same time individual industry members were internally writing such things as:

" . . .the base of our business is the high school student." [Ex. D to Plaintiffs' motion]

"RJR must soon establish a successful new brand in this market. . . ."[14 to 18 year old grout] " . . . if our position in the industry is to be maintained over the long term." [Ex. E to Plaintiffs' motion]

"realistically, if our company is to survive and prosper over the long term, we must get our share of the youth market."[EX F. to Plaintiffs' motion]

"It is important to know as much as possible about teenage smoking patterns and attitudes. Today's teenager is tomorrow's potential regular customer, and the overwhelming majority of smokers first begin to smoke while still in their teens. . . The smoking patterns of teenagers are particularly important to Philip Morris {EX. H to Plaintiffs' motions]

"Raising the legal minimum age for a cigarette purchaser to 21 could gut our key young adult market (17-20) where we sell about 25 billion cigarettes and enjoy a 70% market share." [Ex. EE to Plaintiffs' motion]

"One of the reasons for adolescent attraction to smoking is curiosity about the physical reactions of it. The more reasons for its attraction are the 'forbidden fruits' aspects of cigarettes. The adolescent seeks to display his new urge for independence with a symbol and cigarettes are such a symbol since they are associated with adulthood and at the same time adults seek to deny them to the young . . Serious efforts to learn to smoke occur between the ages of 12 and 13 in most case[s]. . ." [Ex. GG to Plaintiffs' motion]

Plaintiffs argue that with this background, the Tobacco Institute youth campaign actually sought to capitalize on the adolescents; desire to become an adult and do grown up things and that the Tobacco Institute campaign was nothing more than a "beau geste". . .a ". . . media event which in itself promises a lot, but produces little" in the words of Exhibits S and U.

A majority of the documents reviewed did not involve attorneys rendering legal services to the Tobacco Institute and/or were truly prepared in anticipation of litigation, but to the contrary, involved lawyers engaged in lobbying, public relations and the general business activities of the Tobacco Institute. (See Tobacco Institute's Privilege Log)

A lesser number of documents did qualify as involving attorneys rendering legal services. Pursuant to the applicable standards set forth in U.S. v. Zolin, 491 U.S. 554, 109 S. Ct. 2619 (1989), Haines v. Liggett, 975 F. 2d 811 (3rd Cir. 1992), and In re: A.H. Robins Co., Inc. "Dalkon Shield" IUD Products Liability Litigation, 107 F.R.D. 2 (D Kan. 1985), the evidence before me and the factual findings of the undersigned in previous Reports and Recommendations on the issue of crime-fraud, it is determined that the documents as set forth in Tobacco Institute's Privilege Log attached hereto relate to and are involved with the ongoing crime-fraud.

As I have found in previous Report and Recommendations, there is evidence that the Defendants utilized attorneys in carrying out and planning fraudulent activities and undertook to misuse the attorney/client relationship to keep secret research and other activities related to the true health dangers of smoking. I further find there is sufficient credible evidence that such activities extended to attorney involvement with the Tobacco Institute in its youth programs, which Plaintiffs argue was undertaken with improper motives for improper purposes.

| 1 | | 2 |