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Excerpts from YEARS OF IMMUNITY AND ARROGANCE UP IN SMOKE;
TOBACCO COMPANIES FACE 'DEATH OF A THOUSAND PAPER CUTS' FROM 40 YEARS' WORTH OF INCRIMINATING DOCUMENTS.

by MYRON LEVIN, Los Angeles Times [05/10/98]

Big Tobacco is known as a formidable legal adversary, skilled and even ruthless in the courtroom. Yet the industry is being slowly undone by its former secrets, having obligingly preserved piles of incriminating documents for its enemies to use.

Disclosure of the documents, many dating back 40 years, has done enormous damage, outraging citizens and forcing once-helpful politicians to climb on the anti-tobacco bandwagon.

Notes Southern Illinois University law professor Donald Garner: The tobacco companies "are dying the death of a thousand paper cuts."

Why a powerful, streetwise industry saved 40 years of scorching papers--stockpiling the seeds of potential ruin--is an intriguing question in the broader smoking battles that are continuing unabated in Washington and courtrooms across the country.

Several answers emerge, both from interviews and the documents themselves. Chief among them: an industry arrogance born of decades of steamrollering its foes, conflicting priorities of tobacco scientists and lawyers, and the hopeless task of legally and discreetly getting rid of so much paper.

Unlike other beleaguered industries, cigarette makers faced the unique pressure of nearly continuous litigation, which made large-scale document destruction potentially dangerous and illegal.

"There are rules of law that you cannot properly destroy documents . . . that might reasonably be potential evidence in litigation," said Nat Walker, a spokesman for R.J. Reynolds Tobacco.

Because tobacco is a huge and far-flung enterprise--with laboratories, law offices and administrative centers around the world--shredding all that paper would have been impossible anyway.

"The practical reality is that whole sections of these companies were working on subjects that, if known to the world, could be extraordinarily damaging to the companies," said Cliff Douglas, an anti-tobacco lawyer and activist. "They just couldn't destroy all that."

The companies, proud of their unbeaten legal record, were also blind to the risks of being made to surrender their secrets.

Until recently, tobacco lawyers had assumed they could continue to shield some of the most troublesome documents under the doctrine of attorney-client privilege--confidence that turned out to be misplaced.

According to Matt Myers, general counsel for the National Center for Tobacco-Free Kids, the "very existence of the documents demonstrates the arrogance" of the industry. "They believed they had built an impenetrable wall around their wrongdoing, and . . . no one would ever be permitted to get an accurate picture."

Even so, tobacco foes do not view industry efforts to shield the documents as a failure but as a rousing, if temporary, success. For many years in many lawsuits, tobacco adversaries itched to get their hands on the documents but never could--and went down to defeat.

"Think how long they've been able to keep everything bottled up," mused Rep. Henry A. Waxman (D-Los Angeles). He and others contend that had the documents been revealed sooner, a host of legal and regulatory battles might have ended differently.

David R. Hardy, the top tobacco defense lawyer of his day, clearly saw it coming. In 1970, in an impassioned letter to Brown & Williamson Tobacco, he outlined the hazards of revealing documents.

"It is one thing when 'known enemies' claim smoking is dangerous," Hardy wrote. "Our problem becomes entirely different and far more serious" when tobacco's own "agents and employees . . . become spokesmen against it."

He concluded: Evidence from industry files "which seems to acknowledge or tacitly admit that cigarettes cause cancer or other disease would likely be fatal."

Hardy knew that once created, such documents were land mines that could not be defused. That's because laws in many states made it illegal to destroy documents that might be relevant to potential litigation.

And because tobacco companies were defending lawsuits--or under threat of being sued--on a virtually nonstop basis since the 1950s, document destruction could be deemed a crime.

Stephen McG. Bundy, a professor of legal ethics at UC Berkeley, said the standard speech of lawyers to clients is "that if the document has ever existed, somebody's likely to remember it or another copy will show up, so you're just sinking yourself" by destroying it.

Some recently disclosed memos show that hiding or destroying sensitive papers was intended, if not carried out, by people who helpfully left a record of their plans.

During the 1970s, for example, when Philip Morris secretly acquired a German research lab to do biological studies it feared would be discovered if done at home, the company took the added precaution of barring direct written contact between the lab and members of its staff.

In a handwritten note, Thomas Osdene, the company's former director of research, described a clandestine channel for keeping tabs on work at the lab. "If important letters or documents have to be sent, please send them to home, where I will act on them and destroy."

According to evidence in the state of Minnesota's big tobacco case that was just settled Friday, three cases of files belonging to a retired research and development excutive for BAT Industries, B&W's corporate parent, were destroyed in 1985 without an index being made of their contents.

And in a 1969 memo--one of the 39,000 recently disclosed in the Minnesota case--an R.J. Reynolds scientist told company lawyers he stood ready to "invalidate" sensitive documents and prune them from the files.

"Once it becomes clear that such action is necessary for the successful defense of our present and future suits, we will promptly remove all such reports from the files," the memo said.

"It seems like everybody who suggested hiding something or destroying something or burying something made a point to save that memo," a tobacco lawyer said ruefully.

For example, in a 1980 memo, Philip Morris scientist William Dunn observed that nicotine research "is where the action is," but "where our attorneys least want us to be."

"Our attorneys . . . will likely continue to insist upon a clandestine effort in order to keep nicotine the drug in low profile," Dunn wrote.

And an R.J. Reynolds memo noted that one of the firm's former general counsels ordered destruction of a 1953 report on the hazards of smoking. Yet according to the memo, "copies of this report still exist."

The survival of such memos has proved doubly harmful, said Stephen Gillers, a law professor at New York University. Not only were embarrassing documents preserved, he said, "but so is the evidence of the frustrated scheme" to bury them.

Still, it would be many, many years before anyone outside the companies got to see the swelling mass of documents. In effect, they were time bombs, albeit with very long fuses.

For example, a 1979 memo by B&W lawyer J. Kendrick Wells III said the law department would become the gateway for incoming reports to the firm's scientific staff. Scientists could borrow the documents, Wells wrote, but he added that "Law Department control is essential for the best argument for privilege."

Internal distribution of sensitive reports also came under tighter control. William A. Farone, former director of applied research at Philip Morris with a staff of more than 150, nonetheless was not privy to information about the company's secret German lab, he recently told The Times.

Even at the Philip Morris research center in Richmond, Va., there were "labs . . . that were off-limits to people like myself," he said.

In a diary of Wigand's introduced as an exhibit in a court case, he also wrote of having a scientific colleague in England fax papers to his home to avoid trouble with B&W lawyers.

Documents were being handled in restricted circles, and the assumption was: "We don't have to worry about it, we're the tobacco industry. We're Philip Morris."

The ground shifted in 1994, when an obscure paralegal, who had secretly stolen thousands of pages of documents from a B&W law firm, leaked the purloined papers to Congress and the media.

The documents were an instant sensation. In one 1963 memo, for example, the company's former general counsel declared, "We are then, in the business of selling nicotine, an addictive drug."

B&W, which had not been a defendant in Cipollone, had never had to cough up its documents. As one of its lawyers had stated in a recently disclosed memo in 1989, "B&W has been in litigation many years, without being required to produce a significant quantity of documents."

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