IN THE CIRCUIT COURT OF

KANAWHA COUNTY

WEST VIRGINIA

DARRELL V. MCGRAW, JR.,

ATTORNEY GENERAL ex rel,

STATE OF WEST VIRGINIA,

Plaintiff,

v,

THE AMERICAN TOBACCO COMPANY; AMERICAN BRANDS, INC.; R.J. REYNOLDS TOBACCO COMPANY; RJR NABISCO, INC., B.A.T. INDUSTRIES, PLC; BATUS HOLDINGS, INC.; BROWN & WILLIAMSON TOBACCO CORPORATION; PHILIP MORRIS COMPANIES, INC.; PHILIP MORRIS INCORPORATED (PHILIP MORRIS U.S.A.); LIGGETT GROUP, INC.; LIGGETT & MYERS, INC.; BROOKE GROUP, LIMITED;

LOEWS CORPORATION; LORILLARD TOBACCO COMPANY; UNITED STATES TOBACCO COMPANY; UST CORPORATION (CANAL CAPITAL CORPORATION); JOHN MIDDLETON, INC.; THE COUNCIL FOR TOBACCO RESEARCH -- U.S.A. INC. (SUCCESSOR TO TOBACCO INSTITUTE RESEARCH COMMITTEE); THE TOBACCO INSTITUTE, INC., HILL & KNOWLTON, INC., KIMBERLY-CLARK CORPORATION; ANCHOR TOBACCO COMPANY; McCLURE COMPANY, INC.; JOE DOE CORPORATIONS "A" THROUGH "Z",

Defendants.

Civil Action No. 94-1707

September 20, 1994

COMPLAINT

INTRODUCTION

1. Darrell V. McGraw, Jr., is the duly elected and present Attorney General of the State of West Virginia and acting on behalf of the State of West Virginia ("the State") brings this action.

2. For many years, the State has suffered harm and has incurred significant expenses associated with the provision of necessary health care and other such necessary assistance under various State programs to certain eligible citizens numbering in the thousands who suffer, or who have suffered, from tobacco-related injuries, diseases or sickness. This civil action is founded on principles of equity and is brought under West Virginia law to recover damages to reimburse the State for the expenditures made and for such other relief as equitably may be obtained for the harm thus unjustly, intentionally and wrongfully done and continuing to be done to the State and to its citizens by the various defendants, who have been and continue to be unjustly enriched at the expense of the State.

3. The defendants are a cartel who promote, market, distribute and sell cigarettes, and/or materially assist others in so doing to citizens in West Virginia, and elsewhere throughout the United States, and have done so for many years. Under various State programs, the State pays out large sums of money for the provision of necessary health care and other necessary assistance to eligible citizens in West Virginia, who have been and are now being treated in Kanawha Country, West Virginia, and elsewhere throughout the State, for tobacco-induced disease, injury and sickness, and the State has done so for many years. Thus, venue is proper in the Circuit Court of Kanawha County, West Virginia.

4. The defendants are certain cigarette manufacturers and distributors and/or certain of their trade organizations, public relations firms, law firms, cigarette component manufacturers and other entities, with names both known and unknown, that, at all pertinent times, manufactured, tested, designed, promoted, marketed, packaged, sold, distributed, and/or placed into the stream of commerce in and into the State numerous brands of defective, unreasonably dangerous and hazardous cigarettes, or other tobacco products, or, in the course of business, materially participated with, conspired with and/or otherwise aided, abetted and assisted others in so doing.

5. At all pertinent times, the defendants purposefully and intentionally engaged in these activities, and continue to do so, knowing full well that when the State’s citizens would be substantially certain to suffer disease, injury and sickness, including cancer, emphysema, heart disease and other illnesses causing disability and death and that the State itself would be economically injured thereby.

6. Also at all pertinent times, the defendants purposefully and intentionally engaged in these activities, and continue to do so, knowing full well that the State would confer a benefit upon the defendants by providing or paying for health care and other necessary facilities and services for certain of the State’s citizens thus harmed by the intended use of the defendants’ cigarettes, and, in the absence of performance of such duty by the defendants, that the State itself thereby would be harmed.

PARTIES

PLAINTIFF

7. The State is governed by the Constitution and laws of the State of West Virginia, and the State is entitled to bring this action pursuant to law. This suit concerns matters of state-wide interest. Darrell V. McGraw, Jr., is the Attorney General of the State of West Virginia and is duly authorized by the Constitution and Statutes of West Virginia to pursue this action.

DEFENDANTS

8. The American Tobacco Company is a Delaware corporation whose principal place of business is located at 6 Stamford Forum, Stamford, Connecticut 06904. The American Tobacco Company is a subsidiary or division of American Brands, Inc.

9. American Brands, Inc., is a Delaware corporation whose principal place of business is located at 6 Stamford Forum, Stamford, Connecticut 06904. American Brands, Inc. is the parent corporation of or the successor in interest to The American Tobacco Company and has participated in the manufacture and distribution of cigarette and other tobacco products both individually and through its agent and alter ego the defendant American Tobacco Company.

10. R.J. Reynolds Tobacco Company is a New Jersey corporation whose principal place of business is located at 400 Raritan Center Parkway, Edison, New Jersey, 08837, a mailing address of 4th & Main Street, Winston-Salem, North Carolina 27102. R.J. Reynolds is a wholly-owned subsidiary of RJR Nabisco, Inc.

11. RJR Nabisco, Inc. is a Delaware corporation whose principal place of business is 1301 Avenue of the Americas, New York, New York 10015. RJR Nabisco is the parent corporation of R.J. Reynolds Tobacco Company and has participated in the sale and manufacture of cigarettes and other tobacco products both individually and through its agent or alter ego defendant R.J. Reynolds.

12. B.A.T. Industries PLC, is a British Corporation, whose registered office is located at Windsor House, South Victoria Street, London, SW1 ONL, which manufactured and sold cigarettes and other tobacco products through its agent Brown & Williamson.

13. Batus Holdings, Inc., is a Delaware corporation with its principal place of business at 1500 Brown & Williamson Tower, Louisville, Kentucky 40202. Batus Holdings, Inc. is the parent corporation of Brown & Williamson Tobacco Corporation and has participated in the manufacture and distribution of cigarettes and other tobacco products both individually and through its agent and alter ego the defendant Brown & Williamson.

14 Brown & Williamson Tobacco Corporation is a Delaware corporation whose principal place of business is located at 1500 Brown & Williamson Tower, Louisville, Kentucky 40202. Brown & Williamson Tobacco Corporation is a subsidiary or division of Batus Holdings, Inc.

15. Philip Morris Companies, Inc., is a Virginia corporation whose principal place of business is located at 120 Park Avenue, New York, New York 10016, which manufactured and sold cigarettes and other tobacco products through its agent Philip Morris Incorporated.

16. Philip Morris Incorporated (Philip Morris U.S.A.), a subsidiary of Philip Morris Companies, Inc., is a Virginia corporation whose principal place of business is located at 120 Park Avenue, New York, New York 10016.

17. The Brooke Group, Limited, the parent corporation of Liggett Group, Inc. and Liggett & Myers, Inc., ("Brooke") is a Delaware corporation with its principal place of business at 300 North Duke Street, Durham, North Carolina and/or other tobacco products both individually and through its agents or alter egos Liggett Group and Liggett & Myers.

18. Liggett Group, Inc., is a Delaware corporation whose principal place of business is located at 300 North Duke Street, Durham, North Carolina 27401, and has participated in the manufacture and distribution of cigarettes and other tobacco products both individually and through its agent and alter ego the defendant Liggett & Myers, Inc.

19. Liggett & Myers, Inc., is a Delaware corporation whose principal place of business is located at 300 North Duke Street, Durham, North Carolina 27701. Liggett & Myers Corporation, is a wholly-owned subsidiary or division of Liggett Group, Inc.

20. Loews Corporation is a Delaware corporation whose principal place of business is located at 1 Park Avenue, New York, New York 10016. Loews Corporation participated in the manufacture and sale of cigarettes and/or other tobacco products both individually and through its agent or alter ego Lorillard Tobacco Company.

21. Lorillard Tobacco Company is a Delaware corporation whose principal place of business is located at 1 Park Avenue, New York, New York 10016. Lorillard Tobacco Company is a wholly-owned subsidiary or division of Loews Corporation.

22. John Middleton, Inc., is a Pennsylvania corporation whose principal place of business is located at Church and Hillside Roads, King of Prussia, Pennsylvania.

23. United States Tobacco Company and its parent UST Corporation (Canal Capital Corporation) are Delaware corporations whose principal place of business are located at 100 West Putnam Avenue, Greenwich, Connecticut. UST participated in the manufacture and sale of cigarettes and/or other tobacco products both individually and through its agent or alter ego United States Tobacco.

24. The Council for Tobacco Research-U.S.A. Inc. (successor in interest to the Tobacco Institute Research Committee) is a nonprofit corporation organized under the laws of the State of New York with its principal place of business located at 900 3rd Avenue, New York, New York 10022.

25. The Tobacco Institute, Inc. is a non-profit corporation organized under the laws of the State of New York with its principal place of business located at 1875 "I" Street N.W., Suite 800, Washington, D.C. 20006.

26. Hill & Knowlton, Inc., is a Delaware corporation with its principal place of business located at 420 Lexington Avenue, New York, New York 10070.

27. Kimberly-Clark Corporation is a Delaware corporation with its principal place of business located at World Headquarters, P.O. Box 619100, Dallas, Texas 75261-9100.

28. Anchor Tobacco Company is a West Virginia corporation whose principal place of business is located at 605 Capital Street, Charleston, West Virginia 25301.

29. McClure Company, Inc. is a West Virginia corporation with its principal place of business located at 603 Brooks Street, Charleston, West Virginia 25301.

30. The defendants JOE DOE "A" THROUGH "Z" are business entities, both domestic and foreign whose identities are presently unknown to the State but who may be described as certain manufacturers and distributors, and/or certain of their trade organizations, public relations firms, law firms and other such entities that, at all pertinent times, manufactured, tested, designed, promoted, marketed, packaged, sold, distributed, and/or purposely placed into the stream of commerce in and into the State, various brands of cigarettes, or, in the course of business, materially participated with, conspired with and/or otherwise aided, abetted and assisted others in doing, all to the detriment of the State as alleged herein.

31. The defendants listed herein, and/or their predecessors and/or their successors in interest, are either organized under the laws of (I) West Virginia or (ii) a state other than West Virginia, or (iii) are partnerships or other unincorporated associations with principal places of business both within and without West Virginia and each subject to suit under a common name, who have either obtained certificates of authority to transact business in West Virginia, or who transacted business in West Virginia without a certificate of authority, but within the contemplation of section 56-3-33 of the West Virginia Code, also known as the West Virginia "long-arm" statute.

32. The American Tobacco Company, American Brands, Inc., R.J. Reynolds Tobacco Company, RJR Nabisco, Inc., Batus Corporation, Brown & Williamson Tobacco Corporation, Philip Morris Companies, Inc., Philip Morris Incorporated (Philip Morris U.S.A.), Liggett Group, Inc., Liggett & Myers, Inc., Brooke Group, Limited, Loews Corporation, Lorillard Corporation, United States Tobacco Company, UST, Inc. (Canal Capital Corporation), John Middleton, Inc., and certain of the "A" through "Z" Defendants, collectively, are referred to hereinafter as the "Tobacco Companies."

33. The Council for Tobacco Research-U.S.A. Inc., (successor to the Tobacco Institute Research Committee) and the Tobacco Institute, Inc., collectively, are referred to hereinafter as the "Tobacco Trade Associations."

34. Hill & Knowlton, Inc. and certain of the "A" through "Z" Defendants, collectively, are referred to hereinafter as the "Tobacco Consultants."

35. The defendants Anchor Tobacco Company and McClure Company, Inc. and certain of the "A" through "Z" Defendants, collectively, are referred to hereinafter as the "Tobacco Wholesalers."

36. Kimberly-Clark Corporation and certain of the "A" through "Z" Defendants, who provided or manufactured certain components of cigarettes including paper, filters, reconstituted tobacco sheet, tobacco extract and additives including but not limited to humectants, collectively, are referred to hereinafter as the "Cigarette Component Defendants."

JURISDICTION

37. Jurisdiction over all foreign corporation defendants is proper pursuant to the Long-Arm Statute of West Virginia § 56-3-33(a).

VENUE

38. Venue is proper in the Circuit Court for Kanawha County.

CONDUCT ALLEGATIONS

39. At all pertinent times, defendants acted through their duly authorized agents, servants, and employees who were then acting in the course and scope of their employment, and in furtherance of the business of said defendants. At all pertinent times, the Tobacco Wholesalers were authorized retail and/or wholesale distributors, sellers, and/or dealers of and on behalf of the Tobacco Companies. At all pertinent times, the Tobacco Wholesalers and the Tobacco Trade Associations were the agents, servants, and/or employees of the Tobacco Companies and acted within the scope of said agency, servitude and/or employment.

40. The defendants listed above, and/or their predecessors and successors in interest, did business in the State of West Virginia; made contracts to be performed in whole or in part in West Virginia; and/or manufactured, tested, sold, offered for sale, supplied or placed in the stream of commerce, or, in the course of business, materially participated with others in so doing, cigarettes which the defendants knew to be defective, unreasonably dangerous and hazardous, and which the defendants knew would be substantially certain to cause injury to the State and to persons within the State thereby negligently and intentionally causing injury to persons within West Virginia and to the State, and as described herein, committed and continue to commit tortious and other unlawful acts in the State of West Virginia.

41. The defendants United States Tobacco Company and UST, Inc. not only manufacture, sell, distribute and advertise cigarettes under the name of SANO throughout the United States but also manufacture, sell and advertise approximately 88% (i.e. oral snuff and chewing tobacco) sold in the United States under the brand names Skoal, Copenhagen, Hawkens, Red Man and Levi Garrett.

42. The defendants, and/or the predecessors and successors in interest, performed such acts as were intended to, and did, result in the sale and distribution of cigarettes and/or other tobacco products in the State of West Virginia.

43. Tobacco-caused disease has killed, and continues to kill, untold millions of Americans. The Center for Disease Control (CDC) has estimated that over 400,000 persons die each year from smoking. That is 26 times more deaths than from illegal drugs and indicates that approximately one in five deaths is attributable to smoking. Thousands of West Virginia citizens die each year as a result of smoking cigarettes. Each day, more than 3,000 young people begin to smoke-or more than 1 million each year. Most of the new smokers who replace the smokers who quit or die prematurely from smoking-related disease are children or teens. About 90% of smokers born since 1935 started smoking before age 21 and almost 50% started before age 18.

44. The economic consequences of smoking cigarettes are equally as staggering. In May of 1993, the Office of Technology Assessment advised the United State Congress that in 1990 smoking-related illnesses cost United States taxpayers a total of approximately $68 Billion in indirect costs for morbidity; $40.3 Billion indirect cost for mortality.

45. The State spends millions of dollars each year to provide or pay for health care and other necessary facilities and services on behalf of indigents and other eligible citizens whose said health care costs are directly caused by tobacco-induced cardiovascular disease, lung cancer, emphysema, other respiratory diseases as well as the complications of pregnancy and childbirth including but not limited to low - weight babies.

46. The Defendants have known for decades of the lethal dangers of smoking their cigarette products. By the late 1930’s, based on published research, the Tobacco Companies had notice of the potential health hazards presented by smoking cigarettes. In 1946 Tobacco Company chemists themselves reported concern for the health of smokers. A 1953 report by Dr. Ernst L. Wynder heralded to the scientific community, and to the Tobacco Companies, a definitive link between smoking and cancer. In these tests, researchers painted condensed, puffed smoke onto the backs of mice. As a result thereof, the mice grew cancerous tumors. While previous statistical and epidemiologic studies indicated a relationship between smoking and cancer, Dr. Wynder’s study was the first conclusive biological study in this regard.

THE MANUFACTURE OF

FRAUDULENT SCIENCE

47. In response to the publication of Dr. Wynder’s study in 1953, the presidents of the leading tobacco manufacturers, including American Tobacco Co., R.J. Reynolds, Philip Morris, U.S. Tobacco Co., Lorillard, and Brown & Williamson Tobacco Corporation, hired the public relations firm of Hill and Knowlton, Inc., to deal with the "health scare" presented by smoking. Acting in concert, at a public relations strategy meeting, the participants decided to organize a committee to be specifically charged with the "public relations" function. This committee was engineered to take an offensive, pro-cigarettes stance despite the then obvious health dangers presented by cigarettes. As a result of these efforts, the Tobacco Institute Research Committee (TIRC), an entity later known as The Council for Tobacco Research (CTR), was formed.

48. The TIRC immediately ran a full-page promotion in more than 400 newspapers aimed at an estimated 43 million Americans. That piece was entitled "A Frank Statement To Cigarette Smokers" and contained the following language:

RECENT REPORTS on experiments with mice have given wide publicity to a theory that cigarette smoking is in some way linked to 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 lightly dismissed.

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 health.

We always have and always will cooperate closely with those whose task it is to safeguard the public health.

For more than 300 years tobacco has given solace, relaxation, and enjoyment to mankind. At one time or another during those years, critics have held it responsible for practically every disease of the human body. One by one these charges have been abandoned for lack of evidence.

Regardless of the record of the past, the fact that cigarette smoking today should even be suspected as a cause of a serious disease is a matter of deep concern to us.

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 pledging 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 companies.

2. For this purpose we are establishing a joint group consisting initially of the undersigned. This group will be known as TOBACCO INDUSTRY RESEARCH COMMIT-TEE.

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.

49. In this advertisement, the participating tobacco companies recognized their "special responsibility" to the public, and promised to learn the facts about smoking and health. The participating tobacco companies promised to sponsor independent research on the subject, claiming they would make health a basic responsibility, paramount to any other consideration in their business. The participating tobacco companies also promised to cooperate closely with public health officials. However, these promises so publicly and dramatically made to the public, the citizens of West Virginia, government regulators were breached over and over again.

50. After thus beginning to lull the public into a false sense of security concerning smoking and health, the TIRC continued to act as a front for tobacco industry interests. Despite the initial public statements and posturing, and the repeated assertions that they were committed to full disclosure and vitally concerned with public health, the TIRC did not make the public health a primary concern. The Tobacco Trade Association acted at the direction of the Tobacco Companies and the Tobacco Consultants to protect tobacco industry profits, and did not act to protect the public health. In fact, there was a coordinated, industry-wide strategy designed actively to mislead and confuse the public about the true dangers associated with smoking cigarettes. Rather than work for the good of the public health as it had promised, and sponsor independent research, the Tobacco Companies and Tobacco Consultants, acting through the Tobacco Trade Associations, refuted, undermined, and neutralized information coming from the scientific and medical community.

51. The strategy employed by the Tobacco Companies, The Tobacco Trade Associations and the Tobacco Consultants, aided and abetted by the Tobacco Wholesalers and the Cigarette Component Defendants, was a strategy best described as see no evil, hear no evil, and speak no evil concerning the health effects of cigarette smoking. A publication called Tobacco and Health (later, Tobacco and Health Research) was created by the Tobacco Companies, the Tobacco Trade Associations, and the Tobacco Consultants, and was used by them to disseminate false information and create confusion over the casual connection between cigarette smoking and disease. It was sent to the press, doctors, and health officials. The "Criteria For Selection" of articles for publication included an example of "a report in which smoking-associated diseases are questioned."

52. The Tobacco industry repeatedly emphasized its commitment to full public disclosure of CTR-sponsored research: "We are cooperating in efforts to learn and to make known all the facts." The CTR often repeated its representation that it promoted the disclosure of all relevant facts: "The Tobacco Institute believes that the American public is entitled to complete, authenticated information about cigarette smoking and health." At the same time, the tobacco industry widely represented the "independent" and "objective" nature of the CTR, disclaiming any affiliation with or influence of the tobacco industry in the workings of the CTR. These statements extended to representations of independent decision-making regarding the funding of research proposals.

53. The Tobacco Companies, through the Tobacco Trade Associations and on the advice of the Tobacco Consultants, intentionally breached their promises to the American Public, to the citizens of West Virginia and to the State to independently and honestly study and report on the health effects of smoking. They caused the cancellation of press conferences where their scientists sought to inform the public, actively and wrongfully suppressed the publishing of reports concerning the health dangers presented by cigarette smoking, attacked research linking smoking to disease, and threatened professionally the researchers themselves. Their scientists were not allowed to "freely publish what they find as they choose" as a CTR director once claimed. Numerous scientists formerly employed by the Tobacco Companies and the Tobacco Trade Associations have spoken out against the suppression of scientific data and the practice of deception known to exist in the tobacco industry generally.

54. For example, in April of 1994, Dr. Victor DeNoble, a former research scientist for Philip Morris Incorporated, testified before the United States House of Representatives Health & Environment Subcommittee that the Philip Morris Company in 1983 suppressed and refused to allow him or his colleague, Dr. Paul Mele, to publish or to talk publicly about the research that they had conducted with respect to nicotine tolerance in rats, the potentially addictive nature of nicotine in rats, and research with respect to synthetic nicotine substances. Dr. DeNoble testified that his research demonstrated that the animals would administer nicotine to themselves and that this fact indicated that nicotine had the potential to be addictive. Dr. DeNoble testified that the focus of his research was nicotine’s effect on the brain, not nicotine’s effect on the flavor of tobacco in cigarettes. He further testified that his laboratory was closed and his research was terminated following the filing of a lawsuit by Rose Cipollone against Philip Morris and other tobacco companies.

55. In a similar vein, defendant Liggett & Myers, Inc., while publicly refusing to acknowledge Dr. Wynder’s tests mentioned above in paragraph 47, hired the consulting firm of Arthur D. Little, Inc., to duplicate Dr. Wynder’s tests. Defendant Lorillard Corporation also duplicated those mouse tests. The results of the duplicated tests were essentially the same as Dr. Wynder’s, and both Liggett & Myers and Arthur D. Little became aware by 1954 of the cancer causing propensity of cigarettes. A Liggett & Myers researcher requested that the results of this testing be published, but Defendant Liggett & Myers would not allow it, and the results of these additional tests were never made public.

56. The vast body of evidence that identifies smoking as a leading cause of lung cancer is uncontroverted and of long standing. While reputable scientists do have questions about the specific mechanism of causality, there is virtually no disagreement that smoking is a major cause of disease. Tobacco industry scientific consultants also have accepted the casual association between smoking and disease.

57. In addition to the carcinogenic nature of tobacco itself, several thousand compounds have been found in cigarette smoke. These include, for example, carbon monoxide, nicotine, carbon dioxide, benzene, formaldehyde, Polonium-210, ammonia, nicotine sulfate, freon 11, hydrogen cyanide and certain liver toxins known collectively as "furans"; some of these have been deliberately added by the Tobacco Companies. Over forty (40) known carcinogens have been found in cigarettes as well. The defendants were aware decades ago that their cigarettes contain harmful substances and additives such as arsenic and various insecticides, yet they continue to sell and promote the sale of their cigarettes.

SAFE CIGARETTES-SUPPRESSED

58 The Tobacco Companies could have designed and manufactured a safer cigarette, but refused to do so. At defendant Liggett & Myers, Inc., Dr. James Mold conducted tests to divide the components of cigarette smoke into separate entities and to interrupt the process which produces carcinogens by using a catalyst. Defendant Liggett & Myers, Inc., researchers were able to produce a so-called "safer" cigarette which eliminated the carcinogenic activity on mouse skin. However, defendant Liggett & Myers, Inc., did not want to be publicly identified as the source of the research behind this non-carcinogenic "safe" cigarette.

59. Defendant Liggett & Myers instructed its researchers that any meetings held that pertained to the "safe" cigarette project were to be attended by a lawyer, and that all reports, notes or memoranda should go to the Liggett & Myers, Inc., legal department. Defendant Liggett & Myers, Inc., has denied that this project had any implications with regard to the health consequences of smoking and a report of the project was suppressed by defendant Liggett & Myers, Inc., and was not allowed to be submitted for publication. The "safe" cigarette was never marketed.

60. Two reasons apparently led Liggett to abandon its XA project. One was fear that the marketing of a "safer" cigarette would be, in essence, a confession that its -- and the industry’s -- other cigarettes were not safe. Thus, one Liggett executive wrote that, "Any domestic activity will increase risk of cancer litigation on existing products." In addition, there was an apparent threat of retaliation from industry leader Philip Morris if Liggett broke ranks.

61. James Mold, who was assistant director of research at Liggett during the development of the safer cigarette, has provided the following overview of the XA project and its abandonment:

a. Mold stated that the XA project produced a safer cigarette. He stated, "We produced a cigarette which was, we felt, was commercially acceptable as established by some consumer tests, which eliminated carcinogenic activity..."

b. Mold stated that after 1975, all meeting on the project were attended by lawyers, lawyers collected all notes after the meetings, and all documents were directed to the law department to maintain the attorney-client privilege. He stated, "Whenever any problem came up on the project, the Legal Department would pounce upon that in an attempt to kill the project, and this happened time and time again."

c. Mold was asked why Liggett didn’t market a safer cigarette. He stated, "Well, I can’t give you, you know, a positive statement because I wasn’t in the management circles that made the decision, but I certainly had a pretty fair idea why...(T)hey felt that such a cigarette, if put on the market, would seriously indict them for having sold other types of cigarettes that didn’t contain this, for example." Also, "(a)t a meeting we held in...New Jersey at the Grand Met headquarters...at which the various legal people involved and the management people involved and myself were present. At one point, Mr. Dey...who at that time, and I guess still is the president of Liggett Tobacco, made the statement that he was told by someone in the Philip Morris company that if we tried to market such a product that they would clobber us."

62. Philip Morris also explored research to develop a safer cigarette, or, in the words of one memorandum to the board of directors, cigarettes with "superior physiological performance." This memorandum noted competitive pressures to produce "less harmful" cigarettes. However, the memorandum was careful to state that, "Our Philosophy is not to start a war, but if war comes, we aim to fight well and to win." Philip Morris never marketed such a safer cigarette.

63. A memorandum authored by an attorney at the firm of Shook, Hardy & Bacon, long time lawyers for the cigarette industry, confirmed that there was an industry-wide position regarding the issue of a safer cigarette.

64. The 1987 memorandum was written in the context of the marketing by R.J. Reynolds of a smokeless cigarette, Premier, which heated rather than burned tobacco. The Shook, Hardy attorney wrote the smokeless cigarette could "have significant effects on the tobacco industry’s joint defense efforts" and that "(t)he industry position has always been that there is no alternative design for a cigarette as we know them." The attorney also noted that, "Unfortunately, the Reynolds announcement...seriously undercuts this component of industry’s defense."

TOBACCO AND NICOTINE

65. Cigarettes manufactured and sold by the defendants contain nicotine, a highly addictive substance. The defendants know of the difficulties that smokers experience in quitting smoking and of the tendency of addicted individuals to focus on any rationalization to justify their continued smoking. The defendants exploit this weakness and capitalize upon the known addictive nature of nicotine. Nicotine addiction is similar to the addiction of illegal drugs such as heroin, cocaine, and amphetamines. An internal tobacco industry memo acknowledged in 1972: "(w)ithout nicotine...there would be no smoking...the cigarette (is) a dispenser for a dose unit of nicotine." Nicotine addiction guarantees a market for cigarettes. The addictive nature of the nicotine in cigarette virtually extinguishes personal choice in those who became addicted.

66. The industry’s recognition of the extent to which nicotine -and not tobacco -- defines its product is illustrated in a 1972 Philip Morris report on a CTR conference, which stated:

As with eating and copulating, so it is with smoking. The physiological effect serves as the primary incentive; all other incentives are secondary. The majority of the conferees would go even further and accept the proposition that nicotine is the active constituent of cigarette smoke. Without nicotine, the argument goes, there would be no smoking."

***

Why then is there not a market for nicotine per se, to be eaten, sucked, drunk, injected, inserted or inhaled as a pure aerosol? The answer, and I feel quite strongly about this, is that the cigarette is in fact among the most awe-inspiring examples of the ingenuity of man. Let me explain my conviction.

The cigarette should be conceived not as a product but as a package. The product is nicotine.

***

Think of the cigarette pack as a storage container for a day’s supply of nicotine...Think of the cigarette as a dispenser for a dose unit of nicotine.

67. Accordingly, the industry has developed sophisticated technology to control the levels of nicotine in order to maintain its market. David A. Kessler, M.D., Commissioner of Food and Drugs, recently testified before a congressional committee that cigarette manufacturers can manipulate precisely nicotine levels in cigarettes, manipulate precisely the rate at which the nicotine is delivered in cigarettes, and add nicotine to any part of cigarettes.

68. Dr. Kessler testified that "the cigarette industry has attempted to frame the debate on smoking as the right of each American to choose. The question we must ask is whether smokers really have that choice." Dr. Kessler stated:

a. Accumulating evidence suggests that cigarette manufacturers may intend this result -- that they may be controlling smokers’ choice by controlling the levels of nicotine in their products in a manner that creates and sustains an addiction in the vast majority of smokers.

b. We have information strongly suggesting that the amount of nicotine in a cigarette is there by design.

c. he public thinks of cigarettes as simply blended tobacco rolled in paper. But they are much more than that. Some of today’s cigarettes may, in fact, qualify as high technology nicotine delivery systems that deliver nicotine in precisely calculated quantities -- quantities that are more than sufficient to create and to sustain addiction in the vast majority of individuals who smoke regularly

d. he history of tobacco industry is a story of how a product that may at one time have been a simple agricultural commodity appears to have become a nicotine delivery system.

e. [T]he cigarette industry has developed enormously sophisticated methods for manipulating nicotine levels in cigarettes.

f. In many cigarettes today, the amount of nicotine present is a result of choice, not chance.

g. [S]ince the technology apparently exists to reduce nicotine in cigarettes to insignificant levels, why, one is led to ask, does the industry keep nicotine in cigarettes at all?

69. In a subsequent appearance before Congress, Dr. Kessler testified that one manufacturer, Brown & Williamson, had developed a tobacco plant code-named Y-1 with perhaps twice the nicotine content of regular tobacco. Brown & Williamson manufactured and marketed cigarettes with Y-1 tobacco in the United States in 1993.

70. As a result of the industry’s actions, as many as 74% to 90% of smokers are addicted. Eight out of ten smokers say they wish they had never started smoking. Two-thirds of adults who smoke say they wish they could quit. Seventeen million try to quit each year, but fewer than one out of ten succeed. A high percentage of the smokers who have had surgery for lung cancer or heart attacks return to smoking, as do 40% of smokers who have had their larynxes removed.

71. Beyond its addictive qualities, nicotine is believed to contribute to cardiovascular disease and death -- a fact of which the cigarette industry has long been aware.

DECEIT AND FRAUD-

A CONTINUING CONSPIRACY

72. The joint efforts of the industry on the issue of smoking and health also included the general counsel of the major cigarette manufacturers, sometimes referred to as the Big Six, meeting to review proposals for scientific research and the scientific directors of the Big Six meeting and acknowledging " a general feeling that an industry approach as opposed to an individual company approach was highly desirable."

73. There was also a "gentlemen’s agreement" among the manufacturers to suppress independent research on smoking and health. This agreement was referenced in a 1968 internal Philip Morris draft memo, which stated, "We have reason to believe that in spite of gentlmens (sic) agreement from the tobacco industry in previous years that at least some of the major companies have been increasing biological studies within their own facilities." This memo also acknowledged that cigarettes are inextricably intertwined with the health field, stating, "Most Philip Morris products both tobacco and non-tobacco are directly related to the health field."

74. As indicated by this memo, it was believed within the industry that individual companies were performing certain research on their own, in addition to the joint industry research. But the fundamental understanding and agreement remained intact that harmful information and activities would be restrained, suppressed, and/or concealed. This included restraining, suppressing, and concealing research on the health effects of smoking, including the addictive qualities of cigarettes, and restraining, concealing, and suppressing the research and marketing of safer cigarettes.

75. The defendants have employed a strategy over the years that was designed to confuse the medical evidence, stonewall, delay, refuse reasonably to settle claims, and to run up plaintiffs’ attorneys’ fees in a war of attrition. By way of example, a memo written by J. Michael Jordan, an attorney for defendant R.J. Reynolds Tobacco Company, noted: "(T)he aggressive posture we have taken regarding depositions and discovery in general continues to make these cases extremely burdensome and expensive for plaintiffs’ lawyers, particularly sole practitioners. To paraphrase General Patton, the way we won these cases was not by spending all of Reynolds’ money, but by making that other son of a bitch spend all his."

76. Additionally, corporate officials of the Tobacco Companies, the Tobacco Trade Associations and the Tobacco Consultants have attempted wrongfully to create a privilege for various documents that they wish to conceal by sending such documents through their legal departments and law firms at every opportunity in order that they might claim the documents to be protected by the attorney-client or attorney work-product privileges. A "Special Projects" division within CTR was set up to conceal research that was harmful to the tobacco industry and to promote and develop research and expert witnesses needed for the defense of tort litigation. Incriminating reports and documents contained within this division were passes through attorneys and are now claimed by the tobacco defendants to be privileged.

77. The industry has congratulated itself on a brilliantly conceived and executed strategy to create doubt about the charge that cigarette smoking is deleterious to health without actually denying it. A 1962 memo stated that they had handled the "emergency" (of the Wynder report) effectively, by treating the public health threat as a public relations problem that was solved for the self-preservation of the industry’s image and profit. One defendant’s executive called the CTR the best, cheapest insurance the tobacco industry can buy, noting that without it the Tobacco Companies would have to invent CTR or would be dead.

78. Not content with the holding strategy employed by the TIRC and the CTR, the Tobacco Companies advocated a more offensive role through their lobbying arm, the Tobacco Institute (TI). This tobacco industry backed group actively seeks to increase doubt about the negative health effects of smoking by suggesting that there are alternative explanations to the data. One "theory" detailed how individual genetic makeups predisposed individuals to illness. Another, the "multi-factorial hypothesis," asserted that multiple factors should be blamed, i.e., food additives, viruses, occupational hazards, air pollution, or stress, as causing cancer. These public relations strategies have been somewhat successful in the public thinking, if not in the scientific and medical literature. In short, the tobacco industry financed, supported and encouraged the manufacture of fraudulent science.

79. However, evidence began to surface concerning defendants’ illegal scheme. On February 6, 1992, United States District Court Judge H. Lee Sarokin for the District of New Jersey issued an opinion in Haines v. Liggett Group, Inc., Civ. Action 84-678, after reviewing 1500 documents in camera. Judge Sarokin noted that "In 1954, the tobacco industry promised to disseminate the results of industry-sponsored, independent scientific research for the purpose of answering the question: "Does cigarette smoking cause illness?" To fulfill its promise, the tobacco industry proffered the allegedly "independent research organization, the Council for Tobacco Research (the ‘CTR’), which purportedly would examine the risks of smoking and report its findings to the public." After his review of the withheld documents, Judge Sarokin concluded:

Despite the industry’s promise to engage independent researchers to explore the dangers of cigarette smoking and to publicize their findings the evidence clearly suggests the research was not independent; that potentially adverse results were shielded under the caption of "special projects;" that the attorney-client privilege was intentionally employed to guard against such unwanted disclosure; and that the promise of full disclosure was never meant to be honored, and never was.

As a result of this finding, Judge Sarokin went on to note:

A jury might reasonably conclude that the industry’s announcement of proposed independent research into the dangers of smoking and its promise to disclose its findings was nothing but a public relations ploy -- a fraud -- to deflect the growing evidence against the industry, to encourage smokers to continue and non-smokers to begin, and to reassure the public that adverse information would be disclosed.

80. Undaunted by Judge Sarokin’s findings, in November 1993, Tobacco Company executives asserted, under the oath, that tobacco does not conclusively cause cancer, that smoking is not addictive, and that tobacco advertising does not target new smokers. Recently, the fight to uncover the truth has been joined by the Food and Drug Administration (FDA).

81. On February 25, 1994, David A. Kessler, M.D., Commissioner of the FDA, sent a letter to Scott D. Ballin, Esq., Chairman of the Coalition on Smoking OR Health, asserting:

Evidence brought to our attention is accumulating that suggests that cigarette manufacturers may intend that their products contain nicotine to satisfy an addiction on the part of some of their customers. The possible inference that cigarette venders intend cigarettes to achieve drug effects in some smokers is based on mounting evidence we have received that: (1) the nicotine ingredient in cigarettes is a powerfully addictive agent and (2) cigarette vendors control the levels of nicotine that satisfy this addiction.

82. In response to Kessler’s letter, on March 15, 1994, in a letter to The New York Times, James W. Johnston, Chairman and Chief Executive Officer of R.J. Reynolds, continued to assert that cigarettes were not addictive. Johnston based his assertion upon the success rate of American adults who had quit smoking.

83. The Chief Executive Officers of The American Tobacco Company, Brown & Williamson Tobacco Corporation, Philip Morris incorporated, Lorillard and Liggett Group, Inc. all testified under oath before the same Subcommittee in April of 1994 that they believed nicotine is not addictive.

84. For many years, the defendants have engaged in a vast and misleading promotional, public relations, and lobbying blitz which has as its goal increasing the numbers of people addicted to nicotine in cigarettes and decreasing the number of people who attempt or succeed in quitting. Much of their efforts in this regard have been and continue to be directed toward minors. They have done so and continue to do so in contravention of their duty not to make false statements of material fact and their duty not to conceal such true facts from the public. At the cost of countless lives, the defendants spend billions of dollars every year misleading the public and promoting the myth that smoking cigarettes does not cause cardiovascular disease, lung cancer, emphysema and other diseases and that smokers live healthy and vital lives. The tobacco defendants have at all pertinent times presented and promoted smoking as an attractive, glamorous, youthful, and relaxing pastime, associating it with movie stars, athletes, and other successful professionals, including doctors.

TARGETING MINORS

85. The defendants specifically target groups they deem susceptible to their efforts, such as African Americans and low income women. The defendants have even targeted minors. By way of example, the Joe Camel campaign waged by defendant R.J. Reynolds Tobacco Company is intended to and has had great appeal to children. Over one million new underage smokers are addicted in the United States each year. Such efforts by the defendants create more sales for the tobacco industry, and more resulting health care costs for the state.

86. West Virginia Code 16-9A and 2 state:

§ 16-9A-1. Legislative intent.

The Legislature hereby declares it to be the policy and intent of this state to discourage and ban the use of tobacco products by minors. As basis for this policy, the Legislature hereby finds and accepts the medical evidence that smoking tobacco may cause lung cancer, heart disease, emphysema and other serious health problems while the use of smokeless tobacco may cause gum disease and oral cancer. It is the further intent of the Legislature in banning the use of tobacco products by minors to ease the personal tragedy and eradicate the severe economic loss associated with the use of tobacco and to provide the state with a citizenry free from the use of tobacco. (1987, c. 119.)

§ 16-9A-2. Sale or gift of cigarette, cigarette paper, pipe, cigar, snuff, or chewing tobacco to persons under eighteen; penalty.

No person, firm or corporation may sell, give or furnish, or cause to be sold, given or furnished, to any person under the age of eighteen years:

(a) Any cigarette, cigarette paper or any other paper prepared, manufactured or made for the purpose of smoking any tobacco or tobacco product; or

(b) Any cigar, pipe, snuff, chewing tobacco or tobacco product, in any form.

Any person, firm or corporation violating any of the provisions of subdivisions (a) or (b) of this section is guilty of a misdemeanor, and, upon conviction thereof, shall be fined not less than ten nor more than twenty-five dollars for the first offense, and for each subsequent offense, not less than twenty-five nor more than three hundred dollars. (1987, c.119.)

As previously alleged, the defendants have engaged in a concerted effort to circumvent and violate the laws of the State of West Virginia by targeting minors with sophisticated promotional schemes designed to create successive generations of addicted customers. It is virtually impossible for parents or law enforcement resources to control the efforts of the defendants to make children the users of cigarettes.

87. Every day, more than 1,200 cigarette smokers die of cigarette-related diseases. Others manage to break their addiction to nicotine and quit. In order to prevent a precipitous decline in cigarette sales, the big cigarette companies must attract more than 3,000 new smokers a day. Children and teenagers became the main target; and as a result of the tobacco companies’ fraudulent and false advertising, over 3,000 of them begin the habit every day.

88. Despite the best efforts of parents, educators and the medical profession, smoking among young people has remained alarmingly constant since the late 1970’s. This is because cigarette company advertising is used to create a mental image associating smoking with health, glamorous and athletic lifestyles, and with success and sexual attractiveness. This increases demand for cigarettes among young people. The ease with which children and teenagers can obtain cigarettes from vending machines assures that there is a ready supply to meet this demand. In five major trials testing minors’ access to cigarette vending machines, encompassing more than 1,000 attempts by young teenagers to purchase cigarettes, these youngsters were never stopped -- not once. It has been shown repeatedly that cigarette vending machines (even those located in bars and other supposedly adult locations) are readily available to children and teenagers. Within a short period of time, the young smoker becomes physiologically and emotionally dependent, i.e., addicted to tobacco. Later, as the maturing smoker begins to wish he or she could quit, advertising reinforces the practice and seeks to minimize health concerns, create doubt, confusion and mistake which are used by smokers as an excuse to avoid the pain and discomfort of attempting to break their addiction to nicotine. This is the vicious cycle of fraudulent tobacco industry advertising their products.

89. The advertising imagery used to promote smoking among young people particularly appeals to those with low self-esteem and emotional insecurity. Once the young person has been predisposed toward smoking, a variety of factors can precipitate actual experimentation. For many young people, the precipitating factor is being given a free pack of cigarettes by a tobacco company representative, or purchasing cigarettes in order to obtain an attractive tee-shirt, baseball cap, or other gimmick used to promote cigarette smoking.

90. One of the best examples of this was the transformation of Marlboro cigarettes from a red-tipped cigarette for women to the cigarette for the macho cowboy. By changing advertising imagery, Philip Morris was able to tap into a wholly new and different market. In 1950, R.J. Reynolds was the king of the cigarette business. It sold more cigarettes than any other company. Philip Morris, though doing well on the basis of its fraudulent health-orientated advertising, was still far behind. In 1981, Philip Morris passed R.J. Reynolds, and each year has extended its lead by developing an effective marketing campaign for recruiting young new smokers to its brands. The wild spirit of the Marlboro man captured the adolescent imagination. Also, Philip Morris’ representatives fanned out to colleges across the country, giving free cigarettes to incoming freshmen to get them hooked. The children and teenagers, who started smoking Marlboro, became tenaciously loyal customers. Soon, Marlboro became the "gold standard" of cigarettes among teenagers. Up until 1988, nearly three-fourths of teenage smokers used Marlboro.

91. At about the time it lost market leadership to Philip Morris, R.J. Reynolds dedicated itself to a ruthless advertising campaign encouraging children and teenagers to smoke. One of the key elements of the R.J. Reynolds’ strategy for attracting children was to reposition many of its cigarette brands to younger audiences. Just as Marlboro was repositioned from the women’s market to the macho male market by a new advertising campaign, R.J. Reynolds has positioned its cigarette advertising campaigns to younger and younger audiences using a succession of advertising images of men engaged in extraordinary feats of physical and athletic achievements.

92. RJR’s Vantage cigarettes entered the 1980’s as a brand targeted at the health conscious adult smoker. Advertisements were intended to assuage fears of lung cancer and other diseases and give the concerned smoker arguments for rationalizing their continuation of the addiction. Through multiple- advertising transmogrifications, Vantage cigarettes have been progressively repositioned to ever-younger audiences. During the mid 1980’s, this advertising campaign featured young successful professionals (including architects, fashion designers, lawyers, etc.) with the slogan "The Taste of Success." These ads promoted the implication that smoking is helpful-if not essential-to social success or prominence. In the late 1980’s, the advertising theme for Vantage cigarettes began to feature professional-caliber athletes, like wind surfers, aerobic dancers, downhill ski-racers, and auto-racers. These advertisements depict physical activity requiring strength or stamina beyond those of everyday activity, i.e., smoking does not harm you.

93. During the 1980’s, advertising for Salem cigarettes also became more youth oriented. Whereas the dominant advertising theme for Salem cigarettes used to be clean, fresh country air, during the 80’s Salem ads were populated by muscular surfers and beach bunnies, fun-loving party animals, and other attractive adolescent role models. Another successful advertising campaign targeted at young people is the Lorillard Tobacco Company campaign promoting Newport cigarettes. Newport ads frequently show men and women in sexually suggestive positions always having fun using the slogan "Alive With Pleasure."

94. Another successful advertising campaign has been the "You’ve Come A Long Way Baby" campaign, promoting Virginia Slims cigarettes. One of the most important psychological needs of most adolescent girls is to become independent from their parents. By associating smoking with women’s liberation, Philip Morris hopes to create in the minds of these teenage girls the vision of smoking as a symbol autonomy and independence. Ads for Virginia Slims and other "feminine" cigarettes prey upon the natural and almost universal insecurity and sense of inferiority experienced by adolescents by portraying the cigarette as a crutch and a symbol of superiority. Perhaps the most acute psychological need of adolescence is to fit in, to be accepted, to be popular. Ads for Philip Morris’ Benson & Hedges cigarettes thus developed an image of smoking as a happy pleasure to be shared in the company of others and the easy road to instant acceptance within a group.

95. Many teenage girls are obsessed with their appearance and the need to perceive themselves as being attractive. In today’s culture, a prerequisite to popularity is to be thin. Philip Morris and other cigarette companies capitalize upon this perception by presenting cigarette smoking as a suitable alternative to a diet for being thin. Virtually every "feminine" cigarette includes words like slim, light, super slim, ultra light, etc. The photographic imagery in cigarette advertising that targets young females universally portrays gorgeous young women in glamorous outfits. Smoking is thus associated with being sexy and beautiful. While in reality, cigarette smoking is dirty and smelly; smokers have yellow teeth, and cough up vile phlegm, and are addicted. In cigarette ads, the air is fresh and clear, magic things happen.

96. The ultimate status symbol and secret desire of almost every teenage boy is a powerful motorcycle. It is for this reason that so many cigarette brands have used motorcycle imagery to encourage teenage boys to smoke. Many cigarette ads, that target young boys, glamorize high risk activities like hang gliding, motorcycle racing, mountain climbing, etc. Cigarette makers do this deliberately to undermine awareness that smoking is dangerous. In its campaign to attract adolescent boys to become smokers, the R.J. Reynolds cigarette company has made extensive use of risk-taking and danger in its advertising. By glorifying risk-taking, these ads have a more insidious purpose. How a person estimates the magnitude and likelihood of a risk can be significantly affected by what it is compared against. By portraying extremely dangerous activities like hang-gliding, mountain climbing, and stunt motorcycle riding, R.J. Reynolds minimizes the dangers of smoking in adolescent minds.

97. The greatest success that R.J. Reynolds had in its effort to gain on Philip Morris in the youth market is the "Joe Camel" cartoon character. This campaign was inaugurated in the United States in 1987 to commemorate the 75th anniversary of Camel cigarettes. In the first ads, the camel leered out over the saying, "75 Years And Still Smoking." The implication is obvious. It soon became evident that "Joe Camel" would strike a responsive cord among children and teenagers and has been used by R.J. Reynolds to target young persons - even children- to get them to start smoking at as early an age as possible, so they can be addicted to nicotine as early an age as possible. R.J. Reynolds has more than tripled its advertising expenditures for Camel cigarettes after 1988, utilizing themes like "Joe Camel" guaranteed to be attractive to young people at high risk of becoming smokers.

98. When R.J. Reynolds began the Joe Camel cartoon campaign, Camel’s share of the children’s market was only 0.5%. In just a few years, Camel’s share of this illegal market has increased to 32.8%, representing sales estimated at $476 million per year. Another indication of the phenomenal success of this marketing campaign is the fact that in a recent survey of six year olds, 91% of the children could correctly match Joe Camel with a picture of a cigarette, and both the silhouette of Mickey Mouse and the face of Joe Camel were nearly equally well recognized by almost all children surveyed.

99. It is not just the themes within cigarette advertising that betray the real target, it is also the location of those ads. During the decade of the 1980’s, there was a steady migration of cigarette advertising into youth-oriented publications. Magazines, with sexually-oriented themes and those concerning entertainment and sporting activities, had the highest concentration of cigarette ads. For many of these magazines, teenagers comprise a quarter or more of the total readership. Cigarette ads in these youth-oriented magazines were frequently multi-page, pop-up ads which are significantly more costly, but also more attention-grabbing than conventional ads. News magazines, like Time and Newsweek, which have older audiences, had few cigarette ads, and those tended to emphasize implicit health promises concerning tar and nicotine rather than glamorous images.

100. The cigarette companies sell more than one billion packs of cigarette per year to minors under the age of 18. In 1988, these sales accounted for about $1.25 billion sales. Approximately 3% of the total tobacco industry profits ($221 million in 1988) are derived directly from the sale of cigarettes to children under the age of 18, an activity that is illegal in 43 states. Marlboro and Camel cigarettes, produced by Philip Morris and RJR Nabisco respectively, dominate the teenage smoking market.

101. In tests all across the country, it has been demonstrated that children as young as 12 years old can buy cigarettes in three out of four retail outlets. A study by the Inspector General’s office of the Department of Health and Human Services concluded that, while there are laws prohibiting the sale of tobacco to minors in 43 states (47 as of mid-1991), these are almost uniformly unenforced. The risk of a merchant being punished for selling cigarettes to minors is about one in 33 million. Cigarettes are available in unlimited quantities to children through vending machines as well.

102. In late 1990, the Tobacco Institute, on behalf of the industry, inaugurated a public relations campaign designed to convince the public that they want to discourage young people from smoking. Several tobacco companies began their own campaigns at the same time. In fact, these programs are just a continuation of the defendants’ ongoing fraud and conspiracy. While these programs call for age 18 as the national standard for tobacco sales to minors, and for requiring "adult supervision" of cigarette vending machines, in fact, the Institute and tobacco companies hope to freeze the status quo with regard to minors’ access to tobacco as most states already have a minimum age of 18 or older. Brochures, like "Tobacco: Helping Youth Say No", are being distributed by the Institute and tobacco industry. In reality, this is a pro-smoking subterfuge. The brochure presenting smoking as a permissible "adult" decision and smoking as something an "adult" can safely do. The only reason given kids for not smoking is that - like getting married or driving a car - smoking is for grown ups, i.e., which really makes the activity more desirable to kids! An R.J. Reynolds’ brochure even tells parents to tell their children that they smoke "because they enjoy it." None of these brochures disclose that smoking is highly addictive and harmful to human life.

103. Perhaps the most vicious element of this advertising campaign has been advertising aimed at young girls. Nearly every issue of magazines for young girls, like Teen and Young Miss, includes an advertisement by Reynolds urging children not to smoke. But the reasons given for refraining are not that smoking is addictive, that it can harm or kill the infants of pregnant women, or that it causes cancer and other awful diseases; rather’ the reason given is that it is an "adult custom."

104. The likely effect of these ads is that, rather than discouraging children from smoking, they plant in impressionable young girls’ minds the notion that smoking is something to do to show one’s independence, to act grown up. This notion is, of course, reinforced by the ubiquitous cigarette ads depicting glamorous young adult women smoking as a way of demonstrating their independence.

105. This despicable conduct has gone on for 40 years and continues into this decade. In January 1990, the Manager of Public Relations of R.J. Reynolds wrote the principal of a public school that:

The tobacco industry is also concerned about the charges being made that smoking is responsible for so many serious diseases. Long before the present criticism began, the tobacco industry in a sincere attempt to determine the harmful affects, if any, smoking might have on human health, established the Council for Tobacco Research-USA. The industry has also supported research grants directed by the American Medical Association. Over the years the tobacco industry has given in excess of $162 million to independent research on the controversies surrounding smoking - more than all voluntary health associations combined.

Despite all the research going on, the simple and unfortunate fact is that scientists do not know the cause or causes of the chronic diseases reported to be associated with smoking. The answers to many unanswered controversies surrounding smoking - and the fundamental causes of the diseases often statistically associated with smoking - we believe can only be determined through much more scientific research. Our company intends, therefore, to continue to support such research in a continuing search for answers.

We would appreciate your passing this information along to your students. (emphasis added)

106. The targeting of minors while unquestionably wanton, reckless and unethical and cynically denied by the industry was, and continues to be, vitally important to the tobacco industry. Cigarette smoker death rates require it. Minors enticed into smoking provide a guaranteed market for a product which kills the industry’s customers by the tens of thousands.

CIGARETTE COMPONENT DEFENDANTS

107. The Cigarette Component Defen-dants who manufactured various products used in the manufacture of cigarettes, aided, abetted and participated in the manufacture of cigarettes.

108. The Cigarette Component Defen-dant, Kimberly-Clark, manufactured, sold and distributed reconstituted tobacco sheets.

109. Reconstituted tobacco sheets manufactured by Kimberly-Clark, were and are used by the tobacco industry in the manufacture of cigarettes.

110. The Cigarette Component Defen-dant, Kimberly-Clark, knew, or should have known, that the reconstituted tobacco sheets were to be used in the manufacture of cigarettes.

111. The Cigarette Component Defen-dant, Kimberly-Clark, advertised that the use of its reconstituted tobacco sheets would allow the cigarette manufacturers to manipulate the level of nicotine in their cigarettes.

112. The Cigarette Component Defen-dant, Kimberly-Clark, knew, or should have known, that the continued of cigarettes is hazardous to the health of both the user and bystander.

113. The Cigarette Component Defen-dant, Kimberly-Clark, knew, or should have known, that the nicotine contained in its reconstituted tobacco sheets, as well as in the cigarettes in which the reconstituted sheets are used, is addictive.

114. The Cigarette Component Defen-dant, Kimberly-Clark, has been manufacturing, and selling products to the tobacco industry since 1908. These products include not only reconstituted tobacco sheets but also filter materials, tipping base paper and cigarette paper.

LOOSE CIGARETTE TOBACCO

115. The defendants Brown & Williamson, R.J. Reynolds, John Middleton, Inc., and American Brands also manufacture and distribute loose tobacco used in the "roll your own" process of cigarette making.

116. Two of the loose tobacco products manufactured and distributed by these defendants are Bugler and Prince Albert.

117. Cans of these two brands of loose tobacco can be and have been purchased in Charleston, West Virginia.

118. Even though the medical evidence regarding the hazards of cigarette smoking and addiction have been known to these defendants for many years, these cans currently bear no warning regarding such hazards.

SMOKELESS TOBACCO

119. That nicotine delivered by Tobacco Products is highly addictive was carefully and comprehensibly documented in the 1988 Surgeon General's Report, "The Health Consequences of Smoking: Nicotine Addiction." The major conclusions contained in this report are: (1) "Cigarettes and other forms of tobacco are addicting"; (2) "Nicotine is the drug in tobacco that causes addiction"; and (3) "The pharmacologic and behavioral processes that determine tobacco addiction are similar to those that determine addiction to drugs such as heroin and cocaine." Likewise, in a 1988 report addressing the health affects of smokeless tobacco, the World Health Organization concluded: "There is ample evidence that the blood nicotine levels of smokeless tobacco users were as high as or even higher than those found in many cigarette smokers. Its continued use therefore, does cause addiction and dependence in humans."

120. Nicotine in cigarettes and smokeless tobacco is now recognized as an addictive substance by such major medical organizations as the Office of U.S. Surgeon General, the World Health Organization, the American Medical Association, the American Psychiatric Association, and American Psychological Association, the American Society of Addiction Medicine, the American Public Health Association, and the Medical Research Counsel in the United Kingdom. The National Institute on Drug Abuse ("NIDA") has called cigarette smoking the most common example of drug dependence in the United States.

121. Despite their knowledge that cigarette smoking and the use of smokeless tobacco is, as a result of nicotine, extremely addictive, the Tobacco Companies to this day deny that smoking, "dipping," or "chewing" tobacco is addictive. Through their individual advertising and public relations campaigns, and collectively through the Tobacco Institute, the Tobacco Companies have successfully promoted and sold Tobacco Products by concealing and misrepresenting the highly addictive nature of cigarettes and smokeless tobacco.

122. Defendants United States Tobacco Company and UST, Inc. make approximately 90 percent of the oral snuff and chewing tobacco sold in the United States. As alleged above, smokeless tobacco delivers a similar amount of nicotine as cigarettes and is equally as addictive. Plaintiff is informed and believes that smokeless tobacco manufacturers intend to cause nicotine dependence among consumers through a strategy that involved promoting the use of lower nicotine brands with the intent of moving users up to higher, more addictive brands over time. The "graduation" strategy calls for three different brands of high, medium and low nicotine content. The strategy is based on the premise that new users of smokeless tobacco are most likely to begin with products that are milder tasting, more flavored and lighter in nicotine content. After a period of time, there is a natural progression to products switching to brands that are more full-bodied and have more concentrated tobacco taste, with more nicotine, than the entry brand. This graduation strategy is supported by the manufacturers' advertising practices which indicate the manufacturers' intent to have consumers experiment with low-nicotine brands and graduate to higher-nicotine brands over time.

THE IMPACT OF DEFENDANTS' ACTIONS

ON WEST VIRGINIA

123. During all or part of the exposure period, certain residents of West Virginia were exposed, through inhalation, to the smoke created when the defendants' cigarettes were burned.

124. When inhaled, cigarette smoke causes a variety of diseases including but not limited to emphysema and lung cancer and aggravates or increases the severity of respiratory diseases including bronchitis and pneumonia.

125. Each of the defendants knew, or should have known, about the adverse impact of the inhalation of cigarette smoke on the health of both users and bystanders. Instead of warning intended users, the general public, the State of West Virginia or government regulators about these dangers, the defendants ignored, or actively and fraudulently concealed such information or condoned such concealment, and commanded, directed, advised, encouraged, aided and abetted, or conspired with others, or each other, in so doing in order to sell cigarettes and avoid litigation by those who were injured by inhalation of cigarette smoke. Additionally, the defendants not only concealed the hazards of cigarette smoking but also actively advertised cigarettes as safe and beneficial to the health of smokers. Said actions or inactions constitute gross negligence and/or malicious, willful or wanton acts and show a callous disregard for the rights and safety of the State and others, giving rise to the imposition of punitive damages against the defendants herein.

126. As a direct and proximate contributing result of having inhaled cigarette smoke during the exposed period, certain residents of West Virginia have contracted diseases or suffered certain injuries which resulted in the expenditure by the State of substantial sums of money in order to provide medical care for, without limitation, one or more of the following conditions:

a. Emphysema.

b. Pulmonary or bronchogenic carcinoma.

c. Impaired pulmonary capacity

d. Obstructive lung disease.

e. Cardiac and circulatory disease.

f. Increased susceptibility to on of the foregoing as well as asbestos-related diseases such as lung cancer.

g. Exacerbated or increased the risk of and/or the physical burdens caused by other respiratory ailments including pneumoconiosis, asbestosis, bronchitis, pneumonia and others.

h. Complications of pregnancy and childbirth as well as low-birth weight babies and related pediatric health problems.

i. Premature death.

127. Plaintiff further charger that, as a direct and proximate result of having inhaled cigarette smoke, residents of West Virginia will continue to suffer from the above-referenced conditions, and the State will continue to expend substantial sums of money to care for them.

128. Because of the latency period of the above diseases and the active concealment by the defendants of the causes and effects of exposure to cigarette smoke, the State has only recently discovered the liability of the defendants to the State for medical expenses expended for medical care.

129. The defendants collectively sold or aided and abetted in the sale of cigarettes containing tobacco, which cigarettes were and are defective and unreasonably dangerous.

130. The Tobacco Companies' cigarettes are designed, manufactured, marketed and sold by the defendants to be smoked by the consuming public.

131. The smoking of cigarettes was not only a foreseeable use, it was the very purpose for which these defendants manufactured, sold or distributed cigarettes.

132. At all pertinent times, the defendants knew, or should have known, that the smoking of cigarettes was and is hazardous to human health.

133. The Tobacco Companies, the Tobacco Trade Associations, the Tobacco Consultants, the Tobacco Wholesalers, and cigarette Component Defendants through their funding and control of certain studies concerning the effects of smoking on human health, their control over trade publications, promoting, marketing, and/or through other agreements, understandings and joint undertakings and enterprises, conspired with, cooperated with and /or assisted each other in the wrongful suppression, active concealment and/or misrepresentation of the true relationship between smoking cigarettes and various diseases, all to the detriment of the public health, safety and welfare and thereby causing harm to the State.

134. Cigarettes are inherently, abnormally, and unreasonably dangerous. The health risks and costs of cigarette smoking to the citizens of the State and to the State greatly outweigh any claimed utility of cigarettes. The defendants knew, or should have known, of the dangers inherent in the use of their cigarettes, and that the public and the State would be harmed by the intended and foreseeable use of their cigarettes.

135. For many years, the defendants have been engaged in the business of manufacturing, testing, designing, promoting, marketing, packaging, selling, distributing, and/or placing into the stream of commerce in and into the State numerous defective, unreasonably dangerous and hazardous cigarettes, or, in the course of their business, materially have participated with, conspired with and/or otherwise aided, abetted and assisted other defendants in doing so.

136. As a direct and proximate result of the defective design, testing, manufacturing, marketing, and assembly choices and practices of the defendants, the defendants' cigarettes were and are themselves defective and unreasonably dangerous.

137. The defendants' cigarettes reached the users, consumers and bystanders thereof in substantially the same condition which they were in when originally manufactured, distributed and sold by the defendants. At the time the defendants' cigarettes were sold or placed on the market, they were in a defective condition, unreasonably dangerous to users and consumers, and to bystanders in the vicinity of the users and consumers.

138. The defective condition of the defendants' cigarettes directly and proximately caused thousands of West Virginians to suffer various tobacco-related diseases, injuries and sicknesses, and directly and proximately caused the State to expend millions of dollars in order to provide necessary health care to these citizens, thereby damaging the State.

139. At all pertinent times, it was foreseeable by the defendants that certain of the West Virginia citizens who used the defendants' cigarettes would become ill and suffer injury, disease and sickness as a result of using the cigarettes as the defendants intended, and it was further foreseeable by the defendants that the State would be required to expend millions of dollars each year to provide necessary medical treatment and facilities to those citizens so injured.

140. The Tobacco Companies, the Tobacco Trade Associations, the Tobacco Consultants and Cigarette Component Defendants have conspired together, sometimes acting through a clandestine "Special Projects" program of the Tobacco Institute Research Committee, later called the Council for Tobacco Research-U.S.A. Inc., said conspiracy being for the purpose of fraudulently misleading the public, including West Virginia citizens, the State and government regulators, with regard to the health risks of smoking, all for the purpose of furthering the defendants' profits from the sale of their cigarettes.

141. Specifically, and in addition to the allegations above, the Tobacco Companies, the Tobacco Trade Associations, the Tobacco Consultants, the Tobacco Wholesalers and Cigarette Component Defendants knew of the hazards of cigarette smoking. The defendants affirmatively and actively concealed information which clearly demonstrated the dangers of smoking and affirmatively mislead the public with regard to the material and clear risks of smoking. The defendants knowingly engaged in these activities with the intent that the public would continue to purchase the defendants' cigarettes. The defendants knew that the public would not be in a position to know the true risks of smoking and knew that the public would rely upon the misleading information that the defendants promulgated to their detriment.

142. At all pertinent times, the defendants purposefully and intentionally engaged in these activities, and continue to do so, knowing full well that when the State's citizens use their cigarettes as those cigarettes were and are intended to be used, that the State's citizens would be substantially certain to suffer disease, injury and sickness, including cancer, emphysema, heart disease and other illnesses, and that the State would be injured thereby, as described above.

143. At all pertinent times, the defendants purposefully and intentionally engaged in these activities, and continue to do so, knowing full well that the State, as a result of these efforts by the defendants, would be obligated to, and would, provide health care and other necessary facilities and services for certain of the State's citizens thus harmed by the intended use of the defendants' cigarettes, and that the State itself thereby would be harmed.

144. At all pertinent times, these defendants, individually and collectively, had a duty not to deceive or mislead government regulators as well as the American public which they intentionally breached by their individual and collective activities.

145. The statements and representations made and promotional schemes used by the defendants were deceptive, false, incomplete, misleading and untrue. The defendants knew, or should have known, that the said statements, representations and advertisements were deceptive, false, incomplete, misleading and untrue at the time of making such statements. The defendants had an economic interest in making such statements. The citizens of West Virginia who purchased and used the defendants' cigarettes had no knowledge of the falsity, misleading or deceptive nature of the defendants statements, representations and advertisements when they purchased the defendants' cigarettes; moreover, those citizens had a right to rely on such statements, representations and advertisements. Each of the defendants' misleading and deceptive statements, representations and advertisements were material to those citizens' purchasing the defendants' cigarettes in that West Virginia citizens would not have purchased the defendants' cigarettes if they had known that said statements, representations and advertisements were deceptive, false, incomplete, misleading and untrue.

146. The citizens of West Virginia, the state and government regulators had a right to rely upon the representations of the Tobacco Companies, the Tobacco Trade Associations, the Tobacco Consultants, the Tobacco Wholesalers and cigarette Component Defendants.

147. The defendants' decision to mislead and deceive the citizens of West Virginia, the State and government regulators directly, proximately and foreseeable caused the damage suffered by the state.

COUNT ONE

RESTITUTION-UNJUST ENRICHMENT

148. The State realleges and incorporates herein the foregoing allegations of this Complaint.

149. Many of the State's citizens who are afflicted with tobacco-related diseases are poor, undereducated, and unable to provide for their own medical care, which reliance results in an extreme burden on the taxpayers and the financial resources of this State. Yet, these very citizens, along with our youth, are targeted by tobacco promotional techniques. West Virginia taxpayers have thus unofficiously expended hundreds of millions of dollars in caring for their fellow citizens who have suffered from lung cancer, cardiovascular disease, and a variety of other cancers and diseases that were and are caused by cigarettes and other tobacco products. While West Virginia is perhaps the second poorest state in the Union in per capita income, West Virginia leads the nation in its incidence of coronary heart disease, a disease which is directly related to cigarette smoking. *Monthly Vital Statistics Report, U.S. Department of Health & Human Services, Vol. 42 No. 2(5), Aug. 31, 1993.

150. The State is also responsible for the medical costs of certain of its citizens pursuant to the Public Employees Insurance Association. The State is also seeking reimbursement for the medical costs paid through that and other State-funded programs.

151. While the State and its various agencies and institutions are struggling to pay for the health care costs of tobacco, the tobacco industry and its co-conspirators continue to reap billions of dollars in profits from the sale of cigarettes and other tobacco products. Tax revenues paid by the cigarette smokers and/or users of other tobacco products not the members of the tobacco industry help defray but a tiny fraction of the health care costs resulting from tobacco use in this State.

152. The defendants have avoided regulations and have been and are able legally to promote the sale of their cigarettes and other tobacco products to the citizens of West Virginia by continuing to misinform the federal and State authorities about the true carcinogenic, pathologic and addictive qualities of cigarettes and other tobacco products

153. In direct contradiction and in spite of this State's specific statutory prohibition, the Tobacco Companies have spent billions on targeted marketing programs designed to encourage minors to purchase and smoke cigarettes and other tobacco products.

154. In equity and fairness, it is the defendants, not the taxpayers of West Virginia, who should bear the costs of tobacco-related diseases. By avoiding their own duties to stand financially responsible for the harm done by their cigarettes and other tobacco products, the defendants wrongfully have forced the State of West Virginia to perform such duties and to pay the health care costs of tobacco-related disease. As a result, the defendants have been unjustly enriched to the extent that West Virginia's taxpayers have had to pay these costs.

155. Wherefore, premises considered, the State prays for relief and judgment against the defendants, jointly and severally, as follows:

a. for damages in an amount which is sufficient to provide restitution and re-pay the State for the sums the State has expended on account of the defendants' wrongful conduct including, without limitation, costs for medical care with said amount to be determined at trial;

b. for damages in restitution for the sums of money currently being paid and to be paid by the State in the future on account of the defendants' wrongful conduct including, without limitation, costs for medical care;

c. for pre-judgment interest, as well as the State's reasonable attorneys' fees, expert witness fees and other costs of this action;

d. for punitive damages in such amount as will sufficiently punish the defendants for their conduct and as will serve as an example to prevent a repetition of such conduct in the future;

e. for such other and further extraordinary equitable, declaratory and/or injunctive relief as permitted by law as necessary to assure that the State has an effective remedy; and

f. for such other and further relief, as the Court deems just and proper, to which the State may be entitled.

COUNT TWO

COMMON LAW PUBLIC NUISANCE

156. The state realleges and incorporates herein the foregoing allegations of this Complaint.

157. By their wrongful conduct as alleged above, the defendants have intentionally interfered with the public's right to be free from unwarranted injury, disease and sickness, and have caused damage to the public health, the public safety and the general welfare of the citizens of West Virginia, and have thereby wrongfully caused the state to expend millions of dollars in support of the public health and welfare.

158. Wherefore, premises considered, the State prays for injunctive relief and judgment against the defendants, jointly and severally, as follows:

a. for damages in an amount which is sufficient to provide restitution and re-pay the State for the sums the State has expended on account of the defendants' wrongful conduct, with said amount to be determined at trial.

b. for damages in restitution for the sums of money currently being paid and to be paid by the State in the future on account of the defendants' wrongful conduct.

c. for pre-judgment interest, as well as the State's reasonable attorneys' fees, expert witness fees and other costs of this action;

d. for punitive damages in such amount as will sufficiently punish the defendants for their conduct and as will serve as an example to prevent a repetition of such conduct in the future;

e. for such other and further extraordinary equitable, declaratory and/or injunctive relief as permitted by law as necessary to assure that the State has an effective remedy; and

f. for such other and further relief, as the Court deems just and proper, to which the State may be entitled.

COUNT THREE

NEGLIGENT PERFORMANCE OF A VOLUNTARY UNDERTAKING

159. The State realleges and incorporates herein the foregoing allegations of this Complaint.

160. The Tobacco Defendants and their Trade Organizations voluntarily assumed the duty and responsibility to report honestly and completely on all research regarding cigarette smoking and health via their public pronouncements referenced above.

161. The defendants breached this duty by not only failing to report on such research but also knowingly and actively publishing and publicizing fraudulent science.

162. The defendants further breached this duty by suppressing negative research data regarding cigarettes and health.

163. The defendants knew or should have known that the State, government regulators and others would rely on their pronouncements.

164. The defendants knew or should have known that such reliance would result in injury.

165. Wherefore, premises considered, the State prays for injunctive relief and judgment against the defendants, jointly and severally, as follows:

a. for damages in an amount which is sufficient to provide restitution and re-pay the State for the sums the State has expended on account of the defendants' wrongful conduct, with said amount to be determined at trial;

b. for damages in restitution for the sums of money currently being paid and to be paid by the State in the future on account of the defendants' wrongful conduct;

c. for pre-judgment interest, as well as the State's reasonable attorneys' fees, expert witness fees and other costs of this action;

d. for punitive damages in such amount as will sufficiently punish the defendants for their conduct and as will serve as an example to prevent a repetition of such conduct in the future;

e. for such other and further extraordinary equitable, declaratory and/or injunctive relief as permitted by law as necessary to assure that the State has an effective remedy; and

f. for such other and further relief, as the Court deems just and proper, to which the State may be entitled.

COUNT FOUR

FRAUD, INTENTIONAL MISREPRESENTATION

166. The State realleges and incorporates herein the foregoing allegations of this Complaint.

167. The Tobacco Defendants intentionally suppressed material facts about the hazards of cigarette smoking.

168. The Tobacco Defendants knowingly and intentionally lied and deceived the government regulators who sought to investigate the hazards of cigarettes and control those hazards through regulations.

169. The Tobacco Defendants participated in advertising of cigarettes which portrayed them as, at least, harmless and, at best, healthy; such a portrayal was an intentional misrepresentation of the hazardous nature of cigarettes.

170. The purpose of the suppression of damaging research data and the manufacture of fraudulent science was to confuse potential consumers about the hazards of cigarettes thereby encouraging them to continue to smoke.

171. The Tobacco Victims relied on said advertising, purchased cigarettes and smoked them.

172. As a result, the Tobacco Victims became ill and required medical care for which the State was required to pay.

173. Wherefore, premises considered, the State prays for injunctive relief and judgment against the defendants, jointly and severally, as follows:

a. for damages in an amount which is sufficient to provide restitution and re-pay the State for the sums the State has expended on account of the defendants' wrongful conduct, with said amount to be determined at trial;

b. for damages in restitution for the sums of money currently being paid and to be paid by the State in the future on account of the defendants' wrongful conduct;

c. for pre-judgment interest, as well as the State's reasonable attorneys' fees, expert witness fees and other costs of this action;

d. for punitive damages in such amount as will sufficiently punish the defendants for their conduct and as will serve as an example to prevent a repetition of such conduct in the future;

e. for such other and further extraordinary equitable, declaratory and/or injunctive relief as permitted by law as necessary to assure that the State has an effective remedy; and

f. for such other and further relief, as the Court deems just and proper, to which the State may be entitled.

COUNT FIVE

CONSPIRACY AND CONCERT OF ACTION

174. The State realleges and incorporates herein the foregoing allegations of this Complaint.

175. The Manufacturing Defendants entered into an agreement to suppress and conceal scientific and medical information relating to cigarette smoking and the resulting diseases.

176. The Manufacturing Defendants participated in and cooperated with each other in the above conspiracy enabling each and every manufacturer and distributor of cigarettes to take the position that the association between cigarette smoking and disease had not been established.

177. In order to carry out their conspiracy, the Manufacturing Defendants formed The Tobacco Institute ("TI") and the Council for Tobacco Research ("CTR").

178. The TI and the CRT actively participated in the conspiracy to conceal and suppress the hazards of cigarette smoking.

179. The TI and the CRT, acting on behalf of the Manufacturing Defendants, monitored research and literature in the scientific and medical communities regarding cigarette smoking and actively attempted to suppress any negative reports.

180. When TI and CRT were unsuccessful in suppressing negative reports regarding cigarette smoking, the two organizations acted to challenge, dilute and diminish the influence of such reports.

181. As a result of the conspiracy, the Manufacturing Defendants were able to continue selling tobacco cigarettes to an unsuspecting and confused public including the Tobacco Victims.

182. As a result of the conspiracy, government regulators were mislead and deceived; thereby making it impossible for such regulators to properly assess and control the hazards presented by cigarette use.

183. As a direct and proximate result of the Tobacco Defendants' actions, the Tobacco Victims became ill and required medical care paid for by the State.

184. Wherefore, premises considered, the State prays for injunctive relief and judgment against the defendants, jointly and severally, as follows:

a. for damages in an amount which is sufficient to provide restitution and re-pay the State for the sums the State has expended as a proximate and foreseeable result of the defendants' wrongful conduct,with said amount to be determined at trial;

b. for damages in restitution for the sums of money currently being paid and to be paid by the State in the future as a direct and proximate result of the defendants' wrongful conduct;

c. for pre-judgment interest, as well as the State's reasonable attorneys' fees, expert witness fees and other costs of this action;

d. for punitive damages in such amount as will sufficiently punish the defendants for their conduct and as will serve as an example to prevent a repetition of such conduct in the future;

e. for such other and further extraordinary equitable, declaratory and/or injunctive relief as permitted by law as necessary to assure that the State has an effective remedy; and

f. for such other and further relief, as the Court deems just and proper, to which the State may be entitled.

COUNT SIX

AIDING AND ABETTING LIABILITY

185. The State realleges and incorporates herein the foregoing allegations of this Complaint.

186. The actions of the defendants, individually and collectively, provided substantial support and encouragement and aid to the Manufacturing Defendants in the sale of cigarettes and other tobacco products.

187. All of the defendants, individually and collectively, aided and abetted the fraud perpetuated on the State of West Virginia, government regulators and the citizens of West Virginia.

188. All of the defendants, individually and collectively, in aiding and abetting the sale of a product containing tobacco including cigarettes which they knew to be hazardous and defective.

189. As a result, all of the defendants, individually and collectively, are liable for the fraud upon the State of West Virginia, government regulators and the citizens of West Virginia as well as the sale of a hazardous and defective product, cigarettes.

190. Wherefore, premises considered, the State prays for injunctive relief and judgment against the defendants, jointly and severally, as follows:

a. for damages in an amount which is sufficient to provide restitution and re-pay the State for the sums the State has expended as a proximate and foreseeable result of the defendants' wrongful conduct, with said amount to be determined at trial;

b. for damages in restitution for the sums of money currently being paid and to be paid by the State in the future as a direct and proximate result of the defendants' wrongful conduct;

c. for pre-judgment interest, as well as the State's reasonable attorneys' fees, expert witness fees and other costs of this action;

d. for punitive damages in such amount as will sufficiently punish the defendants for their conduct and as will serve as an example to prevent a repetition of such conduct in the future;

e. for such other and further extraordinary equitable, declaratory and/ or injunctive relief as permitted by law as necessary to assure that the State has an effective remedy; and

f. for such other and further relief, as the Court deems just and proper, to which the State may be entitled.

COUNT SEVEN

VIOLATION OF THE WEST VIRGINIA

GENERAL CONSUMER PROTECTION ACT

191. The State realleges and incorporates herein the foregoing allegations of this Complaint.

192. The State of West Virginia has through its legislature enacted certain statutes to protect consumers from fraudulent and deceptive practices. In particular, Article 6 of the WVA Consumer Credit and Protection Act is entitled General Consumer Protection. West Virginia Statute sec. 46A-6-101, et seq.., 46A-7-102 and 46A-7-103.

193. The Attorney General of the State of West Virginia is specifically charged with the administration of sec. 46A-6-101, et seq., and may act on his own motion as the agent and legal representative of the State in civil proceedings to enforce said statute. Sections 46A-6-103, 46A-7-102.

194. The actions of the defendants constitute violations of the West Virginia General Consumer Protection Act in that they are unfair methods of competition and/or unfair deceptive acts or practices pursuant to sec. 46A-6-102(f). These unfair methods of competition and/or deceptive acts are as follows:

(1) Representing that goods or services have sponsorship, approval, ingredients, uses, benefits or qualities that they do not have, or that a person has a sponsorship, approval, status, affiliation or connection that he does not have. §. 46A-6-102(f)(5).

(2) Causing likelihood or confusion or misunderstanding as to the source, sponsorship, approval or certification of goods or services.§ 46A-6-102(f)(2).

(3) Engaging in any other conduct which similarly creates a likelihood of confusion or of misunderstanding. § 46A-6-102(f)(12)

(4) The act, use or employment by any person of any deception, fraud, false pretense, false promise or misrepresentation, or the concealment, suppression or admission of any material fact with intent that others rely upon such concealment, suppression or admission, in connection with the sale or advertisement of any goods or services, whether or not any person has in fact been mislead, deceived or damaged thereby. § 46A-6-102(f)(13).

(5) Advertising, printing, displaying, publishing, distributing or broadcasting, or causing to be advertised, printed, displayed, published, distributed or broadcast in any manner, any statement or representation with regard to the sale of goods or the extension of consumer credit including the rates, terms or conditions for the sale of such goods or the extension of such credit, which is false, misleading, deceptive, or which omits to state material information which is necessary to make a statement therein not false, misleading or deceptive. § 46A-6-102(f)(14).

195. The actions of the defendants in reference to the sale and distribution of cigarettes in West Virginia constitute violations of the General Consumer Protection Act of West Virginia and, as such, have been declared unlawful by the State of West Virginia. § 46A-6-104.

196. Wherefore, premises considered, the State prays for injunctive relief and judgment against the defendants, jointly and severally, as follows:

a. for damages in an amount which is sufficient to provide restitution and re-pay the State for the sums the State has expended as a proximate and foreseeable result of the defendants' wrongful conduct, with said amount to be determined at trial;

b. for damages in restitution for the sums of money currently being paid and to be paid by the State in the future as a direct and proximate result of the defendants' wrongful conduct;

c. for pre-judgment interest, as well as the State's reasonable attorneys' fees, expert witness fees and other costs of this action;

d. for punitive damages in such an amount as will sufficiently punish the defendants for their conduct and as will serve as an example to prevent a repetition of such conduct in the future;

e. for such other and further extraordinary equitable, declaratory and/or injunctive relief as permitted by law as necessary to assure that the State has an effective remedy; and

f. for such other and further relief, as the Court deems just and proper, to which the State may be entitled.

COUNT EIGHT

VIOLATION OF THE WEST VIRGINIA ANTITRUST ACT

197. The State realleges and incorporates herein the foregoing allegations of this Complaint.

198. The Attorney General of the State of West Virginia is empowered by law pursuant to West Virginia Statute § 47-18-6, § 47-18-7 and § 47-18-9 to investigate suspected violation of, and to bring action on behalf of, the State for damages to the State which result from the violation of the West Virginia Antitrust Act.

199. The defendants, individually and collectively, as described above, have violated said Act in particular, but without limitation, § 47-18-3(b)(1)(B) which reads in pertinent part:

Without limiting the effect of subsection (a) of the section, the following shall be deemed to restrain commerce unreasonably and are unlawful:

(a) A contract, combination or conspiracy between two or more persons:

***

(B) Fixing, controlling, main-taining, limiting or discontinuing the production, manufacture, mining, sale or supply of any commodity, or the sale or supply of any service, for the purpose or with the affect of fixing, controlling or maintaining the market price rate or fee of the commodity or service...

(3) A contract, combination or conspiracy between two or more persons refusing to deal with any other person or persons for the purpose of effecting any of the acts described in subdivisions (1) and (2) of this subsection.

200. The defendants and their co-conspirators did combine to control the manufacturing and sale of cigarettes and other tobacco products to maintain not only the market price but also to guarantee a market for their extremely hazardous products.

201. The State is a person within the meaning of the Antitrust Act and has suffered damages to its property as set out above as the result of the actions of the defendants and their co-conspirators. § 47-18-9.

202. Wherefore, pursuant to the West Virginia Statute Sections 47-18-8 and 47-18-9, the State hereby prays for relief as provided therein:

a) treble damages;

b) reasonable attorneys fees, filing fees, reasonable costs and reasonable costs of this action. § 47-18-9;

c) injunctive relief against the defendants as well as any other relief this Court may deem appropriate. § 47-18-8

COUNT NINE

INJUNCTIVE RELIEF

203. The State realleges and incorporates herein the foregoing allegations of this Complaint.

204. The defendants have, for many years, engaged in, encouraged, aided and abetted an intentional and unconscionable campaign to promote the distribution and sale of cigarettes or other tobacco products to children thereby creating successive generations of addicted customers who ultimately become the victims of smoking-relating illnesses. Such conduct is a violation of the laws of the State of West Virginia in particular but without limitation West Virginia Statute § 16-9A-1 and 2 which pohibit the sale of cigarettes to minors, imposes untold human suffering on the citizens of the State of West Virginia, and has created a health care burden for the State totalling hundreds of millions of dollars.

205. It is necessary and essential to stop the defendants from promoting the sale of their cigarettes to minors, a remedy which can only be effectively accomplished by enjoining the defendants from not only promoting the sale of their cigarettes or other tobacco products to minors, but additionally in engaging in aiding, abetting or encouraging the sale or distribution of cigarettes to minors.

206. Enjoining the defendants from promoting the sale of their cigarettes to minors is necessary to prevent substantial injury to the effected minors, such substantial injury being the danger that the minors would become addicted to cigarettes and thereby have their health and their lives placed in danger from smoking cigarettes.

207. If such an injunction enjoining the defendants from promoting their cigarettes to minors is not granted, the minors allowed to purchase cigarettes will be irreparably harmed in that they will likely become addicted to nicotine contained in cigarettes and other tobacco products, and they will be substantially certain to suffer adverse health consequences.

208. It is in the public interest to enjoin the defendants from promoting the sale of their cigarettes and other tobacco products to minors.

209. Wherefore, premises considered, the State prays that this Honorable Court issue the following relief:

a. A prohibitory injunction against all defendants to prohibit them from promoting the sale of cigarettes and other tobacco products to minors and establishing a $10,000 fine for each infraction thereof;

b. An Order directing the defendants, jointly and severally, to pay for the State's reasonable attorney's fees, costs and expenses in seeking said injunction.

c. An Order granting any other relief this Court may deem just and proper.

COUNT TEN

DECLARATORY JUDGMENT

REGARDING PARTIES' RIGHTS

210. The State realleges and incorporates herein the foregoing allegations of this Complaint.

211. Pursuant to the Uniform Declaratory Judgment Act § 55-13-1, et seq., the State hereby requests that this Court issue a declaratory judgment that declares that actions for the recovery of medical care expenditures by the State shall not be subject to:

(1) Statutes of Repose or Limitations.

(2) Principles of common law or equity as to assignment, lien, subrogation, contributory, comparative negligence, assumption of the risk or any other affirmative defenses available to these defendants.

(3) Causation may be proven by epidemiological evidence.

(4) Damages will be assessed in the aggregate and proven by statistical data.

(5) Joint and several liability for damages shall apply.

(6) Punitive damages shall be available to the State.

(7) Plaintiff's attorneys' fees and costs may be assessed against the defendants.

212. Wherefore, the State of West Virginia prays that this Court first decide this Declaratory Judgment Claim so as to save judicial time and limit the scope of discovery and issues to be tried so as to save time and expenses for all parties.

Respectfully submitted,

Ronald L. Motley, Esq.

NESS, MOTLEY, LOADHOLT, RICHARDSON

& POOLE

151 Meeting St., Suite 600

P.O. Box 1137

Charleston, SC 29402

Scott S. Segal, Esq.

SEGAL & DAVIS, L.C.

810 Kanawha Blvd. East

Charleston, WV 25311

R. Edison Hill, Esq.

HILL, PETERSON, CARPER, BEE & DEITZLER

2116 Kanawha Blvd. East

Charleston, WV 25311-5667

Richard D. Lindsay, M.D., Esq.

LINDSAY & LINDSAY and

DITRAPANO & JACKSON

604 Virginia St. East

Charleston, WV 25301

Douglas B. Hunt, Esq.

HUNT & BARBER, L.C.

1116-A Kanasha Blvd. East

Charleston, WV 25301

Attorneys for Plaintiff.