EXHIBIT 10.2
STATE OF MINNESOTA DISTRICT COURT
COUNTY OF RAMSEY SECOND JUDICIAL DISTRICT
THE STATE OF MINNESOTA, Case Type: Other Civil
BY HUBERT H. HUMPHREY III, Court File No. C1-94-8565
ITS ATTORNEY GENERAL,
and
BLUE CROSS AND BLUE SHIELD
OF MINNESOTA,
Plaintiffs,
vs. CONSENT JUDGMENT
PHILIP MORRIS INCORPORATED,
R.J. REYNOLDS TOBACCO COMPANY,
BROWN & WILLIAMSON TOBACCO
CORPORATION, B.A.T. INDUSTRIES
P.L.C., BRITISH-AMERICAN TOBACCO
COMPANY LIMITED, BAT (U.K. &
EXPORT) LIMITED, LORILLARD
TOBACCO COMPANY, THE AMERICAN
TOBACCO COMPANY, LIGGETT GROUP,
INC., THE COUNCIL FOR TOBACCO
RESEARCH-U.S.A., INC., and THE
TOBACCO INSTITUTE, INC.,
Defendants.
WHEREAS, the State of Minnesota, by its Attorney General, Hubert H.
Humphrey III, and Blue Cross and Blue Shield of Minnesota filed their Complaint
herein on August 17, 1994, and their Second Amended Complaint on January 6,
1998;
EXHIBIT A
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WHEREAS, Defendants have contested the claims in the Plaintiffs' Complaint
and Second Amended Complaint;
WHEREAS, the parties recognize that Congress is considering national
tobacco legislation and have agreed to settle this case on a basis which
acknowledges possible federal legislation, but which guarantees to the people of
Minnesota the relief granted herein;
WHEREAS, Settling Defendants, in the Settlement Agreement and Stipulation
for Entry of Consent Judgment, have waived as specified therein their right to
challenge the terms of this Consent Judgment as being superseded or preempted by
future Congressional enactments; and
WHEREAS, the Attorney General believes the entry of this Consent Judgment
is appropriate and in the public interest;
NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED AS FOLLOWS:
I. JURISDICTION AND VENUE
The Court has jurisdiction over the subject matter of this action and
over the Settling Defendants under Minn. Stat. SECTIONS 8.31, 325D.15, 325D.45,
325D.58, 325F.70 and 484.01 (1994). Venue is proper in Ramsey County pursuant to
Minn. Stat. SECTIONS 325D.65 and 542.09 (1994) in that Settling Defendants do
business in Ramsey County.
II. DEFINITIONS
The definitions set forth in the Settlement Agreement and Stipulation for
Entry of Consent Judgment ("Settlement Agreement") are incorporated by reference
herein.
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III. APPLICABILITY
This Consent Judgment applies only to Settling Defendants in their
corporate capacity acting through their respective successors and assigns,
directors, officers, employees, agents, subsidiaries, divisions, or other
internal organizational units of any kind or any other entities acting in
concert or participation with them. The remedies and penalties in Sections XD.
and E. herein for a violation of this Consent Judgment shall apply only to
Settling Defendants, and shall not be imposed or assessed against any employee,
officer or director of Settling Defendants or other person or entity as a
consequence of such a violation, and there shall be no jurisdiction under this
Consent Judgment to do so.
IV. EFFECT ON THIRD PARTIES
This Consent Judgment is not intended to and does not vest standing in any
third party with respect to the terms hereof, or create for any person other
than the parties hereto a right to enforce the terms hereof.
V. INJUNCTIVE RELIEF
Settling Defendants are permanently enjoined from:
A. On and after December 31, 1998, marketing, licensing, distributing,
selling or offering, directly or indirectly, including by catalogue or direct
mail, in the State of Minnesota, any service or item (other than tobacco
products or any item the sole function of which is to advertise tobacco
products) which bears the brand name (alone or in conjunction with any other
word), logo, symbol, motto, selling message, recognizable color or pattern of
colors, or any other indicia or product identification identical or similar to,
or identifiable with, those used for any domestic brand of tobacco products.
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B. Making any material misrepresentation of fact regarding the health
consequence of using any tobacco product, including any tobacco additives,
filters, paper or other ingredients. Nothing in this paragraph shall limit the
exercise of any First Amendment right or any defense or position which persons
bound by this Consent Judgment may assert in any judicial, legislative, or
regulatory forum.
C. Entering into any contract, combination or conspiracy between or among
themselves, which has the purpose or effect of: (1) limiting competition in the
production or distribution of information about the health hazards or other
consequences of the use of their products; (2) limiting or suppressing research
into smoking and health; or (3) limiting or suppressing research into,
marketing, or development of new products.
D. Taking any action, directly or indirectly, to target children in
Minnesota in the advertising, promotion, or marketing of cigarettes, or taking
any action the primary purpose of which is to initiate, maintain or increase the
incidence of underage smoking in Minnesota.
VI. DISSOLUTION OF DEFENDANT COUNCIL FOR TOBACCO RESEARCH
Settling Defendants represent that they have the authority to effectuate
the following and will do so within 90 days of this Agreement: The Council for
Tobacco Research-U.S.A. Inc. shall cease all operations except as necessary to
comply with existing grants or contracts and to continue its defense of other
lawsuits and will be disbanded and dissolved within a reasonable time period
thereafter. To the extent not required elsewhere in this Consent Judgment, the
Council for Tobacco Research shall forward all smoking and health research in
its possession or control to the Food and Drug Administration subject to
appropriate confidentiality protection required by contracts between the Council
for Tobacco Research and any third party. Defendants shall preserve all other
records
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of the Council for Tobacco Research which relate in any way to issues raised in
this or any other Attorney General lawsuit. Defendants may not reconstitute the
Council for Tobacco Research or its function in any form.
VII. PUBLIC ACCESS TO DOCUMENTS AND COURT FILES
A. The Court's previous Protective Orders are hereby dissolved with
respect to all documents, including the 4A and 4B indices and the privilege
logs, which have been produced to the Plaintiffs and for which Defendants have
made no claim of privilege or Category II trade secret protection. Such
documents shall be made available to the public at the Depository, in the manner
provided as follows:
1. The public shall be given access to all non-privileged documents
contained in the Minnesota Depository, including all documents set forth in
Paragraph VII.A. above.
2. Plaintiffs and Settling Defendants shall meet with representatives
of the current Minnesota Depository administrators, Smart Legal Assistance
and Merrill Corporation, and/or other appropriate persons, to discuss
staffing issues and the procedures that should be implemented to continue
the operation of the Minnesota Depository, thereby to ensure broad and
orderly access to these documents.
3. Category II documents shall be returned to the Defendants as soon
as practical, provided that Defendants, upon receiving appropriate
assurances of trade secret protection from the Food and Drug
Administration, shall forward a copy of the Category II documents bearing
the Bates numbers from this action to said agency. Plaintiffs shall retain
the Bates stamp numbers of all Category II documents produced in this case.
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B. The documents produced in this case are not "government data" under
the Minnesota Government Data Practices Act.
C. For documents upon which a privilege was claimed and found not to
exist, including any briefs, memoranda and other pleadings filed by the parties
which include reference to such documents, Plaintiffs may seek court approval to
make such documents available to the public, provided that any such request be
made to the Court within 45 days of the date of entry of this Consent Judgment.
D. Defendant British-American Tobacco Company Limited shall maintain and
operate the Guildford Depository for a period of ten years. Defendant
British-American Tobacco Company Limited shall have the option of maintaining
such depository at its current location or at an appropriate alternative
location. All documents, except those identified in Paragraph VII.A.3 above,
which were selected by plaintiffs from the Guildford Depository in response to
the Plaintiffs' discovery requests shall be moved to and retained at the
Minnesota Depository.
E. The Minnesota Depository shall be maintained and operated at Settling
Defendants' sole expense, in the manner set forth above for ten years after the
date hereof, or such longer period as may be provided in federal legislation for
a national document depository. At the end of such period, or sooner, at the
State's discretion, the documents shall be transferred to the State Archives or
other appropriate state body, where they shall remain available for historical
and research purposes. The parties and the Depository staff shall cooperate with
the State Archivist or such other state officials as may be involved in
transferring the documents to the custody of the State.
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F. Settling Defendants shall provide to the State for the Depository a
copy of all existing CD-ROMs of documents produced in this action that do not
contain any privileged or work-product documents or information, to be placed in
the Depository.
G. Defendants shall produce to the Depository all documents produced by
such defendants in other United States smoking and health litigation but not
previously produced in Minnesota, within 30 days of their production such the
other litigation, provided Defendants do not claim privilege with respect to
such documents, and provided such documents are not subject to any protective
order.
VIII. EQUITABLE RELIEF: NATIONAL RESEARCH; DEPOSIT OF FUNDS.
A. In furtherance of the equitable relief sought by the State, pursuant
to the Court's equitable powers to shape appropriate injunctive relief, in light
of the public health interests demonstrated by the evidence in this case, and
pursuant to the agreement of the parties:
1. Consistent with the Prayer for Relief in the State's Complaint and
Amended Complaints that the Defendants fund cessation programs in the State
of Minnesota, the amount due in December, 1998 ($102 million), pursuant to
the Settlement Agreement, Section II.D, shall be deposited into a separate
cessation account and used to offer smoking cessation opportunities to
Minnesota smokers, and shall be administered as ordered by the Court.
2. In addition to other money paid under this Consent Judgment and the
Settlement Agreement and Stipulation for Entry of Consent Judgment, each
Settling Defendant shall pay pro rata in proportion to its Market Share, on
or before June 1, 1998, and no later than June 1 of each succeeding year
through and including June 1, 2007, its share of
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$10 million into a national research account, to be administered as ordered
by the Court. The parties envision that approximately 70% of the $100
million total will be used for research grants relating to the elimination
of tobacco use by children, and 30% for program implementation, evaluation
and other tobacco control purposes; provided, however, the administrator of
the national research account may, in its discretion, change the
allocation.
3. The State shall submit a plan for the administration and authorized
uses of the funds payable under this section within 45 days of the date of
entry of this Consent Judgment.
4. Monies payable under this section and Section V.B. of the
Settlement Agreement shall be deposited in interest bearing accounts at a
bank to be designated by the Commissioner of Finance. Settling Defendants'
payment of the amounts set forth above are Settling Defendants' sole
obligation under this section.
B. Except as specified in this section and Section V.B of the
Settlement Agreement, all monies payable under Sections II.B. and D. of the
Settlement Agreement between the parties shall be deposited into the general
fund of the State of Minnesota.
IX. FINAL DISPOSITION
This Consent Judgment resolves all claims set forth in the State's Second
Amended Complaint against Defendants, which are hereby dismissed with prejudice,
and shall constitute the final disposition of this action.
X. MISCELLANEOUS PROVISIONS
A. Jurisdiction of this case is retained for the purpose of enforcement
and enabling the continuing proceedings contemplated herein. Any party to this
Consent Judgment may apply to this
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Court at any time for such further orders and directions as may be necessary or
appropriate for the construction and enforcement of this Consent Judgment.
B. This Consent Judgment is not intended to be and shall not in any event
be construed as, or deemed to be, an admission or concession or evidence of
personal jurisdiction or any liability or any wrongdoing whatsoever on the part
of any Defendant. The Defendants specifically disclaim any liability or
wrongdoing whatsoever with respect to the claims and allegations asserted
against them in this action and Settling Defendnats have stipulated to entry of
this Consent Judgment solely to avoid the further expense, inconvenience, burden
and risk of litigation.
C. Except as provided in Section III.D. of the Settlement Agreement and
Stipulation for Entry of Consent Judgment, this Consent Judgment shall not be
modified unless the party seeking modification demonstrates, by clear and
convincing evidence, that it will suffer irreparable harm from new and
unforeseen conditions; provided, however, that the provisions of Section III of
this Consent Judgment shall in no event be subject to modification. Changes in
the economic conditions of the parties shall not be grounds for modification. It
is intended that Settling Defendants will comply with this Consent Judgment as
originally entered, even if Settling Defendants' obligations hereunder are
greater than those imposed under current or future law. Therefore, a change in
law that results, directly or indirectly, in more favorable or beneficial
treatment of any one or more of the Settling Defendants shall not support
modification of this Consent Judgment.
D. In enforcing this Consent Judgment the Attorney General shall have the
discovery powers of Minn. Stat. SECTION 8.31 (1996), as amended. Any Settling
Defendant which violates this Consent Judgment shall be subject to contempt and
to the remedies provided in Minn. Stat. SECTION 8.31 (1996), as amended. In
addition, in any proceeding which results in a finding that a Settling
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Defendant violated this Consent Judgment, the responsible Settling Defendant or
Settling Defendants shall pay the State's costs and attorneys' fees incurred in
such proceeding.
E. The remedies in this Consent Judgment are cumulative and in addition
to any other remedies the State may have at law or equity. Nothing herein shall
be construed to prevent the State from bringing any action for conduct not
released hereunder, even though that conduct may also violate this Consent
Judgment.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated:
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KENNETH J. FITZPATRICK
Judge of District Court
JUDGMENT
Pursuant to the foregoing Consent Judgment, judgment is hereby entered
accordingly.
Dated:
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Court Administrator
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