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.
PHILIP MORRIS INCORPORATED, CONSENT JUDGMENT
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superseded or preempted by future Congressional enactments; and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
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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 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
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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.
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
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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.
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
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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 $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.
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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 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
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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 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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