In re Simon II Litigation

MEMORANDUM AND ORDER

WEINSTEIN, Senior District Judge.

1. Introduction

This memorandum and order addresses plaintiffs’ application for class certification. See Third Amended Class Action Complaint and Supplemental Memorandum in Support Amended and Renewed Motion for Class Certification, dated July 26, 2002. Extensive briefing and argument by the parties on the issue have been considered. A more extensive explanation of this order will be filed as soon as work permits.

This order grants certification. It represents an attempt to provide a procedural solution to the problem of repetitive and unrelated judgments for punitive damages (limited by constitutionally required overall caps) in this massive and complex litigation.

Attorneys representing the class seek punitive damages for a class of:

All persons residing in the United States, or who were residents of the United States at the time of their deaths, who smoke or smoked Defendants’ cigarettes, and who have been diagnosed by a physician with one or more of the following diseases from April 9,1993 through the date notice to the class is ordered disseminated: lung cancer; laryngeal cancer; lip cancer; tongue cancer; mouth cancer; esophageal cancer; kidney cancer; pancreatic cancer; bladder cancer; ischemic heart disease; cerebro-vascular heart disease; aortic aneurysm, peripheral vascular disease; emphysema; chronic bronchitis; or, chronic obstructive pulmonary disease (also called chronic air flow obstruction),

and excluding:

. 1. Persons who have obtained judgments or settlements against any or all Defendants;

2. Persons against whom any or all of the Defendants have obtained judgments;

3. Persons who are members of the certified class in Engle v. R.J. Reynolds *97 Tobacco Co., No. 94-08273 CA-22, 2000 WL 33534572 (Circuit Court of the 11th Judicial Circuit, Dade County, Florida).

Defense counsel has sensibly suggested that a fourth excluded group be persons whose diagnosis predates their use of tobacco.

The court certifies the class subject to modifications described in Part III, infra.

II. Procedural History

Related aspects of tobacco litigation pending in this court have been considered in deciding the certification issue. See, e.g., Mason v. American Tobacco Co., 212 F.Supp.2d 88 (E.D.N.Y.2002) (dismissing claims brought under the Medicare Secondary Payer statute); In re Simon II Litigation, 212 F.Supp.2d 56 (E.D.N.Y.2002) (application of Goshen to Blue Cross cases); In re Simon II Litigation, 212 F.Supp.2d 57 (E.D.N.Y.2002) (application of Goshen to Bergeron case); In re Simon II Litigation, 212 F.Supp.2d 53 (E.D.N.Y.2002) (severing Mason , denying transfer, and noting that the court would consider the merits of the claims); In re Simon II Litigation, 208 F.R.D. 490 (E.D.N.Y.2002) (denying class certification in Bergeron); In re Simon II Litigation, 208 F.R.D. 488 (E.D.N.Y.2002) (court will sua sponte consider dispositive motions in Mason); In re Simon II Litigation, 208 F.R.D. 487 (E.D.N.Y.2002) (court will entertain dispositive motion in Mason); In re Simon II Litigation, 2002 WL 1315807 (E.D.N.Y. Jun 13, 2002) (discussion of Blue Cross stay); In re Simon II Litigation, 2002 WL 1315808 (E.D.N.Y. Jun 13, 2002) (scheduling); In re Simon II Litigation, 208 F.R.D. 484 (E.D.N.Y.2002) (raising issues for discussion at conference); In re Simon II Litigation, 2002 WL 522984 (E.D.N.Y. Mar 28, 2002) (request of court for expeditious treatment of cases, with suggestions of questions for argument); In re Simon II Litigation, 2002 WL 862553 (E.D.N.Y. Apr.23, 2002) (memorandum on possible approaches to resolution of tobacco cases with issues for discussion, see transcript of May 1, 2002); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc., 190 F.Supp.2d 407 (E.D.N.Y.2002) (attorneys’ fees to plaintiff following trial and jury awards for damages under New York General Business Law § 349(h)); Blue Cross & Blue Shield ofN.J., Inc. v. Philip Morris, Inc., 178 F.Supp.2d 198 (E.D.N.Y.2001) (following trial, refusal to dismiss a jury award for direct claims and subrogated claims of medical insurer under New York General Business Law § 349; statistical evidence appropriate; fraudulent actions triggering statute of limitations); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morns, Inc., No. 98-CV-3287, 2001 WL 1328414 (E.D.N.Y. Sept. 27, 2001). Considerations in determining statutory fees. Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc., No. 98-CV-3287, 2001 WL 1328458 (E.D.N.Y. Sept. 17, 2001) (fees hearing to be held after judgment on verdict); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc., No. 98-CV-3287, 2001 WL 811930 (E.D.N.Y. May 22, 2001) (members of single conspiracy to mislead the public with respect to health risks from dates shown); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris Inc., 141 F.Supp.2d 320 (E.D.N.Y.2001) (factual findings of a judge in separate case excluded as hearsay and unfair when sought to be used to impeach an expert). Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris Inc., 138 F.Supp.2d 357 (E.D.N.Y.2001) (insurer permitted to recover extra health care expenditures for smokers and to provide evidence of pass-on premium practice); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris Inc., 133 F.Supp.2d 162 (E.D.N.Y.2001) (New York Business Law § 349 not applicable to activities before statute amended to permit private right of recovery, statistical evidence admissible under federal rules in Erie case, no federal preclusion of state claim, subrogation of punitive damages); Blue Cross & Blue Shield ofN.J., Inc. v. Philip Morris Inc., 199 F.R.D. 487 (E.D.N.Y.2001) (supplemental report of expert allowed to accommodate scientific process and search for truth); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris Inc., 199 F.R.D. 484 (E.D.N.Y.2001) (parties permitted to play clips for jury from videotaped sample of smoker-subscribers without interruption of counter designations); Blue Cross & Blue Shield of N.J., Inc. v. Philip *98 Morris Inc., 113 F.Supp.2d 345 (E.D.N.Y. 2000) (material issues re British holding company’s direction of subsidiary efforts in conspiracy; limits on Civil RICO claim; use of statistical evidence appropriate; subrogation under state law; treble damages under RICO; exclusion of future damages; no preemption); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc., No. 98 CV 3287, 2000 WL 1880283 (E.D.N.Y.2000) {Daubert exclusion of portion of expert’s proposed statement based upon testimony in state court); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc., No. 98 CV 3287, 2000 WL 1805359 (E.D.N.Y.2000) {Daubert rulings based upon rulings in related cases); Blue Cross & Blue Shield of N.J., Inc., v. Philip Morris, Inc., No. 98. CV 3287, 2000 WL 1738338 (E.D.N.Y.2000) {Daubert rulings on experts); Blue Cross & Blue Shield of N.J. v. Philip Morris Inc., 53 F.Supp.2d 338 (E.D.N.Y.1999) (enforcing disqualification agreement); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris Inc., 36 F.Supp.2d 560 (E.D.N.Y.1999) (claim stated under RICO); Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris Inc., No. 98-CV-3287, 1999 WL 104815 (E.D.N.Y. Feb. 25,1999) (no indispensable party; pleading sufficiently particular). Simon v. Philip Morris Inc., 200 F.R.D. 21 (E.D.N.Y.2001) (bifurcation; severance not a violation of Seventh Amendment); Simon v. Philip Morris Inc., 124 F.Supp.2d 46 (E.D.N.Y.2000) (conflict of laws: general liability under New York Law: depecage as needed); Simon v. Philip Morris Inc., No. 99-CV-1988, 2000 WL 1658337 (E.D.N.Y. Nov.6, 2000) (preference for certification of Simon II); Simon v. Philip Morris Inc., 194 F.R.D. 73 (E.D.N.Y.2000) (decision on certification reserved for further briefing); Simon v. Philip Morris, Inc., 86 F.Supp.2d 95 (E.D.N.Y.2000) (long arm personal jurisdiction over BAT proper); In re Simon II Litigation, 172 F.Supp.2d 375 (E.D.N.Y.2001) (consolidation and test cases preceding certification); In re Simon II Litigation, apparently unpublished, 00 CV 5332 (E.D.N.Y. Oct. 23, 2000) (by order to show cause the court referred to prospective attorneys for class and seven subclasses (a-g), seeking any objections to named attorneys and requiring publication); Simon v. Philip Morris, 99 CV 1988, 2000 WL 1745265 (E.D.N.Y. Nov.16, 2000) (sampling of cases; Simon I v. Simon II as vehicles for disposition; choice of law applicable; manageability); In re Simon II Litigation, 00 CV 5332, 98 CV 0675, 99 CV 6142, 98 CV 1492, 97 CV 7658, 99 CV 1988, 98 CV 3287, 99 CV 7392, 00 CV 4632, 2000, WL 1252182 (E.D.N.Y. Sept.6, 2000) (Order to show cause re: severance, stays and certification); Nat’l Asbestos Workers Med. Fund v. Philip Morris Inc., No. 98-CV-1492, 2001 WL 477256 (E.D.N.Y. Feb.27, 2001) (amendment to amend to press New York’s Consumer Protection Act; certification of New York based funds premature); Nat’l Asbestos Workers Med. Fund v. Philip Morris Inc., No. 98-CV-1492, 2000 WL 1424931 (E.D.N.Y. Sept.26, 2000) (effect of Rule 23(f) appeals and stay pending decision of court of appeals); Nat’l Asbestos Workers Med. Fund v. Philip Morris Inc., No. 98-CV-1492, 2000 WL 1364358 (E.D.N.Y. Sept.20, 2000) (motion for certification denied; designation of single member of class for immediate trial permitted if plaintiff wishes); Nat’l Asbestos Workers Med. Fund v. Philip Morris Inc., No. 98-CV-1492, 2000 WL 777834 (E.D.N.Y. June 13, 2000) (request by court for certification motion). Nat’l Asbestos Workers Med. Fund v. Philip Morris Inc., 86 F.Supp.2d 137 (E.D.N.Y. 2000) (RICO service provision not applicable; long arm New York jurisdiction covers British holding company); Nat’l Asbestos Workers Med. Fund v. Philip Morris Inc., 74 F.Supp.2d 221 (E.D.N.Y.1999) (self insured ERISA trust fund had standing as subrogee of smokers); Nat’l Asbestos Workers Med. Fund v. Philip Morris Inc., 74 F.Supp.2d 213 (E.D.N.Y.1999) (insurers and funds slated subrogated claims under RICO); Nat’l Asbestos Workers Med. Fund v. Philip Morris Inc., 71 F.Supp.2d 139 (E.D.N.Y.1999) (discretionary power of district court to deny interlocutory appeals); Nat’l Asbestos Workers Med. Fund v. Philip Morris Inc., 23 F.Supp.2d 321 (E.D.N.Y.1998) (motion to dismiss various theories denied as premature without development of facts); Nat’l Asbes *99 tos Workers Med. Fund v. Philip Morris Inc., No. 98-CV-1492, 1998 WL 372410 (E.D.N.Y. Jul. 2, 1998) (motion to change venue denied as premature); Falise v. Am. Tobacco Co., No. 97-CV-7640, 2000 WL 1880303 (E.D.N.Y. Dec. 27, 2000) (New York General Business Law § 349(h) and § 350-e Private recoveries not retroactive before 1980); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 1880305 (E.D.N.Y. Dec. 27, 2000) (limitations on number of experts and use of their depositions); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 1804542 (E.D.N.Y. Dec. 4, 2000) (foundations for documents); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 1804602 (E.D.N.Y. Nov. 30, 2000) (motions in limine); Falise v. Am. Tobacco Co., No. 99 CV 7392, 2000 WL 1737941 (E.D.N.Y. Nov. 21, 2000) (motions in limine); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 1370437 (E.D.N.Y. Sept. 21, 2000) (holding company denied as to manufacturers’ enterprise but granted as to parent / subsidiary theory); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 1336697 (E.D.N.Y. Sept. 15, 2000) (Individual smoker testimony as well as statistical data admissible); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 1292671 (E.D.N.Y. Sept. 8, 2000) (Daubert motions); Falise v. Am. Tobacco Co., 107 F.Supp.2d 200 (E.D.N.Y.2000) (Daubert analysis); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 1144697 (E.D.N.Y. July 25, 2000) (In limine motions); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 1010982 (E.D.N.Y. July 19, 2000) (in limine motions); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 1010978 (E.D.N.Y. July 18, 2000) (in limine motions); Falise v. Am. Tobacco Co., 94 F.Supp.2d 316 (E.D.N.Y. 2000) (limited theories on which trust could recover; other claims dismissed); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 433097 (E.D.N.Y. Apr.18, 2000) (scheduling orders); Falise v. Am. Tobacco Co., 91 F.Supp.2d 525 (E.D.N.Y.2000) (RICO action date of accrual for asbestos-related claims); Falise v. Am. Tobacco Co., No. 99-CV-7392, 2000 WL 264332 (E.D.N.Y. Jan. 24, 2000) (Nos.CV-98-1492, CV-97-7658, CV-98-3287, CV-98-675) (documents not subject to attorney-client privilege after congressional release on internet); Falise v. Am. Tobacco Co., 193 F.R.D. 73 (E.D.N.Y.2000) (published documents would not be deemed privileged); Falise v. Am. Tobacco Co., 241 B.R. 63 (E.D.N.Y.1999) (once bankruptcy plan confirmed and substantially consummated district court lost jurisdiction); Falise v. Am. Tobacco Co., 241 B.R. 48 (E.D.N.Y.1999) (district court had no independent jurisdiction over case based on bankruptcy). Falise v. Am. Tobacco Co., No. 99-CV-7392, 1999 WL 98626 (E.D.N.Y. Feb. 18, 1999) (Nos.97CV-7640, 97-CV-7658, 98-CV-675) (motion to dismiss denied based on possible joint liability of cigarette and asbestos industries); Falise v. Am. Tobacco Co., No. 97-CV-7640, 1998 WL 372401 (E.D.N.Y. July 2, 1998) (jurisdiction over foreign holding company); Bergeron v. Philip Morris Inc., 100 F.Supp.2d 164 (E.D.N.Y.2000) (further discovery required to determine if Massachusetts or New York law applied); Bergeron v. Philip Morris Inc., No. 99-CV-6142, 2000 WL 748144 (E.D.N.Y. June 8, 2000) (cooperative discovery among related eases); H.K. Porter Co., Inc. v. Am. Tobacco Co., 71 F.Supp.2d 73 (E.D.N.Y.1999) (certification of narrower class action denied in favor of one more comprehensive); In re Tobacco Litig., 193 F.R.D. 92 (E.D.N.Y.2000) (settlement process and questions for discussion); In re Tobacco Litig., 192 F.R.D. 90 (E.D.N.Y.2000) (consolidation for possible settlement and special settlement masters); In re Simon II Litigation, 172 F.Supp.2d 375 (E.D.N.Y. 2001) (test cases rather than class trials); In re Simon (II) Litig., Nos. 00-CV-5332, 98-CV-0675, 99-CV-6142, 98-CV-1492, 97-CV-7658, 99-CV-1988, 98-CV-3287, 99-CV-7392, 2000 WL 1252182 (E.D.N.Y. Sept. 6, 2000) (relations between certification and trial of punitive and compensatory claims).

III. Order

The court certifies a punitive damages non-opt-out class pursuant to Rule 23(b)(1)(B) of the Federal Rules of Civil Procedure. The class consists of:

All persons residing in the United States, or who were residents of the United States at the time of their deaths, who smoke or smoked Defendants’ cigarettes, and who were first diagnosed by a physician with *100 one or more of the following diseases from April 9,1993 through the date notice to the class is ordered disseminated: lung cancer; laryngeal cancer; lip cancer; tongue cancer; mouth cancer; esophageal cancer; kidney cancer; pancreatic cancer; bladder cancer; ischemic heart disease; cerebro-vascular heart disease; aortic aneurysm, peripheral vascular disease; emphysema; chronic bronchitis; or, chronic obstructive pulmonary disease (also called chronic air flow obstruction).

The following persons are excluded from the class:

1. Persons who have obtained judgments or settlements against any or all Defendants;

2. Persons against whom any or all of the Defendants have obtained judgments;

3. Persons who are members of the certified class in Engle v. R.J. Reynolds Tobacco Co., No. 94-08273 CA-22[, 2000 WL 33534572 ] (Circuit Court of the 11th Judicial Circuit, Dade County, Florida);

4. Persons who should have first reasonably realized that they had the disease prior to April 9,1993; and

5. Persons whose diagnosis or reasonable basis for knowledge predates their use of tobacco.

The court finds that each of the necessary elements of Rule 23 of the Federal Rules of Civil Procedure is satisfied.

The class is represented by leading members of the United States plaintiff mass tort bar. Defense counsel are leading members of the tobacco defense bar.

The following Plaintiffs are designated as Class Representatives: Ellis Simon, Trudy Hunt, Tony Younany, George Oko, Jacqueline Hounehell, Sylvia Wohl, George E. Patterson, represented by Plaintiff Estate of George Patterson, Estate of Willie Grier, Estate of Joyce Fogliano, Estate of Virginia Overstreet, Estate of Evelyn Schrieber, Estate of Stanley Kesselman, and James Ebert.

The following counsel are designated as Class Counsel: Elizabeth J. Cabraser, Perry Weitz, M. Frederick Pritzker, Norwood Wil-ner, Stanley M. Chesley, Dianne M. Nast and their respective law firms. Elizabeth J. Ca-braser is appointed as lead counsel.

The class is not seeking compensatory damages. Claims of individual class representatives for compensatory damages will be tried.

The trial will proceed in three stages. The first stage will be before a jury directed to make a class-wide determination of liability and estimated total value of national undifferentiated compensatory harm to all members of the class. This sum will not be awarded but will serve as a predicate in determining non-opt-out class punitive damages. If the jury finds no substantive basis for compensatory claims of the class on a theory permitting an award of punitive damages, there will be no need for a second stage.

Compensatory awards, if any, for individual class representatives will be determined by the same jury.

At the second trial stage, the same jury will determine whether the defendants engaged in conduct warranting punitive damages. If the jury finds no conduct warranting punitive damages, there will be no need for a third stage.

At the third stage the same jury will determine the amount of punitive damages to be awarded the class and how the damages will be allocated, on a disease-by-disease basis. The court and counsel will ensure, through control of trial and pretrial practice, that the jury receives relevant information as to each disease. Thus subclassing by disease is not required.

The court will distribute sums to the class on a pro rata basis by disease to those members of the class submitting appropriate proof. Any portion not so distributed will be allocated by the court on a cy pres basis to treatment and research organizations working in the field of each disease on advice of experts in the fields.

The jury will apply New York law according to principles of conflicts of laws.

Discovery is to go forward as directed by the Magistrate Judge. To avoid unnecessary *101 expense, the parties will not notify the class now — even though an adequate preliminary plan for such notification has been provided by plaintiffs — since the court of appeals may deny or require alteration of the certification order and the plans for trial and disposition of any award.

The court was not presented with, and therefore did not rule upon a compensatory class. The certification of a class for determination of compensatory damages to be distributed using an appropriate matrix would be possible and might be desirable in coordination with the class now certified. Plaintiffs chose the more limited approach of a punitive class only, now approved, which might be considered more conservative.

This Order will be effective upon filing. The court recommends that the court of appeals entertain an appeal pursuant to Rule 23(f) of the Federal Rules of Civil Procedure.

The trial is set for January 20, 2003, at 10:00 A.M. The jury will be selected with the assistance of a written questionnaire. In limine motions are returnable on January 6, 2003, at 10:00 A.M. Motions may be scheduled at a different time after consultation among counsel and with Ms. June Lowe, case coordinator. Appellate procedure may require postponements which will be granted on letter request.

Within thirty days of the date of this order, or, if the court of appeals for the Second Circuit accepts an appeal of this order, then within thirty days of the date appellate procedures are completed, class counsel will submit a proposed plan for the dissemination of notice of the pendency of this action to the class (including all proposed forms of notice).

If the court of appeals requires modification, the court will consider alternative methods of class certification and trial. Some of these alternatives will be examined in the memorandum which will follow.

SO ORDERED.

AMENDED MEMORANDUM AND ORDER

Table of Contents

I. Introduction .............................................................103

A. General Considerations................................................103

1. Equity...........................................................103

2. Punitive Damages.................................................106

B. The Instant Case.....................................................107

II. Summary................................................................108

A. Options Selected......................................................108

B. Possible Permutations.................................................109

1. Punitive Damages.................................................109

2. Compensatory Damages...........................................109

3. Advantages and Disadvantages .....................................109

III. Facts ...................................................................Ill

A. Physical Effect of Tobacco.............................................Ill

B. Industry Conspiracy..................................................114

1. Formation and Execution..........................................114

2. Public statements from the 1950s to the present.......................117

3. Knowledge from the 1950s to the present.............................119

4. Coverup .........................................................121

5. Other Deceptive Conduct...........................................123

C. Consumer Harm from Deceptive Practices...............................126

1. Knowledge that Consumers Would Act Upon Deceptive Practices.......126

2. Evidence that Misrepresentations Caused Consumers Harm............126

a. Expert testimony..............................................126

(1) Dr. Jon Krosnick ..........................................127

(2) Dr. Jeffery Harris and others................................128

b. Videotaped depositions.........................................129

c. Surveys, medical and psychological literature and documents........130

*102 IV. Procedural History.......................................................131

A. Individual Plaintiff cases...............................................131

1. Simon...........................................................131

2. Decie............................................................131

3. Ebert............................................................131

4. Browne..........................................................131

5. Simon II.........................................................132

B. Blue Cross Cases----,................................................132

1. Empire Blue Cross................................................132

2. Other Blue Cross plans............................................132

C. Union Health fund cases...............................................133

1. N ational Asbestos W orkers.........................................133

2. Bergeron ........................................................133

D. Asbestos cases.......................................................134

1. H.K. Porter......................................................134

2. Raymark.........................................................134

3. Falise ...........................................................134

E. Mason (Medicare) ....................................................134

F. Foreign Entities......................................................135

G. Tobacco Cases Nationwide.............................................135

H. Difficulty in Prosecuting Tobacco Lawsuits...............................138

V. Substantive Law..........................................................138

A. Fraud and Conspiracy.................................................138

B. Preemption..........................................................141

C. Statute of Limitations.................................................143

1. In general........................................................143

2. Relation Back ....................................................144

D. Res Judicata.........................................................146

E. Individualized Proof of Causation and Damages...........................146

1. Federal Rules of Civil Procedure and Evidence .......................148

2. Appropriateness of Sampling and Survey Techniques..................149

3. Due Process......................................................152

4. Jury Right.......................................................154

5. Erie.............................................................157

VI. Punitive Damages ........................................................159

A. Principles.............................................................159

B. Caps................................................................163

1. Supreme Court Cases .............................................163

2. Applications......................................................164

VII. Choice of Law............................................................165

A. In General...........................................................166

B. New York Rule of Babcock v. Jackson and Interest Analysis...............167

C. Application of Babcock Rules to Complex Fact Patterns...................168

D. Constitutional Limits..................................................174

E. Interest Analysis in This Case..........................................174

VIII. Class Certification Analysis................................................179

A. General Requirements ................................................179

1. Requirements of Rule 23...........................................179

2. Subclassing ......................................................181

3. Methods of Modern Notice.........................................182

4. Special Requirements for Limited Fund Actions.......................183

5. Limited Fund Class Action Based on Constitutional Caps ..............184

B. 23(f) Review.........................................................186

C. Amendments to Federal Rules of Civil Procedure.........................187

D. Jury Trial ...........................................................187

E. Rule 23 Findings of Fact..............................................189

1. Numerosity......................................................189

*103 2. Commonality.....................................................189

3. Typicality........................................................189

4. Adequacy of Representation........................................189

5. Limited Punishment under Rule 23(b)(1).............................190

IX. Disposition of Funds by Court..............................................191

A. Power...............................................................191

B. Distribution..........................................................192

X. Trial Procedure ..........................................................193

XI. Conclusion........................ .....................................194

I. Introduction

A. General Considerations

1. Equity

This class action raises tantalizing factual, substantive and procedural problems. The order of September 19, 2002 certifying the class is expanded by this memorandum. See In re Simon II Litigation, 212 F.Supp.2d 57 (E.D.N.Y.2002).

The cigarette industry has for many years legally produced and sold a product that has caused the premature deaths of, and serious diseases for, millions of United States residents. The product is partially regulated by governments, national, state and local. Warnings of serious health dangers have been required to be placed on cigarette packages, yet people continue to smoke.

Smokers have alleged and demonstrated in many suits that, had they not been misled by the industry, they would not have started smoking or would have quit earlier, thus eliminating or reducing cigarette-caused damage to their health. In the main, the industry has won these litigations, which present substantial factual and legal barriers to recovery, but a trend in favor of plaintiffs seems to be developing.

One of the problems for claimants has been the enormous expense of trying the cases, making them unattractive to plaintiffs’ attorneys suing for individual clients on a contingency fee basis. Class or consolidated actions for compensatory damages have been difficult to justify because of the varied individual circumstances of the smokers. Yet statistical analysis based upon the law of large numbers, together with extensive demographic and epidemiological data and sampling techniques, arguably provide a basis for computing an appropriate approximation of total compensatory damages that could be awarded were all those injured to sue as a single class.

Another impediment to a determination of total damages is the fact that the law of fraud and other legal bases for recovery varies from state to state, making computation particularly troublesome. Should the law of one jurisdiction apply, this problem would be largely obviated.

Allocation of any global compensatory award to individual class members also suggests an enigma since diseases and circumstances vary so greatly. An award based on a matrix such as was used in Agent Orange, the Holocaust cases, and is being used to settle such massive torts as asbestos, DES and Breast Implants might provide a key to the puzzle since those who preferred to sue on their own could opt out of the compensatory class. For the overwhelming number of those injured the matrix would provide a benefit only theoretically available in individual suits.

Another difficulty with a compensatory class suit is that the information now being made available by the industry is much more frank respecting dangers than it has been in the past; higher taxes and exclusion of smoking in many public and private places have substantially reduced smoking and provided information of a kind potential smokers and smokers cannot ignore, thus reducing the viability of any future claim of fraud by manufacturers. See, e.g., Jodi Wilgoren, Facing New Costs, Some Smokers Say “Enough,” New York Times, July 17, 2002, at A14. The statute of limitations provides only a narrow and closing window of opportunity for effective litigation by plaintiffs.

*104 It cannot be said under these circumstances that plaintiffs’ decision to forego an optout class action for compensatory damages is unreasonable. There is no inconsistency in this decision and one to sue as a class for punitive damages. No violation of fiduciary duties of class representatives can be charged to this pragmatic view.

A new legal development arguably supports the conclusion and choices represented in the present 'suit. Recently the amount of total punitive damages that may be assessed against tortfeasors for essentially one continuing course of fraudulent conduct has been capped by constitutional limitations applied by the Supreme Court. Arguably this rule permits a non-opt out class action for a limited punitive damages fund that might be unfairly depleted by individual suits. Since the punitive award can be said to constitute a punishment on behalf of society generally, cy pres and fluid recovery concepts may make justifiable matrixes and other devices to divide the fund in the public interest as well as in that of the injured. A court’s newly minted wide power to limit punitive damages, as contrasted to its limited authority to reduce excessive compensatory awards, suggests an additional reason for acknowledging the special equitable-fiduciary powers of the court to control distribution of a punitive damage recovery.

A class action for punitive damages has the advantage of ensuring that transactional costs and utilization of the fund will be limited, consonant with the purpose of the recovery. Such a distribution can avoid such questionable attrition of the huge sums agreed to be paid by the tobacco companies in settlement of suits by the State Attorneys General through enormous attorney fees, use of the funds for general municipal purposes, and even to help subsidize growers of tobacco. Strict control by the court of legal fees in a class action ensures that what some have pointed to as excessive compensation to attorneys in private suits and State Attorney General settlements will not occur. Cf. Brown & Williamson Tobacco Corp., et al. v. Stanley M. Chesley, et al., — Misc. -, 749 N.Y.S.2d 842 (Sup.Ct.2002) (finding that legal fees of $1.8 billion awarded in one State Attorney General settlement were unjustified).

Fortunately there is at hand an equitable procedure in the form of the class action that permits a sensible resolution of these problems in the absence of any legislative solution. The class action — as well as the Federal Rules of Civil Procedure generally — are based upon an equity practice flexible enough to assure a fair remedy and due process even in the vexing area of tobacco litigation.

Potential plaintiffs, as a group and individually, can hardly complain about the procedure which provides a benefit that, as a practical matter, compensatory tort law is not capable of providing. Defendants have no reason to protest against a single case which discharges their total liability for punitive damages; the exact division among class members is not, for them, critical, and in fact has not been an issue in any settled or tried mass tort in the past as long as the total sum due from defendants is fair and fairly arrived at.

That the class action generally, and the particular form proposed by the representatives of the class in this case, is a departure from the traditional one-plaintiff-one-defendant individually tried case cannot be confuted. Yet, individualism yields to common interests when pragmatism suggests the former will work to almost everyone’s disadvantage. As Professor Stephen C. Yeazell, in his path-breaking study, From Medieval Group Litigation to the Modern Class Action (1987), put it (p. 2):

These decisions about representation [in class actions] are necessary because the class action forms an exception to a prevailing ethos. Anglo American law has proved to be durably, perhaps obsessively, individualistic. In numerous contexts it exalts individual choice. From ancient doctrines of property to recent developments in American constitutional law one finds expressions of the proposition that the individual is the bedrock unit both of social action and of legal thought. Much has been written in political theory, in philosophy, and in law concerning the ramifications of this individualistic tradition. But like the most great principles, this one *105 has fallen short of consistent application. Neither Anglo-American societies nor their legal systems carry individualism to its ultimate conclusion, and any account of those societies would have to deal with numerous situations in which groups performed crucial functions.

Justice Breyer, quoting then Professor Benjamin Kaplan, Reporter to the Advisory Committee that developed Rule 23, made much the same point as Professor Yeazell: “The reform of Rule 23 was intended to shake the law of class actions free of abstract categories ... and to rebuild the law on functional lines responsive to those recurrent life patterns which call for mass litigation through representative parties.” Ortiz v. Fibreboard Corp., 527 U.S. 815, 882 , 119 S.Ct. 2295 , 144 L.Ed.2d 715 (Breyer, J., dissenting). He also declared:

I cannot easily find a legal answer to the problems [of mass asbestos cases] by referring as does the majority, to “our ‘deep-rooted tradition that everyone should have his own day in court.’ ” ... Instead ... I believe our Court should allow a district court full authority to exercise every bit of discretionary power the law provides.

Id. at 868 , 119 S.Ct. 2295 (Breyer, J., dissenting).

The majority in Ortiz has described the roots of Rule 23 in equity. See 527 U.S. at 832-34 , 119 S.Ct. 2295 ; see also, e.g., In re Joint E. & S. Dist. Asbestos Litig., 878 F.Supp. 473 , 513-35 (E.D.N.Y.1995) (history of the power of the modern judge acting in equity). The Ortiz majority analysis rejecting a class settlement was in the context of a non-opt out limited fund asbestos class action where conflicts between those suffering current disabilities and possible future disabilities had not been resolved. See 527 U.S. at 852-53, 854, 857 , 119 S.Ct. 2295 . Nor had the entire available fund been tendered by defendant corporation, which was left virtually unwhipped of justice; a new virtual and arbitrary fund established only for the settlement was held to be insufficient. Id. at 821, 848 , 119 S.Ct. 2295 (“failed to demonstrate that the fund was limited except by agreement of the parties”). The majority explicitly left open application of a limited fund Rule 23(b)(1)(B) class action in other kinds of cases. Id. at 844 , 119 S.Ct. 2295 (“We do not ... decide the ultimate question whether Rule 23(b)(1)(B) may ever be used to aggregate individual tort claims.”); 862 (“we have not ruled out the possibility under the present rule of a mandatory class to deal with mass tort litigation on a limited fund rationale”); see also Joan Steinman, Managing Punitive Damages: A Role for Mandatory “Limited Generosity” Classes and Anti-Suit Injunctions?, 36 Wake Forest L.Rev. 1043, 1075 (2001) (“Neither Ortiz , nor Amchem, nor any other Supreme Court decision disallowed, or even addressed, mandatory punitive damages classes certified under Rule 23(b)(1)(B).”).

The instant case is quite different from Ortiz or its progeny. The group here, through trial of a class action, proposes to perform the vital function of helping to close the book on a terrible chapter of American medical-legal-entrepreneurial failures in abuse of tobacco.

Equity provided a pliable substantive and procedural tool to meet new problems that the rigidities of the ancient legal writ system could not solve. The substantive branch of equity has largely solidified and been absorbed in the common law and statutes. But the procedural aspect of equity remains alive and pliant. Having been embodied in the flexible Federal Rules of Civil Procedure, which are largely dominated by equity, elasticity to provide just remedies remains unimpaired. This is particularly true of the class action practice, embodied in Rule 23 of the Federal Rules of Civil Procedure, a rule that is still largely nascent. See, e.g., Edwin B. Grayer, Equity in Two Centuries Growth of American Law, 1701-1901, by Members of the Faculty of the Yale Law School, 125 (1901) (hereinafter Yale Law School) (“There has always been present a certain judicial discretion peculiar to equity.”); Jay Tid-marsh and Roger H. Trangsrud, Complex Litigation, Problems in Advanced Civil Procedure 6-7 (2002) (assumption of our modern procedural system is a strong preference for judicial discretion. “The roots of this procedure lie in the system of equity, in which substantive merit rather than procedural ni *106 cety was supposed to dictate the outcome. This preference for merit over form ____ would ensure that substantive justice was accomplished.”). Chief among modern maxims is: “equity will not suffer a wrong without a remedy” — a scintillating compulsion of American procedure and remedial law. Yale Law School at 145; see also id. at 152 (“When the tricentennial of this University shall come [as it has], the present period will probably be taken as when the amalgamation of common law and Equity into a single system ... of procedure consciously and definitely began.”). Equity can of course be subject to abuse. See, e.g., Charles Dickens, Bleak House, passim (chronicling problems in English courts of equity). Modern safeguards are in place to prevent misuse.

The remedy now proposed conforms to the sound modern pattern of procedural law designed to secure the just determination of every action. See Fed.R.Civ.P. 1.

2. Punitive Damages

Challenging developments in the area of punitive damages create legal predicaments that, in the absence of controlling statutes, can find solution in our federal equity procedures. The number and size of punitive damages has so challenged the legal system that the Supreme Court is, as already pointed out, now developing a constitutional doctrine to control them through greater court supervision. See, e.g., BMW of North America v. Gore, 517 U.S. 559 , 116 S.Ct. 1589 , 134 L.Ed.2d 809 (1996); Cooper Industries v. Leatherman Tool Group, 532 U.S. 424 , 121 S.Ct. 1678 , 149 L.Ed.2d 674 (2001).

Unrestrained and undirected overpunishment through civil litigation is the danger because “the most serious problem with the award in the BMW case was that ... the ... jury was not given instructions that would limit its discretion and ensure some predictability. ...” Cass R. Sunstein, Reid Hastie, John W. Payne, David A. Schkade and W. Kip Viscusi, Punitive Damages, How Juries Decide 244 (2002) (hereinafter How Juries Decide). In a pathbreaking empirical multidisciplinary study, How Juries Decide, the authors demonstrated that, while jurors can agree on the degree of moral and ethical failures of defendants who cause massive harm, conscientious as they are, they have no criteria or standards enabling them to translate their findings into dollar amounts. How Juries Decide, supra, at 29 (jurors cannot translate moral judgments into dollar amounts; essentially the jury is standardless as to amount of punishment). Based on this research, we can expect relatively uniform assessments of compensatory damages in tobacco cases, but widely variant punitive damages that will be appreciably higher when awarded by local juries than by juries in a national class action. How Juries Decide 1-2, 30, Ch. 2. A national punitive damages verdict will thus tend to be (a) less than the sum of local jury verdicts, id. p. 30, and (b) more readily controllable than geographically diverse local verdicts because of a greater universe of comparable decisions. See id. at 257; Geressy v. Digital Equipment, 980 F.Supp. 640, 653-60 (E.D.N.Y.1997) (expanding upon Justice Ginsburg’s opinion on controlling jury verdicts in Gasperini v. Center for Humanities, 518 U.S. 415 , 116 S.Ct. 2211 , 135 L.Ed.2d 659 (1996)).

The present case raises starkly the question of what are and should be the rationales for punitive damages in mass torts, and how they can and should be controlled to avoid over- or under-punishment in view of constitutional substantive and procedural due process limits. The compensatory phase of the jury trial plan described below can “serve as an anchor,” reducing somewhat eccentricity in punitive awards. How Juries Decide, supra, at 241. Mechanical application of a crude fixed multiplier to compensatories is hard to justify on any theory of punitive damages. Id. at 257. Judges can add somewhat to stability and predictability by greater control, though the courts too need guidance. Id. at 248-51.

Today’s punitive damages are subject to some of the same objections that Judge Marvin Frankel exposed in sentencing. See Marvin Frankel, Criminal Sentences, Law Without Order (1972). See also, e.g., Arthur W. Campbell, Law of Sentencing §§ 4.8, 4.9 (2d ed.1991, pocket part 2002). The law must be careful not to overreact to, problems with punitive damages, as it has responded to *107 Judge Frankel’s observation, by instituting a counterproductive overly Procrustean regime.

The class action now certified provides a reasonable and conservative solution consonant with legal and equitable tradition. Such a non-opt out punitive class provides an opportunity to effectively address problems of punitive damages in mass torts. The Tobacco litigation is a particularly useful vehicle because it addresses a mature tort with many cases already tried, providing some benchmarks for both compensatory and punitive damages. An immature mass litigation, where an early punitive damage class is assembled without any testing of what juries will do, does not permit the mega-analysis appropriate in this mature dispute approaching its closing stages. See generally Francis E. McGovern, Resolving Mature Mass Tort Litigation, 69 B.U. L.Rev. 659, 690-94 (1989) (defining and discussing mature actions).

B. The Instant Case

This memorandum sets out a procedure for disposing by trial claims of smokers against cigarette manufacturers for punitive damages. The primary vehicle is a class action. Third party claims by Blue Cross/Blue Shield entities, by employee insurance trusts and on behalf of the government for its medicare payments as well as related litigations are discussed in Part IV, infra.

Nationwide individual and consolidated private litigations against the United States cigarette industry have been predicated upon allegations that over many years sustained and calculated fraud by the manufacturers and organizations working with them has resulted in smoking that would have been avoided or curtailed in the absence of that deception. It is claimed that the result of this tortious conduct has been premature death and disease for millions of Americans and added expense to those entities that covered their medical payments. Two major trials over many months in this court have revealed evidence from which juries could conclude that these charges are valid, providing a possible predicate for huge compensatory and punitive damage awards.

In staunch legal defenses over many years, the industry has successfully defended most of the lawsuits against it. Now there has come to a head a series of litigations in this court and elsewhere, described below, attempting to litigate — to the extent that statutes of limitations and statutory and appellate court limitations allow — remaining claims. Plaintiffs ask the court to utilize modern procedural tools crafted from ancient remedies, designed to provide meaningful relief for huge numbers of plaintiffs claiming injuries caused by legally responsible industries. Defendants contend that each smoker’s claim must be separately litigated, making compensation for the millions they have allegedly injured proeedurally impossible.

The key to the most practicable approach to a workable litigation lies in the answer to three categories of questions — one substantive-legal, one factual and one procedural. First, substantive: is there a single applicable rule of law that governs the cases of the many allegedly harmed individuals from all the states and does it provide a basis for recovery? Second, factual: are there valid statistical approaches using the law of large numbers and available epidemiological and demographic data to avoid the need for individual fact finding for each injured person and do the facts as established provide a basis for, and amount of, damages? Third, procedural: are there procedures that will permit (a) a class action decision on total punitive damages, (b) a decision on total liability for compensatory damages by a jury, with division of the award among injured smokers on equitable grounds by the court, and (c) a class action, consolidation and other decisions to facilitate trial or other disposition?

The answers are, in general, affirmative. A viable trial and disposition of potentially millions of claims is desirable, appropriate and proper. Particularly as to procedural decisions, there are a substantial number of permutations from which the court can select those that appear most compatible with a decision on the merits, leaving alternates for selection later, should the court of appeals require reconsideration. The court is limited *108 in the alternatives it can select by the contentions of the parties. For example, as indicated in parts VI and VII, infra, it might be preferable to have the jury decide both compensatory (opt-out) and punitive (non-opt-out) damages for the class, but the plaintiffs seek only punitive damages. If plaintiffs’ theory is accepted, as this court has held that it should be, future plaintiffs in cases seeking compensatory damages will get no punitive award. The public interest in punishment will have been satisfied.

Because these litigations are so expensive, the court has recommended discretionary acceptance of appeals by the court of appeals under Rule 23(f) of the Federal Rules of Civil Procedure and expanded interlocutory consideration by that court of related issues. It recommends that these appeals and a related pending appeal in the Blue Cross case be heard on an expedited basis by the same panel of the court of appeals so that the cases can proceed promptly and, if possible, on consistent theories. Should the substantive or procedural permutation chosen by the trial court be unacceptable to the appellate court, some alternatives are set out.

If the whole universe of possible claims should be embodied in the class, including people injured in the future and passive smoke inhalation, the complaint might be expanded, but no such broadening seems to be sought by named plaintiffs or defendants. No state actions are being enjoined.

For convenience of the reader, this memorandum incorporates parts of some of the prior memoranda issued by this court in related cases. Those memoranda are referred to in the order of September 19, 2002. See 212 F.Supp.2d 57 (E.D.N.Y.2002) (listing pri- or memoranda and orders).

II. Summary

The categories of cases originally commenced in this court are: A, plaintiffs as individual smokers, or their estates, claiming injury to themselves; B, Blue Cross/Blue Shield plaintiffs claiming added costs for medical treatment of smokers; C, Union medical funds claiming added costs for medical treatment of smokers; D, Asbestos related trusts claiming added costs due to synergistic injuries resulting from the combination of smoking and asbestos exposure; E, Individuals seeking recovery for medicaid payments made by the United States; and F, Foreign entities suing for loss of taxes because of alleged “smuggling” by defendants. All categories except for A, the individual smoker class actions (Simon II) have been disposed of.

A. Options Selected

The court has certified a punitive damages class essentially as proposed by plaintiffs. The punitive damages class consists of:

All persons residing in the United States, or who were residents of the United States at the time of their deaths, who smoke or smoked Defendants’ cigarettes, and who were first diagnosed by a physician with one or more of the following diseases from April 9,1993 through the date notice to the class is ordered disseminated: lung cancer; laryngeal cancer; lip cancer; tongue cancer; mouth cancer; esophageal cancer; kidney cancer; pancreatic cancer; bladder cancer; ischemic heart disease; cerebro-vascular heart disease; aortic aneurysm; peripheral vascular disease; emphysema; chronic bronchitis; or, chronic obstructive pulmonary disease (also called chronic air flow obstruction).

The following persons are excluded from the class:

1. Persons who have obtained judgments or settlements against any or all Defendants;

2. Persons against whom any or all of the Defendants have obtained judgments;

3. Persons who are members of the certified class in Engle v. R.J. Reynolds Tobacco Co., No. 94-08273 CA-22[, 2000 WL 33534572 ] (Circuit Court of the 11th Judicial Circuit, Dade County, Florida);

4. Persons who should have first reasonably realized that they had the disease prior to April 9,1993; and

5. Persons whose diagnosis or reasonable basis for knowledge predates their use of tobacco.

*109 See Simon v. Philip Morris, 212 F.Supp.2d 57 (E.D.N.Y.2002).

This constitutes a non-opt-out “limited punishment” class action for all punitive damages allowable under the constitution and law to members of the class. The trial stages are specified in the court’s order of September 19, 2002. See id.

The possible definition of classes and subclasses has changed over the years. For example, on October 23, 2000, the court listed possible attorneys for the class and for proposed subclasses “A” to “G” in Simon II. It ordered publication of the names of the proposed counsel who were those listed in relevant complaints in cases then pending. The purpose was to determine whether any other attorneys or parties had any objection to the named counsel. No objections were received.

Since then the case has been narrowed by a variety of withdrawals of categories of complainants and by transfers. No subclasses are presently contemplated. Claims discovered in the future are not covered. Neither are passive breathers of tobacco smoke considered.

B. Possible Permutations

1. Punitive Damages

Punitive damages could be computed for residents in individual states using state law, distributing the fund by states. In the most complicated form they could be attributed to subclasses by disease in each state and administered on a state-by-state basis. They could be computed overall, taking into account variations by states, and then distributed by eliminating those states which do not allow punitive damages. They could be held available to be added on a pro-rata basis for those recovering compensatory damages in individual actions. They could be utilized for the benefit of all smokers under a form of cy-pres for treatment, monitoring, research and anti-smoking activities. The punitive damage class could be free standing, or coordinated with the compensatory class as part of a combined compensatory-punitive damage class action with or without various forms of opt-out alternatives. Other variations are possible.

2. Compensatory Damages

Compensatory damages could be computed and allocated on a state by state basis with each state’s law applied separately. States could be grouped into categories based on similarity of substantive law. A single trial on liability using one law with referral of eases to different states for computation of individual damages is possible. Allocation of compensatory damages on a matrix with some sums allocated for general cy-pres purposes as suggested for punitive damages above is another available elective. Basic liability issues could be tried for the class with a transfer of cases to the state of each member of the class for determination of individual liability and damages utilizing res judicata on issue principles. Other variations are possible.

3. Advantages and Disadvantages

One alternative considered at various stages of the litigation was a class action for “free floating” punitive damages. This route is available because punitive damages, unlike compensatory damages, need not in theory be tied to any specific monetary harm; rather, their purpose is primarily deterrence and compensation to society for uncompensated external costs of defendants’ delicts. See section VI, infra (punitive damages); John C.P. Goldberg, Twentieth Century Tort Theory, 90 Geo. L.J. (2002) (harm of allowing antisocial behavior to go uncompensated); cf. John C.P. Goldberg, & Benjamin Zipursky, Unrealized Torts, 88 Va. L.Rev. n. 62 (2002) (noting the regulatory effect of punitive damages).

The “free floating” alternative has benefits. With no need to determine compensatory damages, any trial would be less involved and burdensome, possibly minimizing difficult choice-of-law issues. It also has disadvantages. As a novel theory of law, it requires further detailed development; its potential repercussions are not known. There is literature suggesting that punitive damage awards work best when they accompany compensatory damage judgments, which may *110 provide a jury with a useful gauge of how much of an award is appropriate. Cf. Cass R. Sunstein, Daniel Kahneman, & David Schkade, Assessing Punitive Damages (With Notes on Cognition and Valuation in Law), 107 Yale L.J.2071, 2109 (1998) (suggesting that juries best determine punitive damages when they have a compensatory “anchor” to assist them).

A second option is a punitive damages class with a “generalized” finding of compensatory damages by a jury, in order to facilitate setting punitive damages. There are benefits to this approach. It may conserve judicial resources. With the jury already making the punitive determination, much of the work has been done, and it could make sense for it also to make a compensatory determination. While this procedure does involve some additional work, it is still less involved than a full trial of compensatory damages for individuals. Consequences would be more easily predicted. The award of punitive damages would have a compensatory hook, making it potentially less volatile.

This approach also has' its drawbacks. Observers might wonder, if the jury is able to go so far as to find general compensato-rios, why not allow it to award compensatory damages? The question of what to do with the compensatory determination is also challenging. Should the court award these damages? Such a course might be seen as violating rights to individual damage determinations by the jury. Yet, awards by the court dividing a set sum among many claimants have proved useful. Prior decisions in the Agent Orange, Daikon Shield and Holocaust litigations, for example, have appropriately distributed damage awards through court fixed and administered schemes. The complex methods of providing a fair plan for distributing funds, finding the persons entitled to payment, and ensuring that beneficiaries receive awards promptly is illustrated in documents in those cases. See, e.g., Special Master’s Proposed Plan of Allocation and Distribution of Settlement Proceeds, Volumes 1 and 2, In re Holocaust Victim Assets Litigation, Case No. CV 96-4849 (E.D.N.Y. Sept. 11, 2000) (ERK)(MDG) (consolidated with CV 96-5161 and CV 97-461) (Judah Gribetz, Special Master); Final Report of the Special Master on the Distribution of the Agent Orange Settlement Fund, MDL No. 381, Sept. 1997 (Deborah Greenspan, Special Master).

A third approach would be a plain vanilla class action' — a compensatory opt-out class, with a punitive component. Little new legal theory would be needed, making the approach appealing. Punitive damages would be manageable, since they could be related to actual, determined and awarded compensatory damages; they might be easier to calculate than free floating punitive damages. This approach also has problems. A large number of opt outs could cause problems, particularly in placing a constitutional cap on punitive damages. In addition, compensatory damages are often more fact-specific, necessitating a more lengthy and complicated trial. It could be necessary to divide the compensatory class into appropriate subclasses. And, since individual compensatory awards would be granted, more difficult choice of laws analysis might be presented.

Each of these permutations could provide for either an opt-out or a non-opt out type class. The decision on whether any class would be opt out or non-opt-out is also complicated.

Disallowing any opting out has the great advantage of permitting a punitive class to proceed on a limited punishment theory; punitive damages, with their constitutional cap, are a type of limited fund. This would allow the court to determine punitive damages once, for the vast majority of possible claimants, based on fraud by tobacco companies. The res judicata effect of any judgment would be addressed by this and other courts.

A comprehensive punitive class would not create substantial intra-class conflicts. Adequate instructions and control by the court should permit the jury to assess proportionate shares based on well established demographic and epidemiological criteria.

Allowing opting out obviates much of the need for a novel legal theory. It creates problems of its own. It becomes more important to calculate appropriate actual and potential offsets from any award. Calculation *111 of offsets, if that is necessary, may be difficult and implicate choice-of-law and the laws of various states, adding to complexity. Moreover, if opt-outs are allowed, there is a less compelling case for adjudicating the punitive damages, since the determination may not resolve the constitutionally driven issue globally.

The decision on choice of laws presents another series of alternatives. The court could apply New York law. This may be justified since the tobacco harm originated in fraud primarily centered in New York. Such a course, however, might seem to violate other states’ interests. Respecting those states’ interests might require choice-of-law analysis. This could result in fifty different types of damage calculations, though probably states could be placed into groups which have similar laws. Relying on statistical modeling would simplify the task but would require application of a relatively new process.

In the event of certification of a compensatory class, choice of laws principles of depe-cage might appropriately be used. For example, the court might determine liability according to the laws of New York, and then damages according to the law of a class member’s forum state.

Another alternative would be to engage in a master trial followed by series of mini-trials similar to those envisaged for the Engle case.

None of the various alternatives seems decisively more attractive than the one chosen by plaintiffs. It was declared viable in the certifying decision of September 19.

III. Facts

Set out below are some of the allegations relied upon by plaintiffs. While the court makes no factual findings, evidence introduced in two major trials and many motions suggest that there is ample basis for a trier of fact to find the relevant allegations of plaintiffs true; the discussion therefore proceeds as if, as a basis for the certification decision, facts alleged are established. The statements in this and other sections which follow are largely culled from references to the facts and the evidence in previous memo-randa of the court without specific attribution. See, e.g., Falise v. The American Tobacco Co., 94 F.Supp.2d 316 (2000); Blue Cross v. Philip Morris, 113 F.Supp.2d 345 (E.D.N.Y.2000). Citations to the factual record are available in these opinions and the transcripts of the trials.

A. Physical Effect of Tobacco

Cigarette smoke contains hazardous levels of over 40 known chemical carcinogens. The carcinogenic agents in cigarette smoke include: arsenic, benzine, cadmium, chromium VI, vinyl chloride, and nickel. These materials are inhaled into the lungs of smokers, substantially contributing to premature morbidity and mortality for many of those exposed. In addition to the diseases caused directly by smoking, the pervasive effect of degeneration of smokers’ main body systems leads to increased healing complications in treatment of injuries not directly caused by smoking, such as broken bones in an auto crash.

Medically recognized harms caused by smoking are generally conceded. Smoking causes some forms of lung cancer, and increases the likelihood of cancer due to other substances such as asbestos. Pulmonary diseases such as bronchitis and emphysema are traced to smoking. Smoking leads to tens of thousands of deaths annually from cardiovascular diseases such as strokes, heart attacks, peripheral vascular disease, and aortic aneurysms. Smoking can. also lead to cancer of the kidneys, bladder, brain, larynx, mouth, esophagus, stomach, pancreas, uterus, cervix, and colon. It can cause reproductive problems such as reduced fertility, increased rates of miscarriages and stillbirths, retarded uterine fetal growth and lowered infant birth weight.

The toll from smoking-related diseases is enormous. Statistics from the Centers for Disease Control indicate that annually cigarette smoking leads to premature deaths of more than 400,000 Americans. This figure exceeds the combined totals for deaths resulting from automobile accidents, AIDS, alcohol, illegal drugs, homicide, suicide, and fires. Smoking-related illnesses have accounted for one out of every five deaths each *112 year in the United States, making cigarette smoking the leading cause of premature death in the United States. The Supreme Court has said that “one of the most troubling public health problems facing our Nation today” is “the thousands of premature deaths that occur each year because of tobacco use.” See Food and Drug Admin, v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 125 , 120 S.Ct. 1291 , 146 L.Ed.2d 121 (2000). Other mass health disasters such as those attributable to asbestos are relatively insignificant compared to the calamity brought about by tobacco use. Cf. In re Joint E. & S. Dist. Asbestos Litig., 129 B.R. 710, 736 (E.D.N.Y.1991). According to the Centers for Disease Control, smoking costs the nation $150 billion per year in health care costs and lost productivity, or $3000 per smoker. See Erin McClam, CDC Estimates Cost of Smoking, Newsday, Apr. 11, 2002.

Compared to those people who never smoke, current smokers are almost 15 times more likely to develop lung cancer, 12.7 times more likely to develop chronic obstructive pulmonary disease, 7.5 times more likely to develop esophageal cancer, 4.1 times more likely to suffer Ischaemic Heart Disease, 2.2 times more likely to develop pancreatic cancer, and 1.4 times more likely to sustain a cerebral hemorrhage. See Doll, et al., Mortality in Relation To Smoking: 40 Years Observations On Male British Doctors, 309 British Medical J. 901-11 (1994). All told, carcinogenic chemicals inhaled by persons smoking defendants’ products have been linked to 85% of all lung cancers, 80% of deaths from all pulmonary diseases, and 30% of all deaths from other cancers. See, e.g., J.M. McGinnis & W.H. Foege, Actual Causes of Death in the United States, J. of Am. Med. Assoc. 2707-12 (1993).

As anti-smoking measures, such as increased taxes, increased no-smoking areas, limits on youth’s smoking, anti-smoking advertising, and social disapproval take hold, deaths and illnesses caused by smoking is expected to decline. See, e.g., New York Times, Anti Smokers are Set Back by Success, April 3, 1994, at 13 (a study by the California Department of Health Services found that five years of intensive anti-smoking campaign led to triple the normal rate of quitting smoking).

Nicotine is the primary ingredient in cigarettes leading to continued use. It creates the “smoking high” smokers experience while progressively addicting them to cigarettes. It has been recognized as addictive by the Food and Drug Administration, the Surgeon General’s Office, the World Health Organization and the American Medical Association. Once in the blood stream, nicotine is carried almost immediately to the brain where it initiates a series of bio-chemical reactions that alter mood and produce feelings of both sedation and stimulation. It also activates the transmission of a natural chemical, dopamine, that generates pleasurable body sensations, ultimately creating a craving for nicotine. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 , 120 S.Ct. 1291, 1319-20 , 146 L.Ed.2d 121 (2000) (Breyer, J., dissenting) (describing physiological reactions resulting from nicotine use). Cigarettes have been characterized as a highly efficient system of delivering nicotine to the body. As its effects wear off, the smoker reaches for another cigarette in order to maintain the craved level of nicotine.

So powerful is the force of nicotine that, in its absence, the addicted smoker suffers symptoms of physical withdrawal, including headaches, constipation, insomnia, depression, inability to concentrate and anxiety. According to the Surgeon General of the United States, nicotine addicts in much the same way as does heroin and cocaine. Many smokers are unable to quit until they suffer a heart attack or contract lung cancer, and even then, of those who survive the ordeal approximately one-half will return to smoking.

Smoking sharply increases the risks and severity of asbestos-related diseases. The combined synergistic effect of tobacco use and asbestos exposure on human health is far greater than the sum of their individual effects. Epidemiological studies demonstrate this effect. Such “studies seek to identify the patterns of disease occurrence in populations and factors which influence those patterns.” Nancy Lee Firak, The Developing Policy Characteristics of Cause In Fact: Al *113 ternative Forms of Liability, Epidemiological Proof and Trans Scientific Issues, 63 Temp. L.Rev. 311, 328 (1990) (internal quotation marks omitted). There is a statistically significant correlation between asbestos-diseases and combined exposure to asbestos and tobacco smoke. For example, Dr. Piero Mustacchi concluded in 1996 that the incidence of lung cancer from combined asbestos-smoking exposure was 53 times that normally occurring in unexposed populations, and over 10 times that occurring in nonsmokers who were occupationally exposed to asbestos. See Piero Mustacchi, M.D., Lung Cancer Latency and Asbestos Liability, 17 J. Legal Med. 277 , 280-97 (1996) (study conducted on 17,800 North American insulators and asbestos workers over a twenty-year period).

Unlike other drugs, some of which are harmful, tobacco has little beneficial therapeutic value. The Supreme Court has stated bluntly that “cigarettes and smokeless tobacco are an unsafe means to obtaining any pharmacological effect.” Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 142 , 120 S.Ct. 1291 , 146 L.Ed.2d 121 (2000) (emphasis in original).

Though passive smoking claims are not at issue in this ease, it is worth noting that extensive literature demonstrates the harm caused by non-smokers inhaling tobacco smoke. See generally In re Julie Anne, 121 Ohio Misc.2d 20 , 2002-Ohio-4489 , 780 N.E.2d 635 (Com.Pl.2002), Court of Common Pleas, Juvenile Division, Lakewood, Ohio, August 27, 2002 (collecting extensive literature on harm caused by secondhand smoke, including studies by the Surgeon General, the World Health Organization, and the Environmental Protection Agency); Editorial, Smoking Looks Even Worse, New York Times, June 24, 2002, at 18 (citing reports and studies); Chicago Tribune, Secondhand Smoke Sharply Increases Risk of Stroke, Chicago Tribune, August 18,1999, at 19 (citing study that secondhand smoke can increase chances of stroke by 82%); “Passive Smoking May Harm Fertility,” BBC, Sept. 29, 2000, available online at http://news.bbc.co.uk/Vhi/ health/947246.stm. Tobacco smoke has similar deleterious effects on many kinds of animals. See, e.g., Vicki Croke, Where There’s Smoke, There’s Danger for Kitty, Boston Globe, Aug. 24, 2002, at Cl (reporting on study linking secondhand smoke to feline cancer).

Econometric and other models which satisfied Daubert requirements introduced at the Blue Cross trial demonstrated that the health care costs to treat illness associated with smoking are huge. According to plaintiffs witness Dr. Wendy Max, one plaintiff alone, Empire Blue Cross, incurred some $750 million in added costs from treating smoking caused disease since 1994. Dr. Glenn Harrison testified that the figure is even higher when the costs associated with treating smokers for non-smoking caused illness were taken into account. Using an econometric model, he testified that the total economic damages to Empire since 1994 were almost one billion dollars. (The jury, however, only found damages under twenty million). His calculations showed that a person whose respiratory or cardiovascular system is weakened by smoking would, in general, respond less readily to treatment for other diseases. The fact that a particular smoker might heal more readily than a particular nonsmoker is not decisive; the law of large numbers eliminates the effect of such discrepancies or anomalies. See also K.E. Warner, T.A. Hodgson, & C.E. Caroll, Medical Costs of Smoking in the United States: Estimates, Their Validity, and Their Implications, 9 Tobacco Control, 290-300 (1999) (applying econometric model); J.C. Bartlett, L.S. Miller, D.P. Rice, W. Max, Medical Care Expenditures Attributable To Smoking: United States, 43 Morbidity and Mortality Wkly. Rep. 469-72 (1994) (applying econometric model).

The introduction of such statistical models is proper even when all models do not provide exactly the same result. See Blue Cross & Blue Shield of N.J. v. Philip Morris Inc., No. 98 CV 3287, 2000 WL 1738338 at *l-*3 (E.D.N.Y. Nov.1, 2000) (finding both models comply with Daubert); cf. Girden v. Sandals Int’l, 262 F.3d 195, 199 (2d Cir.2001) (“For purposes of admissibility it is not required that a witness’s account of an event be *114 consistent with the same witness’s other accounts of the same event.”).

The evidence supports the conclusion that extra costs result from treating smokers for diseases not caused directly by smoking. Supporting testimony in Empire Blue Cross was based on reliable medical records. Experts were highly qualified to testify; their models were subject to extensive Daubert hearings and determined to be consistent with sound scientific norms. See Blue Cross v. Philip Morris, 178 F.Supp.2d 198, 247-49 (discussing appropriateness of statistical evidence for trial). While the court was in a position to consider a subclass for this kind of claim, the plaintiffs did not seek such compensation.

The court suggested that the class not be divided into subclasses for passive smokers or to cover those who would suffer diseases in the future. These groups would have complicated the case. The plaintiffs’ class definition excludes these possible subclasses.

B. Industry Conspiracy

1. Formation and Execution

While the most persuasive evidence of defendants’ wrongdoing pertains to years up to the early 1990s, evidence of its illegal activities continued well beyond any statute of limitations bar. This was particularly true with respect to misleading smokers about the favorable effects of smoking “light” cigarettes. Many smokers who switched to lighter tar and nicotine cigarettes changed their smoking habits to obtain the amount of nicotine they were used to. This resulted in deeper and more dangerous inhaling of cigarette smoke. The earlier illegal activities were evidence of later continuing conspiracies and misleading practices.

Plaintiffs allege, and can provide supporting evidence, that, beginning with a clandestine meeting in December 1953 at the Plaza Hotel in New York City among the presidents of Philip Morris, R. J. Reynolds, American Tobacco, Brown & Williamson, Lorillard and U.S. Tobacco, tobacco companies embarked on a systematic, half-century long scheme to (according to the complaint and evidence in the Blue Cross litigation):

(a) stop competing with each other in making or developing less harmful cigarettes; (b) continue knowingly and willfully to engage in misrepresentations and deceptive acts by, among other things, denying knowledge that cigarettes caused disease and death and agreeing not to disseminate harmful information showing the destructive effects of nicotine and tobacco consumption; (c) shut down research efforts and suppress medical information that appeared to be adverse to the Tobacco Companies’ position that tobacco was not harmful; (d) not compete with respect to making any claims relating to the relative health-superiority of specific tobacco products; and (e) to confuse the public about, and otherwise distort, whatever accurate information about the harmful effects of their products became known despite their “[efforts to conceal such information.]”

Blue Cross Compl. ¶ 1104; see also Falise v. American Tobacco Co., 94 F.Supp.2d 316, 329-33 (E.D.N.Y.2000).

This meeting was called in response to a series of epidemiological and toxicological reports linking tobacco consumption with lung cancer. See also Kenneth R. Foster, David E. Bernstein, & Peter W. Huber, Phantom Risk: Scientific Inference and the Law 4 (1994) (“Epidemiologic studies by Doll and Hill (1952) conducted in the early 1950s strongly indicated that a pack-a-day smoker has a tenfold higher chance of developing lung cancer than a nonuser.”); see generally David L. Faigman, David H. Kaye, Michael J. Saks, & Joseph Sanders, 2 Modem Scientific Evidence: The Law and Science of Expert Testimony §§ 27-1.0 to 28-2.4 (1997) (epidemiological studies and toxicological studies); Linda A. Bailey, Leon Gordis and Michael Green, Reference Guide on Epidemiology, in Federal Judicial Ctr., Reference Manual on Scientific Evidence 121 (1994) (hereinafter Reference Manual 1991); Bernard D. Goldstein and Mary Sue Henifin, Reference Guide on Toxicology, in Reference Manual 1991, supra, at 181. These studies threatened dramatic reduction in tobacco product sales and industry stock prices.

*115 To carry out their conspiracy to mislead as to health risks of smoking, Philip Morris, R.J. Reynolds, Brown & Williamson, American Tobacco, Lorillard and U.S. Tobacco— with the assistance of the New York-based public relations firm of Hill and Knowlton— formed the Tobacco Industry Research Committee (“TIRC”) in January 1954. Renamed the Council for Tobacco Research (“CTR”) in 1964 when Liggett became a member, it was designed and operated to create the false impression that defendants were carrying out “objective, independent, and unbiased” research into the health effects of tobacco consumption, all the while actually “conducting] a campaign of deceit, misrepresentation and misinformation ... about the [real] health risks of smoking.”

In support of their claims that the TIRC, and later the CTR, were integral to the alleged conspiracy to deceive the public, plaintiffs in other trials relied heavily on the “Frank Statement to Cigarette Smokers,” a joint statement by five of the tobacco manufacturers. It was published in newspapers in virtually every city with a population of 50,-000 or more, reaching more than 43 million Americans out of a population at the time of approximately 150 million. Signed by the presidents of the defendant tobacco manufacturers, it denied that cigarette smoking was hazardous to health and promised that the tobacco industry would conduct independent research to address questions surrounding smoking and disease. It explicitly announced that:

— Recent reports on experiments with mice have given wide publicity to a theory that cigarette smoking is in some way linked with 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.

— [T]here is no proof that cigarette smoking is one of the causes of lung cancer.

— [Tobacco companies] always have and always will cooperate closely with those whose task it is to safeguard the public health.

— [Tobacco companies are] pledging aid and assistance to the research effort into all phases of tobacco [product] use and health.

— For this purpose [tobacco companies are] establishing a joint industry group____This group will be known as “TOBACCO INDUSTRY RESEARCH COMMITTEE.” (capital letters in original).

— 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.

It is plaintiffs’ contention, supported by evidence, that tobacco companies intended the public to rely upon the reports, research, and communications of the TIRC — and the companies generally — in assessing the dangers of tobacco use. As support for their allegation that the TIRC was never intended as the objective research council advertised, plaintiffs have relied on disclosures in internal documents such as the following: ■

— [TIRC] was set up as an industry shield in 1954. That was the year statistical accusations relating smoking to diseases were leveled at the Industry; litigation began; and the Wynder/Graham reports were issued. [TIRC] has helped out legal counsel by giving advice and technical information, which was needed at trials .... [T]he public relations value of [TIRC] must be considered and con-tinued____ It is very important the industry continue to spend their [sic] dollars on research to show that we don’t agree that the case against smoking is closed.;

— Historically, the joint industry funded smoking and health research programs have not been selected against specific scientific goals, but rather for various purposes such as public relations, political relations, position for litigation, etc____ In general, these programs have provided some buffer to public and political attack of the *116 industry, as well as background for litigious [sic] strategy.;

—• To date, the TIRC program has carried its fair share of the public relations load in providing materials to stamp out brush fires as they arose. While effective in the past, this whole approach requires both revision and expansion. The public relations program ... was like the early symptoms of diabetes — certain dietary controls kept public opinion reasonably healthy. When some new symptom appeared, a shot of insulin in the way of a news release ... kept the patient going.; and

— For nearly twenty years, this industry has employed a single strategy to defend itself on three major fronts— litigation, politics, and public opinion. While the strategy was brilliantly conceived and executed over the years helping us win important battles, it is only fair to say that it is not — nor was it intended to be — a vehicle for victory. On the contrary, it has always been a holding strategy, consisting of creating doubt about the health charge without actually denying it.

To complement the fraudulent efforts of the TIRC and CTR, defendants in 1958 formed The Tobacco Institute (“TI”) — a New York non-profit corporation that operated in New York and Washington, D.C. — as a lobbying arm for the industry. In 1969, U.S. Tobacco, the largest manufacturer of smokeless tobacco products in the United States, formed a third organization, The Smokeless Tobacco Council, Inc. (“STC”), as a propaganda and lobbying agent. Though ostensibly focused on protecting the interests of smokeless tobacco manufacturers, plaintiffs allege, with supporting evidence, that STC operated in conjunction with the tobacco industry generally, receiving financial support from Brown & Williamson, Lorillard and R. J. Reynolds.

When significant medical research indicated a statistical relationship between smoking and cancer in the early 1940s and 1950s, defendants embarked on a campaign to discredit this research and reassure the public that their products were safe. Defendants recognized that the publication in the early 1950s of retrospective epidemiological studies showing a link between smoking and lung cancer, as well as mouse skin painting studies that confirmed the results of earlier research, and threatened cigarette sales and tobacco stock prices. See generally David L. Faigman, David H. Kaye, Michael J. Saks, & Joseph Sanders, 2 Modern Scientific Evidence: The Law and Science of Expert Testimony §§ 27-1.0 to 28-2.4 (1997) (epidemiological studies and toxicological studies); Michael D. Green, D. Michal Freedman, & Leon Gordis, Reference Guide on Epidemiology, in Federal Judicial Ctr., Reference Manual 333 (2000); Bernard D. Goldstein and Mary Sue Henifin, Reference Guide on Toxicology, in Reference Manual 1994 at 181. Documents prepared by Hill & Knowl-ton, a representative of the tobacco industry, reveal:

As another indication of how serious the problem is, the officials stated that salesmen in the industry are frantically alarmed and that the decline in tobacco stocks on the stock market has caused grave concern

This is, of course, the most challenging problem our organization has ever faced- and perhaps the most challenging problem that ever faced a great industry, one with annual sales of almost 5 billions [sic] at retail, and with economic roots that réaeh clear back to the farm.

To meet the “grave nature” of this threat, the evidence suggests, defendants developed a joint plan to rebut the mounting proof indicating that cigarettes were hazardous and to reassure the American public that the defendants would assume responsibility for bona fide research to determine whether smoking was dangerous to health:

The underlying purpose of any activity at this stage should be reassurance of the public through wider communication of facts to the public. It is important that the public recognize the existence of weighty scientific views which hold there is no proof that smoking causes cancer.

Statements of defendants’ good faith were belied by internal documents from the de *117 fendants’ own scientists suggesting that they possessed significant proof of the causal relationship between smoking and disease, contradicting their denials. The incongruity between defendants’ public statements and internal documents lasted from the 1950s into the late 1990s.

2. Public statements from the 1950s to the present

The evidence supports the inference that in public speeches, press releases, stockholder reports, television interviews, scientific studies, and letters to consumers and potential smokers, the defendants consistently denied the causal relationship between smoking and disease and argued to the public that more research was needed before a finding of danger was justified. In May 1957, George Weissman, vice president of Philip Morris, stated:

Being as close to the picture as we are, we know that most of the attack is a lot of sound and fury. Without rehashing the arguments I’ll merely assert that there’s not one shred of conclusive evidence to support the link between cigarette smoking and lung cancer, certainly a lot less than the evidence concerning the inhalation of exhaust fumes from the automobiles driven around New York City and the smog fumes in Los Angeles.

The Tobacco Information Committee, an arm of the TIRC, issued bi-monthly newsletters and press-releases to doctors, public health officials and members of the public. Early resulting publicity by tobacco companies in the 1950s and 1960s included statements that cast doubt on ties between smoking and cancer. Statements included: “Six experts state doubts on smoking-cancer theory” (1957); “Study suggests that bronchitis may be the prime factor in lung cancer” (1958); “Many Scientific Reports Show Uncertainties, Doubts About Causation of Lung Cancer” (November-December 1959); “Smoker’s Personality Key To Cancer” (October 1960); “Lung Cancer Rare in Bald Men” (March-April 1964); “Genetic Factors Affect Heart, Lung Syndromes. Smoking Is Probably Not Associated With Coronary Disease.” (Winter 1967-68).

Deliberately misleading materials promulgated by tobacco companies appeared all over the country in various forms. In a 1964 press release, George Allen on behalf of the defendants stated:

If there is something in tobacco that is causally related to cancer or any other disease, the tobacco industry wants to find out, what it is and the sooner the better

Research to date has not established whether smoking is or is not causally involved in such diseases as lung cancer and heart disease, despite efforts to make it seem otherwise. The matter remains an open question — for resolution by scientists.

In 1969, the American Tobacco Company mailed to more than 140,000 of its share holders a booklet entitled “The Cigarette Controversy.” The accompanying press release concluded:

Despite the volume and virulence of anti tobacco propaganda, the cold fact remains that no clinical or biological evidence has been produced which demonstrates how cigarettes relate to cancer or any other disease in human beings.

In 1969, representatives of the defendants published “The Cigarette Controversy Eight Questions and Answers,” which stated in part:

For many adults, cigarette smoking is one of life’s pleasures. Does it cause a difference-even death. No one knows.

The case against smoking is based almost entirely on inferences drawn from statistics and no causal relationship has actually been established. Many respected scientists find that cigarette smoking has not been shown to cause any human disease.

From these developments have come many public warnings:

“Don’t smoke.” “Stop smoking.” A concerned public needs the truth about smoking and health. This requires that both sides of the controversy must be known. Statistics are not enough. If smoking does cause disease, “why has it not been proved, after 15 years of intensive research, how this occurs?”

*118 Does smoking cause disease? That question is still an open one.

That same year, representatives of Brown & Williamson stated in the advertising copy for “Project Truth”:

Ten years ago, there was a cancer scare over the wax in milk cartons. And over using iodine to get a suntan. These theories are about as valid as the one that says toads cause warts.

And they’re about as valid as today’s scare tactics surrounding cigarettes. Because no one has been able to produce conclusive proof that cigarette smoking causes cancer. Scientific, biological, clinical or any other kind.

According to an internal document produced from the files of defendant Liggett Group that discusses the defendants’ response to the 1964 Surgeon General report critical of smoking, the approach of the tobacco industry was to speak on these issues in a united voice:

It is considered to be of prime importance that the industry maintain a united front and that if one or more companies were to conduct themselves as a matter of self interest, particularly in advertising, obvious vulnerability would be the result.

Public pronouncements continued into the 1970s, 1980s, and 1990s. In anticipation of the 1979 Surgeon General Report on Smoking and Health, which defendants knew would be adverse to them, representatives of the defendants released, “Smoking and Health: The Continuing Controversy.” The 168 page text included the following statements:

Indeed, many scientists are becoming concerned that the preoccupation with smoking may be both unfounded and dangerous. Unfounded because evidence on many critical points is conflicting. Dangerous because it diverts attention from other suspected hazards ...

Scientists have not proven that cigarette smoke or any of the thousands of constituents as found in cigarette smoke cause human disease....

Examples of such post 1980 denials also included statements widely disseminated through television, conferences, and letter campaigns. Among them are the following material submitted in the Blue Cross case:

— On October 20, 1983, Tobacco Institute spokesperson, Anne Browder, referring to smoking causation, told a national audience on the ABC program “20/20”: “The case is still open. The jury has not come in.”

— The next year, the Tobacco Institute published a pamphlet, entitled, “The Cigarette Controversy: Why More Research Is Needed,” which stated: There is a cigarette controversy. “The causal theory — that' cigarette smoking causes or is the cause of the various diseases with which it is reported to be related statistically — is just that, a theory.”

— On May 16, 1988, the Tobacco Institute published a press release titled, “Claims That Cigarettes Are Addictive Contradict Common Sense,” which stated: “Smoking is a truly personal choice which can be stopped if and when a person decides to do so.”

—• In a January 11,1989 interview on the ABC program, “Good Morning America,” Tobacco Institute representative Brennan Dawson stated the following on behalf of the tobacco industry: “[T]he causative relationship has not been established ... I can’t allow the claim that smoking is addictive to go unchallenged.... It’s a matter of willpower.”

— Walker Merryman, Vice President of Tobacco Institute, wrote the following in an article published on April 27, 1989, in the Washington Times: “The difference between cigarette smoking and true addictions to hard drugs is stark and compelling.”

— In 1992, Philip Morris published a pamphlet entitled, “Tobacco Issues and Answers,” that stated: “Those who term smoking an addiction do so for ideological, not scientific reasons.”

*119 — On April 15, 1994, the day after its and other CEOs from the industry testified before Congress that smoking was not addictive, Philip Morris placed an advertisement in the New York Times that stated: “Fact: Philip Morris does not believe smoking is addictive.”

Letters were sent to consumers all across the country, including many New York residents. Articles like the “Continuing Controversy” written in the 1970s denying causal connection between smoking and cancer were re-circulated in mailings after 1980. Letters included the following statements:

— Despite all the research going on, medical science has not found any conclusive evidence that any element in cigarettes, tobacco, or tobacco smoke causes human disease.

— We firmly believe that cigarettes have been unfairly blamed as a cause of human disease.

— With the numerous attacks being made on smoking, it is indeed refreshing to read a letter such as yours and to be reassured that not everyone has accepted without question the adverse publicity the tobacco industry has received ... Throughout the years, the public has received a largely one-sided view of the questions that have arisen about tobacco ... Through a series of messages appearing in national newspapers and magazines, we are attempting to provide our side of such public issues as ... passive smoking, smoking courtesy and smoking and health.

■— [I]n the absence of the identification of the processes or mechanisms involved in cancer causation, together with experimental animal evidence which raises questions regarding causation, we believe that scientific proof that cigarette smoking causes chronic diseases in humans is still lacking.

Communications reached elementary school teachers and principals. A 1990 form letter responding to inquiries from fifth grade students at a New York elementary school reads in relevant part:

[T]he 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 smoking and health questions — and the fundamental causes of the diseases often statistically associated with smoking — we believe can only be determined through much more scientific research.

These communications were part of a general policy for the 1980s and beyond. • A summary of plans in conference titled “Marketing in the 80’s” stated “Overall marketing policy will be such that we maintain faith and confidence in the smoking habit, whether brand choice is traditional or not in particular markets. This means that B.A.T. [a British holding company] will not remain on the defensive, by simply reacting to alleged ‘health’ hazards and related competitive challenges: instead we shall actively seek out all worthwhile prospects for brand and product reassurance in marketing throughout the world.”

3. Knowledge from the 1950s to the present

Although the representatives of the defendants continued to release public statements and reports suggesting that smoking neither caused adverse health effects nor was addictive — as well as to finance purported research to support these inappropriate claims — evidence demonstrated that defendants knew the contrary to be true: that smoking is both lethal and addictive.

Internal documents from defendants indicate that through independent company research and the sharing of this research through the TIRC and CTR, each of the major tobacco product manufacturers was aware that tobacco contributed to lung cancer. For example, a 1956 confidential memorandum from a Philip Morris Vice President of Research and Development to top executives at the company regarding the advantages of “ventilated cigarettes” stated: “Decreased carbon monoxide and nicotine are related to decreased harm to the circulatory system as a result of smoking .... [D]e- *120 creased irritation is desirable ... as a partial elimination of a potential cancer hazard.”

Similarly, a British American Tobacco Company (BATCo) document produced in 1958 following a series of meetings between BATCo representatives and twenty American scientists and researchers — including at least nine representatives of the tobacco companies and the Scientific Advisory Board of TIRC — stated that all of the tobacco company researchers with whom they met in the United States (and all but one of the outside people) “believed that smoking causes lung cancer” and noted that there was “general acceptance [among the group] that the most likely means of causation is that tobacco smoke contains carcinogenic substances present in sufficient quantity to promote lung cancer when acting for a long time in a sensitive individual.” That same year, a Philip Morris Vice President of Research, who later joined its Board of Directors, stated in a confidential internal memorandum that “the evidence ... is building up that heavy cigarette smoking contributes to lung cancer either alone or in association with physical and physiological factors.” A 1963 confidential internal memorandum from Lig-gett’s research consulting firm admitted: “Basically we accept the inference of a causal relationship between the chemical properties of ingested tobacco smoke and the development of carcinoma ...”

In addition to knowing that smoking is linked to lung cancer, it can be concluded that defendants were aware of other major deleterious health effects caused by smoking, including bronchitis, emphysema, and cardiovascular disease. Supporting this contention, plaintiff in Blue Cross introduced among other documents the following excerpts from internal company materials:

— A 1963 confidential memorandum to Philip Morris’s President and CEO describes components of cigarette smoke as “known carcinogens” and states: “Irritation problems are now receiving greater attention because of the general medical belief that irritation leads to chronic bronchitis and emphysema. Emphysema is often fatal either directly or through other respiratory complications. A number of experts have predicted that the cigarette industry ultimately may be in greater trouble in this area than in the lung cancer field.”

— An internal memo produced for a B.A.T. Group Conference (e.g., BAT-Co, Brown & Williamson, and other subsidiaries of B.A.T. Industries) in November 1970 that states “nicotine may be implicated in the aetiology of cardiovascular disease.”

Defendants understood at least for the past four decades that many smokers continue to smoke not by choice, but because of nicotine addiction. The evidence includes confidential BATCo documents related to BATCo’s “Project Hippo” that indicate that at least as early as 1962 defendants were aware of the physiological and pharmacological effects of nicotine. Copies of Project Hippo reports were circulated to TIRC, BATCo, Brown & Williamson, and R.J. Reynolds.

A 1963 memorandum written by Addison Yeaman, General Counsel at Brown & Williamson, concludes by stating that the company is “in the business of selling nicotine, an addictive drug.” Similarly, a 1978 internal Brown & Williamson memorandum acknowledges that “very few consumers are aware of. the effects of nicotine, i.e., its addictive nature and that nicotine is a poison.” Evidence that tobacco companies were aware of nicotine’s addictive properties is incorporated in a 1972 report by Philip Morris presented at a CTR conference; it states:

— [N]icotin’e is the active constituent of cigarette smoke;

— Without nicotine ... 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.;

*121 — 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.

Other internal memoranda suggest that the defendants knew that nicotine addiction could lead smokers of low-tar cigarettes to compensate, that is take longer and deeper puffs of cigarettes or to smoke more until the health benefits of these marketed products became negligible. A 1976 Lorillard memorandum stated:

The consensus of opinion derived from a review of the literature on the subject indicates the most probable reason for the addictive properties of smoke is nicotine. Indications are that the smoker adjusts his smoking habits to satisfy the desire for nicotine, either by frequent or large puffs on the cigarette, or smoking a large number of cigarettes.

Another inside document says, “given a cigarette that delivers less nicotine than he desires, the smoker will subconsciously adjust his puff volume and frequency, so as to obtain and maintain his per hour, per day requirement for nicotine____”

All the while the TIRC, CTR, and TI continued to release public statements and reports indicating smoking neither caused adverse health effects nor was addictive — as well as to finance research to support these claims — defendants in fact knew that the contrary was true: that smoking is both lethal and addictive, that it contributed not only to lung cancer but to harm to the circulatory system.

4. Coverup

Despite knowing that tobacco use is injurious and addictive, evidence suggests that defendants — in part through the efforts of the TIRC, CTR, TI and STI — intentionally engaged in a campaign of deceit, misrepresentation and misinformation directed at misleading the public about the health risks and addictiveness of smoking.

Efforts undertaken by defendants to hide this information include what is suggested as the termination and destruction of Philip Morris research regarding nicotine’s addictive properties. For example, in the early 1980s researchers working at a Philip Morris laboratory in Richmond confirmed that nicotine demonstrated addictive qualities and that the laboratory research animals self-administered the substance by pressing levers to obtain nicotine. Less than a year after a briefing to top Philip Morris executives on these findings by the director of the research, Dr. Victor J. DeNoble, Philip Morris representatives instructed the researchers to stop work, to kill all the laboratory animals, to turn in their security badges, and to withdraw a paper on the addictive qualities of nicotine that had been accepted for publication by a scientific journal. Philip Morris then closed the laboratory, and discharged the researchers, requiring them to agree to remain quiet about their work with the sanction of legal action if they published their findings.

Plaintiffs can also point to confidential research conducted by Brown & Williamson’s British affiliate on behalf of Brown & Williamson. In the course of this research, Brown & Williamson suppressed confidential findings of a “causal relation” between ZEPHYR, Brown & Williamson’s code name for cancer, and tobacco smoking.

As part of the central role the TIRC and CTR played in defendants’ deceptive coverup, TIRC established a “Special Projects” division where research revealing the dangers and addictiveness of smoking was secreted from the public and concealed from discovery in litigation. A1970 advertisement placed in newspapers around the nation by the TIRC at the direction of tobacco companies claimed that there was no known link between cigarettes and disease despite, according to the advertisement, decades of “totally independent research.” A public statement in 1982 by Edward A. Horrigan, Jr., then Chairman of the Executive Committee of the TI, claimed:

After three decades of investigation and millions of dollars invested by the government, the Tobacco Industry and private *122 organizations, the smoking and health controversy remains unresolved. The net result of all of this effort has been that no causal link between smoking and disease has been established. That is not merely the opinion of Tobacco Industry executives. That is scientific fact readily available to anyone willing to make an objective, unemotional study of the existing evidence.

Defendants funded scientific studies to discredit scholarship demonstrating causation. Evidence at the Blue Cross trial also suggested that defendants never intended to fund and produce the objective research it had advertised. Internal documents such as the following acknowledged that research grants and studies sponsored by TIRC and CTR were intended to reassure the public, driven by litigation, and designed to sow doubts about the hazards associated with smoking:

It has been stated that CTR is a program to find out “the truth about smoking and health.” What is truth to one is false to another. CTR and the Industry have publicly and frequently denied what others find as “truth.” Let’s face it. We are interested in evidence which we believe denies the allegation that cigarette smoking causes disease ... [A]ll caveats and platitudes aside, we must assume that CTR exists for the good of the [tobacco] industry.

Defendants deliberately refrained from conducting in-house biological research demonstrating the causal relationship between smoking of commercially produced cigarettes and cancer. They agreed to refrain from conducting biological testing, of its products as marketed, on animals, allegedly in order to suppress research that was expected to lead to scientific confirmation that cigarettes being smoked by the public were hazardous. Internal memoranda referred to a “gentlemen’s agreement” not to conduct animal laboratory experiments. An internal document, written by Associate Director of Scientific Issues for R.J. Reynolds, Frank G. Colby, dated December 9,1981, states: Information was obtained that Philip Morris U.S.A. does not live up to the alleged “gentlemen’s agreement” of not having animal laboratory facilities on their premises in this country.

Evidence also showed the tobacco industry purposefully concealed research in the United States. As one industry document stated, “[t]he burden of proof has shifted. It is no longer up to the scientists to prove that cigarettes cause lung cancer. It is the duty of all concerned to prove that they do not.” (internal quotations omitted). Other documents reveal members of the industry diverted correspondence through lawyers that contained “contentious information” — i.e., adverse health information sought to be covered up. There was a “mechanism for [] sending scientific information to B & W. In principle it will mean [ ] mailing contentious information to a legal man called Maddox ... with a covering letter ... saying that Millbank has asked that [Maddox] receive it.”

Documents directed subordinates to “root out” adverse information that would generate negative implications and to produce information that would encourage consumers to continue to smoke. One reads: “RD & E is interested in information pertaining to the role of nicotine in the smoker’s subjective perception of smoke quality. If the reports stick to research data, the reports would be interesting. However, if the reports include discussions of pharmacological effects of nicotine, the information will not be interesting and would be helpful to the plaintiff. RD & E will begin receiving reports from this activity and be prepared to inform BAT to cease sending the data to B & W if the science is not interesting.”

Some reports were to be withheld from the United States Surgeon General as well as from TIRC members if one of the defendants was disturbed at the report’s “implications [regarding] cardiovascular disorders.” “TIRC agreed to withhold disclosure [of] Battelle Reports to TIRC members or SAB until further notice ... [and submission of] Battelle or Griffith Developments to [the] Surgeon General [is] undesirable and ... continuance of Battelle work [is] useful but *123 [the company is] disturbed at its implications [regarding] cardiovascular disorders.” Information pertaining to the “carcinogenicity” of tobacco smoke was vetted from reports.

5. Other Deceptive Conduct

In addition to covering up the health risks and addictiveness of smoking, defendants are alleged to have intentionally enhanced nicotine concentration in cigarettes to increase smoker-addiction. They misled the public to believe smoke from “lighter” cigarettes contained reduced levels of tar and nicotine relative to that released by conventional cigarettes, and suppressed research into less harmful cigarettes. By now almost all smokers have switched to “lighter” cigarettes on the premise that they are not substantially dangerous to health, when in fact defendants withheld their knowledge that such cigarettes as actually used were lethal.

Supporting them contention that tobacco companies manipulated nicotine levels, the plaintiffs can identify various patents filed by defendants that provide the technological capability to manipulate nicotine levels in cigarettes “to an exacting degree.” Examples include the following:

— A Philip Morris patent application for an invention that “permits the release ... in controlled amounts and when desired, of nicotine in tobacco smoke.”;

— Another Philip Morris patent application explaining that the proposed invention is “particularly useful for the maintenance of the proper amount of nicotine in tobacco smoke” and noting that “previous efforts have been made to add nicotine to Tobacco Products when the nicotine level in the tobacco was undesirably low.”; and

— A 1991 R.J. Reynolds patent application stating that “processed tobaccos can be manufactured under conditions suitable to provide products having various nicotine levels.”

In addition to covering up the health risks and addictiveness of smoking, evidence can be introduced to show that defendants misled the public into believing that smoke from “lighter” cigarettes, containing reduced levels of tar and nicotine relative to that released by conventional cigarettes, would result in substantially less danger. The defendants suppressed research into less harmful cigarettes allegedly as part of the cover-up of the continuing danger from low tar cigarettes.

Evidence can be used to demonstrate that defendants fraudulently promoted filtered and low-tar cigarettes as safer or healthier cigarettes than conventional ones. “Light” cigarettes, the evidence showed, often lacked significant health benefits over conventional cigarettes, and in many instances may have increased the risk of emphysema, heart disease, and other diseases caused by smoking. This is because of an effect called compensation: smokers of light cigarettes tend to smoke more, inhale more deeply, and hold the smoke in their lungs longer, in order to maximize their absorption of nicotine. A jury could find that any real health benefit was far less than defendants led the public to believe and that their conduct was particularly insidious and effective in misleading smokers.

One goal in designing new products was, plaintiffs evidence could show, to “intercept” quitters. As a 1978 Brown and Williamson internal memorandum put it: “Perhaps answers to another question ‘How do people stop smoking?’ could lend insight into the creation of new products. Having answers to this latter question, we might then design products to ‘intercept’ people who are trying to give up smoking.” Another internal memorandum stated:

All work in this area should be directed towards providing consumer reassurance about cigarettes and the smoking habit. This can be provided in different ways, for example, by claimed low deliveries, by the perception of low deliveries and by the perception of mildness. Furthermore, advertising for low delivery or traditional brands should be constructed in ways so as not to provoke anxiety about health but to alleviate it and enable the smoker to feel assured about the habit and confident in maintaining it over time.

Advertisements for low tar cigarettes had express or implied health messages. It was *124 not seriously disputed at a prior trial that defendants failed to inform the public about their knowledge of the limited health benefits of low tar cigarettes and their knowledge of smoker compensation by a change in the smoker’s habits.

The evidence in Blue Cross could be found to have demonstrated that a second reason to delay, the development of “safer” cigarettes stemmed from a general fear by defendants that over-aggressive marketing of low-tar products would alert the public to the dangers of stronger cigarettes. For example, documents from B.A.T. Industries, the parent company of Brown and Williamson, revealed that in 1978 Chairman Sir Patrick Sheehy, warned its affiliates against attempting to develop truly safer products:

I thought I should write to explain why it is that I cannot support your contention that we should give a higher priority to projects aimed at developing a “safe” cigarette (as perceived by those who claim our product is unsafe), by either eliminating, or at least reducing to acceptable levels, all components claimed by our critics to be carcinogenic ...

[I]n attempting to develop a safe cigarette you are, by implication, in danger of being interpreted as accepting that the current product is “unsafe” and this is not a position that I think we should take.

Documents illustrated that this practice of delaying attempts to improve cigarette safety could be traced back to the 1950s. For example, a 1953 Hill and Knowlton memorandum to defendants’ representatives entitled “Some Things To Do” states:

Develop some understanding with companies that, on this problem, none is going to seek a competitive advantage by inferring to its public that its product is less risky than others. No’ claims that special filters or toasting, or expert selection of tobacco, or extra length in the butt, or anything else, makes a brand any less likely to cause you-know-what. No “Play Safe with Luck-ies” idea — or with Camels or with anything else.

The tactic of broad denials of knowledge of harm by the industry could be found to have been reflected in its research strategy. Evidence revealed that despite the continuing growth of each defendants’ in-house research efforts, the defendants as a whole continued throughout the 1980s and 1990s to adhere to a “gentlemen’s agreement” to avoid actual marketing of any significant risk reducing innovation that would redound to one defendant’s benefit. Potentially innovative risk reducing products were actually developed, but never, it might be argued, seriously marketed. Others were introduced but without much attention to the fact that they might reduce health risks.

Testimony through depositions confirmed that through defendants’ misstatements and omissions, defendants were successful in influencing some people to purchase and smoke low tar cigarettes (rather than quitting) in reliance upon the supposed health benefit communicated by defendants. A jury could conclude that this strategy had a misleading “informational effect” on emerging markets of tobacco consumers. It could have misled more “health conscious” consumers to continue to smoke a product just about as dangerous as regular tar brands, while limiting the total information available to the public about the relative risks of smoking.

Plaintiffs can contend that tobacco companies knowingly designed so-called “light” products so that advertised tar and nicotine levels understate the amounts of tar and nicotine actually ingested by human smokers. It has already been noted that such design features include a technique called filter ventilation in which nearly invisible holes are drilled in the filter paper, or the filter paper is made more porous. Many smokers of advertised low-tar and nicotine cigarettes block the tiny, laser generated perforations in ventilated filters with their fingers or lips, thereby resulting in greater tar and nicotine yields to those smokers than those measured by the Federal Trade Commission’s smoking testing machines.

It can be claimed by plaintiffs that tobacco companies knew that the ability to block ventilation holes allows smokers to “compensate” for nicotine losses that would otherwise be caused by tar-reducing modifications. Tobacco companies allegedly studied smoker *125 behavior in order to design cigarettes that allow smokers to compensate for lower nicotine yields while appearing to deliver less nicotine in FTC tests. To support this contention, a research study presented at a 1974 BATCO conference concluded that “ ‘whatever the characteristics of cigarettes as determined by smoking machines, the smoker adjusts his pattern [of smoke inhalation] to deliver his own nicotine requirements (about 0.8 mg. per cigarette).’ ”

Rather than actually develop a Iess-harmful cigarette, as light cigarettes were advertised to be, defendants may be shown to have conspired by way of a “gentlemen’s agreement” to suppress independent research, development and marketing of such a cigarette. According to plaintiffs’ theory, defendants recognized a difference between “health-oriented” cigarettes, which were never marketed on a wide basis, and “health-image” cigarettes, such as low-tar and low-nicotine products. The latter were arguably only a marketing tool to give the illusion of a safer product.

As plaintiffs may describe it, the situation among the six major tobacco manufacturers represented a dilemma: no company wanted a “safer” cigarette, but any company, by being the first to produce such a cigarette, stood to gain substantial market share. Lor-illard’s Director of Research and Development wrote to Lorillard’s president in 1966 regarding the development of a safer cigarette: “if we fail to pursue this research and/or a competitor marketed' a cigarette whose smoke condensate gives little tumori-genic response, ... a significant sales loss could result.” This is a variant of the classic prisoner’s dilemma.

Production of such a “safer” cigarette by even one manufacturer would have represented an indictment of the whole industry, potentially unleashing litigation for earlier injuries and illnesses due to conventional cigarettes. As Jeffrey Wigand, a former Vice President for Research and Development for Brown & Williamson testified at a prior trial, “ ‘[a]ny research on a safer cigarette would clearly expose every other product as being unsafe and, therefore, present a liability issue in terms of any type of litigation.’ ”

Allegedly faced with the choice between abandoning the conspiracy and developing a less harmful cigarette on the one hand, or maintaining the conspiracy and avoiding potential liability for injuries resulting from conventional cigarettes on the other, the major tobacco manufacturers arguably opted to maintain the scheme, aided in part by the highly concentrated industry market structure. Such a conscious decision to trade-off decreased public injury from smoking for maintenance of its corporate profits could be inferred from a confidential internal Philip Morris memorandum regarding its decision not to market a less harmful cigarette:

[A]fter much discussion we decided not to tell the physiological story [regarding the health effects and addictiveness of conventional cigarettes] which might have appealed to a health conscious segment of the market. The product as test marketed ... was unacceptable to the public ignorant of its physiological superiority.

Plaintiffs may identify two additional areas of deceptive conduct central to the conspiracy: the target marketing of cigarettes and other tobacco products to children; and the intentional deflecting of tobacco-related healthcare costs to smokers and their héalth plan providers. Plaintiffs can contend that defendants — with the use of sophisticated marketing tools such as Joe Camel' — “systematically targeted” youth to encourage them to purchase cigarettes in violation of various state laws, including New York’s, in order to replace dying adult smokers. Support for this contention can come from a 1974 R.J. Reynolds marketing plan that highlighted as an “opportunity area” a plan to “increase our young adult franchise,” with “young adults” described as including those children 14 to 17 years of age. This evidence was excluded at the Blue Cross trial on grounds that it was too prejudicial under Rule 403 of the Federal Rules of Evidence, but it may have more salience in computing punitive damages.

Recent media reports suggest that tobacco companies also opposed marketing of drugs designed to help smokers stop smoking. See Kenneth Chang, Tobacco Industry Fought *126 Drugs’ Marketing, New York Times, August 14, 2002, at A17.

C. Consumer Harm from Deceptive Practices

Evidence has been found to demonstrate that defendants knew such deceptive practices would cause — and that their practices did cause — plaintiffs’ harm.

1. Knowledge that Consumers Would Act Upon Deceptive Practices

The tobacco industry can be charged with knowing that the consequences of prolonging the debate over the adverse effects of smoking would be to reassure addicted consumers in order to induce them to continue using their products. Documents substantiate this view of defendants’ program designed to mislead and string along smokers. Proof includes such defendants’ statements as follows:

— The CTR (then TIRC), was formed in the early 1950’s in response to published reports linking cigarette smoking with various diseases. The primary purpose for the initial formation was a public relations one____ The CTR, with the help of others, has kept certain questions open when a large body of anti-tobacco scientists claimed the easy answers had been found.

— The long established policy of CTR, carried out through [the Scientific Advisory Board is to] ... maintain the position that the existing evidence of a relationship between the use of tobacco and health is inadequate to justify research more closely related to tobacco; and ... the study of the disease keeps constantly alive the argument that, until basic knowledge of the disease itself is further advanced, it is scientifically inappropriate to devote the major effort to tobacco.

— The BAT objective is and should be to make the whole subject of smoking acceptable to the authorities and to the public at large since this is the real challenge facing the Industry. Not only ... is [this] the right objective but ... it is an achievable one.

A public relations campaign was suggested to “describe more or less truthfully the dramatic efforts” of Philip Morris to safeguard the public. The company also sought to take steps so that the public could be

Assured that Parliament (Marlboro) would immediately bring them any tar and nicotine reducing innovations that were consistent with good smoking and that [Philip Morris] would do this no matter how much effort and expense were required____ [T]he attempt would be made to build an image of the brand as a brand that was made and sold by people who were genuinely concerned about the health of their customers and did not believe in taking chances with the health of their customers.

2. Evidence that Misrepresentations Caused Consumers Harm

Evidence in the form of documents, lay and expert testimony, and depositions may establish that plaintiffs will meet their burden of proving that defendants’ deceptive practices caused them injury. A key question was whether plaintiffs’ smoking behavior would have been different if defendants had been truthful rather than deceitful.

Expert witnesses in a prior trial testified that: (1) members of the American public underestimated the health risks of smoking at the time they started smoking and afterward; and (2) early public acknowledgment by the tobacco companies that they believed smoking causes lung cancer and other diseases would have led the American public not to start smoking, or to smoke less, or to quit smoking earlier.

a. Expert testimony

Defendants’ objections to plaintiffs experts’ testimony in the Blue Cross litigation was ruled on repeatedly at that trial. Critical aspects need only be summarized here. The legal basis for utilizing the statistical analysis of plaintiffs and defendants’ experts is set out in Part V.E., infra. Plaintiffs in the instant case may provide different types of statistical and other analysis to support their claim.

*127 (1) Dr. Jon Krosnick

The testimony of Dr. Jon Krosnick, a behavioral scientist and leading expert on survey methodology, at the Blue Cross trial was to the effect that defendants’ misrepresentations affected subscribers of that insurer plaintiff. Dr. Krosnick presented detailed empirical data that smokers significantly underestimated the health risks and addictiveness of smoking, that the misrepresentations of the tobacco companies had a substantial impact on smokers’ perceptions of these risks, and that if the defendants had not engaged in deceptive conduct fewer would have started to smoke and more would have quit sooner. Dr. Krosnick was qualified by training, experience, and his published studies supporting his views. He employed standard survey procedures and analysis.

Dr. Krosnick’s conclusions were based on statistical analysis of three types of data. First, he supervised a two thousand person telephonic survey conducted by an independent national survey research firm, Sehul-man, Ronca, Bucuvalis, Inc., to assess the impact of smoking related information on consumers. This survey was conducted according to acceptable survey techniques. Second, he compared these results with a comprehensive literature review of pre-exist-ing surveys and articles assessing people’s perceptions and attitudes concerning the health risks of smoking. Third, he relied on a randomized sample of 156 Empire Blue Cross’s subscriber depositions, and over three hundred depositions of other Blue Cross plan members, to extrapolate statistically meaningful inferences about the population as a whole. Depositions were taken in person for up to three hours, with standardized questions, and without witness preparation to preserve the integrity of the sample. Subscribers were either current or former smokers in plaintiff or other Blue Cross plans, all of whom had submitted health care costs to these plans. The sampling procedure conformed to standard practice.

Dr. Krosnick had each of the relevant depositions reviewed by neutral coders who were appropriately selected, instructed and supervised. They coded the transcripts according to set instructions and inquiries.

These questions, which were divided into five groups, focused on (1) what deponents now believed about the health risks and addietiveness of smoking regularly; (2) what deponents believed about the health risks and addictiveness of smoking at any other time after they had become regular smokers; (3) the deponents’ beliefs about their exposure to statements made by the tobacco companies about the health risks of smoking; (4) the deponents’ beliefs about their exposure to statements made by the tobacco companies concerning the addictiveness of smoking; and (5) the deponents’ beliefs about how certain tobacco company statements would have affected their smoking behavior if they had been made to the public prior to, or during, the time that the witness smoked regularly.

The analysis of the depositions and the jury’s view on a large screen of videos of the witnesses being deposed, as well as their own analysis of transcripts of relevant depositions, could lead the jury to find that: (1) a substantial percentage of smokers believed that, at the time they started smoking regularly, smoking was not risky to their health or addictive; and (2) many would have changed their smoking behavior if the tobacco companies had made timely candid statements about what defendants knew were the health risks and addictiveness of smoking.

The results obtained from analyzing the plaintiffs members’ depositions were confirmed by the results of the depositions taken of members of plans other than Empire Blue Cross. Dr. Krosnick also relied upon other surveys that had been conducted by reputable survey and polling organizations. Employing different methodological approaches to reach like results alleviated the potential limitations of any one approach. See David H. Kaye and David A. Freedman, Reference Guide on Statistics, Reference Manual, supra, at 97 (“Sometimes several experiments or other studies, each having different limitations, all point in the same direction ... Such convergent results strongly suggest the validity of the generalization.”); Hans Zeisel & David Kaye, Prove It With Figures: Empirical Methods in Law and Litigation 68-78 (1997) (“Still more powerful support comes *128 when studies based on distinct research approaches (or employing the same general research approach but having differing strengths and weaknesses) reach comparable results____”); Shari S. Diamond, Exploring Sources of Sentencing Disparity, The Trial Process 387 (1981) (comparing simulated methods and actual ease analysis to determine disparities among federal sentences); Harry Kalven & Hans Zeisel, The American Jury (1966) (separate approaches to assess impact of unanimity requirement on hung juries).

Dr. Krosnick concluded that smokers underestimate the relative risks of smoking, and that but for the misleading misrepresentations of the tobacco industry in the 1980s and afterward, more smokers would have changed their smoking behavior. He provided quantitative bases for his opinion.

(2) Dr. Jeffery Harris and others

Dr. Jeffery Harris, a medical doctor and an economist, provided statistical evidence about the effect of the defendants’ misleading statements on smoking behavior. Tracing populations of smokers around the country exposed to different levels of information, Dr. Harris modeled the impact of the defendants’ misrepresentations on smokers. He traced the effects of two types of misconduct: 1) the health consequences which resulted from defendants’ misrepresentations (an “information effect”); and 2) the consequences of defendants’ “gentlemen’s agreement” not to compete to produce less hazardous products or to delay their introduction (an “innovation effect”).

Dr. Harris’s opinion and analyses and the bases for his conclusions were sufficient to allow a jury to find that smokers relied on publicly available information in deciding whether to start and stop smoking and that the smoking behavior of Blue Cross members would have been different had it not been for defendants’ fraud. His study showed how information “moves smoking rates,” demonstrating that as consumers were exposed to different information about smoking, their smoking behavior changed. Empirical evidence further demonstrated that, according to this witness, consumption of cigarettes has historically decreased after significant disclosure about the dangers of smoking. He testified that based upon data from many peer reviewed studies, accurate and timely information increased smokers “quit rates” and reduced teenage “initiation rates.”

Using economic and statistical tools, Dr. Harris created a counterfaetual model to graph what smoking patterns would have looked like had the industry not misrepresented the hazards of its product to the public. He then calculated a “conduct attributable fraction” for each year-one based on the “informational effect” and the other on the “innovation effect” representing the portion of medical costs due to smoking related illnesses resulting from defendants’ fraud. Under this information effect, Dr. Harris found that the rate of smokers quitting smoking would have increased by 4.5% per year (as opposed to a rate approximating 3% per year) in the absence of a conspiracy to deceive the public. He reported that his 4.5% figure was conservative, and that had he mechanically relied upon the results of the underlying studies, quit rates could have increased to as high as 10%.

Dr. Harris used a separate model to determine the effects that resulted from defendants’ attempt to suppress the introduction of safer cigarettes into the market. To measure this “innovation” effect, Dr. Harris consulted surveys, studies, and epidemiologic data to determine the rate at which the health risks of smoking had actually declined since the 1950s. He then measured how much faster the risks of smoking would have declined with the use of a safer technologically available cigarette. His measurements were also based on case-studies of risk reducing technologies that were never marketed, as well as defendants’ rate of spending on research and development compared with those in other benchmark industries.

Dr. Harris’s reliance on a combination of research techniques — mathematical models, statistical regression analysis methods, analysis of data from relevant benchmark industries, and reasoned judgments based upon available data — were consistent with data and research methods of other professional economists.

*129 The smoking attributable costs calculated by other experts were utilized in combination with Dr. Harris’s calculations to determine damages on a per annum basis. Several thorough and prolonged hearings (in this case and in related actions) established that these statistical models and the experts who developed them satisfied Dcmbert and could be used in combination with individualized evidence to satisfy each element of the plaintiffs’ claims.

b. Videotaped depositions

Videotaped depositions of smoker subscribers in the Blue Cross case substantiated the effect defendants’ misstatements had on consumers. Relevant portions of 71 depositions relied upon in Dr. Krosnick’s study were played to the jury. Some of these depositions showed that plaintiffs members underestimated the health risks of smoking at the time they started smoking (and afterward) and that public acknowledgment by the tobacco companies that they believed smoking causes lung cancer and other diseases would have led them not to start smoking, to smoke less, or to quit smoking earlier.

Many testified that the misrepresentations created doubt in the consumers’ minds about the effects of tobacco use and reassured addicted users that it was safe to continue smoking. See, e.g.:

A: But at the time that these warnings came out is the same time the advertisement came out saying there was no proof____So we’re trying to weigh it on our own.

Q: Understanding that, what was it about the statement from the tobacco industry that you believe influenced you away from quitting?

A: Probably that tests weren’t conclusive.

Q: And having seen this warning, the warning didn’t make you stop smoking, did it?

A: No, I was very healthy. You know, we all thought, everyone really, I can’t speak for the whole world, but ... my circle of friends all thought that ... they [the public health community] don’t know what they’re talking about. They’re just doing this to get on a bandwagon of some sort.

A: ... I remember watching on television. It was [an] R.J. Reynolds ... CEO type ... saying that he smoked, you know, and that he sees nothing wrong with it and it doesn’t impact his health at all.

Q: Did you take the same comfort?

A: Yes, I did.

Other testimony indicated that subscribers were affected by defendants’ failure to fund and produce the objective research it advertised it would:

Q: Did you know that as of February 2nd, 1953, that R.J. Reynolds had indicated in its documents ... that studies of clinical data tend to confirm the relationship between heavy and prolong tobacco smoking and the incidence of cancer of the lung?

A: Absolutely not.

Q: And if R.J. Reynolds had disclosed to you and to the public that studies of clinical data tend to confirm the relationship between heavy and prolonged tobacco smoking and the incidence of cancer of the lungs, do you think that would have affected you?

A: Very much so.

Q: How so.

A: It would have scared me to death.

Other deposition statements included such statements as the following:

“They were making available to us teens other information. I don’t understand if it was available why we wouldn’t have seen stuff like this on TV. If they were showing one part, and this indeed was available to the public, why weren’t we seeing this part of it? ... I can honestly say if I had this in front of me, I think I would have chosen not to smoke. If they would have came forward to say that the product had some *130 bad effects, long term effects, I would have probably looked upon it as that ... in ... [the] long term that it would be bad for me.”

Many testified that they were reassured by the non-verbal messages associated with smoking, while others verified the supposed effect of low tar products on intercepting quitters. Examples include:

Q: Do you recall any statements or ad by the tobacco companies that provided some reassurance to you that smoking might not be bad for you?

A: Well, like I said earlier before when the guy — I believe the guy is carrying the girl and they look like they’re happy, it’s like the guy can smoke and he still has his — he is giving the girl a piggyback ride and I guess he smokes, like hey you know, if smoking was bad for you you wouldn’t be able to do this. You know.

Q: Any statement from the tobacco industry that you believe influenced you not to quit?

A: I would' say when they started to come out with the light cigarettes, low tar cigarettes.

This deposition testimony in the Blue Cross case was far from universal, but it was nonetheless probative, and subject to skilled cross examination. The jury could find that significant portions of the deposition testimony corroborated statistical studies, extrapolations, and the conclusions of experts.

c. Surveys, medical and psychological literature and documents

Surveys and literature were also provided to the jury in the Blue Cross litigation. These included studies from the American Cancer Society, studies published in established psychological and medical journals, and Surgeon General reports. These documents would support plaintiffs’ contention about the kind of impact defendants’ misrepresentations had on the population as a whole. See, e.g., Reducing the Health Consequences of Smoking: A Report of the Surgeon General 345 (1989) (“Another possible reason for some smokers’ insensitivity to smoking risks is that they have not always been given the full message, or they have been given mixed messages from the cigarette industry. Factors that impede public awareness and acceptance of the health hazards of smoking include cigarette advertising and promotion and cigarette companies’ public relations and lobbying activities.”).

It was only during the last few years that defendants through advertising and electronic access to internet statements began to concede that serious diseases were caused by cigarettes in their light form. Even then, the advertising campaigns and other activities were arguably continuing to mislead smokers and potential smokers. As a result, more people continued to start smoking, become addicted, and not quit than would have been the case absent defendants’ misleading activities.

While information divulged by public and private groups about continuing smoking dangers has reduced the harm caused by defendants’ conduct, arguably it has not eliminated it. Enforcement of no smoking bans in public and private places and universal higher taxes and charges per pack have been particularly effective in reducing smoking. Substantial damages may still be shown by those with an appropriate theory and procedure for compelling legal compensation.

Most of the damages that might have been uncovered had appropriate suits been brought at an earlier date are no longer available. In many respects this is almost the end-of-the-line for viable anti-tobacco suits of any significance.

Defendants strongly deny the conclusions sought to be drawn by plaintiffs. In fact they have succeeded in defending against most suits by smokers or third party payers of medical expenses. Nevertheless, there still remains a large residuum of possibly valid claims that can still be prosecuted with some hope of plaintiffs for success. While the sun is setting on the battlefield of tobacco litigation, and it is unlikely that anyone can successfully implore a higher authority to stay its apparent movement across the sky, much might be accomplished on behalf of *131 injured plaintiffs by this class action in the lingering twilight.

IV. Procedural History

Set out below is a brief procedural history of related cases brought in this litigation.

A. Individual Plaintiff cases

1. Simon I

Sturgeon v. Philip Morris, 99 CV 01988, was filed on April 9, 1999 on behalf of cigarette smokers with personal injury claims. The magistrate judge provided a motion schedule and organization for pretrial adjudication An amended complaint was filed on October 15, 1999. The amended complaint changed the name from Sturgeon to Simon. In addition, the nature of the class changed. Simon I was a national class action on behalf of:

All persons residing in the United States, or who were residents of the United States at the time of their deaths, who have a 20 pack-year history of smoking Defendants’ cigarettes and who, individually or through an estate or other legal representative, had a timely claim as of April 9, 1999 for personal injury damages or wrongful death arising from cancer of the lung. A pack-year is one package of cigarettes consumed per day per year.

A series of dispositive and discovery motions were then decided.

In April 2000, the court met with the parties and settlement negotiations between plaintiffs and one defendant took place. While these parties appeared close to a settlement, ultimately no agreement could be reached.

The court issued an order on May 9, 2000, presenting the parties with various questions including whether or not punitive damages for a class should be handled on a non-opt-out basis. On September 6, 2000, the plaintiffs filed the related Simon II complaint to determine liability for punitive damages. Further briefing and oral argument followed.

On November 6, 2000, the court denied class certification in Simon I. It stated, “even though Simon I is a viable class action, the motion for certification in Simon I is denied because it would better preserve court resources to certify the broader Simon II class for trial.”

2. Decie

William Decie, et al. v. American Tobacco, et al., 2000 CV 02340, was filed on April 21, 2000. It sought class action treatment of claims by smokers for personal injury, plus punitive damages, medical monitoring, and recovery of insurance premiums.

It has not proceeded. Punitive damage aspects were stayed pursuant to an order in Simon II. In its Memorandum of April 23, 2002, the court suggested that Decie be realigned within Simon II. In a conference on April 30, 2002, the plaintiffs agreed with that suggestion and stated that they would omit increased premium and insurance claims to permit that integration of cases. Transcript of May 1, 2002, at 35. Subsequent filings have included Decie as part of Simon II.

3. Ebert

James Ebert v. Philip Morris, Inc. et al., 2000 CV 04632, was filed on August 9, 2000. That ease sought class treatment for product liability, fraud, conspiracy, RICO, and unjust enrichment. It has not proceeded appreciably. Punitive damage aspects were stayed pursuant to a Simon II order. In its Memorandum of April 23, 2002, the court suggested that Ebert be realigned within Simon II. This was agreed upon in a conference of April 30, 2002. Transcript of May 1, 2002, at 37. Subsequent filings have included Ebert as part of Simon II.

4. Browne

Clara Browne v. Philip Morris et al., 02 CV 599, was filed pursuant to the court’s suggestion that “test cases” might be appropriate for resolving some questions in the litigation. It was filed on behalf of thirteen injured persons from the state of Florida on January 28, 2002.

The court did not find the Browne case helpful. See Tr. of May 1, 2002; see also discussion of Simon II, below. On May 31, 2002, the plaintiffs stipulated to discontinue *132 the action without prejudice, but to include the claims in Simon II.

5. Simon II

Simon et al. v. American Tobacco, 2000 CV 05332 (Simon IT) was filed on September 6, 2000, and included as subclasses all the tobacco cases pending. It sought both compensatory and punitive damages.

On December 7, 2000, the court issued an order anticipating that trials would take place in Simon II, and suggesting that choice-of-law analysis indicated “tentatively, that it is the unitary and substantive law of New York and the unitary federal procedure that will govern much of Simon II.” Simon II, 124 F.Supp.2d at 77 .

On December 22, 2000, plaintiffs filed a motion for class certification and suggested the trial of certain “test cases.” See discussion of Browne v. Philip Morris, ¶ 4, supra.

B. Blue Cross Cases

1. Empire Blue Cross

In April 1998, numerous Blue Cross health plans from across the nation, including New York’s Empire Blue Cross and Blue Shield (“Empire”) filed suit against the major tobacco companies to recover the extra money they were forced to spend on patients harmed by tobacco as a result of alleged fraud by defendants. Blue Cross and Blue Shield of N.J., et al. v. Philip Morris Inc., et al., 98 CV 03287.

Litigation was extensive, lasting over three years. The trial consumed 44 trial days. It required 34 witnesses, 10 of whom were dau- bertized — Daubert screened experts; there were 1,632 demonstratives and exhibits, and over 100 depositions utilized in court. Over 300 video depositions of subscribers and others were taken; many were heard at trial. Twenty-nine defendants’ executives and employees were also deposed. The parties filed over 150 legal memoranda and argued many applications. The docket sheet contains over 1400 entries. Computer technicians were able to quickly access data, diagrams, charts and depositions and display them on a huge screen for the jury. The parties used questionnaires, surveys, statistical evidence and modeling, and other advanced and often novel but appropriate statistical techniques. Reproduction of hundreds of thousands of pages of documents from Empire’s files for the many defense counsel and the court was needed.

Plaintiff made a number of claims including antitrust, conspiracy, RICO, New York Consumer Protection Act (“Act”), and common law fraud. A continuing conspiracy was proved for evidentiary purposes, warranting evidence both before and after 1980 — the effective date for the litigation of the Consumer Protection Act — with damages based solely on post 1980 actions of defendants and reliance by smokers. The jury verdict established, apparently for the first time, that the tobacco industry had engaged in deceptive practices banned by New York statutes harming a third party payor and its subscribers. The jury returned a verdict of $17 million for the plaintiff on the claim under section 349 of the General Business Law and just over $11 million on a subrogated claim under section 349. The other claims were unsuccessful.

On September 19, 2001, plaintiffs counsel Dewey Ballantine filed a motion for award of attorney’s fees under section 349(h) of the New York General Business Law, seeking $39,086,223 in attorneys fees. On February 28, 2002, the court awarded $37,841,054.22 in attorneys fees.

Both the trial verdict and the fee award have been appealed.

2. Other Blue Cross plans

The other twenty-five Blue Cross health care plans located across the country had claims similar to Empire’s. Those plans have expressed a desire to wait until the court of appeals for the Second Circuit answers the question of whether section 349 may be used in these cases before proceeding.

At the request of the plaintiffs the court stayed further proceedings in the cases on July 16, 2002 pending the appeal in Empire. Defendants did not object. Nevertheless, the court indicated that it was dubious about continuing any but the claims of New York *133 Blue Cross cases. In its July 16, 2002 memorandum, it wrote:

It should be noted that the New York Court of Appeals has recently ruled that section 349 cannot be relied upon by plaintiffs injured in other states. Goshen v. The Mutual Life Insurance Company of New York, 98 N.Y.2d 314 , 746 N.Y.S.2d 858 , 774 N.E.2d 1190 (2002). Counsel for plaintiffs concede that the out-of-state Blues cannot rely on section 349, but will have to plead the statutes and common law of the states where they and their smokers were injured. This court will almost certainly not want to try these non-New York cases: the laws involved are, in general, not clear; certifications for clarification of state law may be required; and convenience of witnesses will suggest transfer to a more appropriate district court. Upon completion of the pending appeal a motion for dismissal or transfer of these non-New York Blues will be entertained.

In re Simon II Litigation, 212 F.Supp.2d 56, 57 (E.D.N.Y.2002).

C. Union Health fund cases

1. National Asbestos Workers

National Asbestos Workers Medical Fund v. Philip Morris, Inc., et al., 98 CV 01492, 2001 WL 477256 , was filed on February 27, 1998. It was brought as a class action on behalf of some four thousand “collectively-bargained” health and welfare trust funds. The putative class members are “all self insured, multi-employer benefit plans ... in the building trades and their trustees” seeking to recover money expended for health and welfare benefits for fund beneficiaries injured by tobacco.

Discovery commenced and class certification was denied with leave to renew. Punitive damage aspects were stayed, and, in effect, the parties held the case in abeyance.

At a hearing the court pointed out to plaintiffs that the case would have to be prosecuted or dropped. It noted the huge costs of the litigation were it pressed.

On May 31, 2002, the parties agreed to voluntarily terminate the litigation. The case was dismissed. This decision was fully justified and did not prejudice the rights of any party or persons not represented.

2. Bergeron

Bergeron, et al. v. Philip Morris, Inc., et al., 99 CV 06142, was filed on September 29, 1999. Plaintiffs, trustees of the Massachusetts State Carpenters Health Benefits Fund, brought this action alleging a violation of sections 349 and 350 of New York General Business Law. A series of disposition and discovery motions were decided. The punitive damages aspects were stayed, as in other cases.

Plaintiffs’ first class certification motion was denied. A motion for transfer by defendants was denied by order of June 8, 2000, because the ease raised issues similar to those in the pending National Asbestos cases. See Bergeron v. Philip Morris, 2000 WL 748144 (E.D.N.Y. June 8, 2000). After National Asbestos was dismissed on consent, on June 3, 2002, plaintiffs filed for class certification.

On July 2, 2002, the court orally denied class certification in Bergeron; this decision was confirmed by an order dated July 10, 2002.

Following the decision in Goshen the court suggested:

The plaintiff may wish to amend the complaint to plead Massachusetts law. If so, the case should be transferred to the district court of Massachusetts for the convenience of parties and witnesses, in the interest of justice, where amendment may be sought. See 28 U.S.C. § 1404 . If the plaintiff wishes the case transferred, it should submit an order of transfer within 10 days. Otherwise the complaint will be dismissed for failure to state a cause of action on an order to be submitted by defendants.

In re Simon II, 212 F.Supp.2d 57, 59 . The parties then stipulated to voluntary dismissal of all claims. Stipulation of Dismissal, August 2, 2002.

*134 D. Asbestos cases

1. H.K. Porter

H.K Porter Co. v. B.A.T. Industries, et al., 97 CV 07658, was filed on December 31,1997. Plaintiff paid substantial sums in prior actions to persons injured by its asbestos products. It sought to recover the portion of those damages attributable to tobacco smoking by plaintiffs who were harmed by both asbestos and tobacco. The case was subject to various pretrial motions including motions to dismiss for failure to state a cause of action, for lack of jurisdiction and to settle discovery disputes. A writ of mandamus sought by defendants was denied by the court of appeals.

The punitive damage aspects were stayed with the view'that they could be dealt with in Simon II. See Simon v. Philip Morris, 124 F.Supp.2d 46 (E.D.N.Y.2000).

On May 4, 2001, this action was dismissed pursuant to a stipulation between the parties.

2. Raymark

Raymark Industries v. American Tobacco, et al., 1998 CV 0675, an asbestos case similar to other cases seeking recovery from tobacco manufacturers for harm caused by tobacco and asbestos, was filed on January 30, 1998. Pretrial motions including jurisdictional challenges were decided. As with other cases, punitive elements were stayed by the court’s December 7, 2000 order in Simon II .

The court expressed the view that this case had “not proceeded expeditiously.” Simon II, 172 F.Supp.2d 375 (E.D.N.Y.2001). Its order of March 28, 2002 noted the “lack of dispatch” of this and other cases and asked the parties to decide whether it should be dismissed. In re Simon II, 2002 WL 522984 at *1 (E.D.N.Y. slip op. March 28, 2002).

In its April 23, 2002 Memorandum for Discussion Purposes, the court suggested that it might be “appropriate for plaintiff ... to follow the lead of Manville [Falise] and withdraw,” In re Simon II, 2002 WL 862553 at *9 (E.D.N.Y. slip op. Apr. 23, 2002), and that the case should either be set for trial or dismissed. Id. at *15. On May 31, 2002, the parties stipulated to discontinue the litigation.

3. Falise

Falise, et al. v. American Tobacco, et al., 99 CV 7392, was filed on November 12, 1999 by trustees of the Manville Trust set up to compensate people injured by asbestos. The case was tried over a period of many weeks after the court of appeals denied mandamus. A hung jury resulted in a mistrial. Plaintiffs then withdrew from the litigation.

This decision to close the case was justified since the trustees had a fiduciary obligation requiring them to balance the limited prospects of a final award in favor of the trust against the enormous cost of trying these cases. The theory of asbestos “synergy” with tobacco, increasing the probability of disease, is credible and might provide a basis for recovery. Falise v. American Tobacco Co., 94 F.Supp.2d 316, 327-30 (E.D.N.Y. 2000). Juries and courts have been reluctant, however, to endorse this legal theory in claims by asbestos producers or their successors against tobacco companies since tort based payments by the asbestos industry have generally been discounted to reflect the tobacco causative factor.

E. Mason (Medicare)

This class action, James Mason, et al. v. American Tobacco, et al., 2000 CV 0442, was transferred from the Northern District of Texas (97 CV-293-R) in August 2000. Mason plaintiffs sought to recover under the Medicare Secondary Payor Act, on the theory that defendants, as tortfeasors, attained the status of “self-insured plans” for insurance of individuals they harmed in tort, and that a quasi-qui-tam action was appropriate to recover funds which had been spent by Medicare. These funds should have, under plaintiffs’ theory, instead been paid by tobacco company defendants, the “self-insured plans” which were the primary insurers for harm to Medicare subscribers caused by their torts. See Plaintiffs Memorandum of June 28, 2002 (setting out proposed legal theory).

Plaintiffs moved for class certification in April 2002. They also sought a severance *135 from the Simon II umbrella of cases. Defendants opposed both class certification and severance, and moved for transfer of the case to the District Court for the District of Columbia.

The court indicated to the parties that dispositive motions would be appropriate. Defendants declined to file dispositive motions, both by letter of June 25, 2002, and orally at a conference of July 2, 2002. When the court indicated that it would then consider a dispositive motion sua sponte and without the defendants’ assistance, defendants agreed to make such a motion.

On July 11, 2002, the court denied defendants’ motion to transfer and granted plaintiffs’ motion for severance. On July 26, 2002, after receiving briefing from both sides on a motion for dismissal, the court dismissed the ease. The court ruled that “defendants’ status as accused tortfeasors, standing alone, does not convert them under the statute into primary plans or self-insured plans for Medicare beneficiaries injured by using their products.” Mason v. Am. Tobacco Co., 212 F.Supp.2d 88, 92 (E.D.N.Y.2002). This case is on appeal.

F. Foreign Entities

Other claims involving foreign countries based, among other theories, on claims that American tobacco companies were engaged in a conspiracy to avoid foreign taxes, have been transferred to other judges in the court. These cases have been dismissed. See, e.g., European Community v. Japan Tobacco, 02-CV-00164, European Community v. RJR Nabisco, 01-CV-05188, and Department of Amazonas v. Philip Morris, 00-CV-02881.

G. Tobacco Cases Nationwide

Nationwide, a large number of tobacco lawsuits have been brought. According to tobacco manufacturers, approximately 1500 lawsuits were pending in 2001. See Philip Morris Annual Report, 2001, at 50. Then-presence is a factor which must be considered. Most litigation has resulted in a successful defense on legal grounds or because juries found for the defendants.

(Note that in some instances in this section the court cites to some of the extensive information on tobacco litigation available online through the Tobacco Control Resource Center at Northeastern University School of Law, http://www.tobacco.neu.edu. Citation to this web site is for informational purposes, since consolidated information is otherwise difficult to locate; it is not an endorsement of the positions that organization has taken in lawsuits.)

Among the prominent suits are the following:

State Settlements. On November 20, 1998, forty-six states settled with the five biggest cigarette makers, in which the latter agreed to pay $206 billion over twenty-five years. The participating companies include: Philip Morris, R.J. Reynolds, Lorillard Tobacco, and Brown & Williamson. The fifth largest cigarette maker, Liggett & Myers, was not a party to the negotiations but participated in the agreement. The abstaining states were: Florida, Minnesota, Mississippi, and Texas. These states had previously settled with the companies for a total of $40 billion to be paid over twenty-five years. Except for Minnesota, which settled while the case was being tried before it was to go to the jury, the states settled prior to the start of trials. See 46 States Agree to $206 Billion Tobacco Settlement, Liability Week, Vol. 13, No. 44, Nov. 23, 1998 available at 1998 WL 12498764 . Materials made available from discovery in the Minnesota case and released by Congress form a large part of the evidence supporting Part III, Facts, supra. See Emily Heller, Documents Led to Tobacco Win, National L.J., April 15, 2002, at B10.

The settlement

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