Exhibit 99.1
CERTAIN PENDING LITIGATION MATTERS AND RECENT DEVELOPMENTS
As described in Note 5. Contingencies ("Note 5") to the Condensed Consolidated
Financial Statements included in Part I, Item 1 of this Quarterly Report on Form
10-Q, there are legal proceedings covering a wide range of matters pending in
various U.S. and foreign jurisdictions against the Company, its subsidiaries and
affiliates, including PM Inc. and Philip Morris International, and their
respective indemnitees. Various types of claims are raised in these proceedings,
including product liability, consumer protection, antitrust, tax, patent
infringement, employment matters, claims for contribution and claims of
competitors and distributors. Pending claims related to tobacco products
generally fall within the following categories: (i) smoking and health cases
alleging personal injury brought on behalf of individual plaintiffs, (ii)
smoking and health cases alleging personal injury and purporting to be brought
on behalf of a class of individual plaintiffs, (iii) health care cost recovery
cases brought by governmental and non-governmental plaintiffs seeking
reimbursement for health care expenditures allegedly caused by cigarette smoking
and/or disgorgement of profits, and (iv) other tobacco-related litigation,
including suits by former asbestos manufacturers seeking contribution or
reimbursement for amounts expended in connection with the defense and payment of
asbestos claims that were allegedly caused in whole or in part by cigarette
smoking and suits by foreign governments seeking to recover damages for taxes
lost as a result of allegedly illegal importation of cigarettes into their
jurisdictions. Governmental plaintiffs in the health care cost recovery actions
include the federal government, various cities and counties in the United States
and certain foreign governmental entities. Non-governmental plaintiffs in these
cases include union health and welfare trust funds ("unions"), Native American
tribes, insurers and self-insurers, taxpayers and others.
The following lists certain of the pending claims included in these categories
and certain other pending claims. Certain developments in these cases since
August 10, 2000 are also described.
SMOKING AND HEALTH LITIGATION
The following lists consolidated individual smoking and health cases as well as
smoking and health class actions pending against PM Inc. and, in some cases, the
Company and/or its other subsidiaries and affiliates, including PMI, as of
November 1, 2000, and describes certain developments in these cases since August
10, 2000.
Consolidated Individual Smoking and Health Cases
In Re Tobacco Litigation (Individual Personal Injury cases), Circuit Court of
Ohio County, West Virginia, consolidated January 11, 2000. In West Virginia all
smoking and health cases alleging personal injury have been transferred to the
state's Mass Litigation Panel. The transferred cases include individual cases
and putative class actions. A case management order has been issued which
provides that all pending individual cases as well as cases filed in or
transferred to the court by September 8, 2000 are to be included in a single
consolidated trial. Approximately 1,200 individual cases have been filed. The
trial court's order provides for the trial to be conducted in two phases. The
issues to be tried in phase one are "general liability issues common to all
defendants including, if appropriate, defective product theory, negligence
theory, warranty theory; and any other theories supported by pretrial
development" as well as entitlement to punitive damages and a punitive damages
multiplier. Pursuant to the court's order, the individual claims of the
plaintiffs whose cases have been consolidated will be tried on an individual
basis or "in reasonably sized trial groups" during the second phase of the
trial. Trial is scheduled for June 2001.
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Flight Attendant Litigation:
Broin, et al. v. Philip Morris Companies Inc., et al., a class action brought
by flight attendants claiming personal injuries allegedly relating to
environmental tobacco smoke, was settled in 1997. The settlement agreement
permitted members of the class to file individual suits by September 7, 2000
seeking compensatory damages for their alleged injuries, but prohibited them
from seeking punitive damages. Approximately 3,120 of such suits were filed by
the deadline. In October 2000, the court held that the flight attendants will
not be required to prove the substantive liability elements of their claims for
negligence, strict liability and breach of implied warranty in order to recover
damages, if any. The court further ruled that the trials of these suits are to
address whether the plaintiffs' alleged injuries were caused by their exposure
to environmental tobacco smoke and, if so, the amount of damages to be awarded.
Defendants have filed notice of appeal of the court's ruling. As of November 1,
2000, nine such cases were scheduled for trial from January through May 2001.
Domestic Class Actions
Engle, et al. v. R.J. Reynolds Tobacco Co., et al., Circuit Court, Eleventh
Judicial Court, Dade County, Florida, filed May 5, 1994. See Note 5, for a
discussion of developments in this case.
Norton, et al. v. RJR Nabisco Holdings Corporation, et al., Superior Court,
Madison County, Indiana, filed May 3, 1996.
Richardson, et al. v. Philip Morris Incorporated, et al., Circuit Court,
Baltimore City, Maryland, filed May 24, 1996. The court granted plaintiffs'
motion for class certification in February 1998 and defendants appealed. In May
2000, the Maryland Court of Appeals reversed the trial court's ruling and
ordered the class decertified.
Scott, et al. v. The American Tobacco Company, et al., District Court, Orleans
Parish, Louisiana, filed May 24, 1996. Trial is scheduled for January 2001.
Lyons, et al. v. The American Tobacco Company, et al., United States District
Court, Southern District, Alabama, filed August 8, 1996.
Perry/Champion, et al. v. American Tobacco Co., Inc., et al., Circuit Court,
Coffee County, Manchester, Tennessee, filed September 6, 1996.
Connor, et al. v. The American Tobacco Company, et al., Second Judicial District
Court, Bernalillo County, New Mexico, filed October 10, 1996.
In Re Tobacco Litigation (Medical Monitoring cases) (formerly McCune, et al. v.
The American Tobacco Company, et al.), Circuit Court of Kanawha County, West
Virginia, filed January 31, 1997. In October 2000, the court certified a class
of plaintiffs seeking the creation of a medical monitoring fund. Trial is
scheduled for December 2000.
Muncy (formerly Ingle and formerly Woods), et al. v. Philip Morris Incorporated,
et al., Circuit Court, McDowell County, West Virginia, filed February 4, 1997.
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(Canter) (formerly Peterson), et al. v. The American Tobacco Company, et al.,
Circuit Court, First Circuit, Hawaii, filed February 6, 1997.
Walls, et al. v. The American Tobacco Company, et al., United States District
Court, Northern District, Oklahoma, filed February 6, 1997. In October 2000, the
court denied plaintiff's motion for class certification, and subsequently the
parties filed a stipulation of dismissal.
Selcer, et al. v. R.J. Reynolds Tobacco Company, et al., United States District
Court, Nevada, filed March 3, 1997. In September 2000, the Nevada Supreme Court
heard argument on the questions of state law certified to it by the district
court.
Geiger, et al. v. The American Tobacco Company, et al., Supreme Court, Queens
County, New York, filed April 30, 1997. In October 1999, plaintiffs appealed the
trial court's denial of their class certification motion.
Cole, et al. v. The Tobacco Institute, Inc., et al., United States District
Court, Eastern District, Texarkana Division, Texas, filed May 5, 1997. In May
2000, the trial court granted defendants' motion for judgment on the pleadings.
Plaintiffs filed a notice of appeal to the United States Court of Appeals for
the Fifth Circuit.
Anderson, et al. v. The American Tobacco Company, Inc., et al., United States
District Court, Eastern District, Tennessee, filed May 23, 1997.
Brown, et al. v. The American Tobacco Company, Inc., et al., Superior Court, San
Diego County, California, filed June 10, 1997. In April 2000, the court denied
plaintiffs' motion for class certification. The court has permitted plaintiffs
to file a second motion for class certification.
Fitz (formerly Brammer), et al. v. R.J. Reynolds Tobacco Company, et al., United
States District Court, Southern District, Iowa, filed June 20, 1997.
Guillory (formerly Denberg), et al. v. American Brands, Inc., et al., United
States District Court, Northern District, Illinois, filed July 7, 1997.
Bush, et al. v. Philip Morris Incorporated, et al., United States District
Court, Eastern District, Texas, filed September 10, 1997. In August 2000, the
parties submitted to the court a stipulation of dismissal without prejudice.
Nwanze, et al. v. Philip Morris Companies Inc., et al., United States District
Court, Southern District, New York, filed September 29, 1997. In June 2000, the
court granted defendants' motion to dismiss the complaint for failure to state a
claim. Plaintiffs have filed a notice of appeal to United States Court of
Appeals for the Second Circuit.
Badillo, et al. v. The American Tobacco Company, et al., United States District
Court, Nevada, filed October 8, 1997. In September 2000, the Nevada Supreme
Court heard arguments on the questions of state law certified to it by the
district court.
Young, et al. v. The American Tobacco Company, et al., Civil District Court,
Orleans Parish, Louisiana, filed November 12, 1997.
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Aksamit, et al. v. Brown & Williamson Tobacco Corporation, et al., United States
District Court, South Carolina, filed November 20, 1997.
Jackson, et al. v. Philip Morris Incorporated, et al., United States District
Court, Central District, Utah, filed February 13, 1998.
Parsons, et al. v. A C & S, Inc., et al., Circuit Court, Kanawha County, West
Virginia, filed February 27, 1998.
Basik (formerly Mendys), et al. v. Lorillard Tobacco Company, et al., United
States District Court, Northern District, Illinois, filed March 17, 1998.
Daniels, et al. v. Philip Morris Companies Inc., et al., Superior Court, San
Diego County, California, filed April 2, 1998. In April 2000, the court
confirmed its earlier order denying plaintiffs' motion for class certification.
In September 2000, the court agreed to reconsider its class certification
ruling.
Christensen, et al. v. Philip Morris Companies Inc., et al., United States
District Court, Nevada, filed April 3, 1998. In September 2000, the Nevada
Supreme Court heard arguments on the questions of state laws certified to it by
the district court.
Avallone, et al. v. The American Tobacco Company, Inc., et al., New Jersey
Superior Court, Atlantic County Law Division, New Jersey, filed April 23, 1998.
In April 2000, the appeals court dismissed plaintiffs' appeal from the trial
court's denial of plaintiffs' motion for class certification. In September 2000,
the New Jersey Supreme Court denied plaintiffs' motion for leave to appeal the
denial of class certification.
Cleary, et al. v. PM Inc., et al., Circuit Court, Cook County, Illinois, filed
June 3, 1998.
Creekmore, et al. v. Brown & Williamson, et al., Superior Court, Bucombe County,
North Carolina, filed July 31, 1998.
Jimenez, et al. v. Brown & Williamson Tobacco Corporation, et al., Second
Judicial District Court, County of Bernalillo, New Mexico, filed August 20,
1998.
Sweeney, et al. v. The American Tobacco Company, et al., Court of Common Pleas,
Alleghany County, Pennsylvania, filed October 15, 1998. In November 2000, this
case was dismissed without prejudice.
Brown, et al. v. Philip Morris, Inc., et al., United States District Court,
Eastern District, Pennsylvania, filed October 16, 1998. Plaintiffs allege that
tobacco companies' "discriminatory targeting of menthol tobacco product sales to
Black Americans" violates federal civil rights statutes. In September 1999, the
court granted defendants' motion to dismiss the case. Plaintiffs have appealed
to the United States Court of Appeals for the Third Circuit.
Cypret (formerly Jones), et al. v. The American Tobacco Company, et al., Circuit
Court, Jackson County, Missouri, filed December 22, 1998.
Simon, et al. v. Philip Morris Incorporated, et al., United States District
Court, Eastern District, New York, filed April 9, 1999. In September 2000, a
putative class action was filed which purports to consolidate punitive
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damages claims in this case with nine other pending tobacco-related cases. (See
Simon, et al. v. Philip Morris Incorporated, et al., (Simon II) discussed
below.) In November 2000, the court indicated that, in its view, this case is a
viable class action, but denied plaintiffs' motion for class certification on
the grounds of preserving court resources. The court further ruled that it
appears likely that plaintiffs in Simon II will be able to demonstrate a basis
for certification of an opt out compensatory damages class and a non-opt out
punitive damages class.
Julian, et al. v. Philip Morris Companies Inc., et al., Circuit Court for
Montgomery County, Alabama, filed April 14, 1999.
Force, et al. v. Brown & Williamson Tobacco Corporation, et al., United States
District Court, Southern District, Illinois, filed March 29, 2000.
Decie, et al. v. The American Tobacco Company, et al., United States District
Court, Eastern District, New York, filed April 21, 2000. In September 2000, a
putative class action was filed which purports to consolidate punitive damages
claims in this case with nine other pending tobacco-related cases. (See Simon,
et al. v. Philip Morris Incorporated, et al., (Simon II) discussed below.)
Arnitz, et al. v. Philip Morris Incorporated, et al., Div. H, Circuit Court for
the 13th Judicial Circuit, Hillsborough County, Florida, filed July 3, 2000.
Lewis, et al. v. Philip Morris Companies, Inc., et al., United States District
Court, Massachusetts, filed July 11, 2000.
National Tobacco Consumers' Group Number 2 v. Philip Morris Incorporated, et
al., United States District Court, Massachusetts, filed July 18, 2000.
Ebert, et al. v. Philip Morris Incorporated, et al., United States District
Court, Eastern District, New York, filed August 9, 2000 (not yet served). In
September 2000, a putative class action was filed which purports to consolidate
punitive damages claims in this case with nine other pending tobacco-related
cases. (See Simon, et al. v. Philip Morris Incorporated, et al., (Simon II)
discussed below.)
Vandermeulen, et al. v. Philip Morris Companies, Inc., et al., United States
District Court, Eastern District, Michigan, filed September 18, 2000.
International Class Actions
Caputo (formerly LeTourneau) v. Imperial Tobacco Limited, et al., Ontario Court
of Justice, Toronto, Canada, filed January 13, 1995.
The Smoker Health Defense Association, et al. v. Souza Cruz, S.A. and Philip
Morris Marketing, S.A., 19th Lower Civil Court of the Central Courts of the
Judiciary District of Sao Paulo, Brazil, filed July 25, 1995.
Fortin, et al. v. Imperial Tobacco Ltd., et al., Quebec Superior Court, Canada,
filed on or about September 11, 1998.
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Conseil Quebecois sur le Tabac v. RJR-Macdonald Inc., et al., Quebec Superior
Court, Canada, filed November 20, 1998.
Associacao Cearense' de Defesa da Saude do Fumante e Ex-Fumante (ACEDESFE) v.
Philip Morris Brazil, S.A., et al., Third Civil Court of the State of Ceara,
Forteleza, Brazil, filed April 12, 1999.
Tobacco Control Coalition Inc. v. Philip Morris Limited, et al., Federal Court
of Australia, New South Wales District, filed September 22, 1999.
Yabin Galidi, et al. v. Dubek Ltd., et al., Tel Aviv-Yaffo Region Court, Israel,
filed (but not officially served) July 12, 1999.
HEALTH CARE COST RECOVERY LITIGATION
The following lists the health care cost recovery actions pending against PM
Inc. and, in some cases, the Company and/or its other subsidiaries and
affiliates as of November 1, 2000, and describes certain developments in these
cases since August 1, 2000. As discussed in Note 5, in 1998 PM Inc. and certain
other United States tobacco product manufacturers entered into a Master
Settlement Agreement (the "MSA") settling the health care cost recovery claims
of 46 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam,
the United States Virgin Islands, American Samoa and the Northern Marianas.
Settlement agreements settling similar claims had previously been entered into
with the states of Mississippi, Florida, Texas and Minnesota. Exhibit 99.2
hereto sets forth the status of judicial approval of the MSA in each of the
respective settling jurisdictions. The Company believes that the claims in the
city/county, taxpayer and certain of the other health care cost recovery actions
listed below are released in whole or in part by the MSA or that recovery in any
such actions should be subject to the offset provisions of the MSA.
City/County Cases
County of Cook v. Philip Morris, Incorporated, et al., Circuit Court, Cook
County, Illinois, filed April 18, 1997. In September 1999, the judge granted in
part and denied in part defendants' motion to dismiss the complaint. Dismissed
were plaintiff's claims for intentional/negligent breach of special and general
duty, performance of another's duty to the public, public nuisance and unjust
enrichment/restitution. The counts remaining are for various violations of the
Illinois Consumer Fraud Act, violations of the Illinois Antitrust Act,
negligence per se and conspiracy. In February 2000, the court denied defendants'
motion for summary judgment on the remaining claims. In October 2000, the court
granted defendants' motion to dismiss all plaintiffs except Cook County. The
court also directed that the Cook County board must authorize or ratify the
filing of this suit by November 13, 2000 for it to be a proper exercise of the
County's home-rule powers.
City of St. Louis v. American Tobacco, et al., Circuit Court for the City of St.
Louis, Missouri, filed November 23, 1998.
County of St. Louis v. American Tobacco, et al., Circuit Court for the City of
St. Louis, Missouri, filed December 3, 1998. This case is currently stayed.
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Craig J. Wedde v. Valley Warehousing, Inc., et al., Circuit Court Fond Du Lac
County, Wisconsin, filed April 7, 1999.
County of Wayne v. Philip Morris Incorporated, et al., United States District
Court, Eastern District, Michigan, filed December 7, 1999. In August 2000,
following arguments on defendants' motion for judgment on the pleadings, the
district court certified certain state law questions to the Michigan Supreme
Court. The district court has stayed action in the case until defendants' motion
is resolved.
Ament, et al. v. Thompson, et al., Circuit Court, Dane County, Wisconsin, filed
April 28, 2000.
Lapean, et al. v. Thompson, et al., Circuit Court, Dane County, Wisconsin, filed
April 28, 2000.
Department of Justice Case
The United States of America v. Philip Morris, Inc., et al., United States
District Court, Washington, D.C., filed September 22, 1999. See Note 5, for a
discussion of this case.
International Cases
Republic of the Marshall Islands v. The American Tobacco Company, et al., High
Court, Republic of the Marshall Islands, filed October 20, 1997. In July 1999,
the court denied defendants' motion to dismiss. Trial of this case is scheduled
for April 2001.
The Republic of Panama v. The American Tobacco Company, Inc., United States
District Court, District of Columbia, filed September 11, 1998. In July 2000,
the United States Court of Appeals for the Fifth Circuit, vacated the ruling by
the United States District Court for the Eastern District of Louisiana that
granted plaintiff's motion to remand the case to the Civil District Court,
Orleans Parish, Louisiana. In November 2000, the case was transferred to the
Multidistrict Litigation proceeding pending before the United States District
Court for the District of Columbia (see In re Tobacco/Government Health Care
Cost Litigation (MDL No. 1279) described below).
Kupat Holim Clalit v. Philip Morris, Inc., et al., Jerusalem District Court,
Israel, filed September 28, 1998.
Her Majesty the Queen in Right of British Columbia v. Imperial Tobacco Limited,
et al., Supreme Court, British Columbia, Vancouver Registry, Canada, filed
November 12, 1998. In February 2000, the court dismissed this action, finding
the statute upon which British Columbia's claim was based was inconsistent with
the Constitution of Canada. Subsequently, British Columbia has enacted new
legislation and it is anticipated that the Province will soon file a new lawsuit
based on the new statute.
The Republic of Bolivia v. Philip Morris Companies, Inc., et al., United States
District Court, District of Columbia files January 20, 1999. In February 1999,
this case was removed to federal court by defendants and subsequently
transferred on the court's own motion to the federal district court for the
District of Columbia in March 1999. It is currently pending in In re
Tobacco/Governmental Health Care Costs Litigation (MDL No. 1279) (the "MDL
Proceeding") discussed below.
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The Republic of Venezuela v. Philip Morris Companies Inc., et al., Eleventh
Judicial Circuit, Dade County, Florida, filed January 27, 1999. This case was
removed to federal court by defendants in February 1999 and subsequently
transferred to the MDL Proceeding. The court hearing the MDL Proceeding remanded
the case to Florida state court in June 2000. Defendants have filed a notice of
appeal.
The Caisse Primaire d'Assurance Maladie of Saint-Nazaires v. SEITA, et al.,
Civil Court of Saint-Nazaires, France, filed June 1999.
In re Tobacco/Governmental Health Care Costs Litigation (MDL No. 1279), United
States District Court, District of Columbia, consolidated June 1999. In June
1999, the United States Panel on Multidistrict Litigation transferred foreign
government health care cost recovery actions brought by Nicaragua, Venezuela,
and Thailand to the District of Columbia for coordinated pretrial proceedings
with two such actions brought by Bolivia and Guatemala already pending in that
court. Subsequently, the resulting proceeding has also included filed cases
brought by the following foreign states: Ukraine, the Brazilian States of
Espirito Santo, Goias and Mato Grosso do Sul, Panama, the Province of Ontario,
Canada; Ecuador, and the Russian Federation. In December 1999, the district
court dismissed the complaint filed by Guatemala; in March 2000, the court
dismissed the complaints filed by Nicaragua and Ukraine; and in August 2000, the
court dismissed the complaint filed by the Province of Ontario. Thailand's case
was voluntarily dismissed. Guatemala, Nicaragua, Ukraine and the Province of
Ontario have filed notices of appeal to the United States Court of Appeal for
the District of Columbia Circuit. In July 2000, the district court remanded the
Venezuela and Goias actions to Florida state court, and in July 2000, the court
remanded the Ecuador and Espirito Santo actions to Florida state court.
Defendants have filed notices of appeal to the United States Court of Appeals
for the District of Columbia Circuit. At present, there are four cases pending
in the MDL proceeding: Bolivia, Mato Grosso do Sul, Panama, and Russian
Federation.
The State of Rio de Janeiro of the Federal Republic of Brazil v. Philip Morris
Companies Inc., et al., District Court, Angelina County, Texas, filed July 12,
1999. In September 1999, the United States District Court for the Eastern
District of Texas remanded the case to the district court for Angelina County,
Texas. An appeal is pending in the United States Court of Appeals for the Fifth
Circuit.
The State of Goias of the Federated Republic of Brazil v. Philip Morris
Companies, Inc., et al., Circuit Court, Eleventh Judicial Circuit, Dade County,
Florida, filed October 18, 1999. This case was removed to federal court by
defendants in November 1999 and subsequently transferred to the MDL Proceeding.
The court hearing the MDL Proceeding remanded the case to Florida state court in
July 2000, and defendants have filed a notice of appeal.
The Republic of Ecuador v. Philip Morris Companies, Inc., et al., Circuit Court,
Eleventh Judicial Circuit, Dade County, Florida, filed January 21, 2000. In July
2000, the United States Panel on Multidistrict Litigation transferred this case
to the United States District Court for the District of Columbia. In July 2000,
the district court granted plaintiff's motion to remand the case to the circuit
court of Dade County, Florida. Defendants have filed a notice of appeal.
Her Majesty the Queen in Right of Ontario, Canada v. Imperial Tobacco, et al.,
United States District Court, District of Columbia, filed March 1, 2000. In
April 2000, the United States Panel on Multidistrict Litigation transferred this
case to the United States District Court for the District of Columbia and it was
dismissed in August 2000. Plaintiffs have filed a notice of appeal.
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The State of Sao Paulo of the Federal Republic of Brazil v. Philip Morris
Companies, Inc., et al., Civil District Court, Parish of Orleans, Louisiana,
filed February 9, 2000. The case was removed to the United States District
Court, Eastern District, Louisiana. In May 2000, the case was remanded to Civil
District Court, Parish of Orleans, Louisiana. Defendants have filed a notice of
appeal.
The State of Espirito Santo of the Federal Republic of Brazil v. Brooke Group,
et al., Circuit Court, Eleventh Judicial Circuit, Dade County, Florida, filed
March 20, 2000. This case was removed to federal court by defendants in April
2000 and subsequently transferred to the MDL Proceeding. The court hearing the
MDL Proceeding remanded the case to Florida state court in July 2000, and
defendants have filed a notice of appeal.
Obra Social de Empleados de la Marina Mercante, et al. v. The American Tobacco
Company, et al., Superior Court, Washington, D.C., filed March 8, 2000.
The State of Mato Grosso do Sul, Brazil v. Philip Morris Companies Inc., et al.,
United States District Court, District of Columbia, filed July 19, 2000. This
case was removed to federal court by defendants in August 2000, and subsequently
transferred to the MDL Proceeding described above. It is currently pending in
the MDL Proceeding.
The Russian Federation v. Philip Morris Companies Inc., et al., United States
District Court, District of Columbia, filed on August 25, 2000. This case was
removed to federal court by defendants in September 2000 and subsequently
transferred to the MDL Proceeding. It is currently pending in the MDL
Proceeding.
The Republic of Honduras v. Philip Morris Companies, Inc., et al., United States
District Court, Southern District of Florida, filed October 5, 2000.
The State of Tocantins, Brazil v. The Brooke Group Ltd. Inc., et al., Eleventh
Judicial Circuit, Dade County, Florida, filed October 24, 2000 (not yet served).
Union Cases
Central Laborers Welfare Fund, et al. v. Philip Morris, Inc., et al., Circuit
Court, Third Judicial Circuit, Madison County, Illinois, filed May 30, 1997.
Connecticut Pipe Trades Health Fund, et al. v. Philip Morris Incorporated, et
al., United States District Court, Connecticut, filed July 1, 1997. Plaintiffs
voluntarily dismissed the case in September 1998. In April 2000, they filed a
motion to reinstate the case. In July 2000, the court reopened this case (now
denominated Oberle et al. v. Philip Morris, Inc., et al.) and permitted
plaintiffs to file an amended complaint.
Rhode Island Laborers Health and Welfare Fund v. Philip Morris Incorporated, et
al., United States District Court, Rhode Island, filed July 20, 1997. In June
2000, the district court granted defendants' motion for dismissal.
Eastern States Health and Welfare Fund, et al. v. Philip Morris, Inc., et al.,
Supreme Court, New York County, State of New York, filed July 28, 1997. In March
2000, the court granted defendants' motion for dismissal. Plaintiffs have
appealed the dismissal.
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Operating Engineers Local 12 Health and Welfare Trust Fund, et al. v. American
Tobacco, Inc., et al., Superior Court, San Diego County, California, filed
September 17, 1997. In March 2000, the court ruled that plaintiffs are not
permitted to use California's unfair business practices statute to seek monetary
damages for their claims. In April 2000, the plaintiffs voluntarily dismissed
the case with prejudice and appealed certain trial court rulings to the state
court of appeals.
Puerto Rican ILGWU Health & Welfare Fund, et al. v. Philip Morris Inc., et al.,
Supreme Court, County of New York, New York, filed September 17, 1997. In March
2000, the court granted defendants' motion for dismissal. Plaintiffs have
appealed the dismissal.
United Food and Commercial Workers Unions and Employers Health and Welfare Fund
v. Philip Morris, Inc., et al., United States District Court, Northern District,
Alabama, filed November 13, 1997. In August 1999, the court granted defendants'
motion to dismiss. In August 2000, the United States Court of Appeals for the
Eleventh Circuit affirmed the district court's ruling.
IBEW Local 25 Health and Benefit Fund v. Philip Morris, Inc., et al., Supreme
Court, New York County, New York, filed November 25, 1997. In March 2000, the
court granted defendants' motion for dismissal. Plaintiff has appealed the
dismissal.
IBEW Local 363 Welfare Fund v. Philip Morris, Inc., et al., Supreme Court, New
York County, New York, filed November 25, 1997. In March 2000, the court granted
defendants' motion for dismissal. Plaintiff has appealed the dismissal.
Local 138, 138A and 138B International Union of Operating Engineers Welfare Fund
v. Philip Morris, Inc., et al., Supreme Court, New York County, New York, filed
November 25, 1997. In March 2000, the court granted defendants' motion for
dismissal. Plaintiff has appealed the dismissal.
Local 840, International Brotherhood of Teamsters Health and Insurance Fund v.
Philip Morris, Inc., et al., Supreme Court, New York County, State of New York,
filed November 25, 1997. In March 2000, the court granted defendants' motion for
dismissal. Plaintiff has appealed the dismissal.
Long Island Regional Council of Carpenters Welfare Fund v. Philip Morris, Inc.,
et al,. Supreme Court, New York County, New York, filed November 25, 1997. In
March 2000, the court granted defendants' motion for dismissal. Plaintiff has
appealed the dismissal.
Day Care Council - Local 205 D.C. 1707 Welfare Fund v. Philip Morris, Inc., et
al., Supreme Court, New York County, New York, filed December 8, 1997. In March
2000, the court granted defendants' motion for dismissal. Plaintiff has appealed
the dismissal.
Local 1199 Home Care Industry Benefit Fund v. Philip Morris, Inc., et al.,
Supreme Court, New York County, New York, filed December 8, 1997. In March 2000,
the court granted defendants' motion for dismissal. Plaintiff has appealed the
dismissal.
Local 1199 National Benefit Fund for Health and Human Services Employees v.
Philip Morris, Inc., et al., Supreme Court, New York County, New York, filed
December 8, 1997. In March 2000, the court granted defendants' motion for
dismissal. Plaintiff has appealed the dismissal.
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Operating Engineers Local 324 Health Care Fund, et al. v. Philip Morris, Inc.,
et al., Circuit Court, Wayne County, Michigan, filed December 30, 1997.
Plaintiffs appealed the court's February 1999 decision to grant defendants'
motion to dismiss to the Michigan Court of Appeals.
Lyons, et al. v. Philip Morris Incorporated, et al., United States District
Court, Minnesota, filed December 31, 1997. In April 1999, the court granted
defendants' motion to dismiss the case. In September 2000, the United States
Court of Appeals for the Eighth Circuit affirmed the district court's ruling.
Steamfitters Local Union No. 614 Health & Welfare Fund, et al. v. Philip Morris,
Inc., et al., Circuit Court, Thirteenth Judicial District, Tennessee, filed
January 7, 1998. In January 1999, the trial court granted in part and denied in
part defendants' motion to dismiss. Defendants filed an interlocutory appeal
from the partial denial of their motion to dismiss. In September 2000, the
Tennessee Court of Appeals, Western Division, held that plaintiffs' claims were
too remote to permit recovery. The court remanded the case to the trial court
with directions that defendants' motion to dismiss the complaint be granted.
National Asbestos Workers Medical Fund, et al. v. Philip Morris Incorporated, et
al., United States District Court, Eastern District, New York, filed February
27, 1998. The named plaintiffs in this case are four union trust funds. The
district court denied plaintiffs' motion for class certification in September
2000. In October 2000, the plaintiffs petitioned the United States Court of
Appeals for the Second Circuit for review of that order. The Second Circuit has
not yet announced whether it will accept plaintiffs' petition for review. The
district court has also ruled that plaintiffs may proceed to trial with the
claims of only one union trust fund, which must be a New York based fund. Trial
is scheduled for May 2001. In September 2000, a putative class action was filed
which purports to consolidate punitive damages claims in this case with nine
other pending tobacco-related cases. (See Simon, et al. v. Philip Morris
Incorporated, et al., (Simon II) discussed below.)
Service Employees International Union Health & Welfare Fund, et al. v. Philip
Morris, Inc., et al., United States District Court, District of Columbia, filed
March 19, 1998. In July 1999, the court denied without prejudice the motion of
two health and welfare trust funds to intervene in this lawsuit. In December
1999, the court granted in part and denied in part defendants' motion to
dismiss. In March 2000, the United States Court of Appeals for the District of
Columbia Circuit granted the parties' petitions to appeal the District Court's
partial denial of defendants' motion to dismiss. In April 2000, the District of
Columbia Circuit consolidated the appeal with Guatemala v. The Tobacco Institute
for purposes of oral argument.
S.E.I.U. Local 74 Welfare Fund, et al. v. Philip Morris, Inc., et al., United
States District Court, District of Columbia, filed June 22, 1998. In December
1999, the court granted in part and denied in part defendants' motion to
dismiss. In March 2000, the United States Court of Appeals for the District of
Columbia Circuit granted the parties' petitions to appeal the district court's
partial denial of defendants' motion to dismiss. In April 2000, the District of
Columbia Circuit consolidated the appeal with Guatemala v. The Tobacco Institute
for purposes of oral argument.
Holland, et al. v. Philip Morris, Inc., et al., United States District Court,
District of Columbia, filed July 9, 1998. In December 1999, the court granted in
part and denied in part defendants' motion to dismiss. In March 2000, the United
States Court of Appeals for the District of Columbia Circuit granted the
parties' petitions to appeal the district court's partial denial of defendants'
motion to dismiss. In April 2000, the District of Columbia Circuit Appellate
Court consolidated the appeal with Guatemala v. The Tobacco Institute for
purposes of oral argument.
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Sheet Metal Workers Trust Fund, et al. v. Philip Morris, Inc., et al., United
States District Court, District of Columbia, filed August 31, 1999. In December
1999, the court granted in part and denied in part defendants' motion to
dismiss. In March 2000, the United States Court of Appeals for the District of
Columbia Circuit granted the parties' petitions to appeal the district court's
partial denial of defendants' motion to dismiss. In April 2000, the District of
Columbia Circuit consolidated the appeal with Guatemala v. The Tobacco Institute
for purposes of oral argument. Oral argument on the consolidated cases is
scheduled for February 2001.
Bergeron, et al. v. Philip Morris Incorporated, et al., United States District
Court, Eastern District, New York, filed September 29, 1999. In June 2000, the
court denied defendants' motion to dismiss the case. In September 2000, a
putative class action was filed which purports to consolidate punitive damages
claims in this case with nine other pending tobacco-related cases. (See Simon,
et al. v. Philip Morris Incorporated, et al., (Simon II) discussed below.)
Native American Cases
Crow Creek Sioux Tribe v. The American Tobacco Company, et al., Tribal Court,
Crow Creek Sioux Tribe, filed September 14, 1997. In January 2000, the court
entered a stay of proceedings until July 2001.
Sisseton-Wahpeton Sioux Tribe v. Philip Morris Incorporated, et al., Tribal
Court of the Sisseton-Wahpeton Sioux Tribe, filed May 8, 1998. On December 1,
1999, the court granted defendant's petition for interlocutory appeal from the
trial court's order that granted in part and denied in part defendants' motion
to dismiss the complaint. The trial and appellate courts have stayed proceedings
until November 2000.
Standing Rock Sioux Tribe v. American Tobacco Company, et al., Tribal Court of
the Standing Rock Sioux Indian Reservation, North Dakota, filed May 8, 1998. In
May 2000, the Standing Rock Sioux Supreme Court entered an order affirming the
trial court's denial of defendants' motion to dismiss the complaint for lack of
subject matter jurisdiction. In May 2000, the parties agreed to stay all
proceedings in this action until November 2000.
U Tu Utu Gwaitu Paiute Tribe, et al. v. Philip Morris Incorporated, et al.,
Superior Court, San Diego, California, filed October 30, 1998. In June 2000, the
court denied defendants' motion to dismiss the complaint. Trial is scheduled for
June 2001
Acoma Pueblo, et al. v. American Tobacco Co., et al., New Mexico, First Judicial
District Court, Santa Fe County, New Mexico, filed June 16, 1999. In July 2000,
the court entered a stay of proceedings until November 30, 2000.
Navajo Nation v. Philip Morris Incorporated, et al., District Court, Window
Rock, Arizona, filed August 12, 1999.
The Alabama Coushatta Tribe of Texas v. Philip Morris Companies Inc., et al.,
United States District Court, Eastern District, Texas, filed August 30, 2000.
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Insurer and Self-Insurer Cases
Group Health Plan, et al. v. Philip Morris, Inc., et al., United States District
Court, Minnesota, filed March 11, 1998. In April 1999, the court dismissed all
claims except the state antitrust and conspiracy claims. In January 2000, the
court granted in part defendants' motion to dismiss and certified issues
regarding plaintiffs' consumer protection claims to the Minnesota Supreme Court.
Blue Cross and Blue Shield of New Jersey, Inc., et al. v. Philip Morris,
Incorporated, et al., United States District Court, Eastern District, New York,
filed April 29, 1998. In August 1999, the court denied defendants' motion to
dismiss the amended complaint. In October 1999, the United States Court of
Appeals for the Second Circuit denied defendants' appeals and mandamus petition,
which sought review of the district court's denial of defendants' motion to
dismiss the amended complaint. In October 1999, five of the plaintiffs agreed to
dismiss their claims without prejudice. In November 1999, defendants filed a
petition for rehearing and a petition for rehearing en banc from the previous
order in October declining to review defendants' petition for writ of mandamus.
In December 1999, the Second Circuit denied the petition for rehearing and in
April 2000 denied the defendants' petition for rehearing en banc. In September
2000, the court granted defendants' motion for partial summary judgment on
plaintiffs' claims for pre-judgment interest, future damages, tax damages,
Medicaid/Medicare damages and damages for violations of the Racketeering
Influenced and Corrupt Organizations Act ("RICO") that occurred prior to the
enactment of RICO. The court also determined that plaintiffs may not proceed on
any alleged RICO predicate act other than mail and wire fraud and, on that
basis, denied defendants' related motion for partial summary judgment as moot.
The court severed the claims of one plaintiff from those of the remaining plan
plaintiffs; trial on that plaintiff's subrogated RICO claims and direct New York
law claims based on alleged fraud is scheduled for March 2001. The court also
granted defendants' motion for summary judgment based on the statute of
limitations and granted defendants' motion for summary judgment concerning
plaintiffs' RICO claim based on an investment theory. The court denied
defendants' partial summary judgment motion based on preemption as to the claim
of wire and mail fraud RICO predicate violations, denied defendants' partial
summary judgment motion on plaintiffs' subrogation claims, and denied
defendants' motion for summary judgment for failure to offer individualized
proof of subrogation claims. In September 2000, a putative class action was
filed which purports to consolidate punitive damages claims in this case with
nine other pending tobacco-related cases. (See Simon, et al. v. Philip Morris
Incorporated, et al., (Simon II) discussed below.)
Regence Blue Shield, et al. v. Philip Morris, Inc., et al., United States
District Court, Western District, Washington, filed April 29, 1998. Plaintiffs
have appealed the trial court's dismissal of their action to the United States
Court of Appeals for the Ninth Circuit.
Betriebskrankenkasse Aktiv, et al. v. Philip Morris Incorporated, et al., United
States District Court, Eastern District, New York, filed September 28, 2000.
Taxpayer Cases
Coyne, et al. v. The American Tobacco Company, et al., Court of Common Pleas,
Cuyahoga County, Ohio, filed September 17, 1996. In July 1999, the United States
Court of Appeals for the Sixth Circuit affirmed in part the ruling by the United
States District Court for the Northern District of Ohio that plaintiffs lacked
standing to pursue their federal claims. The Sixth Circuit was unable to
determine whether any of the
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plaintiffs' state law claims survived. As a result of the ruling the case was
remanded to state court for additional proceedings.
State of Tennessee, et al., ex. rel. Beckom, et al. v. The American Tobacco
Company, et al., Chancery Court, Monroe County, Tennessee, filed May 8, 1997. In
April 2000, the United States Court of Appeals for the Sixth Circuit affirmed in
part the ruling by the United States District Court for the Eastern District of
Tennessee that plaintiffs lacked standing to pursue their federal claims. The
Sixth Circuit was unable to determine whether any of plaintiffs' state law
claims survived. As a result of the ruling the case was remanded to state court
for additional proceedings.
Temple, et al. v. The State of Tennessee, et al., United States District Court,
Middle District, Tennessee, filed February 7, 2000. Plaintiffs contend that
defendant the State of Tennessee has no standing to recover the funds paid to it
as compensation for the monies it has paid through its TennCare program for
individuals allegedly injured by a smoking-related disease. Plaintiffs further
seek a declaration that the MSA is unconstitutional. Plaintiffs' amended
complaint also includes claims for class certification on behalf of Tennessee
smokers.
Other Cases
Perry, et al. v. The American Tobacco Company, et al., Circuit Court, Coffee
County, Tennessee, filed September 30, 1996.
Mason, et al. v. The American Tobacco Company, et al., United States District
Court, Eastern District, New York, filed December 23, 1997. In September 2000, a
putative class action was filed which purports to consolidate punitive damages
claims in this case with nine other pending tobacco-related cases.
(See Simon, et al. v. Philip Morris Incorporated, et al., (Simon II) discussed
below.)
Allegheny General Hospital, et al. v. Philip Morris, Inc., et al., United States
District Court, Western District, Pennsylvania, filed December 10, 1998. In
November 1999, the court granted defendants' motion to dismiss. In October 2000,
the United States Court of Appeals for the Third Circuit affirmed the trial
court's dismissal of the case.
Association of Washington Public Hospital Districts, et al. v. Philip Morris
Incorporated, United States District Court, Western District, Washington, filed
March 17, 1999. In December 1999, the court granted defendants' motion to
dismiss and plaintiffs have appealed.
A.O. Fox Memorial Hospital et al. v. The American Tobacco Company, et al.,
Supreme Court, Nassau County, New York, filed March 30, 2000.
County of McHenry, Randolph Hospital District, et al. v. Philip Morris, Inc., et
al., Circuit Court, Cook County, Illinois, filed July 13, 2000.
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CERTAIN OTHER TOBACCO-RELATED ACTIONS
The following lists certain other tobacco-related litigation pending against the
Company and/or various subsidiaries and others as of November 1, 2000, and
describes certain developments since August 1, 2000.
Asbestos Contribution Cases
Raymark Industries, Inc. v. R. J. Reynolds Tobacco Company, et al., Circuit
Court, Fourth Judicial Circuit, Duval County, Florida, filed September 15, 1997.
Raymark Industries, Inc. v. Brown & Williamson Tobacco Corporation, et al.,
United States District Court, Northern District, Atlanta Division, Georgia,
filed September 15, 1997.
Fibreboard Corporation and Owens Corning v. The American Tobacco Company, et
al., Superior Court, Alameda County, California, filed December 11, 1997
Keene Creditors Trust v. Brown & Williamson Tobacco Corporation, et al., Supreme
Court, New York County, New York, filed December 19, 1997.
Robert A. Falise, et al. v. The American Tobacco Company, et al., United States
District Court, Southern District, New York, filed December 31, 1997. In
November 1999, the court granted defendant's motion to dismiss, finding no
subject matter jurisdiction. Plaintiffs appealed this dismissal to the United
States Court of Appeals for the Second Circuit, and defendants cross-appealed
the trial court's denial of their motion to dismiss on the merits. Plaintiffs
filed a new complaint in November 1999, alleging violations of RICO. In April
2000, defendants filed a petition for writ of mandamus with the Second Circuit
seeking review of the trial court's denial of their motion for summary judgment.
The petition was denied in October 2000. Jury selection in this trial is
scheduled for November 2000. In September 2000, a putative class action was
filed which purports to consolidate punitive damages claims in this case with
nine other pending tobacco-related cases. (See Simon, et al. v. Philip Morris
Incorporated, et al., (Simon II) discussed below.)
H. K. Porter Company, Inc. v. The American Tobacco Company, et al., United
States District Court, Eastern District, New York, filed December 31, 1997. In
November 1999, defendants filed a petition for mandamus with the United States
Court of Appeals for the Second Circuit, seeking review of the trial court's
denial of defendants' motion to dismiss. The mandamus petition was denied in
October 2000. Trial is scheduled for April 2001. In September 2000, a putative
class action was filed which purports to consolidate punitive damages claims in
this case with nine other pending tobacco-related cases. (See Simon, et al. v.
Philip Morris Incorporated, et al., (Simon II) discussed below.)
Raymark Industries, Inc. v. R. J. Reynolds Tobacco Company, et al., Circuit
Court, Fourth Judicial Circuit, Duval County, Florida, filed December 31, 1997.
Raymark Industries, Inc. v. The American Tobacco Company, et al., United States
District Court, Eastern District, Pennsylvania, filed January 30, 1998. In
September 2000, a putative class action was filed in the United States District
Court for the Eastern District of New York which purports to consolidate
punitive damages claims in this case with nine other pending tobacco-related
cases. (See Simon, et al. v. Philip Morris Incorporated, et al., (Simon II)
discussed below.)
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Owens Corning v. R.J. Reynolds Tobacco Company, et al., United States District
Court, Southern District of Mississippi, filed August 30, 1998.
UNR Asbestos-Disease Claims Trust v. Brown & Williamson Tobacco Corporation, et
al., Supreme Court, New York County, New York, filed March 15, 1999.
Lights/Ultra Lights Cases
Tirado, (formerly Hogue), et al. v. Philip Morris Companies Inc. and Philip
Morris, Inc., Circuit Court for the 13th Judicial Circuit, Hillsborough County,
Florida, filed June 30, 1998.
Gesser (formerly Cummis), et al. v. Philip Morris Companies, Inc. and Philip
Morris, Inc., Superior Court, Middlesex County, New Jersey, filed July 9, 1998.
McNamara, et al. v. Philip Morris Companies, Inc. and Philip Morris, Inc., Court
of Common Pleas, Montgomery County, Pennsylvania, filed July 16, 1998.
Aspinall, et al. v. Philip Morris Companies, Inc. and Philip Morris
Incorporated, Superior Court, Suffolk County, Massachusetts, filed November 24,
1998.
McClure, et al. v. Philip Morris Companies Inc. and Philip Morris Incorporated,
Circuit Court, Davidson County, Tennessee, filed January 19, 1999.
Cocca, et al. v. Philip Morris Incorporated, Superior Court, Maricopa County,
Arizona, filed May 13, 1999.
Popa, et al. v. Philip Morris Companies Inc., et al., Court of Common Pleas,
Stark County, Ohio, filed June 30, 1999. In November 2000, plaintiffs filed a
notice of voluntary dismissal.
Engle, et al. v. Philip Morris Companies, Inc. and Philip Morris Inc., Superior
Court, Maricopa County, Arizona, filed July 16, 1999.
Marrone, et al. v. Philip Morris Companies Inc. and Philip Morris Incorporated,
Court of Common Pleas, Medina County, Ohio, filed November 8, 1999.
Miles, et al. v. Philip Morris Companies, Inc., et al., Circuit Court, Madison
County, Illinois, filed February 10, 2000. Trial is scheduled for November 2001.
Dahlgren v. Philip Morris Companies Inc. and Philip Morris Inc., et al., United
States District Court, District of Columbia, filed November 18, 1999. In August
2000, plaintiff voluntarily dismissed this action.
Bauer, et al. v. Philip Morris Companies Inc., Circuit Court, City of St. Louis,
Missouri, filed February 15, 2000.
Retail Leaders Case
R.J. Reynolds Tobacco Company, et al. v. Philip Morris Incorporated, United
States District Court, Middle District, North Carolina, filed March 12, 1999.
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Vending Machine Case
Lewis d/b/a B&H Vendors v. Philip Morris Inc., United States District Court,
Middle District, Tennessee, filed February 3, 1999.
California Business and Professions Code Cases
The Company believes that these cases, which were based in part on "Proposition
65", are released in whole or in part by the MSA or that recovery in any such
action should be subject to the offset provisions of the MSA. In January 2000,
the trial court granted in part and denied in part defendants' motion for
summary judgment in the "Proposition 65" cases and dismissed plaintiffs'
"Proposition 65" claims. In August 2000 and October 2000, the parties to these
cases entered into separate settlement agreements. The court is scheduled to
rule on November 20, 2000 on defendants' motion for approval of both settlements
and entry of a final judgment in both cases.
The People of the State of California, et al. v. Philip Morris Incorporated, et
al., Superior Court, Los Angeles County, California, filed July 14, 1998. The
People of the State of California, et al. v. Brown & Williamson Tobacco
Corporation, et al., Superior Court, San Francisco County, California, filed
July 28, 1998.
MSA-Related Cases
The following are cases in which plaintiffs have challenged the validity of the
Master Settlement Agreement described in Note 5. Contingencies.
Hise, et al. v. Philip Morris Incorporated, et al., United District Court,
Northern District, Oklahoma, filed December 15, 1998. Plaintiffs have appealed
the trial court's dismissal of their action to the United States Court of
Appeals for the Tenth Circuit. In February 2000, the Tenth Circuit affirmed
summary judgment for defendants and in March 2000 it denied plaintiffs' petition
for rehearing. In June 2000, plaintiffs attempted to file a writ of certiorari
with the United States Supreme Court but subsequently withdrew their petition.
In August 2000, plaintiffs filed a second petition for writ of certiorari with
the United States Supreme Court that was denied in October 2000.
Forces Action Project, LLC, et al. v. The State of California, et al., United
States District Court, Northern District, California, filed January 23, 1999. In
January 2000, the court granted defendants' motion to dismiss the complaint, and
plaintiffs have appealed to the United States Court of Appeals for the Ninth
Circuit.
A.D. Bedell Wholesale Co. v. Philip Morris Incorporated, et al., United States
District Court, Western District, Pennsylvania, filed April 12, 1999. In March
2000, the court granted in part defendants' motion to dismiss the complaint.
Thereafter, plaintiffs and Philip Morris stipulated to a dismissal without
prejudice of the claim that had not been dismissed by the court. In April 2000,
plaintiffs filed a notice of appeal to the United States Court of Appeals for
the Third Circuit from the court's decision granting in part defendants' motion
to dismiss.
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A.D. Bedell Company, Inc. v. Philip Morris Incorporated, et al., Supreme Court,
Cattaraugus County, New York, filed October 18, 1999. In November 1999, the
court denied a motion to dismiss the complaint and denied a motion to vacate the
temporary restraining order enjoining Philip Morris from refusing to sell
products to plaintiff. Defendant filed an appeal from the court's denial of the
motion to dismiss and the motion to vacate. In May 2000, the appellate court
granted in part and denied in part defendants' motion to dismiss the case. The
case has been stayed pending resolution of A.D. Bedell Wholesale Co. v. Philip
Morris Incorporated, et al., discussed above.
Table Bluff Reservation (Wiyot Tribe), et al. v. Philip Morris, Incorporated, et
al., No. C99-02621-NHP, United States District Court, Northern District,
California, filed June 2, 1999. On November 12, 1999, the court dismissed the
case and plaintiffs have appealed to the United States Court of Appeals for the
Ninth Circuit.
Turner Branch, et al. v. Brown & Williamson Tobacco Corporation, et al., United
States District Court, New Mexico, filed August 3, 1999. In August 2000, the
court dismissed this case with prejudice at the request of the parties.
PTI, Inc. et al. v. Philip Morris Incorporated, et al., United States District
Court, Central District, California, filed August 13, 1999. In May 2000, the
Court dismissed the plaintiffs' claims.
State of New York, et al. v. Philip Morris Incorporated, et al., Supreme Court,
New York County, New York, intervention motion filed August 19, 1999. The
intervention motion was denied. The Appellate Division, First Department
affirmed the trial court's ruling, and the time to seek further review has
expired.
Randall Gomer, et al. v. Philip Morris Companies Inc. et al., United States
District Court, Montgomery, Alabama, filed April 26, 2000. Plaintiffs are
several Alabama Medicaid recipients who seek class certification contending that
the allocation of the State's anticipated MSA funds is unconstitutional. In July
2000, the court granted defendants' motion to dismiss.
Tobacco Price Cases
Wholesalers and Other Direct Purchasers: The following are putative class
actions filed by tobacco wholesalers/distributors and by smokers alleging that
defendants, conspired to fix cigarette prices in violation of antitrust laws.
Buffalo Tobacco Products, et al. v. Philip Morris Companies Inc., et al., United
States District Court, District of Columbia, filed February 8, 2000. In June
2000, the United States Panel on Multidistrict Litigation transferred this case
to the United States District Court, Northern District of Georgia. (See In Re:
Cigarette Pricing Litigation, MDL 1342 discussed below.)
DelSeronne, et al. v. Philip Morris Companies Inc., et al., Circuit Court, Wayne
County, Michigan, filed February 8, 2000.
Greer, et al. v. R. J. Reynolds, et al., Superior Court, San Francisco,
California, filed February 9, 2000.
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Lennon v. Philip Morris Companies Inc., et al., Supreme Court, New York County,
New York, filed February 9, 2000.
Munoz, et al. v. R. J. Reynolds, et al., Superior Court, San Francisco,
California, filed February 9, 2000.
Smith, et al. v. Philip Morris Companies Inc., et al., District Court, Seward
County, Kansas, filed February 9, 2000.
Withers, et al. v. Philip Morris Companies Inc., et al., Circuit Court,
Jefferson County, Tennessee, filed February 9, 2000.
Gray, M.D., et al. v. Philip Morris Companies Inc., et al., Superior Court, Pima
County, Arizona, filed February 11, 2000.
Brownstein, et al. v. Philip Morris Companies Inc., et al., Circuit Court,
Broward County, Florida, filed February 14, 2000.
Morse v. R. J. Reynolds, et al., Superior Court, Alameda County, California,
filed February 14, 2000.
Ulan v. R. J. Reynolds, et al., Superior Court, Alameda County, California,
filed February 17, 2000.
Williamson Oil Company, Inc. v. Philip Morris Companies, et al., United States
District Court, Northern District, Georgia, filed February 18, 2000.
Shafer v. Philip Morris Companies Inc., et al., District Court, Morton County,
North Dakota, filed February 16, 2000.
Sullivan v. R. J. Reynolds, et al., Superior Court, Alameda County, California,
filed February 22, 2000.
Teitler v. R. J. Reynolds, et al., Superior Court, Alameda County, California,
filed February 22, 2000.
Peirona v. Philip Morris Companies Inc., et al., Superior Court, San Francisco
County, California, filed February 28, 2000.
Cusatis v. Philip Morris Companies Inc., et al., Circuit Court, Milwaukee
County, Wisconsin, filed February 28, 2000.
Sand v. Philip Morris Companies Inc., et al., Superior Court, Los Angeles,
California, filed February 28, 2000.
Nierman v. Philip Morris Companies Inc., et al., Supreme Court, New York County,
New York, filed March 6, 2000.
Sylvester v. Philip Morris Companies Inc., et al., Supreme Court, New York
County, New York, filed March 8, 2000.
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Goldschlack v. Philip Morris Companies Inc., et al., United States District
Court, Eastern District, Pennsylvania, filed March 9, 2000. In June 2000, the
United States Panel on Multidistrict Litigation transferred this case to the
United States District Court, Northern District of Georgia. (See In Re:
Cigarette Pricing Litigation, MDL 1342 discussed below.)
Suwanee Swifty Stores, Inc., D.I.P. v. Philip Morris Companies, Inc., United
States District Court, Northern District, Georgia, filed March 14, 2000. In June
2000, the United States Panel on Multidistrict Litigation transferred this case
to the United States District Court, Northern District of Georgia. (See In Re:
Cigarette Pricing Litigation, MDL 1342 discussed below.)
Holiday Markets, Inc., et al. v. Philip Morris Companies Inc., United States
District Court, Northern District, Georgia, filed March 17, 2000. In June 2000,
the United States Panel on Multidistrict Litigation transferred this case to the
United States District Court, Northern District of Georgia. (See In Re:
Cigarette Pricing Litigation, MDL 1342 discussed below.)
Taylor, et al. v. Philip Morris Companies Inc., et al., Superior Court,
Cumberland County, Maine, filed March 24, 2000.
Romero, et al. v. Philip Morris Companies Inc., et al., First Judicial District
Court, Rio Arriba County, New Mexico, filed April 10, 2000.
Belch, et al. v. Philip Morris Companies Inc. et al., Superior Court, Alameda
County, California, filed on April 11, 2000.
Belmonte, et al. v. R. J. Reynolds, et al., Alameda County Superior Court,
California, filed April 11, 2000.
Aguay, et al. v. R.J. Reynolds, et al., Alameda County Superior Court,
California filed April 11, 2000.
Swanson, et al. (formerly Vetter, et al.) v. Philip Morris Companies Inc., et
al., District Court, Hughes County, South Dakota, filed April 18, 2000.
Ludke, et al. v. Philip Morris Companies Inc., et al., District Court, Hennepin
County, Minnesota, filed April 20, 2000.
Marcus Distributors, Inc., et al. v. Philip Morris Companies Inc., et al.,
United States District Court, Southern District, Illinois, filed April 25, 2000.
Kissel, et al. (formerly Quickle, et al.) v. Philip Morris Companies Inc., et
al., First Judicial Circuit Court, Ohio County, West Virginia, filed May 2,
2000.
Hartz Foods, et al. v. Philip Morris Companies Inc., et al., United States
District Court, District of Columbia, filed May 10, 2000. In June 2000, the
United States Panel on Multidistrict Litigation transferred this case to the
United States District Court, Northern District of Georgia (See In Re: Cigarette
Pricing Litigations MDL 1342 discussed below.)
Anderson, et al. v. Philip Morris Companies Inc., et al., United States District
Court, District of Minnesota, filed May 10, 2000. In June 2000, the United
States Panel on Multidistrict Litigation transferred this case to
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the United States Court, Northern District of Georgia. (See In Re: Cigarette
Pricing Litigation MDL 1342 discussed below.)
Baker, et al. v. R.J. Reynolds, et al., Superior Court, Alameda County,
California, filed May 15, 2000.
Campe, et al. v. R.J. Reynolds, et al., Superior Court, Alameda County,
California, filed May 15, 2000.
Barnes v. Philip Morris Companies Inc., et al., Superior Court, District of
Columbia, filed May 18, 2000.
Lau, et al. v. R.J. Reynolds et al., Alameda County Superior Court, California,
filed May 25, 2000.
In Re: Cigarette Pricing Litigation MDL 1342, Federal Multidistrict Litigation
Panel, United States District Court, Northern District, Georgia, Atlanta
Division, filed June 7, 2000.
Philips, et al. v. R.J. Reynolds, et al., Second Judicial District, Washoe
County, Nevada, filed June 9, 2000.
Unruh, et al. v. R.J. Reynolds, et al., Second Judicial District, Washoe County,
Nevada, filed June 9, 2000.
Tobacco Growers' Case
DeLoach, et al. v. Philip Morris Companies Inc., et al., United States District
Court, District of Columbia, filed February 16, 2000. This purported class
action alleges that defendants violated antitrust laws by bid-rigging at tobacco
auctions and by conspiring to undermine the tobacco quota and price support
system administered by the federal government. In June 2000, plaintiffs
voluntarily dismissed the Company and PMI from the case. The remaining
defendants, including PM Inc., filed a motion to dismiss the case. In September
2000, the court granted plaintiffs' motion for leave to file a second amended
complaint. In October 2000, defendants filed a motion to dismiss the second
amended complaint. In October 2000, plaintiffs filed a motion for a class
certification.
Cigarette Importation Cases
Department of Amazonas, et al. v. Philip Morris Companies, Inc., et al., United
States District Court, Eastern District of New York, filed September 19, 2000.
The Republic of Ecuador v. Philip Morris Incorporated, et al., Circuit Court,
Eleventh Judicial Circuit, Miami-Dade County, Florida, filed June 5, 2000 (not
served).
The European Community v. RJR Nabisco, Inc., et al., United States District
Court, Eastern District of New York, filed November 3, 2000.
Consolidated Putative Punitive Damages Cases
Simon, et al. v. Philip Morris Incorporated, et al., (Simon II), United States
District Court for the Eastern District of New York, filed September 6, 2000.
Plaintiffs' complaint requests class certification of a nationwide punitive
damages class and seeks to consolidate the punitive damages claims in the
following ten actions: Simon, et al. v. Philip Morris Incorporated, et al.,
United States District Court, Eastern District, New York, Decie, et al. v. The
American Tobacco Company, et al., United States District Court, Eastern
District, New York, Ebert, et al. v. Philip Morris Incorporated, et al., United
States District Court, Eastern District, New York, National Asbestos Workers
Medical Fund, et al. v. Philip Morris Incorporated, et al., United States
District Court, Eastern Division, New York, Bergeron, et al. v. Philip Morris
Incorporated, et al., United States District Court, Eastern District, New York,
Blue Cross and Blue Shield of New Jersey, Inc. et al. v. Philip Morris,
Incorporated, et al., United States District Court, Eastern District, New York,
Mason, et al. v. The American Tobacco Company, et al., United States District
Court, Eastern District, New York, Robert A. Falise, et al. v. The American
Tobacco Company, et al., United States District Court, Southern District, New
York, H. K. Porter Company, Inc. v. The American Tobacco Company, et al., United
States District Court, Eastern District, New York and Raymark Industries, Inc.
v. The American Tobacco Company, et al., United States District Court, Eastern
District, Pennsylvania. The complaint identifies seven purported subclasses
comprised of: (a) all persons residing in the United States who, at any time
from 1920 through the date of the class notice, smoked cigarettes manufactured
by the defendants and who are suffering from various types of cancer or other
diseases identified in the complaint; (b) the estates or personal
representatives of all such smokers who are deceased and for whom any of the
identified diseases were listed in medical records or death certificates as a
cause of death; (c) all persons and entities described in clauses (a) and (b)
above with pending civil actions who/which have not proceeded to final judgment
on all claims and issues; (d) all persons residing in the United States who, at
any time from 1920 through the date of class notice, have smoked cigarettes
manufactured by the defendants but who are not as of the class notice suffering
from or diagnosed with any of the diseases listed in the complaint; (e) all
multi-employer health benefit plans established under the Labor Management
Relations (Taft-Hartley) Act, that, as of the date of the complaint, have paid
to detect, diagnose, or treat any of the diseases listed in the complaint to any
of the persons described in clauses (a), (b) or (c) above or to prevent or
curtail cigarette smoking; (f) all non-governmental entities located in the
United States (third party payors) that have asserted claims on behalf of
themselves or others with which they have contracted that as of the date of the
complaint are pending in any trial or appellate court, to recover payments made
for health care costs in detecting, diagnosing, treating and/or seeking to
prevent smoking-related disease; and (g) all manufacturers, distributors and
producers of asbestos or asbestos-containing products that as of the date of the
complaint are or have in the past been subject to the supervision of a United
States Bankruptcy Court or a United States District Court exercising bankruptcy
jurisdiction, and successors to the liabilities of the asbestos manufacturers,
distributors and producers. In November 2000, the court indicated that, in its
view, it appears likely that plaintiffs will be able to demonstrate a basis for
certification of an opt-out compensatory damages class and a non-opt out
punitive damages class.
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CERTAIN OTHER ACTIONS
The following lists certain other actions pending against subsidiaries of the
Company and others as of November 1, 2000.
National Cheese Exchange Cases
Consolidated Action: (Servais, et al. v. Kraft Foods, Inc. and the National
Cheese Exchange, Inc., Circuit Court, Dane County, Wisconsin, filed May 5, 1997;
Dodson, et al. v. Kraft Foods, Inc., et al., Circuit Court, Dane County,
Wisconsin, filed July 1, 1997; Noll, et al. v. Kraft Foods, Inc., et al.,
Circuit Court, Dane County, Wisconsin, filed July 11, 1997.) As discussed in
Note 5. Contingencies, in October 1999 the Court granted Kraft's motion for
summary judgment. Plaintiffs have appealed.
Vincent, et al. v. Kraft Foods, Inc., Circuit Court, Cook County, Illinois,
filed October 27, 1997. In February 2000, the appeals court reversed the trial
court's dismissal.
Knevelboard Dairies, et al. v. Kraft Foods, Inc., et al., United States District
Court, Central District, California, filed April 14, 1998. Plaintiffs have
appealed the court's dismissal of this action.
Environmental Matters
State of Missouri v. Kraft Foods, Inc., et al., Circuit Court, Missouri, filed
March 14, 2000. In March 2000, the State of Missouri filed a civil enforcement
action against Kraft and affiliated companies alleging that from 1995 through
1999 the defendants sent spent weiner casings to a farm site near Columbia,
Missouri for reuse. The State claims that this practice violated the Missouri
Solid Waste Law and the Missouri Clean Water Law and seeks civil penalties and
the removal of the spent casings from the farm site and disposal in a permitted
solid waste facility. Kraft filed a motion to dismiss the complaint.
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