Exhibit 99.1
CERTAIN PENDING LITIGATION MATTERS AND RECENT DEVELOPMENTS
As described in Note 5 ("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. 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 May
1, 2000 are also described.
SMOKING AND HEALTH LITIGATION
The following lists the 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
August 1, 2000, and describes certain developments in these cases since May 1,
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. To date, approximately 390 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.
Domestic Class Actions
Engle, et al. v. R.J. Reynolds Tobacco Co., et al., United States District
Court, Southern District of Florida, filed May 5, 1994. See Note 5.
Contingencies, for a discussion of 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.
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Exhibit 99.1
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. Trial is scheduled for October 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.
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.
Selcer, et al. v. R.J. Reynolds Tobacco Company, et al., United States District
Court, Nevada, filed March 3, 1997.
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.
Brammer, et al. v. R.J. Reynolds Tobacco Company, et al., United States District
Court, Southern District, Iowa, filed June 20, 1997.
Denberg (formerly Daley), 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.
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.
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Exhibit 99.1
Young, et al. v. The American Tobacco Company, et al., Civil District Court,
Orleans Parish, Louisiana, filed November 12, 1997.
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 of 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.
Christensen, et al. v. Philip Morris Companies Inc., et al., United States
District Court, Nevada, filed April 3, 1998.
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.
The trial court denied plaintiffs' motion for class certification. Plaintiffs
appealed. In April 2000, the appeals court dismissed plaintiffs' appeal. In June
2000, plaintiffs filed an amended notice of appeal with the New Jersey Supreme
Court.
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.
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.
Jones, et al. v. The American Tobacco Company, et al., Circuit Court, Jackson
County, Missouri, filed December 22, 1998.
Tobacco Consumers' Group Number 3 v. R. J. Reynolds Tobacco Company, et al.,
United States District Court, Massachusetts, filed March 24, 1999. In May 2000,
the court entered an order approving plaintiffs' stipulation to a voluntary
dismissal without prejudice.
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Exhibit 99.1
Simon, et al. v. Philip Morris Incorporated, et al., United States District
Court, Eastern District, New York, filed April 9, 1999.
Julian, et al., v. Philip Morris Companies Inc., 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.
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.
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.
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 August 1, 2000, and describes certain developments in these
cases since May 1, 2000. As discussed in Note 5. Contingencies, 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
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Exhibit 99.1
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
City of New York, et al. v. The Tobacco Institute, et al., Supreme Court, New
York County, New York, filed October 17, 1996. Pursuant to the MSA, plaintiffs,
New York City and the Health and Hospitals Corporation, executed a release
against all defendants and others, including PM Inc., and signed a stipulation
dismissing this action with prejudice.
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.
City of St. Louis v. American Tobacco, et al., Circuit Court for the City of St.
Louis, Missouri, filed November 23, 1998. This action has been stayed by
agreement of the parties until September 2000.
County of St. Louis v. American Tobacco, et al., Circuit Court for the City of
St. Louis, Missouri, filed December 3, 1998. This action has been stayed by
agreement of the parties until September 2000.
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.
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.
County of McHenry, et al. vs. Philip Morris Incorporated et al., Circuit Court,
Cook County, Illinois, filed July 13, 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.
Contingencies, 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 is scheduled for January
2001.
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Exhibit 99.1
The Republic of Panama v. The American Tobacco Company, Inc., United States
District Court for the Eastern District of Louisiana, 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.
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 Caisse Primaire d'Assurance Maladie of Saint-Nazaires v. SEITA, et al.,
Civil Court of Saint-Nazaires, France, filed June 1999 .
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.
In re Tobacco/Governmental Health Care Costs Litigation (MDL No. 1279), United
States District Court, District of Columbia, consolidated June 1999. The cases
filed by Ukraine, the Republics of Guatemala, Nicaragua, and Bolivia, the
Province of Ontario, Canada, the State of Goias, Brazil and Venezuela have been
consolidated into this action. In December 1999, the district court granted
defendants' motion to dismiss the complaint filed by the Republic of Guatemala.
In March 2000, the court dismissed the complaints filed by Nicaragua and
Ukraine. Guatemala, Nicaragua and Ukraine have filed notices of appeal to the
United States Court of Appeal, for the District of Columbia. In June 2000, the
district court granted the motions of the Republic of Venezuela and the State of
Goias, Brazil to remand these cases to the circuit court of Dade County,
Florida. Defendants have filed notices of appeal. In August 2000, the district
court dismissed the complaint filed by the Province of Ontario.
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 with the
United States Court of Appeals for the District of Columbia Circuit.
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. (See In
Re Tobacco/Governmental Health Care Cost Litigation MDL No. 1279, discussed
above.)
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Exhibit 99.1
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 with the United States Court of Appeals for the Fifth Circuit.
The State of Espirito Santo of the Federal Republic of Brazil v. Brooke Group,
et al., United States District Court, District of Columbia, filed February 20,
2000. The case was removed to the United States District Court, Southern
District, Florida. In May 2000, this case was transferred by the United States
Panel on Multidistrict Litigation to the District Court for the District of
Columbia.
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.,
Eleventh Judicial Circuit, Dade County, Florida, filed July 19, 2000.
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, stating that the
plaintiff's claims were too remote and indirect. Plaintiffs are appealing the
dismissal.
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. (See In re TOBACCO CASES II discussed below.) 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. Plaintiff appealed to the United States Court of Appeals for
the Eleventh Circuit.
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Exhibit 99.1
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.
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.
Robert 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. Plaintiffs have appealed to the
United States Court of Appeals for the Eighth Circuit.
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 and the case has been stayed
pending a ruling on the appeal.
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. In July 1999, the District Court denied a motion to intervene filed by
another union health and welfare fund. In August 1999, the court denied
defendants' motion to dismiss
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<PAGE>
Exhibit 99.1
the amended complaint. In October 1999, the United States Court of Appeals for
the Second Circuit denied defendants' appeal and mandamus petition, which sought
review of the District Court's denial of defendants' motion to dismiss the
amended complaint. In November 1999, defendants filed a petition, which was
denied, for rehearing en banc from the previous order in October declining to
review defendants' petition for writ of mandamus. In January 2000, defendants
filed a petition for a writ of mandamus with the Second Circuit seeking to
require that the class certification issue be resolved prior to trial. The
Second Circuit denied the petition, but instructed the district court to decide
the class certification issue prior to trial. The district court has scheduled a
hearing for September 2000. Trial is scheduled for January 2001.
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.
Michael H. 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.
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.
David B. 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.
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.
Lower Brule Sioux Tribe v. American Tobacco Company, et al., Tribal Court of the
Lower Brule Sioux Tribe, Lower Brule, South Dakota, filed December 4, 1997. In
July 2000, the plaintiffs voluntarily dismissed all claims.
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Exhibit 99.1
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, CA., 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.
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. Trial is
scheduled for October 2000.
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.
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 the trial court's ruling that
plaintiffs lacked standing to pursue the action. As a result, the case was
remanded to state court for additional proceedings because there was no federal
subject matter jurisdiction.
10
<PAGE>
Exhibit 99.1
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.
Plaintiffs have appealed the trial court's dismissal of their action to the
United States Court of Appeals for the Sixth Circuit. In April 2000, the Sixth
Circuit ordered that the case be remanded to state court, holding the United
States District Court lacked subject matter jurisdiction to determine
plaintiffs' lack of standing.
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 May 1999, the
United States Justice Department advised the court that the Federal Government
does not plan to intervene in this suit. In July 2000, the United States
District Court, Northern District, Texas granted plaintiffs' motion to transfer
the case to the United States District Court for the Eastern District of New
York.
In re TOBACCO CASES II, Superior Court for the State of California, Judicial
Council Coordination Proceeding No. 4042. The court in this case has
consolidated 30 previously filed cases, including 26 health care cost recovery
actions filed by unions (all of which were recently voluntarily dismissed by
plaintiffs without prejudice) and one by native Americans, two "Proposition 65"
cases, and two putative smoking and health class actions. In a July 1999
telephonic ruling, the court in the native American case denied defendants'
motion to dismiss except with respect to claims for violation of the California
Business and Professions Code. In January 2000, the 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 April 2000, the
court denied class certification in the two putative class actions. Trial on the
remaining claims in these two cases, alleging violations of California's
Business and Professions Code, is scheduled for September 2000.
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 and plaintiffs
have appealed.
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.
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 August 1, 2000, and
describes certain developments since May 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.
11
<PAGE>
Exhibit 99.1
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.
Trial was scheduled for July 2000, however, in April 2000, the Second Circuit
stayed the trial until it decides the mandamus petition. Oral arguments on the
appeals and the mandamus petition are scheduled for September 2000.
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 new complaint. Trial is scheduled
for January 2001.
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, New York, filed January 30, 1998. Trial is
scheduled for March 2001.
Owens Corning v. R.J. Reynolds Tobacco Company, et al., Circuit Court, Jefferson
County, Mississippi, filed August 30, 1998. Trial is scheduled for February
2001.
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
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.
12
<PAGE>
Exhibit 99.1
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.
Engle, et al. v. Philip Morris Companies, Inc. and Philip Morris Inc., United
States District Court, Arizona, filed July 16, 1999.
Catherine 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.
Sarah Dahlgren v. Philip Morris Companies Inc. and Philip Morris Inc., et al.,
United States District Court for the District of Columbia, filed November 18,
1999.
Jackie Bauer, et al. v. Philip Morris Companies Inc., United States District
Court, Eastern District, 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.
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. Trial is scheduled for
November 2000.
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. Trial on the remaining claims, alleging violations of
California's Business and Professions Code regarding unfair and fraudulent
business practices, is scheduled for September 2000.
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. This
case has been coordinated with In Re Tobacco Cases II discussed above.
13
<PAGE>
Exhibit 99.1
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. This case has been coordinated with In Re Tobacco Cases II
discussed above.
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 they withdrew their petition due to
technical deficiencies. They have an additional sixty days to file a new
petition.
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. In
March 2000, plaintiffs filed an appeal 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.
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. Shortly thereafter, the parties agreed to stay further
proceedings in the case pending the outcome of A.D. Bedell Wholesale Co. v.
Defendant, et al. pending in the Western District of Pennsylvania and any appeal
therefrom. Defendant filed an appeal from the court's denial of the motion to
dismiss and the motion to vacate. The appeals court heard argument on the appeal
in February 2000.
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 October 1999, the
court granted defendants' motion to stay the case pending arbitration pursuant
to the MSA. In April 2000, plaintiff withdrew his request for fees submitted to
the arbitration panel.
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.
14
<PAGE>
Exhibit 99.1
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, and this ruling is presently on appeal to the
Appellate Division, First Department.
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 and direct purchasers of cigarettes
alleging that defendants, through the MSA and other activities, 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.
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.
Quickle, et al. v. Philip Morris Companies Inc., et al., Circuit Court, Brooke
County, West Virginia, filed February 14, 2000. In April 2000, the case was
voluntarily dismissed and subsequently refiled. (See Kissel, et al., v. Philip
Morris Companies Inc. discussed below.)
Morse v. R. J. Reynolds, et al., Superior Court, Alameda County, California,
filed February 14, 2000.
15
<PAGE>
Exhibit 99.1
Faherty v. Philip Morris Companies Inc., et al., Superior Court, Cumberland
County, Maine, filed February 16, 2000. In April 2000, plaintiffs voluntarily
dismissed the case.
Rowlen, et al. v. Philip Morris Companies Inc., et al., United States District
Court, Southern District, Mississippi, filed February 16, 2000. In March 2000,
plaintiffs voluntarily dismissed the case.
Vetter v. Philip Morris Companies Inc., et al., Circuit Court, Sixth Judicial
District, South Dakota, filed February 16, 2000. In April 2000, plaintiffs
dismissed and subsequently refiled the case. (See Swanson et al. v. Philip
Morris Companies Inc., et al. discussed below.)
Ulan v. R. J. Reynolds, et al., Superior Court, Alameda County, California,
filed February 17, 2000.
Rog-Glo, Ltd. v. R.J. Reynolds Tobacco Company, et al., United States District
Court, Southern District, New York, filed February 18, 2000. In May 2000,
plaintiffs voluntarily dismissed the case.
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.
Amsterdam Tobacco v. Philip Morris Companies Inc., et al., United States
District Court, Northern District of Georgia, filed March 6, 2000. In May 2000,
the district court granted defendants' motion to dismiss all counts of the
amended complaint.
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.
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
16
<PAGE>
Exhibit 99.1
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. 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. 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 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.
17
<PAGE>
Exhibit 99.1
In Re: Cigarette Pricing Litigation MDL 1342, Federal Multidistrict Litigation
Panel, United States District Court, Northern District of 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 anti-trust laws by conspiring to
displace the tobacco quota and price support system administered by the federal
government, by bid-rigging, and by entering into the agreement with tobacco
growers and quota-holders described in Note 5. Contingencies. In June 2000,
plaintiffs voluntarily dismissed the Company and PMI from the case. The
remaining defendants, including PM Inc., have filed a joint motion to dismiss
the case. Plaintiffs have indicated that they intend to seek leave to file a
second amended complaint instead of filing a response to the dismissal motion.
Cigarette Importation Cases
Department of Amazonas, et al. v. Philip Morris Companies, Inc., et al. United
States District Court for the Eastern District of New York, filed May 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.
Department of Antioquia v. Philip Morris Companies, Inc., et al. United States
District Court for the Eastern District of New York, filed June 30, 2000.
Department of Magdalena, et al. v. Philip Morris Companies, Inc., United States
District Court for the Eastern District of New York, filed August 4, 2000.
18
<PAGE>
CERTAIN OTHER ACTIONS
The following lists certain other actions pending against subsidiaries of the
Company and others as of August 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.
19
