***************************************************************** TOBACCO CONTROL E-NEWS ***************************************************************** Tuesday, January 16, 1996 Edited by Jack W Cannon jcannon@gate.net Contributing Editors: Gene Borio Ellen J Perlow [ 10/JUL/95_ABC_Memorandum ] The following document is the subject of the LEGAL TIMES article entitled "Philip Morris v. ABC: The Case ABC Never Made" and the Associated Press article entitled "Legal Brief Says Philip Morris Adds Nicotine to Cigarettes." It is also available at: http://www.gate.net/~jcannon/tobacco.html ----------------------------------------------------------------- RE: ABC'S "MEMORANDUM IN SUPPORT OF SUMMARY JUDGMENT" AGAINST PHILIP MORRIS, JULY 10, 1995 A few weeks before ABC settled with Philip Morris in the tobacco company's $10 billion libel suit against the network, ABC's lawyers at the law firm of Wilmer, Cutler & Pickering in Washington, D.C. and McGuire, Woods, Battle & Boothe in Richmond, Virginia filed a motion with the state trial court in Richmond asking for dismissal of the case by summary judgment. The "Memorandum in Support of Summary Judgment," which is more than 50 pages long and which was never made public, describes in detail substantial evidence obtained in discovery from Philip Morris that directly contradicts both Philip Morris's denials that it adds nicotine to cigarettes and ABC's eventual apology regarding assertions made in a "Day One" news report that in the manufacture of cigarettes, tobacco companies add nicotine obtained from tobacco other than the tobacco actually used in their products. The following excerpts from the memorandum are exact quotations, and include all footnotes: ----------------------------------------------------------------- [From introductory section, pages 4-8 of memorandum] . . . Contrary to the glib assurances Philip Morris previouslymade to this Court, 4 the admissions in its documents nail down irrefutably that Philip Morris, by design, adds substantial amounts of what may be characterized as extraneous nicotine to its cigarettes during manufacturing. If anything, the "takes it out, puts it back in" observation that ABC quoted at the outset of its news report was an understatement, not a misstatement, of how nicotine is added during the reconstitution process. 5 The nicotine that Philip Morris "takes out" from a batch of tobacco materials in its reconstituted tobacco manufacturing process -- and that Philip Morris does not then have to use in manufacturing cigarettes -- is not "put back," "recombined" or added to the same tobacco, or to the tobacco sheet that Philip Morris produces from that batch of tobacco material. Instead, Philip Morris adds a nicotine-containing solution -- manufactured from some other tobacco -- to that original tobacco material or tobacco sheet. This bears repeating: the nicotine applied is derived from another source. The nicotine that is added to tobacco sheet rarely, if ever, originates from -- in other words, was always "extraneous" to -- the tobacco materials from which the tobacco sheet was derived. The following material facts supporting these conclusions are derived from Philip Morris's documents and are not in genuine dispute: * One of the processes Philip Morris uses to make reconstituted tobacco -- called the "reconstituted leaf" or "RL" process -- begins when tobacco waste materials are "pulped" with liquids. Philip Morris then extracts everything that can be dissolved, including the nicotine, from these tobacco materials. Philip Morris removes potassium nitrate from, adds other chemicals to, and concentrates this tobacco extract to pre-set levels. This concentrated tobacco extract is stored. Philip Morris takes the tobacco remnants that have not been dissolved and forms them into a tobacco sheet. Philip Morris adds to the tobacco sheet the concentrated tobacco extract it has separately manufactured -- without any regard whatsoever to whether it is being "recombined" with the same tobacco materials from which it originated. * In the initial pulping step of the RL process, Philip Morris adds to a new batch of dry raw tobacco materials, from which no solubles (including nicotine) have been extracted, tobacco extract containing significant amounts of nicotine made from other tobacco. This tobacco extract had never been a constituent part of and had always been physically separate from the dry raw tobacco materials to which it is added. As a result, the mixture of that second batch of dry raw materials and tobacco extract has more nicotine in it than was in the dry raw tobacco materials. * After tobacco sheet is manufactured during the RL process, Philip Morris adds from a storage tank tobacco extract containing significant amounts of nicotine to the tobacco sheet, without regard to whether the tobacco extract and the tobacco sheet had a common origin. Sometimes Philip Morris adds tobacco extract that it has stored for several days to tobacco sheet it is currently manufacturing. That tobacco extract had always been physically separate from, and had no common origin with, the sheet to which it is added. Likewise, Philip Morris sometimes adds tobacco extract made from tobacco processed on one production line to entirely different tobacco sheet made from other tobacco being processed on a wholly separate production line. Again, this tobacco extract was always physically separate from and had no common origin with the sheet to which it is added. * When Philip Morris manufactures tobacco extract, it commonly discards the excess tobacco fiber that is left after it has extracted the nicotine and other solubles from it. Later, Philip Morris adds this tobacco extract to different tobacco materials or sheet. Since the tobacco materials that were the source of this tobacco extract have been thrown away, it is beyond dispute that this tobacco extract is not "recombined" or "reapplied" to anything; rather, it is added to tobacco sheet from which it has always been physically separate. * Even if Philip Morris sometimes happens to apply tobacco extract to tobacco sheet of a common origin, the tobacco extract is for some time physically separate from -- outside -- the tobacco materials to which it is then added. * Philip Morris adds tobacco extract containing significant amounts of nicotine without regard to whether the tobacco extract and tobacco sheet had a common origin, because it is necessary to do so to control precisely the amount of tobacco extract -- and thus the amount of nicotine -- it adds to accommodate natural variations in nicotine levels in the incoming raw materials. Philip Morris concentrates the tobacco extracts it adds to achieve predetermined "soluble" levels in its reconstituted tobacco. * Philip Morris could remove all (or virtually all) of the nicotine from the various tobacco extracts it uses in making reconstituted tobacco, but by design does not do so. In sum, Philip Morris does not in any sense merely "recombine" tobacco extract containing nicotine with the same tobacco materials from which it was extracted. It operates the entire RL process without any attention to whether tobacco extract containing nicotine is "returned" to the tobacco materials from which it was extracted. Since these undisputed and indisputable admissions confirm that the gist or allegedly defamatory sting of ABC's report regarding the addition of nicotine was true -- and would remain true even if the gist turned on characterizing the nicotine as "extraneous" -- the ABC defendants are entitled to summary judgment as a matter of law. [From factual discussion, pages 11-32] I. SUMMARY JUDGMENT SHOULD BE GRANTED BECAUSE PHILIP MORRIS'S OWN STATEMENTS AND INTERNAL DOCUMENTATION ESTABLISH THAT THE GIST OF ABC'S REPORT ABOUT ADDING NICOTINE WAS TRUE A. ABC is Entitled to Summary Judgment as a Matter of Law Unless the Court is Convinced Based on Record Facts that Philip Morris Can Affirmatively Prove by Clear and Convincing Evidence that the Gist of ABC's Report Was False ... B. Philip Morris's Admissions Eliminate Any Factual Dispute as to Its Addition of Substantial Amounts of Nicotine During the Process of Making Reconstituted Tobacco Philip Morris does not just take natural tobacco leaf and cut it up to make cigarettes -- it relies heavily on a chemically engineered product called "reconstituted tobacco." 10 Approximately 25 percent of the tobacco in Philip Morris's premium brand cigarettes is reconstituted tobacco. 11 Most of Philip Morris's reconstituted tobacco is known as "reconstituted tobacco leaf" or "RL." Philip Morris manufactures more than 450,000 pounds of RL per day at Park 500 in Chester, Virginia. 12 RL is an artificial tobacco product, not a natural agricultural product. It does not have the texture, size, or shape of any tobacco found in nature. It contains significant quantities of chemicals -- diammonium phosphate, urea, and paraben to name only a few -- that are entirely foreign to tobacco. 13 The production of RL is governed by a detailed set of manufacturing specifications. 14 RL is made by combining two separate manufactured commodities -- "flavored tobacco extract" and "tobacco sheet" -- both of which are made at Park 500. 15 * Philip Morris manufactures flavored "tobacco extract" by dissolving soluble tobacco materials, including virtually all the nicotine, out of what used to be regarded as tobacco waste products (stems, tobacco scraps, etc.). 16 Philip Morris removes potassium nitrate (a carcinogenic substance) from this chemical solution, but does not remove the nicotine, even though it has the technical capacity to do so. 17 Philip Morris adds other chemicals -- such as diammonium phosphate, propylene glycol and urea -- and "flavors" to this solution. 18 Philip Morris evaporates and concentrates this tobacco extract until it reaches a pre-determined ratio of solubles (including nicotine) to water. * Philip Morris manufactures "tobacco sheet" from the fiber remnants of the tobacco waste products after it has extracted the solubles to make tobacco extract. 19 Philip Morris subjects those fiber remnants to intense agitation, heating, and drying until they are "reconstituted" into a sheet of tobacco. 20 Philip Morris's pre-determined specifications, not Mother Nature, govern the width, thickness, chemical composition, and moisture content of this tobacco sheet. 21 Philip Morris has sought to characterize the production of RL as a "closed" process in which the tobacco extract (containing "solubles," including the nicotine) is extracted from waste tobacco materials and then simply "recombined" with the remnants of those same tobacco materials after the remnants have been processed into a sheet. 22 Philip Morris's internal documents, which are admissions, reveal what Philip Morris actually does. Those documents leave no doubt that Philip Morris deliberately adds tobacco extract containing nicotine at various stages in the reconstitution process and that this tobacco extract is not in any sense "recombined" with the same raw tobacco materials from which it originated. Rather, Philip Morris adds tobacco extract that is physically separate and separately manufactured based solely on how much is needed to achieve pre-set design specifications and wholly without regard to whether the tobacco extract shares a common origin with the tobacco to which it is added. 1. Philip Morris Soaks Incoming Stems in Nicotine-Laden Tobacco Extract that is Made from Entirely Different Tobacco Material At the beginning of the RL Process (the "blending" and "pulping" stages), Philip Morris blends incoming tobacco stems with other scrap tobacco materials. 23 A batch of this dry raw material is placed into a pulper. 24 Philip Morris adds to the pulper (and thus to the batch of dry raw tobacco material) tobacco extract it has manufactured, which contains appreciable quantities of nicotine. 25 This tobacco extract is called "weak extracted liquor 3" (WEL3). It is a tobacco extract Philip Morris produced from entirely different tobacco materials at a later stage in the RL process. 26 Philip Morris also adds "rich brown water" at the pulping stage. 27 Philip Morris manufactures rich brown water by running large quantities of water through tobacco fibers before they are formed into tobacco sheet. 28 Although most of the solubles have already been extracted from this fiber, there is still enough nicotine and other soluble material in this fiber to turn the water "rich brown." 29 Philip Morris blends all of these ingredients -- the dry raw tobacco materials, the WEL3, and the rich brown water -- in the pulper to form a slurry, which proceeds to the next stages of the RL process. The tobacco extract and rich brown water that Philip Morris applies to incoming raw materials contains significant amounts of solubles including nicotine -- nicotine that originated with entirely different tobacco material, that was extracted from that other tobacco further down the production line, that had never been a constituent part of the dry raw tobacco material in the pulper, and that consequently increases the total amount of nicotine in the mixture beyond that which was found in the incoming stalks and stems. Philip Morris surely could (as its interrogatory answer represents it does) pulp the dry raw tobacco waste by adding water rather than tobacco extract and rich brown water -- both of which contain nicotine -- to the incoming raw materials. By choosing to use tobacco extract and rich brown water instead, Philip Morris adds extra nicotine to the tobacco used to make RL. 2. Philip Morris Also Adds Tobacco Extract Containing Substantial Amounts of Nicotine to Tobacco Sheet During the RL Process The addition of tobacco extract and rich brown water to the dry raw materials forms a tobacco "slurry." 30 Philip Morris sends this slurry through a series of presses. 31 Each press extracts the soluble materials -- including both the nicotine found in the original dry raw tobacco and the nicotine that had been added in the WEL3 and rich brown water -- from the pulp. 32 Philip Morris turns the non-soluble remnant fiber into what it calls "tobacco sheet." 33 Philip Morris separately manufactures the mixture of water and extracted solubles -- which Philip Morris interchangeably calls "liquor" or "tobacco extract." 34 As one internal document admits, "SEL [Strong Extracted Liquor] is a tobacco extract and may contain high concentrations of nicotine." 35 Philip Morris processes and concentrates this tobacco extract, which already "may contain high concentrations of nicotine," by evaporating off extra water, removing carcinogenic nitrates, and adding chemicals and other flavors. 36 The nicotine is not removed, and the evaporation/concentration process increases the level of nicotine to water in the tobacco extract. 37 Philip Morris then sends the concentrated tobacco extract to a storage tank, where it remains until it is later added to tobacco sheet. 38 When the time comes to add tobacco extract, and its nicotine, to tobacco sheet, Philip Morris does not match tobacco extract and tobacco sheet of common origin so that the original constituents of the tobacco are "recombined." No such effort is made. Philip Morris simply takes the amount of tobacco extract that is needed from a storage tank, which contains tobacco extract that may have been made several days earlier. If there is insufficient tobacco extract to meet the design specifications in a particular productions line's storage tank, Philip Morris simply transports giant containers of tobacco extract from an entirely separate production line. Or it makes extra tobacco extract, discarding the fiber remnants -- since using those remnants would defeat the purpose of increasing the amount of tobacco extract in the finished RL product. As can be seen, tobacco extract is a stand-alone, physically separate, manufactured product. It is not just temporarily removed from and then returned to the same natural tobacco from which it came. It is not used in manufacturing to match the tobacco to its incoming chemical or physical state, which varies in nature, but to match the tobacco sheet to Philip Morris's engineering and design specifications. Accordingly, Philip Morris precisely controls the strength and quantity of this physically separate, nicotine-containing tobacco extract that it adds to tobacco sheet. First, Philip Morris measures the tobacco extract's "soluble percentage," which explicitly includes its nicotine content. 39 If the tobacco extract is not powerful enough (the "solubles" are too low), Philip Morris turns up the evaporator to make a stronger extract. 40 Second, Philip Morris measures the "soluble percentage" of its tobacco sheet both before and after it adds tobacco extract with high concentrations of nicotine. 41 If the "sized" 42 tobacco sheet has not soaked up enough tobacco extract, Philip Morris manipulates the spigot on the "size press" (which controls the amount of flavored tobacco extract that is added to tobacco sheet) to spray more nicotine-containing tobacco extract onto the reconstituted tobacco sheet. 43 Thus, the gist of the Day One broadcast is true. Philip Morris adds, and in so doing carefully controls levels of, nicotine that could have been left out. That conclusion is approved by Philip Morris's own documents. There can be no genuine dispute as to these material facts. Philip Morris cannot carry its heavy burden of proving by clear and convincing evidence -- by mere denials, recharacterizations or otherwise -- that the gist of the ABC broadcast was false. 3. The Nicotine that Philip Morris Adds to Tobacco During the Manufacturing Process is Extraneous Philip Morris has sought throughout this litigation to contrive a factual dispute concerning this sleight-of-hand. An important part of that stratagem is to say that ABC accused Philip Morris of adding "extraneous" nicotine to its cigarettes, 44 and then to define "extraneous" (a word that ABC did not use) in a way that defies all reason by altogether excluding anything that is done during the manufacture of reconstituted tobacco. Defendants believe that it is immaterial to an assessment of the truth of their news reports whether the nicotine that Philip Morris admittedly adds can be characterized as "extraneous." The gist of the news report is the same whether Philip Morris buys or makes the addictive nicotine that it adds. Whatever the proper description of the added nicotine may be, it would not, to quote the U.S. Supreme Court in Masson v. New Yorker Magazine, Inc., "have a different effect on the mind of the reader from that which the pleaded truth would have produced." 501 U.S. at 517. Nor can a plaintiff meet its burden of pleading falsity on the basis of such a semantic exercise. See Fisher v. Richmond Newspapers Inc., 22 Media L. Rep. (BNA) 2372 (E.D. Va. 1994), aff'd mem., 51 F.#d 266 (4th Cir. 1995). Since the gist of the broadcast was that nicotine is added to hook smokers, it did not matter to the viewer whether the addictive substance was "extraneous" or not. Either way, "the story would have affected [Philip Morris's] reputation in the community in substantially the same manner." AIDS Counseling & Testing Ctrs. V. Group W Television, Inc., 903 F.2d 1000, 1004 (4th Cir. 1990). But, in any event, the foregoing description of Philip Morris's actual manufacturing process, based entirely on Philip Morris's own admissions, makes clear that Philip Morris does add "extraneous" nicotine -- not only in the common sense meaning of the term, but even under the strained definition offered by Philip Morris. Philip Morris has defined "extraneous" nicotine as "nicotine from sources other than the reconstituted tobacco itself." Philip Morris Inc.'s Answer to Martin Interrog. No. 1, at 6 (Ex. 46 at 952). The conclusion that the nicotine Philip Morris adds is "extraneous" under any definition is confirmed by the following undisputed facts: Philip Morris (1) adds to tobacco sheet nicotine that is physically separate and could be left out; (2) adds separately manufactured tobacco extract derived from one batch of tobacco material to some other tobacco material; (3) takes tobacco extract containing nicotine produced from tobacco in one production line and adds it to entirely different tobacco sheet it is manufacturing on another line; and (4) produces tobacco extract containing nicotine from natural tobacco, discards the fiber that remains after the extraction, and adds that tobacco extract to some other tobacco sheet. First, the addition of any nicotine-containing tobacco extract to tobacco sheet, regardless of its source, involves the addition of nicotine that is and in most cases always has been physically separate from the sheet, could be left out, and is thus extraneous. As the Court has recognized: "Philip Morris' description of reconstituting tobacco undercuts its argument that we simply don't add nicotine.' It does add nicotine that could be left out." Letter Ruling, Dec. 30, 1994, at 7 (Ex. 2 at 11). Philip Morris could choose to, and has the technical capacity to, leave this nicotine out of the tobacco extract. 45 During the RL process, Philip Morris removes nitrates from tobacco extract. 46 Philip Morris does this in part because nitrates "have been suggested to be undesirable constituents in the smoke from the health standpoint." 47 The same is indisputably true of nicotine. 48 But Philip Morris by design leaves in the nicotine. When it adds this tobacco extract to tobacco sheet, it adds extraneous nicotine. Second, Philip Morris commonly adds to tobacco sheet nicotine that was never a constituent part of the tobacco materials used to form the sheet and that was at some times, and usually at all times, physically separate from the sheet (and its precursors) before being added. This happens at the pulping stage, where the extract is made from the preceding batch of tobacco; it happens again when tobacco extract from storage tanks is added to tobacco sheet. Philip Morris's own documents eliminate any possible factual predicate for its litigation position, which characterizes the addition of tobacco extract as "reapplying" nicotine to tobacco sheet. The nicotine-containing tobacco extract is added, not "reapplied" or "added back," to tobacco sheet and is thus "extraneous." Third, Philip Morris commonly adds tobacco extract manufactured on one of its production lines to tobacco sheet manufactured on another line in order to compensate for natural variations in the raw tobacco. 49 When Philip Morris runs out of the tobacco extract on a given production line that is necessary to compensate for these variations in natural tobacco, it forklifts giant barrels of nicotine-containing tobacco extract from another production line and adds it to the low-soluble tobacco sheet. 50 In so doing, Philip Morris adds extraneous nicotine to reconstituted tobacco. Fourth, just like an outside flavor house, Philip Morris uses natural tobacco to manufacture tobacco extract, commonly discards the remaining tobacco fiber, and then adds the resultant tobacco extract to some other tobacco materials. 51 When Philip Morris makes tobacco extract from natural tobacco, discards everything but the tobacco extract containing the nicotine, concentrates that extract, and then applies it to something else, it adds extraneous nicotine to reconstituted tobacco. In fact, Philip Morris discards a significant amount of tobacco fiber. 52 Thus, Philip Morris adds tobacco extract that is derived from tobacco material not used to make cigarettes. To this extent, Park 500 is a tobacco extract factory, no different from the outside flavor houses that were referred to on Day One to illustrate this point. In addition to reporting that cigarette companies take nicotine out and put it back in during the reconstitution process, ABC also reported on the industry's use of tobacco extracts purchased from outside suppliers and on the industry's use of alcohol denatured with nicotine. Philip Morris admits that these sources of nicotine are "extraneous" but claims that they are insubstantial. Since Philip Morris does not and cannot claim that the nicotine it adds during the reconstitution process is insubstantial, it has tried to focus this litigation on those other processes and, through verbal gymnastics, to distract the focus from the reconstitution process. ABC's report concerning industry use of "outside" tobacco extracts and denatured alcohol was true. But that issue need not be adjudicated in the context of this motion because, if Philip Morris adds nicotine in any way, the gist of ABC's news report is true. 53 (Indeed, as the Court has correctly noted from time to time, the truth of the broadcast can be established by reference to a process not known to ABC at the time of the broadcasts.) Therefore, the possible existence of a factual dispute relating to outside flavor houses and denatured alcohol is legally immaterial to the resolution of this motion since it has been established, based on Philip Morris's own documents, that it adds nicotine during the reconstitution process. [NOTE: THE MEMORANDUM, DATED JULY 10, 1995, WAS SUBMITTED ON BEHALF OF AMERICAN BROADCASTING COMPANIES, INC., JOHN MARTIN, AND WALT BOGDANICH BY THE FOLLOWING: William G. Broaddus Stephen H. Sachs Thomas E. Spahn Roger M. Witten McGuire, Woods, Battle & Boothe John Payton One James Center Charles A. Mendels Richmond, VA 23219 Steven M. Dunne (804) 775-1000 Craig Goldblatt Wilmer, Cutler & Pickering 2445 M Street, N.W. Washington, D.C. 20037 (202) 663-6000 THOMAS SPAHN SIGNED THE MEMORANDUM AS "OF COUNSEL." THE ATTACHED CERTIFICATE OF SERVICE, ALSO SIGNED BY THOMAS SPAHN, SAYS THE FOLLOWING: "A copy of this document was hand- delivered to Lewis T. Booker, Esq., Hunton & Williams, Riverfront Plaza, East Tower, 951 East Byrd St., Richmond, VA 23219-4074 on July 10, 1995."] ----------------------------------------------------------------- ENDNOTES 4 Philip Morris averred in its Amendmended Motion for Judgment: "Defendants' accusations that Philip Morris 'manipulates,' 'fortif[ies]' and 'spikes' its tobacco by adding nicotine during the manufacturing process are entirely false. Philip Morris does not [underlined] do that." AMJ [para.] 12 (Ex. 3 at 23). Mr. Wachtell sounded the same refrain at a recent hearing: "The accusation that Philip Morris added nicotine was totally false...." Tr. Of Oral Arg., May 12, 1995, at 21 (Ex. 5 at 108). 5 Consistent with this Court's prior rulings, this summary judgment motion relies only on evidence relating to cigarettes manufactured and sold by Philip Morris in the United States. However, ABC reserves its objections on this point, as its broadcast was not limited in any way only to cigarettes made and sold in this country. 10 AMJ [para.] 12 (a) (Ex. 3 at 23-25). According to a Philip Morris official, "Probably 99 percent of the world thinks you chop up tobacco for cigarettes." In fact, there is "a lot more to it than that." Chip Jones, Tracking Tobacco: Philip Morris Tour Reveals Company's Efforts to Get Most from Every Leaf, Richmond Times-Dispatch, August 21, 1994 at E1, E3 (Ex. 8 at 115) (statement of David Merrill, Director of Environmental Compliance and Engineering, Philip Morris, Inc.). 11 See, e.g., Primary Brand Formula A1-580 (Ex. 9 at 116). In this brand (whose name Philip Morris redacted), for every 10,000 pounds of tobacco material used, 2,400 pounds (24 percent) is "RLTC" (reconstituted leaf with top casing), a type of reconstituted tobacco. 12 Park 500 - Overview (Ex. 10 at 118). 13 New Product Specifications (Ex. 11 at 124-25). 14 Id. (Ex. 11 at 124-26). 15 Engineering Program - Park 500 (Ex. 12 at 130). 16 Id. After flavors are added to the tobacco extract produced at the RL plant, Philip Morris also referes to it as "size." See id. (Ex. 12 at 143). 17 See AMJ [para.] 13(a) (Ex. 3 at 24); Philip Morris Companies Inc.'s Supp. Answers to ABC's First Set of Interrogs. Nos. 3 & 4 (Ex. 13 at 148-50); U.S. Patent No. 5,018,540 (Ex. 14 at 179). See also RL Process Overview (Ex. 15 at 310-12). An ABC interrogatory asked Philip Morris to describe the RL process "in detail, step-by-step." ABC's First Set of Interrogs. to Philip Morris Companies Inc. No. 5 (Ex. 16 at 459). During the January 23, 1995 discovery conference, Mr. Nunley informed this Court that the Philip Morris "RL Process Overview" contained a thorough and definitive description of the RL process. Based on this representation, the Court permitted Philip Morris to produce this document instead of answering ABC Interrogatory No. 5. See Order, March 23, 1995 (Ex. 17 at 473); Philip Morris Companies Inc.'s Supp. Answers to ABC's First Set of Interrogs. No. 5 (Ex. 13 at 151). 18 AMJ [para.] 13(a) (Ex. 3 at 24); New Product Specifications (Ex. 11 at 124-26). 19 See, e.g., RL Process Overview (Ex. 15 at 333) ("Tickler refiners provide a means of fiberizing the fibers in the stock (separates or splits the fibers) in preparation for forming a sheet of tobacco on the paper machine." (emphasis added)); id. (Ex. 15 at 342) ("The Fourdrinier Section is the place in the process where stock is transformed from an aqueous suspension to a web of tobacco sheet (emphasis added)). 20 See, e.g., id. (Ex. 15 at 343); Engineering Orientation Program - Park 500 (Ex. 12 at 139-40). 21 New Product Specifications (Ex. 11 at 124-26). 22 Philip Morris has asserted from the outset of this litigation that all it does in the reconstitution process is "temporarily ... separate out" and then "recombine[]" the nicotine-containing solubles with the tobacco sheet. AMJ [para.] 13(a) (Ex. 3 at 23-24). See also Philip Morris Companies Inc.'s Answers to ABC's First Set of Interrogs. (Ex. 18 at 521). 23 Engineering Orientation Program - Park 500 (Ex. 12 at 134-35). 24 Id. (Ex. 128 at 135). 25 Ingersoll-Rand Vari-Nip Press (Ex. 19 at 545) ("We mix the dry raw material with hot water (actually, weak process liquor after inital start-ups) to form a slurry."); RL Process Overview (Ex. 15 at 206). In a sworn interrogatory answer, Philip Morris claims that it adds water, not tobacco extract, to the incoming raw materials. See Philip Morris Companies Inc.'s Answers to ABC's First Set of Interrogs. (Ex. 18 at 517). That answer is inconsistent with the information found in Philip Morris's own RL Process Overview. Except for a few times each year when the plant is re-started following a shut-down, Philip Morris soaks the incoming tobacco stems in tobacco extract, not water. See also Park 500 R.L. Processing Lab Shift Technician (T-3) Training Manual (Ex. 20 at 630) ("Pulper: Tank used to mix incoming tobacco materials with liquor to form the slurry."). 26 WEL3 is the liquor extracted from the third press that separates tobacco fiber from tobacco extract. The liquor that is extracted by the first press is called "Strong Extracted Liquor" (SEL). The liquor from the second press is called "Weak Extracted Liquor 2" (WEL2). 27 RL Process Overview (Ex. 15 at 239, 273). 28 Id. (Ex. 15 at 359). 29 See Park 500 R.L. Processing Lab Shift Technician (T-3) Training Manual (Ex. 20 at 605) ("RBW: Rich brown water, usually checked for solubles."). 30 Engineering Orientation Program - Park 500 (Ex. 12 at 136) ("In the pulpers, the raw materials in dry form are mixed with process liquors, making what is called 'tobacco.'"). 31 Id. (Ex. 12 at 137). 32 Id. 33 Philip Morris sometimes refers to "tobacco sheet" as "base web." However, Philip Morris's interrogatory answer claims that tobacco sheet is only [underlined] referred to as "base web," and that it is not "tobacco sheet" until the tobacco extract is added. See Philip Morris Companies Inc.'s Supp. Answers to ABC's First Set of Interrogs. No. 4 (Ex. 13 at 150). That litigation position cannot be squared with numerous Philip Morris documents, including the RL Process Overview (which Philip Morris submitted as a sworn interrogatory answer), that refer to "base web" as "tobacco sheet" or "sheet of tobacco." See RL Process Overview (Ex. 15 at 333, 343, 351); see also Park 500 R.L. Processing Lab Shift Technician (T-3) Training Manual (Ex. 20 at 593); Letter from Stanley Temko to Michael Eriksen, Jan. 19, 1994 (Ex. 21 at 635); Engineering Orientation Program - Park 500 (Ex. 12 at 139); Terms and Meaning Glossary for Sheet Quality Characteristics (Ex. 22 at 637). Despite Philip Morris's unsupported denials, it is clear that tobacco sheet, before the additional tobacco extract is added, is a form of reconstituted tobacco. It is a brown, sweet-smelling substance. It can be cut, rolled into wrapping paper, and smoked. It contains some nicotine. See Unextracted Nicotine as a Potential Source of NNK in Smoke (Ex. 23 at 642). It is not, as Mr. Wachtell represented to the Court, "the equivalent of a brown paper bag that you wrap groceries with at the Winn Dixie." Tr. Of Oral Arg., March 1, 1995, at 68 (Ex. 24 at 647). 34 Philip Morris contends that it uses the term "tobacco extract" only [underlined] to refer to the flavoring agent that it has purchased from outside suppliers, not the solution of extracted tobacco material generated in the RL process. See Letter from Philip Morris to Court, June 22, 1995, at 3 (Ex. 25 at 650). That litigation position is flatly contradicted by the RL Process Overview (Ex. 15 at 368) ("The Size Batch Prep Operation is one stage in the process where flavors and tobacco extracts [last two words underlined] are mixed and sampled to ensure proper composition." (emphasis added)), and other Philip Morris documents. See e.g., Philip Morris USA Material Safety Data Sheet (Ex. 26 at 657). 35 Procedure for Collecting SEL Samples (Ex. 27 at 663). 36 See AMJ [para.] 13(a) (Ex. 3 at 23-25); Philip Morris Companies Inc.'s Answers to ABC's First Set of Interrogs. (Ex. 18 at 518-21). 37 Id. 38 RL Process Overview (Ex. 15 at 317) ("The DNCEL is then pumped to as holding tank referred to as the mix tank. There it is staged until the customer needs it."). 39 Philip Morris's documents plainly admit that "solubles" are "nitrates, nicotine [underlined], sugars, etc." See Terms and Meaning Glossary for Sheet Quality Characteristics (Ex. 22 at 638) (emphasis added). After the nitrates are removed, the "solubles" that are added to tobacco sheet are "nicotine, sugars, etc." 40 See Total Quality Measurers - Lines I/II (Ex. 28 at 666) (Evaporator solubles [out of control] less frequent due to control moves on evap. being made on CEL tank solubles."). 41 The soluble percentage before tobacco extract is added is called "base web solubles." See Park 500 R.L. Processing Lab Shift Technician (T-3) Training Manual (Ex. 20 at 605) ("Base Web Solubles: Percentage of dissolved solute in base web sample. This must also be within workable ranges.") The soluble percentage after the tobacco extract is added is called "finished sheet solubles." See is. ("Finished Sheet Solubles: Percentage of disolved solute in finished sheet sample, checked once per/hour to ensure that they are within specified ranges."). 42 "Size" refers to the flavored tobacco extract that Philip Morris manufactures at Park 500. See supra note 16. 43 Section 6: The Line I/II SPC System (Ex. 29 at 720). Compare Philip Morris Companies Inc.'s Answers to ABC's First Set of Interrogs. (Ex. 18 at 521) ("The tobacco solubles are then reapplied to the fiber sheet. They are reapplied to the sheet in the same ratio that they were extracted."). 44 See, e.g., Philip Morris Companies Inc.'s Answers to ABC's First Set of Interrogs. No. 2 (Ex. 18 at 491) ("Philip Morris contends, among other things and without limitation, that the word 'add' as used by defendants ABC, Martin and Bogdanich was intended to be understood, and was understood, to mean that Philip Morris U.S.A. adds substantial amounts of extraneous nicotine to cigarettes."). 45 AMJ [para.] 13(a) (Ex. 3 at 24); Philip Morris Companies Inc.'s Supp. Answers to ABC's First Set of Interrogs. Nos. 3 & 4 (Ex. 13 at 148-50); U.S. Patent No. 5,018,540 (Ex. 14 at 179). 46 Philip Morris Companies Inc.'s Answers to ABC's First Set of Interrogs. (Ex. 18 at 520-21). 47 See U.S. Patent No. 3,847.164 (Ex. 30 at 744). 48 The Health Consequences of Smoking, Nicotine Addiction: A Report of the Surgeon General (Ex. 31 at 767-68); Nicotine (Ex. 32 at 776-82). 49 Memorandum from David Barfield to S. Prep Supervisors, May 22, 1990 (Ex. 33 at 783) ("Here is the procedure for transferring liquor between lines 1/2, tote bin and tanker,"); Documented Liquor Transfers (Ex. 34 at 796-97). 50 Memorandum from David Barfield to S. Prep Supervisors, May 22, 1990 (Ex. 33 at 783); Documented Liquor Transfers (Ex. 34 at 796-97). 51 See Memorandum from H.C. Waltman to L-3 Machine Room Supervisors, June 2, 1989 (Ex. 35 at 798) ("Subject: When to run base web because of low liquor inventory."); PDCA Problem-Solving Tool Kit (Ex. 36 at 800); Weekly Production Report (Ex. 37 at 806-813). 52 Id. 53 See Masson, 501 U.S. at 517; Aids Counseling & Testing Ctrs., 903 F.2d at 1004. ----------------------------------------------------------------- ************************ END OF DOCUMENT ************************