COURT RULES INDUSTRY PERPETRATED FRAUD ON PUBLIC

A court has just ruled that the tobacco industry purpetrated a "fraud" on the public through the establishment and operation of the so-called Council on Tobacco Research (CIR).

In its ruling the court found that "CTR released the lawyer-picked research projects results under the guise of unbiased scientific findings."

It also rejected a variety of arguments that various documents sought by a victim of smoking should be withheld from her counsel.

Here, in a major excerpt from the court's ruling [Sackman v. Liggett Group, No. CV 93-4166(ADS), United States District Court, E.D. New York, March 19, 1996], you can read for yourself how the tobacco industry operated.

  This is a diversity action.  The plaintiffs, Janet and Joseph
Sackman (hereinafter called the "Sackmans"), are citizens of New
York. The defendant tobacco company, The Liggett Group, Inc.
(hereinafter called "Liggett") is a Delaware corporation.  The
Sackmans are suing Liggett for damages resulting from the cancer
plaintiff Janet Sackman suffered, allegedly caused by her use of
Liggett's product, Chesterfield cigarettes.
Currently before this court is the determination of the
applicability of several privileges asserted by Liggett with
regard to documents related to scientific research projects into medical
issues relating to tobacco use conducted by the Council on Tobacco
Research, Special Projects.  Liggett has submitted 123 documents
for in camera review by the court to which it claims the
attorney-client and/or work-product privilege.  The court has
reviewed the documents.  The parties have submitted supporting
documents and briefs on the law.  The court heard oral argument on
January 22, 1996.

I. Contentions of The Parties and Background
The documents at issue involve the Council on Tobacco Research
(hereinafter called "CTR"), an entity existing pursuant to the
laws of the State of New York which funded allegedly independent
unbiased scientific research relating to any causal nexus between
tobacco use and health.  All the members of CTR are tobacco
companies including the defendant, Liggett.  CTR is the successor
of the Tobacco Industry Research Committee ("TIRC"), formed by
several tobacco companies in 1954.  The purpose of its formation
is
embodied in a document entitled "A Frank Statement to the
Public--By the Makers of Cigarettes" ("Frank Statement").  The
Frank Statement was published in several national newspapers, and
in part states: We accept an interest in people's health as a
basic responsibility, paramount to every other consideration in our
business.  We believe the products we make are not injurious to
health....  We are pledging aid and assistance to the research
effort into all phases of tobacco use and health.  ....  In charge
of [the TIRC] will be a scientist of impeachable integrity and
national repute. In addition there will be an Advisory Board of
scientists disinterested in the cigarette industry.  Frank
Statement, Exhibit "B" to Letter, dated November 21, 1995 from
plaintiff's counsel Kenneth B. McClain. Although Liggett was not
one of the founding members of TIRC, it became a member in 1964. 
During testimony before Congress in 1994, Dr. James F. Glenn, then
Chairman of CTR, reconfirmed the mission, testifying that CTR
"seek[s] scientific truth" on tobacco and related health issues. 
Regulation of Tobacco Products:  Hearings Before the Subcommittee
on Health and the Environment of the Committee on Energy and
Commerce, 103rd Cong., 2d Sess. 103-153 at 341 (April 28, May 17
and 26, 1994)(testimony of James F. Glenn, Chairman, Council for
Tobacco Research, USA).

*2 CTR funded scientific research projects through research grants
and awards.  Letter of James Kearney, dated November 22, 1995 at
2. Liggett states that many of the research projects it supported
were also provided funding by "the federal government and various
national health organizations such as the National Institute of
Health, the National Cancer Institute, the Environmental
Protection Agency, the American Cancer Society, and the American Heart
Association.  ...."  Id. Liggett asserts that all researchers were
free to publish their research results, including Special Projects
researchers involved here, and all such projects undertaken by CTR
are reported in CTR's annual reports which are available to the
public. There are two methods of scientific research grant funding through
CTR. The first is its grant-in-aid program, under which research
proposals are reviewed by CTR's Scientific Advisory Board (also
referred to as "SAB"), comprised of eminent, independent
scientists in their respective fields.  The SAB makes decisions on whether
research requests should be funded by CTR. The second funding
method was through CTR's Special Projects, in which the tobacco
companies themselves, on the advice and recommendation of counsel,
decide whether or not to approve a request for funding.  Liggett
claims that Special Projects funded research that a member tobacco
company, or companies, believed would be beneficial in future
litigation or Congressional hearings.  SAB did not participate in
any way in the selection process. 
The Sackmans seek discovery of the 123 documents relating to
Liggett's participation in CTR Special Projects program, asserting
that the documents are not privileged, and if they are, they fall
within the crime-fraud exception to the privilege.
Although there is some overlapping, the documents fall into three
main categories.  The first category, comprising the overwhelming
majority of the documents, are documents to or from counsel
relating to specific scientific projects, either conducted or
recommended to be conducted, under CTR Special Projects.  The
second category consists of documents of minutes and agenda of
meetings of various general counsel to the tobacco companies in
which CTR Special Projects, or a particular project, is discussed.

The third category consists of documents relating to meetings held
by tobacco company executives wherein CTR Special Projects were
discussed.  Two miscellaneous documents involve a description of
various methods of tobacco product research and public relations,
and annual budget expenditures by Liggett for research and other
legal expenses, which include references to CTR Special Projects.
The Sackman's fraud argument is based on the claim that CTR was
held out to the public to be an independent non-profit entity
dedicated to scientific research to serve the interests of public
health.  Letter of Kenneth B. McClain, dated November 28, 1995 at
3. The Sackmans assert that CTR Special Projects did not fund
independent research on health related smoking issues for the
public good, but instead focused on research likely to produce
findings--intended for public relations purposes and in the
tobacco companies' economic interest--that would disprove or undermine any
causational link between health and the use of tobacco products. 
The Sackmans point to the counsels' distinct role in the selection
of research for Special Projects and to the absence of
participation by SAB to support their claim that Special Projects
lacked scientific value, and was devoid of any concern with public
health issues.

*3 Liggett implicitly acknowledges the lack of any independence in
CTR's goals with respect to Special Projects by asserting that the
projects were undertaken to assist in the defense of anticipated
litigation against member tobacco companies.  Liggett asserts that
the scientists and/or medical physicians involved in Special
Projects research were free to publish their results.  Examples of
such publishings reflect that, although a project was identified
by a Special Project grant number, there was no statement that the
project was undertaken for purposes of defense in litigation, nor
was there any indication that the project had not been approved by
the SAB. Liggett claims the attorney-client, joint defense and
attorney work-product privileges asserting that CTR Special
Projects was funded by the individual tobacco companies on the
advice of their counsel for purposes of defending unspecific but
anticipated litigation.
Previous litigation in New Jersey involved the 123 documents
involved here, in addition to many others.  In Haines v. Liggett
Group, Inc. the federal magistrate judge appointed a special
master to review over 1500 documents relating to CTR and the various
tobacco companies named as defendants,  including Liggett.  The
special master found that the documents were protected by the
attorney-client privilege.  The Magistrate Judge confirmed this
and further found that the documents did not fall within the
crime-fraud exception.  This decision was reversed by the District
Court, Haines v. Liggett Group Inc., 140 F.R.D. 681
(D.N.J.1992)(then District Judge now Circuit Judge Sarokin), on
the ground that there was ample evidence to support the plaintiffs'
claim that Special Projects was part of a public relations fraud
perpetrated on an unknowing public by using the credibility of CTR
and its independent board of scientists to publicize the results
of secret research projects undertaken, on the advice of tobacco
company counsel, to undermine research results that had found a
causal nexus between smoking and illness. The Third Circuit
vacated the District Court's ruling, on the ground that the District Court
had considered documents and information outside the record before
the magistrate judge.  Haines v. Liggett Group.  Inc., 975 F.2d 81
(3d Cir.1992). 

III. Discussion

A. Attorney-Client Privilege

*6 New York's provision for the privilege is found in New York
Civil Practice Laws and Rules, s 4503, which in relevant part
states: Unless the client waives the privilege, an attorney or his
employee ... who obtains ... a confidential communication ... made
between the attorney or his employee and the client in the course
of professional employment shall not disclose, or be allowed to
disclose such communication, in any action....  N.Y. Civ. Prac.
Law s 4503(a) (McKinney 1992). The party asserting the privilege has
the burden of establishing all the essential elements.  Spectrum
Systems International Corp. v. Chemical Bank, 575 N.Y.S.2d 809, 78
N.Y.2d 371, 581 N.E.2d 1055 (N.Y.1991);  People v. Mitchell, 461
N.Y.S.2d 267, 58 N.Y.2d 368 (N.Y.1983);  Matter of Grand Jury
Subpoenas Served Upon Doe, 536 N.Y.S.2d 926, 927, 142 Misc.2d 229
(N.Y.Sup.1988).  The applicability of the privilege should be
determined on the facts surrounding each individual case.  Boiler
v. Barulich, 557 N.Y.S.2d 833, 835, 147 Misc.2d 502 (N.Y. City
Civ.Ct.1990).
The Court of Appeals has set down the following principles
regarding the protection of the privilege: [The attorney-client]
relationship arises only when one contacts an attorney in his
capacity as such for the purpose of obtaining legal advice or
services ... Second, not all communications to an attorney are
privileged.  In order to make a valid claim of privilege, it must
be shown that the information sought to be protected from
disclosure was a 'confidential communication made to the attorney
for the purpose of obtaining legal advice or services'.... Third,
the burden of proving each element of the privilege rests upon the
party asserting it....  Finally, even where the technical
requirements of the privilege are satisfied, it may, nonetheless,
yield in a proper case, where strong public policy requires
disclosure.  Priest v. Hennessy, 431 N.Y.S.2d 511, 51 N.Y.2d 62,
68-69, 409 N.E.2d 983 (N.Y.1980). See also, Matter of Grand Jury
Subpoena of Stewart, 545 N.Y.S.2d 974, 977, 144 Misc.2d 1012
(N.Y.Sup.1989).
The attorney-client privilege extends to information given by the
client to the attorney, as well as "professional advice given by
an attorney that discloses such information."  In re Six Grand Jury
Witnesses, 979 F.2d 939, 944 (2d Cir.1992), cert. denied sub nom.,
Xyz Corp. v. U.S., 113 S.Ct. 2997, 125 L.Ed.2d 691 (1993) (citing
Upjohn Co. v. United States, 449 U.S. 383, 390, 101 S.Ct. 677,
683, 66 L.Ed.2d 584 (1981));  Rossi v. Blue Cross and Blue Shield of
Greater New York, 542 N.Y.S.2d 508, 510, 73 N.Y.2d 588, 540 N.E.2d
703 (N.Y.1989).  The New York Court of Appeals has described the
requisite legal character of the communication required: In order
for the privilege to apply, the communication from attorney to
client must be made 'for the purpose of facilitating the rendition
of legal advice or services, in the course of a professional
relationship.'  Rossi v. Blue Cross & Blue Shield, 73 N.Y.2d 588,
593, 542 N.Y.S.2d 508, 540 N.E.2d 703.  The communication itself
must be primarily or predominately of a legal character .... 
Spectrum, 575 N.Y.S.2d at 814 (citation omitted) (emphasis added.)
 
*7 Thus, the privilege only arises when "a person contacts an
attorney for the purpose of obtaining legal services or advice." 
Application of D'Alessio, 589 N.Y.S.2d 282, 284, 155 Misc.2d 518
(N.Y.Sup.1992);  see also People v. Osorio, 75 N.Y.2d 80, 549
N.E.2d 1183, 550 N.Y.S.2d 612, 614 (N.Y.1989)(privilege attaches
if "information is disclosed in confidence to the attorney for the
purpose of obtaining legal advice or services.");  Civil Service
Employees Ass'n. Inc. v. Ontario County Health Facility, 103
A.D.2d 1000, 478 N.Y.S.2d 380, 381 (N.Y. 4th Dep't 1984)(statements by
witnesses to county attorney during investigation not shielded by
attorney-client privilege) (citing Priest v. Hennessy, 51 N.Y.2d
62, 68-69, 431 N.Y.S.2d 511, 409 N.E.2d 983 (N.Y.1980) and People
v. Beige, 59 A.D.2d 307, 309, 399 N.Y.S.2d 539 (N.Y.1977)).  The
"mere fact that a communication is made directly to an attorney,
or an attorney is copied on a memorandum, does not mean that the
communication is necessarily privileged."  U.S. Postal Service v.
Phelps Dodge Refining Corp., 852 F.Supp. 156, 160 (E.D.N.Y.1994).
Liggett has failed to sustain its burden of establishing the
elements of the attorney-client privilege with respect to the
documents at issue.  More specifically, it has failed to
demonstrate that the documents at issue relate to the rendition of
legal advice or legal services.  The documents involve
communications by tobacco company executives and in-house counsel
and outside counsel relating to CTR Special Projects research. 
Liggett claims that the communications were appropriate legal
advice and/or work-product  for the purpose of developing evidence
for future litigation.
In camera review of the Special Projects portions of documents did
not reveal any confidential legal communications exchanged in the
documents, nor the rendering of legal advice.  The fact that the
documents were prepared by counsel, and in some instances shared
by counsel, does not cloak the document with the attorney-client
privilege when such documents do not reveal a confidential legal
communication from the client, or impart legal advice from the
attorney.  In the Matter of Baker, 528 N.Y.S.2d 470, 472-73, 139
Misc.2d 573 (N.Y.Sup.1988).  The documents instead demonstrate
that the attorneys were serving a function other than that of a legal
advisor.  Counsel to the tobacco companies were functioning in a
scientific, administrative, or public relations capacity in taking
the action that they did.  The role delegated to the attorneys was
one that could have been performed by the Scientific Advisory
Board, a doctor or scientist, or a tobacco company executive.  See
Leonen v. Johns-Manville, 135 F.R.D. 94, 99 (D.N.J.1990)(no
privilege where the "service rendered could have been rendered by
any corporate agent who was not a lawyer "(citation omitted));  In
re Air Crash Disaster at Sioux City. Iowa, 133 F.R.D. 515, 519
(N.D.IIl.1990)("although a document is sent to an attorney, if the
role of counsel is "minor or perfunctory or was intended merely to
immunize the document from the production" the privilege is
inapplicable) (citation omitted)).  Since the documents are not
"primarily of a legal character" they do not fall within the
attorney-client privilege.  Cooper-Rutter Associates, Inc. v.
Anchor National Life Insurance Co., 168 A.D.2d 663, 563 N.Y.S.2d
491, 491 (2d Dep't 1990).

*8 Liggett's claim that its attorneys evaluated the projects in
terms of litigation is without merit.  When specific litigation
and legislative hearing research arose, this work was not undertaken
through Special Projects but instead through "Special Accounts,"
maintained by the law firm of Jacob & Medinger, outside counsel to
R.J. Reynolds Tobacco and the CTR. See Oral Argument dated January
22, 1996, Tr. at p. 32 and Lisa Bero, et al., "Lawyer Control of
the Tobacco Industry's External Research Program," Journal of the
American Medical Association, Vol. 274, No. 3, 241, 242 (1995). 
See also Document No. 33 at RC 6033346.

B. Compelling Public Policy Interests Require Disclosure
This case falls within the exception to the New York
attorney-client privilege since there is a compelling public
policy interest which mandates disclosure; namely, an overriding concern
with protecting the public health.  The attorney-client privilege
is not absolute.  In an appropriate case it must yield "where
strong public policy requires disclosure."  Priest, supra, 51
N.Y.2d at 62, 431 N.Y.S.2d at 511;  see also, United States v.
Goldberger & Dubin, P.C., 935 F.3d 501, 504 (2d
Cir.1991)(attorney-client privilege "cannot stand in the face of
countervailing law or strong public policy");  Leucadia, Inc. v.
Reliance Ins. Co., 101 F.R.D. 674 (S.D.N.Y.1983) (recognizing that
a strong public policy may require disclosure);  see also Leonen
v. Johns-Manville, 135 F.R.D. 94 (D.N.J.1990)(where the court in
asbestos litigation ordered disclosure of documents claimed to
fall within the attorney-client privilege under New Jersey's more
stringent public policy exception, where the documents may
demonstrate knowledge of the health risks associated with its
product). A compelling interest in public health requires disclosure of the
documents.

C. Joint Defense Privilege
New York affords the parties' shared attorney-client
communications privilege status when made for the purpose of "mounting a common
defense."  People v. Osorio, 75 N.Y.2d 80, 549 N.E.2d 1183, 550
N.Y.S.2d 612, 615 (N.Y.1989); see also Kraus v. Brandstetter, 586
N.Y.S.2d 270, 272, 185 A.D.2d 300 (N.Y.A.D. 2 Dep't
1992)(recognizing the existence of the joint defense privilege
under New York law).  It applies where "multiple parties are
represented by separate legal counsel but share a common interests
about a legal matter" but "does not extend to communications about
a joint business strategy that happens to include a concern about
litigation."  Walsh v. Northrop Grumman, --- F.R.D. ---, 1996 WL
75819 at *2 (E.D.N.Y.1996) (citations omitted).  Since the
attorney-client privilege does not apply here between individual
counsel and client, for the reasons stated above, it gains no
further recognition from the fact that it was a joint or
collective undertaking.  Walsh recognizes that attorneys cannot be utilized
as conduits of non-legal communication between parties claiming the
joint defense privilege.  Id. Liggett's joint defense privilege
theory fails because Liggett and the other tobacco companies used
their attorneys for non-legal purposes that involved a joint
public
relations business strategy to promote the economic interests of
their clients.  To the extent that these projects may have been of
assistance in future litigation, such a benefit was incidental or
secondary to the primary goal.

D. Work-Product Privilege

*9 Liggett claims that the work-product privilege protects all but
one of the documents submitted for in camera inspection.   The
applicability of the work product privilege in a diversity case is
governed by federal law. Bowne of New York City. Inc. v. AmBase
Corp., 161 F.R.D. 258, 263 (S.D.N.Y.1995).  See, Federal Rule of
Civil Procedure 26(b)(3).  The privilege protects an attorney's "thought-processes
includ[ing] preparing legal theories, planning litigation strategies and trial
tactics, and shifting through information."  In re In-Store
Advertising Securities Litigation. 163 F.R.D. 452, 456
(S.D.N.Y.1995).  The party asserting the privilege under Rule
26(b)(3) must satisfy a three-part test.  First, the party must
demonstrate that the information requested is either documents or
otherwise tangible.  Second, the document must have been prepared
in anticipation of litigation.  Third, the document must have been
prepared by or for the party's representative.  Fed.R.Civ.P.
26(b)(3);  In re Joint Eastern and Southern District Asbestos
Litigation, 119 F.R.D. 4, 6 (E.D.N.Y.1988);  In re Grand Jury
Subpoenas Dated December 18, 1981, and January 4, 1982, 561
F.Supp. 1247, 1257 (E.D.N.Y.1982).
The party invoking the work product privilege must also
demonstrate that the document was prepared "principally or exclusively to
assist in anticipated or ongoing litigation."  Martin v. Valley
Nat'l. Bank of Arizona, 140 F.R.D. 291, 304 (S.D.N.Y.1991);  U.S.
v. Construction Products Research Inc., 73 F.3d 464, 473 (2d
Cir.1996)(party claiming privilege "generally must show that the
documents were prepared principally or exclusively to assist" in
litigation).  The document must have been "prepared because of the
prospect of litigation."  Bank Brussels Lambert v. Credit Lyonnais
(Suisse) S.A., 160 F.R.D. 437, 448 (S.D.N.Y.1995)(emphasis added).

If the "primary motivating purpose" in creating the materials "is
other than to assist in pending or impending litigation, then the
document does not receive work product protection."  In re Pfizer
Inc. Securities Litigation, 1993 WL 561125 at *3 (S.D.N.Y.1993).
The documents herein do not merit protection under the
work-product privilege.  Liggett has failed to establish that the primary
reason for creation of these documents was to assist in on-going or
anticipated litigation.  See e.g., Document 102 at RC-6033472 and
Document 33 at RC-603346 and 603347.  Special accounts, maintained
by Jacob & Medinger, outside counsel to CTR and to R.J. Reynolds
Tobacco Co., "funded research by expert witnesses in preparation
for testimony directly related to a particular case, preparation
of testimony for congressional or other hearings, and other research
deemed useful by the lawyers."  Lisa Bero, et al., "Lawyer Control
of the Tobacco Industry's External Research Program", Journal of
the American Medical Association Vol. 274, No. 3, 241, 242
(1995)(hereinafter cited to as "Lawyer Control").  This is
confirmed by the documents.  See Document Nos. 33 and 112. Counsel
for Liggett at oral argument confirmed that "special account 4 was
an account of certain lawyers and it was used in connection with
the preparation of defense on product liability cases."  This
explains why the Special Projects research documents are devoid of
references to litigation strategies or other "thought processes"
otherwise associated with litigation.  In-Store Advertising
Securities Litigation, supra, 163 F.R.D. at 456.

*10 Moreover, Liggett asserts that any Special Projects research
scientist was free to publish its findings and opinions without
restrictions.  It would appear that this was encouraged, which is
fully consistent with the public relations motivation behind
Special Projects.  This is hardly the type of agreement that one
would find, however, where counsel engages a scientific or medical
expert for the purpose of testifying in litigation.  In
litigation, counsel tightly controls the availability of the expert report,
and the materials relied on by the expert and disclosure is
customarily ade during the last phase of discovery and then under counsel's
control.  See Rule 26(c) Fed.R.Civ.P.;  and the Civil Justice
Expense and Delay Reduction Plan (E.D.N.Y.) s 11(B).
The work product privilege is not applicable.

E. Crime-Fraud Exception to the Attorney-Client Privilege
The crime-fraud exception applies "to communications made in
furtherance of fraudulent or other unlawful acts."  Matter of
Associated Homeowners & Businessmen's Organization, Inc., 385
N.Y.S.2d 449, 450 (N.Y.Sup.1976).  The proponent of the
crime-fraud exception must establish:  (1) probable cause to believe that a
crime or fraud has been attempted or committed;  and (2) probable
cause to believe that the communications were in furtherance
thereof.  United States v. Zolin, 109 S.Ct. 2619, 105 L.Ed.2d 469,
491 U.S. 554, 563 (1989);  see also In re Grand Jury Subpoena
Duces Tecum Dated Sept. 5, 1983, 731 F.2d 1032, 1039 (2d Cir.1984).  The
party seeking disclosure must show that "a prudent person [has] a
reasonable basis to suspect a perpetration or attempted
perpetration of a crime or fraud and that the communications were
in furtherance thereof."  In re Grand Jury Subpoena Duces Tecum
Dated September 15, 1983, 731 F.2d at 1039.  The crime-fraud
exception also applies to "intentional torts moored in fraud." 
Cooksey v. Hilton Intern.  Co., 863 F.Supp. 150, 151
(S.D.N.Y.1994).  It does not require proof of the commission of an
actual fraud.  Cooksey v. Hilton Intern.  Co., supra, 863 F.Supp.
at 151.
The crime-fraud exception also applies to communications which are
claimed to be privileged under the work-product doctrine.  Matter
of Grand Jury Subpoenas Served Upon Doe, 536 N.Y.S.2d 926, 927-28
(N.Y.Sup.1988)(citing In re John Doe Corp., 675 F.2d 482 (2d
Cir.1982);  In re Sealed Case, 676 F.2d 793 (D.C.Cir.1982 )).
Liggett asserts that the Sackmans have not met their evidentiary
burden to establish "probable cause to believe" the existence of
fraud.  In United States v. Zolin, 491 U.S. 544, 109 S.Ct. 2619
(1989), the Supreme Court held that once the court has found that
the party challenging the applicability of the attorney-client
privilege has made the threshold showing  required to warrant in
camera review, the court may proceed in determining whether or not
the exception applies.  The court has previously found that the
Sackmans met the threshold requirement for in camera inspection. 
See Order dated October 20, 1995.  The proponent does not have to
establish probable cause of fraud through independent evidence but
rather, the court may make such determination based on the in
camera review of documents.  Id. at 555.

*11 The Sackmans' papers, together with the documents, provide the
court with prima facie evidence sufficient to establish probable
cause (1) that a fraudulent purpose existed in Liggett's use of
CTR Special Projects, and (2) that the documents at issue furthered
the fraud.  The "Organization and Policy" of the TIRC states that the
"object of its research program is to encourage scientific study
of facts about tobacco use and health ... for a full evaluation of
all factors being studied in connection with these diseases."   This
is consistent with the formation of a non-profit scientific research
entity formed under the laws of the State of New York. A document
entitled "A Frank Statement to the Public by the Makers of
Cigarettes" ("Frank Statement"), identifies the reasons for the
creation of TIRC, CTR's predecessor.  That statement asserts that
TIRC's purpose was to undertake scientific research in order to
independently ascertain whether tobacco products were injurious to
public health.  The record establishes that CTR Special Projects
was used instead as a vehicle to promote scientific research which
would support the economic interests of the tobacco industry. 
TIRC, and CTR, its successor, along with the tobacco companies and
their counsel, were willing and knowing participants in this
scheme to mislead the public.  See e.g., Declaration of Dr. Richard
Pollay, annexed to plaintiffs' letter dated November 21, 1995 at
Exhibit D para. 8;  and Document Nos. 17, 33 and 112.
The CTR, as discussed supra, had two methods of funding research: 
through SAB, and through Special Projects.  The SAB was comprised
of independent and unbiased scientists that would approve research
funding for "grant in aid" projects.  The CTR Special Projects,
however, by-passed the independent board of unbiased scientists
and funded projects to further the economic interest of CTR members as
recommended and approved by the tobacco company executives and
their lawyers.
CTR did not inform the public of the difference between Special
Projects and its SAB approved grant-in-aid program in releasing
Special Project reports. For example, acknowledgments in the
articles submitted by Liggett as Documents "C", "D" and "E" merely
state that the article was "supported in part by Special Project
Grant No .... from the Council of Tobacco Research (CTR)-- U.S.A.
Inc., New York, New York" or "[t]he studies have been supported by
a Special Project grant from the Council for Tobacco
Research--U.S.A., Inc.".
The documents confirm that attorneys for the tobacco companies
met, discussed, and decided whether or not a specific project warranted
funding.  Liggett implicitly acknowledges that the projects were
not undertaken for the purpose of producing unbiased reports
simply by invocation of the work product privilege.  These documents
furthered the fraud that CTR Special Projects perpetrated on the
public.  CTR released the lawyer-picked research projects results
under the guise of unbiased scientific findings.

*12 Lastly, Liggett claims that the documents reviewed in camera
do not have anything to do with the allegations in the complaint, and
for that reason are not subject to the crime-fraud exception.  The
Sackmans have alleged that a continuing fraud exists, and have
pleaded the facts as best they could, without access to the
documents.  This is adequate, given the unavailability of the
documents when the complaint was filed.
Based on the foregoing, the court concludes that the Sackmans have
sustained their burden of establishing probable cause that a
fraudulent scheme existed and that the documents herein are in
furtherance  of that fraud.  Accordingly, even if the privileges asserted here by Liggett were
applicable, the court finds that the crime-fraud exception applies
and mandates disclosure.

Conclusion
The court's review of the parties' submissions and of the
documents at issue reveals that Liggett has failed to establish that the
attorney-client, joint defense, or work-product privilege is
applicable to these documents.  The court further finds that due
to the critical public health issues at stake, there are compelling
public policy interests which preclude application of any of the
privileges invoked by the defendant herein.  Moreover, the
Sackmans have demonstrated prima facie evidence of the existence of a
fraud, and that Special Projects portions of each of the communications
contained in the documents submitted for in camera review was in
furtherance of that fraud.  Accordingly, Liggett is ordered to
turn over Special Projects portions  of the documents produced for in
camera inspection.
SO ORDERED. 

ASH - ACTION ON SMOKING AND HEALTH 2013 H Street, NW / Washington, DC 20006 / (202) 659-4310