Administatrix

Full title: Susan HAINES, as Administratrix ad Prosquendum and Executrix of the Estate…

Court: United States District Court, D. New Jersey.

Date published: Feb 6, 1992

Fact

  Plaintiff’s theory of fraud in this case is that the defendants knew of the hazards of cigarette smoking; concealed information that demonstrated the dangers of smoking; and affirmatively misled the public about the risks of smoking. It is this last factor—the defendants’ affirmative misrepresentations to the public—that constitutes the alleged fraud.

In addition to the defendants’ direct representations to the public regarding the risks of smoking, a crucial element of the plaintiff’s case is the defendant’s “sub-fraud”: the alleged abuse of the CTR as a primary vehicle for misleading the public. Defendants slavishly advertised the CTR as an entirely independent and objective scientific research body that would investigate the supposed hazards of cigarette smoking and report the results of those cigarette studies to the public. The plaintiff has provided just a few of the many advertisements by defendants as exhibits in this appeal.

Issue

Court Judgment

 As explained supra, the court finds the Magistrate Judge’s Order rejecting application of the crime/fraud exception to the remaining documents clearly erroneous. That Order is reversed. This court specifically finds that the 5 withheld documents quoted in this opinion are not privileged in their entirety, and that at least those quoted portions of those documents shall be turned over to plaintiff. Having concluded that plaintiff’s theory of fraud is supported by prima facie, compelling evidence, the court has sufficient reason to turn over all of the remaining ” special projects” documents to plaintiff. However, neither the Special Master, the Magistrate Judge, or this court has reviewed those documents in order to determine whether the scope of such an order would be too broad and would require defendants to turn over documents that are truly unrelated to the plaintiff’s claims and which only concern defendants’ litigation strategies, etc. Therefore, this court has decided to name a new Special Master, whose task shall be to review the remaining documents to determine whether each document is subject to the crime/fraud exception. This Special Master shall be named at a later date.

         The court shall issue the appropriate orders.

Contrary to defendants’ suggestion, documents which pre-date the 1964 establishment of the ” special projects” division are relevant to plaintiff’s crime/fraud allegations involving ” special projects.” Plaintiff must establish defendants’ general manipulation of the CTR in order to lay the foundation for her theory of fraud with respect to the ” special projects” division.

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