A Big Blow to Big Tobacco

by Russell Mokhiber And Robert Weissman

The latest evidence that Enron and Arthur Andersen are not aberrations comes from Australia.

There, a judge has concluded that British American Tobacco (BAT) has engaged in a massive document-destruction scheme intentionally designed to thwart smokers or former smokers from bringing suit against the company.

The judge found the document destruction to be so serious that he directed a verdict for the plaintiff in the case before him, a 51-year-old Australian woman named Rolah Ann McCabe, without permitting BAT to mount a defense.

In a 133-page decision issued in March but just recently made public, Judge Geoffrey Eames details an elaborate, carefully considered, company-wide document-destruction scheme

“The predominant purpose of the document destruction,” the judge found, “was the denial to plaintiffs of information which was likely to be of importance in proving their case, in particular, proving the state of knowledge of the defendant of the health risks of smoking, the addictive qualities of cigarettes and the response of the defendant to such knowledge.”

The company was a defendant in various lawsuits from 1990 until 1998, during which time shredding may have stopped, though the judge expresses skepticism about this claim.

In February 1996, Phyllis Cremona brought suit against BAT in Australian courts. In the course of the discovery phase of that litigation, BAT’s subsidiary identified 30,000 documents as possibly relevant to the proceeding. With a few exceptions, BAT scanned all of the documents, creating electronic versions. Company lawyers also indexed and summarized virtually all of the documents. The lawyers rated each document on a scale of one to five, according to how damaging each was likely to be to the company in litigation. A rating of five meant the document was a “knockout” against the company, a rating of one a “knockout” for BAT.

Only about 200 of the documents were requested by the plaintiff in the Cremona case.

When the Cremona case ended and with no pending litigation, BAT’s chief counsel told an associate, “now is a good opportunity to dispose of documents if we no longer need to keep them. That should be done outside the legal department.”

Thousands of the 30,000 documents were then destroyed. Also destroyed were the electronic versions of the documents, the summaries, indices and ratings.

“The decision to destroy all such lists and records,” the judge concluded, “can only have been a deliberate tactic designed to hide information as to what was destroyed.”

In 2001, the McCabe litigation commenced. In the course of discovery, the plaintiff’s lawyers requested a range of materials which it appears would have included many of the documents in the Cremona database, but were destroyed after that case’s completion.

Rather than acknowledge the destruction of the documents, however, BAT lawyers engaged in a series of obfuscations and delaying tactics. The judge found that the BAT lawyers misled both the court and the plaintiff’s lawyers, though eventually through persistent questioning the document-destruction scheme was revealed.

BAT defended, and continues to defend, the shredding on the grounds that the company was not obligated to hold on to documents that may be useful to an opposing party in some future litigation. With no litigation pending after the Cremona case, document destruction was proper, the company claims.

But the judge stated that while corporations are not obligated to store documents indefinitely, they are not free to destroy them in anticipation of future litigation. In BAT’s case, the company and its lawyers viewed future litigation as a “virtual certainty,” the judge held. “At all times those who took the decisions about the implementation of the policy regarded future proceedings to be not merely likely, but to be a near certainty,” Judge Eames wrote. “It was that certainty which meant that any opportunity to destroy documents which arose by virtue of the elimination of current proceedings was to be seized upon.”

The judge concluded that the exact prejudicial effect to McCabe was unknowable — since “the prejudice to the plaintiff might be immense by virtue of the deliberate destruction of one document, which might have been decisive in her case” — but potentially extreme. Accordingly, the judge issued a ruling in favor of McCabe, without permitting BAT to mount a defense.

A jury issued an award of more than $350,000. With their client likely to die at any time, McCabe’s lawyers had agreed before trial that no punitive damages would be sought, in order to expedite the trial.

BAT has said it will appeal the judge’s decision.

The potential implication of the decision is enormous. While Judge Eames’ decision will have no binding effect in future cases, other judges, confronted with the same evidentiary problems as in the McCabe case, are likely to consider following Eames’ example. BAT may find itself in Australia facing the flood of litigation it long feared, but without the ability to defend itself.

The decision also has potential implications in the United States, especially because Judge Eames’ findings are that U.S. lawyers for BAT — both company counsel and the Kansas City tobacco firm of Shook Hardy and Bacon — played a critical role in directing the document destruction.

Move over Ken Lay, Jeffrey Skilling and David Duncan of Arthur Andersen. You have company.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and the co-director of Essential Action. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999).

(c) Russell Mokhiber and Robert Weissman




November 26, 2015
Ashley Nicole McCray – Lawrence Ware
Decolonizing the History of Thanksgiving
Joseph Grosso
The Enduring Tragedy: Guatemala’s Bloody Farce
Roxanne Dunbar-Ortiz
Imperial Myths: the Enduring Lie of the US’s Origin
Ralph Nader
The Joys of Solitude: a Thanksgiving!

Joseph G. Ramsey
Something to be Thankful For: Struggles, Seeds…and Surprises
Dan Glazebrook
Turkey Shoot: the Rage of the Impotent in Syria
Andrew Stewart
The Odious President Wilson
Colin Todhunter
Corporate Parasites And Economic Plunder: We Need A Genuine Green Revolution
Rajesh Makwana
Ten Billion Reasons to Demand System Change
Joyce Nelson
Turkey Moved the Border!
Richard Baum
Hillary Clinton’s Meager Proposal to Help Holders of Student Debt
Sam Husseini
A Thanksgiving Day Prayer
November 25, 2015
Jeff Taylor
Bob Dylan and Christian Zionism
Dana E. Abizaid
Provoking Russia
Oliver Tickell
Syria’s Cauldron of Fire: a Downed Russian Jet and the Battle of Two Pipelines
Patrick Cockburn
Trigger Happy: Will Turkey’s Downing of Russian Jet Backfire on NATO?
Robert Fisk
The Soothsayers of Eternal War
Russell Mokhiber
The Coming Boycott of Nike
Ted Rall
Like Father Like Son: George W. Bush Was Bad, His Father May Have Been Worse
Matt Peppe
Bad Policy, Bad Ethics: U.S. Military Bases Abroad
Martha Rosenberg
Pfizer Too Big (and Slippery) to Fail
Yorgos Mitralias
Bernie Sanders, Mr. Voutsis and the Truth Commission on Greek Public Debt
Jorge Vilches
Too Big for Fed: Have Central Banks Lost Control?
Sam Husseini
Why Trump is Wrong About Waterboarding — It’s Probably Not What You Think
Binoy Kampmark
The Perils of Certainty: Obama and the Assad Regime
Roger Annis
State of Emergency in Crimea
Soud Sharabani
ISIS in Lebanon: An Interview with Andre Vltchek
Thomas Knapp
NATO: This Deal is a Turkey
November 24, 2015
Dave Lindorff
An Invisible US Hand Leading to War? Turkey’s Downing of a Russian Jet was an Act of Madness
Mike Whitney
Turkey Downs Russian Fighter to Draw NATO and US Deeper into Syrian Quagmire
Walter Clemens
Who Created This Monster?
Patrick Graham
Bombing ISIS Will Not Work
Lida Maxwell
Who Gets to Demand Safety?
Eric Draitser
Refugees as Weapons in a Propaganda War
David Rosen
Trump’s Enemies List: a Trial Balloon for More Repression?
Eric Mann
Playing Politics While the Planet Sizzles
Chris Gilbert
“Why Socialism?” Revisited: Reflections Inspired by Einstein’s Article
Charles Davis
NSA Spies on Venezuela’s Oil Company
Michael Barker
Democracy vs. Political Policing
Barry Lando
Shocked by Trump? Churchill Wanted to “Collar Them All”
Cal Winslow
When Workers Fight: the National Union of Healthcare Workers Wins Battle with Kaiser
Norman Pollack
Where Does It End?: Left Political Correctness
David Macaray
Companies Continue to Profit by Playing Dumb
Binoy Kampmark
Animals in Conflict: Diesel, Dobrynya and Sentimental Security
Dave Welsh
Defiant Haiti: “We Won’t Let You Steal These Elections!”