Philip Morris Co. filed a $10 billion libel suit against ABC yesterday, charging that the network falsely accused the tobacco industry of artificially "spiking" its cigarettes with added nicotine.
ABC News said in a statement that it "stands by its reporting on this issue" but declined to comment further.
The nation's largest tobacco company announced the lawsuit the day before a House subcommittee hearing today in which David A. Kessler, commissioner of the Food and Drug Administration, is to testify about his plan to consider regulating tobacco products on grounds that manufacturers may be using nicotine, the addictive substance in cigarettes, as a drug to hook smokers.
The lawsuit, filed in state circuit court in Richmond, stems from ABC's "Day One" broadcasts on cigarette production Feb. 28 and March 7. The suit also names ABC correspondent John Martin and producer Walt Bogdanich as defendants.
Steven Parrish, senior vice president of Philip Morris USA, said the company, whose best-known product is Marlboro, was "outraged" by the ABC broadcasts.
"We gave them two written statements, both pointing out that we do not spike our cigarettes with nicotine," Parrish said. "They did not use the statements, nor did 'Day One' indicate they had asked us for comment."
One ABC official disputed this account, saying: "We asked them repeatedly to appear for on-camera interviews and they declined. We gave them advance questions and they sent us statements which did not answer our questions."
But Philip Morris general counsel Murray Bring said in a statement that "these allegations are not true and ABC knows they are not true."
ABC charged in the first broadcast that the tobacco industry "artificially adds nicotine to keep people smoking and boost profits." The segment focused mainly on R.J. Reynolds, but said a Philip Morris official had written an internal memo decades ago that a cigarette should be considered "a storage container for a day's supply of nicotine."
Parrish acknowledged that Philip Morris removes nicotine while making reconstituted tobacco, used in virtually all cigarettes, and puts it back later in the process. But, he said, "What gets reapplied is less than what came out... . We quarrel with the notion that we are adding extraneous nicotine." The company said the reconstituted product contains 20 to 25 percent less nicotine than ordinary tobacco leaf.
Philip Morris is seeking $5 billion each in compensatory and punitive damages, Parrish said, because the "Day One" segments have played a role in the FDA and congressional investigations and prompted a sharp decline in the price of the company's stock. President Clinton has expressed concern about the ABC allegations, and Kessler announced his inquiry after learning that the "Day One" broadcast was imminent.
While the pretrial discovery process would allow ABC to examine internal documents about the Philip Morris manufacturing process, Parrish said the company plans to pursue the case all the way to trial.
Cliff Douglas of the American Cancer Society called the Philip Morris suit "a desperate act. They're seeking to counter in a big public way the public relations nightmare they've been facing in recent weeks, resulting from the disclosure that tobacco companies manipulate the addictive drug in their product."
Washington attorney Bruce Sanford, a First Amendment specialist, said that as a public company Philip Morris must prove actual malice by ABC, "either knowledge of falsity or reckless disregard for the truth. The issue really is what did ABC know and when did they know it."
The suit comes at a time when federal, state and local governments are enacting broad new restrictions on smoking, and a House subcommittee voted this week to increase the cigarette tax by $1.25 per pack. The cover story in Sunday's New York Times Magazine, which focused on Philip Morris, was entitled "How Do Tobacco Executives Live With Themselves?"
Philip Morris joined R.J. Reynolds and other groups last year in a suit to overturn the Environmental Protection Agency's designation of secondhand smoke as a potent carcinogen.
A number of major corporations have sued network news shows in an effort to counter negative publicity. General Motors sued and won a public apology from "Dateline NBC" last year over the program's staging of a fiery crash of a GM pickup truck. Food Lion has sued ABC's "PrimeTime Live" over a report alleging unsanitary practices by the supermarket chain.