Opinion ID: 187362
Heading Depth: 2
Heading Rank: 2

Heading: Secondhand Smoke

Text: We turn next to Defendants' claim that the district court erred in finding that they fraudulently denied the adverse health effects of secondhand smoke. Federal Rule of Civil Procedure 52 obliges us to uphold the district court's findings of fact unless they are clearly erroneous. FED.R.CIV.P. 52(a)(6). Under this highly deferential standard, we may disturb the district court's findings only if we are left with the definite and firm conviction that a mistake has been committed. E.g., Boca Investerings P'ship v. United States, 314 F.3d 625, 630 (D.C.Cir.2003) (quotation marks omitted). This is so even if we would have decided the case differently, as [w]here there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous. Anderson, 470 U.S. at 574, 105 S.Ct. 1504. Defendants contend that their statements disputing the health hazards of secondhand smoke were merely good-faith expressions of opinion. But the district court found to the contrarythat Defendants' representations were fraudulent and not in good faith. Philip Morris, 449 F.Supp.2d at 853, 864-65. Under Rule 52, then, the question for us is whether this finding was clearly erroneous. The district court criticized Defendants' statements regarding secondhand smoke as contrary to the scientific consensus. Defendants object, emphasizing that the district court found no scientific consensus emerged until the issuance of the Surgeon General's 1986 report determining secondhand smoke to be hazardous. Moreover, they point to evidence of selected post-1986 scientific opinions casting doubt on the dangers of secondhand smoke, arguing that even then they possessed some basis for disputing the consensus. Defendants' objections are beside the point. The district court based its finding of fraudulent intent not just on the existence of a consensus but also on evidence of Defendants' own knowledge. Philip Morris, 449 F.Supp.2d at 864-65. Specifically, the district court found that dating back to the 1970s, Defendants' own research and analysis revealed the hazards of secondhand smoke. For example, the district court found that in 1980 a Philip Morris scientist reviewed a paper concluding that secondhand smoke caused significant damage to airway function in exposed nonsmokers, and found little to criticize, deeming the paper an excellent piece of work which could be very damaging to the industry. Id. at 709 (quotation marks omitted). In 1982, a Philip Morrissponsored research facility concluded that the side stream smoke composing the bulk of secondhand smoke is more irritating and/or toxic than the main stream smoke inhaled by smokers. Id. at 710 (quotation marks omitted). And several TI advertisements and press releases claimed that an independent 1981 study showing a significant correlation between lung cancer and secondhand smoke suffered from a statistical flaw, id. at 715, yet the district court found that industry consultants told TI, Reynolds, and Brown & Williamson that TI knew at the time not only that the statistical error did not exist, but also that the study was in fact correct. Id. at 717-18. In addition to these and other findings providing relatively direct evidence that Defendants were aware of the health risks of secondhand smoke, the district court found that Defendants concealed their role in making statements regarding secondhand smoke. While it may be true that purveyors of consumer products, without fraudulent intent, frequently engage in concealed support of positive research in their industries, the concealment of identity by Defendants over so long a period on a subject of such intense controversy is at the very least consistent with knowledge of the falsity of their statements. Although Defendants insist they had no knowledge of the misleading character of their public statements, they nowhere challenge the accuracy of these or any of the district court's other findings suggestive of their knowledge. Instead, they argue that such findings reveal only facts that were known to the public and that had not, at the time, given rise to a scientific consensus. Again Defendants miss the point. The question is not whether other individuals knew that Defendants' claims were false or misleading; the question is whether Defendants did. Regardless of whether a scientific consensus existed at any point, Defendants may be liable for fraud if they made statements knowing they were false or misleading. Based on voluminous evidence, including that summarized above, the district court circumstantially inferred that Defendants did in fact possess such fraudulent intent. Given these unchallenged findings, we have no basis for saying that the district court clearly erred in drawing that conclusion.