TITLE: STATE OF MINNESOTA AND BLUE
CROSS AND BLUE SHIELD OF
MINNESOTA, PLAINTIFFS, V. PHILIP MORRIS, INC., ET. AL., DEFENDANTS.
TOPIC: TRIAL
TRANSCRIPT
TRANSCRIPT OF PROCEEDINGS
DOCKET-NUMBER: C1-94-8565
VENUE: Minnesota
District Court, Second Judicial District, Ramsey
County.
YEAR: March
3, 1998
A.M. Session
JUDGE: Hon. Judge Kenneth J. Fitzpatrick, Chief Judge
TEXT:
THE CLERK: All rise. Ramsey County District Court is again in session,
the
Honorable Kenneth J. Fitzpatrick now presiding.
(Jury enters the courtroom.)
THE CLERK: Please be seated.
THE COURT: Good morning.
(Collective "Good morning.")
(Witness resumes the stand.)
THE COURT: Counsel.
MR. CIRESI: Thank you, Your Honor.
Good morning, ladies and gentlemen.
(Collective "Good morning.")
GEOFFREY C. BIBLE called as a witness, being previously
sworn, was
examined and testified as follows:
BY MR. CIRESI:
Q. Good morning, Mr. Bible.
A. Good morning, Mr. Ciresi.
Q. Sir, when we recessed yesterday, we were talking
about Mr. Lincoln's
1958 memorandum to Mr. Millhiser, who was the vice chairman of the
company
-- or who became the vice chairman of the company, regarding Mr. Lincoln's
recommendation that benzpyrene must go. Do you remember that?
A. I recall it. Could I refer to the document again,
please?
Q. Absolutely, sir. Exhibit 10686 in volume one.
A. (Coughing) Excuse me.
Yes, I have it.
Q. And you see down there at the bottom that Mr.
Lincoln's analysis led
to the conclusion that benzpyrene must go. Do you see that?
A. Yes, I see that.
Q. Now over the course of years, Philip Morris identified
other
carcinogens in its tobacco smoke; correct?
A. I don't know that. What I have been told -- I
think I said yesterday
that it has been identified that there are animal carcinogens in cigarette
smoke.
Q. Can you direct your attention to Exhibit 10300.
It's in the same
volume, sir.
A. Yes, I have it.
Q. Now this is --
If you turn to the second page, you'll see that
the title is "PHILIP
MORRIS INCORPORATED, TOBACCO AND HEALTH-R&D APPROACH, Presentation
to R&D
Committee by Dr. H. Wakeham at meeting held in New York Office on November
15th, 1961." Do you see that?
A. Yes, I do.
MR. CIRESI: Okay. Your Honor, we'd offer Exhibit
10300.
MR. BLEAKLEY: No objection.
THE COURT: Court will receive Exhibit 10300.
BY MR. CIRESI:
Q. Now sir, can you direct your attention to the
first page. And you
see the title there that we just read?
A. Yes.
Q. And if you go to the next page, there's a table
of contents;
correct?
A. Yes.
Q. It has various titles, "Chemistry of Tobacco
Smoke, The Cancer
Controversy, Smoking and Cardiovascular Diseases, R&D Program Leading
to a
Medically Acceptable Cigarette," and then "Summary." Do you see that?
*2 A. Yes.
Q. Can you direct your attention to the next page.
Now it's reported
there, sir, that in 1961 Philip Morris had identified 400 compounds
of
which 50 had been identified for the first time by the Philip Morris
Research Center.
A. Yes, that's what it says.
Q. Do you know if at that time Philip Morris made
any disclosure of
that information to the public?
A. No, I have no idea, sir.
Q. Has anybody ever told you that they did?
A. No, nobody has.
Q. Have you seen any documents which would indicate
that they did?
A. No, I have not, sir.
Q. Sir, can you direct your attention to the next
page. And is there
listed there composition of mainstream smoke in both the gas phase
and
particulate phase?
A. Yes, I can see that.
Q. Do you have any understanding of gas -- or cigarette
smoke, that it
is composed of both a gas phase and a particulate phase?
A. Well somewhat, but not in depth. I'm not a scientist.
But I have a
vague understanding of it.
Q. And you see under the "GAS PHASE" that there
are various chemical
compounds listed?
A. Yes, I do.
Q. And do you know if those chemical compounds are
carcinogenic?
A. Do I know that?
Q. Yes.
A. No, I don't.
Q. Can you direct your attention to the page which
has the number 430.
A. Yes.
Q. And here definitions are provided; correct?
A. Yes, that's right.
Q. And carcinoma is defined as a malignant growth
arising from the
epithelial tissue; correct?
A. That's what it says, sir, yes.
Q. And you're aware that the lung has an epithelial
lining; correct?
A. Well I'm not aware of that, but I certainly am
aware that the lung
has tissue.
Q. And you see where sarcoma is defined as a malignant
growth arising
from connective or muscle tissues?
A. Yes, I can see that.
Q. And then a carcinogen is defined as a substance,
when applied to the
tissue of a test animal, gives rise to tumor formation in tests for
carcinogens. It is assumed that tumors ultimately lead to cancerous
growths
and that a carcinogen so demonstrated in test animals is dangerous
to man.
Do you see that?
A. Yes, I read that.
Q. Now this would be an animal test; correct?
A. Yes, that's what it says.
Q. And it would be an animal test on the tissue
of the animal; correct?
A. Yes. It doesn't say exterior or internal though.
Q. But it would be on the tissues, since that's
what's described in the
definition, sir?
A. Yes, I agree.
Q. Did Philip Morris in 1963 make any disclosure
to the public that a
carcinogen demonstrated in animal tests is dangerous to man?
A. I have no idea, sir.
Q. Has anybody ever told you if they did?
A. No, nobody has.
Q. Have you seen any documents that would indicate
that they did?
A. No, I have not seen any document. I have not
gone back.
Q. Now can you direct your attention to page 434
of the same document.
A. Yes.
Q. And is there listed here a partial list of compounds
in cigarette
smoke identified as carcinogens?
*3 A. Yes. That's the title.
Q. And some of those are arsenic; correct?
A. Yes.
Q. Benzopyrene?
A. Yes.
Q. Chromium?
A. Yes.
Q. Cobalt?
A. Yes.
Q. Xylene?
A. Yes, I see that.
Q. Ethyl alcohol?
A. Yes.
Q. Are you familiar with any of these chemical compounds,
sir?
A. I'm not familiar with any of them. I've heard
the names naturally. I
think some of them probably arise in the tobacco plant itself, sir.
Q. Did Philip Morris in 1963, or for that matter
at any time, disclose
to the public that it had identified as early as 1963 this list of
carcinogens in the tobacco smoke of its cigarettes?
A. Well it might have, but I don't know.
Q. You've never seen any such document that would
reflect that; have
you, sir?
A. No, I have not.
Q. You've never seen any newspaper advertisement
about that; correct?
A. No, I have not, sir.
Q. Now can you direct your attention to page 442.
A. Yes.
Q. "REDUCTION OF CARCINOGENS IN SMOKE." Do you see
the title, sir?
A. Yes, I do.
Q. Now did Philip Morris at any point in time advise
the consuming
public that carcinogens are found in practically every class of compound
in
smoke?
A. I don't know.
Q. Did Philip Morris ever advise the public that
the fact that
carcinogens were found in practically every class of compounds in smoke
would prohibit the complete solution of the problem by eliminating
one or
two classes of compounds?
A. Could you repeat that question, please?
Q. Sure.
Did Philip Morris ever advise the public that the
fact that carcinogens
were found in practically every class of compound in smoke would prohibit
complete solution of the problem by eliminating one or two classes
of
compounds?
A. Not to my knowledge, sir.
Q. Did Philip Morris ever advise the public that
the best the public
could hope for was for Philip Morris to reduce a particularly bad class;
for example, polynuclear hydrocarbons?
A. Not to my knowledge, sir.
Q. Do you know what a polynuclear hydrocarbon is?
A. No, I don't.
Q. Do you know if benzene is included in polynuclear
hydrocarbons?
A. Is it?
Q. Do you know if it is?
A. Do I? No, I don't, sir.
Q. Did Philip Morris ever advise the public that
technology did not
permit the selective filtration of particulate smoke?
A. I don't know, sir. I know we did quite a lot
of work on filtration
to try to eliminate tar and nicotine, or reduce it, but I don't know
if we
ever said anything along those lines.
Q. Did Philip Morris ever advise the public that
flavor substances and
carcinogenic substances come from the same classes in many instances?
A. Not to my knowledge, sir.
Q. And flavorants in large degree are added to cigarette
tobacco; are
they not?
A. We use flavorants in our cigarettes, yes, that's
right. They are
lodged -- I believe all of our ingredients are lodged with the Department
of Health and Human Services each year.
*4 Q. Do you know if the flavorants include carcinogenic
compounds?
A. No, I don't know, sir.
Q. Do you know if the paper in cigarettes includes
carcinogenic
compounds?
A. No, I don't know, sir. I wouldn't have thought
so, but I don't know.
Q. And the last point here is that many pyrolysis
products have
multiple precursors in tobacco; correct?
A. That's what it says, yes.
Q. And the precursor was a precursor for cancer;
correct, sir?
A. Well I don't know. It doesn't say that.
Q. Do you know that -- what pyrolysis is?
A. Not really.
Q. You don't.
A. No.
Q. Never heard of that term?
A. I've heard the term, yes.
Q. What have you heard it referring to?
A. Well I've heard people in our research and development
department
talk about pyrolysis. I don't want to guess at it.
Q. I don't want you to guess, sir.
Now can you turn to page 443, and do you see here
that it says "THE
PRODUCTION OF POLYCYCLIC HYDROCARBONS FROM TOBACCO VERSUS CIGARETTE
PAPER?"
A. Yes, that's the heading.
Q. And polycyclic hydrocarbons were one of the most
highly
carcinogenic; correct?
A. Well I don't recall that. Could you refer me
back to that, please?
Q. I will in one minute, sir. Can you go back to
page 442, just the
previous page.
A. Uh-huh. Yes, I have that.
Q. You see it there then, polynuclear hydrocarbons?
Do you see those?
A. Polynuclear hydrocarbons, yes.
Q. Okay.
A. And what was your question?
Q. And --
A. Poly --
Q. -- you see here that this is the production of
polycyclic
hydrocarbons from tobacco versus cigarette paper, and I was asking
you
whether or not polycyclic are not one of the most highly carcinogenic.
Or
let me put it another way. A particularly bad class.
A. Well I don't know. In fact polycyclic is what
this says, and
polynuclear I think is what this says, and I don't know the difference.
Q. You don't know if they're the same or different.
A. No, I don't.
Q. All right. Well if we assume that they're the
same, they would be
one of the particularly bad classes; correct?
A. Well it's not --
MR. BLEAKLEY: Excuse me. Objection, Your Honor,
calls for speculation.
THE COURT: No, I think it's referring to the document.
You may answer.
Q. I'm just asking you to assume they're the same,
and if they are,
they would be a particularly bad class; correct?
A. Well I'm a little confused again -- and I'm not
trying to be
difficult, please believe me -- but one says polynuclear hydrocarbons,
the
other says polycyclic hydrocarbons. This in the paper here says that
polynuclear hydrocarbons appear to be carcinogenic. I don't know about
polycyclic hydrocarbons. That's all I can say.
Q. I understand. And I'm not trying to be difficult
either.
A. All right.
Q. I just ask you to assume that the two are the
same. If they --
A. Well I don't -- I don't know that I can, but
the terms are
different.
Q. Well I understand that, Mr. Bible, but I have
a right to ask you to
assume that. All right?
*5 A. I don't know.
Q. Because there are other people that will testify
in this case. You
understand that. You understand, sir?
A. No, I don't -- I-I don't -- didn't understand
that you had the right
to ask me those things, but if you do, I shall accept that.
Q. All right. If you assume that to be true, then
that is the
particularly bad class; right?
A. Well I don't know I can form that conclusion.
Q. Fair enough. You -- you just can't form that
conclusion; is that
right?
A. That's right.
Q. Now here we see that polycyclic hydrocarbons
are found in both
cigarette paper and the tobacco; correct?
A. Yes, that's my --
I think that's what this says.
Q. You didn't know that until you saw this; correct?
A. No, I didn't know that, no.
Q. And you see down there the conclusion is that
tobacco is the main
source of polynuclear hydrocarbons in cigarette smoke; correct?
A. Yes, I read that. Uh-huh.
Q. And if you go on to the next page, sir, you can
see that polycyclic
hydrocarbons come from many tobacco constituents; correct?
A. Yes. That's the heading.
Q. And you see the conclusion there, "Removal of
any single precursor
will not eliminate polycyclic hydrocarbons from smoke." Do you see
that?
A. Yes, I read that conclusion.
Q. Yes. Do you know if this information was ever
disclosed by Philip
Morris to the public?
A. No, I don't know, sir.
Q. Has anybody ever told you whether Philip Morris
disclosed this type
of information to the public?
A. No.
This is back in 1961, is it?
Q. '63, sir.
A. '63. No, I don't have any recollection of anybody
telling me that.
Q. And if you go to the last page, you see there's
a summary, sir?
A. Could you give me the number, please?
Q. Yes, absolutely. I'm sorry, it was not the last.
446.
A. Thank you, yes.
Q. Second-to-the-last page.
A. Yes. Thanks.
Q. Do you see the summary?
A. Yes, I do.
Q. And it says "A medically acceptable" --
And that's underscored; is that right?
A. Yes, it is.
Q. -- "low-carcinogen cigarette may be possible.
Its development would
require time, money," and "unfaltering determination." Correct?
A. Yes, that's what it says.
Q. Now did Philip Morris ever tell the public that
it was looking at a
medically acceptable low-carcinogen cigarette which may be possible
to be
developed?
A. I don't know if --
Are you talking about that time, then, sir, or --
Q. Yes.
A. At that time? Then I don't know, at that time.
Q. Do you know if they ever said they were attempting
to develop a
medically acceptable low-carcinogen cigarette?
A. I don't know that they've said exactly that.
I know over the last
year we have developed a product that has, I believe, made a lot of
progress in reducing very significantly many of the elements in tobacco
smoke that people are concerned about.
Q. Is that Project TABLE?
A. No, it's not Project TABLE. This is a -- it's
a cigarette that in
fact would --
*6 The tobacco is heated as opposed to burned. And
currently it is in
consumer home test. And we've spent years trying to develop this product.
And at last we have a product we can put into consumer home test, and
we're
very hopeful about it.
Q. And did that start as Project TABLE?
A. Not to my knowledge, sir.
Q. Have you ever heard the word "Project TABLE?"
A. No, I have not.
Q. All right. Now this was back in 1963, 1963, that
Dr. Wakeham said a
medically acceptable low-carcinogen cigarette may be possible, but
its
development would require time, money and unfaltering determination;
correct?
A. Yes, that's what it says.
Q. Do you know if a decision was made not to develop
that because it
might indict the present cigarettes that were on the market?
A. Oh, I have no idea. What I do know is that we
certainly spent a lot
of effort in reducing tar and nicotine and doing our very best to make
the
best product we can. In fact I believe tar and nicotine levels in
cigarettes over the last 40 or 50 years have come down by about half,
so
we've certainly worked hard at it.
Q. We've heard about that, sir. Are you aware of
the issue of
compensation?
A. Yes, I am.
Q. Are you aware of when Philip Morris knew about
compensation?
A. No, I am not.
Q. Have you ever looked -- I -- strike that.
I take it you've never looked at any documents regarding
that either.
A. No, I have not.
Q. So you don't know when Philip Morris knew that
people were
compensating with low tar and nicotine cigarettes; do you?
A. No, I don't know. I've asked my scientist about
the issue of
compensation.
Q. Now back in 1963 -- I'm going to ask the question
again - - do you
know if Philip Morris at that time undertook a project to develop a
medically acceptable low-carcinogen cigarette?
A. No, I don't know.
Q. Do you know what a medically acceptable low-carcinogen
cigarette
would be?
A. Would I know what it would be?
Q. Yes.
A. It would be pretty hard for me to describe, sir.
No, I wouldn't know
what it would be.
Q. How many carcinogens would be in a medically
acceptable
low-carcinogen cigarette?
A. I don't know.
Q. Have you ever asked anybody that?
A. No, I have not.
Q. Can you direct your attention, sir, to Exhibit
11604. Now this is a
memorandum to Mr. Cullman from Dr. Wakeham; correct?
A. Yes, it is.
Q. And this is October 24th, 1963; correct?
A. Yes.
Q. Have you seen this document before?
A. No, I have not seen this document.
Q. Now was Mr. Cullman --
What was his position in the company, Hugh Cullman?
A. I don't know what his position was then.
Q. Do you know if he was ever president of the company?
A. I don't think he ever was. When I joined the
company he was
president of Philip Morris International.
Q. And did you ever hold the position of Philip
Morris International
president?
A. Did I?
Q. Yes.
A. Yes.
Q. Now this is a technical forecast; correct?
*7 A. Well I --
Yes. That's what the subject is, yes, you're right.
Q. And you see up in the upper left-hand corner
it's personal and
confidential?
A. Yes.
Q. And Dr. Wakeham here is reporting to Mr. Cullman
pursuant to Mr.
Cullman's request for a technical forecast outlining the areas where
the
cigarette industry might be most subject to criticism; correct?
A. Well that's the beginning of the letter, yes.
Q. And he wanted to -- suggestions as to how those
elements in smoke
which might be most accused by either the medical profession or exploited
by our competitors; is that right?
A. Do you mind if I just read it?
Q. Sure. Go right ahead, sir.
A. Yes.
Q. And in this memorandum, Dr. Wakeham is providing
Mr. Cullman with
the considered judgment of the research and development department;
correct?
A. Well I'll read the --
MR. BLEAKLEY: Objection. Objection, Your Honor,
the witness has just
seen this document. If he's going to ask him to summarize it, at the
very
least the witness should be allowed to read the entire document.
THE COURT: Was this document identified?
MR. CIRESI: Yes, Your Honor.
THE COURT: All right. Do you -- do you --
Would you like to read the entire document?
THE WITNESS: Well if I'm going to be asked questions
about it, Your
Honor, I'd like to.
THE COURT: Okay. Well that's why we give notice
to the witnesses. We'll
sit and wait while you read the entire document.
THE WITNESS: Well thank you.
MR. CIRESI: Might I suggest, Your Honor, if I may
--
BY MR. CIRESI:
Q. Mr. Bible, just to save time, as we go through
it, if you need to
take a look at another part of it, please tell me.
A. All right.
Q. Because I want you to have an opportunity to
look at all of it --
A. Thank you.
Q. -- if that's what you need to do, but I'm going
to try to go through
it bit by bit so we'll put it in context. All right?
A. Thank you.
Q. I'm just dealing with the first paragraph there.
And does Dr.
Wakeham say he will present here our considered judgment in this matter?
A. Yes.
Q. Now Dr. Wakeham was the head of research and
development at Philip
Morris; correct?
A. I believe so, but I don't know at what time he
was.
Q. All right. Now Dr. Wakeham here refers to the
health critics;
correct?
A. Yes.
Q. And there are three main lines of attack; correct?
A. Yes.
Q. Okay. Now do you believe it appropriate for Philip
Morris at any
point in time to consider public health officials to be health critics?
A. No, I don't. I don't know if that's who he's
referring to, but --
That probably is who he is referring to, and I don't
think that's
appropriate. But I don't think he meant it in a mean fashion.
Q. No more than you meant it in a mean fashion in
your 1994 report when
you talked about how you were going to defend the company and what
you were
going to do with regard to defending the company; right? You didn't
mean
that in a mean fashion.
*8 A. Of course I didn't, sir.
Q. No. And you know what I'm referring to.
A. You're referring to my letter to shareholders
in the annual report.
Q. Yes.
A. Yes.
Q. You didn't mean that in a mean fashion; did you?
A. No, I don't believe I did mean it in a mean fashion.
Q. When you were talking about the FDA, you didn't
mean that in a mean
fashion; did you?
A. No.
Q. When you said you were going on the offensive
to vindicate your
rights and to make it clear that the current notions of political
correctness cannot be used to justify unlawful conduct that abridges
those
rights, you didn't mean that in a mean fashion; did you?
A. No, I didn't think I was being mean. I was being
objective.
Q. And when you said that in the legal area we are
committing all the
resources necessary to defend the company from new forms of litigation,
making sure we have better firepower than our foes no matter how
formidable, you didn't mean that in a mean fashion?
A. No, I certainly meant it in the most objective
fashion I could
muster, yes.
Q. Yes. And you meant it on a going-forward basis;
didn't you? You were
looking forward, as you said yesterday; weren't you? You weren't talking
about the past.
A. Sir, I'm looking forward all the time now, as
I expressed yesterday.
Q. And when you made that comment yesterday, Mr.
Bible -- or in this
letter in 1995, February 24th, you were looking forward; weren't you?
A. Yes, I expressed that yesterday, and I still
am, and I'm working
very hard to resolve the issues around this industry and company.
Q. And you said we're going to have better firepower
than our foes, no
matter how formidable; correct, sir?
A. Absolutely.
Q. And you said in the new class action suits and
state Medicaid, we
believe the law continues to be on our side. Although these cases pose
difficult challenges, we should ultimately prevail in them, just as
we have
been successful in other types of cases over the last 40 years. Correct?
A. Yes.
Q. And you were talking about going forward; weren't
you, sir?
A. Yes, I was.
Q. You were looking forward at that time; weren't
you, sir?
A. Yes, I was.
Q. And --
A. And I -- and I still am.
Q. And you said it's important to note here that
the tobacco company
has never lost or paid to settle a case; correct?
A. Well I don't have it in front of me, but that
sounds familiar.
Q. And when you said that, you were talking about
going forward;
weren't you?
A. Well certainly. Couldn't be going backwards,
sir.
Q. And you were -- I agree with you. And you were
going to fight those
cases with all the resources that you could bring to bear; isn't that
right, sir?
A. Yes.
Q. And in fact, you called a bunch of analysts in
and you said we shall
fight and fight and fight these issues; didn't you?
A. I don't recall calling a bunch of analysts in.
Q. You remember the time you had a meeting in the
Grand Hyatt ballroom
in New York?
*9 A. Yes, I do.
Q. And you had the Magnificent Seven on a 12-foot
screen, do you
remember that?
A. No, I don't remember that.
But let me correct what you described it as. That
was an invitation to
Philip Morris to attend an investment analysts' seminar where many
companies presented their companies to investment analysts.
Q. And you --
A. So I --
Q. And you presented yours.
MR. BLEAKLEY: Objection, Your Honor, the witness
was in the middle of
his answer.
THE COURT: Allow him to finish his answer, please.
MR. CIRESI: I'm sorry, didn't --
A. And we were one of many companies and we presented
our company to
those analysts at that time.
Q. And when you presented your company, you said
you were going to
fight, fight and fight these issues; correct?
A. Well I don't know if I said that or not, sir,
but it sounds
familiar.
Q. Yes. And there was a 12-foot screen and you put
up the Magnificent
Seven commercial and blasted it out over the whole audience; didn't
you?
A. I don't recall that, sir.
Q. Have no recollection of that, sir?
A. No, I don't.
Q. You don't deny that took place; do you?
A. I -- I don't recall it, sir.
MR. BLEAKLEY: Objection, Your Honor, the witness
doesn't recall it.
Whether he denies it is not relevant.
THE COURT: No, it's relevant.
Q. Do you deny it, sir?
A. No, I neither affirm nor deny it. I don't remember.
Q. Okay. Do you remember there was an article about
it in the Wall
Street Journal?
A. No. There are many newspaper articles in the
Wall Street Journal.
Q. I'll grant you that, sir.
MR. CIRESI: May I approach, Your Honor?
(Document to witness.)
BY MR. CIRESI:
Q. I just want to refresh your recollection of this,
sir; I'm not
asking to enter it into evidence. It's a Wall Street Journal -- copy
of the
Wall Street Journal article dated March 30th, 1995. Do you see that?
A. Yes, I do.
Q. And it relates to this meeting that took place
in October of 1995 --
or excuse me, in February of 1995?
A. Well it's dated Monday, October 30, 1995. I don't
see February.
Q. Wasn't it at the end of February you had this
meeting?
A. Oh, I have no idea.
Q. Well let me see if I can refresh your recollection.
Do you recall
after the meeting that the stock value of the company went up two billion
dollars and it was called the two-billion- dollar day?
A. No, I don't remember that either.
Q. Maybe --
A. It's certainly possible, but I don't remember
it.
Q. Why don't you take a look at the second page,
and if you look at the
left-hand column, sir, third paragraph from the bottom, do you see
that
you're quoted there, "We shall fight, fight and fight these issues?"
A. Well yes, I -- I recall that. Yes, I see that.
Q. And this was at the Grand Hyatt ballroom?
A. That's what it says, yes.
Q. And it said, "I can assure you we will fight
with all the resources
at our command because I am convinced we are right?"
*10 A. Yes, it says that.
Q. And one of the things you personally think you're
right about is
that smoking doesn't cause any disease; is that correct?
A. No, I have said that I think cigarette smoking
is a significant risk
factor in many diseases.
Q. Does that mean it causes disease? You just said
"no" to my answer.
A. I've said that it is a risk factor and a significant
risk factor --
Q. Does that mean --
A. -- in many diseases.
Q. -- it causes disease?
A. I don't know, sir.
Q. Well was one of the things you personally think
you're right about
is that smoking doesn't cause any disease?
A. I don't know. I've said that publicly.
Q. So you didn't know if you were right about that
or not; is that
right?
A. I'm not sure what you're referring to. Could
you --
Q. Whether smoking causes disease.
A. Are you asking me that question?
Q. Yes. You don't know if you're right or not; is
that right?
A. I don't know if I'm right. It might cause disease.
I don't know.
Q. All right. Now at this analysts meeting, do you
see there where the
playing of the Magnificent Seven is referenced?
A. Yes, I do see that.
Q. Does that refresh your recollection, sir?
A. Well it doesn't. But I don't deny that's what
it says, and I -- I
expect we did show it.
Q. And in fact didn't you have some part in the
planning of that? You
wanted to make a big show with the analysts; didn't you?
A. I'm quite involved in those sorts of presentations,
yes, I am, and
I'm very proud of our company and I like to put forward the best foot
that
we can, and I make sure that the operating companies present themselves
as
best they can when we make presentations to analysts. Yes, you're right.
Q. You actually put your management team through
the paces and graded
them; didn't you?
A. I don't recall that.
Q. Well, can you look to the paragraph right above
that. "Executives
who didn't pump up the volume got a drubbing from the new boss." That's
you; isn't it?
A. Well I was the new boss, but they certainly didn't
getting a
drubbing from the new boss, I can promise you that.
Q. Well in February of 1995, did you assemble your
top executives in
New York for a run-through of their presentation of Philip Morris's
aggressive new face to the Wall Street and the media?
A. Well I -- I -- I don't remember, but it's highly
likely I would have
because I take a big interest in those. And I don't know that I would
have
been defining it as Philip Morris's aggressive new face. I --
Q. Well you know that you'd been defined as the
aggressive new face
back in 1994; weren't you?
A. I don't know that.
Q. You never read that?
A. Well I may have, but I don't remember it if I
was. I'm often called
many things.
Q. I understand, sir.
Let me ask you this: Having in mind now that you
are that involved and
that you get involved with your executives, does this refresh your
recollection that you had them in for a run-through of their presentation?
*11 A. Well I don't remember that, but it's highly
likely that I did.
I'm not denying that I did, sir.
Q. And it's reported that you graded the executives
after each one
spoke and you let loose some withering criticism and graded all of
them in
front of everybody else. Is that what you did?
A. I would say that's absolutely wrong.
Q. You didn't do that; is that right?
A. I would never do that.
Q. You wouldn't.
A. No.
Q. Did you have your publicist of this 68-billion-dollar
company call
the Wall Street Journal or write to them and say that's flat-out false,
I
never did that?
A. No, I didn't. I could spend the rest of my life,
I think, if I
wanted to try to correct everything that was said in the newspapers
about
me and the company.
Q. And Murray Bring was the company's top legal
strategist; was he not?
A. Murray Bring would have been the chief general
counsel of the
company.
Q. And he's quoted here; isn't he?
A. Could you direct me to that, please?
Q. Same paragraph.
A. Uh-huh.
Q. And it's --
And he said, "The message was we could do a hell
of a lot better."
Correct?
A. That's what it says.
Q. And is that the message you gave all those executives
after you
graded them?
A. Well I might well have said you could do better.
I could believe I
would say that.
Q. You can't believe, though, that you would have
said we can do a hell
of a lot better; is that right?
A. Well I'm -- I may have. I doubt it though, I
-- just as I doubt I
would have let loose withering criticism. That's not my style.
Q. But you don't deny that the words in the 1994
annual report about
going on the offensive and defending your company are your words; do
you,
sir?
A. Well could you direct me to that again, please,
sir?
Q. Absolutely. Exhibit 17624.
MR. BLEAKLEY: May we have a page number, please?
A. Yes, I have it. That's the 19 -- hmm.
THE COURT: Counsel, can you give him the page number,
please.
MR. CIRESI: 1994 annual report.
THE WITNESS: Yes, right.
MR. CIRESI: And it's the -- I don't have actual
pages --
Well it's page four, lower left-hand corner.
Q. It's the one we've been looking at, sir, your
-- your letter to the
shareholders.
A. Oh, right. Thank you. Got it.
So could you direct me to the --
Q. Certainly. "Defending our Company."
A. Uh-huh.
Q. Right at the bottom where "We are going on the
offensive to
vindicate our rights." Do you see that?
A. Yes.
Q. Okay. And this is the letter that you wrote to
the shareholders on
February 24th, 1995.
A. That's correct, yes.
Q. There's no dispute about that; is there, sir?
A. No, I'm not disputing that. I just wanted to
see that's indeed what
it said.
Q. And did you write the letter or was it written
for you?
A. It would have been a combination of people who
help draft these
letters and myself.
Q. Does that mean that somebody wrote it for you
and then you edited
it?
*12 A. No, it would have been both. We would have
participated
together, probably.
Q. And these are your words and you adopt them as
such; don't you?
A. These are my words I would have thought, yes.
Q. And they were intended to be the words on behalf
of the corporation;
correct, sir?
A. Yes, that is right, to -- to the stockholders.
Q. And in this letter, this is the one where you
said that our one all-
consuming ambition was to create wealth for the owners; correct?
A. Well I --
Could you point me to that, please, sir?
Q. Certainly.
A. I don't doubt saying that.
Q. Page two. Just go back two pages. "Growing our
Business." Right at
the very top.
A. Uh-huh.
Q. "Our one all-consuming ambition" --
A. Right. Yes, I remember that yesterday.
Q. Okay. Now --
And this is in 1995 when you were saying that; isn't
that right?
A. Yes.
Q. Okay. Right after you took over, about six --
six or seven months
after.
A. Well six months after I took over as CEO and
a month after I became
chairman, yes.
Q. And so now if we can't just go back 34 years
-- or excuse me, 32
years, back to document 11604 --
And Mr. Bible, before you do that, let -- let me
ask you this: You
understand that the purpose of this lawsuit is to look at Philip Morris's
conduct over a long period of time. Do you understand that?
MR. BLEAKLEY: Objection, Your Honor, that's an inappropriate
--
improper question. The purpose of this lawsuit is not a proper question
to
ask this witness.
THE COURT: Sustained.
Q. Do you know if in this lawsuit we're looking
at Philip Morris's
conduct over a long period of time?
A. Well I got that impression from yesterday's interrogation.
Q. And in order to look at its conduct over that
period of time, we
must look at what they knew, when they knew it, and what they did with
that
information. You would agree with that?
A. Well --
MR. BLEAKLEY: Objection, Your Honor, whether they
must or not is also a
legal question and not within the competence of this witness.
THE COURT: No, I think you can answer that.
A. Well I would describe that as being your prerogative,
if that's how
you feel it should be done, certainly.
Q. Well you would feel that if someone was going
to look at someone's
conduct over a period of time, they would look at what they knew, when
they
knew it, and what they did with the information.
A. Well that doesn't seem unreasonable to me, no.
Q. Okay. Seems like a reasonable way to approach
it; doesn't it?
A. Well it's one way to approach it, yes. Not unreasonable,
as I said.
Q. Now let's look back 32 years, before your words
in the annual report
and what you said at that analysts' meeting, to see what was being
said by
Philip Morris then. All right?
A. Uh-huh.
Q. Can you take a look, then, back to Exhibit 11604,
the memo from Dr.
Wakeham to Mr. Hugh Cullman.
Now in 1994 and 1995, one of the objects of your
attack or offensive
was the FDA; correct?
*13 A. In nineteen ninety --
Q. Five.
A. -- five? When I say -- you say "attack," I would
define it
differently. We were defending ourselves against a number of matters
at
that time. The FDA had proposed regulation. I think there had been
a lot of
television coverage where we'd been maligned by a television article.
I
believe there were congressional hearings at the time. So there was
-- and
there were mounting legal actions against the company. So there were
many
things that were developing around the company. That's why I was consumed
by all this activity and wanted to find some solution going forward.
So my
sense, if I were asked to define it, would be how can I defend the
company
as best as I can and find a solution to these growing issues.
Q. Sir, my question was pretty simple: One of the
objects of your
offensive was the FDA; correct?
A. Which offensive, sir?
Q. The offensive to defend your company.
A. Well I would say it was the defense of my company,
and I wouldn't
describe it as an offensive, sir.
Q. I thought you said, "We are going on the offensive
to vindicate our
rights." Those are your words, not mine.
A. Well if they were my words, the idea there was
that we were going to
go on the offensive to defend the company, sir.
Q. All right. Well I'll do it that way.
One of the objects of your offensive to defend the
company was the FDA;
correct?
A. Yes, that's correct. We did not believe the FDA
had jurisdiction
over the tobacco industry. That's Congress's right.
Q. And you felt that because you didn't want them
to regulate nicotine.
A. No, I don't think that would be a fair characterization
of it.
Q. Well we'll get to that a little bit later and
take a look at those
documents.
Directing your attention to Exhibit 11604, here
Dr. Wakeham's talking
about the health critics who may follow three main lines of attack;
right?
A. Yes.
Q. "Chemical carcinogenesis of the lungs by smoke
constituents;"
correct?
A. Yes.
Q. Now we know that Philip Morris as of this date
had already
identified smoke constituents that were carcinogenic; correct?
A. Well yes, that's -- I think so.
Q. And the second attack was "Irritation from smoke
components leading
to chronic bronchitis and emphysema;" correct?
A. Yes, that's what it says.
Q. And then the third was "Cardiovascular effects
due mainly to
nicotine in the smoke." Correct?
A. Yes, that's what it says.
Q. Now I understand you have not had the opportunity
to read this
entire document yet, but if you take a look at it -- and please take
time
to look at it -- would you agree with me that in the next part of the
memorandum under number one, Dr. Wakeham reports about the fact that
rather
than there being a super carcinogenic substance, the experts were now
looking to the cocarcinogen issue in which there were several types
of
minor carcinogenic compounds in smoke that reinforce one another?
A. Well I didn't get that, but if I'm --
*14 I think you jumped around a bit.
Q. Well just please -- please read the next two
paragraphs - - and
they're right up there; anybody can read them -- and see if that isn't
a
fair summary of what he reports there.
MR. BLEAKLEY: Objection to Mr. Ciresi's commentary
on the document,
Your Honor.
THE COURT: Just ask a question, please.
Q. Please take a look at those two paragraphs and
see if that isn't a
fair summary of those two paragraphs.
A. Well if I read it, I shall then ask you if you
could give your
summary again, please.
Q. I will.
A. Thank you.
I find it very difficult to summarize. I'd like
to hear yours.
Q. My summary was that rather than there being one
super carcinogen,
people were now looking to cocarcinogens which, combined together,
were
sufficient to account for cancer.
A. Well I think what it says is, as I read this,
although no one
compound is present in sufficient quantities to account for the effect,
the
combined activity of all is enough to do the trick, and I don't see
reference to a super carcinogen.
Q. All right. Well that's what I meant by one carcinogen
itself. And in
fact, Dr. Wakeham at -- in this document, the next page, reports that
the
-- what he refers to as the medical attack on cigarettes will be based
on
the cocarcinogen idea, and that with hundreds of carbon -- hundreds
of
compounds in smoke, this hypothesis will be hard to contest. Do you
see
that?
A. Yes, that's what it says.
Q. And by the notion that the hundreds of compounds
in smoke that may
be carcinogenic, that's consistent with the previous documents we saw
of
Philip Morris which identified many carcinogens in smoke; correct?
A. Could you repeat the question? You mentioned
hundreds of --
Q. It's talking about hundreds of compounds. That's
consistent with the
previous documents of Philip Morris that we just reviewed this morning
--
A. Yes.
Q. -- that showed carcinogens in smoke; right?
A. Yes, that's right.
Q. And Philip Morris had knowledge of that for a
number of years prior
to 1963; correct?
A. That there were carcinogens in smoke?
Q. Yes. And many carcinogens and hundreds of compounds;
correct?
A. Prior -- prior to when, sir?
Q. Prior to October 24th, 1963.
A. Well I don't know. What was the date of the letter
we looked at
earlier?
Q. Well we saw one in 1961, for example. That's
two years before;
correct?
A. The one you just referred to, I'm sorry.
Q. 1961, sir.
A. Thank you.
Q. Two years before; correct?
A. Yes.
Q. Is that --
A. Two years before, yes.
Q. All right. Now Dr. Wakeham then goes on to talk
about the
polynuclear hydrocarbons. Do you recall seeing those in that previous
memo?
A. Yes, I do.
Q. And he talks about nitrosamines. Do you see that?
A. Yes.
Q. And you know nitrosamines are highly carcinogenic;
don't you?
A. I don't know if they're highly carcinogenic.
I've heard that they
are carcinogenic. I believe there is some debate over it, but I believe
they're carcinogenic from what I hear in many --
*15 Q. And Dr. Wakeham reports here that the lower
nitrosamines are
highly carcinogenic in the bioassay tests; correct?
A. I can't find that.
Q. Right under "Nitrosamines," the very last sentence.
A. The very last sentence says, "It is apparent
that interest in
nitrosamines is increasing." Is that the one you're referring to?
Q. I'm starting the first paragraph. Do you see
it there, sir?
A. "The lower nitrosamines are highly carcinogenic
in the bioassay
tests," is that what you cite?
Q. Yes.
A. Yes.
Q. And Dr. Wakeham reports that these substances
have been under
investigation since early in the year, and that indications of their
presence, particularly the higher members, have been found; correct?
A. We have found indications, yes, it says that.
Q. And he says the lower members have not been found,
but the elements
for their formation are present in smoke; correct?
A. That's what it says, yes.
Q. Then he goes on to talk about carbamates or urethanes,
which are
highly carcinogenic, particularly to lung tissue; correct?
A. That's what it says, yes.
Q. And do you know if that was one of the compounds
that we saw in the
earlier memo in 1961?
A. Do I remember? I don't remember that, no.
Q. And he talks about terpenes; correct?
A. Talks about which, sir?
Q. Yes. Terpenes, t-e-r-p-e-n-e-s. Do you see that?
A. Oh, yes. The next paragraph.
Q. Yes.
A. Thank you.
Q. And he references there that some members of
that family are present
in smoke; correct?
A. Yes, he does.
Q. And if you go on to the next page, sir, he deals
with bronchitis and
emphysema; correct?
A. (Coughing) Excuse me.
Yes.
Q. And he talks about the fact that these are serious
diseases
involving millions of people; correct?
A. Yes. That is said, yes.
Q. And that emphysema is often fatal either directly
or through other
respiratory complications; correct, sir?
A. It says that, yes.
Q. And he stated that a number of experts have predicted
that the
cigarette industry ultimately may be in greater trouble in this area
than
the lung cancer field; correct?
A. That -- that's what it says, yes.
Q. And do you know how many cases of chronic obstructive
pulmonary
disease, including bronchitis and emphysema, have been reported extensively
in the medical literature to be caused by cigarette smoking?
A. No, I don't.
Q. And he talks also about other types of compounds
that are in the
cigarette that could cause irritation which would lead to bronchitis
and
emphysema; doesn't he?
A. Where does it say that, please?
Q. "As you know, we have investigated this subject
in some depth and
have made good progress in developing improved products along this
line.
Irritating effects are probably due to a variety of substances including
ammonia, volatile acids, aldehydes, ketones, amines and phenols." Do
you
see that?
A. Yes, I do.
Q. And all of those are present in cigarette smoke;
aren't they, sir?
*16 A. Well I don't know, sir.
Q. All right. Do you know if Philip Morris ammoniates
its cigarettes?
A. I know that Philip Morris uses ammonia compounds
in cigarettes, yes.
Q. You've testified about that in front of Congress;
haven't you, sir?
A. I did, yes.
Q. And it also talks here about cardiovascular effects;
doesn't it?
A. Yes, it does.
Q. And it talks about nicotine in that regard; doesn't
it?
A. Yes, it does.
Q. And it says, "If forced to, we could produce
a fairly tasty low
nicotine product." Correct?
A. It says that, yes.
Q. This was in 1963; correct, sir?
A. Yes.
Q. Now in 1963 Philip Morris didn't feel compelled
to produce a fairly
tasty low nicotine product; did it?
A. Well I don't know.
Q. Okay. It didn't produce one at that time; did
it?
A. Well I don't know.
Q. Now Philip Morris also had knowledge of whether
or not smoking
caused pregnant women to have smaller children; correct?
A. Could you repeat the question, please?
MR. CIRESI: Yes. Would you read the question back,
please.
(Record read by the court
reporter.)
A. I have no knowledge of that, sir.
Q. Can you direct your attention to Exhibit 10270.
A. Yes, I have it.
Q. This is a memorandum to Dr. Wakeham from Dr.
Fagan dated January
3rd, 1969?
A. Yes.
MR. CIRESI: We'd offer it, Your Honor.
MR. BLEAKLEY: No objection.
THE COURT: Court will receive 10270.
BY MR. CIRESI:
Q. This is called "Smoking in Pregnancy: A Prospective
Study Done in
Britain;" correct?
A. Yes.
Q. This was reported in the British Journal; correct?
A. It appears to be, yes.
Q. Now you'll see that in the first two paragraphs,
sir, the
methodology of the study is detailed. Do you see that?
A. Well I'll need to read it, if -- if I may.
Q. Yes.
A. Thank you.
Yes, that's right.
Q. Then starting in paragraph three, an analysis
of the findings is
provided; correct?
A. Yes. It says "Analysis of results shows the following."
Q. Okay. And one was that mothers who smoke had
a lower blood pressure
than mothers who didn't smoke; correct?
A. That's what it says, yes.
Q. And mothers who smoke had a higher percentage
of unsuccessful
pregnancies, abortions, stillbirth, and neonatal deaths taken together?
A. That's what it says, yes.
Q. Did Philip Morris warn anybody of those consequences
in 1969?
A. Not to my knowledge, sir. I think there's a health
warning on the
cigarette packs that were mandated by Congress.
Q. And when was that, sir?
A. Well I think it was 1969.
Q. For children?
A. I'm not sure.
Q. Pregnant women?
A. I'm not sure when the pregnant women health warning
was introduced.
Q. Philip Morris, for example, never took out ads
in the Wall Street
Journal, New York Times, Minneapolis Tribune, St. Paul Pioneer Press,
across the nation, advising consumers of this; did they?
A. Not to my knowledge, no.
Q. They've never done that to this day; have they?
*17 A. Not to my knowledge.
Q. And in subparagraph three -- or c) of paragraph
three, do you see
that it is reported by Dr. Fagan to Dr. Wakeham that the study took
into
consideration many factors such as maternal age, paternal age,
socioeconomic status, educational level, maternal weight -- height,
parity,
et cetera, the non-smoking mother has a heavier baby than the mother
who
smokes, do you see that?
A. Yes, I see that.
Q. Now all of those factors, do you know if they're
called confounding
variables in an epidemiological study?
A. I don't know. I would say that they are certainly
variables.
Q. And starting at the bottom on e), it's reported
as follows by Dr.
Fagan to Dr. Wakeham, "Babies born to smoking mothers grow faster and
put
on weight faster than babies born to non-smoking mothers. By the end
of the
first year, the babies seem to be similar in weight and growth. The
lower
birth weight of babies born to smoking mothers is attributable to the
toxic
effects of smoke, particularly the carbon monoxide." Do you see that?
A. Yes, that's what it says.
Q. And then if you go down to paragraph five --
A. Uh-huh.
Q. -- there is reported by Dr. Fagan to Dr. Wakeham
studies which
looked at the effects of prematurity on child development. Do you see
that?
A. Yes, I do.
Q. And those studies pointed to the effects of cigarette
smoking in the
production of premature infants as defined by birth weight; correct?
A. Yes, that's what it says.
Q. And these reporters attributed that to the effect
of the lower
nourishment of the fetus through one of two mechanisms; correct?
A. That's what it says, yes.
Q. One was the effect of nicotine in constricting
the uterine blood
vessels and hence cutting down on the blood supply available to the
fetus;
correct?
A. Yes.
Q. And the other was to the effect of smoking in
reducing the appetite
of mother -- of the mother, and hence the supply of nutrients, particularly
proteins, to the fetus; correct?
A. Yes, that's what it says.
Q. And it was found that the premature babies are
more likely in later
life to have physiological and psycological problems; correct?
A. That's what it says here.
Q. And those physiological problems and psycological
problems could
include depression, mental disease; couldn't they?
A. Where does it say that, sir?
Q. Could they? I'm just asking you.
A. Oh. Well I don't know.
Q. Could run the whole gamut of physical and mental
problems; couldn't
it, sir?
A. I don't --
Q. As far as you know.
A. Well I don't know what they mean when they say
that, sir.
Q. And do you see in the last paragraph, "All of
the investigations of
this type that smoking mothers have babies of lower birth weight than
non-smoking mothers, and that these lower weight babies are more likely
to
experience problems later in life. Whether the mechanism is that of
a
'slight poison' as suggested by Russell or whether the mechanism is
through
the reduced appetite of the mother is yet to be decided." Do you see
that?
*18 A. Yes, I do see that.
Q. Now was any of this ever reported by Philip Morris
to the public, to
the consumers?
A. I don't know, sir.
Q. Since you have been CEO, you've never ordered
that told to the
consumers by taking out ads; have you?
A. No, I have not by taking out ads. I was once
asked a question in an
annual general meeting as to whether pregnant mothers should smoke,
and I
said I thought it would be sensible if they didn't smoke.
Q. You did.
A. Yes, I did.
Q. Well then why didn't you tell your PR department,
"Let's get this
out. Let's use part of this 6.9 billion in cash flow and take out ads
across the country to get the word out to the consumers," why didn't
you do
that?
A. Sir, there is a health warning on cigarette packs
today that warn
pregnant women not to smoke.
Q. But why didn't the company do it?
A. You know, I wonder if anybody in America believes
cigarette
companies when we say something like that, sir.
Q. Sir, yesterday you said that you would -- there
would be a bigger
impact if the company itself admitted these things.
A. Well I've now concluded that if we were to say
something like that
publicly, people wouldn't believe us.
Q. Do you think maybe, just maybe, Mr. Bible, the
reason they wouldn't
believe you is that you folks stand alone against the entire world
medical
community and say smoking doesn't cause disease? Do you think that's
possible?
A. I don't know, sir.
Q. You have no idea.
A. It might be. It might be.
Q. It's probable; isn't it, sir?
A. It's possible, sir.
Q. If people don't tell the truth, then when they
try to tell the
truth, somebody looks a little askance at it; don't they?
MR. BLEAKLEY: This is becoming argumentative.
THE COURT: It's becoming argumentative.
MR. CIRESI: I'll withdraw that question, Your Honor.
Q. Can you direct your attention, sir --
THE COURT: Counsel. Maybe we should take a short
recess.
THE CLERK: Court stands in recess.
(Recess taken.)
THE CLERK: All rise. Court is again in session.
(Jury enters the courtroom.)
THE CLERK: Please be seated.
THE COURT: Counsel.
MR. CIRESI: Thank you, Your Honor.
BY MR. CIRESI:
Q. Mr. Bible, can you direct your attention to volume
one, Exhibit
10270. You'll recall that's the document we just discussed; correct?
A. Yes.
Q. And that was dated January 3rd, 1969; correct?
A. Yes. Yes, that's correct.
Q. And it was to Dr. Wakeham by Dr. Fagan; correct?
A. Or Mr. Fagan. I don't know if he was a doctor
or not.
Q. Can you direct your attention now to the exhibit
directly before
that, sir, which will be Exhibit 10269.
A. Yes.
Q. And do you see that's a document from Dr. Wakeham
to Mr. Goldsmith?
A. Yes.
Q. And it's January 10th, 1969, or seven days later.
Do you see that?
A. Yes, I do see that.
MR. CIRESI: Your Honor, we would offer Exhibit 10269.
MR. BLEAKLEY: No objection.
THE COURT: Court will receive 10269.
*19 BY MR. CIRESI:
Q. Now Mr. Goldsmith was the president of the company?
A. At that time do you mean?
Q. Yes.
A. I don't know if he was president at that time.
He was president at
some time, but I think it may have been later than that.
Q. He also was vice chairman; correct?
A. I think he was.
Q. Now here he is sending -- or receiving a memo
from Dr. Wakeham
regarding smoking and baby weight; correct?
A. Yes, that's right.
Q. And Dr. Wakeham reports to Mr. Goldsmith that
we now have a study of
the effect of smoking and pregnancy which supports previous conclusions
that smoking mothers produce smaller babies; correct?
A. That's what it says, yes.
Q. And he reports that the position of the medical
people is that
smaller babies suffer detrimental effects all through life; correct?
A. Yes.
Q. In other words, they have a diminished health
status; correct?
A. I beg your pardon?
Q. They have a diminished health status is what
he's reporting.
A. Suffer detrimental effects all through life.
Q. That would be diminished health status; right?
A. That's not what it says, but one could interpret
it to mean that I
guess.
Q. Yes. And he points out that, for example, in
identical twins, the
smaller one at birth has lower intelligence scores at age 10; correct?
A. That's what it says.
Q. And the assumption, of course, is that both twins
have similar
heredities and environments; correct?
A. That's what it says.
Q. And he then says that Dr. Fagan's summary of
the studies is
attached; correct?
A. Yes.
Q. Now do you know if Philip Morris had an opportunity
subsequent to
this to tell the American people about this study or about these studies?
A. Did we have an opportunity?
Q. Yes.
A. Well I guess we did have an opportunity.
Q. Okay. Do you know if there were any specific
opportunities to
specifically address this issue of mothers who smoke?
A. I don't know of any special forum that was created.
Q. Do you recall yesterday when we talked about
Mr. Cullman's Face the
Nation appearance on January 3rd, 1971?
A. Actually vaguely. I'm sorry to say that.
Q. Can you turn your attention to Exhibit 10492.
A. Yes.
Q. And that's the Face the Nation broadcast on January
3rd, --
A. The transcript.
Q. -- 1971. The transcript of it.
A. Right. That's right, yes.
Q. And the guest was Joseph Cullman III, chairman
of the board, Philip
Morris; right?
A. That's right, yes.
Q. And that's the same Joseph Cullman that sits
in on board meetings
now; correct?
A. That's right.
Q. Can you direct your attention, sir, to page --
and I'm referring to
the Bates numbers -- Bates 560. That's the last three numbers.
A. Yes, I have it.
Q. And you did notice, did you not, on the front
page, that one of the
reporters at this interview on Face the Nation was Morton Mintz?
A. Yes, I see his name. Uh-huh.
Q. Now I'd like to read a series of questions and
answers and ask you
some questions. Okay? If you'd direct your attention to the bottom.
*20 "MINTZ: Well, in view of the fact that you haven't
-- they haven't
been proved to be safe, what is the justification you would offer for
spending -- according to one estimate I've seen -- three billion in
the
last 20 years to promote their use when there is that uncertainty,
when we
have an excess deaths of 200 to 300 thousand a year, when there is
all this
evidence, which you don't feel is conclusive -- what is the reason
for
promoting its use when it might cause cancer, heart disease and so
forth?
"MR. CULLMAN: Well, I'd have to answer it this way,
Mr. Mintz. There
are a great many people in the United States and all over the world
who
enjoy smoking, who find it satisfies a very important need. We think
those
people are entitled to the best possible product we can produce. That
is
essentially our job."
Do you see that?
A. Yes, I do.
Q. Do you agree with that even today?
A. I think it's a fair characterization of how I
feel. I believe that
cigarettes are a legal product, I believe that people are very much
aware
of the risks associated with it, and I believe in those circumstances
we
should produce the best possible product we can.
Q. Okay. So you agree with in 1998 what Mr. Mintz
-- or excuse me, Mr.
Cullman said in 1971; correct? Fair statement?
A. I just said what I said, yes.
Q. Okay. Now Mr. Mintz goes on, "Now embryos don't
have much choice;
fetuses don't. They don't like to smoke. The British Medical Research
Council did a study of all the 17,000 babies born in a single week
in the
United Kingdom, as you doubtless know. The Council found that those
babies
born to mothers who smoked during pregnancy were in significantly higher
proportion small, weighing under five and a half pounds approximately,
than
the babies born to mothers who did not smoke, and there was a higher
rate
of stillbirths and of deaths within 28 days of birth. My question is,
in
view of this study, which is the largest and most elaborate of its
kind
ever made, is it right to promote smoking among women with Virginia
Slims
and the other brands especially marketed for them with no warning as
to the
danger to the embryo that may exist?"
Now this was in 1971; correct?
A. Yes.
Q. Two years after the memos --
A. (Coughing) Excuse me.
Q. That's all right. Do you want some water, sir?
A. Thank you.
Q. Two years after the memos that we saw, the internal
memos; correct?
A. Yes.
Q. And Mr. Cullman states, "Well, you are reading
that question because
it is a complicated question.
"MR. MINTZ: Yes, it is.
"MR. CULLMAN: I would say that I did read that report,
and I concluded
from that report that it's true that babies born from women who smoke
are
smaller, but they are just as healthy as the babies born to women who
do
not smoke. Some would prefer -- some women would prefer having smaller
babies." Do you see that?
A. Yes, I do.
Q. And -- and do you agree with that statement today
in 1998?
A. Well no, I wouldn't agree with it. I wouldn't
say that today, sir.
*21 Q. And then Mr. Mintz said, "What about the
higher rate of death?
"MR. CULLMAN. I'm not familiar with that."
Do you see that?
A. Yes, I do.
Q. Now the higher rate of death was in the memos
we just saw from Dr.
Wakeham.
A. Could you refer me back to that again, please?
Q. Yes. If you'd like to go back to 10269, sir.
A. Yes, I have it.
Q. And why don't you go to the next one, 10270.
That might help a
little bit more. Under 3.b).
A. Uh-huh.
Q. "Mothers who smoke have a higher percentage of
unsuccessful
pregnancies (abortion, still-birth, and neonatal deaths taken
together)."
Do you see that?
A. Yes, I do.
Q. And that is a higher rate of death; correct?
A. I think that's a fair characterization of death,
yes.
Q. And Mr. Fagan reported that to Dr. Wakeham; correct?
A. Yes, that's right.
Q. And Dr. Wakeham then reported that to Mr. Goldsmith;
correct?
A. Yes, that's right.
Q. And when Mr. Cullman was on a national broadcast,
he just said I'm
not familiar with that; correct?
A. "What about the higher rate of death?" Mr. Mintz
said.
Q. And what did Mr. Cullman say?
A. He said, "I'm not familiar with that." But the
only question I'd ask
is, is he talking about the higher rate of death of unborn children?
I
presume he is. That's what I'm --
Q. It would be fair to assume that based on the
context.
A. I think that's fair, yes.
Q. Now, you said that the government required a
warning; correct?
A. Yes.
Q. The government didn't require a warning until
1985; isn't that
right, sir?
A. I'm not sure of the exact date, sir.
Q. Let me hand you what has been marked as Exhibit
3824, which is the
1994 Surgeon General's report.
MR. CIRESI: And Your Honor, we'd offer Exhibit 3824.
MR. BLEAKLEY: I'm sorry, what was that? That was
the Surgeon General's
report?
MR. CIRESI: Yes.
MR. BLEAKLEY: No objection.
THE COURT: Court will receive 3824.
MR. CIRESI: May I approach, Your Honor?
THE COURT: Yes.
(Document handed to the
witness.)
BY MR. CIRESI:
Q. Sir, I've opened it to page 264, and satisfy
yourself by looking at
the cover that it is the Surgeon General's report.
A. Yes, I have no doubt about it. I was just looking
for the date,
that's all.
Q. Now do you see on page 264 it shows various warnings
and when they
came into effect?
A. Yes, I do.
Q. And these are warnings that are required by the
government to put
on; correct?
A. That is right. By --
Q. Okay.
A. I think Congress determines it.
Q. And Philip Morris never put on any warning until
it was required by
the government; correct?
A. That is right, sir, yes.
Q. And in 1985 was when the Surgeon General's warning:
Smoking by
pregnant women may result in fetal injury, premature death and low
birth
weight; correct?
A. Premature birth and low birth weight.
Q. Yes. And that is 16 years after Philip Morris
had knowledge of this;
correct, sir?
*22 A. From the date of that letter, yes.
Q. At least 16 years; correct?
A. Well 16 years.
Q. Now would you agree, Mr. Bible, that if a person
is addicted to
something, that her ability to exercise her free will is certainly
limited?
A. Yes. It would be impaired, I would say.
Q. Be significantly impaired; wouldn't it?
A. It -- it would depend upon the level of addiction,
it would seem to
me, sir.
Q. So it could run a spectrum of limitation; is
that right?
A. I would have thought so, yes.
Q. And you can't predict where an individual person
may fall in that
spectrum; correct?
A. I think that's a fair comment. I think most people
-- most people
are different, so we're all affected somewhat differently.
Q. And would you agree that if people are addicted
to cigarettes, that
your company couldn't very well defend the cases by saying people had
a
free choice?
A. Could you give me that question again, please?
Q. Sure.
Would you agree that if people are addicted to cigarettes,
then your
company couldn't very well defend cases by saying people had a free
choice?
A. I find that a bit difficult to answer. I'm not
a lawyer, but I would
say that your choice is limited if you are addicted to something. I'd
understand that certainly.
Q. Can you go to Exhibit 140 -- 14303, and that's
in volume two. This
is a document that's already in evidence, sir. It is a Tobacco Institute
document, and it's from Mr. Knopick, who is a Tobacco Institute employee,
to Mr. Kloepfer, who's a senior vice- president for public relations.
Do
you see that?
A. Well I see the names. I -- it doesn't say Tobacco
Institute, but
I'll accept that you're correct.
Q. It was produced in this litigation by The Tobacco
Institute, and if
you look at the bottom, you'll see a Bates number that is TIMN.
A. Yes, I see that.
Q. Okay. And the subject of this is the National
Institute of Drug
Abuse wanted "addictive" added to the cigarette warning. Do you see
that?
Very first paragraph.
A. Yes, I do see that.
Q. And if you would direct your attention to the
next page where Mr.
Knopick is reporting, "I feel badly about my own lack of
intelligence-gathering in this situation. But I don't think the questions
I
now raise are academic. Shook, Hardy reminds us" --
Do you know who Shook, Hardy is?
A. They're a law firm.
Q. They represent the tobacco industry; correct?
A. Well they represent Philip Morris, I know that.
Q. Okay. And they've represented Philip Morris for
a long time;
correct, sir?
A. I don't know how long.
Q. Okay. "Shook, Hardy reminds us, I'm told, that
the entire matter of
addiction is the most potent weapon a prosecuting attorney can have
in a
lung cancer/cigarette case. We can't defend continued smoking as 'free
choice' if the person was 'addicted."' Do you see that?
A. Yes, I do see that.
Q. Okay. And Shook, Hardy gave that advice to your
company?
A. Well I don't know.
*23 Q. You've never seen this document before?
A. No, I've never seen this document.
Q. Now do you know, sir, that nicotine is a poison?
A. I think I would say I would know that. It would
depend upon the
quantity.
Q. Okay. And you know that in sufficient doses it's
fatal?
A. I would accept that.
Q. And do you know it's a physiologically active
substance?
A. I don't know that.
Q. Do you know if it's similar to cocaine, atropine
and morphine?
A. Do I know that it is?
Q. Yes.
A. No, I would disagree that it is.
Q. You would disagree with that.
A. Yes.
Q. You've never been told that.
A. Never been told what, sir?
Q. That it is similar to cocaine, atropine and morphine.
A. I think I've read that.
Q. Where did you read that?
A. I think I read that in the Surgeon General's
report.
Q. Okay. Can you direct your attention to Exhibit
11559 in volume one.
A. 559?
Q. Yes.
A. Okay.
Q. 11559.
A. Good. I have it.
Q. Do you have it, sir?
A. Yes, I do.
Q. And you see that this is a confidential memorandum,
it's entitled
"TABLE."
A. Yes.
Q. Now I asked you previously about TABLE. Do you
remember that?
A. You asked me previously -- excuse me.
Q. About TABLE, Project TABLE.
A. Oh, yes. Yes.
Q. And I think you said you weren't familiar with
it; is that right?
A. I've not heard that name, no.
Q. You haven't. Okay.
A. No.
Q. Now this is --
The title of this is "TABLE;" correct?
A. Yes.
Q. It says "Competitive Analysis, Organization,"
and "Production."
Correct?
A. Yes.
Q. And --
A. It says "Production - to follow." All right.
Q. And the name is B. Reuter. Do you know who Mr.
Reuter is?
A. Yes, I do know Barbara Reuter.
Q. And who is Barbara Reuter?
A. She's an employee at Philip Morris.
Q. What is her position?
A. I'm not sure of her position today. My recollection
of her was in
the planning department.
Q. Planning department.
A. That was my recollection of her, yes.
Q. And you do not know what position she has today?
A. No, I don't.
Q. Okay.
A. She works for Philip Morris domestic cigarette
operations.
Q. Can you --
There's no date on the front of this document; is
there, sir?
A. No.
Q. Can you direct your attention to page four.
A. Yes.
Q. And I'm using the number at the bottom, not the
Bates number.
A. Yes, I have page four.
Q. Need some more water?
A. I think I'm all right. Thanks.
Q. Now do you see here it says "Source: TMA Estimates
(10/05/92)?"
A. No, I don't see that.
Oh, yes, I do. Thank you.
Q. Right under "Grand Total."
A. Yes, I've got it.
Q. Okay. Would it be fair to assume, sir, that the
date of this
memorandum is at least sometime after October 5th of 1992?
A. I think that's a fair assumption, yes.
Q. All right. Now can you turn back to -- and excuse
me. Strike that.
*24 Do you know that this is a Philip Morris document?
A. Do I know that it is?
Q. Yes.
A. Well I would assume that it is because Barbara
Reuter's name is on
it. But I don't know if it is.
Q. I will represent to you that it is a Philip Morris
document produced
in this litigation. Did you provide this to Congress?
A. Did I provide this to Congress?
Q. Yes.
A. No, I have no -- I have no --
Well I have no recollection of providing it.
Q. Now if you go to page 665, the Bates number --
turn back -- it
starts with the words "COMPETITIVE ANALYSIS" and it's the second page
of
the document.
A. Uh-huh.
Q. Now I'd like to direct your attention to the
second paragraph.
A. Uh-huh.
Q. "Different people smoke cigarettes for different
reasons. But, the
primary reason is to deliver nicotine into their bodies." Do you see
that?
A. Yes, I do.
Q. Do you agree with that?
A. Do I agree with that? No, I don't think so.
Q. You don't. Okay.
A. No.
Q. "Nicotine is an alkaloid derived from the tobacco
plant." Do you see
that?
A. Yes, I do.
Q. And do you agree with that?
A. Well nicotine certainly comes from the tobacco
plant, yes.
Q. Do you know if it's an alkaloid?
A. I think I do. I'm not quite sure what an alkaloid
is.
Q. Okay. Then it states, "It is a physiologically
active nitrogen
containing substance." Do you see that?
A. Yes, I do.
Q. Do you degree with that?
A. I wouldn't have a clue frankly.
Q. You don't know.
A. No, I don't know.
Q. "Similar organic chemicals include nicotine,
quinine, cocaine,
atropine and morphine." Do you see that?
A. Yes, I do.
Q. Do you agree with that?
A. I would have no idea.
Q. This is a Philip Morris document where that's
reported; correct?
A. Yes, it's correct. It seems to me to be written
by somebody who, to
the best of my knowledge, never worked in our R&D department and
has no
scientific background, to the best of my knowledge.
Q. Is she a provocateur?
A. What do you mean by that, sir?
Q. Same thing Mr. Morgan meant yesterday in his
deposition that we saw.
And you witnessed it.
A. You mean does she attempt to provoke thought,
stimulate ideas?
Q. Is she a provocateur?
A. I have no idea.
Q. You don't.
Do you have any reason to believe she was lying
in this document?
A. No, I have no reason to believe she was lying.
Q. Do you know her to be an honest person?
A. I expect she is very honest.
Q. Do you know her to be a responsible person?
A. I do.
Q. Do you know her to do her job responsibly?
A. I do. But I don't know what her job was when
she wrote this, but I
certainly don't believe she's qualified to say these things because
I don't
believe she's a scientist.
Q. You just don't agree with it; correct?
A. I beg your pardon?
Q. You don't agree with it; correct?
A. Agree with what?
Q. The last statement, "Similar organic compounds
include nicotine,
quinine, cocaine, atropine and morphine."
*25 A. No, I think what I said is I don't know.
Q. You don't know.
A. Hmm.
Q. "While each of these substances can be used to
affect human
physiology, nicotine has a particularly broad range of influence."
Do you
agree with that?
A. I have no idea.
Q. Did you tell Congress that when you testified?
A. Tell them what, sir?
Q. What I just read.
A. Why should I have told Congress that?
Q. You were testifying on addiction in front of
Congress; weren't you?
A. I was asked questions about that, yes.
Q. "During the smoking act, nicotine is inhaled
into the lungs in
smoke, enters the bloodstream and travels to the brain in about eight
to 10
seconds." Do you agree with that?
A. Do I agree with that?
Q. Yes.
A. I have no idea.
Q. Never talked to Dr. Ellis about that?
A. I did --
I have asked her some questions, but I never asked
her that particular
question.
Q. Did you ever ask her about the forms of nicotine
and how fast they
can get to the brain?
A. No, I have not. I have asked her about ammonia,
and in the course of
that she talked a little bit about the form of nicotine. But beyond
that,
I've never asked her that question.
Q. Did she tell you at that time that nicotine with
a higher pH gets to
the brain faster?
A. No, she never told me that at all.
Q. Did you ask her?
A. Yes, I did. And what she told me was, if I remember
correctly, was
that ammonia -- sorry, nicotine absorbed through the mouth enters the
brain
more slowly than it does when absorbed through the lung. That's my
memory
of what she told me.
Q. Nicotine absorbed through the mouth enters the
brain more slowly
than when absorbed through the lung; correct?
A. That's what I remember her telling me, yes.
Q. Is that all she told you?
A. On what subject, sir?
Q. On that subject, sir.
A. Which subject?
Q. The subject of how fast nicotine gets to the
brain.
A. Yes, I think that's all she told me.
Q. Did she tell you anything else about the form
of nicotine and it
getting into the bloodstream?
A. I think in the course of that conversation she
told me that --
Could you rephrase the question, please, or repeat
the question?
Q. Of course.
Did she tell you anything about -- else about the
form of nicotine and
how fast it gets to the brain or into the bloodstream?
A. No, I don't recall that, no.
Q. All right. Do you recall anything else that she
told you in that
conversation you had?
A. On what subject, sir?
Q. On the subject of nicotine getting into the blood
system and getting
to the brain.
A. No, I don't recall more else. I think what she
told me I talked to
Congress about, and that was the totality of what our conversation
was.
Q. Well, you were preparing to testify to Congress
--
A. Uh-huh.
Q. -- when you talked to her; correct?
A. I had talked to her before, and then I talked
to her again during
that time, yes.
Q. You wanted her to give you all the information
regarding what you
were going to testify to Congress about; correct?
*26 A. Certainly to the best of what I expected
I would be asked. I
wanted to feel that I could answer questions honestly.
Q. You wanted to be honest and truthful and complete
with Congress;
didn't you?
A. Absolutely.
Q. You understood you had an obligation to do that;
didn't you, sir?
A. Yes. I testified under oath.
Q. Now you're aware that the FDA has found that
the cigarette is a
nicotine-delivery device; correct?
A. The FDA has described it as such, yes, I believe
that's true.
Q. And that the FDA, after looking at recently released
documents and
medical information -- and by "documents" I mean cigarette industry
documents -- came to the conclusion that cigarettes are intended by
the
manufacturer to affect the structure and function of the human body.
You're
aware of that; aren't you, sir?
A. I am aware of that, yes.
Q. And it was based in part on the recently released
documents that the
FDA had; correct?
A. I'm not aware of that, sir.
Q. Do you have your deposition up there, sir? Do
you have your
deposition up there?
A. Where, sir?
Q. It may be to your right.
A. Oh, I see.
Q. The deposition is --
You may not have it, sir. Excuse me.
MR. CIRESI: Your Honor, may I approach?
THE COURT: Yes.
(Document handed to the
witness.)
BY MR. CIRESI:
Q. Let me hand you a copy of your deposition, sir.
A. Thank you.
Q. And you recall giving a deposition on August
21st, 1997, in Palm
Beach, Florida?
A. Yes, I do.
Q. And this was in the Medicaid action brought by
the state of Florida?
A. Yes, that's right.
Q. You were under oath at the time?
A. Yes.
Q. And the FDA, sir, had determined that nicotine
was a drug-delivery
device after 1994; correct?
A. I think that's right, yes.
Q. And you know that this lawsuit here in Minnesota
was brought in
August of 1994; don't you?
A. Well no, I didn't know that, but I'm not going
to argue.
Q. You know that substantial numbers of documents
have been produced in
this case; correct?
A. Yes, I'm aware of that.
Q. You know that they were under protective order
so they could not be
disclosed to various people. Do you know that?
A. They're under the protective order of the court?
Q. Yes.
A. Yes.
Q. And do you know that your attorneys designated
the documents
confidential to be covered by the protective order?
A. I believe that's right.
Q. In fact, you've recently released all those documents
on the
Internet system; haven't you?
A. That's right.
Q. That was last Friday; correct?
A. That's right.
Q. And you did that as part of a commitment that
you made to Congress
on January 29th of this year; correct?
A. That's right.
Q. Now the FDA, sir, after 1994, got access to thousands
of pages of
internal company documents; didn't they?
A. Well I'm not sure, but I know they got access
to a lot of documents.
Q. And that's what they based in part their finding
on; isn't that
right?
*27 A. Well I'm not sure.
Q. All right. Can you turn your attention to page
45 of the deposition
that was taken of you last August 21st.
A. Uh-huh. Yes, I have it.
Q. And I want to direct your attention to that page
45 starting at line
four.
A. Uh-huh.
Q. "Question: Mr. -- Mr. Bible, just as a general
question, you are
familiar, of course, with this big, thick document -- I'm not suggesting
that you've read every page.
"Answer: I can guess what it is.
"Question: It's the rule making of the Food and
Drug Administration,
finding that cigarettes are nicotine delivery devices. You're generally
--
you're aware generally they made such a thing as that?
"Answer: I am.
"And I've placed before you Exhibit 7-A, which is
the executive
summary, and I'd ask you, please, sir, kindly turn to page X. Are you
aware
that the Food and Drug Administration, after a considerable period
of
taking testimony, concluded that, quote, There is an emergence of a
scientific consensus that cigarettes and smokeless tobacco cause addiction
to nicotine and the disclosure of thousands of pages of internal tobacco
company documents detailing that these products are intended by the
manufacturers to affect the structure and function of the human body.
This
new evidence justifies the agency's determination that cigarettes and
smokeless tobacco are delivery systems for the drug nicotine.'
"Now, my question to you, sir, is, are you broadly
aware that they made
that finding?
"Answer: I am."
Is that correct?
A. That's correct, yes.
Q. Now that was just seven months ago; correct?
Roughly.
A. Six months ago.
Q. Now when you testified in Congress, you called
nicotine as having a
mild pharmacological effect, and that it was behaviorally but not
pharmacologically addictive; is that right?
A. I think that's what I said, yes.
Q. And you quoted from a company document in reading
that; correct?
A. Yes. We'd made a document we submitted to Congress,
and it's public.
Q. And who did you rely on in making the statement
that it was
behaviorally but not pharmacologically addictive?
A. My chief scientist.
Q. Is that Dr. Ellis?
A. Yes, that's Dr. Ellis.
Q. Okay. And what is the difference between pharmacologically
addictive
and behaviorally addictive, if you know?
A. Well I'm not a scientist, let me first start
out by saying that, but
I believe that pharmacologically addictive to me would, for example,
include an objective marker such as intoxication, for example. Behaviorally
addictive, say, I would identify that or define that as a habit where
you
repeat something frequently.
Q. Pharmacologically to you means intoxication?
A. I think that's one very important marker which
to me would be
important to the definition.
Q. Do you know what the word "pharmacological" means?
A. No, I don't. I've not looked it up in the dictionary.
Q. Never.
A. No, I haven't actually.
Q. Do you know if it means a drug effect?
*28 A. I would have thought that's probably what
it means, yes. I
wouldn't doubt that if somebody told me that's what it says.
Q. And the drug affects a person physiologically;
correct?
A. Yes, it --
Physiological is a word I've never really fully
understood, but if you
could tell me what you mean by that.
Q. Well how about if it alters the state of the
smoker by becoming a
neurotransmitter?
A. My goodness, that's something I'm not familiar
with, sir.
Q. How about if it affected the brain by that neurotransmitter,
are you
aware of that?
A. Well perhaps I could be guessing now a little,
I don't like to
guess, but perhaps that's what Dr. Ellis meant when she told me it
was
mildly pharmacological.
Q. Oh. So it would have a pharmacological effect.
A. I said it had mild pharmacological effects. I
think I said that in
Congress.
Q. Can you take a look at Exhibit 11559. Same document
we were on, sir.
That's the --
A. Okay.
Q. That's the TABLE document. Very same page.
A. Yes, I have it.
Q. Okay?
A. Uh-huh.
Q. Now remember, I was reading to you that it travels
to the brain in
about eight to 10 seconds?
A. Yes.
Can you just point me to that again, please?
Q. Sure. Third paragraph.
A. Uh-huh.
Q. First sentence. See it?
A. Yes, I have it.
Q. Second sentence, "The nicotine alters the state
of the smoker by
becoming a neurotransmitter and a stimulant. Nicotine mimics the body's
most important neurotransmitter, acetylcholine (ACH), which controls
heart
rate and message sending within the brain. The nicotine is used to
change
psycological states leading to enhanced mental performance and relaxation."
Do you see that?
A. Yes, I do.
Q. Were you ever told that by Dr. Ellis?
A. No, I don't think I was told that, no.
Q. And do you see there that neurotransmitters are
referred to?
Correct?
A. Yes, there is --
That word is there, you're right.
Q. Did you consider those to be pharmacological
effects?
A. Which, sir?
Q. The effect on neurotransmitters affecting the
body's most important
neurotransmitter, ACH.
A. You know, I don't know.
Q. You don't know.
A. I don't know. I am not a scientist, sir.
Q. Do you think that's a mild pharmacological effect?
A. Sir, I would not know. I don't know what a neurotransmitter
is, and
I don't know what acetylcholine is.
Q. If -- does --
Do drugs sedate people?
A. I believe they do, yes.
Q. Is that a pharmacological effect?
A. Well I'd have thought that's a fair indication.
But again, I'm a
layman and I'd just be guessing at it.
Q. Would you call it mild?
A. Depends upon the drug.
Q. Okay. And --
A. For example, I've just taken some Sudafed, and
I think that's mild.
I presume that's a drug.
Q. Okay. Direct your attention, then, to the same
paragraph, little bit
further down, "A little nicotine seems to stimulate, while a lot sedates
a
person. A smoker learns to control delivery of nicotine through the
smoking
technique to create the desired mood state." Do you see that?
*29 A. Yes, I do.
Q. Sounds like a drug-delivery device; doesn't it,
sir?
A. Doesn't to me.
Q. It doesn't to you?
A. No, it doesn't to me, because I'm a smoker. That's
not how I view
the cigarette.
Q. You don't view the cigarette that way.
A. No, I don't.
Q. Now did Dr. Ellis, before you testified in Congress,
tell you that
you can alter the form of nicotine to speed its delivery to the brain?
A. No, she never told me that, I don't think, no.
Q. Did she tell you that could be done through ammonia?
A. No, she didn't tell me that at all.
Q. Can you direct your attention to Exhibit 11751.
A. In fact, if I could just mention that I think
she told me the
reverse, in fact, which I just mentioned back to you, that in fact
nicotine
absorbed through the mouth reaches the brain more slowly than through
the
lung. I think that's what I was told.
Q. I'm talking about, sir --
I understand that. Did she tell you, though, that
altering the form of
it from acid to base would speed its passage to the brain?
A. You've got me there. She didn't say that to me.
I don't know what
"acid to base" means, sir.
Q. Did she tell you the opposite of that?
A. I don't know, sir. I wouldn't know how the opposite
would be
described.
Q. Can you direct your attention to Exhibit 11751,
please.
A. Yes, I have that.
Q. Now that's a letter to Dr. Ellis; correct?
A. Yes.
Q. And it's dated November 15th, 1994; correct?
A. Yes, that's right.
Q. And it's from Cologne, the INBIFO Contract Research
organization
owned by Philip Morris?
A. Yes, that's correct.
Q. And sir, if you'd direct your attention to the
last page, do you see
that there's an enclosure which is an appendix of two pages? It's
referenced there.
A. No, I don't see it, sir.
Q. Right at the very bottom under Mr. Reininghaus's
signature,
"Enclosure: Appendix, 2 pages."
A. Oh, I see, it's written. I don't see any appendix,
I see words
saying that. Sorry.
Q. All right. And if you go to the next exhibit
--
A. Yes.
Q. -- and you'll notice the next Bates number produced
by your company,
Philip Morris, Exhibit 11751, ended with the Bates number 912; didn't
it?
A. Yes, that's right.
Q. And the next exhibit then is Exhibit 11752, at
the top it says
"APPENDIX;" correct?
A. Yes. It says "APPENDIX 1" in fact.
Q. Correct. And the Bates number there is 913; correct?
A. Yes, that's correct.
Q. Okay. I want you to assume that this is the appendix
that was
attached to Exhibit 11751. All right?
A. Yes, I -- I can assume that.
Q. All right. Now, we see the date here is November
15th, 1994;
correct?
A. Yes.
Q. And I want to set the scene a little bit, sir.
A. Uh-huh.
Q. Congressional hearings had taken place in Congress;
correct?
A. That year in 1994? Yes, I think it was April
'94.
Q. And every one of the chief executive officers
of the tobacco
companies stood up and swore under oath that nicotine was not addictive;
correct?
*30 A. That's my memory of what happened, yes.
Q. Philip Morris's CEO did that, correct?
A. That's my memory. And also he had the issue explained
by these
scientists.
Q. And the Waxman hearings had disclosed documents
that had never
before been disclosed; correct?
A. I don't recall that, sir. I won't dispute it,
but I don't recall
that.
Q. And the FDA started investigating; correct?
A. The FDA, I think, had started prior to that.
I remember Dr. Kessler
making some report, I think, in February '94, not long before I became
CEO.
And --
Q. So --
A. -- I think the congressional hearings were in
April '94, so yes, he
started his inquiry.
Q. So at that time there were FDA proceedings going
on to look to
regulate cigarettes as a drug; correct?
A. That's right, yes.
Q. We had the congressional hearings; correct?
A. Yes.
Q. The chief executive officers testified that nicotine
was not
addictive; correct?
A. That's correct, sir, yes.
Q. And between 1994 and 1998, there were no definitional
changes in the
medical literature regarding addiction; were there?
A. Not to my knowledge, sir.
Q. And Philip Morris started investigating between
1994 and 1998 in
order to react to whether or not the form of nicotine had been deliberately
changed to hasten its journey to the brain; correct?
A. I don't know about that, sir.
Q. Let's take a look at Dr. Ellis's information.
Now you see that this
is a letter to her of about four pages.
A. Uh-huh. Yes.
Q. And signed by Mr. Reininghaus; correct?
A. That's right, yes.
Q. Do you know who he is?
A. Yes. I believe he runs INBIFO, the Research Institute.
Q. Okay. And Ms. Ellis is the director of research
at Philip Morris at
that time; correct?
A. I think that's right. Yes, she's addressed as
such, yes.
Q. And still is today; correct?
A. I think she's senior vice-president. I've just
forgotten her exact
title.
Q. She's still head of research?
A. No. I think that the activities have been divided.
I'm just not
quite sure of the exact organization structure now. But she's a senior
scientist at the organization.
Q. Now in this memorandum Mr. Reininghaus sets forth
the uptake of
nicotine by smokers; correct?
A. Yes.
Q. And he talks about it as being a complex process;
correct?
A. He says that, yes.
Q. And he talks about the parameters which are expected
to influence
the bio -- bioavailability of nicotine; correct?
A. He says that, yes.
Q. And do you know that the bioavailability means
its availability in
the blood system?
A. No, I don't know that.
Q. You assume that to be a fair statement?
A. Well I'll accept it as a fair statement.
Q. And he talks, then, about those parameters. One
is smoke production;
correct?
A. Yes.
Q. The nicotine concentration in the smoke; right?
A. Yes.
Q. Particle size?
A. Yes.
Q. Nicotine phase distribution?
A. Yes.
Q. Do you know what that is?
*31 A. No, I don't.
Q. He talks about nicotine deposition and diffusion;
correct?
A. Yes.
Q. Talks about two points under there, particle
impaction and gas phase
diffusional transport in the upper respiratory tract; correct?
A. Yes, correct.
Q. That would be the mouth; correct?
A. I would have thought the upper respiratory tract
would have been
here (gesturing towards throat area) where I would have thought.
Q. Okay. You don't know if it includes the mouth
or not.
A. I don't know, sir, no.
Q. All right. And then he talks about that nicotine
transport in the
lower respiratory tract; correct?
A. Yes, he does.
Q. And then he talks about nicotine uptake; correct?
A. Yes.
Q. And on the next page he talks about overall pharmacokinetics;
correct?
A. Yes.
Q. Do you know if that refers to the speed by which
nicotine is taken
into the blood system?
A. No, I -- I wouldn't have a clue, sir.
Q. Okay. Now if you turn over to page three of this,
--
A. Yes.
Q. -- and do you see he says here, "Due to the selective
membrane
permeability only unprotonized nicotine can freely penetrate the mucosa
or
the bronchial alveolar lining."
A. Yes, I read that.
Q. All right. Now do you know what the bronchial
alveolar lining is?
A. No, I don't.
Q. If I tell you it's the lining of the lung, would
you accept that?
A. Well you're not a scientist, I presume, but it
sounds reasonable.
Q. I'll grant you I'm not a scientist, sir.
Did you discuss that at all with Dr. Ellis before
you testified in
front of Congress?
A. Discuss which, sir?
Q. The bronchial alveolar lining.
A. No, I did not.
Q. Did you discuss the transfer of nicotine through
the bronchial
alveolar lining or through the lung membrane at the time you testified?
A. No, I didn't discuss that particular aspect,
no.
Q. Now you see down right below -- or above number
four --
A. Yes.
Q. -- it says, "However, an influence of smoke pH
on nicotine kinetics
in the lower respiratory tract cannot be excluded: pH-enhanced gas
diffusion of nicotine to the mucosa might increase its uptake rate."
Do you
see that?
A. Yes, I do.
Q. Now if we go on, then, sir, to Exhibit 11752.
A. Uh-huh.
Q. This is the appendix. You remember that?
A. Yes. We presume it's the appendix. I think that's
fair.
Q. "The Effects of Cigarette Smoke 'pH' on Nicotine
Delivery and
Subjective Evaluations." Do you see that?
A. Yes.
Q. Now I want to represent to you, sir, that delivery
is the amount of
nicotine, not the form. Will you accept that? Are you with me?
A. Well I don't really -- I don't really know the
distinction between
the two, frankly.
Q. That's --
Well we're going to see if -- if you do or don't.
A. Okay.
Q. I'd just like you to assume that the delivery
is different than the
form of the nicotine. All right?
A. Well I'll try, yes.
Q. All right. And you didn't have any discussion
about that with Dr.
Ellis?
*32 A. About what, sir?
Q. About the form versus delivery of nicotine itself.
A. It wouldn't occur to me. I don't even know what
it means, as I said
to you.
Q. Well you knew you were going to testify in Congress
about whether or
not you were manipulating nicotine to increase the addictive nature
of
cigarettes; weren't you?
A. I didn't know that.
Q. You didn't --
A. No.
Q. -- at the time you testified?
A. I didn't know what I was going to be testifying
about in Congress,
sir. They generally asked me the questions.
Q. Well that was one of the subject matters that
you knew you were
going to be asked about; wasn't it?
A. Well I thought I might be asked about it.
Q. Okay. And that was whether or not Philip Morris
was manipulating
nicotine through ammoniation to increase its speed to the brain; correct?
A. I thought that I would be asked a question as
to why we used ammonia
in our products.
Q. Okay. Now I'd like to start in the second paragraph.
And if you want
to read the first paragraph, please do so, sir.
A. Well thank you.
Q. Are you ready?
A. Well not quite. Could you just bear with me,
please?
Q. Oh, I will.
A. Yes. Little hard for me to understand, I have
to tell you that.
However, I've read it.
Q. Complex area; correct?
A. I beg your pardon?
Q. Complex area.
A. Well that, I guess, is why I'm not a scientist.
Q. And how many smokers do you think are scientists?
A. I don't know, sir.
Q. Would you agree with me it would be fair to assume
that the
overwhelming majority are not scientists?
A. I think that's probably a fair --
You know, a majority of the citizens of the world
are not scientist, so
I think that's fair.
Q. And would you agree with me that the overwhelming
majority do not
have scientists at their disposal to explain complex chemical matters?
A. Yes, I would agree with that.
Q. Now in paragraph two we see it's reported as
follows: "The argument
that bases" --
Now do you know if ammonia is a base?
A. I don't know what a base is, sir.
Q. All right. I'd like you to assume that ammonia
is a base. It's been
so testified here. Can you assume that?
A. You know, honestly I don't know what a base is
to assume that. I
know a base in baseball, but that's about the only base I do know of.
Q. We're not talking about baseball, sir.
A. I know we aren't, sir, but I don't know what
a base is.
Q. We're talking --
With all due respect, Mr. Bible, we're talking about
matters of life
and death. We're not talking about baseball. Do you understand that,
sir?
A. Sir, I was trying to explain to you I don't understand
what "bases"
mean.
Q. And I ask you to assume that a base is ammonia.
Can you do that?
A. I'll try, yes.
Q. Thank you.
"The argument that bases are added to increase the
nicotine delivery
above normal levels" -- nicotine delivery above normal levels -- "is
entirely specious." Do you see that?
*33 A. Yes, I see that.
Q. All right. Now that's the delivery, the amount
of nicotine; do you
know that? If you don't, just tell me you don't know.
A. I would --
No, I think that's fair. To -- to increase the nicotine
delivery would
be to increase the amount of nicotine. I think that's a fair assumption.
Q. All right. "The same amount of nicotine is delivered
whether the
smoke is acidic, basic, or neutral." Do you see that?
A. That's what it says, yes.
Q. "Only the form, not the amount of nicotine is
changed."
A. Yes, that's what it says.
Q. "To illustrate, a study was conducted on nicotine
aerosols, where
subjects inhaled the same amounts of nicotine at pHs of 5.6, 7.5 and
11.0."
A. Uh-huh.
Q. "It was found that higher peak concentrations
of nicotine in blood
were achieved at higher pHs. Since the amounts of inhaled nicotine
were the
same, the results indicate that the higher the pH, the more rapidly
nicotine enters the blood stream. Eventually, of course, all of the
nicotine, regardless of pH, would enter the blood stream. Only the
rate of
entry is pH dependent." Do you see that?
A. Yes, I read that.
Q. Next paragraph. "We conducted a study comparing
the
electrophysiological and subjective effects produced by smoking cigarettes
containing nicotine as the base to the effects produced by smoking
nicotine
as the citrate." And you know that a citrate is a salt?
A. Yes.
Q. Yes.
A. I think I do, yes.
Q. "Equimolar amounts of nicotine were used. We
found that, compared to
cigarettes containing the citrate, cigarettes containing the base produced
enhanced electrophysiological and subjective responses. It is of interest
to note the filler pHs for the base and the citrate cigarettes were
6.4 and
5.2, respectively. Nicotine delivery levels, however, were not different."
Next paragraph.
A. Uh-huh.
Q. "We conducted a study assessing the effects of
increase filler pH on
electrophysiological and subjective responses to cigarettes." They're
testing them on people; correct, sir? Is that correct?
A. No, I have no idea, sir. I think this is an animal
laboratory --
Q. You do. Okay.
"The cigarettes contained 0, 1 or 2 calcium hydroxide.
Filler pHs were
5.7, 6.6 and 8.0, respectively. The corresponding nicotine deliveries
were
0.34, 0.32, and 0.31 milligrams/cig. It is clear from these data that
filler pH has no effect on nicotine delivery. We found that increased
filler pH resulted in enhanced electrophysiological and subjective
effects.
We interpreted this data to mean that the higher pHs resulted in more
unprotonated nicotine - a physiologically -- a more physiologically
effective form." Do you see that?
A. Yes, I do.
Q. Now before you testified in front of Congress,
did Dr. Ellis tell
you about that?
A. Tell me about what, sir?
Q. What we just read.
A. No, she did not. No.
Q. You didn't know this when you testified?
A. I didn't know --
*34 The contents of this paper that you just read
out?
Q. And when you testified, you were very careful
about what you said;
didn't you?
A. I'm always very careful about what I say. I try
to be, sir.
Q. And if you could direct your attention to Exhibit
24299.
A. Yes, I have that.
Q. And you see that that's a copy of the January
29th, 1998 session in
Congress?
A. Yes, that's right.
MR. CIRESI: Your Honor, we'd offer Exhibit 24299.
MR. BLEAKLEY: Your Honor, there's a lot of information
in here other
than the testimony of Mr. Bible.
THE COURT: Has this been designated, counsel?
MR. CIRESI: It has, Your Honor.
THE COURT: Received.
BY MR. CIRESI:
Q. Now I want to direct your attention, sir, to
page 72. Are you
testifying on that page in response to questions by Representative
Gillmor?
A. Yes. And others.
Q. Okay. Now I'd like to direct your attention,
sir, about halfway down
--
A. Uh-huh.
Q. -- where --
Oop, if you could move it back just a little bit,
please, Ms. Sutton.
Thank you.
Do you see there where it says:
"REPRESENTATIVE GILLMOR: Yeah, I'll -- I'll yield?"
A. Yes, I do see that.
Q. That means he gives up the floor to another congressman;
correct?
A. That's right.
Q. Okay. And the next congressperson then addresses
you with a
question; correct?
A. Yes.
Q. "To follow up on your question about the nicotine
levels, I had in
my initial question asked you about whether some of the companies here
ammoniate, paren, pH, close paren, tobacco in their process. And so
I'm
wondering, Mr. Bible and Mr. Goldstone" --
Mr. Goldstone, he's the CEO from RJR; right?
A. That's right, sir, yes.
Q. -- "if you could comment on whether your company
ammoniates its
tobacco in its production now, or if it has in the past, and whether
that
in fact potentiates the level of nicotine." Correct?
A. Yes, that's what it says.
Q. Now you were very careful how you answered this
question; weren't
you, sir?
A. Sir, I answered the question.
Q. I know you did.
A. And I answered it as intelligently as I could
answer the question.
Q. Did you --
Did you read this answer?
A. No, sir, I didn't read this answer.
Q. But this answer was based on how you were prepared
by Dr. Ellis;
correct?
A. No, it was based on how I asked her these questions
about ammonia,
and that's what she told me.
Q. And what she told you.
A. Uh-huh.
Q. And she didn't tell you about Exhibits 17751
and 17752; did she,
sir?
A. No, she didn't. I think I asked her specifically
about this subject
because, as I said, it had been very topical.
Q. Yeah. And that's how you answered. "Yes, well,
that's a topical
subject, because quite a bit has been written about it. So I've asked
my
scientists about that subject."
Who else did you ask besides Dr. Ellis?
A. Well I really meant Dr. Ellis.
Q. "And I'm told that ammonium compounds are used
in two ways in our
products. In the first instance they are used as a blending agent in
the
manufacture of what is called sheet tobacco, which is included in the
cigarette. And that blend -- its capability there is to act as an agent
to
release the pectins to cause the tobacco to bind and become a sheet."
Do
you see that?
*35 A. Yes, I do.
Q. Two kinds of sheet tobacco, though; aren't there,
sir?
A. I believe there are, but I'm not familiar with
the differences.
Q. One is band cast and one's called RL, reconstituted
leaf; correct?
A. I've heard that, yes.
Q. And there are no pectins released in reconstituted
leaf through the
action of ammonia to bind; are there?
A. Sir, I was told by Dr. Ellis that in order to
release the pectins to
cause the sheet to bind, ammonia was added.
Q. Do you know if that's true in both band cast
and reconstituted leaf?
A. I -- I don't know, but it certainly is true in
one of them, sir.
Q. In one of them.
A. Yes.
Q. You know it's true in only one, and that's band
cast; isn't that
right, sir?
A. I don't know that, sir. In fact I've never heard
the word "band
cast" in my life, I don't think.
Q. But you just said that you knew it was true for
at least one; didn't
you?
A. Well I thought there was -- that all sheet was
similar, frankly,
sir.
Q. You said, "I don't know, but it certainly is
true in one of them."
A. Well because you'd been saying there were two.
Q. Ah. Okay.
You go on to testify, "But I'm also told that the
ammonium compounds
that are used in the cigarettes we sell do not cause the amount of
nicotine
in smoke to rise."
That's the delivery; right?
A. Well yes. I think they're synonymous, yes.
Q. Yes. "They do not cause the amount of nicotine
absorbed by the lung
to rise. It does not change the form of the nicotine that goes to the
brain." Do you see that?
A. Yes, I do see that.
Q. And that's directly contrary to Exhibit 17 --
11751 and 11752 that
we just looked at; isn't it?
A. Oh, I don't know. I couldn't --
Q. Just don't know; is that right?
A. No, I couldn't say that, sir. If I'd read what
you read, I couldn't
describe that as being contrary to what was said there at all.
Q. You couldn't.
A. No, I could not. I'm not a scientist and I found
that very complex.
I can tell you this is what Dr. Ellis told me, and I believe her; she's
a
very fine scientist.
Q. Well if you --
A. And I have no doubt whatsoever about the truth
behind this.
Q. But we just read about the form of the nicotine
getting there faster
when pH is raised; didn't we, sir?
A. Well could you take me back to that, please,
sir.
Q. Sure. Would you go back to Exhibit 17 -- or 11752.
A. 11752.
Q. And I will direct your attention to the second
paragraph, halfway
through it. Well let's start up above. We'll read it again.
"The argument that bases" --
Remember, I asked you to assume that a base is ammonia?
A. Yes.
Q. -- "are added to increase the nicotine delivery
above normal levels
is entirely specious." Okay? "Specious" means false; correct?
A. Yes.
Q. And the delivery is the amount of nicotine; correct?
That's what you
said earlier.
A. Well you asked me to assume that, I think. So
I think that's a fair
assumption, but I'm not going to quibble over it.
*36 Q. "The same amount of nicotine is delivered
whether the smoke is
acidic, basic, or neutral." Do you see that?
A. Yes, I see that.
Q. "Only the form, not the amount of nicotine is
changed." Correct?
A. That's what it says, yes.
Q. "To illustrate, a study was conducted on nicotine
aerosols, where
subjects inhaled the same amounts of nicotine at pHs of 5.6, 7.5 and
11.0."
Do you see that?
A. Uh-huh. Yes, I do.
Q. "It was found that higher peak concentrations
of nicotine in blood
were achieved at higher pHs." Correct?
A. Yes, that's what it says.
Q. "Since the amounts of inhaled nicotine were the
same, the results
indicate that the higher the pH, the more rapidly nicotine enters the
blood
system." Isn't that what it says?
A. "...enters the blood stream."
Q. "Blood stream." Isn't that what it says?
A. That's what it says, yes.
Q. Now let's go back to your testimony, sworn testimony
in front of
Congress.
A. Uh-huh.
Q. "But I'm also told that the ammonium compounds
that are used in the
cigarettes we sell do not cause the amount of nicotine to rise." Do
you see
that?
A. Yes, I do see that.
Q. And we said that that would be the delivery;
correct?
A. Well I think you said that. I see here it says
"delivery" and not
"amount," actually.
Q. Well, and -- and you accepted --
A. Well --
Q. You accepted that; didn't you, sir?
A. Well I did, but now I'm beginning to wonder if
there's something I
don't understand here.
Q. Well --
A. If there is a difference between the two.
Q. Let's go on a minute, sir.
A. Hmm.
Q. "They do not cause the amount of nicotine absorbed
by the lung to
rise. It does change the form -- it does not change the form of nicotine
that goes to the brain." You said that; right?
A. That's what I said, yes.
Q. Who told you that?
A. Dr. Ellis.
Q. When did she tell you that?
A. Before I went to Congress.
Q. When it gets into the bloodstream, is it buffered?
A. I have no idea, sir. I don't know what that means,
"buffered."
Q. Did you ask?
A. No, I didn't. I wouldn't think to ask it because
I don't know what
it means.
Q. Did she explain anything about that to you?
A. I don't recall that, no. I don't recall that.
Q. Did she tell you that, "Mr. Bible, when you ammoniate,
you get the
nicotine into the blood system faster, but once it's into that bloodstream,
it is buffered by the blood and so it doesn't change on the way up?"
Did
she tell you that?
A. I don't recall that, sir.
Q. Did she tell you, "Now if you answer that way,
you won't be stating
a mistruth?"
A. If I answer what way?
Q. The way that I just said. You won't be stating
a mistruth, but you
won't have to answer about whether --
A. No, no, that's --
Q. Excuse me, let me finish.
A. Sorry.
Q. -- but you won't have to say whether or not we
ammoniate to get it
into the blood quicker. Did she tell you that?
*37 A. No, she never said anything like that to
me at all.
Q. And she never gave you this document, did she,
sir?
A. Which document, sir?
Q. The document we've just looked at, 11752.
A. No, I don't --
I've not seen that before. And as I said, I really
feel quite incapable
of interpreting it.
Q. Well did you offer to have Dr. Ellis testify
on this issue and
produce all of the documents that were in Philip Morris's files regarding
this?
A. I think I've offered for my chief scientist to
elaborate on any
points that were made. In fact it may have been in that testimony there.
But I have certainly offered that, yes.
Q. With all of the internal documents?
A. I think I said at that congressional hearing
we are releasing all
documents which we started to release on the Internet last Friday.
I think
you referred to that.
Q. You didn't release 39,000 of those documents;
did you?
A. That's right. They're privileged documents.
Q. They have been found by a special master not
to be privileged;
correct?
MR. BLEAKLEY: Objection, Your Honor, that is highly
prejudicial and
irrelevant.
THE COURT: Sustained.
MR. BLEAKLEY: Move to strike it.
THE COURT: That question will be stricken. The jury
is instructed to
disregard that.
BY MR. CIRESI:
Q. Sir, how many of your documents have you said
you will turn over?
A. When I talked to Congress?
Q. Yes.
A. I think we said there are some 30 million pages
of documents here in
Minnesota that we will be releasing.
Q. And you had never agreed to release those documents
before you went
to Congress; correct?
A. I --
That's right, yes. Yes.
Q. And those documents relate back to over 40 years
of the industry's
conduct; correct?
A. I don't know how far they go back, but I think
they go back a long
time, yes.
Q. And they go back and show what the industry knew
and when they knew
it and what they did about it; correct?
A. I'd have thought that's a fair characterization.
I've not read them,
sir, there are so many. But as I said, I'm looking forward.
Q. You're looking forward to read them?
A. I'm looking forward --
Q. Oh. I --
A. -- to resolve the issues surrounding this industry
and my company,
sir.
Q. Well we'll -- we'll get to that in a little bit,
sir.
A. Uh-huh.
Q. And I know you're looking forward because you've
testified to that;
haven't you?
A. I have.
Q. And we looked at how you were looking forward
based on the article
in the Wall Street Journal and your 1994 annual report. We looked at
that;
didn't we?
Q. The annual report, yes, that's right, sir.
Q. And you put in there that you had never settled
a case; isn't that
right?
A. That's right, sir. Yes.
Q. And when all the documents started coming out,
things changed;
didn't they, sir?
A. What do you mean by that, sir?
Q. What I mean by that is you started settling some
cases; didn't you?
A. We've settled some cases lately, yes, we have.
*38 Q. Yes.
A. But that was in order to make sure that the proposed
resolution
which we've agreed with states attorneys generals were clear and we'll
have, I think, a good pathway for national legislation to be legislated
--
or enacted.
Q. Yes, and --
A. And the attorneys general wanted --
Q. Sir.
A. -- to settle them, too.
Q. Are you done?
A. I am, yes.
Q. Now those settlements came about after documents
were disgorged by
your companies and the others that had never before seen the light
of day;
correct?
A. Of that I'm not sure.
Q. You don't know?
A. No, I don't.
Q. Well you just testified that you're going to
release documents that
had never before been released; isn't that right?
A. I think you asked me if they'd not been released.
I said yes, I
think that's right. But I just don't know, sir.
Q. Oh.
A. I'm not trying to quibble with you, I just don't
know.
Q. I know you're not trying to quibble. I'm not
trying to quibble with
you either.
A. Well thank you.
Q. But just a bit ago you said they've never been
released; isn't that
right? Now maybe that's a quibble, but --
A. The 30 million pages?
Q. Yes.
A. You really are confusing me.
Q. I don't want to confuse you, Mr. Bible.
A. Well please, if you could be very clear, I will
try my very hardest
to answer your questions exactly, clearly. So please if you would repeat
them.
Q. I will go back for you --
A. Thank you.
Q. -- so we are not quibbling and you understand
it.
Documents were released on Friday that had never
before been released
to the public; correct?
A. Well I think that's correct.
Q. And those documents came from the Minnesota depository;
correct?
A. Yes, that's right.
Q. And the documents were placed in the Minnesota
depository as a
result of this lawsuit; correct?
A. I believe that's correct.
Q. And documents were placed in England in a depository;
correct?
A. I believe that's correct.
Q. And those documents have not been released yet
on the Internet.
A. I -- I don't know about that, sir.
MR. CORRIGAN: Objection, Your Honor, that's the
subject of a pending
motion before the court.
THE COURT: And do you want the answer stricken,
counsel?
MR. CORRIGAN: I was not able to hear the answer,
Your Honor, because I
was making an objection.
THE COURT: I wasn't either because you interfered.
We've been through
this before. I'll sustain your objection and strike his answer, whatever
it
may have been.
MR. CORRIGAN: Thank you.
THE COURT: Okay.
BY MR. CIRESI:
Q. Now, these documents that have been discovered
over the past four
years in this case were provided to the other states; weren't they?
A. I don't know that, sir.
Q. Have you heard the term "the Minnesota select
documents?"
A. Yes. Congressman Bliley raised them with me,
yes.
Q. He did.
A. Yes, he mentioned that. I didn't know what he
was talking about,
frankly.
*39 Q. And Congressman Bliley -- I'm not talking
about recently, but a
while back -- subpoenaed some documents; didn't he?
A. Yes, he did.
Q. And those were from Minnesota; correct?
A. I believe that's right.
Q. And those were turned over; weren't they?
A. I believe they were, yes.
Q. And they led to the subsequent hearings that
you went to; isn't that
correct?
A. Well I don't know if they led to the hearings
or not. I don't know
that's the case.
Q. You and others were asked about those documents;
weren't you?
A. At the -- at the congressional hearing?
Q. Yes.
A. I can't recall that.
Q. But it was at those hearings where you first
said publicly that
nicotine was addictive; isn't that right, sir?
A. I made my position clear -- or our company's
positions clear at that
congressional hearing.
Q. Cigarettes were addictive.
A. Well would you like me to say exactly what I
said?
Q. You may say exactly what you said, sir.
A. Well thank you, because I would like to be able
to read it. We went
public with this statement in October 1997 and we said on the subject
of
addiction that we recognize that nicotine as found in cigarette smoke
has
mild pharmacological effects and that under some definition cigarette
smoking is addictive. The word "addiction" has been and is currently
used
differently by different people in different contexts, and the definition
of the term has undergone significant changes over the past several
decades. In 1964, for example, the Advisory Committee to the Surgeon
General of the United States concluded that smoking, although
habit-forming, did not fit within its definition of addiction. However,
in
1988 the Surgeon General redefined the term and concluded that smoking
is
addictive. We have not embraced those definitions of addiction which
do not
include historically accepted and objective criteria such as intoxication
and physical withdrawal as important markers. We acknowledge that our
views
are at odds with those of the public health community, but in the last
analysis there is little point to a continuing public debate about
the
definition of a word used both colloquially and technically to describe
many different kinds of behavior. We continue to believe that people
can
quit smoking if they resolve to do so, but we recognize that it can
be
difficult to quit. Accordingly, to ensure there is a single consistent
public health message on the issue of addiction, we will refrain from
debating the issue other than is necessary to defend ourselves and
our
opinions in the courts and other forums in which we are required to
do so,
and we will also defer to the judgment of the public health authorities
as
to what health warning messages concerning addiction will best serve
the
public interest as reflected in the proposed new health warnings. That's
the statement.
Q. Who wrote that for you?
A. I beg your pardon, sir?
Q. Who wrote that for you?
A. That was drawn up, I think, by our scientists
and our lawyers
together, and myself.
*40 Q. Did they use the internal documents of Philip
Morris to draw it
up?
A. I have no idea, sir.
Q. Now, they said that in 1964 the Surgeon General
said it was
habituation and not addictive; correct?
A. I think he said it was habit-forming.
Q. Habit-forming. And you saw in your own deposition
you recognized
that after all kinds of internal secret documents came out, the FDA
took a
different position on nicotine and its addictiveness; isn't that right?
In
cigarettes.
A. Could you remind me what I said, please?
Q. I certainly will, sir. Do you have your deposition
in front of you?
A. Yes.
Q. Would you look at page 45.
A. Mine starts at page 48 actually.
Q. Your deposition, sir.
A. Oh, my deposition. Sorry.
Q. Do you remember the question?
A. Yes.
Q. "And I place before you Exhibit 7-A, which is
the executive summary,
and I'd ask you, please, sir, kindly turn to page X. Are you aware
that the
Food and Drug Administration, after a considerable period of taking
testimony, concluded that 'There is a emergence of scientific consensus
that cigarettes and smokeless tobacco cause addiction to nicotine and
the
disclosure of thousands of pages of internal company documents detailing
that these products are intended by the manufacturers to affect the
structure and function of the human body. This new evidence justifies
the
agency's determination that cigarettes and smokeless tobacco are delivery
systems for the drug nicotine.'
"Now my question to you, sir, is, are you broadly
aware that they made
that finding?
"Answer: Yes, I am."
Now you gave that under oath.
A. Yes, that's right.
Q. And I think you said, oh, it was more like six
months ago, when I
asked you if it was seven. Remember that?
A. You mean this morning.
Q. Yes.
A. Well yes. Isn't it six months ago?
Q. Now --
A. August.
Q. In 1964 did the tobacco companies provide all
their internal
documents to the Surgeon General regarding nicotine and its addictiveness?
A. Which year, sir?
Q. 1964.
A. Not to my knowledge. I don't know.
Q. And shortly after the 1964 Surgeon General's
report came out, did
the World Health Organization change its definition of addiction?
A. I don't know.
Q. Have you asked that question?
A. I don't think I have, sir.
Q. In 1988 did the Surgeon General find that nicotine
is addictive and
cigarette smoking is addictive?
A. Yes, I believe he did.
Q. And --
A. As I have said in my statement.
Q. -- in 1988 did the defendants, your company and
the other
manufacturers of cigarettes, provide to the Surgeon General all of
the
documents you had internally regarding the addictiveness of cigarette
smoking?
A. I don't know, sir.
Q. Nobody's ever told you they did.
A. No, nobody's ever told me they have.
Q. The fact is those documents didn't come out until
after this lawsuit
was started; isn't that right, sir?
A. Well I don't know, but it may be a fair assumption.
*41 Q. Let's take a look at some of the documents
your company had over
the years --
A. Uh-huh.
Q. -- that were not provided to public health authorities.
MR. BLEAKLEY: Your Honor, we've going for about
an hour and a half and
it's a quarter to 1:00. I wonder if this would be an appropriate time
to
break for lunch.
THE COURT: I think it's been about an hour and 15
minutes, but I think
we can break for lunch.
We'll reconvene at 10 minutes after 2:00.
THE CLERK: Court stands in recess.
(Recess taken.)
THE CLERK: All rise. Court is again in session.
(Jury enters the courtroom.)
THE CLERK: Please be seated.
THE COURT: Counsel.
MR. CIRESI: Thank you, Your Honor.
Good afternoon, ladies and gentlemen.
(Collective "Good afternoon.")
BY MR. CIRESI:
Q. Good afternoon, Mr. Bible.
A. Good afternoon, sir.
Q. When we recessed, I said we'd like to visit with
you a little bit
about the Philip Morris documents regarding nicotine and addiction.
Do you
recall that, sir?
A. Yes, I do.
Q. Can you direct your attention to Exhibit 10255,
which is in volume
one, sir. Do you have it, sir?
A. Yes, I do.
Q. All right. And you see this is a Philip Morris
interoffice
correspondence marked "PERSONAL & CONFIDENTIAL" dated August 12th,
1980;
correct?
A. Yes, correct.
Q. And it's to Dr. R. B. Seligman and directors;
correct?
A. Yes.
Q. Who are directors?
A. Who are the directors?
Q. Yes.
A. Today or then do you mean?
Q. That would be the board of directors; correct?
A. Well I don't know. I would --
That's what I would imagine it to mean.
Q. Okay. And this is back in 1980, and it's a memo
from Dr. Osdene;
correct?
A. Yes, it is.
Q. And you know Dr. Osdene testified here by way
of deposition.
A. I knew he came -- or I knew he testified, yes.
Q. Okay. And the subject of this is "Evaluation
of Major R&D Programs;"
correct?
A. Yes.
Q. So the board was being advised of major R&D
programs that were being
suggested by Dr. Osdene and which he felt were in order of the highest
priority; correct?
A. Well yes. I would just perhaps qualify what I
said earlier. You -- I
don't know if that would be the board of directors or directors of
Philip
Morris U.S.A. where many people have titles, directors of the particular
function.
Q. Sir --
A. So I don't know. It could be and it could not
be, I just don't know.
Q. Fair enough. It's either the directors of Philip
Morris U.S.A. or
the board of directors; correct?
A. That would be right, yes.
Q. And number five, do you see that, "Nicotine Program?"
A. Yes, I do.
Q. "This program includes both behavioral effects
as well as chemical
investigation. My reason for this high priority is that I believe the
thing
we sell most is nicotine." Do you see that?
*2 A. Yes, I do.
Q. Now did Philip Morris, to your knowledge, ever
publicly advise
consumers that the thing they sell most is nicotine?
A. Not to my knowledge, no.
Q. Has it ever so advised the public during the
course of your tenure
as CEO and chairman?
A. No, because I believe we sell cigarettes and
other products.
Q. Okay. It has never so advised; is that correct?
A. That's correct, sir, yes.
Q. Can you direct your attention, sir, to Exhibit
18 -- before we --
Let me ask you one thing about this. Did Philip
Morris ever provide
this to the Surgeon General?
A. Which, sir?
Q. Exhibit 10255.
A. I don't know.
Q. Is this one of the documents that just was recently
released last
Friday?
A. Well I don't know.
Q. Well if it was part of the Minnesota documents
that you produced
over the last four years, is it fair to assume that it was released
last
Friday?
A. Well I would have thought so, it's one of the
30 million pages, yes.
Q. Well you didn't have 30 million pages in there;
did you, sir?
A. No, but I thought all the documents totaled 30
million pages.
Q. Do you know how many there were here in Minnesota
alone of those
what you call 30 million?
A. No, I don't. I thought they were all here in
Minnesota actually.
Q. All right. Are you aware of a depository in England?
A. I've read about that. Certainly Philip Morris
doesn't have a --
doesn't have a depository in England.
Q. And how many Philip Morris documents were provided
to the Minnesota
depository, if you know?
A. No, I don't know.
Q. Now if this was one of those, then the first
time it would have been
made public would have been on the Internet last Friday; correct?
A. If it was one of those.
Q. Please direct your attention, then, to Exhibit
18089, which would be
in volume two, sir.
A. Yes, I have that.
Q. Now you know who Dr. Dunn is?
A. I've heard his name.
Q. He was in the research and development department
at Philip Morris;
correct?
A. Yes, that's my understanding.
Q. For a long time; correct?
A. I don't know.
Q. If you could, sir, would you direct your attention
--
This is called, by the way, "MOTIVES AND INCENTIVES
IN CIGARETTE
SMOKING;" correct?
A. Yes, that's the title.
Q. And have you ever seen this document before?
A. No. It means nothing to me. I don't recollect
ever seeing it.
Q. All right. Let me represent to you that it's
Dr. Dunn's report on a
meeting that took place among 25 scientists on the Dutch side of St.
Martin
in 1972. Can you accept that, sir?
A. Well I'll accept that, certainly.
Q. All right. And if you would turn, then, to page
four.
A. Yes, I have that.
Q. All right. And I'd also like to represent to
you that the San Martin
conference was called by The Council for Tobacco Research. Can you
assume
that?
A. Well if you tell me that, I'll assume that, yes.
Q. Well why don't you turn to the previous page
and you'll see that it
was. Second full paragraph.
*3 A. That page --
Page three?
Q. Page three, yes. The San Martin conference was
called" --
A. Yes, that's what it says.
Q. All right. Now turn to page four then, sir.
A. Uh-huh.
Q. Now do you see the paragraph that starts, "The
majority of the
conferees would go even further and accept the proposition that nicotine
is
the active constituent of cigarette smoke. Without nicotine, the argument
goes, there would be no smoking. Some strong evidence can be marshalled
to
support this argument." See that?
A. Yes, I do.
Q. Now do you know if the scientists who were gathered
on San Martin
were provided with all the internal documents of the defendant
manufacturing companies?
A. Sir, I have no idea.
Q. Now Dr. Dunn reports, "No one has ever become
a cigarette smoker by
smoking cigarettes without nicotine." Do you see that?
A. Yes, I do.
Q. "Most of the physiological responses to inhaled
smoke have been
shown to be nicotine-related." Do you see that?
A. Yes, I do. That's what it says.
Q. Now you mentioned the other day that Philip Morris
had had a
cigarette that had .01 milligrams of nicotine; correct?
A. I think that's what it had, yes.
Q. And it was a flop; wasn't it?
A. It did not succeed.
Q. And when it first came out people bought it,
though; didn't they?
A. I think people bought it and tried it. It was
in test market.
Q. And if you go down to number three there --
A. Yes.
Q. -- "Despite many low nicotine brand entries into
the marketplace,
none of them have captured a substantial segment of the market. In
fact,
critics of the industry would be well to reflect upon the indifference
of
the consumer to the industry's efforts to sell low delivery brands.
94
percent of the cigarettes sold in the U.S. deliver more than 1 milligram
of
nicotine. 98.5 percent deliver more than .9 milligrams. The physiological
response to nicotine can readily be elicited by cigarettes delivering
in
the range of 1 milligram of nicotine." Do you see that, sir?
A. Yes, that's what it says.
Q. Now have you ever discussed with your scientists
whether they
designed the cigarettes so that there would be a threshold value of
nicotine in those cigarettes?
A. No, we've never -- I've never discussed that,
and I don't think
we've ever done that. But I can say --
When was this, sir, back in 19 --
Q. 1972.
A. Right.
Q. And you've answered my question, sir.
A. I did want to make a comment.
Q. Well again -- and I'm not allowed to comment,
but I would point out,
sir, that your lawyer will have a chance to ask you any questions he
wants
to.
A. Thank you.
Q. All right?
If you go on to the next page then, I want to know
if you agree with
this statement: "Why then is there not a market for nicotine per se,
to be
eaten, sucked, drunk, injected, inserted or inhaled as a pure aerosol?
The
answer, and I feel quite strongly about this, is that the cigarette
is in
fact among the most awe- inspiring examples of the ingenuity of man."
Would
you agree with that?
*4 A. Well that's what it says. I don't know that
I would agree with
it.
Q. Okay. Do you disagree with that?
A. Do I disagree with it, that it's one of the most
awe- inspiring
examples of the ingenuity of man? I disagree with that.
Q. Okay. The next statement says, "The cigarette
should be conceived
not as a product but as a package. The product is nicotine." Do you
agree
with that?
A. No, I don't agree with that. I believe the product
is a cigarette.
Q. Now if you go further, "Think of the cigarette
pack as a storage
container for a day's supply of nicotine." Do you see that?
A. Yes, I do.
Q. And then Dr. Dunn goes on and states why that
is. He gives two
reasons; correct?
A. Yes, he does.
Q. Then he says, "Think of the cigarette as a dispenser
for a dose unit
of nicotine." Do you see that?
A. Yes, I see that. That's what it says.
Q. And then he goes on and states the reasons for
that; correct?
A. Yes, he gives threes reasons.
Q. Okay. And what he's talking about here is a drug-delivery
device;
isn't he?
A. Well I don't know if I'd call it that, sir. He's
describing a
cigarette, I think.
Q. And he's describing it in terms of a drug-delivery
device; wouldn't
you agree?
A. Well no, I would probably argue with that.
Q. Okay. Let's go on to the next page.
"Think of a puff of smoke as the vehicle of nicotine."
Do you see that?
A. Yes, I do.
Q. And then next, "The smoker has wide latitude
in further
calibrations: puff volume, puff interval, depth and duration of inhalation.
We have recorded wide variability in intake among smokers. Among a
group of
pack-a-day smokers, some will take in less than the average half-pack
smoker, some will take in more than the average two-pack-a-day smoker."
Do
you see that?
A. Yes, I do.
Q. Now would you agree that what is being described
there is the self-
administration of nicotine?
A. No, I wouldn't. I would simply say that smokers
smoke cigarettes in
different ways.
Q. So you just wouldn't agree with the character
-- caricature or
description of the cigarette as a drug-delivery device; correct?
A. I disagree with that, yes.
Q. Let's go back, then, to Exhibit -- strike that.
Let me ask you one other thing. Do you know if this
document was
provided to the Surgeon General?
A. No, I don't know that, sir.
Q. Was it provided to the FDA?
A. I don't know. I don't know. I wasn't here in
1970.
Q. Was the previous document we looked at from Dr.
Seligman, which went
to the -- excuse me, Dr. Osdene, which went to Dr. Seligman and the
directors, provided to the FDA?
A. No, I don't know that either, sir.
Q. Can we then go to Exhibit 11559 , which is one
that we looked at
briefly this morning. You recall that's the one that dealt with TABLE?
A. Well would you let me get to it?
Q. Sure.
A. I'll see if I can recall it.
Yes, I have it.
Q. Okay. And that's by Ms. Reuter; correct?
*5 A. Yes, that's correct.
Q. And you recall we discussed that briefly this
morning.
A. Yes.
Q. Now Dr. Dunn, he was in the research and development
department;
correct?
A. Yes.
Q. Now if we go to the first page, you'll recall
we discussed that this
morning, that dealt with the issues of cocaine and morphine and atropine
and getting to the brain in eight to 10 seconds. Do you recall that
testimony?
A. Yes, I remember the part about cocaine, quinine,
morphine, yes.
Q. Okay. And if you go to the next page, Ms. Reuter
also describes the
cigarette as a nicotine-delivery device; doesn't she?
A. Yes, she does.
Q. "Nicotine delivery devices range from snuff,
chewing tobacco,
cigars, pipes and conventional cigarettes to unique smoking articles,
chewing gum, patches, aerosol sprays and inhalers." Correct?
A. Yes, that's what she says.
Q. Now, do you understand what a competitive analysis
is?
A. It would depend upon the context, sir, but it
-- I would have
thought that in general terms you would be looking at what your competitors
are doing.
Q. And you're looking at what your competitors are
doing in order to
determine whether or not you might want to be in competition with them;
correct?
A. That would be a fair analysis, yes.
Q. One of the reasons to do that is you'd want to
protect your markets;
correct?
A. Your markets, yes. You might want to grow your
market share.
Q. You might want to grow your market share; correct?
A. Correct.
Q. And the reason you want to do that is you want
to develop revenue or
enhanced revenue; correct?
A. Yes. That's one of my jobs.
Q. And in order --
And you want to do that in order to generate profits;
correct?
A. Correct, sir, uh-huh.
Q. And in doing so, you want to make a safe product;
correct?
A. I'd like to, yes.
Q. Well you want to; don't you?
A. I'd like to, yes, sir.
Q. Is there a difference to you between liking to
and wanting to?
A. Oh, I don't see any difference, no.
Q. Now this is a competitive analysis; isn't it,
sir?
A. Well let me look at it, sir.
Q. Why don't you just look at the first page under
the word "TABLE."
A. Yes, that's what it's titled.
Q. Okay. Then if we go back to the page one, it
says "COMPETITIVE
ANALYSIS" at the top; doesn't it?
A. It does.
Q. And then the page we were on that's on the overhead
right now, it
says "COMPETITIVE ANALYSIS;" correct?
A. It does.
Q. Indeed, if you look all the way through the first
part of this
document, it all says "COMPETITIVE ANALYSIS;" doesn't it?
A. That's what it's titled, yes.
Q. And on the front page it shows that the competitive
analysis is the
first part of the document, then organization is the second part, and
the
production part of it will follow; correct?
A. That's what it says.
Q. Now if we go back to the page we were on, you'll
see that Ms. Reuter
sets forth the nicotine-delivery devices, the major producers, the
target
market, and the motivation; correct?
*6 A. Yes, those are the headings.
Q. And under "Cigarettes," the motivation is "nicotine
and smoking
pleasure;" correct?
A. That's correct. That's what it says.
Q. And this was being prepared for management; wasn't
it, sir?
A. Yes, I think that's a fair --
Well I don't know, actually.
Q. Well --
A. It doesn't say to whom it was addressed.
Q. Competitive analyses are prepared for management;
are they not?
A. Well not necessarily. You could be doing it for
yourself. But I
don't know who she prepared it for, frankly.
Q. If you go back, then, to the page we were on,
which bears the Bates
number 666.
A. Yes.
Q. Each one of those nicotine-delivery devices,
including cigarettes,
sets forth the major producers, the motivations and the target; isn't
that
right?
A. We have major producers, motivation, target,
yes.
Q. Okay. And if you go on to the next page we will
see that Ms. Reuter
goes through a number of the other nicotine-delivery devices; correct?
A. As she describes them, yes.
Q. And many of them deal with, on that page, smoking
cessation and
nicotine reduction; don't they?
A. Yes.
Q. In fact, every single one on that page deals
with that; correct?
A. Well I don't think that's quite accurate, sir.
Q. Well they all have either reduction or smoking
cessation in the
motivation for them; correct?
A. One or the other, yes.
Q. Yes. And we see that in the target market, it's
basically for men
and women smokers or former smokers or quitters; fair?
A. Yes, that's fair.
Q. And if we go on to the next page, sir, we look
at the market size of
the competitive products; correct?
A. Yes, that's the title.
Q. And cigarettes are by far the largest at 45 billion
dollars;
correct?
A. Yes, that's correct.
Q. And that's in 1991.
A. Yes, that's correct.
Q. And then there's an estimated 1992 nicotine patch
prescription
sales; correct?
A. Yes, that's correct.
Q. Now if we look down at the bottom, then, there's
a report, narrative
report by Ms. Reuter regarding those competitive products; correct?
A. Well could I just read it to see what --
Q. Certainly. Certainly.
A. So how did you describe this?
Q. This is the "Competitive Products-Recent Trends"
as stated by Ms.
Reuter; correct?
A. Yes, that's a fair summary.
Q. And she reports here that in the last five years,
the scientific
community in both the United States and Europe had been pursuing innovative
nicotine delivery systems to either replace or transform the worldwide
cigarette business as Philip Morris knows it; correct?
A. As we know it, yes, that's what she says.
Q. And she talks about the majority of the patent
activity has been
focused on transdermal and nasal delivery systems, although more recent
work has moved into tablets and injectable nicotine; correct?
A. That's what it says, yes.
Q. And she points out that the primary motivation
for the products is
smoking cessation through a controlled, gradual reduction in nicotine
delivery; correct?
*7 A. That's what it says, yes.
Q. Now when someone is addicted, do you know if
doctors prescribe for
them serially-reducing products of the addictive substance?
A. I don't know that.
Q. Never heard that.
A. No, I've not heard that. I don't know how it
works.
Q. Have you had any discussion regarding nicotine
patches at the board
of Philip Morris?
A. Not to my knowledge, no.
Q. Never.
A. Not to my knowledge ever.
Q. Have you had any discussion about nicotine patches
and competitive
products for cigarettes with any of your managers?
A. I don't recall any at all, sir, no.
Q. Now Ms. Reuter, in this part of the report, goes
on to state that
there are barriers that have characterized the tobacco business; correct?
A. Barriers to entry.
Q. Barriers to entry. And that means barriers to
entry to the market;
correct?
A. I'd have thought so.
Q. And the cigarette industry is known as an oligopoly;
correct?
A. I didn't know it was known as an oligopoly.
Q. Well it's --
At least it's referred to that by Ms. Reuter.
A. It's referred to her --
Q. "Oligopolistic" --
A. Yes, she --
Q. -- "tobacco industry."
A. She refers to that in that -- in that -- in those
words, yes.
Q. That means that there are very few providers
of the product in the
market; doesn't it?
A. That's what it means. That isn't the case in
the tobacco industry,
though, sir.
Q. That's what it means; isn't it, sir?
A. An oligopoly?
Q. Yes.
A. That would mean a few number.
Q. And in the United States, what percentage does
Philip Morris have of
the domestic cigarette market?
A. Are you talking today or back when --
Q. Today.
A. Today? We have about 48 percent, I think.
Q. Forty-eight percent.
A. Uh-huh.
Q. And in 1992 --
A. Uh-huh.
Q. -- what did you have?
A. Well it -- it would be --
This is a bit of a guess, but around 42, I'd say.
Q. Forty-two.
A. Hmm.
Q. And what did RJR have at that time?
A. Oh, I'd say about -- again a bit of a guess,
but around 32.
Q. Thirty-two.
A. Uh-huh.
Q. So between the two of you in 1992, you had about
70 percent of the
market.
A. That would be roughly.
Q. Who was third at that time?
A. Well it would be fairly close. Probably Brown
& Williamson.
Q. And what did they have, sir?
A. Oh, I don't recall. My sense would be 14 or something
like that.
Q. Fourteen percent.
A. Uh-huh.
Q. So now we're up to 88 percent.
A. Yes.
Q. Who was next?
A. There would be Lorillard and American Brands,
I guess. And then --
Q. They had the balance of the market?
A. No. Then the Liggett & Myers, and then there
are a number of
importers.
Q. Okay. What did American have?
A. I don't recall.
Q. But we do know that the top three had 88 percent
of the market.
A. It would be in that area, yes.
Q. Now today you said Philip Morris has approximately
48 percent of the
market; correct?
*8 A. That's right.
Q. And what does RJR have today?
A. I'd say about 25 percent.
Q. And is Brown & Williamson still the third
largest?
A. Yes, it is.
Q. And what do they have?
A. I'd say about 16, 17 percent.
Q. Okay. So the top three now have about 80 percent;
is that right?
A. Yes. But I should tell you that about two years
ago Brown &
Williamson acquired one of the other companies.
Q. Okay. That would be American; correct?
A. That's right.
Q. Now Ms. Reuter puts out here that "In addition,
the nature of
competitive product development relies on legal protections afforded
the
technological innovation" --
A. Could you refer me to that, please, sir?
Q. Sure. It's right at the bottom, sir.
A. Of page four?
Q. Yes.
A. I'm sorry, I can't find it. Will you tell me
which page?
Q. The last paragraph, page four, second sentence.
"In addition" --
A. Oh, yes, I see it. I'm sorry.
Q. Do you know what she's referring to there?
A. No, I don't know what she's referring to.
Q. Were the competitive products regulated by the
FDA?
A. I don't know.
Q. Do you know if patches are regulated?
A. No, I don't know.
Q. Do you know if aerosol sprays or inhalers are
regulated in any way?
A. Which type of aerosol?
Q. Any type.
Nicotine aerosol. I'm sorry.
A. I didn't know that there are any.
Q. Okay. Can you direct your attention, then, to
the next page where
Ms. Reuter goes into the competitive analysis.
Now do you remember this morning when I first asked
you about TABLE,
you weren't familiar with it?
A. Right.
Q. But you said you'd come out with a new product
-- or you were about
ready to test market a new product?
A. Yes. We have a new product that's in consumer
home testing, yes.
Q. And that's a product that is intended to supplement
the cigarette
business?
A. I don't know what you mean by "supplement." It
would be a product in
our tobacco business, yes.
Q. Is the tobacco heated or burned?
A. I described it this morning as tobacco being
heated.
Q. Heated.
A. Heated, yes.
Q. What's the name of the product?
A. Accord.
Q. Do you know if Accord came from the TABLE project?
A. TABLE project?
Q. Yes.
A. I don't know, sir.
Q. All right. If you look at the competitive analysis,
in the very
first part do you see where the Premier cigarette is referred to, the
one
put out by RJR in 1987?
A. Yes.
Q. And it's described there; is it not?
A. Yes, it is.
Q. And Ms. Reuter states that "In fact, only one
domestic company has
attempted to commercialize a new type of nicotine delivery device;"
correct?
A. Yes, that's what she says.
Q. And it looked like a cigarette, but it consisted
of a carbon heat
source, a reservoir of nicotine and glycerol, and aluminum oxide pellets
and a weakly efficient filter system. Do you see that?
A. Yes, I do.
Q. And it was offered in two test markets and didn't
do well and was
closed in early '89; correct?
*9 A. Yes, that's what it says.
Q. But it had a number of key attributes; correct?
A. Yes, that's what it says.
Q. Zero biological activity; correct?
A. Right.
Q. And what's zero biological activity?
A. Well I don't know that I'm qualified to describe
that.
Q. That means that it wouldn't be cancer-producing;
doesn't it, sir?
A. Well I don't know. But if you tell me that's
what it means, I'm
prepared to accept that.
Q. And no ashes, no minimal -- or minimal sidestream
smoke, and limited
fire safety problems; is that right?
A. That's what she says.
Q. And then in the next paragraph it's pointed out
that RJR, based on
its patent activity, maintained a strong commitment to new smoking
devices;
correct?
A. Well you went a bit quickly. Could I --
May I read it?
Q. Absolutely, sir.
A. Well yes. What did you --
How did you describe it? Or could I have your question
again, please?
Q. Sure.
MR. CIRESI: Could we have the question back, please.
(Record read by the court
reporter.)
A. Yes, that's what it says, yes.
Q. And it pointed out that Reynolds was not alone
in pursuit of a
better cigarette; correct?
A. That's right, it says that.
Q. And it's pointed out in the next paragraph that
the pharmaceutical
companies are pursuing substitute nicotine-delivery devices in a range
of
formats; correct?
A. Yes, it does say that.
Q. Now in the very next paragraph, then, it says
what Philip Morris has
decided to do based on this competitive analysis; doesn't it?
A. Well may I read it?
Q. Sure.
A. Thank you.
Yes, I've read it.
Q. All right. Now it's pointed out in there that
Philip Morris had
chosen to pursue a nicotine-delivery device that like RJR's Premier,
continues the cigarette tradition of sucking on a cylindrical mouthpiece
to
inhale flavorings and nicotine from a tobacco-based product; correct?
A. That's what it says.
Q. And it says "The approach of heating rather than
burning the tobacco
produces a cleaner, safer smoking experience;: Correct?
A. That -- that's what it says, yes.
Q. "Known by the code name of Table, the product
has the potential to
replace the conventional cigarette - in much the same way that cigarettes
replaced chewing tobacco over a hundred years ago - as a more socially
acceptable form of tobacco use;" correct?
A. That's what it says, yes.
Q. And the Accord is that cigarette; isn't it, sir?
A. Well I think probably she's described parts of
what Accord is, and
this may well have been a paper that was referring to the development
of
that cigarette.
I should add that I don't believe this lady is skilled
in the
scientific area at all.
Q. Well let me ask you something. At Philip Morris,
do you have
employees writing competitive analyses for superiors and people in
management who are not skilled?
A. In scientific matters?
Q. Yes.
A. Yes, we do have people who are not skilled in
scientific matters.
*10 Q. And do they utilize the resources available
to Philip Morris in
writing the competitive analysis?
A. Well they should if they have need to.
Q. Yes. And so if Ms. Reuter had need to utilize
scientific resources
available at Philip Morris, she would do so in writing this competitive
analysis; wouldn't she?
A. Well I'd have thought she should have. I don't
know if she did.
Q. But throughout this competitive analysis, which
is a Philip Morris
document, the cigarette is referred to as a drug- delivery device;
isn't
it?
A. That was described as a -- I think a nicotine-delivery
device.
Q. And as you go through the balance of this document,
you'll see that
there is a patent search that's been conducted for other nicotine-delivery
devices; correct? Starts on the next page. It's called "PATENT SEARCH."
A. Yes. I don't know that it covers exclusively
nicotine though.
Q. All right. Well there's a patent search in any
event; correct?
A. That's quite right, yes.
Q. And you know that patent searches are utilized
to determine what the
competition might be doing; correct?
A. Yes, I do.
Q. And if the competition was trying to find a safe
way to deliver
nicotine, Philip Morris would want to know that; wouldn't they?
A. Yes, we would want to know that.
Q. And in fact that's what Ms. Reuter was doing
here; wasn't she?
A. I don't know what she was doing, actually.
Q. Have you ever seen a document in Philip Morris
that said, "Ms.
Reuter, we don't call cigarettes nicotine-delivery devices here because
they're not nicotine-delivery devices?"
A. No, I've not seen one.
Q. Okay. Do you know if this document was provided
to the FDA?
A. I -- I -- I don't know. It may well have been,
but I don't know.
Q. Do you know if it was provided to the Surgeon
General?
A. I don't know.
Q. Isn't it a fact the first time it was made public
by Philip Morris
was last Friday?
A. Well I don't know that either.
Q. Okay.
A. If it was amongst those documents, it would have
been made public
last Friday, but I don't know if that was the first time or not.
Q. If I represent to you, sir, that this was a document
that was
produced in the Minnesota litigation since 1994, would it be fair to
assume
that the first time Philip Morris released it to the public was last
Friday
when they put it on the Internet?
A. It may be.
Q. Now other scientists at Philip Morris have called
the cigarette a
potent pharmacological device; have they not?
A. I've not heard that.
Q. Pardon me?
A. I don't think I've heard that.
Q. Can you direct your attention to Exhibit 10523.
A. Yes, I have that.
Q. Now this is a document that's in evidence, it's
a handwritten note
by Dr. Charles to Dr. Osdene. These were individuals that you know
to be in
your research and development department?
A. Yes, they are.
Q. And Dr. Charles was the manager of the biochemistry
group, vice-
president of research?
*11 A. I don't know what his title was.
Q. You know that Dr. Osdene was director of research;
don't you?
A. No, I don't know that. But I -- I know that they
were both prominent
in the research and development area.
Q. And do you see the date up there, it's December
-- or excuse me,
February 23rd, 1982?
A. Well I -- I can't read that. It could be '82.
It's quite hard to
read. But I -- I -- I won't dispute it.
Q. All right. Let me see if I can help you, sir,
because I understand
it's difficult to read.
A. Oh here, further down there's a reference to
'82.
Q. Okay. And this is the form in which the document
was produced by
Philip Morris. Do you understand that?
A. Yes, I believe you.
Q. Okay. On February --
Well let me back up. "Comments on 'Future Strategies
for the Changing
Cigarette,' National Conference on Smoking and Health." Do you see
that?
A. Yes.
Q. "On February 22nd, 1982 (the day of the 1982
Surgeon General's press
conference on Smoking and Health) you asked me to review the subject
document and provide you with comments. The comments below are those
of a
concerned employee with a 20-year association with PM R&D, of which
the
past 10 years have been directly involved with smoking and health related
research. I consider myself well trained in the biological and chemical
sciences and qualified to make the following comments which would be
--
which should be taken as constructive criticism with suggestions as
to how
to approach the solution to some of the problems. You may shred this
document, have it typed as is, incorporate the suggestion in a position
paper for upper management or use the document in any way you see fit."
Now sir, let me read one more part before we go
on. "This company is in
trouble. The cigarette industry is in trouble. If we are to survive
as a
viable commercial enterprise we must act now to develop responses to
smoking and health allegations from both the private and the government
sectors." Do you see that?
A. Yes, I do.
Q. Now Dr. Charles was a long-time employee of Philip
Morris; was he
not?
A. Well I don't know how long he was there, but
I do remember him being
around. Probably -- well he was there when I first came to the United
States, and that's about 15 years ago.
Q. Okay. At least in 1982 he says he had already
been there 20 years;
correct, sir?
A. Uh-huh.
Q. And how long after 1982 did he stay there?
A. Oh, I did --
I can't quite tell you that exactly. I would say
four or five years ago
that he left.
Q. Four or five years ago?
A. Three or four years ago, something like that.
Q. So 1994.
A. Could be. I may have that wrong by a couple of
years.
Q. Can you direct your attention to the last page.
A. Yes.
Q. I'm sorry, page four, which is the second-to-the-last
page.
A. Right, uh-huh.
Q. Down towards the bottom he says, "Let's face
the facts," doesn't he?
A. Yes, that's what it says.
Q. "Cigarette smoke is" -- and he underscores "is"
-- "biologically
active." Correct?
*12 A. Yes.
Q. That means it affects human beings in a biological
fashion; correct?
A. Well I would think that's right, uh-huh.
Q. And he says, "A. Nicotine is a potent pharmacological
agent. Every
toxicologist, physiologist, medical doctor and most chemists know that.
It's not a secret." Do you see that?
A. Yes, I do.
Q. Okay. He uses the word "potent;" correct?
A. Yes, he describes it as such.
Q. He doesn't say it's a mild pharmacological agent;
does he?
A. No.
Q. And he wrote this at a time where it wasn't intended
to be used in
litigation as far as you know; correct?
A. I don't know why he wrote it.
Q. You don't. Well we know one reason he wrote it
is because his
superior, Dr. Osdene, asked him to review the Surgeon General's press
conference on smoking and health. That's right on the first page; correct?
A. Yes, that's what he says.
Q. Okay. And if we go back, then, to page four,
--
A. Uh-huh.
Q. -- "Cigarette smoke condensate applied to the
backs of mice causes
tumors." Is that right?
A. That's what it says, yes.
Q. That's another fact he wants the company to face;
correct?
A. Yes. That's how it's described.
Q. Another thing he says is "Hydrogen cyanide is
a potent inhibitor of
cytochrome oxidase - a crucial enzyme in the energy metabolism of all
cells." Do you see that?
A. Yes, that's what it says.
Q. And that means it affects the enzymatic action
of cells; correct?
A. Well I presume so. I -- I really can't comment
on that.
Q. Do you know if it's in the cells where malignancy
develops?
A. Yes, I understand that.
Q. Did Philip Morris in 1982 provide this type of
information to the
Surgeon General?
A. I don't know, sir. I wasn't here in 1982.
Q. Do you know if this is another document that
was produced in the
Minnesota litigation?
A. I don't know.
Q. Do you know if for the first time you disclosed
this to the world on
the Internet last Friday?
A. Well I don't know that, sir.
Q. If it was produced in the Minnesota litigation
and it was one of the
Minnesota select documents, then it would have been on the Internet
last
Friday; correct?
A. I believe so, yes.
Q. You made the decision to do that; didn't you,
sir?
A. Yes, I did, sir. I was one of the people that
made the decision to
do that.
Q. You said, "Get the documents on the Internet;"
correct?
A. I said we would put the documents on the Internet,
yes.
Q. Now in 1988 the Surgeon General, as you said,
found that nicotine
was addictive; correct?
A. Yes, that's my recollection.
Q. And he compared it to cocaine; didn't he?
A. That's my recollection.
Q. Just as we saw in the TABLE document; correct?
A. Yes, that was also correct.
Q. Ms. Reuter mentioned cocaine in the TABLE document;
didn't she?
A. That's right, yes. As I said, though, she's not
a scientist, to the
best of my knowledge.
Q. Did scientists work on the Surgeon General's
report in 1988?
*13 A. I would expect so.
Q. And sir, can you turn to Exhibit 3820 in volume
one.
A. Yes, I have that.
Q. It's entitled "The Health Consequences Of Smoking,
NICOTINE
ADDICTION, a report of the Surgeon General;" correct?
A. Yes.
Q. And if you go to the next page, you'll see the
major conclusions;
correct?
A. Yes.
Q. "1. Cigarettes and other forms of tobacco are
addicting;" correct?
A. Yes.
Q. "2. Nicotine is the drug in tobacco that causes
addiction." Correct?
A. That's what it says, yes.
Q. "3. The pharmacologic and behavioral processes
that determine
tobacco addiction are similar to those that determine addiction to
drugs
such as heroin and cocaine." Correct?
A. That's what it says, yes.
Q. And there were eminent scientists that participated
in the
investigation which led to the 1988 Surgeon General's report; correct?
A. I don't know.
Q. Have you ever asked anyone at your company whether
there were
eminent scientists that contributed to that report?
A. No, I have not.
Q. You do know that Philip Morris did not contribute
its internal
documents to the Surgeon General in 1988 so the scientists could consider
those documents in arriving at their opinion; don't you?
A. Well I don't know that, but I don't think we
did.
Q. Well you know that you didn't because the first
time all these
internal documents got out was last Friday when you made the decision
with
other people. You just testified to that; didn't you?
A. That they were made public, yes.
Q. Yeah. That's the first time; correct?
A. That they were made public.
Q. Now the reason that Philip Morris didn't want
to say that nicotine
was a drug is because it felt there would be dangerous FDA implications;
isn't that right?
A. Well that's not my understanding, sir.
Q. Could you turn to Exhibit 10539. I know this
is difficult to read,
sir, but it's the best document we got from your company of this document.
Okay? It's entitle "CONFIDENTIAL" at the top, do you see that?
A. Yes, I do.
Q. It's dated February 19th, 1969?
A. Yes.
Q. It's to Dr. Wakeham from Dr. Dunn; correct?
A. Yes.
Q. And it refers to "Jet's Money Offer;" correct?
A. That's the subject, yes.
Q. Do you think that's Jett Lincoln?
A. Well I expect so, but I don't know.
Q. And would the money offer be the idea of devoting
funds to research
and development at Philip Morris?
A. I would not have any idea, sir.
Q. Could you direct your attention to the third
paragraph, and I'll
read it for you. "I would be more cautious in using the pharmic-medical
model -- do we really want to tout cigarette smoke as a drug? It is,
of
course, but there are dangerous FDA implications to having such
conceptualization go beyond these walls." Do you see that?
A. Yes, I do.
Q. And the walls were the walls of Philip Morris;
correct?
A. Well I would expect that's what he's meaning,
yes.
Q. And the dangerous FDA implications would be that
if Philip Morris
said we're selling a drug, the FDA would look at regulating it; wouldn't
they?
*14 A. I don't know what he meant when he said that,
sir.
Q. It's fair to assume that's what he meant; isn't
it, sir?
A. One could assume that, but I don't know what
he meant.
Q. Well did Philip Morris ever go to the FDA at
any time and say,
"We're selling a drug?"
A. Not to my knowledge.
Q. And did Dr. Ellis tell you when you met with
her that nicotine had
physiological effects?
A. She may have, but I can't remember.
Q. Did she tell you that there were optimum nicotine
deliveries for
producing the most favorable physiological and behavioral responses?
A. No, I have no memory of ever being told that.
Q. Did she tell you there was a certain dose range
for cigarettes --
A. Dose -- dose --
Q. -- with regard to nicotine?
A. Not to my knowledge, no.
Q. Direct your attention to Exhibit 11771, same
volume.
A. Yes, I have it.
Q. That's a memo to C. K. Ellis. Is that Dr. Ellis?
A. Yes, that is Dr. Ellis.
Q. And again, she's a chemist; is that correct?
A. She's a pharmacologist, I believe, sir.
Q. Pharmacologist. Chemical degree?
A. I don't know. I forgotten what her undergraduate
degree is. But
she's a -- she has a Ph.D. in pharmacology.
Q. All right. And the date of this is November 8th,
1990; correct?
A. Yes, that's right.
Q. Do you know who Mr. Gullotta is?
A. No. I've heard his name.
Q. He's a research and development scientist; is
he not?
A. Yes, I believe that's right. He's in the research
department at
least, I know that.
Q. And the subject here is "Raison d'etre;" correct?
A. Raison d'etre.
Q. Raison d'etre. Okay. That means the reason for
being?
A. The reason to be, uh-huh.
Q. Have you seen this document before?
A. No, I've not seen this document before.
Q. Can you go down to paragraph three.
A. Uh-huh.
Q. Does it appear to you that Dr. Ellis was told
by the three
scientists who are listed, on or about November 8th, 1990, that "We
have
shown that there are optimal cigarette nicotine deliveries for producing
the most favorable physiological and behavioral responses?"
A. Yes, that's what it says.
Q. Did she tell you that before you testified in
Congress?
A. No, I don't remember being told that.
Q. Are you sure?
A. Well I'm pretty sure I don't remember being told
that, yes.
Q. You are sure you didn't tell Congress that Philip
Morris knew that
there were optimal cigarette nicotine deliveries for producing the
most
favorable physiological and behavioral effects.
A. No, I never told anybody that because I've never
known about that.
Q. Did she tell you that your laboratories have
demonstrated that all
forms of nicotine are not behaviorally or physiologically equal? This
observation is important for evaluating research cigarettes where the
addition of nicotine is necessary? Did she tell you that?
A. No, I've never heard that.
Q. Now we saw the other document earlier today talking
about the form
of nicotine; didn't we?
*15 Q. Yes. I found that a very complicated document.
I couldn't
understand it.
Q. Now Philip Morris has tracked youth over the
years, haven't they, in
terms of how they smoke?
A. Not to my knowledge.
Q. Have you looked at the documents to determine
whether or not that's
true or not, sir?
A. No. I wouldn't know where to start, sir. As I
said, when I got my
job, I decided I could spend the rest of my life looking backwards;
I
decided to look forward, sir.
Q. Well you wouldn't know where to start. You would
just ask your
people, "I want to know what documents are in our files that
either
suggest or negate whether we marketed to youth." You could ask that
question; couldn't you?
A. Well sir, let me say this: In all the years I've
worked with Philip
Morris, I have never heard anybody talk about marketing to youth, nor
have
I ever heard anybody suggest that we should, so it wouldn't occur to
me to
ask whether we had done so. But then I've seen quite a bit of press
about
it, and I've asked people, and none of -- none of them have ever said
to me
that we've done that.
Q. I don't mean any disrespect by this, but do you
have a policy of
plausible deniability at Philip Morris?
A. Of which deniability?
Q. Plausible deniability.
A. I don't know what you mean by that.
Q. Well that would mean that we don't show somebody
something so then
he or she can deny it even though it may be true.
A. No, I reject that, sir. I have the utmost faith
in the integrity of
the people who work at Philip Morris. I'm very proud of them.
Q. So that they should show you everything; correct?
A. If they thought it was important. I don't know
that they should show
it to me. They would show it to their superior.
Q. And you are the ultimate superior; correct?
A. In the end. And then it would be up to peopleto
determine what I
should see. That I rely on that.
Q. And your company, together with the rest of the
industry, has been
accused of killing over 400,000 people a year; correct?
A. I think I'd put it another way, I'd say people
have suggested that
number of people die from smoking cigarettes.
Q. Okay. Now therefore, having that in mind, you
could demand any
research that is within any file cabinet within the entire world of
Philip
Morris if you wanted it; couldn't you?
A. Yes. I don't know why I would want to do that
because I wouldn't
know what -- how to start to deal with it. It would take me thousands
of
years, probably, to read them.
Q. Well it didn't take thousands of years to turn
over all the
documents in this litigation; did it?
A. The documents you're talking about?
Q. Yes.
A. It was an enormous effort, sir, by, I think,
some 600 people or 700
people.
Q. Seven hundred people.
A. Hmm.
Q. Working how long?
A. Well I don't know exactly, but probably about
nine months or a year.
Q. Nine months or a year, 700 people gathering the
documents to turn
over in this lawsuit; correct?
*16 A. That's what I remember.
Q. Now let's assume that somebody at Philip Morris
had asked for those
documents 20 years ago, a CEO of Philip Morris. Okay?
A. You're asking me to assume that?
Q. Yes.
A. Yes.
Q. It wouldn't have taken any longer at that time
because more
documents were generated in the intervening period; correct?
A. I'm not sure what you mean. It wouldn't take
any longer than what,
sir?
Q. It wouldn't have taken any more than 700 people
working nine months
to gather the documents 20 years ago; would it?
A. Well I would have thought it would have; today
you have better
photocopying machines and probably more technical tools available.
But I'm
not going to argue over it.
Q. Okay. And do you know how many people have started
smoking in those
20 years?
A. No, I don't, sir.
Q. Do you know how many children have started smoking
in those 20
years?
A. No, I don't.
Q. Do you know how many young teen-agers have started
smoking in those
20 years?
A. No, I don't have any idea.
Q. Do you know how many of those teen-agers who
started smoking became
addicted?
A. No, I have no idea, sir, as I told you, how many
even started
smoking, if any.
Q. Do you know how many people in those 20 years
who smoked developed
lung cancer?
A. No, I don't know that, sir.
Q. Do you know how many people in those 20 years
have developed chronic
obstructive pulmonary disease?
A. No, I don't, sir.
Q. Do you know how many people in those 20 years
developed coronary
heart disease?
A. (Coughing) Excuse me.
No, I don't.
Q. Now with regard to youth, sir, do you know what
percentage of your
market is less than 18 years old?
A. No, I have no idea.
Q. You've never asked.
A. I beg your pardon?
Q. You've never asked.
A. I've never asked because nobody would know. We
don't conduct any
surveys of under-age people.
Q. You never have done that; correct?
A. Not to my knowledge. I watched the deposition
of Jim Morgan and I
saw some documents produced there, and that is the extent of my knowledge.
Q. Well you saw in that deposition that documents
showed that Philip
Morris was tracking youth; correct?
A. If I remember correctly as Jim defined that,
he -- I think it was
somebody gathering information from public sources.
Q. Do you know what percentage of smokers start
before the age of 18?
A. No, I don't know.
Q. Let's assume that -- take a conservative number
and say it's 69
percent. All right?
A. Yes.
Q. What happens --
What would happen to your company if you didn't
have 69 percent of the
smokers?
A. Of which smokers?
Q. Of your smokers.
A. Could you explain to me your point, please? I'm
not -- I don't quite
understand --
Q. Sure.
A. -- the sense of it. What would happen to our
company if 69 percent
of young smokers didn't smoke?
Q. No.
A. Oh.
Q. Sixty-nine percent of all smokers didn't smoke.
What would happen to
your company?
*17 A. Well I would expect that we would sell 69
percent less
cigarettes.
Q. A lot less; right?
A. A lot less, yes.
Q. Be a lot smaller company; wouldn't it?
A. Yes, if that's the case. But --
Q. A lot less profit; correct?
A. Uh-huh, yes.
Q. Wouldn't be the 6.7 billion cash flow, would
there, in your
corporation?
A. I believe less.
Q. Less. Be much less; correct?
A. It would be. We have a number of other companies,
sir.
Q. But none as profitable as tobacco, sir.
A. Not quite. Nearly as.
Q. Yes.
A. Nearly as.
Q. And you'll recall yesterday we talked that the
companies started
with tobacco and grew from there; didn't we?
Q. Yes, that's right.
Q. Now do you know if your board of directors received
briefings on 16-
year-old smokers?
A. I don't know, sir. Certainly not under my watch.
Q. Well do you know if they did under Mr. Cullman's
watch, who's still
on your board, and I -- strike that. He's not on your board. I misspoke.
Still attends board meetings; correct?
A. He attends some board meetings, yes.
Q. Okay. Do you know if it happened on his watch?
A. I don't know.
Q. Can you direct your attention, sir, to Exhibit
10497.
A. Yes, I have that.
Q. Now this is entitled "A Study Of Smoking Habits
Among Young
Smokers;" correct?
A. Yes, that's correct.
Q. And it's prepared for Philip Morris Incorporated,
July 1974;
correct?
A. Yes, that's what it says.
Q. And it's prepared by the Roper Organization;
correct?
A. Correct.
Q. And can you turn to the first page.
A. Yes.
Q. Have you ever seen this document before, sir?
A. No, I have no memory of seeing this, sir.
Q. And do you see what the purpose of the study
is?
A. Yes, it says it is to -- "The purpose of this
study among young
smokers age 24 and younger was to gain insights as to what is happening
with regard to brand preferences...."
Q. "...and images of cigarette brands in that segment
of the
population;" correct?
A. Yes, that's correct.
Q. Okay. And it says that "Philip Morris has evidence
that there has
been a rapid trend to menthols -- and to Kools in particular -- among
young
smokers;" correct?
A. That's what it says, yes.
Q. And the study was designed to explore the following
major questions;
correct?
A. Yes.
Q. And one of those questions was what was happening
in the young
market with regard to Marlboro to n/m and menthols; correct?
A. Yes.
Q. What's n/m, sir?
A. Well I don't know, but I think it's probably
safe to say it's
nonmenthol.
Q. Number two, in what segments of the age spectrum
are Marlboro non-
menthol and menthols most popular; correct?
A. Yes, correct.
Q. Three, "Are young people starting with menthols
or is there mass
switching at some point?" Do you see that?
A. Yes.
Q. And starter smokers, sir, those are people who
have never smoked
before; correct?
A. Yes, I think that's a fair definition.
*18 Q. And is it your testimony you don't know that
the vast majority
of people who start smoking start smoking before the age of 18; is
that
your testimony?
A. Well I don't know, but I've read that most smokers
start before
they're 18 years of age. I've read that.
Q. About 80 percent?
A. That's what I've read.
Q. Large segment of smokers; correct, sir?
A. What is a large segment, sir?
Q. Eighty percent.
A. Eighty percent is a large segment of a group,
uh-huh.
Q. Then the next question that was being looked
at was whether smoking
patterns were different among young blacks and how much more popular
are
menthols among young blacks; correct?
A. Yes, that's what it says.
Q. And fifth, "Do more whites smoke menthols when
some of their friends
are black than when few or none of their friends are black;" is that
correct?
A. Yes, that's what it says.
Q. And six, "Is there recognition among young people
that menthols are
growing in popularity?" Do you see that?
A. Yes, I do.
Q. Okay. Then the next paragraph shows how the study
was conducted;
doesn't it?
A. Well that's what it's described as. I haven't
read it.
Q. "The study was not designed to be a large scale
study projectable to
the population, but aimed rather at covering the under 24 age group
with
inclusion of as many important segments of that group as possible.
1,050
interviews were conducted among young smokers." Do you see that?
A. Yes.
Q. So the Roper Organization was actually going
out and interviewing
people in this age bracket to ask them about the questions that are
in the
section of the study which is entitled "Purpose of the Study;" correct?
A. Well I don't know what the age bracket is, sir,
that you refer to.
Q. Under 24.
A. Yes.
Q. "A sample was drawn of 35 locations around the
country...." Correct?
A. Yes.
Q. "...with locations roughly apportioned by the
four major geographic
areas and by size of place;" correct?
A. Yes.
Q. And on the next page we see that the interviewers
were assigned
quotas for sex and race of young smokers to insure adequate numbers
of
whites, blacks, males and females; correct?
A. Yes.
Q. And the interviewers were instructed to go to
locations where young
people, as described in their quota assignments, were likely to be
found;
correct?
A. Well I don't see that.
Q. Well it's right in that paragraph. Move down
toward the - - toward
the end of it.
A. Yes, I do see that.
Q. Near high schools and colleges; correct?
A. Yes. It says to be found near high schools and
colleges. Yes, you're
right.
Q. You find young people under the age of 18 in
high schools; don't
you?
A. I'd certainly expect to, yes.
Q. You find them at soda fountains; don't you?
A. Well I would have thought so. I'm not that familiar
with it.
Q. You'd find them at recreation areas; don't you?
A. I would have thought so.
Q. You find them in parks; don't you?
*19 A. Yes, I would have thought so.
Q. You find them in bowling alleys and beaches and
lakes; don't you?
A. Yes, I think that's fair.
Q. Now this was a study conducted for and on behalf
of the Philip
Morris Company in 1974; wasn't it, sir?
A. Yes. But I would point out that it's for the
under-24 population.
Q. Well, that can go all the way down to zero; can't
it?
A. It certainly can, but it doesn't say that it
does.
Q. Find a lot of 24- and 25-year-olds, 23-, 22-,
hanging around high
schools?
A. No. No. But you may find those people hanging
around the other
areas, but I take your point.
Q. And the point is: Young teen-agers are in all
of those locations;
correct, Mr. Bible?
A. Well I don't know, but I -- I'm not that familiar
with some of those
locations, but I think that's a fair assumption, sir.
Q. Now do you know how much Philip Morris spent
between 1983 and 1994
on advertising, marketing and promotion?
A. No, I have no idea.
Q. Do you know how much it spent on youth prevention?
A. No.
Q. If I told you that Philip Morris spent 15,914,336,845
dollars on
advertising, marketing and promotion from 1983 to 1984 - - or '94,
would
that surprise you?
A. From 1984 to 1990 --
Q. 1983 to 1994.
A. In the domestic cigarette companies?
Q. That's correct.
A. How many billion dollars?
Q. Fifteen billion nine hundred fourteen million
--
A. No, that --
I could understand that.
Q. And if you take a look in your book -- we may
have an exhibit. Well
let me get the board for you, sir; you may not have it there.
MR. CIRESI: May I approach, Your Honor?
Q. Now sir, this comes -- I'll represent to you
this comes from
information provided by Philip Morris.
MR. BLEAKLEY: Your Honor, may I go around?
Q. It's Exhibit 20177, and it's youth prevention
expenditures to
advertising, marketing and promotion expenditures, 1983 to 1994. Do
you see
that, sir?
A. Yes, I see the heading.
Q. Okay. Now over here, and it's represented by
the green on this pie
chart, --
A. Uh-huh.
Q. -- is the expenditures for advertising, marketing
and promotion,
15,914,336,845 dollars. Do you see that?
A. Yes, I do.
Q. Now during that same period of time, based on
Philip Morris's
documents, Philip Morris spent twenty million eight hundred eighteen
million seven hundred forty thousand dollars on youth prevention, do
you
see that?
A. Yes, I do see that.
Q. And that's partly during your watch; isn't it?
A. Yes, that is right, sir.
Q. So Philip Morris spent, if my calculations are
correct -- and I'd
ask you to accept them -- one-tenth of one percent on youth prevention
that
it spent on advertising, marketing and promotion; is that right, sir?
A. Well I'd need to do the calculation.
Q. Would you accept that?
A. Well one percent of 15 billion I expect is 159
million. Am I right?
Q. Yes.
A. And that to me would be about -- 20 million is
one-eighth of that
roughly, so I'd say that's about .125.
*20 Q. .125 of one percent.
A. That's what I would say, uh-huh.
Q. On youth prevention, is that right, sir, according
to your
calculation?
A. Well if the numbers are accurate.
Q. Now can you direct your attention to Exhibit
10299.
A. Yes.
Q. Have you ever seen that before, sir?
A. No, it doesn't ring a chord in my memory, sir.
Q. Now this is a smoker psychology research; correct?
A. That's the title, yes.
Q. And it's by Dr. Wakeham; correct?
A. Yes, that's right.
Q. And it's presented to the board of directors
at Philip Morris on
November 26, 1989; correct?
A. Right.
Q. Or 1969. Excuse me. Is that right?
A. That's correct, yes.
Q. Now that's the highest level of the company;
correct?
A. Yes, that's right.
Q. Now certainly they're not provocateurs; are they?
Or maybe they are.
A. I wouldn't describe them as that, but quite often
they stimulate
one's thinking, yes, I can assure you of that.
Q. And they get information from the company's research
departments, et
cetera, to stimulate their thinking; don't they?
A. Well from time to time we would make a presentation
to them, yes.
Q. Presentations are made and conversation is stimulated
at the highest
levels of the corporation; correct?
A. Can you say that again, please?
Q. Sure.
Information is provided and conversation is stimulated
at the highest
levels of the corporation.
A. Well I'd have thought that's fair comment, yes.
I think that would
probably happen in every company.
Q. And at Philip Morris, its company, they stimulated
conversation on
16- to 24 -- 20-year-olds; didn't they?
A. I don't believe that to be so, sir.
Q. You don't.
A. No, I don't.
Q. Well why don't you turn to the first page of
this document.
A. Yes, I have it.
Q. "Gentlemen of the Board and Guests." Do you see
that?
A. Yes.
Q. By the way, in 1969 was Joseph Cullman III on
the board?
A. I think he was chairman then, sir.
Q. Chairman.
A. I think he was, yes.
Q. And now he attends as a guest; correct?
A. He's chairman emeritus, yes. He's invited.
Q. And this is from Dr. Wakeham, November 26, 1969.
"Once again it is
my pleasure to appear before you and to make this traditional annual
presentation of Philip Morris Research Center activities." Correct?
A. Yes, that's what it says.
Q. And sir, if you turn to the page which bears
the Bates number 749,
--
A. Yes, I have that.
Q. -- and you see where it says "Slide 13?"
A. Yes.
Q. And he says, "First, we must break the question
into two parts: Why
does one begin to smoke?" That's a starter; right?
A. Yes.
Q. And two, "Why does one continue to smoke?" Correct?
A. Yes.
Q. Now this appears to be a slide that is being
put up on the board to
stimulate the conversation; correct?
A. Well it would appear to be a slide put on the
board. I don't know
why it was there, whether it was to stimulate conversation or not.
It might
be to make a point. I don't know, sir.
*21 Q. Well let's see what point was being made
if it wasn't to
stimulate conversation. The paragraph right after what I just read
to you.
"There is general agreement on the first part. The
16 to 20- year old
begins smoking for psychosocial reasons. The act of smoking is symbolic;
it
signifies adulthood, he smokes to enhance his image in the eyes of
his
peers." Correct?
A. Yes, correct.
Q. Sixteen years old; correct?
A. Yes, correct.
Q. Talking to the board of directors; correct?
A. Yes, that's correct, sir.
Q. And where they would --
That's the highest level of this company; isn't
it?
A. It is the highest level of this company, yes,
the board of
directors, yes.
Q. And Dr. Wakeham goes on and says, "But the psychosocial
motive is
not enough to explain continued smoking;" correct?
A. Yes, he says that.
Q. "Some other motive force takes over to make smoking
rewarding in its
own right;" correct?
A. Yes, that's what it says.
Q. "Long after adolescent preoccupation with self-image
has subsided,
the cigarette will even preempt food in times of scarcity on the smoker's
priority list." Do you see that?
A. Yes, I do.
Q. Now does that ring a little bell that that might
be addiction?
A. Not to me, sir, no.
Q. Not to you?
A. No, sir, it doesn't.
Q. Does the term "adolescent" ring a bell with regard
to the age we're
talking about?
A. Yes, it does, and I'm ashamed of that.
Q. You're ashamed of it.
A. Yes, I am.
Q. And yesterday Mr. Morgan was shocked at it; wasn't
he?
A. He said that, yes.
Q. Called it an anomaly; didn't he?
A. Uh-huh, he did.
Q. Is this another anomaly at the highest levels
of the corporation,
sir?
A. Well I don't know what was happening at that
time, sir, but I don't
like to see something talking about the company looking at 16-year-olds.
Q. And we don't know if you're talking about that
today unless we had
some documents to see what you were talking about today; do we?
A. I can tell you categorically today we do not
market cigarettes to
under- age people.
Q. Well we just have to take your word on that;
don't we, sir?
A. I'd like you to take my word on it, sir.
Q. Yes, I know you would. But we don't have any
documents to see what
you're really talking about at the board; do you?
A. Well I thought you had all of our documents,
sir.
Q. No. Documents were cut off.
MR. BLEAKLEY: Objection, Your Honor, objection to
the commentary by Mr.
Ciresi.
THE COURT: Objection sustained.
BY MR. CIRESI:
Q. Do you know when discovery was cut off in this
lawsuit?
A. No, I don't.
MR. BLEAKLEY: Objection, Your Honor, when discovery
was cut off is not
relevant to this witness's testimony.
THE COURT: Well the date I think is relevant, yes.
Q. I'm just asking about the date, sir.
A. Could you ask the question again, please?
Q. Sure.
Do you know when our discovery of getting your documents
was cut off?
*22 A. No, I don't.
Q. If I represent to you that it was in 1994, would
you accept that?
MR. BLEAKLEY: Same objection, Your Honor.
THE COURT: You may answer that.
A. Well could you ask the question again, please?
Q. Sure.
If I tell you it was in 1994, would you accept that?
A. Yes, I'll accept that.
Q. Thank you.
Now Dr. Wakeham goes on to report on this slide
to the board of
directors, "One of the obvious ways to approach the problem is
to ask the
smoker himself why he smokes? When you do this (and Leo Burnett did
this
about ten years ago for Philip Morris)" --
Do you know who Leo Burnett is?
A. Yes. It's an advertising agency.
Q. Yes. They went out and they asked adolescents
why they smoked;
didn't they, sir?
MR. BLEAKLEY: Objection, Your Honor, that is not
what the document
says. That's a mischaracterization. It says "smokers."
THE COURT: Well do you understand the question?
A. I was about to say that -- excuse me.
Q. That's all right.
A. I was about to say that's not what it says.
Q. Do you know if Leo Burnett went out and asked
adolescents why they
started smoking?
A. I don't know that Leo Burnett went out and asked
adolescents why
they asked -- started smoking, so it's not what this says here.
Q. But what it does say, sir, is that whoever they
asked reacted either
to an advertising slogan or gave one of two responses; correct?
A. Yes, that's right. "It relaxes me. It stimulates
me."
Q. Or they will parrot an advertising slogan; correct?
A. That's right, uh-huh.
Q. And when Dr. --
MR. CIRESI: I think I'm losing my microphone, Your
Honor.
THE COURT: Well just so you're not losing your mind.
(Laughter.)
MR. CIRESI: I better not respond to that one, Your
Honor.
THE COURT: All right. Do you want to take a recess
and regroup?
MR. CIRESI: We may -- I think it's all right now.
THE COURT: Okay. Go ahead.
MR. CIRESI: Now the -- well maybe we should take
a recess.
THE COURT: Let's take a recess.
THE CLERK: Court stands in recess.
(Recess taken.)
THE CLERK: All rise. Court is again in session.
(Jury enters the courtroom.)
THE CLERK: Please be seated.
THE COURT: Counsel.
MR. CIRESI: Thank you, Your Honor.
BY MR. CIRESI:
Q. Mr. Bible, we're still on Exhibit 10299, Dr.
Wakeham's report to the
board of directors on November 26th, 1969.
A. Yes.
Q. And we're still on page 749; right?
A. Page --
Q. 749.
A. 749. Thank you.
Q. When the smoker parrots an advertising slogan,
that means a slogan
used by the tobacco company; correct?
A. I'd expect so, yes.
Q. So that the advertising was having an effect
on the smoker; correct?
A. I don't know. I -- I think that's a fair --
Q. Fair assumption; isn't it?
A. Fair assumption.
Q. And Dr. Wakeham then goes on to examine why smokers
smoke on the
balance of this page and over on to the next page, and he points out
differences between smokers and non-smokers; correct?
*23 A. Well I haven't read that yet, sir.
Yes, it says at the outset breaking into two parts,
one, why does one
begin to smoke, and two, why does one continue to smoke. We're still
on
part one, I believe. Is that what you're saying?
Q. Right. Then he goes through behavioral differences
between smokers
and non-smokers. Smokers have higher accident and injury rate; don't
they?
A. Yes, I see that, according -- according to this.
Q. That -- that would result in more medical expenses,
wouldn't it,
compared to --
A. Yes, I -- I expect so, yes.
Q. Yeah. And there's physiological differences;
correct?
A. Yes. That's described here.
Q. Psycological differences; correct?
A. Yes, that's described here.
Q. And then down to "Cigaret Smoke Effects," that's
the approach
looking at the immediate effects of smoke inhalation upon the smoker;
correct?
A. Well I'm not sure who's saying that.
Q. Well it's obviously Dr. Wakeham saying it; isn't
it? This is his
presentation to the board.
A. Yes, I think that's probably fair, yes.
Q. Okay. "A third way to approach the question is
to search for the
immediate effects of smoke inhalation upon the smoker."
A. Yes.
Q. "This approach has also been fruitful. Here are
the changes in human
body function which follow smoke inhalation. All of these changes have
been
reported by at least two independent researchers." Correct?
A. Yes.
Q. And they're looking at why people continue to
smoke; correct?
A. Well why does one begin to smoke and why does
one continue to smoke.
Q. Continue to smoke.
A. I just --
Q. Now we're looking at why one continues to smoke;
correct?
A. Well I don't know. Does it say that?
Q. Do you know, sir?
A. Does it say that anywhere? I don't know where
-- I don't know where
he jumped from one to two, frankly.
Q. All right. Do you see the smoke effects in any
event?
A. I beg your pardon?
Q. Do you see the smoke effects in any event?
A. At the bottom of this page?
Q. Yes.
A. Yes, I do.
Q. And it goes over to the next page; correct?
A. Yes, it does.
Q. And the two at the top of that page are "Arousal
center in brain
stem excited;" correct?
A. Yes.
Q. And we saw in the TABLE memo reference to brain
activity also;
didn't we?
Q. Well I don't quite recall that.
Q. Do you recall talking about reactions of the
ACH earlier this
morning?
A. Of the --
Q. ACH, the neurotransmitters. Do you remember that?
A. I remember we were talking about neurotransmitters,
yes.
Q. That's in the brain. Do you know that?
A. Yes, I think I did know that.
Q. And Dr. Wakeham says to the board, "Now what
can be said about all
of these findings;" correct?
A. Yes.
Q. He goes on to the next page; correct?
A. Yes.
Q. And he summarizes with three general observations;
correct?
A. Yes.
Q. And then he goes on in the next paragraph talking
about whether or
not the differences of the people that are attracted to smoking because
it
acts as a tranquilizer in a stressful situation, or whether it's something
else; correct?
*24 A. "...as some told Leo Burnett."
Q. And then he states the research and development
department's
conviction; doesn't he?
A. Well I can't -- I haven't got there. Can you
point me to that,
please?
Q. Sure. "We are of the conviction...."
A. Oh, I see, yes, in the next paragraph.
Q. See that?
A. Yes.
Q. "We are of the conviction, in view of the foregoing,
that the
ultimate explanation for the perpetrated cigarette habit" --
A. "Perpetuated."
Q. "Perpetuated," I'm sorry. And that is talking
about why people
continue to smoke; correct?
A. Yes.
Q. Okay.
A. I -- I would have thought so, yes.
Q. -- "resides in the pharmacological effect of
smoke upon the body of
the smoker, the effect being most rewarding to the individual under
stress." Do you see that?
A. That's what it says, yes.
Q. And the pharmacological effect, that refers to
the drug effect;
doesn't it, sir?
A. I'd have thought that's what it means, yes.
Q. So that if we go back to page 749, we see that
when we're talking
about the adolescent beginning to smoke --
A. Where -- where does it say that, please?
Q. Back on page 749, right by slide 13.
A. Uh-huh.
Q. Remember, we broke the question down into two
parts, why does one
begin to smoke and why does one continue to smoke; right?
A. Yes. Yes.
Q. And for the 16- to 20-year-old, the act of smoking
is symbolic, it
signifies adulthood, he smokes to enhance his image in the eyes of
his
peers; correct?
A. Yes.
Q. Then he goes through why people continue to smoke
over the next few
pages and he reaches the conclusion that we just saw: They continue
to
smoke because of the drug effect; correct, sir? That's what the research
and development head reported to the board in November of 1969; correct?
A. Can you just point me to that last comment again?
Q. Yes. Page 752.
A. Uh-huh.
Q. "We are of the conviction, in view of the foregoing,
that the
ultimate explanation for the perpetuated cigarette habit resides in
the
pharmacological effect of smoke upon the body of the smoker, the effect
being most rewarding to the individual under stress." Correct?
A. That's what it says, yes.
Q. That's the drug effect; is that right?
A. Well I really don't know that's exactly what
it does mean.
Q. Well "pharmacological" refers to drug; correct,
sir?
A. I think that's right, yes.
Q. So if I take out "pharmacologic" and put in "drug,"
it would be drug
effect.
A. Well yes. I don't know the degree, though. That's
what I'm
challenging on. That's all.
Q. In any event, that's what was told to the board
of directors on
November 26th, 1969; correct?
A. That -- that's correct, sir, yes.
Q. Teen-agers start smoking because they want to
be adults, and then
you hook them and they're addicted. That's essentially what's being
said
here; correct?
A. Well I wouldn't agree with that.
Q. You wouldn't.
A. No.
*25 Q. Now on the Roper study -- remember, we were
talking about that
before we talked about this document?
A. Yes, I do remember that.
Q. And you said, you know, 24, that doesn't mean
it's younger, and I
said well can it go down to zero? Remember that?
A. Yes, I do.
Q. Do you know how young they were interviewing
people?
A. No, I don't. I don't that we interviewed people
actually.
Q. You don't know that they -- pardon me?
A. I say I don't know that we've interviewed people
under- age.
Q. Well will you go back to that Exhibit 10497,
the 1974 Roper report
to Philip Morris.
A. Uh-huh.
Q. And if you go to the very last page --
A. Yes. Is that 185?
Q. Yes, it is.
A. Uh-huh.
Q. And if you look in the upper right-hand corner,
--
A. Uh-huh.
Q. -- can you look at number 30?
A. Yes.
Q. "How old do you happen to be?" Correct?
A. That's what it says. I don't know what this is,
though. May I have a
look?
Q. Well if you want to, you can turn back to Bates
number 182 and
you'll see that's the beginning of the questionnaire that was used
by the
Roper Organization.
A. Well I don't know if that's what was used because
nothing's
completed.
Q. Well let me see what it says here. It says, "I'm
from The Roper
Organization and we're conducting a survey around the country." Do
you see
that at the top?
A. Of? Top of?
Q. Top of page 182.
A. 182.
That's what it says. I think all I'm saying is that
there's no
indication to me here that this was completed by anybody.
Q. Well sir, if you go through the report, it's
a report of the
interviews.
A. Well I haven't been through the report.
Q. All right. Well I want you to assume that's what
it is. Can you do
that?
A. Can I assume that --
Q. That's what it is.
A. That this is --
Q. A report of the interviews that were conducted
--
A. I see.
Q. -- of the over 1,000 people --
A. Uh-huh.
Q. -- by Roper for Philip Morris. Can you assume
that?
A. Yes, I can assume that.
Q. Now if you go to the last page of the interview
form, "How old do
you happen to be?" Where do they stop?
A. Fourteen or younger. Uh-huh.
Q. Fourteen or younger.
A. That's what it says, yes.
Q. Those children were being interviewed in 1974
by Roper on behalf of
Philip Morris based on this document; correct, sir?
A. Well I have to agree with you, it does say, "How
old do you happen
to be?" And that starts at 14 or younger.
Q. And if they were doing that, are you ashamed
of that too?
A. Yes. You know, I -- I'd need to study the whole
document, but it --
If they were actually conducting a survey of people
that age or
children that age to do with smoking habits, yes, I'd be ashamed of
that.
Q. That's another one you're ashamed of; correct?
A. I beg your pardon?
Q. That's another one that you're ashamed of.
A. I -- yes, I'm very sorry about that.
Q. And would that also be an anomaly, or don't you
know?
*26 A. Well I would say it would -- it would be
an anomaly. I would say
it certainly wouldn't happen today.
Q. Do you know if it was an anomaly up until --
let's -- let's use the
day you took over, 1994. Do you know if it was an anomaly up to 1994?
A. Up to 1994 --
Q. Yes.
A. -- or after 1994?
Q. Up to.
A. Up to 1994. I would say it's an anomaly, yes,
because, as I said,
I've never ever in my career at Philip Morris ever heard of us ever
marketing cigarettes to youth or -- I've never heard or seen of any
survey
whatsoever.
Q. Are you shocked by these?
A. I am shocked, yes.
Q. And at least you can see from these two that
surveys and interviews
were being conducted of children as young as 14 by Philip Morris.
A. It appears to have been the case, done by Roper,
yes.
Q. And reports were being made to the board of directors,
the highest
level of the company, about teen-agers 16 years old; correct?
A. Yes. That was that report we saw.
Q. Now can you turn, sir, to Exhibit 11808. That
would be in the second
volume. It's right towards the beginning.
A. Yes, I have that.
Q. Now do you remember this document, this was during
Mr. Morgan's
deposition, you watched it yesterday?
A. I don't --
Q. No, that's not fair, because he was on the overhead
and you couldn't
see the documents, so I'll withdraw the question.
Do you recall in Mr. Morgan's deposition where he
said he was the brand
manager in 1979 for Marlboro and he was shown a document on the Philip
Morris corporate headquarters letterhead and he was asked whether it
was
his document, and he just didn't know? Do you remember that?
A. Vaguely I do recall that, yes.
Q. I'll represent to you that this was the document
that was up at that
time --
A. Uh-huh.
Q. -- or that he was looking at. All right?
A. Uh-huh.
Q. Exhibit 11808.
A. Yes.
Q. Now have you seen this document before?
A. No. It doesn't mean anything to me, sir.
Q. Okay. This is a March 29th, 1979 document.
A. Uh-huh.
Q. Correct?
A. Yes.
Q. Five years after the Roper report; correct?
A. Well I'll accept that. I've forgotten the date
of that report.
Q. Ten years after the report to the board of directors;
correct?
A. Yes, that's correct.
Q. Now it's on the Philip Morris letterhead, 100
Park Avenue; correct?
A. Yes, correct.
Q. And in the first paragraph it says, "Marlboro
represents 60 percent
of Philip Morris USA sales. The brand accounts for one- third of all
growth
of Philip Morris USA. In 1978 101 billion units were sold." Correct?
A. Yes, that's what it says.
Q. Now is that in accord with your understanding
of where the market
was roughly around that time?
A. Oh, I don't remember, sir.
Q. You don't.
A. No. I was not involved in the business then.
Q. And can you direct your attention to "Demographics."
A. Yes.
Q. Remember, you said you didn't think Philip Morris
tracked what youth
was doing?
*27 A. Right.
Q. Yes. Okay. "Demographics.
"Marlboro dominates in the 17 and younger category,
capturing over 50
percent of the market." Do you see that?
A. Yes, I do see that.
Q. That's a report here of Philip Morris showing
what percentage of the
market Marlboro has of the 17 and younger age category; correct?
A. That's what it says, yes.
Q. And it says that Marlboro Red is the choice of
the younger group;
correct?
A. It says Marlboro Red is smoked by the younger
group.
Q. Okay. And lights by the older group; correct?
A. That's what it says, yes.
Q. And Marlboro Lights are the 18- to 24-year-old
group; correct?
A. I'm sorry?
Q. Marlboro Lights were the 18- to 24-year age group;
correct?
A. Yes, that -- that would -- that would be right,
yes.
Q. And then there's a section down there on advertising.
Do you see
that?
A. Yes.
Q. It said, "When Lights were first introduced,
it was a management
decision that the advertising should be significantly different from
Red
advertising." Correct?
A. That's what it says, yes.
Q. And the Red advertising -- strike that.
The Red was the dominant cigarette in the 17 and
younger age category;
correct?
A. It says Marlboro Red is smoked by the younger
group.
Q. It says it dominates in the 17 and younger age
category; correct?
A. I don't --
Oh, there it is. Yes, it does say that. No, it says
Marlboro dominates.
Q. Okay. And it says Marlboro Red is smoked by the
younger group;
correct?
A. That's what it says, yes.
Q. And the younger group there is the 17 and younger
age category;
correct?
A. That is right, yes.
Q. Now when they talk about advertising, we see
what happens when
Marlboro Lights were first introduced; correct?
A. Do we see what happens?
Q. Yes.
A. Well I haven't read it, sir.
Q. Well let me read it to you. "When Marlboro Lights
were first
introduced, it was a management decision that the advertising should
be
significantly different from Red advertising. The problem was, however,
that the money spent on Lights advertising was not reinforcing the
franchise." Do you see that?
A. Yes.
Q. And what does "reinforcing the franchise" mean
to you?
A. I would say that advertising a brand is to keep
the awareness level
of the brand up with its smokers, and by reinforcing it, you'd like
to feel
that your advertising is continuing to do that, maintaining the brand
awareness.
Q. Keeping the brand awareness up among the smokers;
correct?
A. That would be my interpretation, yes.
Q. All right. "A decision was made to integrate
Lights into Marlboro
Country and that all advertising dollars spent would reinforce the
franchise. We now have a single minded advertising campaign which is
a
source of strength for the brand and successfully conveys flavor and
quality at the same time." Correct?
A. That's what it says, yes.
Q. So they took the advertising which was different
for the 18- to
24-year- olds and merged it into the Red advertising where the younger
group dominated; correct, sir?
*28 A. I wouldn't characterize it that way, no.
Q. But that's what the document says; isn't it?
A. No, I don't interpret it that way at all.
Q. Well, we do know that Marlboro Red was smoked
by the younger group;
correct?
A. Yes. But I would say that when we're talking
about the Marlboro
franchise, that by far the majority of the smokers of that brand were
adults.
Q. Sir, that wasn't my question. We do know that
Marlboro Red was
smoked by the younger category, 17 and younger; correct?
A. Yes, that's what it says here.
Q. Okay. And that the Marlboro Lights were in the
older category, which
was the 18 to 24; correct? We know that.
A. That's what this says. It says --
Q. And we know that the advertising was merged to
integrate the Lights
into the Marlboro Country advertising in order to reinforce the franchise.
That's what it says; correct?
A. That's what it says, yes.
Q. Thank you.
Now, did you receive memos regarding what percentage
of the market
under 18 Marlboro has from 1994 on?
A. Not to my knowledge ever, sir, no.
Q. Not to your knowledge.
A. Not to my knowledge at all, sir.
Q. Well if you received it, you would know; wouldn't
you?
A. I would have thought I certainly would know.
Q. Do you know if your people down in the operations
got such
information?
A. No, I don't. But I would be horrified if they
did.
Q. You would.
A. Uh-huh.
Q. Did you ever ask them?
A. No, I didn't. I would take it for granted that
they didn't.
Q. Well we see here that they were getting information
in 1979 about 17
and younger people; don't we?
A. Well that's about 20 years ago, sir.
Q. And if they were 17-year-olds in '79, how old
are they today, 36?
A. Yes.
Q. Maybe smoking for 20 years?
A. Well that could be the case if they started at
17 and continued to
smoke, yes.
Q. And if they were addicted, they'd still be smoking;
wouldn't they?
A. Well I don't believe they are addicted, sir.
But nevertheless --
Q. But if they were addicted, they might still be
smoking; correct,
sir?
A. They might still be smoking.
Q. Get them young and hang on to them; correct?
A. That's not my philosophy, sir.
Q. But we do know that your company was looking
at the 17 and younger
category in 1979; don't we, sir?
A. That's what this says.
Q. Yes. And we do know that your brand, which you
called the universal
sign of consumer brands in your 1994 report, dominated in the 17 and
younger category; correct?
A. That's what the document says here, sir, yes.
Q. Are you ashamed of this document?
A. I'm sorry about it, yes, I am.
Q. And if you go on to the next page, you'll see
"1979 Special
Programs." Do you see that?
A. Which page is that, sir?
Oh, yes, I do see it.
Q. See it?
A. Yes.
Q. First of all, right above that it says "Opportunities,"
to expand
the demographic base; doesn't it?
A. Yes.
Q. "Brand has not achieved its full potential;"
correct?
*29 A. Yes.
Q. "Marlboro is No. 1 in 51 out of 93 marketing
areas;" correct?
A. That's what it says.
Q. "This means that it's not No. 1 in the other
42 areas;" correct?
A. That's what it says.
Q. So they've got some special programs in 1979;
correct?
A. Well the -- it --
There's a heading here that says that, yes.
Q. Yes. "Resort coverage in existence for eight
years...;" correct?
A. Yes.
Q. That's since 1971; correct?
A. Yes.
Q. And "this program represents a continuing brand
presence among young
adults;" correct?
A. Yes, young adults.
Q. "For two to three weeks during the spring and
summer breaks, the
Sales Force promotes the brand heavily...;" correct?
A. Yes.
Q. "Marlboro T-shirts, visors are given away at
the beach, bars and
other hang outs;" correct?
A. Yes.
Q. "No publicity nor outside visibility is desired."
Correct?
A. That's what it says, yes.
Q. Didn't want people to know that you were going
around beaches and
hangouts for young people; is that right?
A. Well I don't know what that means.
Q. Just don't know, sir.
A. No, I don't know. But I could imagine it could
mean that, yes.
Q. Yes. And it says "The program is expanding and
in 1979 will cover
the New England Shore, Myrtle Beach, Texas, Padre Island, the Ozarks,
Wisconsin and the Jersey Shore." Correct?
A. Yes, correct.
Q. Are you ashamed of this, too, sir?
A. Well I don't know if that means young people,
sir, below young
adults. So young adults to me are 18 to 24.
Q. But if young adults were under 17 and went all
the way down to 14,
you'd be ashamed; wouldn't you?
A. I would not like that at all, sir.
Q. You'd be ashamed.
A. I -- I would be very sorry and ashamed, that
we should not be
marketing cigarettes to young people, but I believe that we can market
them
to adults.
Q. Another anomaly?
A. Anomaly in what respect, sir? In my -- the period
that I've been
here? This was before I was CEO.
Q. Oh, okay. Well the company's responsible for
what it did before you
were CEO; isn't it?
A. Yes, it is.
Q. Yes. And young people hang out on the New England
shore - - and by
"young people," I mean under age 18 -- don't they?
A. I should imagine so.
Q. And they hang out at Myrtle Beach; don't they?
A. I should imagine so, yes.
Q. They hang out at Padre Island; correct?
A. Well I don't know. I would imagine so.
Q. And you'd imagine they hang out in the Ozarks;
correct?
A. I don't know.
Q. But you would imagine they would; wouldn't you?
A. I don't know that. I don't even know where the
Ozarks are. And I'm
ashamed to say that.
Q. Okay. Do they hang out in Wisconsin, sir, at
beaches and parks and
other hangouts?
A. I don't know, but I see young people on the beach,
yes.
Q. And the Jersey Shore, are you familiar with that?
A. No, I'm not really familiar with that.
Q. You would agree it's fair to assume that young
people hang out
there, and by "young people" I mean under 18?
*30 A. On beaches?
Q. Yes.
A. Yes, I think that's fair to say.
Q. Can you direct your attention, then, to Exhibit
11780?
A. Yes.
Q. This is entitled "PRODUCT TESTING." If you turn
to the next page,
sir, it's got the full title.
A. Yes, I have it.
Q. You have it?
"PRODUCT TESTING SHORT COURSE," Daniel Ennis, John
Tindall, Lisa Eby.
Do you know them?
A. No, I -- I -- I met John Tindall some years ago.
Q. Okay. And what department was he in, sir?
A. I seem to recall he was in the product testing
department.
Q. And --
A. Or maybe in market research.
Q. Marketing.
A. Market, yes --
I think he was in product testing in the R&D
department.
Q. And this is dated January 23rd to January 24th,
1984; correct?
A. Yes.
Q. Richmond, Virginia; correct?
A. Yes.
Q. And if you go to the preface on the first page,
you see it?
A. Yes.
Q. "In preparing for this short course in Product
Testing, there were
two considerations. First, we intended to make sure that basic principles
and traditional forms of product testing and analysis were covered.
Second,
we felt that it was important to communicate our latest thinking on
how
product testing should be conducted which involves some new, less tried
concepts." Do you see that?
A. Yes, I do.
Q. And the last sentence reads -- and please read
it all if you want
to, but the last sentence reads, "In this course we hope to provide
both
the backbone of our testing system and the general direction in which
our
thinking is headed for the future." Correct?
A. Yes.
Q. And can you go to the Bates number which has
7504. Now I want to
direct your attention -- this is the -- in the "Demographic Developments."
Do you see that?
A. Yes.
Q. And this is where they were building the Marlboro
brand. Do you
understand that?
A. No, I don't.
Q. Well let me read the second paragraph. "Marlboro
floundered for
eight years and then hit a responsive chord among post-war baby-boom
teenagers with the theme from the Magnificent Seven and an image
uncalculatedly right for the wave of teenagers coming of smoking age."
Do
you see that?
A. Yes, I do see that.
Q. Are you ashamed of that, too?
A. "Coming of smoking age?" I don't think I'm ashamed
of that, sir.
Q. You're not.
A. If they can reach an adult age when they can
form their own
decisions, I'm not ashamed of that, no.
Q. The wave of teenagers coming of smoking age?
What if they were
teenagers when they started to smoke, are you ashamed of that?
A. It doesn't say that, sir.
Q. Doesn't say that.
But we do know that Marlboro dominated in the under
17; correct?
A. In that earlier --
Q. Yes.
A. -- paper I read, that's what it said, yes.
Q. And the Magnificent Seven, that's the theme that
you played when you
met with the analysts; wasn't it?
A. That's what you told me.
Q. That's what the --
A. Well at least the Wall Street Journal said that.
*31 Q. They reported it; right?
A. I don't remember that though.
Q. And that's the one I asked you about when Mr.
Bring was there;
correct?
A. I don't think you asked me about that. I think
he was mentioned in
the article though.
Q. Right.
And I think Mr. Bring had said the message was "We
could do a hell of a
lot better." That's what you -- the message you gave?
A. That I gave that message?
Q. Yes.
A. I don't remember saying that.
Q. You don't.
Mr. Bring is in the courtroom; isn't he?
A. Yes, he is.
Q. Been here the last two days.
A. Yes, he has.
Q. Did you ask him?
A. No, I didn't.
Q. Can you direct your attention, sir, to Exhibit
2557, which is in
volume one.
A. Yes, I have that.
Q. Now this is a memo dated May 21, 1975; correct?
A. Yes.
Q. And it's to Dr. Seligman; correct?
A. To Dr. Seligman, yes.
Q. From Myron Johnston; correct?
A. Yes.
Q. It's entitled "The Decline in the Rate of Growth
of Marlboro Red;"
correct?
A. Correct.
Q. And you see up in the upper right-hand corner
they got Dr. Dunn's
name?
A. Yes. That's handwritten there, yes.
Q. Now Dr. Dunn was in research and development;
correct?
A. I believe so.
Q. Now the first paragraph says, "I think Dr. Dunn's
memo has very
effectively dispelled the notion that nicotine reductions have been
cause
-- have been the cause of the slackening in the rate of growth of Marlboro
Red." Do you see that?
A. Yes, I do see that.
Q. And do you know if Dr. Dunn's memo referred to
whether there was a
threshold level of nicotine?
A. I beg your pardon?
Q. Did Dr. Dunn's memo refer to whether there was
a threshold level of
nicotine?
A. Of which memo of Dr. Dunn, sir?
Q. The one that's being referred to here.
A. Oh, I don't know. I -- I haven't seen any memo
from DrDunn --
Q. Okay.
A. -- that I can recollect.
Q. Well you saw a memo of Dr. Dunn this morning
in 1972 relating to the
San Martin conference where he put in the threshold level.
A. Oh, I'd forgotten that that was his.
Q. That was his.
A. Thank you --
Q. Correct?
A. -- for reminding me, uh-huh.
Q. Now it then goes on to say that Mr. Johnston
chose to investigate
the economic and demographic factors that could be responsible for
the
decline in Marlboro's rate of growth; correct?
A. Yes.
Q. Now that doesn't mean that it's not growing in
the number that's
being sold, just the rate of growth had slowed down; correct?
A. Well may I read it, please?
Q. Sure.
A. Can you repeat your question, please?
Q. Yes.
The rate of growth doesn't mean that the brand is
not growing, it's
just the rate of it --
A. That's right.
Q. -- has slowed down; correct?
A. That's how I would interpret that, yes.
Q. So the brand is still expanding, it's just not
expanding as rapidly;
correct?
A. Well that would be my interpretation, yes.
Q. And people at Philip Morris, when that happens,
want to investigate
why that's happening; don't they?
*32 A. Perhaps so, yes.
Q. Well even today you'd want to do that; wouldn't
you, sir?
A. Yes, I think I would, yes.
Q. And that's what Myron Johnston was doing here;
correct?
A. Well that's what that part of this memo says,
yes.
Q. And he states, "It was my contention that Marlboro's
phenomenal
growth rate in the past has been attributable in large part to our
high
market penetration among younger smokers and the rapid growth in that
population segment. I pointed out that the number of 15- to 19-year-olds
is
now increasing more slowly and will peak in 1996 and then begin to
decline.
I also hypothesized that Marlboro would be particularly vulnerable
to the
recession." Correct?
A. That's what it says, yes.
Q. And he then points out his opinion with regard
to why the growth
rate declined for Marlboro; correct?
A. Yes.
Q. And the number one reason is slower growth in
the number of 15- to
19- year-olds; correct?
A. That's what it says, yes.
Q. And number two, the recession; correct?
A. Yes.
Q. Number three, price increases in 1994; correct?
A. Yes.
Q. And number four, changing brand preferences of
youngers; correct?
A. Of younger smokers.
Q. Younger smokers. Correct?
A. Yes.
Q. Now he then traces the demographics down at the
bottom of the page;
correct?
A. Yes. It --
Well I don't think it traces, there's a heading
"Demographics."
Q. "It has been well established by the National
Tracking Study and
other studies that Marlboro has for many years had its highest market
penetration among younger smokers." Do you see that?
A. Yes.
Q. And that's consistent with the other memo we
saw; correct?
A. Which other memo, sir?
Q. The one that we saw that was on the letterhead
of Philip Morris that
said you dominated in the 17 and younger category. Do you remember
that
document?
A. Yes, I do. But that's not what this says. This
says among younger
smokers, and I didn't know what age he would be referring to there.
Q. All right. Well let's go on.
A. Uh-huh.
Q. "Most of these studies have been restricted to
people age 18 and
over, but my own data, which includes younger teenagers, shows even
higher
Marlboro market penetration among 15 to 17 year olds." Correct?
A. Yes.
Q. And the date of this memorandum is after the
Roper study; isn't it,
sir?
A. That was '74, was it?
Q. Yes.
A. Yes, it is.
Q. And that looked at people all the way down to
14 and younger; didn't
it?
A. Well I presume so, because the questionnaire
had that in there.
Q. "The teenage years are also important because
these are the years
during which most smokers begin to smoke, the years in which initial
brand
selections are made, and the period in the life-cycle in which conformity
to peer-group norms is greatest." Correct?
A. That's what it says, yes.
Q. Talking about 15- to 17-year-olds; correct, sir?
A. Yes, that's what it seems to.
Q. Looking at his own data; correct?
*33 A. I don't know if it's his own data. It says
most of these
studies.
Q. Well he talks about my own data; correct?
A. Yes, he does, he does talk about my own data.
Q. Yes.
A. But he -- I think he's saying he's referring
to studies earlier on
than his own data.
Q. Yes. And that own data is what he's referring
to in that paragraph;
correct? In addition to these other national studies.
A. Yes, it seems to be, that's right.
Q. Ashamed of this one, too?
A. Well I am ashamed of that, yes.
Q. Now is it another anomaly for this period of
time before you became
the CEO?
A. Well yes. An anomaly to me is an unusual occurrence,
and frankly I
wasn't around then. And I would have thought this was unusual and anomaly
-- an anomaly.
Q. But if we keep seeing more anomalies, pretty
soon it becomes usual;
doesn't it?
A. Well we've seen a couple. And two or three. It's
a large company and
we sell a lot of products.
Q. We're just talking about cigarettes, sir.
A. Yes, I understand that.
Q. Do you understand that?
A. I understand that, sir.
Q. Now one of the other reasons that he felt the
decline was the
recession and price increases; correct? Correct?
A. Yes.
Q. Can you go to page three. It starts talking about
the recession
here; correct?
A. Yes.
Q. And if you look at the last paragraph --
I take it you haven't read this entire document;
have you, sir?
A. I don't remember ever seeing this document, sir.
Q. Okay. Now I'll represent to you that in the two
pages coming up to
this, that he talked about the demographics and what contribution that
made
to the decline in the growth rate. Okay? Can you accept that?
A. That's a little bit too broad for me, sir.
Q. Well --
A. Could -- if you could --
Q. Can you accept that for the purposes of the next
question? If you
can't, then tell me when we get there. All right?
A. All right. Sure.
Q. Now at the recession --
In the recession, if you look at the last paragraph,
he says, "This
still leaves some of the gap to be accounted for, and does not explain
why
Marlboro market share is below the regression line." Do you see that?
A. Yes, I do.
Q. All right. Now, "In my economic forecast, you
may recall I said that
Marlboro was particularly vulnerable to the effects of the recession
because the highest unemployment rates are among the younger age groups,
precisely the groups in which Marlboro's market penetration is highest."
Do
you see that?
A. Yes.
Q. Now do you recall me asking you yesterday whether
or not it was fair
to assume that teen-agers have less money than adults? Remember that?
A. Yes. I think I remember you saying that, yes.
Q. And I think that we may have quibbled a little
bit, but I think
eventually you agreed with me; didn't you?
A. That young people had less money than older people?
Q. Yes.
A. I agree with you, yes.
Q. Now we go on here, Mr. Johnston says, "In the
first quarter of 1975,
the employment -- unemployment rate of persons 16 to 19 years old was
20.4
percent, the highest it has been since the Bureau of Labor Statistics
began
compiling rates by age in 1948." Do you see that?
*34 A. Yes.
Q. And you know that we did have a recession in
that period of time?
A. In 19 --
Q. '75.
A. -- 75? Not specifically.
Q. Okay. You don't recall; is that right?
A. Well I don't recall. Let me see. I wasn't here
in the United States
then, so I don't recall exactly.
Q. Can you go on to the next page. "It is my contention
that income
elasticity is inversely proportionable -- proportional to income level.
That is, the lower the income of a specific population group," the
lower
you go in income, "the greater will be the depressing effect on cigarette
sales of a decline in real income." Do you see that?
A. Yes.
Q. You agree with that; don't you?
A. I don't know. It seems a fair comment.
Q. Now if you go down through that paragraph, about
a third of the way
from the bottom, you see where it starts "Marlboro smokers...?" It's
over
on the right-hand side.
A. Yes.
Q. Okay. "Marlboro smokers" --
No. It's up. Thank you. Same paragraph, but "Marlboro"
-- there we go.
You see it, sir? You have it?
A. It's -- it's about halfway down the first paragraph?
Q. Right. We're together.
A. Right.
Q. Okay. "Marlboro smokers, being on the average
considerably younger
than the total smoking population, tend to have lower than average
incomes.
Thus, I would expect a proportionate -- disproportionately large number
of
Marlboro smokers to quit smoking or reduce daily consumption. In addition,
young smokers are less habituated than older smokers, and can therefore
probably quit or cut down more easily than a older smoker. Furthermore,
many teenagers who might otherwise have begun to smoke may have decided
against it because of the adverse economic conditions." Do you see
that?
A. Yes.
Q. Now that ties in with what we just saw on the
report to the board of
directors in 1969 --
A. In which --
Q. -- where you get them by peer pressure, and later
on in life they
continue to smoke because they're hooked; doesn't it?
A. I don't remember --
Q. Well I may be paraphrasing --
A. -- that we get them by --
Frankly, I don't believe we hook smokers.
Q. All right. But that's what Dr. Wakeham reported
to the board of
directors as his conviction of the research department; correct?
MR. BLEAKLEY: Your Honor --
A. I don't remember --
MR. BLEAKLEY: I object -- excuse me. I object, Mr.
Ciresi is
characterizing the document, the document speaks for itself, and that
is
not what it said.
MR. CIRESI: Well we'll -- we'll go back then. Let's
take a look --
THE COURT: Rephrase your question.
Q. Let's go to Exhibit 10299. Don't lose your place
there; hold it,
sir. Okay?
A. Okay.
Q. And if you go to the Bates number 752, this is
Dr. Wakeham's report
to the board; correct?
A. Yes.
Q. Okay. "We are of the conviction, in view of the
foregoing, that the
ultimate explanation for the perpetuated cigarette habit resides in
the
pharmacological effect of smoke upon the body of the smoker, the effect
being most rewarding to the individual under stress." Do you remember
that?
*35 A. Yes, I do remember that.
Q. And we talked about "pharmacological" being drug;
correct?
A. Yes. We had a disagreement about that, I think.
Q. Yes. Now if you go -- there it is, okay.
And earlier in that report to the board, people
started smoking because
of the advertising slogan or they gave one of two responses, that it
relaxes me or stimulates me.
A. Yes, I remember that.
Q. And the adolescent began to smoke because it
enhanced his image in
the eyes of his peers; correct?
A. Yes, I -- I recall that now.
Q. So if we can go back, then, to Exhibit 2557,
page four, where we
were --
A. Yes.
Q. Okay? Mr. Johnston's report to Dr. Seligman;
correct?
A. Yes, I think that's what it is. That's right.
Q. And he says, "In addition, young smokers are
less habituated than
older smokers, and can therefore probably quit or cut down more easily
than
an older smoker. Furthermore, many teenagers who might otherwise have
begun
to smoke may have decided against it because of the adverse economic
conditions." Correct?
A. That's what it says, yes.
Q. Okay. So essentially he's saying they're not
hooked --
A. That's not what he's saying.
Q. -- as much as an older smoker; correct?
A. That's not what he's saying there.
Q. Well he doesn't say hooked, he says habituated;
correct?
A. Yes, that's what he says, are less habituated.
Q. Now you'd agree that if the price goes up, teen-agers
might not
otherwise begin to smoke; correct?
A. That is absolutely right. And that's what we've
negotiated with the
states' attorneys general in our proposed resolution.
Q. We're going to get to that, sir.
A. Thank you.
Q. We're going to get to that.
Now you say that's absolutely right, but your company
has protested
that for years, that increasing prices would not depress teen-age smoking;
hasn't it?
A. I don't know about that, sir.
Q. You don't?
A. No.
Q. It's taken public positions on that; hasn't it,
sir?
A. Not to my knowledge.
Q. Never?
A. I don't know.
Q. Now if you turn to the last page, who do we see
getting copies of
this memo? Mr. McDowell; correct?
A. Yes.
Q. Vice-president of the company; correct?
A. I'm not sure. He could have been.
Q. Mr. Morgan, vice-president, brand management
and CEO; correct?
A. In -- at this point in time in 1975, I think
Jim Morgan was what he
said yesterday, a brand manager.
Q. Right. That's what I said, VP brand management,
and he became CEO of
Philip Morris U.S.A.; correct?
A. Yes, a few years ago.
Q. Stayed till 1994; correct?
A. About then, yes.
Q. When did he leave?
A. Oh, I think in November.
Q. November of 1994?
A. No, November 1997.
Q. November 1997.
A. Uh-huh.
Q. Just a couple days after his deposition was taken.
A. Is that so?
Q. You don't know?
A. No, I don't know.
Q. Dr. Wakeham got a copy. Vice-president; correct?
A. Yes.
*36 Q. Mr. Resnik, who is that?
A. Frank Resnik?
Q. Yes.
A. Frank Resnik had been CEO of Philip Morris U.S.A.
He's now since
deceased.
Q. CEO of Philip Morris U.S.A.; correct?
A. I believe so, yes.
Q. Okay. Mr. Thomson; correct?
A. Yes.
Q. And who is he?
A. I seem to recall he ran Philip Morris's operations
in Europe.
Q. In Europe?
A. Uh-huh.
Q. Okay. Dr. Osdene, vice-president of research
and development;
correct?
A. I'm not sure of his title, but he was in R&D,
yes.
Q. And Dr. Gannon, do you know who he is?
A. Well I remember him. He was in R&D, yes.
Q. Yes. And Mr. Daniel, do you know who he is?
A. No, I don't know who he is.
Q. So this went to the president, a future president,
and high
management of the company; didn't it, sir?
A. Well I don't know that it went to the president,
sir.
Q. Well the president of the international, Mr.
Resnik.
A. No, no. He wasn't president of the international.
Q. What was he president of?
A. He became president of Philip Morris U.S.A.
Q. I'm sorry.
A. I'm not sure when.
Q. Do you know if he was president at that time?
A. I don't know.
Q. Okay.
A. This is 1975?
Q. Yes.
A. No, he was not, to my knowledge, no. He was in
-- I think he was in
research and development.
Q. High officials of the company; correct?
A. They were senior executives, yes.
Q. Talking about children and Marlboro's role in
terms of the market
for those children; correct?
A. This letter from Myron Johnston talks about that.
Q. Yes.
A. Yes.
Q. Ashamed of this one, too?
A. I am ashamed. I'm embarrassed about that, yes.
Q. Another anomaly?
A. Well Jim Morgan described it as -- as an anomaly.
I think that's a
fair description, yes.
Q. So it's another anomaly. Fair statement?
A. Well I think you said it was an anomaly before,
so I wouldn't like
to keep saying the same document is an anomaly. So that it sounds like
the
same document is ten anomalies; it's one anomaly.
Q. All right. So this is --
I'm asking you for yours. This is another anomaly
that you've seen;
correct?
A. You asked me about this document before as being
an anomaly, and I
said yes, I think it is.
Q. All right. I apologize if I already asked you
that question.
A. Thank you.
Q. Can you go to Exhibit 10339.
A. Yes, I have it.
Q. And the date of this document, sir, is 1981?
A. Well I can't see the --
Oh, there we are. Yes.
Q. I apologize for that. If you turn to the third
page of the document,
you'll see it's on Philip Morris letterhead, and it's got the date
March
31, 1981?
A. Yes. I have that.
Q. Okay. Philip Morris U.S.A.; correct?
A. Yes.
Q. To Dr. Seligman from Myron Johnston; correct?
A. Yes. Yes.
Q. This is about, what, six years after the last
document we saw;
correct?
A. I've forgotten. That was '75?
Q. Yes. Okay.
MR. CIRESI: We'd offer Exhibit 10339, Your Honor.
*37 MR. BLEAKLEY: No objection.
THE COURT: Court will receive 10339.
BY MR. CIRESI:
Q. If you could turn to the page that's got Philip
Morris U.S.A.
Research Center, it's the first page that has actual type on it, sir.
The
Bates number is 804.
A. Oh.
Q. 804.
A. Okay. Got you. That's --
Q. Do you have it?
A. Yeah. Got it.
Q. Okay. The title of this is "Young Smokers Prevalence,
Trends,
Implications, and Related Demographic Trends." Correct?
A. Yes.
Q. And it's written by Mr. Johnston; correct?
A. Yes.
Q. Approved by Harry Daniel and Carolyn Levy; correct?
A. Yes.
Q. Goes through the distribution list of a number
of people; correct?
A. Yes.
Q. And if you go to Bates number 806, there's some
cc's; correct?
A. Yes.
Q. And Mr. Thomson was director of development;
correct?
A. Not to my knowledge, no.
Q. Do you --
A. I -- I think he was the person who ran Philip
Morris Europe.
Q. Philip Morris Europe.
A. I think that's what his job was.
What year was this again?
Q. 1981, sir.
A. 1981. No, I think he'd left Philip Morris by
then, so I don't know
who Mr. Thomson is.
Q. Okay.
A. I'm getting those confused, I think, here. Because
I know that Mr.
--
The Mr. Thomson I'm thinking of left Philip Morris,
I think, in 1976.
Q. Okay. If I represent to you that he was director
of development,
that's been told to us by Philip Morris, would you accept that?
A. Yes, I would accept that.
Q. All right.
A. Uh-huh, uh-huh.
Q. And Mr. Daniel, do you know who that is?
A. No, I don't.
Q. Do you know who Dr. Levy is?
A. Yes, I do. That's Dr. Carolyn Levy.
Q. Senior vice-president, marketing and sales?
A. Today?
Q. Yes.
A. Yes.
Q. And Mr. Meyer, do you know who he is?
A. No, I don't.
Q. And Mr. Zoler, do you know if he was the director
of marketing
research?
A. I remember that some years ago, yes.
Q. Now if we go to the page that has Bates numbers
805, do you see
that?
A. Yes.
Q. You see the trends that are set forth there?
A. Yes.
Q. "After increasing for over a decade, the prevalence
of teenage
smoking is now declining sharply." Do you see that?
A. Yes.
Q. "After increasing for over a decade, the average
daily consumption
of teenage smoking -- smokers is declining." Do you see that?
A. Yes, I do see that.
Q. Three, "After increasing 18 percent from 1967
to 1976, the absolute
number of 15- to 19-year-olds will decline 19 percent during the 1980's,
with the period of sharpest decline beginning in 1981." Correct?
A. Yes, I do see that.
Q. "Beginning in 1981 the absolute number of 20-
to 24-year- olds,
paren, the ages during which average daily cigarette consumption increases
most rapidly, will begin to decline, after increasing for the past
20
years;" correct?
A. Yes.
Q. And that's because there were less teen-agers
coming into that
market; correct, based on what is set forth?
*38 A. Well yes, I think that's a fair --
That's logical, I think, yes.
Q. Okay. Now if you go on to the next page --
A. Uh-huh.
Q. If you want to read the rest there, please do.
Page two, "It is inevitable therefore, the industry
sales will begin to
decline within the next four years. Thus, Philip Morris USA can sustain
its
past rate of growth only by an acceleration of the rate of increase
in
market share." Do you see that?
A. Yes.
Q. "While this news is not good for the industry,
I believe we can use
these data and other data I plan to report on to good advantage in
order to
minimize the adverse effect on Philip Morris." Correct?
A. Yes, that's what it says.
Q. Good planning; correct?
A. I beg your pardon?
Q. That's a good planning principle; correct?
A. Yes. I think that's sensible, yes.
Q. All right. Then he goes on, "This report deals
with only one of
these trends -- teenage smoking and attitudes toward smoking, together
with
related demographics."
Is that a good principle, too?
A. No, I don't think so.
Q. Are you ashamed of this one, too?
A. Well no, I -- I would need to know more about
it because I don't
think this suggests at all that we're marketing cigarettes to teenage
smokers. I've got a feeling that Jim Morgan talked about this yesterday.
Did he?
Q. No, this has not been introduced.
A. Well, I think what he is talking about was that
Mr. Johnston had
been collating public information.
Q. Yeah. He was a provocateur; correct?
A. That's what he said, yes. That's right.
Q. Somebody who stimulated conversation; correct?
A. Well Jim described him as that, yes.
Q. Just like you described the board as being stimulated
by
conversation.
A. I didn't say exactly those words, sir.
Q. Well the record will reflect what you said.
A. Uh-huh.
Q. "This report deals with only one of these trends
-- teenage smoking
and attitudes towards smoking together with related demographics.
Subsequent reports will cover the social, economic and psychographic
characteristics of teenage smokers and the demographics of other
significant age groups."
Now, if that's what Philip Morris did, you'd be
ashamed of that;
wouldn't you?
A. Well I don't think that's good at all, sir.
Q. Pardon me?
A. I don't think that's good at all.
Q. You'd be ashamed.
A. I'd be ashamed. Yes, I would agree with that.
Q. Another anomaly; correct?
A. It would be an anomaly, I think, to me. I wasn't
around at that
time. But it is certainly anamolous to the Philip Morris I know, I
can tell
you that.
Q. But the company would be responsible for its
actions; wouldn't it,
sir?
A. The company is responsible for its actions.
Q. And it would be accountable for its actions;
wouldn't it?
A. I believe every company is accountable for its
actions.
Q. Must be accountable; correct?
A. Must be accountable?
Q. Yes.
A. Yes, I think that's fair.
*39 Q. Under our system of justice it must be accountable.
A. I think under any --
MR. BLEAKLEY: Your Honor, this is argumentative.
THE COURT: It's becoming argumentative, counsel.
Q. Let me ask it this way: Would you agree that
under our system of
justice, it must be held accountable?
MR. BLEAKLEY: I don't think it's relevant. "Under
our system of
justice," I think that's argumentative and I object to it.
THE COURT: No, you may answer that.
MR. BLEAKLEY: "Under our system of justice?"
THE COURT: You may answer the question.
A. Could you please repeat the question, sir?
Q. Would you agree that under our system of justice
a company should be
held accountable for its actions?
A. Yes. I think that's reasonable, yes.
Q. Now Mr. Johnston goes on to say, "Because the
major data sources
have just become available, and because of the importance of these
data to
the company, I have elected to report the data in a series of memoranda
rather than wait and issue all of the material at once." Correct?
A. Yes.
Q. And if you go to the contents, you see the summary;
don't you, sir?
A. Yes.
Q. Teenage smoking prevalence 1968 to 1974; correct?
A. Yes.
Q. Teenage smoking prevalence 1975 to 1980; correct?
A. Yes.
Q. Smoking prevalence and educational aspirations;
correct?
A. Yes.
Q. Race differences in smoking prevalence; correct?
A. Yes.
Q. Regional differences in smoking prevalence; correct?
A. Yes.
Q. Future smoking expectations; correct?
A. Yes.
Q. Reasons for decline in teenage smoking; correct?
A. Yes.
Q. Conclusions and implications; correct?
A. Yes.
Q. If you go to the next page to the summary, do
you see down in the
third paragraph there's reports about 12- to 18-year- olds?
A. Yes, I do.
Q. "Average daily consumption of these young smokers
also
increased...?"
A. Yes, I do see that.
Q. Do you think it's a good idea for Philip Morris
to be tracking 12-
to 18-year-old smokers?
A. Well I don't know if they're tracking them.
Q. Well let me ask it this way, because I don't
want to quibble with
you. Okay?
A. Thank you.
Q. Do you think it's good for Philip Morris to be
reporting to a number
of people within the company, including people in management, about
average
daily consumption of teenage smokers, not even teen-agers, 12 to 18?
A. No, I don't think that's appropriate, sir.
Q. You're ashamed of that; aren't you, sir?
A. Well I'm ashamed of it, but I don't know the
circumstances under
which this was done.
Q. And if you turn to the "Conclusions and Implications
"--
A. Can you point me to a page, please?
Q. Sure. I'm sorry. Page 828, last three Bates numbers.
"The decline in
the percent of teenagers who smoke, their decreased levels of consumption,
and the decline in their absolute numbers means that the industry can
no
longer rely on an ever increasing pool of teenage smokers to replace
adult
smokers lost through natural attrition." Do you see that?
*40 A. Yes.
Q. "Natural attrition." People who die; correct?
A. Well I would say die or quit.
Q. Die or quit.
A. Hmm.
Q. And maybe die from lung cancer; correct?
A. Well it's certainly possible.
Q. Die from coronary heart disease; correct?
A. Well people can die from that, yes, sir.
Q. Die from chronic obstructive pulmonary disease;
correct?
A. People can die from that, sir, yes.
Q. Die from bladder cancer; correct?
A. I think there are many things people die from,
sir.
Q. All of the things I mentioned have been found
to be caused by
cigarette smoking by the Surgeon General of the United States; correct,
sir?
A. I'm not so sure about that, but I certainly agree
that he has said
lung cancer and emphysema and heart disease.
Q. All found to be caused; correct, sir?
A. Yes, that's what he has said.
Q. And your company and the other companies through
The Tobacco
Institute have lobbied in this state to kill legislation that would
keep
children from smoking; haven't you?
A. I'm not familiar with that, sir.
Q. Can you direct your attention to Exhibit 14488.
A. Yes, I have it.
Q. This is a Tobacco Institute document. Do you
see it, sir?
A. Well I don't know that it is, but I'll accept
that it is if you tell
me it is.
Q. You see down in the lower right-hand corner "TI
Minnesota," you see
that?
A. Yes, I do.
Q. Do you know if this was another document that
was just released on
the Internet last Friday?
A. I have no idea.
Q. And you see the date in the upper left-hand corner?
A. Yes.
Q. April 11th, 1985?
A. Yes, I do.
Q. And I'll represent to you that the author and
the addressee or
recipient of this memo worked for The Tobacco Institute in 1985. Will
you
accept that?
A. I don't know that, but I'll accept that, yes.
Q. And your company financed The Tobacco Institute
in 1985; didn't it?
A. I think we would have been one of the contributors.
I think all of
the companies contribute to The Tobacco Institute.
Q. You would have been the largest contributor because
you had the
largest share of the market; correct?
A. I believe that's right, because I believe we
contribute - -
But in 1985, I'm not sure if we were the largest.
We probably were.
Q. And there's a background section. Do you see
that?
A. Yes.
Q. "Since January, as you know, the situation in
Minnesota has been
'uncommonly active."' Do you see that?
A. Yes.
Q. And it says that -- 39-point technical advisory
committee report on
non- smoking and health, do you see that?
A. Yes.
Q. And there was a raft of legislative issues; correct?
A. Well hang on. I can't keep up with you. Held
the promise, yes, I see
that.
Q. Thirty-nine separate legislative proposals; correct?
A. That's what it says.
Q. And do you see where it says about halfway down
or a little bit more
than halfway in that paragraph, "The ink" -- it's over on the right-hand
side.
*41 A. Yes, I have that.
Q. "The ink was not yet dry on this report before
our lobbyists
initiated an aggressive and focused effort in communication with
legislative leadership and targeted key legislative activists. This
effort
was successful in preventing a majority of the report from seeing its
way
from the drafting board to a legislator's hand." Do you see that?
A. Yes, I do.
Q. It also points out that ten separate bills survived
and have evolved
to form the basis of our opponent's legislative agenda; correct?
A. That's what it says.
Q. And then it goes on to point out that these strategic
moves came on
the heels of a four-day visit by United States Surgeon General C. Everett
Koop; correct?
A. Yes, that's what it says.
Q. And that Koop, in a well-publicized media event,
testified before
several legislative committees and study groups; correct?
A. Yes, that's what it says.
Q. And it says here that in a previous memo, the
author, Mr. Brozek,
had noted that Koop's appearance in Minnesota was timed to bring life
to a
flagging and scattered legislative effort by the Minnesota lung, cancer,
and heart organizations; correct?
A. That's what it states.
Q. Public health organizations; correct, sir, those
three?
A. Which three, sir?
Q. Lung, heart, and cancer.
A. Yes, they would seem to be -- that seems to be
accurate.
Q. Interested in the public health; correct?
A. That -- that would seem to me to be accurate,
yes.
Q. Do you remember the promise in the Frank Statement
to cooperate
closely with those whose duty it is to protect the public health?
A. Yes, I remember you pointing that out to me.
Q. And if you turn to the next page, sir, --
A. Yes.
Q. -- talks about the status of bills; correct?
A. Yes, it seems to.
Q. And do you see the status for SF, which would
be Senate File 38?
A. Yes.
Q. And that was a bill which would increase state
excise taxes on
cigarettes to 54 cents a pack, earmarking those revenues for the state
medical assistance fund. Do you see that?
A. Yes, I do.
Q. And that language contained in the legislation
formally referred to
tobacco-related illnesses?
A. Yes, I see that.
Q. And do you see the legislative program action
notes where it says
that efforts by your organization, The Tobacco Institute, are continuing
to
kill this bill in committee?
A. I read that, yes.
Q. And can you direct your attention to page 954
of this document.
A. Yes, I see that.
Q. And you see Senate File 776?
A. Yes.
Q. And House File 810?
A. Yes.
Q. And this was bipartisan legislation by Senator
Nelson, a member of
the Democratic Party, and Representative Quist, a member of the Republican
Party. Do you see that?
A. Well I didn't know Senator Quist was a member
of the Republican
Party.
Q. Let me represent to you that IR stands for the
Republican Party, and
DFL stands for the Democratic Party. Will you accept that?
*42 A. Yes, I will.
Q. And then it reads that this is Governor Perpich's
priority
legislation. Bill would increase cigarette tax by 15 cents per pack
in
order to segregate revenues for youth education, community stop-smoking
programs, work-place initiatives, sampling ban, advertising bans, and
then
sewer construction, mosquito control and general mischief, do you see
that?
A. Yes.
Q. And right below that, legislative program action
notes, your
organization, they stated it is at the finance committee level that
we hope
to defeat this measure; correct?
A. Yes, it says that.
Q. Are you ashamed of that, too?
A. No, I'm not ashamed of it, sir, because I haven't
read the whole
report.
Q. And if you turn to the back page, sir, the last
page, page nine.
A. Page --
Q. Nine, at the top.
A. Yes.
Q. Do you have it?
A. Yes.
Q. The conclusion is stated there; isn't it?
A. Well I don't know it's a conclusion. It's the
last paragraph.
Q. Well it's under "SUMMARY;" isn't it?
A. Well I haven't seen that. You haven't referred
me to that.
I now see it, yes.
Q. "Every possible legislative, political, social
and theoretical angle
is being utilized in our efforts to get out of this session unscathed.
Since Minnesota has seen fit to designate itself, as Surgeon General
Koop
stated, 'a model for the country' with regard to anti-smoking legislation,
our only choice in this matter is a complete victory. Anything less
could
be used against us in other areas. We will employ all means to secure
that
victory." Do you see that?
A. Yes, I do.
Q. And you were the major contributor, your company,
to that effort;
weren't you, sir?
A. Well I don't know if we were, but we would have
been a significant
contributor to The Tobacco Institute.
MR. CIRESI: Your Honor, that might be --
THE COURT: We should recess and reconvene tomorrow
morning at 9:30.
THE CLERK: Court stands in recess, to reconvene
tomorrow morning at
9:30.
(Recess taken.)