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
6, 1998
A.M. Session
JUDGE: Hon. Judge Kenneth J. Fitzpatrick, Chief Judge
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: Counsel.
MR. CIRESI: Thank you, Your Honor.
Good morning, ladies and gentlemen.
(Collective "Good morning.")
ANDREW J. SCHINDLER called as a witness, being previously
sworn, was
examined and testified as follows:
BY MR. CIRESI:
Q. Good morning, Mr. Schindler.
A. Good morning.
Q. Sir, can you direct your attention to Exhibit
14303, which would be
in volume two. It's toward the front, sir.
A. Yes.
Q. Now sir, you would agree that if smokers are
addicted, that their
free choice would be impaired; correct?
A. If they were. But I don't believe they're addicted.
I believe they
have free choice to start smoking, and I believe they have free choice
to
quit smoking.
Q. And direct your attention to Exhibit 14303, which
is a memorandum to
Mr. Kloepfer from Mr. Knopick of The Tobacco Institute. Have you seen
this
document before?
A. I don't believe I've seen this particular document.
Q. It's dated September 9th, 1980; correct?
A. Yes, sir.
Q. And you'll see in the first paragraph that Mr.
Knopick is attaching
a technical review of the conference of the National Institute of Drug
Abuse, which wanted "addictive" attached -- added to the cigarette
warning.
Do you see that?
A. Yes, I do.
Q. Do you know who Shook, Hardy is?
A. They're a law firm.
Q. Represents the tobacco industry?
A. Yes. I believe -- I believe they represent Philip
Morris.
Q. And have they represented RJR in the past?
A. Not to my knowledge.
Q. Have they represented the Tobacco Institute?
A. I do not know for sure. I do not have specific
knowledge that they
did.
Q. Okay. You do know that The Tobacco Institute
is supported in part by
RJR.
A. Of course.
Q. Okay. Can you turn to the second page, sir. I'd
like to direct your
attention to the sentence starting "Shook, Hardy...." Do you see that?
A. Yes, sir.
Q. "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?
*2 A. Yes, I do.
Q. And you do know that the internal memoranda of
RJR that we reviewed
yesterday dealt with the pharmacological, addictive nature of nicotine;
do
you not?
A. We had a lot of documents yesterday. I recall,
I guess, some of them
-- or one of them talking about pharmacological effect. I don't recall
"pharmacological addictive effect."
Q. Do you recall that it was part of the Teague
memo talking about the
industry being a specialized segment of the pharmaceutical industry?
A. I recall Dr. Teague's personal opinion and theory.
Q. Do you remember Dr. DiMarco's memorandum?
A. Are you talking about one to Dr. DiMarco?
Q. Yes.
A. I remember there was a document yesterday to
Dr. DiMarco.
Q. Do you remember the McKenzie document, Exhibit
12270?
A. Well I -- I remember a document that had John
McKenzie's name on it,
yes.
Q. Do you remember the REST memo?
A. Yes, I remember the REST memo.
Q. Now yesterday you said you couldn't recall what
your superior, Mr.
Goldstone, said when he testified in Congress regarding the addictive
nature of nicotine; correct?
A. I did not have a precise literal remembrance
of exactly what he
said, you know, whatever -- month or so ago, but I had a rough idea
of what
he said.
Q. And your rough idea was that he testified that
nicotine was
addictive; correct?
A. My rough remembrance of that was that if you
classify -- if the
definition for addiction is a habit, then he would say it was addictive
under that definition, is what I remember.
MR. CIRESI: May I approach, Your Honor?
THE COURT: Yes.
MR. WEBER: Is that predesignated?
MR. CIRESI: It's to refresh his recollection, counsel.
MR. WEBER: Your Honor, I object to the use of anything
that hasn't been
predesignated.
It has been? I thought he just said -- let me --
Can I just check for a minute, Your Honor?
MR. CIRESI: We're only using it at this point to
refresh his
recollection, Your Honor.
MR. WEBER: It was predesignated, Your Honor.
THE COURT: Thank you.
BY MR. CIRESI:
Q. This is a document that's in evidence, sir, it's
Exhibit 24299, the
transcript of the proceedings of January 29th, 1998 before Chairman
Representative Thomas Bliley from Virginia.
Do you recall that Mr. Goldstone testified on that
day?
A. Sure do.
Q. And you recall that the CEOs of the various tobacco
companies were
asked whether or not nicotine was addictive?
A. Yes.
Q. And you do know that in 1994 the CEO of RJR testified
that tobacco
was not addictive; correct?
A. He --
Yes, I recall that. I have to see his testimony.
Q. Okay. In fact the CEOs of every one of the tobacco
companies lined
up in a row, put their arms up, swore to tell the truth, and said tobacco
is not addictive in 1994; correct?
A. I believe that's true, yeah.
Q. And that was six years after the Surgeon General
found tobacco and
cigarettes to be addictive; correct?
A. Yes.
Q. Are you aware of any definitional changes by
any health organization
between 1994 and 1998 regarding the addictive nature of tobacco?
*3 A. No, not that I'm familiar with.
Q. Can you direct your attention to page 65 of Exhibit
24299.
A. I'm sorry, what page was that?
Q. Sixty-five. You'll find it at the top, sir.
A. Yeah, I got it. I'm on page 65.
Q. And at the bottom, you see that Represented --
Representative
Degette -- excuse me --
A. Yes.
Q. -- is starting to ask some questions?
A. Yes.
Q. And he states as follows: "The first area I want
to talk about is
this. Four years ago tobacco company executives came before this committee
and under oath like you were asked the question, is nicotine addictive?
Each of those executives responded the same, under oath, that nicotine
was
not addictive.
"I'd like to ask each of you the same question:
Is nicotine addictive?"
And then he says, "I'd like to start with Mr. Brooks,"
who's the CEO of
Brown & Williamson.
If you go over to the next page, I want to direct
your attention down
to Mr. Goldstone's response on page 66.
MR. WEBER: Your Honor, I object on this and ask
for the rule of
completeness that we begin a little bit -- few lines above so we can
get
the entire context of the discussion. It was a panel set of answers.
I'd
suggest we begin with Mr. Brooke's comments a few lines up on page
66 for
completeness purposes.
MR. CIRESI: Well, Your Honor, I'm asking about Mr.
Goldstone at this
point. If we want to talk about Mr. Brookes, then we'll get to him
when we
get to Brown & Williamson.
THE COURT: I think it's appropriate that we relate
to the testimony of
Mr. Goldstone. Mr. Brookes is a completely different issue.
MR. WEBER: But my only point on that, Your Honor,
was that the
questions were following each other and there's a context there. But
I -- I
can deal with that later.
THE COURT: Sure.
BY MR. CIRESI:
Q. See where Mr. Goldstone says, "Yes, I think under
the way people use
the term today, I agree, it is." Do you see that?
A. Yes.
Q. Now, there were no definitional changes that
you're aware of between
1994 and 1988 -- '98 regarding addiction; were there, sir?
A. No.
Q. There were none between 1988 and 1998; were there,
that you're aware
of?
A. I believe --
My understanding is there was a definitional change
in ninety --
nineteen ninety -- 1988 relative to the 1964 Surgeon General's report.
Q. You mean the Surgeon General in 1988 found nicotine
addictive and
with a similar pharmacological effect as cocaine and heroin? Is that
what
you're saying?
A. No. I'm saying that I believe -- it was my understanding
that the
Surgeon General had a different definition in 1988 for addiction than
the
Surgeon General had in 1964, and that's when in the '88 Surgeon General's
report that they said it was addictive. It was a definitional change.
Q. Well, what definitional change are you referring
to, if you know?
A. Well, I believe in, you know, 1964, the Surgeon
General, in the
definition of addiction in those days, referred to things such as
intoxication, an ever-increasing demand for the product, that withdrawal
or
ceasing to use the particular drug or product frequently required
hospitalization, that use of it became debilitating, you could lose
your
job, become socially dysfunctional. That is my understanding of the
term of
addiction back in '64, in that period of time. That is what people
refer to
as the classical definition of addiction. It's certainly the one I
grew up
with, or my understanding of it. And in 1988 I believe there were changes
that basically altered how that was defined, and suddenly intoxication
and
those types of things were not required, that -- that it's sort of
if
something is a habit that people enjoy that may be difficult to give
up,
that you're in a -- in a broader class -- broader definition of addiction.
And under those terms, if it's a habit that some people might enjoy
that
some people might have difficulty giving up, I would say if that's
the
definition of addiction, that cigarette smoking would certainly meet
that.
But if the definition of addiction is one of intoxication, of risk
of
losing your job, socially dysfunctional, needing to be committed to
an
institution to get off the use of the product, I don't believe cigarettes
meet that definition. That's heroin, cocaine, alcoholics. And I just
don't
believe that cigarettes meet that definition of addiction.
*4 Q. Okay. In 1964 did the Surgeon General rely
on the World Health
Organization's definition? If you know.
A. I'm not sure.
Q. In nineteen sixty --
Subsequent to 1964, within a short period of time,
did the World Health
Organization definition change, if you know?
A. I do not know.
Q. Pardon me?
A. I do not know.
Q. Did RJR turn over its internal documents to the
Surgeon General at
any time between 1964 and 1998?
A. I have no knowledge.
Q. Do you know if the definition for addiction includes
physiological
effects and psycological effects?
A. I suspect it does.
Q. Do you know if everybody who's on cocaine has
to be hospitalized?
A. No, I don't know that.
Q. Do you know that smokers who are trying to quit
smoking have to be
hospitalized in some instances?
A. I don't know that. I've never known a smoker
who wanted to quit
smoking who was hospitalized.
Q. Have you read Dr. Hurt's testimony in this case?
A. No, I haven't.
Q. If smokers have to be hospitalized, then they
fit one of the
criteria you just mentioned; is that correct, sir?
A. They would. I've never known anybody to be hospitalized
to give up
smoking. Forty some million people have given up smoking; I don't believe
40 some million people have gone to hospitals to give up smoking.
Q. Do you think everybody who's been on cocaine
or heroin has been
hospitalized to give up it?
A. I don't think everybody is, but I'll bet there
have been more
cocaine addicts go to hospitals to get off of their dependency than
there
have been cigarette smokers.
Q. Have you done a study on that?
A. Pardon me?
Q. Have you done a study on that?
A. No, but I'd bet on it.
Q. Have you had the company do any type of study
on that?
A. Absolutely not.
Q. Have you had the company do any type of study
as to how many people
who are on the addiction of smoking have to seek help from professionals
in
order to quit?
A. To be hospitalized?
Q. Yes.
A. I have --
We've done no study to find out how many people
have been hospitalized
to get off of smoking.
Q. Now you do know that people use other pharmaceutical
aids to quit
smoking; don't you?
A. Yeah. Patches and nicotine gum.
Q. Inhalers?
A. I'm not sure. I guess there are inhalers. I'm
not --
Q. Now you know that people suffer psycological
withdrawal symptoms
when they try to quit smoking?
A. What do you mean by "psychological?"
Q. Do they become irritable?
A. Some people do. They become irritable if they
give up coffee and
caffeine, too.
Q. Sir, I didn't ask you that.
How many people a year does coffee kill?
A. I don't know.
Q. Has it ever been reported that coffee kills 420,000
people a year?
A. Not to my knowledge.
Q. Have you ever seen any reports like that?
A. No.
Q. Have you ever seen a report from the Surgeon
General saying that
coffee is the number one preventable health disease in this country?
*5 A. No.
Q. You don't know what the definitions of addiction
are; do you, sir?
MR. WEBER: Objection, Your Honor, it's asked and
answered. We just went
through that a few minutes ago.
A. I gave --
THE COURT: You may answer.
Q. Let me ask it this way, sir: You don't know the
medical definition
is of addiction; do you?
A. No.
Q. Now at any time between 1954 and 19 -- and today,
has RJR warned
smokers that smoking is addictive?
A. No.
Q. At any time between 1954 and today, has RJR directed
people to their
internal memoranda which shows what RJR knew about nicotine and its
addictive characteristics?
A. Could you --
Could you repeat that question?
Q. Sure.
At any time between 1954 and today, has RJR directed
the public to
RJR's internal documents to show what RJR knew about the addictive
nature
of nicotine?
A. I don't recall the company directing the public
to internal
documents of the company.
Q. Now you said that Joe Camel advertising stopped;
is that right?
A. Yes. July of last year.
Q. July of 1997.
A. Yes, sir.
Q. So all advertising stopped on that day.
A. Well it --
That's when we started to make the transition, started
to take down
billboards, stop print ads, and made the transition to the new ad campaign,
yes.
Q. So you didn't --
There wasn't anything new after that day is what
I meant -- I'm asking.
Is that right?
A. What do you mean by "anything new?"
Q. Well there wasn't any new advertising and promotions
for Joe Camel
after that date.
A. All the billboards went down over a period of
time, all the print
ads, point of sales started to come down, and the only thing that's
going
on is we had a Camel Cash catalog for this year, which is a retrospective
on all the ad campaigns that the brands had over its 85-year history,
and
there's three or four or five pages in that catalog that have Joe Camel
memorabilia in that catalog, and that will finish in September of this
year. That's the only thing that's going on.
Q. That came out after RJR pledged not to have any
more Joe Camel
advertising; didn't it?
A. When we withdrew the campaign from the market
-- from the market or
announced that we were doing it, we made it very clear that there would
be
a Camel Cash catalog. In fact, in the -- I believe we made that known
to
the attorneys in the Mangini case which we settled in California.
So there was no hidden agenda there; that was very
open, that we would
have this retrospective Camel Cash catalog of which there were a few
pages
in there of Joe Camel memorabilia. But all the billboards, all the
print
advertising, point of sales I guess, virtually gone. There could still
be a
few pieces laying around out there, but Joe's off the broad public
landscape.
There's a few pages in the Camel Cash catalog which
will end in
September, and that will be it.
Q. Mr. Goldstone didn't know that was still going
on when he testified
in front of Congress on January 29th; did he?
*6 A. No. And it doesn't surprise me that he didn't;
he doesn't review
all the advertising, promotion and marketing plans that we have.
Q. And in fact, he said it shouldn't be going on;
didn't he?
A. I don't remember that, that it shouldn't.
Q. Well why don't you direct your attention to page
78 of the memo --
or the transcript you have in front of you, Exhibit 24299.
A. What page?
Q. Page 78, sir.
A. Yes.
Q. Start at the top of that page. Representative
Brown.
A. Yes.
Q. "Thank you, Mr. Chairman. I want to follow" --
MR. WEBER: Can I object -- can I object to the reading
of this
question? It's a political speech from a political forum. It doesn't
--
under 403, it doesn't belong in a courtroom.
MR. CIRESI: This is the testimony under oath, Your
Honor, by Mr.
Goldstone in response to a question by a member of Congress regarding
the
representations that all Camel advertising and promotion was done.
MR. WEBER: I have no objection, Your Honor, to the
Goldstone part, it's
the political speechifying.
THE COURT: That's something you can argue. But I
don't see how we
cannot have the question and just get the answer. So just -- I mean
you may
argue with his form of questioning, but you can certainly --
MR. WEBER: Can I make one suggestion on that, Your
Honor?
THE COURT: Yes.
MR. WEBER: Because he could ask just the question
right before Mr.
Goldstone speaks that begins "And I guess...," because that's the question
after all the speechifying before it.
THE COURT: Well --
MR. CIRESI: Well I don't know what "speechifying"
is, --
THE COURT: Okay.
MR. CIRESI: -- but it's the prelude to asking the
question, Your Honor.
THE COURT: I will allow a full question before an
answer, and allow you
--
I mean if you want to argue to the jury later that
this representative
is a politician, you're welcome to do that.
BY MR. CIRESI:
Q. "REPRESENTATIVE BROWN: Thank you, Mr. Chairman.
I want to follow up
with Mr. Goldstone. I didn't get a chance earlier when we were trying
to
talk and the time ran out. I appreciate your comments that the documents
were 'immoral, unethical, illegal"' --
Do you see that, sir?
A. Yes.
Q. Those were the documents we have been viewing
here in this courtroom
that you've testified to; correct, sir?
A. Yes.
Q. Those were the documents to the board of directors;
correct?
A. Yes.
Q. -- "I think, is the three adjectives you used.
I'm troubled by some
things with sort of the re-emergence on the Joe Camel stuff. Your company
sent out a direct-mail piece to at least one family in Minnesota called
"Camel Cash Timeless Collectibles, 1913 to 1998."
"My understanding is you have retired Joe Camel.
He's' gone; he's not
coming back....you can send away still, even after Joe Camel went into
retirement, you can get a set of tumblers called 'Joe's Beach Club.'
You
can get Camel T-shirts. You can get Joe Camel jamming on the piano,
Joe
Camel lighters. And my favorite is you can get a book of the illustrated
history of Joe Camel stating, quote, 'Joe may be gone, but he won't
be
forgotten.'
*7 That's troubling when you said publicly you're
retiring Joe Camel.
At the same time, something really more troubling than that happened
in
Cleveland, not far from my district, in restaurants and coffee clubs
and
concert halls all over, where there's something called Camel Clubs
that was
reported by a Cleveland newspaper when young sort of hip kids in their
20s
-- of smoking age, of legal age -- go and sort buddy up with people
that
may or may not be 18 -- of legal age -- go and buddy up with people
that
may or may not be 18; may be 16 in some cases -- they're not places
that --
that go -- that only 18- or 21- year-olds are allow to go -- and give
away
cigarettes and get to know the people that work at the restaurants
or the
bars or the concert halls. These are the kinds of things still going
on.
"And I guess I'd like to ask you, in light of your
comments of saying
that the documents were immoral, unethical and illegal, are these things
--
is your company going to keep doing the Camel Clubs and keep doing
the
sales of Joe Camel paraphernalia?
"MR. GOLDSTONE: Congressman, I feel quite strongly
when I came to a
conclusion a number of months ago that our company, for a lot of reasons,
should not be using Joe Camel. And I do not expect our company to be
using
Joe Camel on -- I'm not sure what this is; I'm just looking at it now.
But
if this exists today, it is not going to exist -- I don't know that
I can
say tomorrow it will all be gone, but it should be gone. We are not
going
to use Joe Camel. And the only thing I can tell you about the other
activity -- I mean, I do have to say to you that marketing or selling
cigarettes in bars or in places where clearly you must be 21 years
or older
to get in has to be something that we can feel is a reasonable activity
if
tobacco companies are going to be able to advertise at all, because
we know
that children are not in those areas."
Do you see that, sir?
A. Yeah.
Q. And Mr. Goldstone was not aware of the Joe Camel
Cash Collectibles;
correct?
A. Apparently. Or if he was, he forgot. But he makes
a statement it
will be gone, and it will be gone. It -- it -- there's nothing -- there's
no hidden agenda here. It's very open. It's a Cash -- Camel Cash catalog.
Doesn't have Joe Camel on the cover; it has an ad or something, I believe,
from back in the '30s or '40s.
Believe it or not, Mr. Ciresi, adult smokers like
Joe Camel, like the
memorabilia. When we pulled the campaign, all of a sudden some of these
old
mugs and old ads and stuff started being collectibles and people really
liked them. So we're doing a retrospective on 75 years of the brand.
We
have a few pages in there on Joe, and in September that's it, it's
gone.
And --
Q. "Gone but -- Gone but not forgotten" is what
you said in the Cash
Collectibles brochure; correct?
A. Well it won't be forgotten, but it will be gone.
Q. And -- and you had devices in there that could
be put around beer
cans with Joe Camel; correct?
*8 A. Yeah. Some of the stuff that was used over
the about eight or
nine years that we had the campaign.
Q. T-shirts?
A. Yeah.
Q. Handlebar T-shirts, pool-player T-shirts; correct?
A. Yeah, I believe so. I don't remember all the
items in there.
Q. Dart games; correct?
A. Could be.
Q. A beach club tumbler set; correct?
A. Yes.
Q. Money clips; correct?
A. I don't have the catalog in front of me; I'll
have to take your word
for it, that you're getting it all out of the catalog.
Q. Well let me hand you a copy of it, see if it
will refresh your
recollection.
MR. CIRESI: May I approach, Your Honor?
(Catalog handed to the witness.)
BY MR. CIRESI:
Q. That's the catalog; correct?
A. Right.
Q. And if you turn to the page dealing with Joe
Camel, it says "The Joe
Years;" correct?
A. Yes.
Q. All right.
A. Yeah. "Joe Years."
Q. And you've got a lot of posters there, the illustrated
history of
Joe; is that right?
A. Yeah.
Q. And then if you go over to the next page, you'll
see the lighters,
dart games; correct?
A. Absolutely.
Q. And you go to the next page --
That's this page here (displaying); correct, sir?
A. Yes.
Q. Then you go to the next page and you've got ashtrays;
correct?
MR. WEBER: Your Honor, I'd object at this point.
A. Yes.
MR. WEBER: If he's using this for refreshment of
recollection --
THE COURT: Just a moment, please. Would you allow
me to rule, please?
A. Yeah, ashtrays or --
THE COURT: Sir, sir.
THE WITNESS: Oh.
THE COURT: Would you allow me to rule on the objection,
please? Okay.
Thank you.
The objection is sustained unless you're going to
introduce it as an
exhibit.
MR. CIRESI: All right. Thank you, Your Honor.
BY MR. CIRESI:
Q. And there were T-shirts in there; correct, sir?
A. Yes.
Q. And people will be able to order from this until
September of this
year; correct?
A. Yes.
Q. And this went into effect in February of this
year; correct?
A. I believe that's right, yes.
Q. About nine months after RJR said that it wasn't
going to use the Joe
Camel image any more; correct, sir?
A. Yes. And when we said we were pulling out of
the Joe campaign, we
told people we had this Camel Cash catalog coming out in this retrospective
fashion, which also has a bunch of other items from the '40s and the
'50s
in it, too.
Q. Apparently you didn't tell Mr. Goldstone, the
CEO, or he forgot when
he testified under --
A. He might have.
Q. Excuse me.
A. He's a busy man.
Q. Excuse me.
Apparently you didn't tell Mr. Goldstone, your CEO,
or he forgot when
he testified under oath; is that right?
A. He may have forgotten. He may -- he may not have
known. I just can't
remember.
Q. Now you'll recall that yesterday we went over
the Frank Statement?
A. Yes.
Q. The representations that were made by RJR, among
others of the
defendants, to the public back in 1954; correct?
*9 A. Yes.
Q. Now you testified that RJR is part of The Tobacco
Institute;
correct?
A. Yes.
Q. It has also supported The Council for Tobacco
Research since 1954;
hasn't it?
A. Yes.
Q. And that was previously known as the TIRC; correct?
A. I believe so, yes.
Q. And you know that was formed in 1954 to engage,
among -- in, among
other things, public relations; correct?
A. It was formed in 1954, from my understanding,
to do research into
diseases related to smoking.
Q. Okay. Can you direct your attention, sir, to
Exhibit 18904.
A. I'm there.
Q. This is a Hill & Knowlton document, sir,
that's already been
introduced into evidence. Have you seen this before?
A. Hmm. This is one I don't think I've seen.
Q. Okay. Then let's back up a document and let's
go to 18905 first.
A. Yes.
Q. This is another Hill & Knowlton document
dated December 15th, 1953.
Have you seen this?
A. I don't think so.
Q. You are aware, based on your knowledge of the
history of the tobacco
industry, that in 1953 certain studies were published in Reader's Digest
and other places concerning smoking and lung cancer?
A. You know, I remember that broadly as part of
the historical past of
45 years ago.
Q. And at that time that caused great alarm among
the tobacco industry?
A. I was nine years old at the time. I wasn't around
for the great
alarm in the tobacco industry in 1953 or '4.
Q. Well have you learned about that during the course
of your career
with RJR?
A. No. I don't remember interacting with anybody
in or -- in the course
of my career who was telling me about the great alarm they had in 1953
over
the Reader's Digest articles.
Q. Have you learned about the steps the industry
took in order to get
out information that was entirely pro cigarette?
A. In 1950s?
Q. Yes.
A. I -- I wasn't in the company in the '50s.
Q. That's not what I asked.
A. I -- you know, there --
If we're referring to specific documents, I think
we should just go to
them. I don't read --
I mean I haven't studied 1953 and '54.
Q. Well then is your answer no?
A. I suppose it is.
Q. Well then just say no, sir.
MR. WEBER: Object to the commentary of counsel,
--
A. No.
MR. WEBER: -- Your Honor.
Q. Thank you.
Have you read Exhibit 18905?
A. No, I haven't.
Q. Can you go to the first page.
MR. WEBER: Your Honor, I'd object to any questioning
on this exhibit
under Rule 602, which limits testimony to matters of which the witness
has
knowledge. And in addition, it's cumulative, it's a document that's
been
gone through before with other witnesses.
THE COURT: Not with this witness though.
MR. WEBER: And then on Rule 602, Your Honor?
THE COURT: Denied.
BY MR. CIRESI:
Q. Do you see, sir, in the first page, that one
of the participants in
this meeting at the Hotel Plaza was a group called together by Paul
Hahan,
president of American Tobacco, and one of the chief executive officers
was
from R. J. Reynolds?
*10 A. Yes.
Q. Have you seen this document now before?
A. No, I haven't.
Q. Okay. You didn't get an opportunity to read this
in preparation for
your testimony?
A. I just told you I've never seen it.
Q. Okay. Can you direct your attention to the next
page, and about four
paragraphs down under Roman numeral III, "The Industry's Position,"
do you
see the statement, "They feel they should sponsor a public relations
campaign which is positive in nature and is entirely 'pro-cigarettes.'
They
are confident they can supply us with comprehensive and authoritative
scientific material which completely refutes the health charges?"
A. Yes, I see that.
Q. And were you aware that the TIRC, the forerunner
of the CTR, was
formed in part to carry on public relations functions?
A. No, I'm not aware of that. My experience with
CTR is we give money
to the CTR, and blue ribbon panel of medical research and scientists
administer grants throughout the country, Nobel Prize winners and American
Academy of Science people that -- that administer that money.
Q. Have you ever --
A. I have no knowledge of this PR thing back in
the '50s.
Q. Okay.
A. From what I've seen -- the purpose, as I understand
it, is what I've
seen carried out, in my experience with it.
Q. And sir, have you ever called these Nobel Prize
winners and
academicians together to have a blue ribbon committee to determine
from
them whether they believe smoking causes lung cancer?
A. No, I've never done that.
Q. Have you ever called them together to see if
smoking causes chronic
obstructive pulmonary disease?
A. No, I haven't.
Q. Have you ever called them together to see if
smoking causes chronic
heart disease?
A. No, I haven't.
Q. Have you called them together to see if smoking
causes any disease?
A. No, I haven't.
Q. Now you do know that back in 1953 and early 1954,
the companies
considered that their own advertising and competitive practices had
caused
a health problem. You know that; don't you?
A. Could you repeat the question, please?
Q. Sure.
You do know that back in 1953 and early 1954, the
companies considered
that their own advertising and competitive practices created a health
problem.
A. No, I don't know that. I've never heard that
before.
Q. Nobody ever told you that?
A. No. You're the first one.
Q. Well, can you direct your attention to page three.
A. Yes.
Q. And if you look at the second indented paragraph.
A. "Distribution" --
Q. "Do the companies...." Do you see that?
I'm sorry, the further indented paragraph, I should
have said.
A. Oh, "Do the companies...," is that what you're
--
Q. Yes.
A. Okay.
Q. "Do the companies consider that their own advertising
and
competitive practices have been a principal factor in creating a health
problem?
"The companies voluntarily admitted this to be the
case even before the
question was asked."
Do you see that?
*11 A. Yeah, I see that.
Q. And where in the Frank Statement is the statement
that the company's
advertising and competitive practices have been a principal factor
in
creating a health problem?
A. Can you repeat the question, please?
Q. I will, indeed.
Sir, I'll give you an opportunity if you want to
read another paragraph
in there.
A. Well I --
Q. If you could -- if you could listen --
A. -- I've never seen this before, and you give
me a couple of
sentences and then start asking questions. I'll have to admit while
you
were asking the question I was trying to read a little bit of this
thing.
Q. And I'll give you an opportunity to do that if
you want to;
otherwise, if you'd listen to my question, we'll be able to move through
it
a little quicker. All right? Is that agreeable?
A. Fine. Go ahead.
Q. Where in the Frank Statement did RJR or any of
the tobacco companies
say that their advertising and competitive practices have been a principal
factor in creating a health problem?
A. Nowhere that I know of.
Q. In fact, they said that their products did not
create a health
problem; didn't they?
A. I believe they said that they didn't believe
that products were
injurious to health or something like that.
Q. So they said directly contrary to what they said
internally;
correct?
A. I don't know what they were talking about here.
I don't know if they
were talking about an actual health problem or the problem of the health
community attacking them because of the nature of their ads, so I don't
really know what they were talking about here in 1953 when I was probably
in eighth or ninth grade. I had -- you know, you --
You're interpreting this as they were admitting
that cigarettes and
advertising caused health problems. They could be talking about the
problem
they had with the health community because of the nature of their
advertising. I don't know.
Q. Are you done?
A. Yes.
Q. Okay. But what the document says is that "Do
the companies consider
that their own advertising and competitive practices have been a principal
factor in creating a health problem?
"The companies voluntarily admitted this to be the
is case even before
the question was asked."
That's what the document says; correct?
A. I understand that, Mr. Ciresi. This is the first
time I have seen
this document. This is 45 years ago. I have no idea what happened in
this
meeting. I don't even know who these people were that were in the meeting.
And you're asking me to tell you what I think about these two or three
sentences in this document. I have no knowledge of what these folks
were
doing.
Q. Now can you go to Exhibit 18904.
A. I'm there.
Q. Do you know if the companies were faced at that
time with a problem
of establishing confidence in the companies and the companies' leaders?
MR. WEBER: Your Honor, I have the same objections
under 602 and
cumulative as with the last one.
THE COURT: It's denied.
*12 A. I have no knowledge.
Q. All right. Can you direct your attention, please,
sir, first of all,
to the second page of this document.
Do you know if the companies at this time wanted
a cancer- free
cigarette?
A. I have no idea.
Q. Do you know if Hill & Knowlton interviewed
the research directors of
the companies?
A. I have no idea.
Q. All right. Do you see it reported on page two.
A. Where?
Q. At the top of the page, "The attitude of the
men we must directly
deal with in the industry is at once interesting, and important for
us to
understand. This is why notes on the four interviews with 'research
directors' are given at some length. You'll get from them little real
information about lung cancer, pro or con; but you'll find some mighty
interesting opinions. One of them said, 'It's fortunate for us that
cigarettes are a habit they can't break."' Do you see that?
A. Yes. Whoever said that was wrong. Forty some
million people seem to
have broken the habit, the volume in the industry has declined 20 some
percent since 1982, so obviously this person's forecasting skills were
a
little limited.
Q. Well how many people have died from smoking-related
diseases --
A. I have no --
Q. -- since 19 --
Excuse me, sir.
A. I have no idea.
Q. Excuse me. How many people have died from smoking-related
diseases
since 1987?
A. I have no idea.
Q. I suppose they aren't buying cigarettes any more;
are they? Are
they, sir?
A. I don't believe people who are not alive can
buy cigarettes.
Q. So that volume would go down; wouldn't it, sir?
A. Yes, sir.
Q. And if schools in states were trying to overcome
the advertising of
your companies to prevent youth from smoking and youth didn't smoke,
that
would cause the volume to go down; wouldn't it?
A. I don't believe our advertising causes youth
to smoke.
Q. Well, if the schools in the states were trying
to overcome the
tendency of people to smoke, young people, for whatever reason, that
would
cause the volume of smoking to go down; wouldn't it?
A. If people stopped smoking, the volume will go
down.
Q. And your volume went up.
A. When?
Q. In the last two years. Hasn't it?
A. Our volume?
Q. Yes.
A. Our cigarette volume?
Q. Yes.
A. No. Our cigarette volume -- I don't know what
-- from, say, 1992 to
today, has probably gone down maybe 20 percent.
Q. The last two years, sir, the volume --
A. It's gone down in the last two years, probably
about five -- four,
five percent.
Q. Has your market share gone up?
A. No.
Q. Did it go up last year?
A. Our total market share? No.
Q. No, did the market share in any brand go up?
A. Oh, yeah. Camel share went up with four to five
tenths of a share
point.
Q. And did it go up from the time the Joe Camel
ad came on?
A. Yes.
Q. Every year it went up?
A. Not every year.
Q. Almost every year; correct?
A. Probably most of the years, but not every year.
*13 Q. And it went up in the youngest category;
didn't it, sir?
Youngest age group?
A. Eighteen to 24?
Q. Let's take your definition, 18 to 24. Went up
every year; didn't it?
A. No, I don't think it's gone up every year.
Q. Can you think of one year that it didn't since
1988?
A. Yeah. I believe it actually went down some from
ninety through --
'93 through '96.
Q. The Camel --
A. '93, '94 --
Q. Camel --
A. Talking about 18 to 24.
Q. Camel --
A. Yeah, there's some -- there's been some decline
in the 18 to 24.
After the campaign started, somewhere within a couple years or so,
and I'm
not sure of the exact dates, it went up to 10 to 13 percent of 18 to
24.
It's been at nine, it's been at 10, it's been at 13; it's bounced around
a
bit.
Q. So --
A. It's not been -- it's not been some steady rise
in 18 to 24.
Q. It's gone up multiples since before that campaign
was put into
place; hasn't it?
A. I told you it went up from before the campaign,
but it has not
continued to rise, as you implied in your question.
Q. Now if you go back to this document, "'It's fortunate
for us that
cigarettes are a habit they can't break."' You can't break --
A. What --
Q. Excuse me, sir. I haven't finished.
A. No, I'm not sure where you are.
Q. On page two, the same document.
A. Okay.
Q. Right where we were.
A. You're more familiar with this document than
I am, so you have to
give me a few minutes to find the place.
Q. Did your lawyers give you this document? It was
a designated
document.
A. I had told you when we started here I do not
remember seeing this
document, and as we've gotten into it I can tell you I haven't seen
this
document.
Q. "'It's fortunate for us that cigarettes are a
habit they can't
break."' If somebody can't break a habit, are they addicted to it?
A. I don't agree with that statement.
Q. Didn't ask you that.
A. Well if somebody can't break a habit -- can't,
impossible -- I guess
you'd say they were addicted to it.
Q. All right. Now is everybody who uses cocaine
unable to stop using
cocaine?
A. No.
Q. Is everybody who uses heroin unable to stop using
heroin?
MR. WEBER: Objection, Your Honor, asked and answered
earlier this
morning.
A. No.
MR. WEBER: We went through this.
THE COURT: Well this is a little different question.
Q. Your answer was no; is that right?
A. Yes, it was no.
Q. Do you see the next statement, "'Boy! wouldn't
it be wonderful if
our company was the first to produce a cancer free cigarette."'
A. Yes.
Q. "'What we could do to the competition!"' Do you
see that?
A. Yes.
Q. Did RJR at any time from 1954 forward say that
they knew back in
1954 that their cigarettes cause cancer?
A. Could you ask me the question again?
Q. Yes. At any time since 1954, has RJR said that
their cigarettes
cause cancer?
A. No.
Q. Can you go down to the next paragraph. "At the
moment, these men
feel thrown for a loop. They've competed for years - not in price,
not in
any real difference of quality - but just in ability to conjure up
more
hypnotic claims and brighter assurances for what their own brand might
do
for a smoker, compared to another brand." Do you see that?
*14 A. Yes.
Q. Now sir, over the years RJR has sold low tar/low
nicotine
cigarettes; correct?
A. Yes. Low tar cigarettes have been on the market
since, ah, late
'60s, early '70s.
Q. And you don't know if those cigarettes are safer
because you have no
data to confirm that they are safer; correct?
A. That's true.
Q. That's absolutely true; isn't it?
A. That I have no data that says low tar cigarettes
are safer?
Q. Yes.
A. That's true. I have no data that -- that I know
of that says low tar
cigarettes are safer.
Q. RJR has no data; correct?
A. That's right. I don't know of any data RJR has
that says low tar
cigarettes are safer.
Q. You're not aware of any such data that the industry
has; correct?
A. I'm not aware of any.
Q. Are you aware that in this courtroom, RJR is
suggesting that low tar
cigarettes are safer? Are you aware of that?
A. No.
Q. If they were, if they're trying to convince the
ladies and gentlemen
of this jury that they are, there's no data to support that; is there,
sir?
A. I --
MR. WEBER: Objection, Your Honor, --
A. I don't --
MR. WEBER: -- it's a misstatement of what's been
said in this case.
THE COURT: I think you'll have to rephrase that
question, counsel.
Q. I want you to assume that that is what's being
urged in this
courtroom. If that is being urged, you know of no data to confirm that;
do
you, sir?
MR. WEBER: Same objection, Your Honor.
THE COURT: You may answer that.
A. I'm not going to assume that was said in this
courtroom. I find it
hard to believe that it was. In fact I don't believe it was.
Q. Because --
A. So why shall I assume something that I believe
didn't happen?
Q. Well let me --
I'm going to ask you two questions on that. Number
one, I have a right
to ask you to assume. So we'll go forward and say: Assuming that, you
know
of no data to confirm it; correct?
A. I don't --
MR. WEBER: I object to counsel's commentary in the
preface to the
question, Your Honor.
THE COURT: No, I think it was necessary to ask.
Q. You know of no data to confirm it; do you?
A. I don't know of any Reynolds data that says that
low tar cigarettes
are safer, and I do not assume that that happened in this courtroom.
Q. In fact, you would find that hard to believe
because you don't
believe it; correct?
A. Believe what?
Q. That low tar/nicotine cigarettes are safer.
A. In the absolute sense that you're defining that,
I believe that, you
know, basically what medical science has said over the years, that
it's a
good idea to address the risk in smoking -- cigarette smoke by reducing
the
tar levels. And we've pursued that over the years; we have cigarettes
today
that are substantially less in tar and nicotine. I believe in principle
they may have or have the potential to reduce the risk. They certainly
reduce the compounds that science associates with the risk of smoking.
In
the absolute sense of a safer cigarette, I couldn't say that. But it
reduces tar, reduces compounds that people associate with the risk
of
smoking.
*15 Q. Are you done?
A. Yeah.
Q. Okay. Let me ask my question again. See if you
can answer it.
You stated --
MR. WEBER: Object to counsel's commentary again,
Your Honor.
THE COURT: No, that's not commentary.
Q. You stated as follows: "I'm not going to assume
that was said in
this courtroom. I find it hard to believe it was. In fact I don't believe
it was." Isn't that what you said?
A. Yeah.
Q. Thank you, sir.
Now in 1954, were you aware that the problem that
was facing the
industry was confidence and how to establish it, public assurance and
how
to create it?
A. I was not aware of that in 1954.
Q. Did anybody advise you that that was how the
industry looked at the
health issue at that time before they formed The Council for Tobacco
Research, then known as the TIRC?
A. I was in Harrisburg, Pennsylvania in grade school
in 1954.
Q. That's not what I asked you, sir.
A. I -- I do not know what you're talking about
here in terms of 45 or
44 years ago and conversations between PR firms and executives and
scientists in 1954. I have no knowledge of what they were doing.
Q. Please direct your attention to page four of
this exhibit.
A. Yes.
Q. Very top. "Problem 1.
"The very first problem is to establish some public
confidence in the
industry's leaders themselves, so that the public will believe their
assertions of their own interest in the public health." Do you see
that?
A. Yes.
Q. And by "their assurances" -- excuse me.
By "their assertions," that's referring to the industry's
leaders'
assertions; correct?
A. Appears that way. I think it does.
Q. And you're an industry leader today; correct?
A. Yes.
Q. And you're making statements of your interest
in the public health;
aren't you?
A. What do you mean?
Q. That you are interested in not selling to children;
correct?
A. We don't sell to children. We don't market or
develop marketing
programs for children.
Q. And so you're making a statement about the public
health and you
want people to believe it; correct?
A. That's the way we operate the company. It's a
fact.
Q. Can you answer my question?
A. Well of course I want people to believe it --
Q. All right.
A. -- because it's the truth.
Q. Now let's go on to see what the industry thought
of their statements
in the past. Do you know if they felt that they tended to twist the
facts?
A. I don't know if people tended to twist the facts
in the past.
Q. Can you go to page five. Do you see problem three?
A. Yes.
Q. "How to validate this message of assurance."
Do you see that?
A. Yes.
Q. And then it says, "The men talked to in the cigarette
companies tend
to," and then it goes through subparagraphs (a), (b) and (c), do you
see
that?
A. Yes.
Q. One of the things they tended to was to smear
the personal
responsibility, motives, judgments or techniques of Wynder and others
supporting him. Do you see that?
*16 MR. WEBER: Your Honor, I'd object to any questions
about the
characterizations by Hill & Knowlton about what other people did.
I think
that's inappropriate under 403.
THE COURT: No, I think it's appropriate. These people
are working for
the tobacco company and they're talking about the tobacco executives.
It's
relevant, and I will allow that inquiry.
Q. Do you see that, sir?
A. Paragraph (a)?
Q. Yes.
A. Okay. What's --
Yeah, I see the --
Q. Okay.
A. -- the sentence.
Q. "The men talked to in the tobacco" -- or "in
the cigarette companies
tend to:
"Think occasionally in terms of trying to 'smear'
the personal
responsibility, motives, judgments, or techniques of Wynder and others...."
Do you see that?
A. That's what this says.
Q. Okay. And Wynder was one of the scientists who
published materials
regarding the relationship of smoking to lung cancer; correct?
A. Yes.
Q. You remember his name; don't you?
A. Well I've heard his name over the years, yes.
Q. Now another thing that the men talked to in the
cigarette companies
tend to do is set forth in paragraph (c). Do you see that?
A. Yes.
Q. "To overlook the fact that in this particular
instance, the stakes
for the public are even larger than for the tobacco manufacturers.
(For the
public, an issue touching the deepest of human fears and instincts
is
involved - the issues of uncontrollable disease and death. Hence cigarette
companies might not readily be forgiven, if their approach to this
problem
is stemmed only from eagerness to protect their earnings, and if they
twisted the research of medical science (which seeks to save men) into
a
device to save stockholders. There is no precedent where a great industry
has been forced to face such grave issues."
"In the past, industry has given little twists to
the facts of science,
to convert them into sales propoganda, without much risk. The cigarette
industry has indeed been doing this for years."
Now did you know that, sir?
A. Did I know that somebody wrote this in this document
40 some years
ago? No.
Q. No. Did you know that an agent of the tobacco
industry who met with
the executives and research directors wrote that in the past, industry
had
given little twists to the facts of science to convert them into sales
propoganda without much risk? Did you know that?
A. I did not know that anybody ever wrote this or
said that, or this
person existed or anything.
Q. Nobody ever told you about this.
A. No.
Q. Nobody ever told you that it was these documents
which led to the
Frank Statement put out by your company and the other manufacturers
who are
sitting around these tables represented by these lawyers. Nobody ever
told
you that.
A. No.
Q. "We can therefore" -- if you go back to the page
where I was. "We
can therefore readily" --
A. Wait, wait, wait a minute. Where -- I'm lost.
Q. Same paragraph.
A. Oh. Okay. Got you.
Q. "We can therefore readily understand its assumptions
that the same
technique will work now, in devising propaganda. But it is highly important
to note that the deep issues of life-and-death that are involved make
highly doubtful the question as to whether the familiar techniques
can be
relied on. The stakes are too large; the penalties for losing could
be too
great."
*17 Do you see that?
A. Yes, I see that.
Q. Did anybody ever advise you of that?
A. No.
Q. If the tobacco industry has twisted the facts
over the years, the
penalties should be great; shouldn't they?
A. I'm not a lawyer or a judge, I don't know how
to answer a legal
question that you seem to be putting to me.
Q. I'm not asking you a legal question, I'm just
asking you as one
human being to another. If this industry twisted the facts over the
years
regarding science, the penalties should be great; shouldn't they?
MR. WEBER: Your Honor, I'd object to the commentary,
to the
argumentative nature, and to the fact that it does deal with legal
issues
for the jury.
THE COURT: No, it's a proper question, except for
the first half of the
statement.
MR. CIRESI: I'll withdraw that part of it.
THE COURT: The question itself is okay.
BY MR. CIRESI:
Q. Sir, if the tobacco industry twisted the facts
over the years, the
penalties should be great; correct?
A. I don't --
That's a legal judgment I believe you're asking
me to make. I'm
incapable of making that. I don't -- I mean I don't know how to answer
that
question.
Q. Just no way of knowing; right?
A. I'm not a lawyer. I'm not a judge.
Q. So you think --
A. If there are legal penalties to be rendered,
they'll be rendered by
the jury.
Q. So that's for the jury --
A. They will sit and judge what they see and they
will render their
decision. That's the way the system works.
Q. And you have no idea whether the penalties should
be great if the
facts were twisted by the industry that you worked for for over 40
years.
MR. WEBER: Objection, Your Honor, asked and answered.
It's the last
question.
THE COURT: It's been asked and answered.
Q. Now sir, if you look back on page five of that
document, --
A. Yes.
Q. -- you see that at the top there's a reference
to a smoker starting
with "He might just as well go on enjoying his smoke...." Do you see
that?
A. Yes.
Q. "He might just as well go on enjoying his smoke
in this interim
while research pursues the facts, with full assurance that if any
cancer-causing agent is ever found -- really found in tobacco, the
manufacturers will quickly find a way to eliminate it." Do you see
that?
A. Yes.
Q. And if you go on over to the bottom of page seven,
at the bottom of
that page, --
A. Yes.
Q. -- last paragraph, "You can count on the cigarette
companies (who
have obligated themselves to pour millions of dollars into cancer research)
to take anything out of your cigarette that is a health hazard" --
Does that mean if it's a risk?
A. I guess we're talking about risk, yes.
Q. Okay.
-- "if our science ever really finds any such hazard
in the wonderful
tobacco leaf. Meanwhile know this: despite the most elaborate attempts,
no
efforts to give mice a lung illness by making them live days on end
in
tobacco smoke has ever produced a cause -- case of such illness through
that kind of exposure." Do you see that?
*18 A. Yes.
Q. Okay. That's animal testing; correct?
A. Yes.
Q. Biological testing; correct?
A. Yes.
Q. And did RJR do biological testing?
A. In the '50s?
Q. In the '60s, in the '50s --
Let's start in the '50s.
A. I don't know.
Q. Did they do it in the '60s?
A. I'm not sure. I think so, but I'm not sure.
Q. Did they have a Mouse House that they closed
down?
A. I've heard that.
Q. Did you read the documents about it?
A. No.
Q. Do you know if it was closed down because the
CEOs of RJR and Philip
Morris talked and that it was in violation of the gentlemen's agreement
not
to do that type of research?
A. No, I don't know that.
Q. You don't know.
A. Never heard of a gentlemen's agreement.
Q. Did RJR in the '50s and '60s know about cancer-causing
compounds in
the wonderful tobacco leaf?
A. I believe in the '50s and '60s, obviously Reynolds,
I would imagine
the other companies, the public health community, science, was in the
rather aggressive identification process of compounds in cigarettes,
so I'm
sure in the '50s and the '60s they knew there were compounds in cigarettes
that had been identified that had the potential to be cancer-causing
or
potential to have health risk.
Q. So RJR knew; correct, sir?
A. I would think. There was a lot of work, in my
understanding, going
on back in those days, not just at Reynolds but throughout the scientific
community, to attempt to identify various compounds in cigarettes.
Q. Did you not understand the question I asked you?
A. Apparently I didn't, because you're going to
ask it again.
Q. Well, you let me know if you don't understand
the question that I
ask you. Is that agreeable?
A. Yeah.
Q. Okay. Did Reynolds know that there were cance-causing
compounds in
cigarettes in the 1950s and '60s?
A. I believe --
MR. WEBER: Object, Your Honor, that was asked and
answered. It was a
proper answer.
THE COURT: It was not answered.
A. I believe, based on what I've heard, that Reynolds
was doing
research related to identifying compounds in cigarettes that could
potentially be cancer-causing.
Q. Okay. They were hazards found in the wonderful
tobacco leaf;
correct?
A. Hazards?
Q. Yes.
A. They were compounds, as I understand all this,
that had the
potential. Whether or not they were literally hazards in that sense
I don't
know, but they were identifying compounds --
Q. Well you just said no --
A. -- and publishing on it.
Q. Excuse me, sir. Didn't you just say earlier that
if it was cancer-
causing, it would be a hazard?
A. I don't remember what you're referring to.
Q. Can you direct your attention to Exhibit 12581.
A. That's a different book; right?
Q. It is.
Can you tell me, sir, while you're looking for that
document, when
Reynolds warned the consuming public that it knew there were cancer-causing
compounds in its cigarettes?
THE COURT: Counsel, I don't think it's fair to the
witness to have him
looking through to find a document and then ask a question at the same
time.
*19 MR. CIRESI: I'm sorry.
THE COURT: Why don't you wait until he finds the
document, then address
the question, please.
A. I have --
Q. Do you have the document?
A. Yes, I have the document, yes.
Q. Do you know when RJR warned the public that it
knew there were
cancer- causing compounds in its cigarettes?
A. I don't know that R. J. Reynolds ever, as you
put it, warned the
public that there were cancer-causing compounds in cigarettes.
Q. Never, right up to today; correct?
A. I don't recall the company ever taking out an
ad or -- if that's
what you're referring to.
Q. People would write in and ask for information
to Reynolds; wouldn't
they?
A. I suppose so, yes.
Q. People write in and complain about ads that Reynolds
was running;
correct?
A. Are you talking about today?
Q. Yeah. In the '80s, in the '70s.
A. Yeah, people --
You get people that write all sorts of things.
Q. Okay. And people who wrote in and asked about
the health hazards and
what Reynolds knew about the health hazards of smoking, did Reynolds
tell
them what was in their files?
A. No, not that I know of.
Q. And those were members of the public; correct,
that would write in?
A. Yes.
Q. The members who you made -- and by "you" I mean
RJR --
representations to in the Frank Statement; correct?
A. Could be, yes. I mean people --
That was in the public, people that write in are
from the public.
Q. And one of the representations, quoted correctly,
"We believe the
products we make are not injurious to health." Correct?
A. Yes, that's what that says.
Q. Now if you direct your attention, sir, to Exhibit
12581.
A. Yes.
Q. This is a "SURVEY OF CANCER RESEARCH with emphasis
on POSSIBLE
CARCINOGENS FROM TOBACCO" by Claude E. Teague, Jr., 2nd of February,
1953.
Do you see that?
A. Yes.
Q. It's the same Mr. Teague we saw yesterday --
or Dr. Teague we saw
yesterday; correct?
A. Sure is, I think.
Q. Have you seen this document before?
A. Yes, I believe I have.
Q. Okay. When's the first time you saw it?
A. I can't remember. I started seeing documents,
as I've said before,
you know, starting about a year and a half ago as I started to become
involved in various cases in litigation.
Q. Can you direct your attention to page 14.
A. Yes.
Q. And you see --
A. Or I'm sorry -- I'm sorry.
Q. And I'm talking about the 14, not the Bates number,
but the other
number, sir.
A. Yeah.
Q. Do you have it?
A. Yeah. "Tobacco Additives" and --
Q. Correct. And do you see the "CONCLUSIONS" section
there?
A. Yes.
Q. And Dr. Teague concludes there that "The increased
incidence of
cancer of the lung in man which has occurred during the last half century
is probably due to new or increased contact with carcinogenic stimuli."
Correct?
A. That's what it says.
Q. He goes on to state, "The closely parallel increase
in cigarette
smoking has led to the suspicion that tobacco smoking is an important
etiologic factor in the induction of primary cancer of the lung." Do
you
see that?
*20 A. Yes.
Q. And do you know what the term "etiologic" means?
A. No. You want to tell me?
Q. Do you know if it means cause?
A. Cause.
Q. And he goes on to state, "Studies of clinical
data tend to confirm
the relationship between heavy and prolonged tobacco smoking and incidence
of cancer of the lung;" correct?
A. That's what it says.
Q. Now this was almost a year before the Frank Statement;
correct?
A. Yeah.
Q. And in the Frank Statement, RJR said that its
product was not
injurious to the health of its users; correct?
A. Yeah. I believe what they said is they didn't
believe that it was.
Q. And of course cancer is injurious to people's
health; isn't it?
A. Sure is.
Q. Kills people; correct?
A. It can.
Q. And Dr. Teague goes on to say, under "RECOMMENDATIONS"
"It is recommended that this preliminary, broad
survey of cancer
research be supplemented by complete, detailed surveys of the individual
topics discussed above." Correct?
A. Yes. Uh-huh.
Q. "Such surveys should be made at frequent and
regular intervals in
the future so as to make current developments properly available to
interested persons." Correct?
A. Yes.
Q. And an interested person would be a user of the
product; correct?
A. I don't know who -- an interested person could
be somebody who
smokes or it could be something else he's referring to. Could be he's
referring to people in the company. I don't know who he's referring
to as
"interested persons."
Q. Certainly could be your customers; correct? And
by "your," I mean
RJR's customers.
A. Yeah, could be. But it seems to me what he was
doing here was doing
a survey of available medical literature on this subject and summarizing
it. It's not clear to me why the company would publish public medical
literature on research into cancer to smokers.
Q. Do you remember --
A. It's already publicly available.
Q. Have you ever done a survey of your smokers and
say, "How many of
you read the medical literature?"
A. No.
Q. Would it be fair to state, sir, that you would
find very, very, very
few consumers would be reading the medical literature?
A. I think that's true.
Q. And would it also be fair to state that the company
has a duty to
tell the public about what it knows about its product?
MR. WEBER: Let me object on asked and answered.
We went through that
yesterday, Your Honor.
THE COURT: It has been asked and answered.
Q. Let me ask it another way. Having in mind your
testimony that the
company has such a duty, do you know if RJR ever put out at regular
intervals any type of surveys of the medical literature so that its
consumers would know in one place what RJR knew?
MR. WEBER: Let me object to the beginning of that
question because it
attempts to summarize a bunch of testimony from yesterday. I mean the
remainder is all right, Your Honor.
THE COURT: No, I think the question is okay. You
may answer that.
*21 MR. CIRESI: You may answer.
THE WITNESS: Could you please repeat --
MR. CIRESI: Can we have the question back, please?
(Record read by the court
reporter.)
A. No, I don't -- I don't believe the company has.
Q. And if you go on to the next page, sir, Dr. Teague
is stating that
it's recommended that all tobacco additives, flavorants and humectants
used
by the company be examined carefully with respect to their possible
roles
as carcinogens or carcinogen- producing agents; correct?
A. Yes.
Q. Do you know if RJR ever did that?
A. We have toxicologists internal to the company
that review on a
continuing basis all of the additives in -- in the product. That list
has
been provided to Health and Human Services, all the additives that
are in
the products, since the mid-'80s. There was a blue ribbon panel of
toxicologists on an industry-wide basis that evaluates additives. You
know,
I think we do -- I know we do a lot of work relative to additives.
In terms
--
Q. In the 1980s you said?
A. Started --
Well I know for sure it started in the -- in the
early 1980s, that I'm
sure of. I don't know what the company did relative to that prior to
that
because I have no experience relative to this issue prior to that.
But in
the early '80s I know we did. That's when I became a plant manager
and
became familiar with the methodologies and so forth that we were using
in
the company.
Q. Did RJR provide that information to the public?
A. Provide what information?
Q. Its knowledge of carcinogens in the additives
and flavorants and
humectants.
A. I don't know of any carcinogens that we have
in flavors and
additives and humectants and all that sort of stuff, and if there is
any, I
don't think we ever published that list to -- to the public. But we
published a list of additives in 1994.
Q. Nineteen --
A. Ninety-four.
Q. And what caused the publishing of those additives
in 1994?
A. A decision by the industry to publish them.
Q. After the filing of this lawsuit; wasn't it?
A. I don't know. When was it --
I'm not sure when this lawsuit was filed. I don't
think it had anything
to do with this lawsuit.
Q. Okay. Now you say you formed a blue ribbon panel;
is that right?
A. It is my understanding that there is an outside
panel of
toxicologists that evaluate additives that are used in cigarette products.
Q. The entire industry got together with a blue
ribbon panel of their
own toxicologists; correct?
A. No.
Q. Isn't that what you said?
A. Our own toxicologists? No. My -- my understanding
is that there --
there is or has been a panel of outside toxicologists that evaluate,
as a
check on our own internal toxicologists, the additives that are used
in the
products.
Q. Oh, all right. So you got outside experts and
had a blue ribbon
committee to look at additives; is that right?
A. To evaluate or oversee what we're doing relative
to additives in
addition to our own scientists.
*22 Q. Do you know how many Surgeon General reports
there have been
since 1964?
A. '64 and '88, I guess a couple more. I'm not sure
how many.
Q. Do you know if there's been in excess of a dozen?
A. I have no idea.
Q. No idea.
Regardless of how many there are, the industry never
convened a blue
ribbon panel after any of those Surgeon General's reports to determine
what
that blue ribbon panel would say on whether smoking caused disease;
did it?
A. No.
Q. Right up to today it's never done that; has it,
sir?
A. That's right.
THE COURT: Counsel, I think we'll 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. Schindler, this blue ribbon committee that
looked at additives,
you said it was in the '80s?
A. Yes. I think they started somewhere in the mid-'80s.
Q. They don't look at the additives in the paper;
do they?
A. I'm not sure.
Q. They don't look at the additives in the filter;
do they?
A. I'm not sure. They may. I'm just not sure if
they do or not. I know
about tobacco -- I'm not --
I'm just not sure whether or not they look at paper
or filters. They
may.
Q. They don't test under pyrolysis conditions; do
they?
A. I don't believe so.
Q. They have no idea what happens to those additives
and what type of
hydrocarbons are formed when they're subjected to the temperatures
that
tobacco is when it's smoked; correct?
A. I really don't know what the scientific regimen
is that is used by
these folks. I know they're toxicologists, professionals in the field.
Q. But they do not test the additives under the
conditions that they're
subjected to in smoking a cigarette; do they, sir?
A. I do not know the answer to that question.
Q. Now in 1959 you are aware, are you not, that
RJR was aware of many
carcinogens in its smoke that had a distinct possibility would have
a
carcinogenic effect on the human respiratory system.
A. I believe the company was aware there were a
lot of compounds -- lot
of people were -- that were potentially carcinogenic, that were in
the
cigarettes.
Q. That would have -- that would have a distinct
possibility that they
would have a carcinogenic effect on the human respiratory system; correct?
A. I don't know about your specific use of the word
"distinct
possibility." I am aware or have been made aware that the company was
aware
that there were compounds in cigarettes that were being identified
that
were potentially cancer-causing, were carcinogens.
Q. Well if they did have a distinct possibility
of having a
carcinogenic effect on the respiratory system of a human being, that
would
be a health hazard; wouldn't it?
A. I'm not sure how to evaluate the term "distinct
possibility." That
says they may or they may not. I don't know what "distinct possibility"
means.
*23 Q. Can you direct your attention to Exhibit
12418. This is a
memorandum --
A. Is that -- excuse me. Is that 12 --
Q. 418. I'm sorry.
A. All right.
Q. Do you have it, sir?
A. Yes, sir.
Q. If you look to the back -- last page, you'll
see that's a memorandum
from Dr. Alan Rodgman --
A. Yes.
Q. -- to Mr. Kenneth H. Hoover. Do you see that?
A. Yes.
Q. Dated November 2nd, 1959.
A. Yes.
Q. "THE OPTIMUM COMPOSITION OF TOBACCO AND ITS SMOKE;"
correct?
A. Yes.
Q. And in this -- strike that.
Did you know if Dr. Hoover or Mr. Hoover was a research
director at
RJR?
A. I --
No, I didn't know Dr. Hoover. I know Alan Rodgman.
Q. And he was in the research and development department;
correct?
A. Yes, Dr. Rodgman was in research.
Q. And we've seen some of Dr. Rodgman's memos yesterday
relating to
nicotine; correct?
A. Yeah, sure did.
Q. Now in 1959 Dr. Rodgman reported to Mr. Hoover
concerning the
presence of carcinogenic compounds in RJR's tobacco smoke; correct?
A. I --
Yeah, I guess that's what's in here.
Q. And you see in the first paragraph that there's
a reference to the
fact that in 1954 the first report of the presence of benzopyrene in
tobacco smoke was published?
A. Yes.
Q. And that was a carcinogenic or cancer-producing
polycyclic
hydrocarbon; correct?
A. That's what this says.
Q. Do you know what a polycyclic hydrocarbon is?
A. Nope. I mean I've heard the term, but I'm --
as I pointed out
yesterday, I'm not a scientist.
Q. Do you know if they're highly carcinogenic?
A. I -- you know, I --
No. I mean I -- well I've -- I guess it depends
on dosage level and
exposure.
Q. Have you heard that they're highly carcinogenic?
A. I think I heard that they could be.
Q. Okay. And if someone was subjected to them over
20, 30 years on a
daily basis, is that what you're talking about as dose and exposure?
A. I'm not a toxicologist.
Q. Well you --
A. I -- I --
You're asking me if -- what happens if somebody
is exposed to a
polycyclic hydrocarbon over 20, 30 years in the form that it comes
out of
cigarettes, what happens to them. I don't know.
Q. That's not what I asked you.
A. Okay.
Q. You used the term "dose and exposure." I simply
asked a very simple
question. Did you mean by that, "dose and exposure," someone who is
exposed
to them over 20 or 30, 40 years on a daily basis?
A. No.
Q. You didn't.
A. I didn't mean that.
Q. Okay. What did you mean by the term "dose and
exposure?"
A. Well the toxicologists use that term, that the
risk in something has
to do with the amount you get or the dose.
Q. Okay.
A. Risk is in the dose. That's sort of a fundamental
principle, I
guess, that toxicology starts with. At least I've been told that by
toxicologists.
Q. So if someone is subjected to a dose daily during
the day of a
carcinogen, that's a dose element; correct?
A. Yes.
*24 Q. And if somebody is exposed to that over 10
or 15 or 20 years,
that's an exposure to it; correct?
A. Yes.
Q. And those are two terms you've heard from toxicologists;
correct?
A. Yes.
Q. And the more they're exposed to doses, the more
likely they may
contract cancer; correct?
A. Could be.
Q. Now directing your attention to Exhibit 12418,
do you see where Dr.
Rodgman then reports that since 1954, approximately 60 similar compounds
--
A. No, I --
Where are we?
Q. First paragraph. I'm sorry, sir.
A. Just a minute.
Q. Do you have it?
A. "In 1954 the first report" -- is that where --
Where are we? You're at the very first paragraph
under "HISTORICAL?"
Q. I am indeed.
A. Okay.
Q. Right where we were. Do you see it?
A. Like I said, you are more familiar with these
things than I am. It
takes me a little time to catch up.
Q. Do you think I should be more familiar with the
history of your
company with regard to the hazards and health than --
A. You are more --
Q. Excuse me, sir.
-- than the CEO of the company?
A. You are more familiar with these documents than
I am. I'm just
trying to stay with you here.
Q. How many years have you been with this company?
A. Twenty-four years in May.
Q. So you think that I should be more familiar with
your own company's
documents which bear upon safety and health than someone who's been
with
this company and who is the CEO and has been there for 24 years?
A. Mr. Ciresi, I am talking --
MR. WEBER: Let me -- let me object. First, it's
getting argumentative,
and he also asked it once, Your Honor.
THE COURT: Okay. It is argumentative.
MR. CIRESI: I'll withdraw the question.
BY MR. CIRESI:
Q. Direct your attention, sir, to the first paragraph.
See the last
sentence?
A. "Since then...?"
Q. Correct. Do you see it?
A. Yeah.
Q. "since then, approximately 60 similar compounds
have been isolated
from the smoke of cigarettes." Correct?
A. Right. That's what it says.
Q. Similar to benzopyrene; correct?
A. Similar -- similar to benzopyrene. "Since then,
approximately 60" --
Yeah, okay.
Q. Is that a fair statement?
A. Yeah.
Q. Okay. In the next paragraph it states that eight
of those polycyclic
hydrocarbons were isolated from the smoke, are known to produce cancer
in
mice. Correct?
A. Yes, that's what it says.
Q. "Another five or six are suspect as cancer-producing
agents in
laboratory animals." Correct?
A. That's what it says.
Q. And you go down to the next paragraph. "There
is no evidence that
any of these compounds will produce cancer in man. Nonetheless, there
is a
distinct possibility that these substances would have a carcinogenic
effect
on the human respiratory system. Medical experience has shown that
man
responds to various chemical substances in the same manner as experimental
animals. It is there -- It follows therefore that it would be better
for
the consumer if cigarette smoke were devoid of such compounds." Do
you see
that?
*25 A. Yes.
Q. Do you agree with that statement?
A. I think what Dr. -- yeah, I would --
Dr. Rodgman is saying that if you have compounds
in cigarettes that
have potential for risk to a smoker, and if you could get them out,
it
would be a good idea.
Q. Do --
A. And I would agree with that.
Q. And in Exhibit 18905, which was the Hill &
Knowlton document, it was
stated that the industry would remove such compounds; correct?
A. Yeah, I seem to remember there were references
in that PR document.
Q. And RJR never removed such compounds; did they?
A. I believe back there they tried various times
and were unsuccessful,
and that's how the whole effort on reducing risk in cigarettes with
public
health people and the industry finally turned to general reduction
of
compounds, because no one was successful at selective elimination.
So basic
principle that anybody could land on back in the '60s was general reduction
of tar and other compounds across the board as opposed to trying to
target
or selectively remove something, because --that was tried, my
understanding, in --
The company back in the '50s and early '60s tried
that and they were
unable to be successful.
Q. Is your answer no?
A. Yes.
Q. Thank you.
Did you ever tell the public --
MR. WEBER: Your Honor, I'm going to object to the
sarcasm and snide
comments and the smiling when the witness is answering. I think it's
inappropriate.
THE COURT: "Thank you" is not what I would consider
a snide comment.
Q. Once again, sir, if you don't understand a question
that I ask you,
please tell me.
The last question was: Did RJR ever remove such
compounds. "Yes" or
"no."
A. No.
Q. Did you ever tell the public that you found those
comments --
compounds and were not removing them?
A. No.
Q. If we go, then, to the next paragraph. "As described
in RDR, 1956,
No. 9" --
Do you know what that is?
A. An RDR?
Q. Yes.
A. No.
Q. Isn't that nomenclature for research and development
memoranda of
the RJR Tobacco Company?
A. I just told you, I don't know what RDR -- RDR
refers to.
Q. Okay. "As described in RDR, 1956, No. 9, we in
the R. J. Reynolds
Tobacco Company Research Department corroborated the published findings
with respect to 3,4-benzpyrene, obtained this compound in crystalline
form,
and positively identified it as a constituent of cigarette smoke on
the
basis of its chemical and physical properties. Some thirty-odd polycyclic
hydrocarbons have since been similarly characterized in these laboratories.
Of these, eight are carcinogenic in mouse epidermis. Cholanthrane,
a potent
carcinogen, is one of three not yet reported by other investigators."
Do
you see that?
A. Yes.
Q. That means it wasn't known to anybody else; correct?
A. You know, that's what it says in this memo.
Q. Did RJR ever publish that information at that
time?
A. I don't know.
Q. If you go on to page three of this memo. Again,
sir, this is back in
1959; correct?
*26 A. Yes, sir.
Q. This is the "DISCUSSION" section under Roman
numeral III?
A. Yes.
Q. And I'd like to direct your attention about halfway
through that
where it says, "Cigarette smoke should contain...." Do you see that
sentence?
A. Yes, I've got it.
Q. "Cigarette smoke should contain as little as
possible (preferably at
the zero level*) of the polycyclic hydrocarbons, should possess
satisfactory flavor to please the consumer, and should contain sufficient
nicotine to supply the necessary requirements of the smoker with respect
to
this compound." Do you see that?
A. Yes, I do.
Q. And that's the physiological effects that's being
referred to there
of nicotine; correct?
A. I don't know what Dr. Rodgman is referring to
in this 1959 memo.
Q. Then you wouldn't know if he's referring to the
pharmacological --
A. I don't know what he's referring to here.
Q. Do you see the asterisk after "zero level?"
A. Yes.
Q. And if you go down to the bottom, you see that
it states, "We
consider the zero level to be impossible to achieve as long as the
combustion temperature of the cigarette is greater than 700 degrees
Centigrade?"
A. Yes.
Q. And that's the level at which tobacco burns in
a cigarette; isn't
it, sir?
A. I'll take your word for it. I don't personally
know the temperature
that tobacco -- a cigarette burns at.
Q. You've never asked that of your scientists?
A. No.
Q. Have you asked your scientists what happens under
pyrolysis to the
additives and compounds in the cigarette when they're heated at that
level?
A. No, I haven't.
Q. Have you asked whether or not additional polycyclic
hydrocarbons are
formed?
A. No, I haven't.
Q. Did RJR in 1959 say to the public that it's impossible
to achieve
zero carcinogens in its cigarettes?
A. No, not that I know of.
Q. It never has done that; has it, sir?
A. Not that I know of.
Q. And if you go back up to the second full paragraph
under Roman
numeral III, and specifically the last sentence, do you see there where
Dr.
Rodgman is suggesting a threshold level of nicotine delivery?
A. No. You're talking about "...should yield nicotine
in the smoke in
an amount ranging from 1.5 to 2.0?"
Q. Yes.
A. I --
He's talking about a range of nicotine. I don't
understand where that's
any threshold.
Q. Do you have any idea why RJR would want a range
of nicotine?
A. I have no idea what Dr. Rodgman was referring
to in this memo.
Q. Do you know, if it gets above a certain range,
it may have a toxic
effect?
A. I imagine you could get above a certain range
of a lot of things and
get a toxic effect, so I would think that nicotine or something would
have
-- could be toxic in that sense.
Q. If it got below a certain range, would it not
have a pharmacological
effect?
A. Would it not? I don't know. I -- this is --
I don't see where this is about threshold or pharmacological
effect or
toxicity or anything.
*27 Q. If it got below a certain range, would it
have no
pharmacological effect?
A. I have no idea.
Q. So since you have no idea, you don't know if
the cigarettes were
designed to have a threshold level of nicotine; do you?
A. I've never heard anybody talk about threshold
levels --
Q. And you --
A. -- other than these couple documents. But in
my experience in the
company, running a plant, running manufacturing, interacting with R&D
people, I never heard anybody talking about we've got to get to some
threshold level. In 24 years I haven't heard that.
Q. Can you direct your attention, sir, to Exhibit
18187.
A. Yes.
MR. CIRESI: Your Honor, would it be appropriate
to take a short break?
THE COURT: Would you like to?
Why don't we take a short break. And don't go too
far.
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. Schindler, can you direct your attention
to Exhibit 18187.
A. Yes, sir, I'm there.
Q. That would be in volume two. Do you have it?
A. Yes, I'm there.
Q. Now do you see that this is a document entitled
"THE SMOKING AND
HEALTH PROBLEM -- A CRITICAL AND OBJECTIVE APPRAISAL?"
A. Yes.
Q. And it's by Dr. Rodgman in 1962?
A. Yes, it is.
Q. Have you read this document before?
A. I've seen the document. I have not read the whole
document, no.
Q. Now if you direct your attention to the bottom
of the first page,
the second-to-the-last paragraph.
A. "Although" -- it starts with "Although," is that
where you are?
Q. Yeah. Are you there?
A. Yes.
Q. "Although the major part of the sales of this
Company consists of
cigarettes, what the Company sells is cigarette smoke." Do you see
that,
sir?
A. Yes.
Q. Do you agree with that?
A. It's sort of --
I don't know if I agree or disagree. We sell cigarettes
and people
smoke cigarettes. It's kind of a -- I --
I view that we sell cigarettes. I've never viewed
the business that we,
in my mind, sell cigarette smoke. I've always viewed we sell cigarettes
that people smoke.
Q. And what's in the smoke is nicotine and tar;
correct?
A. There's tar and there's nicotine and a bunch
of other things.
Q. And the "bunch of other things" are polycyclical
hydrocarbons and
other types of hydrocarbons that are grouped under the name tar; correct?
A. Yes.
Q. And in the next paragraph it says, "During the
past two decades,
cigarette smoke has been the target of a host of studies relating to
ill-health and particularly to lung cancer." Do you see that?
A. Yes.
Q. "The majority of these studies incriminate cigarette
smoke from a
health viewpoint." Correct?
A. Yes, that's what it says.
Q. And did Philip Morris advise the smoking public
of that in 1962?
A. I'm R. J Reynolds.
*28 Q. Excuse me. R. J. Reynolds.
A. No, not of this.
Q. Do you know if Philip Morris did?
A. I wasn't working for Reynolds in '62. I don't
know about Philip
Morris. I have no idea that Philip Morris did anything.
Q. Do you know if The Tobacco Institute did, --
A. I have --
Q. -- which was supported by all of the cigarette
manufacturers?
A. I have no knowledge that the industry in 1962
wrote a report that
says science reports that cigarettes may cause cancer.
Q. You know of no such --
A. I don't know of any ad like that.
Q. In 1962 did Philip Morris -- or excuse me --
did RJR state that the
amount of evidence accumulated to indict cigarette smoking as a health
hazard is overwhelming and the evidence challenging such an indictment
is
scant?
A. No, I don't believe that R. J. Reynolds said
that.
Q. Did R. J. Reynolds say that in 1988?
A. Not that I recall.
Q. Did it say it in 1998?
A. No, not that I know of. No.
Q. Can you direct your attention to page seven of
this memo, "The
Evidence to Date."
"Obviously the amount of evidence accumulated to
indict cigarette smoke
as a health hazard is overwhelming. The evidence challenging such an
indictment is scant." Do you see that?
A. Yes, I do.
Q. Have you ever seen that before?
A. Yes, I think I've seen that before.
Q. When did you first see it, sir?
A. Oh, I -- I can't give you a precise date. It
was somewhere, as I've
said before, in the last year and a half. This process of getting involved
in litigation has unfolded, and through that whole process I've seen
various documents along the way.
Q. Did you tell Mr. Goldstone before he testified
in Congress about a
month ago that back in 1962 RJR knew that the amount of evidence
accumulated to indict cigarette smoke as a health hazard was overwhelming?
A. I don't recall --
No, I didn't tell Steve about this document in 1962.
Q. Do you know if anybody told Mr. Goldstone that?
A. I have no idea.
Q. Can you direct your attention, please, to page
13 of the memo.
A. Yes.
Q. And if you move down to where there's a paragraph
sign, "Members of
this Research Department...." Do you see that?
A. Yes, I do.
Q. Okay. "Members of this Research Department have
studied in detail
cigarette smoke composition," and then there's some references. Do
you see
that?
A. Yes.
Q. And those references are to the back of the document;
correct, sir,
where there's a bibliography?
A. Yes.
Q. "Some of these findings have been published....
However, much data
remains unpublished because they are concerned with carcinogenic and
cocarcinogenic compounds." Correct?
A. That's what it says.
Q. And it then cites to certain documents in the
bibliography; correct?
A. Yes.
Q. So that RJR in its research department had studied
in detail smoke
composition and found carcinogenic or cocarcinogenic compounds and
they
didn't publish it because of that; correct?
*29 A. I have no knowledge that they didn't publish
it. It says here
some -- some things had remained unpublished. I don't know if a week
later
they published. I have no idea. I --
I know the Surgeon General, I believe in '64, I've
heard had paid
compliments to Reynolds for helping in terms of discovering the compounds,
or some of them in cigarettes, when they published the '64 Surgeon
General's report. So I don't know if they changed their point of view
on
this afterwards or not.
Q. Did RJR --
A. But the Surgeon General seemed to appreciate
it.
Q. Did RJR in 1964 turn over all of the documents
that have been
disclosed in this case to the Surgeon General, sir?
A. No.
Q. And what Dr. Rodgman is reporting is that these
findings weren't
made public because they were concerned about carcinogenic and
cocarcinogenic compounds; correct? That's what he reports.
A. That's what he says.
Q. And this was, what, eight years after the Frank
Statement; correct?
A. Yes.
Q. Where your company represented that it believed
the products we make
are not injurious to health; correct?
A. That's right.
Q. And where they represented to the public that
they accepted an
interest in people's health as a basic responsibility, paramount to
every
other consideration in our business.
A. That's right.
Q. And where they stated we have -- always have
and always will
cooperate closely with those whose task it is to safeguard the public
health; correct, sir?
A. That's what it says.
Q. They didn't meet any of those; did they?
A. I think they were cooperating with the public
health people, or the
Surgeon General wouldn't have complimented the company for helping
discover
some of these compounds that they used in the Surgeon General's report.
Q. Didn't turn over all the documents; did they,
sir? You just said so.
A. No, they didn't turn over all the documents.
Q. So they decided what they would and wouldn't
turn over regarding
what they knew about their product; is that right?
A. I don't know what was going on here.
Q. Well let's see what Dr. Rodgman says, if we go
to the next paragraph
-- or the next sentence. "This raises an interesting question about
the
former compounds." And there he's talking about the carcinogenic or
cocarcinogenic; correct?
A. I guess so.
Q. "If a tobacco company pled 'Not guilty' or 'Not
proven' to the
charge that cigarette smoke (or one of its constituents) is an etiological
factor in the causation of lung cancer or some other disease, can the
company justifiably assume the position that publication of data pertaining
to cigarette smoke composition or physiologic properties should be
withheld
because such data might affect adversely the company's economic status
when
the company has already implied in its plea that such etiologic effect
exists -- that no such etiologic effect exists?" Do you see that?
A. Uh-huh. Yes.
Q. And at this point in time RJR had pled not guilty
and not proven;
hadn't they?
*30 A. I don't know. I don't know what case --
Are you talking about court cases, or --
Q. I'm talking about whether smoking causes --
A. Oh, I'm sorry.
Q. -- lung cancer.
A. I thought -- I thought you were talking about
litigation. Yes, I
think --
Yeah, the company's position was the causal linkage
wasn't proven, or
whatever, back in this timeframe, I guess. I wasn't here in '62.
Q. Still does today; doesn't it?
A. Still what?
Q. Says that it's not proven.
A. Well today the company's position, my position,
is that if you
smoke, if people smoke, they have an increased risk of certain diseases.
Q. Does smoking cause lung cancer?
A. It may.
Q. Does it cause lung cancer?
A. I don't know for sure, but I believe it may.
I believe the risk is
significant, and I believe we have managed this company in a way to
design
products or improve products to reduce the risk associated with smoking,
and I'm proud of it.
Q. Sir, does smoking cause lung cancer?
A. I don't know.
Q. Thank you.
Has RJR said smoking causes lung cancer?
A. No.
Q. So that they are still saying, some 35 years
or 36 years after this
memo, "not proven;" aren't they?
A. Well they're saying that the risk is there, and
yes, it is not
proven in the discrete scientific sense backed up by lab studies, backed
up
by the causal mechanism in -- to go from the risk to the cause in
cigarettes, that's right.
Q. Is the answer to my question yes?
A. Yeah.
Q. Thank you.
And for 36 years, until this lawsuit, information
was withheld;
correct?
A. No, that's not correct.
Q. Did the documents in this case -- were they provided
to any public
health authority before they started coming out in this case, sir?
A. I don't know.
MR. WEBER: Let me object -- let me object to that,
first, Your Honor.
The question implies some obligation that hasn't been proven.
THE COURT: It certainly does. You may answer.
MR. CIRESI: Can you answer the question?
THE WITNESS: Can you repeat the question?
MR. CIRESI: May I have the question back, please.
(Record read by the court
reporter.)
A. I don't know.
Q. Did you ask?
A. No.
Q. If they had come out back in 1962 or any point
up to the time they
came out, do you think they may have affected adversely the company's
economic status?
A. I have no idea.
Q. Well they've certainly affected the company's
economic status as of
today; haven't they, sir?
A. I don't know if they have or not.
Q. And the reason you don't know if they have or
not is because your
company, among others, is seeking immunity in Congress for past actions;
correct?
MR. WEBER: Same objection as earlier on that point,
Your Honor.
THE COURT: Well you may answer that.
A. I believe what we're seeking in Congress is for
society to come to
grips with cigarettes and how to establish them in our society in a
way
that is acceptable in terms of regulatory scheme, in terms of how the
market, and all aspects of its existence in our society. That's what
we're
after. And --
*31 Q. You --
A. -- part of that is that there be some limits
on liability relative
to all this litigation.
Q. You're seeking immunity for past conduct; aren't
you?
MR. WEBER: Asked and answered, Your Honor.
THE COURT: It's not been answered.
A. I -- you know, I don't believe it's immunity
in that sense.
"Immunity" to me implies that there's -- you know, there aren't going
to be
any lawsuits, there aren't going to be any suits in the future. And
there
will be suits based on the way this proposal is today.
Q. Oh, you mean total and absolute and complete
immunity is the only
type of immunity you recognize; is that right?
A. Was that a question?
Q. Yes.
A. I'm giving you my answer to the way I understand
the agreement.
Q. You're seeking immunity in Congress. "Yes" or
"no," sir.
A. I believe --
MR. WEBER: Asked and --
Objection, asked and answered on the last one, Your
Honor.
THE COURT: It hasn't been answered.
A. I believe --
You're asking me my opinion. I believe what is being
asked for are
limitations relative to litigation.
Q. Okay. And a limitation --
A. Given the payments that will be made in the context
of this
regulatory scheme and the total package to establish the rules in our
society as to how cigarettes will continue to exist.
Q. A limitation on liability is an immunity to the
extent it's granted.
A. Well you're the lawyer. I'll take your word for
it.
Q. So the answer is yes, sir?
A. Yes.
Q. Thank you.
A. I'm not a lawyer.
Q. And you say for the monies you're going to be
paying. You're not
going to be paying. The smokers are going to be paying; aren't they?
A. Any lawsuit we lose that would require us to
raise our prices,
smokers would be paying.
Q. Yes.
A. The only --
Q. And --
A. -- place we get money is from selling our product.
That's the only
place a business gets any money is from selling their product. So if
you
lose a lawsuit and it causes your prices to go up, smokers will pay
more
because that's the only place we get money from, is selling product.
Q. Well you could sell your food group and take
that money; couldn't
you?
A. That's, I believe -- again not a lawyer -- but
that's bankruptcy.
And --
Q. Bankruptcy. Just to sell part of the business
is bankruptcy?
A. I think you have shareholders, and if you sell
off a part of the
business or distribute it -- the money to some -- to someone other
than the
shareholders, I think that surely gets into the realm of bankruptcy,
as I
understand it.
Q. Well RJR has been bought and sold a number of
times; hasn't it?
A. Yes.
Q. And parts of the business have been bought and
sold; correct?
A. And they have been transactions with shareholders.
Q. And how many times have you gone into bankruptcy
when you bought and
sold businesses?
A. You're talking about transaction with the shareholders
right now.
I'm talking -- you --
But your first question is why don't you just sell
off your other
assets and give that money to people that win lawsuits.
*32 Q. Sir --
A. I think that's different.
Q. Oh. An asset can be sold by the company; can
it not?
A. You have the shareholders to deal with.
Q. Right. But an asset --
A. They own the company.
Q. And an asset --
A. I think they would care if you sold off their
asset and didn't give
them any money.
Q. Sir, an asset can be sold by the company to satisfy
its debt. "Yes"
or "no."
A. Yes.
Q. If a judgment is entered against the company,
it is a debt against
the company. "Yes" or "no."
A. Yes.
Q. The food group was purchased with tobacco money.
"Yes" or "no."
A. It was purchased with the consolidated cash flow
of the corporation,
which included, at that time, tobacco, Sea/Land Services, containerized
shipping, Del Monte, a bunch of different subsidiaries.
Q. And they all started with tobacco; correct?
A. I believe you're right.
Q. And if the assets of the food group were sold
to some other company,
the manufacturing facilities go with it; don't they?
A. Yes.
Q. The employees go with it; don't they?
A. Yes.
Q. And that business is operated by the new entity;
correct?
A. I would assume so.
Q. And those people keep working for that new entity;
correct?
A. Yeah.
Q. And what RJR would get would be money for that;
correct?
A. I believe so.
Q. And then that money could be used to pay its
debt; correct?
A. Still have some remaining shareholders to contend
with.
Q. They will indeed, sir. Shareholders who benefited
--
MR. WEBER: Let me object to the commentary, Your
Honor. We're getting
very argumentative here.
THE COURT: Well the "will indeed" is commentary,
counsel. That will be
stricken.
MR. CIRESI: I withdraw it, Your Honor. I apologize.
Q. The shareholders have benefited from this company
selling product,
being cigarettes, to the public; correct?
A. Yes.
Q. And they have benefited based upon the management's
decisions over
the last 40 years; correct, sir?
A. Yes.
Q. Those decisions which bore upon the safety and
health of the
American public; correct, sir?
A. Yes.
Q. And they had to discharge the duties that you
talked about and what
we see in the Frank Statement in accordance with the law; didn't they,
sir?
A. I --
You have to repeat that last one.
Q. Management was required to discharge its duties
in accordance with
the law; correct?
A. I believe, based on what I know and have experienced,
the management
of this company has abided by the law in discharging its duties.
Q. And under --
And under our system of justice, as you understand
it, if someone
doesn't comply with their duties under the law, they are held accountable;
correct?
MR. WEBER: I'm going to object again, Your Honor,
this is
argumentative.
THE COURT: Well you may answer that.
Q. Isn't that correct, sir?
A. If it is in a courtroom, between the lawyers
and the judge, the jury
would decide who's accountable, in violation of their duties. That's
the
legal system.
*33 Q. Yes. And if the company has not discharged
its duties under the
law, then, as you understand it, they are to be held accountable under
the
law; correct?
MR. WEBER: Same objection, Your Honor. In addition,
I'd add asked and
answered.
THE COURT: It's been asked and answered.
Q. Now from 1954 to 1998 your company has continued
to create doubt
about smoking and health; hasn't it?
A. What are you referring to?
Q. Do you know if it has or not, sir?
A. I don't believe so. Everybody in our society
believes that
cigarettes cause disease.
MR. CIRESI: Move to strike the last part as non-responsive,
Your Honor.
THE COURT: It is non-responsive, and I will strike
it if you request
it.
MR. CIRESI: I do request it, Your Honor.
THE COURT: It will be stricken.
BY MR. CIRESI:
Q. Has your company attempted to create doubt about
safety and health
over the past 40 years?
A. I don't believe so.
Q. Can you direct your attention to Exhibit 7 --
I'm sorry, to Exhibit
13334. Excuse me.
A. Yes.
Q. Now this is a letter from RJR to Ms. Elaine Olson,
654 East 103rd
Street, Bloomington, Minnesota, dated December 29th, 1988; correct?
A. Yes.
MR. CIRESI: Your Honor, we'd offer Exhibit 13334.
MR. WEBER: No objection, Your Honor.
THE COURT: Court will receive 13334.
BY MR. CIRESI:
Q. Have you seen this before, sir?
A. No, I haven't.
Q. "Dear Ms. Olson.
"Thank you for our letter concerning your Camel
75th Birthday ad
campaign."
Now that's when the campaign kicked off in 1988;
correct?
A. Yes.
Q. "Opinions of our marketing efforts are always
welcomed, and we
appreciate your taking the time to express your thoughts." Do you see
that?
A. Yes, I do.
Q. And you know who Jo F. Spach is?
A. Yeah, I know Jo Spach.
Q. Manager of public information, public relations
department?
A. Yes.
Q. Did she have a duty to be honest to people who
write into the
company?
A. Yes.
Q. To give them complete information?
A. Yes.
Q. To tell them what RJR knows about its product?
A. To tell them what RJR knows about its product?
I --
To be honest and forthright in answering questions
from the public, she
should do that, yes.
Q. Yes.
And to tell them what RJR knows about the health
risks of their
product; correct?
A. Yes.
Q. Just as RJR wanted to get honest reactions, at
least as it said in
this letter, from the public; correct?
A. Yes.
Q. "It is helpful to get honest reactions from the
public in order that
we may better evaluate our efforts and be guided in the future." Correct?
A. Yes.
Q. "The tobacco industry is concerned about the
charges being made that
smoking is responsible for so many diseases. Long before the present
criticism began, the tobacco industry, in a sincere attempt to determine
what harmful impacts -- effects, if any, smoking might have on human
health, established The Council for Tobacco Research." Correct?
*34 A. Yes.
Q. Now that was the TIRC; correct?
A. I believe TIRC preceded CTR.
Q. You have no idea what type of research has been
done, specifically,
with grants from the CTR; do you?
A. I'm not a scientist, but I know there are eminent
scientists that
direct those grants and -- to other scientists at major institutions
of
medical research throughout the country, so I figure they know more
about
it than I do, and they are of esteemed knowledge and expertise.
Q. They're so esteemed and knowledgeable that you've
never asked them
to come in and say what they believe with regard to whether smoking
causes
diseases; is that right?
A. Yeah, that's right, uh-huh.
Q. Yeah. Were you afraid what they'd say?
A. No.
Q. You simply never asked them; is that right?
A. That's correct.
Q. Never suggested to anybody else in the industry
that you get them
all together and ask them; have you?
A. That's right.
Q. Never surveyed them to see what they thought;
right?
A. No.
Q. And we saw from the documents today that the
TIRC was set up to get
out public relations materials; didn't we?
Q. I saw a PR person memo -- or memo written by
a PR person of 45 years
ago talking about that. I don't believe that CTR was set up for PR
purposes, based on my interaction with it over the last couple of years.
Q. Have you looked at the documents that have been
introduced into this
case with regard to TIRC to see whether it performed public relations
functions?
A. The documents that I saw were the ones we went
through today.
Q. Those are the only ones you've looked at; correct?
A. That deal with public relations --
Q. Yes.
A. -- and TIRC? I believe so.
Q. "The industry has also supported research grants
directed by the
American Medical Association. Over the years the tobacco industry has
given
nearly 130 million to independent research on the controversies surrounding
smoking -- more than all the voluntary health associations combined."
Do
you see that?
A. Yes.
Q. Is that referring to the CTR?
A. I don't know if that's just CTR or CTR and other
places, but I would
think CTR is in that, yes.
Q. And again, you don't know what type of studies
were conducted with
money received by the CTR; correct, sir?
A. No. I know they were done by brilliant and competent
and
knowledgeable scientists.
Q. Do you know that a lot of them were just getting
their feet wet?
A. Just getting their feet wet?
Q. Yes.
A. Who? You mean --
Q. The brilliant, knowledgeable scientists who were
the grantees of the
CTR.
A. I am not qualified to challenge grant decisions
by eminent
scientists who have distributed money to other scientists to do research.
Q. That's -- that's not what I asked.
A. You said to me did I know they were just getting
their feet wet.
Q. Did I --
I asked you if you knew if the grantees, many of
them, were just
getting their feet wet.
A. No, I didn't know that.
*35 Q. Have you ever asked the question about the
nature of the grants
themselves in the 24 years you've been with your company?
A. No. I've only been involved with CTR for two
years.
Q. Do you know if the lawyers controlled CTR for
a substantial period
of time?
A. I don't know that the lawyers controlled CTR.
Q. Do you know if there are internal company documents
which showed
that the lawyers controlled CTR?
A. I don't know --
I don't have any knowledge that lawyers controlled
CTR.
Q. Do you know Mr. Ramm?
A. Ramm?
Q. Ramm.
A. No.
Q. Did you know who he was?
A. I know the name, that he was a previous general
counsel, as I
understand. But I never knew him. It's before my time.
Q. Do you know if he controlled CTR?
A. I have no idea. I don't know Mr. Ramm. Never
knew him.
Q. Can you just save that place there and go to
Exhibit 10165, which is
in the other volume.
A. Yes, I'm there.
Q. Do you have it?
A. Uh-huh.
Q. Have you ever seen that document before?
A. I don't think so. (Clearing throat) Excuse me.
Q. I'll represent to you that these are the handwritten
notes of Mr.
Judge, who was the president of Lorillard from 1970 to 1984, and the
CTR --
on the CTR board of directors from 1974 to '84. Have you ever heard
of Mr.
Judge?
A. I've heard his name, yes.
Q. And this is called the "Scientific Research Liaison
Committee." Do
you see that?
A. Yes.
Q. Dated 4/21/78. Do you see that that?
A. Sure do.
Q. And he reports at number one, "We have again
abdicated the
scientific research directional management of the industry to the lawyers
with virtually no involvement on the part of scientific or business
management side of the business." Do you see that?
A. Yes, that's what it says.
Q. Were you ever told that?
A. Told that I should abdicate my business responsibility
to the
lawyers?
Q. Told that the industry abdicated its responsibilities
--
A. No.
Q. -- on scientific research to the lawyers.
A. No, I've never been told that.
Q. Look at number two. "Lorillard's management is
opposed to the total
industry future being in the hands of the Committee of Counsel...."
Have
you heard of the Committee of Counsel?
A. Yes.
Q. And the Committee of Counsel are counsel from
each one of the
manufacturing defendants; correct?
A. Yes.
Q. And they get together and decide what research
will or will not be
done; correct, sir?
A. I've never known that to happen.
Q. You haven't.
A. No.
Q. Mr. Judge says, "it's reminiscent of the late
1960's when Ramm's
group" --
That's your former general counsel; correct?
A. R. J. Reynolds' former general counsel, not mine.
Q. -- "when Ramm's group ran the TI" --
That's Tobacco Institute; correct?
A. Yes.
Q. -- "CTR" --
That's Council for Tobacco Research; correct?
A. Yes.
Q. -- "and everything else involved with the industry's
public
posture." Correct?
*36 A. Yes.
Q. And were you ever told that, sir?
A. No.
Q. Can you go back to the letter to Ms. Olson.
"Despite all the research going on, the simple and
unfortunate fact is
that scientists do not know the cause or causes of the chronic diseases
reported to be associated with smoking." Do you see that?
A. Yes.
Q. Did you tell her that the -- strike that.
Did RJR tell Ms. Olson that the Surgeon General
found nicotine to be
addictive in that year?
A. No.
Q. Did they tell her that they found nicotine to
have the same
pharmacological effect as cocaine and heroin?
A. No.
Q. Did they tell her that RJR knew about carcinogenic
compounds back in
1962?
A. No.
Q. Did they tell her back in 1962 that the evidence
was overwhelming to
indict cigarette smoking?
A. No, Jo Spach didn't have that in her memo.
Q. Did Jo Spach say that the evidence supporting
cigarette smoke way
back in 1962 was scant?
A. No, Jo didn't say that.
Q. Did she say that the scientific research of the
industry was being
run by the lawyers?
A. No, she sure didn't.
Q. Did she say that the TI was set up to create
doubt and controversy?
A. No, she didn't say that.
Q. She didn't give Ms. Olson all the facts about
the industry, to be
honest, so that Ms. Olson could better evaluate whether or not your
company
was telling the truth; did she?
A. She did not --
No, she didn't write that memo to your satisfaction.
Q. She didn't give any adverse information about
the industry so that
Ms. Olson, who took the time to write to your company, could better
evaluate your efforts; did she, sir?
A. No.
Q. And these are form letters that have been sent
out over decades by
your company; aren't they?
A. Yes.
Q. To anyone who writes in; correct, sir?
A. Yeah. Possibly.
Q. People who want to know the truth, and they get
the form letters;
don't they, sir?
MR. WEBER: Your Honor, I want to object to the raising
of the voice and
pounding on the table. It's not appropriate.
THE COURT: Please don't pound on the table, counsel.
Q. People who write in and want to get the truth,
they get the form
letters; don't they, sir?
A. They get a response from the company.
Q. People who you say know everything about cigarette
smoking who write
to your company get the form letters; don't they, sir?
A. They get a company response. I don't know what
question the woman
was asking that this letter goes back to -- or responds to.
Q. You can't tell, based on the context of this
response, what Mrs.
Olson was asking about, sir?
A. I really -- I really don't know what --
I don't know what her letter was. It's not here.
Q. You can't tell from the context of this letter
what the substance of
her questions were?
MR. WEBER: Objection, asked and --
A. Something about --
MR. WEBER: Objection, asked and answered, Your Honor.
THE COURT: It's been asked and answered.
Q. And you went to the Wharton School of Business?
*37 A. Yup. Proud of it.
Q. Your company goes so far in creating doubt that
you take out ads;
don't you?
A. What are you talking about?
Q. Take a look at Exhibit 12667.
A. Yes, I'm there.
Q. Do you have it, sir?
A. Uh-huh.
Q. This is an ad that was placed in 1984. Do you
see that in the upper
right-hand corner, "R. J. Reynolds Company?"
A. Yes, I do.
MR. CIRESI: We'd offer Exhibit 12667, Your Honor.
MR. WEBER: No objection, Your Honor.
THE COURT: Court will receive 12667.
BY MR. CIRESI:
Q. Now sir, I want you to assume, because we've
been so advised by
Reynolds, that this ad ran in Better Homes and Garden, Newsweek, The
New
York Times, People Magazine, Red Book, Time, TV Guide, USA Today, U.S.
News
& World Report, the Wall Street Journal and the Washington Post.
Blanket
the country; correct?
A. It's a lot of magazines. I don't --
You know, they would be distributed all over the
country.
Q. Now can you tell me, in looking at this advertisement
by the R. J.
Reynolds Company in 1984, where it states that Reynolds knew in 1962
that
the evidence indicting cigarette smoke was overwhelming?
A. I don't believe that's in here.
Q. Tell me where it says that Reynolds knew in 1959
that there were
multiple carcinogenic compounds in its tobacco.
A. Doesn't say that.
Q. Tell me where in there it says that nicotine
is addictive.
MR. WEBER: Let me object, Your Honor. It's just
a series of
argumentative questions.
THE COURT: You may answer the question.
A. It doesn't say that in there that I can see.
Q. Where in there does it say we will provide you
all that we know
about our product in the documents in our files?
A. Doesn't say that in there.
Q. Where does it say in there that we will remove
carcinogenic
compounds that we said we would back in 1954?
A. Doesn't say that.
Q. Where does it say in there we have not provided
all of our documents
to the public health authorities?
A. Doesn't say that.
Q. Where does it say in there that smoking causes
any disease?
A. Doesn't say that.
Q. And do you know how many of these ads were run
in 1984, in 1985, and
subsequent years?
A. No, I don't.
MR. WEBER: Object -- Your Honor, I will object to
the pounding again.
THE COURT: Be careful not to get carried away, counsel.
Q. You don't know; do you, sir?
A. No.
Q. You were with the company.
A. I was managing one of our manufacturing facilities.
I don't know how
many ads -- how many times these ads were run.
Q. You were managing a manufacturing facility that
was producing the
cigarettes that were the benefit of this ad campaign; correct?
A. I'm --
I don't understand the question.
Q. You don't.
A. No, I don't.
Q. Do you think these ad campaigns were for the
benefit of RJR Tobacco?
A. What do you mean by "benefit?" I don't understand
your question.
Q. You don't understand what the --
A. No.
Q. -- word "benefit" means?
*38 A. I don't understand your question.
Q. Did it help create doubt in people's minds?
A. I don't believe so. Everybody in our society
believes that
cigarettes have significant health risks. Smokers have been quitting.
Industry volume has been declining since 1983, by 20 some percent since
then. I do not see one shred of evidence that this ad run in Good
Housekeeping suddenly convinced the American public that, you know,
from
the good old tobacco company, you don't have to worry about smoking
any
more. I just don't believe that. At all.
Q. How much did it cost you to distribute this ad,
not just in Good
Housekeeping, but Better Homes and Garden, Newsweek, --
A. I have --
Q. -- New York Times, People, Red Book, Time, TV
Guide, USA Today, U.S.
News & World Report, Washington Post and Wall Street Journal? How
much,
sir?
A. I have no idea.
Q. More than the 20 million bucks that you spent
on children in 11
years to prevent them from smoking?
MR. WEBER: Objection, Your Honor. This is getting
out of hand.
A. I have no idea.
THE COURT: Counsel, try not to slam that on the
table, please.
Q. Have you ever asked how much you've spent trying
to create doubt and
controversy as contrasted to trying to prevent children from smoking?
Have
you ever asked?
A. No, I've never asked that question.
Q. You said you didn't know anything about the Mouse
House; is that
right, sir?
A. I just know that there was one, and somewhere
in the late '60s or
early '70s it was shut down. I do not know the circumstances around
it.
Q. Why don't you direct your attention to Exhibit
2545.
MR. WEBER: Can I have that -- the number again,
Your Honor?
THE COURT: 2545.
MR. WEBER: Thank you.
A. 25 --
Q. 2545, volume one.
A. It must be in this book. Hang on. Two --
Oh, I'm sorry. I was used to looking for five-digit
numbers. Okay.
Q. Do you have it, sir?
A. Yeah.
Q. This is a document that's been introduced into
evidence, Philip
Morris document, October 3rd, 1969, Dr. Wakeham from Mr. Carpenter
regarding R. J. Reynolds' biological facilities. Do you see that?
A. Yes.
Q. Now does RJR have a practice of providing to
its competitors
detailed layouts of its facilities?
A. Absolutely not.
Q. Do you see here that it's reported that Dr. Nielson
showed the RJR
Reynolds biological facilities to Dr. Arthur Burke of American Brands
and
to me on Wednesday, October 1?
MR. WEBER: Your Honor, --
A. Yes, I see that.
MR. WEBER: -- I'd object -- I'd object to questions
on this under Rule
602 unless it's established he has personal knowledge.
THE COURT: You can answer if you know.
Q. Do you know, sir?
A. Would you repeat the question?
Q. Do you see that it's reported here that Dr. Nielson
showed the RJR
biological facilities to Dr. Burke of American Brands and Mr. Carpenter
on
Wednesday, October 1, 1969?
A. Right.
Q. Do you see that?
A. Yes.
Q. All right. Does RJR have a practice of taking
its competitors into
its buildings and showing them its biological testing facilities?
*39 A. Not that I know of.
Q. And if you look at the back of this document,
the attachments, you
see the description of the biological facilities that Philip Morris
and
American Brands were shown by Dr. Nielson on October 1, 1969.
A. Yeah, I see this layout here.
Q. And do you see that, in the balance of the text
of the document,
that Mr. Carpenter details the biological facilities?
A. Yes, I see some of that here.
Q. And that's unusual in your experience; isn't
it, sir?
A. Yeah.
Q. Can you direct your attention, then, to Exhibit
10465.
A. I'm there.
Q. Now many times in the industry, scientists will
get together from
the various companies; correct?
A. Not many times. There are scientific conferences.
Q. Okay. That's not unusual; correct?
A. No, I don't think it's unusual in any industry.
Q. All right. I'm showing you now a memorandum that's
two months after
the previous exhibit. This is December 15th, 1969. Again it's Mr.
Carpenter. Do you see him?
A. Yes.
Q. And it's from Mr. Weissbecker. Do you see that?
A. Yes.
Q. And there's carbon copies to a Dr. Osdene and
a Dr. Wakeham;
correct?
A. Yes.
Q. And this references that Mr. Weissbecker met
with Dr. Price from RJR
Reynolds at the CTR-USA meeting; correct?
MR. WEBER: Object -- objection, Your Honor, the
same 602 issue again.
THE COURT: Do you want to approach the bench, counsel.
THE COURT: You may answer the question.
THE WITNESS: Mr. Ciresi, could you please repeat
the question?
BY MR. CIRESI:
Q. You have the exhibit in front of you, 10465,
sir?
A. Yes.
Q. Okay. Now you see that there's a meeting here
that took place, the
CTR- USA meeting of December 11th and 12th, 1969.
A. Yes.
Q. And Mr. Weissbecker was advised by Dr. Price
from RJR that chronic
cigarette smoke exposure studies with rats was being done at RJR. Do
you
see that?
A. Yes.
Q. And that there was also an expression of interest
in nicotine
pharmacology; correct?
A. Yes.
Q. Now can you direct your attention to Exhibit
--
Before we do that, sir, in Exhibit 10465, do you
see that there was
work being done at Bowman Gray Medical -- or School of Medicine? Do
you see
that?
A. "Recently they hired a wife of an instructor
from Bowman Gray School
of Medicine...." Yes.
Q. And Bowman Gray was a former CEO of RJR?
A. Yes, he was.
Q. And there was some research being done with lung
macrophages. Do you
see that?
A. Yes.
Q. Do you know what macrophages are?
A. No.
Q. Do you know if they're part of the host defense
mechanism of the
human body?
A. I just told you I didn't know what they are.
Q. You've never heard that term in speaking or working
with any of your
scientists in the company?
A. I don't know. I don't remember it.
Q. And you see the reference here that Dr. Price
was interested in
learning about gas chromatographic profile of cigarette smoke within
animal
exposure chambers?
*40 A. Yes.
Q. Do you know what that is?
A. Some scientific testing methodology.
Q. Do you know what it's intended to show?
A. No.
Q. Can you direct your attention to Exhibit 12756.
Ah. Can we go back for a minute to 10465, just one
second. I apologize,
Mr. Schindler.
Do you see the meeting here with -- again with Dr.
Price?
A. Yes.
Q. Okay. And it's reported that the animals over
at RJR were receiving
up to 500 cigarettes and emphysema was produced; correct?
A. That's what it says.
Q. Now that's animal studies producing emphysema;
correct?
A. That's what this says. I don't know if this is
accurate or not. I
don't know anything about this.
Q. Did RJR ever publicly state that they knew that
smoke caused
emphysema?
A. I don't believe that RJR knows that smoke causes
emphysema.
Q. Did you tell Mrs. Olson when she wrote in that
we had determined way
back in the '60s that smoke caused emphysema?
A. I don't believe that this says that the company
had determined that.
This is a memo to some -- I'm not even -- I'm not even sure who these
people are.
Q. Well let me put it this way: In the interest
of a full and open
debate, did RJR ever disclose to the public that it had conducted animal
studies where animals developed emphysema from cigarette smoke?
A. I have no knowledge that the company had an animal
study where the
animals developed emphysema.
Q. But that wasn't my question. My question to you
is: In the interest
of a full and open debate, did RJR ever disclose to the public that
it had
conducted animal studies where animals developed emphysema from cigarette
smoke?
A. No, never disclosed that to the public.
Q. Did it ever disclose that to any public health
officials?
A. Not that I know of.
Q. Have you ever seen this document before?
A. No.
Q. Can you direct your attention to Exhibit 12756.
A. Yes.
Q. Now this is an RJR document, sir, and you see
it has "INTRODUCTORY
REMARKS: BY DR. SENKUS?"
A. Yes.
MR. CIRESI: We'd offer Exhibit 12756, Your Honor.
MR. WEBER: No objection, Your Honor.
THE COURT: Court will receive 12756.
BY MR. CIRESI:
Q. Now sir, this --
The date of this, we've been advised, is March 19th,
1970. Can you
assume that?
A. Yes.
Q. Do you know if the Mouse House was closed on
that day?
A. I have no idea.
Q. Do you know who Dr. Senkus is?
A. I knew Dr. Senkus, yeah.
Q. "We are here today to inform you about a significant
reorganization
of the Research Department and a reorientation of research programs.
This
reorganization of the Research Department is reponsive to changing
times,
events and situations, and has been under study for months and, in
parts,
years." Do you see that?
A. Yes.
Q. "As you will see, the primary result of this
reorganization is to
put even greater emphasis on research useful to our tobacco, food,
packaging and containerized operations, and to eliminate research programs
which are no longer appropriate to corporate needs, objectives and
strategies." Do you see that?
*41 A. Yes.
Q. And you've heard about the Mouse House closing;
haven't you?
A. Yes.
Q. Have you ever seen this document?
A. No, I haven't.
Q. "Mr. Vassallo's statements, which follow, are
designed to give you
the essentials of what is to be done." And then there's comments of
Mr.
Vassallo. Do you see that?
A. Yeah. Well I see -- yeah.
Q. See it?
A. I see "Mr. Vassallo."
Q. And then he goes on, and do you see the "CONFERENCE
ROOM" on the
next page?
A. Yes.
Q. "In-house biological testing in the smoking health
area such as work
we have been doing for the Scientific Advisory Board of the Council
for
Tobacco Research has been terminated. Any further biological testing
that
may be needed in further developing smoking machines, et cetera will
be
referred to qualified independent research organizations. As you know,
we
have used such organizations on and off for years."
Number two, "All synthesis of compounds in fields
outside of tobacco
and foods has been terminated. All biological work in these outside
areas
is being terminated, i.e., pharmaceuticals and fine chemicals and others."
Three, "The Biological Division is being dissolved.
Some service
functions will be -- be retained, such as bacteriological - quality
control
assistance. These functions will be transferred to the Analytical Division.
"The mung bean and tobacco beetle work will continue."
Do you see that?
A. Yes.
Q. Now when the Mouse House biological testing program
was terminated,
do you know if RJR continued to look at whether or not beetles or mung
beans were being developed in their tobacco?
A. Well the mung bean reference is to the foods
company we own, and I
think that related to Chung King where they grew mung beans for Chung
King
brands. So it had nothing to do with tobacco.
Q. So the tobacco beetle, that refers to tobacco;
correct?
A. Yes. Little bug that eats the leaf.
Q. And do you know that on this day, 26 people were
terminated without
notice?
A. No.
Q. Can you turn to the next page.
Number nine, "Altogether, 26 staff people are being
terminated." And
then their names are stated; correct?
A. Yes.
Q. There's a Mr. Colucci in there; correct?
A. Yes.
Q. Do you know Mr. Colucci?
A. No, I don't know him. Heard his name, but I don't
know him.
Q. In what context have you heard his name?
A. Really in the context --
Well, I believe, you know, that he worked in the
Mouse House. Then I
think somewhere in the '80s he might have been on a consulting contract
with our research and development group.
Q. And Mr. Joseph Bumgarner, do you know him?
A. No, I don't.
Q. Now these people were all employees of the Mouse
House; weren't
they, sir?
A. I guess so. I mean that's what this is saying.
Q. And they were all doing biological testing; weren't
they?
A. I have no idea what they were doing.
Q. Can you turn to the "CONCLUDING REMARKS," which
is on Bates number
page 749. Do you see that?
*42 A. Yes.
Q. And in the concluding remarks there is an expression
of appreciation
for the fine professional people who have performed so willingly and
well;
correct?
A. Okay. Where are you here?
Q. I'm down at the bottom. I'm sorry, sir, the paragraph
--
A. "This was a tough decision" --
Q. Second-to-the-last paragraph.
A. "Each and every one of my colleagues" -- is that
--
Q. Yes.
A. Okay.
Q. Do you see that?
A. Yes.
Q. "Each and every one of my colleagues join in
telling you how
sincerely we regret the loss of such fine professional people who have
performed willingly and well. Be assured that your associates in the
Company will make full effort to help you relocate into good jobs in
a
short time;" correct?
A. That's what it says.
Q. "This was a tough decision to make, but there
simply was no
alternative and for this reason we hope that the detail provided will
help
you to understand the reasons this move is necessary. We wish you 'all
the
best' and hope that the special liberal termination agreements --
arrangements we are making, together with your and our best efforts,
will
minimize hurtful effects to you and your families." Correct?
A. Yes, that's what it says.
Q. Then it goes on to say, "To those of you in non-
professional
assignments" --
Those were the non-professionals who were working
on biological
testing; is that right?
A. It's everybody in there that was a non-professional.
Q. So the professionals who were looking -- working
on biological
testing were let go; correct, sir?
A. I -- it looks that way. I don't know what happened
here. I have no
idea.
Q. "To those of you in non-professional assignments
who will stay but
be relocated, I say 'please bear with us.' We will do all we can to
make
your reassignments as quickly and as fairly as possible, keeping both
your
interests and the interests of our Company in mind." Correct?
A. That's what it says.
Q. "I know this all -- this comes to you all rather
suddenly. It had to
be that way to give you the word first. There will be plenty of time
to
discuss this and to get answers to individual questions in the days
to
come. Dr. Senkus, Dr. Teague, George Cook, Alan Kirby, Department Managers
and I are available to answer questions of a specific nature." Correct?
A. Yes.
Q. Now what happened here, sir, was that the CEOs
of Philip Morris and
RJR got together because Philip Morris found out that RJR was conducting
in-house biological research, contrary to a gentlemen's agreement in
the
industry; correct?
A. How do you know that? I have --
Q. Do you know that, sir?
A. No.
Q. You don't.
A. I never heard of such a thing.
Q. You haven't.
A. No, I haven't.
Q. Can you direct your attention to Exhibit 2549.
This is a document
that's already in evidence entitled "STRICTLY PRIVATE AND CONFIDENTIAL"
produced by B.A.T. Company Ltd. Do you see that, sir?
A. Uh-huh. Yes.
*43 Q. And it's a meeting with Dr. Helmut Wakeham,
vice- president and
director of research, Philip Morris Inc., 10th of September, 1970.
Do you
see that?
A. Yes.
MR. WEBER: Your Honor, I would object on that Rule
602 issue we've
discussed earlier.
THE COURT: Overruled. You may answer.
Q. And this is after the last memo we saw where
the Mouse House was
terminated; correct?
A. Yes.
Q. And can you turn to page two.
A. Yes.
Q. Do you recall you asked me how I knew?
A. Yeah.
Q. Do you recall you told me that I knew your documents
better than you
did?
A. Yeah. You're good.
Q. Can you take a look at "Philip Morris Affairs."
A. Yes.
Q. "One result of the greater influence which Wakeham
has with Mr. J.
Cullman has been the agreement, albeit reluctant, to permit Philip
Morris
to do, quote, in-house, end of quote, biological work. When this was
first
mooted" --
Do you know what "mooted" means?
A. Stopped I guess.
Q. Okay.
-- "Wakeham was told there was a tacit agreement
between the heads of
the US Companies that this would not be done. Wakeham had countered
by
saying that he knew Reynolds, Lorillard and American were all undertaking
some and that Liggett and Myers had never been party to the agreement.
Cullman" --
And do you know who Cullman is?
A. I guess that's referring to Joe Cullman, who
was CEO of the company
--
Q. Right.
A. -- back in those days.
Q. And still on the board of Philip Morris as a
chairman emeritus;
correct?
A. I think so.
Q. You heard that during Mr. Bible's testimony;
didn't you?
A. No, I didn't.
Q. How did you know --
A. No.
Q. How did you know that?
A. I just heard it over -- just heard it. I just
know Joe -- Joe
Cullman is still alive, and I kind of just knew from somewhere that
he was
still on the board.
Q. Okay. And let's go on then.
"Cullman had been incredulous and had phoned Galloway,
the President of
R. J. Reynolds who had denied Reynolds was doing any bioassay. When
Cullman
had told Wakeham this, Wakeham's response had been to quote the Reynold's
work on the Senkus smoking machine and to claim that he had floor plans
showing outline area allocations." Do you see that?
A. Yes.
Q. Remember the floor plans we looked at just previously
--
A. Yes.
Q. -- in Exhibit 2544?
A. Yes.
Q. Okay. "This too had been relayed to Galloway
by Cullman" --
Galloway is the RJR CEO; right?
A. I believe that's right.
Q. -- "incredible though it may seem, and Galloway
had visited the
Reynolds Research Department to find it was substantially true." Correct?
A. That's what this says.
Q. "There had been a sudden reorganization at Reynolds,
resulting in
the closure of the biological section, the severance of product development
(which remained with the tobacco division) from the research department
(which became a corporate activity) and ultimately the resignation
of Dr.
Eldon Nielson, who had been in charge of biology." Correct?
*44 A. That's what this says.
Q. The gentlemen's agreement; correct, sir?
A. I've never heard of a gentlemen's agreement.
Q. You now see, though, it was an agreement, though;
don't you, sir?
A. I see speculative documents.
Q. You see speculative documents.
A. Well --
Q. And, sor --
A. -- somebody forgot to tell me about the gentlemen's
agreement. We've
been doing biological research for a long time.
Q. Just like Mr. Tucker forgot to tell you he went
to the board and
told them about marketing to youth in 1975; correct?
MR. WEBER: Objection.
A. That's right.
MR. WEBER: It's argumentative, Your Honor.
Q. That's correct; isn't it?
A. Yes, sir.
Q. Yes. And --
MR. WEBER: If you permit -- I'm sorry.
THE COURT: Well --
MR. WEBER: I'm sorry, Your Honor.
THE COURT: Your witness isn't going to give me have
a chance to rule,
so I'll let the answer stand.
Q. And sir, there's been a united front put up by
the tobacco industry
by supporting CTR and TI for over 40 years; isn't that right?
A. Can you repeat the question, please?
Q. Sure.
There's been a united front put up by the tobacco
industry in
supporting CTR and TI for over 40 years; correct?
A. The industry has been supporting CTR and TI for
40 years.
Q. And they've been commonly paid; correct? Is that
right?
A. I'm sorry, the word "commonly." Did you say "commonly?"
Q. Paid by all of you --
A. Yes.
Q. -- in relationship to your shares; correct?
A. Yes.
Q. And during that time, part of their charge has
been to create
controversy and doubt about controversy; isn't that right, sir?
A. I don't believe that.
Q. Did you ever see a document which indicated that?
A. None that I recall.
Q. Can you go to 20987, volume two. Toward the end.
A. I got it. I thought you said 29 -- 29 --
Q. 20987.
A. Yeah, I got it.
Q. Dated May 1, 1972?
A. Yes.
Q. And that's Horace Kornegay, and you know him
as the president of the
Tobacco Institute; correct?
A. I don't know Horace Kornegay. I seem to remember
he was president of
The Tobacco Institute in the '70s.
Q. And from Fred Panzer, vice-president of The Tobacco
Institute?
A. I have no idea who Fred Panzer is.
Q. You see this says down at the bottom, it says
TI. See it down there,
sir, next to the Bates number?
A. Uh-huh, uh-huh, yes.
Q. I'll represent to you this document is in evidence
and it's been
identified by Mr. Merryman as being a Tobacco Institute document. Do
you
understand that?
A. Fine.
Q. Now I want to read a couple parts and ask you
if you knew this.
Starting in the general comments, second paragraph.
"For nearly twenty years, this industry has employed
a single strategy
to defend itself on three major fronts -- litigation, politics, and
public
opinion." Do you see that?
A. Yes, I see that.
Q. "While this strategy was brilliantly conceived
and executed over the
years, helping us to win important battles, it is only fair to say
that it
is not - nor was it intended to be - a vehicle for victory. On the
contrary, it has always been a holding strategy, consisting of:"
*45 And I want to direct your attention to that
first bullet point.
A. Yes.
Q. "creating doubt about the health charge without
actually denying
it." Do you see that?
A. Yes, I do.
Q. And when you wrote to Mrs. Olson, your company,
you didn't give her
any of the information that you had in your files; did you?
A. We didn't give her any of our files.
Q. And you said there was a controversy; didn't
you, sir?
A. I believe that was in there, yes.
Q. In 1988; correct, sir?
A. I believe that's right, yes.
Q. In a form letter; correct, sir?
A. In a letter from Jo Spach.
Q. In a form letter; correct, sir?
A. I don't know --
MR. WEBER: Object -- let me object, asked and answered
on that issue.
THE COURT: You may answer if it was a form letter
or not.
A. It was a letter from Jo Spach, is what you showed
me.
Q. And you testified earlier those were form letters;
didn't you, sir?
A. I don't know for sure if it's a form letter.
It may be.
MR. CIRESI: Thank you. I have no further questions.
THE COURT: Let's recess for lunch. We'll reconvene
at 2:15.
THE CLERK: Court stands in recess, to reconvene
at 2:15.
(Recess taken.)
(Jury enters the courtroom.)
THE CLERK: Please be seated.
THE COURT: Counsel.
MR. WEBER: Thank you, Your Honor.
Good afternoon, ladies and gentlemen.
(Collective "Good afternoon.")
BY MR. WEBER:
Q. Good afternoon, Mr. Schindler.
A. Mr. Weber.
Q. Before going into your background and personally
on some of your
history at R. J. Reynolds, I want to start off addressing several points
raised by Mr. Ciresi earlier.
As chief executive officer at R. J. Reynolds, are
you ultimately
responsible for Reynolds' policies regarding sales and marketing?
A. Yes, I am.
Q. Now prior to becoming CEO, had you had some involvement
in Reynolds'
sales or marketing functions over your years at Reynolds?
A. Yes. I worked in the sales department back --
from April of '76
through '78, and I really started working before that, in around mid-'75,
with the head of marketing and head of sales in my personnel roll back
in
those days.
Q. And have you had involvement with sales- and
marketing- related
issues as a member of the Executive Committee since 1988?
A. Yes, quite a bit.
Q. Now Mr. Ciresi showed you a handful of documents
discussing
under-age smokers. You remember those?
A. Yes, I sure do.
Q. Had you ever seen those documents in the regular
course of business
in your 20-plus years at Reynolds?
A. No, I hadn't.
Q. Are those documents that Mr. Ciresi showed you
consistent with the
documents you have seen in the ordinary course of business?
MR. CIRESI: Objection, leading, suggestive.
THE COURT: Sustained.
BY MR. WEBER:
Q. Had you seen documents of that type in the ordinary
course of
business at R. J. Reynolds?
A. No, I had not.
Q. Have you had discussions in the ordinary course
of business at R. J.
Reynolds, in meetings with people from marketing or sales in which
sales to
under-age smokers were considered or discussed?
MR. CIRESI: Objection, calls for hearsay.
THE COURT: No. Well you may answer that "yes" or
"no."
Q. Have you had such meetings where under-age marketing
or advertising
to under-age smokers was discussed?
A. I have never been in a meeting where anybody
was discussing --
MR. CIRESI: Excuse me.
*2 A. -- under-age smokers.
MR. CIRESI: Your Honor, that called for blatant
hearsay. The witness
was instructed to say "yes" or "no."
MR. WEBER: Your Honor, may --
THE COURT: Do you have a difficult time hearing
me, sir?
THE WITNESS: No, judge.
THE COURT: Okay. Would you please answer in accordance
with the ruling
of the court.
THE WITNESS: Yes, sir.
THE COURT: Thank you.
MR. WEBER: Your Honor, may I make a comment or be
heard on that last
issue?
THE COURT: You may not make a comment.
MR. WEBER: May I be heard?
THE COURT: With regard to what?
MR. WEBER: I don't think -- I'm not asking for hearsay.
I'm not going
to offer it for the truth. It's just --
THE COURT: I realize you're not asking, but the
defendants' -- the
defendants' response called for hearsay when I instructed the witness
to
answer "yes" or "no."
MR. WEBER: All right.
THE COURT: That's my concern.
MR. WEBER: I understand, Your Honor.
THE COURT: Okay.
BY MR. WEBER:
Q. Let -- let me go back, then, just to make sure
--
A. Yes.
Q. -- I ask the question the right way, Mr. Schindler.
Have you ever been in a meeting during your time
at R. J. Reynolds
where a plan to market to under-age people was discussed?
A. No.
MR. CIRESI: Objection, Your Honor -- excuse me.
Objection, calls for
hearsay by implication. It's also leading and suggestive.
THE COURT: No, I -- the question can be answered
"yes" or "no."
Q. Can -- can you answer that "yes" or "no"?
A. Yes. The question -- the answer to the question
is no.
Q. Now there were some documents involving Mr. Tucker,
Mr. Horrigan and
Mr. Long. Did you know those individuals?
A. Yes, I knew them very well.
Q. Did you have meetings with them?
A. Yes. I worked very closely with Charlie Tucker
starting in that
mid-'75 period through, probably, about '78. I worked with Jerry Long
from
'79 to '81 when I became a plant manager. I worked with Ed Horrigan
in the
'79 through '81 period.
Q. Okay. Can you answer this question "yes" or "no,"
Mr. Schindler: In
any of your meetings with Mr. Horrigan or Mr. Long or Mr. Tucker, did
they
talk with you or suggest to you anything about marketing to under-age
smokers?
MR. CIRESI: Your Honor, objection, calls for hearsay,
and it's also
leading and suggestive.
THE COURT: Well it is leading, certainly, but I'll
allow it. You may
answer it "yes" or "no."
A. No.
Q. Now do you recall Mr. Ciresi asked you some questions
about a
document that may have been presented to the board of directors in
1974?
A. Yes, I recall that.
Q. I think that's Plaintiffs' Exhibit 12493. Could
you turn to that.
A. Yes, I have it.
Q. Now on page one of that document, which is 1311
on the Bates number,
--
A. Yes.
Q. -- can I direct your attention down to the bottom
paragraph on that
first page.
A. Across from chart three?
Q. Yes.
A. Yes.
Q. Now does that say that -- following up where
there was a reference
to 14 to 24, does it say "They represent tomorrow's cigarette business?"
*3 A. Yes, it says "They represent tomorrow's cigarette
business."
Q. Could you turn to page 1314, which is two beyond
there.
A. Yes. I have -- I'm there.
Q. In the middle of the page is there reference
to under 35 age group?
A. "More young adult appeal - trial has increased
from 24 to 31 percent
in the under 35 age group for the King Size."
Q. And then across from chart 10, is there a reference
to young adults?
A. Yes, it says "Salem box profile is younger with
57 percent of users
in the 18 to 34 age group versus 41 percent for Salem King."
Q. And could you turn to page 1315.
A. I'm there.
Q. Right above the bullet points above chart 12,
--
A. Yes.
Q. -- is there a reference in the first bullet point
to young adult
males?
A. It says, "The brand has increased its share penetration
among the
key 18 to 24 male age group - from 1.8 percent to 2.1 percent - a 16
percent increase."
Q. Now I note you weren't at that meeting; were
you, sir?
A. No, I wasn't.
Q. Based on your review of the documents, is the
phrase "young adult"
used consistently to refer to people as low as -- as young as 14?
A. It doesn't appear to be. There's 14 to 17 --
I'm sorry. Yeah, 14 to
24, 18 to 24, under age 35; there seems to be different age groupings
for
references to young adult in this document.
Q. Could you turn to Exhibit 12464. I think that's
in one of the
plaintiffs' volumes as well.
A. Yes, I'm there.
Q. Do you remember that document that Mr. Ciresi
showed you --
A. Yes, I do.
Q. -- from Frank Colby?
A. Yes.
Q. Do you know what Frank Colby's duties were in
the 1970s at R. J.
Reynolds?
A. No, I'm not sure. I know he worked in R&D.
Q. Now Dr. Colby in this document suggested a new
cigarette should be
developed that had a 1950s tar level; correct?
A. Yes.
MR. CIRESI: Objection, it's a misstatement of the
document.
THE COURT: Can you rephrase the question, counsel.
Q. Could you read the --
Can we fix that a little bit? No, down. There we
go. The -- I -- under
"Memorandum," one, two, three, the fourth paragraph --
A. "My suggestion...?"
Q. Right. Can you read that paragraph.
A. "My suggestion covers all these conditions. It
is basically to go
back as much as possible - probably at least halfway - towards the
old
filter cigarettes," and I can't read what's next, it's blocked out
here,
"the cigarettes of the 1950's prior to the Surgeon General's Report.
These
cigarettes had the following three main characteristics as distinguished
from today's cigarettes."
Q. Okay. Could you go to the next page, the top
paragraph, Mr.
Schindler.
A. Yes, I'm there.
Q. Could you read that.
A. "To summarize, it should be easy to develop,
within a relatively few
weeks, these new youth-appeal for market testing for which the following
advertising claims could be unequivocally proven: They will deliver
more
flavor, more enjoyment, and more puffs for the money than any large
selling
cigarette on the market, or for that matter, than any other cigarette
now
on the market."
*4 Q. Did R. J. Reynolds ever make such a cigarette?
A. Not to my knowledge. I don't believe they ever
did.
Q. Did RJR ever advertise a cigarette as having
more puffs for the
money as suggested in this memorandum?
MR. CIRESI: Objection, no foundation. Just said
he didn't know.
THE COURT: Sustained.
Q. Based on your knowledge of 20-plus years at R.
J. Reynolds, Mr.
Schindler, did R. J. Reynolds ever advertise a cigarette that advertised
more puffs for the money?
MR. CIRESI: Objection, no foundation.
THE COURT: No, you may answer that, if you know.
THE WITNESS: Okay.
A. I do not believe the company ever marketed a
product -- a brand on
the basis of more puffs for the money.
Q. Now in the late 1970s, did you become involved
in sales and
marketing for the new brand launch for a new cigarette?
A. I -- I worked in sales for about two years, April
'76 to around July
of '78, and I became involved in the launch of a brand called Real
cigarettes.
Q. That's R-e-a-l?
A. R-e-a-l.
Q. Was that a major effort for R. J. Reynolds at
the time?
A. It was an extremely major effort. It was at that
time one of the
biggest consumer product launches ever. It was an extremely big product
launch or brand launch for the company.
Q. It was an important activity for the company?
A. Yes.
MR. CIRESI: Objection, Your Honor, it's -- it's
leading and suggestive.
THE COURT: It is leading. Try to avoid that, counsel.
Q. Was that an important activity for the company?
A. It was. It was very important. It was a very
big priority for the
company -- or for the company at that time.
Q. Was there any discussion in any of the meetings
in connection with
Real -- and answer this "yes" or "no" if you can -- was there any
discussion whatsoever in connection with this product launch about
marketing to under-age smokers?
A. There was no discussion about marketing to under-age
smokers.
Q. Now do any of the documents shown to you yesterday
by Mr. Ciresi
indicate that Reynolds actually did create marketing campaigns for
under-age smokers?
A. Could you ask --
I thought he (referring to Mr. Ciresi) was going
to get up, so I just
wanted -- could you --
Could you ask the question again?
Q. Right. It's easy to get distracted. Did any of
the documents --
strike that.
Do any of the documents shown to you yesterday by
Mr. Ciresi indicate
that R. J. Reynolds actually did create marketing campaigns for under-age
smokers?
A. No, none of those documents -- documents suggested
that to me.
Q. What is done at R. J. Reynolds, in your experience,
when R. J.
Reynolds creates a marketing campaign? What types of activities are
undertaken?
MR. CIRESI: Well, Your Honor -- Your Honor, I'm
going to object to it,
there's no foundation. Time. He said he had worked in marketing for
two
years.
THE COURT: Okay. Do you want to ask him about the
two years he was in
marketing or --
MR. WEBER: Well, Your Honor, let me lay a little
foundation.
*5 THE COURT: Do you want to go back to 1958 or
--
MR. WEBER: Let in lay a little foundation.
THE COURT: Give us a little hint.
BY MR. WEBER:
Q. Based on the experience you've had in your times
when you consulted
with or worked in the sales or marketing departments or were involved
in
product launches --
A. Yes.
Q. -- or were involved in meetings in which any
marketing issues were
discussed, or since 1988 when you've been on the Executive Committee
or as
CEO, based on those experiences, what does R. J. Reynolds do when it
creates a marketing campaign?
MR. CIRESI: Objection. There's still no foundation.
It also goes beyond
the period of discovery, and we do not know what period of time is
being
referred to that he would have the basis to testify.
THE COURT: Okay. I assume it's 1988 to 1994?
MR. WEBER: May I be heard --
THE COURT: Would that be a valid assumption?
MR. WEBER: May I be heard, Your Honor, at the side-bar?
THE COURT: Sure.
BY MR. WEBER:
Q. Mr. Schindler, you said that, I think, in about
the middle of 1975,
you did some consulting with the sales department?
A. Yes.
Q. Were you aware in that period of what the sales
and marketing
departments did in creating marketing campaigns?
A. Yes. I had a reasonably good knowledge at that
point, yes.
Q. And then you were in the sales department for
several years
thereafter?
A. Yes, couple years.
Q. Seventy what --
A. April of '76 till around July of '78.
Q. And one --
Did that also involve the launch of the Real brand?
A. Yes, it did.
Q. What --
Let's focus now on those periods, '75 to '78, in
there, and based on
the knowledge you had at the time. What types of activities or research
did
R. J. Reynolds do in that time period in connection with creating a
marketing campaign?
A. Well you would do research to develop a product
concept, research to
get what is known as brand positioning or the image that's conveyed
in an
advertisement. Once you develop those ideas, you go to focus groups,
which
is nothing more than you gather eight or 10 people in a room with a
trained
facilitator, and they will, for example, show them an advertisement
and get
their reaction to it, or pack design, show them the pack and get their
reaction to that.
You also do quantitative research on the same things,
which means you
send a survey form out to 400 people, 500 people, and you tabulate
those
results. You take product design and also do product testing where
people
will smoke the product, unidentified, and -- and rate the product to,
you
know, tell you how much they like that product. It's typically referred
to
as qualitative and quantitative research.
You're constantly taking your ideas to the target
consumer or smoker to
see what their reaction is to your idea. And that's the way the marketing
discipline worked at Reynolds and that's really the way it works in
every
consumer products company. You're constantly interacting with your
consumer
so that you can get feedback from them on whether or not -- whether
or not
they like your idea, product, the packaging, the promotional idea,
advertisements and that type of thing, and that's the kind of research
that
goes in to developing a brand and a new product idea before it goes
to
market.
*6 Q. Are you aware of any documents that exist
that show that type of
research showing ads, showing packs, et cetera, showing posters, to
under-age people?
MR. CIRESI: Objection, Your Honor, no foundation.
He testified this
morning he doesn't know anything about -- anything about the documents
going back that far.
MR. WEBER: I object to that. That is not a fair
characterization, Your
Honor.
THE COURT: Well you'll have to lay some further
foundation.
BY MR. WEBER:
Q. Mr. Schindler, again focusing back on that period
when -- when you
did have involvement with the sales and marketing in the late '70s,
--
A. Yes.
Q. -- have you seen any documents showing research
of that type being
done with under-age smokers?
A. No, I haven't.
Q. Does R. J. Reynolds Tobacco Company use code
words to refer to
under-age smokers?
A. Absolutely not.
Q. When you --
When you focus a brand on 18 to 24, I think we saw
some of those
documents, --
A. Yes.
Q. -- what does 18 to 24 mean?
A. It means 18 to 24.
Q. Is it legal for 18-year-olds to buy cigarettes
in the United States
of America?
A. Yes, it is.
Q. Is it legal for 18-year-olds to buy cigarettes
here in the state of
Minnesota?
A. Yes, it is.
Q. Have you ever testified before, Mr. Schindler?
A. No, I haven't.
Q. Let's -- let me go into a little bit of your
background now, if I
could.
When and where were you born?
A. I was born August 12th, 1944, in Harrisburg,
Pennsylvania.
Q. That makes you 53?
A. Yes, it does.
Q. Are you married?
A. Yes.
Q. How long, sir?
A. It will be --
Well, it was 30 years last November, so we're working
on 31 years.
THE COURT: You'll be happy to know the newspaper
disagrees with that.
THE WITNESS: Pardon me? I didn't -- I didn't hear
you.
(Laughter.)
THE COURT: I think the newspaper had a different
age for you.
THE WITNESS: Oh. I understand they had me at 50,
and --
THE COURT: You may want to correct that.
THE WITNESS: -- that's fine. I'd be happy to take
three years off.
MR. CIRESI: So would we all.
BY MR. WEBER:
Q. Do you have any children, Mr. Schindler?
A. I have two daughters and a granddaughter.
Q. How old are your daughters?
A. My daughters are 24 and 21. Granddaughter is
a little over a year
and a half.
Q. Where did you grow up, sir?
A. Harrisburg, Pennsylvania.
Q. Go to high school there?
A. Yes, I did.
Q. When did you graduate from high school?
A. I graduated from Bishop McDevitt High School
in June of 1962.
Q. And what did you do after graduation from high
school?
A. After graduation I got my first full-time job
at Nationwide
Insurance Company running a copying machine and working in the mail
room,
and also had a second part-time job working in a department store selling
shoes.
Q. Did you eventually continue your education?
A. Yes. In December of '65, I guess it was, I returned
to college full
time at the Harrisburg Area Community College and continued working
30
hours a week or so in the shoe store, in the department store.
*7 Q. Did you get a degree from the community college?
A. Yes, I got an associate's degree.
Q. When was that?
A. In December -- I guess it was December -- or
I guess it was January.
I'm getting my dates mixed up here. It was -- I got it in December
of '66,
so '64 that I started.
Q. What happened after you got your associate's
degree from Harrisburg
Community College?
A. I was drafted into the Army.
Q. Did you attend Officer Candidate School?
A. Yes, I did.
Q. Where was that?
A. I went to infantry Officer's Candidate School
at Fort Benning,
Georgia.
Q. And after you got out of -- out of -- excuse
me -- out of OCS, where
were you posted?
A. Well after I got out of OCS, I went back to Pennsylvania,
married my
fiance, Ellen, who's my current wife, and we jumped in the car and
drove to
California to my first assignment at Fort Ord, California, in Monterey.
Q. Did you receive any special training there?
A. I was a training officer as a brand-new second
lieutenant, and we
were training troups in basic training.
Q. What happened in -- I think it was November 1968?
A. Well in November of '68 I landed in Viet Nam.
Q. What unit were you with in Viet Nam?
A. I was with the Second Batallion, Seventh Cavalry,
First Air Cavalry
Division.
Q. Where were you stationed when you first got to
Viet Nam?
A. Oh, about -- up in Tay Ninh Province, about 85,
90 miles northwest
of Saigon, up along the Cambodian border.
Q. And your rank then was what, sir?
A. I was a first lieutenant.
Q. And what were your duties up along the Cambodian
border?
A. Well the first six months I was an infantry platoon
leader out in
the field, out in the boonies as we used to say. After doing that for
six
months I was assigned to the batallion headquarters fire base, which
was
out -- still out in the jungle, but in a fixed position, working on
the
batallion staff. And then my last two months in Viet Nam I was assigned
to
the brigade staff back in Tay Ninh City, which was their larger position
and headquarters.
Q. In that first six months you were there, sir,
was that a combat
assignment?
A. The whole --
Well the first six months was combat out in the
jungle along the
Cambodian border. The whole 12 months was a combat assignment.
Q. When did you leave the Army, Mr. Schindler?
A. In November of '70.
Q. And at the time you left the Army, what was your
rank?
A. I was a captain.
Q. Were you honorably discharged?
A. Yes, I was.
Q. Did you continue with college sometime thereafter?
A. Well I got out of the Army in November of '70
and started back full
time in college at a school called Franklin Marshall College in Lancaster,
Pennsylvania. That was in January of '71.
Q. And when did you graduate from college?
A. I graduated from F&M in June of '72.
Q. And what did you do next?
A. From Franklin Marshall, my wife and I packed
up and went to
Philadelphia, where I started my graduate work in business at the Wharton
School of Business at the University of Pennsylvania in Philly.
*8 Q. And how long a course of study was that?
A. It was two years.
Q. Did you study marketing theory and practice at
the Wharton School?
A. Marketing was part of the curriculum in the M.B.A.
program.
Q. How did you come to be hired at R. J. Reynolds?
A. I was --
I had a research assistant's job at -- at Wharton,
which fortunately
paid tuition, and I was working for a professor, Dr. Rowan, who had
a
friend that worked at R. J. Reynolds in our packaging division, and
he had
sent my resume down to Winston-Salem to this friend of his, and I guess
he
gave it to the corporate personnel people and they sent me a letter
to come
down for an interview.
Q. Now R. J. Reynolds Tobacco Company is located
where, Mr. Schindler?
A. In Winston-Salem, North Carolina.
Q. Do you know when it was founded?
A. I believe in 1875.
Q. Was there a -- was it named after --
Was there a real R. J. Reynolds?
A. Yes, there was a real R. J. Reynolds, Richard
Joshua Reynolds.
That's where the RJR letters come from.
Q. What are the current major brand families for
the R. J. Reynolds
Tobacco Company?
A. Well it's Winston, Camel, Salem and Doral, are
the major brand
families.
Q. What's the largest brand family now?
A. The largest brand that we have is Doral.
Q. Now does R. J. Reynolds Tobacco Company have
any businesses other
than the manufacture and marketing of cigarettes?
A. We have a division called RJR Packaging, which
is a flexible
packaging division that --
They essentially supply all of the packaging for
our cigarettes, but
because of their capabilities, they have the ability to sell their
technology to other businesses, so they have an outside business also
for
various outside customers.
Q. Now at the time you joined R. J. Reynolds in
1974, did the packs of
cigarettes that R. J. Reynolds was marketing carry the Surgeon General's
warning?
A. Yes.
Q. Has that been the case ever since?
A. Yes.
Q. Do you know when those warnings first went on?
A. Well I believe it was in '66.
Q. At the time you joined R. J. Reynolds, did R.
J. -- did
advertisements for R. J. Reynolds' cigarettes carry the Surgeon General's
warnings?
A. Yes, they did.
Q. Is that --
And has that since been true for the period at R.
J. Reynolds?
A. Yes.
Q. Now you said earlier in response to some questions
yesterday, I
believe, that you think cigarettes do carry risk of some health
consequences and serious disease.
A. Yes. I believe people that smoke have an increased
risk of lung
cancer, heart disease, emphysema, and other diseases that are associated
with smoking.
Q. Before joining Reynolds in '74 and before becoming
CEO in '95, I
believe, did you consider yourself the issues raised by working in
a
company that makes a product that carries health risks?
A. Yes. When I interviewed with RJR and they made
the job offer, I --
one of the things I had to consider before I, you know, would take
the job
or accept the job was their -- you know, the health risks of the product.
You know, I believed then as I believe now that there are health risks
with
this product, and so I had to, for my own personal ethical standpoint,
work
through that issue and was I comfortable with it. And that's back when
I
was at -- at Wharton, of course, when I was making that decision.
*9 And, you know, I made that decision on the basis,
first of all, that
it was a legal product, but also from the standpoint that it is a risky
product, but that people, from my own ethical standpoint, needed to
be
aware of that risk, and I --
MR. CIRESI: Excuse me, Your Honor, I -- I'm sorry,
sir. Your Honor,
this is not responsive to the question. It's irrelevant.
THE COURT: We're starting to wander a little bit.
Maybe you should ask
another question.
Q. Did you go through that same type of analysis
before becoming CEO?
A. Well my view about the risk of the product has
evolved over time
from when I first joined as I learned about -- more about the product
as a
plant manager, head of manufacturing and so forth, and more about the
company's efforts to develop products that address the risk issues
with
smoking. That became part of my fundamental ethical basis of being
in this
business and being comfortable with it, that we make a product that
has
risk, that people need to be and must be aware of those risks, and
I need
to be working for a company that is working on products to reduce that
risk.
On that basis, with all the issues that surround
this industry, I'm
very comfortable being in this business, the fact that we are working
on
products to reduce those risks.
Q. Now since 1964, what has been the position of
the federal government
whether cigarettes cause disease?
A. The position of the federal government has --
has been that
cigarettes cause disease.
Q. And since 1988, what has been the position of
the federal government
as to whether cigarettes are addictive under the Surgeon General's
definition?
A. Well the position of the federal government is
that they are
addictive.
Q. Now has the federal government, with those beliefs
in mind, allowed
cigarettes to remain a legal product in this country?
A. Yes. They're a legal product everywhere in the
country that I know
of.
Q. Now does R. J. Reynolds sell cigarettes at retail
here in Minnesota?
A. No, we don't sell -- you know, actually sell
cigarettes at retail.
Q. Can you explain to the ladies and gentlemen of
the jury the system
for marketing and distributing the cigarettes made by the R. J. Reynolds
Tobacco Company.
A. Well we -- we manufacture the product, we market
the product, we do
advertisements on billboards, in magazines, and run promotions. The
product
moves through a distribution system. We sell the product to what we
call a
direct customer, which would either be a tobacco wholesaler or a retailer
directly, and then the cigarettes move through that distribution change
and
-- chain and end up in a convenience store, supermarket, drug store,
some
retail establishment who sells cigarettes.
Q. What does a pack of R. J. Reynolds Tobacco cigarettes
cost in
Minnesota, Mr. Schindler?
A. A -- a full-priced pack of cigarettes in Minnesota
-- and this is
undiscounted, this is an estimate without any discounts after it --
would
be about $2.31 a pack.
*10 Q. Are there taxes included in the price as
well?
A. Yes.
Q. What's the current federal excise tax on a pack
of cigarettes?
MR. CIRESI: Excuse me. Objection, it's irrelevant.
THE COURT: Oh, you can state that if you wish.
A. Twenty-four cents.
Q. And what is the current Minnesota excise tax
on cigarettes?
A. Forty-eight cents.
Q. Per pack?
A. Per pack, yes.
Q. Does R. J. Reynolds make a profit of 48 cents
a pack for each pack
of cigarettes it sells?
A. No, we don't.
Q. How many employees are there at the R. J. Reynolds
Tobacco Company?
A. About 9200 people today.
Q. Nine thousand two hundred?
A. Yes, 9,200.
Q. Where are the manufacturing facilities located,
Mr. Schindler?
A. In Winston-Salem, North Carolina.
Q. How has the -- well let me strike that.
Has the employment numbers, the number of employees
at R. J. Reynolds,
changed over the time you've been with the company since 1974?
MR. CIRESI: Objection, irrelevant.
THE COURT: You may answer that.
A. It's --
Well since 1988, it's come down about 35 to 40 percent;
from around
15,000, a little over 15,000 employees, to about ninety -- 9,200 employees
today.
Q. How are the employees of R. J. Reynolds in the
various departments
informed of company policies?
A. Well we have formal company policies, and they're
informed, you
know, through their chain of command, through their managers, and training
programs and things of that nature.
Q. Are there policies for the sales and marketing
departments?
A. Yes, there are.
Q. How are those employees informed?
A. Well a sales rep is hired, most -- virtually
all of our salespeople
are hired as sales reps, and then they progress up through the
organization. They go through a training program in their jobs and
how to
do their jobs, and as part of that training program they are informed
of
the policies and practices of -- you know, relative to youth smoking,
other
aspects of the job.
Q. Are there policies for marketing research?
A. Yes, there are policies for marketing research
people and also
policies for any marketing research -- outside marketing research firms
that you would hire to work with the marketing research group.
Q. There was some testimony yesterday, some questions
about the Tracker
system. Do you remember that?
A. Yes.
Q. Is the Tracker system set up in a way so as to
exclude smokers under
18?
A. I believe it is.
Q. Does R. J. Reynolds Tobacco Company want people
under the legal age
to smoke to buy its products?
A. Absolutely not.
Q. Why is that?
A. Because, first of all, it's against the law for
them to do it. Equal
to that, I believe, as I've testified in this courtroom, that I --
somebody
who's 14 or 15 or 16 years old is incapable, in my mind, at that age,
to
make a decision about using a product that has potential health risks
to
it. And -- and it's just wrong for that to happen. And beyond that,
it
would be the greatest thing in the world to work -- wake up tomorrow
morning and have nobody under age smoking cigarettes; it would eliminate
a
lot of grief in my life and in the life of many people that work for
this
company.
*11 Q. Now you said that R. J. Reynolds does not
sell directly at
retail; correct?
A. We don't -- we don't sell at retail.
Q. Has Reynolds taken steps to prevent under-age
access to cigarettes
at retail?
A. Yes.
Q. Can you describe that for us.
A. We --
Relative to access, there was a program started
back in late 1991
called Support the Law, which was a program designed to train and educate
retailers and their clerks in stores on -- on the need to card people
when
they buy cigarettes to try and prevent under- age folks from getting
cigarettes. That program, Support the Law, eventually ended up in between
75 and 80 thousand retail outlets. That started in in late '91. And
then in
'96 the industry started a We Card program, which was essentially the
same
program, only it involved the whole industry, so we folded Support
the Law
into We Card. And the We Card program, which is a training program
for
retailers and support materials on carding, is in hundreds of thousands
of
retail outlets across the country.
Q. What type of training materials were included
in the --
A. Well there were, you know, lesson plans, guidelines,
just the whole
training kit that goes with -- you know, materials and so forth to
go with
conducting the training of your clerks.
Q. Training the clerks to check --
A. To card.
Q. -- to check for I.D's?
A. Yeah, make sure they card.
Q. Now does R. J. Reynolds have any other program
intended to address
the decisions made by youths themselves?
A. There was a program -- well it's in existence
today, and it started
in -- again in that same period of late 1991 called Right Decisions
Right
Now, and it's directed at middle schools throughout the country. Today
it's
in about 10,000 middle schools, and by September of this year it should
be
in 12,000 middle schools throughout the country, which I understand
is
about 90 -- would be about 90 percent of the middle schools. That program
is directed at -- at providing teachers and parents lesson plans and
training materials, videos for dealing with kids with regard to helping
them avoid, you know, risky behaviors like smoking, drugs, and other
bad
lifestyle choices for young people. It focuses on supporting efforts
already in the school system, but focuses the resource on how to resist
peer pressure in these behaviors. There -- there are posters provided.
Those posters are on popular television shows like ER, 90210, the French
--
Fresh Prince of Belair, with Will Smith Show and other TV shows have
these
Right Decisions Right Now posters. When the program was launched, Will
Smith became a spokesperson for it, and Danny Glover did some work
for us
in the early development of that program.
Q. Now did R. J. Reynolds have the in-house expertise
to develop this
program directed at communicating to middle-school- aged kids?
A. No, no.
Q. How did you go about developing such a program?
A. Our external relations people were responsible
for having this
program developed, worked with child psychologists, educators, Lifetime
Learning Center, which is a group, I believe, out in the state of
Washington, to develop that, and this group continues to oversee this
program and update it and upgrade the materials and so forth as time
goes
on.
*12 Q. And what's been the reaction of the middle
schools to whom
you've offered this program?
A. It's been very favorable. We --
Each year an increasing number of schools want to
become involved in
it, and I think that's a measure of its effect and success, as it continues
to get other middle schools interested in obtaining this training program
and lesson plans and learning materials.
Q. Mr. Schindler, is advertising of your brands
important to the
business at R. J. Reynolds?
A. It's very important.
Q. Could you tell the ladies and gentlemen of the
jury why you believe
advertising is important.
A. Well advertising is important for two basic,
fundamental reasons.
One is you use advertising to communicate with, you know, current adult
smokers that smoke your brands to reinforce your brand name, your brand
image, your brand position to people who currently claim your brand
as what
we call your usual brand, and you also use advertising to appeal --
try to
appeal to competitive adult smokers, to see if, in the case of Winston,
can
you convince a Marlboro smoker to try Winston, or in the case of Camel,
convince a Marlboro smoker to try Camel. So the two core purposes of
advertising is support your franchise, your usual brand, and see if
you can
get competitive adult smokers to try the brand.
Q. Is the cigarette business a competitive business?
A. It's extraordinarily competitive.
Q. Have there been major changes in the business
over the past, well
let's say since the early '80s?
A. There's been some significant changes over the
early '80s. Over the
last 40, 50 years, if you look at the history of this business, industry
leadership has changed. I think back in the '40s, early '50s, American
Tobacco was the number one tobacco company, then Reynolds became the
number
one tobacco company to the late '70s, and then Philip Morris became
number
one in late '70s, early '80s. There has historically been product
innovation that tends to shift brand leadership around over time.
Probably the most unique change in the industry
in the '80s was the
rise of the savings segment in the business. In the early '80s there
were
virtually no savings brands, private labels or discount brands in the
industry. As the '80s moved on, those brands began to emerge in the
marketplace. From the early '80s up through 1992 they went from virtually
no share of market belonging to savings brands to about 33 or 34 percent
by
the end of 1992. It was a dramatic shift in smoker loyalties. New brands
emerged. An example would be our Doral brand, which is our number one
brand. We actually took it off the market in the early '80s and then
brought it back a year or so later, brand-new, and from then until
now it
now has six share points. And so there was a tremendous shift in brand
loyalties and changing because of the discounting and the savings brands
emerging in the industry.
Q. Has the overall volume of the cigarette business
been declining in
the years you've been at R. J. Reynolds?
*13 A. It peaked, as I recall, in 1982. The industry
--
Are you talking about the company or the industry?
Q. Industry volume.
A. Industry volume peaked in 1982 at about 600 or
so billion
cigarettes, and it has been essentially declining since then, to last
year
the industry sold around 480 billion cigarettes. They had about a 20
percent decline over that time period.
Q. Will the volume decline under the proposed national
settlement?
MR. CIRESI: Objection, Your Honor, calls for speculation
on the part of
this witness.
THE COURT: Sustained.
Q. Do you have a current belief, based on current
analysis, as to
whether volumes will decline under the national settlement?
MR. CIRESI: Objection, no foundation.
THE COURT: Sustained.
Q. If the national settlement as currently contemplated
is put into
effect, will the price of cigarettes increase substantially?
A. Yes, it will.
Q. And based on your years in the cigarette business,
if there's a
substantial price increase, will that affect volume?
A. It will reduce volume.
Q. Let me talk for a few minutes now -- or ask you
about the Joe Camel
campaign. All right, sir?
A. Yes.
Q. Did the Joe Camel campaign win any awards from
advertising entities
that review advertising on a year-by-year basis?
A. I -- I believe --
Well yes, it did. I believe about every year that
the campaign was in
existence it would place in the top 10 top campaigns for print advertising
campaigns, it would win that award. It would be somewhere in that top
10.
Q. Did it cause --
Did the Joe Camel advertising campaign cause smokers
of competitive
brands to switch to Camel?
A. Yes, it did.
Q. Do you believe that Joe Camel advertising campaign
caused anyone who
wasn't a smoker to become a smoker?
A. I don't believe Joe Camel caused anybody to become
a smoker who
wasn't a smoker.
Q. Was Ms. Lynn Beesley at R. J. Reynolds involved
in the Joe Camel
campaign?
A. Yes.
Q. What was her general involvement?
A. Lynn Beesley, who is our current executive VP
of marketing, she was
the brand manager on the Camel brand, she was the one responsible when
the
-- for -- for the brand when the Joe Camel campaign was developed.
Q. Is Ms. Beesley going to come up here and testify
in this case?
A. Yes, she is.
Q. Now does the fact that you used a cartoon Camel,
the fact that it
was a drawing, a caricature, cartoon, whatever it's called, an
illustration, does that show that this was somehow intended for under-age
people?
MR. CIRESI: Your Honor, objection, it's -- it's
leading and suggestive.
THE COURT: It is leading and suggestive, counsel.
Q. Did the Joe Camel campaign use the drawing of
a Camel?
A. Yes.
Q. Are there other advertising campaigns for which
-- of which you are
aware, based on your business experience and your marketing training,
that
have used illustrations and drawings to advertise adult products?
MR. CIRESI: Objection, it's irrelevant and immaterial.
We're not going
to -- unless we're going to try all those cases again.
*14 THE COURT: Sustained.
Q. Do you know whether the Minnesota Lottery uses
Bullwinkle the Moose
to advertise an adult product?
MR. CIRESI: Objection, Your Honor. It's a follow-up
on the previous
question which was sustained.
THE COURT: It is sustained, counsel.
Q. What department at R. J. Reynolds is responsible
for product design
and development, Mr. Schindler?
A. Research and development.
Q. Do you know how many employees there are in the
research and
development department?
A. About 430, 440 people.
Q. Are there professionals there with doctorates?
A. Yes.
Q. Are any of them involved in the scientific community
outside of the
company?
A. Yes, they are.
Q. Could you describe some of their activities.
A. Well a number of those folks have adjunct professorships
at medical
schools and graduate schools of science. They do that, you know, to
develop
their professional skills and keep current in their core scientific
discipline, so they work in different institutions in an adjunct way.
Q. Does R. J. Reynolds have toxicologists in its
R&D department?
MR. CIRESI: Your Honor, may we have a timeframe?
MR. WEBER: In the time you've been at R. J. Reynolds.
MR. CIRESI: I'm going to object if it goes beyond
1994, Your Honor.
MR. WEBER: Up to 1994, sir.
A. Yes, we had toxicologists.
Q. Has it had physical chemists up to 1994?
A. Yes.
Q. Has it had people trained in pharmacology up
till 1994?
A. Yes.
Q. I want you to assume the following, Mr. Schindler:
I want you to
assume that plaintiffs' counsel told the ladies and gentlemen of the
jury
on opening statements that the defendants would do nothing to change
their
products unless and until they were required to do so by government
or as a
result of being held accountable in litigation. Can you assume that
for me?
Now is that a true statement with respect to the
24 years -- does it
accurately reflect the activities of R. J. Reynolds in the 20-plus
years
you've been at the company?
MR. CIRESI: Objection, no foundation.
THE COURT: Can you lay some foundation as to what
time you're talking
about?
Q. As chief executive officer, as chief operating
officer, as a member
of the Executive Committee since 1988, have you become generally familiar
with R. J. Reynolds' activities in cigarette development?
A. Yes.
Q. Have you had to make decisions in that time period
to invest in
certain technologies and research?
A. Yes, I've had to.
Q. Now with that background, is the statement made
by plaintiffs'
counsel an accurate reflection of R. J. Reynolds' product development
activities over that period of time --
MR. CIRESI: Object --
Q. -- up to -- up to 1994?
MR. CIRESI: Well then it's irrelevant with respect
to any statement
made in opening statement because it went back 40 years. Objection.
THE COURT: Is this between 1988 and up to 1994?
Is that the question?
MR. WEBER: I'll start -- yes, let's -- for --
*15 Yes.
THE COURT: You will start there and you will end
there. Okay?
MR. WEBER: Okay.
Q. So in the period 1988 to 1994, is that an accurate
statement with
respect to R. J. Reynolds and what it did in product development?
A. No, it's not.
Q. By the way, do you know a Dr. Sam Simmons?
A. Yes, I do.
Q. Was Dr. Simmons an employee in the biological
research division back
in 1970?
A. It is my understanding that Sam worked in --
in that -- what is
called the Mouse House.
Q. Was he familiar with the work being done there?
MR. CIRESI: Well objection, Your Honor, there's
no foundation.
Q. To your knowledge.
THE COURT: You'll have to lay more foundation than
that, counsel.
Q. Do you have an understanding as to whether Dr.
Simmons worked for
the biological research division?
A. My understanding is that he did.
Q. Did he do research there?
A. I don't know.
Q. Was he familiar with the research that was being
done there?
MR. CIRESI: Objection, Your Honor, there's no foundation.
THE COURT: Okay. You've got to lay foundation if
you're going to --
MR. WEBER: I'll stop -- I'm sorry.
THE COURT: I don't believe he was able to give us
any information this
morning, so you'll have to lay foundation before he'll be allowed to
testify.
BY MR. WEBER:
Q. Is Dr. Simmons going to come here and testify
about his work in the
biological research division?
A. Yes, he is.
Q. Now Mr. Ciresi asked you earlier about lower
tar and nicotine
cigarettes. Do you remember that?
A. Yes.
Q. Has R. J. Reynolds invested in lower tar and
nicotine technology?
A. Yes, it has.
Q. Do you believe that R. J. Reynolds can prove
that lower tar and
nicotine cigarettes are safer?
A. No, I don't believe we can prove that.
Q. Why has RJR invested and supported developments
for lower tar and
lower nicotine cigarettes?
A. Because it was the consensus of public health
people and the
scientific --
MR. CIRESI: Excuse me, Your Honor, I'm going to
object, it's calling
for hearsay on the part of this witness.
MR. WEBER: Well it's --
THE COURT: You may answer.
May I rule?
MR. WEBER: Yes, Your Honor. I'm sorry.
THE COURT: You may answer.
MR. WEBER: Go ahead.
Q. Do you remember the question, Mr. Schindler?
A. I'd just ask it again so that I'm --
Q. Why has RJR invested in and supported developments
for lower tar and
nicotine products?
A. Because it was the consensus of the public health
and
scientific/medical community throughout the world that the -- the most
significant approach to try to address the issues of risk in cigarettes
is
through general reduction strategy, which was to bring down the tar.
And
that is how Reynolds and in fact all the companies in the U.S. -- the
U.S.
companies that developed the technologies to bring down tar in cigarettes,
and that was the strategy that the medical community, public health
community felt was the best one, and that is what the industry pursued.
And
Reynolds, you know, made a significant contribution to those advancements
to try to deliver products that smokers wanted that had substantial
reductions in tar, and that is how Reynolds, you know, as well as the
rest
of the industry, became involved in that -- in that strategic direction.
*16 MR. CIRESI: Your Honor, I move to strike the
answer insofar as it
relates to medical community and other companies. There's no foundation
for
this witness to suggest that.
THE COURT: I'm going to let you cross-examine on
that, counsel.
MR. CIRESI: All right.
BY MR. WEBER:
Q. What was the Premier cigarette, Mr. Schindler?
A. It was a product that started development in
the very early '80s. It
was a product whose fundamental design was to heat tobacco as opposed
to
burning it. And it started in the early '80s and was test marketed
starting
in October of 1988.
Q. And was the Premier cigarette a traditionally
designed cigarette?
A. No, it wasn't.
Q. Did it burn tobacco?
A. No.
Q. Can you explain to the ladies and gentlemen,
just generally, without
-- others will come in later on the scientific/technical aspects --
but
just generally, based on what you know, how the Premier cigarette worked?
A. At the -- the tip of the cigarette where you
would, you know,
normally have the fire crown or the lit end of the cigarette, there's
a
carbon heat source. In the rod itself there was tobacco, and then in
the
center of that rod was a little capsule that had little alumina beads
inside that capsule that had tobacco extracts on it, and then there
was a
filtering system. And the way you smoked the cigarette was you lit
the heat
source and then you'd take a drag on the cigarette and it would pull
the
heat over that system of tobacco, the capsule with the beads, and through
the filter. So the -- the taste that was delivered was really like
an
aerosol because you were pulling heat and you were not burning down
the
cigarette. And so when you took a drag and exhaled, you would see what
appeared to be smoke come out -- it was primarily effectively steam,
it was
a -- and it would dissipate. And it had virtually no secondhand smoke.
Q. Did it have traditional tar that comes off of
a traditional burning
cigarette?
(Mr. Ciresi begins to stand.)
THE WITNESS: For some reason I can see him (referring
to Mr. Ciresi)
better than I could see you this morning.
(Laughter.)
THE COURT: That's called paranoia.
THE WITNESS: Just been here too long.
MR. CIRESI: We've just been with each other longer.
THE WITNESS: Sorry, Mr. Weber. Question, please.
MR. WEBER: That was because I yelled at him; he
couldn't see me when I
stood up to object and he could see Mr. Ciresi much better.
THE COURT: You learn your lesson, counsel.
MR. WEBER: I guess.
Q. Did the Premier cigarette have traditional tar
of the type that
comes off a traditionally burning cigarette?
A. It has --
MR. CIRESI: Excuse me. Excuse me. There's no foundation
for this, Your
Honor.
THE COURT: You can answer that.
A. It had a little bit. Virtually no tar.
Q. Were there any compounds in smoke in a traditional
cigarette -- or
strike that.
Was the smoke chemistry the same in a Premier as
opposed to a
traditional cigarette?
*17 MR. CIRESI: Objection, Your Honor, there's no
foundation for this
witness to testify to that.
MR. WEBER: He was a major officer in the corporation
at the time, Your
Honor.
THE COURT: Without any scientific background.
MR. WEBER: That's right.
THE COURT: Okay. I don't know if he's going to be
a scientific expert
in one area and not another. If you're just making general questions,
fine.
If you're going to pursue this matter, I'm going to sustain the objection.
MR. WEBER: I just want to get a general understanding
of the cigarette
as it was designed.
THE COURT: All right.
BY MR. WEBER:
Q. Was the smoke chemistry different in Premier
as opposed to a
traditional cigarette?
A. It's my understanding that it was.
Q. Did Premier have nicotine?
A. Yes.
Q. At the level of a Light cigarette?
A. Really, as I recall, the level of an Ultralight.
Q. Did Reynolds ever get any patents for its work
on Premier?
A. Yes.
Q. How was --
Well let me go back a second. Did R. J. Reynolds
publish and give to
the scientific community the results of its research on Premier?
A. Yes, they did. They had a -- or have a big monograph
that's about
this thick (indicating approximately six inches) that covered all the
science of the product in every way known to man. It was about that
thick.
Q. Did R. J. Reynolds brief the Surgeon General
and the FDA on this
product?
A. Yes, they did.
Q. How did Premier do in the marketplace?
A. It failed in the marketplace.
Q. What is your understanding as an officer at R.
J. Reynolds as to why
it failed in the marketplace?
A. It was difficult to light. It was a lot harder
to light than a
normal cigarette, took a lot longer. It had an unusual aroma as you
smoked
the cigarette, and it just didn't taste that good.
Q. Did --
How much money, just roughly, if you know, was invested
in the Premier
cigarette?
A. Well, about a billion dollars.
Q. Did R. J. Reynolds make any money, make any profit
off the Premier
cigarette?
A. No.
Q. Did it stop --
Because of the failure of Premier, did it stop from
trying to invest in
new lower delivery cigarette technology?
A. No. We are continuing to explore technologies
in that area.
Q. Did the experience with Premier lead to investment
in another
product using similar technology?
A. Yes, it did.
Q. And what's that product?
A. Eclipse.
Q. Has R. J. Reynolds made a profit on the Eclipse
product?
MR. CIRESI: Your Honor, I -- excuse me, sir. Again,
I take it this will
only go up to 1994?
MR. WEBER: I'd like on this one, if Your Honor will
permit me, to spend
a bit of time at the side-bar. I don't think that ruling applies to
this.
THE COURT: We'll 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.
*18 MR. WEBER: Thank you, Your Honor.
BY MR. WEBER:
Q. Mr. Schindler, do you remember being shown a
document by Mr. Ciresi
from Philip Morris that spoke about a Dr. Price from R. J. Reynolds?
A. Yes.
Q. Do you know whether in 1969 or 1970 there was
a Dr. Price at R. J.
Reynolds?
A. I have no idea.
Q. Do you remember Mr. Ciresi asked you some questions
yesterday about
a design process called the REST, R-E-S-T, process?
A. Yes, I do.
Q. Was the REST process ever included as part of
the process for
commercial cigarettes?
A. No, it wasn't.
Q. Could you turn to Plaintiffs' Exhibit 12800.
I'm not sure which
volume it's in, Mr. Schindler.
MR. CIRESI: Volume one, sir.
A. Yes, I've got it. I thought I had it.
Yeah. Okay, I've got it.
Q. You have it and maybe we don't.
Let me ask you this --
A. 12800, right?
Q. Right. And that was a series of documents that
consisted of a
memorandum to Dr. DiMarco.
A. Yes.
Q. And that dealt with information on the use of
ammonia in cigarettes.
A. Yes.
Q. Could you turn to the second page of that document.
A. Yes.
Q. And do you remember Mr. Ciresi asked you some
questions about the
use of ammonia by R. J. Reynolds Tobacco Company?
A. Yes.
Q. And he asked you, if I'm correct, about the second
use, which was
ammoniation of reconstituted tobacco. Do you see that?
A. Yes.
Q. Did he ask you any questions about the first
listed use?
A. I don't recall that he did.
Q. And what's the first listed use there?
A. Denicotinization of burley tobacco.
Q. Now at the time of this memorandum --
In 1982, isn't that? Let me see if I can get a better
copy. Right,
1982.
-- was R. J. Reynolds using ammonia as part of its
tobacco processing
to denicotinize tobacco?
A. Yes, it was.
Q. What does "denicotinize" mean?
MR. CIRESI: Objection, Your Honor, there's no foundation
for this
witness.
THE COURT: Well you may answer if you know.
A. To remove nicotine from the tobacco.
Q. When you were in charge of the manufacturing
plant --
And what years was that?
A. Oh, plant manager from October of '81 to December
of '86.
Q. Was the process referred to on this memorandum
that Mr. Ciresi
didn't ask you about, the denicotinization process, was that being
used
when you were plant manager?
A. Yes, it -- yes, it was.
Q. So you were familiar with it?
A. Yes. It was a process that was used to remove
nicotine from burley
tobacco.
Q. And why was there such a process for burley tobacco,
as you
understand it as one of the plant managers at the time?
A. Well obviously tobacco is an agricultural crop,
so you maintain a
very large inventory of tobacco because you buy it every season. It's
grown
in different regions of the country. Flue-cured burley, just stay with
that, there's different grades. Leaf size varies depending, you know,
on
the -- on the rain in a given season. But with tobacco, if you have
a dry
season, the leaf will be smaller, but it will still contain essentially
the
same amount of nicotine that it would contain if it was a larger leaf,
only
it's more concentrated in -- in the leaf. And so you have all these
variations in the leaf and all these seasons. And the people that blend
the
cigarettes or design the blends in R&D are balancing these variations
over
time.
*19 So somewhere back in the -- I guess in the '50s
or somewhere -- I'm
not exactly sure when denic started, but the process was used to help
create an inventory of burley leaf that would enable you to balance
all
these differences that occur naturally and over time. And that process
actually --
When I was the head of manufacturing in around 1994,
'93, as I recall,
we shut the process down, frankly, as a cost reduction, because we
weren't
really at that point processing that much leaf through it. So we said
why
are we doing this? And we just shut it down.
Q. Does the management at R. J. Reynolds Tobacco
Company, Mr.
Schindler, remain committed to investing in technology to reduce or
simplify the constituents of smoke?
A. Absolutely.
Q. And have they had that commitment during the
time you've been in
management?
A. Absolutely.
MR. WEBER: I have no further questions now, Your
Honor. Thank you.
BY MR. CIRESI:
Q. Good afternoon, sir.
A. Good afternoon.
Q. Now in response to some questions from Mr. Weber,
you talked about
the fact that tobacco is a legal product; correct?
A. Yes.
Q. Legal here in Minnesota; correct?
A. Yes, it is.
Q. You're not under any impression that this suit
is to make the
tobacco -- the cigarette illegal; are you?
A. No.
Q. Okay. Now you know that you can sell a legal
product illegally;
don't you?
A. I think that's true.
Q. So that if some manufacturer is selling a legal
product and they're
selling that legal product illegally in violation of the laws, they
should
be held accountable; correct?
MR. WEBER: Objection to the "held accountable" again,
Your Honor.
THE COURT: You may answer.
A. I didn't understand your question the first time.
I --
Well I didn't. When you said -- if you'll allow
me a second. When you
said you can't sell a legal product illegally, I agree. I don't know
how
you sell a product that's legal that's illegal.
Q. Well, you can't violate the laws in selling a
legal product; can
you?
A. Yeah, right. I -- I would agree. Yes.
Q. So that if a manufacturer of some product, a
legal product under the
laws, is selling it in violation of laws, they should be held accountable;
correct?
A. If some --
MR. WEBER: Same objection, Your Honor.
A. If some --
THE COURT: No, you may -- you may answer.
A. If somebody violates the law, they should be
held accountable for
violating the law.
Q. Yeah. If they're misrepresenting the product,
they should be held
accountable; correct?
A. If somebody misrepresented the product, I --
they would be held
accountable.
Q. If they --
MR. CIRESI: May I approach, Your Honor?
Q. If they violate promises and representations
that they have been
made -- that have been made to the public, they should be held accountable;
correct?
MR. WEBER: Your Honor, I'd add a additional objection
now. No questions
were asked about the Frank Statement, and this was gone through in
Mr.
Ciresi's opening questioning.
*20 THE COURT: Well I think he can answer that question.
MR. CIRESI: You may answer, sir.
THE WITNESS: Can you repeat the question?
MR. CIRESI: Sure. May I have it back, please.
(Record read by the court
reporter.)
A. You're asking an abstract question, if somebody
violates some
representation? Sure.
Q. Okay. Now you said that you wouldn't sell to
14- and 15- and
16-year- olds -- I take it also 17-year-olds -- because they can't
make the
appropriate judgments; correct?
A. Yes.
Q. And that you only advertise to people of legal
age; correct?
A. Our marketing programs are developed to -- you
know, with people,
that we don't talk to anybody under the age of 21, and that's how we
develop all of our marketing programs when we interact in focus groups,
quantitative research. We talk to people 21 and above, and that's how
we
develop our advertising, promotion, packaging, and product programs.
Q. Sir, do you market to 18-year-olds?
A. Eighteen-year-olds see ads and are of legal age
to buy cigarettes.
Q. Now have you been on highways where there's no
speed limit?
A. No, not in recent times. Many years ago in Nevada
I remember being
on highways without speed limits.
Q. All right.
A. Been in Germany without speed limits.
Q. Now if you're on a highway without a speed limit,
would you drive a
hundred miles an hour down the highway if you saw children along the
sides?
MR. WEBER: Objection, Your Honor, there were no
questions about speed
limits on the direct.
THE COURT: Well that is true, but I'm going to see
if this is
preliminary to any relevant question.
Q. Would you, sir?
A. I don't drive a hundred miles an hour. I did
on the Autobahn once.
But I don't drive a hundred miles an hour. And if there were kids or
adults
or cows or anybody or anything along a road, why I wouldn't drive a
hundred
miles an hour. I don't drive a hundred miles an hour.
Q. Slow down, wouldn't you?
A. I would think so, if they're right on the side
of the road.
Q. You would take action that was prudent in light
of how your
activities may have affect those around you; correct?
A. Yeah. In that situation, sure.
Q. And when you advertise as a manufacturer, you
should take account of
how your activities may affect those who come in contact with that
advertisement; correct?
A. I think that's true.
Q. And that would include children of 14, 15, 16
and 17; correct?
A. Yes.
Q. Now you said that you spent a billion dollars
on Premier?
A. About that, yes.
Q. Did anybody give you some document by which RJR
calculated what they
spent on Premier?
A. That's the estimate that our financial people
have.
Q. Who gave you that?
A. It -- it came from our financial people in the
company.
Q. Who?
A. Well Ken Lapiejko is our chief financial officer.
Q. Did Mr. Lapiejko tell you that?
A. I was talking, yeah, with Ken Lapiejko and Dave
Iauco, who had been
in charge of our Premier project, and we spent the better part of a
billion
dollars on that project.
*21 Q. Are you aware that in this case, information
was provided to us
that showed from 1954 to 1994, the entire amount you spent on research
and
development was 1,127,486,000 dollars?
A. I don't --
No, I don't know that.
Q. Are you telling the ladies and gentlemen of the
jury that all but
127 million dollars of that entire period of time was spent on Premier?
A. No.
Q. Nobody gave you that number; did they, sir?
A. What do you mean?
Q. The billion-dollar number.
A. Yes. My financial group.
Q. Did they give you any documents to back that
up?
A. I don't have any documents with me, but I'd be
happy to get you the
backup for that.
Q. Have you ever seen a document which suggested
you spent a billion
dollars on Premier?
A. I've had discussions with my financial people
and the head of the
project, and the estimate is that we have spent in the neighborhood
of a
billion dollars a year on this project.
Q. A billion dollars a year?
A. I mean a billion dollars in total since the project
started.
Q. Have you ever seen a document which verified
--
A. No, I don't recall.
Q. -- that RJR spent a billion dollars on Premier?
A. No. It was in discussions with my financial people.
Q. You've never seen such a document; have you,
sir?
A. No, but I'm sure that's about what we spent on
this thing, and I'd
be happy to get that information for you and get it back to you.
Q. Sir, you've never seen such a document; correct?
A. I don't believe I have.
Q. And was RJR accurate in the information it provided
to us for
discovery in this case?
A. I haven't seen the information. I assume they
were accurate.
Q. Did they intend to be accurate?
A. I would assume so, of course.
Q. Now Mr. Weber asked you about Exhibit 12800;
correct? Right at the
end. Do you remember that?
A. Yes.
Q. Denicotinization.
A. Correct.
Q. Now when you do reconstituted leaf, do you denicotinate?
A. No. Well --
No, not exactly. What happens in reconstituted process
-- the
reconstituted process, you're taking stems, small particles of tobacco,
dust that can't make it through the normal manufacturing process, and
so
rather than disposing of it, back in the '40s the process was created
to
use that tobacco material, and essentially what it is is a paper process.
So that material goes through a process that removes water solubles
from
the solid matter, the solid matter is then put on a sheet, and through
that
process the same water solubles that were in those particles that had
been
removed are sprayed back onto the sheet in order to make a sheet of
tobacco. And that's what reconstituted sheet is, or as we call it,
G7 in
our process.
Q. We've seen it here, sir.
A. Oh, okay.
Q. And the nicotine is taken out, then put back;
isn't it?
A. Well yes. Nicotine, tobacco extract, materials
that are in that
tobacco are removed and put back in that same tobacco.
Q. Correct.
Now sheet is mixed with burley; correct?
*22 A. Burley, flue-cured, Turkish, a variety of
tobaccos.
Q. And it's blended together; correct?
A. Yes.
Q. Blended together according to a formula; correct?
A. There would be a blend design for every cigarette
-- or every brand
style, yes.
Q. And nicotine in a tobacco crop will vary from
year to year; correct?
A. Sure.
Q. And the people who are doing your blending have
to make sure that
the blend meets the formula; correct?
A. Yes.
Q. And sometimes in order to do that, in the past
they denicotinated
burley; didn't they, depending upon the crops?
A. Yes. They had an inventory of leaf to help balance
this whole thing
out.
Q. So that it would meet the formula; correct, sir?
A. Yes. You're using the term "formula." Blend design,
yes.
Q. And part of that formula was how much nicotine
would be in the
cigarette; correct?
A. Well, the way a cigarette is designed, you --
you say let's -- we're
going to make a full-flavor cigarette, so you have a tar level for
that
which -- and then once you establish tar level, you develop designs,
you
test them until people say that's the one I like, and that will end
up with
a tar and nicotine level that as you produce the product you try to
maintain. You don't want -- you --
You have two reasons. One, you have to take finished
product, smoke it
on the FTC machines, and submit that data to the FTC to verify that
the tar
and nicotine level of that particular brand style is what you are saying
it
is to the FTC. And so that's, obviously, one of the reasons you want
to
maintain that. And you don't want -- because it's an agricultural product,
if everything is varying all over the place over time, you don't alter
the
taste so that, pack to pack or carton to carton or over some period
of
time, it might taste different.
Q. Is your answer yes?
A. Yes.
Q. Thank you.
A. I thought I'd explain how this worked.
Q. So you're trying to meet the formula. One aspect
of the formula is
how much nicotine is to be in the cigarette; correct?
A. The starting place is tar and taste, and you
end up with a nicotine
that will derive from that, and then you're maintaining that tar and
nicotine level.
Q. Is your answer yes?
A. Yes.
Q. Thank you.
Now you mentioned that the Joe Camel campaign won
10 campaign awards;
is that right?
A. I said that --
I believe I said that most of the years that it
was in the market it
would be placed somewhere in the top 10 of print advertising campaigns.
Q. Was it criticized by advertising executives for
targeting children?
A. I think that Joe Camel over its history eventually
was criticized by
almost everybody.
Q. Is your answer yes?
A. Yes.
Q. Now you talked about low tar/low nicotine cigarettes;
correct?
A. Yes. Are you referring back to tar reduction
and -- tar and nicotine
reduction over time? Right?
Q. Yes. And you mentioned something about the worldwide
medical
community.
A. Yes.
*23 Q. What specific document did you have in mind?
A. I don't have a specific document in mind. I had
discussions with
scientific people, my scientific people, as we've discussed this issue
over
the years, that -- that generally the public health community in the
United
States and Europe favors a general reduction of tar in -- in cigarettes
as
a direction to go to attempt to develop designs that reduce risk.
Q. No document; correct, sir?
A. No, don't have a document.
Q. Not a one; correct?
A. Not a one.
Q. You can't point to one --
A. No.
Q. -- health organization which said that; can you?
A. Absolutely can't.
Q. Pardon me?
A. No, I can't.
Q. You can't point to one other company that had
any data that would
support such assertion; can you?
A. I don't have any data available with me.
Q. Not a one; correct?
A. None that I can lay out here today.
Q. And in fact, sir, you yourself -- and by "you
yourself" I mean RJR
-- has no data to confirm that low tar/low nicotine are safer; do you?
A. No, I don't have any data.
Q. None; correct?
A. I cannot --
No, I have no data to confirm that low tar cigarettes
are safer.
MR. CIRESI: Thank you, sir. I have no further questions.
BY MR. WEBER:
Q. Mr. Schindler, with respect to the issue of expenditures
on the
Premier/Eclipse project, --
A. Yes.
Q. -- were there expenditures that were made other
than R&D
expenditures?
A. There are expenditures made that, because of
accounting, wouldn't
show up in the R&D budget.
Q. Was the equipment available commercially to manufacture
Eclipse --
or excuse me, Premier?
A. Some was, some wasn't. Required some unique equipment,
some very
unique customization of existing equipment. It required building a
new
plant.
Q. Okay. Did you --
And you did have to build a new plant?
A. Yes.
Q. And you needed to create and buy equipment?
A. Oh, yes.
Q. And were there marketing expenses as well?
A. Yes.
Q. So R&D wasn't the only expenditure; was it?
A. No.
Q. And with respect to the issue of designing cigarettes,
each brand
style that R. J. Reynolds produces is a brand style for which it reports
to
the Federal Trade Commission a tar and a nicotine level; isn't that
correct?
A. Yes. We're required to do that.
MR. WEBER: No further questions.
THE COURT: You may step down, you'll be glad to
hear.
THE WITNESS: Thanks, judge.
(Witness excused.)
MR. WEBER: Your Honor, we need about five minutes,
maybe a little bit
less to get matters in order for the next witness.
THE COURT: We'll take a five-minute, more or less,
recess.
THE CLERK: Court stands in recess.
(Recess taken.)
THE CLERK: Court is again in session.
(Jury enters the courtroom.)
THE CLERK: Please be seated.
THE COURT: Counsel.
MS. WALBURN: Thank you, Your Honor.
Good afternoon, ladies and gentlemen.
(Collective "Good afternoon.)
*24 MS. WALBURN: Plaintiffs call Professor Cheryl
Perry.
(Witness sworn.)
THE CLERK: Please state your name and spell your
last name.
THE WITNESS: Cheryl L. Perry, P-e-r-r-y.
THE CLERK: Thank you. Please have a seat.
CHERYL L. PERRY called as a witness, being first
duly sworn, was
examined and testified as follows:
BY MS. WALBURN:
Q. Good afternoon, professor.
A. Good afternoon.
Q. What is your current position?
A. I'm a professor in the Division of Epidemiology
in the School of
Public Health at the University of Minnesota.
Q. And were you involved in the publication of the
1994 Surgeon
General's report?
A. Yes, I was.
Q. What was the subject of that report?
A. The subject was preventing tobacco use among
young people.
Q. We'll come back to that report in a moment.
Can you tell us, professor, have you ever testified
in a courtroom
before?
A. No, I haven't.
Q. How long have you taught at the University of
Minnesota?
A. Well I came here in 1980 as an assistant professor,
so I've been in
Minnesota now about 18 winters.
(Laughter.)
Q. And you came here from California?
A. Yes, I did.
THE COURT: Do you ever stay for summer?
(Laughter.)
THE WITNESS: I love summer.
THE COURT: So do we all.
Q. What courses do you currently teach at the University
of Minnesota?
A. I teach two courses for doctoral students on
the principles of human
behavior, and I also teach a course for master's-level students called
"Preventing High Risk Behavior Among Young People."
Q. Can we turn to your educational background.
You received your undergraduate degree from UCLA?
A. Yes, I did.
Q. And what was your major at UCLA?
A. It was mathematics.
Q. Did you then go on to receive a master's degree?
A. Yes. I went to the University of California at
Davis and I received
my master's in education in 1973.
Q. While you were earning your master's degree,
did you teach school?
A. Yes. I taught junior high and high school for
four years in the
Davis and Sacramento City School District.
Q. And did you go on to become a vice-principal?
A. Yes. I was a vice-principal of the only junior
high school in Davis,
California.
Q. Did you then return to school to receive a doctorate?
A. Yes. I went to Stanford, the university, and
received my Ph.D. in
1980.
Q. What was your major at Stanford?
A. Well my major was in the School of Education,
and it was a program
called "The Design and Evaluation of Educational Programs," and then
we
were also required to have a minor, and my minor was in adolescents.
Q. And professor, you are a behavioral scientist?
A. Yes, I am.
Q. And could you describe what that is, please.
A. Yes. Well in kind of the simplest terms, a behavioral
scientist is
someone who studies human behavior. So we study behavioral theory or
behavior- change methods. And since my interest is in community-wide
behavior, those behavior-change methods might include mass communications
like advertising.
*25 Q. And within behavioral science, do you have
any specific area of
interest?
A. Yes, adolescent behavior.
Q. At Stanford, what did your course work include?
A. Well my course work was in the behavioral sciences,
so I learned
about behavioral theory and behavior change methods. I also learned
about
educational theory and curriculum design, and I learned about research
design, and of course took a lot of statistics classes.
Q. Did you also at Stanford work with adolescent
specialists in
different fields?
A. For my minor I worked with specialists in adolescent
sociology, I
worked with an adolescent medicine specialist and worked with her program,
as well as adolescent psychology.
Q. Did you study communications at Stanford?
A. Yes. I was quite fortunate in, about two weeks
after getting to
Stanford, that I received a research job in the Department of
Communications.
Q. And can you tell us a little bit about what that
research job
involved.
A. Yes. I was -- I was working with one of the leading
communications
research experts, and we -- what we did -- and I worked with him for
four
years -- we began to design smoking prevention and heart disease prevention
programs for children and adolescents.
Q. And did that research involve cigarette advertising?
A. Yes. We were looking at cigarette advertising
and how it might
influence young people and how we might teach young people how to resist
those influences.
Q. Did your research there involve peer groups?
A. Yes. We were trying to also see how we could
influence the peer
groups to support non-smoking.
Q. And what is a peer or peer group?
A. Well at that age, in adolescents, a peer group,
you can think of
just people your own age. It might be different when we are adults,
but for
that age group it's just about the same age as yourself.
Q. Have you received any grants for your research
over the years?
A. Yes, I have. I've received about 35 grants for
my work.
Q. And about how many of those grants relate to
smoking and youth?
A. About half the grants, research grants had something
to do with --
with smoking and youth.
Q. And what is your main research area?
A. My main research area now, and has been since
coming to Minnesota,
has been in the designing, developing, implementing and evaluating
large-scale community-wide programs to improve the health of children
and
adolescents.
Q. Have you served on any editorial boards for journals?
A. Yes. Over the course of my career I served on
five editorial boards.
Q. Have you served as a peer reviewer of scientific
literature for
journals?
A. Yes, I do that all the time, I'm sent articles
and then review. So I
review for -- pretty regularly for the American Journal of Public Health,
for the Journal of the American Medical Association, for a journal
called
Preventive Medicine, so forth.
Q. Do you also publish in the scientific literature?
A. Yes, I do.
Q. How many papers have you published in peer-reviewed
journals?
*26 A. I have over 150 papers in the peer-reviewed
literature now.
Q. How many of those papers relate to the health
of children and
adolescents?
A. I think nearly all of them relate to the health
of children and
adolescents.
Q. And how many of your published papers would relate
to adolescent
smoking?
A. I think, again, about half have something to
do with adolescent
smoking.
Q. What has been the major emphasis of those papers
on adolescent
smoking?
A. Well again, my major interest in smoking has
been in designing,
developing, implementing and evaluating smoking prevention programs
for
young people, particularly young adolescents.
Q. Can we discuss a couple of the papers that you've
published,
starting with the first paper in this area, "Adolescent Smoking: Onset
and
Prevention," which was published in Pediatrics in 1979; is that correct?
A. Yes.
Q. Can you tell us about that research and that
publication.
A. Yes, I can.
That was my very first paper in smoking prevention,
and this resulted
from my work in communications. This was in the mid-'70s when I arrived
at
Stanford, and at that time there had been government surveys done showing
that even though adults were quitting smoking after the first Surgeon
General's report, that in fact youth -- the rates of youth smoking
really
weren't going down as much as they thought they would, and in fact
among
young females the rates were actually going up, so of course the government
was quite concerned about that. So they had already funded some studies,
and -- which had taught children in school and adolescents about the
harmful effects of smoking, and they'd found that those - - those studies
had had no influence on their smoking behavior, they didn't have any
effect.
So we decided to take a new approach to smoking
prevention, and what we
wanted to do was to teach adolescents about the environmental influences
to
smoke and ways to resist those influences. And the two main environmental
influences that we were -- that we focused on were cigarette advertising
and peers. So, for example, with cigarette advertising, we wanted the
students to learn how to look at an advertisement and then be able
to
counter- argue in their heads what they saw in the advertisement. So,
for
example, if they saw a woman who was smoking and looking -- and being
portrayed as liberated, they would learn to think, well, she can't
be so
liberated if she's hooked on tobacco. So trying to learn to counter-argue
those advertisements to really see what's going on with those.
We had older students, high school students working
with the -- this
was in the junior high -- with the junior high students to deliver
the
program. So it wasn't adults giving the program, it was these older
students that we had trained.
Q. You mentioned, professor, that in those early
years of your work,
that programs which discussed the harmful effects of smoking were not
shown
to impact smoking rates among youth. Can you tell us why briefly?
*27 A. Well adolescents really don't understand
or can't process the
consequences of smoking. Those consequences to them are -- are remote
and
irrelevant to them.
Q. Can we move to one of your more recent articles.
Did you publish an
article in the American Journal of Public Health in 1992 titled
"Community-Wide Smoking Prevention: Long-term Outcomes of the Minnesota
Heart Health Program and Class of 1989 Studies?"
A. Yes, I did.
Q. And can you tell us about that research and that
publication.
A. Yes, I will. Now this -- in this study we embedded
smoking
prevention in a whole community-wide program that was called the Minnesota
Heart Health Program, so we embedded smoking prevention in the schools
within a larger community program. This study began in 1983, and I
worked
with students who were in the sixth grade -- this was done in Fargo
and
Moorhead -- so they were in sixth grade in 1983, and we followed them
and
worked with them until they were high school seniors in 1989. They
had
smoking prevention programs in the seventh grade and a smaller follow-up
program in the eighth grade and the ninth grade.
Now in addition to the programs in the school, then
they were also
exposed to what was going on in the community, which were primarily
programs, mass media, other kinds of programs aimed at trying to help
adults quit smoking. So the adolescents had their program in school
and the
community-wide program as well.
Now this program in the school was somewhat similar
to what we had done
before, and that is we focused on advertising and we focused on peers
and
ways to resist influences, those environmental influences. In this
program
we had the students, though, look at advertising and tell -- tell us,
tell
each other really, what was really being sold in the advertisement.
So, for
example, we might show an advertisement with a man -- a cowboy on it,
and
we'd ask, well, what -- what are they really selling? And the adolescents
would say to us, well, they're really selling independence or they're
really selling good looks, not cigarette smoking. So -- and again,
we're
trying to get them to counter- argue to realize what was going on in
the
advertising and to counter-argue.
In these programs also we used same-age peer leaders.
The last one, the
older ones, it turned out it worked better. We used same-age elected
peer
leaders and they ran -- really ran the program. We trained them and
they
ran the program. So we tried to make peer influence a positive -- go
in a
positive direction. So peer pressure was kind of turned around, peer
pressure became a good thing rather than a bad thing.
Q. What if anything did this research show about
peer influence in
adolescent behavior?
A. Well it showed that peer influence -- that --
that we or the society
can influence peers either in a positive or a negative direction.
Q. Professor, has your research focused on affecting
the onset, that
is, the uptake of smoking among young people, or has it focused on
trying
to help young people quit smoking after they started?
*28 A. For the most part, almost all my research
has been on preventing
the onset of smoking.
Q. And in addition to your publications, have you
also made
presentations and speeches around the country and around the world
about
smoking and youth?
A. Yes, I have.
Q. I'd like to list a few of those. Did you in 1996
speak in Singapore
on "Peer-led Approaches to Smoking Prevention in the U.S. and
Singapore"
to the Training and Health Education Department, Ministry of Health
for the
World Health Organization?
A. Yes, I did.
Q. In 1995 were you an invited speaker in Osaka,
Japan on the topic
"The Minnesota Heart Health Program: Theory, Programs and Results?"
A. Yes, I was.
Q. In 1995 did you also speak in New Dehli, India,
on the 1994 Surgeon
General's report?
A. Yes, I did.
Q. In 1994 were you an invited speaker to the American
Heart
Association meeting in Chicago, also on the 1994 Surgeon General's
report?
A. Yes, I was.
Q. In 1993 were you an invited speaker at Harvard
University School of
Public Health on community health promotion programs?
A. Yes, I was.
Q. In 1988 were you an invited speaker at the Center
for Disease
Control in Atlanta on international youth health promotion?
A. Yes, I was.
Q. And in 1987 were you an invited speaker at the
Hazelton Foundation
in Minneapolis on psychosocial approaches to drug abuse prevention?
A. Yes, I was.
Q. Did you also serve in a role in the 1994 publication
by the
Institute of Medicine called "Growing Up Tobacco Free?"
A. Yes. I was part of the scientific committee that
prepared that
document.
Q. And is the Institute of Medicine a part of the
National Academy of
Sciences?
A. Yes, it is.
Q. Can we turn to the 1994 Surgeon General's report
on preventing
tobacco use among young people, and I believe there's a copy in front
of
you. This has been marked and previously admitted into evidence as
Exhibit
3824.
You stated, professor, that you were the senior
scientific editor for
that report?
A. Yes, I was the senior scientific editor.
Q. And this was published by the U.S. Department
of Health and Human
Services?
A. Yes, it was.
Q. Would you turn to the page that has Roman numeral
small v, the
acknowledgments page.
A. Okay.
Q. And directing your attention to midway down on
the left- hand column
where it states who the editors of the report were, and that lists
your
name?
A. That's me.
Q. Can you identify the other two people --
A. Yes.
Q. -- who are listed as editors of the report?
A. Yes. Gayle Lloyd and Fred Hull both worked at
the Centers at the
Office on Smoking and Health, and so did the technical editing and
organizing for the report.
Q. Would you turn to page five of the report. In
the left- hand column,
the section called "Development of the Report." I'd like to read you
a
portion of that and ask you a question about it.
Midway down the first paragraph under "Development
of the Report" it
states, "This report is the first to focus on the problem of tobacco
use
among young people. Given the continuing onset of use in adolescence
and
the growing evidence of health consequences associated with early use,
the
report was seen as both needed and timely.
*29 "The current report has been produced through
the efforts of
experts in the medical, pharmacologic, epidemiologic, developmental,
economic, behavioral, legal, and public health aspects of smoking and
smokeless tobacco use among young people. Initial manuscript for the
report
were prepared by 28 scientists who were selected for their expertise
in
specific content areas. This material was consolidated into chapters,
each
of which underwent peer review. The entire document was reviewed by
a
number of experts in the field, as well as by institutes and agencies
within the U.S. Public Health Service. The final draft of the report
was
reviewed by the Assistant Secretary for Health and by the Secretary,
Department of Health and Human Services."
Does that accurately describe the development of
this report?
A. Yes, it does.
Q. And you --
Can you tell us a little bit about your responsibilities
as the senior
scientific editor for this report.
A. Well I was really responsible for putting the
whole report together,
so first of all I had to write portions of the report, so I wrote
significant segments of the report. I also then had to work with all
28
scientists and make sure they got their manuscript in and more or less
on
time. I then took the 28 manuscript and put them together in chapters
or
subchapters so they went together. So, for example, Dr. Samet wrote
the
part on lung problems during adolescence, and I put that together with
someone else who had written about cardiovascular problems, and those
became sections.
Those were sent out to 34 scientists who had specific
expertise in
certain areas of the report, and when those -- those peer reviewers,
those
scientists, then sent back their critiques and questions and concerns
and
edits, and it was my responsibility to attend to each and every one
of
those concerns and edits. So that meant I might have to go back and
talk to
scientists or try to come to some way of -- of dealing with each edit.
Then I put the whole report together, and then that
was sent out to 36
-- 36 senior scientists, and again those senior scientists wrote all
over
it their critiques. And that was sent back, and then my job was to
deal,
again, with each and every concern they had within the report.
Then that -- when that was accomplished, we had
a document that was --
went through technical editing, and then it has to go through an approval
process. So first it has to be approved by the Office on Smoking and
Health, then the Center for Disease Control, then the National Institutes
of Health, all the different like National Institute on Drug Abuse,
National Cancer Institute, then to the Department of Health and Human
Services, and if anyone along the way had a concern, then I had to
deal
with -- with that. And so the document was finally done.
Q. How long did the process you're describing take?
A. It took two years.
Q. And --
A. So each of these takes at least two years to
write.
Q. And in the end was the Surgeon General's report
a consensus
document?
*30 A. Yes. This report really represents, in the
process I just told
you about, what the scientists thought was the best science in this
area as
of -- as of the writing of this report, 1994. So it was considered
the best
science. And we had to all agree; each level of government had to agree.
Any one level of government could veto the entire report.
Q. Would you turn in the report to the table of
contents, please. And
can you tell us what are the different topics covered in the table
of
contents in the '94 Surgeon General's report.
A. Yes. I'll just go over the chapters. The chapter
titles.
The first chapter is just introduction and summary.
The second chapter
dealt with all the health consequences of tobacco use by young people
during adolescence, so that was during that time. Chapter three had
to do
with the statistics, the epidemiology of tobacco use. The third --
the
fourth chapter had to do with the psychosocial risk factors for starting
to
smoke and the shaving tobacco use. The fifth chapter dealt with tobacco
advertising and promotional activity. And then the sixth chapter, efforts
to prevent tobacco youth, things that had been done before to try to
prevent use among young people.
Q. So there was an entire chapter in this report
on tobacco advertising
and promotional activities?
A. Yes, there was.
Q. Have you been involved in any Surgeon General's
reports since the
publication of this 1994 Surgeon General's report?
A. Yes. I've served as the senior scientific reviewer
on -- on one of
the reports.
Q. When was the 1994 report published?
A. It was published in February of 1994.
Q. And when did our law firm first meet with you
about this case?
A. I first met with you in the fall of 1994.
Q. That would have been after the publication of
the '94 Surgeon
General's report?
A. Yes, six or -- six or eight months.
Q. As part of your preparation in this case, have
you reviewed
documents produced by the defendants in this case which relate to youth
smoking?
A. Yes, I have.
Q. How did you obtain those documents?
A. I asked counsel, I asked the lawyers for the
-- for documents, so I
asked for documents around particular subjects. I wanted to see any
documents that had data related to youth, anything that had reports
about
marketing to youth, anything that had research that was done with youth,
and I wanted to see cigarette advertisements. So those were the areas
that
I directed that I wanted documents on.
Q. And when you say you asked counsel, that would
have been our law
firm?
A. Yes, that would.
Q. Were the internal company documents which you
reviewed previously
available to the public?
A. No, they weren't.
Q. Were those documents previously available to
researchers such as
yourself?
A. No, they weren't.
Q. Were those documents available to you and your
colleagues when you
were working on the 1994 Surgeon General's report?
A. No, they weren't.
Q. Were you able to share these documents with your
colleagues?
*31 A. No, I wasn't able to share them, and that
was --
I actually wasn't able to talk about them to anyone
at all, and that
was difficult, you wanted -- you can't talk about what you're working
on,
but also because my colleagues are -- were very interested, this was
the
kind of information we -- we'd been interested in for -- for quite
a while.
Q. Do the tobacco company documents which you reviewed
contain new
information on issues relating to youth smoking?
A. Yes. The documents had an enormous amount of
new information, and I
found the documents quite shocking. They were shocking in that how
explicit
--
I was shocked at how explicit they were in terms
of targeting youth,
particularly under-age youth.
Q. And --
MR. WEBER: Your Honor, I'm -- I'm sorry. I'd object
to the last part of
that as non-responsive and ask that it be stricken. The question was
whether the documents contained new information.
MS. WALBURN: And the answer was responsive, entirely.
THE COURT: Well I think the last part of it was
not responsive. You can
ask another question.
BY MS. WALBURN:
Q. Are you here, professor, to testify on your opinions
relating to the
number of people, young people who start smoking?
A. Yes, I am.
Q. Are you here to testify about why young people
begin to smoke?
A. Yes, I am.
Q. And are you here to testify about the conduct
of the tobacco
companies which affects youth smoking?
A. Yes, I am.
Q. Have you studied the onset of smoking; that is,
when and why young
people start smoking?
A. Yes, I've studied that.
Q. And when is it that most people begin to smoke?
A. Most people begin to smoke during adolescence.
Q. And what does "adolescence" mean?
A. That's a good question, but "adolescence" means
ages -- it's the
second decade of life, ages 10 to 20, or 10, 11 to 20.
Q. Are there different stages of adolescence?
A. Yes. There's three different stages. There's
young or early
adolescence, generally 10 or 11 to about age 14; there's middle
adolescence, 14 to 17; and then there's late or older adolescence,
from
about 17 years old to age 20.
Q. And has there been research on adolescent smoking?
A. There's been quite a bit of research on adolescent
smoking. Hundreds
of studies.
Q. Why is that?
A. Well because smoking is a public health problem
and leads to
disease, and it starts in adolescence and continues into adulthood.
So
smoking is considered an epidemic among youth.
Q. What do you mean, professor, by "epidemic?"
A. I mean that it's a large problem, it's widespread,
it's not confined
to a small subgroup. It affects -- it affects our whole nation.
Q. Would you turn again to the '94 Surgeon General's
report on page
five. And this lists the major conclusions of the '94 Surgeon General's
report. Would you read the first conclusion of the Surgeon General's
report, please.
A. Yes. It says that "Nearly all first use of tobacco
occurs before
high school graduation; this finding suggests that if adolescents can
be
kept tobacco-free, most will never start using tobacco."
*32 Q. Do you agree with that conclusion?
A. I do.
Q. If you look at the total cigarette market, the
number of smokers of
all ages, are youth a big percentage of that market?
A. No, they're not a big percentage.
Q. What, then, is the significance of youth smoking?
A. The significance of youth smoking is that they
-- they start
smoking, and so then they -- they move in to the market; they are the
replacement smokers for those who quit or die.
Q. Has the federal government issued reports on
the numbers of
teen-agers who start smoking?
A. Yes, they have.
Q. Would you turn in the book number two that's
on the ledge there to
Exhibit 26065. This is a document entitled "Preliminary Results from
the
1996 National Household Survey on Drug Abuse, U.S. Department of Health
and
Human Services." Are you familiar with this publication?
A. Yes, I am.
Q. And is this information which is in the public
domain?
A. Yes, it is.
Q. And is this considered reliable?
A. Yes. We use the National Household Survey on
drug abuse data for the
Surgeon General's report. It's part of our epidemiology chapter.
MS. WALBURN: Your Honor, we would offer Exhibit
26065.
MR. WEBER: No objection, Your Honor.
THE COURT: The court will receive 26065, and it's
time to recess.
THE CLERK: Court stands in recess, to reconvene
Monday morning at 9:30.
(Recess taken.)