Tuesday, 17 April 2012

Day 17 - Questions, Answers, Pleadings, Decisions

The one-time vice president of marketing for Imperial Tobacco, Anthony Kalhok, was again on the stand when the trial of the Montreal tobacco class actions resumed this Tuesday morning.

In answer to Justice Riordan's jovial "how are you, sir?" as the session began, Mr. Kalhok allowed that he felt "perked up" by a weekend of physical exercise.

It would have taken a stalwart temperament to maintain any feeling of perkiness over the next few hours, as plaintiff lawyer Bruce Johnston took the witness through a series of focused and relentless questions about the marketing strategies of Imperial Tobacco during his tenure there.

Young smokers - a major opportunity group

Of the day's rich testimony, some of the most memorable sections involved the company's approach to young smokers. 

Mr. Johnston pushed Mr. Kalhok to explain the constraints under which his department operated with respect to advertising that reached young people. As happened last week, responses were usually framed around a business analysis.

"You set up a context that is the opposite to the context we worked," Mr. Kalhok explained when asked why they did not market to youth. "We did not consciously not target to people under 18, we consciously targeted at people over 18." Why not target smokers?  Well, "there is only so much you can do in an ad."

Mr. Kalhok passed over several opportunities to reveal any qualms Imperial Tobacco might have had about youth smoking.

Mr. Johnston: Aside from the voluntary code was there anything else that determined the decision or policy of imperial tobacco not to market to starters who were of legal age?

Mr. Kalhok:  No.

Mr. Johnston:  The risks or possible addiction, that was not a factor?

Mr. Kalhok:  No.

The second theme to which Mr. Johnston returned was the role of the marketing department in addressing smokers' concerns about their health and the marketing of some cigarettes are safer.

The witness began to look a little less 'perked up' when Mr. Johnston introduced a 1971 marketing plan that had been authored by Mr. Kalhok (Exhibit 151, not yet available).  Mr. Kalhok was given a moment to read over the anlaysis he had provided some 40 years ago

Young smokers represent the major opportunity group for the cigarette industry, we should therefore determine their attitude to smoking and health and how this might change over time.

Mr. Kalhok looked up from the page to his questioner and ruefully admitted that if the document had been brought out earlier, "you wouldn’t have had to ask me about my personal views."

At this point, discussion returned to the first marketing studies conducted by Imperial Tobacco on teenagers. The Kwechansky "Project 16" was cited in other tobacco trials (including the trial of the federal Tobacco Products Control Act and the U.S. federal RICO suit), but this is the first time that the man who had responsibility for the study had been asked to testify on it.

Mr. Johnston read out extracts from the study, repeatedly asking if these had caused concern for the company. Not once did Mr. Kalhok acknowledge any disquiet.

Mr. Johnston:  "Serious efforts to learn to smoke occur between ages 12 and 13 in most cases.”  Was that new information for ITL at that time?

Mr. Kalhok:  Yes

Mr. Johnson:  Did it cause concern?

Mr. Kalhok:  You have to remember these are the claimed behaviours of the 16 and 17 year olds.  It would not have statistical validity.  We were, um, surprised.

Mr. Johnston:  "Like adult smokers, teenage smokers find it very hard to quit, even if they want to do so of their own accord.”  Did that cause concern?

Mr. Kalhok:  No more than coffee, coke, or whatever else. We admit that once you enjoy smoking you like to continue smoking.

Mr. Johnston:  Was it considered at imperial tobacco at that time, that smokers were able to give imperial tobacco or any manufacture an informed adult consent?

Mr. Kalhok:  I don’t understand the question.

Mr. Johnston: Do you understand the concept of informed consent?

Mr. Kalhok:  Probably not.

Mr. Johnston:  Did that information have an influence in a marketing strategy in the direction of exercising extra caution?

Mr. Kalhok. Not really.  As I said, it was not new information.

Mr. Johnson.  "The young do not temper their actions with worries about future consequences. This is partly because they don't really understand them yet, and because to them the future means next week, next month or at most next year. It does not mean in fifty years, or even in five."  Did this information prompt anyone to prompt how this misapprehension could be corrected?

Mr. Kalhok: If I understood your question correctly, we wouldn't tread into that territory to correct that misapprehension between the timing of the pleasure and the timing of a potential risk. The facts were they were far apart. And they perceived them as far apart. There was nothing to correct.

Maintaining the social acceptability of smoking
Mr. Johnston also revisited the issue of  Imperial Tobacco's marketing strategies to respond to health concerns of smoking.  He again questioned Mr. Kalhok on (Exhibit 116) which minuted an observation in 1976 of the marketing, research and public relations staff of the company:

In our normal marketing activities, we are constantly aware of the smoking and health issue. Some of our campaigns are very effective in reinforcing the smoker's choice. The image campaigns being currently run for duMaurier, Peter Jackson and Player's Filter, help to convey three of the basic reasons for smoking. Those reasons are, respectively, social acceptance, personal independence, and the pleasure of smoking.

He introduced minutes of a similar meeting the year before (Exhibit 153), a policy statement by Canadian tobacco companies on the question of tar and other smoke constituents (Exhibit 154- under reserve, but also available on the Legacy site), a memo noting changes to that agreement (Exhibit 155), and a proposed new agreement (Exhibit 156, 156a) where the Canadian companies agree to not "expand on or exploit" health concerns, to permit each other to use the words tar and nicotine, but not to use any  'scary' words like carbon monoxide or gaseous phase.

Other documents introduced but not  yet available were a marketing plan for a new Player's cigarette (Project Pel, Exhibit 157R), a review of the tobacco industry (Exhibit 159).

By mid afternoon, the plaintiff's wound up their examination of Mr. Kalhok.  They took him to a document on which Mr. Descoteaux had been questioned in the opening days of the trial (Exhibit 11), and asked him to identify his handwritten note to his colleague.  "Much of the satisfaction (of smoking) is the effects of nicotine," he had scrawled across Mr. Descoteaux's suggestion that the company should develop cigarettes that would provide the same satisfaction without "enslaving" consumers.  "Would you pay $12 for a 40 oz  of gin if it didn't contain alcohol?"

Judge Riordan's calls. 

1. Smokers are not also passive smokers

Justice Brian Riordan was called on to make two decisions about evidence.

The first was in reply to an objection by the tobacco companies to a question about the company's views on second hand smoke. "Bringing second hand smoke into the picture would be a fundamental change to the nature of the case" said Imperial's lawyer, Craig Lockwood. Despite Bruce Johnston's protest that smokers are also affected by second hand smoke, and that the industry's approach to the science on second hand smoke was relevant to their denial of other science, Justice Riordan shut down the line of questions. "The issue is not relevant to the  (class action) groups."

2. Non-appearing documents about document destruction.

Earlier in the month a press release regarding document destruction (Exhibit 57) had not been provided to the plaintiffs as part of the established exchange of documents. This had raised questions about the consistency of the defendant's document production with an earlier ruling of Justice Riordan.

After establishing that there were other documents in the same category (related to implementation of the document retention policy), Justice Riordan clarified "if there is ambivalence in my previous judgement that is my fault, but that doesn't change the fact that the information is relevant, and it has to be provided.  And it has to be provided in a timely way with witnesses." He called for documents related to "document destruction between 1985 and 1995 and referred to subsequently."

Ms. Glendinning questioned the time-frame of the document net ("AFTER the lawsuit has commenced!?"), but promised to provide details in the coming days about the number of new documents to be produced.

Justice Riordan also clarified that Imperial Tobacco was to give priority in its internal review of documents to those that are intended to be provided to the plaintiffs in the main action, and that delays in providing documents to the plaintiffs that resulted from assigning personnel to documents in the action-in-warranty (the federal government involvement) were not acceptable.

Back to the croquet court

At the end of the day, discussion was resumed on the industry's request to disqualify three of the federal government's four proposed expert witnesses.  Mr. Regnier, speaking on behalf of the federal government, resumed his submission from the previous day and provided a detailed account of where Dr. Farone's testimony was linked to the action in warranty.

Andre Lespérance presented the views of the plaintiffs, and their agreement with the position of the federal government's counsel that the court was operating with common evidence.  The main action and the action in warranty were woven together, he explained, and the division of the cases in examining or cross examining witnesses would be unworkable.  The expert witnesses were pertinent to both cases, he said, because the cases were "mirrors of one another."

In her reply to the opposition to their motion to dismiss the witnesses, Suzanne Coté replied that she disagreed with the view that the two actions were being tried with common evidence. The fact that the cases were being heard and judged concurrently did not mean that they were working on the basis of a signle proof.

She went further to question the relationship of the federal government to the plaintiff's case. "The federal government could contest the principal demand," she pointed out.  (Was she remembering with nostalgia when the federal government had sided with the tobacco companies in opposing certification of class actions on tobacco in British Columbia and Newfoundland after they had been sersved with third party notices?).

Simon Potter apologized for not having provided the whole story to the court about the eventual agreement reached by the tobacco companies and the federal government to allow Dr. Burns to testify in the Tobacco Products Control Act case, even after Justice Chabot had disqualified him.  He did not back down from other positions taken the day before, and repeated his concerns that the expert witnesses were provided too late in the day to be fair to the defendants.

The last word went to Mr. Jean Leclerc (on behalf of the federal government), who urged the judge to read again the Burns report, and to consider that it could not be severed but should be read as a whole.

Tomorrow morning, Mr. Kalhok returns to face cross examination by his former employer's attorneys, and possibly by lawyers representing the federal government.  In the afternoon, the former president and chairman of Imperial Tobacco, Mr. Jean Louis Mercier, will be called to testify.