Tuesday, 30 October 2012

Day 78: Thirteen Riveting Minutes

See note on accessing documents at the end of this post.

Mr. John Broen returned to the stand today for his last half-day of testimony at the Montreal trial of the Quebec tobacco class action suits. During his first appearance on October 15 and 16 he had distinguished himself as one of the worst witnesses to-date - he was argumentative, defiant and evasive. So it was a surprise that he closed his testimony at noon today with some of the most damning - and telling - insights into the Canadian cigarette business.

It came after Bruce Johnston had finished his questions for the plaintiffs and Simon Potter had finished his cross examination. (More on this part of the morning follows below). It was only a few minutes after noon when Justice Riordan began a 13 minute exchange with the witness.

The same John Broen who had struggled to find ways to avoid answering Mr. Johnston's questions was suddenly opening up to the judge. The change in his body language and speech patterns gave a credibility that had been lacking in his earlier statements to the court.

In recent weeks, Justice Riordan has more frequently put questions directly to the witnesses, but has usually only done so to restate a question that has been misunderstood or is being avoided. By contrast, his questions today were original and pointed. This is Justice Riordan's second substantive engagement with witnesses in three court days --  lawyers on both sides hung on every word.

The stakes in this case are big, and the outcome depends at this stage on Justice Riordan's analysis. No wonder he is the object of scrutiny and curiosity. For those unable to observe him first hand, I have tried unsuccessfully to find an official court photo. Failing that, I have found one from a different kind of court -- a photo from the McGill basketball team alumni page. Justice Riordan is not always given a reason to smile so broadly during this trial!

The transcript of today's exchange, when it is available tomorrow, will show that his questions to Mr. Broen cut to the heart of the cigarette enterprise, if not to this case. Until then, my rough notes may suffice:

Justice Brian Riordan (BR): In the companies where you worked were cigarettes considered to be a cause of lung cancer?
Mr. John Broen (JB): (Long pause). That is not actually one I want to answer yes or no to. In the early days there was scepticism. I have always said it may cause. In the early days in the industry there was a general feeling that way that it was not absolutely a proven link. I say early days because I have been questioned back to 1957 while I was here.

BR: In your personal experience?
JB: In the early days, yes I think so. I don’t think it was published like it is today and has it has been. Generally it  was agreed to by different companies in a different way. "Cause" has taken a different meaning over the years. There was an acknowledgement that it was risky and an acknowledgement that it could cause cancer.

BR: I have heard a number of times "cigarettes can be a cause of lung cancer in some people." Does that reflect anything you ever heard while working in the industry?
JB: Perhaps not worded exactly like that.
BR: What wording would you use?
JB: Well, maybe I was using semantics. Generally it was acknowledged in my years in the industry 
BR: When you got together with your other chief executives, surely you must have spoken about the health risks of smoking?
JB: Not really. That was an individual company thing for individual companies to take a position on.

BR: Did you have a management committee in your company?
JB: Yes
BR: In those meetings would you discuss the health effects?
JB: Not specifically, because we were all of one mind that it was a risky proposition and some people are going to have problems, problems of the heart, problems of the lungs. Smoking has been attached to an awful lot of diseases all the way from colon cancer to what not. We didn’t specifically go through a discussion on that topic. 
BR: When you were recruiting people for high level jobs, was it ever an issue?
JB: I don’t recall that. I believe people were asked if they had a problem with smoking. 
BR: Did candidates ask you about the companies' position on smoking and health?
JB: I don’t know. I personally didn’t interview anybody after about 1970. I just don't recall whether it was asked. I assume it was.
BR: Was there ever a discussion within your company on how to respond to the question I just asked you – is smoking a cause of cancer ?
JB: Not really. This is an area where I was asked earlier whether I received direction. I don’t want to use 'direction" in this particular instance as in 'direction from our principal shareholders.' But we watched closely what the position of our principal shareholders was. As a general statement we tended to follow what they said as they took a position on international companies as to what their position was on smoking and the potential health effects. 
BR: So they didn’t tell you want you say but you made sure you didn't contradict them – is that fair?
JB: They never said "thou shalt not." But we kept abreast because we wanted to not do anything that was contrary or different to what they were doing. 
BR: You did more than that. You kept abreast and you made sure you conformed.
JB: There was a lead we took by following what they were saying. We were never actually told.
BR: You were president of one of the companies for a while. Did you ever give direction to the VP of corporate affairs or to people working for you to say "follow what the parent companies say?”
JB: The only person who was a spokesperson for the company was someone who reported to me – John Macdonald – he was the company spokesperson. He was the one who really kept track very carefully what was being said on this issue and this subject. Not only by our parents but what was being said by our parent companies around the world. That was part of his mandate. He know what was being said and he knew he was never ordered about what to say but he knew it was not correct to veer off the path that the other companies were saying. We were a very small company so we weren’t able to go and verify this sort of thing. As a little company we took the lead by keeping track of what was being said. 

BR: You took lead from the parent companies and complied with it?
JB: Yes.
BR: Mr. Macdonald implicitly knew this was his directions or did you specifically indicate that he should follow their lead?
JB: I never explicitly said don’t go beyond what was being said anywhere else. He just knew that this is what he should be staying with – also a position that other companies took on this issues
BR: Did he have role in the CTMC?
JB: He was involved in the public affairs committee. He attended some of those meetings, not all. 
BR: Did he ever mention that it was discussed
JB: Not that I recall.

Earlier in the day

During the earlier part of the morning, Mr. Johnston introduced only a few new documents to the trial. He presented an interesting business analysis from the early 1990s, which described BMV cigarettes. (Exhibit 911). Mr. Broen explained that BMV - Below Market Value cigarettes were usually considered to be smuggled products, or those made from home-grown tobacco. As early as September 1993 - before the election and change in government - RBH was anticipating that cigarette taxes would be rolled back.  Contraband continued to be used as a way to discourage governments from passing tobacco control laws, as in Quebec in 1998. (Exhibit 912)

When RBH placed a billboard for Craven A cigarettes near an Ottawa high school, a response was prepared that was wholly unapologetic and defended the promotion of such sponsorships. (Exhibit 913) Today Mr. Broen was asked whether part of the purpose of such ads was to "raise awareness of the brand." "Yes" he admitted.

Insight into John Broen's work as a marketer can be taken from a memo he wrote in preparation for the change in smoking methods in 1985. (Exhibit 914) In addition to a trenchant political analysis and competitive review, he comments that the change will not "serve to solve our Company's problem of the lack of King Size starter smokers."

Mr. Broen was asked about John Luik, who had written to the Globe and Mail saying he was "neither an employee of the industry nor some hired intellectual hitman, charged by the industry with creating arguments in favour of their position." (Exhibit 915) Given the contrary view of Mr. Luik in some circles, Mr. Johnston asked whether this was a "true statement." "I believe so," said Mr. Broen, but under further questioning he qualified that Mr. Luik was not a hitman for the 'industry' but that he was rather engaged by Rothmans.

Another question on which he dissembled was why the company opposed smoking bans. At first he denied that there was opposition: "We didn’t oppose bans that were as specific to restaurants and so on but we just tried to put forward our position that it wasn’t necessary. That changed over time." 

As for the Smokers Freedom Society, he explained "there was a tidal wave of criticism of smoking in public  places and so on and it was better to have someone that didn’t exactly go along with the views of those criticizing the industry. No one was speaking for our side."

The Cross Examination

Only Mr. Potter chose to cross-examine Mr. Broen, and this time he did not focus his questions on the role of the federal government but instead gave a series of soft-ball questions. ("An area where emotions ran high - is this how you saw discussion of tobacco issues?" - "how much did your [foreign owners] get involved in your company"). He tried to weaken the impact of Mr. Broen's stated concern about promotions in Junior Hockey by implying (without showing) that there were ads for cars and whisky in the same magazine.

Later that day

When the court reconvened in the afternoon, the benches had been cleared of senior members of the legal team and the legal gowns had been put aside. With no witnesses to be heard, the business of the day was set to return to the filing of "orphan documents" into the court record, but not before there was a renewed discussion of the acceptability of Legacy documents in this trial.

Mr. Potter has apparently made good on his promise to file a motion to prevent the testimony of Kim Klausner from the Legacy Library which is scheduled for November 12 and 13. (Such motions are part of the public court record, but are not readily available, so consider my report as hearsay!)

I think the question was left still rather open. Mr. André Lespérance explained the categories of documents that they wished to file, and Justice Riordan probed alternative ways to consider or use these documents. It's all a little fuzzy to me where the issue currently stands, but may perhaps become clearer.

In the remaining hour Ms. Gabrielle Gagné introduced a score of new orphan documents, which have not yet been made available on the plaintiff's database. There will be time to look at these next week when the trial is recessed.

For the rest of this week, a lawyer will be testifying. Mr. Guy Paul Massicotte was counsel for RJR-Macdonald in the late 1970s.

To access trial documents linked to this site:

The documents are on the web-site maintained by the plaintiff's lawyers. To access them, it is necessary to gain entry to the web-site. Fortunately, this is easy to do.

Step 1: Click on: https://tobacco.asp.visard.ca

Step 2: Click on the blue bar on the splash-page "Acces direct a l'information/direct access to information" You will then be taken to the document data base.

Step 3: Return to this blog - and click on any links.