Monday, 28 October 2013

Day 176: Mr. Potter's only witness

On Monday last week (October 21), Mr. Simon Potter introduced the first and last fact witness for Rothmans, Benson and Hedges (RBH).

On the shoulders of this one employee - the 49 year old Mr. Steven Chapman - the lawyer placed the daunting responsibility for explaining events that took place at Canada's second largest tobacco company over the last half of the 20th century. It was up to Mr. Chapman to present the facts that might save this company against its share of the $27 billion claimed in the Montreal tobacco trials.

That seems like a lot of pressure to put on any one person, but Mr. Chapman is experienced at being being the legal face of RBH. For a decade or more, he has been the point-person on regulation and government relations at the company. (Exhibit 30046) He was also the representative witness during the off-the-record discovery stage of this trial.

In this latter role Mr. Chapman had boned up on events, some of which predated the 1988 start of his employment at RBH (some even happened before he was born!) These efforts, Mr. Potter suggested, qualified Mr. Chapman to speak about events that would otherwise have been beyond his personal direct experience.

One trial: three defence strategies?

In the day-to-day progress of this long trial the lines between the two lawsuits and three separate defendants often seem to blur. It's easy to forget that although the companies are being tried concurrently, the behaviour of each will be the subject of separate judgements.

So although the counsel have been compelled to work together in the management of their companies' defence, they may have very different views on how best to mount their defence. It is at moments like last week, when the spot-light moves from one company to another, that such differences suggest themselves.

Certainly the drag-it-out tactics of Imperial Tobacco are in sharp contrast to the lets-get-out-of-here approach of Mr. Potter. Since the trial began, Mr. Potter has consistently acted to minimize the amount of time that RBH employees spend on the witness stand, and has even made concessions to avoid witness testimony. Of the 35 corporate witnesses ever identified by the combined defence teams, only three were RBH employees.

Two from that list were culled earlier this month, making Mr. Chapman the last man standing for RBH

A  hearsay account 

I was not among those who watched Mr. Chapman during his three days of testimony last week (I was at a meeting several time zones away). Now it is me who must rely on the reports of others! Let me assure you, this trial is far more entertaining when you are in the courtroom than when reading transcripts.

On the other hand, it would appear that there were some new faces in the spectator's gallery, including some who declined to confirm that they were observing on behalf of Philip Morris.

As one might expect, the RBH legal team was out in force. Gowned and sitting in front of the bar were McCarthy-Tétrault's Simon Potter, Pierre-Jerome Bouchard, Klevinas, as well as Steven Sofer from Gowlings in Toronto. Kristian Brabander and others were watching from behind.

The lawyers outnumbered the witnesses by a More RBH lawyers than RBH witnesses! Hmmmm..

Believing that low tar cigarettes are less risky - but not saying so.

By Mr. Chapman's description, the research capacity at RBH's own facilities was modest, and the company relied on scientific advice from its ownership companies, Philip Morris International and Rothmans.

Despite the small scale of their research base, the company nonetheless adopted a "operating philosophy" that guided its research and product development. This was based on the idea that lower tar cigarettes were less risky. "Nobody knew for sure," Mr. Chapman said, but the company worked on the "belief conveyed by Health Canada that 'low tar is less risky'."

Even today, Mr. Chapman believes that low-tar cigarettes are less risky. "If you reduce exposure to smokers ... [there is] some reduced risk; it doesn't make it safe, but there's a reduced level of risk."  
Exhibit 536. More than 50 years
have passed since the company
shared its views on the risks
 of smoking
These beliefs were never communicated to the public, he said. No health claims were ever made by the company for its low-tar products. In fact the only public statements about the risks associated with smoking were those legendary ads placed by Patrick O'Neil Dunne in the late 1950s. Other than that, Mr. Chapman said, the company "deferred to Health Canada to communicate the information." 

It wasn't just the public that was kept in the dark about what the company actually thought. Employees did not receive any instructions about what they should say or think about smoking and health issues. (This seemed to be such an important point that Mr. Potter raised it twice.)

A general approach to reducing harm

Mr. Chapman explained that it was because the company saw "no way, to the best of our knowledge, to eliminate any specific component in tar itself," that it focused for decades on  "reducing the levels of tar/nicotine/CO in all of our products."

These efforts were successful, by his account. He said the average tar in each cigarette had been reduced from 25 to 35 mg per cigarette in the 1960s to around 12 mg today. "There was a lot of development through that period of time." 

Nonetheless, if specific compounds could be removed from tobacco, the company would do it. Such an opportunity arose a decade ago, when the company participated in the "selective" reduction of tobacco specific nitrosamines (TSNAs) by requiring changes to the way tobacco was cured. (Exhibit 30047

Carefully designed products - but designed to reduce tar, not increase nicotine

As the man in charge of cigarette design, Mr. Chapman was well placed to talk about the various parameters of cigarette design, and how they influence the smoke that is produced when the cigarette is ignited. (Exhibit 30048).  From his description, all tinkering of these various design elements (the blend of tobacco, the filter, the papers, the size or weight of the cigarette) was aimed at "designing a cigarette for a certain taste at a given tar level."  

He assured the Court that the goal was never to ensure that smokers received a set amount of nicotine in any puff, any cigarette or any day of smoking.  "Nicotine does correlate with tar, but it wasn't ever our focus. We designed the product for taste, and if the nicotine happened to be lower or higher, we didn't do anything about it."  

Mr. Potter encouraged his witness to describe how each of these design elements contributed to reducing tar.
* Adding stems to tobacco leaves, or expanding the tobacco to take up more space in the cigarette were cost-saving measures, but they also "have the impact of  reducing tar and nicotine." Mr. Chapman said that RBH does not use reconstituted tobacco.
Chemicals added to cigarette paper caused the cigarette to burn faster, giving "less puffs per cigarette" and consequently less tar per cigarette.
Changes to the permeability, porosity and ventilation of a cigarette resulted in more air diluting the smoke, thus reducing the amount of tar.

Mr. Chapman described other factors which guided cigarette design  - including appearance, taste and costs of productions. "We're trying to produce the quality cigarette that would be a product that our smokers would continue to smoke and that, hopefully, competitors would choose to switch to our brands."  

The company never explored how to make cigarettes elastic or how to facilitate compensation. Nor did they try to make their products to be appealing to people under 18 years of age or to non-smokers. They did not design cigarettes to make it harder to quit smoking.

Mr. Chapman testified that there was a twenty year period when tobacco additives were not used. Public concerns led to suspending the use of humectants (glycerol, propylene glycol, and sorbitol) after 1985. He revealed that the use of glycerol was resumed after 2005. Humectants are used to maintain the taste of cigarettes by preventing them from drying out.

He said that other additives - specifically coumarin and ammonia -- were never used by RBH. Nor was nicotine ever added to any cigarettes sold by RBH. There were no attempts to adjust the quantities of nicotine in smoke, the presence of free nicotine, or the pH balance of the smoke.

Not youth! Not us

Many months ago, the plaintiff's expert witness, Richard Pollay, had identified the Belvedere Rock series as a way that RBH reached young people in its marketing.

Mr. Potter showed Mr. Chapman marketing documents related to the campaign (Exhibits 30054 and 30053) and asked his witness to confirm that the marketing efforts had only ever been aimed at smokers of legal age.

Mr. Chapman agreed with Mr. Potter's suggestion that the campaign directives reflected the company's concern that young audiences be protected from such marketing efforts.
 "Because the events are targeted at our younger, legal demographics (19 to 24 year olds), they are potentially subject to greater scrutiny by anti groups, and require much greater caution on  our part to ensure that there is not a perceived spill over to younger groups."

Innovations intended to increase market-share, not smokers. 

Mr. Chapman was asked about several product development initiatives explored by RBH. Some of these had been discussed earlier in the trial -- such as Project Buck, which aimed to encourage sampling by selling cigarettes in an affordable small package of 5 cigarettes. This was never intended to reach under-age smokers, he said. (Exhibit 30050)  Like many other ideas proposed (Exhibit 30049), it never made it to market.  

He spoke of other product ideas that ultimately went nowhere: Hi-Salt tried for "high sensory appeal at low tar", Passport was aimed at reducing the amount of sidestream smoke, Picnic looked for a cigarette with relatively less tar than nicotine and Phoenix tried to give smokers a cigarette that could be extinguished and then re-lit.

This work was not forbidden by government --- our tax-expenditure dollars were at work supporting it! RBH applied for and received income tax credits for its research into better-selling cigarettes. (Exhibit 30051).  

Law-abiding corporate citizens

Mr. Chapman outlined many of the reporting requirements imposed by Health Canada regulations and willingly complied with by the company. He said he prepared the reports on the ingredients in cigarettes, the chemicals produced when they were smoked, the bioactivity of the smoke and other business information. (Exhibit 30055). 

The company set up internal committees to ensure compliance and the penalty for failing to report was  "dismissal with cause" - Exhibit 30056.

Mr. Potter seemed to imply that the absence of any response by Health Canada to these reports should be taken as a form of endorsement. He asked his witness to confirm that the government has never asked the company to stop making cigarettes, to stop making any brands of cigarettes, to stop using certain papers or ingredients, or to achieve reductions in any specific chemicals in cigarette smoke.

Mr. Chapman described working "with the support from Health Canada" on a pilot study to mathematically extrapolate the quantity of certain chemicals based on measurements of tar. It was this collaboration that led to the "benchmark" exemption in their regulations. (Mr. Potter pointed out that this meant that the general reduction in tar levels also meant a reduction in other chemicals in smoke. "They knew the deliveries of the harmful things were going down."). 

Mr. Potter asked Mr. Chapman to testify that in addition to not opposing RBH's production, the  federal government actively gave the company "a license to manufacture and distribute products in Canada." 

Two of the three days Mr. Chapman spent on the witness stand were given over to cross-examination by the plaintiffs' lawyers. A report on highlights from those days will appear hear tomorrow. 

Next Monday, November 4th, the trial resumes with the testimony of  JTI-Macdonald scientist, Ray Howie.