Thursday, 24 April 2014

Day 230: Round 3 with David Soberman

Even after months at the Montreal tobacco trials, it is often not clear to me how and why lawyers make the call to prolong or to cut short the cross examination of an opponent's witness.  If you can't make your points quickly, at what point does the witness look resilient to your criticism?

Unusually, the plaintiffs continued into a third day with their questions to the man hired by JTI-Macdonald to convince Justice Riordan that the company had not "designed marketing to target adult non-smokers or minors" (Mr. Soberman's report, Exhibit 40560).

Mr. Soberman may have used the overnight break to rethink how he answered their questions. Today, his replies were shorter and less preachy-teachy. He also introduced a new nuance in his replies. His opinion had been about marketing, but his replies today were clarified to be about "advertising" - only one component of the marketing mix.

Plaintiff lawyer Bruce Johnston continued on his game-plan and executed it with an unrelentingly severe tone. As I had been during the cross-examination by Doug Mitchell of the plaintiffs own experts many months ago, I was again struck by the pugilism of cross-examination with some witnesses. If you don't like blood sports (and I don't), the courtroom can be a very uncomfortable theatre.

By the end of this third round -- mid way through the afternoon -- Mr. Soberman and his view of tobacco advertising had received multiple blows. But he showed no sign of altering his belief that advertising did not alter the likelihood of anyone smoking - or that it made smokers' happier by increasing the value they assigned to the cigarettes they bought. He did not relent on his opinion that  -- no matter how many references there were to "young adults", "starters"  and "new smokers" on the records of the company, there had never been a reason for JTI-Macdonald to target such people with their advertsing. His faith in the law firm that shaped the records he reviewed was unshaken. So too, it seemed, was his profound belief that tobacco advertising was a benefit to smokers, not a threat.

Mr. Soberman left the court with a smile, albeit one a little more crooked than when he had arrived a week ago.

The Freshfields Review of Documents

Mr. Johnston continued to focus on the review of JTI-Macdonald documents that had been undertaken on behalf of Mr. Soberman by Freshfields, the UK lawfirm that works for Japan Tobacco, and which has been the first point of contact for expert witnesses for its affiliates in this case.

He again used this 700 page document (Exhibit 1742) to highlight contradictions between Mr. Soberman's view of what the company had done against its own records, to portray Mr. Soberman as irresponsibly naive in his trust of lawyers to prepare an independent report, and to cast suspicion on the representativeness of the documents Mr. Soberman reviewed.

Mr. Johnston drew attention to a few major omissions on the list of documents prepared by the Freshfields lawyers. He pointed out that the document made reference to 1978 marketing plans for minor brands -- like Contessa Slims and More -- but left out that year's plans for Export A, the bread-and-butter brand of the company.

The implausibility that Mr. Soberman could have overlooked the document was emphasized by the fact that references to the same plans had been cited in the report of plaintiff expert Mr. Pollay, a document that would certainly have been thoroughly reviewed.

How was it that Mr. Soberman had neither asked for the document nor sought it out for himself. How was it that his opinion had not been influenced by the references to the company's objective of "convincing first time smokers" and its desire to recruit "new smokers entering the cigarette market"?

Despite Mr. Soberman's general uncertainty about whether he had seen documents or not, he was reasonably sure that he had reviewed this one. Nonetheless, "it is possible that I missed this line". 

Today's reminder did not change his overall opinion. "A first time smoker is someone who is already a smoker" (therefore the company was not targeting non-smokers), and "advertising does not have an effect on being able to get people to smoke" (therefore there was no potential impact).

The exercise was repeated with other documents which described Export A as "the starter's choice" (Exhibit 1742), and which described the importance of young adult smokers to RJR (the owner of JTI-Macdonald at that time). The answers were also repeated: no targeting, no impact.

He stressed that his views were grounded in marketing theory about mature markets, and again cited the  "text book" models of Philip Kotler.

Philip Kotler: the father of modern marketing

Soon, Mr. Johnston taunted Mr. Soberman with a sneering reference to Mr. Kotler - "whoever he is!"  I had barely time to type a note to myself -  "BAIT!" -  before Mr. Soberman hooked himself on the question.

"Sorry, with all due respect, Professor Kotler is actually one of the fathers of marketing!"  After that, it was even harder for the witness to distance himself from the opinions of Mr. Kotler, opinions that Mr. Johnston showed were not at all a validation of Mr. Soberman's views.

Mr. Kotler harshly criticized the behaviour of tobacco companies, and noted that they "win the most by creating young smokers."  ("Ethical Lapses of Marketers", Exhibit 1744). Mr. Soberman replied by saying he was perhaps in a better position to talk about tobacco marketing than Mr. Kotler, as he had "assimilated the wealth of information related to this topic."

Mr. Kotler considered that "buyers have the right to expect the product to be safe" ("What Consumerism Means for Marketers," Exhibit 1745). Mr. Soberman replied by saying he was  "of the view that people should be able to make decisions [about risky products] for themselves but should also be provided with the best information."

Mr. Kotler identified ways in which companies operating in a mature market would try to "convert non-users" (Text-book excerpt, now Exhibit 1746). Mr. Soberman replied that if you could bring new people into the market, then it wasn't a mature market. (There is no rule against circular arguments!)

The opinion that counts

Towards the end of his questions, Mr. Johnston asked about Mr. Soberman's familiarity with the 2007 Supreme Court decision on tobacco advertising.

Did he know that it accepted the trial judge's finding that "much of the industry's advertising is in fact aimed at youth and that persuading teenagers to take up smoking was a calculated and deliberate industry advertising strategy." Or the earlier Court ruling that "lifestyle advertising invariably seeks to increase overall tobacco consumption, not just to inform existing smokers."

"I don't know what trial this is referring to," Mr. Soberman said. Is it possible that marketing professors do not take note of Constitutional Challenges to advertising restrictions! And don't read the papers?

Why had he not asked Mr. Mitchell for background material from this case? "I couldn't have asked for something I didn't know about."

Procedure! Declarations! Timetable?

Among the small number of trial issues discussed this week were:

The Tobacco-related Damages and Health Care Costs Recovery Act.  Justice Mongeon's March 5 decision to uphold the validity of the Quebec law affecting the rights of litigants against tobacco companies is being appealed. In the meantime, Simon Potter was eager to have section 17 of that law  declared of no effect in the two class actions. Even though the plaintiffs made assurance that they did not believe that this section of the law was intended to affect their case and that they had no intention to invoke it, Mr. Potter wanted a ruling from Justice Riordan. It was given "from the bench" yesterday.

The structure of the final arguments. A document much hidden from view is the proposed outline for the final arguments. Mr. Kevin LaRoche (JTI-Macdonald) is coordinating the companies' input to how this should take shape, and there was a brief and cordial discussion on this today. The subject will be considered again when the hearings resume on the first week of May.

The tardiness of the Appeal Court ruling.  The unexpectedly long time without a ruling from the Court of Appeal on Imperial Tobacco's right to call for medical records has put the next stage of this trial in a deep fog. Justice Riordan spoke today of a potential "six-month suspension" of the trial, and yesterday encouraged the parties to try to stimulate a response from the higher court.

Financial records and confidentiality. The president of JTI-Macdonald, Michel Poirier, is scheduled to appear on May 23rd to answer questions about the capacity of his company to pay punitive damages. A decision on whether other witnesses are required will be made by next week. The request by the companies to have their financial records kept confidential will not be discussed until the final arguments. Again, there is a desire not to have more appealable interlocutory decisions than can be avoided!

Counter-proof.  The plaintiffs may not have any witnesses to respond to the companies' defence. Mr. Paul Slovic is the only one tentatively on the calendar, and a final decision on his appearance will be made later today. (Not in open court!)

More documents!  Exhibits from the companies continue to flow onto the court record. It is difficult to know how many such records there are, as the index is not always published in the transcripts, and the numbering system allows for sets of many hundred documents to be filed as part of one number (i.e. Exhibit 123.1, 123.2, 123.3, etc). When the hearing resumes on the first full week of May,more these records - and likely the last - will be discussed and filed.

The trial -- or at least what is left of it at this stage -- will resume on May 5th.