Day 54: Too busy making cigarettes to think about health

For the second day the Montreal tobacco trial was split into two sessions: a Montreal morning session focused on the introduction of exhibits and an afternoon session (morning in Victoria) given over to the testimony of what is likely to be the trial's oldest witness, the nonagenarian Peter Gage.

Mr. Gage, like his testimony, is evocative of a previous time. Today he was wearing his regimental blazer and tie (he was a sub-mariner in the British forces during the Second World War). His bearing and his manners of speech, like his choice of clothing, are charmingly anachronistic - even by the standards of Victoria, B.C.!

The lessened discipline of a conference call is as true in a courtroom as it is in the boardroom - and the poker faces of the lawyers (and judge) watching from Montreal relaxed frequently - even laughing - during Mr. Gage's testimony in ways they would not if he had been in the room.  It was not only because of deference to age that he seemed to be given a high level of respect, but also his apparent sincerity and intelligence.

Peter Gage never had the benefit of going to university - he entered the British wartime navy directly from school (from his accent, I'll wager it was a posh one). Following demobilization he signed up as a management trainee at a cigarette factory in Britain where he worked until he immigrated to Canada a decade later.

That is to say, his entire career was in the tobacco business, much of it during a more innocent time when tobacco was, as it was put to him today, a "normal" product.

The Cross Examination

Yesterday, it was JTI-Macdonald lawyer, Doug Mitchell, who directed questions to Mr. Gage. Almost all of today's questions were put by plaintiff lawyer, Bruce Johnston.

Mr. Johnston focused on the way the companies and Mr. Gage became aware of and responded to the knowledge about the harms of smoking. At some point, like the Kubler-Ross' 5 stages of grief, a model of the stages that corporations go through after they learn of unwelcome science may be developed. Certainly Mr. Gage's testimony and the documents introduced into evidence today are ripe for such an analysis.

In his mannerly and courteous style, Mr. Gage's answers were a variation of : I wasn't told, I didn't know, It wasn't my responsibity, I had a job to do. With seemingly no sense of irony, he said more than once that he was too busy making cigarettes to think about the health harm they were causing.

"I was very busy at imperial tobacco – I had nine plants to look after. I didn’t have time to consider matters of smoking and health ... I have no recollection at ll of getting involved  especially at Imperial Tobacco, they had competent people to look after that sort of thing."

"We had been making cigarettes and we were still making cigarettes and my job was to make sure we kept making cigarettes. There was no conflict in my mind."

As courteous and charming as he was, there were some questions he was not going to answer. Bruce Johnston tried to get out of him when it was that he knew that tobacco caused disease.

Q. In 1971 did you believe that it caused any diseases?
A. Not specifically, no. In my view, which was the same as the general public at the time, there was a question and we didn’t know what the problem was and hopefully research would find out some answers for us.

Q. How is that different than a controversy?
A. I have to allow lawyers to answer that.

Q. Mr. Hardy [a US lawyer advising the CTMC] was a lawyer. When he said there was an existing controversy, what did you understand him to mean by that?. Did you understand that there was a question?

A. I fear that if I answer your question I am only providing you with a guess and I don’t think it is going to assist you if I guessed.

Nonetheless, Mr. Gage was self-aware of some internal dissonance. He said the question of when he accepted that smoking caused disease was "rather like when did you stop beating your wife." While he could not bring himself to say cigarettes cause disease, he knew there was a "health problem" and that it was "in the product, not the person." Repeatedly, Mr. Johnston pressed him to say what that "health problem" was, but he would not give any specifics - never identifying lung cancer or other diseases.   

Mr. Gage gave up smoking in 1972 - but did not tell anyone he had done so. 

Curious meetings

The documents entered into evidence during Mr. Gage's testimony are not so clear that he had no hand in or knowledge of the smoking and health controversy.

This senior executive in two Canadian tobacco companies (he was vice president at Macdonald before he moved to Imperial Tobacco, where he sat on IMASCO's Board of Directors) was present at key meetings where the tobacco companies collaborated on strategies related to "smoking and health." These records include:

• a record of a CTMC meeting (where Mr. Gage was present) where the Canadian companies were receiving advice from the (notorious) David Hardy and where the companies agreed to voluntary measures to avoid legislation. (Exhibit 542)
• A detailed situation report of the industry in Canada, based on a meeting with the CTMC (where Mr. Gage was present). The CTMC acknowledged that its research activities of the CTMC were a "scientific relations gesture" and that "Canadian manufacturers are not interested in safer cigarettes. (Exhibit 543) (It also details the ability of the industry to do an end run around the health minister to the Prime Minister's office) 

Back to the fifties

1958 Rothmans ad

Peter Gage's testimony came a few hours after the plaintiffs entered a series of documents that are so old that there are likely no witnesses alive and available to be questioned about them. These records show that tobacco companies in Canada were very active on the smoking and health file at about the same time that Peter Gage was newly arrived in Canada.

• As early as 1954, Imperial Tobacco's executives (John Keith and Leo Laporte) met with the Assistant Deputy Minister of Health to discuss lung cancer and smoking. (Exhibit 535)
• Patrick O'Neil-Dunne, the head of Rothmans in Canada, shocked his colleagues with an admission that Rothmans "accepts the statistical evidence linking lung cancer with heavy smoking. This is done as a precautionary measure in the interests of smokers." Other companies fell on him like a ton of bricks (Exhibit 536 A, B, C, D, E, F, G, H)  

The weeks ahead

Tomorrow Bruce Johnston will continue his questioning of Mr. Gage and our report will be blogged on Monday.

The court will then adjourning until September 17th, when it will return to the Monday through Thursday schedule. On that week, three witnesses are scheduled:  Rita Ayoung (former librarian for Imperial Tobacco), Michel Poirier (President of JTI-Macdonald) and Ray Howie (scientist with JTI-Macdonald).

Day 53: Voice of the Pioneer

There were two morning sessions today at the trial of the Quebec class actions against tobacco companies. The first morning session took place in the regular court room at Montreal's Palais de Justice, and the second took place three hours later in Victoria, British Columbia.

Morning in Victoria: Peter Gage reminisces about Macdonald Tobacco 

Other witnesses have been expected to travel to Montreal, but in view of the age of this witness (92) it was decided that the proceedings could come to him. The Victoria location was not the only adjustment that was made in light of Mr. Peter Gage's advancing years. His testimony today was as a witness for JTI-Macdonald, even though it will be months before the defendant companies call witnesses in the normal schedule. It is a long trial indeed, when the lifespan of witnesses is weighed against the schedule.

This is the first time that this trial has used teleconferencing to patch in a witness from another city. Let's just say that the technology worked as well as can be expected, but not as well as one would hope. Lawyers, clerks, videographers and family members squeezed into a bare-bones Victoria meeting room that could have been plucked from the set of "The Office." Meanwhile in Montreal, the proceedings were watched on the monitors that are mounted throughout the room.

A legal hearing is a verbal dance that is hard to coordinate across two rooms and 3,000 miles, and everyone adjusted to the changed pattern. Justice Riordan's direction of the proceedings was done with a deliberately light hand, and the number of interruptions and interjections was reduced (although Bruce Johnston did not pass up the opportunity to parrot the objections to evidence that the plaintiffs routinely face).

Doug Mitchell, who has represented JTI-Macdonald for many years, sounded more like a NPR or CBC radio host than tough litigator today, as he invited Peter Gage to reminisce about Macdonald tobacco. And in radio terms Peter Gage was a great interview - a colourful raconteur of social, industrial and family history.

Peter Gage told the story of arriving from a modern tobacco plant in England in 1956 to take up a position as assistant to David Stewart, son of the iconic owner-operator of Macdonald tobacco, Walter Stewart. What he found on his arrival was a manufacturing plant that was 50 years out of date, and a management culture that would have given Freud a field day.

"Walter Stewart was a complete autocrat. He insisted on deciding everything. He didn't like anyone interfering with his decisions - he was semi-benevolent despot."

Mr. Gage's suggestions for improvements to the factory almost got him fired . "He  [Walter Stewart] didn’t talk to me for two years." The silent treatment was extended much longer to the son, David. The witness laughed as he recounted Sunday breakfast at the Stewart family home, to which he was often invited. The father could not even bring himself to ask the son to pass the marmalade jar.

Intermediaries were the norm at the plant, where employees conspired behind the scenes to work around Walter Stewart's bizarre behaviour. Because no one but Walter Stewart could have a telephone, for example, an 'out of order' sign was placed on the factory's public phone to leave the lines open for business calls. Christmas bonuses were given in cash, and accompanied by a note in Mrs. Walter Stewart's hand to "on no account acknowledge this."

Canada's second largest tobacco company ran with almost no management staff.
"What was unique is that there were no positions in the factory – it was a company without any sales people, everything was sold through agencies. We had no marketing department and no Research and Development department. Our head office consisted of Mr. and Mrs. Stewart - basically there was no overhead at all." 

The plant made 35 million cigarettes a day - but not enough to keep up with demand. Mr. Gage's description of the production quota had the courtroom in stitches:
"Mr. Stewart and his wife opened the mail in the morning which comprised of orders for cigarettes. They had an adding machine and when the total came to the amount of cigarettes you could produce in the factory he didn’t open any more mail."

1945 promotion
for Export cigarettes

Even with virtually no advertising, the company did very well, holding about 40% of the Canadian market until the market expansion of the 50s and 60s. The trust fund into which all of the profits of the company were paid supported local charities, especially hospitals and universities.

This Willy Wonka scenario came to an end in 1968, when Walter Stewart died and David Stewart took over (his mother remained President).

This change in ownership came amid the great upheaval in the tobacco business after the health harms from smoking were established. Yet Macdonald had no strategy to deal with this, said Peter Gage.
"The feeling was if you could put a man in the moon they ought to be able to come up with an antidote for the health problem of cigarettes. A lot of people were of the same view. But as you know it didn’t happen. ...We knew there was a problem. We had no research facilities. There was nothing we could do about it.... We had no any major discussions with the industry or even withourselves because we didn’t have the facilities – we didn’t even have a chemist on the side. We were spectators to the scene in some ways."

The publication of tar
numbers  in 1969 was a
"Pearl Harbour" moment
for David Stewart

David Stewart took charge of the company as the pressure for health reform was building. The government for the first time published the tar values of Canadian cigarettes. The publication of these numbers (not favourable to Macdonald brands) took David Stewart by surprise. "He thought it was the Pearl Harbour of the tobacco industry." 

Peter Gage took a message of concern about "the numbers racket" to John Munro, and in a later meeting with David Stewart the tobacco manufacturer told the Health Minister that he "wanted Macdonalds to be dealt with differently because of its major donations to charity."

Mr. Gage said that David Stewart was not a good business man, but rather had a love for history. Without any great business talent, he began to reform the company - modernizing production, launching into advertising and introducing more contemporary brands (like Contessa for "ladies"). He toyed with diversifying into other businesses, and dreamed of buying a castle in Scotland.

For a while he wanted to provide $10 million to fund research to prevent cancer from smoking, and met with doctors to discuss this. "The doctors were frank with their speeches. They told David the only sure way was to stop people smoking. Although research was going on they personally didn’t feel optimistic about the results. It [the meeting] had a big influence on David Stewart - that was when he first thought of selling the business."

In 1974, David Stewart sold Macdonald Tobacco to the RJ Reynolds company. Two years earlier, Peter Gage had moved to Imperial Tobacco, where he worked in operations until 1982. For many years he negotiated the purchase of tobacco from Ontario farmers, and participated in official Canadian trade delegations to promote tobacco sales overseas. He has been retired or semi-retired for 30 years.

Montreal morning: Silvana Conte does not grovel

Imperial Tobacco lawyer Silvana Conte has not been seen in the courtroom since May 17 when she demanded (not asked) for an in camera session to present her reasons for requesting a sealing order on some Imperial Tobacco documents. She was spectacularly unsuccessful in the end - Justice Riordan mocked her request in his ruling ("Franchement"  he wrote) and the Court of Appeal turned a deaf ear to her request for his decision to be reviewed.

Undeterred by her record, and little changed in her demeanor, she returned today with the goal of protecting  another Imperial Tobacco document from disclosure.

The document in question, by inference, involves ITL scientist Dr. Massey and is related to an industry position on smoking and health. A long-ago case-management ruling by Justice Blanchard determined that the draft of this document would remain privileged, but the final version of the document would be made public. The company was given until a year ago to provide the final version -- the penalty for being late was that the draft version would lose privilege.

For over an hour - and with a thick book of legal authorities - Silvana Conte argued that the company should not have to face the consequences for failing to produce the final version - Where We Stand - for several months. Justice Riordan, she said, has the authority to let the company off the hook, by virtue of Article 9 of the Code of Civil procedure, and the responsibility to do so.

She had a most peculiar way of asking for a favour. Only slightly less high-handed in tone than in May, she made it sound like her company was the injured party. She surrounded her request with references to the "quasi-constitutional" rights of solicitor-client privilege, the Quebec Charter of Rights and Freedoms, and the obligation of the courts to err on the side of caution. There was nothing in her tone that said "please," or that acknowledged that their legal team was in a pickle of their own making, as they had clearly faulted on a deadline.

Most curiously, she failed to respond to Justice Riordan's questions and hints about wanting to know why the delay had occurred, or what circumstances might help justify his support of her request.

Philippe Trudel took little time in offering the plaintiff's perspectives - that the document should be made public by virtue of the Blanchard ruling and the company's failure to meet the conditions of it. He provided e-mail exchanges that Ms. Conte had neglected to include in her binderized materials - ones which showed a shift in ITL's strategy to keep the document private after the deadline had passed. Without producing the original document, Mr. Trudel suggested that it was so different enough from the document claimed to be a final version that some demonstration was required of the relationship between the two versions.

After a short break, Justice Riordan said he would rule on the matter when Mr. Massey testified later in the trial.

Housekeeping issues

With some time to spare, the focus shifted to the nit-piky task of entering non-controversial documents into evidence. JTI's document doyenne, Catherine McKenzie, provided versions of all Canadian laws and voluntary industry codes, which are now on the trial record (Exhibits 40002, 40003, 40004 and 40005 series).

Tomorrow's session will similarly have a Montreal morning session focused on documents and a Victoria morning session during which Bruce Johnston will begin his cross examination of Peter Gage.