DAY 90: Eubanks Questions Philip Morris’ “Integrity”
April 11, 2005 12:54 pm by Gene Borio
“We believe in operating with integrity, trust and respect, both as individuals and as a company. We conduct ourselves within both the spirit and the letter of the law, regulations, agreements and policies that govern us. We are honest with one another and with our stakeholders, fully disclosing all appropriate information, and not just that which supports our point of view. We have the courage to do what’s right.”
–Written Direct Testimony of MICHAEL E. SZYMANCZYK.
Apr 11, 2005, 1:47 PM
DOJ attorney Sharon Eubanks this morning attempted to show that Philip Morris USA CEO Michael Szymanczyk’s mission statement and set of core values are a sham, claiming the company he has led over the last 8 years has not really acted “within both the spirit and the letter of the law.” Mostly the spirit, which she said DOJ had never made any claims about, but the Direct Testimony had opened the door on this subject.
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Advertising and Marketing Expenditures by Brand
Ms. Eubanks asked if the figures in a Philip Morris document on Marlboro Brand spending and even Philip Morris’s reports to the FTC on advertising and promotion expenses include:
–Development, maintenance and training of the sales force;
–Sales force base salary, incentive payments, gifts, bonuses, etc.
–Direct sales force expenses, travel, meals, entertaining clients;
–Physical infrastructure for the sales force like offices, overhead, etc.
–Managerial time in overseeing and leading the sales force;
–Philip Morris ad agency Leo Burnett’s researching and developing ad campaigns;
–Brand planning and related hiring of services, brand consultants, test marketing, focus groups, etc.
Mr. Szymanczyk answered no to almost all of these.
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Youth Sales Penalties for Retail Leaders Participants
Ms. Eubanks attempted to establish that the penalties for retailers found selling to minors are miniscule–a one-month suspension in the Retail Leaders program OR mandatory enrollment in the “We Card” or similar program for first offense; a one-month Retail Leader suspension for the second offense in a year; an additional one-month suspension for the third offense in a year, and the same for the fourth.
As far as cutting off retailers entirely from Philip Morris products, Mr. Szymanczyk pointed out that they have little control over many retailers who purchase from wholesalers.
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International Trademark Issues
Ms. Eubanks tried to show that although Philip Morris had sued Swiss company Otomedia over “trademark violations,” it never did anything to stop Philip Morris International from running a Marlboro car in the Indianapolis Formula 1 race in this country.
Mr. Szymanczyk noted that Philip Morris USA only holds the Marlboro trademark for this country; Philip Morris International holds the trademark outside the USA.
Along a similar line, Ms. Eubanks showed a website of a UK retailer who apparently was offering to sell into the USA a child-sized Ferrari Team racing jacket with the Marlboro Logo.
Mr. Szymanczyk displayed an obstructing obtuseness about recognizing various incriminating aspects of the relevant exhibits while at the same time displaying an astuteness in pointing out less incriminating details.
Mr. Webb peppered the testimony with objections. In fact, if this were a TV show, Ms. Eubanks, in the midst of an objection by Mr. Webb that the internet company was based in the UK and had nothing to do with Philip Morris USA, and that there was no evidence the item was ever sold in the US, would have dramatically whipped out from under her desk the shirt.
Finally, Mr. Szymanczyk said he would look into the matter.
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Common Sense
By the end of the morning, Ms. Eubanks had a difficult time introducing some evidence on Michael Watkins, the banded-paper scientist who was fired by Philip Morris USA, and whose testimony was barred from this trial.
At the end of a long trail of questions and objections, Judge Kessler halted the line of questioning. Ms. Eubanks said, “With all due respect,” that Mr. Szymanczyk’s Written Direct Testimony was filled with encomiums of Philip Morris USA, and she needed some way to disprove them.
Judge Kessler then made a rather astonishing statement about the vaunted “common sense” that we rely on juries to have. She said hopefully, judges have some commons sense, too. She asked Ms. Eubanks that,
“when I read 200-300 pages of self-serving testimony on ‘Oh, how wonderful we are,’ don’t you think [I can apply some common sense to it?]”
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Other than this admission from Judge Kessler, I don’t think much got accomplished for the DOJ so far. But it was a spirited fight. Both Ms. Eubanks and Mr. Szymanczyk are razor sharp, and all morning, Ms. Eubanks was under intense fire from Mr. Szymanczyk, Mr. Webb and Judge Kessler, yet she still kept charging after the well-defended, 6′ 8″ Szymanczyk hill, Audie-Murphy-like, firing away.