Thu, DAY 112: Kessler Seriously Considering Remedies?
June 3, 2005 11:22 am by Gene BorioOn a day when observers were on tenterhooks wondering if the DOJ would decide to mount a rebuttal case, Judge Kessler gave the clearest indications yet that she was seriously pondering just what remedies she might impose, and what the effects may be. The questions and hypotheticals she posed throughout the questioning of Dr. Carlton indicated that she may well decide against the industry in at least one aspect of the case–an aspect which would require a remedy.
While it is not Judge Kessler’s method to presuppose a ruling before every last bit of the evidence is in–and she has numerous testimonies and exhibits to pore over this summer–she is also wise enough to know which way she is leaning, and if she is leaning that way, she must be confident she has the legal basis for such a ruling.
Of course, even after closings, the trial is not over: Judge Kessler’s beach reading this summer will consist of 21,888 pages of live testimony, about 22,000 pages of prior testimonies, and almost 14,000 pages of exhibits from live and prior testimonies. (This according to Philip Morris USA attorney Dan Webb.)
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Our 3 Defense economists this week were certainly a mixed bag:
First, we had the animated, bow-tied, Dr. Roman Weil, whose glee at tormenting his students (undoubtedly) and his cross-examiner (definitely) with strict logic and Miss Thistlebottom’s grammar, indicated an expert’s view of data, but a child’s view of deeper issues. To him it all seemed a game, and –considering both his expertise and his personality–a child’s game at that. Dr. Weil argued that all the DOJ proposed remedies, save injunctive relief, would not be targeted to the alleged wrongdoing and/or have no effect on the wrongful behavior and/or would threaten the survival of the Defendants’ business, and/or would adversely impact “innocent third parties,” ie, stockholders, employees, and retirees (through underfunded pension funds).
Wednesday, we had the ultra-chipper, chirpy Dr. Wittes, who, looking far younger than her 60+ years, perked up and flashed a wide, disarming smile with every answer. And yet periodically the facade would drop, and in relaxation she seemed far more like the frumpy creature in front of you in the supermarket check-out line, carefully doling out her coins. Dr. Wittes reviewed the two Farrelly papers which found that the American Legacy Foundation anti-youth smoking ads contributed to the decline in youth smoking, while Philip Morris USA’s “Think Don’t Smoke” ads increased young viewers’ positive feelings towards the tobacco industry and smoking.
And Thursday we had the extremely low-key, sober-faced Dr. Carlton, who, with his quiet voice and faint Boston accent, sounded a little like JFK–but more like Vaughn Meader.
DOJ attorney Renee Brooker’s cross-examination of Dr. Carlton was also a mixed bag. For an hour or more she concentrated on the financial arrangements of Dr. Carlton, Lexecon and Nextera. After several objections by B&W lawyer David Bernick, a long bench conference was held, after which Judge Kessler allowed the questioning to go on. But we got it long ago–Dr. Carlton and Lexecon have done lots and lots of work for the tobacco industry, and for some of the tobacco law firms on non-tobacco issues. A depressing anti-climax came when, after almost an hour of continued questioning, Ms. Brooker finally dropped the subject abruptly, without the anticipated bombshell that would seemingly be the only justification for such an extended use of time.
(There was some speculation, reportedly begun by a tobacco lawyer, that the DOJ simply wanted to extend Dr. Carlton’s testimony to another day because DOJ wasn’t ready for closing arguments–a claim vehemently denied by Ms. Eubanks in a rare talk with reporters after court. Ms. Brooker, according to this charge, was simply “filibustering” to get the closings scheduled for some future week.)
Judge Kessler Objects
Judge Kessler seemed more expressive today, possibly even in somewhat of a peremptory mood.
“Objection sus– MYobjection is sustained!”
But she also directly questioned Dr. Carlton on his notion that an injunction would be the proper remedy, asking what if Defendants still say, “We’ll take the injunction’s penalty as the cost of doing business?”
One advantage of an injunction for the Defense is that the behavior would be spelled out, leaving the companies free to pursue other behavior. Dr. Fiore’s method, in contrast, ties the end result of misbehavior–youth smoking increases–to the penalties. Dr. Carlton averred that by using this proxy for Defendants’ behavior, instead of the behavior itself, Dr. Fiore’s remedy could have unintended consequences. Penalties could be assessed in the absence of misbehavior (if youth smoking rates don’t decline), penalties might not be assessed in the presence of misbehavior (if smoking rates continue to decline), and the whole system could even lead to a rise in youth smoking(!)
As one example, let’s say a company raises its price to discourage youth smoking, since we know price is tied to smoking rates. But this drives some youth smokers down to the discount category, where prices may be lower. Thus, some of these youths may smoke more, since we know price is tied to smoking rates.
This seemingly dire scenario, posited by a “concerned” Dr. Carlton (yes, another member of the “Concerned Tobacco Witnesses of America”), was fairly demolished as a serious threat when probed by Judge Kessler.
Judge Kessler also asked extensive questions about the economic costs of the MSA, and its effects on the industry’s business, indicating that she wanted to be as sure as possible of the effects of any high-costing remedy she may impose.