Tobacco On Trial

Courtroom # 19 was certainly packed Wednesday, and some observers may have felt the trial is finally getting the amount of attention it deserves–though not for the issues at trial, but for the radical and unexplained cut in DOJ’s request for monies to fund Dr. Michael Fiore’s national smoking cessation plan.

The problem with the DOJ’s matter-of-fact change-up request for the program to be funded at $2 billion/year for 5 years, down from $5.2 billion/year for 25 years, is that it could have been justified–but wasn’t. Philip Morris USA attorney Dan Webb had strongly questioned Dr. Fiore’s rationale behind the $5.2 billion figure, and DOJ could have provided a reasonable rationale for how and why they were lowering the estimate. But the cut was simply stated at the end of the day, leaving reporters in consternation–at least, those reporters without inside sources to inform them the cut had been an administrative decision, and not one undertaken by the tobacco team.

(Certainly, such sources had no reason to doubt the integrity of the reporters they spoke to. Based on the Washington Post’s admirable recent history of holding to the letter of their agreement with Watergate’s Deep Throat, Mark Felt (they promised not to reveal his secret until he died, not until he became non-compos-mentis), I’m sure they felt they could depend on Carol Leonnig. Similarly, the LA Times’ Myron Levin has kept many a secret throughout his 20 years of in-depth reporting on tobacco issues.)

Still, someone must have known that simply throwing the reduction out there with no explanation was a bad idea, and one unlikely to get past either the reporters or the Defense team.

When Philip Morris USA attorney Ted Wells took over from Mr. Bernick at the podium in the late morning, he said,

MR. WELLS: The fact that the government could change almost on a dime from $130 billion to $10 billion is the most powerful evidence in and of itself that this whole thing is a house of cards.

JUDGE KESSLER: Perhaps it suggests something else.

MR. WELLS: What’s that?

JUDGE KESSLER: Perhaps it suggests some additional influence was brought to bear on the government’s position.

MR. WELLS: I read that in the paper myself.

There was a fairly loud burst of laughter from the courtroom, after which Mr. Wells said no matter the “judicial speculation,” $10 billion or a dollar, there is insufficient evidence for the court to impose any cessation program period, regardless of cost.

In addition, he said, it’s not a forward-looking remedy, and was in fact first developed with no relation to RICO at all. He accused the DOJ of reacting to the Court of Appeals decision by pulling Dr. Fiore’s plan “off the shelf” to fit the newly-restricted remedies case. As such, it is not “narrowly tailored” to a specific RICO violation. In fact, one group Dr. Fiore specifically mentioned as benefiting from his program was the Hmong refugee population, many of whom, Dr. Fiore testified, had been addicted in South-East Asia. Mr. Wells questioned how their smoking rates could be laid at the feet of the US defendants.

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But it was Mr. Bernick who actually began the Defense’s presentation as court started Wednesday morning.

To illustrate his concept of “The Case that the Government Did Not Construct,” Mr. Bernick introduced up a clever, memorable illustration, which he said was of a Calatrava Bridge (http://www.trekearth.com/gallery/Europe/Netherlands/photo175133.htm, a uniquely balanced structure. Calatrava was undoubtedly an unfamiliar word to Judge Kessler, and she asked for clarification. Mr. Bernick told her that his illustration was of the Calatrava Bridge in Holland. She replied,

Oh, Excuse me, I haven’t been to Holland. . . If I hadn’t been trying this case for 9 months I might have gotten there.

Mr. Bernick, who had begun his presentation by thanking Judge Kessler for her patience, and by commending the DOJ team, commiserated with her, and said in this trial he himself was often lost in all the sports metaphors people used. He said ballet references would have been preferable for him.

Mr. Bernick presented a list of 6 “showstoppers” on a chart labeled “Case-Ending Problems.”

As Mr. Wells would later in the day, Mr. Bernick emphasized that the DOJ had to meet RICO requirements. This is not a wire fraud case, he said, its a RICO case with wire fraud.

He said the DOJ had to prove fraud with a specific intent, and could not ignore the industry’s real reforms in recent years.

He said the DOJ had to establish that an actual RICO Enterprise existed–an entity separate from the defendants and the activities in which it and they engage.

RICO issues were the subject of the sharpest and longest exchange on law that I remember seeing, as Judge Kessler questioned Mr. Bernick on various aspects of his assertions, especially that an “association in fact” can not, for RICO purposes, simply consist of the Defendants. Mr. Bernick told Judge Kessler that if this could be, then any multi-defendant case, where the defendants acted together, would immediately be a RICO case.

Mr. Bernick addressed specific allegations such as the Plaza Hotel meeting, the routing of BAT documents through Robert Maddox at B&W, Y-1, the Vancouver meeting and the Wells/Wigand notes,

During Mr. Bernick’s presentation, Judge Kessler had some interesting comments and observations. At one point she said,

But of course, evidence from government witnesses indicate that despite cognitive answers to the question, there are different layers and levels of knowledge, and believing. And it is one thing for an individual– particularly a young person– to say, “I know it’s a fact,” and to really comprehend the full meaning of that statement in terms of people dying and suffering terribly from conditions such as emphasyma.

At another point, as Mr. Bernick introduced a segment highlighted, “The Touchstone of Courts’ Constitutional Power: 300 Years of Jurisprudence v. Police Power,” Judge Kessler asked of the lawyers in general,

Has the deadline passed for the filing of petition for certiori?

RJR’s Bob McDermott fielded the question, saying, “No.”

I confess I don’t know what Judge Kessler’s pointedly disingenuous reference to the possiblity of a Supreme Court disgorgement appeal meant.

Mr. Bernick later stated in this regard the court had “no power to go beyond traditional injunctive relief.”

Mr. Bernick once again made the point that state and federal governments had plenty of money to fund tobacco control programs today, close to $23 billion a year in excise taxes and settlement payments.

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Briefly, the afternoon session was spent with individual companies defending issues specific to them.

Peter Biersteker and Bob McDermott spoke for RJR.

Michael Minton spoke for Lorillard.

Nancy Straub spoke for Liggett, noting its break from the industry and its resultant praise from public health figures. She also noted its tiny market share.

Bruce Sheffler spoke for BATCo Investments. He noted that since the B&W/RJR merger in July, 2004, BATCo has absolutely no presence in the US at all. BAT’s US-bound cigarettes leave BAT’s hands in Southhampton, England, where they are transferred to the US by Lane Ltd, a wholly-owned subsidiary of RJR. So the potential for future violations from this company may be extra hard to establish.

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Judge Kessler noted that “we’ve set June 21 as the final day to deal with objections” to testimony and exhibits.

This entry was posted on Thursday, June 9th, 2005 at 2:21 am and is filed under Notes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.