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DAY 1 (Morning Session)
WILLIAM FARONE
3 being called as a witness in behalf of the plaintiffs,
4 being first duly sworn his oath was examined and
5 testified as follows:
6 DIRECT EXAMINATION
7 BY: MR. TILLERY
8 THE COURT: You may proceed.
9 Q. State your name, please.
10 A. William Farone.
11 Q. And where do you live, sir?
12 A. I live in Irvine, California.
13 Q. What is your occupation?
14 A. I am president and chief executive officer of
15 a company called Applied Power Concepts, Inc.
16 Q. Could you tell us what that company does?
17 A. Our company develops technology and makes
18 products for environmental remediation, basically
19 removal of toxic materials from the environment,
20 replacement of toxic materials by other materials that
21 are environmentally more friendly.
22 Q. How long have you been doing that?
23 A. Let’s see, seventeen years.
24 Q. Describe how when you say replacing other

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1 materials that are more environmentally unfriendly, can
2 you explain what you are talking about there?
3 A. For example, we developed and had approved by
4 the Environmental Protection Agency an insecticide made
5 from sugar and fat so that actually this is edible,
6 approved by the Food and Drug Administration for eating,
7 kills insects and degrades very rapidly in the
8 environment. This is a replacement for things like
9 chlorinated insecticides.
10 Q. And some of your concepts or inventions been
11 used to alleviate other types of pollution?
12 A. Yes, we have two products that are used at
13 over eight thousand sites in the United States, remove
14 carcinogens and other toxic materials from the
15 environment by injecting them into the ground and
16 allowing the bacteria in the ground to eat and consume
17 the toxic materials; it is called bio-remediation.
18 Q. Could you tell us about your educational
19 background, sir?
20 A. I graduated in 1957 from high school. I went
21 to Clarkson University, which is in Northern New York.
22 I took a triple major undergraduate: electrical
23 engineering, chemical engineering, chemistry. I
24 graduated with a degree in chemistry in 1961. Began a

97
1 graduate program. I received my masters of science in
2 1962 in chemistry and my PhD in 1965 all from Clarkson.
3 Q. What chemical disciplines did you study when
4 you were in school?
5 A. Basically what is known as a physical chemist,
6 meaning that it’s the intersection between physics and
7 chemistry, and in that area we studied chemistry dealing
8 with combustion paralysis, things like organic
9 chemicals, understanding how they interact with living
10 systems, how they are created in plants, how one can
11 synthesize them, extract them so it’s just the
12 understanding of chemistry as it applies to physical or
13 animal systems.
14 Q. Now, did you study, or maybe I should ask you
15 to define first what natural product chemistry is?
16 A. Natural product chemistry is the study of the
17 chemicals and their reactions that are normally found in
18 nature, either in plants or in mammals or bacteria or
19 even in soil.
20 Q. And how does that translate? I know we’re
21 skipping ahead here just a bit. But how does that
22 knowledge—did you study that, by the way, when you
23 were in school?
24 A. Yes, I did.

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1 Q. How long did you have a study of that?
2 A. It began in my senior year in college, full
3 year and then extended into my graduate studies.
4 Q. And what would the significance of your
5 understanding and study of natural product chemistry do
6 in terms of an informed basis for understanding
7 addiction?
8 A. Well, the chemistry of addiction or the
9 chemistry of how chemicals interact with human cells was
10 part of this curriculum. As a matter of fact, we
11 studied all of the major known alkaloids of the time and
12 even some of the synthetic ones. When I was in college,
13 there was a major problem with designer drugs that were
14 being produced that were related to ones you find in
15 nature.
16 The ones you find in nature are things like
17 nicotine, cocaine, heroin, peyote, mescaline, other
18 kinds of alkaloids, and there is also a lot of
19 beneficial drugs that are found in nature that are used
20 like in chemotherapy that are used to treat certain
21 diseases, and the whole purpose of this course was to
22 study those chemicals, understand how they interact with
23 humans or and how they are synthesized in plants, how
24 you can extract them and chemistry with the idea that as

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1 a chemist you might be involved in projects to make
2 synthetic chemicals of similar type like pharmaceutical
3 companies do.
4 Q. When did you get your PhD, sir?
5 A. I completed work in 1964. The degree was
6 granted in 1965.
7 Q. What was the degree awarded in?
8 A. Physical chemistry, it’s a branch of chemistry
9 dealing in my particular case with colloids, which is a
10 state of matter where things are finely divided and
11 suspended. For example, smoke is a colloid. Clouds are
12 colloids. Milk, blood and the inside of bacterial cells
13 are all colloids.
14 Q. What was your dissertation project?
15 A. Dissertation was in terms of using
16 electromagnetic radiation, light radar, infrared to
17 determine the physical and chemical properties of these
18 suspended materials, either an aerosol like smoke or a
19 hydrosol like milk so you could simply shine different
20 kinds of radiation on it without actually disturbing the
21 system and determine both its physical makeup and its
22 chemical composition.
23 Q. Was that dissertation and that independent
24 study important to you when you later worked at Philip

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1 Morris?
2 A. Yes. It was one of the reasons they were
3 interested in hiring me, actually.
4 Q. Explain that.
5 A. Well, there are not too many people that
6 understand the physical chemistry of colloidal systems.
7 Aerosols, smoke, tobacco smoke is an aerosol. And prior
8 to the time I went to work for Philip Morris I had spent
9 a considerable portion of my professional career
10 understanding and publishing on things like smoke.
11 Q. Let’s talk about that. After your PhD in
12 1965, what did you do then? What jobs did you have?
13 A. Actually, between ‘64 and ‘65 I worked as an
14 atmospheric physicist at White Sands Missile Range.
15 Q. Could you explain what you did there?
16 A. The aerosol we were interested in there was
17 the atmospheric aerosol, clouds in the atmosphere, dust.
18 This had application to—I worked for the Department
19 of Defense to understanding things like chemical agents
20 in warfare, radar, things—the military was very
21 interested at that time in technology related to being
22 able to sense things in the environment using radiation
23 like multiple wavelength radar without actually taking
24 samples.

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1 Some of the projects, for example, that I dealt with
2 was determining the colors of the rainbow and that had
3 to do with not we were allowed to publish that part, but
4 from a military perspective how different wavelengths
5 of light were scattered off clouds; it was very
6 important. Radar UFOs. And technology that is
7 confidential related to the Stealth Bomber.
8 Q. What did you do after your work at the White
9 Sands Missile Range?
10 A. I worked there for a year because I needed
11 access to Department of Defense computers to do some of
12 the work that I did. And I went on to teach college for
13 two years.
14 Q. Where did you teach school?
15 A. I taught at Virginia State University in
16 Petersburg, Virginia.
17 Q. What courses did you teach there?
18 A. I taught advanced chemistry courses, physical
19 chemistry, thermodynamics, biochemistry, statistics and
20 a course in mathematics, differential equation.
21 Q. You indicated you were employed at the White
22 Sands Missile Range as a physicist; could you explain
23 your background in terms of how it would allow you to
24 serve as a physicist as well as a chemist?

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1 A. Physical chemistry is a cross-over between
2 physics and chemistry. And in some areas things related
3 to aerosols and clouds and radar are considered physics.
4 When you start talking about the chemical composition of
5 those clouds and how it affects the radiation, then it
6 is chemistry. So it is sort of—I’m in a cross-over
7 discipline, and typically people who have my background
8 are members of like, for example, both physics societies
9 and chemical societies, and we publish in both types of
10 journals.
11 Q. Have you done that?
12 A. Yes.
13 Q. While you were teaching at Virginia State
14 University, did you have your first work with tobacco
15 smoke?
16 A. Actually, second work but, yeah, first major.
17 Q. What was the first work?
18 A. We used to use tobacco smoke in our light
19 scattering systems when I was in college to try—and
20 it was more complex than the aerosols we made
21 synthetically so we would try and extend what we were
22 doing in tobacco smoke.
23 When I taught college, I had a National Institute of
24 Health grant to study atmospheric pollution, which

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1 included tobacco smoke.
2 Q. When was the first time you had any contact
3 with any of the scientists from Philip Morris?
4 A. Actually, it was during that period around
5 ‘66, ‘65.
6 Q. How did you have contact with them?
7 A. The American Chemical Society section that I
8 belong to when I taught college was the same one that
9 the chemists at Philip Morris belonged to, and several
10 times during the course of my teaching career we were
11 invited actually to go to Philip Morris like for talks
12 concerning chemistry topics.
13 Q. What did you do after your teaching
14 experience?
15 A. I went to work for Lever Brothers Company in
16 Edgewater, New Jersey.
17 Q. What did you do there?
18 A. I had a series of positions at Lever Brothers.
19 When I first went in, I was a scientist involved in
20 their programs on Close-up toothpaste, and later the
21 part I was involved in was transitioning Close-up to
22 another toothpaste you may have heard of, Aim
23 toothpaste. The difference is that Aim is a drug
24 because it contains fluoride, and Close-up was a regular

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1 toothpaste at that time. So they hired me to help them
2 develop the formulations and the chemistry that was used
3 to support Aim toothpaste; that was the first job I had.
4 Q. What did you do after that?
5 A. I went through a series of jobs. Shortly
6 thereafter I became a manager of New Product
7 Development.
8 Q. In 1969?
9 A. Yeah.
10 Q. All right.
11 A. Reporting to the vice president of R & D and
12 in that job I was responsible for all the new products
13 that Lever Brothers would make. That includes food,
14 cosmetics, toiletries, detergents, household products,
15 including over-the-counter drugs.
16 Q. When you say responsible for them, what do you
17 mean?
18 A. Well, I would work with the scientists in the
19 development part. I would interface with attorneys that
20 were involved in FTC claims support, with the marketing
21 people, with attorneys involved in patenting the
22 products and financial analysis for the company on which
23 of these products may be successful and which ones might
24 not be.

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1 Q. What was your next job at Lever?
2 A. I became—the next job was manager of
3 Detergent Evaluation, and specifically there I was
4 responsible for FTC claim support on all of the
5 household products.
6 Q. And what was your next job after that, sir?
7 A. ‘72 I became Director of Scientific Research,
8 responsible for the entire Research Division at Lever
9 Brothers.
10 Q. What was your responsibility in terms of
11 supervising scientists and research and conforming to
12 governmental regulations?
13 A. That job entailed supervision of The
14 toxicology Department, the Microbiology Department,
15 organic chemistry, physical chemistry, analytical
16 chemistry and engineering. The engineering department
17 also reported to me. All of the work that was done
18 relating to the Food and Drug Administration,
19 Environmental Protection Agency, the Consumer Product
20 Safety Commission, any government regulatory body went
21 out over my signature, and no advertising claims would
22 be released unless I agreed with the science behind
23 those claims.
24 Q. Explain that.

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1 A. Well, you have probably—some of the
2 products, for example, Whisk. Promise Margarine.
3 Promise Margarine as an example, the advertising claim
4 it lowered your blood level of cholesterol. Before you
5 can make that claim, we actually ran clinical trials,
6 several hundred people in each set where we did Promise
7 Margarine.
8 Margarine in general will not lower your blood level
9 cholesterol; if you make it in a specific way such that
10 you use certain kinds of fats that are known to do that,
11 then, in fact, you can make it do that. In order to say
12 it does you, obviously, have to run clinical trials.
13 So we hired physicians. These were clinical trials
14 like one would do for a drug, and we were able to
15 establish a lowering of blood level cholesterol over a
16 period of a couple of years, and then we could advertise
17 that product for that purpose.
18 Q. Did you go to those extremes in virtually all
19 of the products that Lever was manufacturing and
20 selling?
21 A. Not only for claim support, but also for
22 consumer interactions. I was also the person that was
23 on the call-up for the Poison Control Center in case
24 someone accidentally ingested a bottle of dishwashing

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1 liquid and monitor consumer complaints and would attempt
2 to change products to make them so the complaint rate,
3 you would not have those complaints.
4 By complaints, I’m not saying talking about things
5 where people call and say, didn’t wash my clothes as
6 well, talking about things like I got a rash, I got a
7 mouth irritation, I got sick from eating your product.
8 Q. When you say a rash or a mouth irritation,
9 when you are dealing with toothpaste, what would you
10 recognize as a problem in terms of those types of things
11 statistically when you are dealing with them?
12 A. For example, you keep track of the number of
13 problems you might have per million units sold or ten
14 million units sold. And I think in the case of
15 toothpaste, we didn’t like to see irritation complaint
16 of more than one in fifty million tubes sold.
17 Q. One in every fifty million?
18 A. Tubes.
19 Q. Tubes?
20 A. And if we saw those complaints, we would try
21 and talk to the people and determine if there was a
22 problem. I remember in one case we saw some two hundred
23 complaints in a year, and we were able to establish
24 through going back and looking at our records testing

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1 that the problem was chemical. One of the flavors,
2 cinnamon actually that was added to Close-up toothpaste,
3 and we had to devise a new test that was more sensitive
4 than the previous one to make sure that all new batches
5 of cinnamon that we put in toothpaste would not cause
6 irritation.
7 Q. Would you define what synergy is, synergistic
8 effect of chemicals?
9 A. In consumer products like the ones we were
10 dealing with there in toothpaste, for example, might put
11 three flavors in toothpaste, might use spearmint,
12 cinnamon and peppermint, combine, and if you tested them
13 all individually, you might find they are all okay. But
14 when you put them together, you might find out they are
15 very irritating. Synergy is the unexpected interaction
16 of two or more chemicals that cause a reaction that was
17 greater than the sum of the parts that you put together.
18 Q. And did that play a role in your work at Lever
19 in terms of assessing the effects when you would put
20 together the components, for example, of a bar of soap?
21 A. Absolutely. We have to test not only the
22 individual chemicals that went into the product but then
23 we would test the final formulation exactly what we make
24 to make sure that there were no synergistic problems.

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1 There was always a test of the final product that was
2 sold to customers.
3 Q. Did you have interaction with governmental
4 agencies when you were there?
5 A. Yes, we did; yes, I did. I was, as I said,
6 the senior signatory on the technical reports and things
7 that went to the government agencies.
8 Q. And did the FDA have some jurisdiction over
9 the products that you were manufacturing and selling?
10 A. Yes. Our products—many of them are
11 considered drugs, and in order to develop a new one, you
12 got to file a new drug application, and in order to sell
13 it, you had to provide the Food and Drug Administration
14 with proof that your product was both safe and
15 effective.
16 Q. Could you tell us what whole product testing
17 is?
18 A. It is the testing of the product exactly as
19 the consumer is going to come in contact with it.
20 Typically, you either remove those products from the
21 production line to test or you go out into the market
22 and you buy back products that are on store shelves,
23 both ways are used.
24 Q. Why are you interested in doing that if you

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1 are a manufacturer?
2 A. That’s the product the consumer interacts
3 with, and so that’s the product if it has a hazard or a
4 problem, that you want to test.
5 Q. You want to know if that product as they
6 receive it and buy it might hurt them or make them sick
7 or irritate their skin?
8 A. Correct. We, of course, have a background
9 from having tested it while we’re making it and tested
10 all the compounds, if you tested it before we sent it
11 out, but the idea is that we would test those products
12 exactly as the consumer was exposed. A good example of
13 that is a product intended for a specific purpose might
14 change if it sat out in the store for a year or a year
15 and a half. So, does that one behave the same as when
16 you freshly made it? Those are issues that come up in
17 consumer products.
18 Q. When you are alerted, when you do this whole
19 product testing to some adverse possibility in terms of
20 interaction with a human, what does a responsible
21 company do when they get that information?
7 A. What we actually did when I was there is to
8 either change that formulation, if it was a minor
9 problem, or recall the product if it was a major
10 problem. We did do product recalls.
11 Q. Give us some examples of that.
12 A. The toothpaste I mentioned earlier was
13 recalled. In a case where we found, for example, that
14 the boxes might not be as easy to open as we would have
15 liked them, that would be a minor problem that you
16 typically wouldn’t recall everything that was out there.
17 You might try to take back or replace products in
18 some places that you knew where it was, wouldn’t issue a
19 recall. And if it was extremely severe, we had a
20 product that was freon in a can, the purpose of that
21 product was to open drains when they were plugged, and
22 they were trying to replace lye because people got hurt
23 by putting lye down their drain.
24 You put this can and push it, it would discharge a

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1 little bit of gas and blow the drain clean. We learned
2 that teen-agers were taking that gas, putting it into a
3 bag and sniffing it and thereby getting intoxicated
4 because of shortage of oxygen, and we became very
5 concerned about that.
6 So we had to go to the Consumer Products Safety
7 Commission and get permission to change the product by
8 putting a little pepper oil in it. And we had it listed
9 on the can as being an irritant. The point was you
10 could push it, discharge the drain, nobody knew, but if
11 you put it in a bag and tried to stick your head in it,
12 you immediately take your head out of the bag.
13 Q. Would prevent them from doing it?
14 A. Yeah, so that’s an example of something where
15 you modify the formula to overcome a perceived problem.
16 Q. What did you do after you left Lever?
17 A. I went to work for a company called Pacific
18 Vegetable Oil International. The headquarters was in
19 San Francisco, California. The production facilities
20 and R & D was in New Jersey. I became the vice
21 president of Research and Development.
22 Q. What were they involved in, sir?
23 A. PVO actually is doing similar things to what
24 my company is doing today. We were making products from

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1 vegetable oil that could be used by consumer product
2 companies. So, PVO, for example, sold products to
3 Lever; that’s how I first became aware of them. They
4 were one of the vendors; they sold products to
5 pharmaceutical companies, sold products to all of the
6 consumer product companies.
7 Q. What was your next job?
8 A. I was then hired by Philip Morris.
9 Q. When were you hired by Philip Morris? By the
10 way, just when we refer to Philip Morris throughout your
11 testimony, you are talking about the defendant in this
12 lawsuit, right, Philip Morris International?
13 A. Correct.
14 Q. Now, when did you start with them?
15 A. I started working April 1st, 1976. I actually
16 think I showed up for work the day before but around
17 April 1st, 1976.
18 Q. And you interviewed for this position and
19 talked to several people before you came there, I
20 presume?
21 A. Yes, interview process extended over about
22 three months.
23 Q. And what was it that you offered, as far as
24 your understanding, to Philip Morris at that time?

114
1 A. Well, I have a background in the kind of
2 chemistry that is important for tobacco smoke. I mean,
3 I had studied aerosols; I had studied combustion
4 paralysis. I also worked for a consumer product company
5 and was in charge of getting the products to market. I
6 was the chairman of Unilever’s Patent Committee. I
7 understood patenting technology, developing it.
8 They wanted someone with my background to join them
9 to help them with what was the next stage of what they
10 felt their corporate development was going to be.
11 Q. What do you mean by that?
12 A. Well, they felt that they were under pressure
13 in the cigarette business, and the vast majority of the
14 revenue was from cigarettes at that time, and they felt
15 they would like to diversify away from cigarettes and
16 reduce their dependence on cigarettes as a part of their
17 business, and they would also, the secondary thing based
18 on my background, like someone to come in and evaluate
19 and help them improve their development of safer
20 cigarette products, that is, products which cause less
21 harm.
22 Q. Was your understanding that you were going to
23 assist them in designing and manufacturing safer
24 cigarettes?

115
1 A. Yes.
2 Q. Now, what was your first job at Philip Morris?
3 A. Well, for the first year approximately I was
4 to visit all of the manufacturing plants, all of their
5 operations facilities, interview all of the scientists
6 in the lab to develop my ideas based on my background
7 what areas Philip Morris should focus on with regard to
8 both diversification and for production of safer
9 cigarette products.
10 Q. And how did you go about doing that?
11 A. My—I reported to Dr. Robert Seligman, who
12 was vice president, and I had interviewed, and he
13 arranged that I could spend like a week at the
14 manufacturing facility, a week in the reconstituted
15 wheat factory, even went out in the field, saw how
16 tobacco was grown. Went with the buyers, bought it at
17 auction, how it was stored, and after each of those
18 episodes, I would come back and talk about how I thought
19 the kind of chemistry and things I knew could be used to
20 improve or change some of those processes.
21 Q. Did you have access to historical research and
22 documents?
23 A. Yes.
24 Q. And were you encouraged to learn and

116
1 understand those documents?
2 A. Yes, I was, and some of the people, Dr.
3 Wakeham, a lot of the people there were very helpful in
4 terms of providing me historical documents. Philip
5 Morris had an excellent library where you could have
6 access to reports. I also had access to people’s
7 previous files.
8 Q. How was that important for you?
9 A. Well, I might, for example, come up with some
10 idea. The important thing is had they thought about
11 that before, how much had they done so in science the
12 next level of scientific progress depends on what you
13 know about the past. I mean, you formulate your
14 hypothesis based on observations of what has happened in
15 the past. So I was able to determine what they had done
16 in the past and thereby help me develop new ideas.
17 Q. You talked about diversification, and what was
18 their area of interest in terms of diversification?
19 A. Well, one of the tests I had was to propose
20 areas of interest that they should be interested in,
21 which I did during my eight year career there, several
22 areas and, in fact, made proposals, visited companies
23 that we thought about purchasing or investing in and
24 showing them how that would interact with their business

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1 and help them change their business.
2 Q. Would that or were those companies involved in
3 the manufacture of cigarettes?
4 A. No. Most of the ones I suggested were
5 pharmaceutical companies.
6 Q. When did you become a director of Applied
7 Research, sir?
8 A. 1977 after approximately a year and that was
9 sort of planned before I came there, that was the
10 position for which I was hired.
11 Q. You said that you had access to an excellent
12 library at that point. How were you gaining access to
13 specific documents and research memoranda?
14 A. Well, for most of the documents except for the
15 ones related to smoking and health, but for most of the
16 documents dealing with cigarette technology, tobacco
17 technology they had an index where you could go look;
18 furthermore, every week one of the projects would be
19 presented, and even in my first year I went through all
20 of those, and as a director you go to them. And they
21 give you a report; the scientists involved in that
22 project report on everything they did for the last year,
23 and in that report there is references to prior, like in
24 most scientific publications, there is references to

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1 prior scientific work, so you could go back and look
2 those up.
3 Q. Could you tell us what your job responsibility
4 was as the Director of Applied Research?
5 A. Well, over the seven years it changed
6 considerably. The units reporting to me, which at that
7 time were called divisions, had managers of divisions
8 reporting to a director. What the director—
9 Q. Can I interrupt you for a second?
10 A. Sure.
11 Q. Would you mind walking the Judge through the
12 sort of the hierarchy of how these terms apply in terms
13 of management responsibility when you were there?
14 A. Be happy to. The lowest level, start at the
15 bottom, the lowest level of unit is a project, and a
16 project may be a project, for example, on selective
17 filtration filter that selects out particular toxic
18 chemicals. Those projects were organized into the
19 divisions. Divisions reported to directors. The
20 directors of which in the beginning there was four and
21 later five reported to the vice president. The vice
22 president of R & D of Philip Morris USA reported to a
23 senior vice president who then reported to the president
24 of Philip Morris USA, who at that time then reported to

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1 the president of Philip Morris International or PMI.
2 Q. Where did you fit in that hierarchy?
3 A. I was the director reporting to the vice
4 president of R & D at Philip Morris USA, and over the
5 time that I was there, there were two of them. For the
6 first approximately four years it was Dr. Robert
7 Seligman. The second four years it was Dr. Max
8 Hauserman. So I was a director, number of people under
9 me, divisions ranged from three to five or six.
10 Q. Depending on the time frame?
11 A. Depending on the time frame because we would
12 reorganize periodically and change things around.
13 Q. In terms of this hierarchy then underneath
14 those people you supervised, there were other employees?
15 A. Yes. Ranged from the beginning forty to over
16 two hundred at the time that I left Philip Morris.
17 Q. Could you tell the Judge—again I
18 interrupted your answer, but now could you walk us
19 through your job experience in those positions from the
20 time that you took on this position as Director of
21 Applied Research until you left?
22 A. Okay. The two major job tasks that I had was
23 merger and acquisition which accounted for about twenty
24 percent of my actual time that I spent while I was

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1 there. And about eighty percent of the time was spent
2 on developing safer cigarette products, actually to be
3 precise, developing technology that could be used in
4 safer cigarette products.
5 Q. Why don’t you explain that point?
6 A. Well, I had a fellow director, Dr. Thomas
7 Seskoski. His job was actually to test the cigarette
8 products to determine whether or not there was actually
9 any harm reduction or potential for harm reduction. I
10 would interact with him on a frequent basis.
11 But what we were doing was developing the technology
12 that would then be used to construct cigarettes which
13 then he would test in his area. That information would
14 come back to us in various ways depending on where the
15 testing was done, how it was done. And we would then
16 use whatever was transmitted back to us to go to the
17 next step and change the research we were doing.
18 Q. And did the federal government come in and
19 help you design cigarettes?
20 A. No.
21 Q. We heard this morning just a few minutes ago
22 that—let me see if I can quote this, that their work
23 at Philip Morris with the federal government in the
24 design of cigarettes with a group called the Tobacco

121
1 Working Group. So I guess they helped you design your
2 cigarettes?
3 A. Not quite. The Tobacco Working Group was set
4 up by the government to allow the public health—some
5 people in the public health community and the industry
6 to have a dialog about some of the issues in cigarette
7 design, but they weren’t at Philip Morris helping us
8 design cigarettes.
9 Q. Actually, what would have happened if somebody
10 would have tried to come in and watch your design issues
11 or how you design, would that be fairly top secret?
12 A. Yes. Work at Philip Morris was—we had
13 extreme confidentiality.
14 Q. In this case it has been referred to as highly
15 confidential, is that the way it was then?
16 A. That’s one terminology one could use, yes.
17 Q. Right. Now, I want to ask you some questions
18 about these employees that were there. I have created a
19 list of employees off of some documents here. I want to
20 hand this to you as Exhibit Number 1. Would you take a
21 minute and look at this list, sir? You know who these
22 people are?
23 A. Some misspellings I see. Other than that, I
24 don’t think there is anyone on here who I do not

122
1 recognize the name or recall the function from the time
2 I was there. One time or another in my career I met
3 with or talked to or was involved with many of these
4 people very closely. Some of them reported to me, many
5 of them.
6 Q. Could you explain to the Judge how it was that
7 you became involved in different aspects of this company
8 in terms of your familiarity with all these different
9 scientists and managers?
10 A. Okay. There is a series of meetings that
11 occurred at that time at Philip Morris. We talked about
12 the first year I was there of going around and meeting
13 all the scientists. I mentioned then that every Friday
14 we would have a project review.
15 The lowest level unit organization was the project,
16 and so there would be different projects, and so on
17 Friday all of the managers and directors and senior
18 scientists from Research & Development would get
19 together and review the projects that were being done.
20 So you meet all the scientists, as is typical in
21 scientific meetings, you were allowed to ask them
22 questions.
23 Q. How often did these happen?
24 A. Weekly, every Friday. We were allowed to ask

123
1 them questions. We were allowed to make suggestions;
2 that part of allow is not the right word. That’s the
3 way these scientific meetings were. Then at the next
4 level the directors, myself for example, would have a
5 weekly meeting with our managers.
6 Managers are the people who—to whom these
7 different projects report to; the purpose of those
8 meetings was also to review progress on the ones that
9 weren’t up for review at that point, budgets to figure
10 out what we were going to do next year, change direction
11 in profit, the next level of meeting was directors
12 meetings.
13 I would go to meetings with my fellow directors, for
14 example, when I went there it was Dr. Gannon, myself,
15 Dr. Osdene and Mr. Thompson; the four of us would meet
16 with Dr. Seligman once a week.
17 Then once a month we would have what were termed at
18 that time the Richmond meetings. And at the Richmond
19 meetings we in R & D would propose topics that the
20 people from New York City, the marketing and the finance
21 and the corporate management people, so once a month the
22 president of the company both PM USA, sometimes PMI
23 senior executives would come down, and we would make
24 presentations to them and have interactions with them.

124
1 Q. Now, did you have interaction with other
2 divisions of the company as well other than just pure
3 science like marketing departments as well?
4 A. Yes, marketing departments were done at those
5 meetings. The other departments like leaf department,
6 manufacturing, engineering department those—we didn’t
7 have formal meetings but we had joint projects
8 especially in my area. My area was called Applied
9 Research, and one of the reasons it was called that is
10 that we were trying to get the technology into the
11 production facilities and help the people in the
12 production facilities as best we could. I would meet
13 regularly with the vice president of engineering, vice
14 president of operations, but those weren’t formal
15 meetings, whenever it was required.
16 Q. You described the Richmond meetings, didn’t
17 you?
18 A. Yes.
19 Q. Now, if you can, can you tell us what document
20 control procedures were used at Philip Morris at that
21 time?
22 A. Depends on the level of document for two kinds
23 of projects. Projects that were normally confidential
24 but not top secret, better way of phrasing it. Those

125
1 were maintained in the library, and there was a
2 distribution list that they went to. And when you were
3 finished with that document, you had to return it.
4 There were other documents that required permission
5 of a particular person, most cases it was Dr. Osdene to
6 have access to that document. And then that was to be
7 returned immediately. Those were documents related to
8 smoking and health that had to do with things that were
9 being done that weren’t generally available to the
10 scientists below manager level.
11 Q. Could you give us an idea of the manufacturing
12 process where this was physically located and what the
13 plant’s layout was?
14 A. Well, the manufacturing process covers many
15 different facilities. Tobacco is purchased at auction,
16 comes in in bales, and the first place it goes and at
17 the time Philip Morris owned its own stemmeries.
18 Tobacco is a leaf. It has got veins in it. First thing
19 you do is beat on that and break out the mid-rib from
20 the tobacco leaf from what is called the stem.
21 The leaf is the part in between the mid-rib. If you
22 think of a maple leaf, remember the ribs going out. I
23 dry that down and bang on it, the rib comes out. We
24 call those stems, and the chunks of lamina or leaf in

126
1 between, that’s what we call tobacco leaf. So that’s
2 done at a place called the stemmery.
3 Those components are segregated for most types of
4 tobacco. And they go into storage in curing areas where
5 they may be held for up to five years. They are stored
6 in different kinds of containers. One large wooden keg
7 is called a hog’s head historically. And imported
8 tobacco some of them don’t need to be stemmed, a
9 different form of the plant, tiny leaves. They are put
10 in there.
11 Pieces that are left over because they are too small
12 to make cigarettes or the stem that I was talking about,
13 they’re sent off to other processing facilities, and
14 Philip Morris had two such processes where they are
15 converted into—in one case it was called blended leaf
16 and in the other case reconstituted leaf.
17 These are processes for taking little-tiny bits and
18 scraps of tobacco, turning them back into a sheet of
19 paper. You can then break chunks off of and also chop
20 up and put in cigarettes. All of those facilities
21 existed not only in Richmond but we had manufacturing
22 plants in Kentucky and one in North Carolina.
23 Also, in the making of cigarettes we used a material
24 called expanded tobacco where you take tobacco and

127
1 impregnate it with a liquid and evaporate that liquid.
2 And when you take a leaf and you dry it or cure it, it
3 shrinks, and if you put this material in it and you
4 expand it, it puffs back up not to some larger size but
5 goes back to the original size that the leaf had when it
6 was on the plant.
7 So that’s another type of process. So you had all
8 of these tobacco processing plants. When the time came
9 to make cigarettes, you would pick certain quantities of
10 those materials. And the tobacco plant is a rather
11 interesting thing. The amount of nicotine varies by the
12 stalk position. They were segregated and kept
13 separately as you bought them, so you have these blend
14 sheets. How many hogs’ heads of that, how many
15 containers of that, bring those altogether. That’s
16 sprayed with a material called cassen to make it more
17 supple.
18 Q. Would you explain that a little bit further
19 for the Court?
20 A. We are going to chop it up into fine thin
21 pieces, and if it is too dry when you start hitting it
22 real fast with the knives, turns into dust, or you can
23 make a lot of dust, and pieces will fall out of the
24 cigarette.

128
1 Over the decades machines get faster and faster and
2 faster. So what they have found is by spraying it with
3 things like glycerin, sugar solutions you can moisten
4 it, and so when you cut it, it doesn’t break apart into
5 tiny pieces so that entire mixture or blend is all
6 blended up; it’s sprayed, cut up and then they have
7 after cut. After cut is exactly what it says.
8 After I have cut it up, put the flavors and the
9 other ingredients that we are going to put on it.
10 That’s spread around real well, and then it goes to the
11 cigarette making machine where that finely cut-up what
12 we call filler is rolled up into this extremely long
13 tobacco rod. It is actually being made continuously.
14 The rod is the front part of the cigarette cut up into
15 lengths.
16 Q. I am going to use a demonstrative aid on this
17 in just a moment. Let me get to this point of the
18 actual cigarette construction.
19 A. That’s attached to the filter, and there’s
20 several ways of doing that. One of the popular ones at
21 the time I was there you actually make two filters back
22 to back as one filter. You stick a cigarette rod on
23 each end; you cut it in half, and it makes two
24 cigarettes. The thing that does that you have a

129

1 cigarette-making machine. You have a combiner; the
2 combiner combines the rod with the filter; then you have
3 packers of different size, and it’s packed into the
4 packs or boxes and boxes are packed into cartons.
5 Cartons are packed into the shipping containers.
6 Q. You mentioned something about differences in
7 nicotine depending upon the plant.
8 A. Yes.
9 Q. Depending upon this. Can you tell the Court
10 what you were talking about there?
11 A. Well, tobacco is a natural product. And there
12 is different—in the making of cigarette one uses
13 different, plants different strains of tobacco. The
14 strains by themselves have different nicotine levels,
15 but even within a strain there are three major types
16 that are used. There are many more types of tobacco.
17 Three major types that are used, early, bright and
18 oriental, so let’s just take bright tobacco grown in
19 Southern Virginia. There are varieties just like there
20 are with corn or any other product.
21 Each one of those varieties will have slightly
22 different nicotine alkaloids. Different chemical
23 properties. Just like corn would have different levels
24 of sugar or starch. In addition to that, it depends a

130

1 lot on the weather. If it rains a lot, you get one
2 level of nicotine in the plant.
3 If it is drier, you get another level, and in order
4 to keep track of all this, what normally is done you
5 don’t take all of 2002’s crop year for 2003 cigarettes.
6 You do it over several years, and you keep track of it
7 by the stalk position in the plant.
8 The bottom of the plant has dried out and some of
9 those leaves are ready to fall off; they’re called lugs,
10 and as you go up the plant, the nicotine increases, and
11 then towards the top it goes back down again. There is
12 a leaf section in the plant that has the highest level
13 of nicotine. There is another level where it is lower.
14 And those are sold separately and kept track of
15 separately because of the alkaloid content varying.
16 Q. What is curing?
17 A. Well, curing breaks into two pieces, one of
18 which is the most important part. Before Philip Morris
19 or any other tobacco company buys tobacco, it is
20 processed by the farmer or by some independent agency
21 that processes it for the farmer, and there are several
22 ways of doing that that have grown up over the decades.
23 For certain kinds of tobacco it’s put in a hothouse
24 where either hot gases or heat is applied in some

131

1 manner, and that’s called flue curing. In other
2 tobaccos you simply hang it up to dry either in the shed
3 or in the sun. If you do it in the sun, it’s called sun
4 cured; if you do it in a shed where the sun doesn’t hit
5 it, it is called air cure.
6 And so there is different methods of curing; there’s
7 one more, the foreign, Eastern European countries,
8 tobacco typically referred to as Turkish, although it is
9 not all the time from Turkey. That is a smaller plant,
10 different plant, and those leaves are packed moist into
11 stacks, and that is slightly fermented; that’s a
12 different type of curing.
13 What you are actually doing is taking the tobacco
14 from the green state that is in the plant and converting
15 it to a dry leaf that has the properties that people
16 have known for a couple of hundred years or at least a
17 hundred and fifty as tobacco. Before that it is sort of
18 a tobacco plant, and there is a lot of chemical changes
19 that go on during that curing process, partial
20 degradation, increase in sugars, various things happen.
21 Q. How do these things ultimately affect the
22 delivery of the chemicals to the consumer?
23 A. Very greatly, very greatly, tremendous
24 difference between types of tobacco, the way you cure it

132

1 with regard to the chemicals that are produced when you
2 actually burn the tobacco.
3 Q. You mentioned fermentation of the tobacco.
4 How does that affect the chemistry of tobacco?
5 A. Well, that is only used for the oriental. It
6 is a very mild type of fermentation, and it causes a
7 greater degree of degradation of certain materials; for
8 example, you lose more, you lose sugars in that process,
9 makes some other chemicals from sugar which then give
10 you a different starting point for the combustion
11 process. We will see many many examples of this. By
12 process gives you a different smoke, gives you smoke
13 that has different chemical properties and, therefore,
14 because it has different levels of different kinds of
15 chemicals that are either mutagenic or carcinogenic or
16 whatever, it has different properties in terms of its
17 consequences for harm.
18 Q. What is an alkaloid, sir?
19 A. Well, alkaloid is a term is a very broad class
20 of chemicals that have to do with the fact it is an
21 organic base. Chemically it’s an organic base with a
22 nitrogen compound, nitrogen point that allows it to act
23 as an organic base; from the viewpoint of tobacco
24 chemistry alkaloids are nicotine, nornicotine (sic)

133
1 antibase (sic) specific alkaloids found in tobacco.
2 About five or six of them.
3 The most important one is nicotine; the rest are
4 called minor alkaloids. They are small quantities. And
5 for example, cocaine is an alkaloid. For the purposes
6 of this discussion, when we say alkaloid in tobacco
7 chemistry, you’re referring to nicotine, nornicotine and
8 the other compounds that provide the same
9 pharmacological effect as nicotine or similar not
10 exactly the same.
11 Q. I would like to pull up the power point at
12 this point. Let’s talk about describing and designing
13 a cigarette. Okay?
14 A. Okay.

DAY 1 (Afternoon Session)
1 DIRECT EXAMINATION
2 QUESTIONS BY MR. TILLERY:
3 THE COURT: You may resume your direct
4 examination.
5 MR. TILLERY: Thank you, your Honor.
6 Q. I was at the point of asking you about the
7 design of cigarettes, you were going to walk through
8 that design. Will you pull up the Power Point,
9 please?
10 We have copies for the record, your Honor,
11 of each one of these Power Point slides. There are a
12 few of these slides I want you to go through and,
13 yes, that’s fine you can use your stylist, to mark
14 on it whatever you need to do and describe it.
15 A. Okay. Obviously this is a cigarette. The
16 area I was showing where the—see, if you look
17 closely enough are the ventilation holes, this is
18 the filter. The white section is called the rod. I
19 think on the next slide we labeled these parts.

Q. Let’s pull up the next slide.
11 A. You want me to describe the different
12 parts and how it works? Ventilation holes are part
13 of the filter. The rod is labeled, that’s where the
14 tobacco is. Filler paper, and by wrap what that
15 means there’s a line there where the paper is glued
16 together. The next one?
17 Filler is the material that’s inside the
18 cigarette, which is normally referred to as tobacco.
19 I mentioned these different tobaccos before. Bright
20 tobacco is tobacco that is grown typically in the
21 southeast states. It is cured after it is harvested
22 by being placed in barns where heat is applied.
23 Burley is grown more northerly climates generally,
24 it’s air cured. Oriental/Turkish is imported








4

1 tobacco. I want to make sure we also understand that
2 we also can import and do import some Burley and
3 Bright from other countries too. But historically
4 Oriental and Turkish is all imported. Reconstituted
5 tobacco is those pieces things that have been ground
6 up and made back into sheets of paper that looks
7 like tobacco. We have expanded tobacco, stems,
8 flavors and casings that we discussed. All of that
9 is mixed up in the filler and sometimes referred to
10 as the blend. Next?
11 Q. Here I want you to focus on how you would
12 go about using these and other parameters designing
13 a cigarette. Engineering a cigarette?
14 A. Well, I was at Philip Morris one of the
15 things I participated in was building a model of how
16 the cigarettes delivered different chemicals based
17 on engineering parameters. I’ve listed some of them
18 here, the length of the cigarette, the diameter, the
19 type of filler. That is the blend we were talking
20 about just a moment ago. Filter type. You can use
21 paper filters, tobacco filters, cellulose acetate
22 filters. You can put carbon particles in the
23 filters, all kinds of things you can do to the
24 filter type. Filter density, if we use cellulose








5

1 acetate, which is the most common filtering
2 material, we can put more of it in that. That does
3 something called increase the resistance to draw,
4 makes it harder to draw on the cigarette. Change the
5 type of draw.
6 Q. Before you go on, Dr. Ferone, will you
7 explain this resistance to draw concept in greater
8 detail for the Court?
9 A. Okay. In this cigarette you are going to
10 have to light it. You are going to have to suck on
11 it, draw on the filter and some of the air is going
12 to come through those ventilation holes. Some of
13 it’s going to come down the burning rod and carry
14 smoke along with it. This smoke is going to mix with
15 the air through the ventilation holes. The
16 perception of how much smoke you are getting, for
17 example, compared to an unfiltered cigarette. When
18 you put the filter on it imparts some increased
19 resistance to the process of drawing. Depending on
20 where you put the filter material, by bunching it up
21 for example ahead of where the filter ventilation
22 holes are I can actually construct a cigarette when
23 you draw up on the filter end 99 percent of the air
24 will come through those holes. If I put it on the








6

1 other side I can get a different mix between the air
2 coming down the rod and the air coming through the
3 ventilation holes. So it’s the perception how hard
4 you have to draw in order to get the smoke into your
5 mouth. It’s more than a perception, you can
6 actually measure it with a pressure gauge. The type
7 of paper we use and the porosity, all of these
8 things change the chemistry of what you have in the
9 smoke when you burn the cigarette.
10 So for example, if I change the paper type
11 or porosity, that enters into the chemistry and I
12 can increase the level of certain chemicals and
13 decrease the levels of certain chemicals. Additives
14 we talked about, the two basic classes of additives,
15 they can also be used to change the chemistry of
16 what’s in the smoke.
17 Q. You said two basic types of additives,
18 would you go into greater detail with respect to
19 those?
20 A. I pointed out earlier the casings, the one
21 you put on before you cut up the tobacco, and the
22 after cut flavorants that are put on after the
23 tobacco is cut up, but before it ends up in the
24 cigarette. You can put in different materials in








7

1 either one of those. You can actually, for example,
2 put flavors in the filter, you can put flavors in
3 the paper, you can put burn enhancers in the paper
4 to make it burn faster, slower. So you have all of
5 these in science and engineering called degrees of
6 freedom, things you can do to change the way this
7 delivers smoke and the way it delivers different
8 chemicals.
9 The filler cut sizes; the next one. Many
10 years ago the size of each piece of tobacco used in
11 a cigarette was bigger. It wasn’t fine cut, they
12 were larger. When you burn, if you think about
13 burning things in your fireplace even, if you wad up
14 a—
15 Q. By the way, why were they bigger?
16 A. They were bigger because they didn’t have
17 machines in the early days to cut it up very fine.
18 But they also made them finer to make them easier to
19 tie together and keep them from falling out. If you
20 wad up paper, for example when you burn it, it burns
21 entirely different than if I shred it up into
22 confetti and burn that. The rate at which something
23 burns depends on the surface area. From my aerosol
24 chemistry generally speaking if you burn finer cut








8

1 materials you make a smaller particle size aerosol.
2 You can change the size distribution of the aerosol
3 and chemistry by changing the filler cut. As we
4 mentioned paper coatings. You can change where you
5 put these holes, that will change how it delievers
6 smoke. You can change the filter to rod length. And
7 by tobacco processing, and the tobacco itself, you
8 can totally change the chemicals that are delivered.
9 Q. You were mentioning a few minutes ago
10 about modeling. What was your experience with
11 modeling these design components at Philip Morris?
12 A. Well, during that first year I was at
13 Philip Morris we determined that they had like they
14 had 15 years of smoke data that they had collected
15 over many many different cigarettes. So one of the
16 fellows working for me had an interest in modeling
17 it, and I put several people on it. We bought a very
18 large computer system in order to do this. It turned
19 out there were about 57 different things that we
20 tracked and a person from the development area could
21 go in and if they wanted, for example, make a
22 cigarette which delivered under Federal Trade
23 Commerce conditions ten milligrams of tar and one
24 milligram of nicotine they can type in different








9

1 parameters, like the kind of filter, the diameter,
2 the kind of tobacco they used, and obtain an
3 estimate of what would actually come out based on 15
4 year—this isn’t theoretical, this is based on 15
5 years of empirical data at that time. And that was
6 carried out during my career while I was there. That
7 model helps people understand what you can do to a
8 cigarette to change nicotine, tar, carbon monoxide
9 and even specific chemicals.
10 Q. When you say 15 years of material that’s
11 taking your back to the early ‘60s of data in terms
12 of design?
13 A. That’s correct. They actually had data
14 before that, but the data that was considered useful
15 for cigarettes in 1976 went back about 15 years.
16 Q. Would it be fair to say then that prior to
17 1971 when the Marlboro Light was introduced they
18 were aware of the design parameters that would
19 influence the delivery of tar and nicotine to the
20 consumer?

3 A. Yes. Based on documents that I read while

4 I was there and subsequently, yes, very clearly they

5 were aware of the design parameters which when I

6 went there which lead which design parameters to put

7 into the model.

8 Q. And just before we move on here into

9 combustion and pyrolysis, based upon these 57

10 different design parameters if you wanted to design

11 a cigarette that delivered 4 milligrams of tar on a

12 test machine and you wanted that same cigarette on

13 the test machine that tested four milligrams of tar

14 to deliver a different load to the consumer, could

15 do you that?

16 A. Yes.

17 Q. And how would you, just hypothetically,

18 how would you do that?

19 A. Well, one thing with regard to when you

20 draw on this, the machine draws a specific way. If

21 the consumer draws a different way, they draw more,

22 puff volume is higher, they suck harder if you will,

23 you can design a cigarette so that under that

24 condition the amount increased that you get can be








11


1 very large, the amount of tar increase if you want

2 to measure tar. Conversely, you can design it to

3 avoid that. For example, in the original Cambridge

4 cigarette in 1980 we designed one that was very

5 difficult to suck harder on and get more tar out of.

6 That was one we had that delivered almost no tar

7 under the FTC machine conditions or less than a

8 tenth of a milligram. So we knew all these

9 parameters and how to adjust them to pretty much

10 provide a cigarette of any tar delivery that we

11 wished.

12 Q. And I want to make sure that we are clear

13 on the record here, you are talking about delivering

14 tar, not just to a machine, but also to that

15 consumer?

16 A. To any set of puff parameters you want to

17 put in, whether a machine, a consumer, a different

18 test of a different machine in Europe or however you

19 want to do it. Because all you do, well not all you

20 do, we had information about all of the different

21 levels of puffs that you could draw, how hard you

22 draw, how many puffs, time between puffs, it's

23 simply a matter of developing that data based on how

24 it changes with puff volume or how it changes with








12


1 the pressure drop.

2 Q. Would the design parameters also include a

3 selection of tobacco blend?

4 A. Yes.

5 Q. And while you were there at Philip Morris

6 what type of purchasing were they making for the

7 plants of -- they were using for Marlboro Lights?

8 A. They were using the standard Bright,

9 Burley and Oriental tobacco.

10 Q. How were those in terms of their alkaloid

11 contents compared to other tobacco cigarette

12 products?

13 A. They were typical of what everybody else

14 was using, but I had mean there was no -- in that

15 cigarette, you asked me about Marlboro and Marlboro

16 Lights, there was no specific change in the blend

17 composition that was different between the two

18 cigarettes that I can recall basically.

19 Q. Now, can you describe combustion and

20 pyrolysis -- were you finished with that?

21 A. I'm finished with that one.

22 Q. Next slide please?

23 A. I've drawn the coal, which is the glowing

24 red part there. That's where the chemistry occurs.








13


1 And first what I would like to do is point out that

2 there is a particulate phase and a vapor phase. In

3 the side stream there should be little particles --

4 what happens in the --

5 Q. Excuse me, Dr. Ferone, would you mind

6 before you go further into this, explain these terms

7 for the record please? Particulate phase, vapor

8 phase, side stream smoke, mainstream smoke, it may

9 be clear and obvious to you, but I want to make sure

10 we understand.

11 A. I will explain how the aerosol is formed.

12 The circle I've drawn is behind the coal and at that

13 point you will see it's almost all vapor. The

14 temperatures in the coal and around the coal get up

15 to between 1,500 and 1,700 degrees Fahrenheit. By

16 way of refreshing your basic chemistry. Paper burns

17 at about 450 degrees Fahrenheit. Sugar starts to

18 decompose at about 220, just above the boiling point

19 of water for those of you who ever made caramel. So

20 as you go way up in temperature, different chemistry

21 occurs, but what you are basically doing is taking a

22 solid material and turning it into vapor. You get

23 all this gas.

24 As this gas, this vapor of all these








14


1 different chemicals start to condense that's what

2 makes the smoke. And it starts out all in vapor and

3 condenses into what are called particles, but

4 usually the particles in tobacco smoke are little

5 liquid droplets. They are not particles like solid

6 particles. At the center of each of those liquid

7 particles, however, there is in order for it to

8 start condensing a little bit of inorganic material,

9 this is not unlike cloud seeding, that you may have

10 heard about where you drop solids that you really

11 can't see. It's finely very divided, like salt,

12 into a vapor that's all in the vapor state, but

13 below the due point, that if you put the little seed

14 crystals in there it condenses into water.

15 In this case, regarding a cigarette, not

16 only is it water, but all those chemicals that make

17 up cigarette smoke, four to eight thousand of them

18 condense. Some of them stay in the gas phase, vapor

19 phase. So when we talk about the particulate phase

20 that's the aerosol of smoke liquid that we normally

21 refer to as smoke. And the vapor phase is what does

22 not condense. Things like carbon monoxide, which is

23 a gas, doesn't condense into the particulate phase.

24 This occurs both in the side stream, before puffs








15


1 and in the mainstream which is what the smoker gets

2 when they draw on cigarettes.

3 Q. What's happening chemically in this

4 process?

5 A. Chemically there are two processes. One is

6 called combustion. Combustion is the reaction of

7 oxygen from the air with materials in the tobacco to

8 make a different set of chemicals, that's what you

9 normally think of as burning; the combustion.

10 However, in the absence of oxygen if you heat

11 something up in the absence of oxygen you get a

12 different process called pyrolysis. Pyrolysis is the

13 thermal degradation of material heated to high

14 temperature in the absence of oxygen.

15 As you draw or suck on the cigarette the

16 temperature of that coal goes way up. It gets so hot

17 that the gases and radiation coming off of that

18 keeps the oxygen from getting in there. So when you

19 burn something very rapidly at high temperature

20 pyrolysis are the reactions that occur inside that

21 coal where the air can't get in; combustion is what

22 occurs on the outside where the air can mix and

23 there are different sets of chemicals that are

24 formed in the combustion reaction and in the








16


1 pyrolysis reaction.

2 Q. If you could describe these particulates

3 and how they find their way into the human body, the

4 different sizes of those?

5 A. Sure. This smoke coming out the back end

6 has what we call particle size distribution. What

7 we mean by that is we have all different sizes of

8 particles, but there's not equal amounts of all

9 particles. The maximum for a lot of smoke occurs

10 around four tenths of a micron. Micron is a very

11 small unit of measure. And you can't actually see

12 that with your naked eye. If you shine a light on

13 it, the light that shines in your home sometimes

14 through the blinds you can see the dust that's in

15 the air. You can see it in the presence of light,

16 but at that size you can't see it. But particles

17 that are in the five to seven micron, much larger

18 than that, a lot of those drop out in our mouth and

19 throat. As you get closer to three tenths, three

20 tenths are the particles that actually can go in and

21 come back out again. So there's a range where you

22 can get particles in. When you exhale smoke most of

23 it is around three tenths of a micron. And below

24 that, below three tenths of a micron as they get








17


1 even smaller than that the particles are very very

2 rapidly absorbed almost to completion as you get

3 down into extremely small particles. So this

4 distribution of particles is important in terms of

5 the sensation to the smoker of how much smoke that

6 they are getting.

7 Q. Pull the next slide, please. What are the

8 constituents, the toxic constituents of these smoke

9 products?

10 A. Well, there are as I say many of them

11 formed by combustion and pyrolysis. There have been

12 pretty much categorized in terms of, there's

13 irritants, there's carcinogens. Carcinogens come in

14 different states of knowledge about them. There are

15 ones that are known to be carcinogens in man, ones

16 that are suspected to be carcinogens in man. There

17 are others that are known in animal systems to cause

18 cancer. This list --

19 Q. We are going to call, this is Exhibit 3,

20 your Honor.

21 A. This list actually comes from a Philip

22 Morris document where some of the various classes

are listed.

6 A. When I was at Philip Morris and actually

7 before I became employed there during my

8 interviewing since I was going to be charged with

9 the responsibility of reducing toxic chemicals in

10 smoke, one of the things that we discussed deeply

11 was how one might go about reducing the various

12 classes and the relevant toxicity of the classes.

13 The one that was considered to be the most toxic, if

14 you look down at the bottom of the list where it

15 says N-nitrosamines. There are a group of those that

16 go up on to the next and some of those, like the one

17 that says NNK, that is N-nitrosonomicotine, that is

18 essentially made from nicotine. The one above it,

19 NNN, is made from nornicotine. So those are

20 alkaloids that are found in tobacco. And the reason

21 why these are made is because of the reactions with

22 the alkaloids in the tobacco. In other words, if you

23 didn't have any nicotine in tobacco you wouldn't

24 have any NNK because it's made from the nicotine.








19


1 Some of the others will form in the

2 combustion processes. There is something about

3 these, every one of the compounds in this list, if

4 you think about it, they all say nitro, so N, they

5 all have nitrogen in them. That is an important

6 piece of information about the most toxic class.

7 They are all nitrogen derived. There are a few more

8 at the top we don't need to see those.

9 The next class of compounds are the

10 Aldehydes over in the upper left-hand corner. These

11 are products of combustion. Formaldehyde and

12 acetaldehyde, these are all carcinogens.

13 Formaldehyde and aceteldehyde, however, are very

14 easily formed from the combustion of sugars and

15 other starches and other carbohydrate materials.

16 Q. Will you explain how the sugars are

17 involved in this process?

18 A. As you heat up a sugar, sugar contains a

19 lot of carbon, hydrogen and oxygen in its chemical

20 makeup. It has a certain structure which allows the

21 pieces to fall apart, either as formaldehyde or

22 acetaldehyde which leads to that. It's a very well

23 known combustion reaction in sugars.

24 Q. And before we leave here. In terms of








20


1 these, have they been implicated as carcinogens?

2 A. Yes, they have. While I was there this was

3 considered the, after nitrosamines, this was

4 considered the second most important class to remove

5 to make a safer cigarette.

6 Q. What would be the next?

7 A. Go back to the next one. This is a very

8 large class. Typically we refer to it as the

9 Polycyclic Aromatic hydrocarbons. You can also call

10 it Polynuclear Aromatic, the nuclear simply means --

11 these are compounds that have ring structures, where

12 there is are more than one ring. But -- and these,

13 many of the ones on this list that you see here,

14 like benzo(a)pyrene, the second one on the list, are

15 known carcinogens and the mechanism of those

16 carcinogens are known. All of them typically exhibit

17 similar properties.

18 If you can go back to the main list. There

19 is a group of others like the Aza-arenes, Monocyclic

20 Aromatic Hydrocarbons, Aromatic Amines, they are

21 sort of in the same level. There are some of these

22 are more toxic than others, considerably more. Most

23 of these compounds are the products of pyrolysis,

24 where the aldehydes are products of combustion.








21


1 Q. Can you explain the distinction? I know

2 you described their differences, but in terms of

3 their formation where they would take place?

4 A. The ones that are the products of

5 pyrolysis are formed in that coal in the absence of

6 oxygen. All of those polycyclic aromatic

7 hydrocarbons, if you look at the structure they have

8 very little in the oxygen structure. Same is true in

9 the Monocyclic Aromatic Hydrocarbons, there's no

10 oxygen incorporated in the chemical structure.

11 Whereas in the Aldehydes in the combustion process

12 you incorporated oxygen in the structure.

13 Q. The document we were referencing here as

14 Exhibit No. 3, is entitled "Harm Reduction of

15 Cigarettes, Foreign Correspondents, USA Richmond

16 Tour, March 7th, 2002", it's about 10 months old.

17 The specific page, which is slide five of this

18 presentation is "Product Design: PM Smoke

19 Constituents List for Potential Reduction by New

20 Product Design"?

21 A. That's correct.

22 Q. We are talking in the year 2002 Philip

23 Morris' recognition of these, was any of these

24 compounds changed since you were there, sir?








22


1 A. No. As a matter of fact the list hasn't

2 changed since I went there and the list as I

3 understand it from documents and my colleagues was

4 pretty much the same since about 19 -- early 1960s,

5 say 1965 or so.

6 Q. So the recognition of these compounds as

7 toxic constituents of cigarette smoke was there

8 prior to 1971?

10 Q. Was it there before 1961?

11 A. Yes, it was.

12 Q. Excuse me, let me restate the question.

13 Was it there before 1971?
3 Q. Have you concluded your description of

4 those compounds?

5 A. No.

6 Q. Please go on.

7 A. One more class. This one in the middle,

8 Metal, chromium, nickel, arsenic, cadmium, lead.

9 There is one left off of that that I think is

10 relevant, polonium, polonium-210. It's specifically

11 a radioactive isotope. Other than this list is also

12 the same as when I went to Philip Morris in 1976.

13 Q. How is it that a radioactive isotope finds

14 it's way into a cigarette?

15 A. In the case of polonium it's a degradation

16 product from uranium. Uranium is found in

17 conjunction with phosphate. Phosphate is used in

18 fertilizer. Plants need nitrogen, phosphorus and

19 potassium to grow. And incidently, the fertilizer

20 that contains some tiny amounts of degradation

21 products of uranium if it was mined from certain

22 places in the world.

23 What happens is when you put fertilizer on

24 the ground the dust gets on the leaves of the








24


1 tobacco plant and it sticks there because it's kind

2 of waxy, about half of it is on the plant and about

3 half is inside the plant. And it can stay there

4 during the time the tobacco a cured, its ground up

5 and cooked. It also happens with food. You use

6 phosphate on food, but food is sometimes washed, a

7 lot of times washed, and goes through your body,

8 it's cleared, but in a sense of getting trapped in

9 these aerosol particles, the metals are much more of

10 a problem because the clearance mechanism to get it

11 out of your system isn't so good.

12 Q. I want to go back to blends, go back to

13 blends for just a minute. Did the blends that Philip

14 Morris used differ from other companies when you

15 were there?

2 Q. Are you familiar with different blends

3 other companies use?

4 A. Yes.

5 Q. Let me ask you something, while we are on

6 that topic, was it a matter of interest to Philip

7 Morris what RJR or Brown and Williamson was doing?

8 A. Yes.

9 Q. Why was it such a matter of interest?

10 A. Because you wanted to know what they were

11 doing in the construction of the cigarettes and the

12 flavors and the blends. We routinely analyzed the

13 blends in their cigarettes just as they would

14 routinely analyze the blends of Philip Morris

15 cigarettes. You can find hundreds of documents,

16 websites of all the tobacco companies that discuss

17 the blends and technology used by other companies.

18 It's called retroengineering and it's an important

19 factor in any scientific or engineering discipline

20 to know what your competitors are doing.

21 Q. You were doing that, weren't you?

22 A. Yes, we were.

23 Q. They were doing that a long time before

24 you got there too?








26


1 A. They were. And as far as I can see from

2 documents they are still doing it and will probably

3 continue to do it.

4 Q. Now, how were their blends, the specific

5 blends they were using in terms of alkaloid content

6 different from other tobacco companies, if they

7 were?

8 A. There were some differences. And in terms

9 of the total product mix the Philip Morris tobaccos

10 had a higher levels of nitrosamines in general that

11 were on that list than other people's tobaccos,

12 basically slightly higher alkaloid content. But

13 everybody is buying the same tobacco. It's the

14 selection of which tobacco and within what's

15 available.

16 Q. And the ratios, isn't?

17 A. The some products Philip Morris made

18 actually had higher levels of Burley, for example.

19 There is difference in ratio of the tobacco, but

20 between Marlboro and Marlboro Lights and Cambridge

21 and Cambridge Lights, there was no difference

22 between those, but just a difference in general for

23 Philip Morris. It was fairly well known that Philip

24 Morris had the highest levels of nitrogen containing








27


1 compounds, and the highest levels of nitrosamines.

2 Q. Well, when you say they had the highest

3 levels of nitrogen containing compounds, was that as

4 an out growth of blend selection and ratios?

5 A. Yes.

5 Q. You mentioned earlier that one of the

6 purposes for which you were hired at Philip Morris

7 was to help them in the production of a safer

8 cigarette?

9 A. That's correct.

10 Q. Did you become familiar in the process of

11 learning, I think you told me at one point that you

12 had about a year before you assumed your management

13 position there where you were learning and visiting

14 the different divisions. Did you learn the history

15 of this production while you were there?

16 A. I learned the history of Philip Morris

17 production and tied it into the history of the

18 tobacco industry in general.

19 Q. Was there a change in the production of

20 cigarettes from the beginning of the 20th century to

21 your knowledge?

22 A. Yes, there w as.

23 Q. Could you explain to the Court how that

24 came about?








32


1 A. Well, in the late 1800s cigarettes were

2 low volume almost a handmade thing like cigars.

3 There was some equipment coming into play, automated

4 making cigarettes started in the late 18OOs. As time

5 went on, especially culminating in World War I,

6 there was a great increase in the amount of

7 cigarettes made by mechanical means. Machines got

8 faster and faster and faster. And it's of interest

9 that in terms of cancer in particular that the

10 history that I'm familiar with, I've participated in

11 several documentaries about this, before 1920 even

12 though people had smoked, the amount of smokers

13 there wasn't an extremely high incident of lung

14 cancer. That starts at about the '30s, very high

15 incident of lung cancer. And so given a period of 20

16 years for chemicals to do this sort of thing, one

17 tries to, that's what we did, to look back and see

18 what changes could have been related to this. And

19 one of the things that happened was the use of finer

20 cut tobacco because they were trying to make them

21 faster and wanted them to stay inside the paper so

22 it wouldn't fall out. And inherently in doing that,

23 they may not have recognized it at the time, I

24 mentioned about burning before, that makes an








33


1 aerosol which is much smaller, easier to inhale. All

2 of a sudden we are getting smoke further in our

3 lungs, inhaling more and more of it, and that

4 changed in my opinion and when we were at Philip

5 Morris and I discussed it with scientists there,

6 appears to be one of the things that lead to the

7 cigarette as an inhalation device, as something that

8 was routinely deeply inhaled. And obviously in order

9 to have chemicals cause lung cancer they have to get

10 into your lungs, not always, but the vast majority

11 has to get into your lungs, and true in aerosols

12 that's what it is doing. It has been pretty much

13 scientifically accepted, at least among people that

14 I talked to, and it's in the documentary Tobacco

15 Wars, that the relationship of lung cancer as in

16 association with tobacco related to changes that

17 were made in the 1910 to 1920 area of smoking

18 cigarettes.

19 Q. That was with the machine production of

20 cigarettes?

21 A. The vast -- you can still make cigarettes

22 that have large chunks of tobacco in them by

23 machine, but they are very slow. It's with the

24 improved machine production. Basically around World








34


1 War I cigarettes became a higher demand and machines

2 were invented to make them in much larger

3 quantities. So the sale of cigarettes, the more

4 inhalable cigarettes occurred about that time.

5 Q. Were there additives placed in those

6 cigarette products at that time to keep the tobacco

7 pieces from falling out?

8 A. There's been additives all the way along,

9 but the additives that were added, if you will, the

10 increase in additives had to do with this cutting

11 this up into fine and casings that I talked about,

12 to keep you from turning tobacco into dust when you

13 chopped it up to put it into the cigarette.

14 Q. As you go forward from that period of time

15 was there a change in the '50s with the recognitions

16 on the publication of the association between

17 smoking and the development of lung cancer?

18 A. Well, actually the recognition started in

19 the '30s. And in the '50s the linkage was

20 established, that is carcinogens caused cancer, and

21 it was established that cigarette smoke contained

22 carcinogens. It was also established in test

23 systems anyway, that carcinogens that were in the

24 smoke actually caused cancer. So, I started college








35


1 in 1957 during the period when much of this was

2 being discussed at the academic level before the 64

3 Surgeon General's report which occurred right after

4 my college career. This was a major subject of

5 discussion, that is, chemical carcinogenesis related

6 to smoke, that's what lead to my NIH grant in 1965.

7 That is the time when these specific chemicals or

8 some of them, not all of them, some of them started

9 to become recognized at that time as being

10 implicated and specific attention being made to

11 their chemical analysis and their reduction in

12 products that came in contact with humans.

13 Q. After that period of time we are I think

14 around 1967 did the FTC adopt a test method?

15 A. The FTC adopted a test method around '67

16 for the purpose of measuring on a consistent basis

17 tar and nicotine in cigarette -- marketed

18 cigarettes, yes.

19 Q. Are you familiar with the test method?

20 A. Yes, I am.

21 MR. TILLERY: Can we have a clip of that

22 test method?

23 (Whereupon, a video tape was played)

24 MR. TILLERY: Is there anyway to go just to








36


1 the machine portion? I don't know that we need to

2 show -- I think you've seen it two or three times,

3 your Honor. It's demonstrative.

4 THE COURT: I do not want to see it again.

5 MR. TILLERY: All right. It is, and what I

6 would show, I would ask -- he is speaking faster. We

7 can just stop it.

8 Q. The Court during open statements yesterday

9 and again referenced today, Dr. Ferone, has seen a

10 reference to the FTC testing machine. Could you go

11 through and explain to the Court what the design

12 parameters of that testing machine were? The

13 protocol of that machine?

14 A. Yes. The machine starts with a cigarette

15 like a model I showed you before connected to a

16 device which contains a filter pad. That filter pad

17 is called a Cambridge pad. That filter pad is

18 designed to collect the particulate phase, the

19 actual aerosol particles. It does not collect the

20 vapor phase, it collects the particulate phase. It

21 collects 99.9 percent of the particles down to a

22 tenth of a micron. If you have particles smaller

23 than a tenth of a micron it would not be collected

24 by the pad.








37


1 The machine starts with lighting a

2 cigarette and then it takes a puff, and basically

3 it's taking a puff every minute. The way it cycles

4 is 58 seconds between two second puffs. So every 58

5 seconds a two second puff is taken. And that puff

6 has a volume of 35 cc, which is a prescribed

7 volume. And it continues that process to a certain

8 distance from the end of the cigarette. If it's a

9 filter cigarette it's a certain distance and

10 non-filter cigarette it's a different distance

11 depending on the size of the filter. So from this

12 you have a certain number of puffs. That material

13 that collects on the pad is not tar it's called

14 total particulate matter. All of these particles.

15 Total particulate matter is divided into

16 three categories. Water which is not counted. Tar,

17 and nicotine. So the TPM, total particulate matter,

18 collected on the pad is converted into tar, water

19 and nicotine. So the FTC numbers are that tar and

20 nicotine numbers under that protocol for that puff

21 profile. It does not measure the gases, although you

22 can, you can measure like carbon monoxide and gas,

23 but the tar and nicotine protocol does not tell you

24 anything that's in the gas phase.








38


1 Q. And that vapor phase gets by the Cambridge

2 pad?

3 A. Yes, it does.

4 Q. And so how does that tell you then

5 necessarily what the smoker is getting if the

6 there's a considerable amount in the vapor phase?

7 A. It tells you what they are getting in the

8 particulate phase. It gives you an indication of

9 what's in the tar and up until that point almost all

10 of the focus on the toxic effects of smoke had been

11 in the tar not in the gas phase. So what it does it

12 allows you to collect and analyze the tar. You can

13 measure total amount and what's more important you

14 can analyze that tar for all those constituents that

15 we had up on the board and others and determine

16 whether say a milligram of tar has more or less of

17 specific toxic materials.

18 Q. How does the machine smoke differently

19 than the human being?

20 A. Well, the machine is a prescribed regimen.

21 Human beings basically smoke cigarettes probably

22 every individual smokes a little bit differently.

23 They can be broken into categories as I learned

24 while I was at Philip Morris and from reading the








39


1 literature, and the humans are smoking predominantly

2 for the effect of the alkaloid nicotine or other

3 alkaloids. The machine is smoking to a prescribed

4 protocol.

5 Q. What do you mean they are smoking for

6 their alkaloid content?

7 A. I have some demonstrative slides, if they

8 are available for this?

9 Q. I think you do. The molecule of nicotine?

10 A. Yes. Actually the nicotine molecule if

11 you can pull it up.

12 Q. It's actually four slides I believe. If

13 you are looking for a number it would be CKT90090.

14 This will be Exhibit 4, your Honor.

15 A. What I would like to do is just explain it

16 briefly and I would. What you see on this chart is

17 a representation of a site in the human brain. We

18 just labeled the receptor site. The only particular

19 thing about it is it has a specific size, that 5.9 A

20 with a circle on it. That's not the Anaheim Angels

21 logo, that's the size instrument, which is a tenth

22 of an nanometer.

23 MR. LOMBARDI: I'm sorry?

24 A. A tenth of a nanometer. And that's as of








40


1 the time I was in college and this comes out of a

2 book called Medicinal Chemistry that I used at

3 Philip Morris while I was there. This is a natural

4 process where this chemical, Acetylcholine fits into

5 this particular site in your brain, that you can

6 think of as being a very large protein. When it

7 fits into that site it causes the release of

8 dopamine. It's a natural process that goes on, it

9 makes you feel good. Helps you overcome stress. It's

10 related Adrenaline, a very nice feeling. This

11 happens naturally. The site is called a cholinergic

12 receptor. And your body produces Acetylcholine when

13 you need it and it does that.

14 If you can go to the next slide. Nicotine,

15 it turns out fits into that same space and binds

16 with about the same intensity. So it behaves like

17 Acetylcholine chemically, it binds to that site, and

18 it causes that same chemical reaction. This is what

19 you learned in alkaloid chemistry about other

20 molecules, other sites, different distances and

21 different place where they fit. But for nicotine

22 it's a mimic of Acetylcholine. There are other

23 chemicals that can do the same thing. Some fatally,

24 if we can have the next slide.








41


1 Strychnine will fit in the same space.

2 And one more, next slide, this chemical can actually

3 bind so tightly to that site it prevents you from

4 getting the Acetylcholine or nicotine effect. So

5 compounds that cause these chemical responses in

6 your brain or in biological systems tend to be the

7 drugs that is favored by man for relaxation, for

8 pleasurable sensation and frequently lead to an

9 adaptation frequently called addiction where you

10 wish to continue that experience of putting that

11 drug in that location.

3 Q. Go ahead, sir?

4 A. The predominant scientific consensus is

5 that the people that do use these products,

6 cigarette products do so because of the action of

7 the alkaloid nicotine.

8 Q. Did Philip Morris understand the concept

9 of nicotine and it's addictive effects while you

10 were there?

11 A. Yes.

12 Q. Explain that for me if you would?

13 A. Many many conversations, many studies, we

14 had a program to develop other chemicals that would

15 do the same thing. Nicotine has some negatives of

16 its own. It's implicated in cardiovascular disease.

17 So even if you removed all the tar from the

18 cigarette and have a cigarette only nicotine, you

19 would still have some disease, and the ultimate

20 product would be one without tar and is a different

21 drug that didn't cause the cardiovascular disease

22 that nicotine does. Clearly our program, that was

23 part of the work that we did was directed towards

24 first removing all of the toxic materials in tar.








43


1 And second, for replacing nicotine with something

2 that would give the same effect, but would reduce

3 the risk of increased blood pressure, extra heart

4 beats and some of the cardiovascular problems that

5 nicotine has.

2 Q. I just asked you whether Philip Morris,

3 when I say Philip Morris you were having weekly

4 meetings with the scientists in the upper level

5 management, weren't you, sir?

6 A. Yes.

7 Q. Was there any question at all from the

8 time you were there ever expressed by any person,

9 any scientist there in any of these meetings,

10 Richmond meetings, weekly meeting of the Board of

11 Directors, meetings -- not the Board of Directors,

12 the Directors, and your meetings with your direct

13 supervisors, was there ever any question expressed

14 about the contents of tobacco smoke containing

15 alkaloids being addictive?

16 A. No. The alkaloids in tobacco smoke was the

17 reason why people used the product.

18 Q. Well, let's follow that through if we can.

19 What would happen then if you adjusted some of these

20 design parameters to reduce the nicotine intake?

21 A. People would compensate it was called,

22 change the mechanism by which they smoked to either

23 -- several different ways that can be accomplished.

24 If the change is a simple one you can just draw a








45


1 little harder on the cigarette. And the idea is they

2 would try to get the nicotine they were used to.

3 Each person is used to a different level of

4 nicotine, it's not a set number, but if you gave

5 somebody a cigarette, and there's literature on this

6 and there was evidence of this at that time, even on

7 a single cigarette you give somebody a cigarette

8 with one level of nicotine, you give them a

9 cigarette with another level of nicotine, within the

10 smoking of that one cigarette because it gets to

11 your brain so quickly they would adjust the way they

12 smoke it to try and make the level of nicotine that

13 they receive the same.

14 Q. What would happen if you adjusted that

15 cigarette to the point where they couldn't extract

16 the dosage of nicotine they needed?

17 A. In some cases until they might get use to

18 the lower level out of frustration, in some cases

19 they would smoke more cigarettes. In other words, if

20 they were a one pack a day smoker and the cigarette

21 that they switched to they could not get enough

22 nicotine they might smoke two packs a day or

23 increase. And some of them might in fact become use

24 to the lower level, but basically -- another








46


1 mechanism of compensation is simply change the

2 number of cigarettes.

3 Q. If you produce a cigarette that simply

4 can't compensate would they buy it?

5 A. If you produce a cigarette that reduces

6 the nicotine so low that it became very difficult to

7 compensate, all the evidence says they will not buy

8 it. That cigarette is not going to be a market

9 success.

10 Q. Mr. Lombardi this morning mentioned to us

11 that when Cambridge cigarettes came out in 1980 you

12 were there when that came out, weren't you?

13 A. Yes, I was.

14 Q. And we are going to talk about Cambridge

15 later on, that brand of cigarettes, when it came out

16 it had a very low level of machine tested tar and

17 nicotine, didn't it?

18 A. Yes. There were three varieties of that.

19 The lowest one essentially was so low it was

20 difficult to measure on the Federal Trade Commission

21 test.

22 Q. Was it a market success?

23 A. That particular one was not. My

24 understanding is they had a two milligram and three








47


1 milligram, there were other varieties of that same

2 name at that time that they sold more of those, but

3 my understanding is they did not sell very many of

4 the ones that had no nicotine to the smoker.

5 Q. Okay. Did Philip Morris while you were

6 there and in your division, the people you were

7 dealing with, understand the health concerns that

8 smokers were feeling about smoking?

9 A. Yes.

10 Q. Explain that, if you would?

11 A. Well, there were many many surveys that

12 were done that were discussed concerning people's --

13 how they viewed their products. There's many

14 snippets or facts that came out that had become part

15 of the general understanding in the industry. For

16 example, a very large percentage of the people, some

17 plus 85 percent, become dependent upon nicotine

18 smoke. There is a small percentage of people who

19 smoke socially, not dependent, a very small

20 percentage. That people find it very difficult to

21 quit. People were concerned about their hazard that

22 they were exposing themselves to and everybody was

23 -- the biggest element was give me something that

24 gives me the nicotine, but isn't going to harm me.








48


1 That was the general, but people expressed it in

2 different ways.

12 MR. TILLERY: This is Exhibit 5, your

13 Honor. It's a special report No. 248 Market

14 Potential of a Health Cigarette. It's a Philip

15 Morris document.

16 Q. Are you familiar with this document?

17 A. Yes, I am.

18 Q. Can you just generally tell us your

19 familiarity with the document, have you reviewed it

20 and seen it?

21 A. I reviewed it and seen it and during my

22 time at Philip Morris until the end of my career

23 there I actually was involved in the chain where the

24 facility called the objective evaluation facility or








49


1 the testing facility was in my reporting, consumer

2 testing, where they reported to me and even before

3 that the fellow who wrote this, Myron Johnston, he

4 and I, you know, had dozens and dozens of

5 conversations even before he was in my reporting

6 sphere.

7 Q. This particular area of this document, if

8 you could reference this particular point, are you

9 familiar with this part of it?

10 A. Yes.

11 Q. Does this reflect the knowledge of Philip

12 Morris, this document I think is a 1966 document,

13 some ten years or so before you were there, the

14 recognition of the health implications of the

15 development of the cigarette?

15 Q. All right. If you can explain to me your

16 knowledge or understanding in dealing with

17 scientists and all of the people that you spoke to

18 at meetings. You should probably now explain the

19 meetings that you had that you referenced I think as

20 the Richmond meetings?

21 A. Yes.

22 Q. And who you were dealing with and who you

23 were having meetings with for the Court so the Court

24 understands who you were having conversations with?








51


1 A. Okay. One of the major focuses on research

2 at Philip Morris, let's put it that way, was

3 behavioral research. Why and how people smoke. The

4 person who is signing this, not the person who wrote

5 it, is Dr. William Dunn, who headed that from long

6 before the time I got there through the time that I

7 was there. Dr. Dunn and his group did the vast

8 majority of research on how and why people smoke.

9 The people from New York, the senior executive

10 manager of Philip Morris, Inc. would come down on a

11 monthly basis and marketing people and some of the

12 most senior executives would always be there when

13 any presentation was given by Mr. Johnston or Mr.

14 Dunn relative to this topic because there's a

15 general recognition within Philip Morris that what

16 we are doing is selling a nicotine delivered device.

17 We are selling a device that delivers nicotine.

18 People smoke it for the nicotine. So topics like how

19 much they need, how much they want, how much they

20 can tolerate, how little they can accept were all

21 topics that were discussed frequently. This is one

22 of probably several dozen documents on this same

23 subject. It happens to be one from 1966, which

24 documents like this throughout the files that I have








52


1 seen.

2 Q. On that point, let me interrupt you for a

3 second. This morning we heard from Mr. Lombardi that

4 some of these documents pointed out are snippets

5 taken out of context of just a few documents from a

6 huge corporation. Have you seen documents, did you

7 talk to people, did you have knowledge that this

8 effectively represented the consensus of people at

9 that company while you were there?

5 Q. Let me add one point to this if I can. I

6 want if you can explain to the Court the purpose of

7 the Richmond meetings.

8 A. The purpose of the Richmond meetings

9 was --

10 THE COURT: And maybe who attended them.

11 Q. That's what I was going to get to, your

12 Honor.

13 A. The purpose of the Richmond meetings was

14 to exchange information between senior management of

15 the company, the chairman, the president, officers,

16 chief financial officer, the general counsel.

17 Everybody who was in senior management including

18 marketing, management, vice-presidents, marketing

19 directors and research and development people. I

20 can, and in previous trials I have been chastised

21 for --

22 THE COURT: Just a minute. I don't want

23 you to reference any previous trials. You testify in

24 this trial.








54


1 A. I can name the people who were there. I

2 can tell you dates on which it happened and I can

3 tell you who was there that talked about this.

4 Q. The one question I would just ask, in

5 these meetings, at the meetings that you attended

6 were there people there from who you said were

7 presidents of the corporation, etc.?

8 A. Yes. I can -- the list we have here let me

9 go down and name a few so we are sure who we are

10 talking about. Mr. Cliff Goldsmith.

14 A. Mr. Cliff Goldsmith who interviewed me.

15 When he interviewed me he was president of the

16 Philip Morris USA. He then became president of

17 Philip Morris, Inc., and then became chairman. Hugh

18 Cullman, senior executive in Philip Morris, Inc. He

19 was the chairman of Philip Morris USA. And he

20 attended these meetings regularly. I think almost

21 every one. Joseph Cullman, III attended several of

22 them that I can recall. He was the chairman of

23 Philip Morris, Inc. for the earlier part of my

24 career there. There's Alexander Holtzman who was








55


1 general counsel of PM USA. Bill Campbell, who was a

2 vice president of marketing and marketing director.

3 Jimmy Morgan, James Morgan, who later became

4 president of PM USA at the time I was there. He was

5 marketing vice president and senior executive vice

6 president. Ross Millhiser who was co-chairman of

7 Philip Morris USA. A fellow by the name of Shep

8 Pollack who was president, was president for most of

9 my career there of Philip Morris USA. Frank Resnik

10 who used to be when I first hired was senior

11 director in the R&D division. He became a senior

12 executive in Philip Morris USA and later in 1984

13 became president of Philip Morris USA. Fitz Morris

14 was a marketing guy, John Sollier (phonetic), all of

15 these people from New York came and took part in

16 these discussions of a type we see here where Mr.

17 Johnston and Dr. Dunn and Dr. Dunn's colleagues in

18 his behavioral research would describe in detail how

19 people interacted with nicotine and cigarette

20 products.

21 THE COURT: You may proceed.

22 Q. Now, with respect to this document, this

23 is another portion of that same document, are you

24 familiar with this?








56


1 A. Yes.

2 Q. Was that a recognized, based upon

3 everything you just told us, was that a recognized

4 concept? This document predates these types of

5 meetings where you attended by several years, was it

6 recognized while you were there?

9 A. Yes, it was recognized by those people and

10 all of us in R&D and continues to be true to this

11 day.

12 Q. For the record it's the portion of the

13 document, because we are only referencing that on

14 the slide, that says a cigarette that does not

15 deliver nicotine cannot satisfy the habituated

16 smoker and cannot lead to habituation, and would

17 therefore almost certainly fail. When were Marlboro

18 Lights introduced into the market, sir?

19 A. 1971.

20 Q. To your knowledge was that the first

21 cigarette that ever used any of its descriptor or

22 name and the word light?

23 A. Well, the first modern cigarette. I think

24 there's a cigarette somewhere back in the '30s that








57


1 I recall may have used it, but of the modern era

2 which characterizes as being after the Surgeon

3 General report or after the '50s, after I think

4 that's the first one.

5 Q. And from all of the experience that you

6 had there working, your familiarity with these

7 people, your familiarity with the documents, the

8 word light as it appeared there what was that

9 intended to convey to the consumer?

19 A. Generally recognized by the people that I

20 mentioned before. Certainly and people in R&D I can

21 give you more names, that light was intended to

22 convey the idea that it was reduced risk.

23 Q. Reduced risk of what?

24 A. Disease.








58


1 Q. What's lower tar and nicotine intended to

2 convey?

14 A. Reduced risk.

15 Q. Reduced risk of what?

16 A. Reduced risk of diseases caused by

17 smoking.

18 Q. I'd asked you a bit ago about Philip

19 Morris's understanding and knowledge of nicotine

20 addiction. What was the public statement or policy

21 of Philip Morris at the time regarding statements of

22 nicotine addiction or the link between tobacco

23 products and addiction?

9 A. The position of the industry and Philip

10 Morris was it hasn't been shown that smoking was

11 addictive.

12 Q. And did that, have you ever seen the film

13 clip from the Waxman hearings in 1994?

20 A. Yes, I have.

21 Q. And who was the person at that point who

22 was standing up and taking the oath and telling

23 Congress and the American people that he believed

24 that nicotine was not addictive?








60


1 A. Bill Campbell for Philip Morris.

2 Q. Is Bill Campbell somebody you knew?

3 A. Yes.

4 Q. And how did you know him?

5 A. While I was there he was vice president.

6 First marketing director and vice president of

7 marketing and at the time of that film, because I

8 watched it, I watched the hearings, he was president

9 of Philip Morris USA.

10 Q. Was he a person who would have attended

11 some of these meetings as well?

12 A. He did attend many of the meetings I was

13 at.

14 Q. Was there any question in your mind the

15 meetings he would have attended was there any

16 confusion about whether nicotine was addictive?

20 Q. Are you familiar with this document, sir?

21 A. Yes, I am.

22 Q. And what is this?

23 A. It's a talk that was prepared concerning,

24 the title is Why One Smokes, prepared for








62


1 presentation covering that topic.

2 Q. Could you pull up the paragraph that's

3 referenced and highlight that? And I want to point

4 out here, we are talking about a 1969 talk at this

5 point?

6 A. Yes, that's up on top of the first page.

7 The initial reference, I think there's another -- we

8 know that it's at least after 1962 -- '65, there's a

9 document referred to in the body of this text in

10 1965.

11 Q. This document here, if we can go through

12 the content that I highlighted, does the Court have

13 a copy of this?

14 THE COURT: I have one.

15 Q. The point I'm making is simply this with

16 the series of documents that I want you to go

17 through. And unless there is no issue about this,

18 the recognition by Philip Morris before you were

19 there and while you were there of how the smokers

20 smoked for the alkaloid contents of the cigarettes.

21 Their knowledge and understanding of that

22 phenomenon.

17 Q. Again, you've acknowledged your

18 familiarity with the document, sir?

19 A. Yes, sir.

20 Q. Is it consistent with your understanding

21 of the policy of Philip Morris? And when I say

22 policy, I mean their understanding of this

23 phenomenon and their application of the phenomenon

24 in the design of their cigarette products?








65
23 Q. The document and the highlighted portion

24 on the screen that I'm directing your attention to,








67


1 is it reflective of, one, the knowledge of this

2 company and the application of that knowledge to the

3 production and design of cigarettes?

11 A. Yes.

12 Q. All right. Explain it.

13 A. All the time that I worked there for the

14 entire eight years we understood that the

15 information outlined in this, by "we" I mean

16 scientists, management, Dr. Sullivan, my boss, the

17 people I worked with, this document, if you look on

18 some of the other pages describes in detail some of

19 the pharmacological effects that I described earlier

20 about nicotine that I learned back in 1959 and '60.

21 These are the same pieces of information that are

22 being used here to talk about why people smoke, and

23 the design, and the way we should make our products

24 to make sure that people obtain the nicotine. This








69


1 is the basis for the business Philip Morris was in,

2 while I was there anyway, and what we were doing in

3 regard to the design of products.

4 Q. And when you say what you were doing with

5 regard to the design of products, I mean what do you

6 mean by that?

7 A. Well, the idea we talked about earlier was

8 if you are going to make a safer cigarette you first

9 give people the nicotine that they desire in the

10 absence of any of the bad chemicals. The

11 carcinogens, the mutagens, the irritants, that are

12 in smoke. And then you know that you have to change

13 the nicotine itself because if you go further into

14 this document, on the fifth page for example, it

15 lists -- I wish I could read them.

16 Q. Actually you can, sir.

17 A. Increased pulse rate, increased cardiac

18 output and coronary flow, basal constrictions in

19 arms and legs, lower skin temperature, adrenaline

20 released in the blood stream. Increased blood flow

21 in skeletal structure, musculature it says. The

22 point is, we knew because of the basal constriction

23 and the increased blood pressure and heart rate that

24 nicotine itself ultimately would have to be








70


1 replaced. So this whole idea of developing a product

2 that delivers nicotine and then changing the

3 nicotine, millions of dollars were spent by Philip

4 Morris developing nicotine analogs.

5 Q. You have to describe on the record what a

6 nicotine analog is.

7 A. It's a chemical which would give the same

8 central nervous system effect, that is the effect I

9 showed you on the brain, giving off the dopamine,

10 without increasing the heart rate, the peripheral

11 nervous system. It wouldn't increase your heart

12 rate; it wouldn't constrict your veins; it would not

13 cause an increase in blood pressure.

14 Q. Would it maintain addiction?

15 A. You could or you could not. Some analogs

16 would and some would not. The object would be to

17 make an analog that didn't, but you could actually

18 make an analog that was a central nervous system

19 depressant, not a peripheral system antagonist and

20 maintain addiction.

6 Q. Well, let's talk about that program now.

7 Give us a little more detail about that, that's

8 interesting.

9 A. Well, that program was in place from the

10 time I went there, 1976, up through the time that I

11 left. It was a program to synthesize chemicals that

12 had pharmacological properties similar to nicotine,

13 but what we wanted to have was the positive benefit

14 of the dopamine release without the negative benefit

15 of these other effects that I was just reading off

16 this list that were considered to be bad for

17 nicotine.

18 Q. This was 18 years before Mr. Campbell's

19 appearance before Congress and his testimony, wasn't

20 it?

21 A. Yes.

22 Q. Now, did you ever apply this nicotine

23 analog research to a Marlboro Light cigarette?

24 A. Not specifically the analogs that were








72


1 synthesized for the program, no.

2 Q. In other words, did you ever synthesize

3 nicotine and substitute that in a Marlboro Light or

4 Cambridge Light?

5 A. No.

6 Q. Why not?

7 A. The analogs that -- would have been new

8 drugs, would have required a significant amount of

9 safety testing to prove they were in fact safer than

10 nicotine. We got to the point of using rats to

11 study the pharmacology in the rat brain, but it

12 would have required extensive testing beyond that to

13 show that they were safe for human use.

23 Q. There are more quotes on that document,

24 are there? Can you show those please? Can you








73


1 explain this particular provision of that document,

2 sir?

3 A. Yes. This discusses the secondary

4 effects. That is after a person becomes used to

5 receiving the pharmacological aspects of nicotine

6 then other things happen. So they are talking about

7 the importance of the sucking behavior, ego image,

8 halo of smoke. These are referred to as secondary

9 incentives. They are superimposed on the habit. The

10 habit being driven by the effect of nicotine.

11 Q. How is that important if you are in the

12 business of designing and selling cigarettes?

13 A. Well, after you provide the nicotine, you

14 want the product to seem as similar to a normal

15 cigarette as possible. If you deviate, if you

16 provide a nicotine device that's too far from a

17 cigarette then it -- gum contains nicotine, you can

18 put it in patches, those deliver nicotine, but they

19 don't give you the effect of holding it in your

20 hand, and seeing the smoke, the secondary effects.

21 Q. Was there an effort at times to model

22 cigarettes by brand to be comparable?

23 A. Well, they were analyzed in categories,

24 comparable categories.








74


1 Q. You said earlier when you first came there

2 you did some computer modeling of cigarettes.

3 A. Well --

4 Q. Design features of cigarettes?

5 A. Yes.

6 Q. What did those relate to?

7 A. Those related to being able to make a

8 cigarette of whatever specified tar or nicotine

9 content one desired to make.

10 Q. What about how -- strike that. How would

11 that apply to a Marlboro Light?

12 A. Well, in the case of Marlboro Light the

13 difference in design between those two cigarettes is

14 the filter. A slight increase in ventilation,

15 slightly longer filter to make the puff count be

16 approximately the same. The Marlboro Light has a

17 filter that allows more air to come through the

18 filter compared to the Marlboro. And in doing so one

19 obtains under FTC smoking conditions a small

20 decrease in the amount of tar.

21 Q. Well, what does the consumer get?

22 A. Consumer gets –

14 A. Based on the information we obtained

15 studying human smokers, they obtain the approximate

16 same level of nicotine and thus because there is not

17 a difference in nicotine to tar ratio over the

18 period approximately the same amount of tar.

19 Q. Was there an effort to design them a

20 certain way so that they paralleled one another?

21 A. Yes.

22 Q. Could you explain that to the Court? And

23 I'm now speaking about Marlboro Reds and Marlboro

24 Lights.








76


1 A. Marlboro Reds were at that time that I

2 started and while I was there became the largest

3 single selling brand of cigarettes in the United

4 States. As Marlboro smokers attempted to switch to

5 lower tar cigarettes the objective of Marlboro

6 Lights was to produce a cigarette that kept that

7 entire experience as close as possible to the

8 Marlboro Red. So that they, when smoked essentially

9 get similar taste, similar flavor, similar tar,

10 similar nicotine. In other words, the Philip Morris

11 had a whole bunch of designs they could have made to

12 make it different, but the purpose in that cigarette

13 was to maintain the Marlboro brand and its image and

14 its customers by making those products as close to

15 each other as they could be. The only design

16 difference was the ventilation.

17 Q. Now you said they would keep it as close

18 as possible in terms of nicotine and tar. Why on

19 earth would you do that?

20 A. If you understand that people are looking

21 to obtain a similar amount of nicotine between

22 cigarettes, if they are used to a certain level,

23 then if they smoke a cigarette that gives them a

24 vastly less amount of nicotine they are not likely








77


1 to light that cigarette. If they -- even if they try

2 to compensate, suck harder, smoke more cigarettes

3 they have to really really work at it and in some

4 cases these can't do that. For example, Marlboro

5 smokers if switched to Carlton, which is one

6 milligram, would have a difficult time. If they

7 switch to something which is very close in FTC talk

8 and is designed such that when you draw a little bit

9 harder you get the same amount of nicotine that

10 gives you a cigarette with essentially the same

11 experience. You had to make one small adjustment.

12 You had to suck a little harder, that's the only

13 adjustment. You didn't have to smoke more per day,

14 you didn't have to suck really hard, I don't have to

15 hold it in my lungs longer. The objective is to keep

16 it as close to the Marlboro Red as possible.

17 Q. And was that the case while you were

18 there?

19 A. Yes.

20 Q. And was your computer modeling completed

21 while you were there?

22 A. Well, it's a forever job. But it was

23 completed to the point where it could be used

24 routinely for design after the first year. It was








78


1 used all the time I was there for cigarettes.

2 Q. Was it used for the purpose of trying to

3 keep these two brands of cigarettes the same as

4 possible?

5 A. Actually it wasn't needed for that because

6 the only difference between these two cigarettes is

7 the small amount of dilution. Even before we made

8 the model it was well known that small amount of

9 dilution wasn't going to impede the ability of the

10 smoker to get the nicotine that they wanted to get.

11 Q. To your personal knowledge, sir, from your

12 own work at Philip Morris and the eight year period

13 you were there from '76 to '84, from your knowledge

14 of the documents and discussions and ongoing

15 meetings with scientists working at Philip Morris

16 for the period of time when Marlboro Lights came out

17 in 1971, and from your knowledge of review of

18 documents on websites and in this litigation and

19 others, do you know whether or not as a matter of

20 fact these cigarettes were specifically designed to

21 keep them that close together throughout this class

22 period?

23 A. Yes, I do.

24 Q. What is that?








79


1 A. In my opinion after reviewing the

2 documents and especially from being there these

3 cigarettes were designed to make them as closely --

4 to make a lower tar cigarette that was as close to

5 Marlboro Red the regular cigarette as they could

6 possibly make it.

7 Q. Would that design allow the cigarette

8 smoker to extract the same dose of nicotine and

9 thereby the same load of tar and toxic constituents

10 of smoke when they smoked Marlboro Lights?

11 A. It would. But slightly worse than that

12 because there's plenty of evidence from the smoke

13 chemistry, you have a milligram of tar from the

14 Marlboro Light is actually more toxic in its

15 chemical composition than the regular. So that,

16 yes, you could get the same amount of tar, you get

17 the same amount of nicotine, you get roughly the

18 same amount of tar, but you end up with slightly

19 more of certain chemicals that we had up on this

20 list.

21 Q. Was that function -- was that result that

22 was achieved through 1971 through the class period

23 in this case, was that by design?

24 A. Yes.








80


1 Q. Could it have been different?

2 A. Yes.

3 Q. Could those design parameters have been

4 changed at any time throughout this period to have

5 effected the ability of the cigarette smoker to

6 extract nicotine and thereby tar and the toxic

7 constituents of cigarette smoke from the Marlboro

8 Lights?

18 Q. Are you familiar with this document, sir?

19 A. Yes.

20 Q. Let's talk about who these people are. Dr.

21 Robert B. Seligman at that time in 1975 was not yet

22 the vice president of R&D, he was in New York and he

23 was I thought vice president of commercial

24 development. He was in New York as a vice president








82


1 reporting to Mr. Goldsmith. And Dr. Dunn, that's

2 where I met him at the end of 1975, Dr. Dunn held

3 the position that he had when I interviewed to join

4 there, of being the person in charge of the

5 behavioral research project and also supervising

6 people that studied some of the market trends like

7 Mr. Johnston and other people.

8 Q. All right. Could you direct your attention

9 to the highlighted portion of this next page?

10 A. Yes.

11 Q. As you review this document can you tell

12 the Court, first of all, what this document really

13 involves?

14 A. Well, Dr. Dunn did much of the behavioral

15 research, he was in charge of people who did much of

16 the behavioral research related to the use of

17 nicotine. Everything from questioning people to EEG,

18 electroencephalograph, brain scans. What this

19 document is is a discussion of sales with regards to

20 overall nicotine content for Marlboro Red, for

21 regular Marlboro.

22 Q. Explain that, if you wouldn't mind, sales

23 as it relates to nicotine content?

24 A. Well, within a brand. What Dr. Dunn is








83


1 hypothesizing here is that the change in nicotine

2 amounts has negatively effected some of the recent

3 sales of the Marlboro Red, this is in 1975. Because

4 of the formulations -- the attempt in making a

5 cigarette is to try to keep it as much the same from

6 year to year as possible. If you are going to

7 change it, you change it slowly. For example, from

8 1960s to the early 70s many of the cigarettes on the

9 market had their tar levels reduced. That wasn't

10 usually done in one big jump. Usually to keep the

11 smoker conditioned to the use of that product you do

12 it a little bit at a time. And what Dr. Dunn is

13 talking about here is simply, he has years and

14 billions of units sold and he plots the nicotine

15 levels, if you look on the next page, on page two,

16 he plots the nicotine levels next to the plot of the

17 sales levels.

18 Q. So the recognition was that the, if I'm

19 stating it inaccurately correct me, that there was a

20 direct correlation between the nicotine in the

21 cigarette and the sales?

22 A. That's his premise in this particular

23 document. And much of Dr. Dunn's work was aimed at

24 trying to determine the levels of nicotine that were








84


1 required to maintain use of the product; that were

2 required to make people not let's say smoke more

3 cigarettes, that kind of thing.

4 Q. Okay. I think there's another quote on

5 that document. Let's go to the next, that would be

6 Exhibit 8. This is another Philip Morris document,

7 your Honor, entitled Tar, Nicotine and Cigarette

8 Consumption. That is what Mr. Schori had done at the

9 research center. Are you familiar with this

10 document?

11 A. Yes, I am.

12 Q. And can you tell us what it is, what it

13 involved?

14 A. The title is pretty descriptive. You are

15 talking about cigarette consumption as it occurs at

16 different levels of products and if you read right

17 in the abstract it pretty much summarizes it. At

18 different levels of nicotine and different levels of

19 tar. These are relatively high levels of nicotine

20 and covers a range of tars.

21 Q. And the conclusion of the document?

22 A. It's probably best stated, you got it

23 there, right on -- in the abstract it says,

24 "cigarette consumption rate, i.e., number of








85


1 cigarettes smoked per day, was found to vary as a

2 function of the nicotine delivery of these

3 cigarettes." And this is another statement of the

4 same thing said a different way.

5 Q. "A persistent belief among investigators

6 and laymen alike is that smokers develop a daily

7 nicotine intake quota; thus when smoking cigarettes

8 which deliver different amounts of nicotine than do

9 those to which they are accustomed, they tend to

10 modify their cigarette consumption rate in order to

11 maintain their quotas." What is that called?

12 A. Compensation.

13 Q. This document is January of 1972?

14 A. Yes.

15 Q. And how long had Philip Morris from your

16 review of the internal documents -- strike the

17 question. Did Philip Morris recognize and understand

18 that phenomenon prior to the introduction of

19 Marlboro Lights as far as you know?

5 A. The most striking piece of evidence. In

6 1961 Dr. Helmut Wakeham wrote a letter, Dr. Wakeham

7 at that time was the brand new vice president of

8 research and development to I think it was Mr.

9 Coleman, pointing out that even as of that early

10 date there was considerable evidence for increase --

11 one kind of compensation, increasing the number of

12 cigarettes smoked and later in '67 he writes another

13 memo that indicates that he fully understands that.

14 I had an opportunity to discuss it with him, that

15 volume compensation or sucking compensation,

16 increase your draw on a cigarette was also a form of

17 compensation that smokers used.

18 Q. Let's go to the next document, please.

19 This is Exhibit 9 entitled Motives and Incentives in

20 Cigarette Smoking. It's by William L. Dunn. Philip

21 Morris Research Center, Richmond Virginia. Are you

22 familiar with this document as well?

23 A. Yes, I am.

24 Q. What is this dealing with?








87


1 A. This is a presentation made by Dr. Dunn on

2 this exact same topic, that is the importance of

3 nicotine to smokers.

4 Q. And let's go through his presentation, and

5 by the way just for the record, who was Mr. Dunn?

6 A. Dr. Dunn was the senior ranking scientist

7 in charge of behavioral research. He was considered

8 to be Philip Morris's authority on why people smoke.

9 Q. When you say behavioral research, exactly

10 what did that encompass?

11 A. It encompassed the study of why and how

12 people smoked.

13 Q. Including addiction?

14 A. Including addiction.

15 Q. This particular document does this reflect

16 more or less what you understood while you were

17 working there, what you understood to be consistent

18 with the documents you reviewed?

19 A. Yes. This is Dr. Dunn's presentation that

20 he is making. This is a discussion that I personally

21 had on several occasions with Dr. Dunn. Even if I

22 hadn't had it personally, if you read the record of

23 the documents it's discussing that people smoke for

24 nicotine. It's not much different from the other








88


1 documents that we've seen.

2 Q. "The physiological effects serve as the

3 primary incentive; all other incentives are

4 secondary." Is that the conclusion of the document

5 among other things?

6 A. Then he goes on to list them.

7 Q. We ought to go over this I think.

8 A. He lists the three points that he is

9 trying to make. "Strong evidence can be marshalled

10 to support this argument: Number one, no one has

11 ever become a cigarette smoker by smoking cigarettes

12 without nicotine. Number two, most of the

13 physiological responses to inhaled smoke has been

14 shown to be nicotine related. And three, despite

15 many low nicotine brand entries into the market

16 place, none of them have captured substantial

17 segment of the market. In fact, critics of the

18 industry would do well to reflect upon the

19 indifference of the consumer to the industries'

20 efforts to sell low-delivery brands." It's all

21 consistent with the knowledge base that says that

22 nicotine is the key ingredient in tobacco smoke as

23 far as consumer satisfaction goes.

24 MR. TILLERY: We have a video clip of the








89


1 1994 Waxman hearings, your Honor. I want to offer it

2 into evidence. The purpose of it is to -- the

3 purpose for offering it now is for Dr. Ferone to

4 identify the people involved. Can you show that?

10 Q. Who is Cathy Ellis that was referenced on

11 that film clip?

12 A. Cathy Ellis had various positions. At the

13 time I worked there she was a beginning scientist.

14 But later she became director of research and

15 eventually vice president of research. She's a Ph.D.

16 Pharmacologist.

17 Q. Who is Harold Burmley that he referenced

18 and introduced?

19 A. Harold Burmley was while I was there was a

20 mechanical engineer that worked in the operations or

21 processing areas and shortly before I left Philip

22 Morris he became manager of tobacco processing in

23 the R&D department.

24 Q. Now prior to November of last year did








93


1 Philip Morris ever tell smokers of Marlboro Lights

2 and Cambridge Lights cigarettes through newspaper

3 inserts that their cigarettes were addictive to your

4 knowledge?

5 A. Not to my knowledge.

6 Q. I want to hand you what I will mark as

7 Exhibit No. 11. When did you first see -- wait a

8 minute. I guess I should ask this. Have you ever

9 seen this before?

10 A. Yes, I have.

11 Q. Where did you see it?

12 A. In Sacramento, California. In a newspaper

13 called the Sacramento Bee.

14 Q. Did you read it?

15 A. Yes, I did.

16 Q. When was that?

17 A. It was in November, the day it came out.

18 Q. And did you go through the whole thing as

19 best you can recollect?

20 A. I did.

21 Q. And while you were at Philip Morris had

22 they ever taken this position with the public, the

23 consuming public, told them these things?

2 Q. Let's go through this. When you were there

3 did you tell people that cigarettes were addictive?

4 A. Did I personally?

5 Q. Did Philip Morris?

6 A. Not to my knowledge.

17 Q. You -- when you were there did you ever

18 know Philip Morris, I'm talking about the entire

19 operation, ever sending out in any newspaper this

20 type of statement, which obviously is not an

21 advertisement, okay. It's not advertising. Did

22 they ever make this type of statement one way or

23 another in newspaper ads -- in newspapers of general

24 circulation to your knowledge?

4 A. To my knowledge they did not.

5 Q. Let's take a look at CKT062411. Are you

6 familiar with this document?

7 A. Yes, I am.

8 Q. Is this a document that they put in

9 newspapers around the country right after the Waxman

10 hearings?

11 A. It is.

12 Q. Can we go through this document and

13 highlight some of these portions. This would have

14 been in 1994?

15 A. Yes.

16 Q. Is this what they, Philip Morris said in

17 Exhibit 12 about nicotine and its relation to

18 cigarettes in 1994?

19 A. Yes, it is.

20 Q. And as a fact, right, an absolute fact?

21 A. Yes.

22 Q. This was sent -- to your knowledge was

23 this sent in papers of general circulation

24 throughout the United States in 1994?








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1 A. That is correct.

2 Q. And the next point please? Philip Morris

3 does not manipulate nicotine levels, is that a fact?

4 A. That says it's a fact.

5 Q. Was that true?

6 A. No.

7 Q. By the way, was the first one, the fact,

8 was it true?

9 A. The first one is true, as far as I can

10 see.

11 Q. And the third one, would you pull it up?

12 Read that.

13 A. "Philip Morris has not used patented

14 processes to increase or maintain nicotine levels.

15 Philip Morris, like every other corporation, applies

16 for, and obtains patents on virtually every

17 innovation we pioneer. Philip Morris currently holds

18 over 600 patents. They are publicly disclosed upon

19 issuance through the U.S. Patent Office. Philip

20 Morris has never used any of these patents to

21 increase, or maintain, nicotine levels in any of its

22 products."

23 Q. Is that true?

24 A. Talking about the 600 patents, they don't








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1 need to use patent technology to manipulate

2 nicotine.

3 Q. So I guess the fact would be if they

4 didn't use any patent did they manipulate the

5 nicotine?

6 A. Yes, they manipulated nicotine, but I

7 can't think of a patent that they have that they

8 would have used other than some of the knowledge

9 patents.

10 Q. Is this one of the statements you really

11 intending to convey that you don't manipulate

12 nicotine levels by patents, therefore, we don't

13 manipulate nicotine levels?

1 Q. Your next point please? And at that time

2 in 1994, as far as you knew the people there

3 believed that nicotine smoking is addictive,

4 cigarette smoking is addictive?

5 A. Well, I had plenty of documents where

6 people who worked there at that time had said that

7 they were, accepted the proposition that it was

8 addictive. So again Philip Morris is I presume is

9 made up of the people who work there. The people who

10 worked there believed that cigarette smoking was

11 addictive and before.

12 Q. And the next one. The last one of their

13 facts. "That a none of the ingredients used in the

14 manufacturer of cigarettes is harmful as used."

15 A. I disagree with that completely.

16 Q. Was that fairly well known in the science

17 laboratories there that that was incorrect in the

18 '70s?

19 A. Well –

4 Q. I don't know if we got an answer with

5 respect to that document. That's the last point?

6 A. The ingredients used in cigarettes are

7 burned. And almost anything you burn are going to

8 undergo the combustion pyrolysis chemistry that I

9 discussed. And we went through a long detailed

10 discussion about what that chemistry produces. Many

11 of the toxins that are on that list, that is true

12 for the ingredients as well as for the tobacco. So

13 there's no way that one can conclude that the

14 ingredients aren't harmful. "As used" I'm not quite

15 sure I know what that means, because as used means

16 burned. And not for example eating or other way of

17 using it.

18 MR. TILLERY: I'm moving into an entirely

19 new topic now. If you want to go on I will.

20 THE COURT: How long will this take?

21 MR. TILLERY: The next topic, maybe an

22 hour, your Honor.

23 THE COURT: Well, we said two, and I

24 extended it to 2:30, if you can do it in a half hour








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1 I'll let you go.

2 MR. TILLERY: (Shook head).

3 THE COURT: We'll stand adjourned at this

4 point. We'll reconvene at 8:00.