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CERTIFIED COPY 1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 IN THE CHANCERY COURT OF JACKSON COUNYY, MISSISSIPPI IN RE MIKE MOORE, ATTORNEY GENERAL EX REL, STATE OF MISSISSIPPI TOBACCO LITIGATION, Plaintiff, VS. AMERICAN TOBACCO COMPANY, et al., Defendants. Cause No. 94-1429 DEPOSITION OF: RICHARD J. SEMENIK witness LANETTE SHINDURLING, Reporter and Utah, at the BENDINGER Lake City, commencing at & PETERSON, 170 South Main, #400, Utah, on the 18th day of March, 9:00 a.m. The deposition of RICHARD J. SEMENIK, a in the above-entitled cause, taken before Registered Professional Notary Public in and for the State of law offices of GIAUQUE, CROCKETT, salt 1997, Associated Professional Reporters 10 West Broadway, Suite 200 Salt Lake City, UT 84101 1 (801) 322-3441 / FA~ (801) 322-3443

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 APPEARANCES: FOR THE PLAINTIFFS: Jennifer Coley, "Esq. SCRUGGS, MILLETTE, LAWSON Attorneys at Law 734 Delmas Avenue Pasagoula, Mississippi (602) 762-6068 FOR THE DEFENDANTS: John M. Helms, Esq. SUSMAN GODFREY, L.L.P. .Attorneys at Law 2323 Bryan Street, Suite Dallas, Texas 75201-2633 Allen R. Purvis, Esq. SHOOK, HARDY & BACON Attorneys at Law One Kansas City Place 1200 Main Street Kansas City, Missouri Janet L. Johnson, Esq. JOHNSON & TYLER, P.C. Attorneys at Law 2127 R Street, NW Washington, D.C. 20008 WITNESS RICHARD J. Examination INDEX SEMENIK b~ Ms. Coley BOZEMAN 39567 1400 64105-2118 & DENT PAGE 4

1 2 3 4 5 6 7 8 9 i0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 EXHIBITS EXHIBIT NO. PAGE 1 Notice of Deposition of Defense Expert Witness _. ". 4 Vita of Richard J. Semenik 4 Rule 26 Expert Sta~ement ." 4 4 Summary statistics on research conducted in Mississippi in March of '97 46 Excerpt from Report of SG, 1979 59 Exc'erpt from The Journal of School Health, August 1982 61 7 Page from University of Connecticut Roper Center, the question "Are you currently using any contraceptive methods? If yes, which." 63 8 Beverage Milk Consumption (per capita) 1990-1996 ....... 66 9 Popular Teen Produc£s/Brands 1995 Media Spending 69 10 Tobacco Use in Mississippi 71 ii Excerpts from Psychological Reports, 1976, 38, 251-258 72 12 The Economics of Advertisinq, Richard Schmalensee, 1972, North-Holland Publishing Company, Amsterdam- London 73 13 Summary from the Bergler Book titled Zusammenfassunq 75

1 2 3 4 5 7 8 9 I0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 PROCEEDINGs RICHARD J. SEMENIKo called as awitness, for and onbehalf Plaintiff, being first duly sworn, was testified as follows: (Exhibits 1 through 3 marked identification.) BY MS . Q prefer? A COLEY: Dr. Semenik, EXAMINATION Have you A Q allegations lawsuit? A of the ~xamined and for or Professor, or which do you Rich is fine or whatever first name you would like. Q My name is Jennifer Coley and I'm. a lawyer with Dick Scruggs' firm in Pascagou!a, Mississippi, representing the State of Mississippi in this case. read the Complaint in this case? Yes. So you're generally familiar with the in the Complaint and the gist of the defendants A Yes. When were you first contacted by the to be an expert witness in this case? It was sometime this summer, I believe 4

l 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 19 20 21 22 23 24 25 July. Q A in July Q before? A Salt Godfather's versus CEP, in Salt Lake the class Q A as Engle. Q A And the Of '96? That's right. '96, yes. And have you Excuse me, this last summer been an expert ~itness Yes, I have. Q In what cases? A I have been an expert witness -in cases in Lake City. One was Go.dfather's Pizza versus Restaurant. Another was Black & Decker Incorporated, and those were both here Federal Court. I've been an expert in action suit known as Castano. And that was on behalf of the defendants? That's correct. " Class .action .suit known That would be on behal~ of the defendants? Yes. Q Clark is another case, also defendants. Kerney, K-E-R-N-E-Y, is another case. Those are ones I recall. Q" And so you've given a deposition before? Yes, I have given a deposition before. Q So you understand the rules of the game. •5

6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I'm going to ask you questions and if you don't understand you can ask me to rephrase or just tell me you don't understand and I'll try and commdnicate better with you, and we don't need to talk over each other and things like that. A Yes. The Godfather Pizza case that you mentioned previously, in-what area were you qualified as an expert? A I was qualified as an expert in the of consumer to trade meaning. Q or the A A decision-making specifically with dress, trademark infringement, area regard secondary And were you an expert for the plaintiff defendant in that case? The plaintiff. So that would have been the local-- Yes, the local business referred to as company that grants the Godfather's Restaurant. Q Versus the major franchise? A Correct. Q And what about the Black & Decker case, what kind of expert were you qualified to be in that case? 6

1 2 3 4 5 6 7 8 9 I0 ll 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Precisely the same issue, t~ademark, trade dress issues.with regard to secondary meaning. Q And who were you an expert for in this that case? A I was expert for the plaintiff again. That was the CEP or DEP or-- it was almost 20 years ago so it's hard for me to remember exactly. Q I've had premarked by the court reporter three Exhibits. The first one is the Notice of Deposition. I'm going to show you that. Have you seen that before? A No, I have not. Q Were you advised that your deposition was noticed in this case? A Yes, I was. Q And were you certain documents that to the deposition? A Yes. Q And at the bottom of page i, paragraph 1 asks that all documents review by the witness i~n connection with his work in this case be produced. I received a large box of documents. Are those all the documents you'~e reviewed in preparation for this case? advised that there were needed to be produced prior 7

1 2 3 4 5 6 7 8 9 10 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A Those are the documents I reviewed in preparation for this case. MR. HELMS: I'm sorry, was that question whether it was the documents he reviewed or the documents he relied on? "Q (BY MS. COLEY) Reviewed. A Those are the documents I reviewed, Q Are there more documents you do not to rely on which have not been produced? A Yes. Q For all the documents that rely on in this case have been produced that box of d6cuments? A Yes, it's my understanding. yes. intend you intend to to me in I was not physically there when the box was packed, turned over all the materials I relied on confident-- I was informed that all those were put into the box. Q Page 2 of Exhibit I, paragraph 3 but I you produce all connection with documents that in this A and I'm materials asks that in documents prepared by the witness his testimony. Are there any you have prepared for your testimony case? No, I have not.prepared any documents. Paragraph 4, "A copyof the final version

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of any study prepared by the witness litigation or otherwise,; that is not available." Are there any such prepared any studies either for otherwise that you might-rely on? A We just received, and your hotel received a study that for this publicly documents? Have this litigation yesterday, so that the answer to Q And that document that night, which we'll get to a little bit something that you prepared? A Yes. Q Paragraph 5, "All correspondence with counsel in connection with was one letter in that box produced all correspondence with this case? A Yes. you¸ or hope that you:at I just received this is yes. I received last later, was take just record.) make one study this case." I think there of documents. Have you defense counsel in MR. HELMS: Jennifer, I'm sorry, can I a second and talk to the client? (Witness conferring with Mr. Helms off the THE WITNESS: I would like to clear up-- clarification. With regard tothe research you received yesterday, .I-- those were the 9

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 results as they were prepared yesterday morning from the research firm. So I have not received the underlying data as yet. It is .being overnighted to me. So I may relyon the underlying data, I may not, but I am going to rely on the results Of the study. So with that clarification I want to make sure that everything that I have used or may use has been articulated. Q (BY MS. COLEY) Okay. Paragraph 6, "All. documents that constitute or reflect communications expert had with other witnesses in this case." Are there any documents that fall into that the paragraph? A No, there are not. Q Have you had communication witnesses in this case? A 0nly one. Q And who would A That would be received with other that be? David Goff at the South4rn deposition on Friday? That was two or Mississippi State University. Q Was that since his A No, that was before. three weeks ago. Q Paragraph 7, "All documents the witness. from or sen£ to defense counsel in this I0

6 7 8 9 I0 !I 12 13 14 15 16 17 18 19 20 21 22 23 24 25 case, including internal company documents of any defendant in this case." Are there any documents that fall under paragraph 7 that have been produced or should be produced to me? A No. " Q Have you reviewed any internal company documents in this case or in any other case? A No. Q Have you read any deposition testimony of any other expert witnesses in this case? A Expert witnesses for the plaintiff, yes. Q And who would that be? A Martin Goldbergand Dean Krugman. Q You said that you had a conversation with David Goff several weeks ago. What was the purpose of that communication? A I wanted to know if he had ~vailable copies of articles from the J~ck~on Clarion Ledger. were you asked to review the depositions of Dr. Goldberg and Dr. Krugman by the defendants in this case? A Pardon me? Q" were you asked to review the depositions of Dr. Goldberg and Dr. Krugman by the defendants.in this case in preparation for your testimony? .11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q so of what they plaintiffs? A Yes. Vita. Yes. you-just basically made yourself intended to testify on behalf of aware the And I've had premarked as Exhibit 2 your I'll ask you to take a look at that. It's kind of a crooked copy, ~orry, and just make sure it's complete and current. A (Reviewing document.) The only thing not listed is, and it's a minor item, on page 2-- excuse me, page 3, it doesn't show my-- the courses I taught autumn quarter 1996, which would have been last quarter, or the courses I'm finishing up now~ is our winter quarter. So it's.page 3 of the as the which Vita, but that's-- they're exactly the same ones listed for autumn of '95. Q Okay. Did you go directly from high school to undergraduate? A Yes. Q And I see from your work experience on page 2 you've been with since you received your Ph.D.; That is correct. of Utah correct? A history the University is that 12

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Q Are you a tenured profess.or? A Yes. When did you receive your tenure? A 1981. So you've never had any other work experience other than in the academic field being an expert witness? A Yes. Or consulting preparations. Q What type of consulting do you do? A Most of my consulting has to do with and strategy, communications programs for industries. a list, I know it won't be companies you've consulted advertising different clients, different Q Can you give me a11 inclusive, of several with over the years? A Yes. One would be about American . Investment Bank, which is a subsidiary of Leucadia National Corporation in New York; ~IBM, which has a local sales and marketing office here in Salt Lake City; AT&T, which also had a Salt Lake City Office, the Jerry Seiner Group which is a large mega dealer, automobile dealership here; several small firms, Zion Laser Technology, which has patented laser technology for teet-h whitening processes. The ~ resort group which manages condominiums for• absentee 13

1 2 3 4 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 owners in Park City, Deer Valley, Hawaii, Sun Valley. Those are the ones t.hat come to mind at the moment. Q Do you ever do ~ny consdlting work with advertising agencies? • A Yes, I do. Q What is your involvement in that type of consulting? A Typically the agency work relates to ~ discussing with the agency and the client how the creative execution can reflect th~ client's desired marketing strategies. Q consulted A which is which is I have And-what with? I have here in Salt also in Salt advertising agencies have you consulted Lake Lake had discussions with all those Do you consider yourself an marketing? A Yes. Q Do you consider yourself a~ advertising? A Yes.. Do you consider yourself an with Dunn Communications, City; Harris & Love, City, and Snedeker Group, organizations. expert in expert in expert in 14

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 communications? A Yes. Q Mass communications? A Mass communications and marketing communications which focuses more on the firm's decision-making, of mass A individual communications. Q So when you stated previously that been qualified as an expert in consumer does that fall under the communication? Consumer decisiqn-making would fall under consumer behavior. yourself also an you've auspices the general area referred to as Q So you would consider expert in consumer behavior? A Yes. Q Of marketing, advertising, consumer behavior, which have you qualified in court as an m~rketing and consumer communications. Those have been prior cases. consider yourself an expert in Sociology? expert before? A Advertising, behavior and mass all referenced in Q DO you psychology? A No. 15

1 2 3 4 5 6 7 8 9 i0 ll 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A No. Epidemiology? NO. Statistics? I have substantial would not offer myself training but as an Q Would that training fall category of behavioral statistics? A I'm not sure what you mean by you could rephrase that I might clarify. Q Or by saying you've had training statistics, do you just know how to read studies? in statistics, expert. under the that. If in the journ~l A My training in my Ph.D. program a~lowed me to conduct studies and to read the journal studies. Q I'm looking at your publications which includes books, journal publications, conference proceedings. Have you ever done any work that was specific to adolescents, and I mean in terms of marketing, advertising, communications? A Let me refresh my memory to see if any of my respondents were adolescents. Yes. Q Could you point that out to me? A Yes. -The arts marketing research stream represented by, under Journal Publications, the 16

1 2 3 4 5 6 7 8 9 i0 II 12 13 14 15 16 17 18 19 2O 21 22 23 24 third article, "The Consumption and the with Gary Bamossy. ~ Experiential Shaping of a Gary Bamossy Nature Of 'New Aesthetic'," was a doctoral student. That study focused on adolescents. Q And what was the nature of that study? A The nature of that study was to identify how adolescents the marketplace symphony. Are MR. publications? Q Conference MR. Proceedings, came to view artistic offerings like theatre, dance, opera, there any others? HELMS: Are.you just referring to (BY MS. COLEY) Yes. Which includes Proceedings and Research. HELMS: Publications, Conference Research, pretty mu~h everything. in his THE WITNESS: Right. There"s a study on page-- well, study may be not .thi correct word-- but on page 7 there's an article titled "An Anthropological Perspective on Consumer Research Issues." Q (BY MS. COLEY) And how did that include adolescents? • A That was written with an anthropologist, Dennis Heskel,• and the concept of that study was 17

1 2 3" 4 5 6 7 8 9 I0 ll 12 14 15 16 17 18 19 2O 21 22 23 24 25 that marketers can behavior by studying do in terms of their and production. And so it learn much about consumer people the way anthropologists household domestic consumptio~ included th~ whole family with a significant emphasis on children as part of the consumption decision-making process that households necessarily have to go through. But it was conceptual. We did not ask people questions, we did not generate data. So in that sense study would not be exactly right, but it is an article that considered that issue. Those would be the articles that included adolescents. Q On pagell of your Vita you list your professional service which includes a reviewer of various publications. .What is the difference between a reviewer and being on the editorial board? A The editorial board is a small group, typically from six to 12 individuals, who have been asked to give advice to the editor of the journal regarding editorial policy and philosophical direction of the journal. So it would be very much like a board of directors in a corporation. Q And what do you do as a reviewer? A As a reviewer, the editor sends you 18

! 2 3 4 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 articles quality of the publication. Q And what A An ad hoc asked to do reviews individual who is not and asks you to glve your opinion about article and its worthiness for is an ad hoc reviewer is a by the editor, formally on review board. Q And you're of the Journal of Health A Yes, I am. Q What is journal? A I have not reviewed not want to say what it is. What generally does area? have to the Q 26 Expert that? A reviewer? reviewer that's but is an the editorial on the editorial review board Care Marketi~q? the philosophical purpose of that that lately so I would it deal with, what A The articles I have been. asked to review to do with marketing technology as it's applied health care industry. Next I had marked as Statement Exhibit in this case. Do you Did you prepare this expert 3 your Rule recognize statement? 19

1 2 3 4 5 6 7 8 9 I0 I! 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A I prepared this statement in conjunction with the attorneys in the case. Q When did you start working preparation of this statement? A January. Q '96 or '97? A No, that couldn't be right. March. It would have been November want to go through this Q I and ask you some testify about. on the This is only or December '96. expert statement questions about what it says you'll It says in paragraph 2 that you will general testify about universally accepted models of consumer dec£sion-making. Are you going to talk about several different models or is there one basic model that you have in mind? with A Well, in terms of testifying, I'll testify respect to the questions that are asked. Q I understand that. MR. HELMS: Jennifer, are you just asking whether, in his mind there's more than ode model? Q (BY MS. COLEY) Yes. A There are many models of ~he consumer decision-making. Q Is there one generally accepted model that would apply best t.o consumer decisions about smoking 2O

3 4 5 7 8 9 10 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 cigarettes? A No. •They wou~d all apply equally to that decision. Q What is a basic model of consumer decision-making? A A basic model of consumer decision-making presents all the different influences on an individual consumer with respect to any decision about choosing a brand•of good or a service to use. - Q Does consumer decision-making also involve whether or not to purchase a product in general, not just a specific brand of a product? A We study the ways in which people make those decisions also, yes. Q What are some of the factors that play on decision-making? consumer A Consumer decision-making is an extremely complex process and for each individual consumer it literally is possible that literally dozens of factors affect that individual consumer in making a decision. factors that influence regard to cigarettes and two different thing.s? in your opinion, what are some of the consumer decision-making with smoking., which, is probably 21

1 2 3 4 5 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Which one would you li~e me Q Smoking first. A The decision in what aspect Q Whether to smoke or not, smoking initiation. A Okay, proper level of but if context, we find school, variety kind of Q In your opinion, does advertising have any influence whatsoever on smoking initiation? advertising does not decision. to comment on? of smoking? smoking initiation. Again, the analysis is the individual consumer, we look at consumer decision-making in any including the decision to smoke cigarettes~ that factors like peers, family, friend~, religion, situational factors, lifestyle, a of others, will all come to bear on that a•decision. It is my opinion that the smoking initiation Not at all? Not at all. Once a per.son influence A influence A Q advertising smoker? A help. the becomes a smoker does whether or not they stay a In my opinion, no. In your opinion, does consumer smoker decide advertising simply which brand of 22

1 2 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 19 20 21 22 23 24 25 cigarettes to A Yes. Q And statement role that factors, factors decisions generally A will smoke? Q testify in paragraph 3 on your expert it says that you will testify about the peers, friends, family, sitdational lifestyle and a variety of broad societal and social influences play in consumer about smoking, which I think we just covered; is that correct? Yes. At the end of paragraph 3 itsays that you that there is no basis to believe that these principles of consumer decision-making generally or as applied to consumer decisions smoking operated any Mississippi. To rephrase differently on consumers that, then, is it that the people in Mississippi are just everybody else in the United States when consumer decision-making? A Yes. about in your opinion like it comes Q At the beginning of paragraph 4 it says that you will testify about brand advertising and the various strategic influencesof advertising, including advertising for cigarettes. What are the to .23

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 various strategic does that mean? . influences of advertising? What A That means that advertising plays a role' in a marketer's strategy to influence consumers to choose that marketer's brand of product rather than any of the competitor's brands. Q Marketing generally includes things like not just also customer service, customer things like that? It's not just right? A Q A advertising, but relations, other advertising; is that Yes. And what exactly Marketing is the does marketing encompass? discipline of business that within an organization it's responsible for the decisions with respect to p#oduct dev~lopment, pricing the product, promoting it, and distributing it. Q Is it important for a business to get the consumer involved with the business, to feel like they're a part of the business? A That would be an individual strategic decision rather than a fundamental principle. Q As a part of marketing, would a company consider ways to establish itself in the community as a do-gooder, so to speak? 24

l 2 3 4 5 7 8 9 l0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A an individual company principle. Q In the last expert statement it says Also an individual strategic decision b~ rather than. a fundamental the nature and magnitude expenditures, including expenditures. Are you going to, if you know, compare amount of money that is spent by the tobacco industry on advertising and promotion with other paragraph on page 1 of your that you will testify about of advertising. cigarette advertising companies? A your head, a whole on or 19967 A I review them. the If I'm asked to I can do that. Are you aware, if you know off the top of how much generally the industry spends as advertising and promotion, say, for 1995 have all those data. ~ would like 1996 data is not available yet. There's always at least a one year lag before Advertisinu Aue publishes those data. Q So for 1995 you have the data, don't want to speculate as to what it was? A No, not at this moment. ~ have organized in an analytical way. to but you that 25

1 2 3 4 5 7 8 9 10 ll 12 13 14 15 16 17 18 19 2O 21 22 24 25 says that demand cigarette brand current smoker? A Yes. So if of the advertising Q The last sentence that you will testify that there is cigarette brand for cigarettes. So basically your advertising fourth paragraph no evidence affects primary opinion is that is just directed at the teens, a teenager is a current smoker, wouldn't A question? Q at the then they would fall into that category, they? I'm sorry, could you rephrase, the If advertising for cigarettes is directed smoker to get them to try your brand, then the teenager as a smoker would be included in that over 18 years of age who is a would be the targeted teenager, category? A A teenager legal smoker, that 18, 19-y~ar-olds. Q So cigarette advertising that's the smokers does not include a smoker who the age of 18? A That would be an illegal target Q But wouldn't you agree that the aimed at is under audience. 26

1 2 4 5 6 7 8 9 10 ll 12 13 14 15 16 17 18 19 2O 21 22. 23 24 25 advertising would be seen by the teenage smoker? A It's possible;because the company does control everyone who sees its advertising. Q Wouldn't you agree that a smoker versus a nonsmoker would probably pay more attention to cigarette brand advertising because they would .have more of an interest in the product? A Yes. Q Wouldn't a teenage smoker more not probably pay attention to cigarette brand advertising versus a teenage nonsmoker because they would be interested in the product? A If that individual had decided to be a smoker then that would be more relevant advertising than for products he or she had not decided to use. Q So regardless of the intent of the tobacco company of their target audience, the teenage smoker would probably pay attention to the cigarette brand advertising, aside from any intent of the tobacco industry? A Yes. In the last paragraph of your expert statement it says that thelevel of expenditure for cigarette advertising reflects the fact that it. operates in a cluttered and highly competitive 27

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 advertising environment. What is a cluttered environment? A to the in the is that A Yes. Q And the cigarette environment? A It because it's a mature product multiple competitors. advertising A cluttered advertising environment refers fact that there are. many competing messages same product category. Competing messages for different brands; what you mean by that? in your opinion, why is the tobacco, field, a highly competitive is a highly competitive environment category and there Q What do you mean when you say "a mature product category"? A That the product category has been in the market for many years. new Q Does that also mean that introduction brands is difficult in a mature~market? A That would not be necessarily Q So the cigarette market would considered a growth market in any way? MR. HELMS: Objection to the term are of a condition. not be "growth 28

1 2 3 4 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 19 2O 21 22 23 24 25 market" as vague. Q (BY MS. COLEY) How do you use the term "growth market"? A Well, there are levels of growth, is how we use the term. - Q Okay. Can you explain those levels to me? A There can be from negative growth, which means it's a declining market, through zero growth, through very high accelerating growth. Q would any part of the cigarette market fall into a growth market category? A Well, yes. It would be some level of growth, yes, as I have described it. Q In what way? A In that we would take a look at the total consumption in the industry Year-.to-year, whether it's automobiles, cigarettes, milk, whatever, and identify the extent to which the market is growing or contracting. Q Would the cigarette market be considered growth market because the cigarette market, the industry needs to replace Smokers who quit or die? A. Any industry that has customers who stop using their product or die, wouldhave to replace those customers, or to seek new customers with new a 29

2 4 5 6 7 8 9 10 ll 12 13 14 15 16 17 18 19 20 21 22 23 24 25 products. That would be a common, typical marketing strategy. Q But in seeking new customers into the cigarette market, your opinion is that the industry is not seeking new smokers, they're, seeking people who have already started smoking just to get them to start smoking their brand? Is that your opinion? A The industry is looking for-- yes, that's my opinion. Q Is there any other product category that markets that way, to an established product user? A I believe, yes, in my opinion, there are many. Q Can you give me some examples that you would use to, say, c~mpare ro the cigarette market? A The milk industry, the chewing gum industry. Those would be two that come to mind. Q market? A and are choose Q How are they similar to the There are people who choose milk drinkers and there are not to drink milk. And the milk industry as cigarette to drink milk people who think that their advertising .campaign is non-milk drinkers to drink milk at all? a whole, do you to get 3O

1 2 3 4 5 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A Q from the A different Q you think Yes, they've tried. So that would be a little bit cigarette market? Yes. The milk industry .is doing from the cigarette industry. You mentioned the chewing gum.market. that the chewing gum marketers different something Do are seeking already to get people who chew gum who might not chew gum as opposed to asking them to chew Doublemint versus Juicy Fruit? A I have not seen strategies in the gum industry that would suggest they're get non-chewing gum people to chew gum. Q On page 2 of your expert statement it says that you will testify about themes and appeals in advertising, including cigarette advertising through the years. In the documents that were there were a whole bunch of copies of which appeared to come from magazines were copies of the same advertisement the logo recognition removed, -and some for cigarettes and some were for other What was the purpose of testimony? chewing trying to sent to me advertisements and then there butwith all of them were products. doing .that for your 31

6 7 8 9 i0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 3 4 5 A I'm sorry, could you restate the question, the purpose? Q Why was that done? Why did you copy those magazine ads for cigarettes and non-cigarette products and then have the ads copied with all the logo'recognition .removed? A The purpose of that was to demonstrate that ~hemes and images for non-tobacco products were similar, in some cases almost identical to images that were used for tobacco products. Q Is it also important tothe placement of the advertisement? EntertainmentWeekly versus Horse advertiser For e~ample, in and Rider the Magazine? A It's very important for an advertiser to carefully place its advertising, yes. Q In your testimony, anticipated testimony, do you plan to look at advertisements and talk about the target audience of that advertisement? an accounU? A A If I'm asked to I can, yes. And in determining the target audience advertisement, what things do you take into In determiningthe target audience for the target audience is the target market for ad, of an 32

1 2 3 4 5 6 7 8 9 i0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 whom the brand was developed and distributed. Q Is it important to know the location of the advertisement, for example, what magazine it's in? Would that help you kind of determine who the target market was? A It can. Q So, for example, an advertisement for Marlboro cigarettes in Time Magazine versus Marlboro cigarettes ~n Rolling Stone, that same product might be targeted to different markets? A It might or it might not. Q What way might it not be, example? given my A Marketers try to reach their target through multiple media and in that way that's achieving repetition and repetition continues to give an advertiser a share of mind in a cluttered environment. So using two different magazines accomplish that. Q What do you mean by the phrase "share mind"? A Share of mind means that the brand is prominent in the target market member's mind, hopefully more prominent than competitors' brand names. market called would of 33

1 2 3 4 5 6 7 8 9 i0 II 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Q In the first paragraphon page 2 of your expert statement it says you will testify there is no evidence.that color ahd imagery in advertising for cigarette~infiuences nonsmokers to begin smoking. That's your opinion? A Yes. Q Given that, do you have any opinion as to why the industry is so opposed to the removal of imagery and color in their advertising from certain magazines as a result of the FDA regulations? A I'm sorry, could you repeat the question? Q Are you familiar with the FDA regulations? A Pending, proposed? Q Yes. A Yes. Q And are you aware that as a result of those FDA ~egulations certain magazines with a certain percentage of young readers will not be able to carry color and imagery advertising in those" magazines? A Yes. Q Given your that this advertising smoking, why would the regulation? opinion that you don't think influences nonsmokers to begin industry be opposed to that 34

l 2 3 4 5 6 7 8 9 i0 ll 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A For precisely that reason. Q Which is because that!s not the way it operates? A Correct. Q Okay. In the next paragrapk it says that you will testify about the model of communication utilized in consumer behavior consisting of source, message, channel, receiver and feedback. Is that the basic model of communication? A That is a basic model of communication that has been widely used over many years. Q Do you think that you will testify about any other models of communication? A It's possible if I'm asked to, but I haven't planned on it, no. Q It says that you will apply the communication model to historic messages about smoking communicated by various Sources to in general and to consumers in Mississippi. consumers Is that the purpose all those newspaper articles and all those magazine articles were provided to me? ~ That is one of the sources. ~ Q Okay. The next sentence says that you will testify that the message that smoking could be

1 2 3 4 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 dangerous to health, fatal and habit forming was effectively communicated to consumers. How do you know? A How do I know-- Q That consumers? A What it was effectively communicated to I do know is that the message through other general public regarding health risks, ~atal disease and the habit forming nature of. tobacco was widely disseminated in a variety of readily available publications and sources which would have-- which the would have ready access to. Q So you don't look at the smoking rate to tell whether a message was effective for-- A I'm sorry? Q For example, in the early 1650s there was the "cancer scare" about smoking being related to lung cancer and approximately five years after that the smoking rate was at an all time high. So you don't look at that to determine whether or not the communication, the message ~bout the cancer scare was effective; is that correct? A What do you mean by "effective"? Q I guess what I'm asking is what do you mean by "effective"? 36

1 2 3 4 5 6 7 8 9 i0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Effective means that there's a of awareness of the relationship between and health risks, fatal diseaseor habit nature of the produc~. the high lev41 tobacco use forming Q Then effective does not mean that you got smoker to quit smoking? A No. the basic model of communication, in is the source, for example, the medium York Times, or would the source be the of the United States? Either could be the source of information. What about the channel? What is the of communication? The channel of communication is any means which an individual received that .~ newspaper, television Correct. And others. Q In your opinion, like the New President A channel A through information. Q Like A or radio? Q Does an effect on A It Q For source? A the source of the communication how that message is received? can. instance, the credibility of the have That's one variable that can affect the 37

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 message process. Q What are other variables that can affecn the message process? A Reputation of the source, authority of the source, stature in a person's life. Q In looking at the model of communication and the history of the smoking message, is it important to also consider the time period in which that message is sent, for example, the 1950s versus the 1980s? A Yes. Q So, for example, in the 1950s' a message received from a corporation might be more wel~ received than a message received from a corporation in the 1990s? A It might or it might not be, depending on the corporation and the situation. Q Do you have any knowledge or opinion about society in general, their opinion of corporations in the 1950s? A No. Q How about their opinion or thelr perception of the President of the United States in the 1950s versus the 1990s? A No. 38

1 2 3 4 5 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Q The end of paragraph 2 on page 2 of your expert statement says thit other industry statements were a small part of the total information• environment about smoking. Would those industry statements include statements regarding the health effects of smoking? A Yes. For example-- I'm sorry. A Yes. Q For example, comments in the 1950s or 1960s from the industry that more research needed to be done on whether or not smoking contributed or caused lung cancer? A Yes. Have you looked at ~he various industry statements over the smoking and health? A Industry last 40 or 50 years regarding statements that were in documents like newspapers. that Exhibit. information Q I'm done with A All right. Q I went through produced to me and I had public all thedocuments that were some questions about them. of excerpts from elementary, There were copies junior high and high school textbooks. Were those 39

1 2 3 4 5 7 8 9 i0 Ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 part of The Mississippi Report? A Yes. Q And ~hat .is The Mississippi exactly, if you know?" A The Mississippi Report is an policy for these-- my understanding of Report assessment of it is, as was informed, is that it is an assessment of the Mississippi school system, curriculum, guidelines for grade school, junior high, when junior high. became a level, and high school. Q Why are you relying on The Mississippi Report in .forming your opinions in this case? information their total adolescents receive information any way to measure how much school environment has on the kid an external source like a movie or A Because school is part of environment. Q I•s there influence the school versus television? A The way that's incorporated in consumer decision-making is to assess all the ~soUrces of information as a package and judge them relative in in to one another. Q So can you rank, say, a hierarchy, of th~ sources of information in determining the amount of 4O

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 1.8 19 20 21 22 23 24 influence each has or do you look at them as a total picture? A You look as them at a total picture. So you can't look at a consumer and say that television had more influence than this school textbook had, or can you? A If we were to take an individual consumer and ask him or her to let us know which influence was most important, then yes, the techniques we have can do that. Q But as an aggregate that's a possibility? think of consumers you don't A The only thing we can do with an aggregate is to see if, for example, polling data provides us with information about the relativeinfluence of sources of information. Q Things like the Gallup polls? polling is o~e to rely on the Gallup poll opinions in this case? other sources of intend to rely on? A The Gallup polls organization, yes. Q Do you intend results in forming any A Yes. Are t.here any information that you A Yes. survey

! 2 4 5 6 7 8 9 10 ll 12 14 15 16 17 18 19 2O 21 22 23 24 25 Q What other sources? A One is the Scholastic Magazine poll conducted-- published in 1960. Q Was that produced to me~ I don't remember. A Yes. Q There were also in the documents that were sent to me numerous scientific studies/journal articles. In what way are you relying on those documents in forming your opinion? A Well, those journal articles cover a broad range of topics. So in terms of my expert statement they could relate to any of the expert-- any of the opinions expressed there. Q There's also a copy of the 1989 Surgeon General's report. You're relying on parts of that in forming your opinions in this case? A Yes. There's a copy MississiDDi by Keating. me? admit, thing. of a book called A Uh-huh (affirmative). Q What was the purpose of providing that to In what way are you relying on that? And I'll I haven't ha~ a chance.to read the whole 42

l 2 4 5 7 8 9 l0 ll 13 14 15 16 17 18 19 2O 21 22 23 24 25 A I was interested in learning more about the State of Mississippi, the people in the State of Mississippi, and I went to the University of Utah Library, checked out several book~ on the S~a~e of Mississippi, and that one was one that I felt helped me understand more about the history, the culture, the nature of the people. Q Is that how you came to the conclusion that the people in Mississippi everybody else in the country? A No. are just like MR. HELMS: I'm sorry, let me object to that as mischaracterizing his earlier testimony and as lacking foundation. Q (BY MS. COLEY) Is that one of the sources of information you used in forming your opinion that the principles of consumer decision-making generally, or as applied to consumer decisions about smoking, that there was no basis to believe they operated any differently on consumers in That wohld be one of the sources of think right here would be a Mississippi? A Yes. information. MS. COLEY: good time to take a break. 43

1 2 3 4 5 6 7 8 9 i0 II 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 (Short recess. (BY MS. COLEY); I went through some of the scientific studies and journal articles and .I had some questions about some of them specifically. I don't think I brought them With me so if you can't answer them, they're not substantive, I don't think. If you can't answer them without looking the document, that's okay. There was one called at "Antecedent.s of Smoking Onset" by Timothy Moore, it was about I17 pages long. A I remember the article. Q Do you know where that was published? A Ultimately I don't remember where it was published, no. Q Who is Timothy MOore, do you know about him? A Timothy Moore is a researcher who publishes in marketing journals. I don't know if his degrees are in marketing or not, but he has written on a wide range of topics. That was an article that I t.hou.ght was well written. anything article was ultimately published? understanding it was ultimately Q So that A It's my published. Q Is he a professor somewhere? 44

2 4 5 6 7 8 9 10 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A He is a professor. Q Where is he a professor.? A A~ the moment I don'trecall. Q Then there.was a working paper by John Calfee called "Cigarette ~dvertising Health Information and Regulation Before 1970," it was. about 80 pages long. Is that document publicly available? A Yes, it is. Q Do you know anything about the. author, John Calfee? A Again, another researcher. I'm not sure whether his degrees are in marketing o~ advertising, but he publishes articles on those topics. Q The next one was "The Smoking Paradox" by. Gideon Doron, D-O-R-O-N. It's a 1979 book about 135 pages long. Do you know anything about Gideon Doron? A As an author, no. Q What do you know about him? A Well, that he wrote that particular "The Smoking Paradox." Q And the next one was called Advertising, The Uneasy Persuasion. I think you just copied Chapter I. Is that a book? piece, 45

2 4 5 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A That is Q Is it a A No. It is categorize it. It's places like Barnes & treatise, treatise. my view. a book. textbook? a-- I'm not sure how you would available in paperback at Noble bookstores.- So popular It's certainly not fiction, in Of all the journal articles and books and things that you copied, do you have any _idea about where the funding came from for some of these In many cases the authors will identify things? A their funding Q Are source. there journals which do identification of funding source marketing and advertising?. A I can't answer that. I respect to whether-- with articles, I don't identify or not. Would be an influence article? A not require in the field of don't know with respec~ to certain know if you,re obligated to I don't believe so. an identification of.funding source on the reader in analyzing a journal On an individual reader possibly~ (Exhibit 4 marked for identification.) 46

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Q (BY MS. COLEY) I've had the court reporter mark as. Exhibit 4 what I-received at the hotel yesterday that was faxed to me from Mr. Helms which is what you spoke about earlier. Do you recognize this document? A Yes, I do. And what exactly is this document? A This document Tepresents the summary statistics from ~esearch conducted over the last week. .~ Q Over the last week? A Starting last Thursday. Q What was the purpose of this research? A The purpose of this research was to identify various attitudes, information from people in research? A Mississippi. How many people participated in this 302 . And how did you select the 302 people participated? A The process was to use a standard marketing research technique which is to identify phone prefixes in the State of Mississippi and do random digit dialing to contact households. that ~47

1 2 3 4 5 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Q And who performed this research? A A company called the Market Research Institute. Q Where are they located? . In Kansas City, which is in the document. A In Overland, Kansas, but it's easier for people to remember Kansas City. The first six pages are the questionnaire; is that correct? A That is correct. Q And these are questions that were asked of the person on the other end of the telephone? ask questions .to A Yes. Who designed these questions? A I designed these questions. Q How did you determine what and how to ask them? A The-- most of the questions are simply standard survey research procedure that would be used. Question No. 6A on page 2 is a replication of a question used by Gallup, the Gallup survey question is, "We are can recall,-what Is there ever a organization. Q And that in knowing, as best-you you to start smoking." interested influenced case.when 48

1 2 3 4 5 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you ask somebody what influenced them to do something that they're going to say advertising? A I believe so, yes. Q Can you give me-an example? A I believe if I called-- yes, you an example. If we were to design said, We are interested recall, what influenced the I can give a survey.that in knowing, as best you can you to start using the brand not what influenced questions, A of shampoo you currently use. Q ~But the question is you to shampoo your hair? A Right. So ~s there ever a somebody what influenced you what brand to select, where they advertising? A In my opinion, no. Q What are the-.- I guess iike you have SQI, Right. What do those mean? case when you ask to do something, not will say they're codes by D77 A Those are codes entered by the research firm for their interviewers. So it helps them work their way through because they'll have instructions on the side next to, and it will help them move 49

1 3 4 5 7 8 9 l0 ii 12 14 15 16 18 19 20 21 22 23 24 25 through the questionnaire. Q On page i, question D7 you interviewed no people in Jackson County; is that what that means? A D7, what page are you on? Q On page i. A On page I. Oh, correct. Q And the 302 people were just in other counties, is that what that means, or was there one county in p~rticular? A No, all counties. Q Did somebody ask'you to perform this survey? A I asked if I could perform the survey because it needed to be financed. Q Who financed it? A The defendants. Q Any one company in particular or in the aggregate? A I don't know t~e answer to that. Q How much did this survey cost? A I received the invoice yesterday, $4,500. Q And that was from the Marketing Research " Institute? A From the Q Market Research Institute, right. Did you receive a fee for performing this 5O

1 2 3 4 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 research, for A A fee? Q Were you fee? A No. Q Did the questions Market Research expert fees? A Yes. Q time in A this time records, head. Q page 8? A A counties. formulating the questions and such? p.aid for this. outside your expert you include your time spent in writing and gathering the information from Institute,. for ~xample, in your So you charged performing this? Yes. the defendants for your Q And how much of your time was spent on in preparing for this case versus all the other that you've spent, if you know? A I would have to review my records. I keep but I couldn't tell you off the top of my Starting on page-.- say page 8, the fax Fax page 8? What are these charts? These.are-- on page 8, these are all 51

1 2 4 5 6 7 8 9 i0 Ii 12 14 15 16 17 18 19 20 21 22 23 24 25 Q Okay. And at the So these are responses top, this is~ question DT. you.got from different counties? A Correct. Q Did you specifically exclud~ Jackson County or did it just turn out that way? A Specifi6ally excluded. Q And what was the purpose of that? A Well, Jackson County is the cqunty in which this case will take place and just so that the judge didn't get called or the attorneys in the case or any of those kinds of things, we excluded it. Q Other than that it was a random selection? A Other than that it was a random selection. Q Okay. On page 9, that's just a continuation of counties?. A Yes. Q For example, line is Newton County. underneath Newton County? A Those are code numbers respondents. Q. So in.Newton County you respondents? A Right. on page 9it says the first What are those numbers referring to had three 52

1 2 3 4 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 And - - A And the.y're coded according to phone so that the interviewer can keep track and the research organization can keep track. Q Okay. In the far left column, what is 3 and then Underneath that it that information, says .99? A That's something that organization is doing and-- oh. My guess is that's the percentage sample. But I think that's right 1 percent, so three respondents. to be it because there's 302 so would be .99 of th~ total. Q Then on fax page !0 we question is, "What are the three facing Americans A That Q were wait to A read as asked the any cues. Q calls the research Total speculation. of the total because 3 would be Actually that has .99, three people have QI, the biggest problems right? today?" Is that is correct. these responses cued or did you just hear what the participants said? These were not cued. The question was it was and the interviewer-- the interviewer question and waited for responses without And all responses were kept track of and ~53

1 2 3 4 5 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 are listed here A Yes~ responses. Q So, for abortion. So you on these pages? These are called the said abortion was America today? A I believe the that two respondents verbatim example, the first one is had two respondents out of one of the biggest problems proper interpretation only said abortion and other response. And had no other response? affirmatively. the question asked for the where do I go to find out to all three? three? three. had A (Indicating Since biggest problems, respondents said A Or said Q Or said A example, Clinton, this person problems in Q Okay. corresponds to is the what three what You would look at these verbatims and about the tenth one down says "Bill Hilary Clinton and Richard Gephardt " feels that those are the three the United States. The next on fax page 15, it question Q-- it looks like Q6A influenced you to start smoking 248 who facing is no So biggest for wh•ich

1 2 3 4 5 6 7 8 9 i0 Ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 question. A Q "A my nerves. " A does that question? A No. in the middle responses-- Yes. doctor recommended it so I could calm That's a verbatim response. On Q6A you have question total 13. what mean, that only 13 people answered that If I could take you back to page of the page question 6A shows all well, shows the responses where there the were multiple responses to a particular" category such as closemale friend smoked, close female friend smoked. If you look down there it says "Other/specify." There were 13 people and that's the verbatim responses of 13 people who did not fit into any of the other general categories. Q And then over on fax page 15 on the second column, is that part of Q6A Or is that Q6B? A That is also., I believe-- let ~e take a look-- that's Q6B. So a person had an answer for Q6A that was in the general categories but for Q6B did not so that needed to be listed as a second response when they gave ~.second reason. Q Okay. On q~estion Q6~, the second part 55

1 2 3 4 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 says, smoking. smoking?" close "Please think back to when you first started Wha~ person or .event caused you to start And then it says "Close male friend, female friend." Were those choices given or were those just.kind of expected answers and they were supposed to mark them if they said that? A Those were open-ended responses and the coder tabul.ated everyone who said exactly the same thing. Q And then on D3, which is the race fax.page 16 you have question question. And I take it Asian and Native American, those were the other? A There's only one Asian American and only one-- one person who said Asian American and one person who said Native American and otherwise everything was fit into a standard category. Q And the second column is D4 which is "What is your current occupatiqn"? A Right. Q Were t.hese questions just asked of person who happened to answer the phbne? A No. The-- if you look at page I, the very first item on ~he page, "Hello, ~his is.," the interviewer gives his or her name, "from the Market 56

1 2 3 4 5 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Research Institute in Kansas City. We are conducting a study about important issues facing Americans. May I please speak With the youngest male, 18 years of age or older, who is now at home?" If there was no male at ho~e, then the interviewer asked for the female in the household. Q Why was the youngest male chosen to be the preferred respondent? A Again, this is part of the methodology used by Gallup. So it was an attempt to. replicate. Q What opinions, if any, have you formed based on the results of this survey? A Well, I'm still studying the Survey results. One opinion is that this survey reflects all the literature I reviewed with respect to influences on smoking initiation behavior. Q Which would be basically anything but advertising? A Which as. it indicates on page 2, the three top categories are close male friend, close female friend, other friends Q Have you looked at cigarette advertising? thetypes of different over the years? who smoked. thehistory of What I mean by that is.3ust campaigns that have been used 57

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 19 20 21 22 23 24 25 the market, successful 1913? A know for campaign? A campaigns, at when at, say, after that? A I have looked at many campaigns been used over the years. Whic~ campaigns have you looked at? A I would have to review hhem, but .the-i for various brands, some brands that are no longer on some that are still prominent and brandson the market. Have you looked at the Camel campaign of that have I would have to see an example of it to sure whether I have. The "Reach for a Lucky Instead of a Sweet" I have seen a sample from that Campaign. Have you done any studies of those maybe not those in particular, but looked a campaign was introduced and .then looked smoking rates at some short period ~f time A That's not a done. Q particular analysis I have Have you ever looked at, say, the "Reach for a ~ucky instead of a Sweet" campaign the year it was introduced and then looked tO See how many people started smoky Lucky's after that campaign? 58

7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 1 2 3- 4 5 6 were A No. Q I selected some of the documents which produced to me because I had my basic questio~ is why were these documents selected in forming your opinions. A Okay. (Exhibit 5 marked for i~entification.) Q (BY MR. COLEY) . And I hope I put them together right, I. don't know if I did or not. Exhibit 5, do you recognize this? A Yes. What is this? A It's the cover from-- it's titled "Smoking and Health, a Report of the Surgeon General," and I wrote in myself "Report of SG, 1979" because the copy was not very clear. Q And am I correct in that only one page of this was copied? A Yes. Q And that would be Bates number 1690; is that right? It's at the b~ttom. A Yes. And so Q page? A what are you looking at with this Well, if I can take a moment to-- 59

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Uh-huh (affirmative). A This particular part ofthe Surgeon. General's report talks about mass media and smoking behavior, which is why it was relevant to my opinion. the and econometric studiesare effects of advertising Q Do you think that best way to analyze the on brand consumption? A I think econometric studies are one analyze broad market effects, yes. Q This talks a little bit about the television ad ban which started in 1971. I take it you're familiar with that? A Yes. Q And are you also familiar with the way to statistics that show that after that smoking rates increased? as to time increase. A Have you A the ad ban started MR. HELMS: Let me object to that as vague frame when you're referring to as the (BY MS. COLEY) In the early '70s. Yes . Do you have any explanation for that? looked at ~hat? ~ I haven't looked at all aspects of.it. 6O

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 One explanation would be that advertising s related to smoking initiation behavior. Q Would one explanation also be that the counter advertising under-the fairness doctrine was effective in keeping the smoking rate down and that when that was also removed that its effect was diminished? not A That's a possibility. (Exhibit 6 marked for identification.) -- Q (BY MS. COLEY) I'm done with that one. Let me show you what's been marked as Exhibit 6, and I pulled this came A Bates number 1654 through 1603, so goes together. A Let MR. pages are pages, this document because I don't.know where from. Can you tell me? That-- let me take a look at it. For the record, the first three pages are through 1656 then it has 1599 I'm not even sure if all of this me answer that-- HELMS: Can you hang (Discussion held off the THE WITNESS: .Back from two different (BY. MS. COLEY) which are 1654, second? These on for a record.) on the record. documents. Okay. So the first three 55 and 56, are separate? 61

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A that the the last .A or did A attached pages and Q whence A bigger These are of Health, That would be my suggestion. I believe first.three pages are from one document, five pages are from the Journal of SchoQI August of 1992. 19827 Excuse me, 1982. Thank you. So would those be part of another article you just select this? NO. these I should have stapled these or together as three pages and five asked that they ~e produced.that way. Okay. So the first three pages, from do these pages come? Well, let me see if maybe there was a article and these got separated from it. summary statistics from various Department Education & Welfare studies definitely put in Q Surgeon might be A General's and that article form, but-- Is it possible ~hese came from the 1989 it look like that General's Report? Does the format? It's possible because the Surgeon Report does not have a running title on that's one of the few publications ~hat I use does not have a running title so I apologize it 62

1 2 3 4 5 7 8 9 I0 II 12 13 14 15 16 17 18 19 20 21 24 25 that that's out of place. (Exhibit 7 marked for identification.) Q (BY .MS. COLEY) Okay. That's all I have on that one. I'm going to show you wha-t's been marked as Exhibit 7, it's Bates number 769, and my basic question is where did this come from? A This came from the University of Connecticut Roper Center. the only page that-- the only page I requested, yes. Q Is this A This is Q Why did A I was "RDI5 Are you you request this page? interested in-- the question reads, currently using any contraceptive methods? If yes, which ones?" And I was i.nterested in adolescents use of contraceptive methods. Q At the bottom it says the source document is The Commonwealth Fund Women's Health Survey. What is that? A That would be the organization that sponsored this survey that was conducted by Louis Harris & Associates. Q How do you know the adolescent responses to this question from looking at this piece of. paper? A Because from the description of the study 63

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 19 2O 21 22 23 24 25 the audience surveyed was adolescent men.and women under 20-years-old. Q Do I~know that from looking at this specific piece of paper? A You do not know that from iomking at this piece of paper. Q Where would I find that information, from the entire study? A From the entire study. I was alerted to the sample from a newspaper report. Q Thank you. Why would understanding adolescent contraceptive use be important to your opinions in this case? A I wanted to understand the behavior of individuals in the context of sexual activity in a highly risky environment. Q Were these people surveyed from all over the U.S., do you know? A As I recall, this is a national sample, yes. Q The Study Note at the bottom of the Exhibit says there were 2,525 women interviewed. that yQur understanding? A Yes. And it says, "Including an oversample of Is 64

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 405 Hispanic and 439 African American women who were weighted to reflect their normal proportions in the population." What does that mean? A That means that some populations are more difficult to reach by telephone and.the sponsoring organization will instruct the survey organization to oversample so that a representative proportion of certain populations, in t~is case Hispanic and African American Women, is achieved to reflect the normal population. Q Why is understanding contraceptive methods in a risky environment important to forming your opinions in this case? A Because one of the allegations is that if people know about a risk the~ they will change their behavior. And what is your opinion about that allegation? Do you think that's true? A My opinion is that I want empirical evidence about people's awareness and then ! can look at people's behavior relative to their awareness. Do you think whether or not a behavior addictive has an effect on how people use their awareness of the riskiness of the activity? is ~65

l 2 3 4 5 6 7 8 9 I0 ll 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A only look marked as A Q different beef 756. A Q A opinions I'm not an expert at the behavior. (Exhibit 8 markad (BY MS. COLEY) I Exhibit 8. Yes. And I kind of put charts consumption, in addiction 6o I can for identification.) show you what's been these together. They're on beverage milk consumption and and it's Bates number 750 through Do you recognize these? Yes. Where did you select these charts from? These are charts I created. And how are these charts relevant.to the you have .formed in this case? A These two charts represent situations~ where organizations used advertising campaigns to try to increase consumption in a product category. going to say where did these numbers the source is at the bottom? Q I was come from, but A Yes. What consumers, do you A Yes. Q What is affects milk consumption by have an opinion on that? that opinion? 66

l 2 4 5 6 7 8 9 I0 ll 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A would be an influences, influence, That opinion is that milk consumption individual choice based on a variety of lifestyle, taste, preference, family depending on tke individual, according to consumer behavior analysis. Could per capita influenced by the makeup of the population?. A Yes. Q Do you have any information onthe population from the years 1990 through distribution of the population and how affected this milk consumption? A That's not one of the variables I looked at specifically, but from 19.90 to 1996 is a fairly short period of time. Q So because it's a short .period of time you don't think that the distribution of the population would have that great an effect on milk consumption? A It would be fairly stable during that period of time. Q So what is your opinion about beverage milk consumption per capita versus their spending on advertising? milk milk consumption be 1996, the it could have A What this shows is thah in 1990 per capita consumption was 218.2 pounds per capita and in 67

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in a fairly steady trend to 204.7 1996 it had fallen pounds per capita. Q But that 1996 data is projected data? A That's correct. I have no~ been able find the actual data as of-yet. -Q Did you do that projection or was that something you got from another source? A That's the way it was presented in the U. S. Bureau of Census,-1995 edition. Q Is there a lag time between, say, the current milk campaign and en increase in consumption? A time, yes. Q Is does it vary of things A Could you Q to Any advertising effort would have some lag there a general Standard of lag time or or what kind from product to product, influence lag time? There's a few parts to that question. ask one part and I'll answer that? What things influence the lag time or not it's going to between affect advertising and Whether consumption? A A broad range of factors. One quality of the receptivity of is the effort itself. Another is the the Darget market to the message. 68

1 2 3 4 5 6 7 8 9 i0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Another is the relevance of the message to the target market. Some ad campaigns, can have an almost immediate effegt on-consumption, others end up having no effect at all. been 770 and A Q A products A although cases, sales money on A your A outdoor marked 771. Yes, Are Yes. (Exhibit 9 mark6d for identification.) (BY MS. COLEY) I'm showing you what's as Exhibit 9, which is Bates numbered Do you recognize these two documents? I do. these alsocharts that you. created? How did you select these popular teen brands for this chart? I chose these because I tried to the information was not available that had the greatest find, in all total teen products in dollars. And none of these products had spent any these charts in outdoor media? Correct. Q How do you intend to use testimony in this case? To address the issue of the effect of media advertising on youth smoking behavior. And what is your opinion about that? 69

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 19 2O 21 22 23 24 25 A My opinion is that outdoor advertising does not influence underage smoking initiation behavior. Q Could outdoor media advertising for cigarettes influence the teenager who'already is a smoker? MR. HELMS: I object to the word "influence" as vague. THE WITNESS: Could you rephrase that for me, please? (BY MS. COLEY) .Could outdoor media advertising have an effect on a teenager who is a smoker to keep smoking? A Outdoor media advertising for a brand would choice, perhaps brand. possibly affect that individual's brand either by reinforcing the brand choice or getting that individual to consider another Q Does cigarett~ advertising have on reinforcing a smoker's choice to smoke? A In terms of the decision to use cigarettes? Q Yes. -A any effect • Not brand specific. No, it is brand specific. (Exhibit i0 marked for identification.) 7O

1 2 3 4 5 6 7 8 9 i0 Ii 12 ~--" 13 14 15 16 17 18 19 20 21 22 23 24 ~-" 25 (BY MS. COLEY) Let me show you what's been marked as Exhibit 10 to your.deposition. Do you recognize this document? A Yes, i do. Q And what is this document? A This document is titled "Tobacco Use in Mississippi.." Q And where did you get this document? A I photocopied this document from-- well, excuse me. This document was printed off my printer at home from the Internet. Q And is this from CDC information? A Yes, it is. Q And howdoes this document relate to your opinions in this case? A I wanted to understand the current-- well, most current, which this represents is 1992-1993 information, about smoking behavior in the State of Mississippi. Q Are you familiar with the Youth Risk Behavior Survey which is pu~ on by the Department of Education? A That title is not bringing anything to mind, but I may have :seen information from that. I'm not sure. .71

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Q of the A Do you know what the State of Mississippi? It's approximately-- current population "is ~s I recall from my approximately four people. Ii marked for identifications) COLEY) I show you what's been Ii. Do you recognize that books on Mississippi, that it's and-a-half million (Exhibit Q (BY MS. marked as Exhibit document? A Yes. Q And what is this document? A This is an article titled "Personality and Behavior Correlates of Cigarette Smoking: One-year Follow-up." And Q this appeared in Psychological Reports. Is that a journal? .~ A That is a journal. Q And it's dated 1976; is that right? A Yes. Q And why did you select this document in forming your opinions in this case? A This document is one of many that studies the issue of cigarette smoking behavior among adolescents, and in this case•885 students in ~high school and one year later in college. 72

1 2 3 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Q Is there anything in particular about this article that interests you in forming your opinio.ns in this case? A Well, the article in its entirety discusses various factors students indicated about their smoking and other behaviors. So the article in total, I think. (Exhibit 12 marked for identification.) (BY MS. COLEY) Okay. I show you what's been marked as Exhibit 12. Do you recognize nhis document? A Q A Yes, I do. Andwhat is this? This is an article titled The Economics of Advertising, Richard Schmalensee, S-C-H-M-A-L-E-N-S-E-E, published in 1972. It is widely recognized as one of the most important discussions of the economics of advertising. Q And how has this had any influence in forming .your opinions.in this case? A Specifically this article conceptually addresses both and with empirical evidence the issue of advertising and its effect on aggregate demand. Q And what is your opinion about advertising and its effect on aggregate demand? 73

1 2 3 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A My opinion is that advertising does not affect aggregate demand .'in the industry. Q So does that mean that advertising does not-- I'm not going to ask you what that means. Tell me what that means.. What is aggregate, demand? • A Aggregate demand is the total demand in an industry, for example, how much shampoo is demanded in the United States, how much beef is demanded in the United States, demanded. So you add up the numbers and. it how .many automobiles are take all the automobiles gives you sold aggregate you demand. demand, A Q So advertising does not affect aggregate it doesn't increase or decrease it? Correct. In your opinion, what is the purpose of and advertising generally? A Advertising is one of the tools marketers have to attract and retain customers for their brands. Q What abou.t promotions? And when I say "promotions," I mean buy one get one free, value-added promotions, things like that, how does that affect the market, if at all? A Can you clarify what. you mean by "market, "

1 2 3 4 5 6 7 8 9 i0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 please? Q I may be mixing terms. How does that affect aggregate demand, if a~ all? A That also does not affect aggregate demand. Q So if there is a circle of consumers, and a certain number of consumers who are going to buy an automobile, no matter what k~nd of automobile it is, is it your opinion that advertising and promotion will not increase that number, it wil~ just seek to segregate the number into different types of aut6mobiles? A My opinion is that the total ~market for automobiles will be competed for by various ~ companies with brands and one of the tools they use to attract their customers is advertising. If you segregate the automobile consumers into people who are going to buy mini vans versus people who are going to buy luxury cars or economy cars, can advertising and promotion increase that slice of the pie? A No. (Exhibit 13 marked for identification.} (BY MS. COLEY) I'm showing you what's been marked as Exhibit 13. Do you recognize this? 75

1 2 3 4 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 19 2O 21 22 23 24 25 A Yes. Q What is this document? A This is, and that's my handwriting at the top, this is a section of a book written by Reinholt Bergler. - Q And what was the title of the.book? A I think it was Zusammenfassung, which is listed on the page. Reinholt Bergler is a German researcher. And I apologize, normally I would photocopy the cover of the book and I obviously failed to do that in this instance. He is outside of the United States and studies a variety of adolescent Q Do published? A Off the top of my head, I'm sorry, I do not recall the year of this publication. Q Would yqu be so kind a~ to provide me a copy of the cover of the book? A I would be glad to, yes. Including the date. Q Thank you. How are you going to use this portion of that .book in forming your opinions in this.case? A Again, it will be used to support my risk taking behaviors, including smoking. you know what year this book was 76

1 2 3 4 5 6 7 8 9 i0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 opinion that advertising is not a cause of adolescent smoking initiation or any smoking initiation behavior. I wanted to clarify something if i could. Q Yes. A There is on the underlining or other marginal notations were in pen and those are not mine. MR. PURVIS: Which Exhibit are you referring to? THE WITNESS: I'm sorry, we're referring to the Bergler summary, which is Exhibit 13. when I got the book from the library those marks were already in the book, just for clarification. MS. COLEY: Do yo.u want to take a quick break? (Short recess.) Q (BY MS. COLEY) Back on the record. Are there different types of consumer behavior? A Yes. Q What are some of the different types? And where I'm coming from is I have kind of read through some of the textbooks that you provided on consumer behavior and I saw things like high involvement and low involvement. -77

1 2 3 4 5 6 7 8 9 i0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A That's what X thought you-were ~eferrin~ to. It is possible-- as I said before, consumer behavior is a very complex process and the study of consumer behavior has come up with various ways to try to understand that complexity. One of the concepts used, as you mentioned, is to try to examine consumers decision-making based on the premise of high involvement versus low involvement in the decision-making process. Q Where do cigarettes fall in, if they do, in the consumer behavior category, or purchasers of cigarettes? A That would depend on each individual. Would a person purchasing their first pack of cigarettes be a high involvement consumer or a low involvement? • A I don't think we could answer that question based on that particular bonceptual premise for consumer behavior. Is it your opinion that advertising is not for the purpose users to the product? and cigarette of attracting new A Yes. Do you thlnk ~that cigarette advertising promotion can be used to change attitudes of 78

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 nonusers of the product? A Can you restate understand it? Q Do you the question so I'm sure I think that cigarette advertising and promotion can be used to change attitudes of nonusers of cigarettes? MR. HELMS: Objection-- well, I'm. not sure-- let me just object to the question as vague. I'm not sure I understand it. THE WITNESS: I'm not sure I understand what you mean either. Attitude about whether-- I mean, in terms of attitude, what kind ~f attitude? Q (BYMS. COLEY) Attitude about the ~se of. the product. They may not Choose to smoke the product, but they don't necessarily see it as an evil in society. Do you think that advertising or. promotion can have an effect on that? A It's possible. Q Are you familiar With the 1994 Surgeon General's Report, "Tobacco Use Among YoUng People"? A Yes. Q Have you read the entire report? A I have read most of it. Q I noticed it was not produced in my documents so I take it you're not relying on 79

1 2 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 anything A documents. Q A in that? It should have been produced I'll have to check, I would appreciate as one of the absolutely my intention to produce the 1994 Surgeon General's Reports. So if I might be confused. it because it was 1989 and the it's not in that to you there, I will as quickly as possible get as part of .those documents. "the uptake Q Are you familiar with the term continuum" for smoking initiation? A I may know that under different phraseology, so if you-- Q That there are different stages initiation? For example, experimentation, prefatory stage, things like that? A Is this a medical assessment? from the medical side of the business? Q From the epidemiological side. A Yes. of smoking the Is this So you-'re, familiar-- A I have read that~ I have seen it. That's not terminology we use in analyzing consumer behavior from the marketing/advertising, side. Q Is it your understanding generally that

6 7 8 9 10 14 17 19 2O 22 24 25 people it' s kind A is, an A beliefs product? A cigarette~? A attitudes A strategically And by that I advertising. MR. don't become smokers just like that, of a process they go through? Yes..- Do you have a definition operational definition? I haven't ever articulated Does a person about a product that for what a smoker one, no. generally form attitudes before they purchase that In many instances, yes. Would that be true in the instance of It depends on the individual. Does advertising contribute to and beliefs about a product? Yes, it can. Do you think that teenagers are a person~s important to the cigarette industry? mean regardless of intent of their and HELMS:~ Let "strategically important" THE WITNESS: please? Q (BY MS. COLEY) me object to as vague. Would you restate Do you think the images 81

l 2 4 5 7 8 9 I0 ll 12 13 15 16 !7 18 19 20 21 23 24 25 and themes in cigarette advertising appeal to the psychological A Are there to? needs of an adolescent? particular ones.you're referring Q Like the social need to be ~ccepted, the to feel comfortable in certain situations. A Okay. Those needs. Now, what about the need images you referring to? which images do you think needs specific.to cigarette would HELMS: Object for lack of You can answer it if you have an particular are Q Well, appeal to those advertising? MR. foundation. answer. THE MR. back? Q (BY WITNESS: And the question is? HELMS: Do you want her.to read it MS. COLEY) No. From the advertisements that were. produced to me there were some Marlboro advertisements in there. What themes and images run through those Marlboro advertisements? Can you describe those t.o me? A Of the documents I produced, the Marlboro themes were-- Q Just the Marlboro themes generally, but 82

4 5 6 7 8 9 i0 II 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 think we can all pretty much agree it's the same across the board as far as Marlboro is concerned. Do you have an objection to that? MR. HELMS: I have an objection to asking an objection to facts. I just ask the witness. Let's assume that the lawyers whether we have mean, I think you should Q (BY MS. COLEY) Marlboro theme is pretty.much consistent all of its advertising? A And that theme is? Q The western theme. A Okay. Q What kind of image does that project, your opinion? A In my opinion that.'s outdoor, western Americana. Those types of themes are projected that image. Marlboro the needs throughout Are there any themes and images in the campaign which you think would appeal to of an adolescent? MR. HELMS: 0bject to the use of the in by phrase "needs of an adolescent," it'S vague. Q (BY MS. COLEY) As we discussed previously, those type of needs. MR. HELMS: Same objection. 83

1 2 3 4 5 6 7 8 9 i0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q (BY MS. COLEY) Psychological n~eds like the need to belong, the need to conform, the need to feel comfortable in social situations, things like that, the need for independence. A No, not in my opinion. Do you think that cigarette advertising can imply that smoking can close the gap between a person's actual self-image and their ideal self-image? MR. HELMS: Can you read that back? (Pending question read.) Q (BY MS. COLEY) In other words, if a person looks at a cigarette advertisement and sees their ideal self-image in that advertisement, that they want to be like the person in the advertisement, do you think that smoking in that advertisement could imply that if I Person wants to be like that they should smoke? A For an individual that may be the effect. That may be the perception they take away from that ad. Q Do you think that cigarette advertising and promotion is ubiquitous in society? A Can you define what~ you mean by " "ubiquitous"? 84

1 2 3 4 5 6 7 8 9 I0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Highly prevalent. A I believe that it is far less prevalent than advertising for many other product categories. Q Do you think that adver£ising can affect a. person's perception about the use of a product? In other words, that they might think that more people. are using the product than actually are because there's so much advertising for the product? A That is a possible effect, yes. " Q Do you think that could apply to the cigarette industry? A Some individuals may react that way, yes. Q Do you think that smokers make a fully informed decision to smoke? A I'm sorry. "Fully informed," can you clarify that for me? . Q Do they know everything about the health effects, the addictiveness, the content of the cigarette? Do you think that there are any smokers who make a fully informed decision to smoke on all those aspects? A Yes. the Q Have you read the pending FDA regulations? A I've seen-- I'm. not sure that I've read complete, official statement, but I have read 85

1 2 3 4 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 parts of what the FDA is proposing. I may have read everything, but I'm not ~ure. Do you have an opinion on whether the FDA regulations would be effective in their goal of reducing smoking among adolescents? .A parts of A In their entirety or in terms them? In their entirety. of different And you mean ~he regulations to advertising, restrictions Q Yes. A In my opinion, no. Q What about the other regulations which affect consumption? Like the ID requirement, do you an effect on adolescent smoking think that will have initiation? A I don't point. Q Do you effectiveness of with respect on advertising? have an opinion on that at this have an opinion on the the Surgeon General's warnings regarding cigarettes? A No, I don't have an opinion on that. Do you have an opinion on whether banning cigarette advertising all together is effective in reducing the smoking rate generally?

1 2 3 4 5 6 7 8 9 i0 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A Yes . And what is that opinion? My opinio~ is no. .~ Do you have an oplnion on whether banning advertising all together has an effect on reducing does not affect. smoking initiation rates? A Yes. Q And what is that opinion? A And my opinion is that it smoking initiation rates. Q If banning cigarette together has ~o effect smoking initiation advertising all on smoking rates general-ly dr then why is the industry so opposed to it, if you have an opinion on that? A Because, as I've said earlier today, that advertising is one of the tools competitors can use to attract consumers to their brand. And in the absence of that they would have no way to communicate Q What kind advertising send to A I can't have to look at a analyze with their consumers. of information does cigarette ~he consumer about a brand? answer that question. I would particular example and then Are there some cigarette advertisements 87

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 that basically don't send any information other than an image with the name of the brand and the required FTC stuff? A Yes. And there are other cigarette advertisements that send information onthe tar' and nicotine content a~d that it might be lower than other cigarettes? A Yes. Do you have an opinion on what might be effective in preventing adolescents from taking up smoking? A No. Do you have an opinion on the effectiveness of counteradvertising used to prevent adolescents from taking up-smoking? A No. Q Are you familiar with ~ny of the advertising that's been done in Massachusetts, counteradvertising in Massachusetts? A I have not seen the from Massachusetts, no. Q. Do you smoke? .A No. Q the counteradvertising" Have you ever smoked? 88

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A Yes. Q How old were you when you A Fourteen. Q What brand did you smoke? A ! don't remember. How long did you smoke? A I smoked for 25 years, 26 Q So when did you quit? A When I ~as 40. Q How did you quit? A I quiU. I decided one day started smoking? years. I would quit and I quit. Q Of the cigarette advertisements that you have reviewed, do you think that they show smoking as attractive? A Can you define "attractive" for me, what you mean by that term? That it's a fun thing to do. A Fun is not one of the images I took from any of the ads I reviewed. Q How about that it's enjoyable? MR. HELMS: I'm sorry, are you talking about portraying smoking or the brand? (BY MS. COLEY) Smoking. A Can you repeat the last question or read .89

1 2 3 4 5 6 7 8 9 i0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it back for me? Do you think that the c~garette advertisements you have reviewed portray smoking as enjoyable? A Do you mean enjoyable for the individual or as part of a social setting? Just generally enjoyable. A The brand advertising I reviewed, I think some of those images I would categorize~ as enjoyable, yes. Have you seen any cigarette advertisements that portray smoking as displeasurable in that you wake up with a hacking cough in the morning? A I have not seen an ad like that, no. Promotion is different from advertising; is that right? A Yes. Q But they are used together? A They are often used together. In the recent history Of cigarette- companies, are you familiar with the fact that they've started spending more on. promotion versus, say, print advertising? A Yes. • Q What, in your opinion, if you have one, is 9O

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the general purpose behind using promotions to promote a brand? A The literature in advertising lists several purposes of promotions versus advertising. And what would those several purposes of promotions be? A One is to encourage users of competitive brands to switch brands. Another is to attract attention of users of the product category to the " advertiser's brand, and a third would be to encourage current users of the brand to remain users of that brand. Do you know what percentage of smokers switch brands over their smoking lifetime? A I have never seen a statistic that identifies that. Q Do you think that an adolescent who experiments with cigarettes is more likely to pay attention to cigarette advertising than an adolescent who does not experiment? I don't have an opinion on that. MS. COLEY: I"m done. MR. HELMS: Can you give me just a minute? (Short recess.) MR. HELMS: I don't have any questions, A 91

1 2 3 4 5 6 7 8 9 10 Ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 but I do want to make a point of clarification on the documents ~that he has reviewed. We did send him the Exhibits to the Krugman and Gqldberg depositions and I think that's why, if we didn'~ produce, for example, the '94 Surgeon General's Report, .I think it's because that was something that your experts had relied on. His expert statement says he's going to review what they're relying on. So I just wanted to clarify-that and let you know we did send him those Exhibits. MS. COLEY: And.you don't need to produce. fact it is the '94 Surgeon General's Report. Just the that you are going to use it and have seen enough. was MR. (Whereupon, concluded at 11:55 HELMS: That's all I have. the taking of the deposition --oo0oo-- 92

1 2 3 4 5 6 7 8 9 10 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 STATE OF : ss. COUNTY OF ~- . ) I HEREBY CERTIFY that I have 9ead the foregoing testimony consis.ting of 92 pages, numbered from 1 to 94, inclusive, and the same is a true and correct transcription of said hestimony with the exception of the corrections I have listed below in ink, giving my reasons therefor. 1 Page Reason Line Correction 2 Page Reason 3 Page Reason Line Correction Line Correction 4 Page Reason 5 Page Line Correction "Li{e Correction Reason 6 Page Reason Line Correction 7 Page Reason Line Correction 8 Page Reason Line Correction 9 Page Reason Line Correction I0. Page Line Reason Correction ii. Page Line Reason Correction 19 RICHARD J. SEMENIK SUBSCRIBED AND SWORN to at this .day of ............... , My Commission Residing at N~TARY PUBLIC expires: 93

1 2 3 4 5 6 7 8 9 10 ii 12 13 14 15 16 17 19 2O 21 22 23 24 25 STATE OF UTAH COUNTY OF SALT ~ET IEICA T K ) LAKE ) THIS IS TO CERTIFY that the .deposition of RICHARD J. SEMENXK, the witness in the foregoing deposition named, was taken before me, LANETTE• SHINDURLING, a Certified Shorthand Reporter and Notary Public in and for the State of Utah, residing at Salt Lake City, Utah. That the said witness was by me, before examination duly sworn to testify the truth, the whole truth and nothing but the truth in said cause. That the testimony of said witness was reported by me in Stenotype and thereafter caused by me to be transcribed into.typewriting, and that a full, true and correct transcription of said testimony so taken and transcribed is set forth in the foregoing pages numbered from 1 to 94, inclusive, and said witness deposed and said as in the foregoing annexed deposition. I further certify that after the said deposition was transcribed, the original of same was delivered to MR. PURVIS, to be submitted to the witness for reading and signature before a Notary Public. I further certify that.I am not of kin or otherwise associated with any-of, the parties to said cause of action, and that I am not interested in the event thereof. WITNESS MY HAND and.official seal of Salt La3g~_C~y~ Utah, this 26th day of March, 1997. Utah License NO. 122 My Commission Expires: July 8, 1.999 94

TO: FROM: DATE: RE: CHARLES MIKHAIL, ESQ. W LSON 3230 Cumberland Road, #179 Ocean Springs, MS 39564 ABSTRACT OF DEPOSITION OF, iUCHARD J. SEMENIK MARCH 18, 1997 CONTACTS REGARDING THIS CASE: PP. He was first contacted 1o be an expert in this case in July, 1996. PP. 10-11 He has had communication with one other witness in this case, David Golf. Was 2 or 3 weeks ago, prior to GoWs deposition. He spoke with Gofflo see if he had available copies of articles f~om the Clarion Ledger. AREAS OF EXPERTISE: PP. 5-7 He has been an expert witness before. One was a Godfather's Pizza case; one a Black & Decker ease; one a class action known as the Castano ease, on behalf of the defendants; one a class action case known as Engle, on behalfoftbe defendants; another was the Clark case, on behalf of the defendants; one the Kemey case. He has given a deposition before. In the Godfather's Pizza case was qualified as an expert in consumer decision- making, specifically with regard to trademark infringement, as an expert for the plaintiff In the Black & Decker ease also qualified as an expert in that category; expert for the plaintiff PP. 14-16 Does consider himself an expert in marketing, advertising, and mass communications, and marketing communications which focuses more on the firm's individual communications. Consumer decision-making falls under the general area of consumer behavior, and he considers himself an expert in consumer behavior. He's qualified as an expert in consumer behavior in the areas of advertising, marketing and consumer behavior, and mass communications. Does not consider himself an expert in psychology, sociology or epidemiology. He has had substantial training in statistics, but would not offer himself as an expert,

Deposition of Richard Semenik Page 2 PUBLICATIONS: PP. 16-18 His training m his Ph.D. program allowed him to conduct studies and read journal studies. In his publications he has done work specific to adolescents m terms of marketing, advertising and communications. One was the arts marketing research s~-earn under Journal Publications on his resume. Another was "The Experiential Nature of Consurnption and the Shaping of a 'New Aesthetic'," with Gary Bamossy, a doctoral student. The nature of the study was to identify how adolescents came to view artistic offerings in the marketplace like theater, dance, opera and symphony. Another was the article "An Anthropelogical Perspective on Consumer Research Issues." Was written with an anthropologist, Dennis Heskel. The concept of that study was that marketers can learn much about consumer behavior by studying people the way anthropologists do in terms of their household domestic consumption and production. It included the whole family with a significant emphasis on children as part of the consumption decision-making process that households necessarily have to go through. Was a conceptual study - did not ask people questions, didn't generate data. DOCUMENTS DEPONENT IS RELYING ON: Exhibit I: Notice of Depositi0n: PP. 8-12 The large box of documents he produced to counsel are all the documents he reviewed and on which he intends to rely. There are no documents he prepared for his testimony in this ease. Did prepare one study for this litigation which will be discussed later; the study results were just prepared yesterday morning and sent to him. He has produced all correspondence with defense counsel. There are no documents reflecting communications with other witnesses in this ease. He has not reviewed any of defendants' internal company documents. He has read the depositions of plaintiff's witnesses Mart'm Goldberg and Dean Krugman. Was asked by defense counsel to review them to make himself aware of what they intended to testify about. PP. 41-46 He intends to rely on the Gallup poll results. Another is the Scholastic .Magazine poll published in 1960. The numerous scientific studies/journal articles he is relying on cover a broad range oftopiqs. These documents could relate to any of his opinions as found in the expert statement. He is relying on pans of the 1989 Surgeon General's report. Produced the book, Mississippi, by Keatmg, as he was interested in learning more about MS

Deposition of Richard Semenik Page 3 and it's people. Checked out several books on MS from the Univ. of Utah library. It is one of the sources for his opinion that the principles of consumer decision-making do no operate diffcrcnfly on consumers in MS. Doesn't know where the article, "Antecedents of Smoking Onset," by Timothy Moore, was publishad, but it was published. Moore is a researchar, and a professor, but doesn't know where, who publishes articles in marketing journals; has written on a wide range of topics, and deponent found this article well written. The working paper by John Calfec, "Cigarette Advertising Health Information and Regulation Before 1970," is publicly available. Calfec is another researcher in marketing and advertising, publishes articles on those subjects. Doesn't know anything about the author, Gideon Doron, of the 1979 book "The Smoking Paradox." "Advertising, the Uneasy Persuasion," is a book, a popular treatise available in paperback. In many cases the authors do identify their funding source. Doesn't know if the journals require identification of the funding source; doesn't believe you're obllgated to do this. Identification of funding source could possibly bc an influence on thc individual reader. EDUCATION/EXPERIENCE: Exhibit 2: Reswnc: PP. 12-14 His resume doesn't show the courses he taught fall quarter, 1996, the courses hc's finishing up now m their winter quarter. He went directly from high school to undergraduate school. He's been with the Univ. of Utah since he received his Ph.D. Hc is a tenured professor; received his tenure in 1981. He also does consulting work, mostly to do with advertising strategy and communications programs for different industries. He's consulted with American Investment Bank, a subsidiary of l_~ucadia National Corp. in NY; IBM; AT&T; the Jerry Sciner Group, a large automobile dealership; Zion I_~cr Technology; a resort group which manages condominiums for absentee owners in Park City, Deer Valley, Hawaii and Sun 'qalley; and several small firms. He does do consulting work with advertising agencies. Typically the agency work relates to discussing with the ad agency and the client how the creative execution can reflect the client's desired marketing strategies. The ad agencies include Dunn Commumcations, Salt Lake City; Harris & Love, Salt Lake City; and Snedeker Group. PP. lg-19 Agreed his professional service includes being a reviewer of various publications. An editorial board is a small group, 6-12 people, who arc asked to advise the editor on editorial policy and philosophical direction

Deposition of Richard Semenik Page 4 of the journal. Is very much like a board of directors in a corporation. As a reviewer, the editor sends you articles and asks you to give your opinion about the quality and worthiness of the article. An ad hoc reviewer is asked to do reviews by the editor; is an individual who is not formally on the editorial review board. He is on the editorial review board of the Journal of Health Care Marketing, The articles he's been asked to review deal with marketing technology as it's applied to the health care industry. Exhibit 3: Expert Statement: PP. 19-20 He prepared the statement in conjunction with defense attorneys. Started working on it in 11 or 12/96. CONSUMER DECISION-MAKING AND SMQKING: PP. 20-23 He plans to testify about universally accepted models of consutner decision-making. There ate many models. There is no one generally accepted model that would best apply to decisions about smoking; they would all apply equally to that decision. A basic model of consumer decision-making presents all the different influences on an individual consumer with respect to any decision about choosing a brand or service. It also involves whether or not to purchase a product, in general. It's an extremely complex process, and literally dozens of factors affect the individual consumer. Some of the factors that influence consumer decision-making and smoking initiation are peers, family, friends, school, religion, situational factors, lifestyle, etc. Advertising doesn't have an influence on whether to start smoking, or to stay a smoker. Advertising simply helps the consumer decide which brand to smoke. It is his opinion that people in MS are just like everyone else in the nation when it comes to consumer decision-making. PP. 78-80 Consumer behavior is a very complex process and the study of it has come up with various ways to try to understand that complexity. One concept used is to try to examine consumers decision-making based on the premise of high involvement versus low involvement in the decision-making process. When asked where cigarettes fit in to this concept, said it depends on the individual. It's his opinion that cigarette advertising is not for the purpose of attracting new users to the product. It's possible that cigarette advertising and promotion can be used to change attitudes of nonusers. He is familiar with the 1994 Surgeon General's Report, "Tobacco Use Among Young People," has read most of it. Should have been produced~ is relying on it.

Deposition of Richard Semenik Page 5 PP. 80-81 It is his understanding that people don't become smokers just like that, that it's kind of a process they go through. He's never articulated a definition for what a smoker is. In many instances a person forms attitudes and beliefs about a product before they purchase it. When asked ffthat's tree in the case of cigarettes, said it depends on the individual. Advertising can contribute m a person's attitudes and beliefs about a product. ADVERTIS[NG'S IMPACT ON SMOKI~/G: Generally: PP. 23-25 Advertising plays a role in a marketer's strategy to influence consumers to choose the marketer's brand, rather than a competitor's brand. Marketing also generally includes things like customer service and customer relations. Marketing is the discipline of business; decisions with respect to product development, pricing, promotion and distribution. Getting a customer to feel involved with or a part of a business is an individual strategic decision rather than a fundamental principle of marketing; same with a company establishing itself in the community as a "do-gooder'. PP. 25-27 He can compare the amount of money spent by the Tobacco Industa3, (TI) on adve~sing and promotion with other companies, if asked to do that. He has all the data on how much the T1 spent as a whole on advertising and promotion in 1995; the 1996 data is not yet available. Doesn't know the 1995 data offthc top of his head. His opinion is that cigareRc brand advertising is only directed at the current smoker. A teen 18 years or older is a legal smoker, and would be targeted by the TI. Those under 18 would be an illegal targcl andisnce. It's possible that advertising could be sccn by the minor smoker, because the company does not control everyone who sees it's advertising. Agrees that a smoker, versus a non-smoker, would probably pay more attention to a cigarette brand advertisement because they would have more interest in the product. Ira non-smoker has decided to bca smoker, would probably pay more attention to the ads than a non-smoker who doesn't want to smoke. Agreed that regardless of the intent of the tobacco company of their target audience, the tccn smoker would probably pay attention to the cigarette brand advertising. PP. 27-30 His expert statement says the level of expenditure for cigarette advertising reflects the fact that it operates in a cluttered and highly competitive advertising environment. A cluttered ad environment exists where there arc many competing messages in the same product category for different

Deposition of Richard Semenik Page 6 brands. The cigarette is higldy competitive because it's a mature product category with multiple competitors. The product category has been in the market for many years. Is not necessarily truc that that means introduction of new brands is difficult. Regarding the term "growth market," there are levels of growth - negative growth, which means a declining market; and zero growth to very high accelerating growth. The cigarette market would be at some level of growth. Any industry that has customers who stop using their product or die would have to replace those customers, or see new customers with new products. Is a common, typical markeKag strategy. But then said it's h/s opinion that the TI is not seeking new customers. PP. 30-31 There are many product categories that market to an established product user. Examples are the milk and chewing gum industries. There are people who choose to drink milk and are milk drinkers, and there are people who choose not to drink it. The milk indusWy has flied to get non- milk drinkers to drink milk; so that would be a little bit different from the cigarette market. Hasn't seen strategies for chewing gum marketers that would suggest they are trying to get non-chewing gum people to chew. PP. 31-33 Expert statement says he will testify about themes and appeals in advertising, including cigarette ads, through the years. The copies of advertisements he produced, first showing their logo, and then with the logo recognition removed, some for cigarettes and some for other products, is to demonstrate that themes and images in tobacco ads in some cases are almost identical to images in other product ads. It's very important to the advertiser the placement of the advertisement in certain media_ If asked, he can look at ads and discuss the target audience of the ads. In determining the target audience it can be important to know the location of the ad, for example, what magazine it's in~ Marketers try to reach their target market through multiple media; is called achieving repetitior~ Repetition continues to give an advertiser a share of mind in a cluttered environment. Using different magazines would accomplish that. Share of mind means that the brand is prominent in the target market member's mind, hopefully more prominent than the competitor's brand. PP. 34-35 It's his opinion there is no evidence that color and imagery in advertising for cigarettes influence nonsmokers to begin smoking. He is familiar with the FDA regulations which are pending. He's aware that as a result of those regs certain magazines with a certain percentage of young readers won't be able to carry color and imagery advertising in those magazines.

Deposition of Richard Seminik Page 7 Because color and imagery do not influence smoking initiation, that's why the industry is opposed to that reg. PP. 47-58 He's looked at many cigarette advertising campaigns that have been used over the years for various brands, some no longer on the market, some still prominent and successful. Isn't sure ifhe's looked atthe Camel campaign of 1913, would have to see it to remember. Has seen a sample from the "Reach for a Lucky Instead of a Sweet" campaign. He has not done studies looking at when a campaign was introduced, and then smoking rates thercafl.er. Exhibit 5: "Smoking and Health, a Report of the Surgeon General" 1979: PP. 59-61 This particular part of the report talks about mass media and smoking behavior; is why it's relevant to his opinion. He thinks econometric studies are one way to analyze broad market effects. He is familiar with the "IV ad ban in 1971. Is aware that statistics showed that after the ad ban smoking rates increased. One explanation for this would be that advertising is not related to smoking initiation behavior. It is a possibility that counter advertising under the fairness doctrine was effective in keeping the smoking rate down and when that was removed its effect was diminished. Exhibit 8: various charts on milk and beef consumption: PP. 66-69 He put these together to represem situations where organizations used advertising campaigns to try to increase consumption in a product category. Milk consumption is an individual choice based on a variety of influences, including lifestyle, taste, preference, family influence. Per capita milk consumption could be influenced by the makeup of the population. Didn't look at the variables of distribution of the population and how it could have affected milk population in the years 1990-1996, but would be fairly stable during that time. The chart shows that in 1990 per capita milk consumption was 218.2 pounds per capita and in 1996 has fallen in a fairly steady trend to 204.7. The 1996 data is projected data; that's the way it was presented in the U.S. Bureau of Census, 1995 edition. Any advertising effort would have some lag time. Things that influence the lag time include the quality of the effort itself; the receptivity of the target market to the message; and the relevance of the message to the target market. Some ad campaigns can have an almost immediate effect on consumption, others end up having no effect.

Deposition of Richard Semenik Page 8 Exlxibit 12: "The Economics o.f Advertising" by Richard Sebanalensee, 1972: PP. 73-75 Is widely recognized as one of the most important discussions of the economies of advertising. It addresses both conceptually and with empirical evidence the issue of advertising and its effect on aggregate demand. His opinion is that advertising does not affect aggregate demar~d in the industry. Aggregate demand is the total demand in an industry, for example, how many cars are demanded: you take all the cars sold and add up the numbers - gives you an aggregate demand. Advertising doesn't increase or decrease aggregate demand; it's one of the tools marketers have to attract and retain customers for their brands. Promotion also doesn't affect aggregate demand. The total market for, say cars, will be competed for by various companies with brands and one of the tools they use to attract their customers is advertising. If you segregate ear consumers into people planning to buy mini vans versus people planning to buy luxury cars, advertising and promotion does not increase the slioe of the pie. PP. 89-91 Doesn't believe "fun" is one of the images he has taken from cigarette ads he's reviewed. Some of the images would characterize it as enjoyable. He has never seen cigarette ads portraying smoking as displeasurable. Promotion and advertising are different, but are often used together. He's familiar with the fact that cigarette companies have started spending more on promotion versus advertising. One purpose is to encourage users of competitive brands to switch. Another is to attract attention of users to their brand. Another is to encourage current users of their brand to remain users of that brand. Has never seen a statistic on what percentage of smokers switch brands over their smoking lifetime. Adolescent Smoking/impac~ of Advertising: Exhibit 7: survey conducted by Louis Harris & Assoc.: PP. 63~5 Was funded by the Commonwealth Fund Women's Health Survey. Is about adolescents use of contraceptive methods. He wanted to understand the behavior of individuals in the context of sexual activity in a highly risky environment. Is relevant because one of the allegations is that if people know about a risk they will change their behavior. Is a national sample. There were 2,525 women interviewed, including an oversample of 405 Hispanic and 439 black women - oversample is used where there are some populations more difficult to reach by telephone; the survey

Deposition of Richard Semenik Page 9 organization is instructed to oversample so that a representative proportion era certain population is achieved. His opinion is that he wants empirical evidence about people's awareness and then he can look at people's behavior relative to their awareness. When asked if be thinks whether a behavior is addictive has an effect on how people use their awareness of the riskiness oftbe activity, said he's not an expert in addiction so can only look at behavior. Exhibit 9: Charts created by Deponent on popular teen product brands: PP. 69-70 He tried to find teen products that had the greatest total sales. None of these products have spent any money on outdoor media. Will use these charts to address the issue of the effect of outdoor media advertising on youth smoking behavior. His opinion is that outdoor advertising does not influence underage smoking initiation behavior. Outdoor media ads for a brand could possibly affect that individual's brand choice, either by reinforcing their choice or getting them to consider another brand. Cigarette ads do not have any effect on reinforcing a smoker's choice to smoke; it's brand specific. Exhibit 10: "Tobacco Use in MS" from CDC information~ 1992-1993: PP. 70-72 Wanted to understand the most current information on smoking behavior in MS. He's not sure ifbe's heard of the Youth Risk Behavior Survey on by the MS Dept. of Ed. Believes the current population in MS is @4 1/2 million. Exhibit 1 I: "PersonaliW and Behavior Correlates of Cigarette Smoking: One-year Follow-up", from the journal, Psychological Reports, 1976: PP. 72-73 Is one of many that studies the issue of cigarette smoking behavior among adolescents, in this case g85 students in high school and one year later in col|ego. Discusses various factors students indicated about their smoking and other behaviors. Exhibit 13: section of the book "Zusammcnfassung" by Reinholt Bergler: PP. 75-77 Bergler is a German researcher who studies a varieiy of adolescent risk taking behaviors, including smoking. Doesn't recall what year this book was published. Will be used to support his opinion that advertising is not a cause of adolescent smoking initiation, or of any smoking initiation behavior.

f° oo Deposition of Richard Semenik Page 10 PP. 81-85 The Marlboro western theme is an outdoor, western, Americana theme projected by that image. In his opinion there are not themes and images in the Marlboro campaign which would appeal to the needs of adolescents, needs like the need to belong, the need to conform, the n~ed to feel comfortable in social situations, etc. An individual may look at a cigarette ad and see their ideal self-image in that ad, that they want to be like the person in the ad, that if they want to be like that they should smoke; may have that effect. Believes cigarette advertising is far less prevalent in society than ads for many other products. A possible effect could be that a person might think more people are using a product because there's so much advertising of the product. It could apply to the cigarette industry. ItISTORY OF COMMUNICATING THE IIAZARDS OF SMOKING: PP. 35-37 The basic model of communications that has been widely used over many years consists of source, message, channel, receiver and feedback. It's possible that if asked he will testify about other models of communication. His expert statement says he will apply the communication model to historic messages about smoking communicated by various sources to consumers in general, and to MS consumers. The newspaper and magazine articles he produced are one of the sources for this testimony. He plans to testify that the message that smoking could be dangerous to health, fatal and habit forming was effectively communicated to consumers. He knows this because the message was widely disseminated in a variety of readily available publications and through other sources the general public would have ready access to. "Effective" means that there was a high level of awareness of the relationship between tobacco use and health risks, etc. Effective doesn't mean you got the smoker to quit smoking. PP. 37-38 The charmel of commumcation is any me, ms through which an individual received that information, like newspaper, TV, radio and others. The source can have an effect on how the message is received. One variable is the credibility of the source. Others are reputation of the source, authority of the source, and stature in a person's life. It's important to also consider the time period in which the message is sent, like the 1950's vs. the 1980's. A 1950's message from a corporation might or might not be more well received than a message from a corporation in the 1980's; depends on the corporation and the situation. He doesn't have any k~owiedg¢ or an opinion about society's opinion of corporations in the 1950's; or about their opinion of the President of the U.S. in the 1950's versus the 1990's.

Deposition of Richard Semenik Page 11 P. 39 His expert statement says that other industry statements were a small part of the total information environment about smoking. These statements did include statements about the health effects of smok'mg. There were comments in the 1950's and 1960's from the industry that more research needed to be done on whether smoking contributed or caused lung cancer. He has looked at industry statements that were in public information documents, like newspapers, over the last 40 or 50 years. PP. 39-41 The copies of excerpts from elementary, junior high and high school textbooks he produced were part of the MS Report. This report is an assessment of the MS school system, curriculum guidelines. Is relying on that report because information adolescents receive in school is part of their total information environment. One way to measure how much influence the school environment has on the child in school venus an external source like a movie or TV is to assess all the sources of information as a package and judge them relative to one another;, look at them as a total picture. The way to look at a consumer and see which has more influence is to take the individual consumer and ask them. Polling data does provide information about the relative influence of sources of information, like the Gallup poll. P. 85 Believes smokers know everything about the health effects, the addietiveness, and the contents of cigarettes; that they make a f-ally informed decision to smoke. HIS RECENT SURVEY 1N MS: Exhibit 4: The survey: PP. 4%52 It represents summary statistics from research conducted over the last week in MS; started last Thursday. The purpose is to identify various attitudes and information from 302 people in MS. These people were selected using a standard marketing rcscareh technique - to identify phone prefixes in MS and do random digit dialing to contact households. Market Research Institute conducted this research. They are located in Overland, KS. The first 6 pages are the questionnaire. He designed those questions. Most of them are standard survey research procedure. Question 6A is a replication of a question used by the Gallup survey organization: what influenced you to start smoking. In his opinion there is never a case where a person answers this by saying - advertising. All counties in MS were used, except Jackson County. Was specifically excluded because didn't want the judge or plaintiff's counsel to get a call about the survey. Other

Deposition of Richard Semenik Page 12 than that, the counties were randomly selected. He was not paid for doing this outside of his expert fee. He did include the time spent in writing the questionnaire and gathering the information in his expert fees. Defendants financed it. The survey itself cost $4,500, paid to the Market Research Institute. There were 3 respondents in Newton County. PP. 53-57 The responses were not cued; the interviewer asked the question and waited for a respons~ without cues. They would call and say "Hello, this is so and so from the Market Research Institute. We are conducting a study about important issues facing Americans. May I please speak with the youngest male, 18 years or older, who is now at home?" If there was no male at home, then would ask for the female in the household. Asked for youngest male 18 or over in an attempt to replicate the methodology used by C-allup. He's still studying the survey. One opinion he's formed is that th/s survey reflects all the literature he's reviewed with respect to influences on smoking initiation behavior; the 3 top categories are close male friend, close female friend and other friends who smoked. EFFECTIVENESS OF ANTI-SMOIONG MESSA~;ES: PP. 85-88 He has read parts of what the FDA is proposing. Doesn't believe the regs would be effective in reducing smoking among adolescents. Doesn't have an opinion at this point on whether the ID requirement would have an effect on adolescent smoking initiation. Doesn't have an opinion on the effectiveness of the Surgeon General's warnings about cigarettes. Doesn't believe banning cigarette advertising all together would be effective in reducing the rate of smoking, or smoking initiation rams. When asked - if the ban would have no effect, why is the TI so opposed to the ban: said because advertising is one of the tools competitors can use to attract customers to their brand; in the absence of that they would have no way to communicate with their consumers. Agreed there are some cigarette ads that don't send any information other than an image with the name of the brand and the required FTC stuff, that there are other cigarette ads that send information on the tar and nicotine content being lower than other cigarettes. Doesn't have an opinion on what might be effective in preventing adolescents from taking up smoking; or on the effectiveness of counteradvertising to prevent them from taking up smoking. He's not familiar with any of the counterads done in MA~

Deposition of Richard Semenik Page 13 ..HIS PERSONAL EXPERIENCE WITH SMOKING: PP, 88-89 He doesn't smoke, but did. Started when he was 14. Doesn't remember the brand he started with. Smoked 25 or 26 years. Quit when he was 40; just one day decided to quit, and quit. POINT l SEE AS SCORED BY OUR COUNSEL: 1. Deponem said Mississippians are just like everyone else in the nation when it comes to consumer decision-making. P. 23. Deponent agreed that regardless of the intent of the tobacco company as to its larger audience, a teenage smoker would probably pay attention to cigarette bnmd ads. P. 27. Admitted any indusmy that has customers who stop using their product or die would have to replace those customers, or seek new customers with new products. It's a common markeqing strategy. PP. 29-30. 4. Admitted there were comments in the 1950's and 1960's from the indusa'y that more research needed to be done on whether smoking is linked to lung cancer. P. 39. 5. Admitted it's possible cigarette advertising and promotion can be used to change attitudes of nonusers. PP. 78-79. 6. Admitted a person could look at a cigarette ad and see their ideal self image in the ad, and think that if they want to be like that person they should smoke. P. 84.