Tobacco Documents Online

IN THE CIRCUIT COURT, FIFTEENTH JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA STATE OF FLORIDA, et al,, Plaintiffs, -v- AMERICAN TOBACCO et al., COMPANY, Defendants. -O- : Case No.. CL 95 1466AH Video Deposition of: RZCHARD J. SEMENIK oO- Taken Place: Date: By: Reporter: Counsel for Plaintiffs Airport Hilton Hotel 5151 Wiley Post Way Salt Lake City, Utah May 19, 1997 9:14 a.m. Ariel Mumma, CSR/RPR -0- VIDEOTAPE A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 For the For the APPEARANCES Plaintiff: Mr. Ralph L. Gonzalez YERIK, KNOPIK & MUDANO i01 East Kennedy Blvd., Tampa, Florida 33601 (801) 222-8222 Ms. Jennifer A. Coley SCRUGGS, MILLETTE, LAWSON, BOZEMAN & DENT, P.A. Post Office Drawer 1425 734 Delmas Avenue Pascagoula, Mississippi (601) 762-6068 (601) 762-1207 (fax) Suite 2160 Defendant: Mr. Allen R. Purvis SHOOK, HARDY & BACON One Kansas City Place 1200 Main Street Kansas City, Missouri (816) 474-6550 Also Present: 64105 Ms. Debra Chrobak, Videographer -o0o- RICHARD J. SEMENIK Examination by Mr. Gonzalez -oOo- 39568-1425 WILLIAM ROBERTS, JR., & ASSOCIATES

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 3 EXHIBITS Description Expert Statement (2 pages) Color photograph of billboard (I page) "A Frank Statement to Cigarette Smokers" (1 page) -o0o- A. WILLIAM ROBERTS, JR., & ASSOCIATES 3

LAWYER'S NOTES Paue LAne A. WILLIAM ROBERTS, JR. & ASSOCIATES

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 May 19, 1995; 9:14 a.m. PROCEEDINGS videotape May 19th, 1997. This is the deposition of State of Florida, VIDEOGRAPHER: We are now on the record. The time is 9:14. The date is the beginning of Tape Number 1 in Richard Semenik in the matter of et al. versus American Tobacco Company, et al. This deposition is being videotaped at 5151 Wiley Post Way; Salt Lake City, Utah. Videographer is Debra Chrobak. This deposition is being videotaped also by Legal Video Services located at 1431 Center Street; Oakland, California. Counsel, please MR. GONZALEZ: Dr. Semenik. My name think at this point we be sworn. proceed. Good morning, is Ralph Gonzalez, and I would ask that the witness A. WILLIAM ROBERTS,. JR., & ASSOCIATES

1 2 3 4 5 6 7 8 9 i0 II 12 13 14 15 16 17 18 19 20 21 22 23 25 RICHARD J. SEMENIK, called as a witness, having been duly sworn, was examined and testified as follows: BY MR. GONZALEZ: Q. Dr. Semenik, for the record, would you please state your full name, sir. A. Yes, my name is Richard J. Semenik. Q. And you are a professor at? A. I'm a professor in the school -- David Eccles School of Business at the University of Utah in the marketing department. Q. And again for the record I'm Ralph Gonzalez representing the state of Florida in matter. confusing "I don't again. this Should I ask a question and it is or long-wlnded, please feel free to say understand you, Mr. Gonzalez," and do it With that in mind let's go ahead, and what I'd like to do is I'd like to have your expert statement marked as Exhibit Number 1 for this deposition, please. A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 5 6 7 8 9 10 Ii 12 13 14 15 16 17 18 19 20 21 22 23 25 {Exhibit 1 was marked for identiflcation.} Q. BY MR. GONZALEZ: If you would just take an opportunity to review that statement. Have you seen that before, sir? A. Yes, I have. Q. Okay. Did you draft that statement? A. I drafted this in conjunction with the attorneys in this case. Q. When you say in conjunction with the attorneys, do you mean that they prepared a draft for you to revise and edit or that you drafted it and they revised it and edited it? A. They drafted it, we discussed the points I made and the scope of my testimony, and then I revised it. Q. Okay. I notice that there are several different categories of opinions that are included in here. Were there any categories of opinions that you were asked to comment on that were later dropped from this draft? A. No. Q. Okay. All right. In the second paragraph you refer to marketer-controlled information. Can you tell me what you mean by. marketer-controlled information. A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Marketer-controlled information includes any of the marketing tools that corporations use to provide consumers with information about their brands. Q. And for purposes of your analysis in this case, who did you define the consumers to be? A. Consumers would be anyone in the market who has chosen to use tobacco products, specifically cigarettes. Q. Okay. Did any of your work on this include other consumers of information that might come out from the tobacco industry; in other words, government or medical doctors or researchers or anything like that? Did you look at any of the advertisements or anything you reviewed with that angle in mind? A. Not that I recall, no. It was consumers. Q. When you speak of marketer-controlled information, advertising comes to mind. Are there other aspects of -- that would fit under that that would be generally understandable, other than advertising? A. Yes. Q. What would that be? A. Personal selling, sales promotion, the A. WILLIAM ROBERTS, JR., & ASSOCIATES

8 1 2 4 5 6 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 25 public information arms of corporation that provide news releases for the media. In this day and age the Internet has become a source of information. So various tools of that sort. Q. Okay. As far as the documents that you reviewed in this case, what documents or what information did you gather with respect to personal selling? A. Well, with respect to this case, I gathered no information regarding personal selling. Q. How about sales promotion, as you defined it. A. True sales promotion materials did not appear in any of the materials that I gathered for this case. Q. Okay. What about public information arm as you described; news releases I believe was one of those. Did you review anything in that category? A. The newspaper stories from various Florida newspapers included news releases with comments attributable to tobacco company personnel. Q. But you've not collected a -- a -- a group of press releases or actually issued the entire release; is that correct? A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. That is correct. Q. Okay. And as far as the Interne~ is concerned, have you gone onto the Internet to see what's out there in terms of what one might consider to be marketer-controlled information? A. Not with information, no. Q. Is it fair A. Excuse me. moment. MR. a problem. VIDEOGRAPHER: GONZALEZ: VIDEOGRAPHER: MR. GONZALEZ: respect to marketer-controlled to say that -- The technician would like a One moment, please. Take your time. It's not Sorry about this. It's all right. We haven°t gotten into it yet. (Pause) (There was a discussion held off the record.) VIDEOGRAPHER: Going off the videotape record. The time is 9:20. (There was a short break taken.) VIDBOGRAPHER: We're back on the videotape record. The time is 9:24. MR. GONZALEZ: We had a slight delay there for some video difficultfes that were being fixed by the adjuster. Hopefully we're all rolling A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 10 here. If any at point there's another problem, please do not hesitate to stop us. Q. Dr. Semenik, I think we are talking about marketer-controlled information, and in the second paragraph of your expert statement you refer to the fact that consumer decision making is extremely complex, and that there are so many factors -- I'm paraphrasing -- that -- that that overrides, I guess, marketer-controlled information; is that correct? A. That's not totally correct.' The consumer decislon-making process is extremely complex and involves a large number of factors. Marketer-controlled information is one of those factors. Q. Okay. I guess what I'm trying to do here is I'm trying to isolate what you've written here, and what other factors would act upon the declsion-making process of the consumers that you're referring to, other than marketer-controlled information? A. In a any product or factor such as culture, broad consumer declsion-maklng process for service, for an individual consumer family, friends, .school, lifestyle, social influences, and potentially A. WILLIAM ROBERTS,. JR., & ASSOCIATES

1 2 3 5 6 8 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 dozens of others, can affect the decision that each consumer makes. Q. And so what you're lumping those into a category of the complex decision-making process of the consumers; is that fair to say? A. Yes. Q. And that category, for term -- and we'll Just call that declsion-making process -- the decision-making process cannot marketer-controlled information; you're suggesting? A. No. Not at all. consumers use information, lack of a better the consumer consumer be influenced by is that what The consumer -- such as advertising, such as coupons, as part of the way they go about the process of choosing brands. Q. When you say "are more powerful and have more influence than marketer-controlled information," how do you define "more powerful"? A. In the study of consumer behavior, when we examine consumers' choices regarding products to use, we find that broad in£1uences, such as culture powerful than an influencing that or friends or lifestyle, are more advertiser marketer's efforts in choice. A. WILLIAM ROBERTS, JR., & ASSOCIATES

12 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 Q. Okay. How are you degree of power with respect information? A. Could able to quantify that to marketer-controlled you repeat the question for me, please. I want Q. Yes. degree of power, marketer-controlled about? to make sure I understand. How are you able to quantify the if that's possible, over the information that we've been talking A. The degree of power over marketer-controlled information relative to the broad social influences -- am I understanding your question correctly? Q. That's a good way to phrase it. A. Marketers are fully aware, as they study markets, that consumers need goods and services to lead their lives, and it is the marketer's challenge to try to use advertising, product design, package design, and other tools that we call marketing, to try to fit in lives and make their brands marketer's brand -- relevant consumer llves his or her life needs they have. Q. Okay. I guess what I'm trying to do is: with consumer -- that is the to the way the and the kind of A. WILLIAM ROBERTS, JR., & ASSOCIATES

13 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 You've made the comment in your statement that the decision-making process is more powerful -- the factors that influence the decision-making process is more powerful information. What much more powerful than marketer-controlled I'm trying to figure out is it, or do we know? is how A. We would only know that for any individual product situation, if we had very clear information. So we couldn't say, as a general rule, it is five percent, i0 percent. That would be impossible. Q. Okay. How do you know that it's more powerful? A. Well, I could give you an example. Q. Okay. A. I could be given the unfortunate challenge today of being told that it's my job to sell slide rules to engineers. The technological environment would be so overwhelmingly against me, that no amount of promotion, no amount of advertising, no amount of coupons would ~e more powerful than. computers and technological devices that engineers now have available relative to a slide rule. Q. I understand your example and that's a A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 good example if someone has no background in a particular area, which might be one of the assumptions in your hypothetical, or if you were trying to sell a product that was hopelessly the outdated. But I would -- how would efficiency or -- or the degree you characte.rize of effectiveness with respect to the tobacco advertising in general. Is it quality stuff? MR. PURVIS: Object to the form. THE WITNESS: Could you rephrase please. MR. GONZALEZ: All right. If you were to compare different that, computers, or would you say vis-a-vis other people industries, let's say tobacco with major league sports, how effective their advertising people are in the industry. A. And by clarlfy that for ways we would make Judgments about advertising. the word "effective," could you me because there are different Q. Okay. And in terms of being able to accomplish what they set out to do with their advertising. A. Well, in that -- in that -- I'm sorry, A. WILLIAM ROBERTS, JR., & ASSOCIATES

15 1 2 3 4 5 6 7 6 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 but I wouldn't know what any individual ad was meant to accomplish, so in terms of effectiveness I wouldn't be able to judge that particular kind of effectiveness until I knew what their goals were. Q. Okay. Let's go into your background just a little bit. Apparently you've been a -- you earned your Ph.D. in 1976 in marketing; is that correct? A. Yes. Q. Okay. And your MBA from Michigan State University. Was there a particular emphasis there at all? A. NOt in the MBA program, no. Q. Okay. And then you had a business background from the University of Michigan in 1970, is that correct? A. Yes. Q. And you've been a professor for marketing -- the marketing department here at the for the last five years? I started my career here in 1976. I've been a full professor for the last years. Q. Okay. As a full professor, what classes do you teach? University of Utah A. Actually five kinds of A. WILLIAM ROBERTS, JR. , & ASSOCIATES

1 2 3 4 5 6 7 8 9 i0 11 12 13 14 15 16 17 18 19 21 22 23 24 25 A. I teach marketing and advertising classes. Q. And do any of those classes have specific names? A. Yes. The introduction to marketing class is Marketing 301; the introduction to advertising class, which is now Marketing 450; I have taught consumer behavior, which is -- our numbers have changed because of a recent curriculum review -~ it used to be 385; Marketing Research, 345; Marketing Management, 670; and a course called Executive Protocol, Marketing 500. Those would in the last five or six years. Q. What is executive protocol? A. Executive protocol is a course where students take it as a credit/no-credit course, I try to teach them about aspects that will be important to their career, such as hosting a business dinner, being a guest at a business dinner, traveling internationally, howto use different forms of communication appropriately: fax versus a cell phone versus a regular corded phone; stationery. a way of teaching courses. Things that we just don't in our regular structured so be and have A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 5 6 7 8 10 II 12 13 14 15 16 17 18 20 21 22 23 25 17 Q. Your marketing management course, what is the focus of that course? A. That's an advanced course for MBA students, which presumes they have a fairly high level knowledge of basic marketing, and typically will study much more advanced often using cases as a teaching method. we strategies, Q. When you say strategies and case studies, can you give me an example of maybe two of your consumer for two years cases -- with either a favorite cases that you use in class. A. Since I haven't taught that I can tell you generally the kinds of Q. Okay. A. -- if you wouldn't mind. A case would typically deal products company -- maybe Nike or Proctor & Gamble -- or an industrial products company like Digital Equipment; and the case would set a scenario facing the company that's a problem for the company -- maybe a product that's competltively inferior, may be opening up another international market; the case would provide students with information about the company's financial situation, its personnel, its competitors, the technological environment, the A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 cultural environment -- the kinds of things we spoke of a moment ago -- and present students with a problem such as: Which international market would you enter first, given what you know about technology in these markets, the infrastructure of the market. So we try to give students a very broad challenge and try to help them understand the complex process of designing marketing strategies. Q. Now advertising would be a subset within the -- the -- I guess the -- the term marketing; is that correct? A. That is correct. Q. Okay. And marketing could include marketing channels which might be the distribution and delivery system of a product, correct? A. Yes. Q. So you would have distribution, you have advertising is another area that falls within marketing. What I guess I want you to do is: Have you ever taught any courses, other than the introduction to advertising, that focus specifically on advertising? A. And I think I can answer that this way: A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 In every course -- the advertising course deals the advertising introductory marketing course sequence which deals with The marketing management course from beginning to end with process. The three-chapter advertising. have a section on advertising in terms of how use advertising to strategically support the overall marketing plan. The consumer behavior would also about advertising and how consumers use as part of the information available as has a would we talk advertising they make decisions about brands in the marketplace. Q. Your introductory advertising course, what do you do there, in that course, with your students? A. That course is a course that is attended by marketing students -- excuse me, business school typically marketing students, students journalism school, students from consumer There are five or six departments that as a recommended course for their program students, from the studies. have that study. effects We begin with understanding the economic of advertising, the social effects of A. WILLIAM ROBERTS, JR., & ASSOCIATES

2O 3 4 6 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 23 25 advertising, advertising as a process generally. Then we talk about the creative challenge in the advertising, how advertising agencies work, how they develop messages, what research they used to develop those messages. Then we go on to the third part of the course, which is how advertising agencies and their clients place ads in media and choose between television, radio, newspaper, magazines, the new media, Internets, videotapes. ~And then we have a section on ethical and social advertising process. aspects of the Q. Okay. In I think the second area that you described in the introduction to advertising, which was getting your message across, is that -- is that correct -- did I understand that correctly? A. Yes, that's a fair statement, yes. Q. In that aspect, do you compare different industries, do you look at specific cases with respect to different industries, to use by example, to teach your students? A. Not in this course specifically. What I like to do in this course when we're in the creative area is I like to use the Cllo Awards, which you may know is the industry's A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 21 way of honoring what they believe to be the most creative efforts of any one year -- and in fact those awards were just completed last week, so the new 1997 version of the Clio Awards is now out -- and the students will watch the tape and will examine why this particular ad was used for this particular company. I also have tapes where the company has been kind enough to provide me with a statement -- for example, Kodak -- of their strategic intention for this particular ad, why it was designed the way it was designed, why the appeal that was used was used. Q. Using this sort of secondary as a framework -- and I guess what you've said is you've done that in other classes as well, maybe not to the same degree or maybe to differing degrees -- but using as a framework, that second area, have you ever spoken or discussed about the tobacco advertising in your classes? A. No, I didn't -- unless a student -- students may have asked questions about tobacco advertising but I do not have it as a regular category of discussion in my course. Q. Is it fair to say that prior to this A. WILLIAM ROBERTS, JR., & ASSOCIATES

22 1 2 4 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 case, that you just did not have much of a -- you did not spend much academic time with respect to tobacco advertising? A. With respect -- until this case? Q. Yes. A. No. ~ have examined tobacco advertising over the last five years. Q. Okay. And how did you start, or what started you in that -- down that path, if anything? A. What started me. down that path was that I was asked five years ago to examine materials relative to a tobacco industry case, to offer my observations. Q. Which case was that? A. At that time, that was the Haines case. Q. I take it over the last five years you've probably looked at a lot of different advertising ads and so forth that have been put out by the tobacco companies, though; is that correct? A. Yes, I have. Q. How would you measure the quality of that -- of those advertising ads with respect to other advertisements put out by other industries? A. I would find them faiZly typical. Q. Average? A. WILLIAM ROBERTS," JR., & ASSOCIATES

23 1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Average. Q. Okay. Is there any advertising that you can think of that is -- strike that. When we talk about the decision-making process being more powerful and has the ability to have more influence than marketer-controlled information, I guess that marketer-controlled information, with respect to the tobacco companies, you consider to be average in the industry; is that correct? MR. PURVIS: Object to the form of the question. ahead and please. Q. MR. GONZALEZ: Dr. Semenik, you can answer if you can. THE WITNESS: I need clarification, BY MR. GONZALEZ: Okay. The go marketer-controlled information we referred to -- I think we've been talking about advertising -- the marketer-controlled information, which is a broader category that advertising; is that correct -- A. That is correct. Q. Okay. -- would you consider the tobacco companies use of marketer-controlled information to be average within that which you've reviewed in the A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 10 II 12 13 14 15 16 17 19 20 21 22 23 25 different industries that you've considered, in either your classes or your professional career? A. Yes. Q. Okay. have marketer-controlled information that is above average, that has more Are there other industries that that has -- influenc4? A. Well, there are two parts to that question -- Q. Okay. A. -- and if I could answer the first part. The first part I'll answer is: Are there some industries where the advertising is above average, and my Q. Okay. A. Yes. I think shoe industry has answer to that would be yes. Can you give us some examples. that the advertising -- mostly because of in the sport Nike's tremendously creative efforts over the last two years, has raised the standard in that industry where competitors such as Reebok, Converse, Adidas, British Knights -- the major competitors to Nike -- have felt the need to put more effort into the creative aspects, put more money behind the overall advertising campaigns, and they are typically, in many years, extremely creative and much more A. WILLIAM ROBERTS, JR., & AssoCIATES

25 1 2 3 4 5 6 7 10 II 12 14 15 16 18 21 22 23 25 creative than other categories. I also believe that any service industry -- hotels, airlines, the -- I mentioned Kodak film a few moments ago -- are challenged to communicate about an intangible to consumers, and which will the market. that challenge has forced those industries to seek out extraordinary advertising efforts, help certain brands gain attention in Q. I guess I'm thinking back to when I was child, and -- and I'm comparing my children today who spend a significant amount of money on tennis shoes -- I hate to even call them tennis shoes because some of them are more expensive than the shoes I wear. Is it fair to say that the -- that the in the shoe industry has -- the youth market than it had advertising has -- gone further into existed .has a maybe 10 years ago? I couldn't answer that question because I haven't studied that market, so I apologize. I have used their advertising in my courses as examples of the creativi.ty compared to other ads, but I haven't studied that market in terms of percentage market share, average age of the purchaser, shifts in market share, etc. A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Do you have children, Dr. Semenik? A. Yes, I do. Q. What are their ages, if you don't mind my asking. A. I don't mind your asking. I have to a 10-year-old daughter. Q. Okay. Does she purchase Nike shoes or L.A. Gear or anything like that? A. My daughter likes Velvet shoes, and it's hard to get her out of anything except dress-up clothes, which is not the easier way to go I'm afraid, but -- so I've not witnessed her sport shoe behavior yet. Q. Have you seen other children involved sport shoes or -- or have you noticed anything, just as a member of the general publlc, with respect to adolescents and their desire for shoes? A. Not in particular, no. Q. Okay. Have you read anything in any newspapers about children who come from disadvantaged families or anything like that -- in A. (Witness nods head.) Q. -- who have very expensive shoes? A. Yes, I have. I have read those newspaper reports. A. WILLIAM ROBERTS, JR., & ASSOCIATES

27 1 2 3 4 5 6 7 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 Q. Okay. Is that something that was occurring 10 or 15 years ago, to your knowledge? A. Not to my knowledge. Q. Okay. Based on what you've read, okay, about children from disadvantaged backgrounds and their expensive shoes, and with respect to athletic shoes, is it fair to say that that is something that has opened up in the last 10 years or so with respect to them? A. My understanding is that the -- the market has expanded in the last i0 years to a -- a larger part of the shoe category. Q. And that would include children; is that correct? A. Absolutely. Many of the shoes are designed for that target market.. Q. Okay. Is it fair to say that the advertising for children with respect to shoes is greater than it was I0 years ago? A. I -- I would -- I don't know the answer to that question. Q. Okay. Going back to advertising as a subset of marketing, what are the general goals of advertising, as you understandthem to be? A. That's one of the things we teach in the A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 course very specifically. As we begin the discussion of the role of advertising, the objectives for advertising are -- are very specifically stated -- and this is not just my opinion~ this would be the way the average advertising textbook would present it to students -- the way it's discussed in business meetings when advertisers and advertising agencies set out to design the goals for their advertising. There are many. They come under the category of communications goals, because advertising is the communications tool. of the marketer-controlled variables, there's the product, the price, the distribution, as you pointed out, and the advertising, personal selling, and these are called communications tools. For advertising we set some very specific communications goals depending on the situation a company faces -- and this is called a situation analysis -- and one of the primary and common goals is to create awareness in the mind of consumers of the company's brand~ A secondary level under that would be to create awareness about a particular feature of a company's brand. So if Subaru introduces what it likes to A. WILLIAM ROBERTS,. JR., & ASSOCIATES

2~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 call the first sport utility station wagon, then it will set as a goal that consumers' awareness of the brand Subaru is, first, brand name awareness; and secondly, that oh, yeah, that's the company that has the sport utility station wagon. And -- so communication, awareness, and differentiation -- I'm going to use some technical terms here, and I don't mean to use them as a way to confuse but as a way to explain exactly the way we do it -- differentiating the brand from all the other brands in the category. So Ford's sport utility vehicle, the Explorer, is differentiated from Chevrolet's sport utility vehicle, the Yukon, which is differentiated from Mitsubishi's sport utility vehicle, the Montero, and part of that is brand names, part of that is features. And then once differentiation is accomplished, then positioning is attempted, and once positioning is attempted, then we start to decide what brand for all. So that brand awareness, differentiation, would constitute image would be most appropriate set of factors: awareness -- brand feature awareness, positioning, and finally image, 85 or 90 percent of the goals, one A. WILLIAM ROBERTS, JR., & ASSOCIATES

3O 1 2 3 4 5 6 7 8 9 10 Ii 12 13 14 15 17 18 19 20 21 22 23 24 25 being emphasized more than the other depending on the situation the company faces. Q. I was getting a little bit confused because brand, differentiation, I thought you communications goal. Is covers all those -- A. Yes -- I followed you had on awareness of the positioning, image. started talking about a that an umbrella that Q. -- or is that separate? A. -- I'm sorry -- I'm sorry, but that would have been an umbrella that covers all of the categories I mentioned. Q. Okay. In order to get the awareness of a brand, all right, is there a subset of factors that is used in order to make a brand aware -- I've got a Snickers bar right here. What -- what does a company do to make -- how do I want to say this? the public What is the way they make aware of their brand? A. This is the -- this of advertising comes in. The is where the genius marketing people can it's turned over the the word genius -~ set all these goals but when creative people -- and I use this is where the creative people make their mark A. WILLIAM ROBERTS, JR., & ASSOCIATES

31 I 4 6 7 8 9 I0 11 12 14 15 16 17 18 19 20 21 22 ~ 25 with advertising and can come up with -- after studying all the factors in the environment that a consumer deals with as part of the his or her lifestyle, comes up with a way of presenting a brand in such a fashion that it gains attention in an ad0 holds attention, and ultimately creates a favorable attitude in the target consumer market. And it is that process of gaining attention, holding attention, creating favorable attitude, that can attract a consumer to one brand versus another. Q. Okay. Is clarity of purpose, is that something that would be important for a differentiation or -- or -- or getting the consumer to be aware of a specific product? A. Could you define for me what you mean by clarity of purpose, please. Q. I guess being clear is. in what your product A. Yes. Q. How would you accomplish being clear about what your product is? A. In any -- I would have to answer that saying that, again, we would go back to the consumer decision-making model environment a by A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 32 consumer is in, and determine, with respect to this environment, which factors -- competition, technology, lifestyle -- would be influencing the individual, and try to make the brand relevant within that broad set of influences. Q. All right. Now, with respect to tobacco advertising, is it fair to say that -- that tobacco advertising is competing with other industries for disposable income? A. Could you rephrase that because I'm not sure I understand exactly. Q. Let me give you an example. If a consumer has a hundred extra dollars to spend a month, okay, and he spends his money or her money on the basic necessities -- shelter, food, and let's say education -- got a hundred dollars left over afterwards, that's disposable income, all right, they could go out to the movies, they could go out to eat at restaurants, they could buy sports shoes -- Nike shoes or what-not -- does -- does tobacco compete in that area for disposable income? A. If -- if a consumer is Q. Yes. A. a smoker -- -- then it does compete with that income, A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 just as a Snickers bar would or a trip to the golf course or any other choice ~or a product other than the necessities. So the answer.is yes. Q. Okay. Is there a difference between advertising, as we've been talking about it -- communications with awareness, differentiation, positioning, image -- is there a difference between advertising and the public relations campaign or the public relations face that a company may put on its product or its industry? A. Yes. Q. How would you differentiate the two? A. In our discipline, in marketing and advertising, we identify advertising, personal selling, sales promotion, direct marketing, and public relations as separate categories of what has now, in the last five years, been referred to as integrated marketing communications. Q. Okay. I think you referred to selllng before, and you talked information arm of the company. relatlons, you're referring to information arm of the company; thinking about? A. personal about the public When I say public that public is that what you're That is a fair statement, yes. A. WILLIAM ROBERTS, JR., & ASSOCIATES

34 1 2 3 5 6 7 8 I0 II 12 13 14 15 16 17 18 19 20 21 22 23 25 not company correct, A. Q. Okay. Okay. Now I think earlier you said that you had looked at the public relations arm of the in preparing for your testimony, is that of tobacco companies? I would like to clarify. I did not look at publlc relations What I did see was in information sometimes about the tobacco industry, about an individual. There companies from Reuters News other AP news services that industry; so in that sense I that way. Q. But other than what you read reported in a newspaper, you didn't do documents from the company. newspaper reports, general from the federal government story about sometimes a news would be stories Service or any of the are about the tobacco encountered them in look at the public relations arms of tobacco companies; is that correct? A. That is correct. Q. Okay. Prior to tobacco, were Industry-wlde advertising practices evaluated in a similar manner, that with your -- your evaluation of.the companies? that was anything to the various there any that you you have spent tobacco A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 6 7 8 9 I0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 35 A. Yes. Q. And what would that be? A. In my role as a consultant, which I do privately outside my academic role, I've worked for various companies in various industries and have done similar assessments. Q. Okay. What other industries would those be? A. One would be the banking industry, another would be the wine industry, another would be the automobile industry. Those are the ones that come to mind at the moment. Those -- I've spent most of my career on one or more of those. I'm trying to think if there are any other significant ones. If I think of another one, I'll let you know. Q. I noticed you some areas with respect Are those other areas that amount of great detail? A. Those are areas had written or lectured on to China, and the arts. you've looked at in any I've looked at in great detail, but in each of those cases -- and you've correct, I spend significant portions of my career on those industries -- those did not include an examination of industry-wide advertising, so in A. WILLIAM ROBERTS, JR., & ASSOCIATES

36 1 2 3 4 5 6 7 8 9 10 ii 12 13 14 15 16 17 18 19 21 22 23 24 25 that sense I left those two out. Q. Okay. I wasn't trying to catch you or anything. A. No. I appreciate -- the distinction is it's clear. I spent several years on each of those topics but didn't -- did not examine industry-wide advertising in either case. Q. Okay. Is it fair to say, then, that you have not spent any time evaluating the advertising practices of an industry that involve a product that is an addictive substance? MR. PURVIS: Object to the form of the question. THE WITNESS: Can you restate the question and maybe I can answer it. MR. GONZALEZ: Could you read the question back and then I'll -- (The pending question was read back.) THE WITNESS: I can try to answer that. MR. GONZALEZ: Sure. A. I -- I -- I'm not an expert in addiction, so I wouldn't know from a medical standpoint, which -- whether cola is considered addictive or chocolate is considered addictive or -- I was reading in a magazine the other day that someone is A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 claiming that there are some people who are addicted to sex, and I haven't studied that either, so I -- I honestly have not -- f do not understand the process of addiction so -- Q. You talk about chocolate and Coke and I have them right in front of me. (Laughter) Now, I know that you did review a -- a -- a very large -- several boxes worth of -- of newspaper articles and advertisements and so forth in preparing for your testimony in this case, some of which are too large for me to bring with me, and in those articles there are references to addiction and nicotine and so forth; is that correct? A. That is correct. Q. So you are familiar with the fact that at least some people are making the allegation that cigarettes are addictive and nicotine is an addictive substance? A. Oh, absolutely. In this case, definitely. Q. Okay. When I was asking you about your evaluation of other industries similar to this case, you talked about banking and -- and -- and automobiles and wine, and I guess what i'm saying is: Did you ever read anything, in all that A. WILLIAM ROBERTS,. JR., & ASSOCIATES

8 9 10 Ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 3 4 5 6 7 literature that you did with those other industries, where people were talking about addictive substances? A. NO. Q. Okay. So then, is it fair to say that is the first industry that you've undertaken study of that has to do with addiction? MR. PURVIS: Object to the form question. industry that the of the THE WITNESS: Can you rephrase it or MR. GONZALEZ: Okay. I'll do that. Is it fair to say that this is the first that you've ever spent any time working product is alleged to be an addictive an addictive substance? A. I can answer time I have studied that. This is the first an industry, where, in reading the industry, the word applied to o- to products about the brands in addiction has been brands, yes. Q. Okay. DO you have any background in addiction? A. No, I do not. academic Q. Okay. Do you have any academic background or any journals that you've read or a A. WILLIAM ROBERTS, JR., & ASSOCIATES

39 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 anything that talks about advertising? A. No. Q. On July 17th of spelled Y-e-a-m-a-n, of the following: Quote, addiction and 1963, Mr. Addison Yeaman, Brown & Williamson, wrote "Moreover, nicotine is addictive," close quote. "We are then in the business of selling nicotine, an addictive drug, effective in the effect of the stress mechanisms," close quote. Is that anything that you've encountered in any of your research in this case, that the tobacco companies substance? MR. question. were selling an addictive PURVIS: Object to the form of the THE WITNESS: Can you rephrase it? Q. BY MR. GONZALEZ: Okay. Mr. Yeaman makes the statement, "We are then in the business of selling nicotine, an addictive drug." Okay. Have you read anything, in any of the you, where a product is materials that have been provided to tobacco company is saying that. their A. WILLIAM ROBERTS, JR., & ASSOCIATES

4O 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 nicotine, what Mr. Yeaman is saying here? A. The only time I've seen that kind of statement was that statements like that were included in the Florida complaint, which of course I have a copy of and which I read, so that's where I have encountered those kind of industry statements. I also would have encountered some of those as press releases in some of the papers that have been released and been examined in proceedings -- various proceedings in the industry. Q. In making the conclusion in Paragraph 2 of your expert statement, that the "consumer decision making generally is extremely complex and is influenced by countless numbers of factors that are more powerful and have more influence than marketer-controlled conclusion, any form or was being question. information," in making that did you take into account at all, in fashion, the fact that the product that sent out was an addictive substance? MR. PURVIS: Object to th~ form of the THE WITNESS: In -- I -- you need to clarify that for me, please. A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 41 MR. GONZALEZ: Okay. Q. As I understand it, you made the conclusion for this case that consumer decision making is more complex, is more powerful, and has more influence than marketer-controlled information; and what I'm asking is: In reaching that conclusion, did you in any way take into account the fact that the substance that was being sold in this case was an addictive drug? MR. PURVIS: Object to the form of the question. A. I took into account the fact that the product was tobacco, and that I understood that there were medical experts discussing that tobacco has nicotine, and there were medical experts alleging that tobacco was addictive. So in that sense, yes. That was incorporated in the consumer decislon-making model. Q. How did you incorporate the fact that you had read these facts into your model that you're referring to? A. In examining on consumers' decision continue smoking, whole category of a broad .range of literature to begin smoking, to to quit smoking, I looked at that consumer decision making with A. WILLIAM ROBERTS, JR., & ASSOCIATES

42 1 2 3 4 6 7 8 9 10 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 respect to cigarette brands, and I found that consumer decision making in this product category was typical of consumer decision making in other consumer product categories. Q. How were you able to make that comparison if you have no background in addictive substances? A. The only way I could make that -- the way I did that is that I didn't see any unusual behavior with respect to these consumer decisions. And in that sense, it did not signal to me that there was something I was missing. Q. Are you saying -- let me -- let me strike that. You didn't see any unusual behavior; is that what you're saying? A. Yes, I believe that would be a verbatim phrase from my statement. Q. Okay. You don't think that purchasing an addictive product is unusual compared to the other consumers who are purchasing products out in the marketplace? A. I have no evidence purchasing addictive. purchasing that consumers are cigarette brands first because they're My understanding is that they're cigarette brands because they choose to A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 4 5 6 7 8 9 10 Ii 12 15 16 17 18 19 2O 21 22 23 25 be smokers. Q. What's your personal opinion with to cigarettes and whether they're addictive respect or not? A. A layperson's opinion? Q. Your opinion, if you have one. A. Yeah. I was a smoker. I quit smoking. My wife quit smoking. I have friends who quit smoking. So from my personal experience, while I'm not an expert in addiction, I certainly know that myself and a variety of p~ople close to me have quit smoking, so that would be my layperson's regard to the issues surrounding to the were addictive? Personally, no. Okay. For other while you were a smoker, conclusion and feel that did people, okay, you, as a experience with addiction. Q. Did you ever come cigarettes A. Q. member of the general public, looking at other people out in the world, do you feel that cigarettes are addictive for certain people? A. I -- personally I've never made that judgment about someone else. Q. Okay. On May 1st of 1963, an individual writing to the British American Tobacco Company A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 ~.. 25 44 states that, quote, "The alkaloid," which is nicotine, "appears to be intimately connected with the phenomenon of tobacco habituation, tolerance, and/or addiction." That was in 1963. In your literature view for this case, did you find that addiction or nicotine or the relationship between the nicotine and addiction was being reported in the early 1960s? A. I recall in my review of materials for this case, as early as the 1930s, high school textbooks were teaching students about addictive -- they used the word -- typically use the word "addictive drugs" and discussed tobacco under that category. And these are textbooks from the Florida list of approved textbooks, so I did run into it in some of the literature, yes. Q. Who was making the conclusion in those books that tobacco was an addictive substance? A. Well, would be under Health and Hygiene, llke keeping discuss the in.typical textbook fashion, it a category titled something like and it would discuss things your fingernails clean, and then would -- the risks of alcohol use, and then A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 45 another category was typically drugs and and it would talk about heroin, and that include tobacco. Q. were any of the authors textbooks tobacco companies that you're A. Not that I'm aware of, no. i they were textbook writers with degrees and biology and the kind of expertise needed to write a textbook on health. Q. On October 24th of 1967 the addiction, would of those aware of? believe in health that would wrote in its minutes, "There is nicotine. habit attributable and a form of B.A.T. Group quote, a minimum level of Smoking is an addictive to the nicotine, nicotine affects the rate of absorption. If there is no inhaling there is no lung cancer or the literature to 1970, where or was stating respiratory disease." Now, did you ever see in view that you've encountered prior any tobacco company was admitting that their product was addictive? A. No. Q. Okay. How about during the a tobacco was be 1970S, where admitting that their product was A. WILLIAM ROBERTS, JR., & ASSOCIATES

46 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 addictive? A. I don't recall seeing literature like that, no. Q. were you ever aware, in any of the literature you read, that Brown & williamson was importing a tobacco leaf from South America called Y-I that was nearly double the concentration of nicotine found in any domestic leaf grown in the United States? A. No. Q. As a member of the general public, can you tell me what one of the major industries in North Carolina -- or could you tell me whether or not tobacco is one of the major industries of North Carolina? A. As a layman you're asking me? Q. Yes. Yes. A. I believe North Carolina is one of the primary tobacco growing states, yes. Q. There are a number of states in the United States whose primary -- one of their primary industries would be tobacco; is that correct? A. Yes. As a layman that's my understanding. Q. Okay. Now, the tobacco leaf is being A. WILLIAM ROBERTS, JR., & ASSOCIATES

47 1 2 3 4 5 6 7 8 9 10 ii 12 13 14 15 16 17 18 19 20 21 22 23 used to make the cigarettes; is that correct? A. I think that's the way they do it. I -- O. All right. A. I've never been to a factory but I know tobacco comes in leaves and then they do something with them and grind them up. Q. Have you ever read anything in the llterature why a cigarette company would import tobacco leaf from outside of the United States as opposed to using a domestic crop? A. No. Q. You're familiar with the federal ban on cigarette television advertising and the requirements that cigarettes have a warning label on them with respect to what the surgeon general believes; is that correct? A. Yes. Q. Okay. Prior to the tobacco industry, there any industry whose advertising practices you reviewed were regulated by the federal government? A. A variety of regulations apply to a variety of product categories. Of course the tobacco industry was the first industry where the regulation was as extensive as it has become. was that A. WILLIAM ROBERTS, JR., & ASSOCIATES

4~ 1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Is there any industry that you evaluated in the past, that has federal regulations with respect to its advertising as extensive, in your use of the word, as tobacco? A. No. Q. In your opinion, why is tobacco more heavily regulated than other industries, if you know? A. My -- my opinion on that, in terms of why it's more heavily regulated than other industries, is that the federal government believes that there is some need to control the dissemination of information about cigarettes. Q. With documents that your opinion that your advertising background you've reviewed in this the inclusion of the and the general's warning on unnecessary? A. No, that's Q. Is it your cigarette packages not my opinion. opinion that the on television cigarettes is A. Q. A. advertising with unnecessary? Yes. What's your basis case, is surgeon is federal ban My basis for that it respect to for that opinion? opinion is extensive A. WILLIAM ROBERTS, JR., & ASSOCIATES

49 1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 literature from countries where tobacco advertising has been banned, not just on television, but totally. Q. What is it about the ban on advertising -- the comprehensive ban on advertising that exists in other countries, what is it about that that allows you to conclude that the federal ban on television advertising is unnecessary? A. In those countries where cigarette advertising has been banned totally, some of those bans dating back several decades, there is in many cases a greater growth in tobacco use in those countries, and in other cases similar tobacco growth of tobacco use in those countries as in countries like the United States, where tobacco advertising is only restricted. Q. Do I understand you to be saying that the usage of tobacco has increased and that's why -- place. right Do I need to stop? MR. PURVIS: When you get toa stopping MR. GONZALEZ: Why don't we take a break now. MR. PURVIS: I didn't know. VIDEOGRAPHER: Going off the videotape A. WILLIAM ROBERTS, JR., & ASSOCIATES

5O 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 record. videotape beginning Q. left we smoking countries; A. 0. found The time is 10:22. (There was a short break taken.) VIDEOGRAPHER: We're back on the record. The time is 10:33. This is of Tape Number 2. BY MR. GONZALEZ: Dr. Semenik, when we were starting to talk about the increase despite the comprehensive bans in other is that correct? Yes. What countries did that to be the case? the in you look at where you A. Those countries would include Italy, the Netherlands -- there's a list of 16 countries -- I'm trying to remember -- Scandinavian countries are in there, Finland -- I'd need to review that to give you the accurate list but there is a list of 16 countries where the comparisons were made. review -- to why the countries? A. European countries? Were they essentially Yes. Okay. Okay. Did any of the literature that you reviewed give an explanation as rates of smoking went up in those The only discussion in that regard was A. WILLIAM ROBERTS, JR., & ASSOCIATES

51 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 with respect to peer influence. Q. And what did it say with respect to peer influence? A. It recounted the general literature on smoking initiation, which shows that peer influence is the most important influence on the choice to begin using cigarettes. Q. Okay. When we talk about peer influence, we're talking about -- who are we talking about, when we talk about peer influence? A. Peer influence is a general way to assess consumer -- is one of the factors that is used in peer assessing consumer decision making -- whether it's tobacco or tennis shoes or automobile choice -- and influence includes friends, family -- mother, brothers, uncles, extended that -- that we may identify father, sisters, family -- peers with. If I want hit -- if I want to aspire to be Tiger Woods and hit the ball as far as he does, then that would be an aspired peer. So peers is a broad and important category of consumer decision making. Q. Normally when I think of peers I think of my immediate friends or what-not, and we're talking A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 52 a much broader category which could include movie actors could include significant political figures, could include people that -- adults that for instance children would see in everyday life? A. That's correct. Your first statement was also correct. Peers as a first line of influence would be the peers we have personal contact with, and then in some product categories a second influence could be the peer groups that we aspire to -- peers we aspire to emulate. Q. Does any of your research or anything that you've seen, make any differentiation between the level of effectiveness of peer influences between the immediate group and this sort of aspired group that we're referring to? A. Yes. Across all situations the immediate personal contact group is more powerful than the aspired non-personal contact group. Q. Okay. Who falls into the immediate group? Would that include like your family doctor, your educators, for instance -- I'm talking about children. A. Those would be included in the personal contact group, yes. Q. Okay. Okay. Going back to the A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 9 Ii 12 13 14 15 16 17 18 19 20 21 22 23 25 on smoking in other countries, of studies or was this just one comprehensive ban was this a series study? A. There is a substantial study that was done -- well, let me -- let me back up. Over the years there have been several authors who have chosen to examine the tobacco industry in a broad economic way, and so studies have appeared regularly since the 1950s. It was in the mid-1980s when this study of the ban of tobacco advertise -- the ban of cigarette advertising appeared, the 16-country study; and sporadically, although not in any comprehensive way, information has been released about smoking rates in different countries. But never since the 1980s study, has one done a comprehensive 16-country assessment. Q. What's the name of that study? A. It's by Boddewyn, a professor at Bowdoin College in New York; and the exact title I would have to get for you but it's in my materials -- Q. Okay. A. -- so it's available there. Q. Now, we talked about the television advertising cigarette ban going into effect, A. WILLIAM ROBERTS, JR., & ASSOCIATES

54 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 correct; you're aware of that? A. Yes. Q. And are you of the understanding that the use of cigarette tobacco products went up after the ban went into effect, or do you have any knowledge? A. We're Q. No, States now. A. Oh, Q. Yeah. back to the 16-country -- I'm sorry, we're back in the United we're back in the United States. A. I'm sorry. Could you rephrase -- repeat the question for me. Q. Focusing back to the United States -- I'm sorry I didn't make any transition for you -- that was my fault. With respect to the television advertising ban in the United States, what is your knowledge with respect to the usage of cigarettes after the television advertising ban went into effect? A. There was a short-term increase before that usage rate stabilized back to an historical trend. Q. And what was the historical trend? A. Well, the trend line -- well, I don't A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 3 4 5 6 7 8 9 I0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 recall this precise number, but in terms of the rate of initiation that had been characteristic the United States, there was a short blip after television ban, but then it went back to the rate that had existed before that. Q. You're familiar with the doctrine, aren't you, with respect ban on advertising? A. Yes. Q. Do you believe that -- it's my understanding -- strike that. in the fairness to the cigarette It's my understanding that the fairness doctrine also prohibited advertisements that would be considered to be counter-advertisements against the uses of cigarettes; is that correct? MR. PURVIS: Object to the form of the That wouldn't be my understanding per I don't think it -- as you stated it. MR. GONZALEZ: Let me start over again. Q. What would be your understanding of what question. A. on the fairness doctrine was? A. Well, the fairness doctrine was an agreement that -- before the ban was imposed television advertising, that for every three A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 ? 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 56 television cigarette ads, there would be one counter-ad which would be a public-service type ad informing people about the health risks of the use of tobacco and cigarettes in particular. Q. And after the cigarette ban, what happened to that fairness doctrine? A. Well, with respect to the doctrine -- I don't know what happened to the doctrine, but with respect to the pragmatics of the marketplace, when tobacco advertising was removed from television, then consequently the -- the ads for public-health information were also removed. Q. Okay. Do you feel that consumers have been hurt in any way by the absence of information through television media, with respect to these public-health advertisements that were present? A. No. Q. What's the basis for that opinion? A. The basis for that opinion is the broad and comprehensive information from many sources about the.rlsks of tobacco use. Q. Is television, as an advertising medium, more effective than other sources of communication, to the public at large? A. It depends precisely on the situation an A. WILLIAM ROBERTS, JR., & ASSOCIATES

57 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 advertiser faces. Q. Okay. To reach the largest audience possible in the shortest period of time, what is the most effective communications medium to do that? A. Under those set of criteria, then, the most -- the medium with the greatest capability with respect to those two criteria, is television -- Q. Okay. A. -- and specifically network broadcast. Q. Is it fair to say that you reviewed a substantial amount of information on alleged health public domain? A. I think material with respect to the health hazards of smoking -- the hazards of smoking, going into the that's a fair statement, yes. Q. Okay. All right. What mediums are you familiar with are being used for the dissemination of that public health information? A. The media I have encountered include national newspapers, national magazines -- these are all consumer accessible -- national newspapers, national magazines, high school textbooks, brochures from medical people. A. WILLIAM ROBERTSI JR., & ASSOCIATES

1 2 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 In terms of personal contact, there are a variety of encounters consumers have with mother, father, sister, brother, doctor. So the media -- and excuse me if I didn't answer your question the way you meant to ask it, but in terms of media would be newspaper -- national newspapers, local newspapers, magazines, brochures, that sort of -- of dissemination. Q. In national newspapers and magazines, how -- in what manner is the public health message with respect to the alleged hazards Of smoking, how is it communicated through those mediums? A. Mr. Gonzalez, excuse me but there's one other. And with it turns out that health in -- in television news reports of releases of respect to health information, information does appear reports and radio news surgeon generals' findings or new scientific findings, so I would need to add television and radio to that group as Well. I'm sorry I didn't do that a moment ago. Q. Okay. A. Now if you could re-ask that last question because now I've forgot. MR. GONZALEZ: Do you want to read that A. WILLIAM ROBERTS, JR.,. & ASSOCIATES

59 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 back, because I think I did as well. (The record was read as follows: "Q In national newspapers and magazines, how -- in what manner is the public health message with respect smoking, through to the alleged hazards how is it communicated those mediums?") of THE WITNESS: Thank you. When I review newspaper reports, it -- the average or typical story will be that the federal government is -- for example, the Center for Disease Control -- has discovered another aspect of the use of tobacco that represents a hazard to health. Or there will be a report as to the number of Americans who now suffer from health-related -- or tobacco-related health problems. So it's government government source of the scientific findings, a university or a team of researchers, reporting new findings about the effects of the tobacco on health. Q. So is it fair to say that what you usually either the federal reporting statistics, the federal reporting scientific findings, or the A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 consider to be the typical 2 some sort of 3 about the ill effects 4 you've seen it? 5 A. I would say 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 way it's communicated is summary story or summary conclusion of tobacco? Is that the way that's a typical way in which the information is reported. Q. Would it be more effective to -- would it be a more effective way to communicate that summary conclusory information through the print media or through television, in order to reach the broadest market possible? A. To reach the broadest market possible, television would be better suited to that. Q. Okay. Is funding cancer research considered advertising at all? A. No, that would not come under the advertising category. Q. Okay. Is funding research on a relationship of smoking to any illness or disease advertising? A. No, that would also not be considered advertising. Q. Okay. Are there any industries that you have studied or evaluated that fund that kind of research that we've just talked about in those last A. WILLIAM ROBERTS, JR., & ASSOCIATES

61 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 two questions? A. Industries -- commercial industries, no, not that I'm aware of. Excuse me, unless we call the health care industry an industry, and then of course that would be very typical of the kind of funding they do, but not categorized as advertising -- Q. All right. I'm with you. A. -- if I might make that clear. Q. Does any opinion that you have been asked to provide in this case conclude that the tobacco industry has not engaged in the campaign of information operations? MR. PURVIS: Object to the form of the question. THE WITNESS: I'm sorry, I don't understand what you mean by information operations. Q. BY MR. GONZALEZ: Have you ever heard of the phraseology "information operations"? A. Not with specific meaning. I mean I could say that the advertising and promotion people in a corporation are involved in information operations, but that -- I don't think -- I think you have specific meaning in mind, so no, I don't -- I'm not familiar with it. A. WILLIAM ROBERTS, JR., & ASSOCIATES

62 1 2 4 5 6 7 8 9 10 Ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Okay. How about if I change the question a little bit, and maybe this is a word you can work it -- I don't know if it is or not. Does any opinion that you've been asked to provide in this case conclude that the tobacco industry has not engaged in a campaign of dlsinformation? A. I have not reviewed any documents that suggest to me that there has been a campaign of dislnformatlon. Q. Okay. I understand that you've not reviewed any documents, okay, that suggests there was a campaign of disinformation. What I'm asking you is whether or not in your opinion the tobacco industry's -- strike that. What I'm asking is whether or not you're prepared to offer an opinion that the tobacco industries did not engage in a campaign of disinformation -- of disinformation. A. Am A. An specifically to offer that opinion. Q. Okay. In any I prepared to offer -- an opinion -- opinion. That's not an opinion I set out to offer, so I'm not prepared of the industries that you A. WILLIAM ROBERTS, JR., & ASSOCIATES

~3 1 3 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 have academic career, you aware of any company on a purposeful campaign A. NO, I'm not aware set out to do that, no. Q. Do you have any training psychological operations? A. Could you clarify operations for me, please. previously evaluated or in any of your with respect to advertising, are or industry that carried of dislnformation? of an industry that's or background in psychological Q. Okay. This is not with respect to a product, okay, but psychological operations would be the effort to convey selected information to influence reasoning, influence favorable achieved. statement emotions, objectives, objective and ultimately, behavior to either or reinforce attitudes and behavior to the objectives that are sought to be With that as a goal of a psychological operations -- again not selling a product, okay, Just trying to change attitudes and so forth as just talked about -- do you have any background training in that area? A. Well, that is precisely the kind of that could have been taken from a tO we and A. WILLIAM ROBERTS, JR., & ASSOCIATES

64 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 consumer behavior book, as it turns out -- Q. Okay. A. -- so the attempt to understand those factors which influence consumers to choose a brand would fit precisely that statement. Now maybe that statement was written with respect to trying to get kids to be quiet in a classroom or something, but the attempt to influence behavior is very much what marketers do as they try to influence consumers to choose their brand over a competitor's[ So I would have training, given my -- the statement I just made, I would have very specific training from consumer behavior courses, courses I took in departments of psychology at the three universities we talked about, and my continuing study of how consumers make choices, I would have -- I would have worked hard to understand precisely the issues you raised in that statement. Q. Okay. Okay. Given that we .seem to be talking about consumer behavior but not necessarily directed towards a specific product, can you explain to me why a tobacco company would fund cancer research? A. A tobacco company might want to fund A. WILLIAM ROBERTS, JR., & ASSOCIATES

65 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 cancer research -- specifically with regard to of tobacco on cancer? Let's -- let's -- we'll narrow the effects 0. focus. A. Okay. the Q. Why would a tobacco company or a group of tobacco companies fund research on a relationship between smoking and illness and disease? A. I can't speak for why they did it, but if I'm asked to speculate, then I would say that if the tobacco companies were concerned about that relationship, then they relationship and how it would want to clarify the occurs much in the way that I believe the cellular phone industry is now considering funding medical research on the alleged relationship between cellular phone use and certain kinds of cancer. Q. Other than the tobacco industry, have you or reviewed the advertising industry that markets a product death of more than 400,000 people PURVIS: Object to the form of the a ever evaluated practices of an t~at causes the year? MR. question. A. Only in the sense that -- no. No, the A. WILLIAM ROBERTS, JR., & ASSOCIATES

66 1 answer is no. 2 In the automobile industry I studied, 3 certainly we all are aware of the tragedies that 4 occur with automobile use, but I don't set out to 5 study an industry where that's one of my focuses. 6 Q. BY MR. GONZALEZ: I made the comment 7 that -- or the allegation that the industry -- the 8 tobacco industry causes the death of the 400,000 9 people a year. As a member of the public, do you 10 have an opinion as to whether or not cigarettes or II tobacco causes premature deaths? 12 A. Just as an individual -- 13 Q. Yes. 14 A. -- because it's outside of my expertise. 15 Q. Yes. 16 A. My understanding from the medical reports 17 I read in newspapers and hear on television and 18 hear on the radio is that yes. 19 Q. Okay. So is it fair to say that other 20 than automobiles, tobacco is the only industry that 21 you've been asked to evaluate the advertising 22 practices of, that has a product that kills people? 23 MR. PURVIS: Object -- 24 Q. BY MR. GONZALEZ: -- is alleged to kill 25 people? A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 9 I0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. PURVIS: Withdraw the objection. A. Yes. Q. BY MR. GONZALEZ: Now. does the fact that tobacco, at least in your opinion as a member of the public, can cause death, how does that fit into the framework about consumer decision making versus marketer-controlled information, referring back to the second paragraph of your statement. A. Okay. The way that would be factored in is that as consumers become aware of the risks of using a product, that the choice is made and that information is incorporated in the choice process. Q. How is that -- how does that impact a choice decision; do you know? A. I'd have to look at any individual to know how it affected any individual's choice because some people would choose to use a product, understanding the risks, and some people would choose not to use the product because they understand the risks. Q. Do you have any understanding of why people generaliy use a product that. could kill them? A. Why any individual would? Q. No, the people generally. A. WILLIAM ROBERTS, JR., & ASSOCIATES

6~ 1 2 3 4 5 6 7 8 9 10 ii 12 13 14 15 16 17 18 19 20 21 22 23 25 A. Generally they accept that there are risks involved with riding in a car, getting on an airplane, crossing the street, and include that in their decisions about using products. Q. In your opinion as a member of the public, is the risk of death by using this product, tobacco, cigarettes, is the risk of death by using cigarettes higher than the risk of using any other commercial product -- consumer product, that you're aware of? A. So as a member of the public, my perception is that it's higher. Q. Okay. In addition to the fact that you believe as a member of the public that the risk is higher -- and normally when you do a cost-benefit analysis you look at the risk and you look at the benefit -- I guess you gave the airline example o- what would be the benefit to getting on to an airplane, as you understand it? A. The benefit of airplane travel is the speed with which you can arrive at a location relative to all other alternative forms of travel. Q. Okay. What benefits do people derive from smoking cigarettes, that you're aware of? A. From the research I conducted myself and A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 the literature I've read, they refer to the fact that it's pleasurable, that. they join their group of friends in doing the activity, that it's sociable, that they like the taste. Those are -- those are words that -- that ~ o- that have been associated with the choice. Q. I notice that in some of the literaturs that you provided -- or that was provided to us that you had reviewed, there were articles dating as early as the '70s, I believe, that talked about safer cigarettes. What is your understanding of a safer cigarette, if you have one? A. From that literature, the idea of a cigarette was promoted., both by public health officials and in research by the cigarette companies, to try to produce a cigarette that addressed the health concerns that had been raised from the early 1950s through that time period: the concerns about cancer, the concerns about emphysema. So was a way to the concerns Q. there safer there was an attempt .to see if there redesign the cigarette that addressed of health officials. From the articles that were provided, was a company that actually started to market A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 7O a safer cigarette during it was subsequently withdrawn after a of time. Are you familiar with that A. Generally, yes. Q. Okay. the early 1970s and then short period literature? Do you know why that product was PURVIS: Object to the form of the withdrawn? MR. question. A. No. Typically a product is withdrawn because it isn't successful. Consumers don't find it as satisfying as other alternatives. Q. BY MR. GONZALEZ: Given your academic background and so forth, is that usually the primary reason why a product will be withdrawn? A. Yes. Q. Okay. In making the statement that you did in the second paragraph, that consumer decision making is more complex and is -- that process is more powerful than marketer-controlled information, any advertising; the statement is that that are information, headers. that applies across the board to is that correct? A. If I might clarify, there are countless numbers of factors more powerful than marketer-controlled and that does apply across all product A. WILLIAM ROBERTS,. JR., & ASSOCIATES

71 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 Q. Okay. Do you believe that there's a significant distinction in the tobacco industry because of the fact that, at least in your opinion, the product can cause death? Is that a significant distinction that would set it apart products? A. For any product where the from other risk of death is significant, then set apart from other Q. Earlier we that product category would be product categories, yes. were talking about the tobacco industry's and illness two, and one of why they would be the relationship; funding research with respect to smoking and disease, relationship between the the responses that you gave as to doing that would be to clarify. is that correct? training, is can -- or is of as to why to clarify a A. No. Q. On May a Mr. Kornegay -- I believe that's what I said, yes. With all your academic background and there any other difference that you there any other factor you can think they would be doing that, other than relationship between the two? Tobacco Institute ist of 1972, a Mr. Panzer wrote to they're both individuals in the -- and Mr. Panzer says, quote, A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 21 22 23 24 25 "For nearly 20 years this industry has employed a single strategy to de£end itself on three major fronts, litigation, politics, and public opinion." He goes on to say that .Our .policy has always been, quote, "'a holding strategy' consisting of creating doubt about the health charge without actually denying it, advocating the public's right to smoke without actually urging them to take up the practice. Encouraging objective scientific research is the only way to resolve the question of the health hazard." Now I'd like you -- and I gave you the benefit of all three. I'd like you to focus on the first point, and that is, quote, "creating doubt about the health charge without actua1ly denying it." How do you reconcile an industry strategy with -- of creating doubt with what your academic training tells you that one would want to clarify the relationship between smoking and health. A. WILLIAM ROBERTS, JR., & ASSOCIATES

73 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 question. A. MR. PURVIS: Object to the form of the Well, with respect to that document, I would need to know who those two individuals are and whether either of them can speak authoritatively for the entire industry, and -- because I don't know that that is a true statement or not. Q. BY MR. GONZALEZ: Okay. For the purposes of a hypothetical, let's assume that they are people who could speak for the industry, and let's assume that it's a true statement. MR. PURVIS: Object to the form of the question. Q. BY MR. GONZALEZ: How would you reconcile what your academic training tells you the goal of clarifying a relationship would be versus what apparently has been their strategy over 20 years, and that is creating doubt about the health charge? MR. PURVIS: Object to the form of the question. A. The Way I reconcile that -is that if we look at the way consumers make decisions, as discussed in my second paragraph, that a broad number of factors, as I mentioned before earlier in A. WILLIAM ROBERTS, JR., & ASSOCIATES

74 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 our discussion here this morning -- family, friends, culture, social class, lifestyle, school, religion -- literally dozens of influences -- are more powerful than marketer-controlled information. And the statement you have just readto me, and in your hypothetical you are positioning that as marketer-controlled information. And while it will be considered by consumers in making decisions, I believe that that information, or whatever strategies that individual is talking about, would be put into the mix of influences as I've talked about them as they are discussed in our discipline of marketing. Q. That doesn't answer the question for me, and -- and again, maybe I need to rephrase it. But what I'm trying to find out is: How does creating doubt about the health charge equal clarifying a relationship, or does it? A. Well, you're asking me to -- to rectify a statement you read from a document -- and I don't know where it came from -- with a -- I believe if we go back to the record, you asked me to speculate about why the industry would fund cancer research. So -- I mean in this hypothetical I'm A. WILLIAM ROBERTS, JR., & ASSOCIATES

75 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 making -- I'm making comparisons between -- one is speculation on my part because I don't know what their motivations were, and trying to reconcile that with a statement from a document from people I don't know, so it's hard for me to make that kind of -- of reconciliation. Q. Well, the reason I went in that direction was because earlier we were talking about psychological operations, and then you do you define that, and then you said asked me how "Ahh, yeah, that's consumer behavior, and I've got plenty of background in consumer behavior." And so when you told me that consumer behavior was something that you knew about and then I asked you why an industry would fund that kind of research and your response was to clarify the relationship between the two, I felt that you were speaking authoritatively with respect to consumer behavior and why they would fund that relationship. Was I incorrect in making that assumption? A. Well, when you said fund -- when you said fund -- why would a tobacco company fund research on the relationship between tobacco and health, A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 that's not consumer behavior, that's medical research, so I -- I didn't think I was talking in consumer behavior analysis terms; I thought you were talking about why scientific medical research would be -- Q. Well, obviously they were doing scientific and medical research, but the question doing scientific in the marketof was: Why was the tobacco company research, okay, a company that is selling a product, okay? A. Uh-huh. Q. And I was asking why would they do that, okay, why would they fund that? And your response in the -- in what I thought was the consumer behavior discussion, was that -- to clarify the relationship. A. But that's not a consumer behavioral relationship. That's a scientific relationship, much like: If I wanted to -- if I'm in the automobile industry and I do studies of the relationship between automobile exhaust and the ozone, that's not a consumer study, that's a effects my product's companies try to be good scientific study about the having on the environment. And I think that A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 citizens and would carry out research that has to do with water pollution, air pollution, other hazards that a product might -- the relationship between consumer electronic products and electrocution for, you know, hair driers, etc. So I took that question -- excuse me. I took that question to be asking me about why would a tobacco company undertake scientific research, and I did not construe that to be a consumer behavior question. So if I misconstrued that, I apologize. Q. Let's see if we can get it back into consumer behavior. A. All right. Q. On October 3rd of 1967 the president of Brown & Williamson, a Mr. Finch, states, quote, "Doubt is our product since it is the best means of competing with the, quote, 'body of fact,' close quote, that exist in the mind of the general public. It is also a means of establishing a controversy,. close quote. doubt So here Mr. Williamson is describing as the product, and what I'm trying to find A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 out is from would someone the consumer fund research to of to clarify the health. relationship behavior standpoint, why create doubt instead between smoking and MR. PURVIS: Object to the form of the question. A. I don't statement. Q. BY MR. know why he would make that GONZALEZ: If a cigarette company found that cigarettes cause lung cancer, would it not be in the interest of them in being a good citizen if they did not disclose that -- or excuse me, would they be a good citizen if they did not disclose that to their consumers? A. In the environment that they were -- do you mean -- what time period? Q. Let's say during the 1960s. A. And was that -- was it during that time period that it was known that there was lung cancer associated with -- Q. Let's assume that a cigarette company or many cigarette companies had found that cigarettes cause lung cancer. Would they be a good corporate citizen if they did not disclose that to their consumers? A. WILLIAM ROBERTS, JR., & ASSOCIATES

77 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. In that -- are we talking about the 1960s, again? Q. Yes. A. Okay. In my review of the literature and -- much of which I've provided to you in the box you talked about, it was in 1954 that the British College of Medicine revealed that to the public. And it was the position of the tobacco companies, also in the literature that I've provided you with, that they were going to continue in their official statement to study that. It's my belief from review of all that public information, that the issue of the relationship between cigarette use and lung cancer was widely disseminated to the public, not just in the United States, but around the world. Q. For the purposes of our discussion I'm not disagreeing you that it was widely disseminated. What I'm trying to focus on is whether or not the cigarette companies widely disseminated or disseminated any knowledge that they had with respect to cigarettes, and the adverse health effects that result from smoking cigarettes, particularly in the 1960s. A. They did not disseminate that A. WILLIAM ROBERTS, JR., & ASSOCIATES

8O 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 information, not from the materials I've seen. Q. During a research and development strategic planning conference, a Dr. Frank Colby in this research conference was sponsored by the R.J. Reynolds Tobacco Company, between May llth through May 14th of 1982. Dr. Colby stated, qu6te, "We can maintain controversy every darned day of the week," period, close quote. How does the maintenance of controversy fit into what we talked about at the very beginning, about advertising and trying to have the consumer identify the product? A. ControverSy wouldn't be you wanted to create an awareness part of -- unless around your brand, and in that case you may use controversy as a way to create awareness for your brand, such as Benetton has done. Q. So the only time that your advertising principles would tell you to create controversy would be in the context of product differentiation; is that correct? A. That would be one of -- let me answer your question in the way I feel is the -- is the way in which controversy plays a role. The way it would play a role is that for A. WILLIAM ROBERTS, JR., & ASSOCIATES

81 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 whatever reason, an individual evaluated its environment, and, apparently, seen that that's a corporation has as Benetton has, way to draw attention step we'd of to and create Now whether that differentiation, we awareness for its brand. takes it to the next can't make that leap; have 0. thought to see what happened in the marketplace. I'm sorry, I'm not following you, because that creating a controversy about Benetton from the other competitors. A. No, originally. controversy would itself was differentiating its product products that would be its I don't think I used that phrase I think I said it would -- that create awareness ~bout Benetton. Q. Okay. For A. For people brand name. Remember Q. All being used to correct? A. Yes. useful purpose, right. create you what purpose? to have recognition of the the brand name. So controversy, then, is brand identification; is that -- that would be its only Q. And there isn't any other purpose that can think of for a specific cigarette company A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 to generate controversy about a product, other brand differentiation. That would be the only legitimate reason to do that; is that correct? than A. I'd like to go back and say that I that I would say brand awareness; and differentiation is another different step, so I would say brand awareness would be the effect of controversy. Q. Okay. So let me start back over again because I want to make sure I'm getting this right. I'm not in your field and so if I'm using terms -- and I know you've been correcting me through this -- and that's fine, I want you to do that. So the only legitimate use of controversy would be for brand awareness? A. That would be the -- I would like to use the term the effect of controversy would focus attention on a brand, and that would create brand yes. Is there anything in your academic that tells you that funding medical into the relationship between smgking awareness, Q. training research and health would impact any company's brand awareness? A. It could. Q. Okay. How would a company want to orient A. WILLIAM ROBERTS, JR., & ASSOCIATES

83 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 its research into smoking and health, to create brand awareness? A. Well, the way that could happen is that if a tobacco company funded research, then there might be a news story about the fact that XYZ Tobacco Company is funding research at the University of Massachusetts on the health effects of tobacco and it's on the television news and it's in newspapers. Q. Well, we were talking about brand awareness as being the sort of guiding principle, the lighthouse, if you would, for lack of a better term, as to why people would do these things to create controversy or what-not. And when we're talking about funding that kind of research, I thought the reason for doing that was brand awareness. Was that correct? Strike that. I know that I've confused you. A. No. Q. How does funding cancer or -- or -- or the relationship between smoking and health generally, help assist a company in its brand awareness? A. I don't know that it does or would assist A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 a company in brand awareness. Q. Wouldn't -- if a company was trying to accomplish this goal of brand awareness that we're referring to, wouldn't the company focus its research as to why its product was healthier than someone else's, rather than just general research? A. They might state that as a goal for the research. That -- I mean they could set that as a goal for the research, yes. Q. Okay. And if that was a goal for their research for brand awareness, wouldn't they want to have, as an objective for brand awareness, the goal of attempting to clarify the relationship between their cigarette and its relationship to smoking and health? A. I'm afraid you lost me on that one. Could we break that into a couple pieces, maybe? Q. Okay. All right. What we've been doing is we've been~ talking about brand awareness as a reason that you might do research to determine the smok- -- the relationship between smoking and health. Is that correct? A. Well, I thought we were talking about, first, why would a -- the first question was why A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 would a cigarette company fund cancer research, and my answer was a cigarette company would fund cancer research to clarify the relationship between smoking and health. Then we read -- then a statement was read about controversy and doubt, and I'm having trouble keeping whether those two are together or whether they're apart. So yeah, maybe you could ask me a question again. Q. Yeah. What I was trying to do was I was -- and I think we had moved beyond that, I think we were talking about brand awareness, and and why a company -- and I thought you said that a company might choose to fund research about its product vis-a-vis other products -- that it's more safer, as an example -- and it might do that to accomplish the goal of brand awareness. A. Okay. Let's take that, and let's take a company that fact that is done that, and that's Volvo, an automobile company because we've talked about automobiles before. And Volvo has undertaken research to demonstrate that its vehicles, the way they're constructed, the side panels -- I think they're one of the first companies to come up with side airbags A. WILLIAM ROBERTS, JR., & ASSOCIATES

86 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 years. Their purpose for doing that was awareness; is that correct? and demonstrate that, you know, if you crash a Volvo into a wall, then the risk of harm is less. And Volvo has, over many years, created an awareness of its brand, which is associated with safety. So a company could fund research and .that research, depending on what the results are, could help its brand awareness because of the results of the research. Q. Okay. A. So that -- that I can say. Q. Okay. Let's work with that Volvo example, okay? Volvo was spending money to say that its car was safer than other cars; is that correct? A. Yes. They've had that as an advertising theme for many Q. Okay. to create brand A. Yes. Q. Okay. Was there -- I understand that they might have a scientific curiosity about whether or not their car is safer, all right, but wouldn't you say that at least from the advertising standpoint or from the marketing standpoint, the A. WILLIAM ROBERTS, JR., & ASSOCIATES

~7 1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 ~9 20 21 22 23 24 25 reason that they were -- the primary reason that they were doing this research was for brand awareness. Is that correct? A. I -- the result of the research -- and here's why I'm answering -- this is the way I want to answer this: I don't know what their intention was. The result of their research was that it produced for Volvo a relevant message for consumers making choices in the automobile industry. So they may have, indeed, started out the research with the intent to demonstrate the safety which would then be used to create an awareness. For all I know, the corporate people at Volvo may have started out simply to create a safer vehicle, but ultimately the results proved to be relevant consumer decision making. Q. I guess that any car manufacturer is going to want to have a car that works; is that correct? AQ that's A. of the Q. Yes. They're all going to want safe; is that correct? Yes, because consumers list top criteria in their choice. to have a car that as one to A. WILLIAM ROBERTS, JR., & ASSOCIATES At some point, though, Volvo evolved, and

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 88 they decided to make this part of their advertising message; is that correct? A. Yes. Q. Okay. Now I want to take that -- that concept of brand awareness from Volvo, and I want to apply that same logic to the cigarette industry, if we can. Okay, maybe we can't. Maybe the two are apples and oranges, I don't know. But what I want to do is I want to ask you what would be the reason for -- what would -- based on your academic training, what Would be the reason for a company to choose to undertake research about whether its product would cause cancer or any other illness or disease. Why would that company do that? A. And I would go back to my original statement to clarify the relationship between the two, so that it could know whether there are opportunities presented by those results, or challenges. Q. Okay. In a -- member -- as a member of an understanding of what your understanding of says that"You caused in a -- in a the public, it means -- what it means when an injury to me." -- in a do you have or what is someone What does A. WILLIAM ROBERTS, JR., & ASSOCIATES

~9 1 2 3 4 5 6 7 8 9 I0 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 that word "caused" mean to you? A. As a member of the public, if I say to someone "You caused injury to me," then there was some act on the part of that other person that resulted in my injury. Q. I think it was a pretty obvious statement. I understand that. I just -- I just wanted to -- to put it in your own words. A. Okay. Q. Okay. So an act is -- is -- is how you would look at that, someone had done an act to you? A. Uh-huh. Q. Okay. In any of the research that you've done with other industries or in your academic training, I'd like you to tell me whether or not this fits with any of the things you've seen in other industries. November We have a Dr. Green writing here on 17th, 1975. "In their public relations the tobacco companies are particularly sensitive to the question of causality. Of course the public position with the tobacco companies is dominated by legal A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 considerations. In the ultimate, the companies wish to be able to dispute that a particular product caused injury to a particular person. By repeating a role -- a call to role of their products they hope to avoid liability." Now there Mr. Green is talking about public relations, sort of having it a theme of this causality issue about acts being done. you seen that in any other kind of industry campaigns that you've ever evaluated or seen? A. Not that particular set of discussions, no. several a phone comments it Have I know that when I had a baby -- I had of them -- that on the baby jars there was number that said for any questions or call 1-800-Gerber. Should I keep on going? What was the purpose, as you understand it, for that or things that are similar to that? A. That particular technique is well studied in our discipline, and it is part of what corporations now refer to as their marketing information system. A. WILLIAM ROBERTS, JR., & ASSOCIATES

91 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 And while companies do research, study secondary data like the census and population movement, all kinds of information gets put into the marketing information system, and with the advent of toll-free numbers technology and rapid access to consumers, putting a phone number on a package is a way to ensure that if the consumer wants to use the product properly, they can call and -- and get clarification. Now using baby food properly probably is not a big challenge, you open the jar and spoon it out; but shampoos, paint products, motor oil, a variety of the products where consumers might have questions about use, then that toll-free number is on there as a way to create a dialogue between the two, the customer and the company. Q. Okay. In terms of its relative importance to other advertising channels, how would you rank that as far as effectiveness or what-not? A. I'd rank it as minimal. Q. I guess I'm somewhat confused because you seem to be suggesting that this was a new development that was taking place and that people were starting to do this more, but yet it has a minimal effect? A. WILLIAM ROBERTS, JR., & ASSOCIATES

2 3 4 5 6 7 8 9 10 Ii 12 13 14 15 16 17 18 19 20 21 22 23 25 A. The reason I say minimal is because while companies use that as a way to offer consumers an opportunity to communicate, very few consumers choose to call the toll-free number and communicate with the company. So it has -- it's minimal in the sense that while it has -- it may conceptually.have potential, it's turned out not to be a very widely-used opportunity by consumers. Q. I guess when we say widely used, if we're comparing the number of people who might see Gerber advertisements on television versus the number of people who phone in, it's relatively insignificant. Is that what you're saying? A. YeS. Q. Okay. But in terms of its importance to the company, for those people who are calling in, is this considered to be an important mode of communicating with their customers? A. Well, it's an opportunity that a company can offer to a customer that it can't offer in any other way. The point again is that few consumers are taking advantage of that opportunity to communicate. So it's -- while it's there, it's -- it's not significant in the sense that it's not A. WILLIAM ROBERTS, JR., & ASSOCIATES

93 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 being used much. Q. When you say it's.not being used much, do you have any numbers or any kind of way to quantify that as opposed to just a general qualitative statement? A. It's a general qualitative statement. Q. Okay. And the -- what do we call this method of communication? Was there a phraseology that we used to describe that? A. No -- no, no term of art, no technical language. Just, you know, consumer toll-free number. Q. Okay. What is it -- what is your understanding of who or what part of the company manages or controls the consumer toll-free number for those companies that use it? A. It would come under the general category of the marketing department, and more specifically the marketing information system. Q. In a 1964 report about a tobacco research council -- and this is 1964, October -- they wrote, quote, "There is a need for a voice to speak on behalf of the industry on all matters, not merely those of A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 health and T.I. -- Tobacco Institute -- is that voice, but its activities are minimal. The impression that we obtained is that T.I. is largely a voice at the end of a telephone line from the lawyers, and speaks only when as directed," close quote. Are you familiar with any consumer calling lines or any other modes of the -- where a consumer calls an industry and they speak to what someone would believe would be the voice of the lawyers? Have you ever seen anything like that before? MR. PURVIS: Object to the form of the question. A. No. And I don't -- I didn't understand that statement to be saying that either. But to answer your question, no, I know of no consumer toll-free number where the source at the other end is attorneys, or are attorneys. Q. BY MR. GONZALEZ: How did.you interpret -- you dated it that -- that sentence to read? A. That sentence being from as 1960- -- A. WILLIAM ROBERTS, JR., & ASSOCIATES

95 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 A. 1964. That was well before Watts lines and toll-free numbers were available, so I didn't associated it with those at all. I associated it with a voice of the industry, meaning making making public statements for the industry, as many trade associations do. Q. Have you ever heard of any trade associations being dominated or controlled by lawyers? A. Yes. I think that's typical of a trade association. Q. Which trade associations would you give as an example for that? A. Any trade association: the trucking industry, the automobile industry; I mean they all have, as one of their roles, monitoring the legislative environment for its organization, don't -- I don't see that as atypical, and I wouldn't single out any particular trade so I association, just anything, mattress manufacturers' association -- Q. I could understand the role of lawyers in monitoring legislation and so forth, but for a voice to speak on behalf of the industry, is it A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 96 typical that trade associations would be using their lawyers to speak on behalf of their industry? A. In the sense that -- and -- and I don't know how that's meant in that statement either. But in the sense that the final assessment of a public statement is going to run through the legal department -- ever made for for magazines legal assessment to that's appropriate, and that includes every ad that's televisfon, every ad that's ever made -- there is always going to be a determine if there is language if industry regulations are being held to, if FCC guidelines are being met. So -- now, if this -- if you're construing this to say the lawyers speak for the industry, then no, I would find that unusual, but wouldn't find it unusual that trade associations are made up of, at least in part, a substantial number of lawyers. Q. You are making reference to advertisements, meaning SEC guidelines or what-not? A. (Witness nods head.) Q. What level of lawyer involvement are you generally familiar with in an industry, with respect to its advertising arm. How much scrutiny or control do the lawyers have, if at all, I A. WILLIAM ROBERTS, JR., & ASSOCIATES

97 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 generally? A. In terms of control, you can say it's absolute control. I have been involved in -- in discussions where lawyers completely nixed the ad and said go back to the drawing board. And they do have that power in any agency or any company. But whether they exercise it or not, you know, that's a matter of what they see as -- I mean it -- just what they see is something they're concerned about. Q. So is that a regular process to have lawyers reviewing all the advertising that comes out of a -- for a particular -- a sophisticated company? A. Any company? Q. Any company. A. If you -- yes, the answer is yes. MR. GONZALEZ: Okay. What time is it? MS. COLEY: About I0 till. Do you want to break for lunch? MR. GONZALEZ: Ten until noo~? Is this a good time? Okay. MS. COLEY: Be back at 1:00 -- 1:15. MR. GONZALEZ: Why don't we make it -- I'd like to make it i:00, if we .could. VIDEOGRAPHER: We're going off the A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 videotape record. The time is 11:50. This is the end of Tape Number 2. (The lunch break wastaken from ii:50 a.m. until 1:05 p.m.) VIDEOGRAPHER: We're back on the videotape record. The time is 1:05. This is the beginning of Tape Number 3. Q. BY MR. GONZALEZ: Dr. Semenik, is it fair say that cigarette advertising portrays the act smoking as both pleasurable and enjoyable? A. I have seen certain cigarette advertising to that does use that as the approach, yes. Q. Okay. When you say certain, that makes it sound like it's a small category of advertising. Would it be fair to say that -- that a large portion of their advertising portrays smoking as both pleasurable and enjoyable? A. I would say that -- no, I would not say it's the majority. I would say it is a portion, a segment. I have not done any systematic counting. Q. Okay. HOw would you characterize the rest of their advertising in terms of what is significant -- a significant category of advertising? A. Well, I think there are many versions of A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 ads. They change over time, they change from brand to brand, but the tobacco -- the cigarette advertising is similar to advertising for other products which will portray common scenes of lifestyle, outdoor scenes that are picturesque and can attract attention. So the tobacco advertieing will be similar to -- in terms of those images, to images used for other product category brands. Q. When you say lifestyle, are you referring to a happy lifestyle, a good lifestyle, as might be understood in the normative sense? A. Lifestyle would not, as we use it in marketing, necessarily be equated with the word good. It could be any aspect of lifestyle. There's no normative judgment attached to the "lifestyle" word. Q. Okay. Is it fair to say that cigarette advertising does not depict the consequences of smoking; that is, disease, illness, death? A. I've never seen a cigarette ad depict those consequences, no. Q. Is there anything in cigarette advertising currently that you would consider to be deceptive? A. NO. A. WILLIAM ROBERTS, JR., & ASSOCIATES

i00 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 Q. Okay. How about the fact that there's virtually no cigarette advertising that shells -- that shows or demonstrates any health consequences with respect to smoking? A. The -- the only demonstration, in cigarette advertising, is that every cigarette as we know has the surgeon general's warning, and in that sense literally every ad would demonstrate health consequences but no. Q. Well, that's -- in a visual imagery way, that's what I'm trying to focus on, is the visual imagery which is what comes to mind with me with respect to advertising. You don't consider the absence of that visual imagery from cigarette advertising to be deceptive as to the product? A. No because airplane ads don't show crashing airplanes either, so I think in that sense I think that that would not be deceptive, no. Q. Have you made any study with respect to the -- to determine what the statistical frequency is with respect to airline crashes ~s opposed to people who get sick to any degree, from smoking? A. I've not made that comparison, no. Q. Okay. As a member Of the public, would A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 8 9 I0 Ii 12 13 14 15 16 17 18 19 20 21 22 23 24 .... 25 i01 it be fair to say that the statistical frequency of people who get smoke in any way -- or who get sick in any way from smoking, is much greater than the statistical frequency of airline crashes? .A. Yes. Q. Okay. Given the fact that it is muc~ greater, okay -- the incidence of any kind of sickness from smoking, is it your testimony that you still do not feel that the advertising is deceptive by failing to depict that? A. No, given that the warning is on every ad, and airlines don't warn there's any hazard with their use, so I don't feel that there's any deception, no. Q. Okay. Again I want to focus on the visual imagery with respect to the advertising, and -- Now, in contrasting cigarette advertising airline advertising, you have mentioned several and times that you got the surgeon general's notification there, okay, with respect to cigarette advertising. Okay. Did you feel that there should be a similar requirement on the part of airline industries to state that "When you fly United or A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 any other airline, you may crash"? A. No. Q. Okay. Do you think that corrective advertising is effective in changing a consumer's opinion about a product? A. Could you repeat the question to make sure is effective a product? A. Yes. Q. Okay. advertising I understand it. Q. Do you think that in changing a corrective advertising consumer's opinion about DO you think that corrective could be used effectively to change the reason not a question I've to believe that not be able to do smoking? image associated with smoking? A. I don't know. That's thought about. Q. Do you have any corrective advertising would that, to change the image of A. That's an empirical question, and my own research in the area of corrective advertising was an empirical investigation, so it -- and as that research would-- as that research is discussed in the articles I've written, it is a case-by-case issue, so again, I would have to say that I don't A. WILLIAM ROBERTS, JR., & ASSOCIATES

103 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 know either way whether it would or would not be effective. Q. What are the factors that you rely on in making your determination as to whether or not corrective advertising would be useful in changing the image of a product? A. In the -- the remedy from the Federal Trade Commission known as corrective advertising is a remedy designed to deal deceptive advertising, and the use of that remedy has with court-determined the process of mandating to do with. the extent -- well, has to do with a court order, and a predetermined -- at least in terms of the most widely-known use of it in the Listerine case -- predetermine language that was included in all -- well, that was included in the next 24 months of Listerine advertising after the court decision, and that language was built specifically upon the language deemed to have been deceptive from prior Listerine advertising. Q. Okay. A. So that's why it is a case-by-case basis. What was the language deemed to be deceptive, and therefore the Federal Trade Commission mandated that certain new language was A. WILLIAM ROBERTS, JR., & ASSOCIATES

104 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 deemed to be corrected. Q. Based on your research that you've done in the field of corrective advertising or in the area of corrective advertising, are there any certain factors that you feel are -- that can be generally applied with respect to how to make corrective advertising effective? A. The conclusions from my research did extend to generalizable approaches. It was strictly with respect to the Listerine case. Q. Applying your some 27 years in marketing not since the time you've been at the University of Michigan -- actually it would probably be close to 31 years in the field -- can you state whether or not, with that background and experience, whether or not there are some general factors that would govern the effectiveness of corrective advertising? A. I could not. Q. Okay. Do you think that the image associated with a brand can become the image associated with a product category itself? A. No. Q. Have you done any research or review about Joe Camel? A. I have examined advertising from A. WILLIAM ROBERTS, JR., & ASSOCIATES

105 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 R.J. Reynolds that includes the Joe Camel character, yes. Q. Okay. Have you read any literature that tells you or gives you any basis to conclude what think of when they see Joe Camel? A. Yes. Q. And what would that be? people A. In two Mizerski and one the Joe Camel held a negative smoking. different articles, one by by Henke, children who recognize attitude -- Joe Camel character also attitude toward cigarettes and Q. When people see the Joe Camel advertising -- and let's start with children -- when children see that -- and we'll define children as, I guess, 16 and below -- is that an appropriate cut-off date, given your research? A. I can work with that unless we have subsequent questions that create a problem I'll you know. Q. So we'll define children to be 16 or under. Have you read anything about whether or children who see Joe Camel identify with the R.J. Reynolds brand, Camel, cigarettes generally? let not or they identify with A. WILLIAM ROBERTS, JR., & ASSOCIATES

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. The research demonstrates that in the two pieces of research I am most familiar with, which I alluded to a few moments ago, those -- the subjects in that research related that character to cigarettes, but it's my understanding that they were not asked to identify it with a brand. Q. There was a photograph that was included in the documents that were provided to us, and I'd like to have this marked as Exhibit Number 2. was us. (Exhibit 2 was marked for identification.) know why that Q. BY MR. GONZALEZ: Do you in your document disclosure? A. Yes. Q. Okay. Could you please elaborate for A. This is a-- this is an ad for the Jacksonville Kennel Club that shows a dog -- Jacksonville Kennel Club being a racetrack in Jacksonville, a dog track -- and the billboard says "Be a Winner." And the one of the claims reason it's included is because in this case and other tobacco litigation is that billboards are used to attract underage adolescents to smoking, and this is a demonstration that billboards are used in a variety • A. WILLIAM ROBERTS, JR., & ASSOCIATES

I07 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 of product categories that are also not accessible for or appropriate for adolescents under 18 or 21 years old. So this would be an example of one of those. And also in the state of Florida. Q. With respect to visual imagery of paying that the that that for or sponsoring From my-- it's advertisement, the features of that dog and color that is being used, is it fair to say that -- that there's a relationship between and the Joe Camel figure? A. There are similarities in don't -- yes, I can agree there are the color, yes. Q. Do you have any idea who it was that was this advertisement? the Jacksonville Kennel Do you know paid for the it for them? I would not Okay. What the color. I similarities in Club. Q. actually paid for A. Q. if they are the ones that advertisement or if someone know that. are some of the social aspects of advertising? A. Social aspects of language of the discipline, advertising that advertising, in our are those aspects of include the broad social effects A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 5 6 7 8 9 i0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that includes advertising. Can you be a little more I mean I'm not of any economic system Q. I'm sorry. expansive with respect to that. following you. A. Okay. Q. Yeah. A. The social effects are defined as the fact that a business practice called advertising is used as part of the economic system, the United States -- Australia, Canada, the highly-industrialized capitalistic systems we know about -- as opposed to controlled economies like the former Soviet Union and China, as they used to be -- and the study of the social aspects is the impact advertising as a business practice has on broader social activities of people in the society. Q. What kind of broader social effects would you be talking about in just trying to understand that follow through? A. The broader social effects include things like provision of information as asocial effect. The anthropologists who study adver£ising as a social phenomenon talk about reading the code of social behavior and will point to ads which reflect society as a way of communicating to members of A. WILLIAM ROBERTS, JR., & ASSOCIATES

109 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 society that wearing a certain kinds of clothing, for women wearing a dress a certain length, long short, the provides a society. Q. me think think of "The wet way people wear code of society I tell you: One their hairstyles, for people in that or of the things that makes back, and I don't know why, whenever I advertising the song is stuck in my mind, head is dead" from the mid-'60s. And what I associate with that was that I remember that -- that at ~hat time my .hair was wetted or was oiled or what-not, and then after that came out it became socially unacceptable, okay, to -- to -- to apply that to your hair. Was that part of the phenomenon of the wet head is dead? Are you familiar with that? A. Yes, I am. That was a Vitalis -- the wet head ad was sponsored by Vitalls, and it was an illusion to one of its competitors, Brylcreem, which was one of the thick, gooey kinds of hair treatments that would leave your hair looking slick. And it was one of those advertising slogans that got to be a catch word with comedians and a variety of other people, so it got to be a -- A. WILLIAM ROBERTS, JR., & ASSOCIATES

ii0 6 7 8 9 i0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 truly a broad social phenomenon. And that would be one of the -- an example of the kind of thing that's studied in the category of the social effects of advertising. Q. When you say "code of social behavior" and using the wet head is dead example, it seems my mind that it actually changed the social behavior at the time. Is that correct? in A. Well, what I think we -- if we were to study that case, we would find that with that sort of appeal, Vitalis was claiming that the look their brand provided -- which was not a slicked-back look but a softer look -- was the one that was now contemporary and acceptable, and that the old style slicked-back look was -- was now outdated and not contemporary. Q. But that to me seems to be a pretty radical change in the way men styled their hair, when that occurred. And that's why, from -- from a -- from at least a lay point -- lay perspective, I feel that it was a -- a change in the way society was conducting itself. And what I want to know is from an academic standpoint, okay, whether that bears out, whether that's true, whether you would have A. WILLIAM ROBERTS, JR., & ASSOCIATES

iii 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 any disagreement with that? A. Well, what I would guess is -- and if we could go back and reconstruct the environment -- my guess is men started wearing their hair without the greasy look, and Vitalis, recognizing that, offered their brand as an alternative to promo.te the fluffier softer look, and placing -- positioning itself as the brand through which you can now achieve this contemporary look; and the wet head is dead, which is our competitor. Q. And it may very well have been that there was a core group of people or a core population in a couple of areas or with a few different lifestyles who had adopted that. But in terms of communicating to the mass -- the masses, okay, that smoothing area or those advertisements disseminated the information and changed the culture; is that correct? A. I would -- oh, I would put it just the other way around: The culture had changed, and Vitalis presented itself as an alternative for this now-changing aspect of culture. Q. How did the population know that the culture had changed at that time? A. Well, that is the definition of culture, A. WILLIAM ROBERTS, JR., & ASSOCIATES

i12 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 elucidation on that point A. All right. Q. -- is you've stop wearing ties, and hypothetical the national okay. That seems change influenced just some kind of is that -- that the symbols and language are passed among the individuals in culture, and so if people start wearing their hair long, then that becomes the new -- that's one of the new messages of culture; if they start wearing their hair short, dresses go short, if dresses go long, if men quit wearing ties, then that gets communicated as appropriate. Q. I guess the distinction I'm having trouble with -- and I need some academic got a few men deciding to then all of a sudden in a if world we're talking about, the rest of population of men stops wearing ties, to me to be -- to be a cultural by advertising, as opposed to spontaneous decision of all men to take their ties off. A. No, it wasn't. No. This is what we call primary demand in the world of advertising. There is a primary demand change in the market -- the primary demand for neckties, the A. WILLIAM ROBERTS, JR., & ASSOCIATES

113 1 2 4 5 7 8 9 i0 Ii 12 13 14 15 16 17 19 20 21 22 23 24 25 primary demand for hairstyling that is short versus hairstyling that is long -- and as people start to choose not to wear ties or to wear their hair short or to wear their skirts longer, then advertisers read that aspect of culture as an influence on consumer decision making, and start to make products or portray their brands to be consistent with it. Q. Let's shift gears here for a second. Going from a social aspects, what would you consider to be some of the ethical aspects of advertising? A. The ethical aspects of advertising have to do with presenting products in a realistic fashion. For example, if you're going to show if you're Campbell's soup and you're going to show your soup on television, then the soup that you show on television has to be available to consumers in precisely that form. So there's truth in advertising, there is the adherence to all the Federal Communication, Federal Trade Commission, Food & Drug Administration regulations regarding the manufacture and distribution of your product, as long as -- if you are within those legal A. WILLIAM ROBERTS, JR., & ASSOCIATES

114 6 7 8 9 10 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 guidelines. guidelines. There situations. automobile Those also represent ethical is showing products in normal use For example, if I couldn't drive my the way it's being driven in the ad without it spinning out of control, if the vehicle has been altered, then also I would be showing consumers in an So ethics, advertising courses, inappropriate use of the product. as we teach ethics in courses, marketing courses, marketing management courses, we teach that things need to be within the legal guidelines of the industry, within the guidelines of what is a reasonable perception on the part of consumers, the average person would interpret a message in an accurate way, and ethics is one of those areas of business that is as variableas the individuals who are in the business. What I find to be appropriate and ethical may not be appropriate and ethical for my neighbor. advertising. I use situations. Q. I was able to understand the presenting product in a realistic fashion and truth in was having difficulty with normal Okay. Are a you suggesting that -- is there -- is A. WILLIAM ROBERTS, JR., & ASSOCIATES

115 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 there a legal requirement or is that an ethical norm that is -- that the academics or the people in the industry have -- have put out? A. That would be an ethical norm. There are some use situations where it is simply very difficult to provide a quantifiable standardized regulation for people to follow. For example, if I manufacture -- if I'm Black & Decker and I manufacture a -- a garden tool that cuts weeds, and I demonstrate this in a television advertisement in a way that it seems to work beautifully and the average consumer wouldn't have the kinds of weeds that we used as a demonstration -- in other words, it wasn't a normal use situation -- then that's unethical. You didn't alert the consumer to the fact that this is an unusual application situation. Q. Okay. I appreciate the example, and that's illustrative of -- of I think of one aspect of it. What are you trying to accomplish? What is your goal by requiring.or by making an ethical -- an ethical requirement to show products in a normal-use situation? A. We're just trying to present advertising A. WILLIAM ROBERTS, JR., & ASSOCIATES

116 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 or information to consumers, where the vast majority of consumers would receive the benefit from the product as it is being portrayed, from that brand as it is being portrayed. Let me try and give you another example. I have a man -- I'm Gillette and I show a man shaving in an ad and we had that man shave i0 minutes before, and so now he shaves again and the razor seems to his face. glide effortlessly across That would be not average consumer minutes. So about what man with a normal-use situation. The isn't going to shave twice to while there's nothing that demonstration did -- it shaving cream shaving out of a I0 Gillette that any consumer could buy -- twice in i0 minutes is not a normal-use So that would be a ethical issue rather legal issue. per se illegal showed a can of shaving situation. than a Q. Are you aware that cigarette companies have shifted their focus from advertising to promotions, some of their dollars? A. Yes. Q. Okay. Do you know why they've done that? A. I'm not privileged to the strategic A. WILLIAM ROBERTS, JR., & ASSOCIATES

117 1 3 4 5 6 7 8 9 10 II 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 planning of the organization so I don't know why, no. Q. Okay. Based on your academic experience, do you have an opinion as to why they might have done that? A. Yes. Q. And that would be? A. The -- what we are witnessing across all industries in the United States -- because we have better data in the United States and we're not sure on a global basis -- many organizations are shifting funds from media expenditures and advertising to other forms of communication because there is some belief that it's easier to track the impact of those dollars on consumer awareness and attitude than with the media advertising. Q. Do you consider a T-shirt with the Marlboro name and logo to be an advertisement for Marlboro cigarettes? A. No. Q. Okay. Why not? A. That kind of product falls into the category of premiums -- that's the technical language of the discipline -- and Toshirts, baseball caps, key rings, pens, those kinds of A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 9 !0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 things are called premium items that carry the corporate logo. Q. What about a race car with a cigarette brand logo on it; is that an ad for that brand? A. That is also not considered advertising. It's considered -- it's in the category of sponsorship, and it is called supplemental media to the main advertising. Q. Why do you make the distinction in those -- in those categories with respect to the T-shirt and the race car, and not call them advertising? A. Because with those forms of communi~ation -- and they're categorized as forms of communication along with personal selling, advertising -- they're not considered advertising because we have no way to include a detailed message in the communication form -- there's no way to put a lot of information on a T-shirt or a lot of information on a race car going 200 miles an hour. We can only hope to get the logo and the brand name recognition. So there's.a much -- so that would be the purpose, the logo and brand name recognition. Q. This -- the race car and a T-shirt, does A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 that fall under what you describe in your expert statement as market -- A. I think this is yours, it's been sitting in front of me because it's marked as an exhibit. Q. -- marketer-controlled information? A. Yes, that is marketer-controlled information, yes. Q. All right. A. Unless for whatever reason someone were to paint on the side of a race car the marketer's logo without their permission, then it wouldn't be, but -- which has happened, actually -- but the typical situation is that sponsorships are marketer-controlled information, yes. Q. Going back to normal-use situations, have you ever seen any cigarette advertising that demonstrates or depicts senior citizens smoking? A. Senior citizens defined as -- our normal way, over 65? Q. Yes. A. No, I have not. Q. What is the frequency of advertising -- and we're talking visual advertising -- with respect to individuals appearing in that visual advertising who are probably obviously age 40 and A. WILLIAM ROBERTS, JR., & ASSOCIATES

120 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 over -- and I caveat that with you look at someone like Joan Collins and, you know, you don't know -- but generally I think you know what I mean -- A. I do. Q. -- by people who are more mature. A. There are -- there are far fewer depicting individuals in that older age category. Q. Do you have an opinion why the cigarette companies do not depict senior citizens or very infrequently depict mature individuals in their cigarette advertising? A. Yes. Q. Why that is? A. That -- that would match the demographics of smokers. From -- we can take them either from company records, which show the proportion of people in each age category that use cigarettes, or with the Center for Disease Control also shows that. As we get into the category 40 and over, there are far fewer people smoking cigarettes in that -- in those age cohorts than are there are under 40 years old. Q. I guess what I'm looking at is: From the perspective of normal use, does demographics A. WILLIAM ROBERTS,• JR., & ASSOCIATES

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 override the notion that people who are elderly or people who are mature use cigarettes? A. No. Not necessarily. Q. In California there was an initiative recently -- I believe it was Proposition 99. Were you aware Of that? A. No, not by that description. Q. Okay. All right. Are you aware of a -- of legislation which was requiring advertising to be -- I guess corrective advertising might be the better phrase. Are you aware of California legislation with respect to that? A. Corrective legislation with respect to cigarette products? sorry. I misunderstood -- Q. Yes. Yes. A. No. Q. Okay. I'm (There was a discussion held off the record.) Q. BY MR. GONZALEZ: Is the decision to purchase cigarettes any different thanthe decision to purchase any other product? A. NO. Q. Why that is? A. The reason is that in the process of consumer decision making, as consumers evaluate A. WILLIAM ROBERTS, JR., & ASSOCIATES

122 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 brands and determine which brand is best suited to their desire for certain benefits or satisfaction, then factors as I've mentioned before -- peer influence, family, lifestyle, situational factors, societal -- broad societal factors, price, any number of items -- will come to play. And whether a person is buying toothpaste, laundry detergent, soda pop, cigarettes, automobiles, stereo system, those factors will all be considered, depending on the individual, weighted differently from individual from individual. So in that sense cigarettes are -- decisions about cigarettes are precisely the same as decisions about any other product. Q. When we talk about decisions to purchase cigarettes, do you understand that to mean the decision to enter into the cigarette market or the decision to continue buying cigarettes or both? A. Consumer decision making can evaluate either of those, all three -- all three of those circumstances. Q. " Okay. So I guess what you're saying is is that the consumer decision-making process, with respect to entry into cigarettes and continued use of cigarettes, is the same as it is for every other A. WILLIAM ROBERTS, JR., & ASSOCIATES

123 1 3 4 5 6 7 8 9 i0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 product? A. that Yee. Q. Okay. influence When you're measuring the consumer decision making, factors could you from the rank for me generally where information manufacturer of the product would be on the s~ale of influential factors? A. That's -- that's a very difficult question. And the reason it's a difficult question is because: The role of information from the company selling the product, the manufacturer -- the role of information is going to Change individual to individual, and some people are very information intensive and will seek out Consumer's Reports and gather up brochures from every manufacturer; and other individuals are very casual about the information and rely much more on what they used when they were children, what their next-door neighbor is using. So in these -- in theae many factors we've been talking about today, it -- the role of -- of marketer information is very much related to making the brand choice, but even to the extent of making brand choices, some consumers may --.may rely almost totally on marketer information and A. WILLIAM ROBERTS, JR., & ASSOCIATES

124 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 other consumers may not rely on it at all. Q. Given your review of the literature that has appeared in newspapers that I know you've seen over the last 40 years, do you believe that if a cigarette company were to advise the addictive nature of nicotine associated with its product, that influence the consumer more than sources of information? A. No. Q. Are consumers about or the ill effects that would these other companies had you saying that if the cigarette come out 30 years ago and said -- the -- and had said that causes addiction," would be smoking cigarette companies "Our product causes that the same number today as are smoking A. I -- I need don't understand that Q. Okay. A. -- that themselves disease and of people today? to have version Q. What I'm asking companies -- strike that. We know what has and what has occurred, and of smokers today -- you rephrase that. I of the question. is: If the cigarette happened through history there's a given number A. WILLIAM ROBERTS, JR., & ASSOCIATES

125 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. Uh-huh. Q. All right -- whatever that number is, million, five million, whatever the number is, it's X. What I'm asking is: If 30 years ago the cigarette companies themselves had come out and said "Our product causes disease" of any kind, or "Our product is addictive," do you believe less people would be smoking today? A. No. Because I've seen literature nearly a hundred years ago that relayed effects of tobacco use, the ill effects use, the specific effects of smoke on which is why I don't believe that any information would have been provided, depicted it. Q. Okay. So you're significance to the notion companies themselves had come out that it caused disease, that that than the other any greater impact information? A. No. And have never I also that from the ill nicotine the lungs, new as you've not attaching any that if the cigarette and said this, would have been sources of two think that the the reason is that corporations been viewed as credible as teachers, and recent announcement by A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 Liggett has behavior, which is asking, I believe. Democrat this was shown almost no impact on smoking precisely the question you're Here's an article from the Tallahassee which is dated September 27th of 1969, and referring to the United States Public Health Service which says that "Even a light smoker of i0 cigarettes a day chops four years from his life expectancy," and that's the lead paragraph. Later on in the article it says, quote, "The tobacco industry and its Council for Tobacco Research, CTR, belittle the evidence as primarily statistical. There is no demonstrated causal relationship between smoking and any disease, Dr. Clarence Cokelittle, CTR, scientific director said." Do you remember seeing that article? Yes. Okay. Here's an article from the 14th, 1967, Association has called Tallahassee Democrat dated January where the California Medical on its 23,000 member physicians to quit smoking. Later on down it says, "Spokesmen for the A. WILLIAM ROBERTS, JR., & ASSOCIATES

127 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 tobacco industry have maintained there is no scientific proof that smoking is injurious." I have a whole series of articles -- and I'll save us time of going through all of these -- but I think it's fair to say -- and if you just want a smattering of the ones that appeared in the Tallahassee Democrat -- that all of those are reporting on various findings made by either governmental groups or other groups; and then in every one of those articles there is a statement by the tobacco industry or the Tobacco institute or someone connected with tobacco, saying that's crazy, or words to that effect. MR. PURVIS: Object to the form of the question. Q. BY MR. GONZALEZ: Are you telling us that had -- instead of those highlighted portions contesting the report, if those highlighted portions had come out and said "Yes, we agree that there are problems with smoking, health hazards from smoking," that public opinion on the issue would not have changed? A. No. And the reason is that public opinion during that time -- and.some of the information I provided you indicates extremely high A. WILLIAM ROBERTS,. JR., & ASSOCIATES

i 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 level of awareness and belief about the risks of smoking and health risks of~ smoking. Q. I have a 1954 Gallup poll dated June 12th through June 17th, and the question was: Have you heard or read anything recently to the effect that cigarette smoking may be a cause of cancer of the lung? And 90 percent responded yes. Is this typical of the information that you're relying upon to make the conclusion that it would not have made any difference? A. That is typical, yes, that kind of poll. Q. Okay. Now, this poll is asking whether or not people have heard or read anything, okay. Is there a distinction between being asked the question: Have you heard or read anything, and: Do you believe that if you smoke -- if you smoke, you will get a disease or cancer of the lung? Is there a material distinction between those two polls, hypothetically? A. If we -- well, if we asked that question, we would -- we could determine whether people's awarenessis related to belief. Q. I guess what I'm asking is whether or not asking the poll "Have you read" or asking a poll "Do you know," if those things are two different A. WILLIAM ROBERTS, JR., & ASSOCIATES

129 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 questions? A. They're two different questions, yes. Q. Okay. Would you agree that the answers that might be provided from those questions might be radically different? A. They could be exactly the same and ~ agree they could be radically different. Q. In any of your background research that allows you to make the conclusion that it would not have made any difference had the cigarette industry come forward and agreed with these studies, did you any polls or any information that would allow see you to make the statement that the American public knew that they would get cancer if they smoked cigarettes? MR. PURVIS: Object to the form of the question. A. There was no poll, by Gallup or other organizations that were reputable, that asked the question in that manner. Q. With your background in communications, is it fair to say that these comments by the tobacco industry, in these articles and other articles that were similar to that, that they at least continued the debate about whether or not A. WILLIAM ROBERTS, JR., & AssoCIATES

1 2 3 5 6 7 8 9 I0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 smoking was harmful? A. Well, for example, in Democrat article dated Thursday, 1969, the publication itself -- the Tallahassee February 27th, the Tallahassee Democrat -- has included a little graphic called "The Cigarette Controversy." So I think that during this period of time, there was a widespread belief that there was controversy about the research that was coming out. So yes, I think from a variety of sources, a debate was being fostered and continued. Q. Well, in that article, who was the only person or entity that was contesting the findings of the Public Health Service? And you can take a moment to read it, if you want. A. In this article the only contestants to that would be these statements by the tobacco industry. Q. Given the literature that you've reviewed, would it be fair to say, like this article, that the tobacco industry was at least of the common entities that was contesting the research on disease from smoking? A. Yes. Q. Is there any other entity or individual one A. WILLIAM ROBERTS, JR., & ASSOCIATES

131 1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 24 25 that you can think of that was consistently contesting the relationship between smoking and disease during the 1950s, '60s, and '70s, other than the tobacco companies or their associations? A. The only entity that -- and I've provided it with my materials -- is that at one point, Advertising Age ran a series of ads suggesting that some of the information being provided was in fact, from the health organizations, deceptive in itself, and said that if advertising is going to be honest and ethical, then it has to be honest and ethical from all sides. So that would be the only other organization that I encountered with the -- with the view as you're depicting it. Q. Okay. I'm sorry. I probably wasn't being specific enough. What I was trying to do was I was trying to focus on the public health debate as was being articulated in the articles that I've got here in front of you -- and I realize that this is a small snapshot of 40 years -- and given the public health debate that was being reported by the news media, okay, was there any entity, over that 30- or 40-year period, that consistently was questioning the relationship between smoking and -- and A. WILLIAM ROBERTS, JR., & ASSOCIATES

132 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 disease, other than the tobacco industry and its affiliates? A. The only time I've se~n other individuals contesting those findings is certain researchers on television newscasts who were not identified as affiliated with the tobacco industry, saying that in their view and from their research, they did not believe that this relationship was as conclusive as certain health organizations were claiming. That however is the only other time, and this was one or two or three researchers or five or whatever, that I've seen on newscasts, who appeared to be speaking on their own professional behalf. Q. Z guess what -- what I'm trying to get you to focus on, though, is the consistent nature of that adverse attack, okay. You talked about three or four or five researchers; would those fall under the definition or your understanding of what a consistent attack on the research would be over a 30- to 40-year period? A. No. So to answer your question, no. Q. All right. Given that the only consistent attack over the last 30 to 40 years with respect to the research on smoking and disease, is it still your opinion that had all those articles A. WILLIAM ROBERTS, JR., & ASSOCIATES

133 1 2 4 5 6 7 8 9 10 Ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 said, instead, that the that there is some health effects health effects from smoking, that of people would be smoking today? A. I don't know whether the tobacco industry agrees -- negative the same number same number of people would be smoking today, based on that. What I would say, in answer to your question, is that if the cigarette companies had stated, as you've presented it, there would be no new information in the environment for consumers to make their decision on. Q. Now, I think I've been using a fairly low threshold with respect to my hypothetical by referring to smoking and disease, because disease could be something as just an irritated throat or something. What I want to do is up the ante with you, and I want to know whether or not you believe there would still be the same number of smokers if the cigarette companies had come out and said "Yes, we agree with the public health service that if you smoke, then you cut 10 years off of your life," if that would have had an effect, in your opinion. A. Again, that would not have added any more information to the consumers decision-making A. WILLIAM ROBERTS, JR., & ASSOCIATES

134 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 environment than high school books, grade school books, public health information services. It would have been the same information. Q. All right. I agree with you that there would be some level of redundancy with respect to the information, but isn't it true that had there not been this consistent attack on the research over the 30 to 40 years, there probably would not have appeared that little graphic that refers to the cigarette controversy; is that correct? A. Well, the graphic says cigarette controversy. I -- I don't know that there would have been -- I don't know whether there would or would not have been an ongoing debate. That's something I don't know. Q. Well, Dr. Semenik, who would have been debating consistently over that 30 or 40 years, to create that controversy? A. Individual researchers who, as I said, would on occasion appear on newscasts, not being portrayed as representatives of the tobacco industry. Q. Is it your testimony that individual researchers would ha~e created the same controversy as was being created by the tobacco companies A. WILLIAM ROBERTS, JR., & ASSOCIATES

135 1 2 3 4 5 6 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 taking the position they took over the last 30 to 40 years? A. That's something I can't know. I don't know how much controversy they would have created. Q. What's your basis for believing that three or four researchers, taking that positi6n that the research was bad, would have created any controversy whatsoever? A. I don't think that's a position I tobk. I said I don't know how much controversy they would have created. Q. What is the best way to measure the influence of advertising on the consumer decision to enter the product category? A. We don't measure that because the literature in o- in our discipline has over many years demonstrated that advertising is not capable of creating primary demand, which is the demand for people to enter the product category. Q. Is there any way to measure the influence of advertising on the consumer decision to enter -- to purchase a brand? A. Yes. Q. Okay. What would be the best way to measure that? A. WILLIAM ROBERTS, JR., & AssOCIATES

1 2 3 5 6 7 8 9 I0 Ii 12 13 14 15 16 17 18 19 20 21 23 24 25 A. The best way to measure that is to ask individual consumers about their -- the influences on their choice and the extent to which advertising -- information from advertising was part of the decision to choose that brand over another brand. And one of the ways that companies do that regularly is to monitor how many coupons are redeemed when those coupons appear in ads. So if you open up Parade magazine and you see a coupon for a fabric softener and cut out that coupon and take it to the grocery store, that coupon ultimately ends up back at the manufacturer, and there is clear evidence that a particular ad was part of the decision making by the consumers, or some X number of consumers, to choose your brand. Q. I want to jump back to the controversy discussion that we were having a few minutes ago. A. Okay. Q. In your opinion, based on your 26 years of educational and academic experience in communications, what would it take to create a controversy, as we understand the term for our discussion, a comparable controversy -- maybe that's a better way to do it -- what would it take A. WILLIAM ROBERTS, JR., & ASSOCIATES

137 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 to create a comparable controversy so that there would be this kind of debate in the media? MR. PURVIS: Object to the form of the question. Q. BY MR. GONZALEZ: Do you understand what I'm asking? A. I don't know what would create that kind of controversy. I have not thought about that issue in these -- with respect to these -- these factors. Q. BY MR. GONZALEZ: Okay. I guess we were talking earlier about Benetton -- or Benetton, and the controversy that they were I guess involved in. And I'm Just wondering whether you could extrapolate from that, or anything else in your academic or educational background, that would allow you to say "Here are 'the factors that you would need to necessarily create a national controversy on an issue." A. There -- there would be no princlple we don't study creating controversy, and organizations would prefer not to have controversy around their brands. Benetton is an unusual case, as is Calvin Klein, so no, that's -- there are no principles A. WILLIAM ROBERTS, JR., & ASSOCIATES

l 3 4 5 6 7 8 9 i0 11 12 13 14 15 16 17 18 19 20 21 22 24 25 aboutcontroversy, no rules about creating controversy that we could point to. Q. When you say that a company would not want to have controversy about its brand as a norm, would an industry want to have controversy about its product? A. No. Q. Can you ever really find a cause-and-effect relationship between advertising and purchasing a product category? A. Advertising and purchasing a product category, no. Q. Can you find a cause-and-effect relationship between advertising and purchasing a brand? A. Unfortunately, we're not able to do that either. 'And one needs only to look at the annual issue of Advertising Age of the top I00 advertisers, and we cannot find a direct correlation between advertising expenditure levels and market share. Q. Is there a correlation -- a correlational relationship between exposure to advertising for a product and use of that produc~, enough to reach the conclusion that advertising influenced the use A. WILLIAM ROBERTS, JR., & ASSOCIATES

139 1 2 3 4 5 6 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 of that product? A. And do you mean by product, the product category? Or brand? Q. Let's start with product category and then we'll move to product brand. A. The -- the literature has shown that no, there is no correlational relationship between -- that's called aggregate advertising -- excuse me, that's called advertising expenditures and aggregate demand -- there's literature that's also provided in my materials -- since 1950 -- '52 was major study. So no, the answer to that the first is no. And with respect to brands, there is no If you take any product consistent group of brands, these ago -- levels way to relationship. brands -- automobile brands, stereo toothpaste brands -- this is the -- the are the data I alluded to a few moments find correlations between share. longitudinal study be exposure t.o spending the best advertising and its we cannot and market Would a measure was influence on entering a product category? A. That was precisely what the attempt in the studies about the -- the levels of A. WILLIAM ROBERTS, JR., & ASSOCIATES

140 1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 23 24 25 advertising and aggregate demand. That is what they did. There were longitudinal studies over several years, taking advertising expenditures over several years and identifying several years, and we cannot relationships. Q. Is it the a brand? A. there's cannot Q. aggregate demand over find correlational same conclusion for purchasing What we find with brand purchases is that very sporadic information, which means we make a general conclusion. In the third paragraph of your disclosure statement which I think is still -- A. I think you just took it away from me did you want -- you didn't want these marked as exhibits? Q. No, no, I still have it, sorry. I have it right here. In the second sentence -- well, actually start with the first sentence -- "Dr. Semenik will also testify about the role that peers, friends, family, Situational factors, etc." Then you go on to say that peer and influence -- and not market-controlled -- "have the most powerful effect on the family stimuli A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 9 I0 11 12 13 14 15 16 17 18 19 2O 21 22 24 25 individual's decision to smoke and to continue to smoke." In April of 1967, the Tallahassee Democrat reported that, "Mounting numbers of American adults have quit smoking cigarettes, but that persistently puffing youngsters, including grade schoolers, present a dangerous and discouraging picture." How do you explain the fact that the number of adults smoking was decreasing, which would be part of their peer group -- the immediate peer group we talked about -- how do you explain that the number of adults in that peer group was decreasing but the number of kids was increasing, in terms of the numbers of smokers? A. Well, adults as peers is only one peer category, so friends as peers or siblings as peers is another category; and it could be that the peers that are most influential --in fact not could be -- the literature says that the peers that are most influential are friends rather than adults. Q. Yeah. But that seems to be a tautological argument to the extent that you're A. WILLIAM ROBERTS, JR., & AssoCIATES

1 2 3 4 5 6 7 8 9 i0 11 12 13 15 16 17 18 19 20 21 22 23 24 25 saying that it was other children who were influencing the -- who were influencing more children to smoke -- A. (Witness nods head.) Q. -- but someone must have influenced the first set, the first generation, if you want to call it, of children smokers. And what I'm trying to do is to figure out how that was spreading, when the numbers of peers that they would be looking at was actually decreasing. A. But that's only adult peers. So the peer group, when we do the research and we ask "What influenced you to begin smoking," it's a close male friends, a close female friend, other friend, and adults are a much smaller category. Q. The only way I have to break this down is imagine the time that we had 200,000,000 boxes representing -- I don't know that the number would be that high but let's say it was -- for the number of adults who are smoking -- and coming down from those boxes would be their children or what-not, okay. If you s~arted removing those boxes from the population of smokers, then those children would have no adult figures with which to identify A. WILLIAM ROBERTS, JR., & ASSOCIATES

143 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 Do you follow my graphic that I'm as smokers. trying to illustrate? A. Uh-huh. Um-hm. Q. Okay. Where was the source of smoking children coming from, as far as peer influences? A. Well, as I pointed out before, adults are only one influence. And I think maybe one of the things we're not communicating is that, one peer say a high school or grade school classmate -- could influence 20 other kids to smoke. So we don't need one adult influencing one kid or one kid influencing one kid, we could have one kid influencing dozens of kids, and then those dozens of kids influencing I0 or 12 other. mean, it is -- peer group influence is in fact not a one-on-one influence but a multiple influence. Q. Do you have any data whatsoever that would tell you how many people an individual -- a child would be able to influence, other smokers? A. No. All X can say Is it can be more one, and it doesn't have to be a one-on-one influence. break? MR. GONZALEZ: Why don't we take a VIDEOGRAPHER: Going off I the videotape than A. WILLIAM ROBERTS, JR., & ASSOCIATES

144 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 record. The time is Number 3. (There was MR. GONZALEZ: back. videotape 2:15. This is the end of Tape a short break taken.) I think we're ready to get Tape Number 4. Q. BY MR. GONZALEZ: Dr. looked at any documents stating intentions for advertising for VIDEOGRAPHER: We're back on the record. This is the beginning of The time is 2:30. Semenik, what the any of have you strategic the cigarette Have you looked at any strategic respect to the induetry's goals for what they were trying to accomplish? brands? A, No. Q. Okay. documents with advertising or A. No. Q. Okay. strategic intentions for any cigarette brands, do you believe that it would be important to have reviewed those in evaluating the influence of cigarette ads on consumers' decisions to either -- to smoke or to purchase a brand? A. No. Because whether-a have something With respect to the company intends to happen or not is what they will say A. WILLIAM ROBERTS~ JR., & ASSOCIATES

145 1 2 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 in their strategic initiatives. The test of the effectiveness is of course what happens in the marketplace, so we can look to the marketplace specifically because we have that luxury, because we have the actual impact, we can, regardless of what a company hoped to do, we can look at the market and identify what did happen and the reasons behind what happened. Q. Well, in this case, the intention of the cigarette companies was to sell cigarettes, which they did do. With no -- again, I'm not trying to belittle your academic experience in any form or fashion, but wouldn't it be fair to say that the people who are doing advertising for RJR or for Philip Morris or for any of the other companies, are sophisticated in advertising and that they may feel that they're accomplishing some goals that you're not giving credit to? A. Well, since I have not -- read the strategic initiatives to match those up, I only know from studying the aspects of consumption in the industry, that it is possible that they said something that they wanted to accomplish and accomplish it, but that's -- that's because I've A. WILLIAM ROBERTS, JR., & ASSOCIATES

6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 only -- I'm dealing with the realities because I have the luxury of dealing with those. Q. I guess, then, you really don't know that the level of cigarette sales today are at their level because the industry created doubt about the health hazards of the product as opposed to simply doing advertising with respect to their brands and their products? MR. PURVIS: Object to the form of the question. A. There would be no way of tracing either of those factors across history. We can only look at total consumption figures and -- or literature where -- or data where we have indeed asked individuals why they began smoking, to come conclusions about those issues. Q. Okay. I understand about -- that have a subset with respect to why you began smoking, okay, but with respect to continuing smoking, is the same peer pressure, does that to some we may it the does that have the overriding effect? Is same level of -- of predominance over the marketer-controlled information that we're about? A. There's no specific literature about the talking A. WILLIAM ROBERTS, JR., & ASSOCIATES

147 1 2 3 4 5 6 7 8 9 10 11 12 14 15 16 17 18 19 2O 21 22 23 24 25 extent to which peer pressure is the influence on continuing smoking. Given that it was such an important variable in the initiation, the conclusion has always been that it is an important variable in the continuation. But that sort of data has not b~en developed yet. Q. Okay. Did the studies that you're referring to that talk about -- or anyone who has talked about the continuing -- or has extrapolated the peer pressures influencing the initiation and to continuing, did any of that literature, or did any of those discussions or wherever that the addictive qualities of don't so information come from, countenance qualities -- the alleged addictive nicotine and smoking? A. No. Q. In your opinion, if you have one, what would be the best way to keep people from smoking? That's not an issue I've thought about have an opinion on it. paragraph of talked I Q. Now, in the second your expert disclosure statement, we've considerably about the countless numbers of factors that influence the decision-making process. Now, A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 do doubts about the hazards of smoking make a person more susceptible to peer influence with respect to smoking? A. I don't know the answer to that question. Q. Okay. Does the frequent use of a product by one's peers have a more powerful effect in the decision process than the occasional use of a product by those peers? A. The literature on peer influence is not that specific so I don't know what that influence would be. I don't know that -- in terms of your question, whether more frequent use would be more powerful than infrequent use. Q. Okay. These countless numbers of factors that influence decision making, is a number -- is a different way to refer to those countless numbers of factors -- could we use the term mores or value systems to refer to those countless numbers of factors? A. No, we couldn't, and let me explain why. Q. Okay? A. Values, moral guidelines, mores would be each separate ones, but there are for example factors like situational factors: the things I learned in school, what my religious precepts are, A. WILLIAM ROBERTS, JR., & ASSOCIATES

149 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 that would not have necessarily to do with things values, per se. So -- my past experience would not be a value per se, and that is another one of the things that could be a factor in decision making. Q. Are you saying that a person's experiences don't affect their value systems? A. Not necessarily. If my experience with Michelin tires has been extremely positive and that is a big influence in my choice of Michelin tires the next time, I don't see that related to my value system. Q. Other than your experiences that you're talking about, and I guess religion, are there any other factors that -- that you can describe in addition to a person's value systems or mores that -- that you're referring to when you say situational instances? A. Situational factors is a category of influence on consumer decision making that was identified as prominent as recent -- approximately 15 to 20 years ago, where marketers began to understand that consumer choices may vary dramatically depending on the situation we find ourselves in. A. WILLIAM ROBERTS, JR., & ASSOCIATES

150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 25 For example, my choice of a restaurant or a consumer's choice of a restaurant to take his to celebrate an anniversary may be different than the choice of a restaurant to gO watch the Jazz basketball game tonight. So the situation -- an anniversary celebration versus watching a sporting event on a big-screen television -- would make be choose different restaurants. So that's the situational effect that has come to play in consumer decision making. Q. The statement that you make in the last sentence of that second paragraph starting with "Dr. Semenik is expected to testify," and then it goes on -- and we've read this a number of times -- is it fair to characterize that as an axiom of the advertising industry? A. It's fair tO axiom of the marketing consumer decision making. Q. Okay. Did you that. industry, any attempt characterize that as an discipllne with respect in any manner -- strike In applying this axiom to the tobacco Cigarettes in particular, did you make consider effects of to isolate and to A. WILLIAM ROBERTS, JR., & ASSOCIATES

151 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 addiction on a decision process? A. When I analyzed the consumer decision making with respect to people's decisions to begin smoking, continue to smoke, or quit smoking, I saw that those decisions fit within the general and typical ways in which people made decisions, and I did not see an influence of addiction which would change that. Q. How are you able to isolate addiction and then determine it didn't have any influence on the decision-making process? A. Well, that's my point. I didn't see anything about consumer decisions relative to cigarettes that was significantly different from their decisions about other product categories. Given that I'm not a medical expert and have no expertise in addiction, then, since there were no significant differences in choices about cigarette brands, then I as playlng a role. Q. I~ I understand you're telling me is that did not identify addiction you correctly, what you looked at the decision-making product -- or process of other industries and you found them to be in accordance or similar to the declsion-making process in the A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 8 9 I0 ii 12 13 14 15 16 17 18 19 21 22 23 24 25 cigarette industry; is that correct? A. That is correct. Q. Okay. What did you do, if determine whether or not anything, to that decision-making process was motivated by addiction in the cigarette context as opposed to some other factor in the other industries that you compared it to? A. Well, given that there was no identification in any o£ the literature about choices being motivated by addiction in our categories or in the cigarette category, in of consumers own statements about their choices, terms of research from Gallup or wherever, then as -- not being a factor in the decision-making process in either one, and not being an expert addiction, I proceeded with the variables with which we are experts. Q. What are some of the other variables that you were looking at in these other industries in order to conclude that they were similar to what was going on in the cigarette industry? A. Well, our discussion before about the fact that consumers are influenced by a broad range of considerations -- and those broad range of considerations include school, family, friends, product terms in in A. WILLIAM ROBERTS, JR., & ASSOCIATES

153 1 2 3 4 5 6 7 8 9 10 Ii 12 ~" 14 15 16 17 18 19 20 21 23 24 25 lifestyle, as we've talked about them -- as those play into the choice, then I found that -- that consumers in this product category were making choices like they were making choices in other product categories. Q. Now, that was true for entry into the product category; is that correct? A. It's true for both, both brand choice and for choice of using Q. Okay. and entry into What the product category. For entry into a particular brand a particular product. I'm referring to is the decision to continue to use the product, okay. Did you in any way attempt to isolate addiction as something that was different with respect to the user's use of the product as opposed to a different user in a different industry? A. NO. Q. Assuming that cigarettes had an addictive quality, do you believe that the countless numbers of factors that we've been referring to could be overridden by the addictive element that may or may not be present in smoking? A. I can't answer that qUestion because I'm not an expert in addiction or the medical aspects A. WILLIAM ROBERTS, JR., & ASSOCIATES

i54 1 2 3 4 5 6 8 9 i0 ii 12 !3 14 15 16 17 18 19 2O 21 23 24 25 of it. Q. Have you or anyone else attempted to determine what effect addiction would play with respect to the decision of people to continue to smoke? A. I have not seen literature on that, no. Q. Okay. So as far as you know, the decision of people to continue smoking is just as likely caused by addiction as it is by these complex countless numbers of factors that you're referring to; is that correct? A. No, I don't know that. Q. You have no way of knowing that; is that correct? A. I have no way of knowing that. Q. Do you have any reason to believe, from any of the literature that you reviewed, that the countless numbers of factors are able to actually override addiction, to overcome the addictive -- addictive nature of the product, so that people can make a free choice, like they would in another industry? A. Yes. Q. How did you do that? A. Center for Disease Control statistics A. WILLIAM ROBERTS,. JR., & ASSOCIATES

155 1 3 4 5 6 7 8 9 10 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with respect to the state of over three million people have quit only 2.3 million people continue to state of Florida. Q. Now, we've talked about marketer-controlled information. Florida show that just smoking and smoke in the Is it fair to say that with respect to marketer-controlled information, that you can only spend so much money and you can't go any further, in terms of attempting to influence people to use your product. Is that correct? A. To use your brand or your product? Q. To come into your product category. A. It's -- it's my opinion -- and when asked as a consultant, I give this opinion to clients -- that it is not worth spending to try to get people to come into your product category because the literature is very strong I'm my any money about marketer-controlled information attempting create demand where demand does not exist. Q. Let's talk about product category for a moment. The participation of people in sporting events -- and not -- not athletic but spectator is it fair to say that over the last 40 years, for to A. WILLIAM ROBERTS, JR., & ASSOCIATES

156 2 3 4 5 6 7 8 9 i0 Ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 instance, in the NFL, that has grown? A. I think -- I have not seen those numbers, but I would have to say absolutely they have grown dramatically. Q. Phenomenal. A. Yes. Q. What was the product category that spectators were involved in that they switched, I guess, brands, from? How would you describe that product category? A. Well, they wouldn't switch brands, and that's the whole point. If it's a brand-switching issue then they are in our product category; and if they choose a new product category, product category has, for whatever relevant to their lifestyle, motivations. Q. Would movies be a their product then that reason, become situation, their category -- part of the product category that -- attending sports as a spectator? A. We could define ali of those as entertainment as a category. So whether we choose to rent a video at Blockbuster or go to an NFL football game or a baseball game or a basketball game, then we are choosing -- we're choosing an A. WILLIAM ROBERTS, JR., & AssoCIATES

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 alternative from the entertainment category. Q. What is the product category that cigarettes fit into? A. Cigarettes is its own product category. Q. How do you define -- why isn't the product category for cigarettes stress relievers? A. I hadn't thought about it in that way before. It's -- we could talk about it that way but I never thought about it that way before. Q. Why isn't the product category for smoking, pleasurable, which is alleged to be enjoyable and why wouldn't that include rock and roll and sex? A. I've heard it put into those categories before, but I think that -- you know, it depends on how broad we want to be. I mean we could take -- let's go back to our other set of examples where renting a videotape or going to a basketball game or going skiing are all entertainment choices. Now once we make the entertainment choice, then if I'm going to choose to -- to ski, then I can choose between brands of skiing: Snowbird ski resort in Utah, Aspen ski resort in Colorado; if I choose to watch football can choose the brand I'm most favored for, and A. WILLIAM ROBERTS, JR., & ASSOCIATES

158 1 2 3 4 5 6 7 8 9 I0 11 12 13 15 16 17 18 19 20 21 22 23 24 25 that's typically a hometown but I could choose Green Bay Packers or -- so We get various levels choices. And there are people who say: I'm going to avoid a product category. I'm going to avoid alcohol as a product category. I'm going to a~oid outdoor recreation as a product category, I'm an indoor recreator, or I'm an outdoor recreator instead of an indoor. Q. Well, do you have any reason to believe that it would be inappropriate to consider cigarettes to be in the product category of stress relievers, whether they be sex, rock and roll, or anything else that might be a stress reliever? A. I've just never thought about it that way, and I'm not sure whether it makes sense or not. I mean I'd have to think about it. of Q. Well, I guess I understand it may not make sense, but what I'm trying to do is I'm trying to ask whether, in your 26 yeare of experience, why would it be inappropriate, okay, to put it into that broad a category? A. AS a -- as a basis for understanding think there's anything choice, I don't inappropriate about it. I just don't know whether A. WILLIAM ROBERTS, JR., & ASSOCIATES

159 1 3 4 5 6 7 8 9 i0 ii 12 14 15 16 17 18 19 20 21 22 23 24 ~., 25 it would help us understand anything or not, so. Q. Okay. Now, I understand you may not be willing to put it into that category, but you certainly can't find a reason to exclude it from that category -- A. No. Q. -- at this point? A. No. Q. Okay. Now as I understand your testimony, you've taken the position, based on the literature, that -- that spending money on advertising doesn't do anything to increase the use of or the demand for products in a product category~ it just shifts the demand within that product category; is that correct? A. It shifts demand brand to brand. Q. Okay. So if our product category was stress relievers, whether it be rock and roll or anything else that would fall into the category of stress relievers, why isn't market-controlled information a very powerful influence on shifting from one brand of stress reliever, let's say and roll, to smoking? A. Well, for the same reason that it wouldn't be powerful if we just narrowed the rock WILLIAM ROBERTS, JR., & ASSOCIATES

!60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 category to -- to cigarettes. I -- the literature would say that if you advertise to someone who is listening to rock and roll and not smoking cigarettes, that it would be impossible for you to stop them from listening rock and roll cigarettes. portrayed. and get them to start smoking That's the switch you've just The literature would say that's not That individual is going to make a on different factors. to going to happen. choice based Q. So by spending money for advertising, assuming that we were in this broader category of stress relievers, then they could actually increase the number of people that would be using their product, cigarettes? A. No. I don't understand the question. Q. Okay. Assuming that we put cigarettes into the broader category -- product category of stress relievers, okay, i£ that was the product category, then by the cigarette company spending more money on advertising, they would be able to increase their market share as against these other stress relievers; is that correct? A. No. What I said -- and I think if we A. WILLIAM ROBBRTS, JR., & ASSOCIATES

161 1 3 4 5 6 7 8 9 i0 11 12 15 14 15 16 17 18 19 2O 21 22 23 24 25 could read the record, I'll say it again -- the literature would say if you advertise to an individual listening to rock and roll, that individual will not stop listening to rock and roll and start smoking cigarettes; that you won't be able to make that product category shift. That's called primary demand. And it wouldn't change even if we redefine how we make up product categories. Q. But would you agree that that individual might spend less money attending rock concerts and more money on -- and might spend more money on smoking? A. Q. A. tells us don't No. Why not? Because that's not what the literature about primary demand. And we can take chewing gum. People who chew gum, don't chew gum. People who chew gum, chew gum. The milk industry has spent $500 million and counting trying to get people to drink milk with their ad~campaigns and milk consumption continues to go down. So o- and the literature on primary demand is fairly clear. So in the -- this hypothetical we've been talking about, we would not A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 expect, because of this long history of research, that -- that people would listen to less rock and roll and smoke cigarettes instead. Q. Going back to the more narrow discussion we've had about product category, and that is if you define cigarette smoking -- that product category to be only cigarettes -- it's your testimony that regardless how much money you spend in advertising, advertising is not going to increase the number of people that are smoking or entering that product category; is that correct? That's your testimony? A. Correct. Q. Okay. Now, that's because they are these countless numbers of factors that are out there that override market -~ marketer-controlled information; is that correct? A. Yes. Q. Okay. So the way I understand it, you've got one -- you've got two -- two influences. You have marketer-controlled information and you have your complex countless number of factors. And you can spend all the money you want on advertising but you aren't going to increase the number of people entering your product category; is that correct? A. WILLIAM ROBERTS, JR., & ASSOCIATES

163 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A. Correct. Q. Okay. Now, change the countless can people spend money to number of factors involved in the decision-making A. No. literature and uncontrollable process? Those are referred to in marketing in marketing textbooks, as the environment, the uncontrollable variables, culture, such as answer is no. Q. Okay. smoking be such as your competition, situational factors. Well, would the health one of those countless numbers in product factors that would be involved A. Yes. Q. Okay. So if you were able to such as So the effects of of entry? influence -- assuming that you were able to influence someone's thinking with respect to the health hazards of smoking, would that make them more susceptible to entering the product category? A. That would be one piece of information among the many pieces of information. Now whether it makes them more susceptible or not would be a matter for individual analysis. Q. On April 22nd of 1974, Mr. Zahn -- and I'm almost positive he's with the Council for A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 9 i0 ii 13 14 15 16 17 18 19 20 21 22 23 24 25 Tobacco Research -- but Mr. Zahn is writing to a Henry and a Tom, and he writes, "I had expressed fears several weeks ago as to what Homberger might try to do with his scheduled paper. I purposely arrived in Atlantic City early on Sunday April 7th. Homberger was due to give his paper at 1:30 p.m. the following day. He was to have a news release with him and that was to tell the press that the tobacco industry was attempting to suppress important scientific information about the harmful effects of smoking. He was going to point specifically at CTR." Next paragraph. "This was disturbing news. Homberger undoubtedly would have attracted considerable press attention." He goes on to say, arranged later that evening for press conference to be cancelled. "P.S. I doubt if you or Tom will want to retain this note." "I the A. WILLIAM ROBERTS, JR., & ASSOCIATES

165 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 If I can paraphrase what Mr. Zahn is talking about, is trying to prevent someone who is doing research through the CTR from giving a press conference about his research -- or about the tobacco industry suppressing research. In your 26 years of communication experience both academic and otherwise, have you ever seen anything like that, where an industry purposefully, intentionally, would prevent someone from releasing information into the public mainstream? MR. PURVIS: Object to the form of the question. A. documents Q. Morris I've not been privileged to internal from other industry memos, no. On March 24th, 1981, there's a Philip memorandum that states the following: "The communications committee is committed to instituting national advertising to reinforce the smoker, his choice to smoke, and the custom of smoking. This will be accomplished by attacking bad research, attacking researchers themselves where vulnerable." A. WILLIAM ROBERTS, JR., & ASSOCIATES

166 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 Have you ever seen an industry, in your 26 years of experience, set upon, as this national advertising campaign, to attack researchers or their were research? MR. PURVIS: Object to the form of the question. A. that way. Q. BY MR. GONZALEZ: How did you understand the statement to read? A. I thought the statement said ~hat they going to use advertising, and then there was I didn't understand the statement to read some other form of activity. You said they were going to use advertising to attack researchers. Could we maybe -- Q. Yeah, I'll read it again. "The communications committee is committed to instituting national advertising to reinforce the smoker, his choice to smoke, and the custom of smoking. This will be accomplished by attacking bad research, attacking researchers themselves where vulnerable." Have you ever seen that in any kind of A. WILLIAM ROBERTS,. JR., & ASSOCIATES

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 national advertising campaign? A. No, that's the kind of an internal memo that I wouldn't have access to. Q. Before Congress, a Dr. DeNoble, who was testifying -- and this was on April 28th of 1994 and it was regarding his behavior -- his behavioral research lab and he testified as follows. him - - your "However, we" -- and he's referring to Philip Morris -- "are discontinuing animal research beginning now." And he goes on to say, "and I was basically told to shut the equipment off, terminate the experiments even if they were ongoing, to kill all the animals the following day, and that was the end. Our badges were discontinued and we had no access to the research center. By the following Monday we couldn't get back in. It was a business~decision." That's what Philip Morris was telling or his instructions. Have you ever seen anything like that research or evaluating industries -- in A. WILLIAM ROBERTS, JR., & ASSOCIATES

168 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 Ao Yes. -- or what-not? It happens in the pharmaceutical industry all the time. Q. Okay. A. Research labs are shut down programs are going .nowhere .so overnight. So in that case I shutting down the have seen very common practice of research labs. Q. Okay. When you say nowhere and shutting down the that be materially different if the research here was showing a link between smoking and cancer? PURVIS: Object to the form of the research is going labs, okay, would MR. question. MR. GONZALEZ: It's a hypothetical. A. Hypothetically, if -- that -- that wouldn't be any different to me if the company decided that the research is not useful to their corporate objectives. MR. GONZALEZ: Allen knows what's comins. MR. PURVIS: So does he. Q. BY MR. GONZALEZ: Let me hand you what Number 3. I'd like to have marked as Exhibit A. Okay. A. WILLIAM ROBERTS, JR., & ASSOCIATES

169 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 MR.¸ the back? MR. MR. use it again Q. BY (Exhibit 3 PURVIS: was marked for identification.) Would you like it marked on GONZALEZ: Yes. PURVIS: I suspect you might want to sometime. MR. GONZALEZ: Have you seen this document before? A. Yes. Q. I'd ask you to look in the -- well, let me ask this: Are you aware that this advertisement ran in approximately 400 major metropolitan newspapers in 19547 And you're aware that essentially tobacco manufacturers endorsed this here? And in the first column on the down there where you can see a because I was trying to get this to Uh-huh. -- it says, • We accept an interest in people's A. Yes. Q. Okay. all the major at the bottom A. Yes. Q. Okay. left, a little photocopy line fit -- A. 0. A. WILLIAM ROBERTS, JR., & ASSOCIATES

170 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 similar retracted A. Q. Morris is correct? health as a basic responsibility paramount to every other consideration in our business." Did you ever see a public announcement to the Frank statement here that either or changed that mission statement? No. And R.J. Reynolds -- I'm sorry, Philip one of the signatories to this; is that A. Yes. Q. Do you ever know if Philip Morris announced publicly in any way, that it was the interest in people's health "as a basic responsibility paramount to every other consideration in our business"? MR. PURVIS: Object to the form. I don't know. I haven't seen that. ever changing Q. BY MR. GONZALEZ: All right. Is there any way, based upon the corporate objective -- would you call that a corporate objective, what I just read to you? A. That's -- that's a That would be different than objective. Corporate public statement. a corporate objectives usually have to do A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 9 i0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 171 with markets, market share, competitive position, etc. statement, statement objective. Q. This might be part of a mission a corporate philosophy, would be like that, but it wouldn't be an a Okay. Is it -- I think it's my understanding that usually corporate driven by the mission statement of the In one way or Okay. Okay. Assuming that is that correct? A. Q. another, yes. what Dr. DeNoble referring to was an attempt to prevent his that would establish cigarette, smoking -- how do you reconcile mission statement to A. What was statement? Q. Oh. 19- -- his lab was shut down, A. So 30 years objectives are corporation; is research a link between cancer and assuming that to be the case, this action with what was the Philip Morris in 19547 the date on the first this happened.in 30 years later. later. Yeah. 1984 is when relationship I don't I don't know if there's any between the two. For one thing, see, A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 understand -- I think you're asking me to assume what the purpose of that research is, and I don't know that it was because there was a -- a path of research on cancer. So I don't know if there's any relationship between these two or not. Q. Well, what I'm trying to do is I'm trying to draw upon your 26 years of communications experience, corporate advertising. You've talked about ethics, you've talked about protocols, you've talked a number of different things, and this certainly is a communication -- A. Uh-huh. Q. -- from Philip Morris and others to the American public. And I also understand your testimony to be that you're not aware of any change or attraction in any form or fashion by Philip Morris to this mission statement. So assuming, as I'm allowed to do in asking you as an expert, okay, assuming that this was research that was going to prove a link between cancer and smoking, okay assuming that -- A. Uh-huh. Q. -- how would you reconcile the closing of this lab With this mission statement? A. WILLIAM ROBERTS,. JR., & ASSOCIATES

173 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 MR. PURVIS: Object to the form. A. So you're saying if he continued and discovered a link between smoking and cancer which had been established 30 years earlier, that it would have somehow made an additional contribution to the consumer's environment. And I think we had a discussion a little while ago that said: If somebody said in 1984 that there's a relationship between smoking and cancer, I believe my earlier answers were that that would not have added to the consumer's understanding of the risks of using cigarettes. Q. Well, I think we made a distinction between when someone else has said something and when the company says it itself. Your testimony has been that doesn't make a difference. A. Yes. Q. Okay. But on anymore. I'm not new information that pot, all right? What whether or not, given that's not what I'm focusing focusing on whether there was was going to be put into the I'm asking you to focus on is that mission statement -- whether it was appropriate for this company, okay, to shut down this lab to prevent its scientists from establishing a link to cancer? A. WILLIAM ROBERTS, JR., & ASSOCIATES

174 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 o that that related Q. A. Okay. I understand the question now. So this would be an example of a company made a bad strategic decision about something would hypothetically in our assumption be to its mission statement? Yes. That -- then yes. Q. So is it fair to say that in your view of -- or evaluation of other industries, that you have not seen the destruction of research or the attacking of other scientists that would be in violation of a company's mission statement? MR. PURVIS: Object to the form. A. I've seen companies make decisions strategically not consistent with their that were mission statement, yes. Q. With respect to a public health concern. A. Not with respect to a public health concern, no. Q. The countless numbers of factors that we refer to in the second paragraph of your expert statement, is one of those the understanding of the health effects of a product? A. Yes, that -- that would be one that Could enter the mix of fac.tors, yes. A. WILLIAM ROBERTS, JR., & ASSOCIATES

175 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 Q. Are you able to say with certainty that -- in your expert opinion, that the countless factors influencing consumer decision making are more powerful than when a product is an A. I'm not an marketer-controlled information, addictive substance? expert on addiction so I couldn't make that statement, no. Q. Now, earlier we were talking about the decision to fund cancer research and research on the relationship between smoke and healthing -- smoking and health. Isn't the most likely reason that the cigarette companies were funding research with respect to smoking and health, was that they were trying to influence the countless number of other factors, an example being whether a person may be more susceptible to peer influence because they have doubt over the health effects of a product? A. question. Q. long I'm sorry. back I don't understand the It's getting question. I apologize. A. Okay. late in the day and that's a MR. GONZALEZ: Why don't you read that and see if I can break that down. A. WILLIAM ROBERTS, JR., & ASSOCIATES

176 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 over that -- smoking, number of referring A. (The pending question was read back.) MR. GONZALEZ: Okay. If I can go back that again and try to break that up for you. Q. I think you've already testified that -- that one's doubt about the hazards of all right, would be one of these coun£1ess factors that -- that -- that we're to. No, I -- I didn't -- no, I don't believe testified to that. Q. Okay. Well, believe -- A. One -- just before we went into that long question you said: If a person understood the risks of using a product, would that be a factor, and I said yes, that would be a factor that would do you be one of the countless number of factors. Q. Okay. So I guess doubt would affect a risk. So if someone doubted whether or not a -- there was a hazard related to that product, that would influence these countless factors that we're talking to you -- that would be one of those factors that would -- A. It would be one -- it wouldn't influence the countless factors because it wouldn't influence the situation, and it wouldn't influence your A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 religion. But your level of assessment of risk which is whether you have some small degree of doubt or some large degree of doubt, then that one of the factors, yes. Q. Okay. Okay. So isolating that all right -- A. Uh-huh. Q. -- isn't the most likely reason cigarette companies were funding research is factor, that with respect to smoking and illness, that they were trying to cast doubt on the American public? MR. PURVIS: Object to the form. A. I don't know why they were doing that research. MR. GONZALEZ: Okay. A. I've never seen a statement of purpose. Q. BY MR. GONZALEZ: Well, I think we went through several examples where people said "Doubt is our product." Do you remember that? A. But it was also with respect to those that I didn't know who those people were and whether that was corporate policy and -- so I know the extent to which that's strategic initiative. Q. Okay. Assuming that doubt was the the don't A. WILLIAM ROBERTS, JR., & ASSOCIATES

178 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 corporate policy, to create doubt, and assuming that that -- that research on smoking and disease was being used to create doubt, then wouldn't the most likely reason for doing that would be to affect one of these countless number of factors? A. Okay. If I could -- so if -- so cigarette company funds cancer research, and as we to clarify the they discover is that use the terminology before, relationship, and then what there's no relationship between cancer and the use of cigarettes, then they could use that to change the amount of doubt, and that's one of the factors, then yes. Playing out that assumption that way, then yes, that's why they would do the research. Q. Okay. So it's fair to say that at least in one circumstance the tobacco companies were spending money to attempt to change one of those countless number of factors that goes into the decision-making process? MR. PURVIS: Object to the form. A. Well, as we've -- countless factors means any information -- part of countless factors is information -- MR. GONZALEZ: Right. A. -- from the news media, so as that A. WILLIAM ROBERTS, JR., & ASSOCIATES

179 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 ~., 25 becomes a piece of information, then you can put it into the category of countless numbers of factors. Q. BY MR. GONZALEZ: What would be a more important factor than doubt about the hazards of smoking that would be included in these countless numbers of factors? A. Peers, situations, family. Q. Wait a second. If all the peers had doubt as to whether or not smoking was caused by a disease -- or smoking would cause a disease, then how can you say that -- that peer pressure is operating independent of the doubt factor that we're talking about? A. Because we don't know that those people would have any doubt. We don't know that they would accept information from the surgeon general or a tobacco company or their grandmother, as an important consideration in their decision process. Q. In reaching the conclusion that you reached here, were you able to find out that these people didn't have.any doubt as to the effects of smoking on their health? A. These people being -- Q. I guess whatever group it was you used to evaluate that smoking cigarettes was just like A. WILLIAM ROBERTS, JR., & ASSOCIATES

190 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 doing any other industry that you evaluated. A. Only to the extent to which that in an environment with a ubiquitous amount of information about the risks of smoking, they were choosing to use cigarettes in that environment. Q. I understand there was a lot of information out there about smoking, but what I'm trying to get you to focus on is whether or not you were able to ascertain from these people that you used as a basis for your conclusion, as to whether or not any of them had doubt about the hazards of smoking? A. That was not -- that was not data that was available in the information I was looking at. MR. GONZALEZ: Okay. Could we take like a short five-minute break? VIDEOGRAPHER: We're going off the videotape record. It's 3:25. MR. GONZALEZ: Okay. (There was a short break taken.) VIDEOGRAPHER: We'~e back on the videotape record. The time is 3:35. Q. BY MR. GONZALEZ: Okay. Dr. Semenik, here is a survey I think you were involved in. Do you recognize that document? A. WILLIAM ROBERTS, JR., & ASSOCIATES

181 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 there other A. A. is the Q. A. Q. omitted process? A. Q. A. Yes, I do. Okay. Is that the entire survey questions This is the Okay. Well, let me complete copy. Okay. that were with entire survey. that? or are look back here. Yes, this This is the Mississippi survey. So there weren't any questions or anything like that at.any point in the that were No. Same questions from start to finish? Yes. Okay. Was this a random sample or a quota sample? A. This was a random quota sample, and the way that works in the instructions I gave to the research organization was that I wanted a random digit dialing method used in all counties in Mississippi except Jackson County, but with a quota of 100 smokers -- current smokers, 100 former smokers, and 100 non- -- never smokers. So with that consideration I wanted that many to give me a A. WILLIAM ROBERTS, JR., & ASSOCIATES

2~2 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 sample of 300. Q. Do you consider the scientifically representative sample to be of the population? A. This sample was gathered in a fashion that is considered appropriate for achieving scientific representation, yes. Q. Is there a distinction between appropriate and scientifically representative of the population? A. All we can do is use methods which, time, have proved to create valid samples, so was the method that was used. Q. Okay. Who was asked the questions -- Question 6A and Question 6B? over that A. 6A and 6B, these questions were asked of people who were current smokers and former smokers. Q. How do you define an ex-smoker for purposes of this survey? A. Someone who, when asked the question, "Are you smoking now" says no, or have you smoked any cigarettes in the past week says no. So that would be a former smoker. Q. Okay. What does this survey tell you? A. Well, in general, or with respect to any particular item? A. WILLIAM ROBERTS, JR., & ASSOCIATES

183 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. In general. A. In general what this survey tells me is that it supports the literature over the last 25 years with respect to what we know about smoking initiation behavior. Q. Did the study include any measure of advertising exposure? A. Yes. Q. Okay. Did you do anything like this for Florida? A. No. Q. Okay. Which questions were attempting to incorporate the level of advertising exposure? A. Those would be questions -- Q 6A on Page 2 and Q 6B on Page 2. Q. As part of your opinion on Page 2 of your expert statement, you indicate in the second paragraph on Page 2, "Dr. Semenik" -- this is the second sentence -- actually the third one "Dr. Semenik will testify that the message that smoking could be dangerous to health, fatal and habit-forming was effectively communicated to consumers," and then you go on from there. A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 Tampa This is an article I pulled from the Tribune dated May 15th of 1997, and apparently this has to do with a -- Minnesota. the article says, "By January, snow was piled i0 feet high in the northern plains. The people who run the government's flood insurance program knew that terrible floods in the on to say that they did a could mean spring." And it goes And blanketing of the of airwaves urging people to buy flood insurance, and they didn't. Have you heard of that? Are you familiar with that at all? A. I didn't see this -- this article or hear about this scenario, no. Q. Okay. I mean apparently the snow was up there; it was about to fall -- you know, melt, and it was -- all this water was going to go someplace, flood insurance. but nobody bought A. Uh-huh. Q. of facts about Is there any kind of doctrine or any kind that you're relying upon -- well, doctrine why people would behave that way? A. WILLIAM ROBERTS,. JR.,. & ASSOCIATES

1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 185 A. Because they heard they didn't act on it? the information but Q. Yes. A. The only thing we would do, in a standard consumer behavior analysis, is that given their knowledge of the two situations, the cost of the flood insurance, the risk, they determined that it was a risk they were willing to take. That would be the conclusion from a consumer behavior analysis. Q. Is that the same kind of consumer behavior analysis that you did for the third sentence in Paragraph 2? A. Third sentence of Paragraph 2, what you just read to me? Q. Yes. A. That would be the same conclusion, that because of the amount of information about the relationship between smoking and health, that we have information from these surveys that people had that information and have made decisions about smoking with that information as part of their decision-making system. Q. When, by reviewing the literature, did you make the determination, that it became common A. WILLIAM ROBERTS, JR., & ASSOCIATES

186 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 knowledge lung? Or cancer -- lung? A. 10,000 were lung Q. between that smoking could cause cancer of the actually let me strike that. When did it become common knowledge that or that smoking can cause cancer of the As early as 1960 I found a Survey of high school students, 97.4 percent of whom aware of the relationship between smoking and cancer. Okay. You don't make any distinction -- between the rel- -- between someone who "I acknowledge relationship between and someone who says "I know You don't make any statements? says yes, a smoking and cancer," that smoking causes cancer." distinction between those two A. I don't think we can make it. if we provide a person with information real and accurate, and that person -- is free as an individual to choose to not believe it, then the only thing I information provider, is be sure that information. Just as these people in zone had the information. Q. Would it be fair to say that -- you expect from your research .on consumer If we-- that is that person believe it or can do as an they have the the flood or would behavior, A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 if there was a higher level of certainty by someone in a flood zone that their house was going to flood, that they would have conducted a different cost-benefit analysis? A. If there was -- could you repeat that? Q. Okay. I think earlier you said that -- that they must have done a cost-benefit analysis and they figured that the cost wasn't worth the benefit. That was your explanation for why you think they did what they did. A. I didn't use that language but I'll accept that. Q. I'm sorry, I'm not trying to -- I'm trying to paraphrase; we've got a plane and so forth. I'm -- So given that we're talking about doing a cost-benefit analysis, based on your knowledge of consumer behavior and what consumers do in decision making, what I'm asking is: If the consumer had a higher degree of certainty that his house was going to flood, would you have expected him to purchase flood insurance? A. Not necessarily. Q. Why not? A. Because we see consumers who make A. WILLIAM ROBERTS, JR., & ASSOCIATES

188 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 decisions based on a variety of forms of information, some of which are rational -- such as a highly calculated risk of the probability that my house will be flooded -- and emotional decisions which are very much based on gut feeling -- desire, faith, holding out hope -- and some individuals may rely on their emotional decision criteria more than their rational decision criteria. Q. I grant you that statistically there's probably a bell-shaped curve somewhere where you're going to find a certain amount of people who are going to say that "I was praying that God was going to save my house," and another group of people who was going to say that "I didn't care," all right, or whatever. But wouldn't you expect that the people in the middle of the bell curve are going to be more rational actors and that these other distinctions you're talking about are less likely to occur? A. I don't think we can say that is a general principle. We can say that individuals will use emotional versus rational criteria, and the proof is in the behavior, and the extent to which they have acknowledged or not acted. Because ultimately the individual decides for himself that A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 given the information, this is the personal choice and the personal choice made here was to I make, not buy flood insurance. Q. I realize that to a certain extent all of us are idiosyncratic with respect to how we do things. Could you say that the most likely factor that governs our decision making that rises above our idiosyncratic tendencies is knowledge about the situation? Would that be a fair general statement? A. Yes. As long as we would agree that knowledge is both rational information and emotional information. Q. Okay. Is it your testimony that the quantum of information about the health effects -- was, the adverse health effects -- alleged adverse health effects of smoking, is greater than it say, in the 1930s, or is it the same? A. The -- the amount of information is an empirical question. What I do have as information is historical tracking of awareness, which is available and I provided in my materials with respect to Gallup polls, other polls I was able to locate, like Scholastic magazine, and current studies done for Mississippi which show the level of awareness at points in time. A. WILLIAM ROBERTS, JR., & ASSOCIATES

1 2 3 4 5 6 7 8 9 i0 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 ~ 25 So whether there is more information or less information, what we need to understand is the level of awareness of health risk, and we do have those numbers. Q. Going back to our rational actors and the decision to purchase flood insurance, is it fair to say that the better information you have with respect to an event, the more rational decision you're likely to make with respect to that event? A. No. Q. Why make a was less A. Q. said. A. me the true. is it that a person would be able to @ational decision based on information that than complete? I didn't say that. Okay. Then I'm not following what you Okay. You asked me the other. You asked inverse which does not that the converse So if a person has lots of information, that doesn't mean they'll make a rational decision. If they have little bits of information, that doesn't mean they'll make an irrational decision. The reason is that what is rational is determined by the individual. A. WILLIAM ROBERTS,. JR., & ASSOCIATES

191 Q. Are there any have been advised that you comment upon? I'm looking A. Yes. Q. Who would that be? A. The two depositions other witnesses that you are going to be asked to at the third paragraph. I've received are conclusions about 7 from Professor Krugman and Professor 8 Parrish-Sprowl -- Parrish-Sprowl. 9 Q. And have you formed any I0 Mr. Sprowl's testimony? ii A. I have opinions with regard to the 12 observations he's made, and they're, you know, 13 pages of those, so depending on which opinion 14 asked about, I can give a -- my own opinion in 15 return, yes. 16 Q. Is there any specific opinions 17 been asked to comment upon? 18 A. Not at this time, no. 19 Q. Okay. 20 21 22 23 24 25 300 you've I'm MR. GONZALEZ: Allen, what's the procedure for if he's going to be commenting on -- on John Parrish-Sprowl? How are we going to -- or is there any kind of procedure for us to be able to do that. I just don't know. MR. PURVIS: I don't either. A. WILLIAM ROBERTS, JR., & ASSOCIATES

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 redirect MR. GONZALEZ: Okay. All right. All right. That's all I have. I assume, Allen, you don't have any or anything? MR. PURVIS: That is a very good assumption. MR. GONZALEZ: Okay. All MR. PURVIS: Thank you. right. VIDEOGRAPHER: We're going off the videotape record. The time is 3:55. This is end of Tape Number 4. (The deposition was concluded at 3:55 p.m. the A. WILLIAM ROBERTS, JR., & ASSOCIATES

193 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 DeDonent's Certificate I, RICHARD J. SEMENIK, deponent herein, do hereby certify and declare the within and foregoing transcription to be my deposition in said action taken on May 19, 1997; that I have read, corrected, and do hereby affix my signature to said deposition. DATED this -- day of ................ 1997. STATE OF UTAH Deponent day SUBSCRIBED AND SWORN to before me of , 1997. this My Commission Expires: Notary Public residing in A. WILLIAM ROBERTS, JR., & ASSOCIATES

134 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 ReDorter's Certificate State of Utah ) County of Salt Lake ) Reporter, Notary Public certify: I, Ariel Mumma, Certified Shorthand Registered Professional Reporter, and for the State of Utah, do hereby THAT the foregoing proceedings were taken before me at the time and place set forth herein; that the witness was duly sworn to tell the truth, the whole truth, and nothing but the truth; and that the proceedings were taken down by me in shorthand and thereafter transcribed into typewriting under my direction and supervision; THAT the foregoing pages contain a true and correct transcription of my said shorthand notes so taken. IN WITNESS WHEREOF, name and affixed my seal ~ , 1997. My commission expires December 9, 1997. this have subscribed my ~day of Notary Public I I~-~ ~'~';~t ~ ~39 Sou~ 2500 East | A. WILLIAM ROBERTS, JR., & ASSOCIATES

SEMENIK, RICHARD '[11 77:19 ]9th|l| 4:6 '70S [11 69:10 Ist [21 43:24 71:23 'aOI 72:721~1 - 3:3 3:4 'body [11 77:19 40:13 50:5 98:2 -4{11 95:1 20151 9:19 72:1 73:18 °O[31 1:3 I:|I 1:19 2160I,I 2:3 -oOo DI 2:16 2:21 2201 50:1 3:8 222-8222 III 2:4 -VII1 1:7 24111 9:22 00121 97:22 97:24 24thtq 45:10 05 [21 98:4 98:6 3 {31 3:5 98:7 [ [121 I:0 3:3 301 Ill 16:6 3:4 3:6 4:7 33 [11 50:4 5:24 6:1 97:22 33601111 2:4 97:22 97:24 98:4 98:6 , 345 [tl 16:10 i-800-Gerber pl 3851H 16:10 90:18 39568-1425 [11 2:8 lO[fl 13:10 25:18 3rdol 77:15 27"2 27:8 27:11 4 [I] 2:20 27:19 50:1 50:4 400,000 [21 65:21 97:18 66:8 10-year-oidlq 26:6 450[H 16:7 101 111 2:3 474-6550IU 2:13 I 1 i21 98:1 98:4 50 [31 98:1 98:4 i I/hill 80:5 500111 16:12 I200[H 2:t2 5151121 1:14 4:11 14/31 l:16 4:1 601 I21 2:8 2:9 4:5 1425 IU 2:7 64105 [tl 2:12 1431 Pl 4:15 670111 16:ll 1466AH pl 1:6 73411! 2:7 14th 111 80:6 762-1207 [tl 2:9 | 5 121 27:2 97:22 762-6068 Itl 2:8 16p] 50:14 50:18 80l [ll 2:4 16-¢ountrypl 53:12 816[U 2:13 53:17 54:6 85111 29:25 1 7th pl 39:4 89:19 9181 1:16 4:l 4:5 9:19 9:22 19121 1:16 4:1 19308[U 44:12 9011! 29:25 19508121 53:9 95111 1:6 69:18 a.m 131 1:16 4:1 1954 [q 79:6 98:4 1960 pl 94:25 ability [11 23:5 able [*1 12:1 12:6 19608141 44:10 J4:22 15:3 42:5 78:17 79:2 79:24 90:2 1963 pl 39:4 43:24 above 1~] 24:6 44:6 24:12 1964pI 93:20 93:21 ab~'ll~ [11 56:14 95:2 1967pl 45:10 77:15 aheolutepl 97:3 19/0121 15:15 45:20 ab~olulelypl 27:15 37:19 19708 [21 45:24 ab$orptJo~ [ij 45:16 70:1 a~adel:ni¢ [~21 22:2 1972 [1l 71:23 35:4 38:21 38:24 1975 {q 89:19 63:2 70:12 71:17 1976121 15:8 15:22 72:23 73:16 82:20 19808111 53:16 88:11 8~:14 1982[q 80:6 a¢Cept [11 68:1 1995 [q 4:l aCCCSS [11 91:6 1997p1 1:16 4:6 accessibl¢[Sl 57:23 21:4 accomplish pl 14:23 Cond~n~eltTM 15:2 3h21 84:3 85:17 accomplished III 29:18 account DI 40:19 41:8 41:12 aCCUl'~tO [II 50:17 ~hicvcd pl 63:18 ~tlsl 10:18 89;4 89:10 89:11 98:9 ~tiviti~ [~194;3 ~tivi~ [q 69:3 ~[U 52:2 ~[11 ~:10 ~[tl lS:l 21:6 21:11 31:6 56:2 96:7 ~:8 97:4 addpl 58:19 ad~ [11 37:2 addi¢fi~ p~l 36:21 37:4 37:12 38:7 38:19 38:22 39:1 43:9 43:13 ~:8 ~:9 45:1 36:23 36:24 37:17 37:18 38:3 38:14 38:15 39:8 39:10 39:15 39:22 ~:21 4h9 41:16 42:6 42:19 42:24 43:3 43:16 43:21 ~:13 ~:15 ~:20 45:13 45:22 46:1 Ad~ Pl 39:4 ~dition pl ad~s~ ~l 69:17 69:22 A~d~ Iq 24:20 adj~r [H 9:25 ~Ring [2l 45:21 45:25 ~o1~ [tl 26:17 ~[~ 20:8 22:18 22:22 25:23 56:1 56:11 ~:1 ~ III 52:3 I~v~n~ 1~1 17:3 17:6 Idvao~ [11 92:23 ad~t ~ UI ~:22 ~v~i~ 7:I5 22:23 37~ 55:[3 ~6:16 92:1l ~:20 ~[Zl 11:24 57:1 advc~i~ [q 28:8 ~ising [~1 7:19 7:22 11:14 12:18 13:21 14:8 14:17 14:21 14:24 16:1 16:6 18:10 18:19 18:23 19:1 19:2 19:7 19:8 19:1119:14 20:1 20:1 20:3 20:7 20:1421:20 22:3 22:6 22:2223:2 23:2124:12 24:2425:7 25:21' 27:18 27:2428:3 28:6 28:8 28:1228:15 30:2231:1 32:8 33:5 33:1433:14 35:2536:7 39:2 47:13 48:3 48:14 49: I49:5 49:8 49:10 53:1253:25 54:1955:8 56:1056:22 60:17 60:20 61:7 61:21 65:1966:21 80:1180:18 86:2488:1 96:2497:11 98:1198:15 98:22 98:24 99:3 99:6 99:23 advocating Vl effect Vl affected [11 afraid Pl 84:16 af/erwards pl 5:21 31:24 63:2074:J6 82:9 85:9 egalu~t pl 55:14 32:7 33:8 34:22 36:9 47:19 48:21 49:5 49:16 54:17 55:25 60:15 60:22 63:2 70:20 86:16 91:18 98:9 98:16 99:3 99:18 72:11 IJ:l 67:16 45:15 26:12 32:17 5:15 55:20 79:2 92:22 13:20 18:24 a] [41 1:5 1:8 19:6 4:9 4:10 19:11 alcohol [U 44:25 19:25 alkaloid [q 44:2 20:3 20:12 allegatioa 121 37:16 21:23 66:7 22:17 alleged I.I 38:14 23:19 57:15 58:1l 59:6 24:16 65:15 66:24 25:16 alIcging Hi 41:16 27:22 All~pl 2:10 28:3 28:9 allows D I 49:7 28:17 al~roati~ [U 68:22 al~nlativos D 1 70:11 always/2! 72:7 96:9 Americapl 46:6 American pl 1:8 4:9 43:25 • ~Ll~r/ca~ss [H 59:16 amollnt 141 13:20 13:21 13:21 25:11 35:20 57:]3 analysis [,q 7:5 28:20 68:16 76:3 angle Ol 7:16 answcrnol 18:25 23:14 24;10 24:11 24:13 25:19 27:20 31:23 33:3 36:15 36:19 38:16 58:4 66:1 74:15 80:22 85:2 87:6 94:19 97:16 s~sw~ring D I 87:5 APpI 34:13 apart DI 71:5 71:9 85:8 apologize [11 25:20 77:11 appeal [11 21:12 appear p[ 8:14 58:16 S~IPl2! 8:2 25:24 ag~lCi~[2l 20:3 20:7 28:8 ~"~[11 97:6 ag~[ll 26:3 egO['Vl 18:2 22:11 25:4 25:18 27:2 27:19 58:21 agl~lnentp) 55:24 ahead[2l 5:22 23:14 ahh[ll 75:10 ~[tl 85:25 I~]i~[Zl 68:J7 alrli~[H 25:3 ai~la~[~l ~:3 68:19 68:20 A~[q 1:14 A. WILLIAM ROBERTS, JR. & ASSOCIATES (800)743-DEPO appeam..d[21 53:9 53:12 • pp|~ [11 88:8 applicdpl 38:19 :applie~ 111 70:20 apply [5147:22 I ~6:25 88:6 spp~iate III 36:4 ~pm~h [H 98:12 ~pmp~a~ [2] 29:20 ~pmpfia~ly (q 16:2l ~ 14:2 18:19 20:13 20:24 21:18 32:21 63:23 ~i31 35:18 35:19 35:21 ~CI[H 1:17 ~lsl 8:J6 33:2] 33:23 34:3 96:24 Index

SEMENIK, RICHARD 6~:II 67:12 67:14 67:16 69:6 87:24 choiccs[31 I i:21 64:17 87:9 [ch~se[~l 20:8 42:25 64:4 64:10 67;17 67:19 85:14 88:12 92:4 choosing [H 11:16 chosco [21 7:8 53:7 Chrobakpl 2:14 4:13 cigar~tte[~l 3:5 42:1 42:23 42:25 47:8 47:13 48:17 49:9 53:12 53:25 54:4 55:7' 56:1 56:5 69:12 69:14 69:15 69:16 69~22 70:1 78:9 78:21 78:22 79:14 79:20 81:25 84:14 85:1 85:2 88:6 98:9 98:11 99:2 99:17 99:20 99:22 ~ig~ttes[221 7:9 37:17 43:3 43:16 43:21 47:1 47:14 48:13 48:22 5l:7 54:18 55:15 56:4 66:10 68:7 68:8 68:24 69:11 78:10 78:22 79:22 79:23 CIRCUIT 121 1:0 1:0 ~itizm~[31 78:12 78:13 78:24 citizens 01 77:1 City 141 1:15 2:11 2:12 4:11 CLItl 1:6 claimingpl 37:1 clarification[2123:15 91:9 clarify[tsl 14:20 34:6 . 40:23 63:o 65:12 70:22 71:14 71:21 72:24 75:16 76:15 78:3 84:13 85:3 88:17 clarifying [21 73:17 74:19 cl~ty[~l 31:12 31:17 cla~s[41 16:5 16:7 [7:10 74:2 cla~seS[6l 15:25 16:2 16:321:16 21:20 24:2 Cla~sroom[ll 64:8 cletn[t144:24 clear[31 13:8 3]:18 31:21 36:5 61:9 clientsttl 20:8 eliot21 20:25 21:4 CIoseuI 39:839:12 43:10 77:19 77:23 80:8 94:8 clo~ Ill Coke [ll 37:5 cola tH 36:23 Colby nl 80:6 97:18 97:22 colle~ted [H 8:23 College 121 53:20 79:7 COloruI 3:4 comtl~llt DI 6:19 13:1 66:6 coml~"~t$ I2) 8:22 90:18 commercial [al 61:2 68:9 ~omlllon [al 28:20 99:4 communicate 25:5 60:8 92:3 92:4 92:24 communicated pl 58:12 59:7 60:1 communicating tq 92:18 connnunication [41 16:21 29:6 56:23 93:8 communications 28:11 28:12 28:16 28:18 30:7 33:6 33:18 57:4 companies [a~I 22:19 23:8 23:24 34:5 34:12 34:19 34:25 35:5 39:15 45:5 65:7 65:11 69:16 76:25 78:22 79:9 79:20 85:25 89:21 89:24 90:2 91:1 92:2 93:16 company {ml 1:8 4:10 8:22 17:16 17:lR 17:lq 17:20 21:7 21:8 28:19 29:4 30:2 30:18 33:9 33:21 33:23 34:4 34:7 39:25 43:25 45:21 47:8 63:3 64:23 64:25 65:6 69:25 75:24 76:8 76:9 77:8 78:9 78:21 80:5 81:25 82:25 83:4 83:6 83:23 84:1 84:2 84:4 85:1 85:2 85:13 85:14 85:19 85:20 86:6 88:12 88:15 91:16 92:5 92:16 92:19 93:14 97:6 97:13 97:14 97:15 compaDy's [41 17:23 28:22 28:24 82:23 compare [~1 14:14 20:18 CondcnscltTM compared 121 25:22 26:11 42:19 comparing 121 25:10 92:10 80:3 comparison [tl 42:5 comparisons 12150:18 75:1 2:5 compete [21 32:21 32:25 competiag t21 32:8 77:18 competition Pl 32:2 competitively 17:21 competitur's I~1 64:11 compftitors [41 17:25 24:20 24:21 81:12 complaint pl 40:4 completed [H 21:3 completely {H 97:4 mmplex [71 I 0:7 10:12 11:4 18:9 40:15 41:4 70:18 ~mprchcnsive t~l 49:5 50:8 5S:I 53:14 53:17 56:20 ~ttllptlterS [21 13:22 14:15 'conconlration 46:7 concept [tl 88:5 comptually 92:6 conc~q~led pl 9:3 65:11 97:9 ~,ol~rl~S [41 69:17 69:19 69:1969:23 conclude [31 49:7 61:11 62:5 conclusion ~ 40:13 40:19 41:3 41:7 43:15 44:19 60:2 concluso~y [tl 60:9 condllcted [tl 6825 conf©~-'nce 121 80:3 80:4 confuse Ill 29:9 confused DI 30:3 83:18 91:21 confuaiag 11! 5:19 conjunction 121 6:7 6:9 connected {t i 44:3 consequences [2] 99:18 99:21 eonseqttctltly IH 56:1 I consider t~l 9:5 23:9 23:23 60:1 99:23 considerations gH 90:1 co~sider©d [Sl 24:1 36:23 36:24 55d4 60:15 60:21 74:9 92:17 considering [q 65:15 consisting i~1 72:8 constitute !~1 29:25 constructed [tl 85:24 collstnl© 111 77:9 construitlg 111 96:14 consultant [H 35:3 collstlmor [6~1 10:6 I0:11 10:22 10:23 11:2 11:8 11:9 11:13 11:20 12:20 12:23 16:8 17:16 19:10 19:20 31:3 31:7 31:10 31:14 31:25 32:1 32:13 32:23 40:14 41:3 41:17 41:25 42:2 42:3 42:4 42:9 51:12 51:13 51:22 57:23 64:1 64:14 64:21 67:6 68:9 70:17 75:11 75:12 75:13 75:18 76:1 76:3 76:14 76:17 76:22 77:4 77:9 77:13 78:1 80:12 87:16 91:7 93:11 93:15 94:9 94:11 94:20 COII$1II~'~S P31 7:3 7:6 7:7 7:11 7:17 10:19 11:5 11:14 12:16 19:11 25:5 28:21 42:20 42:22 56:13 58:2 64:4 64:10 64:17 67:10 70:10 73:23 74:9 78:14 78:25 87:8 87:23 91:6 91:13 92:2 92:3 92:8 92:22 COILSIlll'ml's~ 1~1 11:21 29:2 41:23 contact tsl $2:7 52:17 52:18 52:24 58:1 colitett ill 80:20 coDtiI~ 1~1 41:24 79:10 continuing [tl 64:16 control I~l 48:12 59:13 96:25 97:2 97:3 controlledttl 95:9 controlsol 93:1~ controversy [t~q 77:22 80:7 80:9 80:13 80:15 80:19 80:24 81:9. 81:15 81:19 82:1 82:8 82:14 82:17 83:14 85:6 Conver~ IH 24:20 conveyttl63:13 copy Pl ~0:5 corded tu 16:22 colporitte I21 78:23 choiccs- crcatin 87:13 corporation el 8:1 61:22 81:1 corporalJons [217:2 90:24 corl~ct [421 8:25 9:1 10:10 10:II 15:8 15:16 18:12 18:13 18:16 20:16 22:19 23:10 23:21 23:22 27:14 34:5 34:19 34:20 35:23 37:J3 37:14 46:22 47:1 47:16 50:9 52:5 52:6 54:1 55:15 70:21 71:15 80:21 81:21 82:3 83:17 84:23 86:15 86:19 87:3 87:19 87:22 88:2 conecting pl 82:12 cormctly [21 12:13 20:16 cost-benefit pl 68:15 council Ol 93:21 Counsel [21 1:13 4:17 eounter-ad lU 56:2 Ill 55:14 :counting {tl 98:20 countless [21 40:16 70:23 gO~tl'iO~ [141 49: I 49:6 49:9 49:13 49:14 49:15 50.-9 50:11 50:13 50:14 50:15 50:18 50:19 50:24 53:1 53:15 CO~ttl 1:2 couple ttl 84:17 goupons F~l 11:15 13;22 COll,r~ 1~I 16:11 16:15 16:16 17:1 17:2 17:3 19:1 19:1 19:4 19:6 19:14 19:15 19:17 19:17 19:22 20:7 20:22 20:23 21:24 28:1 33:2 40:4 47:23 61:5 89:23 gOura~ [Sl 16:25 18:22 25:22 64:14 64:14 COURT ttl 1:0 ~overs [21 30:8 30:12 crash 11186:1 ~le.,ate it ~1 28:21 28:23 78:2 80:14 80:16 80:19 81:4 81:15 81:20 82:18 83:1 83:14 86:19 87:12 87:14 91:15 created ttl 86:3 ell~af,.,.,.,.os [ i ) 31:6 creating ffl 31:9 A. WILLIAM ROBERTS, JR. & ASSOCIATES (800)743-DEPO Index Page

SEMENIK, RICHARD 35:25 ¢xamJlte |51 I 1:2 I 2J:6 22:11 36:6 53:7 examil~e.~] [31 5:3 22:6 40310 examining [tl 41:2~ example p21 13:14 [3325 14:1 1739 20:20 21310 32312 59312 68317 85316 86:13 95:14 examples [21 24314 25.22 cxc~'pt ftl 26:10 exc~ 171 9:9 19:18 58:4 58313 61:4 77:6 , 78:12 executive [31 16312 16:14 16:15 exercise UI 97:7 exhaust pl 76:21 Exhibit [215:24 6:1 cxist iI] 77:20 cxistedpj 25:18 55:5 eXiStS [11 49:6 expanded 0127311 expensive [31 25:13 26:23 27:6 ~xp~rioa~ [21 43:8 43:12 expert [,1 3:3 5:23 10:536:21 40314 43.~ cxpcrti~ Pl 45:8 66314 experts ['1 41:14 41315 explain Pl 29.~ 64:23 explanation Pl 50:22 Explorer 1q 29:12 extended 111 51316 CXt ~nsivc [21 47:25 48:3 48:25 exttl [11 32313 cxtraordinmy Iu 25:7 extremely f,i 1036 10:12 24:25 40:15 fa~ UI 33:9 f~ [31 28319 30:2 5731 facingpl 17:19 fact [141 1036 21:2 37:15 40:20 4138 41312 41319 67:3 68:13 69:1 71:3 77:19 83:5 85319 factor Pl 10324 713J9 factog~gd it i 67.'9 facior~ D41 10:7 10:J3 10315 10:18 13:3 29:22 30:15 31:2 32:2 40316 51:12 64:4 70:23 73:25 factoly iiI 47:4 f~t~ [H 41:20 fair ptl 9:8 11:5 20317 2)325 25315 27:7 27:17 32:7 33:25 36:8 38:5 38312 57312 57:17 59:25 66:19 98:8 98:15 99317 fairly [21 17:4 22:24 fairness [Sl 55:6 55312 55:2255:23 56:6 falls [31 18:19 52:19 familiar i~1 37315 47312 55:657319 61325 70:3 94:9 96:23 families Ill 26:21 family 1~1 10:24 51315 51:17 52:20 74:1 f~1"141 8:5 9;2 51:20 91:19 fuhinn pl 31:5 40:20 44:21 fstherpl 51:16 58:3 fault IU 54315 favorable 131 3!:7 3139 633J7 favorite [H 17:10 fu [21 2:9 16:22 FCC Ill 96:12 feature PI 28:24 29:23 'featm~ [q 29:16 47312 47:20 48:2 48311 48:20 49:7 59312 59:19 59:20 felt[21 24:22 75317 few Pl 25:4 92:3 92:22 field OI 82:11 FIFTEENTH [U I:0 figuxe pl 1335 figu~s p I 52:2 film [tl 25:4 final [H 96:5 finallyPl 29:24 financial UI17324 Finchpl 77:16 findings Isl58:18 58319 59:21 59:22 59:23 fi~(II 82313 fingcraails pl 44:24 CondcnscltTM Finland !11 50:J 6 first |t*l 18:4 24:10 24: I J 2931 29:3 38:6 38:12 38:16 42:23 47;24 52:5 52:6 72:19 84:25 84:25 85:25 fit [Sl 7:20 12320 64:5 67:5 80:10 fi~ [ll 89:16 fiV© {tl 13:10 15:22 16:13 22:7 2231 33317 fixed [11 9:25 Florida 1:5 2:4 5:16 8321 44:16 fo~u~ if] 1732 65:4 72:1q 82:17 84:4 fo¢:u~s It) Focusing [11 followed g: t following 81:8 follows (21 59:2 food [3l 32:16 forced (tl 25:6 Ford's [tl 29:1 I forgot ttl 58:24 form [1|1 14:10 23:11 36:12 38:8 39:17 40:20 40:22 41:10 45:15 55:16 61314 65:23 70:7 73:1 73:13 73:20 78:5 94:15 fo~xs ~1 16:2 I 68:22 forth 1~i 22:18 37:9 37:13 63:21 70:13 95:24 found [sl 42:1 46:8 50312 78310 78:22 framework pl 21:15 21318 67:6 Frank Pl 3:5 80:3 free IH 5319 friends 171 10:24 11:23 43:7 51315 51:25 69:3 74:2 float [tl 37:6 front~ it) 72:3 full[~l 5.~15:22 15;24 [tally it i 12315 fund [~160:24 64:23 64:25 65:7 74:24 75315 75:J9 75:23 75:24 75:24 76313 78:2 85:1 85:2 85:14 86:6 funded IU 83:4 funding [tl 60:14 60:18 6l:6 65:15 71:11 82:21 83:6 83:15 83:21 GPl 4:2 gain/q 25:8 gainingttl 31:8 gains Pl 31:5 35:20 Gamble [l! 17317 19:21 gather pl 8:7 22:16 gathe~d [3i 8:10 8:4 Gear [11 26:8 1:2 gel~ral [tSl 13:9 4:9 14:9 26:16 27:23 40:4 34:8 43:19 46:11 47;15 51:4 51:11 18:23 77:21 84:6 93:4 79:10 03:6 93:7 ~,n1~11' s p i 48:17 66:5 ,,e~rally [l tl 7:21 54313 17:12 20:1 40315 30:4 67:22 67:25 68:1 70:4 83:23 96:23 39:6 97:1 :l~rals ' Ill 58:18 5:3 gen©llte [ll 82:1 91310 g~nius [31 30321 30:24 G~rb~r [11 92310 ~'¢b~[81J3:16 18:4 64312 64:20 70:12 goal [tel 29:2 30:7 63:19 73:16 84:3 84:7 84:9 84:10 84:12 85:17 goals [~1 15:4 27:23 28:9 28:11 28318 28:20 29:25 30:23 go~ [11 72:6 goif(ll 33:1 gO~ [31 9:3 25:17 Gonzalez pn 2:2 2:20 4318 4319 5:7 5:16 5:20 6:2 9:12 9315 9:23 14:13 23313 23:17 36:16 36:20 38:11 39:20 41:1 49:22 50:6 55:20 58:13 58:25 61:18 66:6 66:24 67:3 70312 73~ 73:15 78:9 94:22 97:17 97:20 97:23 98:8 good[tel 4:18 12:14 1431 76:25 78: l I 78:13 78:23 97:21 99:10 99:14 goods (tl 12:16 government (71 7:13 34:9 4732[ 48;11 59:12 59:20 59:21 gll:4tt [31 35:20 35:21 greater [al 27:19 49312 A. WILLIAM ROBERTS, JR. & ASSOCIATES (8001743-DEPO cxxrnine - help g~atvs1111 57:7 Gg0.,~ ['~1 89:18 grind Ill 47:6 [group pll 8:24 45310 52314 52315 52:17 52:18 52:20 52:24 58:20 65:6 69:2 group8 Ill 52:9 growing [11 46:19 grown Ill 46:8 'growth [~1 49:12 49:14 gUeSS [t41 10:9 10:16 12:25 18:11 18:21 21:15 23:7 25:9 31:18 37:24 68:17 87:17 91:21 92:9 gUCS{ UI guidelines [21 96:12 96:20 guiding pl 83:11 Httl 3:1 habit pl 45:J4 habituation pl 44:5 Haines pl 22:J5 hair pl 77:5 happy {tl ~:!0 haTd p) 26310 64318 75:5 HAP~DY [H 2311 hurDl (t i 86:2 hate (11 25312 hazard [~1 59:15 72:16 hazards (Sl 57:14 57:15 58311 59:6 77:3 h©ad [~1 26:22 96321 h~ad~ra D I 70:25 health (3Sl 44:23 45:7 45:9 56:3 57314 57315 57:20 5831o 58315 58:16 59:5 59315 59317 59:24 6134 69314 69:17 69:23 72:9 72316 72321 72:25 73:19 74318 75:25 78:4 79:23 82:23 8331 83:7 83:22 84315 84:22 85:4 94:1 health-related 59:17 healthier p I hear [21 6631766318 he.ard [3161318 95:8 heavily Pl 48:7 48:10 held [21 9:17 96:12 help [41 18:8 25:8 83:23 86;8 Index Page 5

SEMENIK, RICHARD 67:15 68:16 68:16 18:20 19;4 73:23 89:11 19:9 19:18 looked tSl 22:17 27:23 30:22 34:3 35:19 35:21 33:15 33:18 41:24 86:25 90:24 43:19 93:18 93:19 99:13 marketplace [4] ] 9:13 42:21 56:9 81:7 1l:3 markets i~1 12:16 97:19 18:5 65:20 19:6 19:19 33:13 74:14 91:4 looking1, lost III 84:16 lumpingltl lunch Pl 98:3 lung lSl 45:17 78:10 78:19 78:23 79:14 magagi~ [tl 36:25 m~ t~ 20:9 57:22 57:24 58:7 58:9 59:4 ~:9 Main ~tl 2:12 main~in pl ' main~nan~ ttl~:9 major tsl 14:16 24:21 ~:~ 46:~4 72:3 majo~pl 98:19 m~ DI 11:2 ~ 39:20 98:13 manet P116:1 t 17"1 19:6 man, p] 93:15 ~n~rpl 34:23 58:10 59:4 m~uf~r p 87:17 manef~' 95:2} m~k Pl 30:25 ~d ~ 5:24 6:1 m~[l~ 7:7 17:22 18:3 18:6 25:8 25:17 25:20 25:23 25:24 25:25 27:11 27:16 31:7 ~: 11 ~: 12 ~:25 76:9 ~¢~*SDI 11:24 12:17 12:22 ~c~n~ll~ [~1 6:23 6:25 7:1 7:18 9:5 9:6 10:4 10:9 10:14 10:20 11:18 12:2 12:8 12:11 13:4 23:6 23:7 23:18 23:~ 23:24 24:5 28:D ~:18 41:5 67:7 70:19 70:24 74:4 74:8 m~k~ pl 12:15 renaming p~ 7:~ 12:20 15:8 15:19 15:19 16:5 16:6 16:7 16:10 16:11 16:12 17:1 17:5 18~9 18:11 18:14 83:7 materiallq 57:13 materials 171 8:13 8:14 22:11 39:24 44:11 53:21 80:1 matter ~l4:8 5:17 97:8 marten pl 93:25 martins [1l 95:21 n~y its] 1:16 4:1 4:6 17:21 20:25 21:22 33:9 43:24 51:17 71:23 80:5 80:6 80:15 87:10 87:13 92:6 MBADIIS:I0 15:13 17:3 me~ [tal 6:10 6:24 29:8 31:16 61:17 61:20 74:25 78:16 84:8 89:1 95:16 97:8 meaning [41 61:20 61:24 95:5 96:20 me.~lS (41 77:18 77:21 88:23 88:24 reOaat ~l 15:2 58:5 96:4 lncasn~ pl 22:21 m~hanisms p 139:12 media m 8:2 20:8 20:10 56:15 57:21 58:3 58:5 60.9 medical [11| 7:13 36:22 41:14 41:15 57:25 65:15 66:16 76:1 76:4 76:7 82:21 Medicine pl 79:7 ll~[i~ Pl 56:22 57:4 57:7 nlld~llm8 DI 57:18 58:12 59:8 mcetings Ill 28:7 lnonlber iIq 26:16 43:19 46:11 66:9 67:4 68:5 68: I I 68:14 88:22 88:22 89:2 meationed 131 25:3 30:13 73:25 merely 1tl 93:25 mcsssg¢ 131 20:15 58:10 59:5 87:8 88:2 CondenseltTM II~SSagOS [21 20:4 2~:5 metuI 96:12 method [Zl 17:7 93:8 Michigan pl 15:1o t5:15 mid-1980s itl 53:10 ~11~ 7:11 9:4 14:2 18:15 61:9 ~:2~ 70:22 77:3 83:5 ~:7 ~:22 91:13 92:10 ~:10 ~LLE~ pl 2:6 ~nd psi 5:22 7:16 7:19 17:14 26:3 26:5 28:21 35:12 6h24 77:20 ~aimal [Sl 91 91:~5 92:1 92~ ~:3 ~nim~Pl 45:12 ~nu~8 [tl 45:1 I ~n8~ [1] 77:10 ~ssing p] 42:11 Mississippi p] ~SSO~ [I) 2:12 Mi~ubis~'s pl 29:14 ~X[t] 74:12 ~[1192:17 ~I DI 31:2~ ; 41:18 41:20 I~[11 94:10 ~tlR 9:10 9:1l J8:2 35:12 58:2 I ~ II] 25:4 ~ [Sl 24:23 25:11 32:14 32:15 ~ni~dng [al 95:17 95:24 M~ UI 29:15 ~n~oI 32:14 Mop.it] 39:7 ~ming pl 4:18 74:1 ~[~1 21:1 ~:~ 35:13 51:6 57:4 57:7 ~lypl 24:17 ~fivafiO~ Pl 75:3 ~F[tl 91:12 ~[I] 85:11 m~to] 91:3 ~vi¢ [11 52:1 ~ Ill 32:18 Ma[41 2:5 2:14 97:18 97:22 jMUDANO Itl 2:3 MtI~I~ I11 1:17 N[31 2:1 2:17 4:2 name U14:19 5:9 5:10 29:3 53:18 81:18 81:18 nan~cs [~1 16:4 29:16 narrow I!1 65:3 national PJ 57:22 57:22 57:23 57:24 58:6 58:9 59:3 nearly [al 46:7 72:1 necessarily [~i 64:21 99:13 ~(~iti~ I~1 32:15 33:3 l~l:d It 1112:16 23:15 24:22 40:24 48:12 49:19 50:16 58:19 73:4 74:16 93:23 ncx~.d tt I 45:9 ~ [11 12:24 Netherlands Pl 50:14 ncqwogk DI 57:11 ~-wor [4143:22 47:4 53:16 99:20 l~WI6} 20.9 21:4 53:20 58:19 59:23 91:22 Dew'S Ire) 8:2 8:17 8:21 34:10 34:12 34:13 58:17 58:17 83:5 83:8 m-a,~paper [,i 8..20 20.'9 26:24 34:8 34:17 37:9 58:6 59:10 nowspal~"~ [tel 8:21 26:20 57:22 57:23 58:6 58:7 58:9 59:3 66:17 83:9 ~xt Ill 81:5 nicotine p~l 37:13 37:17 39:7 39:10 39:22 40:1 41:15 44:2 44:8 ~.9 45:13 45:14 45:15 46:8 ~[41 17:16 24:21 26:7 32:20 Nilf~'S HI 24:17 nixed pl 97:4 nod8 (al 26:22 96:21 non-personal 52:18 normally pl 51:24 68:15 normative pl 99:11 99:15 North pl 46:13 46:14 46:18 notice ~1 6: i 6 A. WILLIAM ROBERTS, JR. & ASSOCIATES (800)743-DEPO looked- onc 69:7 notiocd [:~l 26:15 35:17 November [tl 89:19 now 1~-/I 4:4 13:23 J6:7 18:10 2J:4 32:6 33:17 34:2 37:7 45:19 46:25 49:23 53:24 54:8 58:23 58:24 59:16 64:6 65:14 67:3 72:17 81:5 88:4 90:8 90:24 91:10 96:13 number [~el 4:7 5:24 10:13 46:20 50:5 55:1 59:16 73:25 90:17 91:6 91:14 92:4 92:10 92:11 93:12 93:15 94:20 96:18 98:2 98:7 ngmbers t~l 16:8 40:16 70:23 91:5 93:3 95:3 0 [I] 4:2 Oaldaad [q 4:15 Obje¢~ [1~ 14:10 23:11 36:12 38:8 39:17 40:22 41:10 55:16 61:14 65:23 66:23 70:7 73:l 73:13 73:20 78:5 94:15 abjection pl 67:1 ~bjeetive pl63:14 72:14 84:12 • bjectives [31 28:3 ' 63:14 63:17 observations pl 22:13 obtained [ll 94:4 obviot~ t~l 89:6 obviously [q76:6 op~lgr [1166:4 oe~ufriilg [iI 27:2 0~11~ [U 65:13 October pl 45:10 77:15 93:21 Off [41 9:17 9:18 49:25 97:25 offfr [|I 22:12 62:17 62:20 62:23 62:24 92:2 92:20 92:20 Office[t] 2:7 official (tl 79:11 officials ['1 69:15 69:23 Oft~ (tl 17:7 oil (tl 91:12 once F~I 29:17 29:19 ~[~41 2:11 8:17 9:4 9:11 10:14 14:2 21:2 27:25 28:20 29:25 31:10 35:9 35:13 35:15 43:5 46:12 46:14 Index Page

SEMEN]K, RICHARD qualitative pl 93:4 rP.~OUlltod III 51:4 93:6 re~tify ltl 74:20 quality121 14:9 redesigntq 69:22 22:21 Reeb~k lq 24:20 quantify pl 12:1 refer 1.1 6:23 10:5 12:6 93:3 69:1 90:24 questions 141 21:22 ref©rence lq 96:i9 6hi 90:17 9hl4 quiet pl 64:7 references lq 37:12 quit IS1 41:24 43:6 ref©rred pl 23:18 43:7 43 7 43:11 33:17 33:19 qUOtCH61 39:7 rcferr/ng i71 10:20 33;22 41:21 52:15 39:8 39:12 44:1 67:7 84:4 99:9 45:11 71~25 72:7 72:20 77:16 77:19 regard pl 43:12 77:20 77:23 80:6 $0:25 65:1 80:8 93:22 94:8 regarding 121 8:10 P~DI 2:1 ' 2:10 11:21 4:2 i~qllar 141 16:22 ~..J [ll 80:5 16:24 21:23 97:10 radio 141 20:9 58:17 reg~l|~l'ly ill 53:9 58:20 66:18 regulated i~! 47:20 ~aised [3| 24:19 48:7 48:10 : 64:19 69:17 regalation itl 47;25 Ralph pl 2:2 regulations DI 47:22 4:19 5:15 4~1:2 96:11 runge [tl 4h22 rcinfore¢ it i 63:16 rank[21 91:19 91:20 relationst~l 33:8 rapid p191:5 33:9 33:16 33:22 34:3 34:7 34:18 rau~ [~] 45:16 54:22 89:20 90:9 55:2 55:4 rates [2] 50:23 53:15 relationship 1~1 rulher ltl 84:6 re-uk It! 58:23 reach P157:2~0: I 0 60:12 rem3hin8 tt I 41:6 read [221 26:19 26:24 27:4 34:16 36:16 36:18 37:25 38:25 44:9 60:19 65:7 65:12 65:13 65:16 71:12 71:15 71:21 72:25 73:17 74:19 75:17 75:20 75:25 76:16 76:18 76:18 76:21 "F/:3 78:3 79:14 82:22 83:22 84:13 84:14 84;22 85:3 39:23 40:5 46:5 47:7 59:2 66:17 74:6 74:21 85:5 94:23 reading t"l 36:25 38:17 rea,son it i i 70:14 75:7 81:1 82:3 83:16 84:20 87:1 87:1 88:10 88:12 92:1 t~asonltlg it I 63:15 t~:¢l~t [tl16:9 recognition [1l 8h17 recommended Itl 19:22 t~Ol~eil¢ 141 72:22 73:15 73:22 75:3 reconciliation Iq 75:6 record [t~l 4:5 5:8 5:15 9:17 9:19 9:22 ~:1 50:4 59:2 74:23 98:1 98:6 41:20 relative tSl 58:25 13:24 22:12 69:1 91:17 85:5 relatively tq re]ea~c 53:14 rel~ 14l 8:2 8:17 8:21 8:24 40.4) 58:18 relevam [41 32:4 87:8 religion Pl ]~:member [al 81:18 56:12 54:11 repeating t i l rephrase 32:10 38:10 54:11 74:16 repon 93:20 12:11 68:22 92:12 8:25 40:10 12:22 87:15 74:3 $0:15 56:10 12:4 90:5 14:11 39:19 59:15 Condons¢ltTM re~Ol't~ DI 34:17 44:10 60:6 P-,~'port~ It i 1:17 m~ingpl 59:20 59:21 59;23 ~$ l~l 26:25 34:8 58:17 58:18 59:10 ~:16 ~p~nting pl 5:16 ~p~ pl 59:14 :14 ~h[s~l 16:10 ~:4 39:14 52:1 i ~:24 65:1 65:7 65:15 ~:25 69: 7hll 72:15 74:24 75:16 75:24 76:2 76:4 76:7 76:9 ~:1 77:8 78:2 ~:2 ~:4 82:22 83:1 83:4 83:6 83:15 ~:5 84:6 ~:21 85:1 85:3 85:14 85:22 ~:6 ~:7 86:9 87:2 87:4 87:7 87:11 ~:13 89:13 91:1 93:20 ~1~1 7:13 59:23 ~I~uI 72:15 12:2 14:8 20:20 22:2 22:4 22:22 23:8 26:17 27:6 27:9 27:18 32:1 32:6 35:18 42:1 42~ 43:2 47:15 48:3 48:21 51:1 51:2 ~:16 ~:~8 55:7 56:7 56:9 56:15 57:8 57:13 58:11 58:15 59:6 63:2 63:11 ~:7 71:11 73:3 75:18 79:22 ~:24 ~.l 75:16 ~n~ltl 7h13 ~tlq 98:22 ~lll 36:14 ~ 1~1 32:19 ~I~[11 49:16 ~ult DI ~:23 87:4 87:7 ~ul~ lq 86:7 ~:8 87:15 ~U~ Ill 34:12 ~Vl~ [11 79:7 ~IW Iml 6:3 8:18 16:9 37:7 44:ll 50:]6 50:22 59:10 79:4 79:12 rgv~owe~ iI ii 7:15 8:6 23:25 47:20 48:15 $0:22 57:12 62:8 62:12 65:19 69:9 reviewing It1 97:11 revis¢ I t I 6:1 I revised I~l 6:12 6:15 Reynolds Ill 80:5 Richard lSl I :~ 2:19 4:8 5:1 5:10 ridingpl 68:2 right Iltl 6:22 9:15 14:13 $0:15 30:17 32:6 32:18 37:6 47:3 49:23 57:18 61:8 72:11 77:14 81:19 81:23 82:10 84:18 86:23 risk [~} 68:6 68:7 68:8 68:14 68:16 71:7 86:2 risks pl 44:25 56:3 56:21 67:10 67:18 67:20 68:2 role Ill 28:2 35:3 35:4 80:24 80:25 90:5 90:6 95:23 [O1~ [II 95:17 rolliegltl 9:25 I'~ll I~1 13:10 13:24 rules iII 13:18 run [~1 44:17 96:6 SDi 2:1 3:1 4:2 Sir© Ill 87:22 safer ~1 69:11 69:12 69:13 70: I 85:16 86:15 86:23 87:14 safety m s6:5 87:11 sales [4| 7;25 8:11 8:13 33;15 Salt 1~1 1:15 4:11 Satisfying iiI 70:11 say~ tal 71:25 ~:~ ~O[ll 17:19 ~ [~1 ~:4 ~:5 ~l Ill 5:12 5:13 10:2419:18 19:~ ~:12 57:24 74:2 ~i~fifiCl~l 58:19 59:21 59:22 72:14 76:4 76:7 76:8 76:18 76:23 77:8 86:22 ~(ll 6:14 SCRUBS tu 2:~ ~tioy(tl ~:24 qualitative - shocs SC: Ill 55:19 SECPl 96:20 second t~l 6:22 10:4 20:13 21:18 52:8 67:8 70:17 73:24 secondary iSl 21:14 28:22 9h2 secondly p I 29:4 section 121 19:7 20:11 F,(~D~I 0:3 34:8 42:8 42:14 45:19 52:4 69:21 77:12 81:7 92:10 95:19 97:8 97:9 reeing pl 46:2 reek Pl 25:6 i S~1121 64:2091:22 I~'~l~t lII 98:20 selected [tl 63:13 sell I2! 13:18 14:4 selling [, ~1 7:25 8:8 8:10 28:15 33:15 33:20 39:9 39:15 39:22 63:20 76:10 2:19 4:8 4:19 5:1 5:8 5:10 10:3 23:13 26:1 50:6 98:8 ~"~ [IOl 34:14 36:1 41:17 42:10 65:25 92:6 92:25 96:3 96:5 99:11 sensitive iii 89:22 ~"l~t III 40:2| ~"ll~b'll~ [21 94:23 94:24 ~lrlhl t21 30:10 3:16 reqlreI}OO [1| 19:5 S~'~i~ ItI 53:2 servi~ Pl 10:23 25:2 34:12 IIG'I'Vi~I D] 4:15 12:16 34:13 ret [1.1 14:23 17:19 28:8 28:17 29:2 29:22 30:23 32:5 57:6 62:23 63:6 66:4 71:5 71:9 84:8 90:13 36:5 37:8 49: l 1 53:6 90:16 sex Ill 37:2 shalxlpoos Ill 91:12 share [~1 25:24 25:25 Ih~ltcT D I 32:15 shifts [II 25:25 Sho¢ [41 24:17 25:16 26:12 27:12 shoc~ [1+1 25:12 25:12 25:14 26:7 A. WILLIAM ROBERTS, JR. & ASSOCIATES (800)743-DEPO Index Page

Dr. Scm~n~ is • 9rofczsot of M~kcting end ~he ~nb~t ~acuIty Scho~ ~t Da~d Eccles School ofB~ U~ve~ of U~. He ~ taugh~ grad~te ~ ~d~ie co~s ~ ~e~, ~g ~ ~r ~Hor for ~ t~ ye~. He ~ au~r~ ten cohere ~d ~e~y te~o~ on tb~ topics ~ch ~e ~d ~ c0~eges ~d ~erskies ~oug~u~ t~ Unked S~tes ~ ~ound ~¢ world. Dr. Semec~c ~ testify abou~ univers~y acx.~pted models ofco~r d~ision d~c~io~ a~u~ ~ok~ ~i~eu~. Dr. Sc~ is ex~t~ lo test~ t~a~ co~r dec~Jon ~g gene~y ~ e~r~ complex ~d ~ ~ue~ed ~ co~zle~ n~rs of ~to~ ~t uc ~e ~r~l ~d ~ve more ~uence t~ ~keter~n~ollcd Dr. Se~ ~[l ~ t~ ~C t~ ro~ ~t ~ ~en~ f~ly, dt~io~l con=oged st~E - ~ the most ~wer~] ~ on ~ ~d~'s dccbion.~ s~ke th~se p~ciples oCco~ de~on ~g gc~y or ~ ~pp~¢d to ~uenc~ oTadv~ ~lu~ ~v~b~ ~or cig~¢s; Dr. Scmc~ ~11 clg~c~e b~d ~wn~ b ~ ~Fo~tion ~een a ~y c~tome~ ~ ~t ~ ~ ~ e~d~ ~t cig~ene br~ ~ve~g does o~er ~ d~et~te b~. pro~te b~ ]o~ty ~d enco~ge br~ s~g. Dr. p~ ~ for Dr. Se~ ~ ~ te~dfy about tl~ n,~urc ~d n~gr~tude of ~vcnbi~ e~dizure~ ~cl~[ ~g~en¢ ad~[s~g.¢~it~es. Dr. Semen~ ~fi t~t~ t~ • dve~b~g e~ic~ for ~g~es ~e not out olive ~h e~ndit~cs ~ othcr product categode~ ~ l~t the ~1 ofexpendkmc refl~ts ~ f~t t~t it operites ~ s ctu~ered ~ ~g~ co~it~e ~V~nb~ ens'~o~em.

Dr..Semem~k ~ill ~Iso ~es~i~ ~0ou~ v~rio~s ra~rke~ir~., advenis~, ~d pro~do~l p~c~iccs ~ ~ s~m ofFIofi~ D~. Se~ w~ ~esd~" ~dve~is~ ~clu~ ci~e ~v~n~g ~ough ~he y~s. Dr. S~ ~1 there ~ ~ evidence ~ color ~d ~e~' ~ ~venis~g for ci~e~es ~uc~es non- smok~, yo~8 or old, m ~ s~k~. . Dr. Se~n~ ~I ~ te~ ~uz [he model, of co~c~zion co~r ~oz. com~ of~urc~ ~e, c~eL receiver, ~ te~ ~t he ~ appEed the ~on model [o he~h, ~ ~ ~k-fo~ ~ e~cdvcly co~t~ to co~e~ ~ven~ for ci~e~tes md o~er i~O" sm¢c~ weze a ~o~don en~o~nt a~uz ~k~. Dr. Scm~ ~y ~o ~ ~k~ to ~m upon ~e Mm~s, m well ~ zh~ ~dcnce u~n ~ch ~ey rely. Dr. Semen~k b~s=s ~ opinions upon tds eduction, his profc~[o~ ¢~ence ~d ~, ~d ~ ~ fi~e~e ~ o~he~ ~o~ion r~bly refi¢~ u~n by mem~rs of~ prof~io~ He ~ ~s ~ op~on u~n ~ renew of~¢ swdm ~don en~o~m, ~cl~ ~ re~w ofnews~. ~o~ ~d o~er ~c~l~ ~ ~nt~ rc~c~ ~ u~n ~o~tiou ~d ~te~a~ tenably re~ by e~s ~ ~e fie~ of~r

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