Judge Kessler’s new history of the tobacco wars

Author: John Luik
Article Published: 2006

Perhaps the strangest thing about Judge Kessler’s recent decision in the US Department of Justice’s case against the tobacco industry, and there is, as we shall see, an awfully lot that is strange about it, has been the reaction of investment analysts, a considerable portion of the media and many in the public health and anti-tobacco communities who have characterized the Kessler verdict as a victory for Big Tobacco.

While there is a certain logic to this conclusion in that Judge Kessler, due solely to the decision of the appeals court on disgorgement, a decision that severely limited her remedial reach, was unable to present the industry with a multi-billion dollar bill, to describe the Kessler opinion as a victory for Big Tobacco is to use “victory” in a most peculiar way. For while the industry escaped a crippling financial penalty, the Kessler judgment is a devastating loss for the industry in just about every other sense.

This is not simply because of Kessler’s injunctions about light cigarettes or the ways in which her findings of fact might provide ammunition for future litigants against the industry. Rather, it is because her “factual” conclusions about the last 50 years of the tobacco wars represent an almost total endorsement, not to say vindication, of the public health and anti-tobacco movement’s positions on virtually every important tobacco issue - from whether smoking causes diseases to whether ETS is a risk to nonsmokers to whether tobacco advertising leads to youth smoking to whether light cigarettes represent a genuine reduction in the risks of smoking.

And it is not just the issues where Judge Kessler’s verdict is so damming - it is also devastating in what might be called the moral sub-text of her decision - her conclusions about the legitimacy of the entire tobacco enterprise due to its seeming indifference to the very real human costs of its success. As she notes in the opening pages of her opinion in speaking about the mountains of paper and huge expenditures of effort involved in the case, these things should not “obscure what this case is really about. It is about an industry, and in particular these Defendants, that survives, and profits, from selling a highly addictive product which causes diseases that lead to a staggering number of deaths per year, an immeasurable amount of human suffering and economic loss, and a profound burden on our national health care system. Defendants have known many of these facts for at least 50 years. Despite that knowledge, they have consistently, repeatedly, and with enormous skill and sophistication, denied these facts to the public, to the Government, and to the public health community.”   

Now it might be argued that the Kessler verdict is only a judicial conclusion - and one that few will ever bother to read - about something that everyone has “known” for a long-time. After all, there are no real surprises here. Over the last ten years through a combination of careful litigation, the 1998 Master Settlement, selective and non-contextual release of internal industry documents, the anti-industry “Truth” campaign and thousands of popular and scientific articles as well as official government reports, the groundwork has been carefully laid for this decision. Indeed, it is increasingly difficult to find anyone, let along anyone to sit on a jury who does not believe that the tobacco industry is not only profoundly untruthful, but also has engaged in systematic and persistent wrong-doing.

But this is to miss the far-reaching significance of the Kessler decision. For the last fifty years there have been essentially two competing histories of  smoking and health - the one put forward by the public health and anti-tobacco establishments, and also by various governments, the other put forward put by the industry and supported in parts on scientific grounds by many outside of it. For the public health community the tobacco industry is a criminal enterprise which has systematically lied about every smoking and public policy issue that it has confronted. It recruits underage smokers through profoundly deceptive advertising that has always denied the risks of smoking and keeps them smoking through a carefully contrived program of nicotine addiction. It’s cigarettes represent a significant health hazard to nonsmokers, and its claims about light cigarettes attempt to skirt the obvious truth that there is no safe cigarette. For the tobacco industry, the risks of smoking for the smoker, at least until the publication of the initial Surgeon General’s Report, has been an area of scientific dispute, while the health effects of secondhand smoke continue to be unclear. For the industry, marketing has been about brand share as opposed to new consumers, and advertising has never been directed to underage smokers. As for the claims about addiction, the claims about smoking as addictive were manufactured for policy as opposed to scientific reasons, and whatever the meaning given to addiction, the evidence has never shown that smokers are unable to stop smoking. And light cigarettes, even in the hands of compensating smokers, offer a less risky smoke.

Though aspects of these stories have been tested in court before, one thinks particularly of the massive court case on the EPA report on ETS which resulted in the court rejecting the EPA’s scientific position, there has never been a case, until now, when virtually all aspects of these competing histories have been heard together. What the Kessler judgment does is to provide a vindication of almost all of the anti-tobacco story, and with that vindication it brings an almost total rejection and condemnation of every aspect of the industry’s story. It is in one sense an official finding that the government, health establishment and anti-smoking crusaders’ claims about the motives, intentions, science and activities of the tobacco industry are substantially correct. After all, here is a judge who has heard both sides and has determined that the story told by the good guys is the right one. Moreover, it is not simply a vindication which takes the form of “there are two quite legitimate sides on these complicated scientific and policy matters, and the government and public health community’s position in correct”, but rather one that asserts quite boldly that the industry position on just about everything is fraudulent and put forward with but one aim - to deceive.

This means, for instance, that the industry’s regulatory options are probably significantly constrained, both in the
United States and overseas. A change in the US political climate could well result in sweeping regulatory changes on everything from nicotine to less hazardous cigarettes to marketing, and contesting these regulatory changes in court might well prove extremely difficult with Judge Kessler’s findings of facts hovering over the preceedings. Internationally, where the regulatory process is less open to judicial review, the Kessler “facts” could make contesting certain provisions of the FCTC even more problematic.

But to turn to the central question - did Judge Kessler get it right? Having heard both of these stories at great length, are her conclusions, in her self-described capacity as a finder of fact, the right ones? Or has she, at several crucial points, gotten it fundamentally wrong? In this and a subsequent piece we want to argue that the Kessler story is in many respects deeply flawed. Indeed, rather than an accurate account of the tobacco controversies of the last half of the 20th century, one which carefully seeks to arrive at the truth, it is often much closer to a revisionist account of what happened that bears little resemblance to a careful sifting of the facts. We will examine the Kessler “facts” on seven key tobacco issues - the question of fraud, witness credibility, addiction, less hazardous cigarettes, marketing to children, nicotine manipulation and ETS.

A Fraudulent

At the heart of the government’s prosecution of the industry under RICO law is the claim that the industry through an “enterprise” encompassing such organizations as the Tobacco Institute and the Tobacco Research Council, has engaged in a fifty plus year series of carefully constructed and wide-ranging frauds - frauds about the risks of smoking, frauds about addiction, frauds about ETS, frauds about marketing to children, frauds about less hazardous cigarettes, and frauds about nicotine manipulation, just to mention a few. In other words, the industry’s positions on these issues - whether addiction or ETS were not simply mistaken, they were not genuine differences of science or policy, differences held by credible experts but rather they were in fact “knowingly false” positions that were crafted in the language of the statue with an “intent to deceive”.

In virtually every instance, Judge Kessler accepts these claims of fraud. As she states near the end of the opinion “… the evidence of Defendants’ fraud is so overwhelming that it easily meets the clear and convincing standard of proof. The Findings of Fact lay out in exhaustive detail the myriad ways in which Defendants made public statements, often directly to consumers, which were flatly contradicted by their own internal correspondence, knowledge and understanding.”  

But while this might be what Kessler’s findings suggest, it is certainly not what a careful examination of the trial record suggests. For instance, the central claim by the government that the industry formed a RICO enterprise in 1953 whose main purpose was to defraud the public about smoking and health was disproved by the Government’s own expert who conceded under examination that the intention of the defendants in coming together to context the claims about the risk of smoking was to do legitimate and “good science.” Indeed, after that fatal blow, the government never was able to specify, as it was required to do under the RICO statue, precisely what enterprise was in fact created and maintained by the industry. 

More crucially, however, is the question of just what fraud has been committed. According to Kessler, the industry’s fraud consisted of the fact that it knew a series of scientific truths, but lied about these truths to the public, the public health community and the government. In effect, the industry knew that smoking was dangerous, but denied this, knew that smoking was addictive, but denied this, knew that it manipulated nicotine, but denied this, knew that low tar cigarettes were no less risky than other products, but denied this, knew that it marketed to young people, but denied this, and knew that ETS causes disease in nonsmokers, but denied this. In other words, according to Kessler the evidence is, to use her word, “overwhelming” in each instance that the industry’s view of a scientific and/or policy issue was not simply wrong, but that the industry knew that it was wrong - the fraud - and exploited its being wrong in order to convince people to buy cigarettes.

This, however, with perhaps one exception - the question of the risks of smoking - is simply nonsense. Indeed, it suggests that Kessler’s understanding of, attention to or judgment about the complicated science of this case is extraordinarily flawed. Consider but one of many examples. Taken simply on its own - as opposed to through the prism of some government report - that is by examining individually the 70 odd epidemiological studies that have looked at whether ETS causes lung cancer in nonsmokers - it is difficult to come to the conclusion that ETS is a significant risk to the health of nonsmokers, whether spouses or co-workers. This is a scientific finding that is true independently of whether one believes that public smoking should be banned or whether one draws one paycheck from the tobacco industry or from the public health establishment. To claim that the consensus of the public health community is that ETS is a significant health risk, and that this community is more credible than the tobacco industry and therefore, ETS is a public health risk, is both to miss the point and to fail as a neutral finder of fact, not just in some small, but in an enormous way. This is because the science stands on its own - it belongs neither to the government nor to the industry and it has absolutely nothing to do with the credibility of either. Either there is a statistically significant association between, for instance, lung cancer and ETS, or there is not. The primary evidence in the form of the actual studies is in the record for Judge Kessler and rather than analyzing it and allowing it to determine her findings, we have instead a conclusion about ETS that is presented through the lens of government reports and meta-analyzes - apparently heedless of the perils involved in this, rather than through the actual epidemiology. The “fraud” that Judge Kessler has found supposedly everywhere is a fraud only when viewed from the perspective of the government’s witnesses. It is not a fraud based on the scientific evidence.

The Witnesses

And what then of those witnesses? To a large extent Judge Kessler’s findings are driven by the fact that she accepted the tobacco story told by the government’s witnesses, and discounted and indeed dismissed the alternative story offered by the industry’s experts. Kessler notes that this is because she found the government’s witnesses to be more qualified. She writes that “The Government’s witnesses, viewed as a whole, were far more experienced, credentialed, and active in the area of smoking and health, whatever their particular area of specialty, than were the Defendants’…. While the testimony of each person-expert or fact witness- was evaluated on its own merits, there can be denying that, as a GROUP (emphsis in original), the Government’s witnesses were far more knowledgeable, experienced and active in their respective fields.”

This is an extraordinarily odd appraisal given that the Defendant’s experts included a Nobel Prize winner in economics from the
University of Chicago as well as one of the world’s leading experts in risk and regulation, particularly with respect to individual and societal perceptions of the risks of smoking, from Harvard University. But what is even odder is the fact that Kessler appears to discount the Defendant’s experts because- surprise- they had not worked for the public health community in “ascertaining the consensus of scientific opinions embodied in each Surgeon General’s Report.” Rather, many of the Defendant’s experts had “worked only in large corporations, and many for only one or two such employers.” Kessler doesn’t elaborate, but it appears that people who only work in “large corporations” must for some reason provide less expert and less reliable testimony. Kessler appears to believe that this is self-evident, but this is certainly not the case.

Of course, what the judge is really on about here, is that many of the Defendant’s experts worked exclusively for the Defendant’s, either as employees or consultants- with the unspoken presumption that this makes them somehow less qualified. Indeed, she goes out of her way to defend the government’s witnesses from the charge that they are biased precisely because they have worked almost exclusively in the public health community. In the introduction to her opinion she notes that “Much of the Defendants’ criticisms of Government witnesses focused on the fact that these witnesses had been long-time, devoted members of the ‘public health community.’ To suggest that they were presenting inaccurate, untruthful or unreliable testimony because they had spent their professional lives trying to improve the public health of this country is patently absurd.”

But is it really absurd? Judge Kessler appears to be a member of the naïve school of  expert credibility which believes that being a public servant or a member of the health community, or an anti-tobacco activist somehow excludes the possibility of bias. It is this, rather than Kessler’s ringing endorsement of the unblemished credibility of the Government’s public health witnesses that is absurd.

Bias is not merely the product of financial incentive or employer loyalty: it can arise just as easily from the desire to see one’s views prevail or to see the triumph of a deeply desired goal. Virtually all of Kessler’s public health community experts have devoted their lives to eliminating tobacco use. Many have served as expert witnesses in tobacco litigation. They clearly understood the significance of this case in furthering the ends of a tobacco-free world. To argue that these two facts could not give rise to a bias is truly incredible.

Consider two examples of such bias, the first involving one of the Government’s key witnesses and the second involving a key government agency that concluded that ETS was a carcinogen. Dr. Jeffrey Harris is an economist and physician who performed an economic analysis of the industry’s behaviour with respect to smoking and health that claimed that the Defendants had colluded over the last five decades to among other things “jointly with[o]ld potential risk-reducing alternatives from the marketplace”, a serious and absurd charge.

Harris, of course, is no newcomer to the tobacco wars. He is one of Judge Kessler’s “long-time, devoted members of the ‘public health community’” who could not provide “inaccurate, untruthful or unreliable” testimony. But the record suggests otherwise. For instance, Harris was one of the Government of Canada’s major witnesses in its landmark case in the early 1990’s to ban tobacco advertising. In the course of his testimony, Harris presented extremely controversial testimony, testimony that purported to show a connection between tobacco advertising bans and reduced tobacco consumption, testimony that was rejected and characterized as unreliable by the judge hearing the case. Here is part of what that judge wrote about Harris:

“Although the T.S.B. Report and Dr. Harris’ Supplementary Report both appeared impressive at first sight, it became apparent in cross-examination that both are seriously flawed…It likewise became clear that Dr. Harris was fully aware of these errors and of their importance when he testified….”

“This witness [Harris] struck the Court as extremely intelligent and very skilled in the manipulation of ideas and statistics. Unfortunately, he did not demonstrate the scientific objectivity that the Court is entitled to expect from an expert witness of his stature. He often evaded troublesome questions in giving evidence, it was often only on close and rigorous cross-examination … that complete answers were obtained and, frequently, his answers were self-justifications.” (Both quotes are from Justice Jean-Jude Chabot, Judgment in RJR-MacDonald Inc. v. The Attorney General of Canada, 1991)

Indeed, not only Harris’ truthfulness, but his objectivity is called into question.

Similar problems about truthfulness and objectivity are to be found in the 1992 EPA Report, a report which is central to the Government’s claims that ETS is a health risk to nonsmokers. Consider what Judge William Osteen, a fellow District Court judge, wrote of the EPA process and decision, including those long-serving members of the public health establishment whose veracity Judge Kessler is so taken by

“Using it normal methodology and its selected studies, EPA did not demonstrate a statistically significant association between ETS and lung cancer.”

“In conducting the ETS Risk Assessment, EPA disregarded information and made findings on selective information; did not disseminate significant epidemiological information; deviated from its Risk Assessment Guidelines; failed to disclose important findings and reasoning; and left significant questions without answers.”

“Rather than reach a conclusion after collecting information, researching, and making findings, EPA categorized ETS as a ‘known cause of cancer’ in 1989… in this case EPA publicly committed to a conclusion before research had begun.”

“EPA’s study selection is disturbing. First there is evidence in the record supporting the accusation that EPA ‘cherry-picked’ its data.”

(All quotes from Flue-Cured Tobacco Cooperative et al v. United States Environmental Protection Agency, 1998)
These two examples, both from fellow judges, put the lie to Kessler’s claims that members of the public health community have no bias and can be relied on for objective and accurate testimony. But as we shall see next time, these worries about fraud and witnesses, are just the beginning of the problems with the Kessler decision.


Continue to Part 2

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