STATE OF MINNESOTA AND BLUE CROSS AND BLUE SHIELD OF MINNESOTA, PLAINTIFFS,
PHILIP MORRIS, INC., ET. AL.,
TOPIC: TRIAL TRANSCRIPT
TRANSCRIPT OF PROCEEDINGS
VENUE: Minnesota District Court, Second Judicial District, Ramsey County.
YEAR: March 13, 1998
JUDGE: Hon. Judge Kenneth J. Fitzpatrick, Chief Judge
[The following discussion took prior to the jury and the court entering
THE CLERK: Good morning. Counsel is here to present a stipulation of trial exhibits to be presented to jurors for review for document day two.
MR. O'FALLON: Dan O'Fallon on behalf of the state of Minnesota and Blue Cross Blue Shield, the plaintiffs in this litigation.
In conjunction with the defendants, we have entered into a stipulation which admits into evidence numerous plaintiffs' trial exhibits. Those trial exhibits are listed in a list attached to the stipulation. Stipulation is entitled "Stipulation Re: Admission of Plaintiffs' Trial Exhibits for Document Day Two," the list is entitled "Stipulated Trial Exhibits for Document Day Two." Both plaintiffs' counsel and defendants' counsel have had an opportunity to go through the list and verify that these are the documents we agree to stipulate into evidence. We have also had the opportunity to go through the boxes that will be shown to the jury to verify that in fact the documents in the boxes are the documents contained on this stipulation.
In addition, the jury will be shown today documents that have been admitted since document day one, which I believe was on February 25th of 1998. Again both defendants' counsel and plaintiffs' counsel have had the opportunity to go through that box of documents and confirm that the documents in the boxes to be shown to the jury are in fact the documents that have been admitted into evidence since that date. Excluded from that list, of course, are documents that have been entered for demonstrative purposes or documents that have been entered as learned treatises. In addition, there are a couple documents -- they aren't actually documents, they're tapes and videos that are not included in the box because they are not paper documents, but they have been admitted into evidence, not on the Doc Day Two stipulated list, but have previously been admitted through witnesses. Those are not going to be in the courtroom for the jury.
MR. DIESETH: Paul Dieseth for defendants. I would agree with everything that Mr. O'Fallon said. The only addition I would make is that defendants have also provided to the jury for their review the documents that the defendants have had admitted into evidence since the last document day, and the plaintiffs have had an opportunity to review those and agreed that those were the documents that have been admitted by the defendants.
*2 That's it.
THE CLERK: Okay, thank you.
MR. O'FALLON: And there's a signed stipulation.
(The following proceedings were held in Courtroom 3 with the judge, the jury, Plaintiffs' representative Vincent Moccio and Defendants' representative Daniel Ballantine present.)
(Jury enters the courtroom.)
THE CLERK: All rise. Ramsey County District Court is again in session, the Honorable Kenneth J. Fitzpatrick presiding.
THE COURT: Please be seated.
THE COURT: Good morning.
(Collective "Good morning.")
THE COURT: Today is document day, and the parties, the plaintiff and defendants, have offered a number of trial exhibits that have been received by the court as evidence in this action. Three copies of these trial exhibits have been made and will be provided to you for your review here in the courtroom. There will be no further testimony today. You will instead be asked to read through the exhibits. Two counsel, counsel for plaintiff and defendant representatives, will be present in the courtroom during your review along with the bailiff and security staff. All other persons including myself and my staff will leave the courtroom.
You may use the jury box if you're more comfortable, you can go to the tables and use the tables, you can use anything in the well area. As one of you asked last time, if you really want to come up here, you can sit here. I don't care. (Laughter.)
THE COURT: The purpose of the procedure is simply to allow you to review a large volume of trial exhibits at your convenience.
Now you are reminded that you have been ordered not to discuss this case, the issues related to this case, or any evidence presented in this case amongst yourselves or with anyone else until the court instructs you to do so. That admonition applies during your review of the documents today. You are ordered not to discuss today the trial exhibits that you are reading or have read or that any other juror is reading or has read.
And I would further add that I would request that you not mark up the exhibits. If you want to take notes, you're welcome to do that, but leave the exhibits themselves intact; don't highlight them or anything, underline them or anything like that. You'll be able to do that, maybe, at a later time with a copy, but not at this time.
Do the jurors have any questions about today?
As you'll recall, now, you're going to -- you'll have a regular break. If one of you want to go to the restroom, of course, one of you could leave with the bailiff. You'll have a break in the morning and you'll have lunch and then have a break in the afternoon, and then you will work until 3:00 o'clock, and then those of you who wish can be excused and leave. And those of you that wish to remain, however, if you wish to do other work, you're welcome to do that. If you wish to continue to review exhibits, you're welcome to do that also.
THE COURT: Enjoy your day. Enjoy your weekend.
*3 (Proceedings concluded in Courtroom 3.)
(The following proceedings were held in open court without the jury present.)
THE CLERK: All rise. Ramsey County District Court is again in session, the Honorable Kenneth J. Fitzpatrick now presiding.
Please be seated.
THE COURT: Good morning.
(Collective "Good morning.")
THE COURT: We're going to begin with documents, exhibits?
MR. O'FALLON: Thank you, Your Honor.
THE COURT: I've signed the stipulation with regard to the agreed-upon exhibits, so we'll just deal with those not agreed upon.
MR. O'FALLON: Thank you, Your Honor.
Your Honor, the first document I'd like to deal with is actually a document that counsel did not object to. This is a document that we identified this week to be added to the Document Day Two list, and I had pulled it out last night out of the stipulated set because I wanted to make sure that defendants had a chance to object if they so chose.
I think there was a miscommunication on that document, but the bottom line is B.A.T Industries, whose document it is, do not object to that.
However, they do not want to make a big fuss out of having the document put in, so what I would ask to do is that we enter into evidence Trial Exhibit 24355, and then what they've asked is that when the jury is at a break, that we just put it in the box and -- because they don't object to the document.
THE COURT: Is that correct?
MR. CORRIGAN: That's correct. That's what counsel for plaintiffs and defendants have agreed upon, Your Honor.
THE COURT: I would expect that whatever documents are put in today would all go in together to the jury, unless someone has an objection to that. We can do it when they take a coffee break or something.
MR. CORRIGAN: As long as they're not highlighted, Your Honor. That's the only problem.
THE COURT: Right. No highlights.
MR. CORRIGAN: I mean drawn to the jury's attention as a separate batch.
THE COURT: Sure. Okay.
MR. O'FALLON: Thank you, Your Honor.
I would suggest at this point we move to the documents that Reynolds has objected to, if that would be okay.
THE COURT: Go ahead.
MR. O'FALLON: The first such document in trial exhibit order is Plaintiffs' Trial Exhibit 12679. This is a document written by Claude Teague, it's entitled "RESEARCH PLANNING MEMORANDUM ON SOME THOUGHTS ABOUT NEW BRANDS OF CIGARETTES FOR THE YOUTH MARKET," it's Bates stamp numbered 502987357 through 7368.
Your Honor, this is a document that plaintiff -- that defendants have objected to, I believe, as being outside the course of business of Dr. Teague. What I would like to show the court, with the court's permission, is the document that's also a trial exhibit in this case, although it has not been entered, and it was used in Dr. -- or Mr. -- Dr. Teague's deposition, and what it is is his resume, his internal company resume, which shows that among his special skills are included long-range planning for R&D, and that during the time this document itself was written -- I believe the document was written in 1972 -- he was in fact R. J. Tobacco Company's assistant director of research, and under his description of responsibilities it states, "Responsible for day- to-day operation of research department, reporting to the director of research. Special assignments in the area of long-range planning."
*4 Your Honor, it's the plaintiffs' contention that this is a document that is precisely within Dr. Teague's ordinary course of business, and that in any event it's an admission on behalf of R. J. Reynolds.
MR. BIERSTEKER: Your Honor, Dr. Teague testified about this particular document --
THE COURT: Do you have your microphone on?
MR. BIERSTEKER: I guess I don't. Is that better?
THE COURT: Better.
MR. BIERSTEKER: Sorry.
Dr. Teague testified about this exhibit during the course of his deposition, and it was a draft, it was a think piece about marketing new products. It was written by a scientist who had no responsibility in that area, I believe was the deposition testimony at page 463 of volume three, he wrote it on his free time in connection with an executive program course he was taking at the University of North Carolina. He prepared the document in his free time, it was never distributed to anybody at Reynolds, he put it in his files, and as a consequence it was produced during the course of discovery. But this was not something that he did during the course of his ordinary employment, it was done in his free time, it was never circulated to anybody, and it's a draft.
THE COURT: Okay. Was it put in his company files?
MR. BIERSTEKER: It was put in his company files.
MR. O'FALLON: Your Honor, if I may respond. The document itself was signed and dated by Dr. Teague -- and I was wrong about the date, it was February 2nd, 1973. In fact, again as Trial Exhibit 348, his internal resume indicates, the executive program that Dr. Teague took -- first of all, it was paid for by R. J. Reynolds, but it was completed in 1968 to 1969. The fact of the matter was what Dr. Teague also testified to about this alleged 10 percent of his time that he could do what he wants is that anything he generated during that time that was of value, of course, went and accrued to the value of R. J. Reynolds, that it was part of R. J. Reynolds' business practice to make that time available, and that any time an employee created things during that, it was R. J. Reynolds' property.
Now he was certainly paid to do this. I believe at one point, if I remember this quote, I asked him whether he was paid, and he said, "Yes, I'm not a pro bono man."
The fact of the matter is this was generated during a period of time that he was responsible for planning, he was the assistant director of research. It's clearly an admission by the company.
THE COURT: All right. Court will receive 12679.
MR. O'FALLON: Your Honor, the next document is Plaintiffs' Trial Exhibit 12786. This is a document Bates stamp numbered 504331778.
THE COURT: Sorry, counsel, will you give me that number again?
MR. O'FALLON: Sure. Trial Exhibit 12786, Bates number 504331778.
This is a document that sets forth a meeting that Dr. Colby, on behalf of R. J. Reynolds, had with a professor, Dr. Adlkofer, who was at the time a head of one of the German tobacco institutes, an institute that represented the tobacco industry in Germany, and basically what Dr. Colby says, as is recorded in this conversation, is that he asked Dr. Adlkofer to step down and in large part that was due to because Dr. Adlkofer expressed views different than those of the industry concerning causation.
*5 At the top it says it's "Meeting Minutes, Mr. Dembach's conversation with Dr. Colby on February 20th of 1981." As Dr. Colby testified in his deposition, he basically recalls the general outline of this meeting, and Mr. Dembach was one of the RJR employees at the time.
MR. BIERSTEKER: Your Honor, this document is hearsay. It's written by individuals who were not employed by the company and who were not a party to this litigation, and it purports to recount a discussion that was had with one of the parties here. It's also hearsay within hearsay. There are attributions of statements to yet other parties with whom the author never spoke.
As to the deposition testimony, Dr. Colby was asked about this but disagreed specifically with the suggestion made by the document that he wanted the German scientist to step down because he had a position on causation that was inimical to that of the defendants here, and that's found at page 129 of the transcript, where in no uncertain terms he said no, that's not what happened.
The point is that plaintiffs had an opportunity to depose the person who actually made the statements that are recorded here in hearsay form. And he said that was not the rationale, that was not what he was doing.
MR. O'FALLON: Your Honor, I would state that this was also classic conspiracy evidence. Basically what we have is an industry that has a worldwide view that they're going to make sure that no one whom they employ expresses views that are contrary to their position, and this is another indication of Dr. Colby going out, in this case to Germany, and making specific efforts on behalf of his employer, R. J. Reynolds, to basically shut up somebody who is starting to express a view other than that espoused by the tobacco industry. And I think it goes to the unindicted co-conspirator statements and the conspiracy that we've seen in this case to basically suppress truth about smoking and health.
THE COURT: Court will receive 12786.
MR. O'FALLON: The next document --
MR. BIERSTEKER: Before we do that one, Mr. O'Fallon, my understanding is that Plaintiffs' Exhibit 14929 was a duplicate of Exhibit 12786; is that right?
MR. O'FALLON: It was, and that was withdrawn, and it was not part of the stipulated set.
MR. BIERSTEKER: All right. Thank you.
MR. O'FALLON: And it is not offered today.
The next document is Plaintiffs' Trial Exhibit 13017. This is a document Bates stamp numbered 507647971 through 7975. This is a document that was produced out of R. J. Reynolds' files, it's a document from Young & Rubicam, R. J. Reynolds' advertising agency. It's talking about the fact that they're going to be destroying certain marketing documents. If we look through the document, we can see that among those documents that apparently they're going to be destroying are documents concerning the Joe Camel campaign. I would also note that this document has been redacted by R. J. Reynolds. We would assert that this is classic case of a agent acting within the course of their agencies and doing what has been requested of them by their employer, R. J. Reynolds.
*6 MR. BIERSTEKER: Your Honor, some background might be helpful. The Joe Camel campaign started in late 1987 or early 1988. At the time Reynolds' advertising agency was Young & Rubicam. In 1991 some of the Young & Rubicam partners started a different advertising agency, Mezina Brown, and the partners who were responsible for the Joe Camel work left Young & Rubicam prior to the time that this memorandum was written.
What this memorandum reflects is an issue where a former advertising agency that had been retained on this account, but not one that was then currently retained by Reynolds, wanted to know what they should do with old files now that the partners who were responsible for that work had left and joined another advertising agency, and that other advertising agency then had the account, and what was being destroyed were drafts of some of the developmental work and some old advertising copy that was no longer needed for the company's ongoing work, and Young & Rubicam wanted to know what they ought to do with this stuff. And that's what the memo relates to.
I would note that it predates the controversy surrounding Joe Camel. The JAMA articles and the Mangini case in California that focused on Joe Camel were not yet out. This was in November of 1991 and those actions took place in mid- December. This is just routine business and nothing more.
I think that, additionally, it's hearsay because it is a Young & Rubicam document, it is not a Reynolds document. And the implication here, I also submit, once the facts of the circumstances surrounding the document are understood, would be inadmissible under Rule 403 as well.
THE COURT: Well it sounds like an explanation, but it doesn't have anything to do with the issue of whether it should be allowed as an exhibit.
MR. BIERSTEKER: Well I think --
THE COURT: I don't understand the --
MR. BIERSTEKER: I think in part it does, Your Honor. The representation was made that this was a document that was not hearsay because it was written by an agent of the company, and what I'm telling Your Honor is that at the time that this document was written, Young & Rubicam was not an agent of R. J. Reynolds, it did not have the R. J. Reynolds account any longer. They just wanted to know what to do with these old files.
MR. O'FALLON: Your Honor, I would say that, again, that goes to the weight of the evidence, not the admissibility of the evidence. If that explanation is the explanation they'd like to offer, then certainly they can call whoever they need to to explain this document, if that's what they're stating. The fact of the matter is these folks worked for R. J. Reynolds, and it appears that they're doing this at R. J. Reynolds' direction. And this does --
The Joe Camel controversy didn't just start in 1991. This has been a controversial campaign since its beginning. And R. J. Reynolds knew that and there's internal company letters where people are writing them saying "What are you doing with this campaign?" in the late '80s.
*7 MR. BIERSTEKER: Your Honor, if I might just briefly, I mean I think that plaintiffs do have the burden of proving that this falls within one of the exceptions to the hearsay rule, and what I've said is absolutely correct, that Young & Rubicam was not an agent, but more importantly, the explanation I gave concerning the background of the document goes to -- precisely to the purpose for which plaintiffs, I presume, are offering this document, and that is to show some evidence of document destruction. And -- and the -- the implication they're seeking to draw from this document simply is not correct. This was routine business practice. This was a situation where the partner responsible for the account left, and the old ad agency said, "What do you want us to do with the old stuff that you don't need any more?"
MR. O'FALLON: But Your Honor, that kind of raises an interesting issue, because they've also redacted --
THE COURT: Counsel, I mean I don't want to go back and forth all day.
MR. O'FALLON: Yeah. My only point was on the redaction. They've redacted the document.
THE COURT: Okay. You have just the redacted version?
MR. O'FALLON: Yes, I have the redacted version.
THE COURT: Where is the original?
MR. BIERSTEKER: I don't know where the original is. I could certainly get a full copy, Your Honor. I don't know --
I have a copy here, and I'd have to look, maybe compare the portions.
THE COURT: Do you have the original, or do you have an unredacted --
MR. BIERSTEKER: I may have. I would need to see what's been redacted and what hasn't been in order to make that determination.
THE COURT: Why don't -- why don't we hold on that, and if you compare the two documents, and maybe you can provide me with an unredacted version, I could take a look at it. Okay?
MR. BIERSTEKER: I appreciate that, Your Honor.
THE COURT: All right.
MR. O'FALLON: The last of the RJR documents, Your Honor, is Trial Exhibit -- the documents that RJR objects to is Trial Exhibit 21504. 21504 is actually one of the documents that was produced in this litigation and ordered by the court to be given to the plaintiffs as part of the Liggett documents over which the defendants had asserted a joint privilege. As the court found at the time that he released these documents, these documents fell within the crime/fraud exception and should be released to the plaintiffs. It necessarily follows that those documents should also go into evidence. This document is certainly no exception to that rule.
This document is a document by Mr. McDermott. What this document discusses is ingredients and additives and the fact that the industry has not adequately tested those ingredients or additives, and the fact that the industry, as a whole, should do everything it can to fight the release of those ingredients and additives. I think it's important that the jury understand the attorney involvement and the ongoing level at which the defendants have done everything in their power to make sure that plaintiffs in lawsuits, including this lawsuit, do not have the information and do not have the facts to adequately pursue their cases. That's exactly what this document sets out line by line, the industry attempt on an industry-wide basis -- as illustrated by the fact that it was sitting in Liggett's documents and R. J. Reynolds' documents -- to do everything they can to make sure that plaintiffs don't know that there are additives in the cigarettes that the industry has never adequately tested and that the industry cannot adequately defend those claims.
*8 MR. BIERSTEKER: Your Honor, this is a document that has some history in this litigation, and it's one about which Reynolds and its counsel feel pretty passionately. And I'm sure you remember --
THE COURT: How does Mr. McDermott feel?
MR. BIERSTEKER: Pardon me?
THE COURT: How does Mr. McDermott feel?
MR. BIERSTEKER: He particularly has strong views.
THE COURT: Okay.
MR. BIERSTEKER: But this document was a casualty of the category-by- category review process, and as the court recognized, I think, in one of its orders, the category-by-category process will result in the process of some privileged documents. The justification for the category-by-category review process, however, insofar as it concerned production, because of the sheer volume, I don't think is applicable when it comes to the admissibility of the evidence, and that this document deserves to be given individual consideration, as it's being given here. And in fact as the court has already acknowledged in its order of December 16th, this document is unquestionably work product, and indeed, as recently as last month, on February 23rd, 1998, a state court judge in the Dunn case in Indiana said that "This document was work product if ever I have seen it," and excluded it from evidence in that case.
We have submitted, Your Honor, --
THE COURT: Was he addressing the crime/fraud issue?
MR. BIERSTEKER: I'm sorry?
THE COURT: Did he address the crime/fraud issue on that day?
MR. BIERSTEKER: That issue was raised, Your Honor, yes, by Mr. Motley.
THE COURT: Okay.
MR. BIERSTEKER: And indeed, as to crime/fraud, this document is entirely historical. It's a review of information that the -- concerning activities and assumed facts about the industry. And as Your Honor has recognized, the crime/fraud determination relates to future illicit conduct by the client, not past.
Apart from work product, I think that this document is inadmissible for some other reasons, one of which is relevance. The document is an attorney discussion about evidence and the merits of certain claims, and as we have cited in numerous cases in both our in limine motion and the supporting brief and the reply memorandum on the in limine motion, it does not constitute actual evidence. There are legions of courts that have held that attorney comment about the evidence or attorney comments about the merits of a case are not evidence and are not admissible, and indeed should not be mentioned by counsel.
The actual evidence discussed in the legal memorandum that was being analyzed was available to the plaintiffs, many of those documents were produced in discovery, and that's what the plaintiffs should be using here. They should not be using this work-product document.
Not only does it constitute just attorney comment on the evidence, but the comment was based -- it was a draft memorandum, it is based upon certain assumptions about facts that had not been investigated by counsel who were preparing the memo, and indeed some of the portions of the memorandum that plaintiffs believe are important to this case were, as the court knows, subsequently revised once additional facts were -- were -- were discovered that related to this.
*9 Finally, I think that the document clearly constitutes hearsay insofar as it characterizes some of the underlying documents, there are hearsay-within-hearsay statements contained within the document, and it would be highly prejudicial to admit this document into evidence. I think it discusses juries, it discusses litigation strategy, it discusses litigation tactics, and there's a real danger here, I think, that the jury will decide the importance of this document -- it's really an invitation to the jury to impermissibly base their decision upon the approval or disapproval of litigation strategies and litigation tactics of counsel. And again, that's particularly true where it is a draft that inappropriately assumed or characterized some historical facts and that was subsequently revised, and in particular was revised as to some of the portions that plaintiffs themselves think are significant.
It should not be allowed.
MR. O'FALLON: Your Honor, if I could just address a few of those points. First of all, as to future action, what this document sets forth is future action. It sets forth the framework for making sure that the plaintiffs have to go through every hurdle that the defendants can possibly devise to get at clearly relevant information, information that is made relevant by what's stated in this letter, what's stated in this document about the fact that the industry did not test its additives, that the industry was putting stuff in and actually rejecting the advice of its own scientists to do more testing.
The fact of the matter is the industry has not to this date done adequate testing on its own products, and this sets forth what exactly every plaintiff around this country and what we have had to go through, which is we've had to climb every mountain to get at important ingredient and additive information. This document is clearly --
As far as hearsay, I mean this is a document by an agent within their course. The other things that counsel said really again go to the weight. If they want to have somebody come in here and explain that some of the underlying facts that Mr. McDermott and the other lawyers when they did their research were not very accurate in some of their underlying facts, then they can do that. But the fact of the matter is, what this shows is a course of conduct, it shows the very crime/fraud that we've been asserting in this litigation, and it is part of what's going on here.
THE COURT: Well I'll --
I'd like to review this. I think there are portions of this that are clearly relevant, but I do have some concerns about some of the -- part of the document. And we may end up redacting a portion of this before it goes to the jury.
I'll take it under advisement.
MR. O'FALLON: That finishes up the R. J. Reynolds objections.
And just so I'm clear, the two documents you're going to take under advisement, Your Honor, is the one we just talked about, Trial Exhibit 21504, and also you're taking under advisement Trial Exhibit 13017?
*10 THE COURT: 13017 I just would like to receive an unredacted copy, and as soon as I receive that, I'll make a decision. 21504 I'm taking under advisement.
MR. O'FALLON: Thank you.
MR. BIERSTEKER: Does Your Honor have a copy of 21504?
THE COURT: Yes. I have several.
MR. O'FALLON: I'd next like to move on to the objections raised by Brown & Williamson, BATCo and American Tobacco.
The first document there is Plaintiffs' Exhibit 10982. This is a document Bates stamp numbered 105383330 to 334. This document sets forth a discussion that was had with Dr. F. J. C. Roe, a long- time consultant to the industry in England, and also through the affiliations with B.A.T, to the American company, Brown & Williamson. The information we have on the document is that it's from G. F. Todd, again the director of The Tobacco Research Council. This document came out of the files of BATCo's Southampton R&D Center. This is a document that's admissible as a statement of a co-conspirator, it's also a statement basically of an agent, because Dr. Roe was, by B.A.T's own admission, a long- time consultant of theirs, and this is done within the confines of, again, The Tobacco Research Council, the functional equivalent in Britain of our Tobacco Institute and Council for Tobacco Research combined.
MR. BERNICK: Your Honor, maybe we can take up 10982 and 11026 at the same time. They're both authored by Mr. Todd and they're both hearsay documents.
Mr. Todd is not an employee of BATCo, not an employee of an agent of BATCo. It is just plain hearsay.
MR. O'FALLON: Well, I think it would be appropriate to say that Mr. Todd is basically an employee because he's employed by the industry, which includes BATCo, but more importantly he's also a co-conspirator, and both of these documents are equally admissible under 801(d).
MR. BERNICK: There is no predicate evidence whatsoever in this case that there was a conspiracy that involved members of the TRC. It's not even been argued to the jury. So you got an employee of somebody who is working for an organization which is -- which does work for the tobacco industry, is funded by the tobacco industry -- not the U.S. Tobacco industry, the British tobacco industry -- there's no claim in this case that the TRC is part of the conspiracy, there's no conspiracy claimed that includes the TRC. This is being made up in the middle of trial. Todd is not an employee of an agent, he is not an employee of the defendant, he is a third party. They have laid no foundation. They've made no effort to seek discovery from the TRC to lay a foundation for this document.
MR. O'FALLON: Well I think by Mr. Bernick's statement he's already basically admitted that Mr. Todd's an agent of the industry. He said that TRC is funded by the industry, and that includes several of the defendants here, B.A.T, BATCo, BATUKE.
MR. BERNICK: B.A.T Industries does not fund the TRC. That's number one. Number two, the industry -- the BATCo and the U.K. companies fund all kinds of work. Does that mean that somebody working at a hospital under a grant from the TRC funded by the industry says something, and it's the admission of BATCo as an agent of BATCo? That means anybody who ever received a dollar for research in the U.K. from the TRC is also part of the conspiracy, is also an agent, and hearsay rules go out the window.
*11 MR. O'FALLON: Mr. Todd --
MR. BERNICK: That's not contemplated by the rules. If an agent --
If a person is retained by a party to make statements on behalf of that party, that's an exception to the hearsay rule. There is no such relationship that's been established, they have created no predicate foundation for saying that's what occurred here at all.
MR. O'FALLON: Mr. Todd is retained by the industry to form an industry group, he's speaking on behalf of that group which speaks on behalf of the industry and does research for the industry. They're coming over here on behalf of the industry.
MR. BERNICK: He's not speaking on behalf --
He's not authorized to make statements on behalf of the industry. He's created a document during the course of his work. He's not speaking as an agent. Again, if this were true, anybody who received a dollar of research money from the U.K. tobacco industry and wrote down on a piece of paper a statement that then came into the possession of BATCo, or for that matter any of the other defendants, would be immune from the hearsay exception.
THE COURT: Don't we have a lot of testimony already about how the TRC speaks on behalf of the industry?
MR. BERNICK: No, this is a --
I'm glad you asked the question, Your Honor. This is a different organization entirely. We've had statements about the TIRC, which was the predecessor.
Excuse me, counsel. You'll get a chance to speak if you want.
The TIRC was an organization that functioned on behalf of the U.S. tobacco industry and originally had a public relations function. Then we got CTR that was formed and PR got split off and was handled by The Tobacco Institute. This is an entirely separate organization. This is an organization in the United Kingdom called the TRC, and they received funding -- they received funding from tobacco companies in the U.K. to perform research.
MR. O'FALLON: Maybe we're getting a little off the subject here, because the fact of the matter is we're not talking about Mr. Todd's public statements, what we're talking about is Mr. Todd's statements made in the course of his employment by the tobacco companies, memos that he's sending back to the people who employ him, the tobacco companies. I mean that's really what we're talking about here. This is Mr. Todd going out, having meetings on behalf of the industry, doing memos, and sending them back to the -- back to the companies.
THE COURT: All right. Let's move on. 10982 and 11026 will be received.
MR. O'FALLON: The next document, Your Honor, is Trial Exhibit 11845. This is a document that's Bates stamp numbered -- well it's actually got a couple Bates stamp numbers, but I think the one we're offering it under is 2048322229- 30. This is a memorandum that was sent from Mr. J. Kendrick Wells to Mr. Pepples at Brown & Williamson talking about the fact that they need an alternative for handling B.A.T scientific reports which come to B&W in a way that can afford some degree of protection against discovery. Basically what they're talking about here is how they can take the scientific reports from B.A.T and make sure they're not discoverable in litigation. This falls clearly within the crime/fraud exception, and again what they're talking about here is reports from B.A.T.
*12 MR. BERNICK: I'm surprised the suggestion is made to tender this document to the jury at this time. This is a document that's the subject of a currently pending appeal. It's a privileged document. It is subject to the crime/fraud rulings that have been suggested by the special master and affirmed by the court, that's true, but those are matters that are on appeal. So I don't know what -- I think would be -- I think it would be highly inappropriate at this point in time to be sending this document to the jury.
THE COURT: Why is this here now?
MR. O'FALLON: This is a document that was produced out of the --
This document was not claimed as privileged by Philip Morris.
MR. BERNICK: The only way that Philip Morris could have obtained this document is during the course of the exchange of documents in discovery in this case. This is a document produced from Brown & Williamson's law department, and it's subject to a claim of privilege, it is squarely addressed as such by the special master, and it's on appeal.
THE COURT: We won't consider this at this time.
MR. O'FALLON: The next document is Trial Exhibit 11952, this is a document Bates stamp numbered 301140234 through 255. This is a transcript of the Panorama program in which Dr. Green, on behalf of -- when Dr. Green basically admits on a TV program that smoking is a serious causal factor in disease.
I believe the objection on this one, the objection that we saw, was it was a third-party document and incomplete because the document does not include transcription remarks edited from the program. I assume they don't mean to state that this is not an accurate transcript of the program as aired.
MR. BERNICK: I'm sorry. Are you done?
MR. O'FALLON: Yeah. I'm asking the question actually.
MR. BERNICK: No. Our position on this -- it was interesting that Mr. O'Fallon began to say that he was speaking -- he was appearing on behalf of BATCo at the time, and then he stopped himself, because Dr. Green was not an employee of BATCo at the time that this show aired. So we have a statement by a former employee on a BBC television program and then the transcript of that program. The transcript is hearsay, the statements that the -- that the program records are hearsay within hearsay. Dr. Green was not an employee at the time that this program aired.
MR. O'FALLON: Dr. Green was not an employee at the time the program aired, he was a former employee. However, he was speaking about the time when he was at B.A.T, and he was, I believe, a member of the board of directors, he was the head of research --
THE COURT: Was he on the board of directors at the time that he made the statement?
MR. BERNICK: At the time he was on Panorama -- I hate to go back and make representations about people's capacities any time without double checking and make absolutely sure, Your Honor.
THE COURT: Would you double check that for me?
MR. O'FALLON: I'm not --
MR. BERNICK: But we did double check to make absolutely sure that he was not employed by BATCo at the time this show aired. It is inconceivable to me that -- I don't believe he was ever a member of the board of directors for BATCo, but it's inconceivable to me that he was a member of the board of directors at BATCo at a time that he was no longer employed.
*13 MR. O'FALLON: Yeah. Well --
MR. BERNICK: I'm sorry.
MR. O'FALLON: I'm sorry. I'm not -- I'm not certain that he was a member of the board of directors at the time he made the statement. My point is that he was a member of the board of directors. This is a person who had a very significant spot in the organization's leadership and management of this -- of this tobacco industry.
MR. BERNICK: Your Honor, the issue is not relevance, it's hearsay.
THE COURT: Okay. Well do you have some evidence to indicate what his position was? And was he under -- was he being paid by the -- by the company at the time, either as a consultant or as a board of director? I mean what was his role, what was his position?
MR. O'FALLON: I don't -- I don't think we have all the discovery on that issue. I don't think he was actually an employee at the time that he made the statements. I think he was talking, however, about the fact that he believed this when he was an employee at the company, when he was a director and when he was a research director.
THE COURT: Okay. Can you confirm that for me, counsel?
MR. BERNICK: We will -- we will find out for Your Honor whether there was any continuing relationship --
THE COURT: Okay.
MR. BERNICK: -- that Dr. Green had at the time.
THE COURT: All right. If there was no continuing relationship, then I think you have a valid objection.
MR. O'FALLON: Okay. The next document is Plaintiffs' Trial Exhibit 13772. This is a document Bates stamp numbered 670866517 through 520. This is a document that originally an objection was not asserted to by Brown & Williamson. By my letter dated --
A request was made about this document by my letter dated May 29th of 1997, a response was received on June 30th of 1997, and this was listed among those documents to which no foundation objection was asserted.
MR. BERNICK: I'm sorry, which document are you on? I'm sorry.
MR. O'FALLON: Trial Exhibit 13772.
MR. BERNICK: 13772. I think you skipped over one.
MR. O'FALLON: Did I skip one?
MR. BERNICK: Yes, 13483. And we will withdraw --
We have no objection to 13772. If that's the one that you just covered, we can get that one out of the way.
MR. O'FALLON: Ms. Wivell has one that she'd like to -- she's going to address that one. She can either do hers together or we can do it now, whichever is your pleasure.
MR. BERNICK: Well as to 13772, we do not have an objection to that.
MR. O'FALLON: Okay.
Next document is Trial Exhibit 13805. Again, this is another document which I don't believe a foundation objection was asserted. That would have been by that same letter.
MR. BERNICK: Correct. The problem with this document is that it is hearsay within hearsay. This is an advertising agency document. We could probably take it up at the same time that we take up 14235, which is, again, an advertising agency document, albeit for ATCo rather than for Brown & Williamson.
We have a hearsay-within-hearsay objection to both of these documents. They're generated by an advertising agency which we believe to be a third party.
*14 Now we're cognizant of the fact that Your Honor has addressed similar issues in the past and has let advertising agency documents come in in the past. We still lodge our objection on the hearsay-within-hearsay grounds because we take issue with that determination, but I think that there's been a succeeding development that's also relevant to these documents. Last week statements were made on more than one occasion to this jury that documents -- advertising agency documents were not produced from the files of these companies. That statement was made and was made by Ms. Walburn. I listened to it very, very carefully. That was a false statement as to these documents. If that kind of statement is going to be made before the jury, as it has, these documents should not come before the jury, because in fact the extent that advertising agency documents were within our files, they were produced.
MR. CIRESI: Well, Your Honor, if I may -- excuse me. I believe Ms. Walburn's statements were that there were no documents produced from the advertising agency's files. The record will state what it was.
I'd also like to put on the record with regard to the TRC, in regard to statements just made Mr. Bernick made --
MR. BERNICK: Your Honor, --
MR. CIRESI: Excuse me, sir.
MR. BERNICK: -- can we just do one document at a time?
MR. CIRESI: Excuse me. I just want to go back and put this on.
THE COURT: Counsel, it's going to be very difficult for me to jump back and forth like this. Could we wait on that?
MR. CIRESI: Well the only reason I wanted to put it on now, Your Honor, was it related to the document that just came in, the one before last. We can wait until the end.
THE COURT: Let's wait until the end.
MR. CIRESI: All right.
THE COURT: Otherwise we're going to --
If you aren't going to be confused, I will be. So let's -- let's just address this issue here.
MR. BERNICK: We'll undertake to find the citation to the record where the statement was made. But that is an additional objection we have to these documents being used. Can't have it both ways.
THE COURT: Okay. I would appreciate that citation because I do have a little different recollection of that. I did understand that it related to the failure of the advertising agencies producing documents. But I will be glad to review that.
MR. O'FALLON: Your Honor, just so I'm clear, do you want more argument on this particular document or not, on 13805? I mean I think this document clearly was prepared for Brown & Williamson by Kenyon & Eckhardt and studies what's basically the youth market. What we're asking --
THE COURT: Well go ahead if you --
MR. O'FALLON: Okay.
THE COURT: -- have additional evidence, then I'll take it under advisement after receipt from counsel of the transcript. I'd like, you know, the whole page of the transcript, because I do recall the instance.
With regard to 13772, if it wasn't clear, that is received.
MR. BERNICK: Right.
*15 MR. O'FALLON: Going back to the document, 13805, this particular document is entitled the "BROWN & WILLIAMSON TOBACCO COMPANY NEW VENTURES PROJECT: Consumer Views, The 'New' Smoker," and what this is is a detailed analysis of, in essence, the new smoker, the youth market. We think it's entirely relevant to showing that Brown & Williamson, despite what their public statements were, despite what they promised in the ad code, was actively investigating and intricately studying this new market, these under-age smokers. And they were doing that in part through people they hired, like Kenyon & Eckhardt. So this would be a statement of an agent within the course of that agency's employment.
MR. BERNICK: I'm sorry, I wasn't clear. I meant to regard -- to address my prior remarks to the court both to this document, 13805, and to 14235. So I have nothing further to add concerning thost documents.
THE COURT: I assume you're addressing both --
MR. BERNICK: Yes.
THE COURT: -- and I'll hold on both of those until I receive the transcript.
MR. O'FALLON: The other record I would make on 14235, this document is entitled "THE POSITION OF BRIGHTON IN THE ST. LOUIS MARKET," this is an American document, and again this states on the cover of it that it was prepared for The American Tobacco Company, and this is actually a research done on the effectiveness of advertising for American's new product, and it includes the under- age market.
The next document is Trial Exhibit 17761. Trial Exhibit 17761 is a letter from a Dr. Marais, the chief of the Tobacco Research Institute, South Africa. It's dated October 29th of 1964. There's a little bit of history that actually goes with this document because it relates to a document we stipulated to the admission to today, which was 17759, and 17759 is a discussion internally at American concerning the fact that it's recently been discovered that a doctor in South Africa has discovered the presence of nitrosamines in tobacco smoke, and that was a document from a J. M. Mosely to a Dr. W. R. Harlan. Again it's entitled "Nitrosamines in Cigarette Smoke," that was Trial Exhibit 17759, and he basically states that what he's going to try to do is track down as much information as he can about this report.
What we then have back is basically a report from this gentleman concerning nitrosamines. In the third paragraph he talked -- this gentleman, Mr. -- or Dr. Marais, I'm not sure actually, talked to Mr. -- to Dr. Zerfontein, and he was informed that he qualitatively identified nitrosamines in tobacco smoke beyond any doubt. So at the very least what this goes to is notice to The American Tobacco Company that it has now been confirmed that a known carcinogen, nitrosamines, are in their tobacco smoke.
MR. BERNICK: Your Honor, this is a third-party document. It's hearsay.
THE COURT: What's the doctor's relationship with the defendant?
MR. BERNICK: He is said to be with the Tobacco Research Institute.
*16 MR. O'FALLON: Which appears to be --
Let me go back to the previous document. It states on -- on -- again this is back on document 17759, it states, "We wrote to a Dr. J. M. Marais of the Tobacco Research Institute, Roostenberg, South Africa, and asked him to inquire into the report described to Dr. Zerfontein. In his reply dated October 29th, 1964, copy attached" -- so this was actually a document that was attached to this memo, it was produced in an odd fashion because there was a third document in between these that didn't appear to have a whole lot to do with either one of them -- it says "the latter has stated that he had qualitatively identified nitrosamines in tobacco smoke beyond any doubt." So what we have is the doc -- is the letter that American Tobacco, they basically sought this information from a contact they had in South Africa, and what we have is that information being reported back. So again it's notice to the company and confirmation of the fact that nitrosamines have been found in tobacco smoke.
THE COURT: What does "a contact" mean?
MR. O'FALLON: Well all as I can do at this point --
THE COURT: Certainly not an agent in any form.
MR. O'FALLON: I don't --
Again, and without knowing more about how American Tobacco operated in South Africa, I can't stand up here and assert that for certain that Tobacco Research Institute South Africa is an -- is an agent.
THE COURT: I can't either.
MR. O'FALLON: We would still offer it for the purpose of notice though.
THE COURT: Objection sustained.
MR. BERNICK: There was one -- sorry. Do you have any more?
There was one --
MR. O'FALLON: There's a couple that --
Oh, go ahead.
MR. BERNICK: There was one left over, 13483. Do you have that now?
MR. O'FALLON: I think --
MR. BERNICK: Is that --
Do you want to take that up, Marti?
MS. WIVELL: I'll take that up.
MR. O'FALLON: Yeah.
MR. BERNICK: We have --
Just to expedite it, this is a November 6, 1995 "News from B.A.T Industries" document. This was produced from BATCo's -- actually produced from B&W's files. The objection to it is that it post-dates the August 1994 discovery cutoff, it's November 6, 1995, and therefore it would be subject to Your Honor's prior order on the effect of that cutoff.
MS. WIVELL: Good morning, Your Honor.
THE COURT: Good morning.
MS. WIVELL: With regard to this document, it is a document that was produced by B.A.T Industries, and it outlines their reorganization of their worldwide tobacco business into a single new entity, British-American Tobacco Holdings Limited. This includes its organization of Brown & Williamson. And the document is offered to show its continuing control over Brown & Williamson, which it has denied. We believe it's relevant to that issue and also to the jurisdiction issue, because, among the functions that are going to be addressed by this new holding organization, which are listed on the second page of this news release, is the achievement of the vision of becoming the world's number one tobacco business, management and development of strategies and practices with regard to trade marketing, the formulation of manufacturing strategies and global product sourcing, redefinition of fundamental research to develop more effective long-term product development, and development of an organization -- an appropriate organizational structure, and formulation of global leaf strategy. So despite the fact that it does post-date the complaint, we believe it is relevant to show issues of control and involvement in the tobacco industry which this -- which this defendant continues to deny up to today.
*17 MR. BERNICK: To correct the record, this actually, I think, was produced by Brown & Williamson from its files. But be that as it may, it was plaintiffs who sought to effectuate the discovery cutoff as an evidentiary ruling as well. The order in limine was granted. This is not excepted from the order in limine. We have followed by the rules of that rule in limine, by and large, and this document falls outside the scope of that order.
MS. WIVELL: Your Honor, I want to correct a misstatement I might have made. While this particular document, this piece of paper, was produced by Brown & Williamson, it is a news release entitled "News from B.A.T Industries," and it is dated November 6, 1995. It was the subject of deposition testimony by numerous employees of both Brown & Williamson and B.A.T Industries that indeed this reorganization did take place. It is not the only evidence we have that post-dates the complaint. In fact I do believe that defendants have offered in this case and before the jury the settlement that was entered into this summer, so I think it's a little disingenuous to suggest that we have a cutoff of testimony -- or a cutoff of evidence from 1994. Not only that, the defendants have admitted news releases postdating the complaint with plaintiffs' expert Perry in this matter.
So we believe, again, this is -- we should be allowed to offer this evidence and it should be received.
THE COURT: All right. That exhibit will be received.
MS. WIVELL: Your Honor, the next exhibit that we have is one that I think we took care of this morning with plaintiffs' counsel for B.A.T Industries, and that is Exhibit 11508.
THE COURT: Is plaintiffs' counseling stipulating with itself now?
MS. WIVELL: I'm sorry?
THE COURT: Is plaintiffs' counsel stipulating with itself?
MS. WIVELL: No. I'm sorry. If I said plaintiffs, boy, I made a mistake. We -- we talked --
THE COURT: You did say plaintiffs.
MS. WIVELL: I'm sorry, Your Honor.
THE COURT: Go ahead.
MS. WIVELL: But you knew I was wrong.
THE COURT: Well it is the first time, counsel. This is why I was surprised.
MS. WIVELL: Thank you, Your Honor. You have -- you have quite -- a great deal of belief in my abilities. But I'd be happy to stipulate with myself. But I do believe we stipulated with B.A.T Industries this morning, and we're going to offer a redacted portion of Exhibit 11508, and we have shown the redaction to counsel for the defendants, and they have agreed.
THE COURT: All right. 11508 --
Is that correct?
MR. CORRIGAN: On behalf of the plaintiffs, Your Honor, to stipulated.
THE COURT: All right, 1150 --
THE COURT: 11508, everybody agrees, --
MS. WIVELL: Everybody agrees.
THE COURT: -- no matter whose side you're on.
MS. WIVELL: All right. All right. The final document that I would like to address this morning is Exhibit 2909, and I would like, if possible, to be allowed to approach, if the court does not have a copy of this document.
*18 THE COURT: I don't have it in front of me.
MS. WIVELL: All right.
(Document handed to the court.)
MS. WIVELL: Exhibit 2909 is an article that appeared in the Wall Street Journal on 10/31/91, it is entitled "B.A.T Industries Pretax Profit Rose 5 percent; Sale of Tobacco Business Under Review." We are interested in offering this document, Your Honor, for -- actually we're -- we would be -- I tried this morning to stipulate with myself again, and Mr. Corrigan, but it didn't work. We are interested in the portion of this document where Chief Executive Martin Broughton, B.A.T Industry's CEO, said to the Wall Street Journal and to other articles, when asked whether B.A.T's Brown & Williamson unit in the United States had concealed research that showed a link between smoking cigarettes and disease, Mr. Broughton said and is quoted, and I quote, "'We haven't concealed, we do not conceal, and we will never conceal,' he said. 'we have no internal research which proves that smoking causes lung cancer or other diseases or, indeed, that smoking is addictive."'
We have proved to the contrary, Your Honor, and we will continue to prove to the contrary. But we offer this exhibit because it shows several things. Number one, Mr. Broughton is speaking in the "we." Again, he's talking about the company he controls, and the fact that they haven't concealed, which we believe to be incorrect. We -- it shows -- it's relevant to the issue of the statute of limitations, because fraudulent concealment of the statute of limitation tolls the statute. These defendants have made the statute of limitation an issue in this lawsuit. It is also relevant to the issue of conspiracy and it shows B.A.T Industries' continuing involvement in a conceal -- in a conspiracy to deny and diminish the health effects and the addictive nature of smoking, an irony in light of the fact that their lawyers in this courtroom have said everybody knew smoking was addictive. Well Mr. Broughton appears not to. So that's why we offer this, Your Honor.
MR. CORRIGAN: If I may, Your Honor, the document is hearsay. It's an article from the Wall Street Journal two years after this lawsuit was commenced. What it contains are the statements of Tara Parker-Pope, the reporter. I submit, Your Honor, the ruling with respect to a news clipping like this should be precisely the same as Your Honor's ruling on Document Day One in which a newspaper article from the files of B.A.T Industries -- I mean B&W, created before the lawsuit, was -- the objection was sustained.
MS. WIVELL: Your Honor, at his deposition Mr. Broughton admitted he made these statements, that he made them to the press, and he intended them to be read by the public.
MR. CORRIGAN: Your Honor, it's as much hearsay for Ms. Wivell to be saying that as it is for the reporter. Rank hearsay.
THE COURT: You're going to have to get better copies or I'm going to have to get better eyes.
The court will receive 2909.
*19 MS. WIVELL: Thank you, Your Honor. That's all I have.
MR. O'FALLON: Your Honor, I think that's all we have. I believe that's all we have on the documents. I'm going to clear out my stuff.
THE COURT: Mr. Bernick, would I be able to get a copy of that transcript
MR. BERNICK: Yeah. We'll undertake to provide that to Your Honor.
THE COURT: Otherwise I can probably get it myself.
MR. CIRESI: Your Honor, --
THE COURT: Counsel.
MR. CIRESI: -- just a couple items on the documents.
With regard to advertising agencies, the court could direct its attention to transcript 7331 where Ms. Walburn stated, "Objection, beyond the scope of discovery. Advertising agency documents in their files were not produced.
"THE COURT: Sustained."
With regard to the TRC, Mr. Bernick, I think, said that the response to a -- response to the court, the court's response was we have a lot of testimony already about the TRC, and Mr. Bernick said something to the effect, "No, this is -- I'm glad you asked the question, Your Honor, this is a different question entirely. We had statements about TIRC."
Court's recollection was correct. References to the TRC first commenced in opening statement by Mr. Bernick at page 1092 where he talked about the industry funding research with regard to the reduction in tar and nicotine pharmacology through The Tobacco Research Council, the TRC. It begins at page 1092 and goes on through 1093. There are other documents that we submitted during the course of trial which also relate to the TRC. I will get those out. And I believe Mr. Todd was referenced in some of those documents that have already been introduced into evidence.
With regard to other documents, Your Honor, there's one issue that will remain, and that is the misrepresentations in ads that go to misrepresentations which are within the ambit of the consumer protection statutes and the penalties thereunder. That would be a court issue, and what we would suggest be done is that the documents that relate to that issue be submitted separately, they would not go to the jury, they would be for the court to look at with respect to that particular issue, and I think we can deal with that at some later point in time.
THE COURT: Yeah. Let's make that an agenda item at a different hearing.
MR. CIRESI: All right. Very good, Your Honor.
MR. BERNICK: With regard to the two items Mr. Ciresi raised concerning the documents, we'll try to pull up the citations to the statements that are made. We now have the one that we offered. I believe there was more than one.
With regard to the TRC, well there are clearly references to the TRC in this trial. That's not the issue. The issue is whether they created the proper foundation to establish that TRC was acting on behalf of the tobacco companies as an agent in making statements concerning the matters that Mr. Todd speaks to in those documents. Mr. Ciresi hasn't addressed that. In fact it has not been established. There is no conspiracy claim that includes the TRC in this case.
*20 THE COURT: Should we move on.
MR. REDGRAVE: Good morning, Your Honor.
THE COURT: Good morning.
MR. REDGRAVE: Jonathan Redgrave on behalf of R. J. Reynolds Tobacco Company, as well as, with respect to the document depository issue, Brown & Williamson Tobacco Company, both individually and as successor by merger to American Tobacco, Lorillard Tobacco, Council for Tobacco Research, Tobacco Institute, and Philip Morris.
Your Honor, this was the first item listed in your notice of hearing for today. As the court will recall on February 8th of this year, these defendants, who I'm here standing on behalf of, moved this court for an order permitting access to the Minnesota document depository by the public to the majority of the documents at the depository. This request followed up on representations made by certain executives to Congress at the end of January.
We submitted that motion and a proposed order on the 8th of February, the same day the plaintiffs, I believe a letter from Mr. Ciresi, responded to that and made some additional suggestions as well as a few objections to the language we had in the proposed order. On February 9th I wrote to Your Honor and attached a revised proposed order. And if I may, I've got copies of that. The revised proposed order is CLAD document number 2222.
In my letter of February 9th, Your Honor, I tried to set forth those areas from the plaintiffs' letter where we could reach agreement, I believe, and the modifications to the order that we made are in underlined text in the proposed order that's in front of you.
Since the date of February 9 we have not received any letter from the plaintiffs or any other communication with respect to those changes, that they were not acceptable for those changes. There were additional items in the letter from the plaintiffs that are not reflected in there, and my letter of February 9th indicated the reasons why we could not agree with those, and I would like to briefly touch on those. I know Your Honor also in his notice of hearing referenced a letter that he received from three members of the House Committee of Congress, of the United States Congress.
In summary, Your Honor, I think the issues that we have in this order, as disputed or not disputed, are as follows: First, the defendants are seeking to provide access to the public to all documents except those that are privileged or highly sensitive trade- secret documents in the depository, those are the Category I documents. In paragraph two of the proposed order before you, Your Honor, there's also an exception for certain other documents, a very small set of documents that are either personnel matters where individual privacy rights might be implicated, as well as matters that might be covered by third-party contracts that have confidentiality provisions; in other words, a vendor that has an agreement with one of these defendants has a provision in that contract where certain items or certain information should not be made public, and that contractual agreement we want to honor, so those documents need to be segregated.
*21 The plaintiffs, as I understand it, made a request that Category I documents also be released. We do not think that is appropriate, Your Honor. Your order of June 4th, 1996, the addendum to the protective order, set out in paragraphs four through six additional protections for highly sensitive trade- secret documents. There is a small number of documents in the vast population, when you look at it in terms of percentage, that have been placed in the Category I category. Those documents need to have maintained protection against public disclosure for trade secret proprietary reasons, not only vis-a-vis the other defendants in this case, but other tobacco companies around the world. We believe it would be inappropriate to have an access order that allowed for those documents to be out in the public domain or the public would have access at the depository.
With respect to indexes available for the public at the depository, Your Honor, the plaintiffs raised a point that you can't have documents at a depository, boxes and boxes, and have a meaningful access without an index. We addressed that in my -- my February 9th letter by setting forth that we would provide 4B indices to the public that would be allowed into the depository. Since the date of my letter I have been working with technical staff and other
people to come up with a system whereby 4B indices could be made available to the public at the depository, and we have a plan whereby we may be putting computers into the depository to allow people to search the 4B indices. The public could come in and search those. And I don't intend to get into the details of how the computers would work or anything like that, Your Honor, I think it's a matter that could be agreed upon easily once we have an access order. But I wanted Your Honor to understand that we heard the concern about having an index available for people coming in so they're not just sitting there looking at thousands of boxes, and that is a response to that, to have the 4B information readily accessible at the depository in a computerized fashion.
Your Honor, an issue was raised with respect to the 4A indices, and you'll remember back in 1995 one of your orders set forth production requirements for work-product indices. Part of the indices of the defendants' counsel you found to be ordinary or fact work product, and because of a showing of need by these particular plaintiffs, you indicated that portions of these should be produced, and they were produced. Other portions were held non- discoverable as absolutely protected opinion work product, and those haven't been produced.
We believe it to be highly inappropriate for either part, the fact work product or opinion work product, to be released to the public or anyone else. It is work product of the attorneys, and only on a showing of need by a litigant under the Minnesota rules should that be made public -- or made available to a litigant.
A point was raised with respect to releasing briefs and materials that are filed under seal that had confidential documents discussed. My letter of February 9th indicated that to the extent they did not deal with Category I information or deal with other information that would fall in these very narrow categories for personnel information -- and I don't believe there are any briefs that do that -- or for the third-party contact information, the other materials would be subject to some procedure where we could release those.
*22 An issue was raised in the plaintiffs' letter of February 8th with respect to the Liggett Group, Inc. documents at the depository. My response, I indicated that Mr. Stricker from the Kasowitz firm or another person on behalf of Liggett would need to address that. I'm not here on behalf of them, I have not heard a response from them, and I do not know that they have ever responded to the plaintiffs or to the court in that point, and I cannot make a representation as to that.
With respect to the Guildford depository, Mr. Bernick will be addressing the Guildford depository issues that have been raised on behalf of BATCo and BATUKE, and I believe Mr. Corrigan will address B.A.T Industries' position on the Guildford depository.
Your Honor, the plaintiffs in their letter also raised an issue with respect to discussions about documents at the depository. In my response and in the order, as it is in front of Your Honor, CLAD 2222, that we are proposing documents that are released could be freely discussed by the public and plaintiffs' counsel. With respect to those documents that would not be released, they are Category I, or to documents not in the depository, Category II, those should remain subject to Your Honor's protection in the June 4, 1996 addendum to the protective order.
There's an additional issue that we raised in our proposal, and it regards the space at the depository. To accommodate the public, we need to have some additional space and move things around, and we wanted the plaintiffs to consent that their documents that they produced for our use in the depository be moved from the depository to another place so that we could use that additional room to accommodate public access. To date I have not received a response from the plaintiffs. I do not know if they oppose that or not. I just do not know the answer to that question.
And finally, Your Honor, with respect to the details, the space configuration out there, working with a copy service, working with the Smart legal staff, there will be a number of changes that will be needed to be made to all of those things. I am committed to working with the plaintiffs, the court, Smart, Merrill Corporation, who's the current copy vendor, to make it all work. It will take a little bit of time, and that's why in the papers we filed yesterday we indicated we would need 10 to 14 days to make this all work and make it possible to have meaningful access by the public to the vast majority of the documents that are at the Minnesota document depository. So that -- those are minor details, I don't think we need to take up time this morning, Your Honor, to discuss all the different places where I'd put a little wall and do this or do that, and I don't think, Your Honor, they're going to be controversial at all between the parties, the court, or the vendors, but I just want to alert Your Honor that to the extent we have the public coming in, there are modifications that need to be made to make sure that access by the public is meaningful and that the public can make copies or get copies made for them of the documents that they want from this set that would be available to them, and that we have an orderly process whereby plaintiffs in this litigation would have the first right of access to the extent they still need documents from the depository, plaintiffs in other cases would have the secondary right of access, and then the public would, to the extent that there's any logjam or any sort of ordering is necessary, would come after that. So there's no impeding of the progress of this litigation or access by these plaintiffs or their needs.
*23 In short, Your Honor, we believe that the order before you that we proposed on February 9th, the revised proposed order, is essentially agreed- upon language. To the extent there are additional requests for other documents, we think that those are inappropriate at this time. We believe that we have responded to the concerns in the language of that order that make it a meaningful order, and we seek Your Honor to enter the order and allow us to go forward with the process of contacting the vendors, working with the plaintiffs to get the job done and get it done right.
THE COURT: What's your position with regard to the letter from Congress, counsel?
MR. REDGRAVE: You're talking about the letter from the three members of the Commerce Committee?
THE COURT: Yes.
MR. REDGRAVE: Your Honor, with respect to the letter --
THE COURT: I don't -- I don't know what your executives, what their agreement may or may not have been with Congress, so I don't know -- I don't have any background on that.
MR. REDGRAVE: First of all, Your Honor, my -- my contacts with that is limited, but second, I understand that to the extent the Congress and the companies need to work out something further or want to work out something further, that should be between Congress and the companies. But third, with respect to the particular matters that were raised by the letter --
THE COURT: Well the letter was addressed to the court, and I guess -- I guess what I'm asking is what should I tell them? To - - to go jump, or --
MR. REDGRAVE: Well, Your Honor, I mean if --
THE COURT: I mean, you want to negotiate with them or --
MR. REDGRAVE: Your Honor, with respect to the letter, and I just turned to that so I make sure that I am walking through the same request that they made, they made a request that the parties should permit -- or that the court should permit the parties to the litigation to consult the members of the committee and their staffs about the contents and significance of the documents. To the extent it deals with documents that are not Category I or Category II, we believe our order addresses that. To the extent it's Category I or Category II, I don't think it would be appropriate for the court to just order the release of that without some sort of other provision, because there -- there are provisions in your court's -- in the court's addendum whereby third parties can sign on to the protective order and exchange information for the Category I information, but if it's just released to the public, in the public access order, the protections that the companies need and are rightfully provided for in the order could be lost. And I don't think that this is the vehicle or mechanism by which to make that available.
The second point in the second paragraph on page two of the letter from Congress, from the three members to, talk about the order that release the indices to the documents. We believe that the 4B indices that we referenced in our February 9 letter meets that, it provides indices to the documents that is usable and makes access by congressional staff or the public a meaningful access.
*24 To the extent that there is a request for 4A indices, that's not stated here, and we would believe it would be inappropriate to order the release of the work-product indices because they are acknowledged work product for the reasons I previously stated. With respect to the last portion of this sentence, the three members talked about relevant briefs, pleadings, and other materials filed under seal, again to the extent that -- and I believe almost all of the briefs that have been filed under seal, Your Honor, deal with just confidential, there are some that deal with Category I information, especially -- or Category II when we're talking about cigarette parameter interrogatories, for instance, but the majority of the other briefs that have been filed in the course of this litigation CLAD number one through CLAD number 22 -- wherever we are now, 2300, I believe, would probably be released under this.
So I think that you're not telling them to go jump by entering the order that we provided. I think we're telling -- the court would be telling them that most of the provisions that they sought have been -- have been met.
With respect to --
THE COURT: I was hoping that you would be the one that would tell them to go jump.
MR. REDGRAVE: Well, Your Honor, I don't believe I want to go tell anyone to go jump in any circumstance. I believe --
THE COURT: No, I don't mean to be sarcastic. Can you -- I mean could the parties agree -- I mean this is --
I'm not really in this business, you know, and if the parties can agree on an appropriate response to the letter, I would certainly prefer that. I don't want to get into the middle of what your people told Congress or what Congress told your people. I don't have any knowledge, background, or expertise this that area, nor do I wish to.
MR. REDGRAVE: Your Honor, I think that's entirely appropriate. And it would be our position, too, that to the extent that Congress wants something more from the companies, the companies should respond to Congress and deal with that, not working through the court as a conduit to that.
To the extent that we've made a representation, the companies have made a representation to Congress that the Minnesota document depository should be open with respect to the non- privileged, non-highly trade- secret documents, we are trying to work with the court, because Your Honor is the one that has the orders in place with respect to governing the depository, the operation of the depository, and we are just trying to meet what we told Congress we would try to do by having Your Honor enter this order. And in no means and in no way do I want Your Honor to have to get involved as a -- as a middleman or any other way in between -- where the companies or the plaintiffs or any of the parties and Congress in their communications or negotiations or discussions. This is really about our proposed order of access to the depository to allow the public in to take a look at that.
*25 And Your Honor, we don't think that it's necessary to go into the other matters that are requested by the plaintiffs or by Congress to enter and meet what we've set before Your Honor in that proposed order. We think it would be appropriate to enter that proposed order without modification, and to the extent that someone else wants something else, they should make the motion or make the request.
THE COURT: What about the other documents that we'll be discussing here today, any ideas about the documents that aren't there yet?
MR. REDGRAVE: When you're talking about the documents that aren't there yet, I'm not sure I understand which documents.
THE COURT: Well there are a couple outstanding orders requiring the delivery of documents.
MR. REDGRAVE: Are you speaking about BATCo documents or --
THE COURT: Well --
MR. REDGRAVE: I'm not sure with respect to Reynolds --
THE COURT: Right, I guess I'm -- I'm addressing the wrong person. I don't mean to put you in a wrong position. I guess you're not the party to address that question to.
MR. REDGRAVE: Okay. To the extent your question addressed the BATCo situation, I would ask that Mr. Bernick or someone else address that to the court.
THE COURT: Okay.
MR. REDGRAVE: To the extent, Your Honor, there are additional documents that are being produced, one of the provisions that the plaintiffs asked for and we agreed was that they wouldn't have to go fight the public over there, those documents would be produced also directly to the plaintiffs. I don't know if that's responsive to the question, Your Honor.
THE COURT: That is partially responsive. Thank you.
MR. REDGRAVE: Okay. With respect to the remaining aspects of the letter from Congress, I believe that to the extent it's appropriate for the court and necessary for the court to address issues on the depository, we've set forth a very workable, meaningful order in CLAD 2222 and we'd ask that it be entered.
I don't know if Your Honor has any other questions.
THE COURT: Okay. Can we hear from the plaintiffs on that?
MR. CIRESI: Yes, Your Honor. Well do they want to address the Guildford depository first?
MR. BERNICK: I'd be happy to, if that makes sense.
THE COURT: All right. Why don't we. Let's hear about Guildford.
MR. BERNICK: First on a housekeeping matter, I've got both, I think, of the references to the advertising agency documents. They can be found at page 7260, and then one that Mr. Ciresi made reference to at 7331. If I can tender this up to the court.
(Document handed to the court.)
MR. BERNICK: Your Honor, I believe that the genesis is in fact the undertakings that were made by the executives befor Congress. The executives who appeared before Congress included Mr. Nick Brookes on behalf of Brown & Williamson. He's not a BATCo employee nor is he a BATUKE employee, he was there for Brown & Williamson. He was part of the four executives who made the undertaking to make available, I think if it could be worked out, the documents that are in the Minnesota depository. That's been brought about by a formal request or informal request, however you want to characterize it, from Congress to get access to those documents, then there's a third stage, the U.S. tobacco company defendants, including Brown & Williamson, have now made the motion before the court to try to bring that about. So I think that's basically the state of play that brings us here today.
*26 There was never an undertaking before Congress or otherwise to make available here in the United States or elsewhere the Guildford depository. It was never part of the calculus. And that's for a very good reason, which is that from the very beginning of this case, the BATCo documents produced in the Guildford depository have been handled differently. There was a very carefully negotiated arrangement for the opening of the Guildford depository that Mr. Corrigan was involved in, and I think Ms. Walburn participated in on behalf of the state. It was an extended process. It resulted in agreement between the two sides, and under this agreement, the basic essence of the agreement was documents produced from the U.K. would be handled differently. They'd be handled differently. They would not be produced in the Minnesota depository. A whole new depository would be created, and in that depository would be put not only documents that might be responsive to discovery requests, and this is a very, very critical point -- but whole files taken from the archives of BATCo and other U.K. companies. Whole files. So the files would be brought into the depository and placed there even though they might contain many documents that were not actually responsive to the discovery requests, and even though those non-responsive documents might contain very confidential and proprietary information. The idea was to make them all available, and there are literally millions and millions of pages of them. The plaintiffs would then have the opportunity to come to Guildford and make requests for particular documents, and then of those requested documents, they would basically become the produced set and would be available in this litigation.
That procedure was in fact followed. We have a depository that contains millions of pages of documents that are not responsive to this litigation, that contain proprietary and confidential information. The plaintiffs have taken a very small number of documents; they are part of the Minnesota select set, and those documents, obviously, have come in to the depository in this case.
This was not simply an agreement, though, between the parties. It ended up being the subject of a stipulated order of this court, and it modified the case management order. Therefore, to the extent that we're dealing with the Guildford depository, we're talking about an institution, a discovery vehicle that has been structured and approved by this court and has held throughout the entirety of this case.
I think the request that's been received from Congress pursuant to the undertaking that was made by the four executives is not a request that there be new discovery, it's not a request that there be a different kind of depository created, it's a request to do something very simple, which is to make available to the public, subject to Your Honor's order, the documents in Minnesota that are available in Minnesota. In other words, the Minnesota depository becomes, to some degree, a more or less publicly available facility, subject to, obviously, the obvious restrictions that have already been referred to in prior argument before the court. That concept -- that undertaking in Congress, that request from Congress that was the subject of the motion, that does not include Guildford. To make Guildford part of that would fundamentally change the nature of the court's prior orders, it would essentially open up a new area of discovery, it would create a different kind of depository. It has nothing to do with the matters that are the subject of discussion that's taken place as a result of the testimony on the Hill.
*27 THE COURT: So as I understand your position, you would like to tell Congress to go jump as to the Guildford depository. Would that be a fair summary?
MR. BERNICK: I might like to do that, Your Honor, but I don't really have to do that at the end, because I don't think that this dialogue has really involved the Guildford depository.
THE COURT: Well --
MR. BERNICK: I believe this dialogue only pertains to the Minnesota depository. BATCo and BATUKE are prepared to make available hard copies of the Minnesota select set of documents that relate to them in the spirit of trying to facilitate this effort. But to the extent that a request is made, either in this court or outside of this court, to make the Guildford depository a public depository, if that is the request -- I don't think that's the request, but if that was the request, we would oppose that request.
THE COURT: Well they say at the January 29th hearing, "Mr. Brookes, the Chairman of Brown & Williamson Tobacco Company, gave no indication that relevant documents that happened to be produced to the depository in England instead of the depository in Minnesota would be excluded from the documents being made public." I guess my point is I'm not particularly interested in getting thrown in the middle of whatever you represented to Congress. If you --
If it's not clear to Congress what you represented to them, then you people maybe should clarify your position directly to Congress. Would that be a fair statement?
MR. BERNICK: Well I think that that letter actually says -- I mean it acknowledges by saying there was not an exclusion, that there was not an undertaking that was made to Congress. I don't know that there -- I don't know that there is any real illusion but that no undertaking has been made to Congress to make the Guildford depository a public depository. But there is no motion before the court to do that. That would be inconsistent with the court's orders to do that.
Now what happens in our relationship with Congress, Your Honor, I frankly have to tell you I can't address either. I'm here to deal with this litigation and to follow the rules of this court.
THE COURT: Okay.
MR. BERNICK: I understand Your Honor's not real anxious to get involved in the Washington D.C. --
THE COURT: Not one bit.
MR. BERNICK: Neither am I. Neither am I.
THE COURT: Okay. Anybody here anxious to get involved?
MR. CIRESI: I am, Your Honor.
THE COURT: All right. Let's hear from somebody who is anxious.
MR. BERNICK: Then maybe Mr. Ciresi should take his request a little bit further east.
THE COURT: Okay.
MR. CORRIGAN: I have nothing substantive to add, Your Honor, except I laid all of this out in the letter to the court on February 9th, and nothing's changed.
MR. CIRESI: Let me deal with the last issue first, and that's Guildford, since that's one of the areas of dispute, Your Honor.
In the February 12th letter to Your Honor from Representative Dingle, Representative Waxman and Representative Brown, they pointed out that they believed that members of the committee and their staffs should have access to the documents contained in the Guildford, England depository. They felt that those documents were likely to be just as significant as those in the Minnesota depository, and then they pointed out their understanding of the testimony of Mr. Brookes, the chairman of Brown & Williamson Tobacco Company, with regard to the Guildford depository.
*28 In our deposition of Mr. Brookes in November, he said he'd have to talk to the lawyers as to whether he'd release the documents in the depositories. So while Mr. Bernick --
MR. BERNICK: Is there a page reference?
MR. CIRESI: I don't have the page reference.
MR. BERNICK: Oh.
MR. CIRESI: But I'd be glad to provide it to you.
So that Mr. Bernick says he can't add anything to the debate in Washington. He's not here on behalf of that, because they have other lawyers who go out there and make statements and then they bring lawyers into this court and make statements here. The fact is they went to Congress and said now all of a sudden they wanted to have the Minnesota documents discoverable.
With regard to Guildford, Mr. Bernick stated that they provided many irrelevant documents. The plaintiffs could go in and look, and that we took very little of those documents. I believe that Mr. Bible testified that with regard to his own company's documents, he had some 700 people working nine months. Now that's about three and a half times the size of our law firm, and certainly our entire law firm was not looking at the documents over the past four years. I would suggest to the court that there may be many members of the media, many other lawyers, many public health authorities, many interested parties who would go through both the Guildford and the Minnesota depository and select documents that we did not. We are not a font of all knowledge, and many people out there want to look at these documents and be able to get at them.
THE COURT: Well counsel, I'm disillusioned.
MR. CIRESI: We would suggest, Your Honor, that Guildford should be open. They should not have it both ways. If they want to get the information out there --
As Mr. Bible said, "I want to look forward," well then look forward and get all of the documents out, Guildford and Minnesota.
With regard to the 4A indices, they are essential. This court found that we could not obtain the substantial equivalent without undue hardship and a substantial burden. We have been involved in this case for four and a half years -- or four years almost. The members of the media, other public health officials, other interested parties, do not have the background and are not as grounded in the litigation as we are. The 4A indices give them an opportunity to use it, and if I may quote counsel, "in a meaningful fashion." If the intent of the industry is to allow the public to see what they knew, when they knew it, and what they did with that information, in a meaningful fashion, then they should allow procedures that would allow those people to have a meaningful opportunity to gather the relevant information. Therefore, we believe the 4A indices should be made available to the public. All privilege logs should be made available.
With regard to confidential and/or Category I documents, what we suggested, Your Honor, is that for those Category I or confidential documents prior to 1994, those should be allowed. I dare say that it would be exceedingly difficult for the defendants to show under any trade-secret law, either case or statutory, under the Uniform Trade Secrets Act, that information prior to 1994 would have any confidential or trade-secret relevance at the present time.
*29 We have no objection to individuals' personnel files being restricted at this point. We see no need for the public to be able to look at any type of information that's been collected on individual employees and that is in their personnel file, and I think their -- they -- those employees are entitled to that type of protection. But we see that as the only type of information that should be protected at this point, because essentially what we have here is, once again, the defendants attempting to let the information out on their own terms. They're saying one thing and acting differently. If they want the information out -- and we believe it should be out -- then it ought be placed out in a meaningful fashion and all the information should be placed out, both Minnesota and Guildford.
And Your Honor, and finally, I don't think the court should be involved in this and in the middle between Congress and these defendants. If they want to get the information out, they should go to Congress and say we're going to get all the information out.
THE COURT: Should we move on?
MR. REDGRAVE: Your Honor, briefly just --
THE COURT: Go ahead.
MR. REDGRAVE: I think the microphone is on. I'll just do it from here.
Just for the record, I think there was a letter from liaison counsel that responded and a copy was sent to both plaintiffs' counsel and Your Honor, to the three members, so I just want to refer that to the court.
The 4A indices again, this is dealing with the work product of attorneys, it is different under the Rules of Civil Procedure in Minnesota and other states. This is very different from the discovery documents themselves from the companies.
With respect to meaningful access, the 4B indices that were produced by both parties provided meaningful information, we believe it does provide meaningful information. We are going beyond just providing the paper copies that are at the depository now. We think that does provide a very meaningful way for people to search through the documents to find what they're interested in.
And finally, with respect to the Category I issue, I don't believe it's accurate or -- or we can sit here and say, well obviously from 1994 backwards, those cannot be, under any stretch of the imagination, within the confidentiality protections of the court's Category I amendment or the provisions paragraphs four through six of the court's order. I don't think we can just do it in a summary fashion like that. I believe there are a number of documents that would and still remain Category I to this day that remain in the depository, and we shouldn't be in a situation where we make a motion for access to documents and then have all sorts of conditions and other things thrown in it when there's no motion or any affidavits or anything else by the other party put into the record to say why what they want to have added is appropriate.
Under paragraph 17, Your Honor, of your original protective order, the parties are allowed with their own documents to not be restricted by the protective order. If the party wants to say my confidential documents are confidential but I'm going to give them now to the public, the party is allowed to do that, and that should not be restricted because someone else wants you to give up something else.
*30 We have an order that we put before Your Honor. We think it's appropriate. We think it meets the commitment that was made to the United States Congress, and we just ask that be entered and that we be given the opportunity to work with the plaintiffs and the court to make the access meaningful and make it work.
THE COURT: All right. Let's take a short recess, and then we'll finish up the agenda.
THE CLERK: Court stands in recess.
THE CLERK: All rise. Court is again in session.
Please be seated.
THE COURT: Trial Exhibit 14235 and 13805 will be received.
Let's move on to item two.
MR. GORDON: Good morning, Your Honor. Corey Gordon on behalf of plaintiffs.
Is Your Honor referring to the item regarding the BATCo employees, Mr. Heard and Dr. Thornton?
THE COURT: Yes.
MR. GORDON: Okay.
THE COURT: That's right.
MR. GORDON: As the court is aware, neither Heard nor Thornton appeared in Minnesota for deposition as ordered by the court in January. Subsequent to the court's ruling in January, the B.A.T people finally made efforts to procure Mr. Heard and Dr. Thornton's cooperation to appear for a deposition in England, but it was -- they only agreed to make themselves available after this trial had commenced, and plaintiffs did not go to England after the trial commenced to take their depositions, so their depositions were not taken.
The position of the plaintiff remains that the efforts that B.A.T finally undertook to obtain the participation of Heard and Thornton in depositions was eight months too late. Both at the request of plaintiffs and the clear directives of this court, B.A.T should have been doing it many months earlier rather than remaining, as they so frequently told this court, neutral in the dispute. As a result, the plaintiffs were forced to spend many, many thousands of dollars -- actually many thousands of pounds -- in pursuing the English proceedings all for naught, and had B.A.T simply done what this court had directed it to do eight months earlier, clearly we could have taken the depositions in a timely fashion.
The position of the plaintiffs with respect to sanctions, Your Honor, is two-fold. Number one, we've asked the court for an award of monetary sanctions equal to the attorneys' fees we had incurred in England in pursuing their depositions, and the second part relates to issue preclusion.
With respect to the monetary sanctions, if the court so desires, we would ask for an opportunity to submit an affidavit to those -- setting forth those costs and would request that the court consider that as a sanction now.
With respect to the issue preclusion, we would ask that the court defer ruling on that till the close of the defendants' case in chief so that we can be in a better position to fully evaluate the impact of not having Heard or Thornton's testimony on the testimony that is admitted into court.
MR. BERNICK: I'm going to be at least a couple minutes if you want to sit down.
*31 Your Honor, I'd like to review briefly where I think we've come on this matter, and I'm going to go back to the order that was issued for the appearance of these witnesses, the order that was issued on the 5th of January. I know that there's a prior history, and as I did in my remarks to the court when I first addressed this matter to the court, I'm going to focus on what has been done pursuant to that order. I know that there's a long history and I'm not going to --
THE COURT: Long and --
MR. BERNICK: Long history.
THE COURT: -- extensive and over and over and over again.
MR. BERNICK: Yes. Yes.
THE COURT: Probably more discussed than any issue in this case.
Okay. Go ahead.
MR. BERNICK: Okay. And I think you had a similar reaction when I made the same prefatory remark the first time.
But the order that was issued ultimately by Your Honor on the 5th of January reads as follows -- and the operative portion is paragraph two: "B.A.T Industries and BATCo shall take whatever steps required and necessary to prepare these persons for examination under deposition and to ensure their appearance, understanding that they will be answerable to the court for failure to do so." It directed these companies to take whatever steps required and necessary. And as Your Honor knows from the submissions that have been made to the court, in fact those efforts were undertaken and they were undertaken vigorously, and they were extensive, and they did produce results. And I'm not going to go through all of the details of it, but I think the record is pretty clear on this.
We have the Gilbey affidavit which talks about the fact that the order was received the very next day by Mr. Gilbey. They received a copy of the order. Then on the afternoon that same day, upon receiving the order, he telephoned the lawyers who represented Dr. Thornton and Mr. Heard to inform them of the contents of the order. That on the next day he telephoned Mr. Johnson and spoke to him about the urgency of the January 5 order and its potential impact on BATCo.
There was never any mistake or any illusion with the people who were following through on Your Honor's order about the seriousness of the order and the importance of complying with this order, and the efforts that should be undertaken had to be absolutely all that could be done, and that was in fact done.
As you can see, Mr. Johnson's position, representing the two individual witnesses, was that his clients had no obligation to proceed in accordance with the order. And he could have insisted on that position and they could have done nothing at all. Obviously, we weren't satisfied with that; we wanted more. The next day, or actually on the same day, that is the seventh, Mr. Gilbey sent three letters to the lawyer and to Mr. Heard and Mr. Thornton directly in an effort to induce compliance with this request. All three letters stated that if the request was refused, BATCo would inform Lovell White Durrant that it would no longer pay for any work performed pursuant to the consultancy agreements between Dr. Thornton, Mr. Heard, and Lovell White Durrant. And that was the only remaining tie that even existed, was the consultancy arrangement, and the only threat that could be made was the termination of the financial arrangements that were associated with that consultancy. And as the letter that is attached to the affidavit confirms, this is the January 7 letter, it says that "In the event that your two clients do not agree to comply with BATCo's request, BATCo will have no alternative but to cease to reimburse any future expenditure which Lovell White Durrant may pay your clients under the consultancy agreements in an effort to ensure their compliance with our request."
*32 The efforts did not end there. On the next day, Johnson reaffirms his position that the two witnesses had declined the request, telling him again that Mr. Heard and Dr. Thornton were not subject to the control of the court. Again not ending it, on that afternoon Mr. Gilbey now makes direct contact with these two individuals, again underscoring the seriousness of the situation, explaining the potential consequences to BATCo and B.A.T Industries if they did not attend to the court orders, urging the two witnesses, each of them, to reconsider their position that they would not appear.
And on that same afternoon, on January the 8th, contact is made with the lawyers to see what is it that we can offer up to the court by way of any kind of alternative in order to get to the end of this issue and comply with the court's directions? On the evening of January 8th counsel calls back, recited his clients' position that there are under no obligation, but then says that they would be willing to appear in principal, willing to appear in England for a deposition on terms and time to be agreed. That again was not enough. Because of the pressing nature of the schedule that we're facing before trial, we needed a date certain, and ultimately on January 9th there -- a letter comes through on January 9th basically confirming that same conversation and undertaking, that Thornton and Heard would be willing to make themselves available at a time to be agreed upon in the next few weeks. That was not sufficient. And ultimately we were able on January the 14th to have an undertaking for a date certain for the depositions of these individuals. The operative paragraph is paragraph one, "As to timing I'm authorized to say," this is a letter from their counsel, "that Mr. Heard is willing to make himself available for the voluntary deposition exercised on Wednesday, January 28th, Thornton is willing to make himself available on Thursday, January 29." This, in turn, was passed on to counsel by letter of January 15th to inform Mr. Gordon of these dates and the availability of these witnesses.
The net result of all the efforts was that in fact these two people were made available in England, but for U.S.-style depositions in this case, the subject matter being those matters in which they had personal involvement while they were employees of BATCo.
The efforts were successful. The depositions could have taken place. We notified counsel. They declined to appear.
The only further thing that could have been done conceivably under a different set of circumstances than those presented to us was that the people would actually appear here in the United States. That simply was not possible.
THE COURT: Pursuant to the court's order.
MR. BERNICK: Pursuant to the court's order. That simply was not possible. That effort was undertaken. It was unsuccessful.
The order did not require that we guarantee their appearance, it required that we took whatever steps we could that were necessary and appropriate. We took all of those steps. Nor does the law require that we do something that essentially we cannot do. We cannot do and accomplish the impossible, much as we would have liked to take this whole issue off the table.
*33 And the cases are fairly clear and we've cited them in our brief. This is a situation that's happened in the past. In the Cameo-Parkway records case it happened, in the United States versus Afram Lyons it happened. These are both situations where you have people who are not within the control of the company because they are no longer employees, their testimony is sought, it is not possible to obtain that testimony, and the net result is that they simply do not appear.
We would have liked it to be different, Your Honor. I can personally assure you that I would dearly have liked it to have been different. That we couldn't respond to your order to make them available here in this country, but they were in fact available in England and their depositions could have been taken. Other depositions had been scheduled in other litigation. We know that counsel for the state has expressed a willingness and a desire to participate in other depositions that are taking place during the pendency of this trial. They have an extensive team. The time could have been made to take the testimony of these individuals, and it was not in fact taken.
In the meantime things did not simply stay idle here in this courtroom. There were matters that could have been presented to the jury relating to BATCo, and I'd like to just give a little bit of a summary of what's happened concerning BATCo in the case so far.
First, with regard to BATCo testimony, there has been no testimony shown to this jury from BATCo regarding Heard and Thornton. None. There has been no BATCo testimony at all by deposition. There were five different depositions that were taken of BATCo employees. None of them have been played in this courtroom to this jury. There has been no BATCo live testimony. The state has had the option to call a live witness from BATCo; they have declined to exercise that opportunity.
What about Brown & Williamson testimony regarding Thornton and Heard? Have they played any of the testimony regarding Thornton and Heard or their work to show the jury that there's an issue that pertains to them that's of some real consequence in the case? And again, the answer to that is no.
In fact, if you take a look at the documents that are presently in evidence relating to Thornton and Heard, that is documents authored by Thornton and Heard that have been placed before the jury, I believe that there are a total of four documents authored by these two individuals that have been placed before the jury to date, and I believe that next week there may be one more document through a Professor Jaffe and maybe a couple more documents through Professor Dolan, and that's it. That's all that there is.
So again, we would have liked to have them take the opportunity that was afforded in England and moot this whole issue. We think that was the appropriate course. But we believe we are in compliance with Your Honor's order that was issued on January 5, and we do not believe that this issue constitutes a material or significant issue in this case at this time.
*34 THE COURT: Counsel, do you have any relevant cases that address the question of a witness failing to appear on order of the court when that witness is subject to one of the party's control?
MR. BERNICK: The failure of a witness to appear who is within the party's control?
THE COURT: Yes.
MR. BERNICK: There are some cases that have been cited by the state. I'm just trying to think if any of them are responsive to Your Honor's questions.
I believe that in one case -- in one case there is -- this is the Higgins versus Lufi case -- I'm just trying to be responsive to Your Honor's question -- this is a case where I believe that a witness, a doctor -- there was some evidence that a doctor -- yeah, here.
The court made specific findings of bad faith on the part of appellant's attorney and Dr. Jube in scheduling the deposition, willful failure to cooperate in efforts to avoid service of process by Dr. Jube. So I believe that that case involves a situation where in some fashion a witness could have been available, steps were taken to procure his inability to appear; that is, avoidance, presumably, to service of process for the deposition.
I don't know of other cases, Your Honor, that would relate to the question that you've posed.
THE COURT: Thank you. How is Mr. Patrick Sheehy doing these days?
MR. BERNICK: I wasn't --
I don't think I've ever had the pleasure of meeting Sir Patrick.
THE COURT: Neither have I.
All right. Let's move on.
MR. BERNICK: Can we take -- the next matter would be the American -- the American documents, and we're prepared to address that.
THE COURT: Okay. Does plaintiffs have anything further to add on this point so we can move on?
MR. GORDON: No, Your Honor. I would just note that we would adopt Mr. Bernick's chart there as evidence of what the consequences of Thornton and Heard not appearing are from our standpoint.
THE COURT: Okay. Let's move on.
MS. LINDBLOM: Good afternoon, Your Honor. My name is Marjorie Lindblom. I appeared before this court once before on January 15th. As the court may recall, I was asked to do the work to make sure that Brown & Williamson could be brought into compliance with the court's December 30, 1997 order.
THE COURT: It was a memorable appearance, counsel.
MS. LINDBLOM: Thank you, Your Honor.
THE COURT: Okay.
MS. LINDBLOM: At that time, as I reported to the court, Brown & Williamson had already paid 100,000 dollars as a sanction, had turned over 1,114 privileged documents. And the court may recall this is the visual aid I used at that time describing the work we had done to that point. I will not repeat that. We had also at that point filed this notebook, which is CLAD number 1964, describing the work done to date to bring us into compliance. We didn't stop as of January 15th though. We paid the plaintiffs' attorneys' fees as a sanction, more than 76,000 dollars. We filed a supplemental report which is CLAD numbers 2092 and 2093, including comprehensive responses to the court's questions that had been posed in the May 8th, 1997 order. We took the deposition of Fortune Brands, formerly known as American Brands, regarding any smoking-and-health research it had done or its possession of documents, and Fortune Brands directed its counsel, Chadbourne & Parke, to produce any documents responsive to the court's order.
*35 We subpoenaed Chadbourne & Parke for both the Fortune Brands and Gallaher documents. And I've got more visual aids here. These are the papers, about eight inches, that have been filed in the New York court relating to the subpoena and the motion to quash that was filed by Chadbourne & Parke acting under the direction of its client, Gallaher Limited. We filed a motion to expedite that proceeding before the New York court and have been partially successful in that regard, although we are still waiting for a decision from that court.
THE COURT: Counsel.
MS. LINDBLOM: Yes, Your Honor.
THE COURT: Excuse me. Is Chadbourne & Parke representing Gallaher on this issue in that case?
MS. LINDBLOM: No. What's happened is we subpoenaed Chadbourne & Parke. They are being represented by Sullivan & Cromwell as Chadbourne & Parke's attorney, but it is my understanding that Chadbourne & Parke, in resisting that subpoena, is acting under the direction of its other client, Gallaher.
THE COURT: Okay. So Chadbourne & Parke is claiming that Gallaher told them not to release the documents; is that --
MS. LINDBLOM: Yes, sir.
THE COURT: Is that correct?
MS. LINDBLOM: Yes.
THE COURT: This is the same law firm that is in our case here; is it not?
MS. LINDBLOM: Yes, Your Honor. They have appeared before this court.
THE COURT: Okay. Maybe we should broaden the order.
MS. LINDBLOM: What this investigation that we have done shows is that we have supplied what I believe are comprehensive answers to the court's questions that have been posed in the May 8th order regarding any research done by or for The American Tobacco Company or Gallaher. It shows that The American Tobacco Company documents were reviewed and produced long ago, although we are aware of a continuing obligation to make sure that they in fact have been produced, and if any others are located, we will of course produce them immediately. It also shows that there were no transfers of documents from American Tobacco either to American Brands or to Gallaher in anticipation of or in connection with the sale of The American Tobacco Company, which I believe had been a concern of the court. It shows that American Brands had done no smoking-and-health research of its own. The work showed that American Brands had turned over to Brown & Williamson all of The American Tobacco Company documents in its possession for review and production. It showed that American Brands, now known as Fortune Brands, did not have smoking-and-health research information from Gallaher. It showed that Gallaher had not done smoking-and-health research for American Tobacco. And there have been a very few documents that had gone from Gallaher to American Tobacco; those had been reviewed and produced long ago. And the one thing we were left with is that there are only six Gallaher documents in the possession of Chadbourne & Parke, as well as some indices concerning some Gallaher files, and those are the documents that are the subject of the motion to quash in New York.
*36 Those six documents, as far as we can tell and as we have been informed, are documents that were internal to Gallaher, had never gone to The American Tobacco Company or been communicated to them.
We are continuing to work to obtain those six documents and those indices. I was before the New York Supreme Court, which is the trial court, last week arguing that motion, and we asked for an expedited ruling. In fact, when the order came down setting this hearing, we informed the court in New York of this order and asked if there was any way we could get a ruling before this hearing. We have not gotten it. But we continue to work on that.
MR. BERNICK: Your Honor, I'd like to address the law side of this and then the implications of the matters that Ms. Lindbloom has set out here for just a moment.
We have three basic organizations, American Tobacco Company, which is the only one of the three that's a defendant in this case, American Brands, and then Gallaher's, which is now no longer part of American Brands. And as Ms. Lindblom has just described, we now know that no documents were transferred; that is, documents originally subject to the U.S. discovery system were transferred to Gallaher's in order to evade discovery, there's -- there's no evidence of that. We know that no documents were withheld; that is, responsive documents not subject otherwise to a claim of privilege. The documents have been processed and will continue to be processed for production if any -- if and when any other further documents are found.
We also know something else, which is that there was a claim originally that there was research that was conducted under the auspices of the lawyers and not produced. Indeed, I think one of the original facts that prompted this inquiry by the state was the absence of produced documents from ATCo that reflected internal biological research, and the question was posed, well, is that because the research has been done under the direction of counsel and then claimed to be privileged? And that has not emerged, notwithstanding their ability to get access to -- the fact they have gotten access to all the privileged documents that were the subject of Your Honor's order. We don't have what I'll call cloaked research, which is the term that's usually used in going after research where a claim has been made that it's been improperly withheld on the basis of an improper claim of privilege.
And if you stack up all three of these things, what that says is that on the facts, this is not a situation where there has been a default of discovery obligations. We're not talking about a situation where a discovery obligation to produce documents was not responded to or was not discharged.
But there's more. The very significant thing that's happened here is that privileged documents have been produced, indeed they've come before the jury. We're not here to re-argue Your Honor's order. We complied with that order. The documents are here. We have raised objections to their coming before the jury, they came before the jury; we're not here to re-argue any of that. But it's of consequence, because the fact that those privileged documents were produced and have become part of the record in this case and have come before the jury also adds to this equation, and in the following two ways: First, the jury not only gets all of this; that is, the historical documents that actually were produced from the company's files, they also find out the lawyers' interpretation of those documents. That actually comes before the jury. That would never happen in a typical case. That has now happened. They see all this, and they see what the lawyers have to say about it.
*37 And they also see something else. They also see selected facts that were obtained at the request of counsel regarding what Gallaher's thought to the extent that the lawyers have created privileged documents reflecting the views of Gallaher's, lawyers, and those documents have now been produced as part of the privileged set of documents, the jury gets to set the lawyers' perspective on Gallaher's views. And it's been very prominent in this case.
Your Honor will recall Exhibit 21905, which is in evidence, this is the document, April 3, 1970 from the general manager of research to the managing director regarding the Auerbach/Hammond beagle experiment, and this is the document that has been introduced for the following proposition that appears at the end: "To sum up, we are of the opinion that Auerbach's work proves beyond all reasonable doubt that the causation of lung cancer by smoke, even though in an ideal situation it would have been preferable to avoid surgical techniques and allow the animals to live out their life-span. Nevertheless there are certain short- comings of the experiment and it's easier to -- nevertheless" -- I'm sorry. "Nevertheless, these are certain short-comings of the experiment and it is easier to see these in hindsight." This is what's been shown to the jury and shown to the jury repeatedly.
And on the basis of this counsel is able to argue that ATCo knew because Gallaher's knew all about the fact that causation essentially had been demonstrated. They are able to argue that inference, and it's a very powerful inference.
Critically, it is also an inference that we cannot argue against. Why? Because we don't have access to the Gallaher documents and all the balance of the files that might relate to this same fact. All that's come in is what's been filtered into the privileged documents that were made the subject of the court's prior order. We would like to be able to find out, well, what did Gallaher's have to say, other people at Gallaher's have to say about the fact that two distinguished journals, the New England Journal of Medicine and the Journal of the AMA, refused to publish the Auerbach study. That's something that developed after the study was done. What did the Gallaher's people think about that? What would they have said about that? The methodologies and findings of the study were criticized by a number of scientists, including the National Academy of Sciences in published articles after the fact. We'd like to be able to find out, well, what did Gallaher's say about that? Does this change the views that are expressed this this memo? That will never occur. That will never occur.
So we're in a situation now where plaintiffs already get to argue inferences that we cannot rebut, they get to argue those because they have the documents, the privileged documents that enable them to say, "Here's a fact." And this will play prominently. They referred to this through the testimony of their witnesses, they'll refer to it again, that there was secret recognition of the fact that causation already had been established.
*38 THE COURT: But the reason you don't have access, counsel, is because you chose not to at the time of the sale; isn't that correct?
MR. BERNICK: At the time of the sale, at the time of the sale -- again this is the sale by American Brands of ATCo to Brown & Williamson. Did Brown & Williamson have the ability to say to American Brands you must give us the Gallaher's documents in England as part of the negotiation of that deal? I don't think so.
THE COURT: And why do you say that, counsel?
MR. BERNICK: Because this is a transaction that related to ATCo. We didn't buy Gallaher's, we bought ATCo, we bought the property of ATCo. We bought their files, we bought their people, we bought their business. We didn't buy the business of American Brands, we didn't buy their files, we didn't buy their property. And we certainly didn't buy Gallaher's. That wasn't the deal, Your Honor.
THE COURT: Yeah. But the deal was formulated and formed after this lawsuit was brought.
MR. BERNICK: It may well have been formed -- there are lawsuits --
There are deals that are formed all the time that involve entities that are in litigation, but at the time that this deal was done, this deal was a deal for ATCo, it was not a deal for documents that had never been in the United States, never been within the control of ATCo, and were in the United Kingdom.
MS. LINDBLOM: Actually, may I interrupt my partner for a moment? The deal was actually --
THE COURT: I don't want you to get in an argument with your partner.
MS. LINDBLOM: Well I'm bigger than he is.
MR. BERNICK: Until when?
THE COURT: All right. Go ahead.
MS. LINDBLOM: That --
I apologize to Mr. Bernick, but he's not quite as intimately familiar with all of these things as I am.
THE COURT: Mr. Bernick usually does pretty well on his own, but go ahead.
MS. LINDBLOM: I know. But the deal for the purchase of American Tobacco was signed in April of 1994. As the court may recall and as our filing document, that deal remained unchanged until the time it was actually closed. The reason for the delay in the closing was that the Federal Trade Commission intervened, and under the Hart Scott Rodino Act it could not close until the Federal Trade Commission let it happen. That occurred on December 22nd, 1994. The deal closed immediately without any change in the terms. So the terms had been agreed upon before this suit was filed.
THE COURT: I'm very keenly aware of the timing, counsel.
MS. LINDBLOM: Thank you, Your Honor.
THE COURT: Uh-huh. Very keenly aware of the timing.
MR. BERNICK: I appreciate the assistance of counsel here.
THE COURT: Okay. Do you want to continue then?
MR. BERNICK: Well I want to be responsive to Your Honor's question. Your Honor posed a question --
THE COURT: All right, go ahead.
MR. BERNICK: -- and I tried to be responsive to it. This is the position that we're in now, which is that they are in fact able to argue powerful inferences against us already, they're already doing it, and we're in a position that as a matter of fact today we are unable to do anything to contextualize these materials other than talk about what's in the publish literature at the time. And they're free to make the inference, they are already making that inference, and it's a powerful inference. It's one that they have made no hesitation about pursuing throughout the trial, and I expect that they are going to come back at the end of the day.
*39 What does the law say in the context of these types of facts? The law says you can only do what you can do. You're not required to do the impossible. And we've cited the cases that deal with this type of situation. The Cochrane Consulting decision that's in our brief, 1996 decision by the Court of Appeals for the Federal Circuit, was another situation where there were foreign documents that were not within the possession, custody, or control of a domestic defendant. The domestic defendant actually went abroad to sue to obtain the documents and was unsuccessful in that suit. And the most instructive language is the language that's just flat-out on point, Federal Rule 37 is not a legal requirement to do the impossible. And the courts have declined to assess a penalty for failure to do that which could not have been done if -- which it may not have been in the power -- its power to accomplish.
THE COURT: That's the issue in this case.
MR. BERNICK: The issue in this case is whether we, in response to this discovery request, Brown & Williamson, ATCo, in response to this discovery request, had the ability to compel Gallaher's to produce U.K. documents that have never been in the United States.
THE COURT: Had. Had the ability.
MR. BERNICK: Ever had the ability, Your Honor.
THE COURT: Okay.
MR. BERNICK: Ever had the ability.
Brown & Williamson is not even on this chart. Brown & Williamson is a party that's sitting over here. And we're buying a business, and the business that we bought is a business where we've produced all of the documents. And what Your Honor's question suggests is that we had an obligation, an obligation and an ability to not only acquire ATCo, but to acquire the property of a separate company called Gallaher's, property existing in the United Kingdom. And I would submit to Your Honor that we did not have that obligation and we did not have that power and that was not the deal that was struck.
Now do the discovery rules then say when you do your corporate transactions you are required to buy the property of other companies outside the United States in order to bring within your possession documents that you have never had the possession of? I don't believe that's what the law is, Your Honor. And if that's the issue that Your Honor sees, I understand that issue, but I do not believe that the law has taken us that far.
So what I'll say in closing, Your Honor, is I believe we've done everything that we possibly can do. I would talk about prejudice to the plaintiffs, but this is a situation where I don't believe that there's been a default in the original discovery obligations, much less prejudice to the plaintiff, and I do believe that as a result of the orders that have already been entered -- and I'm not taking issue with those orders today -- as a result of those orders, the plaintiffs already are armed with the inferences that they are already using before the jury, inferences about what was known at Gallaher's. They basically have told the jury "Gallaher's believed causation was established," and they are able to do that in a context where we cannot rebut that inference because we don't have the wherewithal to do it.
*40 MS. WALBURN: Good afternoon, Your Honor.
THE COURT: Good afternoon.
MS. WALBURN: After all the effort that has been spent by this court, by the plaintiffs, and even the appellate courts in this state, we have not to date received one single document from this court's orders of May 8th or December 30th, except for the 1100 some privileged documents that were ordered produced as a sanction in the order of December 30, not one single document out of all of the exercise that we've been through and all the time that we've spent on this since this issue first arose as a discovery matter last spring.
I want to spend just one moment on the Gallaher document which Mr. Bernick singled out for treatment here today. That was one of the 1100 documents that was produced to the plaintiffs pursuant to the sanctions in the December 30 order, and it has raised a concern on our part because that document, which is not from a lawyer, and not to a lawyer on its face, does not discuss legal advice, discusses science, discusses inhalation tests, should not have been on the privilege log in the first instance, and Mr. Bernick argues here today that we've been able to take undue advantage of that document by arguing that because Gallaher had information, American Tobacco also had that information. Mr. Bernick fails to point out that there is a companion document that was produced along with the document he referenced, and that is Trial Exhibit 21904, and that document is a cover letter from Gallaher dated April 10th, 1970, and submitting the Gallaher scientific analysis directly to American Brands' senior vice- president and general counsel in New York.
At this point we still do not know where the document trail ends on this issue and the reason that at this point it goes to a virtual dead end. We don't know all of those reasons, but we do know we've received no documents from this court's order and we do know that the documents are somewhere because the void in the American Tobacco production in this case is still striking.
There is one piece of the puzzle that we do know and we do know with absolute certainty, that there are documents responsive to this court's orders that have not been produced that are currently in the possession of Chadbourne & Parke. As this court noted, Chadbourne & Parke is admitted in this case. At least seven different lawyers from Chadbourne & Parke have been admitted in this litigation. Chadbourne & Parke has been appearing in this litigation since the beginning and I believe has been at virtually every single hearing up until this court's order of December 30th, and from that point forward I don't believe we have seen any Chadbourne lawyers appearing again in this courtroom.
Chadbourne has represented American Tobacco since the 1950s, at a time when American was the number-one tobacco company in this country, and now we're faced with the extraordinary situation where one law firm, which is admitted to practice in this case and which, pursuant to the Minnesota rules, is subject to the jurisdiction of this court, that law firm, Chadbourne, is now refusing to comply with this court's orders and has forced a subpoena to be served on it in the courts of New York. Not only did it force a subpoena to be served, when that subpoena was served it promptly moved to quash.
*41 We shouldn't have to be going through a subpoena process in New York, especially at this point in time during trial, for a law firm which is subject to the jurisdiction of this court. The plaintiffs have not been participating in the New York process because of the demands of trial and because, in our view, it is entirely appropriate to be resting on the orders of this court to produce those documents.
There are Gallaher documents in the possession of Chadbourne & Parke. There are document indexes in the possession of Chadbourne & Parke. In fact, we now have learned within the last month or so that Chadbourne was actively involved in a document collection effort at Gallaher in the mid-1980s and also involved in the production of indexes from Gallaher. We also know from the Price deposition, which was just played for the jury yesterday, that Gallaher did do biological research which was disbanded and apparently cut off sometime around 1980.
The six documents from Gallaher that were referenced by counsel, those are documents apparently in the possession of Chadbourne & Parke, but we believe that there are, obviously, many more documents that are covered by this court's orders from Gallaher, and we believe there are more documents beyond the Gallaher documents that are somewhere, perhaps within the knowledge of Chadbourne.
One issue of concern is that we have, as we tried to piece the trail together of where these documents may go, there is -- there is some indication that we may be having continuing difficulty with an issue that has plagued us throughout this litigation, and that is not just documents within the possession or in the files of a party or a law firm, but "documents within the possession, custody or control" and how the defendants and their law firms are interpreting that phrase. When we received from counsel the notice of motion to quash the New York subpoena that was filed by Chadbourne in New York, there was a letter attached from Chadbourne's current lawyers, Sullivan & Cromwell. And if I might approach.
(Document handed to the court.)
MS. WALBURN: The attached letter is dated January 28th, 1998, and it is from Sullivan & Cromwell to Kirkland & Ellis, and the second paragraph states, "After diligent search of its files, Chadbourne has located no documents responsive to a request numbers one, two and four in the subpoena that have not already been produced in the state of Minnesota case." Again, that raises the issue of whether those documents are not presently in the files of Chadbourne but are nevertheless within the control of the law firm.
Another twist in the facts that we learned recently is that there are not one Chadbourne & Parke law firms, but two, and this raises a twist on the issue that we've been facing in this litigation for some time about corporate affiliates and tracing corporate histories. But we learned pursuant to the papers filed in the New York subpoena action that there are two entities, one is named Chadbourne & Parke, which was identified in the papers as a multinational partnership based in London, the second entity was named Chadbourne & Parke LLP, which was identified in the New York papers as an affiliate of the London multinational partnership, and that was referenced in an affidavit submitted in the New York case. Whether this bears any -- whether this has any bearing on the issue of where the documents are, you know, again at this point in time we just know that the documents are someplace and haven't been produced pursuant to this court's orders.
*42 With respect to the efforts that the law firm of Kirkland & Ellis has undertaken since the order of December 30th, everything that has been done since December 30 could have been and should have been done months if not years ago in this litigation. Kirkland has appeared in this litigation since the beginning of this litigation and has not done anything to enforce this court's discovery orders until after the sanction order of December 30.
In addition, of course, the client, Brown & Williamson, which now has American under its auspices, can't merely switch law firms to avoid the consequences of a court's order. And I would note that Brown & Williamson, through the Kirkland firm, has waived any conflict that Chadbourne may have in opposing the New York subpoena. We also don't know at this point in time whether Chadbourne is in fact still representing American and Brown & Williamson either in this litigation or in other litigation around the country.
The relief that the plaintiffs seek at this time is, first of all, the production of additional privileged documents beyond the 1100 documents that were covered in this court's order of December 30. In our brief dated January 12 we submitted an appendix, Appendix A, which listed 2078 documents. These privileged documents, these 2,000 documents, relate in our search of the privileged logs submitted by American either to Chadbourne & Parke or to Gallaher, and none of those 2,000 documents are subject to a claim of joint defense. So we would request the immediate production of those 2,000 documents as an additional sanction. We also believe that the hundred-thousand-dollar-a- day sanction which was ordered by paragraph five of the December 30 order to run from January 19th -- to January 19th from January 10 should be imposed for failure to comply with the court's orders. We also believe it appropriate at this time that the court begin a daily sanction on the law firm of Chadbourne & Parke for failure to comply with this court's orders. And we would request that the remainder of the sanctions that were either listed in this court's order of December 30 or which have been previously suggested by the plaintiffs be held in abeyance until the defendants' case in chief, at which point we would request an opportunity to address the appropriate relief at that time.
MR. BERNICK: Regarding the privileged status of the Auerbach memo, the memo relating to Auerbach, Ms. Walburn suggested that there was no proper claim of privilege with regard to that document to begin with. It's a somewhat collateral issue to the matters that are now before the court, but I know it's a matter of importance to the court because Your Honor has commented repeatedly about problems that you found with the assertion of privilege, so I want to respond to that and respond to the court's prior concerns.
That memo was created at the request of counsel. The attached and related document was a document that reflected the fact that the memo was sent to Mr. Cy Hetsko, who was then general counsel of American Brands. That was a memo that was created at his request as a lawyer. That typically is the kind of document, an analysis prepared at the request of counsel, as to which a proper claim of privilege can in fact be made, and that's why that claim of privilege was made here.
*43 Second, with regard to Chadbourne & Parke, there's been a general issue raised about Chadbourne & Parke and then a couple specific factual issues. First on the general issue, there's a lot of kind of body language about Chadbourne & Parke's role and their place here and the subpoenaes and how they're responding to it, but there's no need for body language. It's a very straightforward, factual situation, and what's taking place now in subpoenaeing Chadbourne is the only way to resolve this situation and a very proper one. It's absolutely no reflection on Chadbourne & Parke's good faith, it's no reflection on conflict issues, it just deals with the fact.
Chadbourne & Parke has represented American Tobacco, Chadbourne & Parke also has represented Gallaher's. These two companies are no longer the same company, they are different companies. ATCo is part of Brown & Williamson. Gallaher's has got nothing to do with Brown & Williamson. Gallaher's has a right to enjoy privilege with regard to its communications with Chadbourne & Parke. There's a privilege that attaches to those communications, and properly so. Chadbourne, on direction of Gallaher's, has absolutely no choice but to be loyal to that client, to satisfy their ethical obligations and to maintain that claim of privilege. No lawyer in this courtroom would ever advocate or argue that somehow Chadbourne & Parke should be abrogating the instructions that are given to them by another client to protect that client's interest and that client's legal rights.
I'm sorry, Your Honor.
THE COURT: Go ahead.
MR. BERNICK: They have that obligation. It's a clear obligation. It's one that nobody would advocate be ignored.
At the same time, Your Honor has made a request of this client here (referring to ATCo) for information, and that's a request that this client here, American Tobacco, Brown & Williamson, has to satisfy, and to the extent that that request would pertain to and include documents that might be in the possession of Chadbourne, Chadbourne is in a situation where it has no choice but to -- I mean we have -- we have put them in a situation where there is no choice but to have the issue of this other privilege litigated. It's the only way to take them out of the position where they're subject to competing demands by competing clients. These things sometimes happen. And the subpoena that was issued was a subpoena issued to say Chadbourne should not be in a position of having to play the interests and commands and directions of one client off against another. So how does our system handle this problem? We leave it up to the judge that has jurisdiction over that firm to resolve that issue, and that's exactly what's taking place.
The judge in New York is going to resolve the issue of whether there's a privilege that attaches to the documents and the files of that firm, and whether that privilege should be applied. And if they determine that the privilege should not be applied, they'll be produced, but if they determine the privilege will be applied, Chadbourne will not produce the document. It's not a question of Chadbourne's wishes and desires, it's a question of their ethical obligations as attorneys to preserve the rights and the -- and the -- the directions that are given to them by another client. That's why the subpoena was issued. That's how it will be resolved.
*44 We, on behalf of Brown & Williamson, have pursued that litigation. We don't represent Gallaher's. We have got no conflict. And so we are aggressively pursuing that. That's in our client's best interests to comply with Your Honor's orders.
Now there were two other factual issues that were raised concerning Chadbourne & Parke. One, Ms. Walburn made reference to a letter that she tendered to the court saying, with kind of a smile, "Gee, there's an issue now about really what's happening here." The letter says, "After a diligent search of its files, Chadbourne has located no documents responsive to requests number one, two and four in the subpoena...." Gee, how is that so? Well, you have to take a look at the rest of the sentence. It says "...that have not already been produced in the litigation." This is simply a statement that they've made a search of their files and they believe that the documents that are responsive to those parts of the subpoena have in fact been produced in this litigation. There's nothing nefarious about that. It's a confirmation of the statements that we've made to the court and the statements that they've made to the court.
What about the London office? Again, there's body language that there's some kind of international play here and we'll have to chase down this particular lead. Our understanding is that, in point of fact, the documents that have been identified as being at Chadbourne that have not been produced, the six documents as to which privilege is claimed, in fact many of them came from the London office, and therefore the response that's been made in the New York litigation is a response that's made on behalf of both of the entities or partnerships that -- or structures, whatever they might be, that were referred to by Ms. Walburn.
So we're now down to a situation where all this finally sorts out at the end of the day. After all of this inquiry and all of this effort, she says nothing's changed. You know, what document has been produced? That fact is confirmation of the diligence that was exercised before this issue ever came -- came into -- came before the court. If we had produced thousands and tens of thousands of documents pursuant to the orders, that would have told the court that there might be some defect in the process that was followed previously. That has not occurred. The documents have been produced in this case, they've been produced in a timely fashion, and this investigation that we performed that counsel says we should have performed earlier has turned up the same unitary fact, which is that there has been compliance with the discovery obligations imposed by this court. That's why additional documents have not been produced.
And this whole investigation has served to produce information about two sets of documents that have not been produced. One is what's in Gallaher's in the U.K., that was never in the United States, was never transferred to Gallaher's to avoid U.S. discovery and U.S. jurisdiction, has always been there. We don't have the power to change that. It's there, that's the way it is. That's not -- they're not going to be produced because we can't control it. And with respect to Chadbourne, documents as to which its client, Gallaher's, claims privilege in Chadbourne's files, that again we cannot compel the production of absent intervention of the court to determine if the privilege does or does not apply. And what are we dealing with? Six documents? Six documents? Is that what this all comes down to? Now that doesn't deter us. We're going to get them if they're not privileged. But is that what we're talking about here, six documents?
*45 Chadbourne got those documents, they say, in connection with their representation of Gallaher's. They com -- they compiled indices of other Gallaher's documents, as properly they should, counsel to Gallaher's. Is Ms. Walburn really suggesting that as a part of this representation of Gallaher's, Chadbourne should not have compiled indices of Gallaher's documents? That would be inappropriate? Are they really saying that notwithstanding Gallaher's insisting that they're privileged, that they should simply produce them here in court? I don't believe that that's consistent with her ethical obligation. I believe these matters are being properly resolved as they should be in New York, and I do believe that the net result of this investigation that we've tried to conduct in the highest and best way we can has been to confirm the fact that was out there before, which is that the right documents were produced and they were produced in a timely fashion.
THE COURT: Anything further on that issue?
MS. WALBURN: No, Your Honor.
THE COURT: Let's move on to item three.
MR. MARTIN: Good afternoon, Your Honor.
THE COURT: Good afternoon.
MR. MARTIN: David Martin, Doherty, Rumble & Butler in St. Paul. I represent the Lorillard Tobacco Company, and today I am speaking for the non-Liggett defendants other than B.A.T Industries P.L.C. I'm speaking with regard to the matter that is numbered number three on your order dated March 9th, 1998, which is the party's report of the status and resolution of the outstanding discovery matter, to-wit: production of all relevant documents in the possession or under control of Shook, Hardy & Bacon, a law firm which also represents Lorillard Tobacco Company.
With respect to all of the items that are in this order, the March 9th order, the eight that are numbered and the matter dealing with public access to the depository, with respect to each and every one of those particular items, this court has previously either entered an order or there has been correspondence of some type back and forth between the parties detailing the requests for discussing what is asked for or the nature of the discovery which is sought by the other party. In this instance, when the court raised the issue of production of all relevant documents in the possession or under the control of Shook, Hardy & Bacon, there's absolutely nothing in the record which reflects a request by plaintiffs' counsel that's been directed to Shook, Hardy & Bacon or directed to Lorillard asking for Shook, Hardy & Bacon documents, there is nothing in the transcript of a meet and confer that deals with this issue, there are no outstanding letters which have not been answered, there are no oral requests, so procedurally I come to talk to you about this with nothing -- with no agenda, with nothing sitting before the court with respect to that issue.
Now the issue of documents that exist at law firms has been dealt with by this court, and specifically in the Case Management Order which was negotiated between the parties, ultimately argued extensively to this court, and the court entered its order, and the court specifically talked about two kinds of documents and inquiry that might be made. And I'm reading from -- and we miscited that in the portion of the brief that we filed, but I'm reading from D, the document production section, specifically page 10, and it follows under paragraph seven dealing with privileged documents, and it says, "The privilege log shall include documents generated by or in possession of outside counsel, but only to the extent that the request seeks documents over which outside counsel act as custodian which were once in the possession or control of a party but are no longer in that party's possession or control." Now I refer to those as transfer requests.
*46 The other issue is at such time as the plaintiffs request documents generated by or in possession of outside counsel which relate to research on smoking and health where outside counsel acted as an agent for or on behalf of one or more parties, to the extent that such documents are not available from the party's own files, the parties agree to promptly meet and confer, discuss the scope of the request, and seek early resolution of any dispute which might arise as to the production of such documents, or the identification of such documents on the log. Both of those processes occurred in the discovery in this case.
With respect to the transfer issue, the court will recall that reports were made with respect to whether or not documents might have been transferred to counsel, to outside counsel, and were not then in the actual possession of the parties. And those issues were dealt with, reports were made to the court. And at one point in a deposition of Richard Lowther, I believe, he testified he was not sure if that -- if -- if -- if Shook, Hardy & Bacon had actually completed that search, and subsequent to that time, Shook, Hardy & Bacon submitted an affidavit to this court and to counsel indicating what they did do in terms of the search, their due diligence, and their completion of the search. And that was almost a year ago, in May of 1997.
Subsequent to the submission of that affidavit, plaintiffs' counsel haven't challenged the process that Shook, Hardy & Bacon engaged in, they haven't made my further request or inquiry, they haven't served a formal request, they haven't served an informal request, they've never raised an issue about documents at Shook, Hardy & Bacon.
Now the second area is the original scientific research, and again I don't want to belabor this issue in terms of how many times that it was briefed, how extensively it was argued, it was argued and the court entered an order and subsequently the court amended its order, and the amended order, which controlled this issue, was the order of November 27th, 1996, and pursuant to that order again, pursuant to the order which I'm not going to go through, but Shook, Hardy & Bacon engaged in that search, logged documents, produced documents to the plaintiffs, and there is a multitude of correspondence back and forth between the plaintiffs and the defendants and between the plaintiffs and Shook, Hardy & Bacon about this issue. But the last correspondence in the file was the correspondence of June 11th, 1997, and in that correspondence, John Monica from Shook, Hardy & Bacon writes to Roberta Walburn and indicates to her, "Yesterday at our informal meet and confer, you raised several questions." Here's the answers. And he concludes by saying, "I believe this responds to your questions," plural, "I believe this responds to your questions. If not, please let me know."
There was no letter that was sent in response to that, but there was action taken, and the action that was taken was to take the issue that was before the court's calendar off the calendar, and so the issue was resolved.
*47 Now as a result of that discovery, as a result of those disclosures, as a result of the documents produced, plaintiffs did not -- I'm sure they reviewed the documents, but plaintiffs did not review the documents and get back to either Lorillard or to Shook, Hardy & Bacon and say this is a follow-up to document number seven or document such and such and such and such, please tell us this, or can you give us more information, or what is the situation? There's been simply none. In fact, there has been no communications between the plaintiffs and defendants about this issue for almost a year, and simply stated, there was no communication about this issue until the court's order of March 9th.
Now as a result of the court's order, which said that the parties should meet and confer in a good-faith effort to resolve the outstanding issues, the parties did -- let me rephrase that -- Mr. Monica on behalf of Shook, Hardy & Bacon met with Mr. Ciresi. I did not attend. Mr. Monica proposed to Mr. Ciresi and to the plaintiffs voluntarily, on behalf of Shook, Hardy & Bacon, to enter into a search. The intent of that, and -- and I believe that the court has a copy of Mr. Monica's letter of, I believe it is, March 11th, and it is Exhibit 3, the affidavit of Craig Proctor, Mr. Monica set out three areas that Shook, Hardy & Bacon would be willing to search, and this is a voluntary enterprise, voluntary suggestion to the plaintiffs to say, look, this issue has come up, the court has raised the issue, do you have any concerns? We don't know what those concerns are. You've raised a couple here. Let's see how we can deal with this. This is a meet and confer.
And the letter takes us back to the November 27th, 1996 order, and with respect to that order and with respect to the documents that were searched, the documents that were disclosed with respect to the order, Shook, Hardy & Bacon proposed that they would search two years on either side of any documents which they found in an effort to log or produce, as appropriate, documents found pursuant to the search that referred to the alleged, quote, suppression of that research. As used herein, the term "suppression" means any attempt to destroy the results of, prevent the publication of, or transfer the results of the research to another location to avoid discovery obligations, subject to a cutoff of August 17th, 1994. Where did this come from? Where did this concept of suppression come from? It came out of the request of plaintiffs at the meet and confer.
So Shook, Hardy, Bacon said if you're interested in suppression, we'll make a search, and we will make this search relative to the documents that we produced pursuant to the court's order. They also suggested that they would be willing, voluntarily, to search the files specifically pertaining to or reasonably likely to pertain to Dr. Gary Huber, or the Harvard institutional grant, and we will similarly agree to produce a log of all such documents found.
Again this makes perfect sense. The plaintiffs are interested in Dr. Gary Huber. Issues have been raised before the court and argued before the court about the admissibility of that deposition. I won't revisit that. But the court has ordered that the deposition and those documents may be introduced in evidence at this trial. Accordingly, Shook, Hardy, Bacon will search its files to determine if there is any documents that refer to alleged suppression of research conducted by Dr. Huber.
*48 Now that issue arises out of plaintiffs' inquiry post court's order and Mr. Gehan's reference to the Gary Huber matter in terms of the court's -- of -- of his order and recommendations to this court.
I said that Shook, Hardy & Bacon voluntarily proposed to do that, and I say that they voluntarily proposed to do that very carefully because, again, the record does not reflect there's any outstanding order directed to Shook, Hardy, Bacon, nor is there any formal or informal request or complaint of the plaintiffs directed to Shook, Hardy, Bacon or to Lorillard relating to outstanding discovery. There is none, so it is simply a non-issue.
In addition, and I will just reference this in passing, but in June of 1997 the Minnesota Court of Appeals addressed an issue which they said was an issue of first impression in the state of Minnesota, and that dealt with the issue of whether or not the court has jurisdiction over counsel that appears before the court representing a party to the litigation, and the court concluded that the jurisdiction -- the district court may not exercise jurisdiction over a non- party, and that an attorney whose participation in a legal action is limited to the representation of his client is not a party to the lawsuit.
So again, Shook, Hardy, Bacon is attempting voluntarily to resolve what may or may not be a dispute.
What am I asking for here today? What I'm asking is some guidance from this court as to what this court considers to be the issue. Plaintiffs have made a response to Shook, Hardy, Bacon's proposal, and plaintiffs' response is unreasonable, it is oppressive, and it would require the search of, as set forth in the affidavit of Craig Proctor, over 35 million pages of documents relating to its representation of the tobacco industry clients. We throw out these huge numbers, but I've been intimately involved in the discovery in this case for three years now. What this search would encompass would require a law firm like Doherty, Rumble & Butler, if Doherty, Rumble & Butler would do it, to take every one of its lawyers and every one of its paralegals that are in the city of St. Paul office, and that is the largest office or the second- largest office of any law firm in St. Paul, every single one working 10 hours a day over 50 straight days to make that kind of a search, and that would be without processing, Bates stamping, reviewing for privilege, copying, logging, or preparing for production.
What the plaintiffs have done in response to the court's order, about an issue which was not important enough for them to make any inquiry on for over a year, is to set up an impossible task, an impossible request, to set Shook, Hardy, Bacon up for failure. I believe that that's inappropriate. Nonetheless, it's appropriate to resolve this dispute, and so I'm asking the court for some guidance or some instruction to Shook, Hardy & Bacon and to the plaintiffs so that we can again meet and confer and attempt to meet any outstanding issues that are appropriate in the middle of this trial.
*49 THE COURT: Do I understand you, counsel, that it's the position of Shook, Hardy & Bacon that in the event that they would have relevant documents, tobacco documents, that they would not subject themselves to the jurisdiction of the court and produce those?
MR. MARTIN: Your Honor, when I -- two issues -- you really raise three issues here. We're not talking about --
When you talk about relevant documents in the possession of Shook, Hardy & Bacon, those documents are the documents of Lorillard, and they've been produced. This is the point here, that those documents have been produced. Lorillard's documents have been produced. Documents that were once Lorillard's, or if -- if they had been transferred to Shook, Hardy & Bacon for any reason and they weren't in the possession of Lorillard, they have been produced.
The jurisdictional issue is an issue related to a single case that simply says that for the court -- in the case that I cited to the court, and the court did say it's a case of first impression in Minnesota, the 1997 case, I've read it a number of times to try to figure out precisely what it said, but what that -- what that case says is that -- and it's better to -- to address it specifically because it was a divorce case, and the divorce court entered an order requiring, I believe it was the wife, to pay over assets to the husband, the issue being whether the wife had wrongfully taken them away. And the court entered its order and ordered the attorney and the wife to make that payment. The attorney objected and said the court cannot enter that kind of an order requiring the attorney to pay the lawfully ordered debt of the wife, and the -- and the Court of Appeals said the trial court in Minnesota doesn't have jurisdiction over the attorney to order the attorney to pay or complete the obligation of one of the parties. And so that's a different -- so -- so the question that you have asked me, --
THE COURT: Let me --
MR. MARTIN: -- Shook, Hardy, Bacon has appeared here --
THE COURT: Do you want me to ask the question again, counsel?
MR. MARTIN: Well I'm not making representations on behalf of Shook, Hardy & Bacon.
THE COURT: Well you are here making representations on behalf of Lorillard and Shook, Hardy & Bacon, and I want to know the answer to that question, and the question is: Is it the position of Shook, Hardy & Bacon that if they have in their possession the relevant documents concerning this litigation, that they are under no obligation to this court to submit those to this court? And I'd like a answer to that question and I'd like to have Shook, Hardy & Bacon's position.
If you wish to consult with them, you can submit that to the court in writing at a later time, if you want. I don't mean to put you on the -- on the spot personally. Okay?
MR. MARTIN: We'll respond to that later, Your Honor.
THE COURT: Okay. Thank you very much.
MR. CIRESI: Your Honor, I'd like to, for the record, point out Rule 5 of the Rules of Practice for District Courts, appearance by out-of-state lawyers within the jurisdiction of the state of Minnesota, quote, "Any lawyer appearing pursuant to this rule shall be subject to disciplinary rules and regulations governing Minnesota lawyers, and by applying to appear, or appearing in any action, shall be subject to the jurisdiction of the Minnesota courts."
*50 The case that Mr. Martin pointed out I have not read for a while, but I believe he's correct in saying it dealt with a divorce action. It did not --
THE COURT: I have read it, but go ahead.
MR. CIRESI: It did not deal with the production of documents and outstanding and extant orders with regard to the listing of documents.
I think Mr. Martin stated that he has been intimately involved in discovery in this litigation. I believe it is equally accurate that it was Mr. Martin who stood up some time ago in the Ramsey County District Courthouse with regard to the privileged documents and, in response to a question -- I don't want to be held to the exact quote -- but said that all of the documents had been reviewed and that they were all properly within attorney-client privilege. I will get that citation for the court and for Mr. Martin.
Before I proceed on this issue, Mr. Bernick asked me what page the Brooke reference was at, and I believe it started at page 102 and went through 105.
Let me return to this issue. The court, in its November 27th, 1996 order, required the defendants to list on a privilege log certain information. I will not reiterate that order here. But in part it said "all documents on original scientific research," it didn't say scientific research, any documents on it. In the special master's order at, I believe, page 100, there was reference to the fact that Mr. David Hardy of Shook, Hardy & Bacon urged people to - - scientific people to move away from making certain statements because of the impact it may have on litigation. Those statements related to work on science and health issues regarding smoking. In addition, there was reference to the Huber deposition.
As a result, Mr. Monica and I, we met over here, but an associate to Mr. Monica's -- Mr. Martin was not involved in the discussion -- had a discussion with respect to what should be listed on a privilege log and what documents were being discussed. We discussed the special master's order, we discussed this court's order. Mr. Martin said he would get back to me, and he did, and he proposed the logging that is set forth in his --
THE COURT: Mr. Martin or Mr. Monica?
MR. CIRESI: Excuse me, Mr. Monica.
THE COURT: Thank you.
MR. CIRESI: And he set forth the information set forth in his March 11th letter that has been supplied to the court. He provided me that here in court during trial. I told him I would get back to him. I did. I wrote to him my letter of March 11th which the court has a copy of.
Yesterday Mr. Monica and I had another discussion and he said your information would require too much work on our part, and I said if you have something different, then let me know, we will sit down and talk about it. And we had that discussion, I believe, right here, between the two counsel tables. I said but we're not going to work off of yours, and if you don't like what I proposed, you can get back to me. That is where the matter sits as we come into today.
*51 Now, it is apparent that there have been documents which have not been listed on a log or produced, and the court's order of November 27th really required a listing on the privilege log. It seems to me that what we're having a difficulty getting an understanding on is whose documents does Shook, Hardy have in their files or in other depositories somewhere? They have represented Lorillard and Philip Morris in this particular proceeding, they have represented other of the defendants in other proceedings. What we need is a complete and exhaustive listing of those documents to determine and ascertain whether or not there are other documents which have not been produced which should have been produced but are not being produced based on an asserted claim of attorney- client privilege or work product.
The issues in this case have been clear. No, we did not make a new motion because there is an extant court order, and if we wanted to keep up with the defendants' motions, they file two or three a day -- that may be an overexaggeration -- but we're not going to engage in that type of proceeding. What we do expect and what we're entitled to expect under the court's orders is compliance with those court orders.
We remain willing, ready, and able to sit down with Mr. Monica, or if he wants to delegate Mr. Martin, Mr. Martin, to discuss what is the most appropriate way to do it. A simple assertion that it's going to take the law firm of Doherty, Rumble & Butler 50 days to get at the information is just that, a naked assertion. I suspect, as sure as I'm standing here, that Shook, Hardy has a very detailed, comprehensive, exhaustive index system with respect to every single document that they have on this litigation, and all we're asking is that these court orders that have been extant for a long period of time be complied with. The special master's order indicates that they have not been complied with, and Your Honor, we're ready to sit down with them and move forward in that. If they're not willing to do that, then we have to suggest something to the court.
THE COURT: All right. Let's move on. I want a report on that issue in one week.
MR. GORDON: Your Honor, the next issue is the deposition of Janet Brown. It is represented to us that Brown & Williamson and ATC and indeed Chadbourne & Parke no longer have any relationship with Ms. Brown, who was a lawyer at Chadbourne and represented American from the 1950s up until approximately 1990. Based upon that representation and their effort -- they have been in contact with Ms. Brown's lawyer, and according to the paperwork, if requested that she voluntarily appear for deposition, and she has declined, based on those representations we're at a dead end and there is no issue presently before the court with respect to this.
THE COURT: Let's move on.
MR. BERNICK: Your Honor, just in an absolute abundance of caution, I think that does accurately state where we are with the exception that Chadbourne is paying Ms. Brown's counsel's fees in connection with this case and in another case, the Oklahoma case, where she was deposed on a jurisdictional issue. And I wanted to make sure that there's no illusion --
*52 We notified counsel of this fact. I want to make sure that the record is clear that that is in fact -- with that exception, Mr. Gordon's statement is accurate. There's no --
She was retired from being a partner 1980 and she has no ties to the firm. And she certainly has no ties to us, and we don't pay her fees.
THE COURT: All right. Let's move on.
MR. GORDON: With respect to issue five, the cigarette parameters interrogatories, each of the manufacturing defendants to whom those interrogatories were directed has represented that they have provided us with all the responsive information that they have available. Based upon those representations, there are no outstanding issues.
THE COURT: All right. Then six, waiver, argument.
Seven, C. Jesse -- C. James Jesse, Jr.'s deposition.
MR. GORDON: Right. That deposition actually took place and Wednesday and Thursday, it was conducted by the state of Washington and I believe a couple of other states. We did not participate. The characterizations in defendants' moving papers with respect to this deposition is accurate.
There is one issue that I -- that I want to put on the record that has emerged from this, which is a stipulation between the plaintiffs and Philip Morris with respect to one document in particular. If I may just have a moment, I want to identify the document correctly.
MR. NUNLEY: Mr. Gordon, I could probably do that for you, it's RB0003666.
MR. GORDON: And just so the record is clear, this is a document that was apparently in the files of Mr. Jesse. It was returned to Philip Morris. Philip Morris provided copies to us with that RB Bates number. That is not the normal Philip Morris production Bates numbers. This is a document dated February 7, 1969, from J. E. Lincoln to Millhiser and Goldsmith, and the subject is "Tobacco R&D." And based on the agreement with Philip Morris, they will not object to its admission into evidence. We will be putting a trial exhibit number on and we'll move its admission after we've had an opportunity to do that.
THE COURT: Okay.
MR. NUNLEY: Good afternoon, Your Honor. I hope this is a matter that will not have to come before the court again, so I'd like to close it out. There were some issues related to the documents returned by Mr. Jesse, there were also some issues related to his deposition, as Mr. Gordon said, either although or because the state of Minnesota wasn't there. It went forward without incident, and as I understand, all issues related to the documents and related to his deposition are taken care of by this agreement.
THE COURT: Thank you.
And item eight. Yes.
MS. WALBURN: I believe this is the last item on the agenda, Your Honor, and it relates to a final date that privilege claims may be raised.
There are two categories of documents, one would be new documents that are produced with new privilege logs, and the second category would be documents that have been previously produced that are in the depository but a new claim of privilege is asserted for those documents as being inadvertently produced, and we are on an ongoing basis getting letters from defendants claiming inadvertent production of documents in the depository.
*53 As the court is aware, there are two prior court orders on the issue of late production of privilege logs. One is the order of May 8th last year, and then there was a stipulated order of November 14. It's the plaintiffs' position that at this late date, that the appropriate procedure would be for an order that from this point forward there be no further new claims of privilege absent one of two circumstances; one would be agreement of the parties, or two would be extraordinary circumstances by order of the court.
At this point in time it's simply too late to process ongoing claims of privilege, and the parties have had ample notice and opportunity to assert all claims long ago.
MR. BERNICK: Your Honor, it is obviously correct that there are prior orders on this subject. Those orders were followed most recently in connection with CLAD filing 2367, which was an order of Your Honor referring to the special master, recently discovered documents of CTR. So very recent times.
Again, Your Honor can resort to those prior orders. Those orders make specific provision for a party to justify the late logging of documents, and I think that it adequately handles this situation. I'm not sure what the thrust of Ms. Walburn's request is other than to somehow, by articulating an extraordinary- circumstances standard, make it all the more difficult to be able to satisfy the court. In fact there's been timely compliance with prior orders, and I really don't see the necessity for that. We're all cognizant of the fact that it's late in the case, but these things happen. We have over 30 million documents that are in that depository, and each time there is an addition made, it is incumbent upon the parties who make sure that addition complies with the terms of the order. This is not an easy thing. It's not a light thing. We're talking about privilege assertions here. And I'm concerned that the proposal that's been made to the court is really an opportunity for saying there aren't going to be further additions, because what possible showing can meet a standard that says it must be extraordinary circumstances? This should not turn into de facto privilege of documents. I know Your Honor wouldn't entertain that, and I know Your Honor's prior orders are sufficient to accomplish the purpose of avoiding that result.
THE COURT: Let me in that regard just emphasize the fact that I do expect justification provided to the court for the delay in the production of the document, and if that justification is not satisfactory, then I will consider it waived. So I do expect that that will continue to be complied with.
MR. BERNICK: Thank you, Your Honor.
THE COURT: Okay. I see some of us have left early for home. I promised others would have that opportunity, and I'm keeping my promise. Despite some thoughts, I'm not that bad a guy. Okay, have a nice day.
MR. BERNICK: Thank you, Your Honor. Appreciate it.
THE CLERK: Court stands in recess.
*54 (Recess taken.)