COMMONWEALTH OF MASSACHUSETTS

MIDDLESEX SS. SUPERIOR COURT

CIVIL ACTION

NO. 95-7378

***************************************

COMMONWEALTH OF MASSACHUSETTS, *

Plaintiff *

*

vs. *

*

PHILIP MORRIS INCORPORATED, R.J. *

REYNOLDS TOBACCO COMPANY, BROWN & *

WILLIAMSON TOBACCO CORPORATION, *

B.A.T. INDUSTRIES P.L.C., LORILLARD *

TOBACCO COMPANY, NEW ENGLAND *

WHOLESALE TOBACCO CO., INC., *

ALBERT H. NOTINI & SONS, INC., THE *

COUNCIL FOR TOBACCO RESEARCH-U.S.A., *

INC., and THE TOBACCO INSTITUTE, INC. *

Defendants *

***************************************

BEFORE: SOSMAN, J.

Thursday

August 20, 1998

Cambridge, Massachusetts

Patricia Bellusci

Official Court Reporter

APPEARANCES:

GEORGE K. WEBER, REBECCA McINTYRE

Assistant Attorneys General, for the Commonwealth

THOMAS SOBOL, JEFFREY WOOLF and NANCY REINER, Special

Assistant Attorneys General, for the Commonwealth

MARSHALL SIMONDS and CERISE LIM-EPSTEIN, ESQS.,

for Philip Morris

RICHARD ZIELINSKI, ESQ., for Lorillard

MICHAEL KOMAR, ESQ., for B.A.T. Industries

PETER C. KOBER, ESQ., for R. J. Reynolds

THOMAS PEISCH, ESQ., for CTR

Thursday

August 20, 1998

Cambridge, Massachusett

(10:05 a.m.)

THE CLERK: Your Honor, this is Superior

Court case number 95-7378, Commonwealth of

Massachusetts versus Philip Morris, Incorporated,

et. als. It's here for a status conference, your

Honor.

Counsel, do you want to introduce

yourselves, please.

MR. SIMONDS: Your Honor, Marshall

Simonds -- Goodwin, Procter & Hoar -- counsel for

Philip Morris, and temporary substitute counsel

for liaison, Mr. Griffin, who is not able to be

here this morning.

MS. EPSTEIN: Cerise Lim-Epstein, counsel

for Philip Morris. Good morning, your Honor.

MR. WEBER: Good morning, your Honor.

George Weber, Assistant Attorney General.

MS. McINTYRE: Rebecca McIntyre,

Assistant Attorney General.

MS. REINER: Nancy Reiner, Special

Assistant Attorney General.

MS. SOBOL: Thomas Sobol, Special

Assistant.

THE COURT: The first item on the

agenda, status report on expert witness

discovery.

MR. SIMONDS: If your Honor, please, the

representative of the defendants who is in a

position to speak to that is Richard Zielinski,

counsel for Lorillard. Richard had an argument in

front of the S.J.C. first thing this morning and

is on his way here. So my request is that we

perhaps delay that until he gets here.

THE COURT: All right.

Next is the master trial exhibit list.

MR. SIMONDS: Yes, your Honor. If you'd

like the defendants to start, I'll address that.

I think the Court has received memoranda

from both sides. There were a series of meet and

confers in an effort to resolve disputes, and I

think we've made substantial progress.

We have some differences which I believe

represent principal differences on the part of

the defendant that relate to the appropriate

efficient preparation of the case, and I'll try

to address those.

Initially the defendants wanted a

sequential, rather than a simultaneous

production, in which each production by the

defendants, followed by a period of weeks, a

production by the Commonwealth so that we could

absorb and think about responding. We modified

that position to say we in effect know that there

are certain documents we're going to want, and we

can produce those.

So we agreed to a series of three dates,

beginning tomorrow, for simultaneous production.

And we're prepared to proceed with that unless we

get an order from the Court countermanding it

today, and we don't seek such an order.

We have agreed on, I believe, on the

fields and the method of identifying the exhibits

that will be usable by the Court and usable by

the parties, and eliminate, as far as possible,

confusion.

We're going to have proposed, and agreed

to, three simultaneous productions on August

21st, on September 11th and on October 2nd.

It is the defendants' position that we,

as defendants, because we are trying to, by

making simultaneous productions, we are trying in

large part to anticipate the direction of the

plaintiff's case, and we ought to have an

opportunity to look at the end result of the

plaintiff's exhibit identification and shape our

responses in light of that end result rather than

to guess at it.

So we have asked for a sequential

production at the end, proposing that the

Commonwealth complete its production on October

2nd, which they're apparently willing to do. And

that we make a final production, which we do not

anticipate would be a dump, but which we do

believe would be productive of efficiency and a

minimum designation rather than an overly

inclusive designation, because it lets us respond

to documents that have now been completely

identified by the plaintiff.

We think that makes sense. We have some

problems, that I think the Court will recognize,

that the plaintiffs do not have. We have at

least four major defendants, four manufacturers.

Each manufacturer, in framing its defense, will

be to some extent focused not on common issues,

but on manufacturer-specific issues dealing with

individual company conduct, individual company

documents, and individual attacks from the

plaintiff on those companies.

It is simply harder to coordinate four

defendants than to designate for a single party.

That takes more time trying to avoid duplication,

avoid overlap, screen documents and go through

what I hope will be a disciplined effort to

reduce the number of exhibits; not to increase

the number of exhibits.

It means that we need to have time to

evaluate those identified by the plaintiffs,

think of the response if necessary, cull out

duplication, and make a coordinated response.

Therefore, we think the October 23rd final

response from us, other than damage exhibits,

makes sense.

Finally, let me say in that regard, an

argument that I think we've made before but I

think remains valid, and that is, as the Court

saw in some of the privilege areas that we've

gone through, it is the defendants' contention

that a document offered to show bad conduct by a

defendant may require reference to not one -- not

the document itself, but several contextual

documents, documents that relate in time or

relate in subject matter to put the document that

is being offered against us in context.

And depending on the number and nature

of the so-called company documents that are going

to be offered, we will be responding with

contextual documents in which there may well be

more than one exhibit designated by the

defendants to respond to a single exhibit of the

plaintiff.

Until we know the exhibits, it's hard to

accurately put a maximum number on that, but we

have tried to be conservative in our estimates in

order to protect ourselves against disappointing

the Court and embarrassing ourselves later in

setting the total numbers. And the need to have

multiple documents to respond to one is one of

the major factors that we have in mind.

Finally, let me address briefly the

issue of damages exhibits. The memoranda make a

point that in the meet and confer, the defendants

refused to set a date for the production of

damage exhibits. I'd like to put that in context

since I was present at at least the principal

meet and confer that dealt with this, and it was

my proposal that they are shooting at.

My proposal was simply this. When we met

on July 16th, the Court directed that we would

have until October 15th to respond to the

damages' evidence from plaintiffs. While we

sought on July 16th for a time period that

related to the date within which we received the

software or the codes that let us in fact

investigate and replicate the calculations of the

plaintiff's damage issues, we didn't get that. We

just got an October 15th date. The Court did not

want to give us what I think you saw as a moving

target that was hard to control.

In point of fact, at least with

reference to the Cambridge Team, the principal

damages' report, we did not get the codes until

about August 4th. That's two and a half weeks

after June 16th (sic).

When we had the meet and confer, I did

not know and did not have current reports either

from our damage consultants or from Mr.

Biersteker, who was the defendant counsel who

principally argued the damages' issue to you on

July 16th, as to what the timing and status of

our work was.

I'm not here to ask for an extension of

that. I simply didn't know. It was my view that I

would know by early September, and that

negotiating a date in good faith for the

designation of damage exhibits ought to be based

on some knowledge; not mere speculation or

guesswork on my part. And that identifying

October 23rd as the date by which we would have

our damage exhibits identified, given the fact

that the cutoff for the damage analysis was

October 15th, and is almost -- I don't know, four

or five working days between there in order to

evaluate our report and criticism and think about

what exhibits we wanted, and I didn't think that

was enough.

It seemed to me I ought to wait until

September and try to have a meaningful - a

negotiation based on factual evidence. That has

been characterized as a refusal to give a date.

It is not our position that we should refuse a

date. It is our position that we don't know now a

date that we can offer that we are confident will

be when we can meet.

I do observe that in the expert

deposition discovery, I believe Mr. Zielinski

will report that there is an agreement that we

have until November 20 to complete the

depositions of the plaintiff's damage experts.

It is clear to me that there needs to be

at least some window to identify damage exhibits

that trades off knowledge we may get for the

first time in those depositions so that an

arbitrary date of October 23rd now, for damage

exhibits, almost certainly guarantees that we

will be back in front of the Court saying we need

to reopen this window. And that it makes more

sense to give us an additional window of time

beyond October 23rd for damage exhibit.

We still contemplate, with the limited

exception that both parties are going to become

aware of additional documents that they need,

that we will come to closure on our document

exhibits by November 6th, and that we will have

the list that the Court is looking for filed with

essential agreement by November 9th.

The other issue I'd like to address

deals with objections. And here, again, we have a

disagreement which I'll try to characterize

fairly.

We have a disagreement that I think can

be characterized as a difference of view of what

is appropriate for the efficient preparation of

this case for management in the pretrial stages

and at trial with reference to exhibits.

And the difference is this. It seems to

the defendants that the obligation we owe the

Court and our opposing counsel is to identify,

insofar as we humanly can, objections to exhibits

that we believe can be obviated by early

notification, or if not obviated, that we believe

can alert the other party to the need to call

some additional witness, or provide some

additional step in the presentation of evidence

in order to make the exhibit admissible.

Initially we thought, and I believe the

Court thought, that there was a nightmare of time

involved in privilege and work-product issues. I

believe the Court's order on waiver has largely

wiped that out. I do not believe that the

defendants anticipate that we are going to be

involved in a lengthy exercise registering

privilege and work-product objections. I don't

mean that there will be none, but I mean that

that has now been reduced to what I think are

manageable limits.

I do not believe that we are going to be

engaged in a war about authenticity and

foundation, although I may be wrong about that

because the admissibility of some of this

evidence as to authenticity may be hotly

contested. But I do believe that we can identify

exhibits in that category in the course of this

exhibit identification, and should do so.

What I have difficulty persuading any of

the defendants to believe is that we can, in a

good-faith way, identify objections to relevance,

to materiality, to issues such as: is the

evidence collateral, or is the evidence so

prejudicial that it ought to be excluded, or

other judgmental things, maybe various hearsay

objections, all of which require that you imagine

the context in which the exhibit is offered, and

imagine what the arguments are likely to be when

the offer is made.

Now, there are some categories of

evidence that may well be the subject of motions

in limine and rulings by the Court. But those

categories do not need to be identified by

individual objections to exhibits. The plaintiff

will have goals in his motions in limine to limit

whole classifications of evidence, and we will

have responsive arguments, and they will be dealt

with under the case management order in

connection with motions in limine.

Putting the parties through a

speculative exercise in trying to identify

whether we have one of these other objections

seems to me to be a waste of time in two ways.

One, the defendants are bound to be over-inclusive as a matter of protecting their

clients. We're going to be reluctant to waive any

objection that we think might be available to us

in whatever circumstances.

So we end up with too many objections,

objections that will in fact, probably a majority

of the time, not be made, but because we don't

have the contextual basis and a circumstance in

which we're going to be arguing either at side

bar or in a hearing after the finish of a day's

trial, we're going to have to over object.

Secondly, we're going to waste an

immense amount of time in discussions in which

the Commonwealth is saying, Oh, don't worry about

that. That won't happen. And the defendants are

saying, Hey, we've got to worry about that. It

might happen. And the Commonwealth says, We don't

intend that. And the defendant says, We don't

know what you intend, but it could happen that

way and we've got to have our objection.

That's not a productive use of time

particularly when, on the most important of these

objections, the time involved is going to be the

time of trial counsel. It's not going to be the

time of some young associate who can be delegated

to do this work, because these issues may have a

significant impact on the trial. And it means

that the senior trial counsel, at least for the

defendants -- maybe the Commonwealth can delegate

it -- are going to have to be involved in what we

truthfully believe is an unproductive exercise

that is not going to leave the Court with a

guideline that will speed up the Court's

consideration of these issues.

So that our position on objections is,

we have gone to what we think the appropriate

stage is that we think will be useful and will

reduce the time and make more efficient the

management of the exhibit issues, and we have

tried to reserve what we think holds too high a

risk of being a waste of time without having a

propensatory gain in efficiency at trial.

Now, there may be other details that I

should address, but let me stop here.

THE COURT: All right. Mr. Weber?

MR. WEBER: Good morning, your Honor.

I'd like to start with the issue related

to objections because I do think that that is a

fundamental difference between the parties.

The way the Commonwealth envisions this

process going forward is that there will be an

exchange of trial -- potential trial exhibits;

that the parties then look at those; they meet

and confer over objection -- they assert

objections related to the documents that they've

been given by the other side, and they meet over

those and see if they can work out those

objections. And if not, that they start in

September and in October to come to the Court and

say we have problems with these objections where

we can't come to agreement over them.

The fundamental difference between our

proposal and the defendants' is that that

process, under their proposal, I think if you

read it closely, won't even begin until late

November. And the Commonwealth is concerned that

if that's true, and if there is an issue

regarding hundreds of documents - even only

hundreds, then it will take up an enormous amount

of time and jam us on the trial date. And that's

the primary concern we have. And that's why we

would like the Court to order that there be some

meet and confers in September and October at

which the parties review the objections that each

side have been making toward -- regarding the

documents that have been exchanged.

I want to respond specifically also to

the point regarding waiver. We have made it

explicit to the defendants that what we are

looking for is good-faith attempt to identify

objections, any objection; not just authenticity.

But if you have a relevance objection that you

know you're going to make, raise it.

We specifically said that there would be

no waiver. If you want later on to raise another

objection regarding a document that you didn't,

we're not going to object to that. What we want

to do is get the process started in October and

November so -- excuse me, in September and

October, so that we're not facing, you know, the

inevitable crunch that comes closer to the trial

date.

Moving on, your Honor, to the issue

related to the date for the defendants'

disclosure of exhibits related to their damages

experts. We have proposed October 23rd. That is

months after the initial disclosures, and still

at least two and a half months after, if Mr.

Simonds is correct, that we provided the last

document on August 4th. It's months after they've

received the documents and disclosures of our own

damage experts. And so, they ought to have a good

idea what their -- what sort of exhibits they're

going to need in response to our damage experts.

In fact, in our case, your Honor,

they're not making their expert damage

disclosures until October 15th, and yet, we've

agreed that we'll do ours three weeks later on

November 6th.

Your Honor, they have more than

sufficient time to identify the exhibits that

they need related -- in response to our damage

experts, and we ask the Court to set a date in

October, October 23rd is what we propose, to

require them to identify whatever documents they

can related to our damage experts.

Again, we have said that if there has to

be a trickle of additional documents, we're not

going to object. There's no waiver. We expect

right up, probably until your Honor's tolerance

is worn out, there'll probably be some additional

effort to get more exhibits on the trial list,

right up to the trial date.

Mr. Simonds indicated that one of the

reasons they can't identify exhibits now is

because of the deposition schedule. Again, your

Honor, our deposition schedule, by the agreement

that's going to be announced to you, will allow

us to take depositions all the way into January.

And so, we're obviously in a much worse position

in terms of our ability to identify trial

exhibits.

Certainly some documents may come out at

the depositions that need to be added to the

trial list, but that's specifically provided for

in the order that we propose; that is, that we're

making a good-faith effort to identify our trial

exhibits now. If additional - limited number of

additional documents need to be added to the

trial list, that can be done. That can be done

after the November 9th date that we proposed be

the date that we give you the trial list.

So, your Honor, we don't believe that

there's any basis for not requiring them now to

identify their damage expert -- their responsive

documents to our damage experts, or any exhibit

based on the fact that depositions may continue.

They'll be able to do that as supplements to the

trial list.

They've also argued, your Honor, that

they ought to have a fourth and final rebuttal-type opportunity to present exhibits, or to add

exhibits to the trial list.

I want to say that we actually proposed

that on October 23rd not only do they give us

their exhibits related to damages' issues, but

that they could also, if they want, submit

whatever else they wanted on October 23rd, which

would be a full three weeks after our last

submission of October 2nd - our last joint

submissions of October 2nd.

So if they want a fourth one, fine. Let

them have a fourth one on October 23rd, but don't

let it be well into November when we'll again be

in a position of jamming ourselves on the trial

date.

Thank you, your Honor.

THE COURT: Let me take what I think is

the toughest one of these first, and I think that

is the subject of the objections and how we're

going to organize -- My concern is, I must say, I

envision the trial itself as being one that will

have some very cumbersome logistical problems

inherent in it. And I am trying to minimize

those, for my sake, the jury's sake, and the

parties' sake.

It is going to be very cumbersome to

have side bar conferences with the numbers of

lawyers involved. We will have extra jurors. I

think that I would like to minimize the need for

side bar conferences during that trial. In that

sense, anything that can be dealt with in advance

should be. I think at the very least I owe that

to the jurors, not to waste their time dealing

with things that could have been done before we

disrupted their lives in the major way we are

about to do.

So my goal is to have streamlined and

dealt with as many objections as possibly can

reasonably be identified and dealt with in

advance of trial.

Also, to streamline all the logistics

involved in the handling of this large volume of

exhibits: the need for premarking of exhibits,

getting agreed exhibits all marked in advance,

and again, we cannot have, with the number of

lawyers, the number of exhibits, we can't have

that kind of fumbling around. Or at least we need

to keep it to the absolute minimum that we

possibly can.

And in that sense, I am very eager to

get this process of resolving objections, whether

it's by agreement of the parties, by

stipulations, or by my orders, to do it as early

as possible, and yet, do it efficiently. And the

question is - the question is, how?

From my point of view, I also see some

merit in having at the earliest possible stage,

with regard to be it each exhibit, or each

category of exhibits, you know, hopefully many of

these will go in groups, where if I see what the

whole range of problems are, it helps me identify

for me, well, if I am inclined to exclude this on

the following grounds anyway, I can focus in on

that. And if I decide to exclude it on that

ground, I don't have to have fumbled with all the

others that might have been either more

complicated, more time-consuming. It lets me see

what the range is.

And in that sense, I favor an approach

that tries, at least, to put those objections

that are genuinely being asserted, or are going

to be asserted, onto this chart for my review

particularly where I would again assume that

except for the 39,000 documents, a lot of these

exhibits have not only been seen before, and

identified as trial exhibits before, but people

have seen them in action, so to speak, in the

Minnesota trial.

I don't think it is unreasonable to

start putting on the table certain categories of

objections, including, relevance, hearsay,

etcetera, where some of them -- a large number of

them, I suspect, have already been identified.

It does become more problematic as we

start dealing with the 39,000 documents, as I

gather those documents weren't available out in

Minnesota until the closing few weeks, and

obviously, a lot less was done with them than

will probably be done in this trial. And that is

uncharted territory for the defendants: how

they're going to be used; which ones are going to

be used, etcetera.

I don't see why, where you already know

that you do have some such objection, it can't be

put on the table, particularly with regard to

those documents that have already been, you know,

long involved in these cases and everybody's

well-aware of them; where they are more recently

disclosed items and people's thinking is

understandably not as refined, I can sympathize

with the defendants' need for a little more

leeway.

But is there a way of getting the best

of both worlds here? Those documents where you

do know, look, you know, we already know that

we're going to try and block the Commonwealth

from putting this in; and we're going to go to

the mat on trying to block the Commonwealth from

putting this in. Why don't you spell it all out

and let me see it. Because, again, if I agree

with you on even just one of the ways you want to

keep it out, that's enough for me. I am not going

to make multiple layers of backup rulings that

I'm excluding this for this reason, and this

reason, and that reason. We don't have time for

that.

I'd like to see the constellation of

objections, because as I say, if I agree with you

on any one of them, that allows us to resolve

that item and move on.

What's an efficient way to do that? Mr.

Simonds?

MR. SIMONDS: Your Honor, could I speak

to that for just a moment?

First off, we do have some learning that

may be helpful to the Court from the management

of this problem in other cases. In this case we

have a representation of three-thousand-document

limit from the Commonwealth.

Assuming that reputation -- that

representation is in fact liable, and that's the,

if not exact total, the approximate total we can

count on, the issue of identifying exhibits that

have previously been objected to and so forth is

in fact more manageable. And it may be that where

there are documents that have been the subject of

a fight, we can be helpful to the Court in terms

of reciting the rulings, the objections made and

the basis for the rulings.

One of the problems is, and one of the

problems that I know the Court is familiar with,

is that at least in my experience when I am

arguing in advance for the admission or the

objections to evidence, I run into a great

judicial reluctance to say in the abstract,

without having heard the context in which the

exhibit is offered, that I'm going to admit it or

exclude it.

And I think many of the objections that

we're going to be dealing with are objections of

that kind. That certainly has been the case in

other trials.

One of the ways the courts have dealt

with that is some combination of identifying

document days, for example, in which the jury is

in recess but the Court's order to the parties is

to bring before the Court, for argument, a list

of exhibits that the party then proffering

evidence expects to offer in the next finite

period through the next designated witnesses, and

argue objections so that the Court is not

burdening the jury with endless side bar

conferences.

Sometimes there has been sort of a

three-day notice requirement in which each side

offering evidence has had to identify, 72 hours

in advance of a given witness, the exhibits they

expect to offer in order to give lead time to the

other side to frame its objections and in order

to allow the Court to say, we will adjourn at

3:00 o'clock, or at 4:00 o'clock, and have an

hour devoted to this outside the jury at the end

of the day.

I'm sure there are other mechanisms that

will occur to the Court, but I do not believe

that we can solve the issue for the Court in a

way that will leave the Court comfortable with

its rulings in many of these instances by doing

it between now and November.

I simply think it is too much of an

exercise in imagination. I urge the Court to

consider doing what we can, and then saying,

let's let -- as to classes of documents which the

Court referred to -- let's let the burden be on

the motion in limine process to identify

classifications of documents which will be on the

list and which will be known by each side as to

which we think there are going to be objections

of a generic sort, and let's try to address those

in in limine arguments before the Court in

advance. Let's try and structure the procedures

of the trial so we burden neither the Court nor

the jury nor the parties by interrupting

presentations of evidence unnecessarily. And

let's look for other creative ways to address

this.

I don't think any attorney on either

side has any interest in having the effectiveness

of their presentation of evidence interrupted by

a -- by this kind of thing, and the jury annoyed

or the judge frustrated.

We have no interest, I assure you, the

defendants have no interest in causing you

irritation in your effort to mange the court and

manage the jury. We would like your benign

approval by every body language and signal you

give, so it is not in our interest to try and

make this a difficult process. It is in our

interest to try and make it an efficient process

because this is immensely time-consuming and

expensive.

THE COURT: I'm well aware, as I say, in

ordinary trials, there may indeed be judicial

reluctance to decide certain things in limine,

but that's a very different situation when it's a

limited number of documents or shorter trial.

I'm not at all reluctant to at least

start grappling with these problems by way of

motions in limine. Some of them I will be able to

decide, I anticipate. And as far as I'm

concerned, even those that I'm not able to

decide, if I ultimately agree that I do need to

hear, for a particular exhibit or set of

exhibits, a context, it alerts me to really, you

know, in advance, that I need to focus on that in

anticipation of the time that I am actually asked

to rule on it at trial. And I think it not only

speeds up my ability to deal with it during the

trial, but actually improves my appreciation of

the particular issue if I'm warned of it going

into the trial in advance.

I find motions in limine to be highly

educational for me even if I find I cannot

resolve the evidentiary problem. And I expect

they will be exceptionally helpful to me given

the size of the trial and the number of issues

that I'm going to be dealing with.

I'm not trying to accelerate the actual

briefing on the motions in limine. We have that

built into the case management order. But I don't

see why we can't start identifying at an earlier

point what those motions, at least in general

terms, are going to look like, what kinds of

things are going to be raised; how many documents

are or are not affected. It's really just a

scoping out in advance of the full-scale

articulation of all the underlying arguments that

will come in the motions in limine themselves.

The other thing that I think is driving

me to do this earlier, and I think should be of

concern to both sides, is, as always, the impact

on opening statements. As far as both sides can

know in advance, I think these parties need to

know in advance of giving their openings whether

they're going to get in or not get in some of

these very significant documents. And where

possible, I would like to put both sides in the

position of knowing as much as they can as they

frame their opening statements.

In a trial of this length and this

complexity, the opening statements are even more

important than they would be in the typical

trial. And for either side to be announcing

things in an opening only to have the rug pulled

out from under them by me on an evidentiary

ruling two months later, particularly if I could

have given them that news three weeks before they

made their opening, I think I owe it to the

lawyers, to the trial counsel to do as much as I

can to let them know what's going to be -- what's

going to be admitted and what's going to be

excluded in this complex trial.

I don't see why we cannot start on this

master chart, you know, filling in the columns

that let the other side know you're taking the

position -- you're likely to take the position in

your motion in limine when it gets filed that

this category is so prejudicial that it outweighs

its probative value and I should keep it out, or

whatnot.

I'm not requiring people to write the

brief in advance, and I'm not preventing people,

obviously, from withdrawing or resolving

particular objections prior to my actually ruling

on them. Obviously, this master chart is going to

be undergoing constant amendment based on what

the parties' decisions: well, we'll withdraw that

document. We won't press it. Or we'll withdraw

this objection. Or we're going to agree to the

following thing in order to satisfy your

objection, so that objection goes off the chart.

This is going to be an ongoing process,

and I realize it's unrealistic for me to think

that we're going to have this perfect chart,

impeccably with every grid box filled out before

we impanel one juror. I know I can't do that, but

I want to be as close to that as we reasonably

can be. And I think the savings during trial will

be well worth it for me, for the jurors, and for

the trial counsel. I understand this part of the

exercise does require trial counsel, but as

always, trial counsel's got to come to grips with

this sooner or later, and they might as well, I

think, start coming to grips with it now.

How can we get these things, you know,

start filling in those columns where you can?

And I'm not going to cut you off at the knees for

some late-breaking brilliant idea that you

understandably couldn't have foreseen,

particularly if it involves, you know, one of

what I call the new 39,000 documents. But if it

involves something that was, you know, exhibit 10

out in Minnesota, I'm going to look a little bit

askance, but I think I can be flexible enough on

that so that people shouldn't fear that I will do

that to them at the last minute before trial if

there is some understandably, sort of late-breaking objection.

For the same reason I never like a

pretrial memorandum that is purely a, you know,

cover the waterfront just in case memorandum. I

don't intend this chart to be that kind of chart.

But I intend it to be the step that gets

us launched on being as organized as we can be

prior to this trial. What kind of dates or

mechanism would you recommend for that?

Yes, Mr. Weber?

MR. WEBER: I'd like to address your

initial question about how to efficiently move

this forward.

What we have in mind is basically this.

Tomorrow the sides are going to exchange a

portion of their trial exhibit list, and what we

have in mind is that the parties each take the

list they've been given by the other party, look

at the documents, think about what objections

they have to those documents, and then take like

a month to do that, or several weeks, or

whatever's reasonable, whatever people need; meet

and confer about whether or not they can come to

agreements over the objections that the other

side has raised. And if not, then proceed to

bring matters to you so that we, for example, if

we have -- if we're exchanging tomorrow and we

have a meet and confer in September, we can have

an initial hearing over a full portion of the

trial list in October. And that way -- or at the

end of September, and that way we would not be

beginning this process in December or, you know,

in holiday seasons, or in January. Because it

will be way too close to the trial and we'll be

doing a thousand things, as this Court well knows

takes place before a major trial like this.

So that's the process we envision. And

then after the second exchange, which is

September 11th, as I recall, we give ourselves

another month, or three weeks is what we

initially proposed, look at what the other side's

given us. Try to meet and confer. And if not, see

what needs to be resolved by this Court again.

And then the same thing for the final portion of

the trial exhibit list.

I mean, both sides have made an effort.

They've made a commitment not to -- for there not

to be a dumping of documents in the last mutual

exchange. The whole idea here, from our

perspective, is to get this thing going and get

issues flushed out and brought to your Honor so

that we're not in the position -- realizing that

people's rights are reserved ultimately, that if

they come up with some additional objection or

something, that with your Honor's agreement, that

they would be able to raise that.

The idea is --

THE COURT: Let me just make sure I

understand. That does sound to me like you are

basically advancing the motion in limine piece

very substantially. Now, maybe we should --

maybe I should rethink that, but that is what

you're doing.

MR. WEBER: May I respond to that, your

Honor?

THE COURT: Yes.

MR. WEBER: That is why we say that we

are not asking anyone to waive objections because

we understood that that could be interpreted as

moving the motion in limine deadline. But it

seems to me that we have months before December

15th, which is the date for the motions in

limine, and we ought to be trying to use that

time to work out whatever objections we can

regarding these documents.

Otherwise, beginning -- your Honor, what

if there are objections over thousands of

documents? We're talking right now of a universe

of nine thousand documents. If there are

objections over thousands of documents, and we

start after the briefs are submitted some time

around December 15th, I think the trial date will

be in jeopardy.

THE COURT: Well, it seems to me that,

again, to the extent that certain objections can

be dealt with as categories, that sort of this

problem affects the following eighty documents,

then what I'm looking at is the arguments about

that problem, and once I sort that out, the

following entries get made on the chart as to

eighty documents in one ruling. Other things will

be, literally, a very labor intensive, document-by-document concern.

I'm trying to get this chart filled out

in a way that signals to the parties earlier than

January how big this problem is, and signals to

me how big it is, so that if there are in fact --

you know, let me take stock of it rather than

just have it land on my desk with the motions in

limine and make me suddenly realize we can't try

this case until May. I am trying to avoid that.

But I think the filling out of the chart

is a separate thing from the question of when

does it get brought to me.

MR. SIMONDS: Your Honor, I think I

agree with the last comment the Court made, and I

want to just correct an impression that George

Weber may have inadvertently given the Court.

It is not the defendant's position that

we should go through a production process

beginning tomorrow and ending at the end of

October or the first part of November, and then

address objections. That was not our proposal.

Our proposal was that we begin trying to

address objections with the first production;

that we have the entire time period in which to

complete that process.

THE COURT: Correct.

MR. SIMONDS: But insofar as possible--

THE COURT: What I want to do is limit

what categories of objections need to be

identified starting with tomorrow's, and I'm

saying, I don't see why those objections that you

already know you're going to make, or should

reasonably realize you're going to make, can't be

identified, leaving open the question of when and

in what way do they get presented to me.

If it's manageable to hold it off to

what's scheduled for motions in limine, I'd stick

to that, because the parties do have a lot else

going on this fall. But if there are things that

are looking, both that they're big, they're

important, they might be time consuming, they

have been brought to a head and we could

segregate them off and set a schedule for me to

start working on them earlier, that let's me see

what's coming down the pike.

Why can't you, if you already know, we

think this is, you know, impossible, totem-pole

hearsay, you already know that, why should you

wait until January to tell me? And why should

you wait until January to tell the Commonwealth

if you already know it?

MR. SIMONDS: Your Honor, let me respond

in two ways.

The Court mentioned motions in limine,

and it, I think is clear, that both sides as they

look at the identification of the exhibits that

are disclosed will be able to identify by

categories the kind of evidence that they intend

to challenge through a motion in limine. And in

general, I think you're going to be dealing with

motions in limine that consider more than one

document; that consider documents that fall

within a particular category and that are

objected to for sort of a series of reasons that

are common to that family of documents.

That issue, category of documents,

ought to remain for the Court's consideration in

the context of the briefing and motion in limine

arguments.

Now, to the extent that we can't

identify up front each document that may fit in

those categories, we have some overlap. But it

seems to me, at a minimum, we ought not to be

required to meet and confer, and negotiate and

argue, when the argument deals with: We object to

all documents that contain this kind of evidence

on the grounds that it is inadmissible under

Massachusetts law for reasons A, B and C, a

category of documents, whether it's hearsay

information that experts can't rely on, or

whatever.

Now, as to those documents, the

individual objection negotiation really does

preempt the motion in limine process which I

think makes sense at the point it is staged.

If the Court is going to order us to try

and anticipate objections in addition to what we

offered as to other kinds of documents, my

concern remains what I've said before, that it, I

think, will be inefficient. It is -- I do not

think, for example, that dealing with documents

that can be referenced at openings is going to be

a big problem.

I think that we can and will be able to

identify before the given trial date what

documents we want to rely upon, that they will be

in front of you and you will have a chance to

give instructions that counsel can take and

comply with in making their openings.

I'm not saying --

THE COURT: It's not just the specifics

of a document that is itself literally going to

be held up during an opening. It's the

announcement to the jury: You will hear evidence

that beginning in August 1964 --

MR. SIMONDS: I understand.

THE COURT: -- executives at Lorillard

did blah-did-e-blah, only to find that all that

stuff, for some reason, gets excluded.

I think as much as possible I want to

let you know in advance. Now, I do not see why,

nor quite frankly, we shouldn't be. I would in

fact anticipate that we do need identification;

that my ruling on a particular so-called

categorical objection changes the column, you

know, in the following documents. We do need them

identified, you know, we are objecting to this

kind of thing, and the following 18 documents are

the ones that are at issue in that category. We

need that.

Now, we don't need it literally

tomorrow, but I think we do need it in advance so

that my categorical rulings do not, quite

frankly, result in confusion. The whole point is

to have them -- have it be clear what exhibits

are okay and what exhibits are not okay.

MR. SIMONDS: Your Honor, I truly

believe that the Court will have to confront in

that context concerns about whether the Court

needs the supporting testimony of experts or

foundation witnesses in order to make the ruling.

We will have gone through a process which ends up

very frequently in the Court concluding that we

really need to reserve on this issue for trial.

THE COURT: And I'm sure I will make

that conclusion on certain items, and perhaps

even on certain very big categories, I will

ultimately agree with you. But I think there are

some I will be able to rule on, and as I

indicated before, the process of alerting me to

the problem let's me be aware as the testimony

goes along, I can appreciate, Ah, he has said

this. That does cure that problem, or it does

fall short of what's needed to be shown. Rather

than trying to search my notes, my memory

afterwards of, Gee, you know, did that witness

actually say this or that. I'd rather be warned

about it in advance.

So I do want the full range of

objections to start being identified as part of

this process.

MR. SIMONDS: Does that include in

limine subject objections, or can we identify

them if we can identify them as in limine

matters, to reserve in that sense?

THE COURT: No. It means I want the

problem identified and put on the table as soon

as it is known that you have it.

MR. SIMONDS: All right.

THE COURT: Now, I have no problem if

people deal efficiently, you know, with the chart

and with each other by saying, your last

production included a whole bunch of this kind of

document and we are going to be objecting to that

whole category for roughly the following reasons.

You don't have to provide them with the brief,

but just identify the problem. How compulsive

people need to be in terms of how early they

start identifying every single document that

falls into that category is not of concern.

But I think that that chart does need to

be cleaned up to that point by the time I am

addressing motions in limine, if not well enough

before.

As I say, particularly, it seems to me

that the documents that are, you know, already

well-known and well-rehearsed, that should not be

-- it shouldn't be that impossible for people to

put those kinds of objections out front; the

documents that never surfaced in Minnesota until

the closing weeks; as I say, I understand are in

a somewhat different category, and I'll give you

leeway and be flexible. But I do think this chart

needs to start mapping out the full scope of

objections. And if there are efficient ways of

flagging them by category rather than doing a

busy-work exercise, that's fine. But I do think

the full range of objections should start to be

identified for my benefit and for yours.

Now, in terms of the defendants' desire

for one sort of final responsive designation on

their part, I don't really see a problem with

that, I must say. You're asking to do it on

October 23rd?

MR. SIMONDS: We asked in our proposal

that the final production from the Commonwealth

would be October 23rd, and that we would have two

weeks until November 6th to respond, your Honor.

The Commonwealth came back and suggested

that they would make a final production on

October 2nd, I believe.

MR. WEBER: Your Honor, I would like to

clarify that. What we said is that both parties

can have an exchange on October 2nd. They can

have a final one on October 23rd. And then both

parties can do any last, limited number of

rebuttal documents on November 6th.

THE COURT: What's wrong with that?

MR. SIMONDS: Your Honor, the difference

is that we were looking for a final designation

by the Commonwealth and a chance to respond to

that final designation with our designation. They

are proposing a simultaneous rebuttal period

which leaves each of us with the same dilemma we

had to begin with.

MR. WEBER: Your Honor, that's not

correct. We're proposing that we do our final

production on the 2nd. They do their final one on

the 23rd, and there'll be a rebuttal, a final

simultaneous rebuttal.

THE COURT: I must say at that point

there won't be anything for the defendants to

rebut because they've already done their own

unilateral production on the 23rd. It's a

question of whether the Commonwealth gets another

shot at identifying rebuttal to what the

defendants have come forward with in their final

-- I mean, maybe I'm misunderstanding. Is it the

23rd that's the problem? Or is it the whole idea

that's the problem?

I have no quarrel with the idea that in

a sense the defendants do need an opportunity,

one opportunity beyond the time that they've

gotten all of the documents that the Commonwealth

intends to introduce in its case in chief, the

defendants need to know what that universe is

before - before they should be required to make

their final designation.

Any designation thereafter by the

Commonwealth should not just be a rebuttal

designation but a designation for the

Commonwealth's rebuttal case, it seems to me.

MR. WEBER: Your Honor, here's the

problem. On October 23rd will be the first time

that they will submit anything on damage experts,

and we need to be able to have some opportunity

to respond to that.

THE COURT: On damages?

MR. WEBER: On damages, right.

THE COURT: Let's deal with damages

separately. On all issues short of damages, is

there any problem with --

MR. WEBER: We'll make our final on

October 2nd, and they can respond by October

23rd.

MR. SIMONDS: Your Honor, I believe we

can live with that schedule on non-damage

exhibits as long as the rebuttal on November 6th

is not a further response on non-damage issues.

In other words, as long as we don't go into

another sequential issue.

THE COURT: I would not envision it

going into another sequential issue. I mean, it

should be, at that point, the Commonwealth would

be putting forward on November 6th essentially

only those new things that have come up in your

stuff on October 23rd.

MR. SIMONDS: And, your Honor, this is

separate from the issue of damage exhibits which

-- for which we have a problem that I've tried to

describe.

THE COURT: Right. Let's deal with

damage, the damages problem separately.

All right. For non-damages exhibits, I

think that schedule makes sense. And the

Commonwealth understands that what it gets to do

on November 6th is rebuttal cleanup, limited

scope, and indeed should not be a sudden

revelation of large numbers of exhibits. I will

be concerned if it gets misused in that way.

Now, in terms of the damages exhibits,

let me just make sure I understand, the

Commonwealth is producing or designating its

damages related exhibits, or the last of them,

when?

MR. WEBER: Your Honor, in our last

production, which is October 2nd.

THE COURT: On October 2nd. Okay.

MR. WEBER: Except that we may have some

rebuttal documents on November 6th in response to

their production on October 23rd.

THE COURT: Now, it seems to me in terms

of the defendants, once your responses on expert

discovery are made, which are scheduled to be

done on October 15th, that by then you ought to

have a pretty good idea, or shortly thereafter,

of what the direct examination of these experts

is going to look like, and what kinds of exhibits

that you're going to want to be putting forward

for that expert to work on.

Now, it may be that from the 15th to the

23rd is a little bit tight. I have no problem

pushing that back another week or something, but

I don't see that -- you don't need to take the

deposition of the Commonwealth's expert to know

that your own expert is relying on the such-and-such study and wants to put that in.

MR. SIMONDS: That's correct. We are

not arguing that.

THE COURT: All right.

MR. SIMONDS: The issue of deposing the

Commonwealth's experts simply is recognition that

out of that deposition testimony there may be

some additional exhibits identified that are

important to us for purposes of presenting our

defense to their testimony at trial, but not our

own identified damage exhibits that we want to

rely upon with our experts.

The problem there, so the Court

understands, is that we have what we anticipate

are three experts on damages who will be

designated and described, and who are working on

the October 15 report.

We also, however, have several experts

who have been identified already but who will be

commenting on components of the damages' case,

and whose designation reserves as to damages'

testimony to be supplemented at the later day,

and some of those experts may also need exhibits

to illustrate their testimony. And we simply need

enough time to evaluate the reports we've gotten

from our consultants, which we do not expect to

get until literally the 11th hour, or the 23rd

hour on this time table; and then identify and

create the exhibits to the extent that we have to

create them or identify and source the exhibits.

That's going to take more days than we

have between the 15th and the 23rd. We're

prepared to do it as fast as possible, but I

think that to undertake to do that in less than

two working weeks is just unrealistic.

THE COURT: Well, I'll do this. I would

set Friday, October 30th for the initial

identification of all the defendants basic damage

exhibits. Again, understanding that there may be

further cleanup, particularly, you know, be it

cleanup that's prompted by things that come out

of either side's expert depositions. Both sides

are going to need some cleanup, but I do think

that the defendants' damage exhibits ought to be

put on the table by October 30th.

MR. WEBER: May I address that?

That would give us then six days on the

current schedule to come up with rebuttal

exhibits to their --

THE COURT: Well, again, I have no

problem setting another deadline for the

Commonwealth on rebuttal and for its damages

exhibits. We're taking them out of some of the

constraints on the others, given this.

How much more time do you think you

would like to have?

MR. WEBER: Well, your Honor, the

problem with that is that that would then mean

that the final list to you and the objections to

you will not be getting to you until the end of

November. And, again, we're troubled that if

there are thousands of documents over which there

are objections, we're going to begin lengthy,

lengthy hearings, which will threaten the trial

date.

THE COURT: Well, I would anticipate

that problems about documents for experts and

damages are going to by and large be covering

different problems than the other kinds. It

doesn't bother me as long as -- if I have some

universe of evidence problems, I'm sure I'll have

plenty to keep me busy earlier than this

designation, and it's just understood that the

problems with the damages exhibits and experts

are going to come a little bit later.

MR. WEBER: It's -- we fail to

understand why, if they're producing their expert

reports on October 15th, that they can't produce

their exhibits related to experts within eight

days of that. But since your Honor's decided to

do October 30th for the experts, I will --

THE COURT: I think it's just a little

more leeway. I don't think that threatens the

trial date or causes a problem.

MR. SOBOL: Can I speak to Mr. Weber a

moment?

THE COURT: Sure.

[Conference between counsel.]

MR. WEBER: Your Honor, we'd ask for

November -- some time after Thanksgiving,

November 27th, I guess, to respond then to

defendants damage experts' exhibits.

MR. SOBOL: If I may, your Honor?

THE COURT: Sure.

MR. SOBOL: I just want to indicate, your

Honor, that there is a little bit of a leap of

faith. We obviously don't know what we're

responding to, and I'm hearing from Mr. Simonds

for the first time that I believe there's more

than three damage experts, and obviously I have a

Cambridge Team who will be reviewing them, so

we're trying to do our best within the shortest

period of time.

Mr. Weber's suggestion is right, shortly

after Thanksgiving will be helpful, but again,

we're sort of shooting in the dark here.

THE COURT: Why don't we make it Monday,

November 30th. I would anticipate endless

logistical problems trying to get hold of people

the day after Thanksgiving. So November 30th.

All right. I know that not everybody's

happy with this, but the major problems that have

been identified, is it appropriate for me to just

put it back to the parties to continue working on

the --

MR. SIMONDS: Your Honor, if I may? Just

one observation about the November 30 date.

Deposition examination of the

plaintiff's damages' experts is to be completed

by November 20th. It seems to me that if the

proposal that the Commonwealth put forward to the

Court a moment ago, that we should identify by

October 23rd, and they would respond by November

6, is a proposal they could live with, extending

November 6th to November 30th, which is ten days

past the time for our completion of their damages

depositions, puts us potentially in a strategic

disadvantage since we do not know what their

responses are to our damages material. They have

to confer with their Cambridge Team, as Mr. Sobol

just said, and we're going to --

THE COURT: You're giving identification

of exhibits; not expert discovery. This is

identification of exhibits. You're going to have

the Commonwealth's damages exhibits on October

2nd. You've got four weeks to think about that.

They've got four weeks to think about, you know,

from your experts damages exhibits, has that

prompted them to recognize that there's another

exhibit they need. This is not expert discovery.

I understand it's related to it, but

this is a different exercise.

MR. SIMONDS: Well, my point I think

is--

THE COURT: I don't see why -- I don't

see why this can't get those exhibits identified

in a timely fashion. I think that ought to cover

it and still give us two full months then before

the start of trial to grapple with problems about

each other's damages exhibits.

MR. SIMONDS: Your Honor, I'm not sure I

understood the Court's order, but if I did

understand it, they have until November 30th to

respond to the damage exhibits.

THE COURT: To identify any additional

damages exhibits that they haven't already

produced to you and identified for you on October

2nd.

MR. SIMONDS: I understand. I

understand, your Honor. My point is this. I

anticipate that we will be taking the depositions

of the plaintiff's damage experts, and we will be

getting testimony that says they are currently

consulting with their counsel in the preparation

of additional exhibits that are intended to

rebut, or to respond to the defendants damages

testimony. And that we will have an inability to

discover --

THE COURT: Let's take up that problem

if it occurs. If something occurs in the

Commonwealth's identification of any further

damages exhibits on November 30th, if you feel

you need to reopen an expert deposition, I'll

hear you on that. We'll deal with that problem if

it actually arises.

Again, I would anticipate that what the

Commonwealth will be producing or identifying, if

anything, on November 30th, is going to be

relatively limited. They will have made their

basic identification of the exhibits their

experts intend to talk about in their direct

testimony, or refer to or need, they're going to

make that identification for you on October 2nd.

MR. SIMONDS: Well, I gather the Court

has said that if we can make a showing that there

is a reasonable basis for additional deposition

discovery because of this problem, we're free to

do that.

MR. SIMONDS: If something comes up on

November 30th that you couldn't adequately

explore, and you didn't know about during an

expert deposition, and you literally need to

reopen it, we can deal with that. We can deal

with that.

MR. SIMONDS: Thank you, your Honor.

THE COURT: I don't think that should

drive a change in this schedule.

MR. WEBER: Your Honor, a couple of

points of clarification.

The parties had agreed that a list, a

tentative trial list, exclusive of damages now,

would be submitted on November 9th to your Honor.

That is still in place under your --

THE COURT: Yes. Yes. I see no reason to

hold off on submitting that to me. That part of

it should be done, and then I'll get a second

thing from you after the damages --

MR. WEBER: Your Honor, one other point

of clarification.

You had made clear that you want the

list to include all objections that a party

believes might be relevant, not just authenticity

and a limited number of objections.

The question is still out there as to

when the parties have to assert those objections,

and I think I failed to make clear to the Court

that what the Commonwealth has been proposing is

that after the part of the list is exchanged to

the -- by the parties -- tomorrow we're going to

be doing a partial disclosure of our trial

exhibits -- we think the parties then some time

after that, three weeks we propose, or a month,

that there be a meet and confer and the parties

disclose what their objections are, and that if

they can't then resolve those objections, the

parties would have an opportunity to come before

your Honor and try to convince your Honor to

begin to hear some of these issues rather than

wait until the very end of the process, which I

believe what defendants are proposing, is that

they don't even have to identify their objections

until November 20th, is what their proposal

submitted to the Court says.

And we just think, your Honor, that that

just wastes months and months of time. And we'd

ask that you order that the parties, as they --

you know, within a reasonable time after they get

a portion of the list, that we be required to

identify the objections, meet and confer about

those, and report to the Court how we're doing,

and perhaps have hearings about some of those

objections.

THE COURT: Well, let me make sure I

understand. The date on which this grand list,

at least of the non-damages materials, is going

to be coming into me is November 9th, right? My

concern is, quite frankly, that I have it by

November 9th.

Now, in order to do that, I mean, in

order to have that list be comprehensive and not

be including things that are going to turn out to

be withdrawn or cured, by definition, the parties

have to start putting their concerns on the table

and talking about it well in advance of November

9th. Now, whether that's done as sort of a

separate period for each disclosure, or whether

it's simply done on a rolling basis, doesn't

really concern me. But I want a list and a chart

that is a real list and a real chart on November

9th; not a posturing chart.

What's the best way to get that?

MR. SIMONDS: Your Honor, what the

defendants sought to negotiate and what we

represented was that we would begin identifying

objections as soon as we received the production;

that we would continuously pay attention to the

need to identify objections, and that we would do

that as soon as reasonably possible, and that we

would, in any event, have a closing date by which

all objections had to be made.

What we initially negotiated at the

first meet and confer was a proposal from the

State that we make a production on August 21st,

and that within two weeks or before the next

production date, we have a meet and confer and

deal with all of the objections on those issues.

We said, We don't think we can do that,

but we will do it as rapidly as we can, and we

are willing, as the need appears, to meet, and

meet and confer on these issues, but we don't

want to have an automatic schedule.

THE COURT: It is difficult for both

sides to grapple with this in advance. You're

going to be making your first exchange tomorrow,

correct?

MR. SIMONDS: Yes.

THE COURT: You're going to be seeing me

in September anyway. I think it's just something

-- as far as I'm concerned, the parties should be

starting to put their objections on the table as

the documents are exchanged and as they are

recognized, do a meet and confer as appropriate,

and keep me updated. We may need to be meeting a

little more often than once a month as we get

into the fall anyway. Keep me updated at every

status conference. And if one side or the other

thinks, you know, Gee, the other side has had our

documents for four weeks now. We still haven't

heard anything other than authenticity

objections, if I have to start setting firm

deadlines that are going to close doors on

people, I'll do it.

But I am reluctant to do that now. This

is a big universe of documents and a difficult

thing to coordinate. But I do want, as I say, the

chart that I get on November 9th, it covers all

categories of objections, and it is itself

already been discussed so that the things that --

the objections the parties are going to withdraw,

or somebody's going to decide, Well, in light of

that objection we're not going to offer that

exhibit, so that's taken off the chart, it's

cleaned up before I get it on November 9th as to

everything except, again, the damages exhibits

will have to be coming in to me later as we just

discussed.

Keep me apprised of it as we go along at

every status conference because I am concerned.

MR. WEBER: One other point of

clarification. I guess we should set a date for

the supplemental list, that is, the list that

will include damages documents.

THE COURT: Well, if your identification

of your rebuttal stuff is going in on November

30th, I would need that list in a cleaned up

fashion some time fairly shortly thereafter in

December. Because, again, there shouldn't be a

lot on your November 30th --

MR. WEBER: December 7th, your Honor,

will be fine. December 7th will be fine with the

Commonwealth.

THE COURT: I think that sounds

appropriate.

MR. SIMONDS: Your Honor, I believe Mr.

Zielinski is now here, and I will, if

appropriate, relinquish my chair to him for

discussion of the expert issue.

MR. ZIELINSKI: Your Honor, thank you

for indulging me this morning. I was stuck in the

Appeals Court, but I do bring good news.

The parties have met over the course of

the last month, subcommittees on both sides.

There's been horse-trading. There's been a

minimal amount of blood spilled, and I'm happy to

report to you that we have agreement on the

expert deposition program save for one, and only

one, item.

And I would like to hand up to the Court

-- we memorialized this, your Honor, in the form

of an amendment to the case management order. I

think logically it fits there. And I've outlined

in normal typescript all those issues on which

the parties have reached agreement. And I've

highlighted in bold-face type the one issue on

which we are at odds. And I have to make one

disclosure, and that is, that I think the

Commonwealth may advocate, when they speak today,

a slightly different proposal than is set forth

here as the Commonwealth's position. I have no

problem with that.

So what I would suggest, your Honor, if

you want to take a minute -- I could walk you

through it, but it will take you probably two

minutes to skim through it yourself and you'll

get the flavor of it, and then I suggest each

side get two or three minutes to give their best

shot on the one disputed issue. And I think your

Honor can probably rule today on it.

[Court examines document.]

THE COURT: All right. Take your shot.

Go ahead.

MR. ZIELINSKI: Your Honor, let me just

address the disputed issue.

As you can see, this order breaks the

experts out into various categories: clinician

experts have been separately dealt with, agreed.

Damages experts, separately dealt with. So the

issue is, with regard to all of the remaining

experts, the issue, quite frankly is, where do

you draw the line between those experts where

presumptively the parties would be limited to one

day of deposition versus two days. And I have two

simple points to make on that.

One, I think wherever that line is

drawn, it should be drawn the same way for the

Commonwealth's experts as it should be for our

experts. And I'll come back to that in a second.

And secondly, we think that the logical

place, the place we propose to draw that line, is

between experts who have testified previously in

Attorney General or Medicaid-reimbursement

litigation, cases that are in a sense like this

case as opposed to some other litigation that may

or may not have similar issues; the scope of

testimony may or may not have been the same; the

parties may or may not have been the same.

We think it's a clean place to draw the

line. And let me tell you how it shakes out,

because I think that's relevant.

If you do draw the line that way, and I

cannot swear to these numbers, but it's been our

best, rough estimate of how the numbers will

shake out if you do draw the line there. The

Commonwealth designated 25 experts total. Of

those, nine are either clinicians or damages

experts. So now we're down to 16, which is the

category we're now talking about.

Under our proposal, of those 16, 11 of

them have previously testified in prior Medicaid-reimbursement litigation, five have not. So

under our proposal, we would have 11, one-day

presumptive depositions, and five presumptive

two-day depositions.

Let's flip over to the defense group.

The defense group includes 42 experts. And don't

get heart failure because that includes, your

Honor, about a dozen industry employees like Alex

Spears, the CEO of Lorillard, who is a fact

witness but in every case the industry has

designated a group of witnesses who may offer

opinions on one or another subject.

So of those 42, 12 of those are either

clinicians or damages experts separately provided

for. So now we're down to 30. Of those 30, our

best estimate is that 23 of those have previously

testified in Attorney General or Medicaid

litigation, and 7 have not. So on the defense

group of experts, the Commonwealth presumptively

would have 23, one-day; and 7, two-day

depositions.

I mention that because I think your

Honor should understand, if you draw the line

where I suggest you draw it, I think there's

rough equity and rough fairness.

Now, the last point I want to make, I

want to just anticipate what I know the

Commonwealth will say, and has said, as to why

the line should be drawn differently for the

Commonwealth than it should be for us. And the

point they've made is that, you know, you guys

have seen these other experts before. You,

defendants, have had face-time, was the

expression that's been used, with these witnesses

that we haven't.

Well, it is true that the defendants,

Lorillard, Philip Morris, Reynolds, have been

parties to other Medicaid-reimbursement

litigation where the Commonwealth has not, but if

you think about what that point really means

about face-time with the witnesses, both sides

have access to the transcripts and can read them

equally in all of the cases. So that's not the

issue.

And the issue really is, I suggest, it

makes no difference whether our clients have been

parties to those reimbursement cases. The real

practical issue is, are the trial lawyers who are

going to conduct the trial of this case, and who

are going to examine the witnesses in court, have

they actually seen and had time with these

witnesses before. And on that issue, I suggest

it's no different for the Commonwealth than us.

And this is the reason.

Mr. Motley, who is one of lead trial

counsel for the Commonwealth, has been involved

in all of these reimbursement cases that have

gotten up to trial save for the Minnesota case.

Of the 23 experts on our side who have testified

in reimbursement litigation, Mr. Motley has been

counsel of record in cases that involved 21 of

those 23 witnesses.

So the Commonwealth has in its arsenal,

able trial counsel who has seen and had face-time

with the witness. On our side, I'm not going to

stand here and tell you we don't have access to

the lawyers who took those depositions, but I can

tell you at the same point, Mr. Mahony, Gael

Mahony and I are trial counsel for Lorillard; as

I stand here today, these witnesses are nothing

more than names on a list. I think it's not

substantially different for Mr. Simonds of

Goodwin, Procter, who's going to be lead trial

counsel for Philip Morris.

So in terms of the issue that really

matters, I suggest the parties are on even

footing and the line should be draw in the same

place. That's all I have.

MS. McINTYRE: Good morning, your Honor.

This -- it is very unfortunate that we

are here today at all. There was a very complex

negotiation over several weeks, and on August

11th, the Commonwealth walked out of the last

meet and confer with the understanding that the

parties had reached agreement on all issues.

So what Mr. Zielinski represents as

being one outstanding issue was never, in the

Commonwealth's view, an outstanding issue. But

the defendants at the last minute backed out.

They changed their minds.

And what Mr. Zielinski hasn't told you

is that the reason why they've had second

thoughts about this provision is because there

are two experts disclosed by the Commonwealth

that they think they want two days with. Expert

Sargent and Hughes. Those defendants -- those

experts, defendants have already deposed in

tobacco litigation. Those experts did not appear

in Medicaid reimbursement litigation.

Now, the Commonwealth --

THE COURT: What is the subject matter

of their expertise? These names are truly

meaningless to me at this point, unfortunately.

MS. McINTYRE: I believe they relate to

the issue of nicotine and nicotine dependence,

both of them.

MR. ZIELINSKI: I think that's true as

to Dr. Hughes. Dr. Sargent is youth -- deals with

marketing to youth.

MR. SIMONDS: Your Honor, just to

provide the information, Dr. Sargent, from

Dartmouth, who is one of the experts, is an

expert on the issue of, basically, youth smoking

and the relationship between tobacco advertising

and youth smoking. Hughes is an expert on the

addiction issues.

Dr. Sargent testified in a case

involving the City of Burlington, Vermont, an

injunction trial, relating to a proposed city

ordinance limiting advertising for cigarettes.

That trial happened just a few weeks ago. And he

was examined by a local attorney in Vermont

representing two convenience stores. No tobacco

company was a party to that case, and no tobacco

company lawyer conducted that examination,

although I do not represent to the Court that we

were uninformed about it. The tobacco companies

were in fact aware of it.

THE COURT: Okay. Go ahead.

MS. McINTYRE: Despite what Mr. Simonds

has told you, we wouldn't be here at all today if

defendants had not, at the last minute, backed

out of the agreement and tried to renegotiate

terms that were in place because of complex,

good-faith negotiation by both sides.

At any rate, the Commonwealth, in an

effort to not have to bring this to the Court,

made a further proposal, recognizing that

defendants were trying to back out because of

their interest in having the opportunity at least

to have Sargent and Hughes for one additional

day.

And so, as an effort to compromise, the

Commonwealth agreed, or offered, to allow

defendants an additional day with both of those

experts, and in return, to allow the Commonwealth

to have a presumptive additional day with any six

of the experts that fell into the same category:

the non-damages experts, the non-clinicians.

And that proposal, that last-minute

proposal is not reflected in the document that

Mr. Zielinski gave to you.

THE COURT: Who, if anybody, is there

out there that you want to now depose for two

days instead of one?

MS. McINTYRE: Excuse me, your Honor?

THE COURT: If I let the defendants

basically have two days with these two experts,

Hughes and Sargent, who is it you now want two

days with?

MS. McINTYRE: Well, they have disclosed

42 experts. We have disclosed 23. There are a lot

of experts that fall into this category, and

particularly experts, there are four historians

that they have disclosed - experts that have not

been -- frankly, that are going to be critical in

-- to their defense and that we want, at least

presumptively, the opportunity to see for another

day. We may not need another day, but we think

it's only fair given that the two experts that

they want to see another day, they've already

seen.

And in an effort -- again, we thought we

had an agreement earlier, but we once again tried

to see if we could resolve their concern.

THE COURT: This, I must say, is getting

very petty. Give me the names of the people that

fall into this category that you want to have the

leeway to go for two days with?

MS. McINTYRE: Well, your Honor, I don't

have a list of the names. There are, I believe --

we got the disclosures on Monday, I think at the

end of the day. So I don't have the names of the

experts that fall into that category, principally

because they have not identified, like, who are

their clinicians.

THE COURT: You think there are six of

them?

MS. McINTYRE: Oh, no. I think there are

-- they haven't disclosed damages experts yet. So

there are 42 non-damages experts, and I believe

Mr. Zielinski reported there were seven

clinicians.

MR. ZIELINSKI: Six, your Honor.

MS. McINTYRE: Six. I'm sorry.

And there are probably a number that-- I

believe that there's, I think, thirty he said

fell into this category.

Mr. Zielinski can correct me if I'm

wrong, but I believe he said there were about

thirty in this category?

MR. ZIELINSKI: Twenty-three, by our

count, your Honor, who have previously testified

in other Attorney General litigation, and seven

who have not, who they would get -- which

includes several of our historians, which under

my proposal they get their two days.

THE COURT: Okay. I'm losing track. This

is very -- who's not --

MR. ZIELINSKI: Believe me, I've lost

track at times myself.

THE COURT: Give me the breakdown of the

42 again. You've got 23 previously deposed in

Medicaid Attorney General cases?

MR. ZIELINSKI: Correct.

THE COURT: So 23 are done.

MR. ZIELINSKI: And seven who have not.

So which under my proposal, they would get two

days with each of those, and that includes at

least two of our historian experts.

THE COURT: All right. And the remaining

twelve are who, or come into what category?

MR. ZIELINSKI: They're either

clinicians, or in the category of damages

experts. I can tell you that -- maybe someone

from Philip Morris should speak to this issue,

but as I look down the list, whether we have

called them officially our damages experts, I see

the names of our damages experts in my column. So

there are a group of six that we've carved out

and put in the damages category which are

separately provided for. So they'll get multiple

days with those witnesses.

And one final point, to complicate it

even further, a large number of this group of

people who have previously testified for us have

been designated in Oklahoma and Washington, and

as we speak, there are depositions of some of

these people -- more depositions going on that

they can either participate in, if they cross

notice it, or they'll have the benefit of those

transcripts.

MR. SIMONDS: If, your Honor, please,

just to clarify on the damages experts. There are

six listed under the damages. Three of them, Dr.

Viscusi, Gary Clarke, and Dr. Jesilow, are what I

would call fringe damage experts.

Dr. Viscusi has testified and been

deposed in numerous cases, and that testimony has

been produced as part of his designation. In

fact, he is from Harvard and he will be deposed

in another case, I believe, later this month or

the first of next month, here.

Gary Clarke and Paul Jesilow are both

new witnesses, and both are two-day candidates

for examination. They testify on Medicaid

administration and on Medicaid fraud issues, and

there is a reservation that they may supplement

their testimony to be specific about damage

components once we know our damage reports.

THE COURT: Who is it you're looking for

two days on? I'm having trouble understanding

what it is --

MS. McINTYRE: Your Honor, the

Commonwealth is just in a slightly different

position. We have just received their

disclosures. We haven't had an opportunity to

digest them thoroughly because there were so many

experts disclosed.

And also, the Commonwealth has never

seen any of these people before, and yet, we are

willing to limit ourselves to one day for the

majority of those experts that have been deposed

in other Attorney General litigation. We're

asking for the limited opportunity to choose six

of them, if we decide that we need it, to have an

additional day.

And, again, the state cases are not all

identical, and we don't know whether the

substance of the disclosures are going to be the

same in this case as they were in other cases

where these defense experts appeared.

THE COURT: So, in other words, beyond

the seven where you would already automatically

get two days, you're saying of the remaining 35,

you want the option to pick six; not on any

particular subject, but just --

MS. McINTYRE: Just in case we feel we

need another day. And of course, the parties are

going to make best-faith efforts to limit -- to

not see an expert for a minute longer than we

need to. But we just want the opportunity.

THE COURT: This is getting incredibly

petty. What's the problem with that?

MR. ZIELINSKI: If I were to stand here

and try to tell you that that's going to croak

us, I'd be a fool. But let me say this, Judge.

The order that we've given you has carve outs in

it for good cause shown, exceptions, supplements.

I don't see why they should be given sort of an

up-front freebie of six extra witnesses. I think

they can deal with it the same way we can deal

with it on the discussion you just had with Mr.

Simonds.

If something new comes up, if they need

more time, they can ask us in the first instance,

or your Honor to give them more time. But I think

starting out, the playing field should be level

for both sides. And beyond that, whatever your

Honor rules, I assure you we will make work.

THE COURT: I think that the most recent

compromise that the Commonwealth has proposed is

reasonable. It's not unfair. The fact that you

have designated a much larger universe of

witnesses does create some problems, and a little

bit of flexibility to deal with that larger

number, if need be.

I do not anticipate that this will be

abused by either side. I would, obviously --

Hughes and Sargent, you may have your two days

with them. That's part of the compromise -- that

seems perfectly reasonable to me.

MR. ZIELINSKI: Would you accept one

friendly amendment then, your Honor, since you

have ruled on that. Could we carve out the

company employee experts, the CEOs of these

companies who have been repeatedly deposed, and

will appear for deposition in this case, but of

the six that they pick, at least the CEOs of the

defendant companies not be included in that

group?

THE COURT: Well, since these are only

the expert depositions, and I assume the CEOs

have already been deposed as fact witnesses, I

must say, it's hard for me to imagine the

Commonwealth squandering one of its precious

second days of experts on someone whose status as

an expert witness is relatively minimal anyway.

MS. McINTYRE: I don't see that there's

any reason for Mr. Zielinski to request the carve

out. I don't think the Commonwealth wants to

squander its days either.

THE COURT: Okay. Let's just go with

this.

The Commonwealth gets six at its option.

Obviously, this is not an opening of the door to

redepose a fact witness on more facts. These are

true expert depositions.

Okay. You had only two remaining items

on the agenda, and there are a couple of things I

need to go over with you.

The Commonwealth's request for

international judicial assistance, other than the

mechanics of needing me to sign off on it, is

there anything else you need me to do today?

MR. SOBOL: There isn't, your Honor. I

just want to apprise you, I did speak with

counsel for B.A.T. Industries. We've made one

modest change to the request, which I'd like to

hand to your Honor. If there are going to be any

additional changes by your Honor to the text of

the request that goes to the English court, then

what I'll need to do is actually make this change

on the word processor back in my office and

return it to you.

Let me tell you what the change is. The

Commonwealth had requested twelve hours for the

deposition of Sir Patrick Sheehy (phonetic),and

six hours, I believe of the deposition of the

other three gentlemen. In speaking with counsel

for the defendants, we wanted to make clear that

there was also time made in the request from this

court to the English Court for the availability

of cross-examination by the defendants. So we've

talked about how much time.

That will also be going because we

wanted to make sure the English court doesn't

have any more ministerial, persnickety issues

that it may have. So to make a long story short,

we changed the request last night. There was

another modest change to it today. And later on

today I would like to deliver it to you, in a

complete and final form --

THE COURT: I'll wait for that then.

MR. SOBOL: And if I'd just simply

request, your Honor, I'll be presenting two to

you, your Honor, for your execution: one to be

returned back to my office as an original that

we'll send to the U.K. and the other to file.

MR. KOMAR: Your Honor, Mike Komar for

B.A.T. Industries.

That's acceptable for my client. There's

just one point I want to clarify for the record.

In the application that Mr. Sobol wants the Court

to sign, there's schedule A that identifies a

number of areas which the Commonwealth thinks is

relevant to its allegations. And I just want to

make clear that these are the Commonwealth's

allegations and by the Court signing this, it's

in no way making findings of fact, or endorsing

any of these allegations. The Commonwealth is

simply seeking to examine the witnesses about

these allegations.

THE COURT: I understand.

MR. KOMAR: Thank you.

THE COURT: Okay. So I'll look for a

clean version of that.

THE COURT: We need to schedule -- the

next item was the schedule with regard to the

Commonwealth's Motion to Compel. I just got that

motion itself the other day, so I assume the

defendants got it at the same time.

MR. ZIELINSKI: We got it, your Honor, as

the doors were closing in my office last Friday

afternoon. And if I could be heard very briefly,

your Honor? I will tell you that I'm not kidding

you when I will tell you that I was shocked when

I got that motion, your Honor. And what I am

going to propose to your Honor is that you give

us the opportunity to try to persuade you, in a

very short period of time, like seven days, why

you ought not even to hear that motion, because

it is untimely on several different grounds, and

I'd be happy to give you a heads-up today if you

want of what those grounds are.

But we just think it's too late. We

didn't expect it. We were shocked to get it. It's

described by the Commonwealth as kind of a narrow

motion. Everything in this case has taken on a

certain sort of unreality, but I have never seen

the likes of a motion, or had to respond to one,

like that.

If it is going to have to be responded

to, it's going to have to be responded to

separately on behalf of at least the four

manufacturing defendants because the story is

different with respect to each one of them. So I

would ask your Honor to give us seven days, a

week from tomorrow, to file with your Honor a

short brief on why we think this motion is

untimely and should not be heard and why you

shouldn't entertain it.

If your Honor can rule on that on the

papers, I think, very quickly; if your Honor is

not persuaded, then maybe give us ten days from

the time you rule to respond substantively and

individually on the merits. That is our proposal.

THE COURT: Obviously without ruling on

such a request itself, the merits of it, is there

any problem with just giving you the opportunity

to first say their peace on why they think they

don't have to respond to it at all, I will indeed

be happy to have that, rule on the papers. And if

they prevail, that's the end of it; if they

don't, we set a very rapid schedule for their

substantive responses on the merits of the

motion.

MR. SOBOL: I think the latter remark

that your Honor made I think is the appropriate

one. If the defendants want to try to prevent any

reasonable discovery from the Commonwealth at all

on this issue, then fine, so be it. Obviously, by

providing simply a day or a day and a half to be

able to at least respond to the histrionics that

are apparently coming your way regarding

unfairness and all the rest of that, then you can

make a decision whether or not you want to hear

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