1 UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TEXAS
2 TEXARKANA DIVISION
3 THE STATE OF TEXAS * CIVIL ACTION
* NO. 5:96cv91
4 Plaintiff, *
* Beaumont, Texas
5 v. *
* September 27, 1996
6 AMERICAN TOBACCO CO., et al * 9:15 o'clock a.m.
*
7 Defendants. *
* * * * * * * * * * * * * * * *
8
TRANSCRIPT OF HEARING ON MOTIONS
9 BEFORE THE HONORABLE WENDELL C. RADFROD
UNITED STATES MAGISTRATE JUDGE
10
APPEARANCES:
11
FOR THE PLAINTIFF, HARRY GRANT POTTER, III
12 The State of Texas: Assistant Attorney General
Attorney General's Office
13 P.O. Box 12548
Austin, Texas 78711-2548
14 (512) 463-2120
and
15 WAYNE A. REAUD
Reaud, Morgan & Quinn
16 801 Laurel Street
Beaumont, Texas 77701
17 (409) 838-1000
and
18 THOMAS WALTER UMPHREY
GREG THOMPSON
19 Attorneys at Law
SANDRA PAYNE
20 Legal Assistant
Provost & Umphrey
21 490 Park Street
Beaumont, Texas 77704
22 (409) 835-6000
and
23 JOHN EDDIE WILLIAMS, JR.
Williams, Bailey & Wesner, L.L.P.
24 8441 Gulf Freeway, Suite 600
Houston, Texas 777017
25 (713) 649-6464
1 and
HUGH EDWARD MCNEELY
2 Provost & Umphrey Law Firm, L.L.P.
2901 Turtle Creek Dr., Suite 250
3 Port Arthur, Texas 77643
(409) 721-6260
4 and
HAROLD WAYNE NIX
5 Harold, Nix & Associates
205 Linda Drive
6 Daingerfiled, Texas 75638
(903) 654-7333
7 and
DAVID GRANT KAISER
8 Kaiser & Morrison
Suite 1440 Lyric Centre
9 440 Louisiana
Houston, Texas 77002
10 (713) 223-0000
11 ALSO PRESENT: DANYEL CHATAGNIER
RHETT D. KLOK
12 RICHARD J. CLARKSON
JOHN A. COWAN
13
FOR THE DEFENDANT, WALTER J. CRAWFORD, JR.
14 R.J. Reynolds Tobacco CHERYL OLESEN
Company: Wells, Peyton, Beard, Greenbert,
15 Hunt & Crawford
550 Fannin
16 Beaumont, Texas 77704
(409) 838-2644
17 and
THOMAS E. FENNELL
18 Jones, Day, Reavis & Pogue
2001 Ross Avenue
19 Dallas, Texas 75201
(214) 220-3939
20 and
HIRAM HOWARD WALDROP
21 Atchley, Russell, Waldrop & Hlavinka
22 1710 Moores Lane
Texarkana, Texas 75505
23 (903) 792-8246
and
24 PETER BIERSTEKER
Jones, Day, Reavis & Pogue
25 Washington, D.C.
1 ALSO PRESENT: MARK HALL
CHARLES MURRAY
2
FOR THE DEFENDANT, GEORGE L. MCWILLIAMS
3 Brown & Williamson Patton, Haltom, Roberts,
Tobacco Corporation: McWilliams & Greer, L.L.P.
4 700 Texarkana National Bank, Bldg.
Texarkana, Texas 75504
5 ( 903) 794-3341
6 ALSO PRESENT: KATHLEEN GALLAGHER
MICHELLE BROWDY
7 STEVE MCCORMICK
8 FOR THE DEFENDANT, LAWRENCE LOUIS GERMER
Philip Morris, Incorp.: Germer & Gertz, L.L.P.
9 805 Park Street
Beaumont, Texas 77704
10 (409) 838-2080
and
11 HIRAM HOWARD WALDROP
ATCHLEY, RUSSELL, WALDROP &
12 HLAVINKA
1710 Moores Lane
13 Texarkana, Texas 75505
(903) 792-8246
14 and
MARILYN K. SCANLAN
15 Fulbright & Jaworski, L.L.P.
1301 McKinney, Suite 5100
16 Houston, Texas 77010
(713) 651-5151
17 ALSO PRESENT: JOHN SCARBORO
18 PAUL DIESETH
TOM STOEVER
19 MIKE HALL
JACK MARONEY
20 MARY JO STAMM
TOM CUNNINGHAM
21
FOR THE DEFENDANT, JOHN E. FISCTT
22 Liggett Group, Incorp.: Kasowitz, Hoff, Benson & Torres
700 Louisiana, Suite 2200
23 Houston, Texas 77002
(713) 220-8800
24
25
C. FRANK MCMILLAN (409) 654-2805 or (409) 287-3705
1 FOR THE DEFENDANT, ROBERT A. GWINN
Lorillard Tobacco Co. Gwinn & Roby
2 Incorporated: 1201 Elm Street, Suite 4100
Dallas, Texas 75270
3 (214) 698-4100
4 ALSO PRESENT: J. WILLIAM NEWBOLD
CATHERINE CASTELLVCCIO
5
FOR THE DEFENDANT, NICHOLAS H. PATTON
6 United States Tobacco Patton, Tidwell, Sandefur & Patton
Company: 6500 Summerhill Road
7 Texarkana, Texas 75505
(903) 792-7080
8
ALSO PRESENT: PETER J. MCKENNA
9
FOR THE DEFENDANT, WINFORD L. DUNN, JR.
10 Hill & Knowlton, Dunn, Nutter, Morgan & Shaw
Incorp.: Suite 6 State Line Plaza
11 Texarkana, Arkansas 71854
(903) 793-5651
12
FOR THE DEFENDANT, MARK E. LOWES
13 Council for Tobacco WILLIAM KEY WILDE
Research-USA, Inc.: Bracewell & Patterson, L.L.P.
14 711 Louisiana, Suite 2900
Houston, Texas 77002
15 (713) 223-2900
16 FOR THE DEFENDANT, LEA F. COURINGTON
Tobacco Institute, Gwinn & Roby
17 Incorp.: 1201 Elm Street, Suite 4100
Dallas, Texas 75270
18 (214) 698-4100
19 OTHER ATTORNEYS PRESENT: ANN K. RITTER
Ness, Motley, Loadholt, Richardson
20 & Poole
151 Meeting Street, Suite 600
21 Charleston, South Carolina 29412
and
22 QUENTIN MIMMS
TUCKER ALAN
23 Dallas, Texas
and
24 JIM HART
Williams & Bailey, L.L.P.
25
1 COURT REPORTER: C. FRANK MCMILLAN
P. O. Box 2664
2 Beaumont, Texas 77704
(409) 654-2805
3 (409) 287-3705
4
Proceedings recorded by stenograph shorthand; transcript
5 produced by CAT system.
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1 THE COURT: Thank you. Be seated if you will.
2 First of all, let me apologize about the weather.
3 Maybe some federal judges feel like they can control it, but
4 this is one that knows he can't. I do apologize for that.
5 I want to first thank everybody for coming down
6 here and for letting me assist you all in this matter.
7 The first thing I would like to do is introduce my
8 staff to you and tell you that they're willing to help each
9 and every one of you at any time. My secretary is acting
10 this morning as my Deputy Clerk, is Sherr'e Luke. You can
11 reach her when you call my Chambers. My Law Clerk is Greg
12 Cox, he's a Phi Beta Kappa from The University of Texas and
13 a lot brighter than I am, I think. I'm Wendell Radford.
14 I always wanted to know a little bit about the
15 judge before I had a hearing in front of him. So I can tell
16 you that I was born and raised out here at Nederland, Texas,
17 and did my undergraduate work at Lamar University and
18 graduated from The University of Texas Law School. I worked
19 for about five and a half years as an assistant to the
20 District Attorney, and then entered private practice and
21 worked as a partner in a defense, insurance defense firm for
22 over 20 years. I wanted to be a judge so badly, that I
23 served as a night court judge here in the City of Beaumont
24 for 22 years.
25 I'm board certified in both personal injury and
1 civil trial law, member of some foundations and an active
2 Episcopalian. I was appointed to the Bench here in 1990,
3 and have been involved in several complex litigation cases.
4 I'll be the first one to tell you that I'm just
5 equal to each and every one of you; and the only think I can
6 promise you is, to give you a flat playing field in this
7 matter.
8 With those announcements, I hope everybody has
9 picked up a copy of the Agenda. And I would like to take
10 the appearances of counsel at this time.
11 Frank McMillan is our court reporter, and I'm sorry
12 I didn't introduce him. Tammy Kotz, who's not here at this
13 time but is stranded someplace between Port Neches and
14 Beaumont, is my regular Deputy Clerk; and she'll be glad to
15 help you if you need that information. Any of you want to
16 get a copy of the transcript, it will give you all that
17 information that I've given you this morning.
18 On behalf of the Plaintiff, can you identify who is
19 going to make the arguments concerning the Plaintiff's
20 Motion to Compel?
21 MR. UMPHREY: Myself will, Your Honor, with the
22 assistants of Mr. Thompson.
23 THE COURT: For the record, let's show Mr. Walter
24 Umphrey for the Plaintiff and Mr. Greg Thompson.
25 On behalf of the Defendants have you had an
1 opportunity to reflect whether or not you want to pool your
2 times, otherwise I'm going to allow each of the 11
3 Defendants five minutes apiece.
4 I have received a note that J. Pultman, who is
5 apparently the attorney for the British Tobacco Company, is
6 stranded at the airport and nobody will drive him in.
7 So, if somebody here would like to volunteer to
8 represent them in the matter. Do I have a representative
9 from -- well. I don't think I do.
10 MR. MCCORMICK: Your Honor, my name is Steve
11 McCormick, and I'm here on behalf of American Tobacco and
12 Brown & Williamson. I believe that the B.A.T. motion that
13 relates to them specifically is the last thing on your
14 agenda, and I think that Mr. Pultman probably can get here
15 by then. I can speak for B.A.T with respect to these first
16 two motions, if that's necessary, Your Honor.
17 THE COURT: Thank you, sir, I appreciate it and
18 if -- Mr. Germer?
19 MR. GERMER: Your Honor, we have had an opportunity
20 to try to allocate our time and we've worked out a schedule.
21 We'll have several people talking in response to
22 the first motion; we'll have several people talking about a
23 general response, including myself; and then perhaps a few
24 individual Defendants' attorneys -- or a few individual
25 Defendants may make very brief comments.
1 THE COURT: Okay. I want to assure everybody here
2 that I have read thoroughly, at least twice, everybody's
3 motions and their exhibits and that you do not need, in
4 arguing your motions, if you would just please hit the high
5 points of it, I sure would appreciate it.
6 Mr. Umphrey, can I hear from the Plaintiffs, then,
7 in regard to your motion?
8 MR. UMPHREY: Yes, Your Honor.
9 By way of introduction, the principal players that
10 represent The State of Texas, Mr. Harry Potter, seated in
11 the jury box, is a Special Assistant to the Attorney General
12 of Texas. Harold Nix on my left from Daingerfield. Of
13 course, you know Greg Thompson with my office and John E.
14 Williams from Houston. Mr. Reaud called, got flooded out on
15 Delaware. I believe he'll be here later. John O'Quinn had
16 a previous commitment today and could not be here.
17 Your Honor, the history of this case, I think you
18 are familiar, is that these five Firms represent The State
19 of Texas. It involves an attempt to recoup tax money that
20 was spent on what we believe to be medical care under the
21 Medicaid provisions of the federal and state laws which
22 amounts to an excess of $400 million a year on behalf of
23 Texas alone.
24 The Tobacco Industry, in our opinion, is known as
25 "The King of Concealment." We filed a memorandum brief with
1 the Court setting out specifics in different cases all over
2 the country for the last 20 years as to their tactics and
3 various measures that they have used to avoid disclosure and
4 concealment of evidence regarding their product. They have
5 a long history of delay, intimidation and abuse. They
6 threaten the Court's ability to, through this delay process
7 and abuse process, to provide equal justice for all,
8 primarily in our case, of course, Texas.
9 We could have filed this case in any of 254
10 counties in Texas or any federal district in Texas, but we
11 selected the Eastern District. And we did that primarily
12 because of the Civil Justice Expense and Delay Reduction
13 Plan. The Court has operated under these since, I think
14 February of 1992, in which you're personally familiar and
15 deal with this Plan on a daily basis.
16 This Plan is not discretionary on behalf of the
17 Defendants. It has mandatory language, and it says
18 specifically what the duties and responsibilities are going
19 to be of any Defendant that appears in the Eastern District.
20 We brought this case here on a large part because
21 it reduces the opportunity for the Tobacco Industry to abuse
22 the discovery process. This circumstance -- and to my
23 knowledge, this is the first case that the Industry has been
24 in a federal court and faced with the, what I call "The
25 Plan." So far they've ignored it.
1 We are prepared and we have filed various summaries
2 of what each of these ten Defendants has produced under the
3 Plan since April of 1996, when Judge Folsom ordered them to
4 make their initial disclosures no later than June the 5th of
5 '96. In effect, they have ignored the Court's order and the
6 Federal Rules.
7 We're here today and we have filed a detailed
8 motion requesting specifications of which the Court's
9 familiar -- and I noticed that you don't want us going into
10 other than the high points of what we're requesting.
11 But, basically, Judge Folsom, in his venue order,
12 where we had the hearing in Texarkana on venue of this case,
13 said that an important part of his decision to keep the case
14 in the Eastern District rather than transfer it to the
15 Austin District was the Plan. That, in his opinion, that
16 the abuse process of discovery could be eliminated by the
17 use of this Plan in the Eastern District and they didn't
18 have the Plan where they requested this case be transferred.
19 The Industry is faced with making a full
20 disclosure, as you well know, on any issue that bears
21 significantly on anything that's pled or any defense that's
22 pled. We're probably talking millions of documents that
23 have been accumulated over a period of 40 years or more.
24 We're prepared to receive these documents in Beaumont under
25 some type of systematic orders of the Court.
1 I think the Court can see what would happen if the
2 Plan were not implemented or if the Defendants where allowed
3 to ignore or abuse the process.
4 The affirmative duties created by the Federal Rules
5 and, again, what I call "the Plan," call for a voluntary
6 disclosure, even though it's mandatory, on any issue that
7 bears significantly on any item that's pled or any defense
8 that's made. We went through the times of disclosure that
9 have previously been ordered by Judge Folsom and ignored.
10 We have not had one document presented to us by any of the
11 ten Defendants.
12 Yesterday at noon was the first time that any
13 Defendant, RJR, made any attempt to identify any document
14 they claimed to be privileged that was hand-delivered to our
15 Firm yesterday. This is the first time that we've had
16 anybody claim privilege on any document since we filed the
17 case. They've ignored the process, they're doing what I
18 call the "Cafeteria Plan," where they can go down the line
19 pick and choose and give us what they want to and not give
20 us what they want to. In effect, what they have done is
21 refer us to -- or requested that we submit ourselves to the
22 jurisdiction of the state court in Minnesota and enter into
23 certain confidentiality agreements that the lawyers in
24 Minnesota have. I don't think that's the intent of the
25 Federal Rules. I think that we have a right to handle our
1 discovery under the rules that apply in the Eastern District
2 of Texas where we elected to file this case. We have a
3 right to go under the Discovery Process, as well as the
4 Procedural Rules, as well as the Federal Rules of Evidence.
5 I have no idea what the rules in Minnesota are and could
6 care less.
7 I assure you, Your Honor, unless we're ordered to
8 do so by the Court, we are not going to subject the
9 sovereignty of The State of Texas to jurisdiction in
10 Minnesota, nor are we going to enter into any
11 confidentiality agreement whatsoever. This matter involves
12 the public health of Texas, it involves the public welfare;
13 it involves taxpayers' expenditures of approximately $400
14 million a year. We have no intent to attempt to keep any
15 matter confidential that affects Texas. As the Court well
16 knows, we're not required to file a discovery request, but
17 it's mandatory on their part to disclose.
18 As the Court knows, that they're obligated under
19 the Rule to give us the name, the address, telephone number
20 and so forth and a brief summary of the substance of the
21 information known by that particular person who may have any
22 knowledge that bears substantially on our issues. They have
23 completely ignored this. They have furnished some names,
24 they have furnished a few organizational charts of the
25 corporation, they have given no telephone numbers and no
1 addresses, any of the ten Defendants. They've completely
2 been selective, extremely selective, and absolutely ignored
3 this provision of the Plan.
4 They're required, and I read into this rule, at
5 their own expense they're required to give us a copy of all
6 of the documents that bear significance. We have no
7 documents, as I called to the attention of the Court
8 earlier.
9 This is going to be a substantial expense. But the
10 history of the Tobacco Industry is that, they spend
11 substantial dollars in defending these cases over the last
12 forty years. These are multibillion-dollar industries.
13 They are defending these cases as a unit. They coordinate
14 all of their efforts as a group, as well as individually.
15 The expense involved in producing these documents and
16 bringing them to Texas weighed against the welfare of the
17 state and the citizens of Texas in tax payer dollars is
18 nothing to these corporations.
19 As I mentioned, there's only one company who has
20 claimed any privilege whatsoever, that was RJR yesterday. I
21 think the Court could very well interpret this as being an
22 absolute waiver of claiming any privilege on any document
23 that they may produce in the future. And there's case law
24 to back that up.
25 The Defendants admit that they have not literally
1 complied with the Plan itself. All they've done, at a
2 meeting that we had in June in Houston, was say, go north to
3 Minnesota, subject yourself to the jurisdiction of a foreign
4 state court, and whatever's there you're welcome to review
5 it and use it in your case. That is discovery abuse. Texas
6 has no intention of subjecting itself to that type of
7 treatment, and we're relying on the Court to enforce the
8 rules of this Court.
9 And the nature of this case involving these
10 companies, as large as they are, the dollars that are
11 involved in damages to Texas, if the Court does not strictly
12 comply and order compliance with these rules, you might as
13 well tear the pages out of the book. There's no reason that
14 these tobacco companies, because of their wealth, should be
15 treated any differently in this Court than any other company
16 corporation or individual. They stand before you subject to
17 the same rules that anyone else does, whether it's an
18 injured refinery worker or a small corporation. We are here
19 to ask strict compliance with the Plan as implemented in the
20 Eastern District.
21 Texas has had no opportunity to provide any input
22 at all into the Minnesota depository. We weren't asked, we
23 don't receive that much cooperation, nor do we ask for
24 cooperation from the State of Minnesota, because we're not
25 required to do so. We have a right to prepare our own case,
1 under our own rules, in our own jurisdiction, without the
2 confidentiality agreements.
3 The Minnesota action does not involve a RICO count
4 such as our case, nor have they pled the federal antitrust
5 statute. In addition, Minnesota does not have a common law
6 public nuisance allegation, a breach of express or implied
7 warranty, they have not pled strict liability for conduct,
8 or any abnormal dangerous activity such as we have in our
9 complaint. Their issues are completely different,
10 especially in regard to the RICO and the antitrust
11 allegation. We have a provision in our complaint that
12 allows us to prove our damages statistically under the
13 federal antitrust law that's a very important part of our
14 case. We have the rules that require mandatory disclosure,
15 and we certainly expect it.
16 We've covered the waiver of privileges. I would
17 ask the Court to give that matter special attention, Your
18 Honor. And if you require a brief from the parties, we
19 would be more than happy to do so. There's also an
20 important case out of the state in New York in the federal
21 supplement that says that the Attorney General of the State
22 of New York has a duty to protect the public health of the
23 citizens of New York, which would relate to us, which say
24 that, in effect, that any documents produced should not be
25 under any kind of confidentiality or privileged agreement.
1 That's cited in our brief that we submitted.
2 In summary, Your Honor, we're saying that whatever
3 documents were produced in Minnesota should be produced in
4 Texas, in addition to the RICO antitrust and additional
5 allegations which we have that are not included in the
6 complaint in Minnesota. We're requesting copies of all of
7 these documents. We feel that Beaumont has the facilities
8 to handle these. We are prepared to receive them in an
9 orderly manner. We are requesting the data base index be
10 produced that was the subject matter of a United States
11 Supreme Court decision recently, involving the Minnesota
12 case. There are two of these indexes. They're referred to
13 as 4(b) and 4(a), and we're requesting both of those. This
14 will save a great deal of time and expense, which is the
15 intent behind the Plan itself. We're certainly requesting
16 copies of all documents that bear significantly on any claim
17 or defense.
18 I would think it would be reasonable, Your Honor,
19 that any document that has been produced in any state by
20 these Defendants in the Medicaid Litigation should be
21 produced in Texas.
22 We don't have access now, because of these
23 confidentiality agreements that they've secured all over the
24 country, to documents produced in other states. If they're
25 material to those states and if they're important enough to
1 get a confidentiality agreement, certainly they bear
2 significantly on our pleadings.
3 We have prepared, Your Honor, a proposed order that
4 we will file with the Court today, if you request, outlining
5 exactly what we feel that we're entitled to under our local
6 federal Plan.
7 The Eastern District was one of the first districts
8 to implement the Plan. It's a model for the nation. It
9 will absolutely eliminate the smoke screens, the delay, the
10 intimidation, and the cost involved to prepare these cases.
11 As the Court well knows, there are 15 states that currently
12 have cases on file. In the absence of confidentiality
13 agreements and mandatory disclosures, we think this Court
14 can do all of these states a great justice by speeding up
15 the process, saving money and making justice available if
16 the jury feels that appropriate.
17 To point out to the Court, that there's nothing
18 that these Defendants can stand up and say under this Rule
19 and the Plan that will give them any excuse for
20 non-compliance. The Plan does not provide for any type of
21 excuse, even if they haven't fulfilled the full
22 investigation of their case, or because it challenges the
23 sufficiency of another parties' disclosures, or even if the
24 party has made no disclosure, the other party such as the
25 state. None of these items, under the Plan, are any type of
1 excuse and there's none provided whatsoever. And there's
2 nothing in that Plan that says that they can ship us out to
3 another state 1,000 miles away and refer us to something
4 that some other lawyers have been involved in in preparing
5 that we have no knowledge.
6 You know, I think the position of the Tobacco
7 Industry over the years is pretty well summarized, and I
8 would like to read it to the Court. This item was
9 discovered in a letter written by the defense counsel for
10 RJR in one of their cases to the other defense counsel, and
11 basically here's what they said, and this is reflective of
12 their attitude, it says: "The aggressive posture we have
13 taken regarding depositions and discovery in general,
14 continues to make these cases extremely burdensome and
15 expensive for the Plaintiffs' lawyers, particularly their
16 solo practitioners. To paraphrase General Patton, the way
17 we won these cases was not by spending all of Reynolds'
18 money, but by making sure that the other SOBs spent all of
19 theirs."
20 By ordering the implementation with the Plan, you
21 can eliminate this, Your Honor. With the five law firms
22 involved in this case, it might take them a little longer to
23 run us out of money than it would some of them, but it's
24 certainly possible and that is not the intent of due
25 process.
1 In conclusion, Judge, in our memorandum brief that
2 we filed in support of our allegations of the Defendants
3 being -- continued concealment, I would like to make a
4 little short review where we feel that a critical question
5 is presented before the Court. This question being: can a
6 multibillion-dollar industry, because of its wealth, power
7 and influence, continue to addict and kill millions of
8 Americans, manipulate the legal system in such a way to
9 preclude an honest look at the industry and continue to have
10 the tax payers foot the medical bills for all of the
11 suffering caused by the intended use of its products?
12 Research shows a forty-year history of tobacco
13 litigation is filed with sickness, deaths and delay. The
14 hazards of tobacco have been used and caused a public health
15 crisis. The evasive and deceptive behavior of the Tobacco
16 Industry have been compounded by the evasive and obstructive
17 behavior in litigation. The gross disparity between the
18 resources of the parties and the use of the great wealth
19 have made many questions whether our system of justice can
20 work in this situation. Beginning early and through today,
21 the Tobacco Industry has never flinched at spending whatever
22 amount necessary and doing whatever amount necessary to
23 stifle adverse litigation.
24 Texas respectfully request that it's time to
25 enforce the Plan. This is an issue that we've never been
1 faced before with. One absolute complete disclosure on
2 significant issues can delay and safe a fortune in the
3 future for various states as well as Texas and see that due
4 process is fulfilled. Thank you, Your Honor.
5 THE COURT: Mr. Thompson.
6 MR. THOMPSON: Nothing, Your Honor.
7 THE COURT: Thank you. Mr. Germer.
8 MR. GERMER: May it please the Court.
9 THE COURT: Yes, sir.
10 MR. GERMER: Larry Germer representing Philip
11 Morris.
12 For almost 30 years I've been in the difficult
13 position of having jury cases against Walter, and he always
14 makes great jury arguments that puts him over the top, and
15 that's sort of what we've heard again today.
16 The Court, I know, will listen to the legal
17 arguments and listen to the arguments and briefs about the
18 issues we're here about as opposed to the, I think,
19 unwarranted attacks on the industry and their attorneys.
20 The Tobacco Litigation that was mentioned is really
21 no stranger to this area. In the '80s, as the Court knows,
22 there was substantial litigation here and in Houston, and
23 Walter Crawford and I and a number of local attorneys were
24 involved. We had cases pending in Judge King's Court, Judge
25 Thomas' Court against Bill Townsley and Bill Watkins, and we
1 litigated fairly -- it was tough litigation, but it was fair
2 litigation. I've always felt like with Bill Watkins that we
3 were the ones that were out gunned and outmanned, but it was
4 handled like any other major litigation should have been
5 handled. And we know it will be handled that way in this
6 litigation.
7 The Plaintiff in the -- Plaintiffs in the
8 litigation in the '80s, it is true, ended up dismissing
9 almost all of their cases. But that, I will submit, was
10 because they found out they had weak cases that they could
11 not win.
12 The issue before the Court is really how we're
13 going to go about discovery, what about the document
14 discovery, what about the witnesses, what kind of process
15 are we going to use to accomplish this. The Court, I can
16 see from the Agenda, is already thinking about having the
17 parties meet and discuss issues, which we applaud. We have
18 been seeking that type of cooperation through letters and
19 verbally for a number of months.
20 Your Honor, I will speak and try to cover for all
21 Defendants some of these general issues that have been
22 raised. Paul Dieseth, an attorney from Minnesota, will
23 speak briefly to help describe to the Court the depository.
24 Jim Scarboro will speak briefly on some of these general
25 issues. Walter Crawford will respond on issues raised about
1 the data base what's called 4(b) and 4(a). It's possible
2 that there would be very brief statements by some individual
3 Defendants, if they feel it's necessary.
4 The Court knows from the papers that this case
5 involves a petition that's 130 pages in length, that covers
6 allegations of conduct over 110 years. It's about as broad
7 allegations as one could imagine. It involves, and will
8 involve, on both sides, both sides, Plaintiff side and
9 Defense side, ultimately, millions of documents, dealing
10 with millions of documents. It will involve, potentially,
11 many, many, many witnesses. Our position is, that all of
12 the Defendants have made a good faith effort under the Plan
13 to make a response under the Eastern District Plan such as
14 it could be made given this type of case.
15 It goes without saying that every document and
16 every witness cannot be listed at this point. I could
17 paraphrase what the Plaintiffs have said in their papers
18 responding to our motion and say to you, "but the fact is,
19 however, that the Defendants are subject to the laws of
20 time, space and physics and simply cannot complete
21 everything in an impossible short period of time." Of
22 course, that's what The State is saying as an excuse for why
23 they haven't done some things. The State also says in a
24 case of this complexity and scope it is simply not possible
25 for The State to file all documents and name all persons in
1 the initial disclosure. I think that goes without saying.
2 This Court is aware that other major cases
3 involving documents, sometimes it's millions, have been
4 handled by courts in the Eastern District and this Court has
5 been involved in them. The Norplant Litigation, handled by
6 Judge Schell, for example, involves literally millions of
7 documents potentially; and the parties, with the Court's
8 help, worked out a plan to accomplish that discovery. That
9 also happened, for example, in the Xerox case that the late
10 Judge Hall handled. But this is not unusual to have to work
11 out how this will all be accomplished in a case of this
12 nature.
13 I would tell the Court, that with the offer that's
14 made of utilizing the Minnesota depository, that is the
15 quickest way to make available to the Plaintiffs many, many,
16 many millions, in fact, of documents that are already
17 indexed, usable, both on -- as a matter of paper and as a
18 matter of computers.
19 I think I've heard one argument that this Court
20 could set something up here and then it could perhaps help
21 people in other states. Well, the fact is, as we're going
22 to talk about a little bit more, that's happened already in
23 Minnesota.
24 Briefly, the Minnesota depository, at this time,
25 has about 7.9 million documents in it. It's anticipated
1 that it will have one million --- excuse me, 15 million or
2 more documents in it. It was set up at a great expense, it
3 works, it covers and it involves a lawsuit that is factually
4 similar to this case. It is true, as Mr. Umphrey says, that
5 there's a few allegations in this case that are not in that
6 case; but if you look at the facts that are involved, the
7 issues that are involved, it's the same.
8 Now, we're not just talking about Minnesota and
9 Texas. There are approximately -- well, exactly, I guess,
10 15 states with similar cases. And I would ask if I could
11 get some help, if we have it. It's shown on a map for the
12 Court and opposing counsel to see. But we've got 15 suits,
13 they're marked basically by the yellow color. There are
14 other suits that are related-type suits that are already in
15 existence. There are also other suits that involve punitive
16 class action claims that have evolved since the Castano
17 opinion. There are other suits, we understand, that are
18 going to be filed; so I don't know what the right number is.
19 But as the Court can see, you already have these suits all
20 over the country and there's more coming; so conservatively
21 we can say we're going to end up with perhaps 20 of these
22 suits.
23 There has to be a solution. If we visualize 15
24 million or plus documents, it cannot be, I would hope for
25 the sake of this process, that we're going to produce 15
1 million documents in each of these states. As it happens,
2 we already have this process going on in Minnesota; and it
3 certainly makes sense to build on that process.
4 I tried to do a calculation as one of our late
5 Presidents, I think, did. If you take a stack of documents,
6 at 15 million documents and you multiply that by 20 or so
7 states, the stack, it may not quite reach the moon, but it
8 could cause an eclipse of the moon. So I think we have to
9 be conscious of that.
10 The depository, Your Honor, it is up, it's running,
11 it's working; we would be pleased if you or Judge Folsom
12 wanted to go see the depository. We would be pleased to
13 have Your Honors look at it, see what's involved. We would
14 be pleased to have the Plaintiffs attorney; and, perhaps,
15 they're already making arrangements to do this. But we
16 would please to have them come up and see the depository.
17 A brief word about the use of depositories. I
18 assume that the Plaintiffs are not saying that there's
19 something wrong with the use of a depository. If you look
20 at the law, you find that there's at least 120 or 140 cases
21 that have talked about using depositories and about how that
22 is an efficient, proper way to do business. The manual for
23 complex litigation talks a lot about use of depositories and
24 how that can be helpful to the parties. There's one case
25 actually that makes the point that, once you have
1 depository, you don't have to set one up in each state.
2 That, of course, would not make any sense at all. In
3 Castano, one of the opinions by the District Court in
4 Castano refers to the fact that Plaintiffs in that case,
5 and, of course, some of those same attorneys are here, were
6 working on their own depository. So, I assume that the
7 Plaintiffs do not oppose, in principal, the use of a
8 depository, particularly one that's already indexed and
9 prepared.
10 So, the question then is, what about using the one
11 in Minnesota that's in existence? What you have heard today
12 and what I read in the briefs was a straw man. The
13 Plaintiffs continue to say The State says, "We're not going
14 to subject ourselves to the sovereignty of Minnesota. We're
15 not going to be controlled by some judge up there," et
16 cetera, et cetera. We have never taken the position that
17 that's the way it has to be. We have taken the position
18 from the beginning, let's use what we have and let's make it
19 available, let's talk about it, let's work out the details,
20 let's work out -- attempt to work out solutions to the
21 problems that are raised.
22 We believe that it should be worked out such that
23 Judge Folsom and Your Honor maintain control of this
24 litigation. They posture as if we're trying to avoid that
25 or trying to create some monster out of state, but that's
1 not what we're trying to do. We're trying to talk with the
2 Plaintiffs about making this work. However it works out,
3 it's going to take some negotiation and thought; but
4 certainly we would conceive that the Court here would
5 control privilege issues, relevance issues, discovery issues
6 in general, trade secret issues, confidentiality and
7 protective orders mentioned by Mr. Umphrey. Certainly the
8 Courts here would make those calls. We disagree with his --
9 The State's edict that they're not going to agree to any
10 type of Confidentiality Order. But, however, that will have
11 to be worked out after negotiations and perhaps by rulings
12 from this Court. But we don't suggest that all of that gets
13 controlled in Minnesota.
14 So, what we do suggest is, that we have documents
15 available, indexed for use that could be made available and
16 we could work out a structure so that the Court here will
17 control the litigation here. All of this has to be worked
18 out, it has to be coordinated given where we are in
19 Minnesota with orders up there.
20 So, there really is a solution if the parties, as I
21 hope the Court is suggesting by its Plan, if the parties can
22 talk about it, agree where they can, not agree where they
23 can't. But, I think, going down this line, there's a
24 logical way to get about getting documents out there.
25 With regard to witnesses, all of the Defendants
1 listed witnesses as best they could at this time. Again,
2 with a petition as far reaching as it is, it's a little
3 difficult to kind of -- to figure out how to answer,
4 specifically, each of these. It's a little difficult to
5 know who to list. But each Defendant made an effort to list
6 who they could. It's certainly a good faith beginning.
7 It's certainly, the Defendants, if one compared, and we're
8 not supposed to do that; but if one compared what the
9 Defendants did with what The State did, the Defendants
10 clearly did a lot more in terms of their disclosure than The
11 State did. The Defendants, by and large, tried to disclose
12 people who were involved as officers, who were involved by
13 categories that we thought would be of interest to the
14 Plaintiffs. We disclosed people that have been involved in
15 other cases. So, we feel like we've made a more than
16 reasonable effort to comply with the Plan as best we could
17 in this type litigation.
18 Your Honor, with the Court's permission, I would
19 like to ask at this time, and my remarks are essentially
20 concluded; but I would like to ask that Mr. Paul Dieseth be
21 permitted to speak just briefly, to give the Court a bit
22 more detail about the Minnesota depository. And after Mr.
23 Dieseth, then perhaps Jim Scarboro would want to say a few
24 words and then Mr. Crawford.
25 THE COURT: Mr. Dieseth.
1 MR. DIESETH: Good morning, Your Honor.
2 THE COURT: Yes, sir.
3 MR. DIESETH: Paul Dieseth from the Law Firm of
4 Dorsey & Whitney in Minneapolis, Minnesota. I was invited
5 to come here today to brief the Court on the depository in
6 Minnesota and try to put some flesh on the bones of the
7 facility up there.
8 A depository was formed in late 1995. A site was
9 selected within a few minutes of downtown Minneapolis. At a
10 cost of about $140,000, an office complex was fitted for the
11 purposes of the document production that is taking place.
12 It is about a 15,000 square foot facility. There are --
13 within that facility there are separate document review
14 rooms for the Plaintiffs and for the Defendants. There is a
15 separately enclosed and secure copy facility, a copy set up,
16 that is used to copy all of the documents that are requested
17 by the parties. There is a loading dock at the rear of the
18 facility for the deliveries of the documents by truck that
19 occurs.
20 The bulk of the facility consist of a large secured
21 area where each of the Defendants and the Plaintiffs have a
22 separate secure facility in which all of their documents are
23 stored. And even within those spaces there is a separate
24 facility for the more confidential, highly trade secret
25 documents that the Defendants are producing in Minnesota.
1 There's a sophisticated electronic security system in place
2 that protects the entire building from intrusion.
3 The building, the depository is staffed by a
4 company called "Smart Legal Assistants." There are 12
5 full-time employees that are on-site by Smart. They verify
6 the accuracy of the boxes that we've been talking about;
7 they sort and they store the documents themself; they
8 provide the documents to the parties; they administer the
9 requests that come in from the parties; and they ensure that
10 the copies are provided to the parties as requested.
11 The copy center that is also located within the
12 depository is staffed by a separate company called the
13 "Merrill Copying Service." They function to copy the
14 documents that are being requested by the parties and then
15 they follow a control check in order to ensure the parties
16 get what they have requested.
17 As noted before, Your Honor, there are 220 document
18 requests outstanding in Minnesota that Defendants are
19 responding to. The document requests cover an incredibly
20 broad range, I believe, of concepts and factual allegations;
21 and the Plaintiffs are supplementing these document requests
22 continuously, and those requests are being responded to by
23 the Defendants.
24 This document production effort that's taking place
25 in Minnesota is a staggering, substantial effort. Philip
1 Morris, who our firm represents, has spend over $1 million
2 per week in providing the documents into the depository.
3 There's over 150 full-time attorneys, legal assistants,
4 document clerks and secretaries who are working on the
5 process of putting these documents into the Minnesota
6 depository.
7 As indicated to the Court, about 7.9 million pieces
8 of document have already been provided. Those are stored in
9 about 3,600 Banker's Boxes which are stored on shelves in
10 the depository. Philip Morris alone produced 1.2 million
11 pages in the depository on September the 3rd, filling about
12 500 boxes of documents. The total documents that are left
13 to be produced are about 7.3 million pages, perhaps more
14 than that as we go along and finalize the production. The
15 Court in Minnesota has ordered that document production be
16 completed by all Defendants by December the 31st of this
17 year.
18 The mechanics of the depository is relatively
19 simple and efficient. The production boxes that are placed
20 into the depository are accompanied by document indices.
21 Those indices are capable of being inputted into a computer,
22 into a data base, and they can be susceptible to computer
23 searches by the Plaintiff, or by any party for that matter.
24 Michael Serice (phonetic), as I understand it, submitted an
25 affidavit yesterday, Your Honor, that -- he is the lead
1 counsel for the Minnesota Plaintiffs. And in that
2 affidavit, he himself indicated how helpful the 4(b) Index,
3 which is the document index, what kind of help that can
4 provide to them in searching the depository for documents
5 that are helpful.
6 The depository is open for review from 8:00 o'clock
7 in the morning to 8:00 o'clock at night. When the parties
8 wish to look at documents, they're escorted to the review
9 rooms, they submit requests for certain boxes from the
10 depository staff, who then removes those boxes from the
11 shelves and brings them into the parties. The parties are
12 then given the option of requesting immediate on-site
13 copying. That is what the Plaintiffs do in Minnesota. The
14 Plaintiffs then are in the depository while the copies are
15 provided to them that very same day. They can then take the
16 documents back with them to their offices, and the boxes are
17 then refiled by the depository.
18 To date this depository process has operated
19 extremely well. The Plaintiffs are caught up with the
20 production, they have managed to review all of the boxes
21 that have been produced and have been made available to
22 them. The depository and the parties have cooperated to
23 ensure the continued efficient operation of the facility.
24 We would certainly welcome people from Texas to come to
25 Minnesota. It may be a little bit cooler there in the
1 winter, but we're very hospitable and we could certainly
2 make this depository work for everyone.
3 I believe now Mr. Scarboro has some comments he
4 would like to make.
5 MR. GERMER: Your Honor, one last point. In
6 addition to these documents that are there and are going to
7 be there in Minnesota within a relatively short time, which
8 we believe cover all of the legitimate requests, legitimate
9 requests that the Plaintiffs in this case will have for
10 documents, but in the event that that's not enough we
11 certainly don't suggest that the Plaintiffs are limited to
12 that depository. We would anticipate that the Plaintiffs
13 would get these documents, review them, would make requests
14 of us of additional documents, indicate to us that they felt
15 they were entitled to additional documents; and, of course,
16 this would be dealt with like in my other case. If we
17 didn't think they were relevant or otherwise appropriate, we
18 would be coming to Your Honor or Judge Folsom to deal with
19 it. But certainly this process would in no way limit the
20 right of The State of Texas to whatever documents it's
21 legally entitled to. And with that, I would like to
22 introduce Mr. Scarboro for a few brief comments.
23 MR. SCARBORO: Your Honor, Jim Scarboro
24 representing Philip Morris. Good morning.
25 I just wanted to add one comment, really, to what
1 Mr. Germer has said, because he's covered things pretty
2 thoroughly, from my perspective. But at the present time,
3 as I understand it, there are some negotiations going on
4 whereby the State of Washington is going to participate in
5 the depository and we also understand that other states may
6 be interested in doing so as well.
7 I do not yet -- I don't have a copy of any final
8 agreement. I understand it's the subject of written
9 negotiation now. Perhaps the Plaintiffs -- or perhaps one
10 of the attorneys of the Plaintiff has talked to the State of
11 Washington about this, I don't know. But under the Plan, as
12 I understand it, The State will retain jurisdiction over the
13 documents in Washington, in the sense that issues involving
14 privilege, confidentiality and so forth will be judged in
15 Washington as the production for the State of Washington.
16 That negotiation occurred, as I understand it,
17 because The State called the lawyers for the Attorney
18 General in Minnesota and requested that they have access to
19 the depository, and the Plaintiff has agreed in principal.
20 And there's a three-way negotiation going on now among the
21 Plaintiff, the Defendants and The State over how to
22 accomplish that. I also think that it may be possible that
23 other states are interested as well, perhaps Arizona.
24 So, there is going to be an effort going on to try
25 to bring all of this together in a way that makes sense and
1 is the most efficient for everyone involved.
2 Do you have any questions, Your Honor, about the
3 depository at this stage in the game?
4 THE COURT: No, sir, not at this time.
5 MR. SCARBORO: Okay. Thank you very much.
6 THE COURT: Mr. Crawford.
7 MR. CRAWFORD: May it please the Court, Walter
8 Crawford for R.J. Reynolds.
9 Your Honor, I'm going to address, in a very short
10 length of time, the issue about the data base, the data
11 basis of the various Defendants in this case. To start off,
12 I want to read a quote from a case that I think everybody
13 will be familiar with; and it goes like this: "Discovery was
14 hardly intended to enable a learned profession to perform
15 its functions either without wits or on wits borrowed from
16 the adversary." Hickman versus Taylor, 329 U.S. 495 at 516,
17 1947. The State apparently disagrees with this. Although,
18 the Defendants have offered The State a comprehensive and
19 organized collection of relevant business records and
20 documents, The State has refused to look at those documents.
21 Instead, The State wants access to certain Defendants'
22 attorney work product in the form of litigation support data
23 bases.
24 I have a real, real -- this is a problem with this
25 issue, as I'm sure the Court will have and every lawyer has.
1 Because when you start talking about production of
2 information that you have developed to defend cases, to run
3 a case, to ask questions that involve mental impressions and
4 your work product, that information should be protected.
5 And you shouldn't have to turn your file over to the other
6 side in any lawsuit, and that's basically what we're talking
7 about here. We're talking about data bases that reflect the
8 opinions, mental impressions of attorneys who have arranged
9 documents in a certain way and want to keep that information
10 from being produced. And that's not something that's very
11 foreign or something that the Court should get upset about,
12 us trying to comply with discovery because it's something
13 that every lawyer expects and every Court will honor.
14 The problem with production under the Plan is this:
15 you are required under the Plan to produce information which
16 bears substantially on the issues in these cases. The Plan,
17 however, does not contemplate in any way that we should be
18 required to turn over work product.
19 Now, we have filed an affidavit and a brief, and
20 I'm sure the Court has looked at that. And we believe that
21 that brief and that affidavit adequately covers the issues
22 and that if the Court would considered that, you can see
23 that we should not be required to turn over these data
24 bases.
25 Now, the litigation data bases consist of
1 attorneys' notes, comments, evaluations and summary of
2 information selected by counsel after reviewing Defendants'
3 business records. They're not the Defendants' business
4 records, they're not corporate documents in the full text
5 form in a computer data base, and they do not list or index
6 all documents in the Defendants' file cabinets.
7 So, the litigation data bases are non-evidentiary
8 materials created by defense counsel for litigation support
9 and electronically captured instead of being written down,
10 typed up, or put into trial or preparation notebooks.
11 Because the Defendants believe that the litigation data
12 bases are privileged, Defendants are under no duty to
13 disclose them under the Plan.
14 And so, our bottom line, Judge, is, is that those
15 documents do not bear significantly on the issues because
16 they're privileged and they shouldn't be turned over.
17 Now, Your Honor, we received an affidavit from Mr.
18 Serice and we got that today for the first time. We believe
19 that there's some inaccuracies in there. And we would like
20 the opportunity, if we could, to respond to this and file
21 something in short order, probably by tomorrow, if the Court
22 would allow us to do that.
23 THE COURT: You may, by Monday.
24 MR. CRAWFORD: I'm sorry?
25 THE COURT: You have until Monday, if you'd like.
1 MR. CRAWFORD: Your Honor, one other point I wanted
2 to cover before I sit down. There was a case, of course, in
3 Minnesota that you've heard quite a bit about that one of
4 the issues in that case involved the data bases. It's
5 pretty clear and we've cited some cases for the proposition
6 that even though there is an opinion up there, which we
7 certainly disagree with, we, nevertheless -- and it's a
8 Fifth Circuit case on this, it's cited in the brief that we,
9 really in the Shield's case, which really will allow us to
10 come back and assert that there's been no waiver as a result
11 of the opinion up there. And, of course, that particular
12 decision in Minnesota was decided under Minnesota law. We
13 believe that the Fifth Circuit and federal law will govern
14 here and that, of course, that's something that the Fifth
15 Circuit will have to look at if that issue comes up.
16 Another point and then I'm going to sit down. I
17 think I've said probably too much. But the Plaintiffs in
18 this case, in addition to not going and looking at the stuff
19 that we offered to them to look at, which -- and I believe
20 we've also offered to let them use our index to get through
21 it a little bit more quickly; but the one thing that they
22 have not done here, they have not established need for these
23 documents, which I think is required with regard to any kind
24 of work product.
25 So, with those general parameters of work product,
1 I think the Court, in this case, should certainly order that
2 the data bases are off base and we should not be required to
3 produce them.
4 Does the Court have any questions?
5 THE COURT: No questions.
6 MR. CRAWFORD: Thank you.
7 THE COURT: Mr. Umphrey, you all have some time
8 left on rebuttal if you would like to make any comments.
9 Mr. Thompson.
10 MR. THOMPSON: Your Honor, just briefly. Greg
11 Thompson for The State of Texas.
12 Your Honor, there was some of us in this room that
13 were here when the Plan was prepared and were on the
14 committee that established the Plan and there were very
15 specific reasons for the Eastern District being an early
16 implementation district and for having a very, very strict
17 Plan, with strict interpretations. The "no excuses" part
18 was put in there specifically by the then Chief Judge of the
19 Eastern District to make sure that no party could come in
20 and claim "we don't have to comply with the Plan because
21 they didn't," or because "some other thing and we haven't
22 investigated enough." The Plan must be complied with.
23 The privilege Mr. Crawford talked about, "Well,
24 Your Honor, we don't have to talk about producing privileged
25 documents," the Plan says you do have to produce a
1 privileged index. You must say these are the documents that
2 we claim are privileged, these are why we claim these
3 documents are privileged, so that we have an opportunity to
4 then go to the Court and say, "Your Honor, let's examine
5 this privilege claim." That's absolutely required by the
6 Plan and, quite frankly, it was required on June 5th, 1996.
7 And the only person that has done anything was RJR, who did
8 it on September 25th, 1996. And quite frankly, we believe
9 this Court could argue that those privileges have been
10 waived because of non-compliance with the Plan.
11 These affidavits, we haven't seen these affidavits.
12 These were filed under seal that they have filed. They
13 haven't given us a copy of these affidavits. These are the
14 companies that come up and tell you, "we're being compliant,
15 we're trying to give them all of the information they want."
16 We haven't seen these affidavits, they haven't shown them to
17 us. The data bases they're talking about, at least the 4(a)
18 and the 4(b) indices talked about by Mr. Serice's affidavit,
19 are data bases that have been produced to the Plaintiffs in
20 the Minnesota Litigation, have been given to the Plaintiffs.
21 And in their effort to be cordial and to say "we've produced
22 them all, yes, Your Honor, but maybe we don't have to give
23 them the data bases here in Texas," well, that's just not
24 right. We believe they bear significantly on litigation
25 aspects here in Texas. They've produced them in Minnesota
1 and they ought to produce them here in Texas.
2 They talked talk about "go north to Minnesota," and
3 they've got their map of Minnesota. Quite frankly, Texas is
4 not Minnesota. Texas is at the heartland of this nation.
5 And what they want to tell us is first the situation is: "In
6 Minnesota we've done all of this." Well, first let me point
7 out to you, Your Honor, that in Minnesota what they did was
8 appeal every order of the Court, including to the United
9 States Supreme Court, and only then did they produce the
10 documents they were required to produce. In our case, Your
11 Honor, here in Texas, it would be an extremely disadvantage
12 to the Texas lawyers if we had to subject ourselves to
13 documents not here in Texas, not where we could look at them
14 and not where we could review them, not where we could
15 prepare our case but in Minnesota and send five lawyers up
16 to Minnesota to live for the next year and a half, or the
17 next year to be reviewing these documents. These documents
18 should be produced here in Texas.
19 They talked about other states. I'll tell you that
20 as recently as Wednesday in Mississippi, the Mississippi
21 Court ordered them to produce the documents in Mississippi
22 not in Minnesota, but in Mississippi. Other states are not
23 aligned in agreement to use the Minnesota depository. Texas
24 is not aligned in an agreement to use the Minnesota
25 depository. The documents, absolutely under the Plan,
1 should be produced here.
2 We can't even talk about some of the documents,
3 Judge, that we get with other lawyers because protective
4 orders have been issued. We've got counsel that we can't
5 even talk to about documents because they said -- because I
6 would be violating protective orders. It would be a huge
7 disadvantage to The State to be basically, the Defendants
8 are going to argue, "we are going to self-select the
9 documents you receive under the Plan." Because the Plan
10 does state that they have the affirmative duty to review the
11 documents that bear significantly on any claim or defense.
12 So, they're going to self select the documents, No.
13 1; but we know they would do that in good faith.
14 Second, they're going to self-select The State
15 where they are going to house the documents in; then they're
16 going to self-select the locations of the documents. And
17 it's not fair to the State of Texas to reduce us and reduce
18 our lawyers to living in Minnesota when we have to live with
19 these documents. We have the burden of proof on liability;
20 we are the ones who are going to have to convince a jury of
21 our claims.
22 The Defendants have had these documents for 20, 30
23 years, they've lived with them for that time, we're going to
24 have them for one year, we need them here in Texas, the Plan
25 contemplates that here in Texas; and it would be a huge
1 disadvantage to us, Your Honor, if that Plan was not
2 strictly enforced.
3 And the Plan -- quite frankly, I can disagree with
4 Mr. Germer in good faith, I've got exactly what they did.
5 The Plan calls for three simple things. No. 1,
6 here's the name and address and telephone numbers of persons
7 who have significant knowledge; and give a brief, fair
8 summary of what they show. And I'll tell you, they didn't
9 do that. And maybe they will do it, but they certainly
10 haven't done it yet.
11 Secondly it says: "Provide a copy of all documents
12 that bear significantly on," and they haven't done that at
13 all.
14 And then thirdly it says: "Provide insurance for
15 inspection." And they haven't done that either.
16 So, realistically, Your Honor, in the three things
17 the Plan requires, they've failed woefully on all three.
18 And we ask for -- the most important thing, we ask
19 those documents be produced and we ask for the documents
20 that have been produced in Minnesota. We ask for the
21 documents that bear significantly on any issue raised in
22 this case. And that includes the RICO action and the
23 federal antitrust action that has not been raised in
24 Minnesota.