HEARING ON PRIVILEGED DOCUMENTS
FEBRUARY 16, 1998
STATE OF MINNESOTA
DISTRICT COURT COUNTY OF RAMSEY
SECOND JUDICIAL DISTRICT
File No. C1-94-8565
The State of Minnesota, by Hubert H. Humphrey, III, its attorney general, and Blue Cross and Blue Shield of Minnesota,
Plaintiffs,
vs.
Philip Morris Incorporated, R.J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corporation, B.A.T. Industries P.L.C., Lorillard Tobacco Company, The American Tobacco Company, Liggett Group, Inc., The Council for Tobacco Research-U.S.A., Inc., and The Tobacco Institute, Inc.,
Defendants.
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THE CLERK: All rise. Ramsey County District Court is now in session, the Honorable Kenneth J. Fitzpatrick now presiding. Please be seated.
THE COURT: Good morning.
THE COURT: Counsel.
MR. WEBER: Before I get started, Your Honor, I have a brief confession to make and some indulgence to ask. I'm in the midst of what you would say in the vernacular is one whale of a cold, so if I end up sneezing or coughing and it comes over here (gesturing to microphone), I apologize to everyone.
THE COURT: You haven't been to the Olympics, have you?
MR. WEBER: So it may be I end up losing my voice a little. If you can't hear me, please just let me know. I'm going to do the very best I can with this.
I want to give the court a brief overview this morning of the defendants' objections to the procedures and conclusions used by the court and the special master with respect to the review of the privileged documents at issue. Our objections, Your Honor, are covered in some detail in the brief we filed on Saturday. I know Your Honor both has and will review them and I don't intend this morning to simply repeat any of that, any of the issues in there, instead I want to take what may be up to about 30 minutes -- and I think that's about all -- or so, to address a few issues of general application to all of the defendants here, and then I want to focus on several issues of particular importance to my client, R. J. Reynolds. When I'm done, Your Honor, I understand that counsel for several of the other defendants will have a few minutes on some particular issues for them. But clearly, we won't be using all of the time we initially discussed.
So let me first address several of the points of general application that come out of the special master's recommendation. As the court's aware from our papers and from the prior proceedings on this, we objected and continue to object to this privilege-by-category approach. We submit that's an unprecedented means of stripping the common law's most ancient and honored privilege, and it has the effect of undermining the rights of these defendants to the effective utilization and representation of their counsel.
Now plaintiffs argue, as they have throughout, that this procedure isn't unprecedented, and the case they always turn to is the A. H. Robbins case they cite. But as you read that case, you see that the case expressly states that every one of the documents at issue there had been individually reviewed. So obviously our objection to this category-by-category approach continues, it's discussed in our brief, and -- and I just want to note that.
I also want to say, secondly, that the standard the special master used for invoking an exception to the privilege, the crime/fraud exception, is a standard that is explicitly incorrect as a matter of law. Now it's clear from page 97 of the special master's report, about paragraph 295, I believe, that the standard used by the special master is not the standard of the Levin v. C.O.M.B. case, the special master's standard, if we look at paragraph 295, page 97, in paragraph second says, "Has it been demonstrated," et cetera, "that the involvement of defendants' attorneys was in furtherance of the conduct or was closely related to...?" It's a disjunctive text. And as I want to show Your Honor, that's explicitly not the test adopted here in Minnesota.
Levin v. C.O.M.B., which we site in our brief, talks about invoking the crime/fraud exception, et cetera, and goes on to say it "was made in furtherance of a crime or fraud and was closely related," and that "and" is a word with a real difference here, as I'm going to demonstrate in a moment.
The reason that word is so important here and the reason it's more than just a sub -- than a semantic debate and in fact is a substantive issue is that if you read that as an "or," there almost is no attorney-client privilege in any case where there are going to be allegations of fraud. For example, in any case where there are allegations of fraud, counsel is going to get hired, and what counsel is going to do, because he's required to do it under the rules, is come in and learn about the case. He's going to look at documents, he's going to do some analysis, he's going to write some memoranda, he's going to discuss the fraud, they're going to be related to the fraud, they're going to be closely related to the fraud, they're going to discuss the very allegations of the fraud, but they're not crime/fraud because they're not in furtherance. What they are is historical analyses of positions, tactics, strategy, issues of that type. And that's why that word, that "and" instead of "or," means so very much.
Indeed, the point I was trying to make is that without the "and," the routine work of analyzing and defending a case becomes crime/fraud simply because documents that have been created relate to the crime and fraud; they deal with the same subjects, they may deal expressly with the same allegations, counsel will go investigate those things. And therein, I think, lies the most fundamental flaw here, and it's not a -- not a point that has gone unanalyzed by other courts, as we mention in our brief, Your Honor.
The 6th Circuit looked at this very type of issue, and this is in the In Re Antitrust Grand Jury case, and it talks about the privileges, talks about the crime/fraud exception, talks about ordering production en masse -- again, rejected the type of approach that's been taken here -- and then went on and said, "For example, merely because some communications may be related to a crime is not enough to subject that communication to disclosure; the communication must have been made with an intent to further the crime." That's the test of Levin v. C.O.M.B., that's the test of the law in Minnesota and throughout the United States, and that's expressly not the test that was applied by the special master.
Indeed, I think it's fair to say that not yet in the jurisprudence of this country or certainly in the jurisprudence of this state has such an intrusion into the attorney work product ever been countenanced by any court,, and I urge the court in this very important respect to reject the standard applied by the special master and send us back for further review.
I want to turn -- this is discussed in our brief -- I want to turn now again to another issue that we touch on just quickly, Your Honor, and that's the privilege issue itself, not the exception to the privilege, but the privilege issue itself. The special master's opinion recommends the disclosure of a wide variety of documents prepared by outside litigation counsel that are opinion work product. Now that's not apparent from the face of the order because the face of the order doesn't discuss those documents, and it's not clear from the face of the order that any opinion work-product document from outside counsel was reviewed, but nonetheless, given the category-by-category approach, outside litigating counsel's opinion work product is to be disclosed. And I think that's inconsistent with one of the basic principles we've had in this litigation from the court's own order back in May of '97 where the court mentioned how opinion work product is absolutely privileged from disclosure. It's a standard that applies under Rule 26 and other rules throughout the federal and the state court systems throughout the United States. And what happened here was a balancing test was applied in which the special master said that, you know, weighing the different factors, the documents should be disclosed. Again, no reference to the opinion work product documents in the opinion, no evidence that any opinion work product documents were explicitly reviewed, and yet we're under a situation now where outside litigating counsel's opinion work product is ordered to be disclosed, and I think that's horribly inappropriate, if I can use that term.
I want to take us back just for a minute, Your Honor, to the principle at issue here, and the principle at issue here is the one from Hickman v. Taylor that the Supreme Court itself recognized as being lying at the heart of our adversary system back in 1947. When a lawyer gets hired in a complex case, as anyone knows today, the lawyer has to come in and do some analysis. The lawyer is going to put some of that in writing, those are the lawyer's thoughts on how to defend the case, how to strategize, and a sharp practice of the worst kind that would allow litigation adversaries to gain access to that. And the situation is even worsened whereas here it's going to happen without the opinion work product documents ever even having been looked at.
Now I want to touch on one other issue raise by the special master of general applicability, Your Honor, and that's this issue of production of documents for which privilege was claimed which relate to scientific issues. And what the special master said in several paragraphs is, under this balancing test he crafted, he was going to order the disclosure of those because they might show what the defendants knew, how the defendants came to that knowledge, et cetera. Again, putting the other objections in our brief aside for a minute, this kind of finding with respect to scientific documents that touch on scientific issues sweeps far too broadly. It again would reach the work product of counsel, including the opinion work product of counsel regarding the allegations being made in the case, counsel's evaluation and analysis of evidence, counsel's communication of his analysis and strategy, counsel's assessment of these issues, his trial strategy, his tactics. It's plainly an impermissible intrusion into the workings and analyses of counsel on how to defend the case. Putting aside all of our other objections, clearly weighing this balancing about any document that deals with a scientific issue sweeps far too broadly, and again, brings within its purview opinion work product, and I think that's just fundamentally and profoundly impermissible.
I want to focus for a minute now, Your Honor, for the time I have left, I want to focus for a minute on the situation with respect to my client, the R. J. Reynolds Tobacco Company. And I understand some of the other clients have issues like this, and I just want to address this as an exemplar of that. And the point I want to make here is there's a unique issue here going at the heart of opinion work product and going at the heart of sharp practice by which my analysis of the case would be turned over to my litigation adversary, and it's a discrete set of documents and a limited set of documents, and I'm going to have to talk, Your Honor, about what those documents are and suggest a alternate way of addressing it.
My law firm was hired by R. J. Reynolds in 1985, they hadn't represented them before. They had a number of cases pending. We came in and did what lawyers are required to do before they start defending somebody in cases, we came in and started looking at documents, talking to people, thinking about the issues, analyzing the complaints that were filed, what types of issues were being made. We did preliminary reviews of documents, wrote up summaries. We did preliminary interviews. We did -- we folded memos together so they'd start to say how one issue might relate to another. We identified plaintiffs' allegations, talked about how plaintiffs might try to prove a case based on the types of allegations that are out there and we talked about how we might respond to them.
These documents have been done over a period of time, some of them very, very preliminary, since all the allegations in this case today, Your Honor, were allegations that were being made back in 1985, allegations of marketing to youths, suppression of research, addiction, CTR, failure to research, all those types of issues -- conspiracy -- were in cases that were then ongoing at that time. We analyzed those issues, we put our opinion work product into that, and some of that appears in our client's files and some of that is what this order would order to be produced to the other side.
Now we prepared strategic and tactical memos, so that not just the lawyers who were then on the cases but other lawyers who might work on the case could understand the issues without having to read a bunch of documents, could understand what the points were the plaintiff might make and our responses, our very core work product discussing our strategies and how we would address those issues, and I want to just touch on some of that now with you.
This chart here is a listing of some of the categories we mentioned in the brief we filed with Your Honor, and this deals with activities that we began to undertake in 1985, not having been involved in this before, at the beginning looking at historic events, trying to understand them, trying to make sure that we knew where to go when we got a discovery response, what types of documents, what people to go check with. That hiring of counsel and reviewing facts cannot and has never been crime/fraud in the United States. It can't be.
Secondly, counsel-prepared memoranda on how to defend specific cases, including some cases currently pending, that are going to be ordered to be turned over, that cannot and has never been crime/fraud in the United States. That's what lawyers do.
Counsel's recommendations and advice on a variety of litigation matters, again, that's what counsel does in litigation matters.
Memoranda regarding jury -- potential jury research exercises where arguments are made to focus groups of jurors, seeing how they react, that too is typical in a complex case, that too was done here, that too cannot be crime/fraud.
Analysis and reports of ongoing developments in trial to which counsel would send memos to the client, here's information on a trial that's ongoing, that cannot be -- at least never has been in America up to now -- crime/fraud.
Memoranda concerning potential expert witnesses, including experts that -- at least one expert who was used in this case, a memorandum of discussion with an expert would be turned over to our litigation adversary under this order at present.
Memoranda concerning preparation of witnesses for deposition, memoranda in which we list documents prepared by certain persons, here are the types of issues that they may be questioned about, including witnesses deposed in this very case, counsel's classic core opinion work product.
Memoranda on advertising/marketing issues, constitutional issues, the very types of things that lawyers do. It clearly couldn't be, under any version of law, crime/fraud to hire my law firm in '85, it couldn't be crime/fraud for my law firm to do these types of things, it cannot be crime/fraud to try to understand and analyze and prepare tactical and strategic memoranda. No outside counsel, no outside counsel could undertake the defense of these clients in these complex cases without doing this very type of work. You're not going to do it writing it on the back of a match book and trying to remember it that way.
Now what's the scope of the documents I'm talking about here? For my law firm it's in the neighborhood of, I think we said, 68 or 71. I think we said 71 in the memorandum we filed. I think, as they say in the NFL, after further review, I think it's actually only 68 that were prepared by my law firm. There are approximately a hundred documents prepared by a law firm in North Carolina of the same ilk that were prepared to do the same types of purposes. So we're talking about 170 some documents here on these issues. And while, Your Honor, in 22 some years of practicing law I don't think I've ever used the word "must" with a court, but I respectfully urge this court, there must be a different way to approach those 170 some documents. There must be. At a minimum they must go back to the master for document-by-document review. What I would urge the court is not even to take that step, I would urge the court, in line with what I said about opinion and lawyer work product, you just exempt these from the order in and of themselves immediately. Counsel must be allowed to do that type of work to give defense to its client.
Finally, Your Honor, let me make a few brief comments regarding two arguments of plaintiffs that they put in their papers in which they expressed a desire for documents beyond those ordered to be produced by the special master. With respect to certain documents in Category 1, they claim the special master made a typographical error with regard to the number of documents being produced. I can't read the master's mind, I don't know what number of documents he meant to include. All I can say on that is rather than have plaintiffs tell us by their own ipsy-dipsy that it must be a typo, obviously I think that matter should be dealt with by going back to the special master himself.
Secondly, they seek some 475 other documents from other categories which they claim, with no factual support whatsoever, have been mischaracterized. They say this should have been in Category 3, and what they did is look through the indexes and find other documents that include the word "nicotine" or "addiction." Again, there's no factual support for that. Category 3 has an authorship screen; that is to say, documents prepared by outside consultants, et cetera, et cetera. There may be documents, and indeed I think from the index it's clear there are documents that, for example, on the Philip Morris log, have the word "nicotine" or "addiction" in the title of the index, and they're not Category 3 documents, but documents that relate to congressional hearings and matters of this type. So there's no evidence whatsoever they've been mischaracterized.
What plaintiffs are asking the court to do with respect to these 475 documents is to undo category-by-category review, a conclusion that I fully agree with plaintiffs on, but I don't think that that's where they want this to go. What they're trying to do is carve out a category of certain documents. I do think the category-by-category approach is wrong, so I agree with them in that respect, but the conclusion they draw in their argument that somehow these were miscategorized has no support in the record.
I also -- one last substantive point before I wrap up--
THE COURT: Counsel, are you saying they're wrong?
MR. WEBER: With respect to the miscategorization issue?
THE COURT: Yes.
MR. WEBER: Yes, I am, Your Honor.
THE COURT: Oh, you're saying they're not miscategorized.
MR. WEBER: That's right.
THE COURT: Okay.
MR. WEBER: There are some documents my client, I'll be honest, has miscategorized that were put in Category 3 and they don't meet the authorship standards like Category 3. Indeed, there are several documents in there that are my firm's opinion work product that didn't belong in Category 3 because Category 3 is for outside researchers, but -- there's some miscategorization of that type, but with respect to the point we're discussing here, I don't believe that's supported, Your Honor.
THE COURT: The 475 documents that they claim are miscategorized you say are not, they are correctly categorized.
MR. WEBER: Yes, Your Honor.
THE COURT: Is that correct?
MR. WEBER: Regardless of whether the court enforces all, some, whatever of this order, if there's any order of production, Your Honor, I would ask for a stay, giving us an opportunity for appellate review. I would ask for a stay of the production, a stay for the release to the public of the master's report while we're appealing it. At a minimum, if the court does not carve out lawyers' work product, if the court doesn't give us for those 170 some documents and the few documents some of the others have, if there's no exception made for that, at a minimum --
THE COURT: Excuse me, counsel. Is that 170 or 107?
MR. WEBER: One hundred seventy, approximately, Your Honor.
THE COURT: Seventy.
MR. WEBER: Yes, sir.
THE COURT: Okay.
MR. WEBER: Sixty-eight I believe are ours, and approximately a hundred from the firm in North Carolina.
THE COURT: Okay.
MR. WEBER: If the court doesn't give us special relief on that, at a minimum I would ask for a stay of those while we seek appellate review, because it is -- it is simply so apart from the doctrines here that my litigation adversaries would be able to get my work product on those matters.
And I guess that brings me to the end, Your Honor. I've still got a little bit of a voice left, but if you have any other questions, I'd be glad to answer them.
THE COURT: I'll have a nurse assigned to you today.
MR. WEBER: Thank you, Your Honor. And I do apologize for the coughing. There's nothing I can do.
MR. BERNICK: Good morning, Your Honor.
THE COURT: Good morning.
MR. BERNICK: We have a very specific issue relating to inadvertently logged documents that I want to raise with the court. There was a brief that was filed, I believe on Saturday, by the plaintiffs, supplemental memorandum on this issue. We filed a response to that yesterday and it sets out the essential facts that we're dealing with here, but I want to review them briefly before the court.
Under the Case Management Order in this case, the privilege log that was to be created for privilege documents was specifically described as one that did not have to list documents that were first created on or after August 17 of 1994. The CMO provides at paragraph nine that the privilege log need not list attorney-client or work product privileged documents first created on or after August 17 of 1994 for this case specifically unless ordered by the court. That's how the CMO reads.
Notwithstanding that provision, we had a problem, which is that in the course of preparing our privilege log, which obviously runs to thousands and tens of thousands of documents, there were 108 documents that were inadvertently logged. These are post-August 17, 1994 documents. It so happened, as fortune would have it, that these documents include probably the most sensitive work product that my client has for purposes of this case.
Our firm was retained in 1994 for the first time in connection with smoking-and-health litigation. In 1995 I was asked to act as national trial counsel for Brown & Williamson in connection with all of the attorney generals suits, and I recommended to the client that the client commission the creation of core work product that would analyze the facts and defenses specifically for the attorney general cases, including this case in particular, and that work was -- was in fact done and it constitutes the basic core work product that we have for purposes of this case and for purposes of the other attorney general suits. And many of those documents -- some of those documents are included in the 108 documents that were logged.
We found out about some of those in August, and they didn't make their way into the categorization process, but there were roughly 90 documents that were categorized. When we found this out in January, we notified Special Master Gehan of the fact that these 90 documents had been logged, had been categorized, but they were outside the scope of the CMO, and we asked for relief from the special master. The matter was never actually argued with the special master, was never actually revolved by the special master, is still in a sense pending before the special master, but it is -- it is ripe for determination now by Your Honor.
With regard to those 90 documents, we did notify the special master about the problem, and no findings have been made in the report and recommendation of the special master regarding any of these documents. However, by virtue of the category-by-category approach, given the categories that the special master has identified for release, there are a total of 18 documents that fall into categories that would be subject to being released in accordance with the special master's report. So of the total of 108, we have about 18 documents inadvertently logged, which would fall within the ambit of the special master's report.
If I may approach, Your Honor, this is a list of all the 108 privileged documents, and then the first 18 are the 18 that would be picked up within the scope of the order.
The relief that we would ask is that in any order that ultimately issues in connection with the report and recommendation of the special master, that it be clear that these 18 documents are not within the ambit of the order, they're excluded.
Now in response to this, the counsel for the state has raised what is really a separate issue, and I want to talk a little bit about that issue and then come back to the issue, I think, that brings us here today. They've raised an issue about post-1994 research regarding pH and ammonia. Remember that your order -- I think it's dated February 4, in connection with post-1994 research -- basically says the post-1994 research is not going to come before this jury, but you make an exception for the testimony of Scott Appleton, who's a Brown & Williamson employee, and Michael Dickson, who's a BATCo employee and also is a designated expert in this case, and the claim that they've lodged and the paper that they filed on Saturday is that they believe that a certain report, the Shehadeh report, which I think was done in 1996, was a report that was tainted by lawyers' involvement or lawyer's direction, so they make out the claim that lawyers have been involved, and because lawyers have been involved, the court should scrutinize carefully certain entries off the privilege log. They identify -- they say it's illustrative, but they identify four additional documents off the log, and they say these are illustrative of the kinds of documents that may be germane to the claim they're making.
This issue -- this -- this issue is an issue that I think is easily resolved by the court, and we set out the predicates for resolution in the brief we filed. First of all what is important to understand is that these are four additional documents beyond the 108. These are documents that have been logged and they're listed in their brief. Two of them would be subject to disclosure under the order. Two of them would not be subject to disclosure under the order. So essentially what they're saying is given their particular theory that they are articulating now, the court should re-review these four documents now from the perspective of their claim that certain post-1994 research was tainted. That's essentially, I think, what they're asking be done. Again, the threshold at this point is that these are separate from the 108. And therefore even when you take a look at their brief, what I've marked down here as being the essence of what we're asking for is relief, none of this really has been tested by any of their papers. I don't think they've ever really seriously contested this. None of the facts, none of the analysis, none of the relief they're asking for has been tested. What they've done is to raise a new issue.
What about that issue? Should the court re- examined these four additional documents from the point of view of the claims that they have made? Couple observations. First of all, none of these documents relate to post-'94 research. It's just not so. They've identified some documents from the log, they don't relate to post-1994 research. Second is that there is no showing of lawyer involvement in the research that was actually done. The Shehadeh report, they make no showing to the court -- there in fact was no lawyer direction of that research. No facts have been brought to the court to the contrary.
So they got documents that don't relate to post-1994 research, they've made no showing of lawyer involvement in that research, and then they go ahead and make a series of arguments about the substance of what the Shehadeh study actually shows. They say, for example, it doesn't deal with a commercial blend, it's an experimental blend. And they take on what we would argue is the significance of the Shehadeh study to the jury. Now we could have simply said to the court, gee, that's an issue for the jury and the court shouldn't have to get involved in any of that. In our paper we go through the Shehadeh study and we show that their claims about the Shehadeh study, their factual claims are just wrong. It was a commercial blend. It was a 1994 commercial blend. It was Viceroy. That's what the Shehadeh study worked with. And it then performed an experiment using that particular blend. So we do lay out the facts before the court. But at the end of the day, their quarrel with the Shehadeh study is in fact an issue for the jury. The jury can weigh and balance and determine what the Shehadeh study shows and what the study shows and what it doesn't show. We don't have to revolve those matters now, although we're more than happy to discuss them with the court. But none of those facts alter -- whatever the Shehadeh study is or is not does not create a basis for re-examination of four documents that don't even relate to the study.
So all of this was a question that they've raised. We're more than happy to answer that question, we have answered that question. There's nothing here that would warrant a re-review of these documents from any perspective, and there's certainly nothing that would warrant a re-examination or a different result with regard to the 108 documents that were inadvertently logged. They were never contemplated to be part of the crime/fraud process, they were not the subject of any crime/fraud finding made by Special Master Gehan, and they do, after all, constitute some of the most important work product in this case that my firm has created specifically for this case.
MR. CLINARD: May it please the court, I'm Noel Clinard for Philip Morris Incorporated, and I have approached the podium just to address a matter which I sense the court might want to hear a little bit more information on at the close of Mr. Weber's remarks.
You'll recall that Mr. Weber addressed the issue of the 475 additional documents allegedly related to nicotine and addiction which plaintiffs asked for wholesale inclusion in the special master and court's disclosure on page 13 of their memorandum, and Your Honor asked Mr. Weber whether or not those 475 documents were or were not miscategorized into Category 3, and my purpose is to address that issue in more detail.
In order to do that, bear with me for a moment while I just recite the terminology of Category 3. It states, quote, "All scientific research or research reports on smoking and health, or information relating to smoking and health, and memos regarding the same," and here's the part I want to emphasize, "written by an employee or outside consultant, researcher or research entity of any defendant or corporate affiliate of any defendant."
Now before I address the particular language, I think the court would agree that the purpose and spirit of Category 3 is to capture that scientific research or memos regarding such scientific research authored by scientists and people of that type and sent to the company and somehow, according to the plaintiffs' allegation, allegedly withheld under the cloak of attorney-client privilege and withheld in some improper fashion. So I would submit to the court that there is what I would call an authorship screen right on the face of Category 3 before you even get into whether or not the subject matter criteria of Category 3 are met.
Now we only received plaintiffs' effort to cast wider the net of nicotine and addiction documents on Saturday afternoon, so we have not had an opportunity to review those documents in any detail, but what we have been able to do is review -- at least I have personally reviewed the appendix one to the Sutton affidavit as it relates to Philip Morris documents, and keeping in mind that authorship screen, the court can literally at a glance flip through appendix one to the Sutton affidavit, which is the list of the 475 documents that they want, and in the title or descriptive field of that appendix you can see on the face that time and time and time again those documents are by counsel to counsel, and the vast bulk of the documents of Philip Morris, anyway, in appendix -- in Exhibit 1 of the Sutton affidavit, are for work product from counsel to in-house counsel and cannot possibly meet the authorship screen in the document -- in the Category 3. Instead, the great bulk of the Philip Morris documents are quite properly categorized largely to Categories 2, 6 and 12. Those which are not authored by counsel are properly categorized to Category 2, and there are only -- of 330 documents, there are only 77 which are authored by anyone other than counsel. So right off the bat, 330 minus 77 should never be accused of being miscategorized out of Category 3.
The remainder are categorized to Category 6, 10 and 12, quite properly. Six is about ingredients and constituents of smoke, which is what nicotine is. Paragraph 10 relates to government regulation, and the great bulk of the Philip Morris documents anyway are work product documents relating to appearances before government regulators. And finally, they already have other types of documents that fall into the miscellaneous category, category 12. So I submit that, at a glance, the court could determine that they are not miscategorized.
THE COURT: I'm not sure I understand what your position is that you're taking with regard to that categorization. Are you saying -- are you representing to the court that they were properly categorized, or --
MR. CLINARD: Absolutely, Your Honor. They were properly categorized in --
THE COURT: Is this based upon your review of those documents after the receipt of the special master's report?
MR. CLINARD: Your Honor, it wasn't physically possible, in the 36 hours allowed, to review those documents physically. All we have is the appendix.
THE COURT: Fine.
MR. CLINARD: The documents are not even in Minneapolis.
THE COURT: I'm not suggesting necessarily that it was. What I'm questioning is whether you can represent to the court the representations that you're making.
MR. CLINARD: Your Honor, based on my long-standing familiarity with the review process by which the privilege log entries were prepared, I have great confidence that the privilege log entries are correct, and in any event, that certainly the privilege logs are correct as to the author and the recipient of those documents. And the privilege log entries overwhelmingly show that these documents were authored by counsel to counsel and therefore cannot meet the criteria of Category 3. And that can be determined by the court by a glance at the privilege log entry.
And in any event, before the court were to make the determination that we have somehow failed to carry our burden of proof at this hearing after having been notified only by 36 hours as to this almost 500 additional documents that the plaintiffs want, if the court has concerns about the veracity of the privilege log entries, which I have represented to the court, then at a minimum there ought to be an additional review by the court or the special master as to these 475 documents to see whether there's even the slightest inference that these documents have been miscategorized, because on their face they could not have been.
Does Your Honor have any other questions?
THE COURT: No. Thank you.
MR. CLINARD: Thank you, Your Honor.
MR. CORRIGAN: Your Honor, Michael Corrigan for B.A.T Industries.
As I understand it, about 39,000 documents are embraced within the four categories that Special Master Gehan has recommended be de-privileged. Approximately 280 documents come from the files of B.A.T Industries. That quantity, while small, presents issues that are unique to my client and no other.
Before a client loses his attorney-client privilege, a fair-minded person and indeed the law would require a finding of exactly what it is that client did that constitutes a crime or a fraud. Now as to B.A.T Industries, no such factual finding can be found anywhere in the report of the special master. And before a privilege is taken away, a fair-minded person would expect to see and indeed the law requires a factual finding identifying that client's lawyer. As to B.A.T Industries, no such factual finding can be found anywhere in the special master's report. And before such a privilege is stripped from a client, a fair-minded person would expect to see and indeed the law requires a factual finding that the identified lawyer rendered specific advice in furtherance of the crime or fraud that the client has been found to have committed. As to B.A.T Industries, no such factual finding can be found anywhere in the report of the special master.
In truth, the special master in this report has made no factual findings of any sort concerning conduct by B.A.T Industries or any lawyer for B.A.T Industries. There's not a single reference to any document written or communication made by anyone employed at B.A.T Industries. There is not a single reference to any document written or any communication from any attorney for B.A.T Industries to his client.
Now, Your Honor, the absence of these findings, I submit, bring home in a very stark way a fundamental flaw underlying the report that is before you. And I'm not talking now about the flaw of proceeding on a category-by-category basis. That has been dealt with before. What I'm talking about is the failure of the special master to make crime/fraud determinations on a client-by-client basis. The cases that we cited to the special master and which we cite again in our section of the joint brief that has been submitted to Your Honor make it abundantly clear that you cannot substitute the requirement of an individual client-by-client determination by the technique of lumping one defendant together with ten others, and that is what has happened, I submit, here. It was because of these legal requirements that B.A.T Industries made a separate presentation to the special master in the proceedings below, and I submit that the instructions contained in Your Honor's order of May 9th to the special master contemplate that, wherein Your Honor referenced a need for a showing that the client engaged in criminal or fraudulent crime and that the attorney's assistance was obtained. The special master was aware of those instructions, he quoted them at page 96 of his report, and therefore our quarrel, Your Honor, is that the special master did not follow that instruction.
Instead, all that I can discern from the report to support the conclusion of a crime/fraud by my client is the footnote on page nine. That's the footnote that in essence says that when the special master uses the term, quote, B.A.T, he may mean BATCo or he may mean B.A.T Industries or he may mean both companies. But nowhere in his report do we find any justification for this, no facts, no discussion at all. Yet the footnote suggests to the reader that B.A.T Industries is to be treated exactly the same as its subsidiary BATCo, but not even the plaintiffs in this case make that contention. We know from their summary judgment papers and from plaintiffs' responses to our contention interrogatories that plaintiffs have clearly stated that their theory of liability as against B.A.T Industries is based on B.A.T Industry's own conduct, not the conduct of any of its subsidiaries, yet no such conduct is found anywhere in the report that is now before the court. And there is no such thing as vicarious crime/fraud.
Now if you go through the report itself, the finding section, pages one through 103, to see where it is that the special master actually uses the term "B.A.T," you find in each instance that it is a reference to BATCo, not B.A.T Industries. And in fact, after you get about a third of the way through the report, you begin to see the special master becoming more precise where he starts to use the term "BATCo" correctly and more frequently, and his use of the term "B.A.T" diminishes.
An example, if you'll look at paragraph 122 on page 43, you see a reference to a 1970 memorandum by D. G. Felton, who was correctly identified as a BATCo senior scientist. I put that in quotes. If you go back to page 13, paragraph 34, you will find the same memo described as being written by D. G. Felton, but this time, quote, B.A.T senior scientist.
Now the lawyers in this case know that the use of "B.A.T" cannot possibly mean B.A.T Industries in this instance, that's because B.A.T Industries hadn't even come into its existence as a holding company until six years after this memorandum was written, and B.A.T Industries never employed scientists who did smoking-and-health research. Now that's just an illustration, but by my count by use of this footnote and transporting it into the paragraphs of the report, that has occurred at least 18 incorrect times.
Now I recognize, Your Honor, that a similar footnote was placed in the report concerning Liggett documents and that Your Honor's prior order on the Liggett documents addressed that footnote, and you said at page 39 of your memorandum that you saw no material reason to distinguish between BATCo and B.A.T Industries, quote, at this time, close quote. And it's true that the Liggett documents do not even mention B.A.T Industries, so the consequences of that footnote at that time are not as significant as they are now. Now we are dealing with company documents, 280 of them, from my client's files, and at this time that footnote is material, and I submit it should be deleted from the report.
I also submit, Your Honor, that regardless of the action you may decide to take with respect to the 10 other defendants covered by this report, that B.A.T Industries should be exempted from it. This is a company that is not a tobacco manufacturer, it's never been a -- was never a party to any smoking-and-health litigation until 1994, and no court has ever made a crime/fraud finding against this company.
We also have a unique situation legally, I submit, and that is there has yet to be a decision on whether personal jurisdiction exists over B.A.T Industries. That is a matter that's pending presently on appeal, and the question of the court's power over B.A.T Industries is still up in the air. I raise that because it could not possibly be correct that the attorney-client privilege could be eviscerated here, disenabling B.A.T Industries to ever undo the damage should its position that it is not subject to jurisdiction finally be agreed with.
Lastly, Your Honor, I ask at a minimum you make the amendments to this report that you made to the last one. I'm specifically referring to the mistaken references to the effect of all defendants signing the Frank Statement and similar allusions. Your Honor did make those corrections last time by way of a separate order rather than a physical amendment to the report, which is perhaps why the special master didn't pick it up. This time I would request that those corrections be made physically to the report.
And I thank you for your time.
THE COURT: Does that conclude the defendants' presentation?
THE COURT: All right. Counsel.
MS. WALBURN: Good morning.
THE COURT: Good morning.
MS. WALBURN: Roberta Walburn on behalf of the plaintiffs.
It's been a long journey to arrive where we are today on the issue of privilege, and at every juncture along the way the defendants have received an abundance of process. There have been repeated grounds of briefings and hearings and submissions, including extensive ex parte proceedings, and the issues raised by the defendants here today and in their submissions on Saturday are primarily issues that have been addressed repeatedly, both by the special master and by this court. The Court of Appeals of Minnesota also has ruled on and rejected defendants' primary challenge to these proceedings; that is, the use of the category process, and the Minnesota Supreme Court also has denied defendants' petition to consider that issue. So I don't believe that at this stage of the proceedings it is necessary to restate some of the fundamental principles of law and procedure of which this court is well versed.
I will point out with respect to counsel's statement about the paragraph in the special master's report on the standard for crime/fraud disclosure that the special master used in this second order the exact same standard that he used in the first order with respect to crime/fraud disclosure, and that's -- the one paragraph that counsel referred to today is one paragraph taken out of the 140-page report.
In the second round of privilege proceedings the special master has issued a report and recommendation which is solidly grounded in basic legal principles and which is also based upon extensive documentation from defendants' own files of crime and fraud and abuse of privilege. After four full days of hearing in October, the special master reviewed literally dozens of boxes of submissions by the defendants, hundreds and hundreds of pages of briefs, and an untold number of documents over which claims of privilege were being asserted, and a painstaking process that took the special master four months. The documents which the special master has recommended be produced to the plaintiffs appear to be, from the information that we have available to us, perhaps the most significant and important documents of this litigation, and documents which should have been produced to us from the defendants' files long ago. It is likely that the documents that the special master has recommended be produced will have a noticeable effect at trial. For example, based upon the privilege log entries of the documents recommended for production, the plaintiffs would, upon receipt of the documents, call for adverse examination in this trial J. Kendrick Wells, the long-time in-house counsel at B&W. The court will recall Mr. Wells as the author of the deadwood memo, which recommended shipping research reports to England. Mr. Wells is also the author of many more memos that the special master has recommended be produced. And there are also a substantial number of documents, as the court heard from counsel for B.A.T Industries, from the files of B.A.T Industries itself that we believe will be extremely probative of the issue of B.A.T jurisdiction and which also may affect our choice of witnesses from B.A.T Industries at trial.
In the most recent report, the special master set forth additional extensive documentation of crime/fraud by this industry and by its lawyers, all the while holding the plaintiffs to a standard of proof -- preponderance of the evidence -- which the plaintiffs respectfully submit, as we did in the last round, is too high a burden for this discovery proceeding. In brief, the special master's latest report found evidence that CTR was meant to serve primarily public relations functions, and that CTR research was of little value in addressing issues relating to the causal link between smoking and health; substantial evidence showing involvement in science by lawyers, and that industry attorneys were a driving force behind the direction and suppression of research; the industry's public relations strategy to deny causation and keep the controversy alive.
The plaintiffs have presented additional substantial evidence showing that the U.S. manufacturers failed to perform in-house smoking and health research, including biological research, which would examine the safety of their product, and that this failure to perform in-house biological research was pursuant to a gentlemen's agreement, and that the industry acted in concert to suppress this research, notwithstanding their public promises.
The special master also made findings specifically related to addiction and nicotine manipulation, and he found that this area was encompassed within this court's crime/fraud findings of May 9th since addiction and nicotine manipulation relates to smoking and health. The special master found that a large number of documents relating to addiction and nicotine manipulation are being withheld on claims of privilege, and in addition that there's evidence that a number of these documents being withheld on claims of privilege specifically relate to nicotine manipulation, including documents relating to ammonia and ammonia compounds, acetaldehyde, and nicotine levulinate.
As we've had throughout these proceedings, the special master's report also clearly evidences further abuses of the privilege process in these proceedings. The special master found defendants' claims of privilege overbroad. The special master found defendants have asserted privilege over thousands of communications relating to scientific research. The special master found defendants selectively employed claims of privilege in order to shield certain information from discovery, and that was part of the basis of the special master's finding in this round that plaintiffs had met the substantial need test to overcome claims of fact work product.
The special master found that the defendants have selectively designated certain employees as, quote, experts, and but -- and but for that designation, information would have been discoverable by plaintiffs. The special master also noted that defendants had withdrawn a number of claims of privilege during the second round of proceedings after particular documents were selected by either the special master or by the plaintiffs for review in this round, and that applied to Philip Morris, R. J. Reynolds, B.A.T Industries, BATCo, Tobacco Institute, and CTR. So it was only when the light was about to shine on these particular documents because they were selected out of the tens of thousands being withheld on claims of privilege and when defendants knew that these documents would be examined, that defendants withdrew their claims of privilege.
The sheer number of documents which the special master recommended for production, approximately 39,000 documents -- and that's documents, not pages -- also evidences a massive abuse of the process. More than one year ago this court put the defendants on notice that counsel should take care to ensure that each and every document placed on a privilege log was individually reviewed by counsel in this litigation. At the hearing on December 17th, 1996, this court stated to defense counsel, "Can you represent to me that you have personally, or people under your supervision, reviewed each one of these documents and have made a good-faith determination that they are attorney- client privilege?" Defense counsel assured the court that this was the case, but it clearly has not been followed over the last year of proceedings.
Given this record, the special master's recommendations for the production of documents to plaintiffs is cautious and conservative. The special master recommended the production of documents from four categories, and overwhelmingly these documents relate to scientific research on smoking and health.
Category 1, pursuant to this court's order of May 22nd, includes two subcategories; the first is documents which other courts have denied defendants' claims of privilege, and the second are documents specifically selected by plaintiffs. For the first subcategory of Category 1, other courts, the special master found that these documents were not privileged or were closely related to the crime/fraud finding, and in this part of the report the special master cited three documents from the BAT Group defendants which he randomly selected from this subcategory, noting that one document, which came from the files of B.A.T Industries, was, in the master's words, particularly disturbing because it was written by David Hardy from Shook, Hardy, Bacon, long-time counsel to the industry, and these documents as described by the master discuss suppressing scientific information and shielding information offshore.
The second category of Category 1 is the selection by the plaintiffs, and the special master also found that the documents selected by the plaintiffs for review were not privileged or subject to disclosure under the crime/fraud exception. The special master states in his report that he reviewed each document designated by the plaintiffs to this category and recommended that they all be produced. The special master's report at paragraph 317 states that the plaintiffs designated 365 documents into this category, and in that same paragraph, 317, the special master specifically references our Appendix A, which was the appendix we submitted back to the special master in October listing all the documents we designated into Category 1.
Appendix A has 457 documents in it. The original Appendix A was filed with the court. We have an additional copy here this morning if it would be helpful for the court. And we request a clarification of the special master's order, since he specifically referenced Appendix A in this finding, that all documents listed in Appendix A be produced.
Category 3 relates to documents on scientific research on smoking and health. The special master found that these documents were not privileged in the first instance, or discoverable under the crime/fraud exception, or were fact work product discoverable upon the plaintiffs' showing of need.
The special master found evidence on Philip Morris specifically that Philip Morris had listed health-related research by some of its key scientists. With respect to R. J. Reynolds, the special master found evidence that Reynolds claimed privilege in Category 3 over cancer research documents, routine reports of Reynolds' R&D department, smoke inhalation studies, and reports on the health effects of cigarette ingredients.
To give the court an illustration of some of the types of documents which Reynolds has been withholding on claims of privilege, documents that are titled "Case-Control Study of Cancer of the Pancreas," "Cardiovascular Animal Experiments," "Smoke Research," "Effect of Smoking on Hemoglobin Level," "Incidence of Respiratory Diseases and Smoking in the U.S.," "Fundamental Research on Chemical Carcinogenesis," "Adenocarcinoma of the Lung," "Cigarette Smoke Inhalation Studies in Inbreed Syrian Golden Hamsters," "Lung Cancer in Women," "Smoking and Lung Cancer," "Nicotine compensation should be dropped from mentioning altogether." These documents on this chart were all written by Frank Colby, a long-time senior scientist at Reynolds. The special master specifically cites portions of the Colby deposition in his report and recommendation, and this sheds some light as to how documents like this ended up on Reynolds' privilege logs. The court will recall that the Colby deposition was taken late this fall after repeated months of trouble in scheduling that deposition, and the plaintiffs submitted the deposition to the special master after the hearings in October.
Colby testified in his deposition that analysis of scientific literature was, quote, channeled through the lawyers, and he called this in his deposition a, quote, distribution system. The special master, referencing this section of the deposition, stated that it leads him to precisely the inference which the plaintiffs have been urging upon the court, that smoking and health analysis was channeled through the lawyers.
In Category 3, the special master also recommended that documents relating to nicotine, which he identified in his findings 262 to 267, be disclosed on the basis that they were not privileged in the first instance, that if they were fact work product, plaintiffs have demonstrated substantial need, and that, in any event, plaintiffs had met their burden of showing that the crime/fraud exception applied. The special master specifically referenced certain nicotine documents in his report. However, it is clear that there are many more documents relating to nicotine that were not specifically referenced by Bates number in the special master's report, and which plaintiffs believe, based on the information we have, which is the privilege logs, these documents were not properly designated by defendants into Category 3. We've identified these documents by Bates number in Exhibit 1 to the affidavit of Tara Sutton which we filed on Saturday. These are documents which the defendants' logs list as relating to nicotine or addiction, and we specifically searched those terms in the computer logs that were given to us by the defendants. We believe that these documents should have been designated into Category 3, and given the improper classification and the special master's specific findings that nicotine documents implicate science and health and should be produced, we request that this court order the documents listed in Exhibit 1 to be produced.
Defendants today have argued that Category 3 has a, quote, screen that would screen out some but not all of the documents which plaintiffs have identified into Category 3, but I believe that the defendants are not properly reading Category 3 from this court's May 22nd order. Category 3 states, "All scientific research or research reports on smoking and health, or information relating to smoking and health, and memos regarding the same, written by an employee or outside consultant, researcher or research entity of any defendant or corporate affiliate of any defendant." That cuts a wide sweep in terms of authorship.
Many of the documents which we have listed in Exhibit 1 are written by employees or outside scientific consultants to the industry. Some of the documents that we've identified in Exhibit 1 were written by in-house lawyers, but in-house lawyers still are employees of these defendants. With respect to any documents in Exhibit 1 which are written by outside lawyers, I think it is fair, given what we know from the record about how this industry has utilized attorneys to essentially take over certain portions of the research function of these companies, to characterize the outside lawyers as consultants to this industry. The titles of some of the documents on Exhibit 1 show the type of information which is still being withheld on claims of privilege relating to nicotine: documents on nicotine levels authored by B&W management, documents on nicotine delivery of particular brands of cigarettes prepared by outside consultants, documents on nicotine pharmacology written by in-house counsel of B&W, an employee, documents on ammonia, nicotine delivery and pH written by the B&W law department, again employees, documents regarding a proposed nicotine control program written by B&W in-house counsel, documents regarding epidemiological study of nicotine consumption, documents regarding the pharmacology of nicotine, documents relating information on nicotine levels, and documents regarding ammonia and nicotine. Unless these documents from Exhibit 1 are produced, they will not be disclosed pursuant to the special master's recommendations.
The last two categories of documents which the special master has recommended be produced are category 4.b., CTR special projects and lawyers' special projects, and Category 5, documents relating to public statements on smoking and health. Again, the special master found that these documents were not privileged in the first instance, or, if they were privileged, the crime/fraud exception applies.
With respect to counsel's arguments in their briefs on Saturday and here this morning on specific documents from outside counsel's files, the opinion work product, at the outset the plaintiffs note that certain of these documents were provided to the court on Saturday ex parte, and the plaintiffs object to that procedure. The special master's fifth order on procedures dated September 12th, 1997, stated that for these proceedings, on paragraph eight of that order, any exhibit for which a party asserts a claim of privilege and which is submitted ex parte shall be provided to opposing counsel with only the allegedly privileged portions redacted, and at this time that has not been done for those documents.
But turning to the substance of the defendants' arguments on the --
THE COURT: Excuse me, counsel. I should note that those documents were not reviewed by the court and will not be reviewed by the court.
MS. WALBURN: Moving to the substance of their arguments this morning on the opinion work product from outside counsel, we can't tell much from the privilege log entries as to the substance of these documents, but we can state that those documents did go through the same process as all the other documents before the special master in this round of the proceedings, and assuming the defendants placed these documents in the proper categories, the special master's recommendations should stand for these documents as well as all others.
I should also note that if counsel believes that these documents are so distinctive, there were two options available to defense counsel to address this issue long ago. First, back in May when this court asked the parties to recommend categories for the category review process, the defendants were given every opportunity to suggest their own categories into which to place the documents, but as this court is aware, the defendants essentially stood by silently and left it up to the plaintiffs, who had not seen the documents, to recommend categories based upon our best information as to what those documents contain.
In addition, not only did defendants walk by that opportunity, but the defendants had an opportunity before the special master to select out any documents they wanted to for particularized discussion. So if these documents were so distinctive, they could have been and should have been brought to the special master's attention during the October round of hearings.
I should also note that the fact that these documents are or may be opinion work product still does not protect them from disclosure given the special master's detailed findings of crime/fraud exception. I don't think the defendants dispute the fact that the crime/fraud exception overcomes all types of privilege, including opinion work product. And the fact that the document was prepared by an outside law firm does not give it a special status under this inquiry.
I should also note that these documents apparently were produced not from the outside counsel's own files but from their client's files, since in large part the court's previous orders exclude many of the documents within the law firms themselves.
The one document that we do have that gives us some glimpse of information as to what type of information may be in this group of documents came from the Liggett round of proceedings where the court will recall particular attention was paid to a memorandum from the Jones Day law firm regarding additives and tactics in litigation on additives. That order -- that document was ordered disclosed by this court in the Liggett round of proceedings, it was previously disclosed in the Florida round of proceedings, and in that document outside counsel describes suppressing research on additives at the direction of counsel, noting asbestos potentially being found in tests of certain cigarettes, and it was clearly subject to the crime/fraud exception. We would expect the same to apply to the documents recommended for disclosure by the special master in this round of proceedings.
With respect to the B&W argument on post-'94 documents, we do oppose the request of B&W to return these documents. There is, as counsel noted, a general rule of a cutoff of post-'94 for both discovery and privilege log entries in this litigation, and that was a rule that the defendants insisted on early in this litigation, and one of the primary purposes of that was to avoid the burden of having to continually update discovery and privilege logs in this case, to have a bright-line cutoff. The documents at issue from B&W now, of course, have been logged and produced to the depository, so burden is not an issue, and more importantly, the documents in the categories recommended produced by the special master should be produced especially to the extent that they relate to nicotine or pH.
The plaintiffs are not limiting our request to these documents to the four documents cited by counsel this morning. We have privilege logs in front of us that are not much better at times than reading tea leaves, and what we do ask for are the documents that went through the process before the special master and which the special master has recommended be produced to the plaintiffs.
To summarize the relief that the plaintiffs seek, we request that this court affirm the special master's report and recommendations. The findings of the special master are clearly not erroneous, which is the standard to be applied at this time. Exhibit 2 to the Sutton affidavit filed on Saturday identifies by Bates numbers from the defendants' computerized logs the 39,000 some documents which fall into Categories 1, 3, 4.b. and 5. That exhibit does include all 457 documents selected by plaintiffs for Category 1, that is Appendix A to the special master proceedings, and we request that all those documents listed in Exhibit 2 to Saturday's affidavit be produced to the plaintiffs directly from the neutral facility within the depository within 48 hours of this court's order. We request that this court clarify that Category 1 includes all 457 documents listed in Plaintiffs' Exhibit A. We request that this court clarify that all nicotine and addiction documents listed in Exhibit 1 to the most recent affidavit be produced. We also request that this court unseal the special master's report and recommendation. There are no trade secrets that needs protecting in that report, and information relating to the public health should be in the public domain.
With respect to the arguments of counsel for B.A.T Industries, the court is well familiar with the extensive record on B.A.T Industries, and there is more information on this from the files of B.A.T Industries in the special master's report itself. I would note that the fact that there are several hundred documents from the files of B.A.T Industries which the special master is now recommending be produced is but one more reason why B.A.T's current appeal on jurisdiction is improper because discovery is clearly not over with respect to B.A.T Industries.
On the request from B.A.T that the footnote on page nine of the order or recommendation of the special master be modified, the plaintiffs do object to the proposed order submitted by B.A.T on Saturday as overreaching, but have no objection to the court entering the same type of order it did with respect to B.A.T in the first round of the proceedings.
There are a couple of related privilege issues that I want to briefly touch on. One is joint defense issues. I'll just note that the special master denied the plaintiffs' request to strike the claims of joint defense for defendants' failure to produce joint defense documents, and essentially the special master deferred on that to this court.
Another privilege issue which we raised in our brief on Saturday is the issue relating to the late production of privilege documents. Even at this late date, well into trial, defendants are continuing to make some claims of privilege, either in newly produced documents or by asserting privilege over documents already produced into the depository some time ago, and I think at some point this process has to end. Last May the court ordered that all documents must be logged on privilege logs within 30 days -- that is, by early June -- or privilege would be waived. Long after June, however, privileged documents continued to be identified, including certain documents from the plaintiffs' files, and after guidance from this court, the parties several months ago entered into a stipulated order as to how to handle the new privilege documents. But we're now in trial and the problem is still continuing, and we request an order that privilege is waived from this point forward for any additional privilege documents absent extraordinary circumstances demonstrated.
With respect to defendants' request for a stay, a stay should not be granted by this court, we submit, for yet another frivolous appeal. The Court of Appeals has already addressed the process used in these proceedings, and a stay would only guarantee that the plaintiffs would not be able to use any of these documents in trial. In view of the documented evidence of abuse of these privilege proceedings, including calculatedly overbroad claims of privilege, and looking at the substance of the documents as they appear to us from the privilege logs, we believe it would be a substantial miscarriage of justice to stay any proceedings and deny us an opportunity to review these documents. With a stay, essentially the defendants will win this process by default.
And finally, the plaintiffs want to make it clear that we believe that many important probative documents will still remain improperly shielded under claims of privilege even with the production of the documents recommended by the special master in his report, but we are now well into the trial of this case and time does not permit a continued fight for disclosure of additional documents. We are confident, however, that the issue of these additional documents being improperly withheld on claims of privilege will be addressed on another day.
Thank you.
MR. WEBER: Just a few very brief points, Your Honor, and I do appreciate the time the court has given us.
Counsel for the plaintiffs mentioned several times that this issue had been addressed by the Court of Appeals. With respect to that, I think all I can suggest is to urge the court to reread the Court of Appeals decision, because that, in just some few paragraphs, makes it clear that that assertion is totally incorrect. The Court of Appeals said that the documents about which the appeal was being taken had already become available to the public by alternative means, and then went on to say that it appeared to the Court of Appeals that given that circumstance, what was being sought was an advisory opinion, and then went on to speak about how the attack was untimely. So I assume the court doesn't need an additional copy of that. If you would like one, I've got one with me.
THE COURT: No thanks.
MR. WEBER: Okay. So I don't think the Court of Appeals addressed this on the substance, and I think that's clear.
When we sat down this morning to talk about this, I was advised then that there had been no misclassification issue with respect to those additional 475 documents. That's what I addressed Your Honor about. I mean I've heard enough here that makes me say that the to deal with that, if the court has any question whatsoever, is deal with those issues in front of the special master with respect to those 475. If there are questions about it, that -- that's what we ought do.
The last point I'd like -- well two last points I'd like to make just briefly, Your Honor. Particularly with respect to outside counsel's work product with respect to witnesses and issues that still live in these cases, I heard no statement about precedent where documents of that type have been turned over. I'm not talking about inside counsel's work product in this area -- we've made our objections on that, we've got it in our brief -- but I'm talking now about outside counsel's work product, it's a discrete set of documents with respect to when our firm was retained and some of these other firms, those documents should either be excepted specially or gone back to the special master for a document-by-document review, because otherwise we're going to be in that position that is unprecedented, Hickman v. Taylor tells us we shouldn't be in, where litigation adversaries are going to be getting strategic analytical pieces by counsel on the other side. Counsel on the other side are allowed to do that, they're expected to do that, they ought to do that, that's how they get familiar with the case. So again, I urge upon Your Honor a special treatment for those outside counsel documents that are opinion work product, that deal with outside counsel analysis on how to defend these cases. And I think the best example of that, as I said, is the fact that my law firm got retained in 1985, and we came in and we prepared a number of those documents, and some of them are in the client's files, and my litigation adversary shouldn't get the benefit of my thinking on how to defend these cases.
The last point on the stay, Your Honor, I would just reiterate our point on that. I think particularly given the breadth of what's being ordered to be produced, a stay would be appropriate. We are going to move expeditiously. And I think the experience with the last time this went up shows that the appellate courts will address this expeditiously and give us all guidance.
Thank you very much. And again, I apologize for my voice.
MR. BERNICK: I guess I have two sentences to give. Is it all right?
Can Your Honor hear me as it is now --
THE COURT: I can hear you.
MR. BERNICK: I'm not going to reiterate the arguments that we already made, I just want to respond to two factual issues concerning the 108.
Ms. Walburn indicated that the documents had been through the review process, and as a factual matter, with regard to the 18 documents, there was only one that was actually reviewed on the list that I gave Your Honor. It is item number 12, and it -- I can give the Bates number, it is 536471102. That was the only one that was actually reviewed, Your Honor, and I tender it up to the court. It was part of the 4.b. category because it relates -- there's a small reference to CTR during the course of the document. That's the only one of the 18 that was actually reviewed.
Now as I indicated previously, no finding --
We had previously notified Special Master Gehan of the status of these documents. No finding was made even as to that one document. Again, Ms. Walburn says, well, we still want the documents that relate to the pH and ammonia. None of these documents relate to -- of the 108, none of them relate to post-1994 research regarding pH and ammonia, none of them do, including that one document that was reviewed. The post-1994 research regarding the pH and ammonia point picks out the Shehadeh study, and that is the subject of this separate argument they've made, but as to the 18 documents that were part of this group that were inadvertently logged, none of them relate to post-1994 research regarding ammonia and pH. Only one was actually reviewed; no findings were made. That document was part of this broader project that was put together that relates to biological research.
Again, if Your Honor wants to take a look at these four documents, these additional documents they've picked off the log for purposes of seeing whether they relate to pH and ammonia, that obviously is the prerogative of the court, but really, it's a separate issue.
THE COURT: Anyone else for the defendants that have any rebuttal?
THE COURT: Okay, counsel.
MS. WALBURN: Two brief points, one with respect to the B&W documents. When counsel states that only one was actually reviewed, of course the special master was conducting a random review process and there were 18 of the post-'94 documents that went through that process, and there are others that fall into categories that the special master has recommended be produced.
With respect to the documents that didn't go through the category process, that was due to B&W's failure to timely put those into categories. And for any categories that they fall in that the special master recommended be produced, we would request those documents. I'll also note that counsel chooses his words carefully when he states what these documents do and don't contain, and our request is for any of those documents that also relate to nicotine and pH.
And the last point with respect to the Court of Appeals decision, the Court of Appeals, among other things, stated in its January 13 order that to the extent the defendants are challenging the procedures employed by the special master, they have not established that they suffered injury for which extraordinary relief is the only remedy, that the procedures they seek would have yielded any greater protection or that the procedures now being employed are identical.
Thank you.
MR. BERNICK: The one document was reviewed by the special master not on the basis of random selection. The plaintiffs were given the ability to pick documents off the log. That was one of the ones that they picked off the log.
THE COURT: Okay. All right. Well we should have had the jury back this afternoon, I guess.
MR. CIRESI: Your Honor, I do have a couple, if I could, just a couple housekeeping matters.
THE COURT: Sure.
MR. CIRESI: Judge, first of all with respect to the issue of punitive damages, the defendants have the option under Minnesota Statute 549.19 and .20 to bifurcate that issue. They have advised us that they do not wish to bifurcate, so the issue will be joined in this case. And I just wanted the record to reflect that, that in this phase of the case, we will address the issue of punitive damages.
Secondly, with regard to the Huber materials, the court has advised the parties that it has received additional materials from Judge Folsom, the United States District Court, District of Texas, and we're just anxious to know when we might be able to obtain those documents, or if the court had something else in mind with regard to that. And I'll leave that for the court to let us -- let the parties know.
Thirdly, we have the Osdene deposition to be continued tomorrow. There are questions that have been designated by the defendants that fit squarely within the court's order prohibiting the use of leading questions with regard to what Philip Morris wanted Dr. Osdene to do. The problem with standing up and objecting is they get the question out every time before we object. And there's a series of questions that commence basically at page 247 of the Osdene deposition, and they are leading questions that incorporate alleged Philip Morris wishes with regard to Dr. Osdene. And I'm referring to the court's order of February 4th, 1998, and specifically the whereas column on page five where it states that "The leading question posed by defendants' question is not based on documents produced in this action and Dr. Osdene's responses thereto shall be inadmissible." And we're requesting that those questions not be allowed to be asked and we not have to be forced to object at the end of each question, because otherwise the very purpose for which the order was entered is vitiated.
The last item, Your Honor, is with regard to document day, the parties do have a dispute. This won't come up until Friday. The defendants take the position that in our case in chief they can put in documents they want to when we have a document day. We take the position that if they want document days, that should be in their case in chief. So we do have that dispute. And we anticipate if the witnesses go as expected, we may be reaching a document day on Friday of this week. So I wanted to alert the court to that.
THE COURT: All right. Yes, counsel.
MR. GARNICK: Murray Garnick from Philip Morris. We can address the Osdene thing, we can address it on side bar, but we do have a response to Mr. Ciresi.
THE COURT: Let's talk about Osdene.
MR. GARNICK: Okay. Plaintiffs' objections to portions of the Osdene testimony designated by Philip Morris really fall into two categories. The first category are questions that do not deal with the substance of the merits of the testimony, but rather they deal with the issue and the issue surrounding Osdene's invocation of his Fifth Amendment right and various letters that were sent to Mr. Osdene or counsel for Mr. Osdene urging him to testify. The plaintiffs played the testimony -- the question in which he was asked if Philip Morris was paying for the attorneys of Mr. Osdene, and the answer was yes, and we think that in light of that, that kind of opened the door and necessitates as a matter of fairness that questions asked about these letters urging Mr. Osdene to testify be played as well.
Now some of these are leading questions as a matter of necessity, but certainly not all of them are leading questions as a matter of necessity, if that was -- if that's the exact problem of the plaintiffs; some of them are on documents that are part of the record, and then there are open-ended questions like "Do you see that? Do you see...?" -- same kind of open-ended questions that the plaintiffs ask drawn from the documents at issue. And we think, again as a matter of fairness, that should be played for the jury.
THE COURT: Well with regard to Osdene, as you know, I did view the deposition, and the basis for my order was based on my view of the deposition, which clearly were questions that clearly were not asked in an appropriate manner. If you choose to abuse that, I will just strike all the questions.
I think my order is clear. I expect counsel to comply with my order, and if you don't comply with my order, I'll strike all the questions. So I'm suggesting you make a good-faith review of the deposition to eliminate all those questions that violate my order and leave in only those that do not. And I don't think I can make it any clearer than that. Okay?
MR. GARNICK: Okay.
THE COURT: Anything further this morning?
MR. WEBER: Your Honor, I don't know if you want to discuss this document- day issue a little bit now or whether you'd like us to give you a piece of paper. I can spend a minute on it now.
THE COURT: Sure. Go ahead.
MR. WEBER: And it's a Rule 106 issue. Rule 106 talks about related writings, not just parts of documents but related writings, and it goes on to say that when a writing, et cetera, is introduced by a party, an adverse party may require the introduction at that time of any other part -- which is not what we're talking about -- or any other writing which ought in fairness to be considered contemporaneously with it. So that the area of the dispute we've had with Mr. Ciresi with respect to his request on these document days is that with respect to certain documents which he wants to put in, we have a right to put in a related writing under 106 that ought in fairness be considered with it. And that's the nature of the dispute. We're not trying to overwhelm his document day. It's a small, relatively small proportion of issues -- of documents in response to his.
THE COURT: Well I think the -- I think the rule's really clear. If the plaintiffs would put a document in and it would be a part of a document and trying to put in something that is only a partial part of the document, obviously it would be appropriate to put the entire document in. However, I expect the plaintiffs to have the opportunity to present their case in chief to the jury and I expect the defendants to have their opportunity to present their case in chief to the jury, and we do this seriatim. And this is the way, this is the process, and I will not allow the defendants to intervene in the plaintiffs' case to get their presentation so that the jury has no idea what they're viewing. The purpose is to allow the jury to understand what's being presented, and we do that in an orderly process.
So I'd be glad to listen to something, but you're not going to be able to abuse the process. And I'm not sure -- I don't see any real advantage to the plaintiffs because you'll have just as much opportunity as the plaintiffs in putting your documents in. But if you want to put something in, you have to treat that as an exception. Where the plaintiffs try to put something -- try to get something that's only partially a document, then I will certainly allow you to put it in. But that will be treated as an exception, just for your --
MR. WEBER: Well we'll go back and look at that obviously--
THE COURT: Okay.
MR. WEBER: -- with Your Honor's comments in mind, see if there still is an issue.
THE COURT: All right.
MR. WEBER: The only other issue on that document-day issue, Your Honor, was I think there may have been some question about the procedure on that. I know the defendants clearly felt that if the jurors were going to be given these little binders of documents, that ought be done, as it is with any evidence in which it's done, in the presence of the court officer, such as the bailiff, so that we can understand there is no discussion going on, just like the receipt of any evidence.
THE COURT: Okay. I'm having difficulty understanding what your position is in that regard.
MR. WEBER: The position is that when the jury gets evidence of whatever type, there's always a court officer there making sure that -- about the manner in which the evidence is received. The only way we can make sure that the jurors aren't talking or commenting or whatever on evidence is to have a court officer there as they sit there and read it. The only time the jurors are free to discuss among themselves is when they go into that room and make their decision, so we do object to a process in which the jurors will be getting evidence and basically just be left alone in a situation where they might talk about it because it's artificial, it's not the way evidence is received in a court.
THE COURT: Well I really have -- I certainly don't want a bailiff overseeing and viewing any action taken by the jury with regard to any evidence in the case. I think the jury is going to be instructed with regard to the evidence that's received. I have real --
I've never allowed a bailiff to look over the shoulders of the jury. I mean once -- the bailiff has no right to do that. I'm real leery of what you're suggesting there. There must be --
I think a corrective -- maybe a corrective instruction to the jury might be appropriate if you want to do that. But I'm concerned about the actions of the bailiff. The bailiff has a very limited capacity, and I don't want him reading documents and I don't want him looking over someone's shoulder. So I don't like that process.
I'd be glad to listen to something else. I understand some of your concern, and I'll be glad to address it, but I think I would have to do it a different manner.
MR. WEBER: There's no question of what I'm suggesting or we'll be suggesting in our papers is unusual, and the reason it's so unusual is jurors never get evidence apart from court process. They're always sitting there. And the procedure plaintiffs are suggesting is they somehow get evidence in some separate way where they can sit there, read it, look at it. Well we can argue about that, but our point was that if they're going to get it, there ought to be some type of court official there to make sure they're receiving it the way they normally would, which is they separately receive it and there's no interchange, et cetera. That was the --
THE COURT: Okay. I understand your concern.
MR. WEBER: Okay.
THE COURT: And I'd be willing -- certainly willing to address it. I don't like your remedy though.
MR. WEBER: Okay.
THE COURT: If you can give me something a little more appropriate, I would certainly be glad to listen to it.
MR. WEBER: You want me to come up with a better idea, then, I assume.
THE COURT: Yes.
MR. WEBER: Okay. We'll see if I can.
THE COURT: Okay.
MR. CIRESI: Your Honor, we have done this before, in fact it's been done in this courthouse, where evidence in the form of documentary evidence was provided to the jurors. It was done on the Dalkon shield case, it was in Judge Alsop's courtroom. And a bailiff is totally inappropriate to be in the jury room. The jurors should be instructed there should be no deliberation or discussion of the documents there, they're to read them, and I agree with that 100 percent, and that should be given to them in strong wording by the court itself. But to suggest that a bailiff or some third party be in the jury room with the jury is just an inappropriate function for a bailiff. And if defendants have some other type of restriction they would want articulated to the jury -- I can't imagine what it would be -- but we can wait and discuss that at that time.
THE COURT: Okay. I'll entertain any more ideas before Friday, if you can get something to me.
MR. WEBER: Okay.
THE COURT: Okay?
MR. WEBER: Thank you, Your Honor.
MR. CIRESI: Judge, one thing, how many copies should we have of the jury of the documents? Should we have maybe three copies of each, or do you want more than that?
THE COURT: I don't think more than three is really a good idea.
MR. CIRESI: Okay.
THE COURT: I don't know if someone has other thoughts about it, but I certainly don't want one copy for each juror.
MR. CIRESI: No.
THE COURT: Otherwise we'll have to have them deliberate in the Civic Center.
MR. CIRESI: Why don't we discuss that with the defendants, Your Honor, and we'll come up with something.
THE COURT: We can count the tables and chairs. In fact, I'm sure -- confident you're going to agree on that.
Anything further?
MR. CIRESI: Nothing further, Your Honor.
THE COURT: Have a nice day.
MR. CIRESI: Thank you.
THE CLERK: Court stands in recess.
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