COMMONWEALTH OF MASSACHUSETTS
MIDDLESEX SS. SUPERIOR COURT
COMMONWEALTH OF MASSACHUSETTS, *
PHILIP MORRIS INCORPORATED, R.J. *
REYNOLDS TOBACCO COMPANY, BROWN & *
WILLIAMSON TOBACCO CORPORATION, *
B.A.T. INDUSTRIES P.L.C., LORILLARD *
TOBACCO COMPANY, NEW ENGLAND *
WHOLESALE TOBACCO CO., INC., *
ALBERT H. NOTINI & SONS, INC., THE *
COUNCIL FOR TOBACCO RESEARCH-U.S.A., *
INC., and THE TOBACCO INSTITUTE, INC. *
BEFORE: SOSMAN, J.
May 7, 1998
Official Court Reporter
GEORGE K. WEBER, ESQ., Assistant Attorney General,
for the Commonwealth
RICHARD M. HEIMANN, RONALD L. MOTLEY, REBECCA McINTYRE,
JEFFREY D. WOOLF and THOMAS M. SOBOL, ESQS., Special
Assistant Attorneys General, for the Commonwealth
THOMAS J. GRIFFIN, JR., KENNETH J. PARSIGIAN, BARBARA HEALY SMITH and BARBARA ROBBINS, ESQS., for Philip Morris
MARJORIE PRESS LINDBLOM, ESQ., for Brown & Williamson
May 7, 1998
THE CLERK: May I call the case, your
THE COURT: Please.
THE CLERK: Middlesex Superior Court
docket number 95-7378, Commonwealth of
Massachusetts versus Philip Morris, Inc., et. als.
The Honorable Martha Sosman presiding.
Will counsel, please identify themselves,
MR. GRIFFIN: Good morning, your Honor.
Thomas Griffin for Philip Morris and liaison
counsel for the defendants. I expect other counsel
for the defendants will be speaking to your Honor
depending upon the agenda items reached.
MR. PARSIGIAN: Good morning, your Honor.
Ken Parsigian for Philip Morris, and speaking on
behalf of all defendants today.
MR. MOTLEY: Good morning, your Honor. Ron
Motley for the Commonwealth.
MR. WEBER: George Weber for the
Commonwealth, your Honor.
MS. McINTYRE: Rebecca McIntyre for the
MR. HEIMANN: And Richard Heimann for the
Commonwealth, your Honor.
THE COURT: I received the agenda only
yesterday, unfortunately, but I did get it. And it
seems to me we'll just go through the things in
order there. So we start first with the
Defendants' Motion Compelling Discovery of
Individual Medicaid Recipients.
May I ask the defendants, first, have you
done come calculation of how long it would take to
take all these depositions?
MR. PARSIGIAN: Well, your Honor, there are
two issues at stake, and that's whether we get all
Medicaid recipients, which we believe we're
entitled to as a matter of law, but which, frankly,
given your Honor's earlier rulings in this case, I
don't hold much hope out for. And you can correct
me if I'm wrong. But we've also proposed an
We preserve that right that we believe
we're entitled to all recipients, and we don't know
exactly how many recipients they claim yet,
because, just recently, your Honor, having led us
to believe they were only seeking damages back to
1989, in their interrogatory answers that we
received last week, the Commonwealth now tells us --
THE COURT: How many Medicaid recipients
are you proposing to depose?
MR. PARSIGIAN: We believe that a
sufficient number to have an expert draw
scientifically reliable inferences is in the range
of 1500 to 2000.
THE COURT: And have you made a calculation
of how long it would take to take 1500 to 2000
depositions of this nature?
MR. PARSIGIAN: Well, we are prepared to
triple, quadruple track them. They do not take
long. The depositions themselves do not take more
than a day, and can often be completed in half a
day. We're prepared to do them as expeditiously as
possible. It does take a little time to get the
medical records, but if you do four, six, eight a
day, we're prepared to do them as quickly as
I'm also at pains to note, your Honor, we
also proposed to the Commonwealth that if they
disagree with our experts' numbers about what is a
sufficient sample to allow an expert to draw a
scientifically reliable conclusion, back in
February we asked them to tell us what their
experts think. Give us a number that you will not
challenge; that you will say is enough. And they
wouldn't give us that number.
The best number we can come up with,
without having had their model yet in particular,
is a number in the range of 1500 to 2000.
But I note, your Honor, we started
deposition discovery in this case in about January
or February of this year. In a case with this much
at stake, the fact that it might take ten months to
do those depositions is not all that unusual. And
let me must give you one example --
THE COURT: I must say, I find it almost
impossible to imagine that this would be completed
in anything remotely resembling two months.
MR. PARSIGIAN: Ten, I said, your Honor.
THE COURT: Ten months even. There is --
you know, there's about 250 business days in a
year, and even if you had these scheduled every
single day without missing a single one, either
from witness problems, attorney problems, even if
you were doing two or three a day, that's not ten
months. And I don't think it's realistic to think
that you're going to get six to eight a day, every-single day, five days a week without missing a
single day or a single witness.
We're talking several years that it looks
to me, minimal, to take 1500 to 2000 depositions.
MR. PARSIGIAN: Well, let me respond to
that, your Honor.
First of all, there's a survey I'd like you
to take a look at. This is a survey that the
Commonwealth did. It's a survey that the
Commonwealth did of a subset of the Massachusetts
Medicaid population, The Primary Care Clinician
Plan Member Survey it's called.
Now, in this survey that they did -- if I
can hand up a copy to you -- this was a survey of a
subset of about 250,000 members of the
Massachusetts Medicaid population. And they felt,
with their statistical experts, not ours, that in
order to draw scientifically reliable conclusions
about that subset, they needed to take a thousand
respondents. They sent out two thousand surveys;
they got 1038 responses. That's what they thought
they needed to draw reliable inferences about a
small subset of the population.
Another example, from their brief, they
site the Marcos case. They say the Marcos case
shows that you can do these cases by statistical
evidence. Well, let's take a look at the Marcos
Number one, it took nine years to try the
Marcos. They tried it in three phases. There were
ten thousand claimants, not hundreds of thousands,
as here - ten thousand. They took nine years to try
it. They did it in three phrases: liability,
compensatory damages, punitives.
Now, here's what they did in that case. The
Court appointed an expert to develop a model of how
many members of the actual group -- so in this
case, the actual Massachusetts Medicaid population
-- they needed to take depositions of in order to
draw scientifically reliable conclusions about the
9500 in the group.
They decided 137 would work. They gave
everyone an opportunity to depose those 137. They
also gave the defendants the names and identities
of all the other class members and gave them the
opportunity to depose all 9500. That's what they
felt was necessary as a matter of due process. Now,
they didn't depose all 9500 in that case because
their argument was, it doesn't matter. You can't do
it by 137. But that's what they say is enough for
us to draw reliable inferences.
We didn't aggregate hundreds of thousand
of claims. They did. It's not unusual for us to --
THE COURT: They're not -- I think the
problem is, they're not aggregating hundreds of
thousands of claims. They are, I gather, maybe -- I
haven't seen it yet, and again, this is not the
argument on the summary judgment motion. Everybody
needs to keep that very clear -- they are using a
statistical epidemiological model that, you know,
such and such percent of people in this age range
get this and that disease, and X percent of it has
been shown to be smoking related. It's that kind of
They're not taking hundreds of thousands
of specific people and adding them up. That's not
Now, you certainly are entitled to
investigate your version of what's wrong with that
approach, how it can be attacked, undermined, how
its assumptions can be challenged. But I must say I
question whether deposing 1500 to 2000 people is a
terribly efficient way of doing that.
MR. PARSIGIAN: Well, let me respond to
that, your Honor.
First of all, let me tell you something
about what they intend to do, because now that we
have their interrogatories answers, we know a
little something about it.
What they're going to do - and they've done
this in every state - is they use a 1987 survey
that was done in the United States, done by the
Federal Government by the Agency for Health Care
Policy and Research. It's a 1987 survey throughout
the United States, 35,000 people were surveyed.
They weren't Medicaid recipients only --
THE COURT: This is not the summary
MR. PARSIGIAN: I understand that, your
Honor, but in order to understand my point you need
to know --
THE COURT: I want to know why you need to
depose people as a means of criticizing the study
or the analysis of the Commonwealth?
MR. PARSIGIAN: There are a couple of
First of all, we have to have an
opportunity to do more than simply criticize their
experts. We have to have an opportunity to put on a
The defense isn't just: Their experts are
wrong. The defense also has to be: We can show you
what's right by looking at the actual Massachusetts
Medicaid population. And if I just might for a
moment, show you from the NMES study. Now, this is
the study that they're going to rely on. It was
done in 1987. They're going to try to project
backward, apparently all the way to 1970 now, based
on their new answers, and forward all the way to
1998 from this study.
Now, let's take a look at what that study
itself says it was for. "The major components of
NMES II contain information to make national
estimates," okay, "of expenditures ... for the
entire civilian population of the United States
during the" year ... "1987." That's what they're
going to look at.
It doesn't do me any good to try to explain
to a jury or to this Court what's happening with
the Massachusetts Medicaid population by, again,
1998 and '97 and '96, to go back and look at a study
that is only designed to deal with the year 1987,
the civilian population of the United States --
THE COURT: Surely you have lots of sources
of information about what is different about
Massachusetts demographics, even the Massachusetts
Medicaid population as compared to a national
survey of everybody, short of deposing 1500 to 2000
MR. PARSIGIAN: It's actually not true,
your Honor. And let me take that on, head on.
Last time I was before your Honor in
October 1997, you said a lot of things I didn't
want to hear, but you said one thing I did want to
hear. You said proximate cause is still a part of
THE COURT: Of course it is.
MR. PARSIGIAN: You also said that the
state has to show that a significant number of
Medicaid recipients actually relied on statements
by the cigarette companies.
Now, what they're going to have to show to
show that wrongful conduct by the defendants
proximately caused increased Medicaid expenditures
by the state - the state didn't smoke cigarettes.
They tell us that all the time. So that's not the
proximate link between us and the state. The link
is that what they allege we did wrong, the wrongful
conduct, caused recipients to start or continue
smoking; that that caused them to get injured; and
that that caused the Commonwealth to spend more
money on Medicaid expenses than it would have spent
without the smoking, without the wrongful conduct.
How can --
THE COURT: Can I ask it this way. Can your
clients investigate what causes people to use their
products, which is something I'm sure they look at
for purposes of marketing, product development,
etcetera, etcetera, do they run around and depose
MR. PARSIGIAN: Well, first of all --
THE COURT: Of course they don't. You
gather data on these subjects in many different
ways, and depositions, I must say, seem to be the
most labor-intensive way of getting at --
MR. PARSIGIAN: Actually, it's not, and let
me tell you why.
THE COURT: -- the information you're
MR. PARSIGIAN: Let me tell you why.
Again, I go back to the survey they're going to
rely on. We explored the possibility of trying to
do a survey, and I note that for us to do a survey
of Massachusetts Medicaid recipients, we need
information from them. However we're going to get
the info, from actual recipients, the actual people
they claim relied and were injured and smoked, we
will have to get those names from them, and those
medical records from them. And they refuse to give
them to us.
But let me tell you what happened with that
survey. That survey only looks to draw
scientifically reliable inferences about that
population, the civilian population of the United
States in 1987, because they didn't just mail out a
survey and take the first thousand that came back.
If you got that kind of response, it would be
What they did is, they sent people out,
door-to-door, and they followed up every three
months for a year, and they'd say to people: If you
don't have the answers to number 16 through 21 on
the survey this time, I'll be back in three months.
That's the only way they could get an 80 percent
response rate which was needed to draw
scientifically reliable conclusions about the
population and fill in the blanks with the
We figure if we tried to do a survey like
that in order to garner this information, first,
we'd still have to have the same thing we're asking
for: the names and identities of the 2000
recipients, and all their medical records.
I'm not sure that it would be faster to go
to them every three months for a year and check up
on their answers to the survey, or to simply get
them in for a deposition where you can ask all
But we were prepared to negotiate with the
Commonwealth about any possibility that would allow
us to reach our goal, which is, to actually put on
a defense in this case; not just criticize their
experts, but put on an affirmative case that's
based not on the national population from 1987, but
on the real people they claim were injured.
It has never happened anywhere in the
United States before, ever, that there has been a
case where the other side put on no evidence about
the actually injured people, only evidence about
some different group, in a different year, and then
tried to draw inferences from it. But even if they
are allowed to do that, surely defendants have to
be allowed some access to the real population. They
use the wrong people. We want to use the right
people. And they won't let us get at them. That's
In Massachusetts there's a case -- we cite
it in our briefs -- called the Meunier's Case, 319
Mass 421. The Supreme Judicial Court said, "The
Massachusetts Constitution requires that a
defendant have, quote, a fair opportunity of
introducing all available material evidence in
support of, or defense against the claim, and to
have it considered and weighed by the trier of
We're not asking for all. I mean, we've
asked for it, but we know you're not going to give
it to us, so we've preserved that issue. But we're
prepared to try to put on some defense with less
than all, but it's got to be a sufficient number
that an expert can sit on the stand, raise his or
her hand and say, "As a matter of science, I can
draw a reliable inference about the whole
population." We can't rewrite the laws of
statistics; the laws of science. The truth is, it
takes a lot of people in order to draw a reliable
inference about the eight hundred thousand, one
million people -- I don't know how many, depending
on how far back they're going -- that they're
trying to claim smoked our products because of our
wrongful conduct; got injured because of our
wrongful conduct; and charged those expenses to the
There's simply no other way to do it
effectively without some access to a sufficient
number of them that an expert can raise his or her
hand and say, "Yes, this is science. This is not
hocus-pocus. This is real science."
And I note for your Honor, a problem very
similar to this that occurred in the Florida case.
A number of times in this case we've talked about
analogies to other cases.
In Florida they tried to get depositions of
all the recipients, and the Court said no. And so
they asked for a more limited number so that they
could show the Court what kind of information they
would get so the Court would be able to see that we
really are entitled to all of them.
They got 45: 25 that were taken randomly,
20 that were volunteers, I believe. When they got
to the stage of trial and they wanted to try to use
those 45 depositions, the plaintiff said, "Wait a
minute, that's not a statistically reliable sample
of the whole Florida Medicaid population. Since
it's not a reliable sample of the whole population,
you can't use any of those depositions. That's not
relevant. It doesn't come in. Those are just
fluctuations, just oddities." And the Court
agreed. None of it got to be used.
I want to take a number that we can use,
that a scientist can use to persuade the jury that
their model, their model which produced the absurd
results in Minnesota that 50 percent of the
smoking-related expense was attributable to 19 to
34 year-old males, who have car accidents and
broken arms, that 87 million of it was attributable
to 94 year-old women in nursing homes who went in
because of broken hips and mental disorders, I want
to be able to say, not just: They're wrong. Their
math is bad. Their statistics are bad. But guess
what, let me show you what happens with the real
They don't spend more. They don't cost more because
they're smokers. And guess why they started
smoking? They didn't rely on what we said.
How can I get that evidence without going
to the recipients themselves? There's simply no
THE COURT: Anything further?
MR. PARSIGIAN: No, I'm not -- I thought
you were about to ask a question.
Now, what I'd like to do to have you
consider very seriously what would work when you're
talking about --
THE COURT: Let me -- I will interrupt you.
If we're going to look to other cases, I gather in
none of these other cases have you been allowed to
take anything more than something in the range of
35 to 45, or something like that, plaintiff's
MR. PARSIGIAN: To my knowledge, there
isn't any state in which we've been allowed more
THE COURT: Right.
MR. PARSIGIAN: But I can also tell you,
when we were allowed the 45, it was a waste of
time. The court didn't allow --
THE COURT: I would agree with that. It
seems to me that there is indeed no point in doing
a small handful because it doesn't do anything
useful for anybody. That's a total waste of time.
But no one has allowed you to do this. And I would
assume it's for the good and practical reason that
it would take years to do.
MR. PARSIGIAN: Well, your Honor, I don't
know if that's the reason. I think it denies us of
our due process rights. But, here's the important
point. I've been in cases in this court, this very
court, with 250 thousand dollars at stake that took
seven or eight years to get to trial. So the fact
that it might take a couple of years to do the
discovery when they want us to write a check for a
couple of billion dollars, should not surprise
anyone. Look at the cases they cite.
The Marcos case took nine years to try. If
we depose two thousand recipients, it would not
take nine years to try this case. It wouldn't take
seven. It wouldn't take five. And we're not
THE COURT: Well, this case --
MR. PARSIGIAN: We didn't put this at issue
THE COURT: -- this case was filed in late
1995. We're now into the spring of 1998 --
MR. PARSIGIAN: Well, your Honor, let me
respond to that.
THE COURT: -- and I am a little bit
concerned. It seems to me that one of the things
about doing studies and surveys in the usual way
that researchers in those areas do them is that
they never needed any permission from me, from the
plaintiffs, or anybody else, to go do investigative
studies, surveys, research in this area. And,
again, I suspect that they do variations on this
kind of work all the time for purposes of
marketing, product development, and those sorts of
things. This is not an arena that is foreign to
these defendants and the various scientists who
work with them.
And that if they, you know, wanted to spend
several years working on models and developing a
database about what is it that causes people to
smoke; what is it that causes people to continue to
smoke, they've had years already in which they
could have been working on it.
I am not impressed by the idea that you
need specifically to have Massachusetts Medicaid
patients to answer those questions: what does cause
people to smoke; what does cause people who are
already smokers to continue to smoke; what causes
them to fail when some of them try to quit and
don't end up quitting. Those are subjects that can
be investigated, and have been investigated, by
people without ever resorting to depositions or
this, and --
MR. PARSIGIAN: Well, your Honor --
THE COURT: -- we've had these kinds of
cases pending. Both the Attorney General-style
cases that match these; similar issues obviously
come up even in all the personal injury cases that
are brought by smokers where the defendants have
explained what is it that causes people to smoke;
what is it that cause people to continue to smoke.
There is nothing that novel about the
issues that are now being raised, and they are
amenable to various research techniques. I really
do not see why in the spring of 1998, we have to
tack on, what strikes me as a minimum three to four
years, absolute minimum, three to four years, just
to get the depositions done. Then, of course,
there's the time for the experts to do the
tabulation of the data, its coding, its
manipulation, that stuff. That would tack on more.
I mean, clearly, if I allowed anything
remotely resembling the kind of discovery you're
now asking for, we would not be trying this case
until something, you know, 2003, 2004, would be my
MR. PARSIGIAN: Your Honor, let me respond
THE COURT: And I am not prepared to do
that over an issue where you have had ample
techniques at your disposal. The only thing you
haven't had at your disposal is the specific names
and medical records of specific Massachusetts
Medicaid patients, but you've had everything else
all along for years.
MR. PARSIGIAN: But, your Honor, what you
miss is the fact that what we're missing is
precisely what we need. And let me explain why.
It's very significant, your Honor.
The Massachusetts Medicaid population--
THE COURT: Do you think that Medicaid
recipients smoke for different reasons from other
MR. PARSIGIAN: We think it's highly
possible, and there are other issues, your Honor,
many other issues.
THE COURT: Different reasons than people
of comparable economic, educational, social
MR. PARSIGIAN: Your Honor --
THE COURT: In other words, you can't even
begin to get a handle on these things unless you
talk specifically to Medicaid
MR. PARSIGIAN: No, that's not -- beginning
to get a handle on it for purposes of making some
marketing decisions is one thing. To stand up in
court and say, have an expert say to a 95 percent
confidence level, "I can draw the following
inferences about this precise population, the
Massachusetts Medicaid recipient population,"
that's a whole different thing than saying, "Can we
get some handle on it? Do we have some idea?" And
let me explore with you some of the issues that
would need to be looked at in order to get that
It's not just, why did you start smoking.
In the Florida case, in Florida, you know, the
statute there created a number of presumptions; one
of them was that you weren't going to be allowed to
find out anything about the actual recipients. And
the Supreme Court of Florida struck that down. They
said: No, that's unconstitutional because without
access to the actual recipients, the Supreme Court
of Florida said without that access, we don't see
how you could possibly -- the current Act would
prevent a defendant from demonstrating the
impropriety of the individual payments, or whether
the Medicaid recipients --
THE COURT: I gather there were other
shortcuts in that statute that are not present in
the Massachusetts statutes, and I don't have to
deal with them. But my question is --
MR. PARSIGIAN: No, but, your Honor --
THE COURT: My question is, do you really
have any basis for believing that data taken from a
population pool that has some of the, at least
basic attributes of Medicaid people in terms of
educational level, income level, background, job
history and those sorts of things, do you really
feel that there's going to be this massive
difference as to why they smoke, or why they have
difficulty stopping smoking as opposed to why
someone else doesn't?
MR. PARSIGIAN: Your Honor, first of all,
it's not just why they smoke. There are lots of
other issues here about alternative causation,
about whether they actually used our products,
about whether the payments were appropriate, the
issue that the Florida Supreme Court went up on.
Number two, your Honor, in Massachusetts
we're not like the federal rules. Let me just note
something here. We don't say that an expert can get
up and rely on anything that an expert normally
would rely on even if it's not independently
admissible. We've cited the DYS case to your Honor
in our brief.
That case stands for the proposition that
in Massachusetts, an expert can only rely on
evidence that is independently admissible. Going
out and doing a survey of a bunch of people who we
think are low income, perhaps, nationwide, to try
to serve as a proxy for the Massachusetts Medicaid
THE COURT: Do your survey low income,
Massachusetts. I mean, you can refine it pretty
MR. PARSIGIAN: But it's inadmissible
under DYS because the survey itself is hearsay,
that answer is hearsay under the DYS case. It won't
be admissible just because an expert wants to rely
on another expert's word. You've got to have
independently admissible evidence. So even if a
survey could work, it couldn't get into evidence
because of the Massachusetts evidence rules, which
is another reason why we're looking at that
THE COURT: Well, it seems to me, without
ruling on whether you're correct in that
interpretation, if you are, the Commonwealth isn't
going to get to first base anyway, so you don't
need to depose anybody.
I mean, if you're right, then you've
eliminated their -- you've eliminated their proof
without conducting any discovery at all, and I
certainly do not need to take on three, four, five
years worth of depositions simply to address this
MR. PARSIGIAN: Well, would your Honor be
prepared to have us brief the issue about whether,
right now, let's have a challenge to their model up
front, have a Lanigan-type hearing and find out
what evidence can go in.
THE COURT: We have a time period set for
summary judgment motions, and I anticipate these
sorts of issues --
MR. PARSIGIAN: But I won't be able to get
any discovery at that point. You'll only be telling
me then, "Why did you wait 'til now to ask me for
THE COURT: No. I'm well-aware that you've
been wanting to take recipient discovery. I do not
see -- I do not see that the inordinate expense and
delay that would be involved in deposing these
people is at all warranted. It is a grossly
inefficient and impractical way of getting at the
subject matter that the defendants wish to get at.
MR. PARSIGIAN: Well, your Honor --
THE COURT: They are, of course, entitled
to investigate, gather data, work with experts to
either attack the Commonwealth's models, develop
their own models, refute the underlying assumptions
in the Commonwealth's models, or doing anything.
That does not mean that they get to depose
thousands of people.
I'm not surprised to hear that no state -
no state has allowed this to go forward in any of
these - in any of these actions, and I don't intend
to break ranks and be the first.
MR. PARSIGIAN: Your Honor, if I might for
just a minute with respect to that last point?
The fact that no state in these very
difficult and highly politicized cases has done
that shouldn't be the only thing you look at. There
is no case anywhere outside these recent tobacco
cases where any court has said that a plaintiff can
prove its case on causation and damages solely by
statistical evidence, and even when they have
THE COURT: I will hear you on that issue
on the summary judgment motions.
MR. PARSIGIAN: But, your Honor, let me
THE COURT: It is a summary judgment issue.
MR. PARSIGIAN: This part of it is not.
This part of it is not.
THE COURT: No, I have --
MR. PARSIGIAN: Beyond that, your
THE COURT: We have other things to move on
to in the agenda. The defendants have never
prevailed on this point in any state. I do not hear
anything --I have read the materials -- I do not
hear anything here that would cause me to reach a
I would also agree that since the
compromise position of letting you take 25, or
letting you take 40 or 45, is meaningless, because
your own scientists, everybody's scientists, will
say, "That's not enough to do us any good," that
that is, itself, a waste of time and resources on a
very tight schedule. I will not allow depositions
of individual Medicaid recipients.
MR. PARSIGIAN: Your Honor, can I ask one
THE COURT: Mm-hmm.
MR. PARSIGIAN: Can we at least get the
names of recipients so we can go -- you suggested
we go out and do our own study. Can we at least get
them to identify the people who are in the actual
population so that we can go out on our own and try
to develop this evidence? They won't identify them
for us. They won't give us their records. If they
will identify them for us, at least we have some
remote hope of doing what you suggest that we do.
We can't do it without the names.
THE COURT: Well, I think you can do it on
a population that is not strictly Medicaid. After
all, they are taking a population, as you point
out, that is not at all strictly Medicaid. Not even
strictly Massachusetts, and not even today. So
surely, if they are putting on experts like that,
they cannot criticize it if you've done a study or
survey of people in Massachusetts today --
MR. PARSIGIAN: Oh, they certainly will
criticize it, your Honor. But should we be limited
to bad evidence because they choose to present
their case with bad evidence? We want to get the
best evidence, the really injured people. All they
have to do is give us the names to at least start
down that path. What is the resistance to giving us
THE COURT: Let me hear the Commonwealth's
position on that. I've ruled in the Commonwealth's
favor on all other aspects of the motion. I only
need you to address the issue of production of
MS. McINTYRE: Your Honor, just permitting
that limited discovery would involve an invasion of
these recipient's privacy on a massive and
The Commonwealth itself has disavowed any
need to invade the privacy of a single recipient
much less millions of them. And the reason that the
defendants are offering here is far from
compelling. They've been able to prepare a defense
in every other state case, including Minnesota,
where closing arguments are being given today,
without any specific recipient information.
I haven't heard anything that would
justify such an invasion of these people's privacy.
THE COURT: I would agree. The motion is
MS. McINTYRE: Thank you.
THE COURT: Now, next is Motion to Compel
Production of Documents Relating to the Same
Subject Matters as the Bliley Documents. Who's
going to be addressing that?
MR. PARSIGIAN: If we could just trade
THE COURT: Yeah.
MR. HEIMANN: Good morning, your Honor.
Richard Heimann on behalf of the Commonwealth on
this motion, your Honor.
This motion has two components to it, in
effect. One has to do with the subject of the
Bliley so-called disclosure, and the other
component has to do with Brown & Williamson
specifically, and concerns their disclosure of
documents on the Internet site they have.
I'll take up the Bliley matter first, and
then address the Brown & Williamson's second.
And with respect to Bliley, let me begin
with the law, and then I'm going to come to some
facts I think that are specific, and respond to
some of the arguments that the defendants have
The defendants rely, to a great extent, on
a peculiarity of the law of the Second Circuit
Federal Court. It arises out of the von Bulow
decision, which created, for the first time at
least in reported decisions, something called an
extrajudicial disclosure of privileged documents.
The Second Circuit concluded that in those
situations where the disclosure is truly
extrajudicial, by which I think they mean entirely
unrelated to litigation of any sort, that the
waiver is only a limited one and only extends to
the documents or information actually disclosed and
not to other communications or documents which
concern the same subject matter.
That decision has been followed, I
suggest, your Honor, only in the Second Circuit.
Actually, you only find cases in the southern
district of New York that rely upon it. It has
never been, in 11 years since it was decided,
relied upon in any other federal circuit that we
can find for the extrajudicial notion. It has never
been relied upon or cited in state court
jurisprudence, or in the Commonwealth.
It is directly --
THE COURT: I understand it hasn't been
relied upon, but it hasn't been rejected either.
It's a somewhat unusual set of facts. It doesn't
come up that often, and so, therefore, you know, we
have a limited number of times that it comes up.
But when it comes up, von Bulow certainly has
dominated the field.
MR. HEIMANN: In the Second Circuit, in the
courts of the Second Circuit in two or three
decisions, and a half dozen or less decisions in
the southern district of New York.
In similar circumstances, the D.C. Court
of Appeals, without even discussing this doctrine,
has rejected it by holding that any disclosure of
privileged material results in a subject matter
waiver, even inadvertent disclosure.
But, be that as it may, whether the von
Bulow extrajudicial disclosure doctrine, as it
were, is a reasonable one or not, we don't have an
extrajudicial disclosure within the meaning of von
Bulow in this case.
Von Bulow itself referred to the Teachers
District Court decision that had predated von Bulow
as a situation that did not involve an
extrajudicial disclosure. That was a case in which
the disclosing party had voluntarily disclosed
certain information or documents to a regulatory
agency of the United States, the S.E.C. in that
case. And that disclosure had nothing whatsoever to
do with the civil litigation in which the party
plaintiff was asserting that the defendant's
disclosure in that prior S.E.C. matter had
constituted a waiver of the privilege for subject
And the Second Circuit, in the von Bulow
opinion itself, agreed that that situation was
distinguishable; that the disclosure to the
regulatory agency was not extrajudicial, by which I
assume and take them to mean that disclosure
related, at least indirectly, to litigation that
was in existence, or was potential.
The same thing is true of the Kidder
decision; that's even stronger, I would suggest,
for us. That's a district court, Southern District
of New York decision that post-dates von Bulow,
that explicitly distinguishes von Bulow based upon
the Teachers case and based upon von Bulow's
analysis of the Teachers case
Kidder, again, was another situation where
the disclosing party had voluntarily disclosed
material to the S.E.C. in a circumstance where in
subsequent civil litigation, the plaintiff
contended that that disclosure was a subject matter
waiver. And the Court agreed. That's the situation
we have here.
The disclosure, as your Honor has
previously held, by the defendant Bliley, was
voluntary, but more important, it was undertaken
for the purpose of advantaging the defendants in
connection with this very litigation. The objective
of the defendants in voluntarily disclosing that
information was to achieve a settlement which would
effectively release the claims that are being
asserted in this very case.
Under those circumstances, it is clear
that the disclosures that were made were for
litigation purposes at least in part; I would say
in whole. Under those circumstances, under the von
Bulow decision, we do not deal here --
THE COURT: Let me ask you this, could you
conceivably characterize that though as a
litigation purpose that is in any way adverse to
the Commonwealth or the Commonwealth's interests?
Both sides, as I understand it, are committed
towards, working toward -- and cooperating towards
implementation of the national settlement. And,
you know, I don't know what the Attorney General
has told anybody in Congress, but I can't imagine
that he would tolerate somebody now arguing, "Well,
because you, you know, told your congressman about
this, you've now waived everything that has
anything to do with this lawsuit, and you've got to
produce it in discovery."
I would assume both sides have been talking
to the appropriate people in Congress, providing
them with information and arguments and positions.
Should I start interpreting that as a -- as a
waiver that now waives not just the specific things
that are said, but everything?
MR. HEIMANN: We haven't been revealing
confidential attorney-client communications to
politicians in Washington in connection with this
matter, your Honor. The defendants have for their
THE COURT: Well, I must say there's an
underlying irony in this motion, and that is, as I
see it, the doctrine that there's been a waiver
that now opens up an entire subject matter of
privileged material is premised on the idea that
what was waived in the first place was a valid
privilege. And the defendants are the ones that are
claiming they have a valid privilege to these
materials. And the Commonwealth is the one that's
saying they never did have such a valid privilege.
And I've never ruled on that issue, one way or the
other, with respect to these Bliley documents. I
merely ruled that if they were privileged, that had
been waived as to those specific documents.
And it is, of course, also curious that the
Bliley subpoena itself was premised on a ruling
from Minnesota that these things were not
privileged. That's clearly what started that ball
rolling, or at least what identified the documents
that Congress wanted.
And so, for me now to declare that the
production of those materials is now a waiver of
all other privileged material on the same subject
would have to, first -- I'd have to first find that
they were privileged, that this was a waiver of an
MR. HEIMANN: There are several points
there, your Honor. Let me take up the last one
first. It is not necessary for your Honor to
conclude ultimately that a document is privileged
in order to find that the disclosure of that
document waived any privilege as to that subject
matter. There's no case that so holds, I would
submit to the Court.
The situation here is, the defendants are
maintaining that all of those documents are subject
properly to attorney-client or work product
privilege. The fact of the matter is that we say, I
will concede, that some of them are not properly
subject to privilege, but we don't contend that
none of them are properly subject to attorney-client privilege at least in the first instance.
So I would submit to the Court that the
defendants should be hoisted on their own petard in
this situation. If they maintain that the documents
are privileged, which they do, not only at the time
that they litigated before, but right to this very
minute, then they should be held to that contention
for purposes of determining whether by voluntarily
disclosing them, they have waived the privilege as
not only to those documents but as to other
privileged communications relating to the same
As to the second point about the --
COURT REPORTER: One moment, please. Thank
MR. HEIMANN: As to the second point
regarding the Minnesota Court's holding, it's true
that the Court held that they were not privileged,
but not because they weren't, at least within
facially the privileges, but rather because they
were subject to the crime-fraud exception. And I
would submit to the Court under those circumstances
that normal law that your Honor has referred to
that generally applies, that is to say, a document
or communication ought to be privileged before its
voluntary disclosure results in a waiver should not
But let me go to one, and maybe even more
important point, because this really, at least in
my reading of this, is the most persuasive point I
thought the defendants made, and that was that we
don't suffer any prejudice or harm, nor are they
advantaged in any way in this litigation because
they disclosed these documents, and they support
that notion by arguing that they are maintaining
that they do not intend, and will not use, any of
those disclosed privileged documents in the defense
of the merits of this litigation. And that may be
true, that is to say, since those documents, and
the names to the extent that we've been able to
review them -- we haven't had a chance to review
them all yet -- but in the named -- they are
documents that are probative in favor of the
positions that we are asserting in this case. So I
would not expect the defendants to be running in
and presenting them as evidence in support of their
case in court.
But, two points. First of all, although
they didn't initially select which documents to
disclose, because that was done in effect by the
processes in the Minnesota court, when they did
disclose them, they knew which documents they were
disclosing, and more importantly, they knew which
documents that related to the same subject matters
they were still keeping under the covers of the
privilege. So they knew which ones were going to be
coming out and which ones relating to the subject
matter were not.
That at least in a sense is a selective
disclosure. It's their choice as to what documents
got disclosed in the end because they could have
Secondly, we will use those documents,
some of them at least, in this case. But we know
now what the defendants will argue in large part
with respect to that use of those documents. They
will say they were aberrations; that they did not
reflect corporate policy; that they were
unauthorized statements; that they were not
intended to bind or speak for the corporation. They
will contend that they were not acted on in certain
instances. I have in mind specifically that the
"deadwood" document -- that's the document in which
the lawyer was planning how to conceal records from
the world by sending them overseas or otherwise
destroying them -- they will argue that, well, that
lawyer may have been thinking about doing that, or
planning it, but he didn't do it in the event.
They may have documents that show that he
did do it that they're keeping under wraps of
privilege right now. And they will also claim that
when we use a document, we're taking it out of
context, because if that document were seen in the
context of all of the other documents, you would
see it means something very much different than
what it says.
In fact, they have actually announced very
publicly that that's their very intent. R.J.R.
issued a press release on April 22 concerning the
documents that we're talking about, and said, among
other things, "While we anticipate that plaintiffs'
lawyers will now attempt to use the documents in
courts by taking them out of context and trying to
mischaracterize and misconstrue them, we will
respond as appropriate. R.J.R. Reynolds has
produced more than six million pages of documents
to lawyers representing the State of Minnesota in
connection with the State's Medicaid lawsuit
against the tobacco industry.
Taken as a whole and not selectively out of
context, these documents more than demonstrate that
our company responsibly researches, manufactures
and markets its products to adult smokers."
On May 2nd, a representative of Brown &
Williamson was quoted in the New York Times with
respect to the Bliley documents as follows. The
fellow's name is Mark Smith, by the way. "The
process of selectively picking out specific
documents is distorted. It is like looking at one
frame of feature-length film and trying to make a
statement about what the movie was about."
This is what they will, at the trial of
this case, argue when we offer into evidence the
privileged documents that they disclosed to
Congressman Bliley and then to the world, by
saying, "Look, if you had all the others, you'd see
these don't mean what they say." We will be
prejudiced as a result of that.
We ought to be entitled to obtain all of
the otherwise privileged documents that relate to
the same subject matters as the ones they chose,
for their own advantage, to disclose, when this
case comes to trial. That is the way we are
Now, that is unusual in the factual
setting. It's not a typical situation, but that is
the circumstance we have before your Honor in this
instance. And that is why, notwithstanding the von
Bulow rule or doctrine, notwithstanding the fact
that perhaps both sides have some interest in
seeing a settlement of this case by the Legislative
process, but when they chose to advance that
interest by disclosing their privileged documents
and at the same time are going to argue that
they're an aberration; that they don't represent
corporate policy, we need to get the rest of those
documents in order to show that's not so; that
these documents do reflect corporate policy.
THE COURT: I understand your position, but
why shouldn't I wait until trial and see what use
of the documents is made, see what people actually
say about them? There's certainly times that things
happen in the course of trial that open up doors
and windows that weren't open before. But should I
sit here now and anticipate what arguments these
people will be making; what these witnesses will be
saying when they take the stand ten, twelve months
You know, I hear your point, but I must say
I think we have to wait and see what unfolds at
trial to see whether the defendants' own approach
to these documents at trial opens that particular
MR. HEIMANN: You really don't need to wait
until this trial. They've already done it in other
-- in the Minnesota trial. I mean, we know based on
what they did there --
THE COURT: Maybe they will learn in
Minnesota how the approach backfires.
MR. HEIMANN: We know what --
THE COURT: We don't know.
MR. HEIMANN: We know what they have
publicly stated, beyond what they actually did in
Minnesota, they intend to do in these trials. But
more to the point, in ordinary circumstances your
Honor's approach would be perfectly correct. And,
in fact, it's the approach that has been taken in
reported decisions. But these aren't ordinary
We're talking about tens of thousands of
documents. If it were a number that would be
manageable to deal with when the issue arose at
trial, then it would be one thing. But when we're
talking about -- just in terms of sheer volume --
more than we could possibly digest in a trial
setting when the issue arises, I would submit to
the Court that that's not fair to us to use that
process. After all, we didn't create this problem;
they did. And they created it for their own
advantage as they saw at the time.
They should not be permitted to put us in a
situation where they're going to take advantage of
having engaged in that voluntary disclosure of
privileged material in that way.
THE COURT: Well, it seems to me, as I
recall, my own reasoning was, when I viewed it as a
deliberate waiver, was the advantage they sought
was not because the contents of the documents were
in any sense favorable to their case, but the
advantage they sought was the public relations
advantage of not appearing to be stonewalling the
very Committee, and Committee Chairman, who was
trying to help them with this legislation.
It was not that, "Gee, if we show
Congressman Bliley these documents, these are
really -- these documents themselves are really
going to help convince Congress to pass this
controversial legislation." Rather, it was, "If we
keep digging in our heels and don't turn these over
but fight Congress on this, where we've already
fought and lost in Minnesota and some other places,
we're just going to look bad for fighting over it,
and we're probably going to lose ultimately anyway.
And we'll look better if we just get the bad stuff
out on the table like Congressman Bliley is asking
us to do."
It's strategic. It's deliberate. It is, in
my view, a waiver. But it's not because the
contents of the documents help them. It was the
appearance of how they handled the disclosure that
seemed to be driving these arrangements with
Congressman Bliley and this decision.
Now, the fact that they're now going to
engage in some degree of damage control to explain
what might otherwise be viewed as unfavorable
information in the documents, still doesn't make
the disclosure helpful to them - certainly not to
the jury. I mean, a jury's going to be looking at
the contents of the documents themselves; what they
say or what they don't say. Not the history of how
they got turned over.
There'll be no advantage at trial to these
defendants. There was perhaps - perhaps some public
relations advantage in front of Congress that was
involved, but not an advantage based on the
I mean, does somebody anticipate that the
jury is going to hear how these documents were
MR. HEIMANN: I don't. I would agree
THE COURT: I didn't expect so. It would
not be relevant for them to hear that.
MR. HEIMANN: Your Honor, I agree. You've
certainly, as I understood it, accurately recounted
your reasoning, at least as stated in open court,
and I think that that is sound. Although I might
add that I think the tobacco industry had in mind
the public relations more general than just the
Congress when they did this. But that probably
doesn't matter in any event in terms of the point
that your Honor is making.
But the point I'm making is, they shouldn't
be permitted, having undertaken to -- having
disclosed their documents for their own advantage,
albeit not with respect to the content but for the
reasons that your Honor has articulated, they
shouldn't then be permitted to come in to court
when we use the documents and say, "Look, this is
an aberration." Or, "Look, that's not corporate
policy." Or, "Look, he was out on a lark of his own
when he said that in that memo, " when the other
documents that they're holding back show that
that's not true; that it was corporate policy; that
it wasn't an aberration. That's the point I'm
And the practical point, I think, is the
tension between your Honor's suggested solution,
which is, hey, let's wait and see whether they
actually do it at trial, and when they do it, then
I'll make them cough up all the documents. Or
whether your Honor thinks that that's really not
fair to us --
THE COURT: No, I understand that there
could be a large volume of documents involved, but
there could also be a very small volume of
documents, depending on who the witness is. I mean,
it's one thing to say you've got to turn over other
documents that were authored by this witness, or
something that would help explain the context that
this witness is now putting on what he said, or
what he knew, or didn't know, as opposed to the
entire universe of these broad subject matters.
I mean, I am certainly concerned about, you
know, gamesmanship at trial with regard to a
specific witness. But I think we -- I know it's
going to complicate trial, but I must say I think I
can handle it more fairly on sort of a witness-by-witness, issue-by-issue basis. If things start
being done at trial that seek to take advantage of
the undisclosed documents, I'll be attuned to that
and try to deal with it. But I don't -- I am
troubled, I say, by the idea, particularly the
subject matters here are very broad. They cover an
enormous time period. We are talking a massive,
wholesale waiver - massive is what you're arguing
MR. HEIMANN: I think --
THE COURT: Do we really need that kind of
massive wholesale production to deal with perhaps,
you know, a few witnesses that might try to bob and
weave a bit on the stand about a particular
document and what they knew or didn't know when
they wrote it, or things like that?
MR. HEIMANN: I think I'll answer that
question my saying, I've made my best case and I
think I haven't persuaded you.
THE COURT: No.
MR. HEIMANN: And I'm prepared to move on
to Brown & Williamson.
THE COURT: Well, let me deal with -- on
the Bliley document, I'm comfortable that I should
not allow the Motion to Compel same subject matters
as the Bliley documents for the reasons I've
The waiver doctrine, when it extends to --
you're talking about waiver of an entire subject
matter, is predicated on there having been a waiver
of a valid privilege. We don't know the answer here
whether there was ever a valid privilege. There's
some strong indications that there was not, but I
have not ruled on it, and I don't intend to for
purposes of this motion.
With regard to extrajudicial disclosures,
I have read the von Bulow case, and while it may be
unique to the Second Circuit, its overall reasoning
strikes me as sound, and reasoning that I would
certainly pay close attention to even if I am not
bound by it. I think, at the very least, the von
Bulow decision and the reasoning that went into it
supports a very cautious approach at least to
subject matter waivers when the partial waiver was
made in the extrajudicial context. So that would at
least reinforce my sense that I should approach
this with caution.
I am satisfied here that these defendants
have not, at this juncture at least, obtained any
litigation advantage by this particular disclosure.
The only advantage they sought was an advantage
with regard to legislation that the plaintiff
itself is committed to support. In other words,
they sought an advantage in the joint effort to get
the legislation passed that will implement the
There has also been no selective
disclosure. The defendants did not select the
documents that Congressman Bliley originally asked
for nor were the documents themselves and their
contents in any way favorable to the defendants
position. Those document, after all, had been
selected by the Minnesota court based on the
Minnesota court's determination that they revealed
crime-fraud, something highly damaging to the
The strategic decision that was made was
not to fight an embarrassing and probably loosing
battle on the crime-fraud issue in front of the
very legislative body that was seeking to pass
legislation to protect them. It was a strategic
advantage based on a public relations perception;
not based on the specific contents of the documents
themselves. We do not have here a situation where
someone has disclosed communications and privileged
material that is itself favorable. Rather, it was
a disclosure of unfavorable material to avoid the
embarrassing appearance of continuing to conceal
Therefore, where there's been no
underlying finding yet that these documents were
themselves privileged, where the plaintiff itself
claims that they are not privileged, where the
disclosure was extrajudicial, under circumstances
that do not in my view lead to any litigation
advantage, at least none that can be seen at this
juncture, the Motion to Compel Production of
Documents on the Same Subject Matter as the Bliley
Documents will be denied.
As I indicated, this ruling is obviously
without prejudice to hear issues that may come up
at trial with regard to how these documents, or any
other documents, actually get used. And I'll
certainly hear the parties then on a very focused
context about what a particular witness has said,
or an argument that a particular attorney has made.
So it's without prejudice to hearing those issues
at that time.
All right. Let's move on to the Brown &
Williamson, Merrill Williams' documents and the
posting on the Internet.
Let me just ask at the outset, I'm a little
bit confused from reading the materials as to
exactly what it is that Brown & Williamson has
placed on this Web site. Are these -- I take it
these are documents that are some of the documents
that were stolen by Merrill Williams?
MR. HEIMANN: That's my understanding.
THE COURT: All right.
MR. HEIMANN: Let me put it this way, they
certainly are -- they correspond with documents
that appear on the lists of documents that are the
Merrill Williams' documents.
THE COURT: All right. Now, I hear from the
defendants, they say that we have never claimed a
privilege as to the specific documents that we
posted on the Net. I need to hear whether you agree
if that is true. And if that is true, my next
question is, are they, however, indistinguishable
from the bases for claiming a privilege in other
documents where they have claimed a privilege?
You know, the mere fact that you don't
assert a privilege is a waiver if the document is
privileged. So the mere fact that they haven't
claimed a privilege does not necessarily mean that
it's not a waiver unless I can compare the
characteristics of the documents that have been
released in some fashion with the characteristics
of the documents they are claiming to be
And I'm functioning a little bit in the
dark because I haven't had the opportunity to do
that kind of comparison between these documents. So
if you could first start by helping me out on what
set of documents are we looking at, and how do they
compare to other sets of documents that are out
MR. HEIMANN: Let me begin by responding to
the very first point, which is, whether or not
Brown & Williamson have asserted claim of privilege
to any of the documents out of the Merrill
Williams' group that they put up on the Internet.
My understanding was that they had, in this
court, in response to the motion that we brought,
the Commonwealth brought with respect to the public
domain documents, the Merrill Williams' documents,
Brown & Williamson's response in this court was
that all of them were confidential. That was
determined both in writing and in oral argument
before the Court. And then they went on to discuss
the claim, in the context of saying they were
confidential, they went on to talk about attorney-client privilege and work product.
I drew from that -- and I think the Court
did as well -- that they were maintaining that all
of the documents were claimed to be privileged. And
it was a surprise indeed to us when we got, in
response to our motion, the position that, "Oh, no.
We didn't mean that all of them were privileged.
Only that some of them were. And the ones that we
put up on the Internet were among the group that
Well, I don't know what to make of that in
terms of the position they took in this court. My
reading of what they wrote and what they said was
that they were maintaining that they were all
privileged. But let's pass that for the moment.
It is not true that they have never claimed
that these documents are subject to either
attorney-client or work product privilege. They
have in fact done so in all sorts of litigations in
this field. In fact, if I might hand up to the
Court, because I've undertaken to analyze this to
some extent -- and keep in mind one thing about
this whole subject matter, it is sometimes
difficult because of the fact that Brown &
Williamson frequently doesn't describe the
documents in privileged logs and other disclosures
with complete accuracy, and also, as the result of
the fact that they apply different Bates numbers to
different documents -- they're the same document
that they produce in one case that they produce in
another, and it is sometimes difficult to make sure
that you're correlating things exactly right.
But having said that, let me move on to
describe what I've provided to your Honor. This is
an effort to take a sample of the documents that
are the subject of this motion, that is to say,
Merrill Williams' documents that were posted by
Brown & Williamson on the Internet, and to see what
claims of privilege they have made, Brown &
Williamson has made as to those documents in
The litigations that are the subject of
this analysis are, first, the Castano case. That is
the punitive class action that was filed in early
1994 in the Federal Court in New Orleans, and in
which these documents first became the subject of
The next case is the Butler case. That's an
individual, second-hand smoker case in Alabama or
MR. MOTLEY: Mississippi.
MR. HEIMANN: Thank you.
MR. MOTLEY: It's part of the south.
MR. HEIMANN: In Mississippi, where these
documents were, almost simultaneously with the
Castano proceedings, the subject of similar
proceedings, and were also the subject of a motion
by the plaintiffs regarding the claims of
The third case is the Florida Attorney
General case. The fourth, the Texas Attorney
General case. And the last the Hawaii Attorney
Now, the documents themselves are set
forth in the binder corresponding to the number in
the first column. So let me just start with the
first document. This is the document known amongst
the plaintiff's side of this case as the "deadwood"
document. This is counsel -- general counsel for
Brown & Williamson -- I believe he was general
counsel at the time, in any event, he was in their
general counsel's office in 1985 when he wrote this
memo in which he described conversations he had had
with a gentleman who is an employee at Brown &
Williamson, Mr. Kohnhorst, about what Wells
proposed to do with documents that he designated as
"X" documents which included the "Janus" series.
The "Janus" series was a series of documents
relating to some research done overseas by Brown &
Williamson having to do with smoking and cancer, I
think it was.
In any event, this document in the Castano
case, on a privilege log that was submitted in that
case at the direction of the Court, was claimed to
be subject to both the attorney-client privilege,
and to what they characterized as a work product
privilege based upon lawyer selection. I'll pass
what that means unless your Honor is interested in
hearing those details.
But the important point, I think, is, they
claimed it was attorney-client privilege. On its
face it would appear to be. It's a communication
relating to -- or it's a document relating to
communications between counsel and client. The
subject matter itself would indicate that it was
intended to be confidential. He's talking about
destroying, or putting beyond the jurisdiction of
the United States, documents that were deemed to be
damaging to the interests of Brown & Williamson.
The document was also submitted as a
privileged document in a privileged log submitted
to the Court in the Butler case. These are events
that took place, at least in the Castano case, in
early to mid-1995, and I believe in the Butler
case, at or about that time as well.
Now, in the Florida case, curiously
enough, which came just a little bit later in terms
of time, the document was produced without any
claim of privilege by Brown & Williamson. The same
is true in the Texas case: produced without any
claim of privilege.
Then lo and behold, two or three weeks ago
in Hawaii, Brown & Williamson claimed that this
document was privileged and confidential in
pleadings filed with that court.
The second document, and I think the
analysis becomes self-evident at this point in
terms of its meaning, the second document is a
communication between a Mr. McCormick, who I
believe at the time was associated with, employed
by, one of the B.A.T. English entities in England.
British American Tobacco Company, Limited is the
stationery on which he wrote, addressing Addison
Yeaman, who at that time was counsel for -- inside
house counsel in the general counsel's office,
perhaps the general counsel, I'm not sure, of Brown
The document has to do with the subject of
some research, scientific research that was going
on at the time concerning the Battelle Reports.
This document was, in Castano, claimed to be
subject to attorney-client privilege. In the Butler
case it was claimed to be attorney-client
privilege. In the Florida case it was claimed to be
attorney-client privilege. I don't have,
unfortunately, information as to Texas or Hawaii.
And then we can go down the line, your Honor.
Most of these documents, by no means all,
appear on their face to be subject, at least
setting aside the crime-fraud exception, to one
claim of privilege or another. Some of them clearly
are not, at least in my judgment are not. For
example, there's a research report, that's item 6.
It's the minutes of a research conference that was
held in Southampton, England in 1962, entitled "The
Importance of Phenols To The Health Question and
Their Possible Elimination From Cigarette Smoke."
It involved participants from all across
the world, employees of various B.A.T. companies.
There's nothing on its face that would suggest, at
least in my reading, that it's privileged.
Nevertheless, it was claimed to be attorney-client
privileged in Castano; and claimed to be work
product in Butler.
The point I'm making, I suppose, your
Honor, is, it is not true if this is Brown &
Williamson's contention that they have not asserted
claims of privilege to any of the documents that
went up on the Internet.
Now, let me allude, or let me go back to
where I started, which was how difficult it is
sometimes to correlate things.
There are some 80 or 90 documents that we
have been able to identify that Brown & Williamson
has put up on the Internet that correspond with
Merrill Williams' documents. Then the next step was
to figure out which of those 80 or 90 had been the
subject of privilege claims on privilege logs, or
otherwise, in other cases. There, I've been only
able to identify some 20 to 25. And the difficulty
there is, the privilege logs are so concise, I'll
be generous, in their description of the documents
that we weren't able, at least up to now, to
identify the other 75 or so. But I am confident, as
I say that, that most if not all of them are on
And the reason I can say that is, this is
the privileged log that was submitted in Castano.
It supposedly lists all of the Merrill Williams's
documents. I say supposedly - these are the ones
that were claimed to be privileged (indicating).
These are the ones they've acknowledged were not
(indicating). There are about seven or eight pages
here, and about 700 pages there. So the likelihood
is that most if not all of the other 70 or so
documents that we have identified as being Merrill
Williams' documents that are on the Internet, were
claimed to be privileged in the Castano privilege
log. We just haven't been able to find them. We've
only been able to find the 20 or 30.
Now, where does that take us? I guess the
point is, they have claimed privilege, contrary to
their assertions here, for many of these documents,
the Merrill Williams' documents that they've now
put up on the Internet. They claimed it in some
cases. They haven't in others, and they have in
others again. They have been, to put it generously,
cavalier in their treatment of these documents,
contrary to what the law requires when one is
espousing and seeking to preserve a claim of
privilege to what the party contends to be
I would submit to the Court based on the
fashion in which Brown & Williamson dealt with
these documents that the Court would be treating
them fairly to find that they've waived the
privilege as to all of them, and as to the subject
matter, although that's another point I suppose.
I don't know -- it's difficult to try and
deal with this kind of a situation in a document-by-document fashion. It's difficult to deal with a
situation where a party claims privileged documents
in two or three cases and then decides, for
whatever reason, they're better off by not claiming
privilege in another case. I just am at a loss as
to what to say at this point, and I don't know,
maybe we need to hear from Brown & Williamson to
explain why they've done this. And maybe their
explanation will enlighten us as to what the
appropriate sanction, if any, is.
But at this point, we would submit to the
Court that your Honor ought to find that by
voluntarily putting up on the Internet this number
of what they previously asserted to be privileged
documents, they have waived the privilege not only
as to those documents they put up on the Internet,
but as to all other documents that relate to the
same subject matter.
MS. LINDBLOM: I find it very interesting in
listening to Mr. Heimann that he did not say that a
single one of the documents that Brown & Williamson
has put on the Internet was claimed to be
privileged in Massachusetts. And I notice that
that column is missing from the chart that he
submitted to this court. It seems to me --
THE COURT: He acknowledged at the outset
they have not been claimed to be privileged here.
MS. LINDBLOM: That's right.
THE COURT: But the question again, is, if,
you know, by definition - by definition,
voluntarily disclosing a document without asserting
a privilege is a waiver if the document was
privileged, that's what a waiver is. So the fact
that you haven't asserted a privilege about these
documents in this litigation does not mean that the
posting on the Internet was not a form of waiver.
MS. LINDBLOM: Let me make clear that the
posting on the Internet seems to have taken on some
kind of iconic status here. What was posted on the
Internet were documents that were produced to the
Commonwealth. Just so we're clear on that. What
started out with the posting was the so-called
Minnesota Select Set which was made available to
the Commonwealth ages ago. So it's not like
there's something new that has happened by these
documents being put on the Internet. These are
documents that were produced in this litigation
that have been in the Commonwealth's possession for
a long time. So there's nothing new and different
by being posted on the Internet than there was by
the production in this case.
So then the question becomes, well, is
there some kind of waiver? And you know, the easy
answer is that when you sit down and you look at
documents you can make judgments when a lawyer is
involved as to whether or not it is privileged. And
a judgment that may have been made ten years ago
about a document may no longer be the judgment we
THE COURT: Why did you decide that -- why
did you now decide that document number 1 in this
notebook was not privileged? How is it
distinguishable, in other words, from the other
documents that you are still withholding on the
claim of privilege? This is a -- I gather Mr.
Wells was a lawyer at the time, communicating with
someone within the company.
MS. LINDBLOM: It's, you know, how do I
distinguish this document from thousands of others?
I can't do that right here.
THE COURT: Let's keep matters a little bit
simpler. The first thing that strikes me is, I'm a
little bit concerned about what light this now
sheds on the analysis that I did when the issue of
the Merrill Williams' documents as a whole were
presented to me. I'm not accusing anybody of
anything. I'm just -- I was unaware - I was unaware
that we had things like this that were among the
ones taken by Merrill Williams that were in fact
being disclosed and now posted for the public.
You know, one way of dealing with this is
simply, does this change the analysis of the
Merrill Williams' scenario --
MS. LINDBLOM: Oh, not at all.
THE COURT: -- and that set of documents as
opposed to the subject matters of these documents
in the broader sense. So compare this document, if
you will, to -- we can talk about it relatively
openly since the Merrill Williams' documents are
out there also in the public through other people's
efforts, not yours -- how does this differ from the
other Merrill Williams' documents that Mr. Williams
took, disclosed through others as to which you are
still claiming a privilege?
MS. LINDBLOM: Well, the simple answer is
that Merrill Williams stole a lot of documents.
Some of them --
THE COURT: Eight hundred something,
MS. LINDBLOM: I don't know the number
THE COURT: All right.
MS. LINDBLOM: Some of them that he stole
were privileged, some were determined not to be
privileged. And, you know, I can't speak to the
precise reasons why this was determined not to be
privileged. I can tell the Court, however, that,
first of all, this is the same document that Mr.
Heimann cited earlier in talking about the Bliley
documents. It is not a document that was produced
in response to the Bliley subpoena. It is not a
document as to which we have claimed privilege. It
is a document that was produced to them ages ago.
They like to bring this document up a lot.
You know, I remember being in Texas when they
claimed that we hadn't produced this.
THE COURT: I still want to know. I am very
concerned, I am very concerned. I mean, the Merrill
Williams' documents which are out there, I can look
at if need be to make this comparison myself. But I
am troubled to see things in this notebook, which
were apparently taken by Merrill Williams, which at
least appear on their face to be subject -- there's
many of them at least -- to the same kinds of
privilege claims that you have been -- that you
have been making with regard to other documents,
and then ask, well, how -- how is this not a waiver
of whatever privilege you claimed on the Merrill
I mean, when it was presented to me, my
understanding was, and the impression I got, was
that Merrill Williams had taken incredibly
sensitive, highly protected, etcetera, etcetera,
stuff. And to now find that, well, yeah, but we've
been turning over some of it, withholding some of
it, and we've done it differently in different
litigations, how does that now measure up to the
kind of care that you're supposed to show when
you're saying that disclosure was not with our
permission; we did everything we could to prevent
it, etcetera, etcetera?
MS. LINDBLOM: Well, it's very simple. When
someone takes documents from a law firm or from a
lawyer's offices, those documents may be highly
protected and kept very secret. There may also be
documents in there that while they are just as
highly protected in the lawyer's office, are
determined not to be privileged upon careful
review. And the fact that he stole documents that
we determined we could validly claim privilege on,
and some that we determined we could not later, or
did not chose to, doesn't in any way affect the
care with which those documents were kept.
What's happened here is that Brown &
Williamson and its attorneys have carefully gone
over things and said, you know, let's be sure that
when we claim privilege, we are claiming it on
documents that we truly believe to be privileged.
The Court itself has indicated that there are times
when she wonders whether some of the documents were
subject to a careful claim of privilege.
This is exactly the kind of procedure, by
the way, that's contemplated by the Zolan case
(phonetic spelling), where, you know, you get to go
back and look and make sure that your privilege
claims are right. And if you think that maybe some
of them shouldn't be privileged, you say they're
not privileged. That doesn't in any way effect the
status of other privileged documents unless the
Court finds that there is some kind of a waiver,
and there is something else that is closely
On this Wells' document --
THE COURT: I am puzzled, as I look at
this, what was the basis for deciding that some of
these documents were not privileged but the other
Merrill Williams' documents that you're still
withholding on claims of privilege are?
MS. LINDBLOM: Well, it could be, for
example, whether they reflected legal advice or
whether they reflected more kinds of business
advice, the very argument that the plaintiff makes.
It -- a party cannot be put in the position
of either having to say that everything a lawyer
writes is privileged, or that you've waived if you
claim that some things that a lawyer writes are not
Now, if they truly think that this document
is privileged, is properly claimed to be
privileged, then they can come into the court and
say, you know, this really was a privileged
document; therefore, they have waived other things
that directly relate to this particular document.
I note for the Court, by the way, that
every single one of the documents that was retained
in the Brown & Williamson files that this refers to
have been produced to the plaintiffs. And every
time they make a stink about this, the same answer
comes back: they have these documents. So while
they like to talk about it as though we're hiding
documents, in fact, we are not.
Now, the fact is Merrill Williams stole
documents. The Court was correct in finding that.
He stole some that we have determined were
privileged, many of them. He stole others on which
Brown & Williamson has not claimed a privilege. And
I don't know if this statement about Hawaii is
true. I haven't -- you know, about this document
being claimed privileged in Hawaii. If it is, it's
a mistake, because I know that the company does not
claim privilege on this document. But I don't know
if it's true or not.
And if they want to argue about whether
there would therefore be a waiver as to the
documents referred to in this memo, let them. Of
course, the problem is, they've already got the
documents so there's nothing there to waive.
You know, the real problem here is that
what the plaintiffs did is, they went out and said,
"Oh, well, some of the documents that you put on
the Internet are documents that showed up in the
University of California in San Francisco files
that were stolen by Merrill Williams." From that,
they automatically say, "Therefore, you must have
waived something." They didn't even go back and
look at the privilege logs to see if we were
claiming privilege on these documents.
And the fact, you know, the only documents
that Brown & Williamson put up are documents that
have been produced to the Commonwealth. There's
nothing magical about the documents that were put
on the Internet. There's no special waiver by them
having been put on the Internet. They're documents
that were produced in this litigation. And there is
no claim by the plaintiff that Brown & Williamson
has made any kind of disclosure, whether on the
Internet or otherwise, of privileged documents -
documents that are claimed to be privileged in this
MR. HEIMANN: That's just not true. They
have claimed privilege as to the documents. Now,
they didn't claim privilege, at least according to
the privileged log they submitted in Minnesota to
these documents, but they claim privilege in
arguing this case to your Honor on the Brown &
Williamson documents when we had the motion.
Now, they didn't go through each document
and say that, but they said it generically to you.
And in fact, they have submitted to us recently, if
I may, a proposed stipulation having to do with
Your Honor will recall that your Honor
ruled that the documents, because they're in the
public domain, while they may not be admissible in
evidence, they can be used in the course of
discovery. And then we got into the question of,
the defendants wanted a protective order to protect
their interests with respect to the documents. And
they submitted a proposed stipulation to us, which
the last sentence of which reads, in the context of
protecting their claim of privilege, "In addition,
any portion of a deposition transcript, or other
document, or pleading that uses, contains or
reveals any of the Brown & Williamson documents,
any portion thereof, or any of defendants'
responses thereto, shall be sealed until further
order of the Court."
This is what they proposed to us be done
with respect to the treatment of these documents.
Now, that only makes sense if they are maintaining
that all of the documents are privileged and
confidential. And now counsel is arguing just the
opposite. That's exactly what they've done in these
various litigations. In half of them they assert
attorney-client privilege as to documents; in the
other half, for whatever reason that they deem
appropriate for their advantage, they don't.
MS. LINDBLOM: Your Honor, I'm not arguing
just the opposite of anything. We don't make
generic claims of attorney-client privilege. We
make claims of attorney-client privilege based on
the privileged logs. It is the plaintiffs who come
up with a list of the privileged documents - what
the plaintiff represented to be documents that were
from the privileged log that should be de-privileged.
And Mr. Heimann neglected to read the first
portion of that order which specifically refers to
privileged documents. We claim privilege on the
documents that we claim privilege on. We don't
claim privilege on all of our documents. And that
should be no surprise to anybody.
And the only documents that we've put on
the Internet are documents we don't claim privilege
THE COURT: So, in other words, at least
roughly ten percent of the documents Merrill
Williams took, you acknowledge are not privileged?
MS. LINDBLOM: I don't know the
percentages, your Honor. I could have somebody find
THE COURT: Well, if there's 80-something
documents on the Internet, and they're Merrill
Williams, and there were 800-something Merrill
Williams' documents, is my recollection, it's about
MR. HEIMANN: My guess is counsel doesn't
know how many documents of the Merrill Williams
they claim privilege to and how many they don't. My
guess is counsel doesn't even know which ones they
claim privilege to and which ones they don't of the
Merrill Williams' documents. We asked them in the
course of these dealings to identify them for us,
and they refused.
MS. LINDBLOM: They asked us to identify
which documents Merrill Williams had stolen. Now,
I'm not in a position to tell this Court or anybody
else which documents Merrill Williams stole.
THE COURT: I thought we -- well, at the
time I entertained that motion, we were not looking
at specific documents. We were looking at the
MS. LINDBLOM: Right.
THE COURT: -- of Merrill Williams. I never
got into the details of the documents or the list.
My recollection is that everybody knew which ones
they were. I think the Ness, Motley firm had
submitted a list to me and there's 800-something.
MS. LINDBLOM: Here's what we know, your
Honor. We know which privileged documents were made
public through the UCSF. We know which documents we
claim privilege on. And it is my understanding that
the Commonwealth's list was a list of document on
which we claim privilege.
We also know that there are additional
documents that Merrill Williams must have stolen
because they show up on the UCSF that we don't
claim privilege on. And we don't know if there are
other documents that Merrill Williams stole.
So for them to come to us and say, "Which
documents did Merrill Williams steal," is a
meaningless question. We can tell you which are our
documents. We can tell you which documents we claim
privilege on. We could, if forced, even, I suppose,
do a comparison of the UCSF database to our
databases, although that would be complicated. But
that's meaningless. What counts is, which documents
are we claiming privilege on. And when we refer to
the Brown & Williamson stolen documents, stolen
privileged documents, we're talking about documents
we claim privilege on.
The fact that he might have stolen non-privileged things just is immaterial to the
question of waiver of privilege.
MR. MOTLEY: Your Honor, I took the
deposition -- Excuse me. Ron Motley for the
Commonwealth -- of J. Kendrick Wells two years ago,
and in that deposition, document number 1, they
claimed privilege to. I haven't looked at all of
them in detail to see which other ones they claimed
privilege to and instructed him not to answer
MS. LINDBLOM: Your Honor, where we are is,
there is no assertion by the Commonwealth that any
of the documents that they're talking about were
claimed to be privileged in this case. Period.
Number two, if they want to claim that
there is some particular document that we don't
claim privilege on; that they say really should
have been privileged, and therefore, there is a
waiver as to related privileged materials, then let
them bring a motion as to that particular document.
And, you know, the Court can determine whether we
have waived a privilege that we should have
claimed, and therefore, whether other closely
related documents should be produced.
But, I note with interest, first of all,
that this notebook they come up with is new and
doesn't correspond, as near as I can tell, to the
exhibits that they've submitted. So it makes it
difficult to deal with on that basis. But they do
not assert in the affidavit supporting their motion
that they even attempted to find out whether the
documents that were put on the Internet have been
claimed to be privileged.
THE COURT: There's no dispute they've not
been claimed to be privileged in this case. But
there does seem to be this somewhat erratic pattern
of how they are handled.
Let me, to try to move forward on this a
little bit, in terms of treating this Internet
posting, in terms of the subject matter waiver,
i.e., subject matters of the documents, I have the
same problem with some of that argument that I had
with regard to the Bliley documents. It's still
extrajudicial. It's not -- you know, it's not at
this point a trial use of the documents, and so,
for the same reasons, not be ordering any kind of
wholesale production of all documents on the same
With some of the confusion here today, I'm
not prepared to really rule on what impact, if any,
this should have on my prior ruling about the so-called Merrill Williams' documents as a category.
And that's not, quite frankly, specifically even
briefed to me in this particular motion. It was a
I would simply say, or perhaps -- or maybe
all I should say, we should move on to the next
item -- that I would be willing at the next
conference, you know, with some appropriate
briefing and time for everybody to clarify exactly
what documents they're talking about, how they
compare to other documents of the Merrill Williams'
set of documents overall, to revisit that.
I had not looked at that recently. That was
back in January, I think, that we did that. So it's
been some months.
MR. MOTLEY: Your Honor, may I clarify
something for the record?
THE COURT: Yes.
MR. MOTLEY: I asked my co-counsel from the
State of Hawaii, Mr. Gallagher (phonetic spelling),
who's in court, to call and ask and confirm what
Mr. Heimann said, and that is, that just last week
Brown & Williamson claimed document number 1 to be
THE COURT: Well, I think that given the
confusion, I'd give everybody a little time, if
they want to refine their analyses of exactly
what's been produced where, what's been claimed
privileged where, and how that compares -- how
those documents compare with the other Merrill
Williams' documents that are still being withheld,
because that's what's puzzling to me. That's what's
very puzzling to me. And I'm certainly willing to
sort of revisit my analysis of the Merrill
Williams' documents with a clearer understanding of
the handling of some of them. Not that that's
necessarily going to result in a different
decision. It just creates confusion in my mind
about that analysis. And I'd be happy to give
everybody an opportunity to clear up that confusion
at, I guess, the next conference.
MR. HEIMANN: This would be very helpful,
your Honor, if your Honor would order Brown &
Williamson's counsel to provide to us a list of
those Merrill Williams' documents that they now -
now, today, claim still are privileged, either
attorney-client or work product privilege. We
don't know what that is. We've asked them in the
past to provide that to us, as I understand it, and
they have declined to provide that list to us.
We need that list in order to do what your
Honor is asking us to do, that is to say, to
compare those documents that they previously
claimed to be privileged but have yet since
abandoned that claim of privilege with those that
they continue to maintain privilege --
THE COURT: Let me ask you, I don't see why
we can't do it in a slightly different direction.
We have Ness, Motley's list of what it has
identified as the Merrill Williams' documents. I
think people need to look carefully at that list
and update and correct and clarify what on that
list is still being claimed to be privileged, and
what is not.
MR. HEIMANN: That's what I want from Brown
THE COURT: It's a cooperative venture.
MS. LINDBLOM: That's different than what
he asked a minute ago. Sure, I mean, we take that
list to be 887 documents, and we'll take another
look at it and make sure that all of those 887 are
still being claimed as privileged, and if they're
not, we'll let them know.
Now, that's different than saying, "Tell
us which documents he stole that you're not
claiming privilege" --
THE COURT: No. It's a matter of putting
the lists together and updating and clarifying.
MR. HEIMANN: So that should be a very
simple matter. Can we have that this week?
MS. LINDBLOM: I don't know how simple a
matter it is, your Honor. You know, I can't tell
you. I don't go back and compare them. I'll get it
to them as soon as I can.
MR. HEIMANN: We need it, obviously,
sufficiently in advance of the next hearing so that
we can submit briefs to inform your Honor of the
situation and our position on it.
THE COURT: Well, let me just leave it at
that. I expect it to be ready by the next status
conference. And if there's delay in people getting
back to others, I won't hear them on how we can't
take it up at that status conference. We're going
to take it up at the next status conference.
Everybody need to be ready to do it by then, all
steps involved. How you divide the time up is up to
you. But be ready to clarify this situation. And
I'll go back and look at the underlying briefs that
were submitted on the so-called Merrill Williams'
documents in the first place to refresh my memory
of the issues before that.
Now, the 39,000 documents. This particular
motion, having reviewed the briefs, I should make
clear, I do not intend to reinvent the wheel on
some of what we discussed on the first round of
It is my understanding that a party is not
required to go into contempt in order to avoid a
waiver; that a party must exhaust all options short
of contempt, or else their disclosure will be
deemed voluntary, and that is a waiver.
And to some extent, some of the things the
Commonwealth is now briefing seem to me to suggest
that, no, we should be requiring these people to
risk contempt of Congress.
I think I've already decided they don't
have to do that. And I think that's a correct
statement of the law. My question here is, as I now
look at the paper record, at least, that was
created about the production of these particular
sets of documents, is, did these defendants exhaust
all steps short of contempt?
Last time there wasn't even this kind of
correspondence to look at. Now, we have this
correspondence, and I perhaps need to know a little
bit more than I presently do about the technical
requirements of how Congressional Committees work,
and what their rules are. Some of the attached
materials about other proceedings to initiate
referrals and contempts on some of these other
recalcitrant witnesses were making reference -- I
think one of the ones that came from the Senate,
some Senate Resolution that outlined procedures for
handling privilege claims in front of Senate
I don't know about those things with regard
to this House Committee at this time, and how this
exchange of correspondence compares with whatever
those technical requirements were. And that seems
to me to be the principal issue that I've now got
to decide: did this exchange of letters meet the
technical requirements to exhaust claims of
privilege short of going into contempt? That's the
principal issue. And the other possible issue,
depending upon how that one comes out, is, is there
any evidence to suggest that these letters, these
exchange of letters, were some kind of a
prearranged or collusive sham ruling, as it were;
and what evidence, if any, does the Commonwealth
have to support a claim that it was?
But, first, if you would, educate me on
MR. HEIMANN: May I hand up to your Honor
an excerpt from the rules of the Commerce
Committee, and also some relevant rules from the
[Documents handed to Court.]
MR. HEIMANN: I attempted to highlight in
the copy that I've given your Honor, some of those
that I think are most pertinent.
We start with the general provisions that
provide that the Rules of the House, or the Rules
of the Commerce Committee, and at some Committee,
so far is applicable, except for things that aren't
really relevant to our discussion.
And then if you move, your Honor, to the
subject of Rule 21, which is at page 6,
"Subpoenas." Are you with me?
THE COURT: Yeah.
MR. HEIMANN: That provides that the
Committee or any Subcommittee may authorize and
issue a subpoena under clause 2M 2A, at Rule 11 of
the House, if authorized by a majority of the
members voting of the Committee or Subcommittee, a
quorum being present.
So the Commerce Committee Rules require a
vote of a majority of the members of the Committee,
a quorum being present, to issue a subpoena.
Now, there are no specific rules that we
have been able to find that describe as the Senate
Rule, which your Honor made reference to, the
specific process by which the Committee would
consider, hear, and resolve a claim of privilege or
other refusal on the part of a witness to comply
with a subpoena.
But we do know that the rules -- bear with
me, your Honor -- concerning a related subject --
now I'm going to page 10, at the upper right-hand
portion. And this is -- this is from the Rules of
the House as distinguished from the Rules of the
Committee, I believe -- those rules deal with the
situation where it is claimed by a witness that a
hearing or the giving of testimony in open session
will, for whatever reason, be adverse to the
interest of the witness. And under investigative
hearing procedures, at paragraph 4, "The Chairman
my punish breaches of order and decorum and of
professional ethics on the part of counsel by
censure and exclusion from the hearings, and the
Committee may cite the offender to the House for
contempt." Not the Chairman. The Committee.
There's that authority.
Now, the next section, Section 5 deals with
at least an arguably analogous situation, that is
to say, whenever it is asserted that the evidence
or testimony may tend to defame or incriminate the
person, "such testimony shall be presented in
Executive Session provided that a majority of those
present" -- meaning of the members -- "vote to that
So, once again, it's the Committee, not the
Chairman who has that authority. And, again, "The
Committee shall proceed to receive such testimony
in Open Session only if the Committee, a majority
being present, determines that such evidence will
not tend to defame," etcetera. So in both
instances, the authority of the Chair is
distinguished from that of the Committee, and it's
the Committee, by majority vote, that holds the
authority over those matters.
Now, beyond those rules, and frankly, your
Honor, that's the best we've been able to ascertain
from the specific rules, you have before you in the
pleadings, the reports by the House in the case of
Ralph and Joseph Bernstein, and in the Senate in
the case of William Kennedy, a Senate report
relating to the very situation that we're talking
about and what is required.
And I would submit, your Honor, from the
report in the case of Bernstein, it is very clear
that the -- where a witness has declined to respond
to a subpoena -- in this case it was based in part
upon attorney-client privilege -- the determination
of whether to allow or to overrule that claim of
privilege is made by the Committee and not by the
Chair acting without the vote of the majority of
the Committee members.
Throughout the Bernstein report, you will
see references to the Committee having given every
consideration to the claim of privilege. The
Committee having held a formal hearing or hearings
at which to hear from the reluctant witness
regarding -- hear the case of the reluctant witness
regarding the claim of privilege.
And I might, in the sense I want to avert
back to what I thought your Honor had said back on
the hearing on February 26, when you ruled on that
matter, where your Honor was of the view, and
informed the defendants, that at a minimum the
convening of a formal hearing and the obtaining of
a formal ruling was required in order for the
defendants to have taken the necessary steps short
of actually being held in contempt to preserve
their claim of privilege.
And your Honor's observations at that
time, I think, are perfectly consistent with, and
in fact supported by, both the House Rules that we
just looked at, that vest in the Committee the
authority to issue subpoenas; not the Chair. And in
the reports in the Bernstein and William Kennedy
matters, where it is very clear that it was the
Committee itself, not the Chairman, who held the
hearings, who considered the claims, who discussed
them and who then indicated, by vote, what the
ruling would be.
The Chairman may have announced that
ruling, may have communicated that ruling, but the
communication of the ruling was based upon, in both
instances and according to, I think, the best
interpretation of the rules, the vote of the
Committee. And that only makes perfect sense when
you think about what's at stake here.
In both these instances, Bernstein and
Kennedy, a very serious claim of privilege is being
asserted to resist the efforts of the Committee to
obtain what the Committee believed to be important
information in connection with its investigation.
Now, that is exactly the situation we have here.
The Committee of Commerce determined that
the documents that they wished to obtain from the
defendants were very important to their
consideration of substantially important
litigation, substantially important to this nation,
that is under consideration, and they sought to
obtain the documents from the defendants. The
defendants objected, claiming very substantial
privileges on the grounds of attorney-client
privilege and work product, to that effort, and
were entitled to receive a full and fair hearing
from the Committee on those assertions and
privileges, and entitled to receive a ruling from
the Committee on those claims.
And, moreover, I would go even beyond that,
we're entitled, we would submit, to receive a
direct order from the Committee not only overruling
the claim of privilege, but direct incompliance
with the subpoena in the face of those claims of
privilege. That's what happened in both the
Bernstein and Kennedy matters.
And in both of those instances, they -- the
Bernstein and Kennedy claims were to the effect
that, look, we can't produce documents short of
that kind of a process. In fact, they even wanted
to go further and say that contempt was required.
And the Committee said, "No." And I want to turn
particularly to the Bernstein opinion, because the
defendants, for their purposes, seize on a single
sentence in that report to support their position.
Under the section that begins in the
Bernstein Report, "Claim regarding bar
requirements," the witnesses, according to the
report, contend that because voluntary disclosure
is that which has not been judicially compelled,
disclosure pursuant to Congressional subpoena could
be considered voluntary," in taking the position
that would have naturally flowed from that, that
the witness would have had to have submitted to
contempt and then brought into court to vindicate
After pointing out that the Committee now,
and I'm reading here, "The Committee may sustain
the objection; in such instances, the witness's
refusal to answer is not contempt-- contumacious" -- I have trouble pronouncing that one -- "for there
is lacking the requisite criminal intent, or the
Committee may disallow the objection" -- this is
the report speaking now -- "and thus give the
witness the choice of answering or not. Given such
a choice the witness may recede from his position
and answer the question, and if he does not then
answer, it may be fairly said that the foundation
has been laid for a finding of criminal intent to
violate Section 192." And that's a quotation from
a case, Quinn vs. United States (phonetic
Then the report continues, "Thus the
Congressional context cannot be analogized to IRS
context. Once the Chair" -- and this is now the
sentence that they seize upon -- "Once the Chair in
a Congressional proceeding overrules the objection,
the period when disclosure would be voluntary has
passed." But then it goes on, "Once the Committee
overruled their objection, the Bernsteins were
bound to obey its" -- the Committee's --
"direction, and follow its," -- the Committee's --
"ruling as a commandment of disclosure in the words
of the Code."
So I submit to your Honor that the one
sentence they seize upon where it says, "The Chair
overruled," was really a reference to the Chair
overruling on the basis of a vote of the Committee,
the decision of the Committee, who has the
authority to do so.
Now, if you look at the exchange of
correspondence that the defendants rely upon, you
start with the April 6th letter. And I'd like to
come back in a moment and just talk a little bit
about the extraordinary events on April 6th in
response to your question about whether this was
all a sham, a charade.
THE COURT: I first want to cover the
technical, procedural arguments from both sides and
keep them separate and distinct from the --
Anything further to say about what your
interpretation that this requires some form of vote
or decision by the Committee as a whole?
MR. HEIMANN: Just to outline, these are
the steps that the rules and the procedures provide
for. First, the objection has to be made and
clearly articulated by the recalcitrant witness to
Next, the Committee hears the objection.
And by that I mean, in -- the recalcitrant witness
is entitled to insist upon a formal hearing of the
Committee, not just some informal thinking about
it. That is supported by the cases, I think, that
we cited, as well as by the rules themselves.
Third, the Committee rules on the
objection, yes or no.
Fourth, the Committee, assuming that the
Committee rules against the claim of privilege,
then after having overruled the privilege, orders
the witness to produce the documents and give the
testimony in light of the overruling of the
Once all that has happened and the witness
still resists, the Committee -- and this is clear
from the rules -- then votes to recommend the
House, in the case of the House, consider a
citation for contempt. The Committee doesn't have
the authority itself to cite the witness for
contempt. The Committee only has the authority to
refer the question of contempt to the House or the
Senate, as the case may be. And that's what you see
in the Bernstein and Kennedy cases. Those documents
were reports from the respective Committees to the
senior body, to the body as a whole, I mean to say,
and it was that body then who was charged with the
responsibility and authority to determine whether
or not to cite the witness for contempt.
The next step then, if it's going to be
criminal contempt, is that the House or the Senate
refers the matter to the United States Attorney. In
this case for the District of Columbia. And that
United States Attorney then -- there's some
question of law whether he or she has discretion or
not -- but in any event, has to take the matter
before a grand jury. We're talking about a contempt
citation. And, of course, the grand jury has
discretion whether or not to indict.
So our position would be, in terms of the
technical requirements, that the defendants didn't
even begin the process except perhaps in terms of
asserting the privilege. The first step. But they
never went beyond that. Instead, all that happened
was, the Chair -- and I'll come back to this after
defense counsel has a chance to speak and we can
talk about it more at length -- but they never went
the next step of even seeking and obtaining a
hearing on the matter, let alone a vote of the
MS. LINDBLOM: Counsel's argument is
founded on the extraordinary assertion that the
tobacco companies have the right to insist that the
Committee hold a hearing. And yet, they have
pointed to no authority that supports them in that.
THE COURT: What I want to know is, where
does Congressman Bliley have the authority to
unilaterally make a decision about a witness's
assertion of privilege?
MS. LINDBLOM: He has the authority to
recommend a resolution of contempt. The problem is
that once a subpoena has issued, and clearly the
subpoena rule indicates that this was a valid
subpoena -- and I don't think there's any
indication that it wasn't -- once that subpoena has
issued, if the companies did not comply with the
terms of that subpoena, they would be in contempt.
Now, last time we were here on this issue,
we heard what the Court said about needing a formal
objection and a ruling, and the Court's analogy to
not just getting a prediction of a ruling from a
judge, but actually getting a ruling. And that's
what happened here.
We made sure that there was a written
record, not just a verbal record of it. And we have
a letter back from Congressman Bliley threatening
to proceed with the contempt resolution unless the
documents are produced immediately.
Now, there is nothing that the plaintiff
can point to, and nothing that any of us has found,
that entitles us to say, "Congressman, before you
do that, we need to have a hearing of the
THE COURT: But that -- it is somewhat
extraordinary to decide that one person on a
Committee can unilaterally make this decision.
Setting aside either circumstances surrounding this
case, some Committee Chair could, as long as he got
some subpoena authorization from the rest of his
Committee to get in somebody who's his political
enemy, he can unilaterally say, "I don't care how
good your privilege claims are, you've got to
produce them or I'm going for contempt," even if he
knows his Committee won't conceivably back him up
on the underlying claim of privilege, he has that
MS. LINDBLOM: Now, wait a second. There's
a couple of things going on here. First of all,
remember that Congress has taken the position that
it does not need to recognize common law privilege
Second, remember that this is a subpoena
authorized by the Committee. The Committee has
already said, "We want these documents."
THE COURT: I realize that. But where do we
now have the -- where do we now find the missing
link that, namely, when in response to that
subpoena somebody asserts a privilege that the
decision-making power as to whether that privilege
should or should not be recognized, where do you
have something that indicates that that power rests
unilaterally and uniquely with the Chair, and that
no one else on the Committee has any ability to
even hear about it, to even be aware of it, before
the Chair can just say, "That's it, because my view
is we shouldn't recognize this privilege"?
MS. LINDBLOM: Well, the Court I think is,
first of all, jumping to conclusions that it was
just the Chairman, because, after all, the letter
says -- and I think it's fair to say that because
he is writing about a Committee subpoena and he
talks about consultations in regard to
confidentiality with another member, he is writing
on behalf of the Committee.
He says, "The claim of privilege for the
documents requested in the subpoenas will not be
recognized." He's not saying, "I personally don't
think it's any good." He says, "It will not be
And if the Court is to say that this isn't
enough, then what the Court is really saying is, it
is presuming to tell Congressman Bliley that he
lacks the power to override a privilege claim; that
he lacks the power to do what he did, which, I
think, would truly be breathtaking, especially in
the absence of any rule that says that he does not
have that power. This is a subpoena --
THE COURT: But what's wrong with the
analogy though? You agree the Chair cannot issue
the subpoenas unilaterally.
MS. LINDBLOM: Well, actually it can.
THE COURT: He needs the rest of his
Committee, that is, a majority of the Committee, to
authorize him to do it. Then wouldn't it sort of at
least make sense that --
MS. LINDBLOM: Actually it says, "The
Chairman of the Committee" -- in Rule 21 -- "may
authorize and issue subpoenas." And this is a newly
cited rule to me, so I admit I haven't studied it.
But then has to report back.
So in fact, he does, I believe, have
THE COURT: What rule are you pointing to?
MR. HEIMANN: I have studied this, and I
want to correct counsel.
THE COURT: Let me just take a look, which
one are you pointing to here?
MR. MOTLEY: 21 I guess.
MS. LINDBLOM: Your Honor --
THE COURT: 21. "The Committee or any
Subcommittee may authorize and issue a subpoena if
authorized by a majority of the members voting, of
the Committee or Subcommittee, as the case may be,
a quorum being present." Now it goes, "Authorize
subpoenas." In other words, if they've already been
authorized by that vote of the Committee or
Subcommittee, may be issued over the signature of
the Chairman. In other words, the subpoena itself
does not have to reflect the signatures of the
majority. That's how I would interpret that. He's
got to get authorization from the majority of the
Committee and then he can go ahead and issue it.
MS. LINDBLOM: Your Honor, let's step back
for a minute. What the law requires is that for a
production of privileged documents not to be a
waiver, you have to take all reasonable steps to
protect a privilege. What the Commonwealth is
suggesting, and what the Court is listening to, is
an argument that says when the Chairman of the
Congressional Committee, with a duly authorized
subpoena, says, "Produce the documents immediately
or I will move to hold you in contempt," that
people have to say, "Sorry. First you have to -- I
need a better ruling. That's not a good enough
ruling. Go ahead and throw me in jail if you must."
That they have to do precisely what he has said
will lead to contempt, and that's not reasonable.
What is reasonable is to go ahead and
assert the privilege, and when you get a ruling
back to say, you know, "I've got to take that as a
ruling." And for the plaintiffs to try to split
hairs about this, to try to say that the CEOs who
were subpoenaed have to risk going to jail,
particularly in a highly politicized kind of case
like this, is truly absurd. It is reasonable steps
that are required.
And what is reasonable is to assert the
privilege, and when you get something back that
says, "The claim" -- from the Chairman of the
Committee that says, "The claim will not be
recognized. If you do not produce these documents
immediately, I intend to proceed with a contempt
resolution." It is reasonable under those
circumstances to comply.
[Conference between counsel.]
MS. LINDBLOM: Oh, excuse me. My co-counsel's pointing out, the last sentence of the
letter says, "I urge your clients to remedy their
current non-compliance status by immediately
producing the subpoenaed documents." So they're
saying, "You're already not in compliance."
Now, the question is, what is reasonable?
Last time we discussed this issue, the Court said,
"I want a ruling not just a prediction of a
ruling." This is a ruling. And if it turns out
that technically --
THE COURT: Well, what if it's not enough?
MS. LINDBLOM: You still shouldn't have to
take that risk.
THE COURT: Well, what do I do though if
what's calling itself a ruling is not a ruling that
meets the requirements of the Committee's own
rules. Suppose you've gotten a letter like that
from somebody who was just a member of this
Committee, where you would say, "Well, he doesn't
have the authority to do this to me, but since he's
threatening it, I'm going to produce them and not
do anything to call him on the fact that, hey, wait
a minute, you can't do this by yourself. You need
the rest of the Committee." Does the mere fact
that someone who is threatening to do something to
you, if they don't have authority to do it, that's
MS. LINDBLOM: Well, you know, of course
it's not the situation they face. And the question
is, what's the reality of the risk? I mean, let's
say that the secretary to the Chairman, you know,
says, "Well, I'm going to recommend you for
contempt." Would that be voluntary if you went
ahead and produced them? Maybe it would be because
you could say, you know, he or she doesn't have the
authority to do that.
But when the Chairman of the Committee
writes and says that your claim of privilege will
not be recognize. I will proceed with a contempt
resolution, you're entitled to rely on that.
THE COURT: Why should I not interpret that
letter much like what was claimed here the last
time: the Chairman's prediction that, you press
this in front of the whole Committee, it's not
going to work?
MS. LINDBLOM: Your Honor --
THE COURT: Again, it may be a very solid
prediction on his part.
MS. LINDBLOM: Well, the problem is
THE COURT: But, I mean, there is this
peculiar reluctance, let me call it that, there is
this peculiar reluctance on the part of these
defendants to actually deal with the Committee, as
opposed to just with Bliley, that is somewhat
MS. LINDBLOM: Your Honor, it is not a
peculiar reluctance at all. The letters were sent
objecting to the Committee's subpoenas. I mean, of
course you address them to the Chairman because
that's how it comes out. But you are asking -- you
know, it's the Committee that has issued the
subpoena. It is the Committee to whom you address
your objections. I mean, look at -- I'm looking at
Tab C, the Meyer Koplow letter of March 12th: "We
are confident that the Committee appreciates the
important issues." We are addressing the Committee.
If the Committee chooses to act by having its
Chairman write, then we have to be entitled to rely
The Commonwealth has not pointed to any
other procedures that are permitted. We have no
right to have a hearing. It's as though, if this
Court issues an order, we have to act as though
that order is justified. The Court may be wrong,
but we are entitled under those circumstances to
rely on that. And, you know, the question is, was
there a real risk? And there was a real risk here.
The Washington Court, faced with exactly
the same issue, found very easily that the
reasonable steps had been taken to protect the
claims of privilege. The issue is reasonableness.
And when you get a ruling, as the Court said it
needed, when you get someone with apparent
authority saying your claim is overruled, produce
it immediately or you'll be in contempt, you have
no real choice. You are faced then -- you're
between a rock and a hard place. You're faced with
the choice of either producing or possibly having
to go to jail.
And if you chose not to produce, then, you
know, he says he's going to cite you for contempt.
And that's not what the law requires. The Court is
correct in recognizing that you are not required to
be in contempt.
Congressman Bliley said we were already
not in compliance.
THE COURT: You're not required to be in
contempt. You are required to exhaust all
procedural avenues short of contempt.
MS. LINDBLOM: You are required to take all
reasonable steps. And the Commonwealth has not
pointed to a single additional step that is
permitted by Congressional Rule that the defendants
could have taken. Not a single step. There is
nothing. There is nothing that says you can ask for
a hearing. There is nothing that says you are
entitled to a vote of the full Committee on the
record. There's nothing that says that. We have
to proceed based on what seems to be reasonable.
And when you object and claim privilege, as
the Court said last time -- I mean, we heard you.
We heard you. We tried to do it. We have writings
that say, "We are claiming privilege." And we got
a writing back that says it's no good.
[Conference between counsel.]
MS. LINDBLOM: Oh, and Ms. Robbins points
out that it was not only that, but in the meantime,
we did convince them to wait. We went all the way
up to the United States Supreme Court to try to not
have these documents produced in Minnesota because
what the Congress was doing was subpoenaing the
documents that had been ordered produced in
You know, how far can you go? You can only
go up to the Supreme Court. You can only go to the
point of non-compliance when somebody with
authority, with apparent authority at minimum,
says, "Your claim is overruled. If you don't do
this immediately, you're in contempt." Then it's
reasonable to stop at that point, especially when
there is no rule that permits anything else.
THE COURT: Yes?
MR. HEIMANN: Counsel has stated two or
three times that there's no authority for the
proposition that their clients were entitled to be
heard by the Committee, or a decision -- to a
decision by the Committee.
We have cited the Ansara vs. Eastland case.
It's a case from the Court of Appeal for the
District of Columbia, Circuit Court Appeal. And
they were in a situation in that case, your Honor,
where the recalcitrant witness was seeking judicial
intervention at a point in time where he was
resisting the subpoena from a Senate Committee to
give testimony and produce documents. And in
refusing to entertain the suit, the Court said by
way of explanation as to why it was inappropriate
for a court to intervene that, "We first note that
the plaintiffs" -- I've forgotten. The plaintiffs
in that case was the government, I think. But in
any event, "We first note that the plaintiffs will
have an opportunity to present their constitutional
objections to the Subcommittee. This Court cannot
assume, as plaintiffs urge, that the members of the
Committee will fail to give consideration to
constitutional claims they consider may have
Clearly, according to that court, the
recalcitrant witness was going to be entitled to a
hearing before the Committee, and a decision of the
Committee -- the members of the Committee; not the
Chair, the members of the Committee. And that only
makes sense for the reasons that your Honor has
And I submit the defendants know that very
well. But they had reasons of their own to do what
was done here.
I might go, just on -- although it may not
bear specifically on your Honor's view of this, but
the Ansara Court went on to say, "Furthermore, if
the existence of a contempt should be reported by a
Committee" -- and I emphasize it's only the
Committee that can report that to the House; not
the Chairman, and I'll come back to that in this
letter in a moment -- "that Body will also be
invested with jurisdiction to consider the
Constitutional issues in determining whether to
adopt a resolution to certify the contempt to the
United States attorney." This is only an
They have -- they could have, had they
wished to really preserve their claims of
privilege, refused Bliley's, what I would say,
prediction, not an order; gone before the
Committee, assuming the Committee would hear them,
refuse the Committee's direction and gone and made
their case to the House of Representatives. They
still would not be in contempt.
Only once the House had ruled, and then
they failed to comply, would they have truly been
in jeopardy of being held in contempt, because they
would still be two steps removed from that
contempt. They would still not even be to a point
where the matter was referred to the U.S.
Attorney's Office, let alone gone before the grand
But they chose not to go through those
steps. Now, why? Let me look. Now is when I want to
go back and look carefully at these documents that
they say establish the fact that they were
We start with -- well, actually, let me
start at the beginning, and that's Chairman
Bliley's letter of February 19. This is the cover
letter. He wrote identical letters to each of the
individuals in question. And he says, "Attached
please find a subpoena issued today, demanding
production of certain documents described in the
Then he says, "Production of these
documents in electronic form on CD-ROM will be
deemed to constitute compliance with this subpoena.
I appreciate your cooperation with the efforts of
the Committee on Commerce to inform our members and
the American public on issues central to the
proposed tobacco settlement." It's pretty clear
then the context in which this comes, and I would
say suggestive very much of the relationship
between Congressman Bliley of -- North Carolina?
MR. MOTLEY: Virginia.
MR. HEIMANN: Thank you. Virginia. And the
MR. MOTLEY: It's south of the Mason-Dixon
MR. HEIMANN: The subpoena calls merely for
all documents which are identified. It doesn't say
we need them in electronic form on CD-ROMs. It
doesn't say you're required to produce indexes to
the documents, and searchable indexes to the
records - merely documents. He'd appreciate CD-ROMs, I infer from this, but the subpoena calls for
Then on March 12, the day on which the
subpoena is returnable, the firm of Wachtell,
Lipton, Meyer Koplow, writes on behalf of all of
the subpoenaed parties to the Chairman of the
Committee on Commerce. And he outlines in brief
form the claims of privilege. He doesn't support
those claims of privilege other than to
conclusorily state that the documents are protected
by a claim of privilege. I think that's an
important point to make when you consider whether
or not those claims were really heard by the
Committee in the end.
All he says is, "We claim privileges to
these things." And then goes on about the process
by which the crime-fraud exception have been found
by the Trial Court in Minnesota, and then ends by
telling the Committee, first of all, "If the
Committee nonetheless overrules these claims of
privilege and directs the companies to comply with
those subpoenas, the companies will comply with
such a ruling and direction." In other words, we
won't bother the House of Representatives about it,
as we're entitled to. We'll immediately respond to
any order that comes out of the Committee.
But then requests that the Committee, in
view of the appellate process that they intended to
follow, or had already begun, "We request that the
Committee either extend the deadline for any
response to its subpoenas, or refrain from issuing
any ruling or direction with respect to the
companies' privilege claims" -- talking about the
Committee -- "here until the conclusion of the
Minnesota Appellate process, which we hope will be
an expedited one."
Now, I draw two things out of this at a
minimum. One, they understood very well that it
was the Committee that had the authority to deal
with this matter and not the Chairman, and that's
why in this letter they address the Committee's
action, and the Committee's ruling; not the
Chairman's ruling. And these are, as your Honor has
pointed out before, some of the most sophisticated,
experienced lawyers in the country, let alone in
Boston and New York, who are dealing in this
matter. They know what the rules provide, and they
know what the law provides in this regard.
Now, what's the next step in this history?
A vacuum. There's nothing in the record as to what
happens between March 12 and April 6. There's no
affidavit before your Honor explaining what the
interaction was between representatives of the
defendants and the Chairman as in response to this
March 12th date. The record is void.
The next thing we see instead is the letter
of April 6. Now, before I get to the letter of
April 6. This is the letter from Chairman Bliley,
let's understand what else happened on April 6.
Justice Scalia issued an order at some time
on April 6 -- It's dated April 6 -- denying the
last effort or procedural step in the appellate
process, and thus, now the Minnesota order is
effective. They've exhausted their appellate
On that same date, April 6, Chairman Bliley
writes to Mr. Koplow, who had previously
corresponded -- the author of the previous letter,
and among other things says -- recites that the
Committee issued subpoenas. "Your client's claim
that they cannot comply because they assert a claim
of attorney-client privilege or attorney work
product protection," and then the operative
sentence: "The claim of privilege for the documents
requested in the subpoenas will not be recognized."
What does that mean? He doesn't say, "Is
not recognize, is overruled." He says, "Will not
be recognized." Now, that is either very carefully
crafted language to be somewhat ambiguous, or, in
my judgment, it's an indication, as your Honor
said, of what will happen, not what had happened.
Then he goes on to say, "Further, unless
the documents in question are produced immediately,
I" -- not the Committee -- "I intend to proceed
with a contempt resolution for enforcement of the
subpoenas by the House of Representatives."
Congressman Bliley doesn't have the authority on
his own to refer a contempt citation to the House
of Representatives. Only the Committee has that
So it is clear, I suggest, from this
letter, that we didn't have a ruling certainly by
the Committee, nor could the defendants have
believed that they did. And that Congressman Bliley
was clearly overstepping his bounds if he was
saying that he intended to refer a contempt
citation to the House, and the defendants knew
that, because, as I say, if anybody knew what the
law and the procedure and requirements in this
regard were, they did.
One wonders about the next step, because
the next step is all six of the defendants whose
documents were subpoenaed, on that very same day,
April 6, address lengthy letters to the Chairman
and simultaneously deliver on that day, for the
most part, CD-ROMs with searchable indexes of the
documents, and in some cases, copies of the
documents themselves. Even segregating in some
cases, as I understand it, segregating out in hard-copy form those that they viewed as super-sensitive. All on April 6.
Now, I think there's only one inference one
can draw from the fact that all of those events
take place on the very same day, presumably during
business hours, although I can't say that for sure:
this was all planned out in advance. This was all
discussed and agreed to before April 6. How else
could it have happened?
And you don't have any record presented by
the defendants in connection with this motion as to
what happen. Why? Why is there no record? Why is
there no affidavit as there was the last time
around about what the discussions consisted of to
show that this wasn't a contrivance but a reality;
that they were really being compelled? Instead of
working hand-in-glove with a congressman who they
regard as one who is interested in helping them
That is what I think a fair inference is
from these sequence of events, and from the
evidence, and more to the point, lack of evidence,
that the defendants have submitted to the Court in
connection with this motion.
What really went on here, I submit, your
Honor, was the creation of a facade of resistance,
the appearance of compulsion when the reality was
MS. LINDBLOM: There are a lot of points
Mr. Heimann has made. Let me see if I can remember
how to respond to all of them.
First of all, it is clear that the
companies -- actually, the CEO's, not the
companies. These were addressed to the CEO's
individually, would have been in contempt of
Congress if they had not produced the documents as
called for by these subpoenas. There are no further
steps that are taken. If you get a subpoena that
says you have to produce, and you don't produce,
you are in contempt.
The Ansara case has nothing to do with this
situation. That was a case in which the people ran
to court and said, "We want you to enjoin
Congress." And the court wisely refused to do so.
And I notice that Mr. Heimann quoted things about
saying, well, they can have a hearing. Well, that's
because the plaintiffs were subpoenaed to attend a
The CEOs were not subpoenaed to attend a
hearing here. They were subpoenaed to produce
documents. That was the only opportunity that there
was to resist.
And these kind of snide remarks, these
inferences about something going on, what Mr.
Heimann is really trying to do is to call into
question the integrity of the Committee of
Congress, and he's asking the Court to rule that
what was said by the Chairman on behalf of the
Committee is somehow a sham. And I -- with no
evidence, no evidence of that.
The fact is that if Congressman Bliley were
such a friend, if the Committee were so friendly to
the tobacco companies, they would not have
subpoenaed these documents.
And as for any inferences regarding CD-ROMs, we had been ordered to produce the documents
in searchable CD-ROM format in Minnesota. And so,
there's nothing underhanded going on there.
This is a situation in which, having been
ordered to comply, the companies complied. Just
like if you're ordered by a court to comply, having
made a claim of privilege, you are entitled to
comply and not have it be a voluntary waiver.
THE COURT: What time of day on April 6th
did these defendants get word that the stay was not
going to be -- that the stay --
MS. LINDBLOM: I don't know. I can tell you
ten o'clock in the morning --
THE COURT: I mean, I must say, even if it
does come first thing in the morning, it is an
extraordinarily action-packed day. It would
certainly suggest that these letters were prepared
in advance. CD-ROMs were prepared in advance, and I
gather, not turned over to the people in
MS. LINDBLOM: No, wait, wait.
THE COURT: -- until a little later.
MS. LINDBLOM: Now, wait a second. There is
a real nasty implication going on here. What
happened here is that the judge in Minnesota, on, I
think it was a Saturday morning, a Friday night or
a Saturday morning, ordered that the documents be
turned over on Sunday. There was a rush to go to
the Minnesota Court of Appeals, a question as to
whether or not there would be a stay obtained
there. The stay was obtained. It wound its way up
through the various courts and into the United
States Supreme Court on an extremely expedited
You can be sure that given the order in
Minnesota that had said, produce these documents
right away, the defendants were well-aware that a
decision could come down at any moment, anywhere
along the process, that would require them to
produce these documents, and to produce them
immediately. And of course people were getting
ready to do that. We would have been fools not to.
We would have had too many people thrown in jail in
Minnesota if we hadn't had those things ready. And
so, people got them ready. And of course we were
aware that already being in non-compliance with the
Congressional subpoena, from having asked for their
indulgence while the case wound its way through the
courts, that --
THE COURT: Let me ask it in a simple way.
Are you saying -- let me put it another way. Is it
not true that CD-ROMs and the indices made it into
the hands of the Commerce Committee before they
made it into the hands of plaintiff's counsel in
Minnesota with a trial ongoing?
MS. LINDBLOM: The CD-ROMs were, I believe,
delivered to the plaintiffs the next morning in
Minnesota. What happened is that the CD-ROMs --
THE COURT: So Congressman Bliley got there
MS. LINDBLOM: Oh, excuse me.
[Conference between counsel.]
MS. WHARTON: Excuse me, your Honor. Leslie
Wharton with Arnold & Porter. I'm counsel for
Philip Morris in the Minnesota litigation, and I've
been handling the privilege proceedings there
throughout. We were under an order from the
Minnesota court to produce immediately, and all of
the defendants had to produce their documents in
CD-ROM form, searchable form, at four o'clock
central time, on, I think it was Monday, April 6.
It was the day that the Supreme Court refused to
extend the stay application. They were produced at
that time. They had been prepared to be able to be
produced at that time.
MS. ROBBINS: Your Honor, Barbara Robbins
from Wachtell, Lipton. They were produced to the
Congressmen and to the Congress Committee also that
afternoon. There may have been minutes one way or
the other, but there was no sizeable piece of time
MS. LINDBLOM: And the stuff that was cited
by them, complaining about this, this was a
question of the judge saying, "Wait a minute. I
wanted them produced to the Minnesota plaintiffs in
CD-ROM before they went to Congress as opposed to
at the same time, or the same afternoon." And so,
that's just nitpicking, is what it's all about.
The plaintiffs got searchable CD-ROMs.
They were made available to both the plaintiffs in
Minnesota and to Congress. And, you know, the
reason that the letters were able to go out, and
the CD-ROMs were able to go out, is because the
defendants understood what kind of threat was
hanging over their head, both from the Minnesota
court and from Congress. And as I say, we would
have been fools not to have the letters prepared;
not to be ready.
THE COURT: Do we even have an answer to
the letter you submitted on the return day of the
subpoena, asking for more time? Anything that
assured these trembling CEOs that they were alright
to wait until the Supreme Court ruled? I am having
trouble, I must say, envisioning these CEOs shaking
in their boots, that Congressman Bliley is going to
send them to jail.
MS. LINDBLOM: Well, I think it's fair to
say that the defendants took the lack of response,
the lack of a formal overruling of the privilege,
you know, after the March letter, as meaning that
they would not go to jail without some additional
step. And that additional step came on April 6th,
when the Congress says they'd be held in contempt.
THE COURT: Let me ask it another way. I
assume you are not suggesting, you are not
suggesting that your people had no communication
with Congressman Bliley's office about this, other
than the correspondence? Surely, the
correspondence is not the only communications that
were going on here?
MS. LINDBLOM: I would think there may well
have been other communications. And whether there
were or not is immaterial because what the
plaintiffs are saying is --
THE COURT: How is it immaterial what was
going on in those conversations?
MS. LINDBLOM: Because what the Court said
we needed was a formal objection and a ruling. And
that's what we got. Is the Court really prepared to
say that based on the plaintiff's speculation that
somehow the Committee is being manipulated by the
tobacco companies? Or that there's something
underhanded going on here? We have a Committee of
THE COURT: There's nothing at all
underhanded in producing the documents. It's not a
question of being underhanded. It's a question of,
was the turn over of these documents done under
true compulsion, or was it done by a prearranged
understanding with the Chairman. There's nothing
wrong with having prearranged understandings.
There's nothing underhanded on the part of either
the tobacco defendants, or on the part of
Congressman Bliley or his staff.
But, you know, from the discussion we had
before, we have these statements coming from the
Chairman that don't seem to at least completely
jibe with the technical requirements of the
Committee Rules, or common understanding, and your
interpretation, "Well, but it was coming from the
Chairman. So even if it was unauthorized, we were
justified in being afraid, and we had to obey it
because we didn't have any other procedural
Is it now not legitimate to ask, since we
don't clearly have a Committee vote, is it not
legitimate to ask, Well, what was your real
understanding with the Chairman?
MS. LINDBLOM: The real understanding--
THE COURT: Beyond the formal exchange of
letters, is it not reasonable to inquire, well, did
this letter, which certainly is not a vote of the
Committee or any kind of resolution or anything
else, did it really frighten these people and make
them do this against their will? When we don't
even know what else got said in all those
MS. LINDBLOM: I think it's fair to say
that I can assure the Court that there was never
any communication that indicated there would not be
a contempt citation. We have a letter from Bliley
that says, "I'm going to hold you in contempt."
Now, does the Court really think that under
those circumstances that we as attorneys could
advise the CEOs of our company that there was not a
risk that they would be held in contempt?
THE COURT: Let me put it this way. If
there had been prior discussions with members of
Bliley's office that said, "Well, because of this
judge up in Massachusetts, we need you to put this
in writing, and please make it look as threatening
as possible so she won't find it to be a waiver,"
yes. I mean, I --
MS. LINDBLOM: Well, your Honor --
THE COURT: It's difficult to view these
letters as something other than the tip of an
iceberg, and I have no idea what the rest of that
iceberg does or doesn't involve.
MS. LINDBLOM: I think what the Court is
saying is, let's look at the analogy of, you go to
court and you get a ruling from a judge that says,
"Produce these documents or you will be held in
contempt. Produce them immediately or you will be
held in contempt. You have been in non-compliance."
Now, I think, first of all, it doesn't
really matter what happened before then because
that's what the judge has ordered, and that is what
Bliley has said here. And for this Court to take
this anything other than on its face is to call
into question the integrity of the Chairman of the
Committee of Commerce. That's what I think is going
And what the law requires is that we take a
reasonable risk -- excuse me, only take reasonable
measures, excuse me a moment, and under the
circumstances, when the Chairman of the Committee
says he's going to hold you in contempt if you
don't comply, it is only reasonable to comply.
Now, if the Court has concerns about this,
there's nothing that we can do to compel Congress
to do anything. There's no rules that the
plaintiffs have pointed to that would have
permitted us to do anything else.
And it's my understanding, although I am
not an expert on the speech-and-debate clause, that
there are real speech-and-debate clause issues
about, like, compelling testimony from Congress. I
invite the Court to call Congressman Bliley and
ask, and find out if he meant what he said in here.
I invite the Court to do that on behalf of Brown &
Williamson, and unless someone else jumps up and
tells me no, it's on behalf of the other defendants
as well. Or write. Whatever the Court wants. Go
ahead and do that. Because what the plaintiffs are
doing is questioning the bona fides of this.
THE COURT: Perhaps what I might say is,
what would be more persuasive to me than
Congressman Bliley's answer, would be to see the
notes of every phone conversation, every meeting -
notes in possession of defendants, that they had
with anyone in Congress Bliley's office this winter
and spring. That would be a lot more persuasive
than an answer from Congressman Bliley. And I'm not
sure that it's necessary or appropriate to engage
in that exercise.
As I say, there's nothing underhanded in
people saying, you know, in people cooperating with
Congress. It's good that they do it. And -- but why
shouldn't I look at this and at least question
whether these defendants didn't tell Congressman
Bliley, "Look, if we can't block them in Minnesota,
and we've got to turn them over in Minnesota, we've
got no problem turning them over to you. But we
want to make sure -- we want to cooperate with your
Committee but we want to make sure that our
cooperation is made to look as little like a waiver
as we can possibly make it look." And particularly
since this follows -- I don't know whether other
courts agree with me or disagreed with me -- my
sense that the prior extraordinarily informal
arrangements with Congressman Bliley had not
exhausted all steps, and that now there was sort of
a -- a warning that we've got to make this look
like it's compelled or it's going to be treated as
You want to cooperate but you don't want it
to be a waiver. You want to have your cake. You
want to eat it, too. Lots of people do. There's
nothing wrong with it. But I think it does raise a
question in my mind as to whether this is genuine
compulsion, or prearranged to be cooperative but
try not to make it look like a waiver if we can
possibly avoid it, and yet not -- and yet not have
the unpleasantness, the embarrassment, the
counterproductive quality that would be involved in
having a Committee vote, or a Committee hearing on
these privilege claims.
MS. LINDBLOM: What your Honor is
suggesting is, really, that the defendants somehow
were interested in turning over unfavorable
privileged documents, because that's what these
are. Whereas, by contrast --
THE COURT: If they were going to come out
in Minnesota anyway --
MS. LINDBLOM: But, let's look at what
happened in Minnesota. We asked for confidential
treatment of those documents, and were granted
that. The only documents that have been made public
through Minnesota are a relative handful that were
actually introduced at trial. That is a far cry
from all of these documents being made public. In
fact, the Congressional subpoena presented the far
greater threat, as shown by the Congressman's
previous actions, that the documents would be put
out on the Internet; that all of them would be made
public. And that was a real serious threat of this
breach of privacy issue.
And so, what we've got is this strange
dichotomy. We had to produce them in Minnesota
pursuant to the Minnesota orders, and less than 50
of them have been made public through the trials,
are what I believe the numbers are of these 37,000
documents that were produced to Congressman Bliley.
In contrast, 37,000 of them have been put
on the Internet by Congressman Bliley, and what
this Court is suggesting with these speculations is
that somehow that was something that the defendants
wanted to do. And that just is not fair. That is an
THE COURT: No, they did not want to turn
the documents over, but once the handwriting was on
the wall from the Supreme Court, I think it is fair
to infer that they did not, as the last time, they
did not wish to incur the public relations problem,
the delays, etcetera, etcetera, in continuing to
fight the privilege issues in that other --
MS. LINDBLOM: Right.
THE COURT: -- Congressional forum. But
you're -- you're not really fighting them in the
Congressional forum, but you're still fighting them
here in front of me. That's the problem.
MS. LINDBLOM: And once the handwriting is
on the wall that the documents have to be turned
over, the disclosure is compelled. And once that is
so, it is legitimate.
THE COURT: It was clearly compelled in
Minnesota. The question is, was it truly compelled
yet by Congress.
MS. LINDBLOM: But, you know, what the
Court is now implying is that it is somehow
illegitimate to ask for a formal ruling, to make a
formal objection after having heard the Court the
last time. And you know, that's this whole
implication that's going on here, that somehow if
what we said is, "You know, Judge Sosman says we
did it wrong last time. This time we want to do it
right," that there's something wrong with doing
THE COURT: No, there's nothing --
MS. LINDBLOM: And there's nothing wrong
with doing that.
THE COURT: There's nothing wrong with
doing that. The question still comes back, is this
really a formal ruling? I think the answer is,
it's not a formal ruling, and if it's not a formal
ruling, your alternative argument is, well, even if
it's not authorized, if it's not formal, it
genuinely put my clients in fear, and that's why
Now, I do sort of look a little bit askance
MS. LINDBLOM: You know, your Honor, then
the question is -- I don't want to offer my CEO's
deposition on this issue, but I feel quite
confident that if the CEOs were called to testify
about their subjective views, they would have said,
you know, "Look, my attorneys tell me that the
Congressman, that this Chair of the Committee is
threatening to hold me in contempt. You bet I feel
And, again, what -- you know what the Court
is really doing here -- step back and take a look
at it -- is saying that we are not entitled to
believe what Congressman Bliley says, that the
Court should somehow be looking underneath his
threat to see whether he doesn't really mean it.
THE COURT: No. I should be looking as to
whether these defendants already know that he
doesn't really mean it.
MS. LINDBLOM: Well, that means he doesn't
really mean it, your Honor, and that's what the
Court is saying, and I submit that that is really a
shocking thing for the Court to say, that a letter
written by Congressman Bliley is a
misrepresentation of his intentions.
Now, you know, I'd be willing to submit an
affidavit on behalf of our CEO as to his state of
mind regarding the compulsion. But I think -- I
really do think it is beyond the bounds or
propriety for this court to -- faced with a
THE COURT: What about producing every note
of every meeting and every conversation with anyone
in Congressman Bliley's office for the past several
months, are you willing to do that?
MS. LINDBLOM: Your Honor, I don't
understand why that's necessary. I truly don't. I
think what -- you know, I think what the Court is
doing now is digging to find a way to find this not
to be a reasonable step.
THE COURT: Well, it's a form of discovery.
It's a form of -- if you're saying, we were in
fear, it's saying, well, show me what the
underlying conversations actually were so that we
can test whether your claim to a subjective fear is
believable, reasonable, credible. There obviously
were extensive discussions. Nothing illegal or
wrong about that. It goes on all the time. But if
those discussions were very different from what's
in these letters, it then would call into question
whether the letters should indeed be taken truly at
MS. LINDBLOM: But, you know --
THE COURT: And I'm uncomfortable with the
idea that when they are short of a formal Committee
vote, I should take them totally at face value
without anybody having an opportunity to look into
what else -- what other communications were going
on at the same time.
MS. LINDBLOM: Surely the Court would not
suggest that this is a grounds for breaching the
THE COURT: Well, conversations with
Congressman Bliley's office are, by definition, not
privileged. They're conversations with some third
[Conference between counsel.]
MS. LINDBLOM: I'm sorry. I didn't hear the
Court's last comment.
THE COURT: Conversations or meetings with
Congressman Bliley's office are obviously not
MS. LINDBLOM: No, no. I meant the
conversations with the CEOs, which, of course,
would be privileged. But if the Court's --
[Discussion between counsel.]
MS. LINDBLOM: I'm sorry, I'm talking --
she's correcting me about something that I don't
have wrong. Excuse me.
I'm talking about the communications
between attorneys and the CEOs, of course remain
privileged. If the Court really thinks that
discovery is necessary, you know, that an affidavit
or a deposition of the person who was responsible
would somehow shed light on this, or make a
THE COURT: It's the production of the
notes. It's the production of the notes that would
be key to anybody's affidavit, deposition, or
submission to me. And I --
MS. LINDBLOM: I think what the Court is
really saying is that it thinks it might find that
this letter is a sham; that Congressman Bliley
didn't really intend as we contend --
THE COURT: I think there's reason to at
least suspect that it might be, yes. That it was
prearranged, that is, a form of facade, and dress
it up a bit. Yes, I'm suspicious of it, let's put
it that way. I'm suspicious.
[Discussion between counsel.]
MS. LINDBLOM: Well, you know, your Honor,
I guess where I come down is obviously a different
place from what the Court seems to be leaning to,
which is that -- I don't think, for example, that
it makes a lot of difference whether the Court is
really persuaded by whatever arguments I make today
or not. What really matters is what orders the
Court issues. And just as I don't think it's
appropriate to look into Judge Sosman's head to
find out what the real intent is, that we are
entitled to look at the writings and to rely on
those; that's how I think it is with Congressman
But if the Court is, you know, is looking
for something else, I need to confer with other
counsel before making any offers on what to do.
THE COURT: Anything further from the
plaintiff's side? Any recommendations as to how to
MR. HEIMANN: My view is -- I need to get
Mr. Weber's view, actually before --
[Conference between counsel.]
MR. HEIMANN: Two fold, your Honor. One, my
thought; and Mr. Weber's thought. I think that your
Honor needn't go on this factual point in order to
resolve this question in favor of the motion. On
its face it is clear there was no -- there's no
indication that there was any vote of the Committee
with respect to the issue overruling the claims of
privilege, and commanding the production of the
documents. And I submit to your Honor, the law is,
and the House Rules require, that the Committee
rule, and the Committee did not rule, and that that
is, in and of itself, a sufficient basis to resolve
this question without getting into an investigation
of what went on between the lines that clearly has
not been demonstrated on this record.
If your Honor is of the mind that, for
whatever reason, that isn't sufficient, we would be
interested in examining, both in terms of seeing
the documents that reflect the interactions between
the Committee -- excuse me, the Chairman and his
staff, and the representatives of the defendants,
and in deposing counsel, because I think that's
what we're going to find out, who the people were,
counsel for the defendants who were the persons who
were having the communications with the members of
the Chairman's staff and perhaps the Chairman as
well in order to flush out just what this really
MS. LINDBLOM: May I know what rule Mr.
Heimann is relying on when he says the law is, and
the House Rules require a Committee ruling? Is he
relying on the investigative hearing procedure rule
that he previously cited?
THE COURT: I understand what he's
referring to. I'm not saying whether I absolutely
agree with his interpretation, but I think I
understand what he's referring to.
Let me do this. I will take this under
advisement in its current posture and see whether
I'm satisfied that it can be resolved in this
To the extent that either side wishes to
submit anything further on, first, there's the
technical issue about the interpretation of these
rules, what they do or don't require, what they do
and don't provide for, because I only first saw
these this morning. This particular issue was, for
all the volume of briefing I got on it, not really
briefed by either side. And since it is an
important issue, I'd be happy to, you know, give
the parties a little more time just on that
procedural issue; not this other more convoluted
Does the Commonwealth wish to supplement
its oral arguments on that today and put something
MR. HEIMANN: I think that would be
helpful, your Honor.
THE COURT: And I assume defendant would as
well, since you were just confronted with it today,
MS. LINDBLOM: Sure.
THE COURT: Okay. What kind of time frame
should I be looking for to get any briefs? What
would you like?
MR. ROBBINS: Two weeks.
THE COURT: Sure. That's certainly
MR. HEIMANN: That's fine.
MR. ROBBINS: If it's not a Sunday.
MS. LINDBLOM: Two weeks from Thursday is
THE COURT: Okay.
MR. ROBBINS: It's been a tough previous two
THE COURT: We would normally -- let me
just ask you, how much more time do we need? We've
got a few other items that are on the agreed
agenda, a contested item, and then I've got a few
little ministerial things, and it's almost one
o'clock, and the court reporter's been going for
three hours here. How much more --
MS. LINDBLOM: I think the only other item
remaining -- oh, I guess there's a couple of minor
scheduling things. I think those will take a very
short amount of time. Numbers 4 and 5. And on
number 1, what this is all about is a supplemental
brief not attached to any motion that the plaintiff
submitted, wanting to argue the privilege status of
the documents that the Court found not to have
prima facie crime-fraud finding.
It's really a Motion in Limine on the
admissibility of the documents. And, you know,
there's no motion so it makes it a little tricky to
respond to, but we can, if the Court wishes, we can
respond to that written submission.
MR. MOTLEY: Your Honor, that supplemental
brief that causes the procedural problem, we'll
withdraw it. This was pursuant to our original
motion of December 1997. Your Honor invited, on
twelve different occasions the last time we were
here, that we do this this time.
MS. LINDBLOM: Actually this was a motion.
THE COURT: Yeah, well, I did want to --
that was my recollection of last time, that I did
want to, you know, get to the issue of the
documents in the notebook where I had ruled against
the Commonwealth but had questions about why are
some of these things privileged. They may not be
crime-fraud, but why are they privileged in the
first place? We needed to get that loose end, as
it were, to the remaining documents, resolved. So I
was not surprised to see something from the
Commonwealth on that.
Did defendants want to respond in writing
to what the Commonwealth has put forward or what?
MS. LINDBLOM: Well, I would think so. I
mean, the problem is that if they're going to bring
a motion, we have procedures for doing it a certain
amount of time before a status hearing, and it
wasn't done, and so I guess we'd like to respond in
writing, and it can be heard at the next conference
if that's what the Court wishes.
MR. MOTLEY: Your Honor, we -- your Honor
invited us, way back last fall, to begin
suggestions about how we ought to deal with these
privilege issues. We filed a proceeding in which we
suggested a four or five step procedure.
Your Honor then decided to have a hearing
to address the crime-fraud, and you invited us and
directed our attention to a finite number of
documents, which we did, on April 9th. At that time
I attempted to establish, your Honor, that we need
not get to crime-fraud because they weren't
privileged in the first place, but -- and your
Honor -- and I've tagged the number of pages here.
It's about nine different occasions -- told counsel
that we would get to that later. And you told me,
and you told Miss Lindblom that. You said it on the
record, nine different occasions.
That time is today, your Honor, I
respectfully suggest. Your Honor has had that
notebook. They've had the notebook. They've had our
brief on the four step procedure since December of
1997. In fact, your Honor -- and I didn't take
this to be the highest of complements -- said that
my arguments would not come as a surprise to the
defendants, and that there was no reason, on page -- let me see if I can find this -- of the
transcript, on page 78 and 79 of the transcript,
your Honor even pointed out that the arguments that
I would be making about privilege were not novel.
In fact, your Honor made statements in here
that they weren't privileged, indicating that your
Honor had questions, looking at the documents,
analyzing them from a crime-fraud perspective,
whether they were privileged in the first instance.
There's no reason why they didn't have ample
notice, your Honor, that those issues of those
documents in that notebook were going to be
MS. LINDBLOM: Your Honor, we'd like an
opportunity to respond in writing.
THE COURT: Well, I had thought we were
going to address this today. I think that was what
I was inviting. It's a small handful of documents.
And it's very simple. You know, who are these
people? What's the basis for saying this thing is
privileged? Where is any legal advice? It's a
small handful of documents.
Let me ask this, it is our norm, after all,
to take our lunch break between one and two. I
think maybe we should take it, resume at two and
I'll at least hear the Commonwealth's arguments on
this because it's a small handful of documents. If
I've got 39,000 coming down the pike that I've got
to be dealing with, I really can't still be dealing
with five or six leftovers for several months.
MS. LINDBLOM: Your Honor, may I be heard
on this for a minute?
THE COURT: Yeah.
MS. LINDBLOM: If they want to submit
something, under the case management order there's
a specified time before the hearing in which
they're supposed to submit it. That's not what they
did. They just came in at the last minute. We're in
the middle of doing the brief on the other
documents that the Court did find a prima facie
crime-fraud. I'm not prepared to respond to that
today, and I ask the Court's indulgence on that,
given that this was a submission that was out of
time on the case management order. Had we
understood that the Court expected this, we of
course would have been ready. But we didn't
understand that. And if it's my fault, I apologize.
But I'd ask that it be deferred until the next
MR. FRANKEL: May I be heard, your Honor?
THE COURT: Yes.
MR. FRANKEL: Andrew Frankel from Simpson
Thacher for B.A.T. Industries, on a couple of
documents related to our client. It's one thing to
talk about procedures, but we received just the
other day, a brief making argument on these
documents, and all we're asking for is the courtesy
to respond in kind with a brief.
THE COURT: Let me ask you. You know, when
you assert that a document is privileged, the
burden is first on you to identify what is the
basis. And here we are, you know, months after
these things have been designated as privileged,
and I'm hearing a resistance to even explain to me
on your part, and it's your burden, what is your
analysis that makes these things privileged. And
we're talking, what, six documents? Seven
MS. LINDBLOM: Well, your Honor --
THE COURT: Can't we wrap this up today?
MS. LINDBLOM: Well, we can't because I'm
not ready. And for that I apologize. As I say, I
didn't understand that it would be -- it takes some
doing on my part to check with other people
Now, I detected a note of concern on the
Court about having 37,000 more documents coming
down the pike. Let me just point out that this --
this isn't something that I think should concern
the Court, because the fact is that there were over
40,000 privileged documents produced to the
plaintiffs in Minnesota. There were 59 -- 59, with
no zeros after it, privileged documents introduced
at trial. What this shows is that it is a very
THE COURT: Correct.
MS. LINDBLOM: -- very small subset.
THE COURT: A massive volume of documents
were produced in the closing weeks of that trial.
MR. MOTLEY: That's exactly right.
THE COURT: And I suspect that we've got a
little more time before this trial.
MR. MOTLEY: The eleventh hour and fifty-ninth minute, I might add.
THE COURT: All I'm saying is, we don't
know how we're going to handle these 39,000 when I
rule on some of these other motions or theories of
how they wish to get at them. But I am troubled at
the idea that we're going to have to wait awhile
longer to even hear from the defendants as to why
these six, or seven, or eight, whatever it is,
documents were claimed to be privileged in the
first place. I don't think it should take that
MS. LINDBLOM: Your Honor, in response to
their brief, our brief would be due May 11th. And
the Court had previously set May 11th for our brief
on the other crime-fraud issues. The case
management order is set up so that people have a
reasonable time to respond to briefs; not so that
they can bomb in at the last minute with briefs
that hadn't been -- the Court did request briefs on
certain issues last time, and our brief on that is
due Monday. And we'll have it to the Court Monday.
And we'll be ready for hearing it the next time.
THE COURT: Well, it shouldn't be an issue
of, quote, responding to their brief, to have your
side articulate for me what is there about this
document that makes it privileged in the first
place. You've listed it on a privileged log.
Somebody has decided that it is privileged, and all
you've got to do is tell me why.
MS. LINDBLOM: Well, that somebody isn't
me. And that's the problem that I face here today,
is that I need to find out from other people the
basis for the privilege. And I truly did not
believe the Court would even consider dealing with
a brief filed out of time.
THE COURT: Let me ask, one of the other
items on here is requesting a status conference on
May 28th, which would be a shorter time, three
weeks, rather than the usual month.
MS. LINDBLOM: Right. We could be prepared
by then. Oh, that's easy.
Now, I have to warn the Court there's a
chance I'll have an appellate argument that day and
one of my partners would come in.
THE COURT: Yes.
MS. LINDBLOM: But we'll be prepared, sure.
THE COURT: And competent. And the
defendants are going to go first. They're the ones
that have to tell me why these things are
privileged in the first place. It's not a question
of responding to the Commonwealth's brief. It's
just telling me.
MR. MOTLEY: Your Honor, if your Honor is
inclined to postpone this, may we, shall I use the
word, key up additional documents? Because here's
my fear, your Honor. There's not 37,000 documents.
There's 150,000 documents to which privilege is
claimed. And the 39,000, the State of Minnesota
lost some very important categories that we're
going be prosecuting here, like the committee of
counsel -- I don't want to get into details, but my
point is, Judge, we've got a February - hopefully a
February trial date --
THE COURT: You have.
MR. MOTLEY: -- and we've got lots of things
to do. And as you might see, I won't call this
foot-dragging. I'd call it body-dragging, from the
tobacco companies. They want to postpone facing up
to these privilege issues as long as they can.
Now, I don't object to May 28th. I think
your Honor is probably inclined to do that anyway,
but can we give your Honor a list of maybe 50 more
documents, and let them explain why they're
privileged, and let me attack the privilege, and
move this process. Because we're never going to get
there, six documents in five months, with due
respect. And I know it's not your Honor's fault.
MS. LINDBLOM: Well, your Honor had set up
a procedure where we agreed on what the list of
privileged documents were that they were attacking,
and the Court wanted to do the crime-fraud, and
we're in the middle of doing that. And so, I don't
know what all these new documents are that they're
MR. MOTLEY: Well, some of them were
produced in Minnesota that were introduced this
THE COURT: Well, I will take up the
remaining so-called crime-fraud documents in that
notebook where I ruled that the Commonwealth had
not made out their prima facie case, but I would
hear the defendants first, on May 28th, explaining
to me what there is about those documents that is
privileged in the first place.
With regard to anything else that's got to
be gotten ready for that, that's fine, but you do
have to get it to the other side and indicate
promptly that you want it on that agenda, and give
them what they need.
If there's lists of other documents where
you are questioning the privilege nature in the
first place, just give them a list of what they
are. You don't need a brief, just a list of what
they are. As far as I'm concerned, the defendants
should be prepared to address what their claim of
privilege is at the May 28th hearing on those
items. The burden is initially on the defendants,
the claimer of the privilege, to indicate what it
is that makes that document privileged.
Okay. So I will, obviously, see you on May
28th, this same courtroom, at ten o'clock. That
takes care of that. And that takes care of the
contest item one.
The last item you had on the agreed agenda
was status of production of documents from Dr.
Cady. Is there anything I need to deal with on
MR. GRIFFIN: Just, your Honor, I'm
informed that there's a problem with that that we
wanted to bring to your Honor's attention so that
we could have that set up for disposition by your
Honor at or before May 28th.
Let me just mention one other thing, just
to put before you what the background of May 28th
is. We're dealing with a close of fact discovery on
THE COURT: I understand that.
MR. GRIFFIN: The thinking was that by the
28th, and perhaps that's even too late, but that
was the target, we would be able to present to your
Honor a status of where we are and what our needs
were past May the 30th. So I think there would be
some necessity for advance filings by both sides,
possibly motions to compel, depending on what could
or could not be worked out before the 28th, but
basically a statement so that we could get some
guidance from your Honor as to what to accomplish
in fact discovery after our May 30th date. There
are already some loose ends we've identified, your
Honor. So that would have to be part and parcel of
what we do on the 28th as well.
THE COURT: Yes. Okay. That's fine. Dr.
MR. GRIFFIN: I would defer to my partner,
Barbara Healy Smith, who wanted to bring to your
Honor's attention an issue with respect to Dr.
Cady's document production, which I think is
COURT REPORTER: Just a moment.
MS. HEALY-SMITH: Just briefly, because we
would hope this would be resolved then, but it has
been a month since the April 9th hearing. Two
motions were filed talking about an enormous volume
of documents. The subpoena was narrowed, as you
might recall. We knew that would be a smaller
universe. We have, to date, received a single one-page document. I'm told there's another box, and
that's it. And the box is going to be gone through;
we still don't have it. There may well be a motion
to compel on this.
As you might recall, the intent was that we
would have any relevant documents prior to the
depositions of the former DPH commissioners, which
one has occurred, and actually all of them will
have taken place before the 23rd. So if we don't
see something soon, we will be filing a motion to
THE COURT: What has Dr. Cady's counsel
said to you about this? In any case, counsel is
MS. HEALY-SMITH: No, he's not, which is why
this isn't a motion. I mean, the representation is
that anything except this one-page document was
destroyed but for this box that still had to be
gone through as of last Monday. And I haven't heard
MR. SOBOL: Your Honor, Thomas Sobol for
the Commonwealth. I've only spoken once with Mr.
Cady's counsel, but it was this week, and he
reported to me that there had been a delay in
getting whatever documents there were. He thought
it would be worked out by this morning. I haven't
spoken to him since.
THE COURT: Be prepared to update me. I
hope it will get resolved.
MS. LINDBLOM: Your Honor, there's one
other small matter. On May 1st, Foley, Hoag
submitted a proposed order --
THE COURT: Yes, I have that. Does anybody
have any objection to this proposed order?
MR. HEIMANN: Is this the stipulation with
respect to the Brown & Williamson documents?
THE COURT: This is a proposed order with
regard to the Brown & Williamson documents, yes.
MR. HEIMANN: Yes, we have an objection to
MS. LINDBLOM: Your Honor, this is the
first we've heard that there is a problem with it.
MR. HEIMANN: Is it the order I talked
about earlier today --
THE COURT: Yes.
MR. HEIMANN: -- when you were asking about
the documents regardless of whether they're claimed
to be privileged not to be put under seal, yes, I
have an objection.
MS. LINDBLOM: No, your Honor. That's not
what this order provides. It provides what the
Court had previously said, which is, namely, that
use of documents that were claimed to be privileged
would not be a waiver.
MR. HEIMANN: That's not how we read it.
THE COURT: It seems to me the only
confusion that's now in this order that will be
clarified by the other exercise you're going to
perform, namely, this refers to -- this sort of
specifically refers to the 887 documents, and
there's going to be some clarification as to
whether any of those are -- which of those are or
are not still subject to a claim of privilege. It
may mean that this number needs to be corrected or
updated after that exercise is done.
MS. LINDBLOM: Our concern is that there's
a deposition set for the 14th at which we think
they might want to use some documents, and we want
to be very clear that in preparing the witness or
using them at the "dep" would not be a waiver.
MR. HEIMANN: Am I to understand counsel's
representing to the Court that they claim privilege
as to each and every one of the 887 documents that
are referred to in this proposed order?
THE COURT: How about if I just insert
this? The problem seems to come with the
definition of the term "Brown & Williamson
documents." How about if it reads: The Brown &
Williamson documents are those documents on the
list of 887 documents as to which defendants still
claim a privilege.
MS. LINDBLOM: That's fine, your Honor.
THE COURT: Okay. And we'll have it
straightened out, hopefully, soon.
MR. HEIMANN: Within the next few days I
THE COURT: Okay.
All right. It now reads, "The Brown &
Williamson documents are those documents on the
list of 887 documents, open paren, submitted by the
Commonwealth to the Court in support of the
Commonwealth's position the privileged documents
should be de-privileged because they are in the
public domain, close paren, as to which any
defendant claims a privilege." That definition I
think will have to hold us until that number is
perhaps updated or corrected. Okay.
With that modification, any other
objection to the wording of the order?
MR. HEIMANN: No, your Honor.
THE COURT: Then I'll sign it in that form.
The last ministerial item that I think had
been inquired about, I am getting from time to time
these things about out-of-state deposition, or
foreign depositions, and particularly, as I've been
moving around to different places, I'm never quite
sure which of those have caught up with me, been
properly docketed and gotten back to the people who
need them. I have a whole stack of them, some
originals, some copies, and it might be useful -- I
see you standing up, Mr. Sobol -- for someone to go
through those and see which ones are for some
reason missing that I still need to sign off on.
I've been receiving no objections so far to
them, and I've been signing all that have come to
me, although I think a few just came to me recently
that I haven't signed off on quite yet.
MR. SOBOL: Would you like me to do it
during the lunch break?
THE COURT: Sure. Sure.
Anything else we need to do today?
THE COURT: All right, then I'll see you on
May 28th, at ten o'clock in this courtroom.
[Court adjourns 1:12 p.m.]
C E R T I F I C A T E
I, Patricia Bellusci, do hereby certify that the
foregoing transcript, pages 2 through 167, is a
complete, accurate and true record of my voice recorded
tapes taken in the aforementioned matter to the best of
my skill and ability.
Official Court Reporter
The foregoing certification does not apply to any
reproduction of the same by any means unless under the
direct control and/or direction of the certifying
Back to Massachusetts STIC Library