UNITED STATES DISTRICT COUR

EASTERN DISTRICT OF TEXAS

TEXARKANA DIVISION

THE STATE OF TEXAS,

Plaintiff,

v.

THE AMERICAN TOBACCO COMPANY; R.J. REYNOLDS TOBACCO COMPANY; BROWN & WILLIAMSON TOBACCO CORPORATION; B.A.T. INDUSTRIES, P.L.C.; PHILIP MORRIS, INC.; LIGGETT GROUP, INC.; LORILLARD TOBACCO COMPANY, INC.; UNITED STATES TOBACCO COMPANY; HILL & KNOWLTON, INC.; THE COUNCIL FOR TOBACCO RESEARCH - USA, INC. (Successor to Tobacco Institute Research Committee); and THE TOBACCO INSTITUTE, INC.

Defendants.

Civil Action No. 5:96CV91

JUDGE: DAVID G. FOLSOM

MAGISTRATE JUDGE: WENDELL C. RADFORD

JURY

THE STATE OF TEXAS’ MOTION TO COMPEL

TO THE HONORABLE JUDGE DAVID FOLSOM:

COMES NOW, THE STATE OF TEXAS, Plaintiff herein, and makes this Motion to Compel the Defendants to comply with their disclosure obligations under this Court’s Civil Justice Expense and Delay Reduction Plan (the "Plan"), and to impose appropriate sanctions on Defendants Liggett Group, Inc.("Liggett"); Hill & Knowlton, Inc.("H&K"); Lorillard Tobacco Company("Lorillard"); United States Tobacco Company ("UST"); The Tobacco Institute, Inc.("TI"); Brown & Williamson Tobacco Corporation("B&W"); The American Tobacco Company("ATC"); The Council for Tobacco Research-USA, Inc.("CTR"); R.J. Reynolds Tobacco Company("RJR"); Philip Morris, Inc.("PM"); and B.A.T. Industries, P.L.C. ("BAT")(hereinafter collectively referred to as the "Defendants") in support thereof shows the following:

DISCLOSURE REQUIREMENTS

Article Two §§ (1)(a),(1)(a)(I),(1)(a)(ii) and (1)(a)(iv) of this Court’s Plan requires that each party tender to opposing parties, without awaiting discovery requests: (1) the names, addresses, telephone numbers and summary of information known by persons and (2) copies of documents, [both (1) and (2) are those persons and documents that "significantly bear on" the issues of the case]; and (3) access to copies of insurance agreements which may cover liability incurred due to the case. [ According to Article Two (1)(a), (1)(a)(I), (1) (a)(ii), (1)(a)(iv) of the Plan, [e]ach party shall , without awaiting a discovery request, provide to every other party ¼ (I)[the name and, if known, the addresses and telephone number of each person likely to have information that bears significantly on any claim or defense, identifying the subjects of the information and a brief, fair summary of the substance of the information known by the person; ¼ (ii)[a] copy of all documents, data compilations, and tangible things in the possession, custody, or control of the party that are likely to bear significantly on any claim or defense ¼ (iv)[for inspection and copying as under Rule 34, any insurance agreement under which any person carrying on an insurance business may be liable to satisfy part or all of the judgment which may be entered in the action or to indemnify or reimburse for payments made to satisfy the judgment (emphasis added).] Article Two § (1)(a)(v) provides: "There is no duty to disclose privileged documents. Privileged documents or information shall be identified and the basis for the claimed privilege shall be disclosed."

No Defendant has complied with, or even made a reasonable, good faith attempt to comply with its disclosure obligations under the Plan. The "non-disclosure" effected by the Defendants demonstrates an agenda to abrogate the provisions of the Plan and an intent to disregard the Court’s Order of April 19, 1996. (Attached as Exhibit A is this Court’s Order setting the deadline for Initial Disclosure for June 5, 1996). Defendants have not complied with the requirements set out under the Plan regarding the identification of privileges nor have any Defendants provided a privilege log containing the specific information as mandated under the Plan. [See the Plan, Article Two § 1(a)(v)]. Specifically, Defendants have not provided a privilege log identifying any document, (by Bates stamp number or other identification), the date such document(s) were generated, the date such document(s) were produced, the present custodian of said document(s), the name of individual(s), the name or identification of the entity or related entities from which the document(s) emanated and/or generated, the privilege asserted and a material description of the document(s).

PERSONS

Although all the Defendants, except ATC, BAT and UST, submitted lists of persons who may have information that may "significantly bear on" the issues of this case, these lists fall short of the Plan’s Initial Disclosure requirements. The degree by which each Defendant failed to comply with the Plan varies.

ATC-B&W, as successor to ATC, did not file any disclosure on behalf of ATC.

RJR-Out of RJR’s long list of names submitted, only four (4) persons are arguably properly identified according to the requirements of the Plan. The list of these four persons is not accompanied with a "brief, fair summary of the substance of the information known by the person" as required by the Plan. (See Defendant R. J. Reynolds Tobacco Company Initial Disclosure of Persons and Documents Likely to Have Information Bearing Significantly on a Claim or Defense, pages 5-6, June 5, 1996).

B&W-Although B&W provided an extensive list of persons gathered from their organizational charts dating back from 1964 to 1993, the list is incomplete because: (1) B&W failed to provide a list of current persons [ B&W’s list of persons ends in 1993 and does not indicate any changes in corporate structure which may have occurred since 1993 to the present.] and (2) B&W failed to identify the subjects of information, and provide a brief, fair summary of the substance of the information known by the persons listed. (See Initial Disclosure of Documents and Persons by Defendant Brown & Williamson Tobacco Corporation (Individually and as Successor to the American Tobacco Company), Pursuant to the Civil Justice Expense and Delay Reduction Plant, Articles Two, Section (1)(a), June 5, 1996).

PM-Like RJR, PM provided a list of names but only four (4) persons are arguably properly identified according to the requirements of the Plan. The list of these four persons is not accompanied with a "brief, fair summary of the substance of the information known by the person" as required by the Plan. (See Philip Morris Incorporated’s Initial Disclosure of Persons Likely to Have Information That Bears Significantly On a Claim Or Defense, June 5, 1996).

LIGGETT-Liggett only provided the names of five (5) persons; four (4) of whom are identified to have knowledge regarding product research and one (1) to have knowledge of marketing. Besides grossly failing to comply with initial disclosure, Liggett did not provide a "brief, fair summary" of the knowledge of the witnesses identified. (See Defendant Liggett Group, Inc.’s Initial Disclosure, June 5, 1996).

LORILLARD-Lorillard submitted a list of persons who testified in previous smoking and health litigation and persons selected solely by virtue of their job title. Lorillard did not separate these two types of persons nor submit a "brief, fair summary" of those persons’ knowledge. (See Defendant Lorillard Tobacco Company’s Initial Disclosure Pursuant to the Civil Justice Expense and Delay Reduction Plan, June 5, 1996).

H&K-Although H&K submitted a list of persons who "performed any services in connection with either the Tobacco Industry Research Committee or the Tobacco Institute", H&K failed to identity the subject of each person’s information or a "brief, fair summary" of their knowledge. (See Hill & Knowlton Inc.’s Initial Disclosure of Persons and Documents, June 5, 1996).

CTR-CTR provided a list of persons subdivided into nine categories, eight of the categories identified groups of persons by positions held at CTR. Only one category identified persons by information known to those persons. [ Although CTR submitted nine categories of persons with knowledge, category seven, "Special Projects Recipients", did not contain any names of persons even though any individuals who may fall into this category would necessarily have knowledge which "significantly bears on" this case.] None of the listed persons’ knowledge was identified by issue or accompanied by a "brief, fair summary" of the person’s knowledge. (See Defendant The Council For Tobacco Research--U.S.A., Inc.’s Initial Disclosure of Persons Likely to Have Information, June 5, 1996).

TI-TI failed to comply with the Plan and merely submitted a list of persons who gave testimony in previous smoking and health litigation. No attempt was made to identify the subject of information known by the persons nor was a "brief, fair summary" of the persons’ knowledge submitted. (See Defendant The Tobacco Institute, Incorporated’s Disclosure of Persons Likely to Have Information, June 5, 1996.)

TOTAL FAILURE OF DEFENDANTS

TO ADDRESS SPECIFIC ISSUES

The Amended Complaint (hereinafter referred to as the "complaint") filed by the State of Texas raises several issues where the information and knowledge are solely within the control of the Defendants. For example, paragraph 103 of the complaint alleges the Defendants targeted children and teenagers in an advertising campaign. The witness disclosure statements filed by the Defendants wholly ignore the subject of youth-targeting, which is squarely within the companies’ knowledge.

A list of additional important subjects raised by the amended complaint, but ignored by the Defendants includes the following:

1. Attempts to influence witnesses. [See ¶ 167(d)].

2. Nicotine addiction. (See ¶¶ 77-89).

3. Manipulation of nicotine levels. (See ¶¶ 82, 128, 142, 164, 202, and 227).

4. Suppression of evidence concerning the development of safer cigarettes. (See ¶¶ 70-89).

5. Attorney involvement in controlling and suppressing scientific research. (See ¶¶ 70-89).

The disclosure of the identity of the persons involved in these activities is within the knowledge of Defendants. Their failure to disclose this information appears to be part of their apparent ongoing scheme to suppress all information adverse to the tobacco industry.

DOCUMENTS

According to Article Two of the Plan, each party must provide to every other party a copy of all documents that "significantly bear on" the issues of the case. None of the Defendants attempted good faith compliance with this requirement. Two Defendants, UST and BAT, did not comply whatsoever.

LIGGETT-Liggett did not provide the State of Texas with copies of documents as required by the Plan, or even a description by category and location as allowed under the looser requirements of F.R.C.P.26(a)(1)(B). [ To the extent the Federal Rules of Civil Procedure are inconsistent with the Plan, the Plan has precedence and is controlling. Civil Justice Expense and Delay Reduction Plan for the Eastern District of Texas, Art. 6 § (4); Friends of the Earth, Inc. v. Chevron Chemical Co. , 885 F. Supp. 934, 936 (E.D. Tex. 1995).] (See Liggett’s Initial Disclosure, supra at 5). Instead, Liggett stated that non-privileged documents likely to bear on this case, and a list of documents as to which privilege is claimed, are available for inspection and copying at its attorneys’ New York offices. The Plan requires Liggett to provide the Plaintiff with copies of all documents likely to bear significantly on a claim or defense. It does not require the Plaintiff to go to New York and sift through documents. Liggett’s "disclosure" falls short of what is required under the Plan.

H&K-H&K offered nothing more than to produce for inspection and copying non-privileged documents relating to the Tobacco Industry Research Committee and the Tobacco Institute, and discussing services rendered to H&K by those organizations. (See H&K’s Initial Disclosure, supra at 5.) H&K states the production of these non-privileged documents is conditioned upon entry by the Court of "an appropriate protective order".

H&K did not provide the State of Texas with copies of any documents, nor did it identify privileged documents and disclose the basis for the privilege claimed. Further, there is no authority under the Plan whereby a Defendant can, without Court intervention, withhold production of non-privileged documents pending entry of a protective order. The Plan expressly requires H&K provide Plaintiff with copies of all non-privileged documents likely to bear significantly on a claim or defense. [See Plan, Article Two § 1(a)(v)].

LORILLARD, TI, B&W, ATC, CTR, RJR and PM-Rather than provide Plaintiff with copies of documents likely to "bear significantly on a claim or defense" as required under the Plan, Defendants Lorillard, TI, B&W, ATC, CTR, RJR and PM have merely referred Plaintiff to a document depository in Minnesota, and purport to condition Plaintiff’s access to those documents on Plaintiff’s agreement to the terms of a protective order entered into in the Minnesota action. (See Lorillard’s Initial Disclosure, supra at 4 and Defendant the Tobacco Institute, Incorporated’s Initial Disclosure of Documents, June 5, 1996).

The Minnesota court’s protective order would require, among other things, that the State of Texas and its attorneys submit to the jurisdiction of the Minnesota State Court that established the depository. (See Exhibit A, ¶ 3(d) of B&W’s Initial Disclosure, supra at 3).

The protective order in the Minnesota case would also require the State of Texas and its attorneys to be bound by the Defendants’ designations of "confidential" documents, (Id. at ¶ 5). "CONFIDENTIAL - CATEGORY I: MINNESOTA TOBACCO LITIGATION" (See Exhibit B, Addendum to Protective Order for Highly Sensitive Material or Information, ¶ 4) and "CONFIDENTIAL - CATEGORY II: MINNESOTA TOBACCO LITIGATION" [Id. at ¶ 10(d)]. The Minnesota court’s protective order allows any party placing documents in the depository to designate as "confidential" any part of a document produced by it. (See Exhibit A, ¶ 5 of B&W’s Initial Disclosure, supra at 3). According to the terms of the Minnesota court’s order, the State of Texas would be prohibited from using any information designated "confidential" unless this Court entered a protective order substantially similar to the Minnesota court’s order. [See Id. at ¶ 10(e)].

There are numerous reasons why the Minnesota discovery is not an adequate substitute:

1. The State of Texas should not, and will not, subject itself to the jurisdiction of a Minnesota trial court.

2. Minneapolis/St. Paul, Minnesota is 969 miles from Texarkana.

3. Discovery in this case should be conducted pursuant to the Federal Rules of Civil Procedure, the Federal case law interpreting such rules, The United States District Court Civil Justice Expense and Delay Reduction Plan, and the Federal Rules of Evidence. The Minnesota Rules of Civil Procedure and Evidence have no bearing on this case.

4. Minnesota law is appropriate for citizens of Minnesota, but should not be applied to the State of Texas. None of the lawyers representing the State of Texas are experts in the laws of Minnesota, nor hold licenses to practice law in Minnesota.

5. The Minnesota case is based on a narrower set of legal theories and does not allege RICO violations.

6. The Defendants’ have participated in the Minnesota proceedings and have benefitted from the opportunity to provide input to the Minnesota Court. The State of Texas has been deprived of any input as to what has happened in Minnesota.

7. Policy considerations militate against Plaintiff abandoning the provisions of the Plan and submitting to the jurisdiction of the State Court in Minnesota to accomplish pre-trial document discovery. First, the Plan’s goal of reducing cost is thwarted by forcing attorneys located in the State of Texas to travel 969 miles to St. Paul, Minnesota to review documents. Second, such "disclosure" relieves defense counsel of their obligation to determine which documents "bear significantly upon" the case filed by the State of Texas.

8. Upon information and belief, as of July 1, 1996, Defendants have placed 5,079,320 pages of documents in the Minnesota repository. Defendants intend to produce approximately another 7,000,000 pages by December 31, 1996. BAT has produced 5,000,000 pages of documents in the England repository and expect to produce another 7,000,000 pages by the end of the year.

9. The methodology in the Minnesota case for document production was generated by specific production requests made on behalf of the attorneys representing the State of Minnesota. The documents were not produced in Minnesota under the comprehensive and carefully crafted requirements of the Plan. Furthermore, the State of Texas seeks relief under different theories of liability and recovery, i.e., Federal Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. § 1962 © and (d) (See ¶¶ 162-170), 18 U.S.C. § 1962(a) and (d) (See ¶¶ 171-180), 18 U.S.C. § 1962(b) and (d) (See ¶¶ 181-186); Negligence (See ¶¶ 237-250); Strict Liability for Defective and Unreasonably Dangerous Product (See ¶¶ 251-256); Strict Liability for Conduct and Abnormally Dangerous Activity (See ¶¶ 257-262); Breach of Express and/or Implied Warranties (See ¶¶ 263-268); and Common Law Public Nuisance (See ¶¶ 280-281), which the Minnesota attorneys never included in their discovery requests.

In essence, Defendants are attempting to relinquish their affirmative duty of document identification and disclosure contained under the Plan by forcing the State of Texas to rely on the legal judgment of Minnesota attorneys.

INSURANCE

According to Article Two (1)(a)(iv) of the Plan, the Defendants do not have to provide actual copies of their insurance agreements to the State of Texas, but they must provide Plaintiff access to copy those insurance agreements. All the Defendants, except Liggett, are in breach of their duty to make available for inspection and copying insurance agreements. B&W, as ATC’s successor, breached their duty to disclose by failing to file any disclosure particular to ATC. UST and BAT breached their duty to disclose by failing to file any disclosure. Through omission, B&W, PM, H&K, CTR, and TI breached their duty to disclose by failing to even address this requirement.

DOCUMENT DATABASE NOT DISCLOSED

Defendants have compiled, reviewed, analyzed, indexed, and cataloged millions of pages of documents on computerized databases in other litigation. Defendants currently have at their disposal databases that would assist them to meet their disclosure obligations but instead they opt to employ "hide the ball" tactics in complete abrogation of the Plan. [ As the Court is well aware, these sections of the Plan were designed and implemented with the idea and purpose that Counsel for the respective parties maintain an affirmative duty to go through the evidence and materials in their possession and lay the cards on the table by disclosing the smoking guns at the start of the litigation. The United States District Court for the Eastern District of Texas was frustrated with the gamesmanship of playing hide and seek with valuable but discoverable documents. The cost of litigation was skyrocketing and the discovery game became a war of attrition where the ultimate goal was to wear the other side down into submission where they would no longer try to acquire the documents and materials that would make their claims and defenses. This affirmative duty to disclose all documents and materials bearing significantly on claims and defenses, as enunciated under the Plan, was of the utmost importance to then Chief Judge Robert M. Parker. Judge Parker, as taught in his implementation seminars on how to work under the Plan, actually envisioned a complete and independent cause of action for a party’s failure, or willful misconduct, to comply with disclosure procedures as mandated under the Plan. ( Civil Justice Expense and Delay Reduction Plan Workshop , U.S. District Court, (E.D. Tex. 1992, Tyler), U.S. District Judge Robert M. Parker, U.S. District Judge William M. Steeger, U.S. District Judge William Wayne Justice, January 21, 1992).] An example of this latter tactic is Defendants’ offer to make available their The State of Minnesota case production logs. Defendants fail to mention, never mind disclose, the computer databases ordered by that court and made available to the plaintiffs in Minnesota that significantly bear on the issues relevant in the instant action. Specifically, Exhibit C identifies with great detail discoverable portions of Defendants’ databases, ordered by the court in The State of Minnesota case. These databases, as identified by Defendant and designation are as follows:

PMI

SHB Database;

ABC Database;

A&P Database;

RJR

Litigation Database;

DMS Database;

Additives Database;

Camel Congressional Investigation Database;

Premier Database;

Outside Attorney Database;

B&W

Litigation Database;

Stolen Database; and

BAT

Reva Database.

(See Exhibit C, ¶ 5(A-C); ¶ 9)

Lorillard, ATC, Liggett, CTR and TI were ordered to provide additional fields of information to supplement their production logs/indices. [See Exhibit C, ¶ 5(D-E)and ¶ 6-8]. Upon information and belief, PM, RJR, B&W and BAT have now provided the above-referenced databases to the Plaintiffs in Minnesota.

SANCTIONS

The policy that supports this Court’s Plan for the reduction of expense and delay is being challenged by the Defendants and is squarely before this Court. Should the Plan be enforced or tossed aside? Does the phrase "no excuses" have any meaning? If so, harsh sanctions are appropriate.

Article II Section (1)(d)-No Excuses of the Eastern District Civil Justice Expense and Delay Reduction Plan is absolutely clear and states in pertinent part:

A party is not excused from disclosure because it has not fully completed its investigation of the case, or because it challenges the sufficiency of another party’s disclosures, or because another party has not made its disclosures.

This is a critical provision of the Plan and the Judges of the Eastern District have been steadfast in upholding the parties’ obligation of mandatory disclosure. Judge Parker said it best when he gave the judicial workshops at the inception of the Plan. He affirmatively stated:

But the disclosure provision is one of the key elements of this Plan, and it places you in a posture you have never been. It places some real responsibility on counsel, and it will require a real high level of real professionalism. You will note the word "Shall" is there. It is set out with considerable particularity what you shall disclose.

See Exhibit D, original transcript of proceedings - Civil Justice Expense and Delay Reduction Workshop, U.S. District Court, (E.D. Tex. 1992, Beaumont), Chief U.S. District Judge Robert M. Parker, U.S. District Judge Richard A. Schell, U.S. District Judge Joe J. Fisher, and U.S. Magistrate Wendell C. Radford, between the hours of 2 p.m. and 4 p.m., February 4, 1992 (Page 18 Line 23 through Page 19 Line 4).

Obviously, the United States Eastern District Court places a high duty of disclosure on the lawyers in any given legal action. The primary purpose of making initial disclosures under the Plan is to avoid unnecessary expense and delay such as the filing of burdensome discovery and motions to compel. Judge Schell confirmed Judge Parker’s interpretation when he affirmatively stated:

The substitution of disclosure, as Judge Parker said, for unlimited discovery is the primary cost-reduction feature of this plan. And it is, of course, suggested in the legislation that prompted this Plan. That feature obviously represents a compromise. It is a compromise between the cost and benefits of unrestrained discovery.

Now this compromise may mean that on occasion some relevant information that wide-open discovery would have revealed will not be uncovered. But in the long run, reducing cost and delay should increase access to the courts. And that is good not only [for] the public but for lawyers, too.

See Exhibit D, original transcript of proceedings - Civil Justice Expense and Delay Reduction Workshop, Beaumont, Texas, February 4, 1992, (Page 34 Line 4-17).

By failing to make the mandatory disclosures under the Plan the Defendants have substantially increased the delays and costs of the litigation.

The Judges of the Eastern District have directly addressed the failure of a party to make the required mandatory disclosures in a case filed under the Plan. In talking to the issue the Judges have specifically stated the following:

Q. Judge [Parker], what are the penalties and sanctions that are available to ensure that you abide with it?

A. For Failure to disclose, for example?

Q. Well, you say, "No Excuse; a party is not excused from disclosure" and so forth.

A. Right.

Q. Now, suppose he violated that. Where are you going to take him to? What are you going to do to him?

A. Well, Judge Schell can address that. Let me just repeat an answer that I made at the Sherman workshop. A lawyer asked essentially the same question, except he said, "Well, what if two years or three years after I lose my case, I find out that the lawyer on the other side had significant information that they failed to disclose?"

And my answer to that question was: the court would impose an appropriate sanction. It appeared to me that it probably would be appropriate to let that lawyer retry his case with no defense being asserted on the other side, but you have to look at each case individually.

See Exhibit D, original transcript of proceeding - Civil Justice Expense and Delay Reduction Workshop, Beaumont, Texas, February 4, 1992, (Page 48 Line 4 through Page 49 Line 2).

Judge Schell went on to define the required procedure for disclosure and stated:

I would say that at the end of the [thirty] 30 days, Joe, you should have an obligation to disclose whatever you feel bears significantly on the issues in the case, whatever that is. You may be in doubt about what all you need to disclose; but whatever you feel bears significantly on, you must disclose. And I would say you ought to read that inclusively.

Now, if we find out that a lawyer has not disclosed something that he or she should have on a timely basis, then certainly they could be prohibited from using that evidence at trial. I would think that would be a worthy sanction in a situation like that. So you cannot hide evidence.

See Exhibit D, original transcript of proceedings - Civil Justice Expense and Delay Reduction Workshop, Beaumont, Texas, February 4, 1992, (Page 49 Line 3-16).

In the present case, the Defendants have caused delays, increased the costs, and disregarded their affirmative duty under the Plan. Documents required to be disclosed in the present action have been disclosed in other tobacco/health-related litigation. Accordingly, the State of Texas believes there is a substantial cache of documents and materials that bear significantly on Plaintiff’s claims asserted in this case that have not been disclosed. Furthermore, Defendants have not certified to this Court that all documents and materials bearing significantly on the claims in the present action have been disclosed to the State of Texas. The State of Texas is entitled to all the materials that bear significantly on the claims and defenses in the action. Defendants are without an excuse for non-compliance with the mandatory disclosure provisions of the Plan.

These Defendants’ blatant refusal to make a good faith effort to comply with this Court’s Civil Justice and Expense Reduction Plan warrants sanctions under Rule 37 of the Federal Rules of Civil Procedure. Such sanctions should include, pursuant to Rule 37, requiring Defendants to pay Plaintiff’s expenses in making this motion, including attorney’s fees.

Accordingly, the State of Texas requests the Court enter an order compelling Defendants to comply with the disclosure requirements set out in this Court’s Civil Justice Expense and Delay Reduction Plan, and, further, that the Court impose appropriate sanctions for Defendants’ discovery abuse.

CERTIFICATE OF ATTEMPTED RESOLUTION

I certify that Plaintiff has in good faith conferred or attempted to confer with each of the Defendants listed in this motion in an effort to secure disclosure without Court action, and those efforts have failed. Plaintiff’s counsel met with Defendants’ counsel on June 3, 1996 to discuss their respective disclosure obligations. At that time, Defendants expressed their intent not to produce to Plaintiff any document database indices as ordered in the Minnesota case. Defendants further expressed their intent not to produce documents to Plaintiff in Texarkana in accordance with the Plan. Despite Plaintiff’s counsels’ objection to Defendants’ proposed actions, Defendants have contumaciously implemented their intentions not to make disclosure under the Plan.

Respectfully submitted,

DAN MORALES

Attorney General of Texas

Tx. Bar No.: 14417450

JORGE VEGA

First Assistant Attorney General

Tx. Bar No.: 20533800

JAVIER AGUILAR

Special Assistant Attorney General

Tx. Bar No.: 00936300

TOM PERKINS

Chief, Consumer Protection Division

Tx. Bar No.: 15790850

HARRY G. POTTER, III

Special Assistant Attorney General

Tx. Bar No.: 16175300

P. O. Box 12548

Capitol Station

Austin, TX. 78711-2548

(512) 463-2191

(512) 463-2063 Fax

OF COUNSEL:

LAURENCE H. TRIBE

Hauser Hall 420

1575 Massachusetts Ave.

Cambridge, MA 02138

ARTHUR MILLER

Areeda Hall 228

1545 Massachusetts Ave.

Cambridge, MA 02138

WALTER UMPHREY, P.C.

490 Park

P. O. Box 4905

Beaumont, TX. 77704

(409) 835-6000

(409) 838-8888 Fax

Tx. Bar No.: 20380000

ATTORNEY-IN-CHARGE

JOHN M. O'QUINN, P.C.

440 Louisiana St., Ste 2300

Houston, TX. 77002

(713) 223-1000

(713) 222-6903 Fax

Tx. Bar No.: 15296000

JOHN EDDIE WILLIAMS, JR.

8441 Gulf Freeway, Suite 600

Houston, TX. 77017

(713) 649-6464

(713) 943-6226 Fax

Tx. Bar No.: 21600300

REAUD, MORGAN & QUINN, INC.

801 Laurel

Beaumont, TX. 77701

(409) 838-1000

(409) 833-8236 Fax

Tx. Bar No.: 16642500

NIX LAW FIRM

205 Linda Drive

P. O. Box 679

Daingerfield, TX. 75638

(903) 645-7333

(903) 645-5389

Tx. Bar No.: 150410000

By: HAROLD W. NIX

HUGH E. MCNEELY, of Counsel for

Provost & Umphrey Law Firm, L.L.P.

LSBA No.: 10,628

2901 Turtle Creek Drive, Ste 201

Port Arthur, Texas 77642

(409) 727-0800

(409) 727-7671 Fax

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing THE STATE OF TEXAS’ MOTION TO COMPEL has this the 3rd day of July, 1996 been properly forwarded to all known counsel of record as attached hereto as Exhibit "1" by hand delivery and/or facsimile and/or first class mail.

HAROLD W. NIX

EXHIBIT "1"

Stephen McCormick

Kirkland & Ellis

200 East Randolph Drive

Chicago IL 60601

Paul E. Stallings

Vinson & Elkins

1001 Fannin St.

Suite 2300

Houston TX 77002-6760

James N. Haltom

George McWilliams

John B. Greer III

Patton, Haltom, Roberts, McWilliams, Greer

P.O. Box 1928

700 Texarkana Nat’l Bank Bldg.

Texarkana TX 75504-1928

Robert McDermett

Jones, Day, Reavis & Pogue

1450 G. St., N.W.

Washington D.C. 20005

J Dennis Chambers

Howard Waldrop

Alan Harrel

Victor Hlavinka

Atchley, Russell, Waldrop, Hlavinka

1710 Moores Lane

P.O. Box 5517

Texarkana TX 75505-5517

Mary Elizabeth McGarry

Jacob S. Pultman

Simpson, Thacher & Bartlett

425 Lexington Ave

New York NY 10017-3954

Damon Young

Young, Kesterson & Picket

4122 Texas Blvd.

P.O. Box 1897

Texarkana AR-TX 75504

James E. Scarboro

Murray R. Garnick

Arnold & Porter

1700 Lincoln St

Suite 4000

Denver CO 80203

Jerry L Mitchell, Jr.

Marjorie C. Bell

Kasowitz, Benson, Torres & Friedman

700 Louisiana St

Suite 220

Houston TX 77002

Marc E. Kasowitz

Michael M. Fay

Kasowitz, Benson, Torres & Friedman

875 Third Avenue

New York NY 1002

William J. Crampton

Shook, Hardy & Bacon

1200 Main St

Kansas City MO 64105

Robert A. Gwinn

Lea F. Courington

Gwinn & Roby

4100 Renaissance

1201 Elm St

Dallas TX 75270

Nicholas H. Patton

Patton, Tidwell, Sandefur & Paddock

4122 Texas Blvd

P.O. Box 1897

Texarkana TX 75504

Bruce Ginsberg

Davis & Gilbert

1740 Broadway

New York NY 10019

Winford Dunn

Dunn, Nutter, Morgan & Shaw

Suite Six, State Line Plaza

Texarkana AR 75502

Steve Klugman

DeBevoise & Plimpton

875 Third Ave

New York NY 10022

William Key Wilde

Mark E. Lowes

Bracewell & Patterson

2900 South Tower Pennzoil Place

Houston TX 77002

William E. Hoffman, Jr.

King & Spalding

2500 Trust Company Tower

191 Peachtree St. N.E.

Atlanta GA 30303

Thomas E. Riley

Chadbourne & Parke

30 Rockefeller Plaza

New York NY 10112

James O. Copley

Latham & Watkins

855 Third Avenue

New York NY 10022

Allen M. Katz

Munger, Tolles & Olson

355 South Grand Avenue

35th Floor

Los Angeles CA 90071-1560

Robert E. Dodson

Gooding & Dodson

300 Texarkana National Bank Building

Texarkana TX 75501

Peter C. Hein

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York NY 10019

Jack D. Maroney

Maroney, Crowley, Bankston, Richardson & Hull

1520 Austin Center

701 Brazos, Suite 1500

Austin TX 78701

Morris Atlas

Atlas & Hall

818 Pecan Avenue

McAllen TX 78502

Bill Iverson

Covington & Burling

P. O. Box 7566

Washington DC 20044-7566

Tom Couch

Fulbright & Jaworski

1301 McKinney, Suite 5100

Houston TX 77010

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TEXAS

TEXARKANA DIVISION

THE STATE OF TEXAS, § CIVIL NO.: 5:96CV91

§

Plaintiff § SECTION:

§

VS. § JUDGE: DAVID FOLSOM

§

THE AMERICAN TOBACCO COMPANY; § MAGISTRATE:

R.J. REYNOLDS TOBACCO §

COMPANY; BROWN & WILLIAMSON § JURY

TOBACCO CORPORATION; B.A.T. §

INDUSTRIES, P.L.C.; PHILIP §

MORRIS, INC.; LIGGETT GROUP, §

INC.; LORILLARD TOBACCO §

COMPANY, INC.; UNITED STATES §

TOBACCO COMPANY; HILL & §

KNOWLTON, INC.; THE COUNCIL §

FOR TOBACCO RESEARCH-USA, §

INC. (Successor to Tobacco §

Institute Research Committee); §

and THE TOBACCO INSTITUTE, INC., §

§

Defendants §

ORDER TO MOTION TO COMPEL

Before the Court is The State of Texas’ Motion to Compel. The Court has considered the Motion and finds that it is well taken. It is hereby

ORDERED, ADJUDGED and DECREED that the Defendants, Liggett Group, Inc.; Hill & Knowlton, Inc.; Lorillard Tobacco Company; United States Tobacco Company; The Tobacco Institute, Inc.; Brown & Williamson Tobacco Corporation; The American Tobacco Company; The Council for Tobacco Research-USA, Inc.; R.J. Reynolds Tobacco Company; Philip Morris, Inc.; and B.A.T. Industries, P.L.C. have failed to make initial disclosure in compliance with the Civil Justice Expense and Delay Reduction Plan (the "Plan"). It is further

ORDERED, ADJUDGED and DECREED that the Defendants’ failure to make disclosure in compliance with the Plan is unlawful and this Court hereby orders the Defendants to immediately comply with the Plan’s initial disclosure requirements, and specifically, to produce and deliver to Plaintiff the following computer databases:

DEFENDANT DATABASES

Philip Morris, Inc. SHB Database

ABC Database

A&P Database

R.J. Reynolds Tobacco Company Litigation Database

DMS Database

Additives Database

Camel Congressional Investigation Database

Premiere Database

Outside Attorney Database

Brown & Williamson Tobacco Corp. Litigation Database

Stolen Database

B.A.T. Industries, P.L.C. Reva Database

It is further ORDERED, ADJUDGED and DECREED that Defendants shall pay to Plaintiff the reasonable expenses incurred in connection with the Motion to Compel, including attorney’s fees.

SIGNED this the ____ day of ___________, 1996.

JUDGE DAVID FOLSOM

U.S. DISTRICT JUDGE


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