Thu, Day 85: Defense Asks to Subpoena CTFK, Matt Myers for Files

March 31, 2005 5:15 pm by Gene Borio

Mar 31, 2005, 6:24 PM

B&W attorney David Bernick informed Judge Kessler late this afternoon that the Defense would be asking her to approve 2 document discovery subpoenas that it wants to serve directly on Matt Myers and the Campaign for Tobacco-Free Kids.

The Defense apparently sent the proposed subpoenas to the DOJ last night.

Mr. Bernick said that Mr. Myers had “volunteered to appear on his own,” so if the document request was a burden for him, “it is an appropriate burden.”

Complicating the matter is the fact that Mr. Myers’ personal counsel is seriously ill, and, as late as 9PM last night, he said he hasn’t yet decided whether to represent himself or hire a new attorney. He also said in an email to the DOJ that the CTFK was not in any position to bear the burden or expense of a document request.

Further complicating the matter is that Mr. Myers’ deposition is scheduled for Saturday, April 9th. Defense argues this is not enough time for them to digest their material, and want to push the deposition back to April 20th.

Based on the DOJ’s presentation of his likely testimony, here’s what the Defense says it “needs”–not what it would normally want, but just what it needs:

1. All documents related to his proposed testimony

2. All documents on the efficacy of youth smoking and cessation programs, and the MSA.

3. All communications, emails, etc., with the government or others in regards to this case. (”It goes to his bias.”)

4. All documents on who funds Mr. Myers and CTFK.

Sharon Eubanks, in an astounding, 15-minute, nearly-off-the-cuff, non-stop presentation of the DOJ’s objections (Judge Kessler, as Timer of Fact, noted that, “I’ve let you go on for 15 minutes”) painstakingly detailed Judge Kessler’s previous rulings on the matter.

(Interestingly, Ms. Eubanks recounted as precedent the time DOJ was denied access to tobacco law firms’ documents. DOJ had apparently learned too late about the “significant involvement of the law firms, in particular in the ETS part of the case, and we were not able to get the documents, and that hurt our case.”)

Mr. Bernick rebutted that no ruling of the court can deprive the Defense of their Due Process under the Federal Rules. “There is no way prior rulings can be used to estrange our rights.”

Mr. Bernick said the Defense had worked to limit its request, ie, “we were looking for areas (of Mr. Myers’ past activities) that appear to overlap with the remedies.” They are not looking for documents on advertising or taxes, for example. Mr. Bernick showed on the Elmo the section of the DOJ’s Remedies Witness list that guided their request:

Mr. Myers. . . will offer fact testimony concerning defendants’ behavior as specifically related to conduct identified in the Master Settlement Agreement, and remedies aimed at preventing and restraining defendants from marketing to young people under 21 and preventing and restraining fraudulent marketing activities.

But Defense also seriously wants his “communications and correspondence” with the government and others related to this trial, because, “[H]e has been working with the government to assist the case. His agenda is to go after the industry. . . We believe he is plugged in to the Litigation Enterprise. (I don’t know if L.E. is capitalized or not, but the way Mr. Bernick said it, it sounded like it should be.) We want the documentation–it goes straight to bias.”

Judge Kessler listened soberly to Mr. Bernick’s and Ms. Eubanks’ lengthy presentations, and said her ruling on Defense’s subpoenas might come as late as Monday or Tuesday.

She said she considers the next 7-8 days “very crucial.” Not exclusively because of this matter, although that’s a part of her concern, but “much more importantly, what — if any — agreements can be come to in the work with the Special Master in regards to all the other discovery issues relating to the remedies witnesses.” (DOJ has a meet with the Special Master this Sunday. The Defense, as of this morning, had not contacted Mr. Levy yet to arrange a session–they are finishing their submission.

The trial could be extended a significant period of time, Judge Kessler said. “[I]f the parties continue in the — I’ll use a word the kids use these days — ‘hyper’ mode they have been in the last 8-10 days, I am not terribly optimistic.”

She said, “If we have to go through a litigated phase of discovery, it would be very unfortunate, very uncomfortable for everyone, and will probably impact the optimistic date that people have estimated for this trial to finish on. . . . I urge all counsel to rethink their attitudes going into the Special Master negotiations.”

Vector chief Bennett LeBow will testify Monday morning.

8 Responses to “Thu, Day 85: Defense Asks to Subpoena CTFK, Matt Myers for Files”

  1. tobacco observer Says:

    >>>She [Judge Kessler] said, “If we have to go through a litigated phase of discovery, it would be very unfortunate, very uncomfortable for everyone, and will probably impact the optimistic date that people have estimated for this trial to finish on. . . . I urge all counsel to rethink their attitudes going into the Special Master negotiations.”

    The DOJ has had five full years to develop their evidence, including more than six months when the disgorgement issue was on appeal when they could have (and should have) developed non-retrospective remedies and witnesses. They’ve already deposed dozens of witnesses, and filed literally tens of thousands of documents into evidence.

    If the current discovery situation is “unfortunate” and “uncomfortable”, its entirely Kessler’s fault for opening up Pandora’s box and allowing new evidence at this 11th hour. New evidence necessarily means new discovery, and this would hardly be the first fight over the admissibility of evidence or other discovery issues during this trial. Did Kessler really think that tobacco would just allow any old evidence in at this point without a chance to hold it under the microscope?

    Tobacco said upfront that permitting new evidence would initiate “frantic” discovery, which probably not coincidentally is almost exactly the same word (”hyper”) that Kessler used to describe the recent activity!

    “Long before discovery closed, the Government pled in court filings that it would seek and prove the very same non-disgorgement remedies for which it now—in the middle of trial—seeks more time to develop its evidence. The Court of Appeals’ decision cannot be used as an excuse for the Government to delay its “remedies” case. The Court’s decision forecloses some of the Government’s sought-after remedies. But nothing in it warrants adding new witnesses or **initiating frantic mid-trial discovery** to support remedies that the Government has pursued since the beginning of this case.”

  2. krueger Says:

    Both sides have had 5 years to prepare.

    But one side has vastly more resources than the other.

    “With their army of top-flight corporate defenders, the tobacco companies have far outnumbered and clearly outspent the government.”

    Los Angeles Times, September 12, 2004

    With the same amount of time to prepare, but far more resources over that time, it should come as no surprise that Big Tobacco is better prepared.

  3. tobacco observer Says:

    >>With the same amount of time to prepare, but far more resources over that time, it should come as no surprise that Big Tobacco is better prepared.

    More violins. . .

    The DOJ has asked for, and received, a special funding appropriation from Congress for this case. So far the gov’t (ie the taxpayers) has already spent over $140 million on this case, and will likely spend another $30+ million more before the case is over.

    Needless to say, that’s PLENTY of money; possibly the most ever spent by the gov’t on ANY case in the history of American jurisprudence. Its far more than ever should have been necessary to prosecute this case, had the gov’t actually had a case to make against tobacco! Their problem is that they don’t now, and never have. This was a politically motivated cash grab from the onset. Thats why the gov’t has stretched interpretation of the RICO statutes to the ceiling trying to push on alleged offenses like child marketing, even though such offenses have little to nothing to do with “racketeering” as defined by the RICO statutes.

    Let’s not forget that long before this trial started, and long before this website existed, the first 2/3 of this case, the entire Medicare recovery action, was laughed out of court as legally baseless. Since you like the LA times so much, here is what they wrote right before this case was originally filed in ‘99:

    “The White House, frustrated by the collapse of anti-smoking legislation, is giving increasingly serious consideration to a strategy aimed at extracting massive monetary damages from cigarette makers by filing a lawsuit on behalf of the government’s Medicare program.”

    So, according the the LA Times, since its inception, this DOJ case has always been about grabbing money!

    The reason discovery took so long on the remaining RICO charges was because of repeated deliberate delays on the part of the gov’t. In fact, before the trial started, Judge Kessler chastised the gov’t multiple times for foot-dragging, even threatening at one point to dismiss the entire case if they didn’t get their act together and proceed. So while both sides may have had five years to prepare, the only reason its taken that long was because the gov’t, not tobacco, couldn’t get its act together. And again, its the gov’t, not tobacco, that feels the need to introduce totally new evidence at this 11th hour.

    The reason the gov’t needs to do that has nothing whatever to do with funding or lack thereof. Its because the gov’ts case was poorly founded to begin with. The case was based on an unprecedented, over-reaching, and illegal interpretation of the civil RICO code. The DCCA recognized this breach and acted to prevent disgorgement and limit the rest of the gov’ts illegally proposed remedies, leaving the gov’t with NOTHING left to ask for.

    Had they had a little less hubris, the gov’t might have planned for this eventuality. Had they had an intrinsically strong case, it wouldnt have changed anything. Instead, they are stuck with an empty sack, and THAT’S why they are scrambling now!

  4. krueger Says:

    “So far the gov’t (ie the taxpayers) has already spent over $140 million on this case,”

    We sure have.

    And Big Tobacco has spent more. Most likely a great deal more.

    With its army of top-flight corporate lawyers, Big Tobacco has clearly outspent the government. See the Los Angeles Times, September 12, 2004.

    It’s not every day that the federal government is outmatched in court. That’s one of the unusual characteristics of this trial, one thing that makes it interesting: in this trial, the US plays David to Big Tobacco’s Goliath.

    “‘The White House, frustrated by the collapse of anti-smoking legislation, is giving increasingly serious consideration to a strategy aimed at extracting massive monetary damages from cigarette makers by filing a lawsuit on behalf of the government’s Medicare program.’”

    “So, according the the LA Times, since its inception, this DOJ case has always been about grabbing money!”

    Read what the Times wrote. You won’t find your interpretation supported by the citation above.

    What the Times was reporting on: the death of the McCain bill. Big Tobacco killed law it didn’t like:

    “The industry hired one lobbyist for every two members of Congress. The major manufacturers spent over $30 million in lobbying fees last year alone, a number that does not include the millions in campaign contributions or the billions spent on advertising grass roots and front organizations. The number of tobacco lobbyists on the Hill was obscene.”

    Dr. C. Everett Koop
    http://www.no-smoking.org/sept98/09-14-98-1.html

    Yes, I can imagine that was frustrating to the administration. It was also a lesson in the power of the industry in Congress. One reason that litigation remains a public policy tool here.

    Litigation is not always the best policy option, but at least it is an option. With this industry, legislation is simply not an option. This industry holds a veto over federal legislation. It has the power to kill legislation it doesn’t like. It proved that with McCain.

    The big picture: progress against tobacco disease and death has been slow. A comparison to tuberculosis is revealing.

    At the turn of the century, tuberculosis killed one out of five Americans. An aggressive public health campaign cut that toll dramatically: within a few decades, a TB death was rare. Today, tobacco kills one out of five Americans — and those numbers are not dropping dramatically. They’re dropping slowly or standing still.

    TB does not have a powerful, smart, ruthless industry spreading it. Tobacco does. TB does not have lobbyists killing law that reduces its spread. Big Tobacco does. Aggressive public health campaigns are not mounted against tobacco. Aggressive health measures against tobacco die in Congress:

    http://multinationalmonitor.org/hyper/issues/1992/01/mm0192_08.html

    http://www.ccsi.com/~comcause/news/exhale.html

    http://www.opensecrets.org/lobbyists/indusclient.asp?code=A02&year=1998

    http://www.westword.com/issues/1997-10-02/news2.html

    http://www.infact.org/fdarept.html

    And Congress is where the McCain bill went to die in 1998:

    http://www.citizen.org/congress/civjus/prod_liability/tobacco/articles.cfm?ID=903

    Yes, that probably was frustrating to the administration. But to some of us it was just a reminder that this Congress was never going to do anything decent about tobacco. This Congress is floating in a sea of tobacco money and influence. This industry has the power in Congress to kill legislation it doesn’t like. That’s why legislation fails, and leaves ligitation as a policy option.

    However, money is power in litigation, too. Just not as much. But it’s not a level playing field in this case by any means. The industry has the advantage. It spends more, it gets more. DoJ is at a disadvantage. This shows. Big Tobacco is better prepared. It is not surprising that DoJ is scrambling. The Dream Team works for Big Tobacco.

  5. tobacco observer Says:

    Krueger: Read what the Times wrote. You won’t find your interpretation supported by the citation above.

    LA Times “‘The White House, frustrated by the collapse of anti-smoking legislation, is giving increasingly serious consideration to a strategy aimed at extracting massive monetary damages from cigarette makers by filing a lawsuit on behalf of the government’s Medicare program.’”

    Tobacco_observer “So, according the the LA Times, since its inception, this DOJ case has always been about grabbing money!”
    =======

    “Extracting massive monetary damages” = “grabbing money”. It seems to me that my interpretation of the LA Times’ reporting is fairly straightforward.

    Regardless, the gov’t could have spent $150 million or $500 million on this case. That’s not the point. The fact that the Justice Department is accustomed to getting its way by bullying much poorer defendants with deep Federal pockets and extortionate threats, and that they’ve finally picked on someone “their own size” isn’t the point either.

    The point is the DOJ has been “scrambling” because FUNDAMENTALLY THEY CANNOT MAKE A RACKETEERING CASE AGAINST TOBACCO. As any lawyer will tell you, 90% of any case is made or broken before it gets into the courtroom.

    It doesn’t matter how how much money tobacco has, or how “little” the DOJ has, if the DOJ actually had the goods to make RICO charges stick, tobacco would have written the proverbial “blank check” years ago with a multibillion dollar settlement. In this case, one ad ACTUALLY aimed at 14 year old would be literally worth a $100 million dollars. Where is it?

    The reason the gov’t is struggling is because, among other major deficiencies in this case, they simply don’t have proof of ongoing RICO violations. The govt’s criminal investigation into tobacco was a complete failure, and the civil RICO statutes were never intended to permit this kind of sweeping action. Tobacco may have done all kinds of outrageous and slimy things in the past (and still may be doing some of them), but they simply don’t add up to the sort of criminal conspiracy that the RICO act was intended for! If the DOJ weren’t lucky enough to have drawn Judge Kessler, a liberal Clinton appointee known for political activism, this entire case (and not just the Medicare bit) probably would have been tossed out years ago.

    Its these fundamental deficiencies in their case that explains a lot of the stretches the DOJ has had to take so far. This is why the gov’t has been forced to cite as RICO “violations” press releases from the 1950s which predated the RICO act by 20 years. This is why two defendants in this case remain to this day trade organizations that have been dismantled years ago and no longer exist. This also explains why the gov’t has, among other contortions, bizarrely chosen to define legal adult smokers between the ages of 18 and 21 as “youth” and to assert that advertising to them is improper, even though its perfectly legal!

    The reason the gov’t is specifically having problems NOW is because everything they’ve been asking for all along in this case has finally been exposed as illegal. Now that they have to present evidence on remedies, they are having trouble coming up with remedies that are allowed under a correct interpretation of RICO 1964(a).

    This also, by the way, is why ultimately the gov’t is going to come away with nothing, or next-to-nothing in this case.

  6. krueger Says:

    “they simply don’t have proof of ongoing RICO violations.”

    Thanks for your legal analysis. Once again, I’m reminded of legal analysis by financial analysts:

    “The other unique feature of the tobacco analysts is that they are all keen students of law, as they must be since their industry’s outlook is completely dominated by its legal issues. But they always seem to read the law very narrowly, in the way that favors their clients, er, I mean companies.”

    Wake-Up Call / The Tobacco Tar Pit, David Smith, July 17, 2000

    That’s why I prefer to get my legal analysis from a legal expert. For instance, G. Robert Blakeley, Professor of Law at Notre Dame Law School, author of the RICO statute. Blakely explains why RICO applies to Big Tobacco:

    http://tobacco.neu.edu/litigation/cases/DOJ/Blakey_Congress.htm

  7. tobacco observer Says:

    Professor Blakely, (one “e”) is a fantastic lawyer and legal scholar, and he may have organized the RICO act, but unlike the Pope, he is not infallible. In this case, by his own admission, he isn’t an unbiased observer either. From your own reference:

    Prof.Blakely: “Candor requires that I acknowledge, before making this statement, that I represented Florida, Texas, and several other states, in their successful litigation against the industry; I represented several Taft-Harley Funds in their unsuccessful litigation against the industry; and, I represented the Government of the Republic of Guatemala in its unsuccessful suit against the industry.

    So by his own admission Professor Blakely has a long history of anti-tobacco activity. For example, he has had no problem representing plaintiffs using a novel theory of liability trying to “forum shop” their torts into the United States from the third world! Needless to say, that particular legal theory was literally rejected by the courts more than 40 separate times; literally every single time it was tried.

    With respect to Professor Blakely’s legal arguments as to the scope of RICO 1964(a) in this case, the gov’t made those very same arguments at appeal, and they were soundly rejected in a majority decision of the DC circuit appeals court. More simply put, architect of RICO or not, Blakely has already been proven wrong in this case!

    It doesn’t matter what my opinion is on this, or your opinion, or the tobacco analysts’ opinion, or Prof. Blakely’s, or even Judge Kessler’s. The only “opinion” that matters with respect to this issue right now is that of the DC circuit. . .and they have opined in a majority decision that the civil RICO act was never intended to permit the kinds of remedies the gov’t was asking for.

    That’s why now, at this 11th hour, the DOJ is strugging to introduce new evidence and put together a remedies presentation with new witnesses. Even Judge Kessler has acknowledged this.

  8. krueger Says:

    Thanks again for your legal analysis. I regret I can’t contribute here, as I have neither legal training nor experience. I’ll have to defer to those who do, such as G. Robert Blakely, lawyer, legal scholar, and author of the RICO statute. It is his opinion that the statute he drafted applies in this case.

    Yes, I agree DoJ is struggling here. It’s not surprising DoJ is struggling here. Big Tobacco has more money:

    “With their army of top-flight corporate defenders, the tobacco companies have far outnumbered and clearly outspent the government.”
    Los Angeles Times, September 12, 2004

    For those so naive as to believe otherwise: yes, money is an advantage in court. And this is an industry with “more money than God”:

    http://web.idrc.ca/es/ev-28814-201-1-DO_TOPIC.html

    This industry is using its money to keep the United States Department of Justice struggling in court. This is a basic tactic for this industry. It forces the other, less well financed side, to spend all their money:

    “the way we won these cases was not by spending all of [RJR]’s money, but by making that other son of a bitch spend all of his”

    http://web.idrc.ca/en/ev-28826-201-1-DO_TOPIC.html

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