BAT, LORILLARD APPEAL TO DCCA
September 11, 2006 6:01 pm by Gene BorioBAT and Lorillard have filed their appeals with the US Court of Appeals for the District of Columbia Circuit.
NOTE: BATCo is also appealing Judge Kessler’s Order #904, which dealt with Gulson/Foyle issues and fined BATCo $250,000 for “reckless misconduct and bad faith dealings with the Court.” * This was one of the major incidents Sharon Eubanks told of in
Insights into USA v. Philip Morris, et. al. from Sharon Eubanks
Texts follow of:
BAT Appeal, September 11, 2006
Lorillard Appeal, September 11, 2006
**———————————————————
BAT Appeal, September 11, 2006
**———————————————————
UNITED STATES DISTRICT COURT DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff;
-against-
PHILIP MORRIS USA, INC., et al.,
Defendants.
99 Civ No. 02496 (GK)
No court appearance scheduled
NOTICE OF APPEAL
NOTICE is hereby given that defendant BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED (”BATCo”) hereby appeals to the United States Court of of Appeals for the District of Columbia Circuit from the judgment below and Order # 1015 (”Final Judgment and Remedial Order!!) entered in this action on August 17, 2066.
In appealing from that Final Judgment and Remedial Order, BATCo appeals from any and all orders antecedent and ancillary thereto, including any and all interlocutory judgments, decrees, decisions, rulings, orders, and opinions that merged into and became part of the Final Judgment and Remedial Order, that shaped the Final Judgment and Remedial Order, that are related to the Final Judgment and Remedial Order, that affected the discoverability and admissibility of evidence that became part df the record for review by the Court, and upon which the Final Judgment and Remedial order is based.
**———————————————————
NOTICEis further hereby given that counsel for BATCO, CHADBOURNE & PARKE LLP, hereby appeals to the United States Court of Appeals for the District of Columbia Circuit from Order # 904 entered in this action on March 28, 2005.
Dated: September 11, 2006 New York, New York
Respectfully submitted,
CHADBOURNE & PARKE LLP
BruceG.Sheffler
A Member of the Firm
Attorneys for British American Tobacco (Investments) Limited
30 Rockefeller Plaza
New York, New York 10 112
(212) 408-5100
**———————————————————
CERTIFICATE OF SERVICE
I hereby certify that on this 11th day of September 2006, 1 caused the foregoing NOTICE OF APPEAL to be served by Federal Express, priority overnight service, on the following parties:
Attorneys for plaintiff United States:
Linda MeMahon, Esq. Acting Director, Tobacco Litigation Team UNITED STATES DEPARTMENT OF JUSTICE National PLACE Building 1331 Pennsylvania Avenue, N.W. National Press Building, Suite 1150-2 Washington, DC. 20004
Attorneys for defendants Altria Group Inc. and Philip Morris USA Inc.:
Daniel K. Webb, Esq. Thomas J. Frederick, Esq.
WINSTON & STRAWN LLP 35 Wet WackerDrive, Suite 4200 Chicago, Illinois 60601
Theodore V. Wells, Jr., Esq. James L. Brochin, Esq.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP H 1285 Avenue of the Americas New York, New York 10019-6064
Attorneys for defendant R.J. Reynolds Tobacco Company:
Robert F. McDermott, Esq.
Peter J. Biersteker, Esq.
JONES DAY 51 Louisiana Avenue, N.W. Wâshington,D.C. 20001-2113
Attorneys for defendant Brown & Williamson Holdings Inc.:
David E. Mendelson, Esq.
KIRKLAND & ELLIS
655 15th Street, N.W., Suite 1200
Washington, D.C 20005
Attorneys for defendant Lorillard Tobacco Company:
Michael B. Minton, Esq.
THOMPSON COBURN LLP
One US Bank Plaza, Suite 3500 St. Louis, Missouri 63101-1693
Gene E. Voigts, Esq.
SHOOK, HARDY & BACON LLP
2555 Grand Blvd. Kansas City, Missouri 64108-2613
Attorneys for defendant the Tobacco Institute, Inc.:
James A. Goold, Esq. Keith A. Teel, Esq.
COVINGTON & BURLING
1201 Pennsylvania Avenue, N.W.
P.0; Box 7566 Washington, D.C. 20044-7566
Attorneys for defendant the Council for Tobacco Research-U.S.A., Inc:
Steven Klugman, Esq.
Steven Michaels, Esq.
DEBEVOISE & PLIMPTON
919 Third Avenue New York, New York 10022
Attorneys for defendant Liggett Group, Inc.:
Leonard A. Feiwus, Esq.
KASOWITZ, BENSON, TORRES & FRIEDMAN
1633 Broadway New York, NY 10 119
Attorneys for intervcnor British American Tobacco Australia Services, Limited:
Jack McKay, Esq.
SHAW PITTMAN LLP
2300 N Street, NW Washington, D.C. 20037
2
**———————————————————
Attorneys for intervenors Tobacco Free Kids Action Fund, American Cancer Society, American Heart Association, American Lung Association, Americans for Nonsmokers’ Rights, National African American Tobacco Prevention Network:
Katherine A. Meyer
MEYER GLITZENSTEIN & CRYSTAL
1601 Connecticut Ave., N.W., Suite 700
Washington, D.C. 2UU09-1056
[signed] Ashkahn Pajoohi
3
**———————————————————
Lorillard Appeal, September 11, 2006
**———————————————————
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff,
TOBACCO-FREE KIDS ACTION FUND, AMERICAN CANCER SOCIETY, AMERICAN HEART ASSOCIATION, AMERICAN LUNG ASSOCIATION, AMERICANS FOR NONSMOKERS’ RIGHTS, and NATIONAL AFRICAN AMERICAN TOBACCO PREVENTION NETWORK
Intervenors,
v.
PHILIP MORRIS USA INC. (f/k/a
PHILIP MORRIS INCORPORATED), et
al.,
Defendants.
Civil Action No. 99-CV-2496 (GK)
NOTICE OF APPEAL
Notice is hereby given that defendant Lorillard Tobacco Company hereby appeals to the United States Court of Appeals for the District of Columbia Circuit from the judgment below and Order #1015 (“Final Judgment and Remedial Order”) entered in this action on August 17, 2006. In appealing from that Judgment, defendant appeals from any and all orders antecedent and ancillary thereto, including any and all interlocutory judgments, decrees, decisions, rulings, orders, and opinions that merged into and became part of the Judgment, that shaped the Judgment, that are related to the Judgment, and upon which the Judgment is based.
**———————————————————
Dated: September 11, 2006 Respectfully submitted,
By /s/
Michael B. Minton
Richard S. Cornfeld
A. Elizabeth Blackwell
THOMPSON COBURN LLP
One US Bank Plaza, Suite 3500
St. Louis, Missouri 63101-1693
(314) 552-6000 – phone
(314) 552-7597 – fax
Gene E. Voigts
SHOOK, HARDY & BACON L.L.P.
2555 Grand Blvd.
Kansas City, Missouri 64108-2613
(816) 474-6550 – phone
(816) 421-2708 – fax
Attorneys for Defendant
Lorillard Tobacco Company
2
**———————————————————
* FURTHER TO ORDER #904, MARCH 28, 2005:
Order #904 precluded BATCo from introducing evidence on the publicly-available portions of the Foyle memorandum and imposed a $250,000 fine on BATCo.
Order #341, referenced in #904, demanded BATCo produce a qualified witness to address the document management issues raised in the Foyle memo.
From the Memorandum to Order 904:
BATCo not only violated Order #341, but also misled the Court about whether or not it had told the Court of its intention to violate that Order. BATCo’s conscious choice of this course of action amounted to reckless misconduct and bad faith dealings with the Court. . . .
Finally, it must be noted that this is not the first time that BATCo has been sanctioned for failure to comply with the Court’s Orders. On October 3, 2003 in Order #411, BATCo was held in contempt of Court for violation of Order #343 and ultimately sanctioned in Order #419. Pursuant to those Orders, BATCo paid $25,000 a day, totaling $1,400,000, into the Court registry. It would appear from BATCo’s egregious lack of candor regarding compliance with Order #341 that BATCo does not seem to have learned any lesson from that experience. In this instance, BATCo not only violated a Court Order, but also misled the Court in its submissions about whether it was going to comply with the Order, and then misrepresented the facts about what it had previously told the Court on that subject during oral argument on issues relating to the Gulson testimony
Order #896, also referenced in #904, was addressed in Kessler Allows Gulson Testimony on Foyle; Slams BATCo
Below are the relevant docket entries, followed by PDF links and texts, where available:
**———————————————————
ORDER #904, MARCH 28, 2005:
03/28/2005 5094 MEMORANDUM OPINION to Order #904. Signed by Judge Gladys Kessler on 3/28/05. (lcgk3, ) (Entered: 03/28/2005)
MEMORANDUM OPINION to ORDER #904 granting US Motion for Sanctions Against BATCo , March 23, 2005
03/28/2005 5095 ORDER #904 granting 4948 United States’ Motion for Sanctions Against BATCo and Motion for Reconsideration of Its Motion in Limine Precluding BATCo from Introducing at Trial Evidence on the Subject Matters Specified in Order #341 for Which it Failed to Produce a Knowledgeable 30(b)(6) Witness. Signed by Judge Gladys Kessler on 3/28/05. (lcgk3, ) (Entered: 03/28/2005)
ORDER #904 granting US Motion for Sanctions Against BATCo, March 23, 2005
**———————————————————
ORDER #341, APRIL 14, 2003:
04/14/2003 2161 ORDER #341 by Judge Gladys Kessler: Report and Recommendation #109 of the Special Master is adopted; Plaintiff’s Motion to Compel BATCo to produce Testimony Pursuant to Rule 30(6)(6) “Document Management” Notice is granted in part and overruled in part; BATCo’s Cross-Motion for a Protective Order Quashing the Remainder of the United States’ 30(b)(6) Notice is denied; setting forth additional instructions to BATCo regarding discovery; the United States is granted leave to take the depositions of BATCo’s witness(es) produced pursuant to this order outside of 7/1/02; Plaintiff’s request that BATCo be ordered to produce such witness(es) in Washington, DC at BATCo’s expense is denied. (N) (tth) (Entered: 04/14/2003)
FURTHER DOCKET ENTRIES ON ORDER #341:
04/15/2004 3126 MOTION in Limine To Preclude BATCo From Introducing at Trial Evidence On The Subject Matters Specified In Order No. 341 For Which BATCo Failed To Produce A Knowledgeable 30(b)(6) Witness by UNITED STATES OF AMERICA. (Attachments: # 1 Exhibit Exhibit 1 Letter Pfeffer to Gette# 2 Exhibit Exhibit 2 Deposition of Alison Kay Kinnard# 3 Exhibit Exhibit 2 Deposition of Alison Kay Kinnard# 4 Exhibit Exhibit 2 Deposition of Alison Kay Kinnard# 5 Exhibit Exhibit 2 Deposition of Alison Kay Kinnard# 6 Exhibit Exhibit 3 Meet and Confer# 7 Text of Proposed Order Proposed Order)(Eubanks, Sharon) (Entered: 04/15/2004)
06/01/2004 3286 REPLY to opposition to motion re 3126 United States’ Motion in Limine to Preclude Batco from Introducing at Trial Evidence on the Subject Matters Specified in Order No. 341 for Which Batco Failed to Produce a Knowledgeable 30(b)(6) Witness filed by UNITED STATES OF AMERICA. (Attachments: # 1 Exhibit 01_Exhibit 1 20030217 Excerpts of Deposition of Dr Frank Marsh# 2 Exhibit 02_ Exhibit 2A -20020701 -Deposition transcript of J.Kendrick Wells# 3 Exhibit 03_ Exhibit 2B -20020701 -Deposition transcript of J. Kendrick Wells# 4 Exhibit 04_ Exhibit 2C -20020701 -Deposition transcript of J. Kendrick Wells# 5 Exhibit 05_ Exhibit 2D -20020701 -Deposition transcript of J. Kendrick Wells# 6 Exhibit 06_ Exhibit 2E -20020701 -Deposition transcript of J. Kendrick Wells# 7 Exhibit 07_ Exhibit 2F -20020701 -Deposition transcript of J.Kendrick Wells# 8 Exhibit 08_ Exhibit 2G -20020701 -Deposition transcript of J.Kendrick Wells# 9 Exhibit 09_ Exhibit 2H -20020701 -Depiosition transcript of J.Kendrick Wells# 10 Exhibit 10_ Exhibit 2I -20020701 -Deposition transcript of J.Kendrick Wells# 11 Exhibit 11_ Exhibit 2J -20020701 -Deposition transcript of J.Kendrick Wells# 12 Exhibit 12_ Exhibit 2K -20020701 -Deposition transcript of J. Kendrick Wells# 13 Exhibit 13_ Exhibit 2L -20020701 -Deposition transcript of J.Kendrick Wells# 14 Exhibit 14_ Exhibit 2M -20020701 -Deposition transcript of J.Kendrick Wells# 15 Exhibit 15_ Exhibit 3 -20020501 Transcript Excerpts of Read Deposition# 16 Exhibit 16_Exhibit 4 -20040109 -Excerpts of Deposition transcript of Robert E.Northrip# 17 Exhibit 17_ Exhibit 5 -20040428 Ruling US v PM and BATCO# 18 Exhibit 18_Exhibit 6 20040526 Letter Wallace to Eubanks# 19 Appendix 19_060104Appendixliminereply)(Eubanks, Sharon) (Entered: 06/01/2004)
**———————————————————
DOCKET ENTRIES ON ORDER #896, MARCH 14, 15, 2005:
03/14/2005 4991 MEMORANDUM OPINION to Order #896 sustaining in part and overruling in part Defendants’ Objections to the United States’ Submission of the Written Direct Examination of Mr. Frederick T. Gulson. Signed by Judge Gladys Kessler on 3/14/05. (lcgk3,) (Entered: 03/14/2005)
03/15/2005 5000 ORDER #896 sustaining in part and overruling in part Defendants’ Notice of Objections to the United States’ Submission of the Written Direct Examination of Mr. Frederick T. Gulson . Signed by Judge Gladys Kessler on 3/15/05. (CS, ) (Entered: 03/15/2005)
(SEE: Kessler Allows Gulson Testimony on Foyle; Slams BATCo)
**———————————————————
TEXT OF:
ORDER #904 granting US Motion for Sanctions Against BATCo, March 23, 2005
**———————————————————
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff,
v.
Civil Action No. 99-2496 (GK)
PHILIP MORRIS USA INC.,
f/k/a PHILIP MORRIS INC.,
et al.,
Defendants.
ORDER #904
Upon consideration of the United States’ Motion for Sanctions Against BATCo and Motion for Reconsideration of its Motion in Limine Precluding BATCo from Introducing at Trial Evidence on the Subject Matters Specified in Order No. 341 for Which it Failed to Produce a Knowledgeable 30(b)(6) Witness, BATCo’s Opposition, the United States’ Reply, and the entire record herein, it is hereby
ORDERED that the United States’ Motion for Sanctions Against BATCo is granted; and it is further
ORDERED that within 30 days of the date of this Order, BATCo shall pay a monetary sanction of $250,000 to the Court’s Registry; and it is further
ORDERED that within 30 days of the date of this Order, counsel for BATCo shall by $10,015.33 to the United States as reimbursement
-2-
for the costs associated with the Rule 30(b)(6) deposition of Alison Kay Kinnard, taken July 24, 2003; and it is further
ORDERED that the United States’ Motion for Reconsideration of its Motion in Limine Precluding BATCo from Introducing at Trial Evidence on the Subject Matters Specified in Order No. 341 for Which it Failed to Produce a Knowledgeable 30(b)(6) Witness is granted; and it is further
ORDERED that BATCo is precluded from introducing at trial any evidence or making any arguments relating to the publically available portions of the Foyle Memorandum and any document management practices or procedures described therein; and it is further
ORDERED that BATCo is precluded from introducing at trial any evidence or making any arguments relating to the document management issues addressed in the McCabe decision, specifically including any consideration, decision, policy, practice or procedure concerning the destruction, editing or management of documents at BATCo or any affiliate of BATCo, in Australia or elsewhere, for the purpose of avoiding discovery of such documents in United States litigation or preventing the public from learning the true effects of smoking.
March 28, 2005 /s/
-3-
Gladys Kessler
United States District Judge
Copies via ECF to all counsel record
**———————————————————
TEXT OF:
MEMORANDUM OPINION to ORDER #904 granting US Motion for Sanctions Against BATCo , March 23, 2005
**———————————————————
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff,
v.
PHILIP MORRIS USA INC.,
f/k/a PHILIP MORRIS INC.,
et al.,
Defendants.
Civil Action No. 99-2496 (GK)
MEMORANDUM OPINION
The United States has filed a Motion for Sanctions Against BATCo and Motion for Reconsideration of Its Motion in Limine Precluding BATCo From Introducing at Trial Evidence on the Subject Matters Specified in Order No. 341 for Which it Failed to Produce a Knowledgeable 30(b)(6) Witness (“Motion for Sanctions”). Upon consideration of the Motion for Sanctions, BATCo’s Opposition, the United States’ Reply, and the entire record relating to the issues raised in the Motion for Sanctions, the Court concludes that the Motion should be granted.
On March 9, 2005, the Government filed the present Motion requesting (1) reconsideration of the denial of its motion in limine; (2) sanctions against BATCo (including an appropriate fine and reimbursement for the costs associated with the July 24, 2003 deposition of Alison Kay Kinnard); and (3) an Order precluding
**———————————————————
-2-
BATCo from introducing at trial any evidence or making any arguments relating to the publicly-available portions of the Foyle Memorandum and the document management policies and procedures addressed in the McCabe decision. On March 14, 2005, the Court issued Order #896, which set forth in great detail factual findings and conclusions regarding BATCo’s failure to comply with Order #341.
First, given the findings and conclusions reached in Order #896, there can be no doubt that there is “new evidence” which justifies reconsideration of the Government’s motion in limine. United States v. Philip Morris USA Inc., 200 F.R.D. 109, 112 (D.D.C. 2004), quoting Pearson v. Thompson, 141 F. Supp.2d 105, 107 (D.D.C. 2001). During the hearing on the Gulson testimony, the Court received evidence from which it found by clear and convincing evidence that:
BATCo violated the plain command of Order #341, as it later acknowledged in oral argument relating to these Objections – by failing to prepare its witness to comply with that Order’s requirement that she be able to testify about the publicly available portions of the Foyle Memorandum and document management issues discussed in McCabe.
Mem. Op. accompanying Order #896 at 12.
Second, Fed. R. Civ. P. 37(b)(2) authorizes the trial court to impose such orders “as are just” to sanction a party that fails to obey an order to provide or permit discovery. Shepherd v. American
**———————————————————
-3-
Broadcasting Cos., 62 F.3d 1469, 1474 (D.C. Cir. 1995). In this case, BATCo violated Order #341.
Third, the Court possesses inherent authority, as our Court of Appeals recognized in Butera v. District of Columbia, 235 F.3d 637, 661 (D.C. Cir. 2001)(internal citations omitted), “to ‘protect [its] integrity and prevent abuses of the judicial process.’” See also Shepherd, supra, 62 F.3d at 1474-1475. As the facts set forth in Order #896 make clear, BATCo not only violated Order #341, but also misled the Court about whether or not it had told the Court of its intention to violate that Order. BATCo’s conscious choice of this course of action amounted to reckless misconduct and bad faith dealings with the Court.
Fourth, the sanction which the Government requests — preclusion of evidence on the subject matter specified in Order #341 for which BATCo failed to produce a knowledgeable 30(b)(6) witness — is entirely appropriate and “proportionate” to the conduct engaged in. See Shea v. Donohoe Constr. Co., 795 F.2d 1071, 1077 (D.C. Cir. 1986); Shepherd, supra, 62 F.3d at 1478 (approving use of issue related sanctions to correct and deter discovery misconduct).
Finally, it must be noted that this is not the first time that BATCo has been sanctioned for failure to comply with the Court’s Orders. On October 3, 2003 in Order #411, BATCo was held in
-4-
contempt of Court for violation of Order #343 and ultimately sanctioned in Order #419. Pursuant to those Orders, BATCo paid $25,000 a day, totaling $1,400,000, into the Court registry. It would appear from BATCo’s egregious lack of candor regarding compliance with Order #341 that BATCo does not seem to have learned any lesson from that experience. In this instance, BATCo not only violated a Court Order, but also misled the Court in its submissions about whether it was going to comply with the Order, and then misrepresented the facts about what it had previously told the Court on that subject during oral argument on issues relating to the Gulson testimony, as described in detail in the Memorandum Opinion accompanying Order #896.
For all these reasons, sanctions are fully justified. The testimony precluding sanctions is directly related to the subject matter of Order #341. The requirement of reimbursement for the costs associated with the deposition of Ms. Kinnard is similarly related to the subject matter of Order #341.
A more difficult issue is the Government’s request for imposition of a fine. As noted earlier, BATCo has already paid a substantial fine into the Court registry for failing to comply with an earlier Court Order. In determining an appropriate fine for BATCo’s latest transgression, the Court can certainly consider that the previous fine did not serve to effectively deter BATCo’s non-
-5-
compliance with Court Orders. “The district court’s interest in deterrence is a legitimate one, ‘not merely to penalize those whose conduct may be deemed to warrant such a sanction, but to deter those who might be tempted to such conduct in the absence of such a deterrent.’” Bonds v. District of Columbia, 93 F.3d 801, 808 (D.C. Cir. 1996) (internal citations omitted). The Court of Appeals in Bonds cautioned that sanctions based on principles of deterrence “‘call for careful evaluation to ensure that the proper individuals are being sanctioned (or deterred) and that the sanctions or deterrent measures are not overly harsh.’” Id. (internal citations omitted). Taking these principles into account, as well as BATCo’s prior history, and in order to deter further non-compliance with mandates of this Court, the Court will impose a fine of $250,000, payable within thirty days from the date of this Order.
March 28, 2005 /s/
Gladys Kessler
United States District Judge