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United States v. Philip Morris Inc.

August 23, 2002

UNITED STATES OF AMERICA, PLAINTIFF,
v.
PHILIP MORRIS INCORPORATED, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Gladys Kessler United States District Judge

MEMORANDUM OPINION

On May 21, 2002, Special Master Levie issued Report and Recommendation #50 ("R&R #50"), recommending that the Court grant without prejudice the motion of Philip Morris Incorporated ("PM") to preclude the deposition of its Senior Vice President and General Counsel, Denise Keane. On May 24, 2002, the Special Master issued Report and Recommendation #53 ("R&R #53"), recommending that the Court quash the deposition notices of three in-house counsel to R.J. Reynolds Tobacco Company ("Reynolds"), namely Charles A. Blixt, Guy M. Blynn, and Daniel W. Donahue, and that the Court deny Reynolds' request for an order governing attorney depositions.

The United States objects to R&R #50 and R&R #53's recommendation that the Court quash the three deposition notices of Reynolds. Upon consideration of R&R #50 and #53, the Objections filed by the Government, the Opposition of PM and Reynolds, the applicable case law, and the entire record herein, the Court concludes that the Government's Objection are sustained.

I. BACKGROUND

The parties all agree that the Government is seeking to depose Ms. Keane and Messrs. Blixt, Blynn and Donahue as fact witnesses only, about, inter alia, non-privileged information relating to "public relations," "corporate conduct and positions," marketing strategies, tobacco research and development, and the Master Settlement Agreement. *fn1

In R&R #50, the Special Master found that before the deposition of an attorney employed by the opposing party could be taken--no mater what the subject matter--Plaintiff must meet the three requirements crafted by the Eight Circuit in Shelton v. American Motors Corp., 805 F.2d 1323 (8th Cir. 1986). These requirements are that: "(1) no other means exists to obtain the information than to depose opposing counsel; (2) the information sought is relevant and non-privileged; and (3) the information is crucial to the preparation of the case." Id. at 1327.

The Special Master found that these requirements apply regardless of whether the attorney employed by the opposing party is trial counsel or in-house counsel, and regardless of whether they are being deposed about legal activities or business, marketing or research activities. See R&R #50 at 3. Concluding that the Government failed to meet these requirements for Ms. Keane and Messrs. Blixt, Blynn, and Donahue, the Special Master recommended that the Government be precluded from taking their depositions. See R&R #53 at 11.

II. STANDARD OF REVIEW

A district court reviews any factual findings by a Special Master for clear error. Any legal conclusions and mixed questions of law and fact are reviewed de novo. Fed. R. Civ. P. 53(e)(2).

III. ANALYSIS

A. The Meaning of Shelton

Shelton provides the cornerstone for Defendants' argument and the reasoning of R&R #50 and R&R #53. The present dispute centers on whether Plaintiff needs to satisfy, before taking the depositions in issue, the three criteria identified by the Eighth Circuit. Defendants contend that the three criteria apply to any attempt to depose an attorney, without regard to the subject matter of the deposition or the attorney's role in the pending litigation. This is not only a misinterpretation of the holding in Shelton and the subsequent case law re-affirming that holding, but is contrary to the language and philosophy of the Federal Rules of Civil Procedure.

Shelton involved a suit against an automobile manufacturer in which parents sought damages for the death of their child, who was killed in a rollover accident. Plaintiff sought to depose opposing counsel defending the suit about her discovery preparation for that case, namely, about whether she possessed documents concerning testing done on the vehicle in question. Defense counsel refused to answer these questions, citing work product privilege. Plaintiff's counsel admitted that his sole purpose in asking these questions was to determine whether defendant's counsel had, in fact, truthfully complied with his document requests and interrogatories and to confirm the information he had already received. Shelton, 805 F.2d at 1327.

The district judge entered judgment against defendant as a sanction for counsel's failure to answer the deposition questions. The Eighth Circuit reversed and held that certain deposition questions, posed to trial counsel during her deposition relating to the existence or non-existence of documents, were barred because they were intended to ...


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