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U.S. v. PHILIP MORRIS USA.

March 30, 2004.

UNITED STATES OF AMERICA, Plaintiff,
v.
PHILIP MORRIS USA., f/k/a Philip Morris, Inc. et al. Defendants



The opinion of the court was delivered by: GLADYS KESSLER, District Judge

MEMORANDUM OPINION

Before the Court is BATCo's Motion for Reconsideration of Order No. 454 and the Court's Underlying "Control" Determination ("Motion"). Upon consideration of the Motion, the United States' Opposition, and BATCo's Reply, the Court concludes that the Motion should be granted in part and denied in part, For the reasons explained below the Court will lift the contempt finding as of January 15, 2004, but will not revisit its previous determination that BATCo. controls the documents at issue.

I. BACKGROUND

  On April 14, 2003, the Court issued Order #343, adopting the Special Master's Report and Recommendation ("R&R") #102, which required BATCo to produce within thirty days certain documents that were in the possession of its affiliate British American Tobacco. Australia Services, Ltd. ("BATAS"). BATCo. subsequently requested Page 2 additional time to comply with order #343 on the ground that BATAS had not yet determined how it would respond to BATCo's request for the documents and, in any event, would need additional time due to the scope of the production involved. Order #354 at 1.

  On May 16, 2003, the Court issued Order #354, which required BATCo. to file a Status Report by June 1, 2003, "indicating what position BATAS intends to take with respect to Order #343." In a footnote, the Court also stated that "[i]f BATCo. thereafter needs a reasonable amount of additional time to fully comply with Order #343, the Court will entertain a motion at that time." Id. at 2 n.1. BATCo. then filed a Status Report as ordered and two motions which were considered in R&R #120.

  The first motion, BATCo's Motion for a Protective Order Regarding Production of Non-Privileged BATAS Documents Under Order No. 343 ("Non-Privileged Documents Motion"), sought to have the use and dissemination of non-privileged BATAS documents limited to the litigation of this case. The Special Master recommended denial of the Non-Privileged Documents Motion. However, in Order #394, the Court overruled R&R #120 in that respect and granted BATCo's Motion for the reasons explained in its August 20, 2003 Memorandum Opinion.

  The second motion that was the subject of R&R #120 was the Compliance Motion. In the Compliance Motion BATCo. sought to be Page 3 released from compliance with Order #343 insofar as that Order required BATCo. to produce or log privileged documents; BATCo. also sought an order prohibiting the Government from seeking sanctions or additional compliance with Order #343 absent a finding of "good cause." The Special Master recommended that the Court take jurisdiction of the Compliance Motion and R&R #120 was adopted in that respect. Order #394 at 2.

  The Government filed a Cross Motion for a Finding of Contempt Against BATCo. and for Imposition of Continuing Monetary Sanctions. On October 3, 2003, the Court issued Order #411 denying the Compliance Motion, granting the United States' Cross Motion, and holding BATCo. in conditional civil contempt. Order #411 provided that, in order to purge itself of the contempt finding, BATCo. was to fully comply with Order #343 by October 17, 2003. When BATCo. failed to comply by October 20, 2003, the Court issued Order #419, requiring that BATCo. deposit into the Registry of the Court $25,000 per day until such time as BATCo. came into compliance.

  On November 7, 2003 BATAS filed its Motion for Leave to Intervene. BATAS sought to intervene for the purpose of asserting and, if necessary, litigating privileges it holds in the documents that are in its possession and that are the subject of Order #343. On December 5, 2003, in Order #449, the Court granted BATAS' Motion. Page 4

  BATAS subsequently filed a privilege log. Although BATAS initially filed this log on December 15, 2003, the Government maintains that the log "failed in significant ways to meet the requirements of the Court's orders" and that BATAS did not produce a compliant log until January 15, 2004. Opp'n at 7 n.6, 9.

  BATCo. filed a Motion to Vacate Order #419. On December 16, 2004, in Order #454, the Motion to Vacate was denied. However, the Court did temporarily stay the imposition of the penalty provided in Order #419 as of December 15, 2003.

  BATCo. now seeks reconsideration of Order #454 as to two issues: (1) the Court's denial of its request that the contempt findings and sanctions be vacated and (2) the Court's prior determination that BATCo. "controls" the relevant documents in BATAS' possession.

 II. ANALYSIS

  A. BATCo. Has Not Satisfied the Legal Standard for Reconsideration in Question of Its ...


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