The opinion of the court was delivered by: GLADYS KESSLER, District Judge
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
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
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
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
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.
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.
A. BATCo. Has Not Satisfied the Legal Standard for
Reconsideration in Question of Its ...