Anti-Tobacco Attorneys See ‘Treasure Map’ in Documents
State attorneys general and private lawyers seeking out-of-court settlements with Liggett Group believe a deal with the cigarette maker would produce a trove of incriminating new documents that could help them defeat Liggett’s larger rivals in lawsuits throughout the country.
A log of sensitive documents prepared by Liggett’s lawyers, described as a “treasure map” by one anti-tobacco attorney, was examined by representatives of several attorneys general and private anti-tobacco lawyers late last week in New York as intensive negotiations toward a settlement continued over the weekend and into Monday. The log would be turned over to plaintiffs as part of a settlement.
Liggett, the smallest of the major U.S. cigarette makers, last March reached a settlement with five of the six states that had sued the industry to recover tax funds spent treating people with smoking-related illnesses. But 14 more states and several localities, including Los Angeles County, have sued the industry since then. Liggett wants to broaden the settlement to buy peace with the other states, while the attorneys general are seeking specific commitments from Liggett to disclose heretofore secret documents.
Sources close to the negotiations told The Times that Liggett’s attorneys have prepared a “privilege log”--a listing of documents that a company ordinarily would claim it did not have to turn over to adversaries in a lawsuit. Such documents might be exempt from disclosure because they involved confidences between attorney and client, or work done by attorneys preparing to defend lawsuits.
According to one anti-tobacco lawyer who reviewed it, the log lists two categories of documents: Liggett papers that the company would turn over in a settlement, and documents dealing jointly with Liggett and other cigarette makers who would claim that Liggett is not entitled to unilaterally surrender them.
Anti-tobacco lawyer Russ Herman described the privilege log as “a road map to the treasure--to the mother lode.” A Liggett spokesman Monday declined comment.
The question of what Liggett could turn over--other than documents concerning it alone--would have to be decided by judges in the major lawsuits filed against the industry.
Other cigarette companies have bluntly served notice that they will strenuously resist any disclosures by Liggett that might compromise the companies’ claims of privilege. Robert McDermott, national counsel for R.J. Reynolds Tobacco Co., last month sent a letter to several state attorneys general threatening legal action if they improperly obtained privileged materials.
Reynolds spokeswoman Peggy Carter said Monday: “No company in any industry could afford to stand by and let somebody else damage their privilege situation. The auto manufacturers wouldn’t stand for that, or the computer manufacturers, or anybody else.”
Liggett has said it does not intend to surrender documents that rival firms consider privileged. But according to plaintiffs’ attorneys, the privilege log could be invaluable in helping them pry loose potentially damning documents. Armed with a list of such documents, the plaintiffs would ask a judge to review the papers in private and would argue that privilege claims are invalid.
“Sometimes lawyers can use a privilege log the way the treasure seeker can use a buried treasure map,” said Herman, whose New Orleans law firm is allied with 60 other firms in a series of statewide class-action suits against the industry. Liggett is also seeking a separate settlement with the private lawyers.
While certain that the contested materials deal with meetings of top industry lawyers, plaintiffs’ attorneys believe some of the documents describe non-privileged matters as studies on smoking and health, and legislative, marketing and public relations strategies.
In addition, under certain circumstances, a judge could order release of normally privileged documents--such as in a case where the communications involved acts of fraud or other crimes. Anti-tobacco attorneys contend that tobacco executives and some of their lawyers engaged in such misconduct--claims that industry officials and lawyers adamantly deny.
“I believe that once the documents are ordered produced . . . and examined” by a judge, “thousands of these documents will be released and they will implicate not only executives of companies but their attorneys in a very, very serious scheme,” said Herman, echoing the feelings of other plaintiffs’ lawyers.
But some observers voiced skepticism that Liggett will provide any more ammunition than plaintiffs already have, noting that tobacco companies have already surrendered more than 20 million pages of documents in the Minnesota attorney general’s case alone. Said Smith Barney & Co. tobacco analyst Martin Feldman: “I don’t think there’s anything that Liggett can provide that can add value to the case being brought by the attorneys general throughout the country.”
Liggett has just 2% of the U.S. cigarette market, and would not be paying a huge amount to the states. The original settlement required Liggett to pay $1 million apiece to the five states over 10 years, plus an annual 2.5% of the firm’s pretax profits, which totaled just $11 million in 1995. People close to the negotiations declined to say what Liggett might pay under an expanded agreement.
A sticking point so far, said some sources, involves payments required of a larger and wealthier cigarette maker, should one merge with Liggett and seek to take part in the deal. The original agreement last March--reached when Liggett chief Bennett S. LeBow was seeking a merger with R.J. Reynolds--included a payment schedule for Reynolds in case the merger went through.
Although a Reynolds merger is considered extremely unlikely, sources said negotiators were still haggling over what to require of any future Liggett merger partner.
“LeBow will offer statements tobacco is harmful” and some documents, said Florida Gov. Lawton Chiles, whose state has sued the industry. But, he added, “if we ended up with a sweet deal for RJR . . . that gives us a problem.”
