Document 8Ow2aOB1Xk7yb3z4n9gv24mze

es ---- X a s Ar s CALL B E F Qg g S E NS ZHG .Ci , C&iviiA Q__ S F. ai h 1^ /k c C M A P R -- 22-92 UES S S4 5 FROM 333 520 7151 iEt call before sending r* R .0 2 P3 CONFIDENTIAL ATTORNEY WORK PRODUCT Date April 20, 1992 Tos Jones, Jones, Close'& Brown (Chuck licCrea, Chris Ballard, Doug Cohen, Randall Jones), Bill Snyder, David McCrea Fromi P . Merrel1 Re; Nevada Power Co v. Westinghouse, et al Notes 'from our telephone conference today f:* '*'% The conference began at 9;15 and for those of you filling out timesheets, lasted two hours and 15 minutes.' By acclmation, Chuck McCrea was appointed moderator and I won the contest for recording secretary, I've attempted to collect my notes into discrete subjects, so this memo does not reflect the actual order of discussion. . >r- Chuck began by opining that tha purpose of the conference was to begin organizing for the trial on remand Notwithstanding Chuck's opinion on the purpose of the conference, discuss ion ".turned almost immediately to other topics such as the prospects'of the defendants petitioning the U.S. Supreme Court for certiorari and whether certiorari was available under the circumstances Conference participants were split on whether certiorari was available at this time, but agreed that no one knew for sure) the., question obviously will need to be re searched if it. becomes .^mport ant. The issue apparently would turn on whether the Ninth Circuit's*reversal of the trial court's dismissal transformed the appeal into an interlocutory appeal Bill asked whether, there was any advantage for the defend ants to settle the case1prior to entry of the Ninth Circuit's mandate. There ,was agreement that settlement would not forestall entry and publishing of| the opinion and that there probably was no advantage such as w4\s suggested. There was general agreement that the defendants might petition for certiorari and later dismiss the petition simply to obtain a delay. However, a question was raised whether a peti tion for certiorari wotild necessarily delay lower court proceed ings. Chris was asked to research the topic David suggested that Chris might contact John Pendergast to obtain his thoughts- . -I i atF R - g-SL_^_-9LJ2___LLEL CALL BEEORE SENDING R .0 3 CONFIDNTIAL ATTORNEY WORK PRODUCT Nevada Power Co- Litigation Team April 20, 1992 and any research on the issue. Pendergast is the plaintiff's lawyer who won the Stroh Diecasting verdict against Monsanto in Wisconsin. He feels indebted to David and Bill for advice and documents he used in his case. His telephone number is (414) 271-7722. Another question raised was how long the defendants have to petition for certiorari. Chris looked this up during the confer ence and reported late in the session that defendants have 90 days to file their petition. The period apparently runs from the entry of the Ninth Circuit's opinion, rather than from the entry of mandate. (Query, whether the latter point was researched?) David suggested that if the defendants recommence litigation in the district court it might operate as a waiver of the right to petition for cprtiapari and that we could probably force them to file motions in the district court by filing discovery re quests or noticing depositions. There was agreement that no one knew whether this was correct. However, we did agree that research on this topic could be held in abeyance since we intend ed to move vigorously in district court anyway. POSTURE OF THE LI T IBAT,ION I .M O Although not;a specific agenda Item, most conference partic aipants at one time or another expressed strong opinions that the defendants are now in very difficult position and we are in a very strong position. They have no further recourse in the Ninth Circuit absent,an;uni i,kel y event in the next few days, such as a new Supreme Court opinion conflicting with the Ninth Circuit's opinion. Odds of a petition for certiorari being accepted are highly uni Iksly. L aDefendants can not afford to have a fraud verdict entered against them on remand, verdict that would result in collateral aestoppel decisions in:defendants' litigation against their insurance companies and in host of pending personal injury cases. Furthermore, with the Third Circuit's decision in the Faoli Railrqad Yard 1itigation ---- that workers who have blood levels of PCBs po higher than the general populations may still ago to the jury on personal injury claims -- defendants are at Ktreme risk from fraud verdict in 1ight of the new study implicating PCBs as a causative agent in human breast cancer. 2 A P P - 2 1 - 9 2 TIJF lS ' n A KftX ? 1(1 R R ^un a s 5 - ^ n J f E D e = 4 & C A I _ 1 _ B E F O R E p*-S E N D I N G ,," R" . 0 <4- CONFIDENTIAL ATTORNEY WORK PRODUCT Nevada Power Litigation Team April 20, 1992 Another case illustrating the dangers to the defendants is Bui den v. Crown Zellerbach. 890 F.2d 195 <9th Cir. 19B9) which found a fraud and battery exception to a worker compensation statute for FCB-exposed workers. The general sentiment of the participants was perhaps best characterized by Randall, who remarked that defendants must "have a chill going dawn their spines." Cruder statements to the same effect were offered by other participants whose voices I could not identify. DEFENDANTS * RULE 11 LETTERI David suggested a response to the defendants' letter earlier in the proceedings threatening a Rule 11 motion. He pointed out that this Is the fourth such letter he has received In PCB liti gation against these companies and that such letters are being used offensively by more and more corporate defendants as an intimidation tactic. D^vid suggested a Rule 11 motion in re sponse. Paul offered that while there is authority for imposing Rule 11 sanctions for groundless Rule 11 motionsf the rule literally applies only to court filings.1 He and Randall also agreed that 1 Not# from f*4U'\ to Davldi Upon reflection following the meeting, I amf)not so certain that a Rule 11 letter could not provide a basis f$r a cross-motion for Rule it sanctions, although I still do not...think the time Is ripe. As I recall, the Advisory Committee Notes on Rule 11 require a party to advise the opposing party and the, court as soon as they become aware of grounds for such a motion Obviousjy, merely notifying opposing counsel is insufficient, so there would be grounds for asking a court to treat the letter as a motion. The argument could be buttressed by the'fact "that a letter threatening legal process without sufficient grounds fits within the abuse of process tort, which Rule 11 codifies in substantial part. The fact that a Rule 11 letter is sent improperly only to opposing counsel and is not filed concurrently as ^ m o t i o n with the court is strong evidence that the purpose of th,e letter is Intimidation for a collatera! purpose . in the future, 1 suggest responding immediately to such letters with a reply brief and cross-motion for sanctions, asking the court to treat the letter as a motion. {This assumes, however, that you have good grounds for'whatever the defense is complaining 3 * *=F R -- 2 2 -- ^ 2 WED a s4 T 22 CALL. B E F O R E S E N D I N G F> , 0 3 P3 CONfM DENTIAL ATTORNEY WORK PRODUCT Nevada Power Litigation Team April 20, 1992 the Ninth Circuit's ruling that both sides would stand their own costs on appeal was a signal that both sides had good grounds for their appellate arguments) thus, a Rule ll motion would be un likely to succeed. Paul suggested that we should reserve our Rule 11 motions for situations where we have a good chance of winning them and suggested exhibiting all the previous Rule 11 letters to such a motion if we had a clear opportunity later in the 1itigatlon. Randall's adapted suggestion was to work the subject of the defendants' .Rule 11 letter into our settlement proposal discussed below. He felt the matter could be handled subtly in a way.that might heighten tensions between the defendants and their attor neys* The participants also agreed that the settlement proposal should also threaten the defendants with a Rule 11 motion if they abandon their statute they farced an appeal oopf limitations defense, on grounds that an affirmative defense they never In tended to use at trial SETTLEMENT PROPOSALi Participants speaking were unanimous on coupling the settle ment proposal with strops pressure in the form of accompanying discovery requests, deposition notices, and a proposed scheduling order seeking an early,'^rial date. (See also d iscussion of "dis 1covery strategy" below.} >: i David suggested thjit we should be asking ourselves what defendants expect from ,us at this point and whether it's to our advantage to do something else'. Randall agreed to take the lead on a draft settlement pro posal and scheduling order during the coming week or so, while David was unopposed in ibis bid;for lead responsibility in draft ing interrogatories and,requests for admission and production. !u Paul conveyed his .partner Ralph Bradley's suggestion that we should avoid locking Beporal Electric into the same drum with the other defendants becaus^ of their message prior to the Ninth Cir cuit briefing that they wish to settle chould Nevada Power pre- about.) 4 * ::r jc RRR~ 2 2 ~ ^ ^ ^ FROM 9 6 3 S2 B 7 1 5 1 ^ = ** 9 ^ ** *- L B E R O R E S E N D I M G RS. 0 1 CONFIDENTIAL ATTORNEY WORK PRODUCT Nevada Power Litigation Team April 2 0 f 1992 vail on appeal. Ralph suggested instead that the G.E. lawyer who carried the message be approached informally to discuss prospects of settling G.E.'s liability separately. Randall enthusiastical ly supported the idea, pointing to M s prior success in obtaining good settlements by dividing and conquering when one defendant was willing to settle. There was agreement, however, that a written settlement-proposal should still go to all three defend-' ants, with the informal approach to S.E. being made shortly thereafter through G.E.'s local counsel. There was no opposition to Randall's suggestion that t h e = other defendants not be contacted through local counsel In stead, efforts will be focused on getting the settlement package to the defendants themselves, through their major law firm coun sel . Randall obtained general agreement on a degree of subtlety in the proposal, with a goal of driving a wedge between defend-- ants and their outside counsel. To that end, the proposal will remind outside defense counsel of their obiigation to forward the package to their clients. Randall suggested that the strength of the letter may affect our opinion on damages, and obtained con sensus on leaving the amount demanded blank until the remaining participants review the tjraft. . An formal offer of judgment for compensatory damages plus a nominal amount for punitive damages was suggestedi however, Paul was concerned that deferidants might accept the offer when we were likely to obtain more through negotiation or Judgment. Discus sion moved on without resolution. i'f * There was agreementthat the proposal should threaten a Rule 11 motion should defendants abandon the statute of limitations defenas, as discussed unger the Rule 11 topic above. Paul offered that if defendants do not believe our ability to force the statute of limitations issue to be litigated, we could mention Nevada punitive damage(easel aw allowing ue to submit our attorney fees to the Jury. By Introducing testimony on the reasonableness of our hours, i.e.f what we were working on, we could force litigation of the statute of limitations issue. Bill reminded that we need to get approval from Nevada Power of the settlement amount'offared. David's adapted suggestion was to have Nevada Power's CEO. indicate his approval of the offer in writing, to be transmitted with the proposal. That resolves any i A.RR -- 2 2 -- 3 2 U E D 8 !49 CALL BEFORE SENSING DENTIAL ATTORNEY WORK Pf ^UCT Nevada Power Litigation Team April 20, 1992 R -0 2 doubts In the defendants' minds that the offer is firm and approved. The issue of the amount to propose in settlement of the punitive damage claim drew a piecemeal response. B i n suggested that we should make It clear that we are aware of their settle ment? In the Independent Life and One Market Plaza cases, perhaps hinting that we have learned the amounts- David suggested that we point to the inevitability of the defendants having to call each other names at trial as part of the difficulty of their position. He pointed out that they had done so in the One Market Plaza case prior to settlement* noting that he has illustrative court documents from that case David said there are some other prior settlements where the amounts can be discussed* others where the amounts have gag orders. I missed who !said:Lt* but someone (Chris?) said that puni tive damages in Nevada are resolved on a clear and convincing standard, which might affect evaluations of the worth of the punitive damage claim. I recalled that the same was true of the fraud claim In Nevada* but pointed out that the standard of proof was not a real problem in this case because of the strength of our evidence. There was no dissent. (The failure to warn claim uses a preponderance of, the evidence standard- Ironically* I thought we were likely to lose on that claim in the Ninth Cir cuit, but made the argument so we might have a lower standard of proof to work with on cqtgtpensatary damages. So much for my predictions!) 1 David suggested that we assemble some research on prior punitive damage awards Nevada to use for negotiating purposes. Z didn't get lt to take on that in my task. nq\tes, but recall vaguely that Chuck agreed t: Regarding the potential for raising the settlement by the attorneys agreeing not to sue these defendants in further PCS utility litigation* ethical limitations were discussed and apparently foreclose suqh an agreement. DISCOVERY STRATESri .. ^ c !* All participants agreed on a vigorous discovery effort. David will head the1preparation of interrogatories and requests 6 t .c APR-21-92 TUE 16:05 383 328 7151 P.07 FROH 9 4 3 3 2 4 7 1 9 1 P !l'j .1 J_P R -- 2 2 -- -9 Nevada Power Litigation Team Aprii 2 0 F 1992 P -O 3 for production and admissions. David and Paul agreed to conduct depositionsi but apparently there was no decision on who will prepare subpoenas and notices of deposition. Randall pointed out that we have a limit of 40 each on interrogatories and admissions in Nevada federal court. His suggestion that we move for permission to serve more was adopted. ns a general tacticT we will first ask defendants to admit that documents are genuine* if they will not so admit, then we will schedule document depositions. This strategy requires that requests for admissions of authenticity should be served early on. Paul will fax David the approved form for admissions frpm the Federal Rules. Bill will have responsibility for obtaining further docu-ments from John;Penderpast. Suggested discovery topics Includes Documents from the One Market Plaza and Independent Life cases. Industrial B|to-Test Labs documents in possession of City of Bloomington that were the subject of a City response to interrogatories filed by Monsanto in prior litigation. 'These can be subpoenaed from the City or requested frpm Monsanto. Records relating to Clarence Thomas' role at Monsanto (useful to Induce settlement and/or head off appeal from final Judgment). These relate to fraudulent Industrial ^jlo-Test reports submitted to EPA while Clarence Thomas had supervisory authority at Monsanto. *!S Defendants' knowledge of mothers' milk contamination, which should be a good Jury Issue for punitive damages. Classified system of records at Westinghouse. Focus on napihalenes. New Wisconsin documents show defendant knowledge by 197Q that PCBs were contaminated, with chlorinated napthalenes. Researchers in 1920s or so b#1ieved that the connection of napthal enes with Chloracne was so elear-qufc that chloracn* should be i 7 APR-21-92 TUE 16:06 F R 0(1 9 0 3 9 2 8 7 1 9 1 503 528 7151 P.08 t A F R - 2 2 - 9 2 MED Nevada Power Li April 20, 1992 SSS0 C A i - U . .B .E jatlon Team D I HG V. renamed perna disease, a contraction from porch!orinated tlfipthalenes. Also, an original 1934 British patent for PCBs involved chlorinating dibenrofurana to produce PCBs and naptha!ones. Depose G-E. lawyers who put pressure on Indiana Board of Health to alter the findings of their worker health study (Randall pointed out the advantage of this discovery Item to settlement with G.E. There was a query, however, whether G.E. would provide the evidence to be used against the other defendants as part of settlement) Depose the G.E. official who met with plaintiffs In settling the Independent Life case. Depose C.E.O.'s of the defendants, probably later in the litig-atioh. Paul recently won such an order in his pulp mill case and has a strong magistrate's opinion and legal research. Ue are required to show that the executives have personal knowledge of issues In the : case, so we should be on the lookout for evidence of such knowledge. 1 . TRlftL ORDER OF PROOF l . iK There seemed to be unanimous support far the chronological timeline order of proof sqggested in Paul's last memo. David agreed to begin organizing material in this way. *i OTHER POTENTIAL CLIENTS * Consensus seems to be that we should continue sending them information, but not aggressively pursue retainer agreements while we'vs moving hot and heavy in the Nevada Power litigation. Estimates ranged from Randall's two months to Bill's 3-4 weeks before ws are in a position to close these agreements. Bill gave a summary of the estimated potential claims of the 16-13 potential el lent we are In touch withi Southern Cal. Edison, 160 mil lion| B.G .* Hydro and Ontario Hydro, 30-30 million each| perhaps 50^Q0 million for most of rest. Bill estimates that we *could ev1Aentually represent 300 million in 8 APR-21-92 TUE 16507 PAOK 303 528 2131 303 32S 7151 P.09 P 13 .1 , . A P R ~ 2 2 _"~ 9 2 1,1E -P-J_ a = B 1 g> t ^__ B E F" O R E ,, S E N S I N G Cl 1DENT IAL ATTORNEY WORK PRO - T Nevada Power Litigation Team April 20, 1992 compensatory damages, and leave the rest to others. His thinking is that higher amounts would force confrontation rather than settlement TQH KOTOSKE,i Chuck reported that Tam Kotoske has apparently contacted the Ninth Circuit and added his name to the court records as an attorney of record on the appeal. We are agreed and adamant that Kotoske's name should be kept off the published opinion. What ever we send to the court should attach Kotoske's April 9, (year???) letter where he mentions being fired by David and David's April 10, 1992 letter to Kotoske (discussing shredding of documents), demonstrating that Kotoske does not represent Nevada Power ethically or in fact. David will prepare a letter to Katoske and circulate it immediately for approval . T .'ioH ifl tl L APR i K " ?-?-- IVJ...*.*?.... FROM 3 0 3 3 2 8 7 1 3 1 I 9 503 520 7151 P - 1B Fu