Tobacco Analysts Meet the Plaintiff's Lawyers
[originally published in the Wall Street Journal, August 30, 1995]
Call them the Wall Street Five. Tobacco analysts Marc Cohen of Goldman Sachs, Gary Black of Sanford C. Bernstein, Diana Temple of Salomon Brothers, Roy Burry of Oppenheimer & Co., and Rebecca Barfield of CS First Boston are the latest to discover that when you rain on the parade of the litigation lobby, you'd better pack a legal umbrella of your own.
Reporters rely on all five for what are often the only skeptical comments from outside the tobacco business to balance the opinions of plaintiff's lawyers and anti-smoking activists. This spring Mr. Black predicted that a federal appeals court will torpedo Castano, the much-hyped class action, by vacating an order sweeping tens of millions of smokers into a single class. In June, Mr. Cohen saw "nothing new" in reports of years-old nicotine research that the lawyers were waving about. Ms. Temple and Mr. Burry have told the press they think jurors are tiring of the argument that smokers can't be held responsible for their choices after 25 years of warning labels.
The five must have known such comments wouldn't endear them to the consortium of 40 law firms spearheading the Castano suit. Still, they were apparently unprepared for the subpoena that landed on their desks dated June 28. It came from the Castano lawyers and demanded pretty much everything related to tobacco in their offices save the contents of the ashtrays. Among the demands were for all correspondence they or their firms had received from tobacco companies since April 1 of last year, and all documents from whatever source shedding light on nicotine and the nicotine habit.
That was just for starters. Here's the full text of the profoundly burdensome Request No. 2: "Please produce for inspection and copying each and every document relied upon or reviewed by you, persons employed by you or members of your organization, in the formulation of your opinions with respect to the purchase of stock in any entity listed above. Please list the source of and date of receipt for each document produced in response to this Request."
Most professionals who give opinions for a living have "relied upon or reviewed" an indefinitely high number of documents, many long since discarded, that fill out the overall picture. In this case, an opinion on whether the market is underpricing Philip Morris or RJR Nabisco may derive in part from a gauging of the general cultural climate surrounding tobacco ("Documents 781-863: 'Doonesbury' cartoons tweaking cigarette makers. Source: Daily Bugle. Dates: see attachment.")
Request No. 6 seeks the customer correspondence of the five investment firms -- specifically, "each and every document" that each firm supplied to "persons or other businesses expressing an interest in purchasing shares or making an investment in" any tobacco company -- with names of recipients and dates, of course.
What justification is being offered for this massive invasion of the Wall Street Five's professional privacy -- an invasion that, aside from menacing the confidentiality of their employers' dealings with thousands of individual investors around the country, could inflict millions of dollars of response costs in file searches and lawyers' time? The Castano lawyers haven't proffered any charges of actionable wrongdoing against the Five, and it's hard to imagine how even the most creative lawyer could graft such charges legitimately onto the current suit. Instead they're putting the analysts through the mill as third-party witnesses: their files no doubt contain many documents relevant to Castano's issues, and tobacco executives who've spoken to them over the past year and a half might have made admissions or claims unrecorded elsewhere but preserved in their notes.
Even by the absurdly liberal standards by which American courts now permit pre-trial "discovery", this is a stretch. An oft-heard principle is that burdensome discovery should not be demanded from third parties if the same data could be sought from one's opponent directly, which would seem to apply to much of what is being sought here. Nor is there an established right to cash in on third parties' research skills by forcing them to point out publicly available scientific papers and the like that one's own team might have overlooked. As for the argument that we're entitled to your files because you've been talking to someone we're suing, it's only too easy to see the potential for abuse in harassing third parties who keep up contact with the targets of litigation.
John Coale, spokeslawyer for the Castano suit, seems remarkably unconcerned that the subpoena might be viewed as a way of intimidating the analysts and curtailing their influence on informed opinion. "We're pulling them into the game", he said. "We think the analysts favor the tobacco companies and are consistently trumpeting the industry's position."
If the Wall Street Five want some sympathy, they could talk to researchers who have looked skeptically at the breast-implant scare. Dr. Marcia Angell, executive editor of the New England Journal of Medicine, published an article and editorial rebutting it and has been digging her way out ever since from under subpoenas and document demands filed by incensed plaintiff's lawyers.
Dr. Sherine Gabriel, the Mayo Clinic investigator who wrote the New England Journal study, told the Times that the discovery onslaught "has severely compromised my ability to do research" and has also scared other scientists away from the field, who've told her in so many words that they won't risk being subjected to a similar ordeal.
A standard tactic is to demand confidential patient data. On July 27 Alabama federal judge Sam Pointer refused to quash a massive subpoena seeking patient files from the implant-exonerating Harvard Nurses study. A panel of the American College of Rheumatology found that "rheumatologists who have expressed opinions or published work viewed as contrary to the interests of plaintiffs and plaintiffs' attorneys in implant-related litigation have been subjected to various forms of harassment in the work place or even at their homes. Much of this has been attributed to plaintiffs' attorneys."
Despite a growing outcry, nothing is being done to halt these tactics. Sanctions against litigation abuse have fallen from favor in the federal courts since the previous Congress quietly gutted the main sanctions provision. And although a bill to revive them has passed the new House it's stalled in the Senate along with so many other legal reforms. Even the House Republicans have yet to propose the sort of systematic rollback of litigators' discovery powers that would bring our practice into line with what other countries allow, and help protect the privacy of personal diaries and memos, deleted e-mail and telephone logs. The need for such a rollback grows clearer every day.