Cornered (34 page)

The confrontation over PMI had put the document wars on a new, even more hostile footing, but the most heated battle was yet to come. It raged over the companies' claims of attorney-client and work-product privilege.

In April 1997, in a memorandum to Fitzpatrick, the state argued that the total number of documents for which the companies had claimed privilege had exceeded a “staggering” 130,000, or more than half a million pages. Included was scientific research into the health hazards of cigarettes that had simply been passed by the desks of company attorneys and could not, the state argued, properly be claimed as privileged. In some cases, the state added, documents were subject to the “crime-fraud” exception to the privilege rule. The “crime-fraud” exception prevents lawyers from using privilege as a shield behind which they take part in an ongoing crime or fraud. Minnesota asked for a private review of more than half a million pages by the court.

On May 9, 1997, in a great victory for Ciresi's team, Fitzpatrick ruled that the state had established a reasonable basis for believing that the crime-fraud exception should be invoked for thousands of documents. One of the documents on which he based his ruling was a 1979 memorandum from B&W's corporate counsel, J. Kendrick Wells, to Ernest Pepples, the company's vice president, which, as the judge noted, had been publicly available on the Internet “for months, if not years.” In the memorandum, Wells had outlined a plan to wrap scientific information in attorney-client privilege in order to separate “sensitive” reports. Other documents demonstrated how the industry deliberately sought evidence that underplayed the health risks of smoking and made public statements denying those risks. A 1970 memo written by Helmut Wakeham, then head of research and development for Philip Morris, to the company's president, Joseph Cullman, discussed the raison d'être for the Council for Tobacco Research: “It has been stated that CTR is a program to find out the ‘truth about smoking and health.' What is truth to one is false to another. CTR and the industry have publicly and frequently denied what others find as ‘truth.' Let's face it. We are interested in evidence which we believe denies the allegations that cigarette smoking causes disease.”

Given these and other examples of how the industry had tried to undermine public knowledge of the effects of smoking, the judge felt his own review was not broad enough and ordered that the documents for which privilege had been claimed be reviewed by a special master of the court. The problem was how to review so many pieces of paper—more than half a million. A full review was clearly an impossible task. It would last well into the next millennium, said Fitzpatrick. Supposing that it only took five minutes to retrieve a document and assess whether the companies had correctly classified it—as work-product or attorney-client communication—it would take 750,000 minutes, or 12,500 hours, or roughly 6.25 years of a lawyer's working career to complete the task.

To finish the job in the two months before the discovery period ended, it would take more than thirty people working two hundred hours a month. It just wasn't possible. Instead, Judge Fitzpatrick proposed that the documents be put into categories of the privilege claimed and the court's special master then do a random review or “spot check.” In August, the special master declared that eight hundred of the privileged documents from the Liggett Group (the first to be examined) were, in his opinion, not subject to privilege and could be released. More documents were expected.

*   *   *

A
S THE
T
HIRD
W
AVE PROGRESSED
, the Minnesota lawsuit would remain separate and apart. In the summer of 1996, as Scruggs and Moore started down the road to settlement, Minnesota refused to join in. “It's a combination of lawyers running scared and wanting to make a quick buck, and it's a very bad combination,” said Walburn. As far as Skip Humphrey and the Ciresi law firm were concerned, they were going to trial on January 19, 1998, and there was still a lot of work to do. “Ten years from now,” forecast Walburn, “people are going to look back and say Minnesota was the only state that stood up and didn't sell out.”

11

THE FORDICE SAGA

You know what AG stands for, don't you? Aspiring Governor.

—
Kirk Fordice, governor of Mississippi, 1996

 

Our governor has made a deal with the devil.

—
Mike Moore, attorney general of Mississippi, 1996

 

I
N
M
ISSISSIPPI
, the state suit against the tobacco industry turned into a personal tug-of-war between Mike Moore, the cocksure Democratic attorney general, and his Republican governor, Kirk Fordice. Before it was over, Fordice had joined forces with the tobacco companies and together they had taken Moore to court in an unprecedented effort to stop the lawsuit.

When Moore filed the suit in May 1994, he knew that he could not count on his governor's support. Fordice was the state's first Republican governor since 1874, an old-style supporter of big business and the beneficiary of generous campaign contributions from the tobacco industry. Moore was one of the state's new yuppie Democrats, a group of moderate, reform-minded politicians who had swept into office in the late 1980s under the banner of a progressive governor, Ray Mabus. At thirty-nine, Mabus was the youngest governor in the nation. His secretary of state was thirty-eight. Moore was thirty-five. Camelot had finally made it to Mississippi, they said of the Mabus entourage. Their goal was to “unravel the status quo,” as one of them put it; to bring “basic, drastic change” so that Mississippi would never again be at the bottom of the national ladder in per capita income, employment, and literacy.

The pace of change Mabus set was too breathless for the old Mississippi establishment and he lasted only one term. His political base was shaky. Blacks, who made up about 30 percent of the state's registered voters, supported him, but two out of three white voters had been against him.

In 1991, Maybus lost his bid for reelection to Kirk Fordice, a political throwback, an old-style bubba. Fordice, born in 1934, came from a generation dedicated to staunch resistance to social change. An engineer who started his own construction company, Fordice learned politics on the building site and later as head of the Associated General Contractors of America. His formula for Mississippi was traditional: a return to family values, tax breaks for the rich, and leftovers for the poor. Fordice campaigned against welfare abusers and racial quotas. The rest, he reckoned, following the blueprint of the new conservatism, would take care of itself—with little personal touches here and there; most of them embarrassing. He ordered signs placed on highways at the state line saying, “Only Positive Mississippi Spoken Here.” A year into his first term, he called the United States “a Christian nation”; when people complained, he apologized, explaining that what he had meant to say was that “the overwhelming majority of Americans say they are Christians.” He wanted convicts back in prison-striped clothing, called for a return of chain gangs, and declared Mississippi “the capital of capital punishment.”

If people took offense, he reminded them that everything he said or did was all in the cause of turning Mississippi into one of the most attractive business opportunities in the New South. That is what he cared most about. And taking the tobacco companies to court—even if there was money to be had in it for the state's coffers—was not good for the image he was creating for Mississippi.

The tobacco companies showed their gratitude by pouring funds into the governor's 1995 reelection campaign. Rewarding friends around the country was part of the industry's agenda as it sought to fend off antitobacco attacks by the Clinton administration and David Kessler's FDA. In Mississippi, tobacco industry opponents, including the liability lawyer Dick Scruggs, responded by supporting Moore's bid for reelection to a third term, which he won with more than 70 percent of the vote in 1995. When Fordice also won reelection, a feud between the governor and his attorney general over tobacco was inevitable.

Moore, by then still only forty-two, was taking a big gamble; he rated the chances of success at about sixty to forty. If he lost the tobacco suit, it could end his political career. If he won, he would step out onto the national stage with new political possibilities—to be a U.S. senator, or governor. He and his old law school pal, Dick Scruggs, were moving far from the comfortable but limited horizons of their youth in Pascagoula and into a fast new world of high-flying financial deals in New York and backroom lobbying in Washington. Both were ready. Scruggs by this time was a liability lawyer of considerable personal wealth who was eager to spend his “war chest” on “what could be the trial lawyers' finest hour.” He needed no encouragement and was not lacking in energy or resources. The two men complimented each other. Scruggs had done his time in the front lines and now was happy to be in the back room plotting strategy. Moore was to be the point man. He liked the limelight; some said he couldn't get enough of it.

Moore was ready for new adventures and when his other law school pal, Mike Lewis, urged him to take on the tobacco companies he needed to know only that Scruggs would come aboard before accepting the challenge. As fresh evidence of the industry's fraudulent enterprise turned up, Moore quickly learned how to translate it into sound bites. “I know that the tobacco companies have perpetrated the biggest fraud ever,” he would say, “not only on the American public but probably on the public health in this whole world.… So I feel very, very good to have played a small part in exposing the truth about these companies.… We really are in Mississippi, this small southern state, kind of bringing them to justice for the first time.” Within a year he was spending more than half his time on the lawsuit. Of course, it helped that everywhere he went, the Learjet of Dick Scruggs made the journey less arduous.

Scruggs's support bolstered Moore's self-confidence, already considerable for one so inexperienced and unknown in Washington and New York. As time passed and the Third Wave of tobacco litigation gained momentum, Moore would take on an arrogant air that irritated the state's old guard, especially Governor Fordice, who was being upstaged at every turn. Scruggs and Moore began to dominate the dispatches from the Third Wave. There were profiles in
The Wall Street Journal
and
The American Lawyer,
plus glossy pictures in
Vanity Fair.
Fordice could have sat back and quietly watched Moore take the heat from the industry. If he won, he could grab credit for having the bright attorney general on his team. If Moore lost, Fordice could have accepted credit for trying, without being seen as a loser. Instead, the excitable governor chose to join forces with the tobacco industry and take Moore to court. “What this is all about is money,” said the governor, pushing the industry's line. “It's greed on the part of a few trial lawyers. It has nothing to do with the public health, or anything else.… It makes me want to throw up.”

The first legal salvo came from the governor's office in February 1996, six months after Moore had filed the state's lawsuit for recovery of Medicaid expenses.

Fordice claimed that Moore did not have the authority to bring the suit in the first place. The state's Medicaid Division was part of the governor's office, Fordice maintained, and the attorney general was, in practice, the governor's lawyer. He could not bring a suit concerning any aspect of Medicaid without the governor's permission. This permission had not been sought and would not be given. Citing an obscure state law that allowed the Mississippi Supreme Court to order state officials to take certain actions, Fordice asked the court to order Moore to drop the suit.

As far as anyone could recall, it was the first time the governor of a state had tried to stop his attorney general from bringing a lawsuit that, if won, would clearly benefit the citizens of the state. Philip Morris, Brown & Williamson, and twenty-one other tobacco-related enterprises immediately filed the same request to the Mississippi Supreme Court. Moore commented, “Our governor has made a deal with the devil, and now the devil has joined him.”

Fordice's excuse for opposing the suit was that it would send a message that Mississippi was antibusiness. “If this lawsuit is successful, I have little doubt that similar ones will follow against makers of other legally available products,” said Fordice. “Who will be next? The proverbial floodgates will certainly open and a progressive, probusiness reputation that we have carefully nurtured will be ruined.” Adding to the gloomy forecasts, an official in the governor's office suggested that the litigation would turn Mississippi into a “dumping ground” for other product-liability suits. Poultry and pizza parlors would be next—even red meat and motorcycles.

Mike Moore stood his ground. “When pepperoni kills 425,000 people a year, we'll go after the pepperoni business,” he said. And then he added, “The tobacco companies were looking for a new Marlboro Man and they have found him … and his name is Daniel Kirkwood Fordice.”

*   *   *

T
HE TOBACCO COMPANIES
launched their offensive on the Mississippi lawsuit using all their old tricks. First, they sought summary dismissal of the suit in the chancery court, claiming that it was based on novel, and meritless, legal theories. They failed to convince the judge. What really upset the companies was that Moore had cleverly brought the case in the state's chancery court, meaning that it would be tried by a judge, not a jury. This was a big advantage. The case could be tried quickly because there was less demand on the chancery court's time, and the technical questions of state law on reimbursement of Medicaid funds could be argued more easily in front of a judge than a jury.