V. September 28- November 30, 1989: Chronology of 89c1113, 89c1114, and 89c1117 through the date Grove Fresh fired Hines.

In November 1989, two months after the leaked FDA documents had boosted our expectations, Mr. Troy and I were stunned to learn that Hines had orally agreed to limit Grove Fresh’s claims in 89c1113 to a mere six months.  Eventually, we discovered that the cut-off date Hines had placed on Grove Fresh’s claims (August 10, 1988) corresponded to the ending date on a covenant restricting his right to litigate against Labatt and its orange juice companies. 

Hines had never told Mr. Troy about the covenant or about the defense’s efforts to enforce it.  Feeling betrayed by Hines, Mr. Troy fired him.  See §E-10, below. 

This Section chronicles the events leading to Hines’s dismissal, starting with Judge Bua’s ruling on the motion to dismiss the 89c1114 complaint. 

A. The duty to withdraw triggered by Judge Bua’s ruling on the motion to dismiss the 89c1114 complaint. 

On September 28, 1989, when Judge Bua sustained two of the three counts in the 89c1114 complaint.  After this ruling, McDermott Will & Emery had three ethical options:

McDermott Will & Emery exercised Option# 1, but it could not settle the cases before the deadline for answering the complaint and responding to discovery.  Instead of withdrawing from 89c1114, as the rules mandated, McDermott Will & Emery continued to represent 89c1114 defendants for six more months. 

B. October 8 and October 28: Hines’s failure to enforce deadlines in 89c1114. 

The answer to the 89c1114 complaint was due on October 8, 1989, ten days after Judge Bua denied the 89c1114 defendants’ motion to dismiss the Lanham Act and common law claims.[2]  Grove Fresh asked Hines to enforce that deadline.  Grove Fresh also asked him to enforce the deadline for the 89c1114 defendants’ answers to Grove Fresh’s discovery requests, which were due on October 28, thirty days after the stay of discovery had expired. 

In an early sign of his disloyalty, Hines ignored both requests. 

C. October 16: The settlement meeting in Baltimore.

On October 16, attorney Weitzman took a four-hour round trip flight to Baltimore to present a settlement offer to Hines.  Weitzman made a nuisance-value offer to settle both the 89c1113 and 89c1114 cases.  He offered $17,500 for each case—a combined total of $35,000.

When Hines reported this offer to Mr. Troy and me, he told us that the offer was explicitly limited to orange juice products sold during the six months preceding the filing of the complaints.

I thought it odd that a nuisance-value settlement offer would include such a specific limitation on the time period covered by the offer.  I also thought it odd that Weitzman’s clients would authorize a four-hour round trip to Baltimore to make a nuisance-value offer, when he could have walked two blocks to my office and presented the offer to me, in my capacity as Hines’s local counsel. 

In hindsight, Weitzman went to Baltimore not merely to present a settlement offer, but also to jawbone Hines on the covenant restricting his right to litigate against the Labatt Entities. 

D. October 23: Grove Fresh’s request for sales data as a condition to settlement negotiations. 

The explicit limitation of the settlement offer to a six-month period perplexed Mr. Troy.  Among other things, the limitation was incongruous with Everfresh’s admission to the FDA that it had made and sold adulterated orange juice products for at least six years. 

Hines could not explain this limitation to Mr. Troy’s satisfaction, so Mr. Troy sought my advice.  I recommended that he decline to take part in any further settlement talks unless Everfresh and Flavor Fresh disclosed sales data for the time-period covered by the lawsuits, which Hines’s most recent discovery requests had defined as 1985 to the present.  Having that sales data would help us formulate an informed demand modeled on Grove Fresh’s Lanham Act claim for the defendants’ illegal profits.

In a letter dated October 23, 1989, which I drafted for Hines’s signature, Hines told Weitzman that if “Everfresh or Flavor Fresh wishes to make an offer of settlement, the offer should be stated with reference to…(a) the time period it covers; and (b) the total sales of orange juice during that period.” (emphasis added)  

E. The meetings, letters, and telephone conversations that exposed Hines’s conflicts of interest and led to his discharge.

Grove Fresh’s October 23rd request for sales data triggered a series of meetings, letters, and telephone conversations that slowly brought Hines’s conflicts of interest to light.

In the course of these communications I queried attorney Weitzman about the defense’s refusal to provide certain sales data.  Honest answers to my queries would have disclosed the existence of the Canadian Everfresh Inc. and other relevant facts.   Weitzman omitted to disclose those facts, however.

[1] See Memorandum No. 3-C, §VI-B. 

[2] See FRCP 12(a)(4)(A), which requires that a responsive pleading be filed 10 days after the court denies a motion to dismiss the complaint.

[3] John Labatt Annual Report 1988, p. 20.

[4] See Memorandum 3-B, §§VI-A through VI-D.