XIV. September 20-December 11, 1990: Chronology of 89c1113 through the date of Murray’s admission regarding the Bio Trade Documents.

A. September 20: Kowal’s obstruction of the discovery promised by Flavor Fresh in the 89c1114 settlement contract.

Paragraph 9 of the 89c1114 settlement contract required James Marshall to appear for a deposition in 89c1113 upon 14 days notice and to testify about what he knew concerning the adulteration of Everfresh’s products.  Grove Fresh exercised this right and deposed Marshall on September 20, 1990, but, as discussed below, Kowal obstructed Grove Fresh’s right to plumb the depths of Marshall’s knowledge.

1. Kowal’s obstruction of discovery regarding Kohlbach and Oleum 320/IDEA.

In 1993, Marshall would admit in the related criminal case that he had conspired with Kohlbach and others to adulterate orange juice with Oleum 320/IDEA and other illegal additives.[1]  He would also admit to knowing that the ingredients in Flavor Fresh’s, Everfresh’s and Home Juice’s orange juice included Oleum 320/IDEA.[2]  As of the date of his 1990 deposition, however, Grove Fresh had never even heard of Oleum 320/IDEA.  Grove Fresh’s only information about Kohlbach was that he and Marshall had been partners in a European operation.[3]

At his deposition, Marshall admitted what Grove Fresh already knew—that Marshall and Kohlbach were friends—but at the instruction of attorney Kowal, who was also the attorney of record for Home Juice, Marshall refused to answer any further questions about Kohlbach unless Grove Fresh first demonstrated Kohlbach’s relevance to the claims against Everfresh.[4] 

Kowal’s objection was disingenuous.  As he surely knew, Everfresh’s lawyers had omitted to disclose any information about Kohlbach in their responses to Grove Fresh’s discovery requests, so Grove Fresh lacked the facts necessary to meet his condition.  Consequently, Marshall gave no evidence regarding Oleum 320/IDEA.

2. Kowal’s obstruction of discovery regarding other adulteration activities.

Kowal also instructed Marshall not to answer questions on the following relevant subjects:

Beet sugar and pulpwash:  The complaints in 89c1113 and 89c1114 alleged that the defendants added beet sugar and pulpwash to orange juice. Nevertheless, Marshall was instructed not to answer the following question:

“Have you ever heard that from time to time processors or packers in the United States add pulpwash concentrate to orange juice concentrate and call the resulting product pure orange juice?”

No claim of privilege was made to support this instruction.

Blending for Holiday Juice:  Flavor Fresh was a blender of concentrates. During the relevant period it had supplied concentrate to Holiday Juice.[5] Nevertheless, Marshall was instructed not to answer questions about blending concentrates for sale to Holiday Juice. He was also instructed not to answer specific questions as to whether he ever added beet sugar or pulpwash to orange juice concentrate and resold the resulting product as pure orange juice. These instructions were not supported by any claim of privilege.[6]

Peninsular Products: During the relevant time period, Marshall and Flavor Fresh were buying orange juice concentrate from Holiday Juice at wholesale and re-selling it to Peninsular Products.[7]

Despite the obvious relevance of the subject matter, Marshall was instructed not to answer any questions about the sale of orange juice concentrate to Peninsular Products. He was also instructed not to answer questions as to his knowledge of whether Peninsular Products added beet sugar and other undeclared ingredients to orange juice.[8]

(The relevance of Grove Fresh's inquiry became all the more apparent six months later, in March 1991, when Peninsular Products was forced to make a nationwide recall all of its orange juice because “these juice products may not comply with the standards of identity of those products and ... these products may contain a chemical preservative that is unapproved for use in beverages."[9])

Purchasing activities: Marshall was instructed not to answer the question, "Have you ever bought adulterated orange juice?"[10]

B. September 27-30: The stories in the Chicago Sun-Times

In April 1990 Mr. Troy (Grove Fresh’s president) got a call from P. J. Bednarski, the Chicago Sun-Times reporter who had published a story on the Grove Fresh litigation the previous summer.[11]  Bednarski wanted to do a follow-up story.  At Troy’s request I met with Bednarski and reviewed with him the progress of the litigation.  Shortly afterwards Bednarski received a promotion; he turned the story over to another Chicago Sun-Times reporter, Gilbert Jimenez. 

Jimenez reported two stories that the Chicago Sun-Times published on its front-page on September 27 and 30, 1990.  The first story was headlined “Feds probe 3 suburb orange juice makers,” referring to Everfresh, Home Juice, and Veryfine, the 89c1115 defendant.  The story included this discussion of the Powell affidavit, which the 89c1113 defendants had served earlier that year in lieu of interrogatory answers:[12]

According to federal court records, Hugo Powell, president of Everfresh Inc., said in a sworn affidavit that immediately after joining Everfresh in January, 1989, he "learned the company had prepared amounts of orange juice from concentrate in a manner contrary to the manner (he believed) should have been used."

In the document, Powell also said he learned that a former president of the company "on some occasions in 1986, 1987 and some portion of 1988 . . . had the company prepare orange juice not only from concentrate, water and orange oils, but also with additional pulpwash and/or liquid sugar."

Jimenez’s follow-up story was headlined, “Feds vow action on ‘juice doctors.’”  After repeating the gist of the Powell affidavit the story reported these comments by a defense attorney:

David Stetler, one of the attorneys for Everfresh, said he was “unaware that there (was) any affidavit of Hugo Powell in the case as part of the public record.”[emphasis added]

The court files, which are part of a federal civil lawsuit filed against Everfresh, also contain documents that state: "Everfresh admits that there were occasions when Everfresh Inc., under its previous management, manufactured orange juice that did not comply with federal Food, Drug & Cosmetic Act regulations in 1986, 1987 and that this was phased out in 1988."  

Asked to comment on the documents, Stetler said the “question goes to pending litigation. . . . I don't think it's appropriate for me to comment.”

In fact, the Powell affidavit had been part of the public record since April 18, 1990, when I attached it to Grove Fresh’s motion to enforce the agreements on discovery in the 89c1114 settlement contract.  See discussion above in §XI-C.  The gist of the affidavit had also been disclosed in three subsequent filings by Grove Fresh.[13] 

The 89c11113 defendants never raised any objection to the April 18th filing of the Powell affidavit or to any of the subsequent references to the affidavit in public filings.  Under well-settled Supreme Court precedent, these uncontested filings placed the Powell affidavit irretrievably in the public domain.[14] 

C. October 3: The ex parte order entered by Judge Williams

In the meanwhile, between August 30 and September 26, McDermott Will & Emery issued a series of Rule 11 threats. I responded in a letter dated October 1, 1990. Two days later, McDermott Will & Emery obtained an ex parte order from Judge Anne Williams, sitting as the emergency judge in Zagel’s absence, that enjoined me from doing something I never threatened to do—publish the letter to the press.

Five years later, Judge Zagel cited the manufactured controversy underlying this ex parte order as one of the reasons why he sealed 90c5009—even though the seal was imposed 34 days before I even wrote the October 1st letter. See §__, below.

1. McDermott Will & Emery’s Rule 11 threats.

In a in a letter dated August 30, 1990; in a motion filed that same date in 89c1113; and in a motion presented in 90c5009 on September 26, 1990, McDermott Will & Emery alleged that I had violated Rule 11 when I made allegations about the knowledge and culpability of certain Labatt officials.

The August 30th letter alleged as follows:

Your “new complaint” makes allegations which are false and groundless. It is clear that you either know the allegations are false or you have refused to conduct the investigation required under Rule 11 of the Federal rules of Civil Procedure.

For example, you have refused to proceed with the opportunity to take the depositions of David Murray and Bruce Fraser, during which the groundless nature of your current allegations could have been promptly exposed in the record. Your alternative course of simply concocting in a “new complaint” outrageous allegations concerning Mr. Murray and Mr. Fraser is intolerable.

This letter is to advise you that further Rule 11 sanctions will be ultimately sought for all of your improper conduct.

The August 30th motion in 89c1113, captioned Defendants’ First Motion for Sanctions Against Plaintiff’s Attorneys, concerned Grove Fresh’s claims against Powell, whom Hines had sued “individually and personally in that he exceeded his authority and committed multiple instances of fraud, as set forth hereinbelow.” (89c1113 Complaint, ¶3.)

McDermott Will & Emery alleged that I violated Rule 11 by persisting in the allegations against Powell because the “[d]efendants [had] denied the allegations against Mr. Powell” and his deposition allegedly “confirm[ed] that there was absolutely no basis for the complaint’s allegations against Mr. Powell.”

The September 26th motion in 90c5009 alleged that ¶¶9-10, 12-15 of the 90c5009 complaint violated Rule 11 and should be stricken pursuant to Rule 12(f) for the following reasons:

Plaintiff makes several baseless and scandalous allegations that Labatt employees knew of “adulteration,” and that Labatt had “actual knowledge” and “acquiesced in and profited from the adulteration practices.” These allegations are baseless and scandalous. Plaintiff has been informed on several occasions that such allegations are not true; plaintiff has had the opportunity to depose the persons listed in these paragraphs; and plaintiff has purposely avoided investigating the truth.

2. My October 1st letter responding to the Rule 11 threats.

I responded to these allegations in a nine-page letter dated October 1, 1990. Pp. 3-5 of the letter outlined with particularity the evidence supporting the allegations about the Labatt officers’ knowledge and culpability. That evidence included the following facts surrounding Labatt’s 1986 acquisition of Everfresh:

  • Purity Products’ March 1986 suit alleging that Everfresh was making and selling adulterated orange juice, filed when Everfresh was owned by the Allens.
  • The disclosure of that suit to Labatt in the fall of 1986, when Labatt initiated the negotiations that led to its acquiring Everfresh in December 1986.
  • The Batch Sheets showing that Everfresh made 3.2 million gallons of adulterated orange juice in the 12 months after Labatt acquired the firm.
  • Batch Sheets showing that after August 1987, when Everfresh settled Purity Products’ lawsuit, Everfresh made 1.4 million gallons of adulterated orange juice.

Pp. 7-8 showed with particularity how false and misleading discovery responses by the 89c1113 defendants had concealed the knowledge and culpability of those Labatt officers named in ¶¶9-10, 12-15 of the 90c5009 complaint.

On the basis of the facts outlined in the letter, I demanded, among other things, that: (1) the 89c1113 defendants withdraw the August 30th Rule 11 motion; (2) the 90c5009 defendants withdraw the Rule 11 motion to strike ¶¶9-10, 12-15 of the 90c5009 complaint; (3) the 89c1113 defendants amend and supplement their answer to an interrogatory regarding the knowledge of certain Labatt officers.

If the defense did not resolve these disputes by October 3, the letter declared, “you will leave Grove Fresh with no choice but to present the allegations herein to the court….in a motion to compel the production of all documents that refer or relate to the 1986 Purity lawsuit….[and] in the reply brief due on Friday, October 5th, regarding Grove Fresh’s motion to compel the production of third party documents.”

The letter made no threats, actual or implied, to publish the letter to the press.

3. The ex parte Emergency Motion.

On October 3, 1990, McDermott Will & Emery presented ex parte to Judge Williams a motion labeled “Emergency Motion” which had been slipped under my office door sometime after 6:30 p.m. the night before. I received no courtesy notice of the motion by telephone or by fax.

I did not learn about the motion until shortly before 10 a.m. the next morning. By the time I got to court, Judge Williams had already granted the motion.

The motion, styled Everfresh Inc.'s Motion to Require Grove Fresh to File its Motion and Reply Under Seal, alleged in ¶¶5-6 as follows:

The [90c5009] complaint contains many scandalous statements that plaintiff knows or should know to be untrue. Judge Zagel has refused to lift the seal in the new case, and the parties are in the midst of a briefing schedule before Judge Zagel on Everfresh’s motion to dismiss. Apparently, Grove Fresh is unhappy with Judge Zagel’s unwillingness to lift the seal, and further desires to make its scandalous statements public. Mr. Messina has in the past included documents that were designated as confidential, pursuant to a protective order entered by Judge Zagel, as attachments to pleadings in the public record, which have subsequently been forwarded to the press.

The October 1, 1990 letter, which realleges and outlines many of the scandalous statements contained in the new complaint, is another obvious attempt of Mr. Messina to avoid the rulings of Judge Zagel and put these allegations into the public record. Everfresh has no doubt that Mr. Messina intends to include a copy of his October 1, 1990 letter as an attachment to his motion to compel [discovery], which he threatens to file.

No supporting affidavit, that I had no such intent. What I did intend to do, and what I explicitly said I would do, was to include in a reply brief due on October 5 the allegations set out in the letter. 

D. September-October: The controversies over the Powell Affidavit.

A week before the Chicago Sun-Times published its September 27th story on the Grove Fresh litigation, I marked the Powell affidavit as an exhibit at the deposition of James Marshall and cross-examined him on its contents.  The 89c1113 defendants objected to the cross-examination, claiming that Powell’s affidavit was subject to the 89c1113 Confidentiality Order.  Four days later, they incorporated that claim into a motion styled as Everfresh Inc.’s and Hugo Powell’s Motion to Enforce Protective Order.  The motion prayed for an order “barring plaintiff from disclosing the Powell affidavit.” 

Grove Fresh filed a reply the next day, presenting four reasons why the affidavit wasn’t covered by the 89c1113 Confidentiality Order, including the fact that the Powell affidavit had been in the public record without objection since April 18.  At a hearing on September 26 Judge Zagel heard from both sides, but he did not resolve the dispute. 

More controversies arose, so on October 29, Grove Fresh filed a Motion for a Finding that the Powell Affidavit Is Not Covered by the Protective Order.  At a hearing on November 2, Judge Zagel entered and continued the motion without a ruling. 

E. The secret, ex parte relief granted by Judge Zagel to the 89c1113 defendants regarding the Powell affidavit. 

By entering and continuing Grove Fresh’s Motion for a Finding that the Powell Affidavit Is Not Covered by the Protective Order, Judge Zagel had left the controversy over the Powell affidavit in limbo, so far as we were aware. 

In fact, after November 2, McDermott Will & Emery contacted Judge Zagel’s chambers ex parte and arranged for the sealing of all papers that attached the Powell affidavit or made references to it.  Grove Fresh first learned about this ex parte communication and relief six months later, when the 89c1113 defendants filed papers declaring that after the November 2nd hearing,

Everfresh was obliged to spend considerable time and effort going back and searching the court files and having these documents [attaching or referring to the Powell affidavit] sealed by this Court’s minute clerk.[15]  

For the next six months, Grove Fresh and the 89c1113 defendants operated with completely different understandings regarding the alleged confidentiality of the Powell affidavit. 

F. Grove Fresh’s October 10th motion for sanctions against Everfresh, Powell, and Weitzman. 

On October 10, Grove Fresh presented two motions for sanctions under FRCP 11 and 26(g) against Everfresh, Powell, and Weitzman regarding the supplemental answers to interrogatories served on April 24, 1990.  The motions alleged the following misconduct:

  • The answer to interrogatory no. 10 was false and misleading for deliberately omitting to disclose the 1986 lawsuit by Purity Products as a prior complaint about adulteration.
  • The answer to interrogatory no. 6 was false and misleading for deliberately omitting to identify all of the officers and directors of Everfresh who had knowledge of the firm’s illegal practices.
  • Powell’s affidavit was false and misleading for alleging that Kotwicki was the only Everfresh officer who directed the manufacture of adulterated orange juice, when, in fact, Michael Allen had directed the manufacture of 3,400,000 gallons of adulterated juice between December 1986 and the fall of 1987. 

The motion against Powell asked for a finding that Powell had falsified his affidavit in order to conceal Labatt’s culpability for failing to correct Everfresh’s illegal practices.

Judge Zagel entered and continued the motions until the conclusion of the case.

G. Grove Fresh’s October 19th motion to compel discovery regarding sales. 

On October 19, Grove Fresh presented its Motion to Compel an Answer to Interrogatory No. 12 Concerning Sales of Orange Juice.  At a hearing on November 2, Judge Zagel entered and continued the motion and indicated that the “disgorgement of [the defendants’] profits seems to me an issue that I would be likely to sever at trial anyway.”[16]

Sixteen months later, Zagel granted the 89c1113 defendants’ motion for summary judgment, with prejudice, on the specious ground that Grove Fresh had failed to meet its burden of coming forward with evidence of Everfresh’s sales.[17] 

H. November: The leaked FDA report regarding Bosch’s whistleblower complaint. 

As we discussed in Memorandum 3-A, in November 1988 Duane Bosch met with an FDA agent, told the agent about Oleum 320/IDEA, and gave the agent a sample he had smuggled out of the Warren plant.[18]  In October 1990 Agent Mundo gave me a copy of the FDA’s internal report regarding this meeting. 

This leaked report was the first notice that Grove Fresh or I had about this illicit product. 

I. The false interrogatory answers, Part III: The omission to identify Kohlbach as a vendor and Oleum 320/IDEA as an ingredient.

Grove Fresh’s Interrogatory Nos. 7 and 8 asked for the ingredients in Everfresh’s adulterated products and the names of the vendors who supplied them.  Everfresh’s answers did not identify Kohlbach or Oleum 320/IDEA.

The information in the leaked FDA documents was the first notice to Grove Fresh that Everfresh had given false answers to Interrogatory Nos. 7 and 8.

J. November 28: Moser’s false deposition testimony.

Bruno Moser testified at a deposition in Warren, Michigan, on November 28, 1990. His sworn testimony included three grossly false denials:

Purity Products: Moser denied that he had ever heard of Purity Products.  He also denied knowing that Everfresh had been sued in previous years for adulteration.[19] 

In fact, Moser is specifically identified as one of the persons who assisted in investigating the allegations in the first of the three Purity Products suits, filed in 1977. And, a fair reading of Everfresh's answers to interrogatories in the 1982 and 1986 suits is that Moser, as one of Everfresh's quality control supervisors, assisted in the defense of those cases as well.[20]

Oleum 320/IDEA: Moser denied knowing about Oleum 320/IDEA.  But the Bio Trade documents produced in April 1991 show that the invoices for Everfresh’s purchases of Oleum 320/IDEA were mailed from Switzerland to the attention of Moser.

Preservatives:  Moser denied knowing that Everfresh had ever used a preservative.[21]  But the product that Everfresh ordered from Bio Trade was a preservative, and Moser was aware of this product and its intended use because he handled the paperwork for it.[22]

K. December 11: David Murray’s disclosure regarding the Bio Trade documents.

David Murray is the Labatt officer who, under Appler’s supervision, audited Everfresh’s manufacturing practices in February 1989.  On December 11, 1990 I deposed Murray in Toronto, Canada. 

Murray described the audit of the Everfresh plants that he and his staff conducted in February 1989.  He testified that during the audit, he found some documents relating to Oleum 320/IDEA; we’ve referred to these documents as the Bio Trade Documents.[23]

He testified that an employee at the Windsor plant had referred to Oleum 320/IDEA as DEPC.[24] 

He testified that he attached the Bio Trade Documents to the audit report that Labatt sent to McDermott Will & Emery on February 21-22, 1989.

The Bio Trade Documents should have been included in the June 1990 document production; they weren’t.

After Murray’s deposition, I made repeated requests to McDermott Will & Emery for copies of these documents.  McDermott Will & Emery ignored my requests until April 5, 1991.  See §XIX-J, below.  

[1] Marshall Proffer  pp.10-11.

[3] Messina Affidavit ¶86 (10/31/00).

[4] Id., ¶87-88.

[5] Uncontested Facts Appendix II, Ex. 35 (Boden Dep. 125-126).

[6] Uncontested Facts, Appendix II Ex. 40, Marshall Dep. 41-44; 47; 96-97; 146-147.

[7] Uncontested Facts, App. IV Ex. 121, Memorandum from M. Kanan to Dan Kotwicki, dated October 28, 1987. 

[8] Uncontested Facts, App. II Ex. 40, Marshall Dep. 45-46, 146-147.

[9] Uncontested Facts, App. III Ex. 87, Food Recall Notice dated March 22, 1991; emphasis added.

[10] Uncontested Facts, App. II Ex. 40, Marshall Dep. 46.

[11] See §IV-D, above.

[12] See §X-B, above.

[13] The filings were: Grove Fresh’s Memorandum In Support Of Its Motion To Consolidate For All Purposes (June 13, 1990); Grove Fresh’s Reply In Support Of Its Motion For A Finding On The Statute Of Limitations (June 27, 1990); and Grove Fresh’s Motions In Support Of Six Discovery Motions (August 27, 1990). 

[14] See Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 496 (1975) (holding that the press may not be prohibited from “truthfully publishing information released to the public in official court records.”)  See also Oklahoma Publishing Co. v. District Court, 430 U.S. 308 (1977) (holding that the First and Fourteenth Amendments will not permit a state court to prohibit the publication of widely disseminated information obtained at court proceedings that were in fact open to the public.)

[15] Everfresh Inc.’s Motion: (A) To Enforce this Court’s Protective Order; (B) To Strike and Seal Grove Fresh’s Latest Pleadings; and (C) For Sanctions, p. 3 (May 1, 1991).  See discussion below in §XVI-H, below.

[16] Tr. of Proceedings, pp. 7-8 (Nov. 2, 1990).

[17] See §XIX-C, below.

[18] Memorandum 3-A, §VIII-D.

[19] Uncontested Facts, Appendix II, Ex. 39 (Moser Dep. 60).

[20] Uncontested Facts, Appendix I, Ex. 2 (1976 Responses to Interrogatories, ¶33).  See Appendix I, Ex. 4 (1982 Responses to Interrogatories, ¶¶8, 24); Appendix I, Ex. 5 (1986 Responses to Interrogatories, ¶¶8, 24).

[21] Uncontested Facts, Appendix II, Ex. 39 (Moser Dep. 88).

[22] Uncontested Facts, Appendix IV, Ex. 130 (Everfresh Bio Trade Documents).

[23] Copies of the Bio Trade Documents are attached to Memorandum 3-B as Appendix Q.

[24] See Memorandum 3-C, §III-D, above.