XIX. September 26, 1991-September 21, 1992: Chronology of 89c1113, 89c1114, and 90c5009 through the date that Henry Lang, American Citrus’s president, gave notice that he would invoke his Fifth Amendment privilege against self-incrimination.

  1. September 26, 1991-February 5, 1992: Briefing on the Ad Hoc Coalition for In Depth Journalism’s claims for access to the 90c5009 case file and 89c1113 discovery.
    1. The Coalition’s arguments on the merits of its claims for access.
    2. Everfresh’s initial brief opposing intervention.
    3. The Coalition’s response to Everfresh’s initial brief.
    4. Grove Fresh’s response to Everfresh’s initial brief.
    5. October 31: The oral ruling on the Coalition’s standing, and the warning that the reporters might be subject to discovery.
    6. The second round of briefs: The defamatory arguments accusing Grove Fresh’s attorneys of criminal and unethical conduct.
    7. The second round of briefs: American Citrus’s defamatory briefs, which were eventually withdrawn.
    8. The second round of briefs: The Coalition’s reply.
    9. The second round of briefs: Grove Fresh’s reply.
    10. The second round of briefs: Everfresh’s surreply.
    11. The second round of briefs: Grove Fresh’s motion to strike.
  2. January 29-March 11, 1992:  The briefing on Grove Fresh’s motion to overrule the defense’s objections to the time period for discovery in 90c5009.
  3. February 21, 1992: Judge Zagel’s result-oriented summary judgment against Grove Fresh’s Lanham Act claims in 89c1113
  4. March 20, 1992: Judge Zagel’s result-oriented —and patently wrong—declaration that collateral estoppel did not preclude Grove Fresh from pursuing the identical Lanham Act claims in 90c5009.
  5. March 20, 1992: The Coalition’s request for a ruling on its motion for access.
  6. March 27, 1992: Grove Fresh’s amended Rule 11 motion.
  7. June 23, 1992: Everfresh’s Rule 11 motion.
  8. July 23, 1992:  The order overruling the defense’s objections to the time period for discovery in 90c5009.
  9. September 21, 1992: Henry Lang’s Fifth Amendment claim.

A. September 26, 1991-February 5, 1992: Briefing on the Ad Hoc Coalition for In Depth Journalism’s claims for access to the 90c5009 case file and 89c1113 discovery. 

The Ad Hoc Coalition for In Depth Journalism (“Coalition”) was a group of Chicago reporters associated with the Medill School of Journalism and represented by John Elson of the Northwestern University Legal Clinic. 

On September 26, 1991, the Coalition filed a Motion for Leave to Intervene and Application for an Order Vacating the Sealed Order Sealing 90c5009 and for an Order Limiting the Parties’ Discretion to Suppress Information in 89c1113 (“Intervenors’ Application”); it also filed a supporting memorandum (“Intervenors’ Memorandum”), which is summarized below in §1. 

At a hearing on October 9, Judge Zagel ruled that the issues of intervention and of the Coalition’s right of access to judicial documents were not co-extensive, so he ordered a round of briefs limited to the Coalition’s standing.[1]  Those briefs are summarized in §§2-4, below.

Three weeks later (October 31), Judge Zagel ruled that the Coalition had standing to intervene (§5, below), so he ordered a second round of briefs on the merits of the access claims.  These briefs are summarized in §§6-11, below.. 

Access claims are supposed to be resolved expeditiously.[2]  Here, the briefing on the merits of the access claims was completed in early February 1992, but 10 months passed before Judge Zagel finally ruled on the Coalition’s claims, denying them in November 1992.  See §XXII-F, below. 

1. The Coalition’s arguments on the merits of its claims for access.

Mincing no words, Intervenors’ Memorandum argued that the court’s failure to explain its reasons for sealing the case was “unprincipled and unprecedented” (p. 2) and invited the following questions (pp. 4-5):

Does [the court] have a financial interest in the outcome of the case?  Does it have personal ties with anyone linked with the parties or their attorneys?  Does it have a publicly unpopular or unacceptable ideological agenda? [citations omitted]

Intervenors’ Memorandum went on to make the following legal arguments on the merits of its access claims:

  1. The public has a constitutional right of access to court documents. (pp. 5-6.)
  2. The public should have access to judicial records in order to monitor the functioning of the court. (pp. 6-8.)
  3. The public has an interest in understanding disputes presented in a public forum. (pp. 8-9.)
  4. The first amendment guarantees public access to information before the court when the information is of public interest. (pp. 9-11.)
  5. The public has a common law right of access to the judiciary. (p. 11.)
  6. The presence of allegedly embarrassing or incriminating information is not, standing alone, sufficient to justify sealing the files of a case. (pp. 11-12.)
  7. In 89c1113, the court had not found “good cause” for its order granting the parties’ unlimited power to deny the public access to all discovery information. (pp. 12-14.)

2. Everfresh’s initial brief opposing intervention.

The defendants’ initial response to Intervenors’ Application was supposed to be limited to the issue of standing, but Everfresh ignored that limitation.  Its Memorandum in Opposition to the Motion to Intervene, filed on October 23 (and adopted by the other defendants), made the following allegations regarding the merits of the sealing order: 

  1. Allegedly, Grove Fresh had repeatedly attempted to disclose information subject to the 89c1113 Confidentiality Order. (p. 2.) 
  2. The court had “thoughtfully reviewed and addressed the propriety of the [89c1113 Confidentiality Order] on several occasions.” (p. 2.)
  3. Allegedly, Grove Fresh had engaged in improper tactics, such as “threatening to file a completely new lawsuit unless it received a satisfactory settlement offer” and “funneling information to journalists.” (pp. 2-3.)
  4. “[T]his Court’s decisions with respect to the protective orders and the seal have been informed, reasoned, and appropriately responsive to the Court’s and the defendants’ legitimate concerns.” (pp. 4-5.)
  5. The 90c5009 complaint was “clearly derivative” of the 89c1113 case and based upon discovery obtained in that case.  Consequently, the 90c5009 seal was “now actually required to give effect to the [89c1113] protective order.” (p. 12.)

Argument (e) contradicted an argument that Everfresh had made a year earlier, when it moved to dismiss the 90c5009 complaint as an unauthorized amendment to the 89c1113 complaint.  Then, it argued that “[t]he information that Grove Fresh…relied upon to ‘amend’ [the 89c1113 complaint] was obtained from public agencies, [all of] which was…available prior to [the filing of the 89c1113 complaint in] February 1989.”

Argument (e) also contradicted the March 1991 order denying the motions to dismiss, which included a finding that “the information used to [draft the 90c5009 complaint] was obtained from public agencies without help from the defendants or a court order.”

On the issue of the Coalition’s standing, Everfresh presented these arguments:

  1. The Coalition lacked standing under FRCP 24 (pp. 5-8).
  2. The Coalition had no common law right of access to discovery materials. (pp. 9-10)
  3. The Coalition had no first amendment right of access to discovery materials (pp. 10-12.)

3. The Coalition’s response to Everfresh’s initial brief.

Intervenors’ Response to Defendants’ Memorandum in Opposition to Motion to Intervene, filed on October 30, made the following arguments:

  1. The defendants had not cited any precedent or policy showing that the Coalition lacked sufficient interest to challenge the court’s denial of press access to court documents. (pp. 1-5.) 
  2. The defendants’ arguments on access misstated the facts, the law, and the Coalition’s arguments. (pp. 5-11.)

4. Grove Fresh’s response to Everfresh’s initial brief.

Grove Fresh’s Memorandum in Support of the Standing of the Ad Hoc Coalition of In Depth Journalists (“Grove Fresh’s October 1991 Brief”), filed on October 31, 1991, addressed two factual issues raised by Everfresh that the Coalition was in no position address—the procedural history of the 90c5009 sealing order and the contents of the 90c5009 complaint. 

Procedural history: Citing to transcripts and correspondence between counsel, Grove Fresh set out (at pp. 2-6) the procedural history leading to the sealing order.  That history showed that the court had never held a hearing on the alleged reasons for the seal.

Contents of the 90c5009 complaint: Grove Fresh submitted an exhibit which identified, paragraph-by-paragraph, the sources for the allegations in each of the 238 paragraphs in the amended complaint.  The exhibit showed that only three of the 238 paragraphs referred to information in documents designated as confidential:

  • Paragraph 109 included a reference to Hugo Powell’s affidavit.[3]
  • Paragraph 111 included a reference to batch sheets of misbranded juice processed at the Everfresh plant in Michigan.
  • Paragraph 144 included a reference to an internal Everfresh memorandum on the subject of adding undeclared pulp wash to orange juice. 

Grove Fresh argued that “the information in all three of these paragraphs is cumulative of allegations for which there is substantial public or non-confidential sources, such as the records of the Florida Department of Citrus, or the test results of Krueger Food Laboratories.” (p. 7.)

5. October 31: The oral ruling on the Coalition’s standing, and the warning that the reporters might be subject to discovery. 

At an October 31 hearing, Judge Zagel ruled that “intervention for a limited purpose is something which I have the discretion to grant and I want to exercise that discretion in your favor.”[4]  He expressed concern, however, at “the possibility of some joint effort between the intervenors and the plaintiff to worsen the position of the defendants in this case, which if pursued creates a question that might or might not be relevant.”[5]  He warned the Coalition that “if you become a party, you may subject yourself to discovery of the sort that might not be appropriate under other circumstances.”[6] 

Judge Zagel then set a briefing schedule and suggested that “despite the fact that it is [the Coalition’s] motion, the other side ought to go first, because they know what it is they want to protect.”p[7] 

6. The second round of briefs: The defamatory arguments accusing Grove Fresh’s attorneys of criminal and unethical conduct.

On November 29, Everfresh filed a Memorandum in Opposition to the Intervenors’ Motion to Lift the Protective Order and vacate the Seal in 90c5009 (November 29, 1991).  Everfresh argued that good cause existed for the 89c1113 Confidentiality Order and the designations made thereunder. (pp. 4-10.) 

On the merits of the 90c5009 sealing order, Everfresh embellished the arguments it had presented in the initial round of briefs to a point where they now accused Grove Fresh’s attorneys of criminal and unethical conduct (p. 10):  

The seal was originally ordered in the [90c5009] case at Everfresh’s request because plaintiff had threatened to file the action in the public record, if Everfresh did not pay a multi-million dollar settlement, with unsubstantiated scandalous accusations that would damage the reputation of Everfresh and others.  Plaintiff’s pleadings also incorporate and attach protected, confidential information obtained through discovery.  Had this court not placed the [90c5009] case under seal, the unsubstantiated, scandalous allegations and information that were subject to the protective order would have been improperly disseminated into the public realm. 

If these statements were true, which they weren’t, Grove Fresh and its attorneys would have been guilty of the crime of intimidation, a class three felony under Illinois law. 70 ILCS 5/12-6 (1992). See People v. Hubble, 81 111. App. 3d 560, 563,401 N.E.2d 1282, 1285 (2d Dist. 1980) (essence of crime of intimidation is "a threat made with intent to coerce another person.")  The attorneys would also have been guilty of filing a groundless complaint in violation of Rule 11, and of having violated at least five Rules of Professional Conduct.[8]

The key precedent cited by Everfresh was Nixon v. Warner Communications, 435 U.S. 589, 598 (1978), which holds that trial courts can seal files that “have become a vehicle for improper purposes” such as to “promote public scandal” or “to serve as reservoirs of libelous statements for press consumption.”   Citing Nixon, Everfresh argued (p. 15):

[T]he allegations in the sealed court file were clearly written by plaintiff, in part, for the purpose of damaging or smearing the reputation and image of defendants.  They do not contain objective facts, but unsubstantiated conjecture and argument.  The Court, thus, would not be releasing facts or evidence, but intentionally disparaging accusations.

Everfresh also argued that public access was unnecessary because the U.S. Attorney and the FDA were investigating the matter. (pp. 2-3.)

7. The second round of briefs: American Citrus’s defamatory briefs, which were eventually withdrawn.

On December 2, 1991, Burditt Bowles & Radzius filed Memorandum of Law of American Citrus Products Corporation and Henry Lang in Opposition to the Intervenors’ Motion to Vacate the Order Sealing 90c5009 and to Limit the Protective Order in 89c1113 (“American Citrus Memorandum”).  The American Citrus Memorandum opened with this defamatory paragraph (p. 1), made without any citations to the record or to any other form of evidence:

Grove Fresh began these proceedings by filing a series of separate suits against some of its competitors.  Protective orders were entered and discovery proceeded.  Then, Grove Fresh developed a settlement strategy—threaten to induce the media to publish scandalous, unsubstantiated but inflammatory allegations about the defendants if they did not pay millions.  To thwart this inappropriate behavior, this Court, after hearing and argument sealed the file in this case.  (emphasis added)

The body of the American Citrus Memorandum included a four-page section labeled “Facts” that purported to recite the procedural history of the sealing order.  The recitation included this defamatory claim about my conduct (p. 3): 

Several months later one of Grove Fresh’s counsel, Mr. Messina, sent a letter to the defendants’ counsel in the 89 cases.  In that letter, Mr. Messina demanded an immediate settlement of the ’89 cases for millions of dollars.  Mr. Messina also stated that if the demanded millions were not paid he would cause the media to publish Grove Fresh’s allegations in a way that would ruin the defendants’ businesses.

Neither this “fact,” nor any of the other “facts” in the recitation, were supported by citations to the record or to any other form of evidence. 

The American Citrus Memorandum also made a defamatory claim, again, without citing any evidence, that Grove Fresh had filed the 90c5009 case with a malicious intent (pp. 10-11):

This case was brought by Grove Fresh as part of its plan to use the threat of damage to American Citrus’ business and reputation in the press as leverage for settlement.

On December 4, I sent attorney Kowal a letter objecting to the defamatory claims in the American Citrus Memorandum and demanding that he produce the evidence on which those claims were based. He acknowledged that he had mischaracterized the facts and promised to file an amended brief. 

On December 10, American Citrus filed a Motion for Leave to Substitute Memorandum Instanter, but the substitute brief did not cure all of the misstatements, so I again objected.  In a letter dated December 16, 1991, Kowal apologized for the recurring misstatements.  Two days later, he withdrew both the original brief and the substitute brief and filed a statement adopting the brief that Everfresh had filed on November 29. 

8. The second round of briefs: The Coalition’s reply.

On December 26, the Coalition filed Intervenors’ Memorandum in Response to Defendants’ Memorandum in Opposition to Intervenors’ Motion to Lift the Protective Order in 89c1113 and to Vacate the Seal in 90c5009 and made the following arguments, among others:

  1. The defendants had not identified any of the documents in the 90c5009 file that were allegedly subject to the 89c1113 Confidentiality Order. (p. 3.)
  2. Alleging that a pleading makes “baseless, scandalous accusations” is not a sufficient justification for a broad sealing order.  The more appropriate remedy is a motion to strike the offending allegations. (p. 4.)
  3. Defendants had not made a particularized showing of the alleged harm that their reputations would suffer if the case were unsealed. (p. 5.)
  4. The case law cited by the defendants did not support maintaining the seal. (pp. 10-13.)
  5. The argument that public access was unnecessary because the U.S. Attorney and the FDA were investigating the matter was unpersuasive. (pp. 13-15.)

9. The second round of briefs: Grove Fresh’s reply.

On January 6, 2002, Grove Fresh filed Grove Fresh’s Initial Brief in Response to Defendants’ Memorandums in Opposition to Intervenors’ Motion to Lift the Protective Order in 89c1113 and to Remove the Seal in 90c5009 [“Grove Fresh’s January 1992 Brief”].  Grove Fresh presented the following arguments:

  1. The defendants had failed to carry their burden of proof, in that they had not specified which of the 238 paragraphs in the amended complaint were “unsubstantiated” or “scandalous.” (pp. 1-3.)
  2. Contrary to what the defendants were contending, the 90c5009 complaint did not attach any documents subject to the 90c5009 Confidentiality Order. (p. 5.)
  3. Only three of the 238 paragraphs in the amended complaint referred to information in documents designated as confidential under the 89c1113 Confidentiality Order.  The information gleaned from those documents was redundant of information Grove Fresh had gathered from other, open sources.
  4. During the bargaining over the 89c1113 Confidentiality Order, defense counsel acceded to Grove Fresh’s insistence that the Order not require the automatic sealing of papers that made references to business records designated as confidential.  (Messina Affidavit, ¶¶8-10, attached to Grove Fresh’s January 1992 Brief as Exhibit D.)
  5. The terms of the 89c1113 Confidentiality Order did not require or authorize Grove Fresh to file under seal papers that referred to documents designated as confidential.  (pp. 9-11.)
  6. Grove Fresh’s counsel “state[d] under penalty of Rule 11 that they have never displayed, described or in any way disclosed Everfresh’s allegedly confidential documents to anyone other than Mr. Troy and Grove Fresh’s paralegals.” (p. 11n.5.)
  7. Grove Fresh had not otherwise violated the 89c1113 Confidentiality Order. (pp. 11-14.)

10. The second round of briefs: Everfresh’s surreply.

On January 15, 1992, Everfresh filed its third brief opposing the Coalition’s challenge, styled as a Reply to Grove Fresh’s Initial Brief in Response to Defendants’ Memorandums in Opposition to Intervenors’ Motion [“Everfresh’s Reply”]. 

Everfresh’s Reply did not dispute the arguments described above in §9(a), (b), or (c).

Pages 1-4 of Everfresh’s Reply contained Everfresh’s first and only discussion of the evidence in the case.  These pages quarreled with Grove Fresh’s characterizations of certain evidence. 

11. The second round of briefs: Grove Fresh’s motion to strike.

On February 5, 1992, Grove Fresh filed Grove Fresh’s Motion to Strike Parts of Everfresh’s Reply Brief on the Intervenors’ Motion (“Grove Fresh’s February 1992 Motion”).  The motion sought to strike pp. 1-4 of Everfresh’s Reply on the ground that those pages, which constituted Everfresh’s first and only discussion of the evidence in the case, should have come at the beginning of the briefing, not at the end, when Grove Fresh had no chance to reply. 

In the alternative, Grove Fresh asked the court to consider portions of Grove Fresh’s Motion to Overrule Objections to Time Period, filed on January 29, 1992.  Grove Fresh argued that the evidence summarized in that brief refuted Everfresh’s claim that the allegations in the 90c5009 complaint were “unsubstantiated.”  (Grove Fresh’s Motion to Overrule Objections to Time Period is discussed below in §C.)  

B. January 29-March 11, 1992:  The briefing on Grove Fresh’s motion to overrule the defense’s objections to the time period for discovery in 90c5009. 

In the 90c5009 complaint Grove Fresh alleged a conspiracy to make misbranded orange juice that began no later than May 1975.[9]  That date was based on Exhibit 6 to the amended complaint, which was a computer printout Grove Fresh had obtained from the Florida Department of Citrus dated May 13, 1975.  The document was entitled “Everfresh OJ—Formula” and listed 14 ingredients for making 1,028 gallons of “OJ.”  Twelve of the ingredients listed in the Exhibit 6 formula could not lawfully be added to a product labeled as “100% pure orange juice from concentrate.”

Grove Fresh's written discovery requests in 90c5009 sought information for a period of time beginning in January 1974, which was just 16 months before the date of the Exhibit 6 formula.  The Home Juice defendants refused to provide any information about their manufacturing practices for the period prior to July 15, 1988, citing Hines’s unauthorized Rule 36 admission in 89c1117.[10]  The Everfresh defendants refused to provide any information about their manufacturing practices prior to January 1, 1983, citing Judge Zagel’s ruling on the time period for discovery in 89c1113. 

On January 29, 1992, I filed Grove Fresh’s Motion to Overrule Objections to Time Period.  The motion was supported by a 23-page brief, including a 15-page statement of facts supported by 75 specific citations to deposition transcripts and documents.  The statement of facts covered 10 topics:

  1. It traced the history of the relationships between and among the corporate co-conspirators, from the 1950s to the present. (pp. 3-6).
  2. It described the evidence showing that Home Juice and Everfresh had shared formulas from the 1960s through the late 1980s. (pp. 6-7)
  3. It described the evidentiary foundation for admitting the Exhibit 6 formula for “Everfresh OJ” into evidence, including the chain of custody from Everfresh to the Florida Department of Citrus.  (pp. 7-9)
  4. It explained the properties of DEPC and traced the regulatory history of the chemical compound from the 1960s to 1971, when the FDA banned it as a carcinogen. (pp. 9-11)
  5. It described Kohlbach’s expertise in aseptic packaging and his consulting work for Home Juice (p. 11)
  6. It traced the history of Ever Fresh’s use of preservatives from the mid-1970s through 1989. (pp. 11-13)
  7. It described the anonymous complaints the FDA received during the mid-1980s alleging that Ever Fresh, Home Juice, and Holiday Juice were using Oleum 320/IDEA and that DEPC was the active ingredient in that product. (p. 14)
  8. It summarized the evidence underlying Bosch’s 1988 complaint to the FDA and his whistleblower suit against Everfresh (pp. 14-16)
  9. It described the audit Labatt conducted after learning about Bosch’s whistleblower suit. (pp. 16-17.)
  10. It described Labatt’s lack of candor with the FDA regarding Everfresh’s illegal practices. (pp. 17-18.)

Grove Fresh’s reply brief, filed on March 11, 1992, included nine pages of additional facts (pp. 2-11) supported by 25 specific citations to deposition transcripts and documents.

C. February 21, 1992: Judge Zagel’s result-oriented summary judgment against Grove Fresh’s Lanham Act claims in 89c1113.

In June 1991 the 89c1113 defendants had moved for summary judgment on Grove Fresh’s Lanham Act claims.  The defense conceded that Everfresh had sold misbranded orange juice, but it claimed that Grove Fresh had no evidence of a causal link between Everfresh’s illegal conduct and Grove Fresh’s losses.  Grove Fresh opposed the motion with affidavits from Mr. Troy and Grove Fresh employees on the issue of causation.  Similar testimony from them in the case against the makers of Veryfine juice had been deemed to create a fact question for the jury.  See Grove Fresh Distributors, Inc. v. New England Apple Products Co., 969 F.2d 552 (7th Cir. 1992).

Nevertheless, on February 21, 1992, Judge Zagel granted summary judgment for the 89c1113 defendants.  His ruling was based on a ground that the defense hadn’t even raised—that Grove Fresh had failed to come forward with evidence of Everfresh’s gross sales of misbranded products.  Judge Zagel stated: “Apparently there has been no discovery on this point, despite considerable opportunity to pursue it.”[11] 

This finding was wrong.  Grove Fresh had served discovery requests for this information in December 1989, but Everfresh had repeatedly refused to provide it.  Grove Fresh had moved to compel answers in October 1990, but Judge Zagel had entered and continued the motion and never ruled on it. [12] 

D. March 20, 1992: Judge Zagel’s result-oriented —and patently wrong—declaration that collateral estoppel did not preclude Grove Fresh from pursuing the identical Lanham Act claims in 90c5009. 

In the same order granting summary judgment Judge Zagel ruled that Grove Fresh could pursue the identical Lanham Act claims against Everfresh in the 90c5009 case.  This ruling was also wrong.  Under the doctrine of collateral estoppel, the adverse ruling on the Lanham Act claims in 89c1113 barred Grove Fresh from pursuing those same claims in the 90c5009 case.[13]  

Grove Fresh moved for reconsideration of the summary judgment on the ground that the court was mistaken in its recollection of Grove Fresh’s discovery efforts;[14] the motion also pointed out the collateral estoppel effects of the judgment.[15]  Judge Zagel denied the motion and reiterated that Grove Fresh had to pursue its Lanham Act claims against Everfresh in the 90c5009 case.  In effect, he ruled that Grove Fresh was exempt from the collateral estoppel effects of the summary judgment ruling.  He cited no authority for this exemption; none exists. 

If Grove Fresh had been permitted to litigate its Lanham Act claims in the 89c1113 case, the defense’s burden of proving the manufacturing costs of its adulterated orange juice would have put that evidence in the public domain no later than the filing of the final pretrial order. 

By requiring Grove Fresh to litigate the Lanham Act claims in 90c5009, where everything was under seal and nothing was entered on the docket (see Memorandum 3-C, §XVII), Judge Zagel assured that the details of Everfresh’s illegal additives would not enter the public domain unless the case went to trial and Everfresh put on a defense. 

E. March 20, 1992: The Coalition’s request for a ruling on its motion for access. 

The Coalition’s attorney attended the March 20th status hearing and asked whether the “intervenors could look forward to a ruling on the motion to unseal the ’90 case.”  Judge Zagel replied: “Yes, you can look forward to it.”[16] 

F. March 27, 1992: Grove Fresh’s amended Rule 11 motion.

On October 10, 1990, Grove Fresh had filed two motions for sanctions under FRCP 11 and 26(g) against the 89c1113 defendants and attorney Weitzman.  Judge Zagel had entered and continued the motions until the conclusion of the case.  On March 27, 1992, after Judge Zagel had denied Grove Fresh’s Motion to Alter or Amend Judgment, Grove Fresh filed an Amended Motion for Sanctions that incorporated and updated the allegations of the October 1990 motions.

Grove Fresh’s motion alleged the following wrongs:

  • The April 1990 Interrogatory Answers omitted to disclose material information regarding: (a) prior complaints about adulteration, (b) past or present employees who had knowledge of Everfresh’s illegal practices; and (c) its relationship with Kohlbach and its decade-long use of Oleum 320/IDEA. (Motion, pp. 2-8.)
  • The defense withheld material documents relating to the issue of responsibility for the adulteration formulas used at the Warren plant. (Motion ¶¶5-11.)
  • The defense misstated the facts regarding Everfresh’s status as a division of Labatt.
  • The defense withheld information for the improper purpose of protecting Everfresh from potential embarrassment with the FDA, and also to avoid the lawsuits that would probably follow if the public learned that over the ten-year period from 1979 to 1988, Everfresh illegally imported Oleum 320/IDEA and illegally added it to orange juice. (Motion ¶¶16-24.)

The motion also sought a finding that these failures to provide discovery breached the covenants Everfresh made in the 89c1114 settlement agreement.

G. June 23, 1992: Everfresh’s Rule 11 motion. 

In a tit-for-tat move, Everfresh filed a Rule 11 motion against Grove Fresh in 89c1113.  The motion was based on the following comment in Judge Zagel’s ruling on the motion to dismiss the 90c5009 complaint: 

[G]iven the defendants' arguments and the plaintiff's agreement that the information used to cure the RICO claims was obtained from public agencies without help from the defendants or a court order and therefore was available at the time the original complaints were filed, the defendants may have a Rule 11 remedy for the original "severely flawed" RICO claims.[17]

Everfresh’s Rule 11 motion reiterated the judicial admission it had made in October 1990, when it moved to dismiss the 90c5009 complaint:

[Th]e information eventually used to plead the RICO claims in [90c5009] was available from public agencies.  This information was equally accessible prior to the filing of the First Complaint [in February 1989 in the Everfresh case] but Grove Fresh did not seek it out.[18] (emphasis added)

H. July 23, 1992:  The order overruling the defense’s objections to the time period for discovery in 90c5009. 

On July 23, 1992, Judge Zagel granted Grove Fresh’s motion to overrule all of the objections to the time period for discovery. 

I. September 21, 1992: Henry Lang’s Fifth Amendment claim. 

Henry Lang was Home Juice’s president and sole shareholder and a defendant in both 89c1117 and 90c5009.  After Judge Zagel overruled the various objections to the time period for discovery, I served Lang with a deposition notice. 

In a letter dated September 21, 1992, attorney Kowal gave notice that Lang would invoke his fifth amendment privilege:

It is our understanding the deposition of Mr. Lang is presently scheduled for September 29, 1992.  We have now been able to fully consider the matter, and we have reluctantly concluded that the prudent course of action would be for Mr. Lang to decline to answer questions concerning the manufacturing and related operations of the company prior to July 15, 1988.  Mr. Lang will invoke his constitutional privilege under the Fifth Amendment. (emphasis added)

[1] 10/9/91 Tr. of Proceedings, p. 6.

[2] E.g., Chicago Council of Lawyers v. Bauer, 522 F.2d 242, 250 (7th Cir. 1975).

[3] Powell’s affidavit is discussed in Memorandum 3-C, §§XIV-B, XVIII-C, D.

[4] 10/31/91 Tr. of Proceedings, p. 7.

[5] Id.

[6] Id.

[7] Id., p. 9.

[8] The five Rules of Professional Conduct implicated by the arguments in Everfresh’s brief are as follows:

  • Rule 1.2(f)(l): "In representation of a client a lawyer shall not file a suit... or take other action on behalf of the client when the lawyer knows or reasonably should know that such action would serve merely to harass or maliciously injure another."
  • Rule 3.1: "A lawyer shall not bring ... a proceeding ... unless there is a basis for doing so that is not frivolous ..."
  • Rule 3.3(a)(l): "In appearing in a professional capacity before a tribunal a lawyer shall not: make a statement of material fact or law to a tribunal which the lawyer knows or reasonably should know is false."
  • Rule 4.4: "In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person ..."
  • Rule 8.4(a)(4): "A lawyer shall not engage in conduct involving dishonesty, fraud, deceit or misrepresentation."

[9] 90c5009 Amended Complaint, ¶¶99-101.

[10] See Memorandum 3-B, §VII-F.

[11] Mem. Op. 6-7.

[12] See Memorandum 3-C, §XVIII-F.

[13] “Under the doctrine of issue preclusion, or collateral estoppel, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits … involving a party (or privy) to the prior litigation.  Issue preclusion therefore applies to prevent, or estop, relitigation of the same issues in a subsequent case.”  Moore’s Federal Practice 3d §132.01[1].

[14] Motion to Alter or Amend Judgment, pp. 5-8 (March 13, 1992).

[15] Id., pp. 8-9.

[16] 3/20/92 Tr. of Proceedings, p. 6. The ruling came seven months later. See §V-F, below.

[17] 3/20/91 Mem. Op., p. 8 [emphasis added]. 

[18] Defendants' Motion to Impose Rule 11 Sanctions Against Grove Fresh Distributors, Inc., p. 6 (June 29, 1992).