Case 1:20-cv-00393-LO-TCB Document 1159-9 Filed 03/25/22 Page 1 of 7 PageID# 30738
`Case 1:20-cv-00393-LO-TCB Document 1159-9 Filed 03/25/22 Page 1 of 7 PagelD# 30738
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`EXHIBIT 9
`EXHIBIT 9
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`Case 1:20-cv-00393-LO-TCB Document 1159-9 Filed 03/25/22 Page 1 of 7 PagelD# 30738
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`EXHIBIT 9
`EXHIBIT 9
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`Case 1:20-cv-00393-LO-TCB Document 586 Filed 05/03/21 Page 1 of 15 PageID# 13283Case 1:20-cv-00393-LO-TCB Document 1159-9 Filed 03/25/22 Page 2 of 7 PageID# 30739
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`1
`
`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`
`RAI STRATEGIC HOLDINGS, INC.
`et al.,
`Plaintiffs,
`v.
`ALTRIA CLIENT SERVICES, LLC,
`et al.,
`Defendants.
`TRANSCRIPT OF MOTION HEARING PROCEEDINGS
`BEFORE THE HONORABLE THERESA C. BUCHANAN,
`(Via Zoom Conference)
`UNITED STATES DISTRICT COURT MAGISTRATE JUDGE
`
`)))))))))))))
`
`Civil Action
`No. 1:20-cv-00393-LO-TCB
`
`April 16, 2021
`10:00 a.m.
`
`APPEARANCES:
`For the Plaintiffs:
`
`For the Defendants:
`
`Charles Bennett Molster, III, Esq.
`The Law Offices of Charles B.
`Molster III, PLLC
`2141 Wisconsin Ave NW, Suite M
`Washington, DC 20007
`703.346.1505
`Email: Cmolster@molsterlaw.com
`J. Thomas Vitt, Esq.
`JONES DAY
`90 South Seventh Street Suite 4950
`Minneapolis, Minnesota 55402
`612.217.8858
`Email: Tvitt@jonesday.com
`Maximilian Antony Grant, Esq.
`Latham & Watkins LLP (DC)
`555 11th St NW, Suite 1000
`Washington, DC 20004-1304
`202.637.2200
`Fax: 202.637.2201
`Email: Max.grant@lw.com
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`
`
`Case 1:20-cv-00393-LO-TCB Document 586 Filed 05/03/21 Page 2 of 15 PageID# 13284Case 1:20-cv-00393-LO-TCB Document 1159-9 Filed 03/25/22 Page 3 of 7 PageID# 30740
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`2
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`APPEARANCES: (Cont.)
`
`For the Defendants:
`
`
`
`Official Court
`Reporter:
`
`Lawrence J. Gotts, Esq.
`Lathan & Watkins, LLP
`555 Eleventh Street, Suite 1000
`Washington, D.C. 20004
`202.637.2200
`Email: Lawrence.gotts@lw.com
`Scott L. Wallace, RDR, RMR, CRR
`Official Court Reporter
`United States District Court
`401 Courthouse Square
`Alexandria, VA 2231-5798
`202.277.3739
`scottwallace.edva@gmail.com,
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`
`
`Case 1:20-cv-00393-LO-TCB Document 586 Filed 05/03/21 Page 5 of 15 PageID# 13287Case 1:20-cv-00393-LO-TCB Document 1159-9 Filed 03/25/22 Page 4 of 7 PageID# 30741
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`5
`
`THE COURT: I don't really have any questions, but I did
`read the reply. But go ahead and add anything that you would
`like.
`MR. VITT: Sure. So, on -- I would like to focus, I
`think, primarily on Topic 28, Your Honor, and the key issue there
`is there are really three legal principles that ought to drive
`this. The question we're looking at is, is there anything
`relevant about the negotiations and the lead up to that font in
`RJ Reynolds' agreement.
`The first legal principle, Your Honor, is we all agree
`that a settlement agreement can be a comparable license. And
`then the Federal Circuit's kind of instructed us to look at, is
`the settlement agreement about valuing the patents or is it about
`settling litigation? But here we don't have to worry about that.
`We agree that its about value of the patent.
`And then the second legal principle is, Rule 408 says that
`the settlement negotiations are not admissible for exactly the
`purpose that Philip Morris wants to use them for; that is, to
`prove or disprove the validity or amount of a disputed claim,
`just not admissible for that purpose.
`And then that leads to the third legal principle. If you
`look at the cases that we cited and they cited, there's a general
`rule that the settlement negotiations are not discoverable.
`There's not a broad discovery privilege, but there's a general
`rule that those negotiations are not discoverable unless the
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`
`
`Case 1:20-cv-00393-LO-TCB Document 586 Filed 05/03/21 Page 6 of 15 PageID# 13288Case 1:20-cv-00393-LO-TCB Document 1159-9 Filed 03/25/22 Page 5 of 7 PageID# 30742
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`6
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`party to the settlement agreement that has a comparable license
`has opened the door, and we have not opened the door in any way.
`Both parties' experts agree that we look at the terms of the
`agreement. They agree about how to apportion between the font
`and the agreement, which is the comparable license, and the
`hypothetical negotiation. They agree about that. Their
`disagreement is just about which agreement to use. We have not
`opened the door to the background of the negotiations.
`The last point I would like to make, Your Honor, is the
`reply makes it clear that they would really like to dig into our
`own internal deliberations. This -- it bears noting that this
`didn't come up for months and months as we discussed this. This
`raises significant issues of attorney-client privilege and work
`product on this exact issue, which is why courts don't allow
`discovery into this unless the party to the settlement agreement
`opens the door.
`Thank you, Your Honor.
`THE COURT: All right. Thank you. Did you have anything
`else to add Mr. Gotts? You're muted. Sorry.
`MR. GOTTS: You would think by now we would all have
`learned to push unmute. But in any event, Your Honor, the --
`just a few quick points. Number one, there's no 408 privilege,
`and the very case that Plaintiff Reynolds cites in their brief,
`the MTSG case, shows exactly otherwise, namely that we should be
`entitled to test the underlying negotiations for the purposes of
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`
`
`Case 1:20-cv-00393-LO-TCB Document 586 Filed 05/03/21 Page 7 of 15 PageID# 13289Case 1:20-cv-00393-LO-TCB Document 1159-9 Filed 03/25/22 Page 6 of 7 PageID# 30743
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`7
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`the agreement.
`Second, the notion that this is a privilege issue makes --
`is clearly not viable as an argument here. First of all, if
`there's a privilege objection, they can make it, but the actual
`testimony at page 214 of the transcript of Mr. Gilly {sp} makes
`clear that the negotiations were handled by the leadership team,
`not by the lawyers in terms of the assessment and evaluation and
`analysis, and that's the very same leadership team that Mr. Gilly
`had no conversations with.
`So, we are entitled to, we believe, the underlying
`information used to evaluate and analyze the $79 million
`agreement which both parties agree upon. So we think the
`relevance is quite clear.
`THE COURT: All right.
`MR. VITT: You're mute now, Your Honor.
`THE COURT: Sorry. I was trying to talk off screen. So,
`I think that the -- as far as the other discovery that the
`parties had done with regard to the plaintiff/counter-defendant,
`I don't really think that's relevant here.
`As to Number 28, I believe that it's not appropriate to
`get into negotiations or the considerations that they made
`internally as to this. I think the document speaks for itself.
`As to 54, I am going to allow that, and I am going to allow 78 as
`well. I think that those are within the scope of what -- Well, I
`think that what's communicated to the expert in Number 54 should
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
`
`
`
`Case 1:20-cv-00393-LO-TCB Document 586 Filed 05/03/21 Page 15 of 15 PageID# 13297Case 1:20-cv-00393-LO-TCB Document 1159-9 Filed 03/25/22 Page 7 of 7 PageID# 30744
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`15
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`both sides of the --
`THE COURT: I know you're all experienced, and you can
`make -- you can make that argument to Judge O'Grady and see if he
`allows it.
`MR. VITT: All right. Thank you.
`MR. GRANT: Thank you, Your Honor.
`THE COURT: Thank you.
`(Proceedings adjourned at 9:19 a.m.)
`
` C E R T I F I C A T E
`
` I, Scott L. Wallace, RDR-CRR, certify that
`the foregoing is a correct transcript from the record of
`proceedings in the above-entitled matter.
`
`4/16/21
` /s/ Scott L. Wallace
` ---------------------------- ----------------
` Scott L. Wallace, RDR, CRR
` Date
` Official Court Reporter
`
`
`
`Scott L. Wallace, RDR, CRR, Official Court Reporter
`
`
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