Case 1:20-cv-00393-LO-TCB Document 1209 Filed 04/29/22 Page 1 of 32 PageID# 32051
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
`
`RAI STRATEGIC HOLDINGS, INC. and
`R.J. REYNOLDS VAPOR COMPANY,
`
`Plaintiffs and Counterclaim Defendants,
`
`v.
`
`ALTRIA CLIENT SERVICES LLC; PHILIP
`MORRIS USA INC.; and PHILIP MORRIS
`PRODUCTS S.A.,
`
`Defendants and Counterclaim Plaintiffs.
`
`Case No. 1:20-cv-00393-LO-TCB
`REDACTED
`
`REYNOLDS’S OPPOSITION TO PM/ALTRIA’S OBJECTIONS TO MAGISTRATE
`JUDGE BUCHANAN’S ORDER DENYING MOTION TO
`SHOW CAUSE WHY SANCTIONS SHOULD NOT BE IMPOSED
`
`

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`Case 1:20-cv-00393-LO-TCB Document 1209 Filed 04/29/22 Page 2 of 32 PageID# 32052
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`TABLE OF CONTENTS
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`Page
`
`
`I.
`II.
`
`V.
`
`INTRODUCTION ............................................................................................................. 1
`BACKGROUND ............................................................................................................... 5
`A.
`Judge Buchanan Denied Discovery Into The Fontem-RJRV Litigation
`Settlement Negotiations Over A Year Ago. .......................................................... 5
`Altria Obtained Fontem-RJRV Negotiation Documents In June 2021 In
`The MDNC Action. ............................................................................................... 6
`Judge Buchanan Properly Denied PM/Altria’s Motion To Show Cause. .............. 7
`C.
`LEGAL STANDARD ........................................................................................................ 8
`III.
`IV. ARGUMENT ................................................................................................................... 10
`A.
`Judge Buchanan’s Denial Of Rule 37 Sanctions Is Not Clearly Erroneous
`Or Contrary To Law............................................................................................. 10
`1.
`Judge Buchanan Correctly Found That Reynolds Did Not Violate
`Any Discovery Obligation. ...................................................................... 10
`There Is No Basis To Revisit Judge Buchanan’s 2021 Ruling That
`The Fontem-RJRV Negotiations Were Not Discoverable. ...................... 11
`Judge Buchanan Properly Found That Reynolds Did Not Make
`Misrepresentations To The Court. ........................................................... 17
`Reynolds Was Substantially Justified In Its Position And There
`Has Been No Harm To PM/Altria. .......................................................... 21
`PM/Altria’s Requested Relief Is Improper. ......................................................... 23
`1.
`PM/Altria Cannot Request New Relief Via An Objection To A
`Magistrate Judge’s Order. ........................................................................ 23
`To The Extent It Is Admitted, Reynolds Is Entitled To Respond To
`PM/Altria’s Supplemental Damages Opinion. ........................................ 24
`PM/Altria’s Authentication Request Is Misleading, Unnecessary,
`And Improper. .......................................................................................... 25
`CONCLUSION ................................................................................................................ 26
`
`B.
`
`B.
`
`2.
`
`3.
`
`4.
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`2.
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`3.
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`
`
`
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Page
`
`Alpex Computer Corp. v. Nintendo Co.,
`No. 86 CIV. 1749(KMW), 1994 WL 139423 (S.D.N.Y. Mar. 18, 1994) ...............................16
`
`Apple, Inc. v. Samsung Elecs. Co.,
`No. 12-CV-00630-LHK, 2014 WL 794328 (N.D. Cal. Feb. 25, 2014) ...................................16
`
`Avocent Redmond Corp. v. Rose Elecs.,
`No. C06-1711RSL, 2012 WL 4903272 (W.D. Wash. May 29, 2012) ....................................16
`
`Harmon, Tr. of Harmon 1999 Descendants’ Tr. v. Harmon,
`No. 1:20-cv-1442, 2021 WL 5416022 (E.D. Va. Nov. 19, 2021) .............................................9
`
`Haysbert v. Bloomin’ Brands, Inc.,
`No. 4:20cv121, 2021 WL 5003280 (E.D. Va. Aug. 10, 2021) ..................................................9
`
`In re MSTG, Inc.,
`675 F.3d 1337 (Fed. Cir. 2012)..........................................................................................15, 16
`
`Jaguar Land Rover Ltd., v. Bentley Motors Ltd.,
`No. 2:18cv320, 2021 WL 8086709 (E.D. Va. Aug. 2, 2021) ....................................................9
`
`Jesselson v. Outlet Assocs. of Williamsburg, Ltd. P’ship,
`784 F. Supp. 1223 (E.D. Va. 1991) .....................................................................................9, 24
`
`Jordan v. Berryhill,
`No. 1:16-cv-951, 2018 WL 555716 (E.D. Va. Jan. 23, 2018) .................................................24
`
`Kebe ex rel. Kebe v. Brown,
`91 F. App’x 823 (4th Cir. 2004) ................................................................................................9
`
`S. States Rack & Fixture, Inc. v. Sherwin-Williams Co.,
`318 F.3d 592 (4th Cir. 2003) .............................................................................................21, 22
`
`Sharer v. Tandberg, Inc.,
`No. 1:06cv626(JCC), 2007 WL 433152 (E.D. Va. Feb. 2, 2007) .............................................9
`
`
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`
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`
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page
`
`Stradtman v. Republic Servs., Inc.,
`121 F. Supp. 3d 578 (E.D. Va. 2015) ......................................................................................23
`
`Stretchline Intell. Props. Ltd. v. H & M Hennes & Mauritz LP,
`No. 2:10-cv-371, 2015 WL 789185 (E.D. Va. Feb. 24, 2015) ................................................23
`
`Superior Prod. P’ship v. Gordon Auto Body Parts Co.,
`784 F.3d 311 (6th Cir. 2015) ...................................................................................................11
`
`Uniloc USA, Inc. v. Microsoft Corp.,
`632 F. Supp. 2d 147 (D.R.I. 2009)...........................................................................................14
`
`Wells v. Shriners Hosp.,
`109 F.3d 198 (4th Cir. 1997) ...................................................................................................11
`
`STATUTES
`
`28 U.S.C. § 636 ................................................................................................................................8
`
`OTHER AUTHORITIES
`
`Fed. R. Civ. P. 26 .............................................................................................................................1
`
`Fed. R. Civ. P. 30 .....................................................................................................................24, 25
`
`Fed. R. Civ. P. 37 .................................................................................................................9, 10, 17
`
`Fed. R. Civ. P. 72 ...................................................................................................................8, 9, 11
`
`Fed. R. Evid. 403 .....................................................................................................................14, 22
`
`Fed. R. Evid. 408 .........................................................................................................14, 15, 16, 22
`
`Fed. R. Evid. 703 ...........................................................................................................................16
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`
`I.
`
`INTRODUCTION
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`Just weeks before trial, PM/Altria is again rehashing year-old discovery rulings—and
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`leveling unfounded accusations of dishonesty against Reynolds’s counsel—to try and backfill
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`support for its damages expert—first under the guise of a motion for an order to show cause why
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`an evidentiary sanction should not be imposed, and now as an objection to Magistrate Judge
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`Buchanan’s order denying that motion. As appropriately recognized by Judge Buchanan,
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`PM/Altria’s motion is baseless because Reynolds did not violate any discovery obligation or
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`misrepresent facts to the Court. PM/Altria’s objections should be overruled.
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`1. Reynolds did not violate any discovery obligation. PM/Altria does not claim that
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`Reynolds violated a Court order, but that it violated its Federal Rule of Civil Procedure 26
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`obligation to produce litigation settlement negotiations between Fontem and Reynolds. However,
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`Reynolds objected to the production of those documents, and Judge Buchanan ruled over a year
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`ago that those negotiations were not appropriate for discovery. Judge Buchanan explained, “it’s
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`not appropriate to get into negotiations or the considerations that they made internally as to this”
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`because “the document”—i.e., the final Fontem-RJRV license agreement—“speaks for itself.”
`
`Dkt. 586, 7. Judge Buchanan reaffirmed that decision at the hearing preceding the instant order,
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`stating “I already ruled, and I still see no reason why my thought process was incorrect.” Dkt.
`
`1189, 4. Judge Buchanan explained that “What the final agreement is is what is relevant, what is
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`operative, and I think you’re just going down a rabbit hole when you start chasing what is in draft
`
`agreements.” Id. at 13. Indeed, PM/Altria itself took the same position and objected to production
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`of its
`
` negotiation documents. Dkt. 1167, 5 n.3; see also Dkt. 1167-1, 6-7. What
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`is worse, the very documents that PM/Altria alleges that Reynolds “concealed” are documents that
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`Altria has had for almost a year—Fontem produced the documents to Altria in June 2021 in
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`response to Altria’s subpoena in the co-pending action in the Middle District of North Carolina.
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`If Altria wanted to produce them here, it could have asked long ago. It did not. Given this record,
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`there can be no doubt that Reynolds was not required to produce Fontem negotiation documents
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`in this case; and there was no basis for Judge Buchanan to issue sanctions against Reynolds.
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`2. Reynolds did not misrepresent the Fontem-RJRV negotiation documents.
`
`PM/Altria’s contentions about purported Reynolds “misrepresentations” are similarly frivolous. It
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`is undisputed that, other than the Fontem-RJRV and
`
` agreements, there are no
`
`other Fontem licenses in the record here. Thus, the terms of the other Fontem licenses are not
`
`known here. Nonetheless, PM/Altria’s expert speculates as to what nine other licensees paid
`
`Fontem. But because PM/Altria never even sought those other licenses in discovery, PM/Altria is
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`scrambling for something Mr. Meyer might use, and trying to blame Reynolds for PM/Altria’s
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`own evidentiary shortcomings.
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`In its motion to show cause, PM/Altria identified three purported misrepresentations:
`
`(1) Reynolds’s argument in response to PM/Altria’s 2021 motion to compel that “the negotiations
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`leading up to the Fontem-RJRV settlement agreement are not relevant,” Dkt. 1163, 24 (quoting
`
`Dkt. 555, 1); (2) Reynolds’s statement in its Daubert motion that
`
`
`
` id. (quoting Dkt. 1090, 8);
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`and (3) Reynolds’s statement at the March 18 Daubert hearing that “No one knows the terms of
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`those prior license agreements,” id. (quoting Dkt. 1188, 43:8). But those statements are true.
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`The Fontem-RJRV negotiation documents provide no new information as to the terms of other
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`Fontem licenses. The record reveals that it is PM/Altria who is misrepresenting the relevancy (and
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`content) of those Fontem-RJRV negotiation documents.
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`
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`Reynolds argued in good faith—and still maintains—that the Fontem-RJRV draft
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`agreements and negotiations are not relevant. Rather, it is the final agreement that is relevant here.
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`Judge Buchanan has twice reached the same conclusion.
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`As to Reynolds’s arguments in its Daubert motion, PM/Altria’s damages expert,
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`Mr. Meyer, uses a
`
` to set his
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`baseline reasonable royalty rates for three patents. He claims that nine other Fontem licensees
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`paid at least
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` based on
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`
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` But, as Reynolds explained to the Court in briefing and
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`argument on the Daubert motion,
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` does not identify how many, if any, prior licenses
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` is as follows:
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`.
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`
`
`. The
`
`
`
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`
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`Dkt. 892-5,
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`doubt that
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` at § 6.10.9. Review of the representation leaves no
`
`
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` And the eight press releases that Mr. Meyer references to identify Fontem’s prior
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`settlements show that at least seven of the prior Fontem licenses were global,
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`
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` That remains true today.
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`PM/Altria now tries to go “down [the] rabbit hole” described by Judge Buchanan (see Dkt.
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`1189, 13) by speculating about
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`Specifically, PM/Altria claims that
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` are proof of what any and all Fontem-licensees paid. But
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`And as PM/Altria well knows,
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`
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`
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`. The Fontem-RJRV
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`negotiation documents are not evidence of the terms of any other Fontem agreement with other
`
`licensees. As a result, even considering the Fontem-RJRV negotiation documents, “No one knows
`
`the terms of those prior license agreements.”
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`Thus, the alleged “misrepresentations” by Reynolds were true when made and
`
`remain true today. If PM/Altria wanted its expert to rely on what other Fontem licenses paid, it
`
`should have sought and obtained those license agreements. PM/Altria did not, and Reynolds is
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`entitled to point out that deficiency at the “heart” of PM/Altria’s damages claim.
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`3. The relief requested by PM/Altria is improper and unnecessary. Finally, PM/Altria
`
`requests new relief in its objection, requesting to strike any upcoming Reynolds expert opinions to
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`rebut PM/Altria’s supplemental opinions relying on the Fontem-RJRV negotiations. But that is
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`procedurally improper and substantively unnecessary because no discussion or testimony
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`regarding the inadmissible Fontem-RJRV negotiation documents should be allowed at trial by
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`either side. PM/Altria also seeks unnecessary relief in the form of a deposition of Reynolds to
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`authenticate the negotiation documents that Fontem produced and a Fontem representative already
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`authenticated in the Middle District of North Carolina action (via a declaration that counsel for
`
`PM/Altria already has). Because PM/Altria cannot request new relief here, and the primary relief
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`it requests is unnecessary, PM/Altria’s objection should be seen for what it is—an unwarranted
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`burden on this Court’s and Reynolds’s resources in the weeks leading up to trial.
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`
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`In sum, Reynolds did not do anything remotely sanctionable. Reynolds did not violate a
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`discovery rule or order, and PM/Altria’s attempt to impugn the credibility of Reynolds’s counsel
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`is frivolous at best. On review of the record, Judge Buchanan reached the appropriate conclusion:
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`“I really don’t think, even if it was relevant … that this is sanctionable.” Dkt. 1189, 13. For the
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`reasons set forth below and in Reynolds’s opposition to PM/Altria’s motion to show cause (Dkt.
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`1167), the Court should overrule PM/Altria’s objections to Judge Buchanan’s order and dispense
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`with PM/Altria’s efforts to manufacture an eleventh-hour discovery dispute.
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`II.
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`BACKGROUND
`
`A.
`
`Judge Buchanan Denied Discovery Into The Fontem-RJRV Litigation
`Settlement Negotiations Over A Year Ago.
`
`PM/Altria’s damages expert Mr. Meyer provided his opinions on damages on February 24,
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`2021, the deadline for reports for the party with the burden of proof on an issue. See Dkt. 461.
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`After that deadline, on March 12, 2021, PM/Altria served Request for Production No. 224 (“RFP
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`224”) seeking materials relating to the Fontem-RJRV settlement and negotiations. See Dkt. 1159-
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`1, 8. Reynolds had already produced the responsive Fontem-RJRV settlement agreement. On
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`March 29, 2021, Reynolds specifically objected to further production in response to RFP 224,
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`citing both the lack of relevance and the overly-broad and unduly-burdensome nature of the
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`request. Dkt. 1159-6, 4. PM/Altria had similarly objected to providing its negotiation documents
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`relating to the
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` agreement upon which PM/Altria’s expert relied. Dkt. 1167, 5
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`n.3; see also Dkt. 1167-1, 6-7. On April 9, 2021, PM/Altria moved to compel a deposition
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`regarding the negotiations of the Fontem-RJRV settlement agreement (deposition topic 28). See
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`Dkts. 542, 547. On April 12, 2021, Reynolds informed PM/Altria that “Reynolds does not expect
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`to produce Documents in response to [RFP 224] beyond those already being produced in response
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`to other requests.” Dkt. 1159-6, 4. Thus, PM/Altria has known for over a year that Reynolds did
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`not intend to produce the Fontem-RJRV negotiation documents.
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`Judge Buchanan heard PM/Altria’s motion to compel related to the negotiations for the
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`Fontem-RJRV settlement on April 16, 2021, confirmed that PM/Altria had also served outstanding
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`document requests on the issue, and then denied PM/Altria’s request for discovery on the
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`negotiations, ruling: “I believe that it’s not appropriate to get into negotiations or the considerations
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`that they made internally as to this.” Dkt. 586, 4, 7. PM/Altria did not object to that ruling under
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`Federal Rule of Civil Procedure 72(a). Nor did PM/Altria move to compel production of the
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`negotiation documents, despite its apparent belief that it was entitled to production of them. Fact
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`discovery closed on April 19, 2021. See Dkt. 534, 1; Dkt. 535.
`
`B.
`
`Altria Obtained Fontem-RJRV Negotiation Documents In June 2021 In The
`MDNC Action.
`
`In the co-pending action between Altria and Reynolds in the Middle District of North
`
`Carolina (the “MDNC action”)1, Altria subpoenaed Fontem for documents relating to negotiation
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`of the Fontem-RJRV litigation settlement agreement. Dkt. 1167, 7-8; see also 1167-3, 1167-4,
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`1167-5. Curiously, Altria did not seek Fontem’s production of any other Fontem license
`
`agreement. Id. Fontem objected to the requested negotiation documents, in part because the
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`subpoenas sought documents that were “not relevant to any party’s claim or defense or
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`proportional to the needs of the case;” but, nonetheless Fontem provided Altria with documents
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`relating to the negotiations between Fontem and Reynolds in June 2021. Dkt. 1167-6, 2. Altria
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`incorporated certain excerpts of those documents in its MDNC expert report on damages on
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`August 4, 2021. See Dkt. 1163-3.
`
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`1 The case is captioned Altria Client Services, LLC, et al. v. R.J. Reynolds Vapor Company, et al.,
`Case 1:20-cv-00472-NCT-JLW.
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`During the March 18, 2022 motion hearing in this case, PM/Altria first used the Fontem
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`negotiation documents with this Court, providing the Court with excerpts of Altria’s own expert
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`report in the MDNC action—in violation of the protective order in that case (see Dkt. 1167, 8;
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`1167-7)—and misleadingly implying that Altria’s expert report was a surprise to PM/Altria.
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`C.
`
`Judge Buchanan Properly Denied PM/Altria’s Motion To Show Cause.
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`On March 25, 2022, PM/Altria filed a motion to show cause why sanctions should not be
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`imposed because Reynolds did not produce in this case the Altria-obtained Fontem negotiation
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`documents and purportedly made “misrepresentations” related to the relevance of those
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`documents. Dkt. 1158. PM/Altria identified two statements in the Fontem negotiation documents
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`that it believes obliged Reynolds to produce them: (1)
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`; and (2)
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` Dkt. 1163, 10.
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`PM/Altria agrees the first representation is
`
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`, so it adds nothing to the information already available
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`to the parties. And the second representation is nothing more than a paraphrasing of the first
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`
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`identified by PM/Altria and it provides no new information. Further, there is no dispute that
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`. This is the full extent of allegedly relevant evidence
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`As Judge Buchanan explained during the April 1, 2022 hearing on the motion, she already
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`ruled in 2021 that the Fontem negotiations were not discoverable: “I already ruled, and I still see
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`no reason why my thought process was incorrect.” Dkt. 1189, 4. Judge Buchanan concluded that
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`relying on negotiation documents in the way PM/Altria proposed is exactly why such documents
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`are not relevant: “I think this is part of the problem when you go into negotiations, because what
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`are put in them and why they’re—why certain statement are put in there are—it’s really just too
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`much. What the final agreement is is what is relevant, what is operative, and I think you’re just
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`going down a rabbit hole when you start chasing what is in draft agreements.” Dkt. 1189, 12-13.
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`Judge Buchanan also found that Reynolds did not misrepresent the relevance of the
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`Fontem-RJRV negotiation documents; she saw no reason why her prior determination that the
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`documents were not relevant was incorrect. Dkt. 1189, 4. Judge Buchanan therefore rejected
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`PM/Altria’s allegations of misrepresentations to the Court and accepted Reynolds’s counsel’s
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`representations regarding the good faith basis for Reynolds’s statements. Dkt. 1189, 13.
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`Based on her findings, Judge Buchanan concluded that Reynolds did nothing sanctionable
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`(Dkt. 1189, 13), and entered an order denying PM/Altria’s motion (Dkt. 1177).
`
`III. LEGAL STANDARD
`
`When a magistrate judge considers a pretrial matter pursuant to 28 U.S.C. § 636(b)(1)(A),
`
`such as a discovery dispute, the district court reviews the resulting order only to determine if it “is
`
`
`2 During the course of the briefing before Judge Buchanan, both Fontem and Reynolds agreed to
`production of the Fontem-RJRV negotiation documents in this case. Those documents include
`emails making clear that
` two representations
`identified by PM/Altria.
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`clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a). Under that standard, “[a]ltering a
`
`magistrate’s non-dispositive orders is ‘extremely difficult to justify.’” Sharer v. Tandberg, Inc.,
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`No. 1:06cv626(JCC), 2007 WL 433152, at *2 (E.D. Va. Feb. 2, 2007) (quoting 12 Wright &
`
`Miller, Federal Practice and Procedure § 3069 (2d ed. 1997)). As to fact issues, “the reviewing
`
`court is not to ask whether the finding is the best or only conclusion permissible based on the
`
`evidence.” Haysbert v. Bloomin’ Brands, Inc., No. 4:20cv121, 2021 WL 5003280, at *1 (E.D. Va.
`
`Aug. 10, 2021) (Beach Smith, J.). “Rather, the court is only required to determine whether the
`
`magistrate judge’s findings are reasonable and supported by the evidence.” Id.
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`“[T]he magistrate judge has ‘nearly unfettered discretion to control the timing and scope
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`of discovery and impose sanctions for failures to comply with its discovery orders.’” Jaguar Land
`
`Rover Ltd., v. Bentley Motors Ltd., No. 2:18cv320, 2021 WL 8086709, at *3 (E.D. Va. Aug. 2,
`
`2021) (Davis, C.J.) (quoting Hinkle v. City of Clarksburg, 81 F.3d 416, 426 (4th Cir. 1996)). A
`
`magistrate judge’s non-dispositive discovery order is therefore properly reviewed under the clearly
`
`erroneous or contrary to law standard. See Jesselson v. Outlet Assocs. of Williamsburg, Ltd.
`
`P’ship, 784 F. Supp. 1223, 1228 (E.D. Va. 1991); see also Haysbert, 2021 WL 5003280, at *1 (“It
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`is not the function of objections to discovery rulings to allow wholesale relitigation of issues
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`resolved by the magistrate judge.”). That includes motions for discovery sanctions under Federal
`
`Rule of Civil Procedure 37. Kebe ex rel. Kebe v. Brown, 91 F. App’x 823, 827 (4th Cir. 2004)
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`(“The magistrate judge’s order disposing of Kebe’s Rule 37 motion for sanctions is undoubtedly
`
`a nondispositive matter covered by Rule 72.”); see also Harmon, Tr. of Harmon 1999
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`Descendants’ Tr. v. Harmon, No. 1:20-cv-1442 (RDA/TCB), 2021 WL 5416022, at *5-6 (E.D.
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`Va. Nov. 19, 2021) (Alston, J.) (concluding that magistrate judge order on Rule 37 motion was
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`non-dispositive motion subject to clearly erroneous standard of review where order did not result
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`in dismissal or termination of claims).
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`IV. ARGUMENT
`
`A.
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`Judge Buchanan’s Denial Of Rule 37 Sanctions Is Not Clearly Erroneous Or
`Contrary To Law.
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`Judge Buchanan appropriately found that PM/Altria failed to identify any sanctionable
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`conduct in support of its motion to show cause. Fundamentally, PM/Altria’s motion was premised
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`on the contention that Reynolds violated its discovery obligations. Reynolds did not. Under Judge
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`Buchanan’s April 2021 discovery ruling, Reynolds had no obligation to produce Fontem litigation
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`settlement negotiation documents. But on top of that flimsy claim of a discovery violation,
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`PM/Altria has injected claims of dishonesty, accusing Reynolds of misrepresenting facts to the
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`Court and casting aspersions against Reynolds’s counsel. PM/Altria’s accusations are unfounded
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`and should be recognized for what they are: a belated attempt to correct its own strategic choices
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`in discovery and to distract Reynolds in the weeks leading up to trial.
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`1.
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`Judge Buchanan Correctly Found That Reynolds Did Not Violate Any
`Discovery Obligation.
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`Reynolds did not have any obligation to produce the Fontem-RJRV negotiation documents,
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`so there is nothing sanctionable about Reynolds not producing them. Reynolds timely objected to
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`the request for those materials as not relevant and not proportional to the needs of the case back in
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`March 2021. See Dkt. 1159-6, 4. PM/Altria did not contest that objection (and indeed PM/Altria
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`took the same position with respect to its negotiation documents (see Dkt. 1167, 5 n.3; Dkt. 1167-
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`1, 6-7)). And, importantly, Judge Buchanan rejected PM/Altria’s 2021 motion to compel on this
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`topic, concluding that it is “not appropriate to get into negotiations or the considerations that they
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`made internally as to this” and that the final Fontem-RJRV litigation settlement agreement “speaks
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`for itself.” Dkt. 586, 7. That ruling plainly encompasses the then pending document request on
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`the same issues.3 At the hearing on the instant motion, Judge Buchanan specifically stated “I
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`already ruled” that the Fontem negotiation documents were not discoverable. Dkt. 1189, 4.
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`Indeed, at the April 1 hearing, PM/Altria recognized as much: “[M]aybe under Your Honor’s
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`ruling they didn’t have to produce the documents.” Dkt. 1189, 7 (emphasis added). That
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`admission should end the inquiry.
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`Accordingly, Judge Buchanan’s April 2021 ruling on PM/Altria’s motion to compel—to
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`which PM/Altria did not object—requires that PM/Altria’s requested sanctions be denied. And to
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`the extent PM/Altria argues that order did not cover PM/Altria’s document request, it did not
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`separately move to compel Reynolds to disclose the negotiation documents following Reynolds’s
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`objection or following Altria’s receipt of the Fontem-produced negotiation documents in MDNC.
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`Where the Court had ruled the documents were not relevant and PM/Altria did not pursue their
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`production following Reynolds’s objection, there was simply no predicate discovery obligation for
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`Reynolds to have violated.
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`2.
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`There Is No Basis To Revisit Judge Buchanan’s 2021 Ruling That The
`Fontem-RJRV Negotiations Were Not Discoverable.
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`As an initial matter, PM/Altria waived its right to challenge that ruling because it did not
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`file objections within the 14-day deadline. See Fed. R. Civ. P. 72(a) (“A party may not assign as
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`error a defect in the order not timely objected to.”); see also Wells v. Shriners Hosp., 109 F.3d 198,
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`200 (4th Cir. 1997). PM/Altria cannot bootstrap a waived challenge to Judge Buchanan’s 2021
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`order onto the instant motion. Superior Prod. P’ship v. Gordon Auto Body Parts Co., 784 F.3d
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`3 In its 2021 motion to compel, PM/Altria argued that the depositions were necessary in part to
`uncover information about the negotiation documents, asserting that the designated witness
`“should be familiarized with the underlying documents regarding such considerations,
`negotiations and communications within the possession, custody, or control of the company.” Dkt.
`547, 9. That express discussion of documents leaves no doubt that the motion to compel and Judge
`Buchanan’s ruling covered the production of documents too.
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`311, 321 (6th Cir. 2015) (Defendant failed to make a timely objection to a magistrate judge’s order
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`limiting discovery. As a consequence, it waived its right to appeal the issue even though it timely
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`objected to the denial of its second motion to compel production, where the second motion in effect
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`sought reconsideration of the first ruling.). Yet PM/Altria spends the first section of its brief doing
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`exactly that—arguing not that Judge Buchanan was wrong to deny sanctions, but that Judge
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`Buchanan was wrong in 2021 to conclude that the negotiation documents were not discoverable.
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`Dkt. 1195, 8-12. That argument is untimely and improper.4 Judge Buchanan’s 2021 ruling was
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`and is the operative ruling in this case, and Reynolds’s discovery positions that were consistent
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`with that ruling are not sanctionable just because PM/Altria now disagrees.
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`A review of Judge Buchanan’s 2021 ruling also confirms that the ruling was substantively
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`correct, and certainly not clearly erroneous or contrary to law. Indeed, Judge Buchanan confirmed
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`that ruling on April 1, 2022. See Dkt. 1189, 4, 12-13. The Fontem-RJRV negotiation documents
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`are irrelevant and inadmissible, and are not properly discoverable. That is consistent with the
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`position PM/Altria took as well in refusing production of its own
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` negotiation
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`documents. See Dkt. 1167, 5 n.3; see also Dkt. 1167-1, 6-7.
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`First, it is the final Fontem-RJRV agreement that is relevant and relied upon by Reynolds’s
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`expert here, not the Fontem-RJRV negotiation documents. Importantly, PM/Altria’s expert opined
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`that “the circumstances surrounding these [
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` and Fontem-RJRV settlement]
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`agreements do not indicate that litigation materially influenced the consideration agreed upon in
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`either agreement.” Dkt. 553, 5. Reynolds’s expert did not rely on the negotiations either.
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`4 PM/Altria’s assertion that Judge Buchanan did not address this procedural argument (Dkt. 1195,
`12 n.7) is belied by the record. Judge Buchanan expressly stated that she had already ruled on the
`relevancy question. Dkt. 1189, 4.
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`PM/Altria’s mischaracterizations of the documents only strengthen this conclusion and
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`show the dangers of admitting such evidence. PM/Altria asserts that the documents “go[] to ‘the
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`heart’ of PMI/Altria’s damages theories” and are “highly probative of damages.” Dkt. 1163, 21,
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`23. But that simply is not true. The “heart” of PM/Altria’s damages theory purports to be based
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`on the
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` agreement and a purported established rate of
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` paid by at least nine
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`Fontem licensees. But, to know what those nine other licenses paid, PM/Altria would have needed
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`to obtain the other prior Fontem licenses. It did not.
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`Fontem-RJRV negotiation documents are no better evidence of the terms of other Fontem
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`licenses than
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`PM/Altria admits that
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` is
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`.
`
`
`
`
`
`. Just as with the
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` agreement, the problem with that
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`. And what is more,
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`. The same is true with respect to the
`
`
`
`. Nor does the
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`
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`
`
`
`
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`
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` Thus, there is still no evidence of the terms of other Fontem agreements. To
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`speculate as to the terms of other non-produced Fontem agreement