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Main Index: Trial Testimony June 18, 1997


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                   v.                           93 CV 6656 LbS
                                                June 18, 1997
  12                                            2:40 p.m.

  13    Before:

  14                        HON. LEONARD B. SAND

  15                                            District Judge


  19         Attorneys for Plaintiffs
        BY:  ROBERT L. PLOTZ
  20         PETER E. SEIDMAN

             Attorneys for Defendants
  22    BY:  SUSAN L. BURKE





   1               (Trial resumed)

   2               THE COURT:  Mr. Plotz.

   3               MR. PLOTZ:  Your Honor, there are actually just a

   4    very few matters to bring up.  We worked, both sides, I

   5    think, very hard at narrowing down the issues on exhibits.

   6    Many exhibits that had previously been offered have been

   7    withdrawn.  Many objections to exhibits have been withdrawn.

   8    There are just, as far as the plaintiffs' offer of exhibits,

   9    literally a handful of exhibits that we wish to raise with

  10    the Court.

  11               There are five exhibits which fall into two

  12    categories.  The first, Exhibits 29, 30, and 34 -- and I

  13    have to say, due to the location of the physical exhibits

  14    being in two places at once, I only have our own office

  15    copies.  I don't know if the Court still has the copies of

  16    the exhibits.

  17               But while they are being given to the Court, I

  18    can say that all three exhibits relate to the secondary use

  19    of the survey by the defendant AIP, and the Court will

  20    recall that Dr. Lustig testified as to APS and there was a

  21    lot of colloquy about whether or not this issue was still an

  22    issue that had to be proven, and eventually what happened

  23    was, there was a document-by-document determination as to

  24    whether or not there would be an objection, and all of the

  25    documents relating to the secondary uses by APS were


   1    eventually not objected to during Dr. Lustig's testimony.

   2               These three exhibits relate to the same issue as

   3    the other defendant, AIP, and --

   4               THE COURT:  The stipulation with respect to

   5    intent to make further use relates to both defendants?

   6               MR. PLOTZ:  As I understand it.  The issue,

   7    though, that was raised during the trial and during

   8    Dr. Lustig's testimony, why we needed to go further, related

   9    to what the secondary uses were.  The contention is not just

  10    the survey but what the uses of the survey were that we

  11    contend were false.  If you look particularly at Exhibit 34,

  12    that is AIP's version of Exhibit 33, which is in evidence,

  13    which was APS's secondary use -- that was admitted, I

  14    believe, during Dr. Lustig's examination, a secondary use in

  15    September of 1987.  This is simply the AIP analogue.  So we

  16    don't see a basis for distinguishing between the two.

  17               THE COURT:  Ms. Burke, do you have an objection?

  18               MS. BURKE:  Your Honor, these three documents

  19    actually relate to the 1986 Barschall article, which has

  20    been found to be barred by the statute of limitations, so

  21    that the claims made in these documents have no bearing on

  22    the claims that might be made about a cost effectiveness

  23    survey.  The 1986 Barschall article was a cost efficiency

  24    survey.  So we don't think they are relevant and they need

  25    not be admitted into evidence.


   1               MR. PLOTZ:  The fact that the '86 article is

   2    outside the statute period just means we don't have a direct

   3    claim that relates to it, but the Second Circuit case law

   4    shows that it is relevant to the issue of what use the

   5    defendants are making.  And that's all we're offering it

   6    for.

   7               THE COURT:  Yes.  The objection is overruled and

   8    they are received for the limited purpose just stated.

   9               (Plaintiff's Exhibits 29, 30, and 34 received in

  10    evidence)

  11               MR. PLOTZ:  Thank you, your Honor.  The other two

  12    documents, which are 56 and 87, have been objected to, as I

  13    understand it, on the basis that they go into the editorial

  14    decision making process of putting the article together.

  15    That very same point was raised at trial.

  16               THE COURT:  I thought those were received.

  17               MR. PLOTZ:  Well, there are two documents.  There

  18    was much testimony about this.  This is the issue of the

  19    footnote of one of the Court's opinions.  At pages 325

  20    through 328 in the transcript where there was colloquy and

  21    testimony with respect to this very same objection, the

  22    Court overruled the objection and admitted the evidence, and

  23    these are simply documents which relate to the very same

  24    issue.

  25               MS. BURKE:  Your Honor, although certainly the


   1    line is blurred between what is editorial and what is not

   2    and you have overruled some of our objections on those

   3    grounds, these two documents in particular have no bearing

   4    other than on the editorial process.  Gloria Lubkin is the

   5    editor.  She has not been deposed in this case.  And the

   6    other document is an e-mail, with editorial comments, that

   7    has nothing to do with the dissemination or distribution.

   8    It strikes the defendants that these are just purely as to

   9    the editorial process and they aren't relevant in this case.

  10               THE COURT:  What is the significance of 56?

  11               MR. PLOTZ:  Your Honor, the close linkage of the

  12    APS management to the preparation of the article goes to the

  13    Castrol element of the objectivity of the survey.

  14               THE COURT:  Havens is suggesting to Barschall

  15    that he change the title?

  16               MR. PLOTZ:  Havens is on, if you will, the

  17    business side, not the editorial side, and it shows the

  18    linkage of the business side to the preparation of the

  19    article, which we contend is relevant to the Castrol element

  20    of whether this was an objective study by Barschall.

  21               MS. BURKE:  Your Honor, Havens was actually the

  22    editor in chief.

  23               THE COURT:  I sustain the objection to 56.

  24               Now, what is 87?

  25               MR. PLOTZ:  87 was an affidavit that was filed in


   1    one of the European litigations, in which Ms. Lubkin, the

   2    editor, made what we contend are inaccurate, false

   3    statements relating to the editorial process.

   4               THE COURT:  I sustain the objection to 87.

   5               MR. PLOTZ:  That completes our issues.

   6               THE COURT:  Ms. Burke?

   7               MS. BURKE:  Your Honor, we have a few documents

   8    that all relate to the unclean hands.  Essentially it is

   9    half of the correspondence.  It has been objected to on

  10    hearsay grounds.  We are offering the documents not for the

  11    truth of the matters stated but in order to provide the

  12    Court with the means by which to judge the plaintiffs'

  13    intent.

  14               I would just walk through one example so that you

  15    will understand how it is relevant.  I will hand you up a

  16    document that has been admitted into evidence, a document by

  17    Mr. Lupert, and the correspondence that preceded it.  In

  18    Mr. Lupert's letter, he appears to be quite reasonable and

  19    proposes a settlement.  On its face, there is nothing

  20    inherently unreasonable about it, but when it is viewed in

  21    the context of the prior letter from Ms. Edelman when she

  22    explains the circumstances and states that there is no

  23    secondary promotional issue and that it is merely a matter

  24    of free speech, then Mr. Lupert's letter no longer is

  25    reasonable, and so for you to have the ability to judge


   1    Mr. Lupert's letter, you really need to see what he is

   2    responding to.

   3               There is another person and example as well.

   4               THE COURT:  Let's stop with that.  The objection

   5    is to the Dorsey & Whitney letter?

   6               MR. PLOTZ:  Yes.  This came up during

   7    Dr. Tailor's cross-examination, you may recall, and I made

   8    the argument that it was double hearsay because it's a

   9    lawyer's letter of what the lawyer's client told her.

  10    Neither the lawyer nor the client was ever deposed or a

  11    witness in this case, and it seems to me that there is no

  12    way of getting around the fact that this letter is being

  13    offered for the truth, for what IEEE and Vig's position is,

  14    and you can only judge Mr. Lupert's letter if you accept as

  15    true what is in the letter, and the way for them to have

  16    done it is to have called Dr. Vig as a witness.

  17               THE COURT:  Why can't I accept as true the fact

  18    that this is what was said by Dorsey and Whitney to

  19    Mr. Lupert?

  20               MR. PLOTZ:  Well, certainly it's not hearsay if

  21    accepted for that purpose.

  22               THE COURT:  Yes.  But isn't that what it is being

  23    offered for?

  24               MR. PLOTZ:  I don't think it is.

  25               MS. BURKE:  Yes, your Honor.  That is exactly


   1    what it is being offered for.

   2               MR. PLOTZ:  That is what they say, but I don't

   3    think it can be so limited, because you cannot judge the

   4    response to the letter without being able to judge the

   5    substance of the lawyer's letter that was written.  The way

   6    to do that is for Dr. Vig to have testified.

   7               THE COURT:  It seems to me that it is a classic

   8    case of the admission of something not for the truth but as

   9    evidence that the words were spoken, or in this instance

  10    written, and it is just like a lawyer's question isn't

  11    evidence but to evaluate the answer one has to put it in the

  12    context of the question.

  13               MR. PLOTZ:  I understand that point, your Honor,

  14    and my problem is just this.  The issue on the unclean hands

  15    defense is the essentially good faith of the plaintiff in

  16    this, and if you're going to judge whether Mr. Lupert's

  17    letter is a reasonable letter, unreasonable letter, or

  18    whatever it is, you can't just judge that with respect to

  19    the words that are in the Edelman letter.  You have to

  20    address that against whatever the facts of the situation

  21    are.

  22               THE COURT:  That doesn't make the letter

  23    inadmissible.  That goes to its probative value or the

  24    probative value of the Lupert letter, but it doesn't go to

  25    the admissibility of the Dorsey & Whitney letter not for the


   1    truth but as evidence that this is what was said to

   2    Mr. Lupert and to which he was responding.  I will receive

   3    it.

   4               MR. PLOTZ:  I take it that the defendants are

   5    then not going to make any argument as to the IEEE version

   6    of what happened in this incident.  The only evidence about

   7    what actually happened in this incident is Dr. Taylor's

   8    testimony.

   9               THE COURT:  Dr. Taylor's testimony and

  10    Mr. Lupert's letter.  Was that received in evidence?

  11               MR. PLOTZ:  Yes.

  12               THE COURT:  Very well.

  13               MR. PLOTZ:  In light of your Honor's ruling,

  14    there are a number of other similar exhibits that obviously

  15    we object to but I acknowledge they fall within the same

  16    category.

  17               THE COURT:  All right.  Just state what those are

  18    so the record will be clear that they are received not for

  19    the truth but as evidence that that was what was said to --

  20    are these all to Mr. Lupert?

  21               MS. BURKE:  Yes.  The majority.  A few are to

  22    prior counsel.

  23               They are ZZZ, EEEE, MMMM, OOOOO4, PPPPP10, 12,

  24    and 13, RRRRR2, TTTTT3 and 5.

  25               MR. PLOTZ:  That's right.


   1               (Defendant's Exhibits ZZZ, EEEE, MMMM, OOOOO4,

   2    PPPPP10, 12, and 13, RRRRR2, TTTTT3 and 5 received in

   3    evidence)

   4               MS. BURKE:  The remaining documents, your Honor,

   5    are the documents that Mr. Meserve used in examining

   6    Mr. Gordon, and they are the published version of the FISC

   7    panel report, the supplement to the FISC panel, and the

   8    supplement to the FISC panel report, and the prepublication

   9    draft of the FISC panel report.  He used those and there was

  10    testimony about them.  He neglected to formally move them

  11    into evidence and we want to move them in at this point.

  12               THE COURT:  Is there objection?

  13               MR. PLOTZ:  There is, your Honor.  You will

  14    recall that this was the subject of much pretrial activity

  15    and there was some discussion at the trial as to the scope

  16    of what was permissible as to the FISC report.  It went to

  17    the financing and initiation of the report, and Mr. Gordon

  18    was asked questions relating to those issues without

  19    limitation.  The report itself, though, it seems to me, goes

  20    beyond that.  The questions and answers on the FISC report,

  21    initiation and financing, are in the record, and it doesn't

  22    seem to me that the reports themselves or the drafts of the

  23    reports add anything to what is in the record.

  24               THE COURT:  No, I think they might very well, in

  25    terms of the issues of good faith, what the actual facts


   1    are, and what was told to whoever received the FISC report

   2    or questionnaires and so on.  The objection is overruled.  I

   3    will receive them.

   4               MS. BURKE:  Thank you, your Honor.  That's all we

   5    have.

   6               THE COURT:  That's all you have?

   7               MR. PLOTZ:  Yes, your Honor.

   8               THE COURT:  Thank you.  We did set a timetable

   9    for briefing and reply briefs, and I assume that the parties

  10    were going to submit proposed findings of fact and

  11    conclusions of law.

  12               MS. BURKE:  Yes, your Honor.

  13               MR. PLOTZ:  Yes.

  14               THE COURT:  Very well.  Thank you all.

  15               MR. PLOTZ:  Thank you, your Honor.

  16               MS. BURKE:  Thank you.

  17                                o0o