UNITED STATES DISTRICT COUR

EASTERN DISTRICT OF TEXAS

TEXARKANA DIVISION

THE STATE OF TEXAS,

Plaintiff,

v.

THE AMERICAN TOBACCO COMPANY; R.J. REYNOLDS TOBACCO COMPANY; BROWN & WILLIAMSON TOBACCO CORPORATION; B.A.T. INDUSTRIES, P.L.C.; PHILIP MORRIS, INC.; LIGGETT GROUP, INC.; LORILLARD TOBACCO COMPANY, INC.; UNITED STATES TOBACCO COMPANY; HILL & KNOWLTON, INC.; THE COUNCIL FOR TOBACCO RESEARCH - USA, INC. (Successor to Tobacco Institute Research Committee); and THE TOBACCO INSTITUTE, INC.

Defendants.

Civil Action No. 5:96CV91

JUDGE: DAVID G. FOLSOM

MAGISTRATE JUDGE: WENDELL C. RADFORD

JURY

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THE STATE OF TEXAS’ MOTION FOR AN EMERGENCY HEARING

Plaintiff, the State of Texas, respectfully moves this Court for an emergency hearing on its Motion for a Temporary Restraining Order Enjoining Defendants from Interfering with this Court’s Discovery Orders. In support, the State would show as follows:

1. On March 20, 1997, Liggett entered into the Attorneys General Settlement Agreement ("Settlement Agreement") with 22 states – including Plaintiff, the State of Texas – that have filed lawsuits against the cigarette manufacturers to, inter alia, recoup the public health care costs caused by smoking-related disease. Central to these suits are allegations that the cigarette manufacturers have affirmatively misrepresented and hidden the true health dangers of smoking from the public and health regulators.

2. As part of the settlement agreement, Liggett agreed to turn over "all documents and information that are relevant to the subject matter of the Actions or which are likely to lead to admissible evidence in connection with the claims asserted in any of the Actions . . . ." Settlement Agreement, para. 4.3.2(2). Liggett further agreed to deposit in this Court, under seal for in camera inspection, all documents which any tobacco company claims may be privileged. Id.

3. Defendants R. J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corporation, Lorillard Tobacco Company and Philip Morris Incorporated sought, and were granted, a temporary restraining order dated March 20, 1997, the effect of which has precluded Liggett from disclosing documents and information as required by the Attorneys General Settlement Agreement. See, Temporary Restraining Order. On March 21, 1997, Defendants R. J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corporation, Lorillard Tobacco Company and Philip Morris Incorporated sought, and were granted, a further order regarding the documents and information pertinent to the Settlement Agreement. This Order requires Liggett to retrieve all copies of all documents subject to the TRO and deposit them with the Superior Court of Forsyth County, North Carolina by Monday, March 24, 1997, at 5:00 p.m. See, March 21, 1997, Order.

4. The actions of Defendants R. J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corporation, Lorillard Tobacco Company and Philip Morris Incorporated attempt to seriously interfere and infringe on the jurisdiction of this Court, undermine this Court’s previous Orders, and impair this Court’s power to effectively manage and decide the above-captioned action.

5. Given the North Carolina court’s Order to retrieve all copies of all documents subject to the TRO and deposit them into that court by Monday, March 24, 1997, at 5:00 p.m. E.S.T., the State requests this Court to conduct an emergency hearing to determine whether the State’s Motion for Temporary Restraining Order should be granted. If this Motion for Emergency Hearing is not granted, the matters at issue will become moot at 5:00 p.m. E.S.T. today and this Court will have been effectively deprived of its jurisdiction to determine matters properly before it.

WHEREFORE premises considered, the State of Texas respectfully requests that this Court schedule and hold an emergency hearing on the State’s Motion for Temporary Restraining Order at a time sufficiently in advance of 5:00 p.m. E.S.T. to determine whether the motion should be granted.

Respectfully submitted:

DAN MORALES

Attorney General of Texas

Texas Bar No.: 14417450

JORGE VEGA

First Assistant Attorney General

Texas Bar No.: 20533800

JAVIER AGUILAR

Special Assistant Attorney General

Texas Bar No.: 00936300

TOM PERKINS

Special Assistant Attorney General

Texas Bar No.: 15790850

HARRY G. POTTER III

Special Assistant Attorney General

Texas Bar No.: 16175300

P. O. Box 12548

Capitol Station

Austin, Texas 78711-2548

512.463.2191

512.463.2063 Fax

WALTER UMPHREY, P.C.

490 Park

P. O. Box 4905

Beaumont, Texas 77074

409.835.6000

409.838.8888 Fax

Texas Bar No.: 20380000

ATTORNEY-IN-CHARGE

GRANT KAISER

Kaiser & Morrison, P.C.

Suite 1440 Lyric Centre

440 Louisiana Street

Houston, Texas 77002-1634

713.223.0000

713.223.440 Fax

State Bar No.: 11078900

By: ______________________________

Grant Kaiser, by permission of Walter

Umphrey, Attorney-in-Charge

CERTIFICATE OF SERVICE

I hereby certify compliance with Fed. R. Civ. P. 5 and Case Management Order of November 5, 1996, that a true a correct copy of the foregoing document has been sent by hand delivery on March 24, 1997, to the following:

Administrative Liaison Counsel for All Defendants:

Howard Waldrop

Atchley, Russell, Waldrop & Hlavinka, L.L.P.

1710 Moores Lane

P. O. Box 5517

Texarkana, TX 75505-5517

903.792.8246

903.792.5801 Fax

Respectfully submitted,

_________________________

Grant Kaiser

UNITED STATES DISTRICT COUR

EASTERN DISTRICT OF TEXAS

TEXARKANA DIVISION

THE STATE OF TEXAS,

Plaintiff,

v.

THE AMERICAN TOBACCO COMPANY; R.J. REYNOLDS TOBACCO COMPANY; BROWN & WILLIAMSON TOBACCO CORPORATION; B.A.T. INDUSTRIES, P.L.C.; PHILIP MORRIS, INC.; LIGGETT GROUP, INC.; LORILLARD TOBACCO COMPANY, INC.; UNITED STATES TOBACCO COMPANY; HILL & KNOWLTON, INC.; THE COUNCIL FOR TOBACCO RESEARCH - USA, INC. (Successor to Tobacco Institute Research Committee); and THE TOBACCO INSTITUTE, INC.

Defendants.

Civil Action No. 5:96CV91

JUDGE: DAVID G. FOLSOM

MAGISTRATE JUDGE: WENDELL C. RADFORD

JURY

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ORDER SETTING EMERGENCY HEARING

The State of Texas’ Motion for Emergency Hearing was determined today. After reviewing all pertinent pleadings, briefs and other filings and arguments of counsel, the Court determines that the State’s Motion should be in all things granted.

IT IS THEREFORE ORDERED, that a hearing be held on the State of Texas’ Motion for Temporary Restraining Order on the _____ day of _____________________, 1997, at ______ __.m.

Dated: March 24, 1997.

_______________________________

DAVID FOLSOM

Federal District Judge