(Jul 23, 2008) The six-year-old case between Grand River Enterprises and 31 U.S. states has become so contentious that the judge was forced to make a ruling on an incident that happened during a washroom break.
On Feb. 13 and 14 this year, GRE president Steve Williams was ordered to appear at the New York State Attorney General's Office in downtown Manhattan to provide testimony under oath as part of the ongoing court case.
The news of Williams' pending appearance in New York caught the attention of the attorney general's office for California, one of the 31 states named in GRE's lawsuit.
California also happens to have obtained three default judgments against Grand River Enterprises in the past for failing to put money into a reserve fund designed to cover future health costs related to smoking and possible litigation against tobacco companies.
The amount of money required for deposit is based on the number of cigarettes sold each year. According to California court documents, GRE sold almost 114 million cigarettes in the state from 2002 through 2004.
With penalties and interest, GRE now owes California more than $9 million.
GRE has never contested the cases in court, and the State of California had never been able to properly serve the company with documents to collect on the outstanding judgments.
The California attorney general decided to take advantage of Williams' appearance in New York to serve legal notice to GRE.
On one of the days of Williams' deposition, a California process server went to the 22nd floor of the Manhattan office building, identified Williams as he was on his way to the washroom during a break in his testimony, and served him with notice of the default judgments.
Grand River Enterprises immediately complained that the action "interfered in the orderly conduct of discovery" and was an attempt "to intimidate Grand River."
The judge refused to make California withdraw the summons and he also refused to stop any other state from adopting the same tactic in the future.