Slee v. Erhard, Plaintiff's Motion for Sanction of Judgment by Default Pursuant to Rule 37 (1990)

157

FILED

JAN 18 1990

8 44 AM

U.S. DISTRICT COURT

NEW HAVEN, CONN

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF CONNECTICUT

ALFRIEDA SLEE, Administratrix

Of the Estate of Jack Andrew Slee

v.

WERNER ERHARD, ET AL.

CIVIL ACTION NO. 84 497 JAC

Plaintiff, by counsel, hereby moves This Honorable Court for judgment by default pursuant to Rule 37 (b) (2) (c) and for other sanctions against the defendants for failing to comply with discovery, failing to comply with a direct Order of This Honorable Court, and for committing a fraud upon this Court and plaintiff.

Respectfully submitted,

[signature] Gerald F. Ragland, Jr. 526 King Street, Suite 214 Alexandria, VA 22314 (703) 836-2166 COUNSEL FOR PLAINTIFF

William F. Gallagher Gallagher and Gallagher 1377 Boulevard New Haven, Connecticut 06511 (203) 624-4165 CONNECTICUT COUNSEL

This motion is based upon the defendants’ actions in withholding information and documents pertaining to incident reports and reports of “severe emotional upsets”. The discovery requests and Order of this Court in question date to 1985. Consequently, al discovery subsequent to early 1985, all preparation of plaintiff’s expert witnesses, all depositions of defense witnesses, all depositions of defendants’ experts, and all trial preparation have been based upon the false representation that defendant had no records pertaining to prior incidents of “severe emotional upsets” or of emotional distress in the est training, an issue central to plaintiff’s theory of liability. This representation is clearly false in light of documents received by plaintiff’s counsel from an outside source in the past few days. More detail pertaining to this issue is contained in the attached Memorandum.

Because of the scope of the fraud and the years of reliance upon defendants’ false responses, plaintiff seeks the following sanctions:

Judgment by default against defendants on the issue of liability and/or an order that it be conclusively presumed for purposes of the upcoming trial as follows:

1. That the defendants negligently caused the death of Jack Slee.

2. That the defendants intentionally inflicted emotional stress which caused the death of Jack Slee.

3. That the defendants had prior notice of the emotional intensity of their trainings due to the large number of severe emotional upsets which occurred in the standard est training prior to the death of Jack Slee.

4. That the defendants’ denial of paragraphs 23, 24, 25, 26, 34, 35, 36, 37(a), 37(b), and 38 contained in plaintiff’s second Amended Complaint shall be stricken and that said paragraphs shall be taken as admitted for purposes of this cause of action.

By way of further sanction, plaintiff requests this Honorable Court to order defendants to reimburse plaintiff’s counsel for his time consumed in either conducting or participating in approximately 28 depositions that have occurred in this case since the initial false denial of the existence of documentation pertaining to severe emotional upsets or “incident reports” filed by the defendants in this case in March, 1985, in the form of answers to interrogatories and replies to requests for production of documents.

By way of further sanction, plaintiff further requests the Court to order defendants to produce all documents pertaining to severe emotional upsets or other emotional or psychological injury from the year 1979 to the present time.

By way of further sanction, plaintiff requests an Order directing defendants to pay the costs of plaintiff’s re-preparation of her expert witnesses based upon these further materials to be provided by the defendants. (Even with liability concluded, plaintiff will produce evidence addressed to punitive damages.)

By way of further sanction, plaintiff requests an order directing defendants to reimburse plaintiff’s counsel for years of transportation to the west coast, to the New England region, to New York, and other places on the basis that the value of counsel’s expenditure of time has been undermined and devalued by the defendants’ fraud in discovery pertaining to severe emotional upsets and/or incident reports in March, 1985, and thereafter.

Defendants have claimed and this Court has allowed the claim of attorney-client privilege for witness statements taken following the death of Jack Slee. Since it is clear, based upon the accompanying memorandum and documents attached thereto, that the defendants had a standard policy and procedures for gathering information following incidents in their training, plaintiff requests the Court to reconsider its prior ruling and order that plaintiff’s counsel be given the witness statements taken in the hours and days following Jack Slee’s death. In the alternative, counsel respectfully requests that this Honorable Court obtain all such witness statements and seal them as part of their record in this case so that there might be further reconsideration of the Court’s ruling during the course of trial and so that the records will be preserved on appeal, if any.

The records regarding “severe emotional upsets” and incident reports are not the only documents withheld in discovery by defendants. In 1985, plaintiff requested all videotapes of est trainings. This request was made with the knowledge that certain videotapes existed. It now turns out that defendants turned over to plaintiff’s counsel only those tapes of which counsel had prior knowledge. For years plaintiff’s counsel has relied upon defendants’ representation that these were the only tapes. These tapes have been used in the preparation of expert witnesses and lay witnesses for the trial of this matter. However, in a deposition which occurred in December of 1989, it was made clear that the defendants possessed considerably more videotapes of the est trainings than the ones given to plaintiff’s counsel. In light of counsel’s reliance upon the representation that all tapes in existence had been given to plaintiff’s counsel, counsel moves for a sanction against the defendants in the form of an Order to the effect that the “August B” video of the “danger process” (the only videotape of the danger process given to plaintiff’s counsel) is conclusively presumed to be representative of the “danger process” in which the plaintiff’s decedent, Jack Slee, was participating when he died of a stress induced cardiac arrest.

Additionally, in the December, 1989 deposition, counsel learned that the defendants did not fairly respond to a 1985 request for the production of explanatory materials designed to assist the trainers in presenting the standard est trainings. It is requested that the Court order the production of these documents at this time.

By way of additional remedy, counsel requests that this Honorable Court order the defendants to allow plaintiff’s counsel access to their library to further discover videotapes of the standard est training and other materials used by est trainers at the expense of defendants.

Since the resolution of this motion will have an effect on the issues to be presented at trial as well as the documentary evidence, it is requested that the present deadline for the filing of the Trial Memoranda Order be delayed from January 31, 1990, until at least two weeks following the disposition of this motion.

Finally, it is requested that the Court order the defendants to compensate plaintiff’s counsel for the 28 hours spent reviewing his file for this motion and preparing this motion.

In support of the above requests, plaintiff relies upon the power of this Court to grant such sanctions pursuant to Rule 37 and the facts contained in the attached memorandum and the exhibits.

MEMORANDUM IN SUPPORT OF PLAINTIFF’S ACTION

Documents Sent to Plaintiff’s Counsel Show Discovery Fraud by the Defendants in this Case

Within the past two weeks and the past few days counsel has obtained documents from two sources which are evidence that the defendants in this action have committed a fraud upon the Court and upon the plaintiff since March of 1985. The fraud pertains to the question of whether or not the defendants maintained reports and data regarding the occurrence of severe emotional distress on the part of the participants in the standard est training. In discovery and before this Court, the defendants have repeatedly denied that any such records are kept or that such documents exist. Defendants even produced a designated witness to speak for the corporation and who testified that such documents did not exist. The documents obtained by plaintiff’s counsel in the last two weeks show this to be false.

The first document that counsel received was a copy of a Second Amended Complaint by which a former trainer and employee of the defendants is suing Werner Erhard, individually, and Werner Erhard and Associates. In this Complaint she alleges that the long work hours requited of staff were detrimental to …”the health and well-being of seminar attendees.” Additionally, she refers to the fact that when seminar attendees experience psychotic episodes, these are referred to as “severe emotional upsets” (or “SEU’s”). See Exhibit A for excerpts from this Complaint.

More importantly, and more conclusively, several days ago plaintiff’s counsel received documents which were sent last June to another person interested in informing the public of the hazards associated with the est (and now the Forum) trainings. Attached as Exhibit B is the cover letter to these documents which is dated June 6, 1989. The writer conveyed documents pertaining to “so-called SEU’s (severe emotional upsets)”. This person refers to these documents as being “out of date”. Ironically, they concern the years 1981, 1982 and 1983, which are particularly crucial to this case in which the death actually occurred in August of 1983. These documents include, inter alia, an outline of “action taken when an incident occurs”, dated 6/2/83 and authored by Nancy Johnston who is referred to in the letter. This document refers to “incident reporting”. It contains an organization chart dated June, 1983, that contains, inter alia, the name of Martin Leaf, a counsel of record in this case, as a member of an advisory board to a “participant well-being board” which deals with “incidents”. Document of 6/2/83 attached as Exhibit C.

Also conveyed by the writer are 1981 studies of statistics pertaining to severe emotional upsets (SEU’s) in the est training. See Exhibit D. Apparently the defendants statistically analyzed the number of severe emotional upsets before and after the implementation of an informed consent in 1981. Exhibit D shows graphs presenting the incidence of severe emotional upsets per 100 people in the training for various times during the year 1981. Exhibit D also shows a breakdown of severe emotional stress according to trainer. David Norris, the trainer in this case, had people experience severe emotional upsets in trainings which he conducted on 5/18/81, 6/8/81, 7/13/81, 7/21/81, 8/10/81, and 8/21/81. For 1981 the severe emotional distress events were also analyzed by center.

The writer also conveyed a statistical report for 1982 which is dated 1/28/83 and contains the initials “NJ”. This shows the dates of severe emotional upset incidents for various cities and a decimal figure presumably representing the incidence of severe emotional upset for the given city operation. The information for the defendants’ operation as a whole is presented graphically for 1982. See Exhibit E.

The writer also conveyed statistical information regarding severe emotional upsets for the year 1983 (the year in which Jack Slee died). Like the earlier reports, these summaries show the city, the date, and the initials of the trainer. The information for 1983 is also presented graphically (See Exhibit F).

The clear and unavoidable inference from these statistical reports is that the defendants have a standardized process for gathering information regarding incidents which occur in their training, they specifically include incidents which involve severe emotional upset. They clearly systematically gather reports and data which enable them to reduce the information to statistical computations by date, place, and trainer. It is inconceivable that such detailed reports could be prepared without a large base of information being gathered routinely as incidents and severe emotional upsets occurred in the est training.

These documents show the falsity of the defendants’ prior representations to this Court that various witness statements taken following the death of Jack Slee were taken solely in anticipation of litigation. In fact, the defendants had a standard policy of gathering information following incidents at the training. Accordingly, this court should reconsider its prior rulings that defendants need not release the statements taken of witnesses immediately following the death of Jack Slee for which they have claimed attorney work product privilege.

Given the history of discovery in this case in which plaintiff’s counsel repeatedly in 1985 and early 1986 sought information pertaining to incident reports or other documentation pertaining to psychological or emotional distress, the defendants have committed a grave fraud. Since the defendants made representations in Chambers before the Court, they have perpetrated a fraud directly upon the person of this Court. Since the Court, in September of 1985, ordered the defendants to turn over such materials, the defendants have been in violation of an Order of this Court for four and one-half years.

 History of the Issue 

The history of the “severe emotional distress” discovery issue is reviewed here to convey the significance of the defendants’ actions and the magnitude of the fraud upon the Court.

The question of severe emotional distress is central to plaintiff’s theory of the case. It is the opinion of plaintiff’s experts, Dr. Merikangas and Dr. Singer, that the defendants negligently and intentionally inflicted severe emotional distress upon Jack Slee causing his death from a stress induced cardiac arrest.

A major defense in this case has been that Jack Slee’s death was unforeseeable. Since the death was the result of stress, the degree and number of prior severe emotional distress incidents is relevant to the determination of the foreseeability of the death of Jack Slee.

In her complaint, initially filed on September 5, 1984, plaintiff raised the issue of severe emotional distress in the following paragraphs (Paragraphs below are taken from the second amended complaint. Underlining added in this motion for emphasis.)

23. During the est training attended by JACK SLEE the defendants and their employees and agents inflicted intense amounts of physical and psychological stress upon JACK SLEE and the other participants, in reckless and outrageous disregard of the safety of JACK SLEE and the other participants.

24. The infliction of emotional and psychological stress in est trainings is  intentional and is designed into the trainings by the defendants.

25. the techniques and practices utilized by defendants in conducting the est training had caused psychological and other injuries to a substantial number of participants both prior to the time JACK SLEE took the training and subsequently.

26. Through actual observation of the harmful effects which the est training had on various participants, from reports of psychological injury to participants in the training and from articles published in respected medical journals prior to the time JACK SLEE took the training, the defendants knew or should have known of the harmful effects of their training, that their training caused intense emotional distress to many trainees and it was therefore reasonably foresseable to defendants that members of the general public, including JACK SLEE, would be injured by the training as of the time the JACK SLEE took the training. Despite this knowledge, defendants induced JACK SLEE and others to attend the est training without informing them of the true nature of the est training, in reckless disregard of their safety without warning them of the dangers of taking the training and without employing adequate screening procedures to insure that the training was safe and appropriate for those entering the training.

37. In addition to the foregoing, defendants and their agents were careless and negligent in the design and administration of the set training attended by JACK SLEE in that said defendants : a. Incorporated into the est training and applied to JACK SLEE unreasonably powerful manipulative psychological processes and techniques posing an unreasonable risk of severe mental, emotional, or physical distress to JACK SLEE.

All of the above allegations were denied by the defendants. Plaintiff’s counsel had oral hearsay information to the effect that defendants had experienced a great number of adverse psychological reactions (severe emotional upsets) in their trainings and that records of such emotional distress casualties had been seen b a volunteer in the New York Office. Accordingly, plaintiff’s counsel sought evidence on the issue. Her initial interrogatories and request for production of documents (both addressed to all defendants) were filed in late December of 1984, and plaintiff made discovery requests addressed to the question of severe emotional distress and documents pertaining thereto. Plaintiff, inter alia, referred to these potential documents as “incident reports”.

In her First Request for Production of Documents, Request No. 18, plaintiff requested “all memoranda, instructions, directives and other documents pertaining to unusual or inappropriate behavior on the part of est trainees during the training attended by Jack Slee or during any est training delivered before August of 1983.” The defendants reply to this request was “ None .”  In her First Request for Production, Request No. 19, plaintiff requested all incident or accident reports or related documents referring to unusual or inappropriate behavior during any est training prior to August of 1983.”  The defendants reply was “ None .”  In her First Request for Production of Documents, Request No. 20, plaintiff requested “all incident or accident reports or related documents referring to unusual or potentially harmful physical symptoms or reactions during any est training prior to August, 1983.”  The defendants reply was “ None .”  See Exhibit G.

Defendant’s replies filed on or about March 5, 1985 are clearly false in light of the statistical analysis of “severe emotional upsets” shown in Exhibits D, E, and F.

In her first Interrogatory 18, plaintiff requested that defendant identify any and all studies, surveys, tests, ….. conducted by ….. defendant Werner Erhard or Werner Erhard and Associates to evaluate and/or analyze the results of est, or the impact or effect of est on its participants. In an answer filed under oath, the defendant claimed that no studies were made by Werner Erhard or Werner Erhard and Associates (See Exhibit H). This is false in light of the graphs showing the incidence of severe emotional upsets received by counsel (See Exhibits E, F and G).

All depositions in this case conducted after March, 1985, without the benefit of information and documents fraudulently withheld by defendants.

Plaintiff then filed a Second Request for Production of Documents in which she requested in Request No. 31, “Exclusive of any documents prepared in anticipation of litigation, all documents or studies prepared at any time pertaining to the number of suicides, psychiatric hospitalizations, or other psychiatric injuries resulting form attendance at the est trainings.” Defendants replied by stating: This request is objected to due to the fact all formal documents and studies which are known to this defendant have been previously identified; additionally, any other studies what my exist are a matter of public record and are therefore equally available to the plaintiff as  they are to defendants in this matter.

The studies attached as Exhibits D, E, and F were not identified or produced.

In plaintiff’s Second Request for Production of Documents, Request No. 32, plaintiff requested “All incident reports or related type reports referring to unusual behavior of trainees during any est standard training prior to August 30, 1983.” Defendants replied by stating, “This request is objected to due to the fact that any such reports, if in fact exist are reports of an organization, namely est, which is not a party to this action and said documents are not within the control of these defendants.”

In her Second Request for Production of Documents, Request No. 33, plaintiff requested “All incident reports or related type reports referring to unusual behavior of trainees during any est standard training during or following August 30, 1983.” Defendants replied by stating, “This report is objected to due to the fact that any such report if any in fact exist, are reports of an organization, namely est, which is not a party to this action, and said documents are not within the control of these defendants.”

In fact, the documents were in possession of defendants in this case. The responses were false because est is not an organization. It is a training delivered to the public by the defendants. See Exhibit I for above responses.

In a letter related to outstanding discovery issues dated April 5, 1985, and sent to attorney John McGrail, plaintiff’s counsel warned defense counsel as follows: Let me say by way of introduction that it appears as if your clients have adopted the tactic of denying the existence of information or documents when they believe I am unlikely to have prior knowledge or their existence. This is contrary to the spirit and letter of the Federal discovery rules. (See Exhibit J.)

In the same letter plaintiff’s counsel warned defense counsel of his “…conscious intention of preparing a foundation for a motion for a directed verdict on liability for violation of the discovery rules if this is warranted.”

In an attempt to resolve these discovery matters, counsel for plaintiff met with attorneys John McGrail and Martin Leaf in early May of 1985. At that time, Mr. McGrail was counsel of record, but Mr. Leaf (currently a counsel of record) was in control of the defense of this case on behalf of the defendants and specifically appeared to be responsible for the responses to discovery. At this meeting defense counsel agreed to investigate and advise as to “the existence or nonexistence of documents, either specifically labeled as incident or accident reports or which in fact fit that description.” Plaintiff’s counsel summarized the agreements reached in that meeting in a letter dated May 6, 1985, which is attached hereto as Exhibit K.

In response to this letter, defense counsel, John McGrail, by letter dated May 15, 1985, stated (referring to attorney Martin Leaf), “further he has confirmed with the New York area center that nothing like an ‘incident report’ is either prepared or maintained at the New York center.” (See Exhibit L).

This Honorable Court held a status conference on discovery matters on September 12, 1985. In her outline of issues for this status conference, plaintiff presented as an item to be addressed the question of incident reports in response to requests for production Nos. 32 and 33. Plaintiff pointed out that defendant was inconsistently denying the existence of such documents in response to Request for Production No. 1, but in response to Request for Production No. 2 were claiming that if they did exist, they were not in control of the parties to this litigation.

Reference to the transcript of this Status Conference at page 32 shows that plaintiff’s counsel inquired of defense counsel as to their position pertaining to the existence of incident reports. Mr. McGrail replied as follows: “Yes, it is our position that there is no such thing called ‘Incident Reports’ by my clients in the situation. There apparently, at least in this case, was a report file.” The Court then inquired as to the claim for work privilege as to the report in this case, and Mr. McGrail answered in the affirmative.

Plaintiff’s counsel then at page 33 addressed the issue of his belief that the defendant routinely kept incident reports of psychological casualties and physical accidents that occurred in the trainings. The colloquy that occurred is as follows:

Mr. Ragland: I’m really referring to, in addition to those, my belief that this defendant routinely keeps incident reports of psychological casualties and physical accidents that occur in these trainings.

The Court: Have you asked for that?

Mr. Ragland: I have asked for it, and I believe that I don’t have a clear denial on the record.

The Court: Do they keep such records as far as you know? Quite aside from this incident?

Mr. McGrail: As far as I know each incident is probably handled on its own as to whatever happens to it.

The Court: As long as you know that’s his interest. He wants to know whether there are reports, quite apart from this case, which are routinely kept or kept in the normal course of business. You should make such inquiries.

Mr. McGrail: I have.

The Court: Quite apart from any interrogatories or questions which he may put to you and tell him that as soon as possible. So Ordered. (Emphasis by counsel.) See Exhibit M.

In a later motion for sanctions filed in 1985, the plaintiff presented this issue to the Court again. The applicable sections of this motion for sanctions are quoted as follows:

C. Statement as to Existence of Incident Reports - Throughout the course of discovery, plaintiff has attempted to obtain from defendant a clear statement as to whether documents, formally or informally known as “incident reports” or documents serving that function exist. Plaintiff was referring to records routinely kept by defendant (not of this case but of other cases), of psychological casualties and physical accidents that occur in these trainings. As plaintiff was unable to obtain a clear denial of their existence of the record, plaintiff brought this matter to the attention of the Court at  the Status Conference on September 12th.

In response to plaintiff’s counsel’s request for such a statement, the Court told defendant’s counsel, “Quite apart from any interrogatories or any question which he may put to you … you tell him that [i.e., whether such reports were routinely kept or kept in the normal course of business as soon as possible. So ordered.” In disregard of the Court’s order, defendant has not given plaintiff a final statement as to the existence of the “incident reports” nor has there been any communication concerning attempts to obtain this information. Defendant’s failure to comply with the Court’s order has significantly delayed plaintiff’s preparation of the notice aspect of her case and/or the filing of a motion for sanctions concerning the incident reports.

There was a status conference held on December 19, 1985, in which this question was again raised. At page 3 of the transcript, this Court is quoted as follows in an address to defense counsel:

What about the incident reports? At page 34 of the transcript we dealt with the question of incident reports and these also were to be turned over. I take it those haven’t been done either? (See Exhibit N).

At page 7 of the same Status Conference, the Court stated as follows:

I want you to be sure to be in touch with them (referring to attorney Martin Leaf or members of his firm)  and make it very clear that I have no hesitation whatever on this records in  awarding attorney’s fees and in precluding expert testimony, and taking as admitted that the defendants were on notice of the prior psychological and/or physical harm that could be caused unless the defendant complies with the Court’s orders and produce the records custodian before January 15, 1986. (See Exhibit N).

This Honorable Court deferred the consideration of sanctions at the time, because plaintiffs had filed a Notice of Deposition asking the defendants to designate a records custodian to testify as to the existence of documents called incident reports or otherwise descriptive of severe emotional distress, psychological injury or physical injury, etc. At the status conference, apparently Mr. McGrail indicated that such a records custodian would be produced. (See Notice of Deposition attached as Exhibit O). The Court ordered plaintiff’s counsel to report to the court regarding the status of this issue in January of 1986.

At the deposition of January 8, 1986, the defendants produced Armand DiCarlo who described himself as the “Center Manager for the New York Office” (p. 4). At that time he went on to testify that he was appearing on behalf of defendants’ organization (p. 23), that he was a staff member of Werner Erhard and Associates, and that he was not aware of any records or documents or tapes or anything or anything fitting the description in the notice of deposition (p. 27). (See Exhibit P).

Given the sworn testimony of a witness designated by the defendants, the matter was dropped, counsel reported to this Court in January of 1986 that the designated witness had been produced, and proceeded with years of discovery and preparation of witnesses on the assumption that such documents did not, in fact, exist. The Court did award the plaintiff the cost of preparation of one motion. Counsel presented a time statement but believes that the Court never entered a final order for payment.

Plaintiff’s assumption was, in fact, false and materials relevant to an important issue were withheld from this case, this Court, and plaintiff through the fraud of the defendants.

Potential Direct Fraud by a Counsel of Record

The document dated 6/2/83 pertaining to actions to be taken when an incident occurs (authored by Nancy Johnston) refers to a “well-being team”. On page 2 of this document reference is made to a professional advisory board which “operates in an advisory capacity to the participant well-being board on issues requiring objective professional expertise.” Reference to page 5 of this document, also dated June of 1983, shows the name of Marty Leaf, a counsel of record in this case, as a member of the advisory board. It has been well known to plaintiff’s counsel that Mr. Leaf has represented the defendant over a long period of years and is the coordinator of their defense for claims made in the eastern United States. However, as he was a member of the professional advisory board, he also functioned in an administrative capacity to the defendants and apparently was involved in policy making concerning the handling of incidents of severe emotional upsets. Plaintiff’s counsel can made no representations as to the degree of Mr. Leaf’s personal knowledge, but the documents attached suggest that Mr. Leaf has personal knowledge of the process of documenting severe emotional upsets or distress and, if so, has personally committed a fraud upon this Court. Plaintiff’s counsel, lacking independent knowledge of the true degree of Mr. Leaf’s involvement, can only suggest that the Court consider an independent inquiry on this issue based upon the fact that Mr. Leaf appears in an administrative capacity on an organization chart combined with the fact that it was Mr. Leaf who controlled the defendants’ responses to discovery.

Additionally, it should be noted that Art Schreiber, referred to in the letter marked Exhibit B, in the procedures outline in Exhibit C, and on the organizational chart as a member of the “participant well being board”, is an attorney in California generally involved in the defense of claims against defendants.

The Defendants Withheld Important Documents and Materials Pertaining to Methods of Delivering the Standard est Training

In her initial request for production No. 16, plaintiff requested the training manual applicable to the est training. Although the defendants objected at that time, this manual was later produced. However, in her Request No. 17, plaintiff requested the following: Any instruction manual, guideline or explanatory material, other than that produced in response to No. 16, designed to assist the trainer or his assistants in the presentation of  the est training which was applicable to the est training in which Jack Slee participated.

The defendants responded, “None.” In her initial interrogatories answered in March of 1985, plaintiff asked: Does any manual or written guideline exist outlining the procedures to be used or the activities to take place during est training which was applicable to the est training attended by Jack Slee. If so, please identify the manual by title, author, date of compilation or composition, and period during which it was applicable.

In reply, the defendants identified only the training manual which was later produced.

Last month, plaintiff took the deposition of Dr. Jerry Joiner who had been designated as a witness to replace Dr. Mantos, now deceased. In his deposition, Dr. Joiner identified a variety of materials used to train trainers to deliver the standard est training. On page 13 of his deposition he indicates that the trainers in training usually looked at videotapes of the training. He identifies additional training materials as “videotapes, audiotapes, transcripts, and then everything I have described already in terms of participating in the training itself.” When asked about transcripts, he indicated he was referring to transcripts of another trainer leading the training or Werner leading the training. On page 16 of his deposition he states that the trainers were trained by utilizing materials in a library. Dr. Joiner states as follows: “In the Academy Library, we would have tapes, training tools, and that’s where they would go.”  Dep. Page 16.). On page 17, Dr. Joiner stated the videotapes were used to train trainers.  He states as follows:  “The trainer, not just the trainer training to be a trainer, but the trainers as well, people like myself, would view the videotapes basically to study the delivery of the training.”  These videotapes were kept in the same academy library (Page 18).  (See Exhibit Q).

Now, after almost five years of discovery and weeks or months before trial, it is learned that defendants did not fully reply to Request for Production of Documents, Request Nos. 16 and 17, to identify training materials, materials which the defendants will surely claim no longer exist.

The defendants have produced in this case the August B, 1975 videotape of an est training. However, on page 21 of his deposition, Dr. Joiner states that there are other tapes of the “danger processes” that are more representative of the normal est standard training. Dr. Joiner does not know whether or not these materials still exist.

Accordingly, the defendants failed to identify and produce a substantial body of materials utilized to assist trainers in learning to deliver the training and tapes representative of the “danger process” in which Jack Slee died.

Argument

The withholding of information regarding incidents and severe emotional upsets by the defendants goes to the very heart of this case. Jack Slee died of a stress induced cardiac arrest. To the extent that the defendants withheld documentation of prior and severe emotional upsets, the defendants withheld information which would have allowed plaintiff’s counsel to pursue appropriate lines of questioning with lay witnesses, expert witnesses, and which would have affected the preparation of plaintiff’s expert witnesses. The fraud of defendants has persisted through four and one-half years of expensive discovery.

The power of this Court to order sanctions lies in Rule 37, F.R.C.P.

It’s clear that the defendants should be ordered to cease their stonewalling and produce all of their documents pertaining to “incidents” or “severe emotional upsets.” It is important inter alia, to plaintiff’s punitive damages case. However, to limit plaintiff to the remedy of reconducting discovery after four and one-half years would punish plaintiff for defendants’ misconduct. It would cause no less than an additional year’s delay in what is already a lengthy case. It would cost additional time and money. Accordingly, the only appropriate remedy at this time, the final stages of pretrial preparation, is default judgment and issue preclusion as requested in plaintiff’s motion.

Even assuming the court grants plaintiff’s request regarding default judgment and issue preclusion, counsel for plaintiff has conducted years of futile discovery because counsel was denied the documentary tools to make that discovery effective as to a central issue in this case, the question of defendants’ infliction of emotional distress and the casualties prior to the death of Jack Slee. Accordingly, the economic value of years of counsel’s time, innumerable depositions, innumerable trips involving days of counsel’s time, has been effectively wasted and undermined by the fraudulent action of the defendants. Accordingly, it is requested that this court direct the defendants to make a monetary payment to plaintiff and/or plaintiff’s counsel to compensate them for the lost value of this extensive discovery time and the lost value of the money spent for deposition transcripts, airplane tickets, hotels, etc. Counsel estimates that at least 120 days of discovery time have been spent in this case. Assuming an 8 hour day and a reasonable rate of $200.00 per hour for retroactive payment, this time has a value of $192,000.00. Having denied plaintiff the tools to address a central issue through fraud, defendants should be ordered to pay counsel for his time. Additionally, three trips to California were made exclusively for this case and part of two or three other trips were spent in informal discovery, with a total estimated travel cost of $4,000.00. Counsel does not know the total paid for transcripts as of this writing, but estimates the cost at $10,000.00 to $12,000.00. The review of the files and preparation of this notice has required 28 hours of counsel’s time to date. At the regular rate of $125.00 per hour this equals $3,500.00. The value of wasted east coast travel expenses related to discovery is estimated at $2,000.00. Accordingly, plaintiff requests an Order directing defendants to pay plaintiff the sum of $211,500.00.

Since the defendants have demonstrated their lack of trustworthiness in appropriately responding to discovery and since it is clear that there is a pattern of severe emotional upsets which may well result in additional litigation from time to time, it is respectfully requested that this Court enter an order foreclosing at this time any possibility of any resolution of this case which would result in plaintiff’s counsel having to return discovery materials to the defendants. It is respectfully submitted, given the track record of the defendants in this case, that plaintiff’s counsel would be a safer depository for the fruits of discovery, past and yet to be obtained than the defendant.

It is important for plaintiff’s counsel that the Court order the production of the underlying discovery materials in addition to providing sanctions. This is because of the necessity of addressing the question of punitive damages at trial. Additionally, the defendants sough and were granted summary judgment in the case of Urgell v. Werner Erhard and Associates, et al., in a case which was assigned to the Honorable Peter Dorsey in the United States District Court in Connecticut. The defendants’ motion for summary judgment was based upon the lack of foreseeability of psychological injury. In responding to that motion for summary judgment, which was granted, plaintiff’s counsel herein, also counsel for Nancy Urgell, relied upon discovery materials (and the lack thereof) produced by the defendants in this case. Accordingly, the defendants’ withholding of information regarding prior psychological casualties, incidents, and severe emotional upsets (SEU’s) in this case also may have resulted in the granting of summary judgment in favor of defendants in the case of Urgell v. Werner Erhard and Associates. It is important for counsel to receive the discovery materials in this case to determine the appropriateness of petitioning Judge Dorsey to reopen judgment in the Urgell case based upon discovery fraud.

Since the defendants withheld videotapes of trainings and materials used by the trainees, it is requested that this court rule that it is conclusively presumed that the August B video of the “danger process” (the only tape of this process received by plaintiff) is representative of the “danger process” in which Jack Slee died.

WHEREFORE, plaintiff, by counsel, hereby moves this Honorable Court for an order granting the remedies requested in her motion.

Respectfully submitted,

[signature] Gerald F. Ragland, Jr. 526 King Street, Suite 213 Alexandria, VA 22314 (703) 836-2166 COUNSEL FOR PLAINTIFF

William F. Gallagher Gallagher and Gallagher 1377 Boulevard New Haven, Connecticut 06511 (203) 624-4165 CONNECTICUT COUNSEL