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When W. Thomas Haynes was reorganized out of his job as general counsel for The Coca-Cola Co. subsidiary Coca-Cola North America in 2001, the company gave its blessing for him to take a position as executive director of the Coke bottlers association. Jeffrey T. Dunn, then chief executive of Coke’s North American and South American subsidiaries, gave Haynes written reassurances that the Coke bottlers’ position didn’t pose a conflict, with the exception of several specific legal matters in which Haynes agreed not to participate. Coke was so supportive of Haynes’ move that it issued a news release in which Dunn said he was “pleased” that Haynes would “continue his leadership in the Coca-Cola family.” Five years later, such magnanimity has vanished. A King & Spalding lawyer who represents Coke has accused Haynes of violating his “professional and ethical obligations as an attorney.” Coke has offered, without success, to pay Haynes to leave the bottlers’ job and has said it is prepared to seek sanctions against him. Business, not legal advice Haynes argues in court filings that many of the matters he worked on during 16 years as a Coke in-house lawyer constituted business, not legal advice, or reflected Coke’s public position, and therefore were not covered by attorney-client privilege. In addition, Haynes pointed to written agreements he secured from Coke that Haynes said limit his obligations regarding disclosure of company business. Like his predecessors at Coke, Haynes’ boss clearly deemed it advantageous for Coke to have one of its own working for the bottlers, overruling some in the corporate legal department who feared potential conflicts of interest. But the disagreement, which simmered for four years, developed into a crisis when 55 independent bottlers filed a federal suit in February against The Coca-Cola Co. and Coca-Cola Enterprises, the company-affiliated bottler, over who has the rights to distribute Powerade, Coke’s sports drink. Coke wants to bypass the bottlers and ship the sports drink directly to Wal-Mart Stores Inc. warehouses for distribution to Wal-Mart’s retail stores. The independent bottlers claim that the direct distribution violates their contracts with the company and disrupts the bottlers’ historical role. Powell Goldstein attorney William V. Custer, who represents the bottlers, said that if Coke distributes Powerade directly to Wal-Mart, it could cost his clients “hundreds of millions of dollars in sales.” Although Haynes doesn’t represent the bottlers as counsel in the litigation, he has said that he has the right to provide business and legal advice on the issue, and has done so. The bottlers’ attorneys have also indicated they may call Haynes as a witness in the litigation. Haynes’ possible testimony, according to Custer, could be pivotal in the suit. Custer said Haynes would testify that Coke’s current view of the contract “is very different than the position they espoused back in 1997 and 1993 when the contracts were negotiated.” Coca-Cola lawyers are asking U.S. District Judge Jack T. Camp in Atlanta to bar Haynes from testifying in the case or providing any advice to bottlers on the business issue. Haynes said that Coke’s motion to disqualify him “is not a conventional disqualification motion.” Instead, Haynes said, Coke lawyers intend “to prevent me from testifying on non-privileged matters” and, he added, “to prevent me from participating in any way” in the ongoing litigation. An outraged ex-GC Haynes is particularly outraged over the challenge to his professional ethics. Coke’s motion to disqualify Haynes as counsel for the plaintiffs includes stiff language suggesting that, as executive director of the Coca-Cola Bottlers Association, Haynes may violate Georgia’s legal professional ethics code and the sanctity of his 16-year attorney-client relationship with Coke. In an interview with the Fulton County Daily Report, an affiliate of The National Law Journal, Haynes insisted, “It never occurred to me that anyone would see this as presenting even an arguable issue on conflicts.” He said Coke has long had a revolving door among lawyers at Coke corporate, the bottling companies, the bottlers association and the company’s law firms. Coke attorneys who have been involved in the ethics challenge declined to comment. But Coke spokesman Dan Schafer said, “No matter what Mr. Haynes says in his affidavit, the fact remains that he is legally representing a group of plaintiffs who are suing the company on an issue for which Mr. Haynes had previously provided legal counsel for the company . . . .He has acknowledged he is working as an attorney for the plaintiffs. So what we are saying is that he is prohibited by Georgia law and legal ethics from doing that. We would argue that he is prohibited from providing testimony on matters he provided legal counsel on to the company previously.” According to a letter included in the court file from Don Knauss, the COO of Coke North America, to the Coca-Cola Bottlers Association, Coke executives suspected Haynes of pushing bottlers to sue the company while blocking attempts by Coke management to resolve the dispute internally. In his letter, dated Feb. 13, 2006, Knauss accused Haynes of obstructing Coke’s efforts with “primarily unfounded legal concerns.” “I am concerned that CCBA [Coca-Cola Bottlers Association] and its members would rely on such clearly incorrect legal advice, and I fail to grasp how allowing Mr. Haynes to inject these questionable legal theories into our business discussions can possibly help move us toward a successful resolution,” Knauss wrote. Knauss continued in the letter: “We acknowledge that some of your members, based on questionable legal advice and at the urging of Mr. Haynes, may actually choose to sue us in an attempt to enforce non-existent contract rights . . . . Led by Mr. Haynes, over the past few months your organization has consistently adopted a confrontational, litigation-oriented approach to this and numerous other issues, repeatedly threatening us with lawsuits and raising questionable legal theories. “When our attorneys have tried to engage with your lawyers to attempt to understand our differences on the legal issues, they have gotten limited or no response. Even worse, your organization’s constant legal posturing has created an environment in which it is very difficult to negotiate a business resolution at this critical juncture,” Knauss’ letter stated. Haynes’ personal lawyer, Emmet J. Bondurant, calls allegations that Haynes has violated professional ethics “a good deal of bluster” on the part of Coke lawyers that is intended to prevent Haynes from providing testimony for the bottlers. “Frankly, it is that testimony, more than any other, that Coke would like to prevent him from providing,” Bondurant said. “What they’d like to do is bury him, embalm him, or whatever.” In 2001, Haynes was among three Coke executives, all of them attorneys, who were candidates for executive director of the bottlers association, according to Haynes’ affidavit. Haynes said at the time that he knew the association and its members regularly negotiated with Coke corporate over contractual issues, some of which had crossed his desk when he was at Coke, and that occasional conflicts of interest were inevitable. But Haynes also knew that during his tenure at Coke, lawyers and other executives routinely moved back and forth between Coke corporate and the bottling system. Three of Coca-Cola Enterprises’ general counsel had served as in-house counsel at Coke corporate, according to Haynes’ affidavit. Two of them had also served as lawyers for two different bottlers. Four of Coke corporate’s general counsel had also served on the governing boards of various bottlers. However, to be “prudent,” Haynes said that before accepting the job, he sought approval from Dunn, who at that time was Haynes’ boss and CEO of Coke’s operations in North and South America.

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