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May 25 was a bad day in court for Wal-Mart Stores Inc. In a Texas courtroom, one of the company’s top in-house lawyers apologized for Wal-Mart’s “misguided conduct” in a case in which the judge had threatened to fine Wal-Mart $18 million for discovery abuses. Later in the day, a federal judge in Illinois ordered Wal-Mart CEO Lee Scott to answer questions in his court, after saying that a Wal-Mart employee had “lied to cover Wal-Mart’s tracks” in a Tennessee case. Less than a week later, lawyers in the Tennessee case were pointing to both developments to urge a different federal judge to sanction the retail giant. All of this comes at a time when Wal-Mart is defending itself against accusations that it improperly withheld documents and misled plaintiffs and judges across the country in lawsuits involving crimes committed on Wal-Mart premises. The Illinois lawsuit was filed by Ralph Davis, a lawyer at Peoria’s Janssen Law Center, on behalf of Jared Robbins, a teen-ager who was shot through the arm in an East Peoria Wal-Mart in 1997. His attacker was another boy, who shot him with an air rifle and ammunition that he had taken off the store’s shelves. Robbins v. Wal-Mart Stores Inc., No. 98-1239 (C.D. Ill.). After months of back-and-forth disputes, Chief District Judge Michael M. Mihm held hearings to determine whether Wal-Mart had failed to produce documents relating to crime on store premises and on policies for displaying guns. In a telephone hearing on May 25, Mihm rejected the testimony of Ron Lance, a Wal-Mart employee who said that he had never seen a document reflecting a 1993-94 Wal-Mart study of crime committed on store property, despite evidence that he had the document in 1997. “This court believes that had Mr. Lance testified truthfully in this case … it would have cast serious doubt on Wal-Mart’s excuse in the [Tennessee] McClung case” that Wal-Mart did not learn it had the study until 1998, said Mihm. “I do believe that he lied to cover Wal-Mart’s tracks in the McClung case.” The judge also said that Dave Gorman, a Wal-Mart official in charge of loss prevention, was “considerably less than candid” when he testified that Wal-Mart does not keep records of criminal acts in its stores for more than 30 days. It was technically true, the judge found, but a wholly owned Wal-Mart subsidiary, CMI, compiles exactly that type of data for Wal-Mart’s use. Mihm ordered Lee Scott, Wal-Mart’s CEO since January, to appear before him on June 5 to answer two questions: � Who made the decision to stop selling handguns at Wal-Mart in 1993, and on what basis? (This issue related to the discovery dispute.) � Are Wal-Mart’s “discovery compliance deficiencies” or “less than candid testimony” the result of corporate policy? Late the next day, a Friday, Wal-Mart brought in the top-shelf national firm Jones, Day, Reavis & Pogue to contain the damage and to spare Scott a trip to Peoria. At presstime, Jones Day’s motion to reconsider, drafted over the Memorial Day weekend, looked at least partly successful. In a telephone hearing on June 1, Mihm backed off from requiring Scott to testify. Instead, Williams, who apologized for Wal-Mart in Texas, will be required to answer for the company in Illinois. THE EYES OF TEXAS In Texas, meanwhile, Wal-Mart’s mea culpa is part of the endgame to an extraordinary battle over the retailer’s discovery tactics. The Texas lawsuit claimed that inadequate security at a Beaumont Wal-Mart helped lead to the abduction and rape of Donna Meissner in 1996. Meissner v. Wal-Mart Stores Inc., No. A-159,432 (Dist. Ct., Jefferson Co.). Meissner’s case nearly became a sideshow to a fight over Wal-Mart’s discovery tactics in April 1999, when Judge James Mehaffy said that he would fine the retailer $18 million for a pattern of discovery abuses. Mehaffy never made the fine final, but he allowed Meissner’s lawyers to request documents and take depositions on discovery abuse. According to Beaumont, Texas, lawyer Gilbert T. Adams III, Wal-Mart resolved the case with his client on April 13. The terms are confidential. The sanction remains as an issue between Wal-Mart and Judge Mehaffy, but the settlement takes Meissner’s lawyers out of the game. During months of litigating over the discovery sanction, Adams’ firm discovered documents and testimony that may prove damaging in other cases, including: � Internal memorandums showing the success of parking lot security cart patrols — used at some, but not all, Wal-Mart stores — in reducing crime. � A 1994 list of Wal-Mart stores in high- and medium-crime areas. � Correspondence suggesting that some of Wal-Mart’s outside lawyers were kept in the dark about evidence of a crime survey. � An admission by one of Wal-Mart’s in-house lawyers, under questioning by Adams, that Wal-Mart had falsely denied the existence of a crime survey in another parking-lot case. In a prepared statement, read in Mehaffy’s court, Williams, Wal-Mart’s No. 2 in-house lawyer, apologized for Wal-Mart’s conduct and said, “Wal-Mart is engaging in a searching re-evaluation of the litigation processes which have led the parties to the courtroom on this day.” In September, Wal-Mart hired a lawyer to supervise discovery after the company had been hit with 24 discovery sanctions in 18 months. A Wal-Mart spokesman adds that the company is sanctioned in “substantially less than 1 percent” of its cases. “We made a mistake,” he says. For Bruce Kramer, who represents the plaintiff in the Tennessee case, McClung v. Wal-Mart Stores Inc., No. 98-2849, the crime survey evidence has come full-circle. It first came to light in McClung, in the middle of a tortured, 10-year path through Tennessee’s state and federal courts that is still going on. Kramer represents the family of a Tennessee woman who was raped and murdered after being abducted outside a Wal-Mart store. The crime survey evidence would later find its way into Meissner, Robbins and other suits involving crimes on Wal-Mart property. Although the case against Wal-Mart has been dismissed by a federal judge (the dismissal is being appealed), Kramer is using the developments in Meissner and Robbins to bolster his own request for sanctions against Wal-Mart.

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