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Stung by bad publicity and by dozens of rulings that it has withheld, hidden or destroyed evidence in cases across the country in recent years, lawyers for Wal-Mart Stores Inc. insist that the company has taken steps to ensure that such obstruction doesn’t happen in the future. They note that Wal-Mart has added to its in-house legal department, set up special teams to coordinate pretrial discovery and brought in a top-shelf law firm to figure out what the company was doing wrong and how to fix it. The result, after more than a year working on the problem: Wal-Mart claims that it has cut the number of sanctions against it in half. And the retailer vows to do better, having set a “zero tolerance” standard for court sanctions. “It’s Wal-Mart’s policy to play by the rules,” says General Counsel Robert K. Rhoads. If so, it’s clear that not everybody working on Wal-Mart’s 10,000 lawsuits has gotten the message. Ask Matthew Block. In October, Block was a month away from trial in a slip-and-fall case against Wal-Mart in Louisiana state court, when Dawn Steib walked into his Thibodeau, La., law office, unannounced. Block’s client, a retired oil worker named Cleveland Bergeron, had slipped on a wet floor in the Thibodeau Wal-Mart one rainy night in 1998, suffering a nasty broken ankle. Steib, a former store employee, handed over two statements written shortly after the accident. One was Steib’s. The other was from Nikki Blanchard, still employed by the store, whom Wal-Mart had failed to identify as a witness during discovery. The statements were devastating. According to Steib and the statements, Blanchard had photographed the accident scene but was told to destroy the pictures and take new ones once the floor had been dried and warning cones put in place. Blanchard wrote that she had slipped on the same patch of wet floor just after Bergeron. Steib then swore, in an affidavit for Block, the plaintiff’s lawyer, that she had given the statements to Wal-Mart’s lawyers months before she walked into his office. “This is the kind of thing you usually see only in the movies or in John Grisham novels,” said Block about Steib’s evidence. Apparently hoping to keep the new evidence from a jury, Wal-Mart admitted liability for the accident. Block filed a motion for sanctions and put on a trial limited to determining Bergeron’s damages, which the jury set at $112,000, including interest. Shortly after the trial, Wal-Mart filed notice that it would appeal, but then it agreed to pay Bergeron $128,000 to settle — a $16,000 premium on top of the jury award. The sanctions motion became moot. Bergeron v. Wal-Mart Stores, No. 85405 (Dist. Ct. Laforche Par.). Then, the week after the trial, Block testified in an unrelated Texas case about Wal-Mart’s actions in Bergeron. The Texas case involved a man who claimed that he had been injured by merchandise falling off store shelves. Christ v. Wal-Mart, No. 55747 (Dist. Ct. Liberty Co.). On Jan. 2, the judge in the Texas case fined Wal-Mart $73,000 for producing a “false and misleading” incident report. Wal-Mart has appealed. According to Wal-Mart, the documents were accidentally misfiled by store employees in both the Bergeron and Christ cases. The company’s lawyers and corporate-level employees were unaware of the documents, says a spokesman. ANTI-TRUSTWORTHY? Wal-Mart has recently been accused of hiding the ball in some big cases, too. In a huge antitrust case in Brooklyn, N.Y., federal court, defendants Visa USA and Mastercard International accused Wal-Mart of destroying and withholding evidence. In re Visa Check/Mastermoney Antitrust Litigation, No. 96-5238 (E.D.N.Y.). (In November 2000, District Judge John Gleeson declined to dismiss Wal-Mart from the case, saying that even if the charges against Wal-Mart were true, the requested sanction was “too onerous.”) Much of Wal-Mart’s sanctions trouble dates back to a case involving a woman who was abducted from outside a Memphis, Tenn., Wal-Mart in 1990, then raped and murdered. Wal-Mart told the plaintiff’s lawyer, Bruce Kramer of Borod & Kramer in Memphis, that it had not done any studies of parking lot safety. But in 1996, the dead woman’s husband learned that the company had conducted a pilot program showing that store parking lots could be made safer, cheaply, with roving parking lot patrols. Still, in many similar cases, Wal-Mart lawyers continued to deny that the study existed, even as some plaintiffs’ lawyers began circulating the evidence. Then, in 1999, lawyers from the Law Offices of Gilbert T. Adams in Beaumont, Texas, persuaded a judge to fine Wal-Mart $18 million for failing to reveal the study in another parking lot rape-abduction case. The judge withdrew the sanction when Wal-Mart settled the case, but only after its No. 2 lawyer made an extraordinary in-court apology for the company’s “misguided conduct” in the case in May. Meissner v. Wal-Mart Stores, No. A-159,432 (Dist. Ct. Jefferson Co.). To help address its mounting discovery troubles, in September 1999 Wal-Mart hired a local attorney, Jay Saxton, to act as a sort of in-house consultant on discovery matters. The company has also added two discovery teams, each composed of a lawyer and two paralegals, according to Saxton. And Wal-Mart’s legal department has added four new lawyers to handle tort cases. Still, there have been problems. In December 1999, three months after Wal-Mart hired Saxton and at a time the company was facing the $18 million sanction in Texas for similar behavior, company lawyers told yet another plaintiff’s lawyer that the company had no study of parking lot safety. Simon v. Wal-Mart Stores, No. 80,299 (La. Dist. Ct. Livingston Par.). A motion for sanctions is pending. “That was a screw-up,” admits Bill Wertz, a company spokesman. “Collectively, we did not respond correctly.” At the retailer’s request, 1,400-lawyer Jones Day Reavis & Pogue spent six months looking at Wal-Mart’s discovery process and how Wal-Mart manages litigation generally. “They’ve devoted considerable resources to addressing this problem,” says Jeffrey S. Sutton, a partner in Jones Day’s Columbus, Ohio, office. “My sense is, they’re on the right track.” According to Wal-Mart, there were 10 sanctions against the company last year, compared with 22 in 1999 and 20 in 1998.

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