Eastman Kodak is expected to try to reverse a $113 million antitrust judgment recently handed down against the company by a federal jury here by claiming in part, that serious errors were committed by the outside law firm which represented the photographic giant.
That appears to be the upshot of an announcement Kodak made on Wednesday that it was jettisoning Donovan, Leisure, Newton and Irvine, the firm representing the company in the Berkey Photo antitrust suit since 1973, and would replace it for appeals purposes with Sullivan and Cromwell, which has done other antitrust work for Kodak.
While individual defendants in criminal trials frequently have based appeals on the claim they were denied effective counsel, such a move would be highly unusual in a civil case involving a large corporation with a well-paid law firm.
John Doar, the former counsel for the House Judiciary Committee's inquiry into President Nixon's impeachment, was the chief Donovan, Leisure trial counsel representing Kodak in the courtroom.
Behind Kodak's action is a startling series of developments that took place in the final week of the six-month trial, involving the sudden appearance of analytical documents that the opposing counsel for Berkey had requested, but which Donovan,Leisure inside partner had sworn in an affidavit had been destroyed.
The revelation that the documents existed served to undermine testimony by the final witness in the trial, Merion Peck,a Yale economics professor and a former member of President Johnson's Council of Economic advisers, who had prepared some of the documents and who was appearing on behalf of Kodak as an expert witness.
Kodak general counsel Kendall Cole, calling the matter and "unfortunate incident," said that, "Since Berkey used the withholding of documents to challenge the credibility of KODAK's defense before the jury, the indident raised a possible conflict of interest between the company and its law firm regarding this aspect of the case."
He noted that "neither Kodak nor Doar was aware that the document in question had been retained and withheld or that the Donovan, Leisure partner's document was erroneous." Mahlon Perkins Junior, the partner who had given the sworn affidavit in question, resigned on March 20.
Doar, reached by telephone, declined any comment on the matter.
An attorney with Parker, Chapin, Flattau and Klimpl, which represented Berkey, said his firm's position was that nothing occurred during the course of the trail that would serve to reverse the jury's verdict.
Neither Cole nor anyone else connected with Kodak would expand on the prepared announcement regarding the switch in law firms.
Legal observers speculated that, besides citing inadequate defense, Kodak might seek a new trail on the basis that U.S. District Court Judge Marvin Frankel Prejudiced the proceedings by allowing the jury to hear cross-examination about the witholding of documents. And some observers said it was possible that Kodak also is contemplating a negligence suit against Donovan, Leisure.
Reference to the trial record shows that problems began to surface on Jan 5 when Peck was on the stand, testifying that Kodak's dominance in the photography market was due to its ability to innovate and not to grow through acquisitions.
This provided a wedge for Berkey attorney Alvin Stein to bring up a 1975 antitrust decree against Kodak, which was based in part on violations resulting from purchase of competitors. The Kodak lawyers argued that the 1915 decree was no longer relevant and should not be introduced before the jury during cross-examination of PecK.
Then, a 1974 letter written by Peck surfaced which stated difficulties he might have in making his case about kodak's reliance on innovation in light of the 1915 decree. The letter, it turned out, was one of a number of documents that he had forwarded to Donovan, Leisure in boxes and suitcases and which were the ones that supposedly had been destroyed.
Doar objected to cross-examination about either withholding or distruction of evidence, claiming it would prejudice the jury against Kodak.
"All of the documents that I know of have been produced to Mr. Stein for his cross-examination with respect to Dr. Peck's opinion," Doar told the judge. "The matter of the destruction of the documents seems to me to be so prejudicial to Kodak as against the relevancy of or as against the going to Professor Peck's credibility that the prejudice would outweigh any possible issue of credibility."
To which Judge Frankel responded:
"I don't understand how you can say that when a few minutes ago Mr. Stein told me that at your instance Peck looked in his files over the weekend and found some that were not sent back and not destroyed both, and if that doesn't go to his credibility I don't know what does. For his $60,000 or $70,000 (fee from Kodak) he ought to look in his files."
On cross-examination, Stein then asked the professor to recall whether "Mr. Perkins, a member of the firm of Donovan, Leisure in your presence" during a pretrial deposition the previous April had told Stein "that all of that material had been destroyed?"
"Yes, "Peck responded.
"Do you know now those representations to be untrue? Stein continued.
"Yes," Peck replied.
The Yale professor then recalled that one of the reasons he had been asked to forward the material to Donovan, Leisure was not only to preserve its confidentiality, as he previously had asserted, but also in anticipation of discovery requests by attorneys for Berkey for material he then could claim he no longer had in his possession.