Draft letter to Judge Downes

Privileged and Confidential Joint Defense Communication

From: Don Schultz
To: All Quinque JDT Participants
Re: Reply to Grynberg letter requesting discovery.

Set out below is a draft letter which is being circulated among
the Grynberg defendants for possible submission to Judge Downes. I have not
heard any suggestion that the Quinque defendants should weigh in on the
subject of whether or not Grynberg should be allowed the discovery he
requests, which seems to be a FCA subject. There is no requirement that the
Quinque defendants submit anything on this. Please let me know if you think
there is a need for the Quinque defendants to speak to this topic. Don.

Re: In re Natural Gas Royalties Qui Tam Litigtion, MDL Docket No.
1293, All Cases

Dear Judge Downes:

The Coordinated Defendants in the Grynberg cases respond as follows
to the Court's invitation to submit comments on discovery issues related to
the Government's motion to dismiss portions of the Grynberg complaints:

First, the Coordinated Defendants' silence, as a group, regarding the
Government's motion to dismiss should not be viewed as an indication that we
believe the Government's motion lacks merit. The Defendants have simply been
at a disadvantage in presenting their views because the Government's motion
is in large measure dependent upon facts, such as the adequacy of the
submissions Grynberg made to the Government, not known to the Defendants (due
in part, as discussed below, to Grynberg's failure to serve the Defendants
with materials he has submitted to the Court).

The Coordinated Defendants remain of one mind, however, in their
belief that all of the Grynberg complaints should be dismissed for the
entirely separate reasons that they are improperly pled under Fed. R. Civ.
Proc. 9(b) and fail to state a claim under Fed. R. Civ. Proc. 12(b)(6). The
Coordinated Defendants are also united in their belief that consideration of
the Government's motion should not take precedence over the Coordinated
Defendants' pending motion to dismiss. We were thus pleased to learn at the
status conference on December 7, 2000 and from the Court's Order Following
Status Conference that the Court proceeding ahead with a ruling on the
Defendants' pending motions to dismiss without regard to other pending
matters.

Specifically with regard to Grynberg's position on discovery, as
outlined in Mr. Figa's letter to the Court on December 8, 2000, we feel
compelled to point out that the Grynberg request for discovery has
implications far beyond the narrow issues raised by the government's motion
to dismiss. Grynberg essentially is requesting discovery on whether he or
Wright is the proper relator on royalty valuation claims. See Dec. 8 letter
at 2-3. While Grynberg is not necessarily volunteering to open himself up to
discovery on whether he is the original source of the information he claims
to have given to Wright's attorneys, he is specifically asking for public
disclosure/original source discovery from Wright, and certainly the discovery
Grynberg is seeking may well overlap discovery on whether he himself was the
original source.

In light of this fact, we remind the Court that the Coordinated
Defendants have, with the Court's concurrence, delayed seeking discovery on
and filing their own public disclosure/original source motion until the Court
has ruled on the pending motions to dismiss the Grynberg complaints and, if
necessary, any subsequent constitutional challenges to the Grynberg
complaints. That orderly progression should not be upset by the sudden
intrusion of the Government's motion and Grynberg's request for discovery.
Therefore, if the Court should decide that some discovery between and among
Grynberg, Wright and the Government is appropriate to resolve the limited
issues raised by the Government's motion to dismiss, we respectfully request
that the Court make it abundantly clear that such discovery will in no way
prejudice or restrict the right of the Defendants in the Grynberg cases to
take their own discovery at the appropriate time (and assuming these cases
have not previously been dismissed) on the public disclosure/original source
issues.

Finally, we respectfully request that, whether or not the Court
grants Grynberg's request for discovery, it enter an order directing that any
information produced in discovery or submitted to the Court in this case be
provided to all parties alike. This requirement is so fundamental that it
ordinarily does not require an order of the Court to implement. However,
Grynberg has already submitted to this Court under seal documents that he
claims support his position on the Government's motion to dismiss, and he has
requested that the Clerk not make those documents available to the
Defendants. Absent direction to the contrary from the Court, the Clerk has
thus far complied with Grynberg's request and denied the Defendants access to
those documents. This submission of documents to the Court by Mr. Gynberg is
a clear violation of Fed. R. Civ. P. 5(a), which requires that all filings,
with the limited exception of motions that the movant specifically requests
be heard ex parte, be served on all parties. If Grynberg truly has a
legitimate reason for asking that the documents be placed under seal (such as
that they contain proprietary information), the Defendants will happy to
agree to an appropriate protective order restricting access to those
documents. But in no event should the Defendants be denied any access
whatsoever to documents relevant to these cases.

The Coordinated Defendants appreciate this opportunity to present
these views to the Court.

Respectfully submitted,