William Schultz, a former Justice Department lawyer who headed the tobacco case during the Clinton administration, said the memo is key to the government's racketeering case.
''In the context of a fraud case, evidence of intentional document destruction could be very relevant because the whole notion of fraud is that you are deceiving the public," Schultz said. ''Document destruction on a systematic basis could be a central activity in the scheme of fraud."
British American Tobacco owns Brown & Williamson Tobacco Corp., which recently was acquired by R. J. Reynolds. The conglomerate is the second-largest tobacco company in the United States.
The trial is expected to last six months. The fight over the memo is proceeding as the lower court hears other evidence. The trial will continue even if the appeals judges rule that the memo cannot come in.
In the lower court trial, which began last week, the government is seeking $280 billion that cigarette makers allegedly earned through fraud.
Government lawyers have not seen the sealed Foyle memo but know what it concerns because an Australian appeals court decision two years ago quoted the memo.
Bruce Sheffler, representing British American Tobacco, told the three-judge panel of the US Circuit Court of Appeals for the District of Columbia that District Court Judge Gladys Kessler erred when she ordered the memo released.
Sheffler said the document is irrelevant to the case against US cigarette makers because it deals with a foreign market.
US Circuit Court Judge David Tatel said Sheffler was describing the objection in overly broad terms compared with past arguments the company has made.
