ML19344F471
| ML19344F471 | |
| Person / Time | |
|---|---|
| Site: | Summer  |
| Issue date: | 09/11/1980 |
| From: | Brand W BRAND & HALL |
| To: | Chilk S NRC OFFICE OF THE SECRETARY (SECY) |
| Shared Package | |
| ML19344F472 | List: |
| References | |
| ISSUANCES-A, NUDOCS 8009150307 | |
| Download: ML19344F471 (15) | |
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BRAND E HALL ATTORNtYS AT LAW WALLACE EDWARD BRAND k
SECOND FLOOR September 11 is23 t stater,w.w.
zow^^oz^^'H^tt-s wanNcrOs, o. c. 2OoOs SEAN T. BEENY (2O2) 3A7-7002 7 %c
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Honorable Samuel J. Chilk 9
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Secretary 4W 3
U.S. Nuclear-Regulatory ~Commissi k,<h. 4 s
Washington, D.C.
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cp Re:- In the Matter-of South Caro 1 ectric &
Gas Company and South Carolina Public Service Authority (Virgil C.' Summer Nuclear Station Unit No. 1), Docket No. 50-395A
Dear Mr. Chilk:
This is to advise the Commission and the parties that the attorneys for the Department of Justice, Antitrust Division, have returned to counsel for petitioner, documents obtained by the North Carolina Elcctric Membership Corporation through discovery in an antitrust proceeding before the United States District Court for the Middle District of North Carolina, styled North Carolina-Electric Membership Corporation, et al. v. Carolina Power & Light Company and South Carolina Electric & Gas Company, pending the disposition of a Motion for. Protective Order filed by SCE&G.
Petitioner's counsel has responded to that motion on behalf of NCEMC and himself, and for the Commission's information has enclosed a copy of that response.
Tbc District-Court in Greensboro has a substantial workload ano it is likely as a result of the strategic timing of SCE&G's action that it-will have made these documents unavailable to the Department of Justice for its comments as now scheduled.
Some of the. facts disclosed by these documents may go L
beyond the allegations made heretofore in pleadings submitted by petitioner:herein.
These facts will not be available to the Commission for its decision herein unless the Commission makes further opportunity to hear the petitioner and the Department of Justice following disposition of that motion by the U.S. District Court.
Respectfully submitted, Q
h/'k& Y D -c~cf Wallace E. Brand
Enclosure:
cc:
All Parties 6009150[
r UNITED STATEC DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA CREENSBORO DIVISION
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NORTH CAROLINA ELECTRIC MEMBERSHIP
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Plaintiffs,
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) Civil Action v.
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No. C-77-396G
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CAROLINA POWER & LIGHT COMPANY,
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SOUTH CAROLINA ELECTRIC & GAS COMPANY, )
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Defendants.
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OPPOSITION OF NCEMC, ET AL., TO SCE&G'S MOTION FOR A PROTECTIVE ORDER INTRODUCTION In the period 1976-77 Mr. Wallace E.
Brand was retained by the plaintiffs herein and by the Central Electric Power Coopera-tive, Inc. to make a factual and legal investigation to determine whether there were good grounds for their secking relief under the antitrust laws. (Aff. 4 3[ In August, 1977 the plaintiffs herein filed suit. (Aff. 1 4) Central was still negotiating with a power supplier in its area.
When it apeared that further negotiations would be fruitless, Central learned that it could assert its rights under the Atomic Energy Act and filed a petition with the Nuclear Regulatory Conmission. (Aff. 1 5)
In June, 1979 and again in May, 1980, SCE&G produced to plaintif fs thousands of documents pursuant to Rule 34, F.R.Civ.P.
(Aff. 1 12) These were documents which were sought by the
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plaintiffs under Rule 34 bet Jse they were relevant to the instant proceeding. No documents were requested simply because they would be useful in some other proceeding.
(Aff. 1 6)
There was no stipulation or understanding among counsel that these d'ocuments be kept confidential.
Indeed, SCE&G had never even made a request that they be kept confidential. (Aff 1 12)
Whatever SCE&G meant when it made its cryptic statement to the Court on-October 18, 1979 (SCE&G Memo, pp. 1-2),1/
it never
'even bothered to request an informal agreement on confidentiality.
4 On August 6, 1980, before Central had any knowledge of SCE&G's filing of a motion for a protective order, Central sent copies of several hundred of these documents to the Department of Justice. These were documents that Central had intended to use in a pleading to be submitted to the Nuclear Regulatory Commis-sion but which it has not used because of the pendency of this motion. (Aff. 1 14) Justice's attorneys have returned the documents to counsel for Central pending the disposition of this motion. (Aff. 1 14)
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SUMMARY
OF ARGUMENT The proposed order would constitute an unlawful prior res-traint on Central's First Amendment right to use said informa-tion in litigation and would be presumptively invalid. In offering solely the unsupportedwcontentions and conclusions of counsel, SCE&G has not met the heavy burden of showing good 1/
The " protection" referred to implied a suit not yet filed Eut to'be filed in the federal or state courts in South Carolina by Central. No reference was made to Central's action before the Nuclear Regulatory Commission, which as of October 18, 1979, had been underway some eleven months.
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cause for the order. There is no merit to the contention that the fruits of discovery in a case must be used in that case only.
SCE&G has not. offered any facts which would fit this case into the category of the abuse of this Court's process. Public
. policy' favors free use of the information in antitrust enforce-SCE&G's 15-month delay in moving for a protective order-ment.
may work the harsh and unf air result of depriving Central of effective counsel. This is not a case in which discovery wcs made pursuant to an understanding or stipulation on confiden-4 tiality and hence would work an unfair result.
SCE&G has not drawn as narrow and precise a protective order as would be required even if the other standards for such an order were satisfied. Consequently, enforcement of the order would be difficult both for counsel to carry out conscientiously and for the Court to enforce equitably. The information for which protection is sought here is not within the scope of matters specifically entitled to protection under Rule 26(c)(7) and its release would not result in unfairly aiding SCE&G's competition.
ARGUMENT 1.
The Proposed Order Would Be a Prior Restraint On Expression In Violation of the First Amendment To the Constitution.
The question of whether a protective order should issue to
. prevent discovery materlata fqom being used for purposes othe.
,than the purpose of the litigation in which they were obtained is frequently addressed in pretrial motion practice by the I
District Courts where the time for analysis is relatively brief.
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In a few instances, the question has been addressed by the Courts of Appeal with opportunity for e more extended analysis.
The most recent of these cases is a decision of the United
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g-States Court of Appeals for the District of Columbia in In re Halkin, 598 F.2d 176 (1979). This was a ruling on a petition for mandamus to vacate an order of the District Court which had entered a protective order prohibiting plaintiff from' disclosing documents or information except in the proceeding in the Dis-trict Court.
The proceeding was identical to this one in two respects. First, there was no stipulation among counsel that doc uments or information obtained in the course of the proceed-ing would be held as confidential, nor any express or implied 4
agreement regarding their use.
598 F.2d at 180.
- Secondly, Defendant's motion was not accompanied by any affidavits, nor was any other evidence adduced in its support. 598 F.2d at 182.
The plaintiffs in Halkin argued that while the district court's order was not unconstitutional per se as a prior restraint on expression, nonetheless it bore a heavy presumption against its validity. The court held that the right to disseminate such information and documents was protected by the First Amendment and noted that " Litigation itself is a form of expression protected by the First Amendment." 598 F.2d at 187.
Under Halkin. the movant for a protective order must meet three criteria. The harm posed by dissemination must be substan-tial and sericus; the restraining order must be narrowly drawn and precise; and there must be no other means of protecting the public interest which intru3es'less directly on expression.
SCE&G's showing meets none of these criteria. We show below, citing a number of cases starting with Williams v.
Johnson & Johnson, 50 F.R.D. 31 (S.D.N.Y. 1970), that collabora-tive arrangements for discovery in related cases has not been held to be the type of discovery justifying protection, and that even if such collaboration were proved here rather than simply -
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surmised, there'would still not be good cause for a protective order. The requested restraining order in the instant case is not narrowly drawn and precise.2/ lt requests protection for all discovery obtained from SCE&G in this proceeding., Lastly, it would be impossible for SCE&G to show alternative means for o
protecting the public interest which are less intrusive,than the method chosen,Jsince as we show below, public policy favors enforcement of the antitrust laws and free use of discovery
. materials from civil litigation for.that purpose.
The Sixth and Seventh Circuits have taken generally the same approach as the D.C. Circuit in Halkin.
In CBS v. Young, 522 F.2d 234 (6th Cir.1975), the Sixth Circuit held that First Amendment rights even of a non-party could and must be protected and "[t]o justify the imposition of a prior restraint, the activity restrained must pose a clear and. present danger, or a serious or imminent threat to a protected competing-
. interest." The Court also held that' the restraint must be narrowly drawn and cannot be upheld if reasonable alternatives are available having a lesser impact-on First Amendment freedoms.
A similar result was reached in Chase v. Robson, 435 F.2d 1059 (7th Cir., l'970).
In one similar case, a protective order against two attorneys for the plaintiff was upheld by the 10th Circuit, but only after evidence that one of them was inciting to riot with
- w a speech ending in " burn, burn,' burn" and that the_other openly boasted that he told the witnesses what to say.
See United States v. Tijerina, 412 F.2d 661 (10th Cir.), cert. denied 396 U.S. 900-(1969).
27. Nor has SCE&G shown a " concrete threat to an important counteivailing interest" as required )y Halkins. i
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One early case in the Second Circuit, International Products Corp. v. Koons, 325 F.2d 403, 409 (2d Cir.,1963), can be read
'as holding that when taking part in discovery, the parties and
-counsel waive their First Amendment rights.
In Rodgers v.
Unite'd States Steel Corp., 536 F.2d 1000 (3d Cir. 1976), when asked to rule on that claim, the Court assumed the-propopition
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to be correct because it was not necessary to decide the question before it, which involved documents obtained without resort to discovery and hence no waiver could have taken place. However, the HalPin court read the Yoons opinion only as holding that a properly drawn order under Rule 26(c) can be compatible with the First Amendment. 598 F.2d at 189. The Halkin court went on to say that if Koons does stand for the proposition that parties in-a civil action waive their First Amendment rights, it is wrong.
II.
The Burden Is On the Movan't To Show " Good Cause" By Appro-priate Testimony and That Burden May Not Be Met By the Unsupported Allegations and Conclusions of Counsel.
The allegation of harm here is s*;mply'the unsupported allegation that SCE&G will incur harm (with the implication that it is of the kind which the law protects it against) unless the broadly drawn protective order is granted, and the instant documents are proscribed from use in a Nuclear Regulatory Commission proceeding under Section 105(c) of the Atomic Energy Act, 42 U.S.C. 5 2135(c)..
In Essex Wire Corp. v. Eastern Sales Co. Inc., 48 F.R.D.
308,.312 (E.D.Pa. 1969), it was held that in any attempt to keep pre-trial proceedings secret It becomes incumbent upon the defendants to show " good cause" why this information should not be made public [ citations omitted). Moreover as a general proposition,,
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s trial and pre-trial proceedings of the Federal judicial system are ordinarily conducted in public.
Fed.R.Civ.P. 43(a)
Olympic Refining Co. v. Carter, 332 F.2d 260
[ cert. denied, 379 U.S.
900]pthCir.1964)
In Davis v. Romney, 55 F.R.D. 337 (E.D.Pa. 1972), the court,
citing Apco Oil Corp. v.
Certified Transportation Company, 46 R.R.D. 428 (W.D.Mo. 1969), characterized this burden as follows:
It is not necessary to add that the burden of proof will rest upon [ party seeking the Protective Order] and that determination of whether good cause does or does not exist 4
must be based upon appropriate testimony and other factual data, not the unsupported contentions and conclusions of counsel.
In at least one case, the court held that a motion under Rule 26 is a " disfavored motion," Kiblen v. Retail Credit Company,
- 76. F.R.D. 402, 404 (E.D. Wash. 1977), and in requiring the movant to show some " plainly adequate reason" for the order, " insisted on a particular and specific demonstration of fact, as distin-guished from conclusory statements in order to show good cause,"
citing Essex Wire, supra.
III. Public Policy on Antitrust Enfurcement Justifies Free Use of the Information In an Action Under 42 U.S.C. 2135(c).
In pursuing rights under the antitrust laws, plaintiffs in this action, acs acting as " private attorneys general." Bruces Juices Inc. v. American Can Co.,
330 U.S. 743, 751-752 (1974);
Gulf & Western Industries, inch v. Great Altantic E Pacific Tea Co., 476 F.2d 687, 699 (2d Cir. 1973). Central, in pursuing its rights under the Atomic Energy Act, is performing a similar 3/
The Seventh Circuit has also held that "As a general pro-position, pretrial discovery must take place in public unless compelling reasons exist for denying the public access to the proceeding. American Tel. & Tel. Co. v.~Grady, 594 F.2d 594, 596 (1978)..
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function. One commentator has suggested that public policy requires a free dissemination of information gathered'in private antitrust actions.
Dore, Confidentiality Orders -- The Proper Role of Courts in Providing Confidential Treatment for Informa-tion Disclosed Through the' Pre-Trial Discovery Process, 14 New
. England Law Review I at 15, 16:
. Private treble damage antitrust actions, for example, were established by Congress to multiply the means of enforcing the antitrust laws. The optimal enforcement potential of such private actions cannot be achieved if litigants are permitted to prevent or postpone 4 disclosure of important enforcement information obtained through the pre-trial discovery A characteristic of " private attorney process.
general" litigations, is that non-parties have a special interest in the conduct of pre-trial discovery and, as a result, the courts should not leave the management of this area exclusively in the hands of the particular litigants in the individual case.
In such actions, the rights of non-parties may not be adequat,1y protected by the party prosecuting the individual action. The prosecuting party may realize that pre-trial discovery could disclose information which would be useful or vital in the prosecution of similar actions by similarly situated indifiduals. The individual litigant, however, may be willing to permit this information to f -
remain confidential during the course of pre-trial discovery because such confidentiality, while not having any adverse impact upon this individual litigant, may make the prospect of an impending public trial all the more ominous to a defendant, and thus make settlement "on the courthouse steps" more likely.
The court should carefully evaluate stipulated confidentiality orders,in such cases and should refuse to permit the. order if it believes the stipulation is being used to frustrate the ef fective enforcement of the law.
The court should engage in a careful and precise analysis of the nature of the litigation and the information subject to the stipulation before issuing any confiden-tiality order. The court should carefully balance the interests not merely of the parties.before it, but also the public J
interest which would be served by disclosure of the purportedly confidential material.
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In American Tel. & Tel., supra, the Court was impressed by the wastefulness of requiring duplicative discovery by the federal government. 549 F.2d at 597.
The Congress has recognized the policy against restricting
. antitrust pcetrial discovery information in enacting the Publicity in Taking Evidence Act, 37 Stat. 731 (1913) 15' U.S.C. 30, which prohibits outright any protection of deposition testimony in antitrust suits brought by the U.S. government.,
This enactment reversed the result in United States v. United Shoe Machinery, 198 F 870, 871 (1912). While this statute does not expressly apply to discovery in private civil actions, the policy behind its enactment applies equally to broader areas of discovery. See Olympic Refining Co. v. Carter, 232 F.2d 260, 264 (9th Cir. 1964).
Some courts have not permitted this public policy to pre-vail when there was at the time of the disc?osure a stipulation in effect among the parties that the information disclosed would be kept confidential.b/ As previously noted, these cases are inapplicable here where disclosure was made without any stipulation, understanding or_ agreement long before any request for protection was made.
IV.
SCE&G's Abuse of Process Allegation is Unsupported; NCEMC's Sharing of Discovery Materials With Central is Lawful and Even Commendable.
%s The main thrust of SCE&G's motion is the entirely unsup-ported allegation that plaintiffs' counsel is using this antitrust SI See e.g., GAF Corp. v. Eastman Kodak, 415 F. Supp 129, 130 (TY76); contra Olympic Refining Co. v. Carter, Asu ra; American~Tel. & Tel. v. Grady, 594 F.2d 594 (7th Cir. 1979),
1 cert, denied 99 S.Ct. 1533.
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action solely'for the purpose of obtaining information for use in the NRC proceeding. Several of_the precedents cited by movant support only the proposition that-the foregoing alleged fconduct is unlawful.. An identical-claim was unsuccessfully asserted in the case of Essex Wire Corp. v. Eastern Electric Sales Corp., 48 F.R.D. 308, 312 (E.D.Pa.1969), in which the
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befendants have submitted cases to the Court.
which stand for the propsition that discovery proceedings may not be:had solely for the purpose of obtaining information for use in
'anather proceeding._ While the Court agrees with this proposition, the Court does not 4
find it helpful to the defendants in the instant case.
Since-the Court finds this matter relevant and does not have any reason to. doubt the good faith of the plaintiff, the Court holds that the plaintif f may make any lawful use of the information which comes to light during this proceeding.
[ Emphasis supplied'in text]
Defendant's sole contention here is the implication that Central and NCEMC.are collaborating in their discovery
-in some sinister way since they employ the same counsel.
As shown in the annexed affidavit, 11 8, 9 and 10, - there is no such sinister collaboration, no such hidden " forces behind this lawsuit" as SCE&G warns, or attempt at conceal-ment as it suggests, 1 16.
Moreover, even if such col-laboration existed, several courts have refused to enter I
protective orders which prevent disclosure to others liti-gating similar issues on the grounds that the Federal Rules do not prohibit collaboration'in discovery where there was no showing.the moving party was exploiting one case solely to assist in the litigation of another. Williams v. John-son & Johnson, 50 F.R.D. 31 (S.D.N.Y. 1970); Johnson Foils Inc. v. Huyck Corp., 61 F.R.D. 405, 410 - (N.D.N.Y. 1973) :
Am. Tel'., supra, 594 F.2d at 597. In Johnson Foils, the court'specifically; declined a protective order which would g-W
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limit the use of the information in foreign litigation of a closely related nature.
In WI)11ams, it was held that "there is no merit to'the all-encompassing contention that fruits of discovery in one case are to be used in that case on1'y."
50 F.R.D. at 32.
See also F.T.C. v. Anderson, 442 F.2d 1118,1124 (D.D.C. 1977); Patterson v. Ford Motor Co., 85 F.R.D. 152, 154 (D,D.C. 1980).
Indeed, one court has even commended the shared use of discovery in furtherance of the purposes of the federal rules. In Re Upjohn Co. Antibiotic Cleocin Products, 861 F.R.D.
482, 484-485 (E.D ich. 1979).
V.
Compliance With and Enforcement Of the Proposed Broadly Drawn Order Would Be Difficult and Unduly Burdensome.
Lastly, if any protective order should be granted, unless drawn far more narrowly and precisely than the proposed order, it would be almost impossible for the best-intentioned counsel to comply with it and nearly as impossible to enforce it equitably.
Impossibility of enforcement has been found by at least one court to be a power f ul argument against a protective order, Reliance Ins. Co. v. Barrons, 428 F. Supp. 200, 205 (S.D.N.Y. 1977).
In addition, it would create great burdens on both the court and on counsel for Central.
It would apply to all the deposition testimony henceforth, requiring sealing of each deposition and special. cage to insulate it from public disclosure.
Each time counsel for Central wishes to act on each fact in the NRC proceeding, counsel would be required to ponder whether he has that piece of information solely as a result of discovery in the Creenshore proceeding. This task may be so dif ficult to carry out conscientiously that Central's counsel may have to disqualify himself from further proceedings before the NRC..
F Even if this result were tolerable as a general matter, it would be' intolerable in this case.
SCE&G should have pressed its case for-protection at the outset, since it knew in December,
1978 that NCEMC's counsel was also counsel for Central. To require Central to employ new counsel now, in a proceeding more than twenty months old, would inequitably deprive Central of its right to effective counsel and would work against the efficient administration of justice. Marco v. Dulles, 169 F. Supp. 622, 632 (S.D.N.Y. 1959). See also Milone v. English, 306 F.2d 8I4, 818 (1962).
4 CONCLUSION With very little legal foundation and no factual support whatsoever, SCE6C has blithely impugned the motives and practices of plaintif f's counsel, and has burdened the Court by requesting the Court to order that which had never before been requeeted of plaintiffs either formally or informally.
The only harm to SCE&G which can.Se gleaned from a careful reading of the several pages of innuendo in its memorandum, is that it claims it may be injured if the Nuclear Regulatory Commission has SCE&G's internal documents before it to assist the Commission in making its statutory findings under Section 105(c) of the Atomic Energy Act.
The requested order should be denied.
Respec'tfully submitted, W
D Wallace E.~ Brand Sean T. Beeny BRAND & HALL 1523 L Street, N.W.
Suite 200 Washington, D.C.
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4 Thomas J. Bolch P.O. Box 2211 Raleigh, North Carolina 27602 John L. Toumaras 403 Blandwood Avenue P.O. Box 1567 Creensboro, North Carolina 27402 4
DATED: September 4, 1980
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