Grove Fresh Distributors, Inc. v. Everfresh Juice Co.

• Decision Date: 12 May 1994
• Docket Number: Nos. 92-4038,93-2438,s. 92-4038
• Citation: 24 F.3d 893
• Parties: , RICO Bus.Disp.Guide 8552, 22 Media L. Rep. 1754 GROVE FRESH DISTRIBUTORS, INCORPORATED, Plaintiff-Appellee, v. EVERFRESH JUICE COMPANY and Hugo Powell, Defendants-Appellees. GROVE FRESH DISTRIBUTORS, INCORPORATED, Plaintiff-Appellee, v. JOHN LABATT LIMITED, A Canadian Corporation, et al., Defendants-Appellees. Appeal of AD HOC COALITION OF IN DEPTH JOURNALISTS, Intervenor-Appellant. GROVE FRESH DISTRIBUTORS, INCORPORATED, Plaintiff, v. EVERFRESH JUICE COMPANY and Hugo Powell, Defendants-Appellees. Appeal of Leslie DONLEY, Barry Shore, Sybil Shore, et al., Intervenors-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 893

24 F.3d 893

62 USLW 2722, RICO Bus.Disp.Guide 8552, 22

Media L. Rep. 1754

GROVE FRESH DISTRIBUTORS, INCORPORATED, Plaintiff-Appellee, v. EVERFRESH JUICE COMPANY and Hugo Powell, Defendants-Appellees.

GROVE FRESH DISTRIBUTORS, INCORPORATED, Plaintiff-Appellee, v. JOHN LABATT LIMITED, A Canadian Corporation, et al.,

Defendants-Appellees.

Appeal of AD HOC COALITION OF IN DEPTH JOURNALISTS,

Intervenor-Appellant.

GROVE FRESH DISTRIBUTORS, INCORPORATED, Plaintiff, v. EVERFRESH JUICE COMPANY and Hugo Powell, Defendants-Appellees.

Appeal of Leslie DONLEY, Barry Shore, Sybil Shore, et al.,

Intervenors-Appellants.

Nos. 92-4038, 93-2438.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 14, 1994.

Decided May 12, 1994.

Dale R. Crider, Warren S. Radler, Rivkin, Radler & Kremer, John P. Messina, Chicago, IL, for plaintiff-appellee.

Jeffrey E. Stone, Bruce H. Weitzman, David J. Stetler, Lazar Pol Raynal (argued), McDermott, Will & Emery, Chicago, IL, for Everfresh Juice Co., Hugo Powell, John Labatt Ltd.

Daniel G. Litchfield, Steven M. Kowal, Burditt & Radzius, Chicago, IL, for American Citrus Products Corp., Henry Lang.

John S. Elson, Karen Taylor, Jack Doppelt, Chicago, IL, Mindy S. Trossman, Evanston, IL, for Ad Hoc Coalition of In Depth Journalists.

Kristi L. Browne, Lawrence Walner (argued), Julie L. Murphy, Robert J. Walner, Walner & Associates, Chicago, IL, for Leslie Donley, Barry Shore, Sybil Shore, Don Shifris, Lorraine Wallace, Thomas Scorzo, Pat Gordon, Catherine Thomas, Sam Gordon, Michele Chroman, Melissa Chroman.

Before BAUER, COFFEY, and RIPPLE, Circuit Judges.

BAUER, Circuit Judge.

This appeal requires us to determine the rights of third parties who wish to intervene in pending litigation for the limited purpose of obtaining access to documents which have been shielded from public scrutiny either by seal or by a protective order. At the heart of this dispute are a pair of lawsuits filed by Grove Fresh Distributors, Inc. against various of its competing orange juice manufacturers. The lawsuits are based on allegations that the defendants engaged in a conspiracy to unlawfully adulterate and misbrand orange juice in violation of federal unfair competition laws, Food and Drug Administration regulations, and the federal Racketeer Influenced and Corrupt Organizations statute (RICO). 18 U.S.C. Secs. 1961 et seq. In the first of these cases, filed in 1989 (the " '89 case"), the district court issued a protective order limiting Grove Fresh's ability to disclose information obtained from the defendants by virtue of the discovery process which the defendants classified as confidential. In a subsequent lawsuit involving similar claims, filed in 1990 (the " '90 case"), the district court sealed the entire court file.

Two different sets of intervenors requested leave to intervene in the cases for the purposes of modifying the protective order in the '89 case and vacating the seal in the '90 case. The first group of intervenors are plaintiffs in a separate group of class action cases. Also citing unlawful adulteration and labelling practices, these intervenors ("Consumers") are suing many of the same orange juice manufacturers for consumer fraud and breach of warranty. The Consumers wish to spare the time and expense of a separate pre-trial discovery process by obtaining access to the discovery produced in the Grove Fresh cases. They believe that due to the factual similarity between their case and the Grove Fresh cases, much of the relevant material will be the same. The trial court rejected the Consumers' motion to intervene because the court believed that they lacked standing and that they would not suffer any prejudice from the denial.

The second group of intervenors, The Ad Hoc Coalition of In-depth Journalists ("Coalition") represent a group of professional journalists. Their attempt to vacate the seal in the '90 case and modify the protective order in the '89 case was denied by the district court on November 20, 1992. In its opinion, the court recognized that the Coalition had a right to any court decisions in the case and any documents upon which the court relied in making its decisions. Despite this acknowledged right, for reasons of expedience, the court refused to grant access to the Coalition until the proceeding was completed. The district court also denied the Coalition's motion to modify the protective order in the '89 case because in its view the Coalition had no standing nor any rights on the merits to have access to materials which were part of the discovery process.

The '89 case was dismissed pursuant to the defendants' successful motion for summary judgment on February 21, 1992. In late April of 1993, the '90 case was dismissed pursuant to a settlement among the litigants. The Coalition renewed its request to vacate the seal on June 1, 1993. The district court denied the request.

The differences between the two types of intervenors require us to analyze their claims separately. We begin with the Consumers.

I.

We address, as a preliminary matter, our appellate jurisdiction here because in their briefs, the defendants in the Grove Fresh case, The Everfresh Juice Company and John Labatt Limited, suggest that the order denying the Consumers' motion was not an appealable order. At oral argument, counsel for the defendants acknowledged that the proceedings in the two cases are now complete and it is not clear whether they adhere to their original position on jurisdiction. Nevertheless even if proceedings below were not complete, our decisions make it evident that an order granting or refusing to grant access in favor of an intervening party is appealable under the collateral order doctrine. Wilk v. American Medical Ass'n, 635 F.2d 1295 (7th Cir.1980) (refusing to modify a protective order); American Tel. &amp Tel. Co. v. Grady, 594 F.2d 594 (7th Cir.1978) (modifying a protective order), cert. denied, 440 U.S. 971, 99 S.Ct. 1533, 59 L.Ed.2d 787 (1979). Thus, even though the order did not end the litigation on its merits, the order was immediately appealable. Everfresh and John Labatt also suggest without elaboration that the Consumers lacked standing to intervene in this case. It is apparent, however, that intervention is the procedurally appropriate course for third-party challenges to protective orders. See id.; United Nuclear Corp. v. Cransford Ins. Co., 905 F.2d 1424 (10th Cir.1990), cert. denied, 498 U.S. 1073, 111 S.Ct. 799, 112 L.Ed.2d 860 (1991); Public Citizen v. Liggett Group, Inc., 858 F.2d 775 (1st Cir.1988), cert. denied, 488 U.S. 1030, 109 S.Ct. 838, 102 L.Ed.2d 970 (1989). Hence, Everfresh and John Labatt's jurisdictional challenges are unavailing.

Everfresh and John Labatt also argue that because the Consumers failed to serve them with its motion to intervene, the motion was properly denied. This claim ignores the facts of the case. As originally filed, the motion to intervene was directed only to the '90 case. Due to the seal, which included within its terms the docket sheet, the identities of the defendants and their counsel of record were unknown, and they, therefore, could not be served. The Consumers then amended their motion to include the '89 case, but the court denied the motion before the Consumers had a chance to serve the defendants. Because the failure to serve the defendants in this case was justifiable, Everfresh and John Labatt's procedural challenge is also without merit.

As for the merits of the district court's decision, we find our decision in Wilk to be dispositive. In Wilk, five chiropractors sued various medical organizations, alleging a conspiracy to violate federal antitrust laws. The State of New York then filed a federal antitrust suit against many of the same organizations. Though the causes of action in the two suits were not identical, both were directed at similar wrongdoings. At the time of the second suit, discovery in the first action was nearly concluded but the court had entered a protective order prohibiting the plaintiffs from revealing the contents of any materials which the defendant had labelled as confidential. The State of New York requested that the protective order in the first case be modified so as to allow it access to discovery materials. The district court denied the motion for intervention.

Reversing the district court, we held that where a third party wishes to modify a protective order so as to avoid duplicative discovery in collateral litigation, policy considerations favoring the efficient resolution of disputes justify modification unless such an order would tangibly prejudice substantial rights of the party opposing modification. Wilk, 635 F.2d at 1299. Even if such prejudice is demonstrated, the court has broad discretion in determining whether the injury outweighs the benefits of modification. Id.

Applying this test to the facts in Wilk, we recognized that as a bona fide litigant, New York had a legitimate basis for its request, and that because the allegations in the two matters were virtually identical, much of the material produced in the first action would be relevant and eventually discoverable. Thus, we concluded that New York was presumptively entitled to access to the Wilk discovery on the same terms as the Wilk plaintiffs. On remand, the burden was placed on the parties opposing modification to establish that the intervenors would not be entitled to certain materials. Id. at 1301.

The reasoning of Wilk applies with equal force here and we therefore remand the case to the district court with directions to reconsider, in light of Wilk, the Consumers' motion to intervene. Our holding in no way diminishes the defendants' rights to limit the Consumers' access so as to retain protection for items which would ordinarily not be discoverable due to privileges or irrelevance. Moreover, if the district court finds that there are legitimate secrecy concerns, the seal and protective order need only...