Jepson, Inc. v. Makita Elec. Works, Ltd.
| Decision Date | 22 August 1994 |
| Docket Number | No. 92-3687,92-3687 |
| Citation | 30 F.3d 854 |
| Parties | JEPSON, INCORPORATED and Ko Shin Electric and Machinery Company, Limited, Plaintiffs, v. MAKITA ELECTRIC WORKS, LIMITED, Makita USA, Incorporated and Makita Corporation of America, Defendants-Appellants, and William A. ZEITLER, Douglas J. Colton and Verner, Liipfert, Bernhard, McPherson & Hand, Appellants, v. BLACK & DECKER, INCORPORATED, Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Jeffrey A. Orr, Frederick J. Sujat, Klayman & Associates, Washington, DC, for plaintiffs.
James K. Gardner (argued), Phil C. Neal, James H. Bowhay, Ralph T. Russell, Bradley C. Twedt, Neal, Gerber & Eisenberg, Chicago, IL, for Makita Elec. Works, Ltd., Makita USA, Inc., Makita Corp. of America, William A. Zeitler, Douglas J. Colton, Verner, Liipfert, Bernhard, McPherson & Hand.
Raymond P. Niro, John C. Janka (argued), Niro, Scavone, Haller & Niro, Chicago, IL, Mark D. Gately, Daniel R. Lanier, Steven F. Barley, Miles & Stockbridge, Baltimore, MD, for Black & Decker, Inc.
Before CUMMINGS, KANNE, and ROVNER, Circuit Judges.
Jepson, Inc. and Ko Shin Electric and Machinery Co., Ltd. filed suit against Makita U.S.A., Inc., Makita Corporation of America and Makita Electric Works, Ltd. (hereafter collectively referred to as "Makita") for alleged violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. Sec. 1961 et seq. and various state law provisions.
During discovery, Makita served a Notice of Deposition on the Black and Decker Corporation ("Black & Decker"), pursuant to Fed.R.Civ.Pro. 30(b)(6), seeking to depose a representative of Black & Decker knowledgeable about "foreign and domestic competition in the United States power tool industry; the geographic and product markets for power tools in the United States; the importation into the United States of power tools; the manufacturers and importers of power tools sold in the United States and their product lines and sales; labeling of domestic content requirements; trademarks of power tools in the United States; the reputation and performance of power tools manufactured in the United States and abroad." 1 In response to the Notice of Deposition, Black & Decker offered the testimony of Joseph Galli, Jr., Vice President of Marketing for Black & Decker's power tools group.
Prior to Galli's deposition, Makita and Black & Decker entered into a Stipulated Protective Order which provides in pertinent part:
1. This Protective order shall apply to all information conveyed by Black & Decker, Inc. (hereinafter termed "conveying party") to another party (hereinafter termed "receiving party") in this action pursuant to the Deposition Subpoena and Notice of Deposition served upon it.... CONFIDENTIAL MATERIALS are any DISCOVERY MATERIALS that contain trade secrets or other confidential research, development, financial, corporate, or commercial information of the conveying party. Subject to the terms set forth below, all information produced by the conveying party shall be used by the receiving party solely for the purposes of preparing for and conducting this action and shall not be used for any other purpose.
2. Counsel for the conveying party may designate as CONFIDENTIAL MATERIALS any deposition testimony that counsel in good faith considers to contain or reflect research, financial, commercial, business or other information that the conveying party deems confidential.
....
9. In the event counsel for the party receiving CONFIDENTIAL MATERIALS objects to the designation of any or all such items as being designated CONFIDENTIAL MATERIALS, said counsel shall advise the conveying party, in writing, of such objections and the reasons therefore. If the parties fail to resolve the dispute among themselves, it shall be the obligation of the party objecting to the designation of material as CONFIDENTIAL MATERIALS to file, within (5) days after notifying the conveying party of its objections, an appropriate motion to obtain a prompt ruling from the Court concerning the confidentiality of the items in dispute....
Through an oversight, the Stipulated Protective Order was never submitted to the district court.
The parties to the litigation, but not Black & Decker, further stipulated to an Agreed Interim Protective Order ("IPO") which provides in pertinent part:
1. [T]he following information shall be considered "Confidential Material" and may be used in this action as set forth in this Interim Protective Order ("IPO"), subject to objections from opposing parties: All documents, things, pleadings, and deposition transcripts labeled "Confidential" produced or taken by plaintiffs and defendants from each other or from third parties in this litigation, subject to challenge by any opposing party(s) within 20 days of entry of this IPO or 10 days of production, whichever is later.
....
4. Recipients of Confidential Material shall not reveal, reproduce, disclose, or describe the Confidential Material, or the contents of Confidential Material, in whole or in part, to any person other than a person authorized to receive such documents.... Recipients of Confidential Material shall use such material only for purposes of this action and for no other purpose.
The IPO was signed by Magistrate Judge Edward A. Bobrick on May 30, 1991.
On June 5, 1991 Makita took Galli's deposition. Before Galli began his testimony, Black & Decker's attorney designated "the entire context of Mr. Galli's deposition testimony ... as confidential pursuant to paragraph 3 of the stipulated protective order...." Makita did not challenge the designation of Galli's testimony as confidential within the ten day period required by the IPO.
In May of 1992, Black & Decker filed a petition with the United States International Trade Commission ("ITC") alleging that Makita was "dumping" professional power tools in the United States at less than fair market value within the meaning of 19 U.S.C. Sec. 1673 et seq. During an ITC Preliminary Conference, Gary DiCamillo, President of Black & Decker's power tool group, gave testimony on what constitutes a like-product for purposes of the ITC's investigation. 2 After DiCamillo testified, William Zeitler, one of Makita's attorneys, made the following statement:
I would like to at this point bring to the panel's attention two significant facts. There is an anti-trust case currently pending, where a number of depositions have been taken of Black & Decker officials and other officials in the domestic industry. All of these depositions directly pertain to the issue currently before this panel on what constitutes the appropriate like-product. We would like to ask at this point if the good samaritans at Black & Decker would object to our releasing of all this deposition testimony from their individuals to this panel for its use. These depositions are currently under a protective order. Obviously, Black & Decker can release that information to this panel. And we would like to know if they would be willing to do so now, in which case we would be willing and able to introduce it in our post-hearing brief.
At the same hearing, Douglas Colton, another attorney for Makita, made the following statement:
Specifically, we are referring to a deposition which was conducted on June 5, 1991, of Mr. Joseph Gally, [sic] Jr., who identified himself as the vice president of marketing for Black & Decker's power tools in the United States. I personally conducted the deposition. This is a transcript of it. At the time the deposition was taken, long before this action was contemplated, a number of questions were asked with regard to markets, who sells what to whom, who buys what, and so on. We had agreed with Black & Decker at the time of the deposition to enter a protective order which said that the document of the deposition would only be used in the context of the litigation in which [it] was taken. And of course we deemed that to be an agreement we made, and is binding. But is waiveable by Black & Decker.
Shortly after the ITC Preliminary Conference, Mark D. Gately, one of Black & Decker's attorneys, wrote Makita's counsel to express his belief that Makita had violated the IPO by discussing Galli's testimony in the ITC Preliminary Conference. Gately also indicated that he would recommend to Black & Decker that it seek sanctions for any further violation of the IPO. Thereafter, Makita made reference to Galli's deposition in its ITC Post-Conference Brief:
Specifically, on June 5, 1991, Douglas Colton on behalf of Makita deposed (technically, in the Chicago case) on oral examination, under oath, Mr. Joseph Galli, Jr., Vice President for Marketing for U.S. power tools for Black & Decker. By agreement with counsel for Black & Decker, this deposition was made subject to a protective order that prohibits its release by Makita without consent from Black & Decker or a court order. The deposition directly addresses many of the issues in this matter, particularly the "like product" issue. Makita believes that the contents of this deposition are highly pertinent to the claims now being made by Black & Decker. Makita strongly urges that the ITC request Petitioner to provide the ITC with a copy of this transcript.
Black & Decker subsequently filed a Motion for Enforcement of Protective Orders and for Sanctions in the district court, alleging that Makita violated the IPO "by revealing, disclosing, and describing Mr. Galli's deposition" in the ITC proceeding. Makita responded by filing a memorandum in opposition to Black & Decker's Motion for Enforcement of Protective Orders and Sanctions. Makita also filed a motion requesting that it be allowed to use the non-confidential portions of Galli's deposition testimony in the ITC proceeding.
The district court granted Black & Decker's motion and...
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