410 F.2d 843 (3rd Cir. 1969), 17592, Borden Co. v. Sylk

Docket Nº:17592.
Citation:410 F.2d 843
Party Name:The BORDEN COMPANY v. William SYLK and Harry S. Sylk v. PENROSE INDUSTRIES CORPORATION Sylvan Seal Milk, Inc., Appellant.
Case Date:May 13, 1969
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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410 F.2d 843 (3rd Cir. 1969)

The BORDEN COMPANY

v.

William SYLK and Harry S. Sylk

v.

PENROSE INDUSTRIES CORPORATION Sylvan Seal Milk, Inc., Appellant.

No. 17592.

United States Court of Appeals, Third Circuit.

May 13, 1969

Argued March 28, 1969.

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Israel Packel, Fox, Rothschild, O'Brien & Frankel, Philadelphia, Pa., for appellant.

John D. Egnal, Egnal, Simons & Egnal, Michael H. Egnal, Philadelphia, Pa., for appellees.

Before SEITZ, ALDISERT and STAHL, Circuit Judges.

OPINION

ALDISERT, Circuit Judge.

This is an appeal from a discovery order of the district court compelling the disclosure of certain business information by a non-party witness 289 F.Supp. 847. Suit was brought in the court below by the Borden Company against William and Harry Sylk as the endorsers of certain outstanding promissory notes. The maker of the notes, Penrose Industries Corporation, was joined as a third-party defendant.

Penrose filed cross-claims against Borden alleging breach of contract and violations of federal anti-trust laws. Specifically, Penrose asserted that: (1) Borden breached its agreement to sell ice cream to Penrose at a price equal to the lowest retail-outlet price charged by Borden; and (2) Borden's use of its wholly-owned subsidiary Sylvan Seal Milk, Inc. in distributing its products was in violation of the Robinson-Patman Act, 15 U.S.C. §§ 13 and 14.

When Borden's motion to dismiss the cross-claims was denied by the lower court, Penrose moved to depose certain corporate officers of Borden and Sylvan in an attempt to discover the specifics of the Borden-Sylvan distributive arrangement. In the course of depositions, Sylvan's president refused to answer certain inquiries into the volume and prices charged by Sylvan to its customers. The ostensible reason for his refusal was that publication of such confidential information would seriously prejudice Sylvan's competitive standing.

Penrose then moved to compel answers. Upon a finding that the information sought could be considered relevant to the litigation, the district court granted the motion. To insulate Sylvan against serious competitive damage, at least at the pretrial stage, the court directed that 'no such information shall be disclosed to the public or to any competitor

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of the plaintiff.' Sylvan has appealed.

It is a well-established principle that the scope and conduct of discovery are within the sound discretion of the trial court. It is equally well established that such orders compelling or denying discovery are...

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