Sanderson v. Winner
| Citation | 507 F.2d 477 |
| Decision Date | 14 April 1975 |
| Docket Number | No. 74-1477,74-1477 |
| Parties | 1974-2 Trade Cases 75,369 James W. SANDERSON, Petitioner, v. The Honorable Fred M. WINNER, United States District Judge for the District ofColorado, Respondent. |
| Court | United States Courts of Appeals. United States Court of Appeals (10th Circuit) |
Granvil I. Specks, Specks & Goldberg, Ltd., Chicago, Ill. (Richard M. Kranzler, Brenman, Sobol & Baum, Denver, Colo., on the brief), for petitioner.
Patrick M. Westfeldt, Holland & Hart, Denver, Colo., H. L. Arkin, Arkin & Hanlon, r. Brooke Jackson, of Holland & Hart, Denver, Colo., and David Brice Toy and Pamela Ann Rymer, Lillick, McHose, Wheat, Adams & Charles, Los Angeles, Cal., on the brief), for respondent.
Before SETH, HOLLOWAY and DOYLE, Circuit Judges.
Plaintiffs seek the issuance of writs of mandamus and prohibition which would direct the district court to vacate certain discovery orders entered June 25, 1974 and prohibit the court from issuing future discovery orders which would invade the attorney-client privilege relating to financial arrangements with attorneys.
The complaint describes a class action pursuant to Rule 23(b)(3). The allegation is that the various Nissan Corporations named in the complaint in the district court have engaged in an unlawful conspiracy with the named dealerships to violate 1 of the Sherman Act.
The present conflict results from a notice to take depositions in which plaintiffs were served with a demand for the production of the following documents:
2. Current financial statements, income tax returns for the years 1972 and 1973, and any other writings or documents reflecting plaintiffs' ability to finance the expenses that may be involved in this purported class action litigation.
3. Any agreements plaintiffs have made, collectively or individually, among themselves, with their attorneys of record herein and with any other persons, pertaining to (a) the financing of the costs of this litigation, and (b) the payment of attorneys' fees that might be incurred. Such documents should include, in addition to express written agreements, correspondence and any and all other writings or records reflecting any oral agreements that may have been made or understandings that may have been reached.
Plaintiffs object to both requests on the ground of relevance and, secondly, on the assertion of attorney-client privilege.
Nissan U.S.A. has moved to compel production asserting that the information is relevant for the purpose of determining whether plaintiffs are adequate class representatives and on the ground that plaintiffs have demanded attorneys' fees, and hence information as to the fee arrangements that plaintiffs have made is necessary. 1
On June 25, 1974 an extensive hearing was held which included considerable discourse between the court and counsel. The upshot of this was that the district court granted the defendants' requests as set forth above. The court also denied the request of plaintiffs to appeal the ruling pursuant to 28 U.S.C. 1292(b). The refusal of the court to issue this certificate for interlocutory appeal necessitated the petitions which are before us.
In essence, the court's ruling was that the requested documents were relevant to the issue as to whether a class action was appropriate; that the material was germane to whether the plaintiffs were worthy representatives.
The court also noted that the defendants were entitled to inquire as to whether it was the kind of a class action in which a lawyer seeks to 'capture the pot of gold at the end of the rainbow,' and that discovery as to all of the details of the arrangement between the lawyers and clients was pertinent in order to make this evaluation and adjudication. The court distinguished between a trial and the inquiry leading to the determination of appropriateness of the class action. It indicated that the latter inquiry allows it to in effect police the lawyers' ethics in connection with the solicitation of business from class members. 2
Our primary concern is with the propriety of the extraordinary writ. Mandamus is, of course, not to be used as a substitute for an appeal. See Schlagenhauf v. Holder, 379 U.S. 104, 85 S.Ct. 234, 13 L.Ed.2d 152 (1964). Nevertheless, we have recognized that it may be used in some circumstances to review an interlocutory order. See Erie Bank v. United States District Court, Colorado, 362 F.2d 539 (10th Cir. 1966). See also Paramount Film Distributing Corp. v. Civic Center Theatre, Inc., 333 F.2d 358, 361 (10th Cir. 1964). The Supreme Court in Will v. United States, 389 U.S. 90, 88 S.Ct. 269, 19 L.Ed.2d 305 (1967) recognized that mandamus can be used in exceptional circumstances 'amounting to a judicial 'usurpation of power' . . .'
We are of the opinion that the writ of mandamus is appropriate in the present circumstances because, as will appear hereinafter, the court's action was within the standards which have been recognized by the cases. We view the trial court's decision as an unwarranted extension of the Supreme Court's decision in Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974), which extension would limit and curtail Rule 23 in a manner never contemplated.
Plaintiffs maintain that the production of the documents should not be allowed, first, because it invades the attorney-client privilege; secondly, because the substance of the fee arrangements is irrelevant and not calculated to lead to the discovery of admissible evidence; and, third, tax returns and other similar financial data are generally irrelevant and compulsory disclosure is not favored. A further reason advanced is that the plaintiffs have agreed to pay the costs of notices to the members of the class.
The defendants as well as the district court relied strongly on Eisen v. Carlisle & Jacquelin, supra. We read the district court's decision as expanding and projecting the Eisen case. First of all, its facts were wholly different from ours. There, the class was extremely large. 2,250,000 members were identifiable. These were the odd-lot traders on the New York Exchange. The district court held a preliminary hearing on the merits and found that petitioner was more than likely to prevail at trial. It then assessed 90% Of the notice costs to the defendants. The Supreme Court condemned the holding of a preliminary hearing on the merits and held also that this did not mitigate the error of assessing 90% Of the costs to the defendants. The plaintiffs were held bound to advance the notice costs. There is nothing in the opinion of Mr. Justice Powell in Eisen which calls for unlimited inquiry into the financial capacity of plaintiff or which authorizes exposure of the plaintiff's income tax returns together with financial statements, plus documents showing specific financial capacity. Nor are fee arrangements with lawyers a prescribed discovery subject.
Defendants considered it important to ascertain whether plaintiffs were able to pay all of the costs in the litigation including extensive depositions. We fail to see relevancy in these inquiries particularly with respect to in limine inquiry as to whether a class action is to be allowed. Ordinarily courts do not inquire into the financial responsibility of litigants. We...
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von Bulow, In re
... ... there is only sparse discussion of it in the reported cases."); Sanderson v. Winner, 507 F.2d 477, 479 (10th Cir.1974) (per curiam) (issuing mandamus directing district court to vacate its discovery order due to ... ...
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F. T. C. v. Turner
... ... Sanderson v. Winner, 507 F.2d 477, 479-80 (10th Cir. 1974), Cert. denied, 421 U.S. 914, 95 S.Ct. 1573, 43 L.Ed.2d 780 (1975); Cf. Fed.R.Civ.P. 69(a) (discovery ... ...
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In re Clinton
... ... 524 (mandamus may be appropriate where resolution of discovery issue will "add importantly to the efficient administration of justice"); Sanderson v. Winner , 507 F.2d 477, 479 (10th Cir. 1974) (per curiam) (granting mandamus to vacate discovery order where district court's "decision [w]as an ... ...
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In re Clinton
... ... 524 (mandamus may be appropriate where resolution of discovery issue will "add importantly to the efficient administration of justice"); Sanderson v. Winner , 507 F.2d 477, 479 (10th Cir. 1974) (per curiam) (granting mandamus to vacate discovery order where district court's "decision [w]as an ... ...
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Class Action Law in Georgia: Emerging Trends in Litigation, Certification, and Settlement - Jeffrey G. Casurella and John R. Bevis
...the plaintiff has not satisfied the burden of establishing all the requisite elements for class certification. 31. Sanderson v. Winner, 507 F.2d 477, 479-80 (10th Cir. 1974). 32. Schatzman, 91 F.R.D. at 273 n.2 (citing Roper v. Consurve, Inc., 578 F.2d 1106, 1112 n.4 (5th Cir. 1978); Arthur......
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Class Actions-some Selected Problems
...of Colorado; Judge Finesilver's Order awarding counsel fees is reported at 420 F. Supp. 610 (D. Colo. 1976). 2. Sanderson v. Winner, 507 F.2d 477 (10th Cir. 1974), cert. denied, Nissan Motor Co. in U.S.A. v. Sanderson, 421 U.S. 914 (1975). 3. Sanderson, supra, at page 480. 4. Sanderson, sup......