United States Steel Corp. v. United States, Court No. 82-10-01361.

• Citation: 569 F. Supp. 870
• Decision Date: 22 July 1983
• Docket Number: Court No. 82-10-01361.
• Parties: UNITED STATES STEEL CORPORATION, Republic Steel Corporation, et al., Plaintiffs, v. UNITED STATES, et al., Defendants, and Highveld Limited, Companhia Siderurgica Paulista (COSIPA), and Usinas Siderurgicas De Minas Gerais (USIMINAS), Defendants-Intervenors.
• Court: U.S. Court of International Trade

569 F. Supp. 870

UNITED STATES STEEL CORPORATION, Republic Steel Corporation, et al., Plaintiffs, v. UNITED STATES, et al., Defendants, and Highveld Limited, Companhia Siderurgica Paulista (COSIPA), and Usinas Siderurgicas De Minas Gerais (USIMINAS), Defendants-Intervenors.

Court No. 82-10-01361.

United States Court of International Trade.

July 22, 1983.

Law Department of United States Steel Corporation (D.B. King, J.J. Mangan, C.D. Mallick, L. Ranney and P.J. Koenig, Pittsburgh, Pa., of counsel), for plaintiff U.S. Steel Corp.

Cravath, Swaine & Moore, New York City (Joseph R. Sahid and Steven Schulman, New York City, of counsel) for plaintiffs, Republic Steel Corp., Inland Steel Co., Jones & Laughlin Steel Inc., National Steel Corp., and Cyclops Corp.

J. Paul McGrath, Asst. Atty. Gen., David M. Cohen, Branch Director, A. David Lafer and Francis J. Sailer, Commercial Litigation Branch, Civil Div., Dept. of Justice, Washington, D.C., for defendants.

Wald, Harkrader & Ross, Washington, D.C. (William H. Barringer, Christopher A. Dunn and Arthur J. Lafave III, Washington, D.C., of counsel) for defendants-intervenors COSIPA and USIMINAS.

WATSON, Judge:

In this opinion, the Court answers the difficult question of whether to allow inhouse or corporate counsel to have access to confidential information regarding the business of their employer's competitors. The question was raised in United States Steel Corp., et al., v. United States, Consolidated Court No. 82-3-00288; but the settlement of the steel dispute with the European Community made the issue moot.¹ Now the issue has been raised once more in this motion² by U.S. Steel for access to the business confidential portions of the record. These are portions of the record of the final countervailing duty determinations on carbon plate steel from South Africa³ and Brazil.⁴ To the extent that it claims that these determinations were not supported by substantial evidence, there is no doubt that U.S. Steel has a need for access.

There is also no question that the information sought contains confidential business data of U.S. Steel's competitors in South Africa and Brazil, and could cause significant harm to them if used outside this judicial review. An in camera examination by the Court was sufficient to show that this information contains revealing financial, production, and sales data.

The statute which governs this dispute is part of the law which provides for judicial review on the administrative record. At 19 U.S.C. § 1516a(b)(2)(B) it provides as follows:

(B) Confidential or privileged material. — The confidential or privileged status accorded to any documents, comments, or information shall be preserved in any action under this section. Notwithstanding the preceding sentence, the court may examine, in camera, the confidential or privileged material, and may disclose such material under such terms and conditions as it may order.

This provision has been held to require the normal balancing test which courts make between the need for the information and the need for maintenance of confidentiality. Connors Steel Co. v. United States, 85 Cust.Ct. 112, C.R.D. 80-9 (1980). Roquette Freres v. United States, 4 CIT ___, 554 F.Supp. 1246 (1982).

In this case, the test is complicated by the fact that disclosure is requested for in-house counsel, the only ones who have been representing U.S. Steel in these matters. The Court has previously shown a reluctance to release confidential business information to the in-house counsel of competitors. It expressed this reluctance briefly in Atlantic Sugar Ltd. v. United States, 85 Cust.Ct. 133, C.R.D. 80-18 (1980) when it stated as follows:

The court is of the opinion that in actions such as these the confidential business information of business competitors should not be disclosed to in-house counsel unless a party has no other reasonable way of adequately preparing and presenting its arguments. This preference is not based on any reservation as to the integrity of in-house counsel but is intended to avoid placing them under the unnatural and unremitting strain of having to exercise constant self-censorship in their normal working relations.

At this time the Court, in the necessary exercise of its discretion, has to extend its reasoning to in-house counsel for U.S. Steel. This carries with it the conclusion that in the present circumstances the retention of outside counsel remains a reasonable way for U.S. Steel to satisfy its need for this information.

It is only because the Court sees this information as having ineradicable importance that it takes this step. In the combination of its detail, and its scope, the information is extremely potent. Its nature and volume place it beyond the capacity of anyone to retain in a consciously separate category. When the Court said in Atlantic Sugar that it was acting out of a desire to avoid placing lawyers under an unnatural and unremitting strain, it was really expressing its rationale indirectly and incompletely as a form of solicitude for the lawyers. The direct and complete reason is that, in the Court's judgment, it is humanly impossible to control the inadvertent disclosure of some of this information in any prolonged working relationship.

Obviously, this judgment can also apply to retained counsel in certain situations. It is impossible, however, to extend this reasoning to its logical conclusion and still have adversary proceedings and judicial review as contemplated by 19 U.S.C. § 1516a(b). So the distinction between in-house counsel and retained counsel is made because with respect to the former, a closer and more sustained relationship can be presumed as an outgrowth of the employer-employee relationship. It follows that a meaningful increment of protection can be obtained by excluding in-house counsel.

The Court's rationale has absolutely nothing to do with the possibility of deliberate disclosure of this information. The integrity of counsel for U.S. Steel is unquestioned and their unblemished record of adherence to protective orders is acknowledged.

The Court also accepts the representation that in-house counsel herein do not have direct involvement in pricing or other competitive decision-making. Nevertheless, the Court's concerns arise more from counsel's general position in the corporate environment than their specific duties. If they are somewhat isolated, it is still within a rather worldly cloister. In addition, the Court has to make some reasonable assumptions that they will move into other roles and functions and that the compartmentalization of this information will become even more difficult.

The Court simply sees a greater likelihood of inadvertent disclosure by lawyers who are employees, committed to remain in the environment of a single company. The factor of permanent employment by one company is a...