U.S. v. Columbia Broadcasting System, Inc., s. 80-5345

Citation666 F.2d 364
Decision Date22 January 1982
Docket Number80-5346,Nos. 80-5345,s. 80-5345
Parties1982-1 Trade Cases 64,492 UNITED STATES of America, Plaintiff, and Columbia Pictures Industries, Inc., Gulf and Western Industries, Inc., MCA, Inc., Twentieth Century-Fox Film Corporation and Warner Communications, Inc., Witnesses/Appellants, v. COLUMBIA BROADCASTING SYSTEM, INC., Defendant/Appellee. UNITED STATES of America, Plaintiff, and Columbia Pictures Industries, Inc., Gulf and Western Industries, Inc., MCA, Inc., Twentieth Century-Fox Film Corporation and Warner Communications, Inc., Witnesses/Appellants, v. AMERICAN BROADCASTING COMPANIES, INC., Defendant/Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Ronald L. Olson, Los Angeles, Cal., argued, Nancy Y. Bekavac, Munger, Tolles & Rickershauser, Los Angeles, Cal., on brief, for Columbia Pictures.

Daniel H. Margolis, Washington, D. C., argued, Bergson, Borkland, Margolis & Adler, Washington, D. C., George Vradenburg, III, Robert S. Rifkind, Cravath, Swaine & Moore, New York City, on brief, for CBS.

Appeal from the United States District Court for the Central District of California.

Before GOODWIN, NELSON and BOOCHEVER, Circuit Judges.

BOOCHEVER, Circuit Judge:

This is a consolidated appeal by five nonparty witnesses who were subpoenaed to produce massive quantities of documents and deposition testimony for use in antitrust suits brought by the Justice Department. The issues are whether this court has jurisdiction to review the district court's order denying the nonparty witnesses' post-production motion for reimbursement of their substantial discovery costs, and, if so, whether the denial of reimbursement without stated reasons constituted an abuse of discretion.

We conclude that the order was final as to these nonparty witnesses, and thus appealable under 28 U.S.C. § 1291, by operation of the collateral order doctrine first articulated in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). We further conclude that, in light of the district court's failure to articulate findings of fact or conclusions of law in support of its decision, the record before us affords an insufficient basis for determining whether the court properly exercised its discretion in denying the nonparties any reimbursement for their discovery costs. Accordingly, we reverse and remand.

I. Facts

Appellants are five producers of television programming (the "studios") 1 who were subpoenaed as nonparty witnesses by CBS and ABC (the "networks") to produce extensive pretrial discovery material for use in antitrust suits brought against the networks by the Justice Department. The Government's nearly identical complaints against the networks principally challenged the manner in which the networks acquired prime-time programming from independent producers such as the studios.

The first three and one-half years of the litigation consisted primarily of disputes over jurisdiction, the legal sufficiency of the Government's case, and the Government's discovery demands on the networks. The district court eventually ordered the Government to identify "with particularity" each of its claims and the evidence it intended to offer. The Government's "Identification of Evidence" indicated that it planned to challenge a wide range of the networks' dealings with program suppliers and talent, specifically putting in issue several hundred transactions spread over more than a twenty-year period.

In August and September 1978, the networks served subpoenas duces tecum and ad testificandum upon the nonparty studios and a number of their officers and employees who the Government had identified as witnesses. Consistent with the breadth of the Government's case, the networks' discovery demands were extensive. The subpoenas sought production of most of the material in the studios' control that pertained to production of television programming and theatrical films since 1960.

The studios moved to quash the subpoenas pursuant to Fed.R.Civ.P. 45(b). In the motion, the studios expressly "reserved" the right to seek reimbursement of discovery costs if production was ordered. The studios subsequently filed memoranda in support of their motion to quash in which they specifically requested the networks to pay at least some discovery costs.

The district court ruled on the motion to quash on March 6, 1979, enforcing most of the subpoenas with limited modifications and setting a deadline for compliance. The order contained no mention of costs. The studios did not seek timely reconsideration or appellate review of the order, and, instead, immediately began to comply with its dictates.

In order to comply with the network's discovery demands, the studios hired and trained large staffs of lawyers, paralegals, accountants, and clerks to glean relevant material from their warehouse-sized depositories of archived documents. Thousands of boxes of documents were transported to offices specially set aside and equipped by the studios for discovery purposes, where the documents were reviewed, organized, copied, and sent to the networks. The networks also subpoenaed numerous officers and employees of the studios. Seventeen of these individuals were eventually deposed over a period of more than eighty work days.

The studios filed five Status Reports during the eighteen months it took to complete document production. In these five reports, the studios kept the district court informed of the progress they were making in production, the type of services and facilities they were providing, and the costs they were incurring. The studios also reiterated to the district court and the networks their intention to seek reimbursement of costs.

On March 14, 1980, after having produced all the requested documentary material, the studios filed a motion seeking termination of discovery and reimbursement for some or all of the approximately.$2.3 million out-of-pocket costs they allegedly incurred in complying with the networks' discovery demands. By minute order dated March 27, 1980, the district court declared discovery complete and declined to award the studios any reimbursement. The order contained no findings of fact or conclusions of law pertaining to the denial of costs.

The studios filed a timely appeal from the March 27, 1980 minute order, arguing that the denial of any reimbursement constituted an abuse of discretion. On October 20, 1980, a motions panel of this court denied the networks' motion to dismiss for lack of appellate jurisdiction without prejudice to its renewal before the present merits panel. Final consent judgments were entered against CBS and ABC on July 31, 1980 and November 14, 1980, respectively.

II. Appellate Jurisdiction
A. Timeliness of the motion for costs

The networks contend that the studios' motion for costs was untimely under Fed.R.Civ.P. 45(b) because it was made a year after the district court ruled on the motion to quash and after compliance with the subpoenas was virtually complete. Rule 45 provides that the district court, "upon motion (to quash or modify the subpoena) made promptly and in any event at or before the time specified in the subpoena for compliance therewith, may ... (2) condition denial of the motion upon the advancement ... (of costs)." Seizing upon the language of the Rule, the networks contend that Rule 45(b) makes the "advancement" of costs available only as a "condition" of denying a motion to quash, and contains no provision for awarding costs after discovery is complete.

Under the networks' logic, in order to avoid having any right to eventual reimbursement foreclosed, a nonparty witness would have no alternative but to file a motion to quash and to demand advancement of costs as a sine qua non of production. This procedure would be mandatory according to the networks even where the witness is willing to produce the requested documents and where the compliance costs are not susceptible to reasonable pre-production estimation. Moreover, because orders pertaining to motions to quash are generally interlocutory, a nonparty witness desiring review of that portion of an order declining to condition denial of a motion to quash upon advancement of costs would have to refuse to produce and be punished for contempt. 2 Thus, a witness willing to produce would be forced to suffer contempt and to interrupt discovery, thereby indefinitely delaying trial, solely to resolve the question of entitlement to costs.

Whatever merit the networks' argument may have in the abstract, it has none on the facts of this case. The studios expressly reserved the right to seek post-compliance reimbursement in their motion to quash. The district court's March 6, 1979 order pertaining to the motion to quash contained no mention of costs. We see no reason why the court's failure to address the studios' reservation of the right to seek reimbursement constitutes an implied or sub silentio denial of the reservation. The court's silence, coupled with the subsequent conduct of the parties and court, is more susceptible to being interpreted as tacit approval of the reservation of the studios' right to seek post-compliance reimbursement.

Our conclusion in this regard is corroborated by several facts. First, the record contains no indication that either the court or the networks objected to, or sought clarification of why, the studios filed five Status Reports detailing, inter alia, the costs they were incurring during the course of document production. The record discloses a similar lack of reaction to the fact that, during the same period, the studios reiterated their intention of seeking reimbursement following production. Second, a stipulation was entered into by the studios and networks, in conjunction with the studios' post-production motion for costs, that contains no indication that the networks objected to the motion as having been previously...

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