Schlaifer Nance & Co. v. Estate of Warhol
| Decision Date | 15 August 1990 |
| Docket Number | No. 90 Civ. 1095 (LLS).,90 Civ. 1095 (LLS). |
| Citation | 742 F. Supp. 165 |
| Parties | SCHLAIFER NANCE & COMPANY, INC., Plaintiff, v. The ESTATE OF Andy WARHOL, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Paul K. Rooney, New York City, for plaintiff.
Paul J. Hanly, Jr., Coblence Warner Hamilton & Smith, Steven M. Hayes, Parcher & Hayes, New York City, for defendant.
Plaintiff Schlaifer Nance & Company, Inc. ("SNC") moves for an order directing defendant the Estate of Andy Warhol (the "Estate") to turn over to SNC all documents given to the Estate in breach of a settlement agreement in another action, to which the Estate was not a party.
In 1985, Original Appalachian Artworks, Inc. ("OAA") sued SNC in the United States District Court for the Northern District of Georgia (the "OAA action"). As part of the settlement of that action, the parties to it agreed "to destroy or return all copies of all documents to the party which produced them". (Affidavit of Paul K. Rooney sworn to July 18, 1990 ¶¶ 2-3, exhibit 1). Later, the Estate retained the former counsel for OAA, Messrs. Kilpatrick & Cody of Atlanta, Georgia, to represent the Estate in an arbitration proceeding it anticipated SNC might bring in Atlanta. (Id. ¶ 4; Affidavit of Paul J. Hanley sworn to July 30, 1990 ¶ 3). That arbitration is now pending.
It appears that a partner at Kilpatrick & Cody, Jerre Swann, Esq., gave the Estate documents that SNC had produced in the OAA action, but which had been neither destroyed nor returned to SNC. The Estate received those documents before discovery in this action began, and its counsel in this action (not Kilpatrick & Cody) denies knowing that the documents were under restrictions when he received them. (Id. ¶ 4). SNC asserts that the Estate should be ordered to return those documents.
Courts may issue orders "under the inherent `equitable powers of courts of law over their own process, to prevent abuses, oppression, and injustices.'" International Products Corp. v. Koons, 325 F.2d 403, 407-08 (2d Cir.1963) (quoting Gumbel v. Pitkin, 124 U.S. 131, 144, 8 S.Ct. 379, 383, 31 L.Ed. 374 (1888)).
However, Mr. Swann obtained those documents in another action in his capacity as counsel for OAA, and he voluntarily gave them to the Estate. Neither the Federal Rules of Civil Procedure nor courts' inherent powers support an order prohibiting use of information innocently obtained from third parties without use of judicial process. See Bridge C.A.T. Scan Assocs. v. Technicare Corp., 710 F.2d 940, 945-46 (2d Cir.1983).
While Mr. Swann apparently produced the documents in violation of the settlement agreement in the OAA action at the time the Estate retained him, there is no showing that the...
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