964 F.2d 1227 (1st Cir. 1992), 91-2088, Banco Popular de Puerto Rico v. Greenblatt

Docket Nº:91-2088.
Citation:964 F.2d 1227
Party Name:BANCO POPULAR de PUERTO RICO, Plaintiff, Appellee, v. David GREENBLATT, et al., Defendants, Appellees. The Official Secured Creditors' Committee of Amfesco Industries, Inc., etc., Intervenor, Appellant.
Case Date:May 13, 1992
Court:United States Courts of Appeals, Court of Appeals for the First Circuit
 
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Page 1227

964 F.2d 1227 (1st Cir. 1992)

BANCO POPULAR de PUERTO RICO, Plaintiff, Appellee,

v.

David GREENBLATT, et al., Defendants, Appellees.

The Official Secured Creditors' Committee of Amfesco

Industries, Inc., etc., Intervenor, Appellant.

No. 91-2088.

United States Court of Appeals, First Circuit

May 13, 1992

Heard March 4, 1992.

Page 1228

Gabriel B. Schwartz, New York City, with whom Jorge R. Jimenez, San Juan, P.R., Anthony C. Acampora, and Hahn & Hessen, New York City, were on brief, for intervenor, appellant.

Elihu Inselbuch, Caplin & Drysdale, Chartered, Washington, D.C., and Diaz Ascencio, Lopez & Orsini, San Juan, P.R., on brief, for plaintiff, appellee.

Stuart A. Summit, with whom Summit Solomon & Feldesman, New York City, Sanchez-Betances & Sifre, Hato Rey, P.R., Curtis C. Mechling, Stroock & Stroock & Lavan, New York City, and O'Neill & Borges, Hato Rey, P.R., were on brief, for defendants, appellees.

Before SELYA, Circuit Judge, FEINBERG, [*] Senior Circuit Judge, and CYR, Circuit Judge.

SELYA, Circuit Judge.

The Officia1 Secured Creditors' Committee of Amfesco Industries, Inc. sought to intervene in this case for the purpose of modifying a protective order entered as part of the final judgment. The district court refused to allow intervention. We affirm.

Page 1229

I. BACKGROUND

This appeal is a tale of two lawsuits, both rising from the rubble of Amfesco's collapse. In late 1985, Amfesco entered bankruptcy in the Eastern District of New York. The bankruptcy court constituted an Official Secured Creditors' Committee and appointed Irving Trust Company, Chemical Bank, and Banco Popular de Puerto Rico as members of it. On November 18, 1987, the Committee sued Amfesco's former directors in a New York state court. Some seven weeks earlier, however, Banco Popular, acting to its own behoof, had sued Amfesco's former directors and accountants in the United States District Court for the District of Puerto Rico.

The two cases were spun from much the same yarn. The federal action alleged fraud, negligence, and civil conspiracy; the state action alleged waste and mismanagement. An insurer provided counsel for the directors in both forums, acting pursuant to a liability policy purchased by Amfesco in its salad days. Because the policy was a corporate asset, the bankruptcy court enjoined the insurer from disbursing the policy's avails without prior bankruptcy court approval.

On September 9, 1988, the parties to the federal action entered into a confidentiality agreement providing, inter alia, that any person producing discovery material (the "Designating Party") could classify the information as "confidential," thus restricting its dissemination to individuals directly involved in the litigation. The agreement also provided for judicial review of inter-party disputes anent classification. The district court sanctioned the confidentiality agreement, embodying it in a protective order. Paragraph ten of the protective order stipulated that:

Promptly after final termination of this action, each party or other person subject to the terms hereof shall assemble and destroy or return to the Designating Party all material, documents and things in his or its possession or control designated as Confidential Information by any other party, as well as all copies, summaries, and abstracts thereof, and all other materials, memoranda or documents, constituting or containing information designated as Confidential Information and not subsequently relieved of that designation by the Designating Party or by a court. If such material, documents, or things are destroyed, the person shall certify their destruction to the Designating Party in writing. The [nondisclosure] provisions of this Stipulation ... shall continue after the conclusion of this action until such time as the parties may otherwise agree in writing.

In April 1989, following protracted discovery, the director-defendants sought the bankruptcy court's permission to use insurance monies for settlement of the federal action. On May 1, the Committee filed a motion beseeching the bankruptcy judge to condition approval of the directors' application on a requirement that the settling parties share the fruits of their federal-court discovery with the Committee. The bankruptcy judge, hesitant about fiddling with another tribunal's protective order, granted the directors' application but stayed disbursement of the needed funds for sixty days (during which period the Committee, if it so desired, might have asked the Puerto Rico federal district court to modify the protective order). The Committee made no overtures to the district court. After the sixty-day grace period had passed, the district court, unaware of the Committee's misgivings, entered the settlement agreement as a final judgment. The judgment expressly reaffirmed the protective order.

Some three weeks thereafter (on August 10, 1989, to be exact), the Committee moved to intervene in the federal action for the purpose of enjoining the destruction of discovery documents. All parties to the federal action objected. The district court pondered the motion for over two years. 1 On September 6, 1991, the court finally heard oral argument.

Page 1230

The objectors (appellees before us) urged that intervention should be denied for four reasons: (1) the motion was untimely; (2) the Committee had no standing to intervene; (3) the court lacked authority to grant the relief requested; and (4) modification of the protective order would undermine the settlement. Five days later, the district court ruled. The court stated that it lacked authority to impose "new, affirmative requirements" on the appellees after the underlying litigation had been concluded. Accordingly, the court denied the application for intervention without addressing appellees' other asseverations. This appeal ensued.

II. DISCUSSION

The matter of when, and under what circumstances, a protective order may be lifted at the insistence of a nonparty after entry of final judgment is a complicated one. It is unnecessary for us to meet that issue head-on. After all, an appellate court is not wedded to the district court's reasoning but, instead, can affirm a judgment on any independently sufficient ground reflected in the record, see, e.g., Garside v. Osco Drug, Inc., 895 F.2d 46, 48-49 (1st Cir.1990); Polyplastics, Inc. v. Transconex, Inc., 827 F.2d 859, 860-61 (1st Cir.1987); and in cases of this stripe there is a prevenient question: timeliness stands as a sentinel at the gates whenever intervention is requested and opposed. 2 Here, the temporal inquiry is...

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