Boeing Airplane Company v. Coggeshall

• Decision Date: 09 June 1960
• Docket Number: No. 14958,15312.,15311,14958
• Citation: 280 F.2d 654,108 US App. DC 106
• Parties: BOEING AIRPLANE COMPANY, Appellant v. Thomas COGGESHALL, Chairman, The Renegotiation Board, Appellee. Thomas COGGESHALL, Chairman, The Renegotiation Board, Appellant v. BOEING AIRPLANE COMPANY, Appellee. BOEING AIRPLANE COMPANY, Cross-Appellant v. Thomas COGGESHALL, Chairman, The Renegotiation Board, Cross-Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

108 US App. DC 106, 280 F.2d 654 (1960)

BOEING AIRPLANE COMPANY, Appellant v. Thomas COGGESHALL, Chairman, The Renegotiation Board, Appellee.

Thomas COGGESHALL, Chairman, The Renegotiation Board, Appellant v. BOEING AIRPLANE COMPANY, Appellee.

BOEING AIRPLANE COMPANY, Cross-Appellant v. Thomas COGGESHALL, Chairman, The Renegotiation Board, Cross-Appellee.

Nos. 14958, 15311, 15312.

United States Court of Appeals District of Columbia Circuit.

Argued December 17, 1959.

Decided June 9, 1960.

COPYRIGHT MATERIAL OMITTED

Messrs. Numa L. Smith, Jr., Washington, D. C. and Andrew M. Williams, Seattle, Wash., of the bar of the Supreme Court of Washington, pro hac vice, by special leave of court, with whom Messrs. Barron K. Grier, John S. Nolan, Washington, D. C., and Lowell P. Mickelwait, Seattle, Wash., were on the brief, for appellant in Nos. 14,958 and 15,312 and appellee in No. 15,311.

Mr. John G. Laughlin, Jr., Attorney, Department of Justice, with whom Asst. Atty. Gen. George Cochran Doub, Messrs. Oliver Gasch, U. S. Atty. and Samuel D. Slade, Attorney, Department of Justice, were on the brief, for appellee in Nos. 14,958 and 15,312 and appellant in No. 15,311. Mr. Harland F. Leathers, Attorney, Department of Justice, also entered an appearance for appellee in No. 14,958.

Before WASHINGTON, BASTIAN and BURGER, Circuit Judges.

WASHINGTON, Circuit Judge.

These are three appeals from orders by the District Court on motions relating to a petition to enforce a subpoena duces tecum. The subpoena, which demanded certain documents in the possession of the United States Renegotiation Board and the Los Angeles Regional Renegotion Board, was issued by the Tax Court of the United States pursuant to Section 108 of the Renegotiation Act of 1951, 65 Stat. 21, as amended, 70 Stat. 791 (1956), 50 U.S.C.A.Appendix, § 1218. Enforcement was sought in the District Court by Boeing Airplane Company, appellant in Nos. 14,958 and 15,312 and appellee in No. 15,311. Jurisdiction over the enforcement petition was exercised by the District Court under Section 7604(a) of the Internal Revenue Code of 1954, 26 U.S.C. § 7604(a) (1958). See Blair v. Oesterlein Machine Co., 1927, 57 App.D.C. 75, 17 F.2d 663, modified and affirmed, 1927, 275 U.S. 220, 48 S.Ct. 87, 72 L.Ed. 249.

Boeing wants the documents in question for its own and the Tax Court's use in a proceeding before the Tax Court under Section 108 of the Renegotiation Act of 1951, supra.¹ The Section 108 proceeding is one to determine the amount of money, if any, which Boeing must return to the United States as a result of allegedly excess profits earned on contracts with the United States Air Force. The subpoena requires Mr. Coggeshall, Chairman of the United States Renegotiation Board, to bring to the Tax Court "all of the reports, correspondence and data contained in or constituting the files of the Los Angeles Regional Renegotiation Board and of The Renegotiation Board of the United States in connection with the renegotiation of Boeing Airplane Company for the year 1952 * * *." These files included reports by certain Air Force procurement officials, by the Office of Review of the Renegotiation Board, and by the Office of Economic Review of the Renegotiation Board, in addition to memoranda, analyses, and other matter relevant to the deliberations of the Regional Board and the Board in Washington. The papers to be subpoenaed related not only to the costs, efficiency, and prices of Boeing but covered similar data with respect to Boeing's competitors.

On January 7, 1959, the District Court, refusing enforcement, entered summary judgment for Mr. Coggeshall, who had claimed that production of the documents "would be injurious to the public interest" since the individual Board members would be inhibited in their deliberations and other contractors would be deprived of the protection against disclosure provided by Part 1480 of the Board's regulations.² Boeing appealed from the summary judgment and that appeal is our No. 14,958.

Pending the appeal in No. 14,958, Boeing moved in the District Court under Rule 60(b), Fed.R.Civ.P., 28 U.S.C., to reopen the enforcement proceedings in that court. This motion was based on further developments in the Tax Court. After the District Court's refusal to enforce the Tax Court subpoena, certain Air Force officers had testified for the Government in the Tax Court. To impeach the credibility of these officers, Boeing renewed in the Tax Court its earlier request for subpoena. The Tax Court stated that its earlier subpoena was still outstanding; thus, Boeing sought enforcement of the same subpoena a second time in the District Court.

Because of the new events in the Tax Court, the District Court vacated its order of January 7, 1959, insofar as it related to reports of the Air Force concerning the matters in dispute before the Tax Court, and enforced the subpoena accordingly. No. 15,311 is an appeal by Mr. Coggeshall from that order of enforcement, entered May 11, 1959. No. 15,312 is an appeal from the same order by Boeing to the extent that the court refused to vacate its original judgment and fully enforce the original petition. No. 14,958 is Boeing's appeal from the District Court's first refusal to enforce the subpoena.³

With one exception, the issues before the court are essentially the same in all three cases. On the motion for summary judgment in No. 14,958, Boeing based its petition on an alleged general right of the Tax Court to secure all relevant and material information, urging the usefulness of the Board files for that purpose. On the motion involved in Nos. 15,311 and 15,312 the Renegotiation Board files were sought, ostensibly, for the more limited purpose of impeaching the credibility of particular witnesses. In each situation, however, full enforcement of the subpoena poses the same dangers to the Board and persons having dealings with the Board, since Boeing seeks the Board files not only for examination by the Tax Court but for its own examination as well. To protect the interests of the Board and the people who deal with it, the Chairman resists the subpoena on the ground, first, that Boeing has made no showing of necessity, and, second, that the documents are privileged.

Enforcement of this subpoena is governed by the Federal Rules of Civil Procedure. See Fed.R.Civ.P. 81(a) (3). In particular, Rules 26(b), 30(b), and 45(b) and (d) are controlling. These rules must be read in pari materia. See, e. g., Demeulenaere v. Rockwell Manufacturing Co., D.C.S.D.N.Y.1952, 13 F.R. D. 134; Rosseau v. Langley, D.C.S.D. N.Y.1945, 7 F.R.D. 170. Rules 45(d) and 26(b) establish the outer limits of enforcement. Rule 45(d) permits a subpoena to order any person to produce papers "which constitute or contain evidence relating to any of the matters within the scope of the examination permitted by Rule 26(b), but in that event the subpoena will be subject to the provisions of subdivision (b) of Rule 30 and subdivision (b) of this Rule 45." Rule 26 (b) permits the discovery of "any matter, not privileged, which is relevant to the subject matter involved in the pending action," but is also limited by Rule 30(b).

Rules 30(b) and 45(b) impose the following restrictions on enforcement under Rules 45(d) and 26(b): Rule 30(b) confers broad power on the court, "for good cause shown," to afford relief from a subpoena "which justice requires to protect the party or witness under subpoena from annoyance, embarrassment, or oppression."⁴ Rule 45(b) authorizes the District Court to "quash or modify the subpoena if it is unreasonable and oppressive." Thus, if the documents under subpoena in this case are relevant to the subject matter of the Tax Court proceeding, the subpoena should be enforced on a showing of good cause unless the documents are privileged or the subpoena is unreasonable, oppressive, annoying, or embarrassing. If the District Court believes the subpoena has a meritorious basis but should not be enforced as drafted, it has authority under Rule 30(b) to modify the subpoena and impose such conditions on enforcement as justice may require.

Broad as the subpoena in this case may be — seeking all documents relating to the Boeing renegotiation for 1952 which are in the files of the Renegotiation Board of the United States and the Los Angeles Renegotiation Board — it would appear to ask only for documents which are, within the meaning of Rule 26(b), relevant to the Tax Court proceeding. Under Rule 26(b) relevancy is defined in terms of the likelihood that useful evidence may be uncovered.⁵ Since Rule 45(d) specifically incorporates this standard, the court need not consider whether or not the papers, themselves, would be admissible in evidence. Rosseau v. Langley, supra. Moreover, it is doubtful that an admissibility test would be proper in this case, irrespective of the Federal Rules, since the District Court might then be passing on evidentiary matters, which are primarily (if not solely) within the jurisdiction of the Tax Court. Cf. Macauley v. Waterman S.S. Corp., 1946, 327 U.S. 540, 66 S.Ct. 712, 90 L.Ed. 839; United States v. California Eastern Line, Inc., 98 U.S.App.D.C. 1, 231 F.2d 754, certiorari denied, 1956, 352 U.S. 848, 77 S.Ct. 35, 1 L.Ed.2d 59. Insofar as the Board suggests that the subpoenaed documents are irrelevant, we must disagree.⁶

Nonetheless, when a party objects to the enforcement of a subpoena, enforcement depends preliminarily on a showing of good cause by the party seeking production. "Good cause" may ordinarily be sustained by a claim that the requested documents are necessary to establishment of the moving party's claim or that denial of production would cause the moving party "undue hardship or injustice."⁷ And the burden of showing good cause is an affirmative one in that it is not satisfied merely by a showing that justice would not be impeded by production of the documents. See 4 Moore, Federal Practice, para. 34.08, p....