Covey Oil Company v. Continental Oil Company, 7989-7991.
| Decision Date | 05 April 1965 |
| Docket Number | No. 7989-7991.,7989-7991. |
| Citation | 340 F.2d 993 |
| Parties | COVEY OIL COMPANY, Valley Oil Company, Frank Ferguson, Fred Smith and Jack Wiles, Appellants, v. CONTINENTAL OIL COMPANY and Texaco, Inc., Appellees. PYRAMID OIL COMPANY, Premium Oil Company and Quality Oil Company, Appellants, v. CONTINENTAL OIL COMPANY and Texaco, Inc., Appellees. SLIM OLSON, INC., Appellant, v. CONTINENTAL OIL COMPANY and Texaco, Inc., Appellees. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Lynn S. Richards, Salt Lake City, Utah (Richard L. Bird, Jr., and M. Byron Fisher, Salt Lake City, Utah, were with him on the brief), for appellants in No. 7989.
Louis H. Callister, Sr., Salt Lake City, Utah (Louis H. Callister, Jr., Salt Lake City, Utah, was with him on the brief), for appellants in No. 7990.
George K. Fadel, Bountiful, Utah, filed a brief for appellant in No. 7991.
Everett B. Clary, Los Angeles, Cal. (Brayton, Lowe & Hurley, John W. Lowe, Salt Lake City, Utah, A. T. Smith, Denver, Colo., O'Melveny & Myers, Henry C. Thumann, and Alan I. Rothenberg, Los Angeles, Cal., were with him on the brief), for appellee Continental Oil Co.
George W. Jansen, Los Angeles, Cal., for appellee Texaco, Inc.
Before PICKETT, BREITENSTEIN and HILL, Circuit Judges.
Certiorari Denied April 5, 1965. See 85 S.Ct. 1110.
These appeals, which were considered on a consolidated record, relate to orders on motions to quash subpoenas duces tecum issued to non-party witnesses. The trial court modified the subpoenas by striking therefrom a requirement as to an identified category of information and otherwise denied the motions to quash.
The action was brought by Uinta Oil Refining Company and Utah Cooperative Association, which are not parties to these appeals, against Continental Oil Company and Texaco, Inc., appellees herein, to recover damages for alleged violations of §§ 1 and 2 of the Sherman Act1 and of § 2(a), (d), and (e) of the Clayton Act as amended by the Robinson-Patman Price Discrimination Act.2 Uinta and Utah Cooperative own a refinery in Colorado and market petroleum products in Utah. Continental and Texaco are major, integrated oil companies doing business in Utah.
The Sherman Act allegations of the complaint charge a conspiracy to restrain trade and an attempt to monopolize commerce in gasoline by controlling sources of supply, by fixing and maintaining wholesale and retail gasoline prices, and by suppressing competition of independent jobbers. The Robinson-Patman violations are said to consist of price discriminations which effect competition and tend to monopoly. The Continental answer denies these allegations and, as an affirmative defense to the Robinson-Patman charge, says that if there has been price discrimination, the lower price to any purchaser was made in good faith to meet an equally low price of a competitor or was in response to changing conditions affecting the gasoline market.
Continental caused subpoenas duces tecum to be served on the appellants and a number of other non-party witnesses who are independent oil marketers. The appellants moved to quash the subpoenas. After extensive hearings the trial court filed a comprehensive memorandum and ordered the production of information by the non-party witnesses relating to their purchase price of gasoline, their sale prices and gallonage of gasoline sold other than at retail, and the number and location of their service stations. Texaco has adopted and supports the position of Continental.
The threshold question is the jurisdiction of this court to review the order. Under 28 U.S.C. § 1291 the courts of appeals have jurisdiction "of appeals from all final decisions of the district courts of the United States."3 Continental says that the order is interlocutory and not final.
Appellants recognize that generally the denial of a motion to quash a subpoena issued under Rule 45, F.R.Civ. P., is not appealable4 because the order is interlocutory to the main litigation and the effect of the discovery will be determined at the trial; but they say that this rule does not apply when the subpoena is enforced against nonparty witnesses who will suffer irreparable harm from the enforced disclosures and who have no recourse other than appeal from the order itself.5
In Cobbledick v. United States, 309 U. S. 323, 60 S.Ct. 540, 84 L.Ed. 783, an appeal from the denial of a motion to quash a subpoena for appearance before a grand jury, the Supreme Court stated the general rule of unreviewability of interlocutory orders and the reasons therefor — principally the avoidance of piecemeal reviews of litigation. In so deciding the Court commented that due regard for efficiency in litigation must not go so far as to deny all opportunity for the review contemplated by the statutes.6 This concept was enlarged in Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 547, 69 S.Ct. 1221, 1225, 1226, 93 L.Ed. 1528, which recognized a small class of cases "which finally determine claims of right separable from, and collateral to, rights asserted in the action" and held an interlocutory order appealable "because it is a final disposition of a claimed right which is not an ingredient of the cause of action and does not require consideration with it."
Beneficial was followed in Swift & Co. Packers v. Compania Colombiana Del Caribe, 339 U.S. 684, 688-689, 70 S.Ct. 861, 865, 94 L.Ed. 1206, where the Court held an interlocutory order appealable and said that in the circumstances of the case the provision for appeals only from final decision "should not be construed so as to deny effective review of a claim fairly severable from the context of a larger litigious process." The principle was again recognized in DiBella v. United States, 369 U.S. 121, 125, 82 S.Ct. 654, 657, 7 L.Ed.2d 614, where the Court said that "the concept of finality as a condition of review has encountered situations which make clear that it need not invite self-defeating judicial construction."
The threshold question of appealability is not to be decided by rote,7 because cognizance must be given to the competing requirements of finality and fairness to the witness. Appellants say that the trial court's order will cause irreparable harm because the revelation of their trade secrets will destroy their businesses. This claim is without the mainstream of the litigation. Postponement of consideration might destroy the claimed right.8 More importantly, the appellants, as nonparties to the main suit, will have no right of appeal from a judgment therein. The trial court's order, final as to these appellants, commands them to divulge the requested information. Such order is both collateral to the main suit and final as to these appellants. DiBella says9 that the concept of finality must not be used to frustrate appellate review of an order collateral to the principal litigation "when the practical effect of the order will be irreparable by any subsequent appeal."
Severability of the appellants' claim from the issues presented by the plaintiffs and defendants must not be confused with relevance of the information sought by the subpoenas. In one instance the question is the right of protection against disclosure of alleged trade secrets. In the other the question is the pertinence of the information to main suit issues. Relevance will be determined in the trial of the main issues and the dissatisfied party will have the right of review. So far as the appellants are concerned the ultimate determination of relevance will be an "empty rite"10 because the harm which they fear will have occurred.
We are not impressed with the argument of Continental that the appellants may obtain review by disobedience of the order and appeal from a subsequent adjudication of contempt. These non-party witnesses should not be required to expose themselves to the hazard of punishment in order to obtain a determination of their claimed rights.
What we have said does not mean that every order on a motion to quash a subpoena is appealable. Here we have a serious claim by non-party witnesses of a right to protection from the disclosure of trade secrets. Their claims are, in the language of Swift & Co. Packers v. Compania Colombiani Del Caribe,11 "fairly severable from the context of a larger litigious process." The practical effect of the order will be irreparable by any subsequent appeal.12 In our opinion the order is appealable.
The subpoena as limited by the court order requires the production of documents showing, for the state of Utah during a designated period:
Rule 45(d) covers subpoenas for taking depositions and permits them to require the production of designated documents which are within the scope of the examination permitted by Rule 26(b), subject however to the provisions of Rule 30(b) and Rule 45(b). Rule 26(b) permits the examination of a deponent on any matter "which is relevant to the subject matter involved in the pending action." Rule 30(b) provides that "for good cause shown" the court may make any order "which justice requires to protect the party or witness from annoyance, embarrassment, or oppression." Rule 45(b) authorizes the court to "quash or modify the subpoena if it is unreasonable and oppressive." Accordingly, if the documents are relevant and are sought for good cause they should be enforced unless the documents are privileged or the subpoenas are unreasonable, oppressive, annoying, or embarrassing.13
Relevancy is shown. The complaint charges restraint of trade and monopoly in the fixing of gasoline prices and in the...
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