Dell Inc. v. Toshiba Samsung Storage Tech. Corp. (In re Optical Disk Drive Antitrust Litig.), 14–17502.

• Decision Date: 10 September 2015
• Docket Number: No. 14–17502.,14–17502.
• Citation: 801 F.3d 1072
• Parties: In re OPTICAL DISK DRIVE ANTITRUST LITIGATION, Dell Inc.; Dell Products, L.P.; Hewlett–Packard Company; Ingram Micro, Inc.; Synnex Corporation; Acer America Corp.; Gateway, Inc.; Gateway U.S. Retail, Inc., FKA eMachines, Inc.; State of Florida, Office of the Attorney General, Department of Legal Affairs; Aaron Wagner ; Chris Johnson; Evan Jacobson; Lisa Melegari; Barney Goodman, Jr.; Benjamin Murray; Thomas Stenger; James Itoadler; Sandra Steffen; Alex Bissen; Benjamin Faber; Matthew Hosking; Cindy Booze; Matthew Ence; Evan Ravenelle; Michael Reilly; Susie Lim; Angela Pritchard ; Mike Bishop; Kimberly Wood; Benjamin Porter; Gail Murphy ; John McKee, on behalf of themselves and all others similarly situated; JLK Systems Group, Inc. ; Jeff Kozik; Meijer, Inc.; Meijer Distribution, Inc. ; Paul Nordine; Seneca Data Distributors, Inc.; Gregory Starrett; Ashley Tremblay, on behalf of themselves and all others similarly situated, Plaintiffs–Appellees, v. Toshiba Samsung Storage Technology Corp. Korea, as Liaison Counsel for Defendants, et al., Defendants, and John Doe 1, Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

801 F.3d 1072

In re OPTICAL DISK DRIVE ANTITRUST LITIGATIONDell Inc.; Dell Products, L.P.; Hewlett–Packard Company; Ingram Micro, Inc.; Synnex Corporation; Acer America Corp.; Gateway, Inc.; Gateway U.S. Retail, Inc., FKA eMachines, Inc.; State of Florida, Office of the Attorney General, Department of Legal Affairs; Aaron Wagner ; Chris Johnson; Evan Jacobson; Lisa Melegari; Barney Goodman, Jr.; Benjamin Murray; Thomas Stenger; James Itoadler; Sandra Steffen; Alex Bissen; Benjamin Faber; Matthew Hosking; Cindy Booze; Matthew Ence; Evan Ravenelle; Michael Reilly; Susie Lim; Angela Pritchard ; Mike Bishop; Kimberly Wood; Benjamin Porter; Gail Murphy ; John McKee, on behalf of themselves and all others similarly situated; JLK Systems Group, Inc. ; Jeff Kozik; Meijer, Inc.; Meijer Distribution, Inc. ; Paul Nordine; Seneca Data Distributors, Inc.; Gregory Starrett; Ashley Tremblay, on behalf of themselves and all others similarly situated, Plaintiffs–Appellees

v. Toshiba Samsung Storage Technology Corp. Korea, as Liaison Counsel for Defendants, et al., DefendantsandJohn Doe 1, Appellant.

No. 14–17502.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 6, 2015.

Filed Sept. 10, 2015.

Sean F. O'Shea (argued) and Daniel M. Hibshoosh, O'Shea Partners LLP, New York, NY, for Interested Non–Party Appellant.

Jeff D. Friedman (argued) and Shana E. Scarlett, Hagens Berman Sobol Shapiro LLP, Berkeley, CA; Steve W. Berman, Hagens Berman Sobol Shapiro LLP, Seattle, WA; Guido Saveri, R. Alexander Saveri, and Cadio Zirpoli, Saveri & Saveri, Inc., San Francisco, CA; Lee Gordon, Hagens Berman Sobol Shapiro LLP, Pasadena, CA, for Indirect and Direct Purchaser Plaintiffs–Appellees.

Michael P. Kenny, Debra D. Bernstein, Rodney J. Ganske, and Andrew J. Tuck, Alston & Bird LLP, Atlanta, GA; James M. Wagstaffe, Kerr & Wagstaffe LLP, San Francisco, CA, for Plaintiffs–Appellees Dell Inc. and Dell Products L.P.

Daniel A. Sasse, Crowell & Moring LLP, Irvine, CA; Beatrice B. Nguyen, Crowell & Moring LLP, San Francisco, CA, for Plaintiffs–Appellees Hewlett–Packard Company, Ingram Micro Inc., and Synnex Corporation.

David B. Esau, Carlton Fields Jorden Burt, West Palm Beach, FL, for Plaintiffs–Appellees Acer America Corp., Gateway, Inc., and Gateway U.S. Retail, Inc., FKA eMachines, Inc. Defendant Toshiba Samsung Storage Technology Korea Corporation.

Lizabeth A. Brady, Nicholas J. Weilharnmer, and R. Scott Palmer, State of Florida, Office of the Attorney General, Department of Legal Affairs, Tallahassee, FA, for Plaintiff–Appellee State of Florida.

Christopher Ries, United States Department of Justice, Antitrust Division, San Francisco, CA; Ila C. Deiss, United States Attorney's Office, San Francisco, CA, for Non–Party United States Department of Justice, Antitrust Division.

Appeal from the United States District Court for the Northern District of California, Richard Seeborg, District Judge, Presiding. D.C. No. 3:10–md–02143–RS.

Before: RICHARD C. TALLMAN, MILAN D. SMITH, JR., and MARY H. MURGUIA, Circuit Judges.

OPINION

M. SMITH, Circuit Judge:

Interested Non–Party John Doe 1(Doe) appeals from the district court's order denying his motion to quash a subpoena from Plaintiffs–Appellees Dell, Inc., et al. (Dell Plaintiffs)¹ to the Department of Justice, Antitrust Division (DOJ). As part of a criminal antitrust investigation into the optical disc drive industry,² the FBI made secret tape recordings and transcripts of conversations among various individuals, including Doe, an employee of one of the companies being investigated. Doe, who was initially designated as a subject of the grand jury investigation hearing for the potential antitrust case, was not indicted. After the grand jury investigation concluded with corporate pleas and a settlement, the Dell Plaintiffs, in a collateral civil antitrust suit against certain optical disk drive manufacturers, subpoenaed the DOJ seeking “recordings of conversations” and “verbatim transcripts” relating to the DOJ's investigation of those manufacturers. The FBI had made the tape recordings two months before the grand jury issued its subpoena to Doe seeking his testimony. Doe moved to quash the subsequent civil subpoena pursuant to Federal Rule of Criminal Procedure 6(e), which prohibits disclosure of “a matter occurring before the grand jury.” Fed.R.Crim.P. 6(e). Doe argued that no protective order would protect his interest in not having his identity and the content of those tapes revealed. The district court denied Doe's motion, concluding that Rule 6(e) did not apply because the recordings at issue are not “a matter occurring before the grand jury” within the definition of material protected by the rule. We agree, and hold that the tape recordings at issue in this case are not “matters occurring before the grand jury,” and, therefore, are not protected by Rule 6(e). Doe contends erroneously that the district court abused its discretion by failing to apply the “effect test,” which requires the court to “make a factual inquiry on a document-by-document basis” to determine “whether disclosure of a particular requested item will reveal some secret aspect of the inner workings of the grand jury.”United States v. Dynavac, Inc.,

6 F.3d 1407, 1413 (9th Cir.1993). We did not adopt the “effect test” in Dynavac, and we decline to do so now. Moreover, Doe has offered no evidence showing that the disclosure of the tape recordings would compromise “the integrity of the grand jury's deliberative process.” Id. at 1414.

We affirm the decision of the district court.

FACTUAL AND PROCEDURAL BACKGROUND

The Dell Plaintiffs served a subpoena on the DOJ requesting the production of secret tape recordings and transcripts of conversations that were part of an earlier, completed DOJ criminal antitrust investigation into the optical disc drive industry. As required by the “Touhy regulations,”³ the DOJ objected to the subpoena on a variety of grounds, including “to the extent it demands information that would violate the grand jury secrecy rule of Rule 6(e) of the Federal Rules of Criminal Procedure.” However, following negotiations, the DOJ agreed to produce the tapes to the Dell Plaintiffs under the terms of a protective order. Doe, who is not a party to the civil suit, intervened and sought to quash the subpoena that requested recordings and transcripts of conversations to which Doe was a party. Doe argued that the subpoena “must be quashed because it purports to require the production of secret recordings of [ ] Doe that, irrespective of their specific contents, would seriously harm and possibly destroy his personal and professional reputation, and quite possibly deprive him of his livelihood.”

Acting under an order of reference from the district court, the magistrate judge disagreed, and denied Doe's motion to quash, but issued an order stating that “the materials at issue (recordings) shall not be produced until an appropriate supplemental stipulated protective order is signed.” The magistrate judge rejected the argument “that just because an agent goes out and gets some evidence in an investigation, ... it's grand jury material,” concluding that Rule 6(e) did not apply to the subpoenaed material.

The district court affirmed the magistrate judge's decision, noting that “[a] district court will modify a magistrate judge's ruling on a non-dispositive matter only if the order is ‘clearly erroneous' or ‘contrary to law.’ ” Order Overruling Objections to Nondispositive Pretrial Order of Magistrate Judge Re Production of Recorded Conversations, In Re Optical Disk Drive Antitrust Litigation, No. 3:10–md–2143 RS, at 1 (N.D. Ca. December 19, 2014) (citation omitted). The court focused on “what constitutes ‘grand jury materials' in the first instance,” identifying as the key component, “matters occurring before the grand jury(.)” Id. at 2 (quoting Sec. & Exch. Comm'n v. Dresser Indus., Inc., 628 F.2d 1368, 1382 (D.C.Cir.1980) ). The court held that “the record does not support a conclusion that the recordings in dispute constitute ‘matters occurring before the grand jury’ within the meaning of this rule” because “while it might be reasonable to assume that some or all of the recordings were presented to the grand jury, nothing in the subpoena seeks to discover what the grand jury actually did or did not have before it.” The court further noted that “[p]roduction of all material responsive to the subpoena likewise would not establish that any or all of those materials were ever presented to the grand jury, much less shed light on its inner workings.” See Dynavac, 6 F.3d at 1411–12. While the district court did not explicitly apply the “effect test,” it did apply some of the “principles” of that test to the factual record before it, focusing on whether releasing the recordings would reveal “some secret aspect of the grand jury's investigation.”

Doe filed this timely appeal.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction over this appeal pursuant to Perlman v. United States, 247 U.S. 7, 13, 38 S.Ct. 417, 62 L.Ed. 950 (1918). “The Perlman rule has been formulated as providing a right of immediate appeal by a party aggrieved by a district court discovery order whenever the order requires a third party to produce evidence or documents and that third party cannot be expected to go into contempt merely to create a final appealable order.” In re Nat'l Mortg. Equity Corp. Mortgage Pool Certificates Litig., 857 F.2d 1238, 1240 (9th Cir.1988). The district court's order in this case does not compel Doe to produce evidence, but the Perlman doctrine has been applied to situations like this one where a third party (e.g., Doe) must rely on another third party (e.g., the DOJ) to protect his interests in the discovery process. See In re Grand Jury Subpoenas Dated Dec. 10, 1987, 926 F.2d 847, 854 (9th Cir.1991) ( “Doe Three must rely on Doe Four to protect his interests. Doe Four, however, elected to comply with the subpoenas. The only way to...