Duplan Corporation v. Deering Milliken, Inc.

• Decision Date: 30 May 1972
• Docket Number: 70-493,70-622,70-386,70-628,70-391,Civ. A. No. 71-306,70-14,71-126,70-358,68-705,71-87 to 71-102,70-295,70-968,69-1096,71-115,69-777,70-677,70-189,71-127 and 71-283.,70-385,70-683,70-250
• Citation: 370 F. Supp. 761
• Parties: The DUPLAN CORPORATION, Plaintiff, v. DEERING MILLIKEN, INC., et al., Defendants. DEERING MILLIKEN RESEARCH CORPORATION, Plaintiff, v. The DUPLAN CORPORATION and Burlington Industries, Inc., Defendants. The DUPLAN CORPORATION et al., Plaintiffs on the Counterclaim, v. DEERING MILLIKEN RESEARCH CORPORATION, Defendant on the Counterclaim, and Deering Milliken, Inc., et al., Additional Defendants on the Counterclaim.
• Court: U.S. District Court — District of South Carolina

370 F. Supp. 761

The DUPLAN CORPORATION, Plaintiff, v. DEERING MILLIKEN, INC., et al., Defendants.

DEERING MILLIKEN RESEARCH CORPORATION, Plaintiff, v. The DUPLAN CORPORATION and Burlington Industries, Inc., Defendants.

The DUPLAN CORPORATION et al., Plaintiffs on the Counterclaim, v. DEERING MILLIKEN RESEARCH CORPORATION, Defendant on the Counterclaim, and Deering Milliken, Inc., et al., Additional Defendants on the Counterclaim.

Civ. A. Nos. 71-306, 70-968, 69-1096, 68-705, 69-777, 70-14, 70-189, 70-250, 70-295, 70-358, 70-385, 70-386, 70-391, 70-493, 70-622, 70-628, 70-677, 70-683, 71-87 to 71-102, 71-115, 71-126, 71-127 and 71-283.

United States District Court, D. South Carolina, Spartanburg Division.

May 30, 1972.

Fletcher C. Mann, Leatherwood, Walker, Todd & Mann, Greenville, S. C., Charles B. Park, III, Parrott, Bell, Seltzer, Park & Gibson, Charlotte, N. C., Anthony F. Phillips, Willkie, Farr & Gallagher, New York City, for United Merchants & Mfg. Inc., The Duplan Corp., The Schwarzenbach-Huber Co., Jonathan Logan, Inc., Frank Ix & Sons Va., Corp., Lawrence Texturing Corp., Burkyarns, Inc.

Edward P. Perrin, Perrin, Perrin & Mann, Spartanburg, S. C., David Rabin, McNeill Smith, Smith, Moore, Smith, Schell & Hunter, Greensboro, N. C., for Texfi Industries, Inc., Blanchard Yarn Co., Reliable Silk Dyeing Co., Dixie Yarns, Inc., Tex-Elastic Corp., Hemmerich Industries, Spring-Tex, Inc., Olympia Mills, Textured Fibres, Virginia Mills, Inc., Throwing Corp. of America.

Thomas A. Evins, Butler, Means, Evins & Browne, Spartanburg, S. C., Jay Greenfield, Simon H. Rifkind and David J. Brody of Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for Deering Milliken, Inc., and Deering Milliken Research Corp.

Rufus M. Ward, Ward, Howell & Barnes, Spartanburg, S. C., Granville M. Brumbaugh of Brumbaugh, Graves, Donohue & Raymond, New York City, for Moulinage et Retorderie de Chavanoz, Ateliers Roannais de Constructions Textiles, (ARCT, France).

R. Hoke Robinson, Thomas T. Moore, Robinson, McFadden & Moore, Arthur O. Cooke, Cooke & Cooke, Greensboro, N. C., for ARCT, Inc.

W. Francis Marion, O. G. Calhoun, Haynsworth, Perry, Bryant, Marion & Johnstone, Greenville, S. C., John W. Malley, Wm. K. West, Jr., of Cushman, Darby & Cushman, Washington, D. C., for Burlington Industries, Inc., Madison Throwing Co., Inc., Leon-Ferenbach, Inc., National Spinning Co., Inc.

HEMPHILL, District Judge.

In this multidistrict litigation pursuit of discovery has reached a temporary impasse on a Rule 34¹ request launched by the Duplan Corporation,² and associated litigants, called plaintiffs for the purpose of further identification herein. On November 1, 1971, plaintiffs filed a Rule 34 request on each ARCT³ (France) and Chavanoz;⁴ these requests were extensive and request various categories of documents of each of the defendants pursued. Among the requests was one numbered 17⁵ which requested:

17. Each document which refers to, reflects upon, or in any way relates to, and which was received from or went to any of the following:

(k) Leo Soep

(z) Michael Laurent

Numbers of documents have been produced in most of the categories named in the request, and some have been produced as to Leo Soep and Michael Laurent, but a claim of privilege, as between Soep and/or Laurent and the pursued defendant as client has brought this discovery effort to a halt and demands a decision by this court.

Originally, plaintiffs had signified an intention to depose Mr. Soep in Paris, or elsewhere in France because the condition of his health forbid distant travel. Also, defendants are French companies, and access to records or notes would be enhanced by stalking the witness in his business bailiwick. There arose no serious opposition to the taking of the deposition there, but counsel, and court, envisioned facility in completing certain discovery in the United States before repairing to France. While the American discovery was in progress, misfortune intervened, and the court was advised of the untimely demise of Mr. Soep.⁶ Mr. Laurent, who is claimed to be an attorney for ARCT is alive and present indications evidence an intent to depose him.^*7

Certain papers of Mr. Soep were returned by him to his clients when heart surgery was imminent.⁸ Subsequent to the death of Mr. Soep, this court requested of counsel⁹ that the widow and fiduciaries of the late lamented be contacted and asked to preserve the papers of the deceased the court realized its entire lack of any jurisdiction over any papers held by the widow or the fiduciaries of the estate. Counsel graciously complied and there now exist certain papers of Mr. Soep either in the hands of the present targets of the Request, or in the hands of others; the availability is not the issue; privilege is the issue.

It is to be remembered that the throwsters have charged DMI, DMRC, Chavanoz, ARCT-France, Whitin and ARCT, Inc. (ARCT-France's majority-owned American subsidiary) with combining and conspiring to restrain and to monopolize interstate and foreign commerce in the importation, sale and distribution of FT machines, FT processes and FT technology in violation of Sections 1 and 2 of the Sherman Act by, among other means, (1) controlling the exportation of ARCT FT machines from France and their importation into the United States, (2) regulating the licensing of Chavanoz' FT technical processes, (3) creating and maintaining a regimented distribution system for Chavanoz' FT technology and ARCT's FT machines which DMRC and Chavanoz camouflaged with an unlawful patent use-licensing system and (4) entering into collusive arrangements whenever necessary to achieve their common plan. These "means" are borne out by the FT spindle episode.

Defendants contend that the relationship between ARCT and Chavanoz, respectively, with Soep and Laurent, support the claim of privilege. Judgment on this issue as to Laurent can await his deposition; there is no reason the documents cannot be in possession of counsel at the deposition and/or available to the court for in camera inspection then or later. As to the Soep documents, the problem is immediate.

Initially, the court is confronted with the obvious, whatever relations Mr. Soep had, they were initiated in France, and there is no dispute but that

Throughout the period during which Mr. Soep and Mr. Laurent served as conseil en brevets to ARCT France, all communications with them were for the purpose of seeking their advice and assistance as conseil en brevets. During the course of these communications, ARCT France disclosed information to them which was of a confidential nature to ARCT France in order to obtain their professional advice. In was ARCT France's intent that this information should remain confidential.¹⁰

Henri Crouzet, President of ARCT-France, further declared under oath before a notary public:¹¹

It has always been my understanding that my communications with Mr. Soep and Mr. Laurent were confidential, and that a court could not compel their disclosure. Only because of this understanding did I disclose, and authorize other ARCT France personnel to disclose, confidential information to them.

Admittedly, Leo Soep, was not a lawyer in the same professional status accorded to members of the bar in this country. He had been, however, a conseil en brevets d'invention for over ten years prior to this litigation. If the issue here concerned an American advisor on patents, or under certain circumstances, patent counsel, there would be no question but that ARCT could not claim privilege as to those Soep communications it has in possession, or accessible. In NLRB v. Harvey (C.C.A. 4 1965) 349 F.2d 900, 904, the court adopted Wigmore's statement of the essentials of the attorney-client privilege:

(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) except the protection be waived. 8 Wigmore, Evidence § 2292 (McNaughton rev. 1961).

and quoted with approval the definition of privilege as stated in United States v. United Shoe Machinery Corp. (D.Mass. 1950), 89 F.Supp. 357, 358:

* * * The privilege applies only if (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.

Wigmore also explains:

2300. Persons having legal knowledge, but not admitted to practice. (1) There is no ground for encouraging the relation of client and legal adviser except when the adviser is one who has been formally admitted to the office of attorney or counselor as duly qualified to give legal advice.

That the person consulted is in fact practicing, without formal sanction of the court, is certainly not sufficient. 8 Wigmore, Evidence a€” Rev.1961

This court is not dealing with an attorney-client relationship established by parties in the United States. The client and the advisor, whether he be considered as an attorney, or other, are French. Soep, in France, occupied the status of "conseil en brevets d'invention," also called "ingénieurs conseils en propriété industrielle", as defined by Article 842 of the Code Civil of the Republic of France (decree 65-921 of 29 October 1965) which provides in part:

Any person included in a national list made

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