Fischer v. McGowan, Civ. A. No. 83-0481 S.

CourtUnited States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island
Writing for the CourtGunning, LaFazia & Gnys, Edward L. Gnys, Jr., Providence, R.I., for defendants
Citation585 F. Supp. 978
PartiesSyd FISCHER and Australian Challenge for the America's Cup, Plaintiffs, v. Andrew McGOWAN and Newport Offshore Ltd., Defendants.
Docket NumberCiv. A. No. 83-0481 S.
Decision Date13 April 1984

585 F. Supp. 978

Syd FISCHER and Australian Challenge for the America's Cup, Plaintiffs,
Andrew McGOWAN and Newport Offshore Ltd., Defendants.

Civ. A. No. 83-0481 S.

United States District Court, D. Rhode Island.

April 13, 1984.

585 F. Supp. 979
585 F. Supp. 980
Decof & Grimm, R. Daniel Prentiss, Vincent T. Cannon, Providence, R.I., for plaintiffs

Gunning, LaFazia & Gnys, Edward L. Gnys, Jr., Providence, R.I., for defendants.

Edwards & Angell, Deming E. Sherman, Jeffrey Schreck, Providence, R.I., for deponent.


SELYA, District Judge.

This is an appeal from an order of a United States Magistrate for this District compelling Bruce Stannard, a reporter for an Australian-based newspaper, to disclose the names of confidential sources upon whom he relied in authoring an article which appeared in the Melbourne Age on July 19, 1983.1 Written at a time when the upcoming America's Cup finals had captured the imaginations and stirred the emotions of competitors and spectators alike, the column described in considerable detail some of the alleged financial woes which had befallen the sponsors of the twelve-meter yacht "Advance" (one of the prime contenders for the highly coveted trophy). The article, which was no doubt viewed as a juicy morsel in international yachting circles, attributed certain of the kernels of information contained therein to the defendant Andrew McGowan, the owner of a dockyard known as Newport Offshore, Ltd. ("Offshore"). It stated in substance that McGowan had confirmed that the Australian syndicate promoting Advance's challenge (Syndicate) was in arrears on an indebtedness of approximately $12,800 owed to Offshore; that repeated attempts to satisfy the debt had been unavailing; and that Offshore was contemplating the institution of legal action in an effort to effect collection. The article also described other aspects of what it painted, generally, as the Syndicate's deteriorating financial situation. Alan Payne, a marine designer whose handiwork had contributed to construction of the Advance, was named as the well-spring of some of this data. Much of the information, however, was not attributed to any particular source(s).

Following the publication of the story, the Syndicate and its project director, Syd Fischer, brought this defamation action against McGowan and Offshore in this court. Jurisdiction was premised on 28 U.S.C. § 1332.2 In the course of pre-trial discovery, Stannard was deposed by the plaintiffs on September 8, 1983. During that deposition, numerous questions were propounded concerning the sources plumbed by Stannard in extracting the intelligence upon which the article was bottomed. In response to such probing, Stannard confirmed the accuracy of the statements attributing certain points in the article to McGowan and Payne, respectively, and disclaimed that McGowan was a source of any other portions of his information. Despite repeated interrogation with respect to the unattributed segments of the piece, however, Stannard declined specifically to name any other informants upon whom he

585 F. Supp. 981
relied, claiming that such knowledge was privileged.3

The plaintiffs, disaffected with Stannard's reticence, moved for an order compelling answers to those questions concerning the identity of hitherto undisclosed sources. That motion was duly served upon the defendants, and notice thereof was given to Stannard. Only the deponent filed an objection thereto.4 And, while plaintiffs' request was pending, the defendants climbed aboard the anti-Stannard bandwagon by filing their own motion to compel (a virtual replica of the plaintiffs' initiative). That motion was served only upon the plaintiffs; it was not brought to the attention of Stannard or his attorney in any way. The plaintiffs, predictably, did not object to the defendants' motion. It was, therefore, granted automatically by the clerk on December 27, 1983 under Local Rule 12(a)(2) of this court.

In the meantime, the plot continued to thicken. Plaintiffs' motion to compel was referred to a magistrate for determination under 28 U.S.C. § 636(b)(1)(A). The magistrate held a hearing at which all counsel (including Stannard's) appeared and were heard. Thereafter, on January 12, 1984, the magistrate issued a thoughtful memorandum (Memorandum) granting the relief requested by the plaintiffs and ordering Stannard to answer the disputed questions.5 Stannard, however, did not learn of the Memorandum until January 26, 1984.6 At that time, Stannard's lawyer indicated that he would promptly prepare a notice of appeal and requested that the absence of earlier notice be brought to the attention of the court. Stannard filed this appeal on February 2, 1984, less than ten days after he first learned of the Memorandum.

Stannard requests that this court set aside the magistrate's order on the ground that it is clearly erroneous and contrary to law. Both the plaintiffs and the defendants, in a touching display of unanimity atypical of adversary litigation, join forces to urge, first, that the deponent has no standing to appeal; second, that his appeal is ineffectual as being out of time; third, that this issue is foreclosed by the mechanical granting of the defendants' unopposed motion to compel (see text ante); and fourth, that the Memorandum in any event correctly deciphers the applicable law. The matters at issue have been extravagantly briefed; and this court heard oral argument on February 13, 1984.


Before reaching the merits of the important constitutional and statutory issues raised by Stannard (if, indeed, it proves necessary to do so), the court must as a threshold matter traverse the procedural jungle presented by this dedalian record. In so doing, an attempt will be made to

585 F. Supp. 982
treat as a unit the series of snares and pitfalls mapped out by the appellees' first three lines of defense. But, this inquiry need not long detain the court

The notion that Stannard is somehow estopped from litigating his rights by the granting of the defendants' motion to compel is ludicrous. The asseveration is phrased in declarative terms by the plaintiffs, in manner following:

Stannard's appeal from the Magistrate's order of January 12, 1984, is moot for the reason that the defendant, on December 7, 1983, filed its own motion to compel Stannard to answer questions posed by defendant's counsel at the deposition, which were refused on the same grounds as those relied on to refuse to answer the plaintiff's question. That motion was granted on December 27, 1983, and no appeal was taken. That decision is now final. The instant appeal is an attempt to relitigate the same issues which have been finally determined by this Court. That determination is now the law of the case, and should not be disturbed.

Plaintiffs' Memorandum in Opposition to Appeal of Bruce Stannard (Feb. 10, 1984) at 1-2.7

This declamation stands naked as a new-born babe, unadorned by even a single citation to caselaw suggesting such a Draconian result. Such an omission is readily understandable, given the shaky footing upon which the appellees' position rests.

It is difficult to see how, consistent with fundamental fairness, Stannard could be bound by the December 27, 1983 order when (i) he was not a party to the case, nor in privity with any party, (ii) he received neither notice of the defendants' motion nor an opportunity to object or be heard, and (iii) he received no notification of the order emanating therefrom until well after all applicable appeal periods had expired. In analogous situations, courts have consentiently rejected the idea that important rights can be eviscerated in such a casual fashion. Cf. Kremer v. Chemical Construction Corp., 456 U.S. 461, 480-81, 102 S.Ct. 1883, 1897, 72 L.Ed.2d 262 (1982) (collateral estoppel inapplicable where the party against whom the earlier decision is asserted did not have a "full and fair" opportunity to litigate the claim or issues); Hansberry v. Lee, 311 U.S. 32, 44-46, 61 S.Ct. 115, 119, 85 L.Ed. 22 (1940) (res judicata doctrine inapplicable where persons against whom judgment was invoked were not parties, nor in privity with any of the parties, to the suit in which the judgment was rendered).

And, this is especially true in a case such as this, where the putative bar arises not from judicial deliberation but from a temporary coincidence of interests between plaintiffs and defendants, culminating in ministerial approval of an unopposed motion. If the law is to have any meaning, parties to an action cannot colleague to twist the processes of the court to their mutual ends, impairing the rights of unseen third persons in the bargain. That is precisely why Fed.R.Civ.P. 37(a) provides, with regard to motions for orders compelling discovery, that "reasonable notice" must be given "to other parties and all persons affected thereby." (Emphasis added). The defendants, of course, wholly ignored the mandate of Rule 37(a) in the filing of their motion to compel; and the resultant order was, as to Stannard, rendered totally impotent by this oversight. Accordingly, the ipse dixit assertion of the appellees in this wise is as empty as a celibate's couch.

The arguments as to standing and timeliness are inextricably intertwined. Stannard maintains, with compelling force, that his ten-day period for appeal, see Fed. R.Civ.P. 72(a); Local Rule 32(b)(2),8 did not

585 F. Supp. 983
expire until ten days after being served with notice of the magistrate's order. Hence, Stannard reasons, since he did not receive any notice of the magistrate's order until January 26, 1984, his February 2 appeal was timely. The appellees counter on two fronts. They assert, first, that contrary to Stannard's averments, he was not entitled to receive notice of the Magistrate's order and thus cannot rely on the lack of notification to circumvent the ten-day period; and further, that the right to...

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