Makita Corp. v. US

• Citation: 819 F. Supp. 1099
• Decision Date: 01 April 1993
• Docket Number: Court No. 93-02-00114.
• Parties: MAKITA CORPORATION, Makita U.S.A., Inc., and Makita Corporation of America, Plaintiffs, v. UNITED STATES of America, and United States Department of Commerce, Defendants.
• Court: U.S. Court of International Trade

819 F. Supp. 1099

MAKITA CORPORATION, Makita U.S.A., Inc., and Makita Corporation of America, Plaintiffs, v. UNITED STATES of America, and United States Department of Commerce, Defendants.

Court No. 93-02-00114.

United States Court of International Trade.

April 1, 1993.

Verner, Liipfert, Bernhard, McPherson and Hand, Chartered, Kathleen H. Hatfield, Washington, DC, for plaintiffs.

Stuart E. Schiffer, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Jeffrey M. Telep, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, Linda Andros, Washington, DC, of counsel, for defendants.

OPINION & ORDER

AQUILINO, Judge:

This is another case which raises issues of unusual sensitivity, including the propriety of judicial intervention in on-going administrative proceedings, protection of confidential information, effective assistance of counsel in the absence of access to such information and the interaction of attorneys in zealously representing the competing interests of the clients, to quote from Hyundai Pipe Co. v. U.S. Dep't of Commerce, 11 CIT 238, 1987 WL 8807 (1987).

I

In its notice of Initiation of Antidumping Duty Investigations, Professional Electric Cutting Tools and Professional Electric Sanding/Grinding Tools, 57 Fed.Reg. 28,483 (June 25, 1992), the International Trade Administration, U.S. Department of Commerce ("ITA") stated that it was commencing the proceedings based on a petition filed on behalf of Black & Decker (U.S.) Inc. At that time, the petitioner was represented by the law firm Dorsey & Whitney, which filed with the ITA a form application for administrative protective order signed July 9, 1992 by three lawyers with that firm and two other individuals. The application was granted on July 28, 1992, whereupon Dorsey & Whitney applied to amend the protective order to include another attorney associated with the firm, Panagiotis C. Bayz. That application (of July 30, 1992), however, bore a copy of a written objection by an attorney for the primary focus of the ITA nascent investigations, Makita Corporation, to inclusion of Mr. Bayz under the protective order on the ground that he had

had a significant and substantial involvement in a Section 337 case Makita had brought before the ITC in 1988-1989. At that time he was working for Makita, and became privy to Makita's sensitive financial and marketing data.¹

Before the ITA acted on the request for amendment, signatories of the July 9, 1992 application left Dorsey & Whitney for the law firm Stroock & Stroock & Lavan, along with Mr. Bayz and their client Black & Decker. A new application for a protective order was submitted and granted, followed by another request for inclusion of the firm's new associate.

On February 17, 1993, after more than six months of repeated opposition by Makita, the ITA determined to grant Mr. Bayz access to the confidential information submitted by that respondent corporation per the following reasoning:

It is clear from the submissions of both parties that Mr. Bayz did have some prior legal involvement with a Section 337 action on behalf of Makita. However, the fact that Mr. Bayz worked on such a matter at various times in the past, and at various levels in his legal maturation, has no bearing as to whether or not he is entitled to an APO under our regulations for the current AD investigation, which involves 1991-92 less than fair value sales allegations. Section 777 of the Tariff Act of 1930 and Department regulations circumscribe the bounds of our jurisdiction. Section 777(C)(1)(A) mandates that the Department ... "shall make ... available all business proprietary information ... to all interested parties who are parties to the proceeding under a protective order ...". Our regulatory procedures set out how and when a party is entitled to business proprietary information and are concerned with ensuring that parties who gain APOs do not directly, or even inadvertently, disseminate, or in any manner disclose such information to others who are not so entitled. Our application Form ITA-367 (3.89) sets out the limited circumstances that we inquire into when determining whether to grant APO status. The questions are concerned with particular relationships, present and future, that the person applying may have with interested parties to the current proceeding pending before the Department. Where a person currently holds, or will hold, a decision making position in a company that is a party to the proceeding (e.g., in-house counsel), or holds, or will hold such a position in the company of a competitor of a party(s) to the proceeding, then the Department may determine not to grant APO status under these circumstances. Again, this will be a limited decision for the sole purpose of determining if the relationship in question would compromise proprietary information to be released under APO, now or in the future.

Additionally, whether or not a 337 action is substantially related to the current AD investigation before the Department is not relevant to the inquiry we must make before granting APO status, nor is it relevant that Bayz may have information concerning Makita's past Section 337 action, which might now assist or give some advantage to petitioner or its counsel in this pending investigation. Since the Department has no jurisdiction over parties to a 337 action it can not make findings regarding information submitted in that matter. Rather, the Department has limited jurisdiction to determine who may receive APO status in antidumping or countervailing duty proceedings based upon the current and future relationships of those requesting an APO with those parties that have submitted business proprietary information in a current proceeding. Therefore, the Department takes no position regarding actual or potential breaches of conflict of interest and/or attorney-client privilege by Bayz, and we do not deem it a matter that is within our provence to decide upon.

Rather, such allegations would seem to be more appropriately decided by the Bar in which Bayz is a member, or in some other forum which has jurisdiction over such matters ... Mr. Bayz has provided all of the information required by the Department in his applications for protective order, FORM ITA-367 (3.89). Moreover, it is the Department's general policy not to interfere in a party's choice of representation.

This decision concluded by warning that the respondent(s) had two business days within which to withdraw any

information Makita does not want to release to Mr. Bayz. Any information withdrawn will not be considered in this proceeding and may result in the use of the best information available for the Department's final determination.

II

This case then commenced, and, after immediate oral argument from both sides on plaintiffs' proposed order to show cause, the court granted a temporary restraining order, pending formal response by the defendants and a full hearing on plaintiffs' application for a preliminary injunction. Such a hearing has been held, at the conclusion of which the defendants consented to extension of the restraining order until this decision.

A

In 1988, Makita U.S.A., Inc. and Makita Corporation of America filed a complaint with the U.S. International Trade Commission ("ITC"), alleging unfair methods of competition and unfair acts in the importation of articles into the United States within the meaning of 19 U.S.C. § 1337. See Certain Electric Power Tools, Battery Cartridges and Battery Chargers, 53 Fed.Reg. 31,112 (Aug. 17, 1988). Counsel for the complainants were Bell, Boyd & Lloyd, who had had Panagiotis C. Bayz in their employ as a paralegal since May 1986.

According to an affidavit submitted in the matter now before the ITA by Mr. Bayz, he began law school in August 1988, subsequent to which he was a "part-time law clerk with Bell, Boyd & Lloyd from January 1989 to April 1990 and ... a summer associate from May to July, 1989." He states that, during those months at the firm, he worked with William A. Zeitler and other attorneys on the section 1337 complaint filed by Makita. An affidavit provided to the court in this case by Mr. Zeitler adds:

4. I was lead counsel for Makita in the Section 337 proceeding. As such, I was aware of Mr. ... Bayz's activities on behalf of Makita in his various capacities as paralegal, law clerk, and summer associate at Bell, Boyd & Lloyd.

5. Mr. Bayz spent a significant portion of his time at Bell, Boyd & Lloyd on Makita matters. I recall Mr. Bayz having meetings with me about pricing comparisons of Makita's and competitors' products that I had requested him to do. Also, there were deposition digests I asked him to prepare, and Makita documents that I asked him to review. Mr. Bayz also had input into a large number of the pleadings, or portions of the pleadings, in the Section 337 proceeding. This included the appeal to the Federal Circuit, large parts of which were filed under seal.

6. As a part of the Section 337 proceeding, Makita produced thousands (at least 80,000) of documents, most of which were submitted under the ITC protective order. Mr. Bayz had access to these for his legal tasks. These documents contained confidential information regarding Makita's competition, Makita's distribution practices, its pricing practices, operations and sales figures. Mr. Bayz also had access to information relating to the similarities/differences between Makita's various tools and Makita's marketing practices.

7. In addition, Mr. Bayz had access to sensitive production data at Makita's production facilities at Buford, GA., as well as profit and loss statements for Makita Corp., Makita USA, Inc. and Makita Corporation of America.

8. Mr. Bayz assisted Makita in compiling, and had access to, the confidential data underlying Makita's submission in the Section 301 retaliatory tariff proceeding in 1987 where Black & Decker, the

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