U.S. Comm. Futures Trading v. Mcgraw-Hill

• Decision Date: 02 December 2005
• Docket Number: No. 05-235 (RCL).,05-235 (RCL).
• Citation: 403 F.Supp.2d 34
• Parties: In the matter of an APPLICATION TO ENFORCE ADMINISTRATIVE SUBPOENA OF the UNITED STATES COMMODITY FUTURES TRADING COMMISSION, Applicant, v. The McGRAW-HILL COMPANIES, INC., Respondent.
• Court: U.S. District Court — District of Columbia

403 F.Supp.2d 34

In the matter of an APPLICATION TO ENFORCE ADMINISTRATIVE SUBPOENA OF the UNITED STATES COMMODITY FUTURES TRADING COMMISSION, Applicant, v. The McGRAW-HILL COMPANIES, INC., Respondent.

No. 05-235 (RCL).

United States District Court, District of Columbia.

December 2, 2005.

Anthony M. Mansfield, United States Commodity Futures Trading Commission, Washington, DC, for Applicant.

Richard L. Cys, Davis, Wright & Tremaine, LLP, Washington, DC, Carolyn K. Foley, Davis, Wright & Tremaine, LLP, New York City, for Respondent.

MEMORANDUM OPINION

LAMBERTH, District Judge.

This matter comes before this Court on Respondent's Motion [16] to Clarify this Court's October 4, 2005 Order. In that Order, The McGraw-Hill Companies, Inc. ("McGraw-Hill"), was ordered to comply with an administrative subpoena duces tecum issued by the Commodities Futures Trading Commission ("CFTC"), as modified by this Court. Respondent now returns to this Court in search of an order clarifying and further modifying the same subpoena, as well as ordering the imposition of a protective order. The CFTC filed an Opposition [17] on November 7, 2005, and McGraw-Hill filed its Reply [19] on November 14, 2005. Upon a thorough review of each party's filings, the applicable law and the entire record herein, this Court finds that Respondent's Motion [16] to Clarify this Court's October 4, 2005 Order shall be DENIED.

I. BACKGROUND

In brief,¹ McGraw-Hill resists compliance with an administrative subpoena requiring it to provide numerous documents to the CFTC. The CFTC requested the documents as part of its investigation of an energy marketing company ("Energy Company")² suspected of reporting false price data in an effort to affect market prices. The Company allegedly reported the false data to Platts, a division of McGraw-Hill, which publishes a wide range of energy industry information. The Energy Company allegedly did so knowing that its false data would alter the price indices that Platts publishes, which industry players then use to set prices for transactions going forward. The suspected false reporting, if it occurred, constitutes a violation of the Commodities Exchange Act ("Act"). The subpoena requests documents that will enable the CFTC to identify (and/or confirm) instances of false reports over a three-year period and to demonstrate how those reports might have impacted market prices.

McGraw-Hill objected to the subpoena on the basis that the reporter's privilege protected it from having to reveal confidential information received from its sources and that the CFTC had not made the showing of need and exhaustion of alternative sources required to overcome the privilege. In the alternative, McGraw-Hill argued that the subpoena was overly broad and unduly burdensome.

In its October 4, 2005 Memorandum Opinion ("Opinion"), U.S. Commodity Futures Trading Comm'n v. McGraw-Hill, Inc., 390 F.Supp.2d 27, 30-31 (D.D.C.2005) (Lamberth, J.), this Court found that, while Platts was entitled to claim the privilege, the privilege was overcome by the public interest in the CFTC's investigation. Id. at 32-35. In the Order accompanying the Opinion ("Order"), this Court modified three of the subpoena's document requests in accordance with McGraw-Hill's complaints that they were so broad as to be unduly burdensome. Id. at 38. The remainder of the subpoena, however, was found to be reasonable and thus enforceable as written. Id. at 35.

McGraw-Hill now moves this Court, pursuant to Federal Rule of Civil Procedure 59(e), to amend and clarify its Order "so as to conform the October Order with the findings set forth in the October 4 Memorandum Opinion." (Mot. 1; Mem. P. & A. 5.) Specifically, McGraw-Hill requests that this Court limit the subpoena to information that the Opinion deemed was necessary to the CFTC's investigation (Mem. P. & A. 2, 5-9) and to issue a protective order (id. at 3, 13-15). Failure to do so, McGraw-Hill argues, would "be clear error and would constitute a manifestly unjust intrusion of McGraw-Hill's reporter's privilege." (Id. at 2.)

The CFTC opposes the motion and claims that it merely reiterates McGraw-Hill's initial claims that the subpoena was too broad and unduly burdensome. (Opp'n 1-4.) The CFTC also believes that the proposed protective order is duplicative of protections already afforded under the Act as well as so broad that it would impermissibly limit the CFTC's use of the information. (Id. at 9-14.)

Upon a thorough review of each parties' filings, the applicable law and the entire record herein, this Court finds that Respondent's Motion [16] to Clarify and for a Protective Order shall be DENIED.

II. DISCUSSION

A court may grant a motion for reconsideration under Federal Rule of Civil Procedure 59(e) when there is an "intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C.Cir.1996). The Court will deny the motion, however, if the movant uses the motion to argue theories that were or could have been presented in the initial matter. Taylor v. DOJ, 268 F.Supp.2d 34, 35 (D.D.C.2003) (citing Kattan v. District of Columbia, 995 F.2d 274, 276 (D.C.Cir.1993)). The strictness with which such motions are viewed is justified by the need to protect both the integrity of the adversarial process in which parties are expected to bring all arguments before the court, and the ability of parties and others to rely on the finality of judgments. In light of the foregoing, motions for reconsideration are rarely granted by this Court.

McGraw-Hill does not direct this Court to any change in controlling law since the Order was issued; nor does it assert that new evidence has become available. Rather, the basis for its motion is the "need to correct a clear error or prevent manifest injustice." (Mem. P. & A. 1.) The error alleged, in a nutshell, is that this Court did not narrow the subpoena enough, given its findings regarding the CFTC's needs for the information. (Id. at 2.)

McGraw-Hill makes two proposals to cure the claimed error. First, it limits the transactions, hubs and days called for by the subpoena. (Mem. P. & A. 2-3.) Second, it proposes a procedure for compliance with the subpoena, under which it and the CFTC would exchange information and documents in four stages, at the conclusion of which McGraw-Hill will have fully complied with the twice-modified subpoena. (Id.) According to the deadlines suggested by McGraw-Hill, this Court estimates that the time between initiation of the process and full compliance with the subpoena's requests for monthly and daily price indices could easily exceed 180 days.³

This process, including the narrowed scope of the subpoena, should displace the subpoena as modified by this Court, McGraw-Hill contends, because it satisfies this Court's determination of the CFTC's investigatory needs (id. at 5-9), and because providing the smaller amount of information incrementally and in response to specified prompts reduces the intrusion on McGraw-Hill's privilege (id. at 4). The CFTC should not object now because, at the September 27, 2005 hearing, it expressed a willingness to "work with" McGraw-Hill "to facilitate the review" of documents potentially responsive to the subpoena. (Id. at 2 n. 2.) Similarly, McGraw-Hill argues that the CFTC previously supported the entry of a protective order. (Mem. P. & A. 2-3, 5-6.) After outlining the above proposal, McGraw-Hill leads this Court once again through each of the subpoena's document requests, identifying why each request is duplicative of other requests, outside the scope of the investigation, overly broad, impossible to comply with, or has already been complied with.

The CFTC opposes McGraw-Hill's motion on the basis that it merely restates arguments already presented (Opp'n at 3-4) and that the subpoena's requests remain relevant to the investigation (Opp'n at 4-8). Noting that McGraw-Hill's objections as to relevance and scope already have been considered and ruled on by this Court, the CFTC...