U.S. v. American Tel. & Tel. Co.

• Citation: 642 F.2d 1285,206 U.S.App.D.C. 317
• Decision Date: 16 September 1980
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 1285

642 F.2d 1285

206 U.S.App.D.C. 317, 1980-2 Trade Cases 63,533

UNITED STATES of America v AMERICAN TELEPHONE AND TELEGRAPH COMPANY, et al., Appellees MCI Communications Corporation, et al., Appellants.

In re MCI COMMUNICATIONS CORPORATION and MCI

Telecommunications Corporation, Petitioners.

Nos. 80-1141, 80-1513.

United States Court of Appeals District of Columbia Circuit.

Argued 12 June 1980.

Decided 16 Sept. 1980.

Appeal from the United States District Court for the District of columbia.

Petition for Writ of Mandamus (D.C. Civil No. 74-1698).

Michael H. Salsbury and Theodore R. Tetzlaff, Chicago, Ill., William J. Byrnes, Washington, D.C., for appellants.

George L. Saunders, Jr., Robert D. McLean, Lee M. Mitchell and Harold S. Levy, Washington, D. C., for appellee.

Before TAMM, ROBINSON and WILKEY, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILKEY.

WILKEY, Circuit Judge:

Appellants MCI Communications Corp. and MCI Telecommunications Corp. (hereinafter collectively "MCI") seek reversal of an interlocutory discovery order of the district court, issued in the course of a civil antitrust suit brought by the United States against the American Telephone and Telegraph Company (AT&T). The district court's order would require the United States to accede to AT&T's discovery request for certain documents which the Government earlier received from MCI, and in which MCI claims a work product privilege. We have stayed the district court's discovery order pending our decision on this appeal. ¹

Shortly before the district court handed down its discovery order, MCI moved to intervene for the purpose of asserting its claim of work product privilege in the documents requested by AT&T. The district court denied this motion. MCI now appeals both the district court's denial of its intervention motion and the district court's interlocutory discovery order, and in the alternative seeks a writ of mandamus to prevent the transfer of the documents from the Government to AT&T. We hold that MCI should have been allowed intervention as of right, that the denial of intervention is appealable, and that MCI has not waived any work product privilege that it might have in the requested documents.

I. BACKGROUND

The controversy in this appeal arises from two antitrust suits with closely related issues, filed against AT&T in two different federal district courts. The first suit was filed against AT&T by MCI in the United States District Court for the Northern District of Illinois on 6 March 1974. MCI charged AT&T with monopolizing and attempting to monopolize the market for long-distance telephone communications. The second suit, which directly concerns us in this appeal, was filed as a civil antitrust action by the United States against AT&T on 20 November 1974 in the United States District Court for the District of Columbia. In claims overlapping those made by MCI, the Government charged AT&T with monopolizing, attempting to monopolize, and conspiring to monopolize markets for telecommunications services and equipment.

Discovery in the District of Columbia suit has extended over a several year period, interrupted at times pending appeals on various issues. The first stage of the controversy that resulted in the present litigation occurred in 1978, when a magistrate supervising the discovery process required AT&T to produce for the Government all materials previously given by AT&T to private plaintiffs in the discovery stage of several private antitrust actions. ² One of the private plaintiffs to whom AT&T had given documents was MCI, which had discovered documents from AT&T in the antitrust suit in the Northern District of Illinois. ³ Of the approximately seven million pages of documents that AT&T had produced for MCI in that case, the United States sought to obtain the one and a half million pages that MCI had selected for copying. ⁴ Over AT&T's objections, the district court ordered AT&T to produce these pages for the United States. ⁵

At the same time, the United States pursued a second approach to benefit from MCI's earlier discovery efforts against AT&T. Upon a motion by the United States in the Northern District of Illinois, the judge presiding there over MCI's antitrust suit against AT&T granted a modification of an existing protective order to allow MCI to make available to the United States all discovery materials it had acquired from AT&T in the case, including documents, deposition transcripts, and exhibits referred to in depositions. In addition, this order permitted MCI to furnish to the Department of Justice "any explanatory material or information which would be helpful to an understanding of the items produced." ⁶ To preserve the confidentiality of any material provided by MCI pursuant to the order, the order prohibited the Government from using such materials for any purpose other than its case against AT&T in the District Court for the District of Columbia. ⁷ It is this latter, explanatory material, which is in issue in the case at bar.

Following the Seventh Circuit's affirmance of this modification of the protective order, MCI furnished the Government the documents, depositions, and exhibits that MCI had discovered from AT&T. MCI also furnished certain documents pertaining to a "database" consisting of computerized abstracts of documents, deposition transcripts, and exhibits received from AT&T during discovery. MCI's counsel had prepared the database for the Northern District of Illinois litigation. The "database documents" furnished by MCI and at issue in the current appeal describe the structure of the database and explain how information can be entered and retrieved. MCI claims to have maintained strictly the secrecy of the database documents from AT&T-although they relate to the original documents discovered from AT&T and furnished the Government-and to have provided them to the United States under the confidentiality provision of the Northern District of Illinois order.

Since AT&T had already given microfilm copies to the Government for documents selected by MCI in discovery, the major additional effect of the modification of the protective order was to permit MCI to produce their depositions and analyses of data for Government counsel's use. ⁸ Much of this analysis of data and documents was contained in MCI's computerized litigation support system, to which the now disputed database documents pertain. Unlike the documents and data themselves, none of the analytical or descriptive material in the database documents is admissible as evidence. But the database documents enable the United States to gain access to the analysis contained in the computerized support system, and might well enable AT&T to determine which documents a plaintiff's counsel would consider important, why counsel might consider them to be important, and what portions of those documents counsel might think are most important for the issues in this suit. ⁹

The controversy leading to the district court's discovery order now challenged by MCI began on 23 February 1979, when AT&T served a document request on the United States seeking discovery of the database documents furnished by MCI. The United States raised MCI's work product privilege as a defense against this request. To resolve the privilege issue, the district court submitted the matter to two Special Masters. Upon request by the United States, the Special Masters permitted MCI to participate in the proceedings by submitting a letter asserting its work product privilege and stating that it had turned over the database documents to the Government upon an assurance of confidentiality from the Government.

On 3 August 1979 the Special Masters issued their first opinion and order concerning the database documents. ¹⁰ Their decision denied AT&T's discovery request on grounds that the United States had acquired a work product privilege for documents collected by government counsel in preparation for trial, even though the documents had been prepared by a third party, MCI. This rationale did not rest on the separate work product privilege claimed by MCI. On 16 November 1979 Judge Greene vacated the Special Masters' order, finding that the United States had waived any privilege of its own, and remanded the case to them for reconsideration. ¹¹ The Special Masters issued a second opinion on 27 November 1979, holding that the United States could not assert a work product privilege for MCI, and that the database documents should therefore be released to AT&T. ¹²

The United States appealed the Special Masters' second opinion to the district court on 7 December 1979. Ten days later MCI communicated its views concerning the work product privilege to the district court by letter. ¹³ At the same time MCI moved to intervene formally in the Government's suit against AT&T for the limited purpose of asserting its work product privilege.

On 22 January 1980 the district court denied the appeal by the United States and the motion by MCI to intervene, holding that the database documents must be disclosed to AT&T for four reasons:

(1) The Government could not validly claim work product privilege for the documents because it was not a party to the litigation in which the documents were created, and it is not an agent for MCI, the party that created them.

(2) MCI waived any work product privilege it may have had when it disclosed the database documents to the Government.

(3) A Special Master in MCI's suit against AT&T in the Northern District of Illinois had held that work product materials shared by MCI with the Government would lose any privileged status, and MCI had acquiesced in that ruling.

(4) The Government's suggested public policy of encouraging private parties to cooperate with the Government does not outweigh the arguments for disclosure. ¹⁴

The district court denied MCI's intervention motion on the grounds that the court had already ruled that any work...