U.S. v. Leggett & Platt, Inc.

• Decision Date: 29 September 1976
• Docket Number: No. 75-1719,75-1719
• Citation: 542 F.2d 655
• Parties: 1976-2 Trade Cases 61,124 UNITED STATES of America, Plaintiff-Appellant, v. LEGGETT & PLATT, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 655

542 F.2d 655

1976-2 Trade Cases 61,124

UNITED STATES of America, Plaintiff-Appellant, v. LEGGETT & PLATT, INC., Defendant-Appellee.

No. 75-1719.

United States Court of Appeals, Sixth Circuit.

Argued Dec. 19, 1975.

Decided Sept. 29, 1976.

William T. Plesec, Anti-Trust Div., Dept. of Justice, Cleveland, Ohio, Thomas E. Kauper, Howard E. Shapiro, Chief App. Section, Dept. of Justice, Washington, D. C., Robert J. Wiggers, Donald I. Baker, Washington, D. C., Barry Grossman, Atty., Antitrust Div., Dept. of Justice, for plaintiff-appellant.

Murray S. Monroe, John R. Phillips, Cincinnati, Ohio, for defendant-appellee.

Before EDWARDS and PECK, Circuit Judges, and CECIL, Senior Circuit Judge.

JOHN W. PECK, Circuit Judge.

On May 15, 1971, the government filed the instant civil antitrust action against defendant-appellee Leggett and Platt ("LP") to require LP to divest itself of the March 31, 1968 stock acquisition of Detroit-based Motor City Spring Company and the January 2, 1969, assets acquisition of Cincinnati-based J. R. Greeno Company. On January 3, 1975, LP filed amended requests for the government to produce certain documents, including documents relating to the government's investigations, no more than one culminating in litigation, of other innersprings and box springs manufacturers' acquisitions of other springs manufacturers. ¹ Over government objections of relevancy, work product, and governmental privilege, the district court ordered the government to produce the requested documents, except work products of the government's investigation of LP and of "other open investigations." The court, in denying the government's motion for reconsideration, elucidated its reasoning.

"A work product privilege has a terminal point. When a case has ended or when an investigation is closed a work product privilege terminates. . . ." 19 Fed.Rules Serv.2d 1370, 1372, 1975 Trade Cas. § 60,220.

The court, in rejecting the governmental privilege claim, found no "clear" or "accepted" privilege applicable, then purported to apply a "traditional weighing and balancing of interests" test, apparently finding LP's interest in "information" it "deems essential" sufficient to overcome "the government's interest in preserving the privacy of its internal consultative and deliberative process, thereby encouraging 'open, frank discussion between subordinate and chief concerning administrative action.' " The government failed to comply with the production order, and the district court thereafter dismissed the government's complaint without prejudice.

On appeal of the dismissal, the government argues that the district court improperly ordered production of irrelevant and privileged documents, such error thereby invalidating the dismissal. Because the district court made no explicit determination of relevance and failed to properly apply the government privilege doctrine, and because we view the work product doctrine as protecting work products of closed investigations, we vacate the dismissal and remand to the district court for further proceedings.

The Federal Rules of Civil Procedure (F.R.C.P.) authorize "extremely broad," C. Wright, Law of Federal Courts § 81 at 355 (2d ed. 1970), discovery. Unless the requested documents are either irrelevant or privileged, F.R.C.P. 26(b)(1), LP was entitled to their production.

That the government failed to prosecute civil antitrust actions to divest other industry acquisitions is in and of itself irrelevant because LP's purported defense of "discriminatory enforcement" is, as a matter of law, no defense. The government "alone is empowered to develop that enforcement policy best calculated to achieve the ends contemplated by Congress and to allocate its available funds and personnel in such a way as to execute its policy efficiently and economically." Moog Industries, Inc. v. FTC, 355 U.S. 411, 413, 78 S.Ct. 377, 379, 2 L.Ed.2d 370 (1958). Accord, FTC v. Universal-Rundle Corp., 387 U.S. 244, 87 S.Ct. 1622, 18 L.Ed.2d 749 (1967); Kixmiller v. SEC, 160 U.S.App.D.C. 375, 492 F.2d 641, 645 (1974); United States v. Hunter, 459 F.2d 205, 220-221 (4th Cir.), cert. denied, 409 U.S. 934, 93 S.Ct. 235, 34 L.Ed.2d 189 (1972); L. G. Balfour Co. v. FTC, 442 F.2d 1, 2 (7th Cir.1971); Robins & Weill, Inc. v. United States, 63 F.R.D. 73 (M.D.N.C.1974). There is no allegation that the proceedings against LP stem from racial or religious animosity, see, e. g., Oyler v. Boles, 368 U.S. 448, 454-456, 82 S.Ct. 501, 505-506, 7 L.Ed.2d 446 (1962); Yick Wo v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220 (1886); United States v. Swanson, 509 F.2d 1205, 1208-1209 (8th Cir.1975), or from a desire to punish LP for exercising its constitutional rights, see, e. g., United States v. Berrios, 501 F.2d 1207 (2d Cir.1974), United States v. Falk, 479 F.2d 616 (7th Cir.1973) (en banc).

Yet investigatory inquiries into other industry acquisitions are relevant, and thereby discoverable unless privileged, to the extent they contain factual materials, such as surveys and economic analyses of the industry, and the government analyses. The government's reply brief admits their relevancy. ² Because the district court failed to explicitly determine the relevancy of the requested documents, the district court on remand should determine the relevancy in light of the above criteria.

For documents containing relevant material, the district court should then consider the applicability of government privilege and work product doctrine.

The district court properly applied a balancing test in determining whether LP could pierce the qualified governmental official information privilege ³ to obtain the investigatory files. ⁴ But the court erred in finding that LP's subjective need, its "deem(ing)" the documents "essential," overrode the government interest in secrecy. To override the government interest in secrecy the court must find that LP's objective, rather than its subjective, need for the documents overrides the governmental interest in secrecy. See, e. g., Sun Oil Co. v. United States, 514 F.2d 1020 (Ct.Cl.1975); EEOC v. St. Francis Community Hosp., 21 Fed.Rules Serv.2d 975, 11 EPD P 10,806, 70 F.R.D. 592 (D.S.C.1976); Kinoy v. Mitchell,67 F.R.D. 1, 11, 14 (S.D.N.Y.1975); SEC v. Bausch & Lomb, Inc., 19 Fed.Rules Serv.2d 332, 334 (S.D.N.Y.1974); Center on Corporate Responsibility, Inc. v. Schultz, 368 F.Supp. 862, 881 (D.D.C.1973); Note, Discovery of Government Documents and Official Information Privilege, 76 Colum.L.Rev. 142, 144 (1976). Although a district court's balancing of the competing interests will be reversed only for an abuse of discretion, Brown v. Thompson, 430 F.2d 1214, 1215-1216 (5th Cir.1970), the district court must use the proper interests in its balancing process.

In assessing LP's need, the district court should consider, inter alia, the importance of the documents to LP's defense, SEC v. Nat'l Student Marketing Corp., 68 F.R.D. 157, 160-163 (D.D.C.1975), aff'd, 175 U.S.App.D.C. ---, 538 F.2d 404 (1976), Kinoy, supra, 67 F.R.D. at 12, Dos Santos v. O'Neill, 62 F.R.D. 448 (E.D.Pa.1974), Amchem Products, Inc. v. GAF Corp., 64 F.R.D. 550, 553-554 (N.D.Ga.1974), Wood v. Breier, 54 F.R.D. 7, 10 (E.D.Wis.1972), and the availability elsewhere of the information contained in the documents, Kinoy, supra, United States v. Illinois Fair Plan Ass'n, 67 F.R.D. 659, (N.D.Ill.1975), Dos Santos, supra, 62 F.R.D. 448, Gaison v. Scott, 59 F.R.D. 347 (D.Hawaii 1973), see McKillop v. Regents of the University of California, 386 F.Supp. 1270, 1277-1278 (N.D.Calif. 1975).

In assessing the government interest in secrecy, the district court should remember that the requested files are of completed investigations. ⁵ Often courts have recognized that there is less government interest in secrecy in completed, than in ongoing, investigations. See e. g., Breier, supra, 54 F.R.D. at 10 n.18.

The district court viewed the work product doctrine as being inapplicable to closed investigations. ⁶ Supporting the district court's determination are United States v. IBM, 66 F.R.D. 154, 178 (S.D.N.Y.1974),71 F.R.D. 376 (S.D.N.Y., filed May 14, 1976), Honeywell, Inc. v. Piper Aircraft Corp., 50 F.R.D. 117, 119 (M.D.Pa.1970), Hanover Shoe, Inc. v. United Shoe Mach. Co., 207 F.Supp. 407, 409-410 (M.D.Pa.1962), and Tobacco & Allied Stocks, Inc. v. Transamerica Corp., 16 F.R.D. 534, 537 (D.Del.1954). However, Duplan Corp. v. Moulinage et Retorderie de Chavanoz,487 F.2d 480 (4th Cir.1973), 509 F.2d 730 (4th Cir.1974), cert. denied,420 U.S. 997, 95 S.Ct. 1438, 43 L.Ed.2d 680 (1975), United States v. O.K. Tire & Rubber Co., 71 F.R.D. 465, 1976 Trade Cas. P 60,984 n.7 (D.Idaho 1976), Burlington Industries, Inc. v. Exxon Corp., 65 F.R.D. 26, 43 (D.Md. 1974), Midland Inv. Co. v. Van Alystyne, Noel & Co., 59 F.R.D. 134, 138 (S.D.N.Y.1973), and Philadelphia Elec. Co. v. Anaconda Am. Brass Co., 275 F.Supp. 146 (E.D.Pa.1967), have found the work product doctrine applicable to bar discovery of work products in terminated litigation, at least of "closely related" litigation. Anaconda Brass, supra; Midland Investment, supra. The irreconcilably conflicting opinions have prompted courts and commentators to refer to the applicability of the work product doctrine to work product generated in anticipation of other litigation as lacking "decisive resolution" (Midland Investment, supra, 59 F.R.D. at 138), "unresolved" (Note, Discovery of an Attorney's Work Product in Subsequent Litigation,1974 Duke L.J. 799, 810), and "not altogether clear," (J. Moore, Federal Practice P 26.64(2) (2d ed. 1975)). Wright and Miller, however, have referred to the application of the work product doctrine to documents prepared in anticipation of other litigation as "(t)he sounder view . . ., at least if the two cases are closely related." Wright & Miller, Federal Practice & Procedure, § 2024 at 200-201 (1970). Duplan supra, similarly has been hailed as "maintaining the delicate...