Yankee Milk, Inc., Matter of

• Decision Date: 12 April 1977
• Citation: 362 N.E.2d 207,372 Mass. 353
• Parties: , 1977-1 Trade Cases P 61,375 In the Matter of a Civil Investigative Demand Addressed to YANKEE MILK, INC. Supreme Judicial Court of Massachusetts, Suffolk
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 207

362 N.E.2d 207

372 Mass. 353, 1977-1 Trade Cases P 61,375

In the Matter of a Civil Investigative Demand Addressed to YANKEE MILK, INC Supreme Judicial Court of Massachusetts, Suffolk.

Argued Jan. 6, 1977.

Decided April 12, 1977.

Paula Gold, Asst. Atty. Gen. (Barton J. Menitove and Richard A. Gross, Asst. Attys. Gen., with her), for the Attorney General.

Timothy J. Dacey, III, Boston (Joseph D. Steinfield, Boston, with him), for Yankee Milk, Inc.

Before HENNESSEY, C.J., and QUIRICO, KAPLAN, WILKINS and LIACOS, JJ.

HENNESSEY, Chief Justice.

The Attorney General appeals from a decision and order of the Superior Court modifying his Civil Investigative Demand (C.I.D.), addressed to Yankee Milk, Inc. (Yankee), pursuant to G.L. c. 93A, § 6(1). Yankee filed a motion under G.L. c. 93A, § 6(7), to set aside or modify the C.I.D. ¹ A Superior Court judge ordered the C.I.D. modified by striking four specifications in the C.I.D. and by limiting the scope of the C.I.D. to documents which relate to transactions having 'significant and material contacts with Massachusetts' and also having 'more significant contacts with Massachusetts than with any other jurisdiction.' This appeal is the first to come before us concerning the construction of the C.I.D. statutes. We granted the application of Yankee for direct appellate review.

The C.I.D. at issue implements the Attorney General's investigation into alleged violations by Yankee of G.L. c. 93A, § 2(a), including alleged price fixing, price maintenance, price stabilization, monopolization and attempts to monopolize milk. Yankee, an agricultural cooperative association, ² derives more than 20% of its gross revenues from transactions in interstate commerce. The C.I.D., as originally drafted, comprised forty-two paragraphs, including a demand for documents stating the names and addresses of all Yankee member milk producers (par. 3), a demand for '(a)ll documents relating in whole or in part to balancing functions, balancing facilities or balancing the market' (par. 20), a demand for documents stating the names and addresses of Yankee's fifty largest customers by dollar volume and the exact amount of that dollar volume (par. 36), and a demand for all documents relating to a committee on 'Pricing Milk on a Nutritional Basis' (par. 42).

The judge modified the C.I.D. by limiting it to documents which relate to transactions and actions occurring primarily and substantially in Massachusetts because Yankee falls within the exemption provision of G.L. c. 93A, § 3(1)(b). In addition, he struck the four paragraphs referred to above (3, 20, 36 and 42) on the ground that Yankee, in support of its motion for modification, had shown, as to each of the paragraphs, 'good cause' within the meaning of the governing statute to set aside these demands. It appears that the Attorney General does not contest the ruling which struck par. 42.

We conclude that the judge's order must be modified only as to his first ruling. As to that ruling, we construe the statute as conferring broader privileges of discovery on the Attorney General than those defined by the judge. As to the controverted rulings which struck three specific paragraphs (3, 20 and 36) we find no error, but for reasons shown, infra, in part 3 of this opinion, we remand those matters, as well as the entire controversy, to the Superior Court which may in its discretion continue to retain jurisdiction over the case. In reaching this result we have considered that in C.I.D. matters there must be, as in all discovery proceedings, a broad area of discretion residing in the judge. Nevertheless, as we emphasize in part 3 of this opinion, the judge's discretion in C.I.D. cases must be guided by indications of legislative policy in the statutes.

1. We conclude that we must reverse that part of the judge's order which in essence limited the scope of the C.I.D. to documents which relate to transactions having significant and material contact with Massachusetts, and more significant contacts with Massachusetts than with any other jurisdiction. As we construe the statute, the limit to be applied is simply one of relevance.

General Laws c. 93A, § 6(1), ³ provides that '(t)he attorney general, whenever he believes a person has engaged in or is engaging in any method, act or practice declared to be unlawful by this chapter, may conduct an investigation to ascertain whether in fact such person has engaged in or is engaging in such method, act or practice.' The Attorney General's investigation concerning Yankee seeks to ascertain whether Yankee has engaged in or is engaging in anticompetitive milk pricing practices which violate the c. 93A, § 2(a), ⁴ prohibition on '(u)nfair methods of competition . . . in the conduct of any trade or commerce . . ..' General Laws c. 93A, § 3(1), ⁵ provides that '(n)othing in this chapter shall apply to . . . (b) trade or commerce or any person of whose gross revenue at least twenty per cent is derived from transactions in interstate commerce, excepting however transactions and actions which (i) occur primarily and substantially within the commonwealth . . ..' ⁶ More than 20% of Yankee's gross revenues derive from transaction in interstate commerce. Therefore, the Attorney General's investigatory authority, which extends only to 'practice(s) declared to be unlawful by this chapter,' § 6 (1), supra, does not extend to anticompetitive Yankee conduct in any and all trade or commerce. Instead, his investigatory authority extends to anticompetitive conduct primarily and substantially concerning the Massachusetts market.

General Laws c. 93A, § 6(1)(b), further provides that in investigating possible unlawful methods, acts or practices the Attorney General may 'examine or cause to be examined any documentary material of whatever nature relevant to such alleged unlawful method, act or practice' (emphasis added). This provision sets forth a relevance test to define the documents the Attorney General may examine pursuant to a valid investigation. In this case, since Yankee has shown entitlement to a § 3(1)(b) exemption, the Attorney General may examine any documentary material apparently relevant to the investigation as limited by § 3(1)(b), unless Yankee proves that other provisions of § 6 make production of requested material unnecessary.

Section 3(1)(b) as it relates to § 6(1)(b) does not limit the Attorney General's examination power to documents which directly concern Yankee's anticompetitive conduct concerning the Massachusetts milk market. Such an interpretation of relationship between the two provisions would render meaningless the term 'relevant' in § 6(1)(b) in cases involving both provisions. Such a result would controvert the established principle of statutory construction that every word in a statute should be given meaning. See Commonwealth v. Woods Hole, Martha's Vineyard & Nantucket S.S. Auth., 352 Mass. 617, 618, 227 N.E.2d 357 (1967). In addition, such a statutory construction would impair the Attorney General's ability to investigate misconduct in Massachusetts by persons with interstate business. Documents which are relevant to anticompetitive practices within Massachusetts may not necessarily relate directly to conduct primarily and substantially concerning the Massachusetts market. Anticompetitive actions in Massachusetts may, for example, derive from a general, regional anticompetitive policy. Section 6 authorizes broad investigatory power and § 3 expressly includes in c. 93A coverage Massachusetts misconduct by interstate corporations. Clearly, then, the Massachusetts Legislature did not intend to limit the Attorney General's investigatory powers in this area. Nor did the Legislature intend to bar the Attorney General from investigating possible antitrust violations occurring in Massachusetts merely because such violations occurred to a greater degree in other States. Use of the relevancy test to define the scope of permissible documentary examination in cases involving § 3(1)(b) thus comports with legislative intent as well as the plain language of the two provisions.

2. Yankee, in its motion to set aside or modify the C.I.D., cited, in statutory terms, specific reasons as 'good cause' for striking various paragraphs of the C.I.D. At issue before us are the judge's rulings that three specific demands be struck from the C.I.D. (pars. 3, 20 and 36) for failure to meet various standards set forth in §§ 6(1)(b), 6(4)(c), and 6(5). In so ruling he exercised his powers pursuant to G.L. c. 93A, § 6(7), which provides that 'the court may, upon motion for good cause shown . . . modify or set aside such demand.' In deciding that Yankee had met its burden of showing good cause to set aside these demands, he apparently relied exclusively on affidavits submitted by Yankee's employees. His findings and rulings imply, for example, that he did not rely on any oral representations such as sometimes characterize motion hearings.

Ruling as to Paragraph 3. The judge set aside the C.I.D. demand for names and addresses of all Yankee members, because it required disclosure of trade secret information in violation of G.L. c. 93A, § 6(5). An affidavit submitted by a Yankee manager alleged in essence that (1) disclosure of Yankee's membership list would facilitate competitor solicitation of Yankee members (already widespread) to the detriment of Yankee's legitimate competitive interests; (2) the list would be difficult to duplicate from independent sources; (3) full membership lists are available to all officers and some employees of Yankee, who 'understand that the names and addresses of the members are to remain confidential'; and (4) partial lists are available to district delegates, independent haulers and State and Federal agencies responsible for inspections, all of whom likewise understand that the lists are confidential.

General Laws c. 93A, § 6(5), expressly restricts the scope of the Attorney...