Crystal Grower's Corp. v. Dobbins

616 F.2d 458
CourtCourt of Appeals for the Tenth Circuit
DecidedFebruary 25, 1980
DocketNo. 78-1451
StatusPublished
Cited by3 cases

This text of 616 F.2d 458 (Crystal Grower's Corp. v. Dobbins) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crystal Grower's Corp. v. Dobbins, 616 F.2d 458 (10th Cir. 1980).

Opinion

LOGAN, Circuit Judge.

The question for decision is whether, under the circumstances of this case, we should order to be sealed the docketing statement, joint appendix, and appellate briefs filed in connection with an appeal to this Court. The question arises in the following context.

In 1972 Crystal Grower’s Corporation (Crystal Grower’s), owned by various sugar beet growers, and American Crystal Sugar Company (American Crystal) formulated a plan of purchase and merger by which the sugar beet growers would become the only shareholders of American Crystal, the surviving corporation. Before consummation of the transaction, American Crystal was issued a subpoena in connection with a Justice Department investigation into possible antitrust violations committed by American Crystal and other companies. Following meetings between the parties to the proposed agreement, the contract was altered, the chief amendment being a one million dollar reduction of the gross purchase price of American Crystal. The amendment stated that it

represents an agreed upon adjustment because of possible adverse effects on the business and financial condition of American Crystal which might in any manner result from the investigation of its operations now being made by the United States Grand Jury for the Northern District of California in connection with which a subpoena dated December 7, 1972, has been served on American Crystal.

Thereafter, the shareholders of the two companies approved the plan, as amended, and the merger was effected. Four months later American Crystal was converted from a New Jersey business corporation into a Minnesota cooperative corporation.

The federal antitrust investigation continued and resulted in an indictment charging American Crystal and other companies with violations of the antitrust laws. The United States contemporaneously filed a civil action for injunctive relief against those entities and a national federation of sugar beet growers. Following the government's actions, approximately 100 private antitrust suits were initiated against the sugar companies, including American Crystal, alleging the same violations charged by the government. Apparently these actions are all still pending.

In 1976, Crystal Grower’s, American Crystal, and the other plaintiffs-appellants brought this suit, alleging fifteen claims for relief based upon federal, state and common law. All the claims hinged upon plaintiffs’ assertion that defendants-appellees misled or deceived plaintiffs with respect to American Crystal’s possible exposure to antitrust suits. Defendants are the twelve former directors of American Crystal, the law firm of Davis, Graham & Stubbs, which had served as counsel for American Crystal in connection with the merger, and Boettcher Realty Company and Boettcher Foundation, which as shareholders of American Crystal allegedly controlled five of the individual defendants.

In the course of discovery defendants Davis, Graham & Stubbs and the Boettcher entities tendered to plaintiffs a request for production of documents. Plaintiffs withheld 845 of the documents requested, asserting attorney-client privilege and work product immunity. Subsequently, the trial court granted defendants’ Fed.R.Civ.P. 37 motion for an order compelling discovery of these documents, which consisted in part of premerger communications between plaintiffs and their attorneys, the law firms of Dosland, Dosland & Nordhougen of Moor-head, Minnesota, and Oppenheimer, Wolff, Foster, Shepard and Donnelly of St. Paul, Minnesota, and various reports prepared by those attorneys.

[460]*460Defendants asserted, and the trial court agreed, that the documents were relevant to material issues raised by plaintiffs’ claims: what representations plaintiffs made to defendants and their agents concerning their knowledge of American Crystal’s potential antitrust exposure; what plaintiffs and their agents knew of that potential exposure through their own investigations; upon what facts did plaintiffs rely in going ahead with the merger; and, concerning defenses based upon statutes of limitations, the timeliness of plaintiffs’ discovery and awareness of facts regarding American Crystal’s alleged noncomplianee with antitrust laws.

The trial court did not examine the 845 documents individually; instead, it assumed they were privileged and held that plaintiffs, by filing this lawsuit, put those documents in issue and therefore waived the right to resist production on the grounds of privilege and immunity. The trial judge, however, entered a protective order providing that the documents were to be produced only to the defendants in this lawsuit, and that in the further conduct of this litigation the parties and court would maintain the documents as confidential to the extent possible.

The litigation proceeded, and in April 1978 the trial court entered summary judgment or judgment on the pleadings in favor of the defendants, dismissing all claims. The trial court held as a matter of law that “plaintiffs actually knew, prior to the February 21, 1973 merger, facts sufficient to establish that American Crystal was susceptible to suit for violations of the Antitrust laws.” Therefore, the court reasoned that plaintiffs’ federal securities acts claims were nonmeritorious because plaintiffs did not reasonably rely upon defendants’ representations “that American Crystal had no antitrust exposure,” or their claims were barred by applicable statutes of limitations. The trial court also dismissed all state law claims, finding lack of diversity jurisdiction and declining to exercise pendent jurisdiction. The judgments concerning the federal securities law claims were based largely upon evidence in the 845 documents discussed above. The memoranda relating to defendants’ motions and the district court’s memorandum opinion, all of which quoted from and discussed the documents, were held under seal pursuant to the court’s protective order.

Plaintiffs then appealed to this Court, seeking reversal of the judgments below. Among the issues raised by plaintiffs was the propriety of the trial court’s ruling that plaintiffs had waived the right to assert the 845 documents were privileged from disclosure under the attorney-client privilege and the work product immunity doctrine.

The record on appeal filed with this Court, parts of which had been sealed pursuant to the trial court’s protective order, remained sealed here as a ministerial matter. Plaintiffs requested that we order the amended docketing statement, joint appendix and the appellate briefs be filed under seal. Before making a final ruling thereon, we ordered the parties to brief the question “whether the court may and should order the sealing of such matter consistent with the statutes, rules of court, and the common law protecting the right of the public to inspect judicial records and for judicial proceedings to be open to the public.” Plaintiffs and defendants responded with briefs, both sides arguing the documents could and should be sealed during the course of the appeal. The papers were kept under seal pending resolution of this question.

On July 16, 1979, the merits of the appeal were argued orally in open court, the Court having denied plaintiffs’ motion to bar public access to the oral arguments. During the argument the specific content of the 845 documents was not discussed.

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Related

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607 A.2d 1027 (New Jersey Superior Court App Division, 1992)
Crystal Grower's Corporation v. Dobbins
616 F.2d 458 (Tenth Circuit, 1980)

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Bluebook (online)
616 F.2d 458, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crystal-growers-corp-v-dobbins-ca10-1980.