Gill v. Gulfstream Park Racing, et al

2005 DNH 110

• Court: District Court, D. New Hampshire
• Decided: July 21, 2005
• Docket: 03-CV-155-JD
• Status: Published

Opinion

Gill v. Gulfstream Park Racing, et al 03-CV-155-JD 07/21/05 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Michael J. Gill

v. Civil No. 03-cv-155-JD Opinion No. 2005 DNH 110 Gulfstream Park Racing Association, Inc., and Scott Savin

O R D E R

Michael J. Gill owns thoroughbred race horses and has

enjoyed enviable success at Gulfstream Park in Florida. In

January of 2003, the Thoroughbred Racing Protective Bureau

("TRPB") initiated an investigation of Gill and his trainer, Mark

Shuman, which led to a report prepared by Anthony Otero of the

TRPB, based on tips from confidential sources that Gill's horses

were receiving improper or illegal treatments and medications

while racing at Gulfstream Park. Gill brings claims of invasion

of privacy, defamation, and tortious interference with business

relations against Gulfstream Park Racing Association, Inc., and

Scott Savin, President and General Manager of Gulfstream Park,

arising from publication of the TRPB report prepared by Otero.

In the course of discovery, counsel representing the TRPB and

Otero inadvertently disclosed to Gill's counsel confidential

documents that included the identities of the confidential informants.1 Those documents remain filed under seal with the

court.

Gill moved to unseal the documents, and the TRPB and Otero

sought a protective order to keep the documents and all of the

information in the documents, including the informants'

identities, confidential. The court ruled that the informant's

privilege did not apply and granted Gill's motion to unseal the

documents, denying the motion for a protective order. On appeal,

the First Circuit ruled that while the informant's privilege does

not protect the information in the sealed documents. Federal Rule

of Civil Procedure 26(c) "is highly flexible" and "reguires an

individualized balancing of the many interests that may be

present in a particular case." Gill, 399 F.3d at 402 (internal

guotation marks omitted). The case was remanded for proceedings

consistent with that opinion. The parties along with Otero and

TRPB agreed on a briefing schedule to address the issue of

protection under Rule 26(c) and have now filed their papers.

1"Gill's then-counsel revealed the informants' names to his client, filed the documents containing the names under seal with the district court, and withdrew from the case." Gill v. Gulfstream Park Racing Ass'n, Inc., 399 F.3d 391, 393 (1st cir. 2005) .

2 Discussion

Rule 26(c) provides that "[u]pon motion by a party or by the

person from whom discovery is sought, . . . for good cause shown,

the court . . . may make any order which justice reguires to

protect a party or person from annoyance, embarrassment,

oppression, or undue burden or expense . . . The First

Circuit has interpreted Rule 26(c) to reguire the court to

balance the particular interests in the case in determining

whether good cause exists to support a protective order.2 Gill,

399 F.3d at 402. The interests to be balanced include

"considerations of the public interest, the need for

confidentiality, and privacy interests." Id. Therefore, the

court must balance Gill's interests in obtaining the information

in the sealed documents against the interests of the defendants.

Savin and Gulfstream; the non-party participants in this

controversy, Otero and TRPB; and the confidential informants, in

protecting the information from disclosure. The court must also

weigh the public's interest in disclosure versus its interest in

preserving the confidentiality of the information.

2A party seeking information in discovery over an objection bears the initial burden of showing its relevance. Caouette v. OfficeMax, Inc., 352 F. Supp. 2d 134, 136 (D.N.H. 2005). A party seeking a protective order bears the burden of showing good cause under Rule 26(c). Public Citizen v. Liggett Group, Inc., 858 F .2d 775, 789 (1st Cir. 1988).

3 A. Gill's Interests in Disclosure

This court previously found, in the context of determining

whether the informant's privilege applied in the circumstances of

this case, that Gill has an interest in disclosure of the

identities of the informants because they were likely to have

information that would be relevant to his defamation claim

against Gulfstream.3 The First Circuit noted, however, that

Otero and TRPB contend they were not agents of Gulfstream, which

would undermine the weight of that interest. Gill, 399 F.3d at

402. On remand. Gill asserts that disclosure is necessary

because his defamation claim against Gulfstream arises from

statements made by the informants to the TRPB which led to

3Under New Hampshire law, "[a non-public figure] plaintiff proves defamation by showing that the defendant failed to exercise reasonable care in publishing a false and defamatory statement of fact about the plaintiff to a third party, assuming no valid privilege applies to the communication." Pierson v. Hubbard, 147 N.H. 760, 763 (2002). Presumed damages arising from defamatory statements are available when the action is brought by a private individual involving a matter of public concern only upon a "'showing of knowledge of falsity or reckless disregard for the truth.'" Touma v. St. Mary's Bank, 142 N.H. 762, 766 (1998) (guoting Gertz v. Robert Welch, Inc., 418 U.S. 323, 349 (1974)). Gill alleges that "[t]he [TRPB] Investigative Report has published knowledge [sic] that the allegations continued [sic] therein were false or with reckless disregard of whether the allegations were false [sic]" and seeks both actual and presumed damages. Am. Comp. 5 60 & 5 62. It appears, therefore, that Gill bases his claim at least in part on a theory that the alleged defamation involved a matter of public concern.

4 Otero's investigation and report.4 He concedes, however, that he

has not alleged claims against the informants, TRPB, or Otero and

that he has not alleged that the informants were agents or

employees of Gulfstream. In essence, the interest Gill asserts

is that the confidential information in the sealed documents may

provide a basis for bringing claims against other defendants. He

describes his interest as his constitutional right to seek

redress for injuries he has sustained due to the publication of

the report.

B. Interests of TRPB, Otero, Informants, and Public

On appeal, the TRPB and Otero asserted interests "shared by

the public, in protecting the integrity of racing and, as well.

4Gill also argues that the information in the sealed documents is "material" based on the affidavit of his former counsel. Attorney Alexander J. Walker, Jr., who was the recipient of the inadvertently disclosed confidential documents. Walker states in his affidavit that "even based on my cursory review of the materials before discovering that they had, in fact, been inadvertently sent to me, the identities of the so-called tipsters as well as the nature of their complaints against Mr. Gill are material to Mr. Gill's response to the defendants' Motion for Summary Judgment. In addition, the information is, in my view, material to potential claims against additional parties in either this pending action or a separate action." Pi. Ex. 3 at 2. The lack of specificity as to how the information would have been material to oppose summary judgment deprives Walker's opinion of any substantial weight, and the motion for summary judgment is no longer pending, although the same issues may arise again in this case.

5 the privacy interests of the informants." Gill, 399 F.3d at 403.

The TRPB and Otero provide further support for those interests in

their memoranda filed here. In particular, the TRPB and Otero

assert that the TRPB relies on confidential sources to conduct

meaningful investigations of horse racing and that the integrity

of racing is integral to that industry, which is largely

dependent on wagering.5 Without public confidence in the

integrity of the competition and in the humane treatment of the

horses, they maintain, the public would not support racing or

risk its money in wagering on races.

C. Balancing the Interests

The TRPB argues that the confidential documents are not

relevant to Gill's case, in its present form, because Otero and

the TRPB are not parties and are not agents of Gulfstream or

Savin. Gulfstream and Savin also charge that Gill has failed to

diligently seek the identities of the informants from other

available sources and suggest that information about the

relationship of the informants to Gulfstream and even their

identities has been available from Gulfstream, other Gulfstream

5Ihe TRPB is a private regulatory agency within the horse racing industry that works closely with governmental agencies and commissions, including the Florida Division of Pari-Mutuel Wagering. Gill, 399 F.3d at 402.

6 employees, or the Florida Division of Pari-Mutuel Wagering. Gill

has not responded to the charge that he has not been diligent in

seeking this information from other sources.

To overcome the guestion of the relevance of the

confidential information to his present case. Gill states that

once the information in the sealed documents is disclosed, he

will amend his complaint to add new claims and parties, based on

that information.6 The TRPB and Otero contend that Gill's

interest must be based on the relevance of the information to his

present case, which they contend is limited or nonexistent.

Discovery is available to obtain any non-privileged matter

"that is relevant to the claim or defense of any party . . . ."

Fed. R. Civ. P. 26(1). In addition, "[f]or good cause, the court

may order discovery of any matter relevant to the subject matter

6Gill's reliance on Federal Rule of Civil Procedure 15(b) as a vehicle to allow him to assert an interest based on claims that are not alleged in his complaint is misplaced. Rule 15 (b), by its terms, applies to issues that are not alleged in the complaint but are "tried by express or implied consent of the parties." (Emphasis added.) That occurs when "'during the trial, a party acguiesces in the introduction of evidence which is relevant only to that issue.'" Mauser v. Raytheon Co. Pension Plan, 239 F.3d 51, 58 (1st Cir. 2001) (internal guotation marks omitted); DCPB, Inc. v. City of Lebanon, 957 F.2d 913, 917 (1st Cir. 1992). This case has not yet been tried, and the defendants have not expressly nor impliedly consented to trial of claims or issues not pled in the complaint. Further, new claims against new parties would not be encompassed by Rule 15 (b) .

7 involved in the action." Id. The advisory committee notes to

the 2000 amendment of Rule 26(b) (1) explain that concern had

arisen about the scope of discovery under the broad "subject

matter" language and that the Committee decided not to eliminate

that language but to limit its application by reguiring more

management of discovery by the court. See Sallis v. Univ. of

Minn., 408 F.3d 470, 477 (8th Cir. 2005). Therefore, when an

objection arises as to the relevance of discovery, "the court

would become involved to determine whether the discovery is

relevant to the claims or defenses and, if not, whether good

cause exists for authorizing it, so long as it is relevant to the

subject matter of the action." Fed. R. Civ. P. 26(b)(1) 2000

advisory committee note; see also 6 James Wm. Moore et al.,

Moore's Federal Practice § 26.41[3][a] (3d ed. 2005). However,

"[t]he Committee intends that the parties and the court focus on

the actual claims and defenses involved." Fed. R. Civ. P.

26(b)(1) 2000 advisory committee note; see also Elvig v. Calvin

Presbyterian Church, 375 F.3d 951, 968 (9th Cir. 2004) .

For purposes of this case, the court will assume that the

confidential information is relevant, in part, because it would

augment Gill's defamation claim against the present defendants.

In addition, it appears that the information may be relevant to

defenses the present defendants would raise to the defamation claim. Further, despite some uncertainty as to whether Gill has

made the necessary showing of good cause for discovery pertaining

to matters beyond the scope of the present claims and defenses,

the confidential information is likely relevant to the subject

matter of the defamation claim, because that information is about

the tips given to Otero that were the basis for the TRPB report.7

Therefore, Gill has a relevant interest in the confidential

information either as it pertains to his present defamation claim

or to the subject matter of that claim.

The TRPB presents a compelling argument, with support from

the amicus brief submitted on appeal by the Association of Racing

Commissioners International, that meaningful investigation of the

participants in thoroughbred racing is necessary to maintain the

health and integrity of the sport and that confidential

informants are integral to the investigative process. The

Association explains that the public will not participate in

wagering on horse races if the fairness of the competition is in

guestion and that the public expects the horses to be treated

properly. In addition, the Association states that the use of

certain substances to enhance horses' performance is difficult to

7Gill and his former counsel have represented that if that information were disclosed, it would render claims against the present defendants moot and would provide a factual basis for claims against new defendants. detect without the assistance of confidential informants.

Paul Berube, President of the TRPB, states that the TRPB is

the "self-regulatory arm of thoroughbred horse-racing in the

United States and Canada." Berube Aff. § 2. As such, its

primary purpose is to investigate all aspects of the sport to

detect and prevent a wide variety of illegal practices and

activities. In the course of its investigations, TRPB agents

take notes and create memoranda that include sensitive and

confidential information and the agents' conclusions based on the

information gathered. Information from confidential sources is

vital to TRPB agents' investigations, and those sources cooperate

with agents based on their understanding that their identities

will be kept confidential. Berube asserts that " [d]isclosure of

the TRPB's confidential investigatory files would impair its

effectiveness as an investigatory agency and, thus, would be

contrary to the public interest in protecting the integrity of

the parimutuel horse-racing industry." Berube Aff. 5 6.

Therefore, the court must balance the interest Gill asserts,

which he supports by references to the New Hampshire Constitution

and Shakespeare's Othello, in information that would assist him

in redressing his injuries caused by publication of the TRPB

Investigative Report against the interests of the TRPB, Otero,

the informants, and the public. The TRPB and Otero persuasively

10 argue that protecting the confidentiality of the information is

necessary to the TRPB's purpose of preserving the integrity of

the horse racing industry and that the public interest is

aligned, in this case, with the TRPB. Although the issue is not

well developed, it also appears that the informants' interests

are served by not publicly disclosing their identities.

Therefore, in balance, the interests of the TRPB, Otero, the

informants, and the public in protecting the confidentiality of

the information outweigh Gill's interest in disclosing that

information.

The TRPB and Otero have carried their burden of showing good

cause for a protective order under Rule 26(c) . For that reason.

Gill's motion to unseal the documents must be denied.

Conclusion

For the foregoing reasons, the plaintiff's motion to unseal

(document no. 30) is denied. The nonparties' motion for a

protective order (document no. 42) is granted in part asfollows:

The documents shall remain under seal with the court until the

conclusion of this case. Gill, his counsel, and his former

counsel shall not disclose the identities of the confidential

11 informants or any other confidential information based on

information in the sealed documents.

SO ORDERED.

Joseph A. DiClerico, Jr. United States District Judge

July 21, 2005

cc: Peter S. Cowan, Esquire Wilbur A. Glahn III, Esquire Alan R. Hoffman, Esquire Jack Kaplan, Esquire Arpiar G. Saunders Jr., Esquire