In re Consumers Power Co. Securities Litigation

109 F.R.D. 45, 1985 U.S. Dist. LEXIS 15474
District Court, E.D. Michigan·Decided September 30, 1985·No. No. 83-CV-6448-AA·Published·Cited by 7 cases

Opinion

MEMORANDUM OPINION AND ORDER

STEVEN D. PEPE, United States Magistrate.

This matter involves a review of a protective order entered by this Court on stipulation of the attorneys representing the plaintiffs’ executive committee, defendant Consumers Power and defendant Morgan Stanley. The case involves a securities fraud class action over certain representations regarding the Midland nuclear power plant being built by Consumers Power. Booth Newspapers, Inc., has moved to intervene under Fed.R.Civ.P. 24(b) to challenge the legality of the protective order asserting:

Reporters from the Ann Arbor News have been denied access to discovery documents transmitted by and between the parties due to the existence of [the] Protective Order dated December 7, 1984.

They seek only a removal of the protective order, not an order for production of discovery documents.

The motion involves two issues. The first issue is whether newspapers that are not parties to a lawsuit have standing to intervene for purposes of questioning a protective order which prohibits parties from revealing to the press certain information that it may wish to report to the general public. Assuming that Booth Newspapers has standing to raise this issue, the second question is whether the present protective order is justified under the Federal Rules of Civil Procedure and under the United States Constitution.

1. The Issue of Standing to Intervene:

Booth Newspapers asserts a common law right of access to pretrial documents exchanged among the parties in preparation for a trial. Booth asserts standing as a necessary predicate to raising the question of access.

Defendant Consumers Power asserts that the public, or the press acting on the public’s behalf, does not have standing to be heard unless “it has been excluded from proceedings or records to which it has an established right of access.” It reads In re Knoxville News-Sentinel, 723 F.2d 470 (6th Cir.1983), to provide standing to be heard only to: (1) persons present in open court when their exclusion from the courtroom is being considered; and (2) to the public and press “before being denied their presumptive right of access to judicial records.” Consumers Power argues that in the present case the pretrial materials that are exchanged between the plaintiffs and defendants have not yet been filed in court and are thus not “judicial records”. (See the discussion of Fed.R.Civ.P. 5(d) below showing that filing dates of discovery do not necessarily define “judicial records”.) Accordingly, it asserts that the standing suggested by In re Knoxville News-Sentinel does not exist in the present case since the items in question are presently neither judicial documents nor public court records.

In re Knoxville News-Sentinel was dealing with a situation where certain exhibits had been removed from the court record by court order prior to allowing public inspection. The Sixth Circuit noted that “given the important rights involved”, it was concerned about the “failure of the district court to afford the press a reasonable opportunity to state their objections to its protective order.” In addition, it noted that it would not give the ordinary deference to the district court’s decision and use a “narrow review reserved for discretionary decisions based upon first-hand observations.” Rather, it indicated that “only the most compelling reasons can justify non-disclosure of judicial records.”

[47]*47The implications of the Knoxville ruling have been altered in part by Seattle Times Co. v. Rhinehart, 467 U.S. 20, 104 S.Ct. 2199, 81 L.Ed.2d 17 (1984). Yet the Supreme Court altered only the standard of review, not the Sixth Circuit’s declaration of a right of the public or press to a limited standing in court to challenge protective orders and assert the public’s right of access.

While Booth Newspapers has moved to intervene under Fed.R.Civ.P. 24(b), it limits its purposes to vacating the protective order. Rule 24(b) is appropriate for a party who wishes to become a full-time participant in the litigation. In light of the important first amendment right involved in cases where the court has entered protective orders restricting information flow to the public, In re Knoxville News-Sentinel recognized a special, limited purpose intervention to provide the press and/or public a reasonable opportunity to state objections to a protective order or other obstacle to access to certain information involved in a litigation.

Noting that other courts had extended the right to be heard to situations other than the closing of the courtroom, the Sixth Circuit felt that its earlier holding of Brown and Williamson Tobacco Corp. v. F.T.C., 710 F.2d 1165 (6th Cir.1983):

... invites application of a similar rule where a district court is requested, either in writing under seal or during an in chambers conference, to seal its record.

The Sixth Circuit noted that with respect to the records involved in the litigation:

... the district court below was well aware of the public’s interest in the litigation between [the parties]. After receiving the bank’s request to seal the record, the district court had an obligation to consider the rights of the public and the press____ In our view, the district court should not be placed “in the position of sole guardian of first amendment interest even against the express wishes of both parties.” Younger, The Sheppard Mandate Today: A Trial Judge’s Perspective 56 Neb.L.Rev. 1, 6-7 (1977), quoted in [U.S. v.] Criden II, 675 F.2d [550] at 558 [ (3rd Cir.1982) ]. Rather, the public and press should be afforded, where possible, an independent opportunity to present their claims. “Certainly, the failure to invite participation of the party seeking to exercise first amendment [and common law rights] reduces the possibility of a narrowly drawn order, and substantially imperils the protection which the amendment [and the common law] seeks to assure.” Carroll v. President and Commissioners of Princess Anne, 393 U.S. 175, 184, 89 S.Ct. 347, 353, 21 L.Ed.2d 325 (1968). The importance of the rights involved and interests served by those rights require that the public and press be given an opportunity to respond before being denied their presumptive right of access to judicial records.

723 F.2d at 475.

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In re Consumers Power Co. Securities Litigation, 109 F.R.D. 45, 1985 U.S. Dist. LEXIS 15474 (E.D. Mich. 1985).

109 F.R.D. 45 (In re Consumers Power Co. Securities Litigation) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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