Litton Industries, Inc. v. Chesapeake & Ohio Railway Co.

129 F.R.D. 528, 16 Fed. R. Serv. 3d 646, 1990 U.S. Dist. LEXIS 1591, 1990 WL 10824
CourtDistrict Court, E.D. Wisconsin
DecidedFebruary 7, 1990
DocketNo. 89-MISC-124; Civ. A. No. C81-371
StatusPublished
Cited by6 cases

This text of 129 F.R.D. 528 (Litton Industries, Inc. v. Chesapeake & Ohio Railway Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Litton Industries, Inc. v. Chesapeake & Ohio Railway Co., 129 F.R.D. 528, 16 Fed. R. Serv. 3d 646, 1990 U.S. Dist. LEXIS 1591, 1990 WL 10824 (E.D. Wis. 1990).

Opinion

DECISION AND ORDER

AARON E. GOODSTEIN, United States Magistrate.

Bay Shipbuilding Corp. and the Manitowoc Company, Inc., two non-parties to the above-entitled action which is pending in the Northern District of Ohio, have filed motions to quash subpoenas for production of documents served upon them by plaintiffs (hereinafter referred to as “Litton”). Since the motions to quash are identical and since there is a unity of interest between the two movants, they will be referred to as Bay Shipbuilding.

By order dated December 19, 1989, Judge J.P. Stadtmueller referred the motions to this court for disposition pursuant to 28 U.S.C. § 636(b)(1)(A) and Local Rule 13.02. Following that reference, Bay Shipbuilding filed a motion for a protective order. All motions were fully briefed and this court entertained oral argument on January 22, 1990. Following that hearing, the “parties” to this dispute (Litton and Bay Shipbuilding) entered into a stipulation for a protective order which was signed by the court on January 29, 1990.

By way of brief background, Litton.is the plaintiff in a civil action in the Northern District of Ohio against several railroads involved in the transportation of iron [529]*529ore in the Lake Erie area. Litton claims that the defendants engaged in a conspiracy to prevent Litton from competing in the transportation of such commodities. Litton was engaged in the business of construction, conversion, repair and maintenance of sea-going vessels at the time of the alleged conspiracy. Litton is seeking damages against the defendants pursuant to federal and state anti-trust laws for a period from approximately 1965 through 1981.

The lawsuit was filed eight years ago, and a trial date has been scheduled for May 2, 1990. The instant dispute was triggered by Litton’s need to comply with a pretrial order of the district court requiring it to submit its damage calculations by February 1, 1990 (Litton indicated at the hearing that there may be some flexibility with this deadline in view of the pending motions to quash).

To date, Litton has engaged the services of experts who have developed their damage theories. However, Litton wishes to supplement its experts’ theories with the actual experiences of companies that engaged in the same business during the period in question; that is where Bay Shipbuilding comes into the picture. Bay has been, and still is, in the business of serving the Great Lakes shipping market. It has constructed sea-going vessels, maintained and repaired such ships, converted existing vessels to self-loaders and operated a dock. Litton wants its experts to review Bay’s records in order to ascertain what the actual profits of a company in the business were in the various categories under consideration.

Bay Shipbuilding objects on several grounds. First, it submits that Litton’s request is massive; for example, regarding the area of ship construction alone, Bay has thirty file drawers of documents. Second, and more importantly, Bay claims much of the information requested is highly sensitive and, in the hands of a competitor, would provide that company with an unfair advantage. Bay claims that Litton is such a company. Next, Bay contends that disclosure of some of this information to its present customers, certain defendants in this lawsuit, would have a serious adverse effect on its customer relations. Finally, Bay asks why does it, an “innocent bystander”, have to produce confidential information for litigation in which it is not involved.

Litton responds by submitting that an appropriate protective order specifically addressing each of Bay’s concerns can be fashioned to maintain the confidentiality of this information. Litton says that it is an “innocent victim” of the defendants’ conspiracy and, in order to persuade the jury that its claim for damages is based in reality, it needs the records of a company like Bay who has been engaged in the business that Litton attempted to enter.

This court’s legal analysis is governed by Rules 45 and 26 of the Federal Rules of Civil Procedure. Rule 45(b) provides, in part, that the court may quash or modify a subpoena for documents “if it is unreasonable and oppressive.” Rule 45(d) states that the subpoena may command the person to produce documents within the scope of Rule 26(b), but subject to the provisions of Rule 26(c). Rule 26(c) authorizes the court in the district where the deposition is to be taken to “make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.”

Rule 26(b) provides the framework of relevancy to this discovery dispute. There is no meritorious contention here that the documents requested are not relevant. While the probative value of these documents can be argued, there is no question that they are germane to Litton’s damage calculations. They arguably form a “reality” aspect of damages which can buttress the experts’ theoretical scenarios; they provide a “yardstick” measure for the profits Litton claims they were deprived of making. Bay’s objections to relevancy are not persuasive in supporting a motion to quash on that basis alone, but are more appropriate to consider when applying the balancing test of Rule-26(c).

Bay Shipbuilding is resisting discovery and thus it is incumbent upon Bay to estab[530]*530lish that the subpoena should be quashed, modified or subject to a protective order. Here, Bay submits that it has satisfied its burden by demonstrating that the information is confidential. In discussing the application of Rule 26(c) to a similar situation involving discovery from a non-party, the court in the case of Shields Enterprises, Inc. v. First Chicago Corporation, 1988 Westlaw 142200 (N.D.Ill.1988), succinctly states,

If it is established that confidential information is being sought, the burden is on the party seeking discovery to establish that the information is sufficiently relevant and necessary to his case to outweigh the harm disclosure would cause to the person from whom he is seeking the information.

Id. at 4.

The first question to be addressed is whether Bay Shipbuilding has established that the information it seeks to protect is confidential. Based upon the representations of the parties to this dispute, it appears that Bay is willing to produce for inspection documents relating to its construction of certain vessels. Apparently, Bay is willing to concede that this is historical data and disclosure would not be injurious to its present business. These documents, which will be subject to the stipulated protective order, are now being reviewed by Bay’s attorneys to ascertain if it will object to disclosure of any particular documents within this general category.

Parenthetically, this court concurs with the discovery of the ship construction documents. In this area, Litton claims that, absent the conspiracy, it would have constructed several maximum size self-unloading vessels. The alleged lost profits from the construction and sale of these vessels has been limited to a discrete time period, 1969-1975. To calculate damages, Litton’s experts have arrived at a profit margin based upon various factors. Therefore, the actual experience of a Great Lakes shipbuilder, i.e.

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129 F.R.D. 528, 16 Fed. R. Serv. 3d 646, 1990 U.S. Dist. LEXIS 1591, 1990 WL 10824, Counsel Stack Legal Research, https://law.counselstack.com/opinion/litton-industries-inc-v-chesapeake-ohio-railway-co-wied-1990.