Minpeco S.A. v. ContiCommodity Services, Inc.

832 F.2d 739, 56 U.S.L.W. 2290
CourtCourt of Appeals for the Second Circuit
DecidedNovember 2, 1987
DocketNo. 181, Docket 87-6108
StatusPublished
Cited by4 cases

This text of 832 F.2d 739 (Minpeco S.A. v. ContiCommodity Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Minpeco S.A. v. ContiCommodity Services, Inc., 832 F.2d 739, 56 U.S.L.W. 2290 (2d Cir. 1987).

Opinion

GEORGE C. PRATT, Circuit Judge:

This case represents merely a single plot line in an ongoing soap opera, “As The Hunts Turn”. Its central characters are the three brothers Hunt, Nelson Bunker, William Herbert, and Lamar. The overall drama is even now being played out in far-flung courts and administrative hearing rooms, and pits the Hunts against various adversaries determined to take them to task for events in 1979 and 1980, when the Hunts allegedly attempted to corner the silver market and reap enormous profits thereby. Like any good soap opera, particularly a legal one, the story has unfolded slowly.

Today’s episode involves an attempt by the Commodity Futures Trading Commission (“CFTC”) to obtain modification of a protective order entered by the district court. The CFTC seeks to take advantage of discovery that has thus far taken place in the underlying civil suit brought by the plaintiffs, who are not a party to this appeal, against the Hunts and various other defendants. The district court ruled that the CFTC was required to show a “compelling need” to justify modification of the protective order, and further that the CFTC had failed to meet this burden. Because we conclude that the district court [741]*741applied the correct standard, and that its application of that standard to the showing made by the CFTC was not an abuse of discretion, we affirm.

BACKGROUND

For purposes of the limited issues presented by this appeal, it is not necessary to understand the entire civil suit being prosecuted against the Hunts. It is enough to know that on July 27, 1983, the district court entered a protective order covering the fruits of the action’s discovery. With respect to the government, the scope of the protective order was both clear and broad; it provided:

No information, documents or things produced in this action by defendants, whether or not designated as confidential pursuant to the terms of this order, may be disclosed by any party or counsel for any party to any federal, state or other government commission * * * without prior approval of the court which shall be requested on reasonable notice to all parties.

On February 28, 1985, the CFTC began an administrative enforcement action against the Hunts and several other co-defendants, including many of the same defendants to this civil action, charging that they had manipulated silver prices upward in violation of the Commodity Exchange Act.

On October 10, 1986, the administrative law judge presiding over the CFTC’s action issued a subpoena duces tecum to Minpeco, the plaintiff in the underlying civil suit here, requiring production of documents covered by the district court’s protective order. Minpeco declined to produce the documents, citing the prohibitions in the protective order. The CFTC then sought to intervene in this action solely for the purpose of modifying the protective order. On February 20,1987, the district court granted intervention, but denied the CFTC’s motion to modify the protective order. See Minpeco, S.A. v. ContiCommodity Services, Inc., 653 F.Supp. 957 (S.D.N.Y.1987). This appeal followed.

DISCUSSION

A. Appealability of the District Court Order.

As a preliminary matter, the Hunts contend that the order of the district court denying the CFTC’s motion to modify the protective order is interlocutory and therefore not appealable. They rely on H.L. Hayden Co. of New York, Inc. v. Siemens Medical Systems, Inc., 797 F.2d 85 (2d Cir.1986), for the proposition that orders denying motions to modify protective orders for discovery purposes are not appeal-able under 28 U.S.C. § 1291.

We conclude, however, that Hayden is inapposite to this case. There, we held that the district court did not abuse .its discretion in denying a motion by the State of New York to intervene in order to make a motion to modify a protective order. In dicta we went on to state that even if we were to grant the state’s motion to intervene on appeal, we would nevertheless hold that the district court’s order denying the plaintiffs’ motion to modify the protective order was not appealable, on the basis that “the order denying modification did not dispose of the entire controversy in the district court”. Id. at 89.

Here, however, it was not plaintiff’s motion to modify the protective order that was denied; it was the CFTC’s. The entire controversy between the CFTC and the defendants in this case was disposed of by the district court’s denial of the government’s motion to modify the protective order. Had the district court in Hayden granted the state’s motion to intervene, and proceeded then to deny its motion for modification of the protective order, that denial would have been appealable under Martindell v. International Tel. & Tel. Corp., 594 F.2d 291, 293-94 (2d Cir.1979) (“If the Government had sought and obtained * * * intervention] in the action pursuant to Rule 24(d), F.R.Civ.P., for the limited purposes of seeking modification of the protective order, the district courtfs] * * * resulting decision would be final as to the intervenor within the meaning of Title 28 U.S.C. § 1291, it being the only [742]*742pending matter in the action.”). More recently, in In re New York Times, 828 F.2d 110, 113 (2d Cir.1987), we held that an order maintaining a seal on motion papers was appealable by the newspaper which had intervened in an ongoing criminal case solely to seek disclosure. We also noted there that, as the CFTC could have done here, the New York Times could simply have filed a separate civil suit, rather than intervened, and in that event the district court’s order unquestionably would have been appealable. We adopt the same approach to appealability here, refusing to exalt form over substance by forcing the parties to go through an additional procedural step that would produce precisely the same result.

The district court’s order would in any event be appealable under Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 545-47, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949). The district court’s order was “separable from, and collateral to” the underlying action, and would be effectively unreviewable on final judgment in the civil action, since the CFTC seeks the material for immediate use in its administrative action. Id. at 546, 69 S.Ct. at 1225-26. See also In re Application of National Broadcasting Co., Inc., 635 F.2d 945, 949 n. 2 (2d Cir.1980) (“Cohen very likely applies” to allow appeal where television network intervened in criminal case to gain access to videotape evidence). We therefore hold that the order is appealable.

B. Modification of the Protective Order.

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Bluebook (online)
832 F.2d 739, 56 U.S.L.W. 2290, Counsel Stack Legal Research, https://law.counselstack.com/opinion/minpeco-sa-v-conticommodity-services-inc-ca2-1987.