National Presto Industries, Inc.

24 Cont. Cas. Fed. 82,222, 216 Ct. Cl. 422, 1978 U.S. Ct. Cl. LEXIS 80, 1978 WL 8428
CourtUnited States Court of Claims
DecidedMarch 17, 1978
DocketNo. 301-76
StatusPublished
Cited by2 cases

This text of 24 Cont. Cas. Fed. 82,222 (National Presto Industries, Inc.) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Presto Industries, Inc., 24 Cont. Cas. Fed. 82,222, 216 Ct. Cl. 422, 1978 U.S. Ct. Cl. LEXIS 80, 1978 WL 8428 (cc 1978).

Opinion

"This case is before the court on a request by defendant pursuant to Rule 53(c)(2)(ii) for prompt review of a procedural order entered by Trial Judge Harry E. Wood. The suit is one for redetermination of alleged excessive profits under 50 U.S.C. App. § 1218 as amended. The plaintiff, seeking discovery, filed interrogatories under Rule 73. Defendant initially promised to furnish files from [423]*423which plaintiff could obtain what it wanted, but belatedly came to realize the burdensome nature of the task it had taken on itself, and that the rights of third parties were involved. It thereupon moved for a protective order under Rule 71(f). The trial judge took the view that defendant failed to make a timely objection, but rather had repeatedly advised that it would respond and has in fact made some kind of response to most interrogatories, and therefore any injury was self-inflicted. However, he did allow defendant to notify third parties if it chose, within thirty days, and to defer divulging third party data until this is done.

"It appears to us that counsel on both sides are subject to criticism. Counsel for plaintiff has filed interrogatories that appear to us a farfetched extension of the discovery procedure. Counsel for defendant did not speak out against them promptly as he should have done. By the trial judge’s order, one party is rewarded for making excessive demands, the other is punished for not promptly objecting to them. We consider that important interests are at stake, which cannot be destroyed by us because of counsel’s neglect.

"Both sides purport to rely heavily on our decision in Instrument Systems Corp. v. United States, 212 Ct. Cl. 99, 546 F.2d 357 (1976) and Marinette Marine Corp. v. United States, 212 Ct. Cl. 114, 546 F.2d 365 (1976). Both cases address the problem of discovery in renegotiation redeter-mination. In Instrument Systems we noted that comparisons with other companies, third parties to the litigation, were essential in renegotiation at both the administrative and judicial stages. We tried to cool the discovery heat of counsel for plaintiffs, holding that the moderate burden on a plaintiff to make a prima facie case did not require him to submit data as to the business of third parties to the litigation, beyond that available under the Freedom of Information Act (FOIA) 5 U.S.C. § 552. Defendant, we said, was the party who must lose if the comparative data was inadequate for an informal and reasoned judgment. The Renegotiation Board was the only source of third-party data referred to in the Instrument Systems opinion, and it still would appear to be by far the best. The Board had been involved in much FOIA litigation and as a result, had announced what material would be available to anyone who asked, and what would be withheld. This was a well [424]*424understood predicate to the decision. We thought, as a general thing, defendant should provide to any litigant who asked in discovery, any data the litigant could obtain directly from the Board under the FOIA. We hoped in most cases this would suffice. If not, the party demanding more out of Board files should be required to notify the third parties whose privacy rights might be infringed, and the trial judge should consider their objections before ruling.

"None of this by its own terms or by any logical extension had any application to any documents in the files of other government agencies. We called what we were talking about 'third party renegotiation documents,’ which would not refer to documents generated in the course of contract performance or contract audit. Nearly the whole discussion was about the Renegotiation Board’s Form RB-1 and at the end of the opinion we said:

If any disputes arise about documents generated during and at the end of renegotiation [emphasis supplied] what we have said can be applied by analogy.

"Plaintiff is in error in relying on Instrument Systems as authority that defendant should cull out of discovery files any third-party documents it deems exempt under the FOIA exemptions, or otherwise privileged, and turn over the rest without notifying third parties. Except in regard to Renegotiation Board documents, when the task appeared ministerial, this would involve debatable decisions regarding disclosure of possibly confidential business data of third parties without their having a chance to be heard, the very thing we disapproved in Instrument Systems. We do not think government agencies are wholly to be relied on to protect third party interest, and defendant’s blithe assurances on the filing of the interrogatories here affords further evidence that this is so.

"If there is any other instance where the scope of an agency’s duty to withhold or to furnish data under the FOIA is as clean-cut as it is with the Renegotiation Board, so as to make it needless to hear from the third parties, neither side has pointed it out. So far as appears, any decision on the papers demanded here would be made by defendant ad hoc, without recourse to any previously announced rule.

"In Marinette Marine Corp., supra, we turned to the problem presented by a renegotiation plaintiff who wanted [425]*425discovery of documents in possession of procurement officials, not the Renegotiation Board. Plaintiff, a shipbuilder, wanted to discover documents relating to contracts awarded to other shipbuilders, specifically pre-award surveys and cost breakdowns submitted in support of bids. All the third-party shipbuilders had been notified. The trial judge forbade defendant to turn over cost breakdowns submitted by bidders who moved for protective orders, and held it need not produce any others. As to pre-award surveys, he held defendant might not produce or turn over those the subject of objections by third parties, but should turn over those relating to third parties who did not object. In both classes of cases there were express commitments of confidentiality to the third parties, in ASPR 1-907 and in the IFB’s.

"In that case the only request for review was by plaintiff; but we thought the trial judge had erred, if at all, in favor of plaintiffs discovery. We pointed out the requirements of our rule that the discovered material be relevant (Rule 71(b)(1)) and we stressed the dubious relevance for comparison purposes of cost data that was not assembled on the overall fiscal year basis, but with reference to particular contracts, that related to anticipation, not experience, and that was governed as to allowability by rules other than the Internal Revenue Code.

"Turning now to the present interrogatories, they start out with lists of companies. One list of 20 names, described as producers of 'projectiles of interest’ and 'cases of interest,’ will be called hereinafter 'the 20.’ Another list of 71 names is made up of producers of 'metal parts.’ They will be called hereinafter 'the 71.’ This indicates the scope of the discovery desired by plaintiff into the business of third parties.

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Related

Martin v. United States
1 Cl. Ct. 775 (Court of Claims, 1983)
National Presto Industries, Inc. v. United States
231 Ct. Cl. 772 (Court of Claims, 1982)

Cite This Page — Counsel Stack

Bluebook (online)
24 Cont. Cas. Fed. 82,222, 216 Ct. Cl. 422, 1978 U.S. Ct. Cl. LEXIS 80, 1978 WL 8428, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-presto-industries-inc-cc-1978.