United States v. Capitol Service, Inc.

89 F.R.D. 578, 1981 U.S. Dist. LEXIS 11297
CourtDistrict Court, E.D. Wisconsin
DecidedMarch 23, 1981
DocketNo. 80-C-407
StatusPublished
Cited by10 cases

This text of 89 F.R.D. 578 (United States v. Capitol Service, Inc.) 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
United States v. Capitol Service, Inc., 89 F.R.D. 578, 1981 U.S. Dist. LEXIS 11297 (E.D. Wis. 1981).

Opinion

MEMORANDUM AND ORDER

WARREN, District Judge.

Plaintiff United States and defendant United Artists Theatre Circuit (UATC) have filed cross motions to compel production of documents and answers to interrogatories. UATC in its motion seeks four different types of information. Document requests 1, 3, 4, 5, 6 and 7 seek all information, documents and transcripts obtained during the pre-complaint investigation carried on by the antitrust division of the Department of Justice as well as information regarding splits in other cities obtained by the plaintiff from distributors, distributors trade groups and exhibitors since 1975. Document request 10 and interrogatories 16 and 18 seek information and documents dating back to 1948 regarding the antitrust division’s prior support of distributor participating splits and the documents and information pertinent to the change of position which was announced on April 1, 1977. Documents 11, 12, 13, 14 and 18 request information on specific allegations of the complaint. Finally, defendant’s document request 15 asks for any surveys, studies, analyses or reports prepared by or for plaintiff relating to the business of motion picture exhibitors in Milwaukee.

In response to these various requests, the plaintiff raises four general objections. Plaintiff asserts that much of the information requested is protected by one of three privileges: the work product privilege, the informant privilege, or the deliberative process of government privilege. It also contends that the information sought concerning the prior policy of the Justice Department regarding splits and the change of policy is irrelevant as is any information it has regarding splits in cities other than Milwaukee. These objections appear throughout plaintiff’s responses and, consequently, a discussion of each is required to resolve the motion.

RELEVANCY

Under the Federal Rules of Civil Procedure, a party is entitled to discovery on “any matter, not privileged, which is relevant to the subject matter involved in the pending action.” Rule 26 of the Federal Rules of Civil Procedure. In Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351, [581]*58198 S.Ct. 2380, 2389, 57 L.Ed.2d 253 (1978), the Supreme Court broadly interpreted the underlined phrase “to encompass any matter that bears, or that reasonably could lead to other matters that could bear on, any issue that is or may be in the case.” At the same time, however, the Supreme Court recognized that discovery is not unlimited and that discovery of matters not “reasonably calculated to lead to the discovery of admissible evidence” is not within the scope of Rule 26(b)(1). Id. 351-52, 98 S.Ct. 2389-90. Therefore, in ruling on issues of relevancy, this Court must determine if the matters sought bear in any way on the subject matter of the action and whether the information can possibly lead to discovery of admissible evidence. In light of this standard, the Court will now address plaintiff’s objection based on relevancy.

Plaintiff raises two issues of relevancy. The first concerns the change of policy by the Department of Justice which culminated in the press release of April 1, 1977. The second relates to the defendant’s request for information obtained by the plaintiff since 1975 concerning the existence of splits in other cities. With regard to the change of policy the defendant has requested all documents relating to the press release of April 1, 1977 and all documents since 1948 relating to the prior position of the Department of Justice that distributor participating splits were legal. Plaintiff asserts that these documents are not relevant to this litigation because the plaintiff’s prior position or exercise of prosecutional discretion does not have any bearing on this matter nor would it reveal any relevant evidence. Furthermore, the United States contends that its policy regarding exhibitor only splits has never been changed and because this is an exhibitor only split, the change of policy regarding distributor splits is irrelevant. Finally, although not directed to the issue of relevance, the plaintiff states it would place an undue burden on it to force it to comb its many files on the movie industry to produce the requested documents.

As to the requests for information on splits in other cities dating from 1975 to the present, the plaintiff asserts that this information is irrelevant because the complaint alleges a conspiracy limited to the Milwaukee market and because the split in Milwaukee is a per se violation of section 1 of the Sherman Anti-trust Act. Plaintiff also points to defendant’s own objection regarding plaintiff’s request for production of documents about another area of the country defendant is involved in. Defendant in its objection seeks as the plaintiff does here, to limit discovery to the Milwaukee market. Notwithstanding these objections, plaintiff has provided the defendant with non-privileged information and documents concerning distributors’ policies towards splits. Plaintiff does not believe these documents are relevant, yet recognizes the potential argument that such statements would lead to admissible evidence regarding distributors’ policies toward the Milwaukee split.

Defendant contends that the plaintiff’s prior policy regarding distributor participating splits is relevant to an assessment of the nature, purpose, and effect of splits. Because defendant views this case as one that must be tried under the rule of reason theory, it believes that the plaintiff’s past support of the practice is evidence of its rational basis and that plaintiff must have previously recognized some benefit to the practice. In support of this position, defendant cites the Court to the plaintiff’s ongoing role of regulating the movie industry pursuant to the decrees entered in 1949 and 1952 in United States v. Paramount Pictures, 334 U.S. 131, 68 S.Ct. 915, 92 L.Ed. 1260 (1948). In this regard, defendant also refers the Court to the Supreme Court’s recent decision in Broadcast Music, Inc. v. Columbia Broadcasting Systems, Inc., 441 U.S. 1, 99 S.Ct. 1551, 60 L.Ed.2d 1 (1979).

In Broadcast Music, Inc., the Supreme Court considered whether the blanket license fees set by the American Society of Composers, Authors and Publishers (AS-CAP) and Broadcast Music, Inc. (BMI) for use of copyrighted material were per se illegal under the Sherman Anti-trust Act. The Court held that the practice was not per se illegal. The Court based its decision, [582]*582in part, on the government’s extensive supervision of the alleged conduct and the existence of consent decrees between the government and ASCAP and BMI. The Court stated:

In these circumstances, we have a unique indicator that the challenged practice may have redeeming competitive virtues and that the search for those values is not almost sure to be in vain, (footnote omitted.) Id. at 13, 99 S.Ct. at 1559.

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Cite This Page — Counsel Stack

Bluebook (online)
89 F.R.D. 578, 1981 U.S. Dist. LEXIS 11297, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-capitol-service-inc-wied-1981.