United States v. Continental Can Co.

22 F.R.D. 235, 1 Fed. R. Serv. 2d 563, 1958 U.S. Dist. LEXIS 4314, 1958 Trade Cas. (CCH) 69,107
District Court, S.D. New York·Decided July 9, 1958·Published·Cited by 2 cases

Opinion

DAWSON, District Judge.

This is a motion for discovery made pursuant to Rule 34 of the Rules of Civil [236]*236Procedure, 28 U.S.C.A., which seeks an order directing the defendant to produce at the office of the Antitrust Division of the Department of Justice, at the United States Courthouse in New York, certain books, papers and documents and to permit them to be copied by the plaintiff.

The action is one brought by the Government under the provisions of the Clayton Act, 15 U.S.C.A. §§ 12-27. The offense charged in the complaint is that on September 19, 1956, the defendant and Robert Gair Company, Inc., entered into an agreement of merger which was thereafter approved and consummated; and that the effect of this merger will be substantially to lessen competition or to tend to create a monopoly in violation of § 7 of the Clayton Act, 15 U.S.C.A. § 18. The action is described by the attorneys for the Government in their brief as “a complex and protracted antitrust suit.”

The documents sought to be discovered are described generally in fifty categories contained in the notice of motion. Each one of the categories would require production of numerous documents. For example, item 8 would require production of “all notices, announcements, correspondence, memoranda or other written communications prepared, issued or received by subsidiaries, divisions, departments, plants, sales offices or sales representatives, executives, supervisory personnel and employees” of defendant “referring to or relating to defendant’s acquisition of the whole or any part of the stock or assets of or from” twenty-six different companies. An affidavit submitted by the Vice-President of the defendant states that “currently there are about 310 file locations in the United States in which such material might possibly be found.” It also points out that defendant has more than a dozen decentralized divisions which contain in total 57 plants and 84 district or regional sales offices. The volume of files which will have to be searched to comply with the proposed order for production and the amount of papers which will have to be produced in response to the proposed order would truly be staggering. To the extent that such papers are necessary and relevant they should, of course, be produced. The Court recognizes that the discovery rules should be applied to provide disclosure of facts and issues to the fullest practicable extent and that rules for discovery in antitrust cases should be construed liberally to permit discovery. Leonia Amusement Corp. v. Loew’s, Inc., D.C.S.D.N. Y.1954, 16 F.R.D. 583.

However, the courts in recent years have become acutely aware of the fact that in long and protracted cases, such as these antitrust cases, interparty discovery proceedings under the Rules of Civil Procedure, not arranged for on a judge’s pre-trial program, are not helpful in elimination of unnecessary delay, expense or volume of record, and that this delay, expense and volume of the record impose unfair burdens on the litigants and impossible burdens on the courts.

Nor is it possible for the Court to decide in vacuo what documents are “relevant to the subject matter involved in the pending action” and therefore “constitute or contain evidence relating to any of the matters within- the scope of the examination permitted by Rule 26(b).”1 To do so must presuppose that the judge has some knowledge of the issues involved in the action. However, the complaint in an antitrust action apparently does not have to define the issues with any precision. Nagler v. Admiral Corp., 2 Cir., 1957, 248 F.2d 319. As the distinguished Chief Judge of the Tenth Circuit has stated:

“Particularization of the issues is indeed the first order of business. But the rules do not contemplate [237]*237their definition by paper pleadings. They are to be ascertained and articulated by the free use of controlled pre-trial discovery under the guiding hand of the judge who has the responsibility for the trial of the case.” New Home Appliance Center v. Thompson, 10 Cir., 1957, 250 F.2d 881, 883-884.

Faced with the problem of deciding “relevance” when the issues have not been clearly defined, some courts have taken the easy course of deciding that everything is probably relevant. Bank of America v. Loew’s International Corporation, D.C.S.D.N.Y.1956, 19 F.R. D. 115. However, a court should not lightly abdicate its responsibility of deciding what is relevant and whether “good cause”2 has been shown for the production of documents. See 4 Moore, Federal Practice, Par. 34.08.

Caught thus between the Scylla of not knowing precisely what the issues are, and the Charybdis of deciding whether the documents are relevant to undefined issues, the courts have tried to establish reasonable procedures for meeting the problem. A committee appointed by the Judicial Conference of the United States spent considerable time studying the problem and thereafter the Judicial Conference adopted and promulgated a report which pointed the way to a solution of this and other problems in cases of this nature. This is the so-called “Prettyman Report” entitled “Procedure in Antitrust and Other Protracted Cases.” 1951, 13 F.R.D. 62. The Committee pointed out that

“It is not practical to proceed in these cases as in a lawsuit of ordinary complexity and bulk; that is, to let the parties exhaust the cross fire of pleading, to conduct open-court pre-trial hearings, or to let counsel try the case as they please. The potential range of issues, evidence and argument is so great, and the necessities of adversary representation so compelling, that the activities of counsel will result in records of fantastic size and complexity unless the trial judge exercises rigid control from the time the complaint is filed.” At page 66.

The Committee then reached the following conclusions:

“All preliminary motions should be considered and disposed of by the judge who will hear and determine the cause.”
“In a case of the type here under consideration, where pre-trial is a necessary, although preliminary, part of the trial proceeding, deposition or discovery proceedings outside the planned scope of the judge’s direction are likely to be at least surplusage if not quite in conflict with the judge’s program.
“Your Committee is, therefore, of the view that interparty discovery proceedings, under the Rules of Procedure, not arranged for in the judge’s pre-trial program, are not helpful in the elimination of unnecessary delay, expense or volume of record.” At page 83.

The Rules of this District provide the means for putting the recommendations of this Committee into effect See General Rule 2 and Calendar Rule 16 of the Rules of the District Court, Southern District of New York.3 However, the [238]*238rules are not self-executing. They require that an application be made to the Chief Judge for the assignment of a long and protracted case to a single judge, and that application be made for the holding of a pre-trial conference before that judge.

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United States v. Continental Can Co., 22 F.R.D. 235, 1 Fed. R. Serv. 2d 563, 1958 U.S. Dist. LEXIS 4314, 1958 Trade Cas. (CCH) 69,107 (S.D.N.Y. 1958).

22 F.R.D. 235 (United States v. Continental Can Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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