United States v. United Fruit Company, Standard Fruit and Steamship Company

410 F.2d 553, 10 A.L.R. Fed. 598, 13 Fed. R. Serv. 2d 822, 1969 U.S. App. LEXIS 12653, 1969 Trade Cas. (CCH) 72,778
CourtCourt of Appeals for the Fifth Circuit
DecidedApril 25, 1969
Docket26801
StatusPublished
Cited by47 cases

This text of 410 F.2d 553 (United States v. United Fruit Company, Standard Fruit and Steamship Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. United Fruit Company, Standard Fruit and Steamship Company, 410 F.2d 553, 10 A.L.R. Fed. 598, 13 Fed. R. Serv. 2d 822, 1969 U.S. App. LEXIS 12653, 1969 Trade Cas. (CCH) 72,778 (5th Cir. 1969).

Opinion

*554 FISHER, District Judge:

This appeal challenges the district court’s authority to enter and enforce a protective order prohibiting disclosure of divestiture plans filed in compliance with a consent judgment in an antitrust case. We believe the court did have such authority and did not abuse its discretion in enforcing the order.

In 1954 the United States brought a civil antitrust suit against appellee United Fruit Company alleging violations of sections 1 and 2 of the Sherman Act. 1 The plethoric complaint alleged numerous offenses amounting to unlawful domination of the banana import industry and prayed for injunctive relief. Chief Judge Lynne of the Northern District of Alabama was specially designated in 1956 by Chief Judge Hutcheson of this Court to sit in the Eastern District of Louisiana to hear this case.

After extensive discovery and pretrial proceedings, the district court entered a final consent judgment on February 4, 1958, without taking testimony or other evidence. United was enjoined from a long list of antitrust violations and was ordered inter alia to create from its own assets a new competitive banana company having a specified banana importation capacity. 2 In addition, United was required to submit detailed plans for compliance with the decree by July 1, 1967.

Shortly after entry of judgment, the district court granted United’s motion for a protective order pursuant to Federal Rule of Civil Procedure 30(b). 3 The order provided that third parties could not, without an express order of the court inspect or copy any document submitted and filed with the Clerk of the court by either party to the litigation. 4 The protective order was designed to insure by keeping secret intimately detailed information which another competitor could use devastatingly that the new company, once established, would function as a viable competitor.

The court approved United’s proposed plan for compliance on July 28, 1967. The plan required that within 30 days, United should begin organization of the new company and complete divestiture of specified assets; that within one year after approval of the plan, United should submit a detailed program for the initial organization, staffing, production, shipping, marketing and other arrangements; that within two years United should submit shipping arrangements, liquid assets and other essential accessory assets transferred or offered to the new company with the distribution of defendant’s capital stock; and that progress reports be submitted every 60 days *555 thereafter. United has now organized the new company which is named Sovereign Fruit Company.

On July 2, 1968, appellant Standard Fruit and Steamship Company filed a motion requesting the Court to permit it “to inspect and copy the progress reports and programs submitted * * * pursuant to the plan, as well as other portions of the record.” Standard is the second largest banana importer in this country, and Standard’s purpose was admittedly one of self interest to obtain advance information about the proposed competitive plans, practices and policies of Sovereign. After oral argument, the Court entered an order denying appellant’s motion on the grounds that to reveal the confidential information on file would give Standard a competitive advantage deleterious to the public purposes of the Final Judgment; viz., establishment and survival of a new competitor.

Standard brought this appeal alleging the district court was without authority to enter the protective order, but if it did have such authority, the court abused its discretion in not permitting Standard to inspect the documents on file.

Initially, we are confronted with whether this Court has jurisdiction. United’s brief suggests lack of jurisdiction on two bases. The first involves Section 2 of the Expediting Act 5 which provides that eases under the Sherman Act brought by the United States are appealable only to the Supreme Court. The second is United’s allegation that there is no final order here from which an appeal can be taken because the Court denied Standard’s motion without prejudice to renew it at a later time. The first question was answered by the Supreme Court in Standard Fruit & Steamship Co. v. United Fruit Co., 393 U.S. 406, 89 S.Ct. 684, 21 L.Ed.2d 634, January 21, 1969. Standard had in fact filed appeals to both this court and the Supreme Court. The Supreme Court dismissed the appeal before it citing, Shenandoah Valley Broadcasting, Inc. v. ASCAP, 375 U.S. 39, 84 S.Ct. 8, 11 L.Ed.2d 8, which indicates an appeal to the Court of Appeals under 28 U.S.C. Sec. 1291 6 is permissible when the order appealed from disposes of a controversy outside the mainstream of litigation in the government’s case. Clearly, Standard’s motion to inspect was of an ancillary nature, and this Court therefore has jurisdiction. Cf. also Olympic Refining Co. v. Carter, 332 F.2d 260 (9th Cir. 1964). With respect to whether there is a sufficiently final order from which an appeal can be taken, we think the order here sufficiently final if it denied the relief sought irrespective of the fact that the order denied the motion without prejudice to renew it at a later time.

Appellant’s primary argument that the district court lacked authority to enter the protective order is based on the Publicity in Taking Evidence Act 7 perti *556 nent to antitrust cases which requires generally that depositions and hearings be open to the public as freely as trials in open court. The district court concluded that the statute was limited by its terms to depositions and that if Congress had intended such a broad public policy as contended for by Standard, it would have so stated.

We agree that Congress did not intend to preclude entry of protective orders where necessary to effectuate a court’s judgment. To the contrary, we find ample authority justifying the court’s action. First, we note the well developed concept that the courts possess inherent equitable powers over their own process to prevent abuses. 8 Second, we quote with approval the rule stated in 4 Moore’s Federal Practice, 2d Ed., pp. 2519-2520.

“There is no true privilege against discovery of trade secrets or other ‘confidential’ business information, but the courts nevertheless will exercise their discretion to avoid unnecessary disclosure of such information, particularly where the action is between competitors.”

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Bluebook (online)
410 F.2d 553, 10 A.L.R. Fed. 598, 13 Fed. R. Serv. 2d 822, 1969 U.S. App. LEXIS 12653, 1969 Trade Cas. (CCH) 72,778, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-united-fruit-company-standard-fruit-and-steamship-company-ca5-1969.