Petition for Writ of Certiorari — Oklahoma Publishing Co. v. Oklahoma Hospital Ass'n

Office -Supreme Court, U.S.

34-1708 © ey:

MAY 1 1985

No.

ALEXANDER L. sj

=a

IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

THE OKLAHOMA PUBLISHING COMPANY,

Petitioner,

Vv.

OKLAHOMA HOSPITAL ASSOCIATION, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

MICHAEL MINNIS *

DAviID MCCULLOUGH

PIERSON, BALL & DowD

210 W. Park Avenue

Oklahoma City, Oklahoma 73102

(405) 235-7686

JACK N. GOODMAN

ROBERT TRAGER

PIERSON, BALL & DowD

1200 18th Street, N.W.

Washington, D.C. 20036

(202) 331-8566

Attorneys for Petitioner

* Counsel of Record

May 1, 1985

QUESTIONS PRESENTED *

1. Whether a member of the press, which was not a

party to the underlying action, has standing, represent-

ing the public, to challenge a protective order which pre-

vents a governmental entity, as a party to civil litigation

involving matters of significant public importance, from

revealing to the press or public pretrial discovery docu-

ments or discussing information contained in them.

2. Whether a protective order in a case involving ex-

penditures of public funds which is entered and con-

tinued on the basis of a conclusory statement that the

discovery materials are “confidential,” and without any

consideration of the First Amendment, satisfies the “good

cause” requirement of Fed. R. Civ. P. 26(c).

* Respondents whose names are not contained in the caption

are the Oklahoma Department of Human Services; Comanche

County Memorial Hospital; Hillcrest Medical Center; Oklahoma

Hospital Founders Association, Inc.; St. Anthony Hospital; and

St. John Medical Center, Inc.

(i)

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ............................. ccbuueaiiaasns i

ype i Fy tis yi SCOOTER iv

ES te ae 1

I Aaa nhac pitliekasnciiatiomeoneenvisiniahiansets 2

CONSTITUTIONAL PROVISIONS AND RULES

EE a ee ee ee 2

STATEMENT OF THE CASE .................. 2

REASONS FOR GRANTING THE WRIT... 9

I. The Tenth Circuit’s Holding That OPUBCO

Lacked Standing to Challenge the Protective

Orders Is in Conflict with Decisions of This

Court and Other Courts of Appeals —.................. 11

II. The Decisions Below, in Refusing to Vacate a

Protective Order Despite the Absence of a ““Good

Cause” Showing, Conflict with Decisions of This

Court and Other Courts of Appeals and Violate

the Federal Rules of Civil Procedure .................. 16

RSE SRE AR SS REE A BERS le A es 25

APPENDIX

(iii)

iv

TABLE OF AUTHORITIES

CASES: Page

‘

American Telephone & Telegraph Co. v. Grady,

594 F.2d 594 (7th Cir. 1978), cert. denied, 440

I I MI Nistitaicdec nits nai iciieiatlsceitnaedaniaptaatiaiatnael 16

Application of National Broadcasting Co., 635 F.2d

Re Re Serene te ee 14

Belo Broadcasting Corp. v. Clark, 654 F.2d 423

IG, inate bisiirensitldicieisiaicnccnalitaiduttiaiereeindtgion 12, 14

Brown & Williamsor Tobacco Corp. v. FTC, 710

F.2d 1165 (6th Cir. 1983), cert. denied, 104

Se fT Saree 20, 24

Chase v. Robson, 435 F.2d 1059 (7th Cir. 1970).... 22

In re Continental Illinois Securities Litigation,

782 F.2d 1802 (7th Cir. 1964) ......................... 13

Convey Oil Co. v. Continental Oil Co., 340 F.2d

993 (10th Cir.), cert. denied, 380 U.S. 964

nai 22

In re Coordinated Pre-trial Proceedings, 101

ct ee Bo ee. | cee 20

In re Coordinated Pre-Trial Proceedings, F.2d

, 10 Med. L. Rptr. 2430 (9th Cir.), cert.

denied, 106 S. Ct. 768 (1984) ................................ 13, 24

Gannett Co. v. DePasquale, 443 U.S. 368 (1979)... 12

Gladstone, Realtors v. Village of Bellwood, 441

I i 15

Globe Newspaper Co. v. Superior Court, 457 U.S.

NESE eS Stale Raed Oe 12

Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981)... 18, 24

In re Halkin, 598 F.2d 176 (D.C. Cir. 1979) _...... 18

Humana of Virginia v. Blue Cross of Virginia,

Ga wae ve Cane Ge, ee 20

In re Iowa Freedom of Information Council, 724

fe 5 6 RS ae 13, 22

In re Knoxville News-Sentinel, 723 F. 2d 470 (6th

a ie GIy Pa ORs oo eo RN 13, 24

New York Times Co. v. Sullivan, 376 U.S. 254

OI lice nist inciilg capitan a Re ae eee 11

Nixon v. Warner Communications, Inc., 435 U.S.

ESN ET GSE LIST TOLD: a Oe 11

Vv

TABLE OF AUTHORITIES—Continued

Page

Parkridge Hospital v. Califano, 625 F.2d 719 (6th

a sedisennneiiniinaine 20

Press-Enterprise Co. v. Superior Court, 464 U.S.

| RE EASE HNC SSO NE DIAS TD AR is toe Serene 11

Publicker Industries, Inc. v. Cohen, 733 F.2d 1059

AR i I on 13

Richmond Newspapers, Inc. v. Virginia, 448 U.S.

I ID Sitenceicectcdbnircheisnsnisbadsphotdincdihstcaehbambticetipinsinis 12

In re San Juan Star Co., 662 F.2d 108 (1st Cir.

I is atoteitesticertiecsidecinatbiccinindadainalidisiline wtdbedice 12,14

Seattle Times Co. v. Rhinehart, 104 S. Ct. 2199

CRIED: i iccticecinaisinihnntsiniibcibaiaiitienitntiinshiepiinslinciantaccniinncetealiioad passim

Tavoulareas v. The Washington Post Co., 737 F.2d

1950 Ga, Ge ee stdiiindcskinniin 23

Tulsa Tribune Co. v. Oklahoma State Nursing

Home Ass’n, 55 Okla. B.J. 1858 (Okla. Sup. Ct.

OT TD niviiciciitiinen: inttinigiacisceciidlibinesiinniiaiibintbbalnilenne 21

United States v. Booklier, 685 F.2d 1162 (9th Cir.

TI on aiindeisdosndiptedeg naclaamunondiaedaeadumaas 12

United States v. Criden, 675 F.2d 550 (3d Cir.

|. REESE SENS PCR ree nae a EGON FAieme ee C seea 12

United States v. International Business Machines

Corp., 67 F.R.D. 40 (S.D.N.Y. 1975) .................. 22

Valley Forge Christian College v. Americans

United For Separation of Church and State, Inc.,

PE aaa SE i oe ee eR 8,14

Waelde v. Merck, Sharp & Dohme, 94 F.R.D. 27

EE I iti ller ees neds alepeaitannsalliietigiaie 19

Warth v. Seldin, 422 U.S. 490 (1975) _.................... 15

CONSTITUTIONAL PROVISIONS:

I a ii icine 3

8 Bee Re tear RA SOE I 2, 23, 24

STATUTES AND RULES:

Code of Federal Regulations:

a ccsihcnianinaemnniiahianioaine 20

ne 20

vi

TABLE OF AUTHORITIES—Continued

Page

Federal Rules of Civil Procedure:

OF RF Reem 16, 17, 18

RR 8 eee passim

hs Ge. ts | ea 18

Seen, Seen re 3

United States Code:

Be IE csi cncichennesiitinninsiiniccaacciindnesiiasidiailee 20

AOR eka 7 4

2 TE ee Sa 2

an © beer 8

28 U.S.C. § 1292 (b) ...................... “ 5

a i iiicsniscrscaiinhnn-mmnsienilitiihinbibetninns 3

EE Ce Ee 3

Pg ES EE OE SOL Re are ae we 20

4B UBD. & TERS CAD CIB) CA) cceecentsscccswenterescssstens 9

Ri a Re IIE Se re 11

Be ete ns a I ttle cadh nsiticiinlnctecccheelinticecnitiilindis 6

MISCELLANEOUS AUTHORITIES:

Amendments to Rules, 85 F.R.D. 521 (1980)... 17

Fed. R. Civ. P. 5(d) advisory committee note

CID ccccnitectiniiareititiinaientia lial cial ie a iii 18

Fed. R. Civ. P. 26(c) advisory committee note

2 ER Re oer Gee RR ST 9 SN 22

Preliminary Draft of Proposed Amendments to

the Federal Rules of Civil Procedure, 77 F.R.D.

Re CO» cnc ectckceccnctestbenceaniaindaaiinn 17

IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

No.

THE OKLAHOMA PUBLISHING COMPANY,

- Petitioner,

OKLAHOMA HOSPITAL ASSOCIATION, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

The Oklahoma Publishing Company (“OPUBCO”)'

petitions that a writ of certiorari issue to review the

opinion and judgment in this case of the United States

Court of Appeals for the Tenth Circuit.

OPINIONS BELOW

The opinion of the court of appeals (App. la)? is re

ported at 748 F.2d 1421 (10th Cir. 1984). The order of

the United States District Court for the Western Dis-

trict of Oklahoma is unreported (App. lla).

1 The Oklahoma Publishing Company has the following affiliated

or subsidiary companies that are not wholly owned: The Farmer

Stockman Publishing Company; Datatek Corporation.

2“App.” refers to the Appendix to this Petition.

2

JURISDICTION

The judgment of the court of appeals was entered on

November 27, 1984. A timely petition for rehearing and

a suggestion for rehearing en bane were denied on Janu-

ary 31, 1985 (App. 10a). The jurisdiction of this Court

is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS

AND RULES INVOLVED

The First Amendment to the United States Constitu-

tion states in pertinent part:

“Congress shall make no law . . . abridging the free-

dom of speech, or of the press... .”

Fed. R. Civ. P. 26(c) states in pertinent part:

“Upon motion by a party or by the person from

whom discovery is sought, and for good cause shown,

the court in which the action is pending . . . may

make any orders which justice requires to protect a

party or person... .”

STATEMENT OF THE CASE

By this petition, OPUBCO seeks to protect its right

and that of the public to learn of information contained

in litigation documents exchanged in a suit settled by a

state agency before trial which resulted in the payment

of millions of dollars in public funds for Medicaid reim-

bursement to private entities. OPUBCO, publisher of

The Daily Oklahoman, an Oklahoma City daily news-

paper with the largest paid circulation of any news-

paper in the state, has reason to believe that cost re

ports submitted to the Oklahoma Department of Human

Services (“DHS”) by four Oklahoma hospitals and used,

in part, as a basis for Medicaid reimbursements may

have been highly inflated. Only a protective order entered

a

without the “good cause” required by Fed. R. Civ. P. 26

(ec) prevents OPUBCO from verifying this through ac-

cess to materials produced in civil discovery.

The documents OPUBCO Seeks are at the heart of the

public controversy initiated by the filing of the underly-

ing action by the Oklahoma Hospital Association and five

of its members (“Hospitals”). In 1983, DHS changed

the methodology by which it reimburses hospitals for in-

patient hospital services provided under the Oklahoma

Medical Assistance Program.’ This change would have

reduced reimbursement to the Hospitals by $16 million

in comparison to the previous plan. On May 10, 1983,

the Hospitals brought an action to enjoin DHS from im-

plementing this new methodology.

Invoking jurisdiction under 28 U.S.C. § 1331, the Hos-

pitals filed suit in the United States District Court for

the Northern District of Oklahoma in Tulsa where venue

was improper.‘ On May 25, 15 days after the suit was

filed, DHS’s motion for a change in venue was granted,

and the case was transferred to the Western District of

Oklahoma and randomly assigned to District Judge Rus-

sell. However, with the encouragement of the Hospitals °

and over DHS’s objections, Judge Brett, to whom the

case was originally assigned in the Northern District,

was reassigned to the case on June 7.

3 DHS is authorized to administer the Medical Assistance Pro-

gram under Okla. Const. art. 25, § 1, and Okla. Stat. tit. 56, § 162.

*See 28 U.S.C. §1391(b); see also Order (May 25, 1983), at

4, Oklahoma Hospital Association v. Oklahoma Department of

Human Services, No. CIV-83-1274-BT (W.D. Okla. filed May 31,

1983) [OHA v. DHS) (“Because all the defendants reside in the

Western District of Oklahoma and the cause of action arose in

the Western District of Oklahoma, the Court concludes venue in

this district [ Northern] is improper.” ).

5 By a letter dated May 27, 1983, the Hospitals advised the

Clerk for the Western District that it was “important that the

case remain in Judge Brett's Court.”

4

On August 29, DHS moved to disqualify the trial judge

under authority of 28 U.S.C. § 445 on the grounds that

(1) prior to becoming a judge, Judge Brett had repre-

sented St. Francis Hospital, Inc., the largest hospital

member of the OHA, in a suit against DHS involving

similar issues; (2) Judge Brett had a prior business as-

sociation with a witness (a St. Francis employee) listed

by the Hospitals to appear at the hearing on a prelimi-

nary injunction; and (3) Judge Brett would not have

been assigned the case had it not been filed in the

Northern District where venue was improper.®

On September 2, DHS served the Hospitals with a

document discovery request under Fed. R. Civ. P. 34

which asked for production of the financial documents

which support cost reports submitted by the Hospitals in

fiscal years 1980-83. Defendants’ First Request for Pro-

duction of Documents (Sept. 2, 1983), OHA v. DHS.

The Hospitals offered to produce the requested docu-

ments if covered by a protective order. This order would

exclude access to all documents for which a privilege was

claimed, would prohibit public dissemination of any ma-

terial produced and provide that all material produced

but not introduced in open court would be returned to

the originating party or destroyed upon completion of the

litigation. The court would rule on privilege disputes

after an in camera inspection. DHS agreed and sought a

similar order for documents it produced. Both protective

orders were requested on the sole basis that the docu-

ments were “confidential.” No “good cause” for request-

6 DHS argued that filing in the Northern District was signifi-

cant becauss “of the three district judges assigned to the United

States District Court for the Northern District of Oklahoma who

are regularly assigned cases in that district, . .. two judges...

represented the hospitals in actions against DHS while they were

in private practice, and their former firms still represent these

hospitals.” Defendant’s Motion for Disqualification and Supporting

Brief at 5, OHA v. DHS.

5

ing the orders was given by the parties, as required by

Fed. R. Civ. P. 26(c).

On September 9, the court signed the protective order

offered by the parties concerning the documents produced

by the Hospitals." The order did not suggest any addi-

tional rationale beyond that provided by the Hospitals.

The court noted only that “in order to expedite discov-

ery” the parties were “prepared to agree to production

of the documents” and that the “records in question”

were of a “confidential nature.” Protective Order (Sept.

9, 1983), at 4, OHA v. DHS. With few exceptions, the

approximately 100,000 discovery documents covered by

the Hospitals’ order were not reviewed by the court.*

On September 22, the district court denied DHS’s mo-

tion to disqualify. On September 27, DHS sought a certi-

fied interlocutory appeal of the trial court’s denial of the

recusal motion under 28 U.S.C. § 1292(b). This request

and a related request to stay the trial were denied on

October 5, and the trial was scheduled to begin on Octo-

ber 11. However, trial was delayed after the parties ad-

vised the court that serious settlement negotiations had

begun.

On November 22, the Hospitals and DHS announced a

tentative settlement, under which DHS would reimburse

the Hospitals during the next fiscal year at a level ap-

proximately $8 million greater than DHS initially pro-

7On September 26, a similar protective order was entered

covering the documents to be produced by DHS.

8 The trial court examined, in camera, several documents the

Hospitals refused to produce, including the minutes of an Okla-

homa Hospital Association Executive Committee meeting held

May 2, 1983. The Hospitals’ assertion of an attorney-client privilege

concerning these documents was upheld. Order (Oct. 4, 1983),

OHA v. DHS.

6

posed. The parties proposed that the settlement would

be entered into and the case dismissed on December 15,

at which time the documents produced during discovery

would be destroyed or returned under the terms of the

protective order.

OPUBCO’s attention was called to the discovery mate-

rials when it learned that an investigator who had made

a hurried, cursory review of some documents produced

by the Hospitals had testified in a deposition that the

Hospitals factored into their cost reports such items as

“condominiums . . . [and] expensive food items being

air freighted in from time to time on a regular basis,”

“a surfer package for an individual to Waikiki Beach”

and “expenditures for what I considered to be unusual

foodstuffs ....” Deposition of William D. Brown (Sept.

22, 1983), at 58, 59, OHA v. DHS. The investigator

stated, “I don’t understand the connection between coun-

try clubs . . . condominiums at resort lakes and running

a hospital.” Jd. at 91.2 When The Daily Oklahoman re-

porters sought additional information, DHS representa-

tives told them that only the September 9 protective or-

der prevented the agency from giving them access to

the discovery documents produced by the Hospitals.

Based on the investigator’s testimony, OPUBCO asked

to appear specially for the limited purpose of urging

that the protective orders be vacated.’® Application of

®OPUBCO did not learn about this testimony earlier because

under local rules discovery documents and depositions are not

filed with the Clerk “unless on special order of the Court or unless

they are attached to a motion, response thereto, or are needed for

use in a trial or hearing.” W.D. Okla. R. 10(e).

10 By the time OPUBCO moved to appear specially, it was ap-

parent that the Hospital’s discovery documents would not be used

in open court and would be destroyed. However, it is clear from

the pretrial conference that DHS would have introduced these

documents in open court had the case been tried. As DHS counsel

stated, “We’re going to show which expenses are not necessary

7

OPUBCO to Appear Specially and Applicant’s Motion to

Vacate Protective Order (Dec. 12, 1983), OHA v. DHS.

OPUBCO asserted that the orders were not valid under

Fed. R. Civ. P. 26(c) absent a showing of “good cause,”

and that preventing public access to evidence of possible

misallocation of public funds contravened the First

Amendment.

DHS neither supported nor opposed OPUBCO’s mo-

tion. Response to [sic] Defendants Oklahoma Depart-

ment of Human Services and Robert Fulton to The Okla-

homa Publishing Company’s Application to Appear Spe-

cially and Motion to Vacate Protective Orders (Jan. 5,

1984), OHA v. DHS. Indeed, DHS stated that it im-

mediately would make available to OPUBCO all docu-

ments it had produced during discovery. Transcript of

Hearing on Motion to Vacate Protective Orders (Jan. 11,

1984), at 38-39, OHA v. DHS [Hearing Transcript].

On January 27, 1984, the district court, while recog-

nizing OPUBCO’s standing to move to vacate the orders,

denied OPUBCO’s motion. Despite acknowledging that

“some of the materials sought may be a matter of public

interest as the lawsuit involved the expenditure of large

sums of public funds,” the court found that the parties

had stipulated to the orders and had a right not to re-

veal information if they so chose. Order (Jan. 27, 1984),

OHA v. DHS (App. 14a).

for an economic and efficient hospital. These [are the] documents

underlying the Medicare cost reports that DHS officials relied

upon in performing Medicaid methodology that’s in dispute in this

case. Most of these will be presented in summary form.” Pretrial

Conference Transcript (Sept. 27, 1983), at 8, OHA v. DHS. During

the same conference, the court paraphrased the DHS position by

saying, “We've got approximately 20 areas of expenses that were

unnecessary to the Medicaid costs of an efficiently and economically

run hospital. And those 20 are broken down into further more

expenses areas and the entire 20 may have 50- to 60,000 documents

behind them.” Id. at 31-2.

8

OPUBCO appealed the district court’s decision to the

Tenth Circuit, invoking its jurisdiction under 28 U.S.C.

§ 1291. The Tenth Circuit affirmed based solely on its

determination that OPUBCO lacked standing to challenge

the protective orders. The court relied on the test set

forth in Valley Forge Christian College v. Americans

United for Separation of Church and State, Inc., 454

U.S. 464, 472 (1982). The court acknowledged that

since OPUBCO had alleged “that were it not for the

protective orders, the parties would be free to dissemi-

nate, and it would thereby be free to gather and publish,

discovery documents not subject to those orders,”

OPUBCO met the “injury in fact” prong of the Valley

Forge test. Oklahoma Hospital Association v. Oklahoma

Publishing Company, 748 F.2d 1421, 1424 (10th Cir.

1984) (App. 6a).

However, the panel found that OPUBCO did not sat-

isfy the second part of the test, i.e., “whether OPUBCO’s

alleged injury ‘fairly can be traced to the alleged action’

and ‘is likely to be redressed by a favorable decision.’ ”

Id. (quoting Valley Forge, 454 U.S. at 472). Despite

having alluded to OPUBCO’s representation that only the

continued existence of the protective order prevented ac-

cess to the documents, and despite submission to the court

of an affidavit from a DHS assistant general counsel

stating that DHS would permit OPUBCO to review the

documents if the order were vacated, the Tenth Circuit

concluded that lifting the protective order would not re-

sult in OPUBCO having access to the discovery docu-

ments. Jd. at 1425 (App. 7a). Additionally, the court

concluded that the interest which OPUBCO sought to

vindicate in seeking to vacate the protective order was

not within the zone of interests protected by the First

Amendment—concluding that the press had no special

right of access to discovery materials. Jd. (App. at 8a).

OPUBCO timely filed a petition for rehearing and sug-

gestion for rehearing en banc. The petition and sugges-

Ce EN eee NN NT TT aw

9

tion were denied without opinion on January 31, 1985

(App. 10a). The return of the documents to the Hos-

pitals has been stayed pending action by this Court. Or-

der (Jan. 31, 1984), OHA v. DHS.

REASONS FOR GRANTING THE WRIT

The importance of this case rests in the nature of the

documents OPUBCO and the public are forbidden to see.

These documents contain cost information that may re-

veal whether certain of the Hospitals’ Medicaid cost re-

ports were inflated or whether public officials breached

their duties in agreeing to pay public funds to the Hos-

pitals at rates exceeding efficient and “reasonable” costs.

42 U.S.C. § 1896 (a) (18) (A).

The protective orders in the underlying litigation pre-

vent the parties from allowing the press or public to

view these important documents and forbid the parties

from discussing information contained in them. Allega-

tions of fraud in the use of public funds cannot be in-

vestigated while the orders are in place, and the public

therefore remains uninformed about the legitimacy of

the Hospitals’ claims and the actions of DHS officials.

DHS determines the rate of Medicaid reimbursement

it pays by, in part, relying on cost reports submitted by

the Hospitals. The cost reports are summaries of those

costs which the Hospitals believe support their claims for

reimbursements. The protected discovery documents are

those the Hospitals used to prepare the costs reports, i.e.,

the proof or evidence relied on by the Hospitals to seek

public funds. As characterized by a DHS attorney,

“These documents are the underlying documents for the

Medicare and Medicaid cost reports that were at issue in

this case.” Hearing Transcript at 34. Without review-

ing these documents, the press and the public cannot

assess the validity of the Hospitals’ claims for Medicaid

reimbursement or evaluate whether DHS acted in the

public interest when it adopted the new methodology or

settled this case.

10

This case presents two questions of law which warrant

review by this Court. First, the court below simply was

wrong in holding that OPUBCO did not have standing

to challenge the protective order. This Court and other

courts of appeals have permitted the news media, repre-

senting the public, to challenge protective orders which

sealed documents, closed judicial proceedings or ordered

certain persons not to discuss information gained during

the course of litigation. The Tenth Circuit’s decision,

then, is in conflict with decisions of this Court and cre-

ates a conflict among the circuits. It represents a clear

deviation from the principle established by this Court

that the press can challenge orders which prevent the

public from learning of judicial proceedings. Since

OPUBCO’s standing was the sole ground for the Tenth

Circuit’s decision, its holding should be reversed on this

basis alone.

Second, the Tenth Circuit apparently read this Court’s

decision in Seattle Times Co. v. Rhinehart, 104 §S. Ct.

2199 (1984), as permitting courts to prevent public ac-

cess to pretrial discovery documents under all circum-

stances. Rhinehart does not stand for this, but only for

the proposition that if “good cause” first is shown for

issuing a protective order under Fed. R. Civ. P. 26(c),

no additional right of access can be grounded in the First

Amendment. The court of appeals erred in not reach-

ing the question of whether “good cause” was shown for

initially entering or later continuing the protective or-

der in question here. Because the trial court did not con-

sider the “good cause” standard, and ignored the First

Amendment and public interest implications of the order,

the protective order violated Fed. R. Civ. P. 26(c) and

should have been vacated. -

The decisions below, if allowed to stand, are important

in that not only do they forever prevent public examina-

tion of what appears to be flagrant misuse of public

funds, but in a startling departure from this Court’s

11

holdings, will drastically reduce access by the media, and

through them the public, to judicial proceedings. The

decisions under review permit courts to entirely ignore

on standing grounds any claim by a nonparty that an

order closing a proceeding or otherwise restricting ac-

cess is improper, and further takes a proceeding—civil

discovery—which for almost 50 years has been presump-

tively open to public examination, and allows it closed

upon no more than a conclusory request. The effect of

these rulings inevitably will lessen the “uninhibited,

robust, and wide-open” debate on public issues that is at

the heart of the First Amendment. New York Times Co.

v. Sullivan, 376 U.S. 254, 270 (1964).

I. The Tenth Circuit’s Holding That OPUBCO Lacked

Standing to Challenge the Protective Orders Is in

Conflict with Decisions of This Court and Other

Courts of Appeals

It was plain error for the Tenth Court to hold

that OPUBCO lacked standing to challenge the protec-

tive orders at issue. This Court repeatedly has recog-

nized the proper role of the press in asserting a First

Amendment objection to restrictions on public informa-

tion, not based on the interests of the press itself, but

on vindication of the public’s First Amendment inter-

ests.

For example, in Nixon v. Warner Communications,

Inc., 485 U.S. 589 (1978), the three national commer-

cial broadcast television networks and other media or-

ganizations asked to copy portions of audio tapes played

during a criminal trial stemming from the Watergate

break-in. This Court did not question the press’ stand-

ing to seek access to these judicial materials, but ruled

only that the Presidential Recordings Act, 44 U.S.C.

§ 2107, did not permit such copying. Similarly, this

Court has accepted the media’s standing to object to or-

ders restricting the press’ and the public’s right of ac-

cess to judicial proceedings. In Press-Enterprise Co. v.

12

Superior Court, 464 U.S. 501 (1984), a newspaper peti-

tioned for a writ of mandamus to compel the release of a

transcript of voire dire proceedings in a criminal trial.

This Court ruled, implicitly granting the newspaper’s

standing, that voir dire examinations are presumptively

open. This Court also implicitly recognized the press’

standing to challenge the closure of a trial, Globe News-

paper Co. v. Superior Court, 457 U.S. 596 (1982) ; Rich-

mond Newspapers, Inc. v. Virginia, 448 U.S. 555 (1980),

and a pretrial hearing. Gannett Co. v. DePasquale, 443

U.S. 368 (1979). In each of these cases, the petitioner

newspapers were not parties to the underlying action and

often appeared to challenge a trial court’s order after it

had been granted. Nonetheless, this Court ruled on the

merits of the challenges. In the instant case, however,

the Tenth Circuit refused to reach the merits and in-

stead found OPUBCO without standing to object to the

orders. This is in direct conflict with the stance of this

Court.

The Tenth Circuit’s decision also is in conflict with

other courts of appeals which have permitted challenges

to closure or protective orders by media representatives

who were not parties to the underlying action. Courts of

appeals may have disagreed on the form the case must

take on appeal to challenge a lower court’s order.”

However, at least eight circuits—the First, Second, Third,

Fifth, Sixth, Seventh, Eighth and Ninth—have held that

media representatives who were not parties to an action

11 Some courts of appeals have implicitly recognized the right

of media representatives to bring such challenges. See, e.g., In re

San Juan Star Co., 662 F.2d 108 (1st Cir. 1981) ; Belo Broadcasting

Corp. v. Clark, 654 F.2d 423 (5th Cir. 1981). Others have held

that the media first must intervene in the underlying action. See,

e.g., United States v. Criden,, 675 F.2d 550 (3d Cir. 1982). Some

require media representatives who are not parties to the under-

lying action to challenge closure or protective orders only by peti-

tioning for writs of prohibition or mandamus. See, e.g., United

States v. Brooklier, 685 F.2d 1162 (9th Cir. 1982).

13

had standing to argue that certain judicial documents

should be made public.’* OPUBCO’s appeal of the dis-

trict court’s refusal to vacate the protective orders was

consistent with these cases, in none of which was there

an objection to the news media’s standing.

The Tenth Circuit chose to overlook this body of prece- a

dent making clear that the news media, representing the

public, have the right to challenge protective orders. It

also ignored the district court’s apparent acceptance of

OPUBCO’s standing.” Further, counsel for the Hospitals

conceded OPUBCO’s standing in the district court.

12 See, e.g., In re Coordinated Pre-Trial Proceedings, —— F.2d

, 10 Med. L. Rptr. 2430 (9th Cir.), cert. denied, 105 S. Ct. 768

(1984) (newspapers granted writ ordering trial court to lift stay

delaying declassification of pre-trial documents) ; Publicker Indus-

tries, Inc. v. Cohen, 733 F.2d 1059 (3d Cir. 1984) (newspaper

challenged trial court rulings closing pre-trial hearing, sealing

transcript and ordering counsel not to reveal “confidential” infor-

mation) ; Jn re Continental Illinois Securities Litigation, 732 F.2d

1302 (7th Cir. 1984) (newspapers moved to have document used in

liitgation made available to public) ; Jn re Knoxville News-Sentinel,

723 F.2d 470 (6th Cir. 1983) (newspaper motion to vacate order

allowing party in underlying action to remove exhibits); In re

Iowa Freedom of Information Council, 724 F.2d 658 (8th Cir.

1983) (reporters sought writ of mandamus to order district court

to release transcript of contempt hearing); Jn re San Juan Star

Co., 662 F.2d 108 (newspaper challenged trial court’s order for-

bidding attorneys in civil rights suit from disclosing evidence

obtained through depositions) ; Belo Broadcasting Corp. v. Clark,

654 F.2d 423 (reporters sought permission to copy audio tapes used

at trial) ; Application of National Broadcasting Co., Inc., $35 F.2d

945 (2d Cir. 1980) (television network sought access to videotapes

used in criminal trial).

13 The Order denying the relief OPUBCO sought did not question

OPUBCO’s standing. Order (Jan. 27, 1984), OHA v. DHS (App.

lla).

14 See, e.g., Hearing Transcript at 10, OHA v. DHS (“We don’t

contest their [OPUBCO’s] standing to be in this courtroom today.

We think there are sufficient cases that that question is moot.”).

14

Instead, the court below applied the test for standing

found in Valley Forge Christian College v. Americans

United for Separation of Church and State, Inc., 454

U.S. 464. There, this Court noted that it is not sufficient

for a party to request “a court of the United States to

declare [the party’s] legal rights.” Jd. at 471. Rather,

the litigant must “have ‘standing’ to challenge the action

sought to be adjudicated in the lawsuit.” Jd. Standing

requires “at an irreducible minimum” that the party

“show that he personally has suffered some actua! or

threatened injury’ . . . and that the injury ‘fairly can

be traced to the challenged action’ and ‘is likely to be

redressed by a favorable decision’... .” Jd. at 472

(citations omitted). The Tenth Circuit erred in finding

that OPUBCO did not meet the test, assuming arguendo

that it is applicable here.

The court of appeals conceded that OPUBCO complied

with the “injury in fact” prong of the test, but ruled

that OPUBCO’s injury could not be redressed by a

favorable decision and thus that the second part of the

test was not met.” To the contrary, the record indicates

that in the absence of the protective orders DHS would

allow OPUBCO access to the pertinent documents.

In its brief to the Tenth Circuit, OPUBCO emphasized

that “representatives of DHS told reporters for The

Daily Oklahoman that only the protective orders prevent

the agency from revealing the documents produced by

the Hospitals to the journalists.” Brief of Appellant at

15 The Tenth Circuit did not have this Court’s guidance in apply-

ing that portion of the Valley Forge test on which the court of

appeals focused, i.e., whether OPUBCO’s injury is likely to be

redressed by a favorable decision. Since this Court found that the

plaintiffs in Valley Forge failed to identify any personal injury, the

Court did not need to apply the second prong of the test to the facts

before it. Valley Forge Christian College v. Americans United for

Separation of Church and State, Inc., 454 U.S. at 477.

15

4. The Hospitals did not dispute that this was DHS’s

intention.**

Contrary to the Court of Appeals’ findings, OPUBCO

did not ask for adjudication of “abstract questions” or

“generalized grievances.” Warth v. Seldin, 422 U.S. 490,

499-500 (1975). It showed a “ ‘distinct and palpable in-

jury’ . . . that is likely to be redressed if the requested

relief is granted.” Gladstone, Realtors v. Village of Bell-

wood, 441 U.S. 91, 100 (1979) (quoting Warth v. Seldin,

422 U.S. at 501). The record offers no basis to doubt

that vacating the protective orders would permit

OPUBCO to review the documents in question and

allow the parties in the district court to discuss the docu-

menis with OPUBCO. Thus, both prongs of the Valley

Forge test are met, confirming OPUBCO’s standing to

challenge the orders."

The court of appeals’ decision on standing, therefore,

is entirely at odds with decisions of this Court and every

court of appeals which has considered the question. If

allowed to stand, the ability of the press to vindicate the

First Amendment rights of the public in access to judi-

cial proceedings, which often, like this case, involve is-

sues of overwhelming public importance, will be virtually

defeated.

16To remove any doubt concerning DHS’s intention to release

the discovery documents if the protective orders were vacated,

OPUBCO submitted with its Petition for Rehearing an affidavit

from the Assistant General Counsel to the Department of Human

Services for the State of Oklahoma who is the custodian of the

discovery documents. This affidavit stated that, if the bar of the

protective orders were lifted, DHS would permit OPUBCO access

to the documents. App. 22a.

17 Other aspects of the court of appeals’ decision, in particular its

improper interpretation of Seattle Times Co. v. Rhinehart, 104

S. Ct. 2199 (1984), are addressed in Argument II, infra.

16

II. The Decisions Below, in Refusing to Vacate a Pro-

tective Order Despite the Absence of a “Good Cause”

Showing, Conflict with Decisions of This Court and

Other Courts of Appeals and Violate the Federal

Rules of Civil Procedure

The Tenth Circuit’s decision—erruneously finding that

OPUBCO lacked standing to challenge a protective order

and disregarding the trial court’s abuse of its discretion

in issuing and maintaining a protective order without

“good cause shown”—is in direct conflict with decisions

of this Court and other courts of appeals and in viola-

tion of the Federal Rules of Civil Procedure. If allowed

to stand, the decision will permit district courts in the

six states of the Tenth Circuit, and others which adopt

the precedent, to enter Rule 26(c) protective orders with-

out satisfying the rule itself. A party’s mere assertion of

“confidentiality” —and the district court here based its or-

der on nothing more—will be sufficient to seal all discov-

ery documents and prohibit parties from discussing them.

Even in cases of significant public interest, as is the

instant case, the public will remain uninformed of all

information elicited during discovery except for that used

in open court.

The Federal Rules do not condone this, and, as shown

by Seattle Times Co. v. Rhinehart, 104 S. Ct. 2199, nei-

ther does this Court. The plain meaning of the Federal

Rules of Civil Procedure is that the discovery process is

presumptively open. The norm under Rule 26 is that

disclosure is permitted; the exception, requiring judicial

action, is a protective order. Accordingly, the Seventh

Cireuit concluded that, “As a general proposition, pre-

trial discovery must take place in the public unless com-

pelling reasons exist for denying the public access to the

proceedings.” American Telephone and Telegraph Co. v.

Grady, 594 F.2d 594, 596 (7th Cir. 1978), cert. denied,

440 U.S. 971 (1979) (emphasis added). Further, sub-

division (d) was added to Rule 5 in 1980 specifically to

protect the rights of nonparties to have access to “deposi-

17

tions . . . . interrogatories, requests for documents, re-

quests for admission, and answers and_ responses

thereto... .” Fed. R. Civ. P. 5(d).?* Initially, the Ad-

visory Committee suggested that, due to storage costs,

discovery materials not be filed unless so ordered by the

court or for use in open proceedings. Preliminary Draft

of Proposed Amendments to the Federal Rules of Civil

Procedure, 77 F.R.D. 618, 622-23 (1978). Despite its

recommendation that discovery materials normally not be

filed, the Committee appended a note making clear that

nonparties still were to have access to the materials:

“This amendment and amendments to the discovery

rules permit the materials described te be retained

by the parties unless and until they are used for

some purpose in the action. But any party may re-

quest that designated materials be filed, and the

court may require filing on its own motion. It is

intended that the court may order filing on its own

motion at the request of a person who is not a party

who desires access to public records, subject to the

provision of Rule 26(¢).” Jd.

However, following complaints by the press and others

“about the ‘unconscionable burden’ of obliging them to

secure a court order for access,” the Advisory Commit-

tee instead recommended the current Rule 5(d). Amend-

ments to Rules, 85 F.R.D. 521, 540 (1980). The subsec-

tion now presumes that material served on parties will

be filed and open to the public. The Advisory Committee

note to the 1980 amendment recognizes that sometimes

18 Fed. R. Civ. P. 5(d) states:

“All paper after the complaint required to be served upon a

party shall be filed with the court either before service or

within a reasonable time thereafter, but the court may on

motion of a party or on its own initiative order that depositions

upon oral examination and interrogatories, requests for docu-

ments, requests for admission, and answers and response

thereto not be filed unless on order of the court or for use in

the proceeding.”

18

no use is made of discovery materials, “[b]ut such ma-

terials are sometimes of interest to those who may have

no access to them . . . such as members of a class, liti-

gants similarly situated, or the public generally.” Fed.

R. Civ. P. 5(d) advisory committee note (1980) (em-

phasis added). Even the rejected Rule 5(d) recognized

a right of access for nonparties to discovery materials.

Similarly, Rule 30(f) (i) requires that depositions be

“promptly file[d] ... with the court in which the action

is pending” unless otherwise ordered by the court. This

filing requirement was added to Rule 30 in 1980, and the

advisory committee note refers to the note to Rule 5(d)

as an explanation of the amended provision. Together,

the Federal Rules of Civil Procedure and the advisory

committee notes show that discovery proceedings are pre-

sumptively open, for the purpose of allowing access by

nonparties such as OPUBCO here.

The district court, however, took the opposite approach.

Neither the Hospital nor DHS showed good cause with

particularity, as this Court has required under Rule 26

(ce):

“To establish ‘good cause’ for a protective order un-

der [Fed. R. Civ. P.] 26(c), [t]he courts have in-

sisted on a particular and specific demonstration of

fact, as distinguished from stereotyped and conclu-

sory statements... .’” Gulf Oil Co. v. Bernard,

452 U.S. 89, 102 n.16 (1981) (quoting In re Halkin,

598 F.2d 176, 193 (D.C. Cir. 1979) ).

Despite this, the district court issued the requested or-

ders, although the sole reason even suggested by the par-

ties’ motions was the general and conclusory statement

that the documents at issue were “confidential.” Plain-

tiffs’ Combined Response to Defendants’ First Request

for Protective Order; and Plaintiffs’ Brief in Support of

the Foregoing at 6, OHA v. DHS.

Other than this bald assertion of confidentiality, the

court had no information before it that explained why

19

protection from public access was necessary.’® Even

given two additional opportunities to specify the reasons

for needing a protective order, the Hospitals failed to do

so. In their brief opposing OPUBCO’s motion to vacate

the orders, the Hospitals referred only to “the confidential

status of the documents and records exchanged.” Hos-

pital Brief at 2, OHA v. DHS. In the argument before

the district court on OPUBCO’s motion, the Hospitals

again merely asserted confidentiality while also suggest-

ing that some documents might be privileged. Hearing

Transcript at 15.”

The district court’s general conclusion that the mate-

rials were confidential by itself is insufficient to support

a protective order. See, e.g., Waelde v. Merck, Sharp &

Dohme, 94 F.R.D. 27, 28 (E.D. Mich 1981). Further,

although the Hospitals never explained the nature of

their claim of confidentiality, there is no reason to be-

lieve that the materials involved would support the entry

of a broad protective order.

First, courts have held that corporate entities, such as

the individual hospitals, have no generalized privacy ex-

19 Additionally, at oral argument before the district court, the

Hospitals indicated for the first time that an underlying reason

for the orders was to expedite beginning the trial. Hearing Tran-

script at 20. Whatever validity that suggestion might have had

when the order was entered, it had none by the time the district

court considered OPUBCO’s motion to vacate, since the underlying

case had by then been settled.

20 Apparently responding to this claim, in denying OPUBCO’s

motion to vacate the protective orders, the trial court suggested that

the orders may have been entered in part because some “documents

were subject to various privileges.” Order (Jan. 27, 1984), at 2,

OHA v. DHS (App. 12a). However, the Hospitals did screen the

material before making copies for DHS, removing numerous docu-

ments in the process. Hearing Transcript at 15. Further, the

protective order sct forth a procedure for allowing the district court

to rule on disputed claims of privilege. As noted, see supra note 8,

the parties used this procedure at least once. It must be presumed,

therefore, that none of the documents actually produced were sub-

ject to a claim of privilege.

iia ima

20

pectations. To the degree the district court read the

Hospitals’ claim of “confidentiality” as an interest in

keeping their business practices from public view, the

decisions are in conflict with other courts. For example,

the Sixth Circuit has stressed that “showing that the in-

formation [in discovery documents for which a protec-

tive order was requested] would harm the company’s

reputation is not sufficient to overcome the strong com-

mon law presumption in favor of public access to court

proceedings and records.” Brown & Williamson Tobacco

Corp. v. FTC, 710 F.2d 1165, 1179 (6th Cir. 1983), cert.

denied, 104 S. Ct. 1595 (1984). A district court hearing

a complex antitrust case refused to issue a protective

order to cover material which alleged that companies had

engaged in price fixing and which discussed the com-

panies’ analysis of how government regulations would

affect the prices and supply of their products, concluding

that this material, although doubtless confidential, was

not subject to the expectations of privacy which has to

be established for “good cause” to be shown. Jn re Coor-

dinated Pre-Trial Proceedings, 101 F.R.D. 34 (C.D. Cal.

1984).

Additionally, in the Medicare program, hospitals and

nursing homes providing services similar to those pro-

vided by the Hospitals to the Oklahoma Medicaid pro-

gram are required to file cost reports with insurance

companies which act as intermediaries for the Depart-

ment of Health and Human Services. 42 U.S.C. § 1395g;

42 C.F.R. § 405.453. Medicare regulations require that

cost reports be made available to the public on written

request. 20 C.F.R. § 422.435. Since these reports contain

“detailed financial information,” providers have contended

“that release of the cost reports would likely cause sub-

stantial harm to [their] competitive positions ... .”

Humana of Virginia v. Blue Cross of Virginia, 622 F.2d

76, 78-79 (4th Cir. 1980). Despite such contentions,

courts have held that release is not prohibited by the

Trade Secrets Act, 18 U.S.C. § 1905. See, e.g., Parkridge

21

Hospital wv. Califano, 625 F.2d 719 (6th Cir. 1980).

While the documents at issue in the instant case are the

underlying documents for the cost reports, rather than

the cost reports themselves, the cited cases show that

participation in government medical programs provides

no expectation of avoiding public knowledge of health

care providers’ operations. This was emphasized by the

Oklahoma Supreme Court, which found that cost reports

and audits are not exempt from the Oklahoma Open Rec-

ords Law:

“Those who voluntarily choose to participate in a

program which is primarily supported by tax dol-

lars cannot reasonably expect the public which

funds the program will be denied the right to scru-

tinize the basis on which the payments are made.”

Tulsa Tribune Co. v. Oklahoma State Nursing Home

Ass’n, 55 Okla. B.J. 1858, 1859 (Okla. Sup. Ct. June

26, 1984).

The discovery documents supplied by the Hospitals,

therefore, could not be hidden behind the shield of ‘‘con-

fidentiality” on the amorphous basis of protecting busi-

ness interests... Nor could the Hospitals validly have ar-

gued that individual privacy interests were at stake, since

the Hospitals appear to already have excised all privi-

leged material which might contain confidential informa-

tion about individuals. See supra note 20.”

Even if it were alleged that the documents contain

trade secrets, e.g., the methodology by which the Hos-

pitals set their service charges (a claim not raised by

the Hospitals), this also would be, without more, an in-

sufficient basis for granting a protective order under Rule

26(c). “The courts have not given trade secrets auto-

matic and complete immunity against disclosure, but have

in each case weighed their claim to privacy against the

21 Even if certain individual names remain in the discovery docu-

ments, that information could be redacted.

22

need for disclosure.” Fed. R. Civ. P. 26 advisory com-

mittee note (1983); see, e.g., Convey Oil Co. v. Conti-

nental Oil Co., 340 F.2d 993 (10th Cir.), cert. denied,

380 U.S. 964 (1965).

Thus, a generalized concern about confidentiality—

whether concerning individual privacy or protection of al-

leged trade secrets—does not specify a harm sufficient to

justify broad protective orders. The Hospitals were obli-

gated to show with particularly that the discovery ma-

terials contained trade secrets or other confidential busi-

ness information and “that disclosure .. . [would] work

a clearly defined and very serious injury to [their] busi-

ness[es].” United States v. International Business Ma-

chines Corp., 67 F.R.D. 40, 46 (S.D.N.Y. 1975). In not

doing so, the Hospitals failed to show the “good cause”

required for issuing a protective order.

Moreover, even had the parties supplied some basis for

a protective order, a trial court must fully explicate its

reasons for denying public access. See Chase v. Robson,

435 F.2d 1059, 1061 (7th Cir. 1970). Here, however, the

district court’s orders merely refer to “the confidential

nature of the records,” failing to explain why they were

confidential or to support this assertion. Protective Order

(Sept. 26, 1983), at 3; Protective Order (Sept. 9, 1983),

at 5, OHA v. DHS. Indeed, the district court did not

even review the documents. It simply accepted the con-

clusory claim of confidentiality which was made to it.

This was insufficient since, as the Eighth Circuit has

pointed out, courts ordinarily “should not take represen-

tations of interested counsel on faith’ when a party

moves for a protective order. In re Iowa Freedom of

Information Council, 724 F.2d at 663.

Because of the lack of specificity of harm to the parties

in the absence of protective orders, the instant case is

not analogous to Seattle Times Co. v. Rhinehart, 104 S.

23

Ct. 2199, relied upon in part the Tenth Circuit.” The

predicate of the Rhinehart decision was that the state

trial court had established the existence of ‘“‘good cause”

for issuing a protective order under Rule 26(c). Thus,

Rhinehart “does not dictate a result . . . unless [it is]

determine[d] whether there was good cause for a protec-

tive order under Rule 26(c).” Tavoulareas v. The Wash-

ington Post Co., 737 F.2d 1170, 1172 (D.C. Cir. 1984).

The Rhinehart trial court had first refused to issue an

order protecting pre-trial discovery documents because

“the facts alleged by [movant Rhinehart and his religi-

ous group] . . . were too conclusory to warrant a finding

of ‘good cause.’” Seattle Times Co. v. Rhinehart, 104

S. Ct. at 2204. It was not until the movants submitted

“detailed” affidavits offering extensive support for the

need for a protective order that the court entered a nar-

rowly focused order. Jd. The movants described letters

and telephone calls threatening physical harm to those

associated with the religious group, and “incidents at the

group’s headquarters involving attacks, and assaults” di-

rected at the group and its members. Jd. Only after such

a persuasive showing did the Rinehart trial court find

the “good cause” necessary for issuing a protective order.

In Rhinehart, this Court held that there was no special

First Amendment interest in pre-trial discovery docu-

ments once a valid protective order was issued, a predi-

cate not met in this case. However, this Court made

clear that the impact on First Amendment rights is an

essential element of a good cause finding, and is one

factor to be balanced in determining if a valid protective

order may be issued. Writing for a unanimous Court,

Justice Powell stressed that “it is important to recognize

22 This case also differs from Rhinehart in its impact on the

public interest. The underlying action in Rhinehart involved two

private parties litigating a libel suit. Here, a state agency has

agreed to pay $8 million in public funds to settle the underlying

litigation. The public interest thus is significantly more affected

in this case than in Rhinehart.

24

the extent of the impairment of First Amendment rights

that a protective order may cause.” Id. at 2207. In con-

currence, Justice Brennan emphasized this by observing

that “the Court today recognizes that pretrial protective

orders . . . are subject to scrutiny under the First

Amendment.” Jd. at 2210 (Brennan, J., concurring).

The Tenth Circuit’s decision, therefore, conflicts with

Rhinehart by essentially reading out both the requirement

of “good cause” and its integral requirement that First

Amendment considerations be weighed, which were the

foundations of the Rhinehart ruling. The decision below

also is in conflict with the Ninth Circuit’s reading of

Rhinehart. In In re Coordinated Pre-Trial Proceedings,

F.2d at , 10 Med. L. Rptr. at 2430, decided

after Rhineart, the Ninth Circuit found that the “public

and the press have the right to inspect public records and

documents, including pretrial judicial records and docu-

ments,” a right “grounded in both the common law and

the first amendment,” which must be balanced against

conflicting governmental interests.

The district court in the instant case did not balance

First Amendment concerns against interests in prevent-

ing abuse of the court’s processes. See Seattle Times Co.

v. Rhinenart, 104 S. Ct. at 2207-08. It did not consider

the public nature of the questions raised in the Hos-

pitals’ litigation. It did not engage in “a careful weigh-

ing of competing factors.” Gulf Oil Co. v. Bernard, 452

U.S. at 102. It did no balancing at all.

Courts do have discretion under Rule 26(c) to issue

protective orders. See Seattle Times Co. v. Rhinehart,

104 S. Ct. at 2209. However, “the power to exercise ‘dis- |

cretion’ does not imply that discretionary powers can be

exercised without restraint.” In re Knoxville News-

Sentinel, 723 F.2d at 473. A district court’s decision

to enter a Rule 26(c) order is “not insulated from review

merely because the judge has discretion in this domain.”

Brown & Williamson Tobacco Corp. v. FTC, 710 F.2d at

1177. Here, the trial court abused its discretion by not

25

making any effort to weigh the factors and make a rea-

soned judgment. The Tenth Circuit understood Rhinehart

as permitting such a result, a reading this Court did not

intend and should not let stand.

In Rhinehart, this Court carefully balanced valid needs

for protection during discovery with the long-established

presumption that discovery normally is an open process.

The decisions here drastically alter that balance, relying

on Rhinehart instead to foreclose public access on the

flimsiest of grounds. The effect of this case, if not re-

versed, will be that parties to litigation may keep ma-

terials hidden from public view essentially on demand,

despite the fact that the matters hidden may involve, as

here, expenditures of millions of dollars of public funds.

This result could not possibly have been intended by the

Rhinehart Court, and this Court should accept review of

this case to correct the Tenth Circuit’s dangerous mis-

interpretation. |

CONCLUSION

For the foregoing reasons, a writ of certiorari should

issue to review the judgment of the United States Court

of Appeals for the Tenth Circuit.

Respectfully submitted,

MICHAEL MINNIS *

DAvID MCCULLOUGH

PIERSON, BALL & DowD

210 W. Park Avenue

Oklahoma City, Oklahoma 73102

(405) 235-7686

JACK N. GOODMAN

ROBERT TRAGER

PIERSON, BALL & DowpD

1200 18th Street, N.W.

Washington, D.C. 20036

(202) 331-8566

Attorneys for Petitioner

May 1, 1985 * Counsel of Record

APPENDIX

la

APPENDIX

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

No. 84-1171

OKLAHOMA HOSPITAL ASSOCIATION, et al.,

Plaintiffs-A ppellees,

V.

OKLAHOMA PUBLISHING COMPANY,

Defendant-A ppellant.

Appeal from the United States District Court

For the Western District of Oklahoma

(D.C. No. CIV-83-1274-BT)

[Filed Nuv. 27, 1984]

Michael Minnis of Pierson, Ball & Dowd, Oklahoma City,

Oklahoma (Jack N. Goodman and Robert Trager of Pier-

son, Ball & Dowd, Washington, D.C., with him on the

brief), for Appellant.

William C. Anderson (G. Michael Lewis and Leonard I.

Pataki with him on the brief) of Doerner, Stuart,

Saunders, Daniel & Anderson, Tulsa, Oklahoma ( Michael

H. Cook, Douglas J. Colton, and Debbi M. Johnstone of

Wood, Lucksinger & Epstein, Washington, D.C., with him

2a

on the brief), for Appellee Oklahoma Hospital Associa-

tion.

Before HoLLoway, Chief Judge, BARRETT, and DOYLE,

Circuit Judges.

BARRETT, Circuit Judge.

Appellant, The Oklahoma Publishing Company (OPUB-

CO), appeals a district court’s ruling refusing to vacate

protective orders entered in a civil action styled Okla-

homa Hospital Association v. Oklahoma Department of

Human Services, bearing case number CIV-83-1274-BT.

We will dismiss the appeal due to OPUBCO’s lack of

standing.

Background

In 1983 the Oklahoma Department of Human Services

(DHS) changed the methodology by which it reimburses

hospitals for inpatient hospital services provided to

Medicaid beneficiaries under the Oklahoma Hospital As-

sistance Program. On May 10, 1984, the Oklahoma Hos-

pital Association (OHA) brought an action against DHS

challenging the new methodology and seeking an order

requiring DHS to use a different reimbursement formula.

OHA thereafter filed a motion for class certification; on

July 5, 1983, the district court certified a plaintiff class

comprised of some 120 hospitals. Noting that Eleventh

Amendment concerns (prohibiting the awarding of retro-

active monetary damages absent the State’s waiver of its

sovereign immunity) necessitated speedy resolution of the

dispute, R. Vol. I at 252, the trial court set the final cut-

off for discovery on September 21, 1983, with trial to

commence on October 11, 1983. R. Vol. III at 702-03. In

light of the expedited discovery completion date and trial

8a

date, DHS filed motions to shorten the time for OHA to

respond to its interrogatories and to its request for pro-

duction of documents, and to shorten the time of “reason-

able notice” under Rule 30(b) (1), Fed. R. Civ. P., for

the taking of depositions. R. Vol. IV at 798. Following

OHA’s combined response to these motions but before the

trial court had ruled on them, the parties agreed upon

terms for reciprocal protective orders covering documents

produced during discovery. Id. at 840.

According to the terms of the protective orders, the

pevty seeking production of documents would first des-

ignate which classes of documents it wished to inspect.

Id. The opposing party then would set aside the des-

ignated documents it claimed were privileged. Jd. If the

party seeking production disputed the claim of privilege

and the parties could not resolve the dispute between

themselves, the dispute was to be presented to the court

| for an in camera inspection of the claimed privileged

| documents. Jd. at 841. Once documents were delivered

to a party, access to those documents was limited to the

parties’ management-level employees, counsel, auditors,

and expert witnesses, who were all required to keep the

contents of the documents confidential. Jd. at 842. This

confidential status was to be maintained throughout the

action, except with regard to documents introduced in

open court. Jd. All documents not introduced were, upon

completion of the litigation, either to be returned to the

party who produced them or destroyed. Id. at 842-43.

The district court incorporated these stipulations into two

protective orders—one covering documents produced by

OHA, the other covering documents produced by DHS—

which it issued pursuant to Rule 26(c), Fed. R. Civ. P.

Id. at 839, 856. According to the district court, these pro-

tective orders were necessary because: (1) the discovery

encompassed hundreds of thousands of documents, many

of which were subject to various claims of privilege, and

(2) the parties could not otherwise review requested doc-

ii eeeeeneneeniiaiillll

4a

uments, assert claimed privileges, and then produce re-

maining documents in time to meet the expedited trial

date. (Order No. CIV-83-1274, Western District of Okla-

homa, January 27, 1984, at 2.)

Following entry of the protective orders but before

trial on the merits, the parties sought court approval of

a Stipulated Settlement Agreement regarding the reim-

bursement methodology. A hearing on the proposed agree-

ment was scheduled for December 15, 1983. On December

12, 1983, OPUBCO, who was not a party in the case,

filed a motion to vacate the protective orders and sought

an order “directing the parties to allow the public (in-

cluding [OPUBCO]) access to all documents produced

pursuant to discovery in this litigation.” R. Vol. V at

1049. OPUBCO argued that the district court abused its

discretion in granting the protective orders by not bal-

ancing “the interests to be protected against the historical

and constitutionally-protected interest in open-court pro-

ceedings and the specific public interest in the items pro-

tected.” R. Vol. V at 1054. OPUBCO’s motion was op-

posed by OHA, but was neither opposed nor supported by

DHS. On January 27, 1984, the district court denied

OPUBCO’s motion and ordered the return or destruction

of the documents. On February 1, 1984, the court granted

OPUBCO’s motion to stay execution of that order for the

purposes of this appeal.

II.

Discussion

During oral argument of this appeal, counsel for

OPUBCO was asked upon what basis OPUBCO claimed

standing to challenge the district court’s imposition of

protective orders in the underlying suit. Because stand-

ing is “a threshold requirement which empowers a fed-

eral court to adjudicate a dispute,” Hinkson v. Pfleiderer,

729 F.2d 697, 700 (10th Cir. 1984), we cannot reach the

merits of the case unless OPUBCO first demonstrates

5a

that a “case or controversy” exists between it and OHA

which is proper for judicial resolution. Glover River Or-

ganization v. U.S. Dept. of Interior, 675 F.2d 251, 253

(10th Cir. 1982).

OPUBCO’s claim of standing is predicated on its al-

leged First Amendment right to gather information. R.

Vol. V at 1054-55. OHA did not, in the district court,

contest OPUBCO’s standing insofar as OPUBCO sought

to vindicate its own First Amendment rights. OHA did,

however, contest OPUBCO’s standing insofar as it at-

tempted to assert the constitutional rights of the parties

to the underlying suit. Jd. at 1192. The district court

in its order did not discuss OPUBCO’s standing, except

in noting that, as a nonparty, OPUBCO had no standing

to assert the parties’ First Amendment rights. (Order

No. CIV-83-1274-BT, Western District of Oklahoma,

January 27. 1984, at 5.)

The requirements for standing under Article III, Sec-

tion 2, of the United States Constitution were recently

clarified by the Supreme Court:

at an irreducible minimum, Art. III requires the

party who invokes the court’s authority to “show

that he personally has suffered some actual or threat-

ened injury as a result of the putative illegal con-

duct of the defendant” and that the injury “fairly

can be traced to the challenged action” and “is likely

to be redressed by a favorable decision.” (Citations

omitted. )

Valley Forge Christian College v. Americans United for

Separation of Church and State, Inc., 454 U.S. 464, 472

(1982), quoted in Hinkson, supra, 729 F.2d at 700. Be-

yond these “constitutional requirements,” Jd. at 474, the

Court has also adhered to certain prudential principles,

including the principle that a plaintiff cannot base his

claim to relief on the legal rights of third parties, Warth

v. Seldin, 422 U.S. 490, 499 (1975), and the principle

i

6a

that a plaintiff’s alleged injury must “arguably” fall

within “the zone of interests to be protected or regulated

by the statute or Constitutional guarantee in. question.”

Association of Data Processing Orgs. v. Camp, 397 U.S.

150, 153 (1970). Cf. Valley Forge, supra, 454 U.S. at

474-475 (recognizing the continuing importance of pru-

dential considerations).

OPUBCO, in its Motion to Appear Specially, alleged

that were it not for the protective orders, the parties

would be free to disseminate, and it would thereby be

free to gather and publish, discovery documents not sub-

ject to those orders. This, we believe, is a sufficient al-

legation of injury in fact to satisfy the first requirement

for standing under Valley Forge. Injury in fact, how-

ever, is not the sole constitutional requirement. We also

must consider whether OPUBCO’s alleged injury “fairly

can be traced to the challenged action” and “is likely to

be redressed by a favorable decision.” The challenged ac-

tion here is the district court’s imposition of protective

orders. In its Motion to Appear Specially, as noted

earlier, OPUBCO moved to vacate the protective order

and sought an order “directing the parties to allow the

public (including [OPUBCO]) access to all documents

produced pursuant to discovery in this litigation.” R. Vol.

V at 1049. OPUBCO’s contention that it is merely seek-

ing removal of “barriers to normal access,” Reply Brief

of Appellant at 16, is thus without merit. OPUBCO’s al-

leged injury is that it was denied access to documents

covered by the protective orders. We therefore must con-

sider whether by vacating those protective orders

OPUBCO will gain access to those documents.

While it may be conceded that parties to litigation have

a constitutionally protected right to disseminate infor-

mation obtained by them through the discovery process

absent a valid protective order, See Seattle Times Co. v.

Rhinehart, —— U.S. ——, 52 U.S.L.W. 4612 (No. 82-

1721, May 21, 1984), it does not follow that they can be

Ta

compelled to disseminate such information. The Supreme

Court recognized this proposition in Wooley v. Maynard,

430 U.S. 705, 714 (1976), when it noted “that the right

of freedom of thought protected by the First Amendment

against state action includes both the right to speak

freely and the right to refrain from speaking at all.”

See also Miami Herald Publishing Co. v. Tornillo, 418

U.S. 241 (1974); West Virginia State Board of Educa-

tion v. Barnette, 319 U.S. 624 (1943). This proposition

applies with equal force notwithstanding that the parties

to the underlying suit are an association and a state

agency. Consolidated Edison Co. v. Public Serv. Comm.,

447 U.S. 530, 5383 (1979) (“[t]he inherent worth of the

speech in terms of its capacity for informing the public

does not depend upon the identity of its source, whether

corporation, association, union or individual.’”), quoting

First National Bank of Boston v. Bellotti, 485 U.S. 765,

777 (1978).

Consequently, assuming we were to lift the protective

orders, still the parties to the unlerlying suit cannot be

compelled, ipso facto, to disseminate documents in their

possession; OPUBCO, a nonparty, can gain access to those

documents only by exercising a party’s right to dissemi-

nate. This it cannot do. See Warth, supra; In Re “Agent

Orange” Product Liability Litigation, 96 F.R.D. 582, 584

(1983) (Pratt, Circuit Judge, sitting by designation).

Moreover, the protective orders were imposed by the dis-

trict court following the parties’ agreement and stipula-

tion to terms and conditions for production of documents.

R. Vol. IV at 840. Neither OHA nor DHS objected to or

appealed from the district court’s imposition of those

orders. In light of the fact that the parties have not

chosen to assert their rights of dissemination, we view

it as highly unlikely that they would do so were we simply

to lift the protective orders at this time. Cf. Agent

Orange, supra, 96 F.R.D. at 584 (“Neither plaintiffs nor

defendants have appealed from the special master’s pro-

8a

tective order, and the court concludes that CBS does not

have standing to assert the parties’ rights where they

have not chosen to assert them at this time’). Conse-

quently, it is unlikely that OPUBCO would succeed in

obtaining the redress it seeks—access to the documents—

were we to lift the protective orders. We therefore con-

clude that OPUBCO has failed to satisfy the second con-

stitutional requirement for standing under Valley Forge.

Even if we were to assume, as OPUBCO contends, that

this is not an “access” case, and that mere removal of the

protective order is the only redress OPUBCO seeks (thus

satisfying the second Valley Forge constitutional require-

ment), we would nonetheless deny OPUBCO’s standing

based on the prudential concern that the interest for

which it seeks redress is not within the “zone of interest

to be protected or regulated by the statute or constitu-

tional guarantee in question.” The interest OPUBCO

seeks to protect is its alleged First Amendment right to

gather information. Although it is true that the Supreme

Court has recognized that newsgathering does warrant

some First Amendment protection, Branzburg v. Hayes,

408 U.S. 665, 681 (1972), that right is not unlimited:

“The right to speak and publish does not carry with it the

unrestrained right to gather information.” Zemel v. Rusk,

381 U.S. 1, 17 (1965). Thus, the Supreme Court has

recognized that, whatever the extent of protection war-

ranted newsgathering, it is no greater than the right of

the general public to obtain information. Pell v. Pro-

cumer, 417 U.S. 817, 834 (1974) (“The Constitution does

not... require government to accord the press special

access to information not shared by members of the public

generally.”) Accord Branzburg v. Hayes, supra; Nixon v.

Warner Communications, Inc., 485 U.S. 589 (1978).

The Supreme Court recently stated that “pre-trial depo-

sitions and interrogatories are not public components of

a civil trial.” Seattle Times, supra, 52 U.S.L.W. at 4616.

This is so, the Supreme Court recognized, because

9a

“lm]uch of the information that surfaces during pre-trial

discovery may be unrelated or only tangentially related,

to the underlying cause of action.” Jd. Such is the case

here. The district court entered protective orders in order

to expedite a discovery process involving literally hun-

dreds of thousands of documents, many of which were

subject to claims of privilege. At that stage in the litiga-

tion, those documents had not been filed with the court

and certainly had not satisfied threshold tests of rele-

vancy and admissibility. They therefore were not avail-

able to the public generally, and OPUBCO does not have

standing to complain about the existence of the protective

order. Cf. Agent Orange, supra, 96 F.R.D. at 584 (“The

same factors that support access to judicial records and

other public documents . . . simply are not implicated

where the materials were obtained by a party through

discovery but have not been filed with the court”). Hav-

ing determined that OPUBCO lacks standing to challenge

the district court’s imposition of protective orders, it is

unnecessary for us to reach the substantive contentions.

DISMISSED.

10a

JANUARY TERM—January 31, 1985

Before Honorable William J. Holloway, Jr., Honorable

William E. Doyle, Honorable James E. Barrett, Honor-

able Monroe G. McKay, and Honorable James K. Logan,

Circuit Judges

No. 84-1171

OKLAHOMA HOSPITAL ASSOCIATION, et al.,

Plaintiffs-A ppellees,

VS.

OKLAHOMA PUBLISHING COMPANY,

Defendant-A ppellant.

This matter comes on for consideration of appellant’s

petition for rehearing and suggestion for rehearing en

banc in the captioned cause.

Upon consideration whereof, the petition for rehearing

is denied by the panel that rendered the decision sought

to be reheard.

The petition for rehearing having been denied by the

panel to whom the case was argued and submitted, and

no member of the panel nor judge in regular active

service on the Court having requested that the Court be

polled on rehearing en banc, Rule 35, Federal Rules of

Appellant Procedure, the suggestion for rehearing en banc

is denied.

Judge Seymour did not participate.

/s/ Howard K. Phillips

HOWARD K. PHILLIPS

Clerk

ee ee

We alk Rs Sta eae maleic KS:

lla

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF OKLAHOMA

No. CIV-83-1274-BT

OKLAHOMA HOSPITAL ASSOCIATION, et al.,

Plaintiffs,

Vv.

OKLAHOMA DEPARTMENT OF HUMAN SERVICES, et al.,

Defendants.

[Filed Jan. 27, 1984]

ORDER

The Oklahoma Publishing Company’s (OPUBCO) mo-

tion to vacate the protective orders previously entered is

before the Court for decision after briefing and oral

argument.

When expedited discovery of literally hundreds of

thousands of documents was scheduled, the parties jointly

applied to the Court for entry of protective orders. The

requested protective orders were entered on September 12,

1983 relative to plaintiffs’ documents and September 26,

1983 relative to defendants’ documents. The movant seeks

to have the protective orders vacated because of First

Amendment rights in the subject matter of the action and

the fact that no reasonable cause as provided in F.R.

Civ.P. 26(c) was established for entry of the protective

orders. Following OPUBCO’s motion to vacate the sub-

ject protective orders, the principal parties, without preju-

dice to OPUBCO’s motion, entered into a settlement of

plaintiffs’ claims.

12a

OPUBCO acknowledged at the hearing on January 11,

1984, that all pleadings and evidence, both oral and ducu-

mentary, offered in the reccrd by the parties have been

made available to it for its review. The parties agreed

at the hearing that any discovery documents, the property

of and furnished by the Department of Human Services

(DHS) pursuant to the September 26, 1983 protective or-

der, would be made available to OPUBCO for review. The

documents at issue, numbering approximately one hun-

dred thousand, are those produced by 4 of the 117 plain-

tiff hospitals under the protective order dated September

12, 1983. Copies of these documents at this time remain

in the hands of DHS, and none have been filed in the

case or offered by either party into the record.

ENTRY OF PROTECTIVE ORDERS

This case was originally set for trial on October 11,

1983. On September 2, 1983, DHS filed a request for pro-

duction of documents, motion to shorten time to respond

and motion for expedited discovery. Plaintiffs responded

to the motions on September 8, 1983, and the Court held

conferences on the motions September 8 and 9, 1983. Ac-

cording to counsel, hundreds of thousands of documents

were encompassed by the discovery motions. Plaintiffs

contended some of those documents were subject to vari-

ous privileges and should not be made available to de-

fendant. The parties agreed in light of the short time

frame the plaintiffs could not review the requested docu-

ments, assert claimed privileges and produce the remain-

ing documents before the trial date. Therefore, the par-

ties agreed to a protective order restricting access to the

documents. The expedited trial was dictated by the Elev-

enth Amendment considerations, preventing retroactive

damages to the plaintiffs should they be entitled to relief.

Under the protective order, the materials were to remain

confidential, save and except any documents introduced

in open court. All documents not introduced were to be

returned to plaintiffs or destroyed upon completition of

13a

the litigation (a copy of the subject protective order is

attached as Exhibit “A”). A similar protective order was

entered two weeks later covering documents produced by

defendant DHS for plaintiffs.

Nonjury trial of the case was set for October 11, 1983.

At that time, the parties announced a tentative settle-

ment had been reached. On November 22, 1983, the par-

ties reached a final settlement agreement, and on Decem-

ber 15, 1983, the Court approved the settlement following

notice to the plaintiff class. OPUBCO’s motion to vacate

the protective orders was filed December 12, 1983.

RIGHT OF ACCESS/RIGHT TO DISSE WiNATE DIS-

COVERY MATERIALS

OPUBCO contends it has a right of access to the dis-

covery materials at issue under the First Amendment of

the United States Constitution. It seeks an order grant-

ing OPUBCO such access.

Clearly, a party to a lawsuit who gains information

through discovery may exercise its First Amendment

right to disseminate that information absent a protective

order. See Leonia Amusement Corp. v. Loew’s, 18 F.R.D.

503, 508 (S.D.N.Y. 1955); In re Halkin, 598 F.2d 176

(D.C.Cir. 1979). Thus, as in In re Halkin, supra, where

a protective order is entered over the objection of a party,

the Court must take into consideration the First Amend-

ment right of that party in determining whether “good

cause” exists to enter the order. Jd. at 193.

Furthermore, OPUBCO has a constitutionally pro-

tected right of access to filed documents, court exhibits or

trial proceedings, all of which are a matter of public

record. In re Application of National Broadcasting Co.,

635 F.2d 945, 949-51 (2nd Cir. 1980). Access to discov-

ery materials which are not a part of the public record,

however, is another matter and this is the issue here

presented. Discovery under the Federal Rules of Civil

l4a

Procedure is liberal, giving parties broad powers to gather

information. In In re San Juan Star Co., 662 F.2d 108,

115 (1st Cir. 1981), the court stated:

“. . a deponent may be obliged to reveal informa-

tion that will not be admissible at trial. Unlike evi-

dence at trial, it has not passed the strict threshold

tests of relevance and admissibility, yet it has been

compelled by dint of legal process. The information

revealed may be irrelevant, prejudicial, or pose an

undue invasion of an individual’s privacy.”

Id. at 115.

In In re Agent Orange Product Liability Litigation,

96 F.R.D. 582 (E.D.N.Y. 1983), the court dealt with a

request by a nonparty for access to discovery materials.

In denying the request, the court stated:

“The same factors that support a right of access to

judicial records and other public documents—the pub-

lic’s right to know and the public interest in insuring

that judicial proceedings are conducted fairly, to

name but two—simply are not implicated where the

materials were obtained by a party through dis-

covery but have not yet been filed with the courts.”

Id. at 584.

The Court acknowledges some of the materials sought

may be a matter of public interest as the lawsuit involves

the expenditure of large sums of public funds. However,

none of the materials sought by OPUBCO are part of the

public record. Moreover, the parties to this action agreed

and stipulated to the protective order and have not chosen

to assert their First Amendment right to disseminate in-

formation they have obtained. OPUBCO, as a nonparty,

has no standing to assert the First Amendment rights of

the parties. Barrows v. Jackson, 346 U.S. 249, 255

1 The plaintiffs oppose the motion to vacate the protective orders

and defendant DHS has taken no position on the motion.

— ee ee "

a ee mS oS eee, ee oD ae ee

Se

15a

(1953) ; In re Agent Orange Product Liability Litigation,

supra, at 584. This ruling in no way prevents OPUBCO

from reporting on the litigation at issue, or obtaining the

same material from other, independent sources. Jd. It is

pertinent to note the right to speak and publish does not

carry with it the unrestrained right to gather informa-

tion. See Zemel v. Ruck, 381 U.S. 1, 17 (1965); Pell v.

Procunier, 417 U.S. 817, 833-34 (1974).

Just as the parties have a right to disseminate dis-

covery information absent a protective order, they have

a right not to disseminate such information, for “the

right of freedom of thought protected by the First Amend-

ment against state action includes both the right to speak

freely and the right to refrain from speaking at all.”

Wocley v. Maynard, 430 U.S. 705, 714 (1977). Thus,

this Court cannot compel the parties to release informa-

tion contained in the discovery materials to OFUBCO.

The request of OPUBCO to be granted access to subject

discovery documents is denied, but the protective orders

are to be vacated as hereafter provided. Any party, in-

cluding OPUBCO, shall have until February 3, 1984, to

file a motion to stay the effect of this order pending ap-

peal. If, by that date, no motion to stay has been filed,

the parties are to return all copies of any documents cov-

ered by the protective orders of September 12, 1983, and

September 26, 1983, by February 10, 1984. The expense

of exchanging the documents are to be born by the owner

of the originals. The protective orders shall thereafter

expire on February 13, 1984.

ENTERED this 25th day of January, 1984.

/s/ Thomas R. Brett

THOMAS R. BRETT

United States District Judge

l6a

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF OKLAHOMA

No. CIV-83-1274-BT

OKLAHOMA HOSPITAL ASSOCIATION, et al.,

Plaintiffs,

VS.

OKLAHOMA DEPARTMENT OF HUMAN SERVICES, et al.,

Defendants.

[Filed Sept. 9, 1983]

PROTECTIVE ORDER

Defendants filed their First Request for Production of

Documents, Motion to Shorten Time to Respond, and Mo-

tion for Expedited Discovery herein on Friday, Septem-

ber 2, 1983. Copies were served by regular mail on coun-

sel for Plaintiffs, and received by them on September 6,

1983. Counsel for Plaintiffs had no prior notice of the

filing of these Motions. Plaintiffs served their Response

to said Motion, together with Motion for Protective Or-

der, by hand delivery to counsel for Defendants on Sep-

tember 8, 1983. The Court has held conferences with

counsel for the parties on September 8 and 9, 1983, con-

cerning said Motions.

With respect to Category V of the Defendants’ First

Request for Production of Documents, Plaintiffs do not

object to production. Plaintiffs are therefore directed to

produce said documents on September 14, 1983, at the

Federal Court House, in Oklahoma City, at the hearing

now scheduled there for 8:00 A.M.

17a

With respect to categories I through IV of the Defend-

ants’ First Request, Plaintiffs have made and preserved

objections based on relevance and burdensomeness. How-

ever, in order to expedite discovery, so that trial may go

forward as now scheduled, Plaintiffs are prepared to

agree to production of documents covered by categories I

through IV of the Defendants’ First Request pursuant to

the stipulated terms as hereinafter set forth and ordered.

At the direction of the Court, the parties have con-

ferenced in an effort to agree upon the terms for a Pro-

tective Order and a schedule for production. They have

agreed and stipulated upon the following terms and con-

ditions for production of documents pursuant to the De-

fendants’ First Request, which the Court hereby approves

and adopts as the Order of the Court.

IT IS THEREFORE ORDERED, ADJUDGED AND

DECREED as follows:

1. Production shall take place at the business of-

fices of the respective hospitals, and shall exclude

privileged documents.

2. No original documents shall be removed from

the hospitals, except that with respect to odd-size

copies for which on-site copying capability is unavail-

able, original documents may be removed for copying

elsewhere, but must remain in the custody of a hos-

pital employee or of counsel for Plaintiffs for the

purpose of such off-site copying.

3. On arrival at the hospitals, Defendants shall

designate which classes of documents set forth in

categories I through IV of their First Request they

wish to inspect.

4. Plaintiffs shall review said classes of documents

concerning claims of privilege, and set aside any doc-

uments they claim to be privileged.

18a

5. Defendants shall inspect the classes of docu-

ments they have designated, except for the documents

set aside pursuant to a claim of privilege.

6. After inspection, Defendants shall designate

which documents they desire copies of.

7. If requested, Plaintiffs shall acquaint Defend-

ants with the general nature of any documents

claimed to be privileged. If Defendants disagree as

to the asserted privilege, and if the parties cannot

resolve such disagreement between themselves, the

disagreement shall be immediately presentd to the

Court for resolution (including in camera inspection

by the Court of the questioned documents, if appro-

priate).

8. Copies of the documents designated by Defend-

ants pursuant to paragraph 6 above shall be made

by or under the supervision of the hospitals or their

counsel, with copies to be made and delivered to De-

fendants as soon as practicable after designation.

9. Defendants shall pay the actual cost incurred

by each respective hospital in making copies of the

designated documents, upon receipt of invoices which

will be processed by DHS in the ordinary course; the

parties agree that this charge is 10¢ per copy. Any

commercial copying charges wiil be billed directly by

the copying service to the party receiving the copies.

10. Production shall occur one hospital at a time,

on a rotating basis, in the following sequence unless

altered by agreement of the parties, commencing 8:30

A.M., September 12, 1983:

St. John Medical Center, Inc.

Hillcrest Medical Center

St. Anthony Hospital

Comanche County Memorial Hospital

19a

St. Francis Hospital, Inc.

Oklahoma Hospital Founders, Inc.

d/b/a Oklahoma Osteopathic Hospital.

The parties will attempt to complete document dis-

covery in one day or less at each hospital, although

additional time may in some cases be required.

11. In view of the confidential nature of the rec-

ords in question, any document copies delivered to

Defendants, and all of the contents thereof, as well

as all of the contents of any document reviewed but

not copied, shall be maintained in strict confidence

by the Defendants, with access thereto limited to

management-level employees of Defendants, counsel

for Defendants, Defendants’ auditors, and Defend-

ants’ expert witnesses. All such persons having ac-

cess to said copies shall be likewise bound by this

Court-ordered obligation of confidentiality. Such con-

fidential status shall be maintained continuously

through the completion of this action, save and except

only with respect to any such documents that are

introduced in open court. All such documents not

introduced, and all copies thereof, shall be returned

to Plaintiffs or destroyed upon completion of the

litigation. Defendants are required to identify no

later than the pre-trial conference on September 27

all such documents they intend to offer at trial.

12. In producing any given document pursuant to

the Defendants’ First Request, Plaintiffs shall not be

deemed to have waived any right to object to admis-

sion of the same in evidence on grounds of privilege,

relevance or any other applicable grour’; nor to have

waived any right to object to further production from

other members of the class.

13. Defendants have agreed to serve St. Francis

Hospital, Inc. with a subpoena duces tecum covering

Items I through IV of Defendants’ First Request,

20a

with service to be made upon William C. Anderson,

one of the counsel for Plaintiffs. Thereupon, produc-

tion by St. Francis Hospital, Inc. shall be deemed sub-

ject to the provisions of this Protective Order.

With respect to the Defendants’ Motion to Expedite

Discovery, the Court will take the same under advisement

for the time being. However, as announced to counsel at

the conference on September 8, the Court is unequivocally

of the view that Defendants, and Plaintiffs for that mat-

ter, are entitled to expedited discovery as necessary in

order to complete discovery within the time prescribed

by the Court’s Order of August 24. The Court would

prefer that the parties schedule this discovery between

themselves, without the intervention of the Court being

required. The parties have agreed to work cooperatively

in this direction, and to present to the Court only those

scheduling issues which cannot be resolved by agreement.

The Court has observed that the conduct of multiple dis-

covery tasks on the same day or days may be necessary,

as well as Saturday discovery work, in order to complete

discovery within the allotted time. Counsel for Plaintiffs

have assured the Court that they will staff discovery at

as many locations as Defendants designate, so that the

production of documents and taking of depositions may

proceed simultaneously. The Court will remain on call

to assist the parties in expediting the completion of dis-

covery, and to make such Orders as may be necessary con-

cerning the time and place of discovery, to make rulings

on questions of privilege, and to resolve promptly any

other issues which may arise.

IT IS SO ORDERED this 9th day of September, 1983.

/s/ Thomas R. Brett

United States District Judge

2la

IN THE UNITED STATES COURT OF

APPEALS FOR THE TENTH CIRCUIT

No. 83-1171

THE OKLAHOMA PUBLISHING COMPANY,

Appellant,

Vv.

OKLAHOMA HOSPITAL ASSOCIATION, et al.,

Appellees.

AFFIDAVIT OF RICHARD FREEMAN

COMES NOW the undersigned, Richard Freeman, and

after being duly sworn does state under oath that:

1. I am an assistant general counsel to the Department

of Human Services for the State of Oklahoma and have

entered an appearance on behalf of the Oklahoma Depart-

ment of Human Services in the above-styled matter.

2. This affidavit is being made solely in response to a

request from the appellant for use in a petition for re-

hearing.

3. On behalf of the Oklahoma Department of Human

Services, I have under my possession and control the

documents that are the subject of the above-styled appeal,

i.e. the documents produced by the appellees (Hospitals)

in response to defendant’s “First Request for Production

of Documents” (Sept. 2, 1983) in the proceedings below.

4. The appellant has previously asked for access to

these documents. Access has been denied because of the

“Protective Order” (Sept. 9, 1983) entered in the case

below.

;

22a

5. If this “Protective Order” is vacated, the appellant

will be provided with access to the documents sought.

FURTHER AFFIANT SAITH NOT.

/s/ Richard Freeman

RICHARD FREEMAN

COUNTY OF OKLAHOMA )

¥. ae

STATE OF OKLAHOMA )

Subscribed and sworn to before me this 5th day of

December, 1984.

/s/ Marilyn K. Gordon

Notary Public

My Commission Expires:

August 1, 1986