Appendix — Liggett Group, Inc. v. Cipollone
Supreme Court brief1987
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NIOL, JR,
LIGGETT GROUP INC.,
PHILIP MORRIS INCORPORATED,
and LORILLARD, INC.,
Petitioners,
vs.
ANTONIO CIPOLLONE, Individually and as Executor
of the Estate of Rose D. Cipollone,
Respondent.
LIGGETT GROUP INC., LORILLARD, INC.,
R. J. REYNOLDS TOBACCO CoO.,
PHILIP MORRIS INCORPORATED,
and THE TOBACCO INSTITUTE,
Petitioners,
vs.
SUSAN HAINES, as Administratrix ad Prosequendum
and Executrix of the Estate of Peter F. Rossi,
Respondent.
APPENDIX TO THE PETITION
FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
DonaLp J. COHN
(Counsel of Record)
WEBSTER & SHEFFIELD
237 Park Avenue
New York, New York 10017
(212) 808-6000
Attorneys for Petitioners
(Additional Counsel Listed on Inside Cover)
Of Counsel:
ARNOLD & PORTER
1200 New Hampshire Avenue, N.W.
Washington, D.C. 20036
(202) 872-6700
CovINGTON & BURLING
1201 Pennsylvania Avenue, N.W.
P.O. Box 7566
Washington, D.C. 20044
(202) 662-6000
Jones, Day, Reavis & PoGuE
1700 Huntington Building
Cleveland, Ohio 44115
(216) 348-3939
SHOOK, Harpy & BACON
1101 Walnut
Kansas City, Missouri 64106
(816) 474-6550
TABLE OF CONTENTS
Opinions
Opinion of the Court of Appeals, dated June 8,
og kL
Opinion of the District Court, dated November
ek ee eee
Opinion of the Court of Appeals, dated March
ee Re Bk
Opinion of the District Court, dated July 17,
Ri Ae
Orders
Order of the Court of Appeals, dated July 9, 1987
Order of the Court of Appeals, dated June 8,
SU aie eon iy tak pn 2 Ea Ey gh
a cS rhea uae kh cn AE en kw ime 8
igh oar rs bye eke ae REESE hh wets
Writ of Mandamus issued by the Court of
Appeals, dated March 12, 1986 ..............
Order of the District Court, dated July 17, 1985 .
Order of the District Court, dated March 25,
RRS SUR oe gop ee ra ger RS CaN a ee ar
eSB SEGA ASE tee ire Sls gL AS a
Order of the District Court, dated May 1, 1984 ..
Page
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D-1
E-]
F-1
G-1
L-1l
M-1
Page
Other Materials
Oral Argument before the Third Circuit in
Cipollone v. Liggett Group Inc., Liggett Group
Inc. v. Honorable H. Lee Sarokin, and Haines
v. Liggett Group Inc., dated September 26,
SOOE ook c fan's ea nto taken eee N-1
Handwritten Order of the District Court in
Palmer v. Liggett Group accompanying the
Wall Street Journal’s Motion for
Reconsideration of Proposed Intervenor, dated
August 12, 1985 .... 2. cee ccc ene eereesccess O-1
Handwritten Order of the District Court in
Palmer v. Liggett Group accompanying
Defendants’ Motion to Require Compliance
with Protective Order, dated July 16, 1985 .... P-1
Order of the District Court in Palmer v. Liggett
Group Inc., dated February 25, 1985......... Q-1
Order of the District Court in Barnes v. R. J.
Reynolds Tobacco Company, et. als., dated
Novena 37, BOBS. . < ccs0n0005 cesdesanee en R-1
A-1
Opinion of the Court of Appeals
dated June 8, 1987
ANTONIO CIPOLLONE,
Individually and as the Executor of
the Estate of Rose D. Cipollone,
Plaintiff-Respondent,
a |
LIGGETT GROUP INC.,
PHILIP MORRIS INCORPORATED,
and LOEW’S THEATRES, INC.,
Defendants-Petitioners.
SUSAN HAINES,
as Administratrix ad Prosequendum
and Executrix of the Estate of Peter F. Rossi,
Plaintiff-Respondent,
— We _—
LIGGETT GROUP INC.,
LOEW’S THEATRES, INC.,
R.J. REYNOLDS TOBACCO CO.,
PHILIP MORRIS INCORPORATED,
and THE TOBACCO INSTITUTE,
Defendants-Petitioners.
LIGGETT GROUP INC.,
PHILIP MORRIS INCORPORATED,
R.J. REYNOLDS TOBACCO CO.,
THE TOBACCO INSTITUTE, and
LOEW’S THEATRES, INC.,
Petitioners,
= Y, =
HONORABLE H. LEE SAROKIN,
United States District Judge,
District of New Jersey,
Nominal Respondent.
No. 87-5014
United States Court of Appeals,
Third Circuit
Decided June 8, 1987
Before: GIBBONS, Chief Judge,
SEITZ and GARTH,
Circuit Judges
A-3
OPINION OF THE COURT
GIBBONS, Chief Judge:
The defendants in several product liability actions pending
in the district court petition here pursuant to 28 U.S.C. § 1651
(1982) for a writ of mandamus (1) directing the district judge
to vacate an order modifying a discovery order previously
entered by a United States magistrate, and (2) reassigning the
cases to another judge. Petitioners contend that the challenged
order is inconsistent with the mandate of this court in Cipollone
v. Liggett Group, Inc., 785 F.2d 1108 (3d Cir. 1986), and is
otherwise inconsistent with law. They contend, as well, that
the district court judge should be removed from the case because
of bias against the defendants’ industry. We deny the petition
for mandamus and for reassignment.
I.
Prior Proceedings
The Cipollone case is one of eight actions filed on behalf of
cigarette smokers in the state and federal courts of New Jersey
by the same law firm. There are presently over 100 such cases
pending in other jurisdictions. Plaintiffs in all of them are
cigarette smokers or their personal repres. atatives who have filed
product liability suits asserting negligence, strict liability and
intentional wrongdoing by tobacco companies. Claiming that
their lung cancer or other smoking-related disease resulted from
smoking defendants’ cigarettes, the plaintiffs in those actions
allege that the defendants failed to inform consumers adequately
of the health risks in smoking and that when health warnings
did appear on their products, they were effectively negated by
their advertising practices.
This case began in the United States District Court for the
District of New Jersey, when Rose Cipollone and her husband,
Antonio, filed a complaint on August 1, 1983 against Liggett
Group, Inc., Phillip Morris, Inc., and Loew’s Theaters, Inc., all
A-4
of which manufacture cigarrettes. Cipollone alleged that as a
result of smoking defendants’ cigarettes for almost forty years,
she developed bronchogenic carcinoma and sustained other per-
sonal injuries. Cipollone sought compensation for her injuries
on theories of strict liability and negligence and her husband
sought compensation for loss of consortium. Cipollone’s primary
contentions were that the defendants had withheld scientific
evidence from the public and had misrepresented the health
hazards of smoking.
A short time later, Susan Haines, administratrix ad prose-
quendum and executrix of the Estate of Peter F. Rossi brought
an almost identical action in the same court against the same
defendants as well as R.J. Reynolds Tobacco Co. and the Tobac-
co Institute, Inc. Haines had the same counsel as Cipollone and
sought compensation for Rossi’s pain and suffering and com-
pensation for his death, which allegedly resulted from his smok-
ing defendants’ cigarettes.
Pursuant to 28 U.S.C.§ 636 (1982 & Supp. III 1985), the
district court ordered discovery in both cases under the super-
vision of then Magistrate Robert E. Cowen. In the fall of 1983,
Cipollone made initial discovery requests of the defendants. The
defendants responded by filing motions to strike, claiming that
the information sought was irrelevant and that the requests were
burdensome and harassing. Magistrate Cowen heard oral argu-
ment on those motions on March 22, 1984. A discovery order
was issued on May 2, 1984.
Defendant’s counsel then approached Cipollone’s counsel
about a confidentiality order. Counsel agreed temporarily not
to disseminate any documents “until [they] had an opportuni-
ty to attempt to agree upon a Protective Order regarding the
documents or, if that [was] not possible [defendants were] to
make request for such a Protective Order to the Court.” Let-
ters between counsel dated May 3 and 4, 1984. That agreement
was in force until the entry of Magistrate Cowen’s protective
order dated March 25, 1985. In the interim, defendants pro-
duced thousands of documents and many corporate represen-
tatives were deposed. Additionally, discovery of non-parties,
including the Tobacco Institute, was conducted. Cipollone’s
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counsel and the Tobacco Institute’s counsel agreed that if
Cipollone wished to disclose confidential material received as
a result of that discovery, ten (10) days notice would be given
to allow the Tobacco Institute to object. See Letter Agreement
dated August 2, 1984. Accordingly, on October 5, 1984,
Cipollone’s counsel notified the Tobacco Institute of the inten-
tion to disseminate certain confidential documents. See Letter
from Marc Z. Edell dated October 5, 1984. Because the Tobacco
Institute objected, however, the information was not
disseminated.
Meanwhile, negotiations regarding the terms of a protective
order broke down because the parties could not agree on
Cipollone’s counsel’s right to use the documents obtained in this
discovery in other cases, and because of the defendants’ alleg-
ed misuse of the “confidential” stamp on documents produced
during discovery. On March 25, 1985 Magistrate Cowen entered
a protective order for the stated purpose of streamlining the
litigation. No specific findings of good cause for the issuance
of the protective order were made.
On March 25, 1985, Cipollone appealed the magistrate’s order
and the district court, on July 17, 1985, vacated that order and
entered a modified order. See Cipollone v. Liggett Group, Inc..,
106 F.R.D. 573 (D.N.J.1985). Defendants then petitioned this
court for a writ of mandamus, which was granted. See Cipollone
v. Liggett Group, Inc., 785 F.2d 1108, 1118 (3d Cir. 1986).
Granting the writ, we held that the district court had commit-
ted two errors of law: 1) it had applied the wrong standard for
issuance of a protective order—first amendment con-
siderations — rather than the less strict “good cause” standard
under Fed. R. Civ. P. 26(c); and 2) it had exercised plenary
review over the magistrate’s order instead of the review specified
in 28 U.S.C. § 636. See Cipollone, 785 F.2d at 1123.
In response to our judgment, Judge Sarokin reconsidered the
protective order. He noted that the magistrate had made no
specific findings regarding good cause. Judge Sarokin held that
the magistrate’s failure to apply a good cause standard was a
clear error. See Cipollone v. Liggett Group, Inc., 113 F.R.D.
A-6
86, 93 (D.N.J. 1986). After considering the defendants’
arguments for finding good cause, the district court rejected
them. With regard to the magistrate’s determination of an “um-
brella order,” the district court upheld “the aspect of the
magistrate’s order that permits defendants to make an initial
designation of confidentiality, subject to their determination
that such designation is warranted in good faith, and subject
to plaintiff's later epportunity to challenge such designation and
request sanctions pursuant to Fed. R. Civ. P. 26(g).” Cipollone,
113 F.R.D. at 94. Consequently, on December 18, 1986, the
district court entered a new modified protective order and issued
a supplemental opinion. See Cipollone v. Liggett Group, Inc.,
Civ. No. 83-2864 (D.N.J. Dec. 18, 1986). The magistrate’s pro-
tective order remained unchanged except that the district court
limited the scope of the order’s protection to “confidential”
documents and permitted the use of documents in other related
actions. '
‘ Eleven paragraphs of the magistrate’s order were included verbatim. The
changes [italicized] are set forth in a comparative table as foliows:
Magistrate's Order
2. All information produced or ex-
changed in the course of this civil ac-
tion or any appeal arising therefrom
(the “litigation) shall be used solely
for the purpose of this case.
3. “Confidential information” as us-
ed herein means any information
which is designated as “confidential,”
whether it be a document, informa-
tion contained in a document,
District Court’s Order
2. All “confidential” information
produced by defendants in the course
of this civil action or any appeal aris-
ing therefrom (the “litigation”) may
be used in all related or similar cases
subject to the terms and conditions
of this order.
3. Any plaintiff seeking to use “con-
fidential or nonconfidential” infor-
mation from this matter shall seek
leave of the court before whom that
matter is pending.
4. “Confidential information” as us-
ed herein means any information
which is designated as “confidential”
whether it be a document,
(footnote continued)
Defendants then petitioned again for mandamus, claiming
that the district court’s order on remand is contrary to law and
contrary to this court’s instructions. In addition, they request
reassignment of this case to another judge, suggesting bias
against the defendants on the part of Judge Sarokin.
information revealed during a
deposition or in any interrogatory
answer or otherwise disclosed in
discovery. Information shall be
designated as confidential only upon
the good-faith belief that the infor-
mation falls within the scope of con-
fidential information under the
Federal Rules of Civil Procedure and
the precedents thereto.
6. Confidential information may be
inspected only by the following
persons:
(a) Counsel of record for the plain-
tiff and defendants in this litigation,
any lawyers specifically employed by
them in connection with the litiga-
tion and any employee of such
counsel assisting with this litigation:
and
(b) Experts retained by or on behalf
of any party to provide assistance or
information contained in a docu-
ment, information revealed during a
deposition or in any interrogatory
answer or otherwise disclosed in
discovery. Information shall be
designated as confidential only upon
good-faith belief that the informa-
tion falls within the scope of “con-
fidential” information under the
Federal Rules of Civil Procedure and
the precedents thereto, including this
Court's opinions in this case. Counsel
shall have the right to challenge, by
motion, the designation of any docu-
ment as “confidential” and, if the ob-
jection is sustained, sanctions may be
imposed upon the party making the
designation, if not made in good
faith, including attorney's fees and
the reasonable expenses incurred by
counsel pursuant to Fed. R. Civ. P.
26(g).
7. Confidential information may be
inspected only by the following
persons:
(a) Counsel of record for the plain-
tiff and defendants in this litigation,
or where authorize2 in other litiga-
tion, any lawyers specifically
employed by them in connection
with the litigation and any employee
of such counsel assisting them; and
(footnote continued)
|
II.
Scope of Review in Mandamus
In Sporck v. Peil, 759 F.2d 312, 314 (3d Cir.), cert. denied,
106 S. Ct. 232 (1985), we set forth the standards for issuing a
writ of mandamus. Two requisites must be found: a) the
testimony in connection with this
litigation.
7. Each person, other than those
described in Section 6(a), to whom
designated confidential information
or documents are to be disclosed
shall, prior to disclosure, agree in
writing under oath or attestation to
the following, a copy of which shall
forthwith be furnished to all counsel:
I hereby attest to my understanding
that information or documents
designated confidential will be pro-
vided to me pursuant to the terms
and conditions and restrictions of the
Protective Order of [ ], 1985, in
Cipollone v. Liggett Group Inc., et
al,, the United States District Court
for the District of New Jersey; that
I have been given a copy of and have
read the Protective Order and have
had its meaning and effect explain-
ed to me by the attorneys providing
me with such information or
documents, and that I hereby agree
to be bound by it and its terms. I fur-
ther agree that I shall not disclose to
others, except in accordance with the
Protective Order, such information
or documents, and that such infor-
mation or documents shall be used
only for the purposes of the legal pro-
ceedings in which they were produced.
(b) Experts retained by or on behalf
of any party to provide assistance or
testimony in connection with the
litigation or where authorized in
other litigation.
8. Each person, other than those
described in Section 7(a), to whom
designated confidential information
or documents are to be disclosed
shall, prior to such disclosure, agree
in writing under oath or attestation
to the following:
I hereby attest to my understanding
that information or documents
designated confidential will be pro-
vided to me pursuant to the terms
and conditions and restrictions of the
Protective Order of [ ] 1986, in
Haines v. Liggett Group Inc., et al..,
the United States District Court for
the District of New Jersey; that I
have been given a copy of and have
read Protective Order and have had
its meaning and effect explained to
me by the attorneys providing me
with such information or documents,
and that I hereby agree to be bound
by it and its terms. I further agree
that I shall not disclose to others, ex-
cept in accordance with the Protec-
tive Order such information or
documents, and that such informa-
tion or documents shall be used on-
ly for the purpose of the legal pro-
ceeding in which they were produced.
(footnote continued)
party seeking the writ must have “no other adequate means to
attain the relief he desires,” Allied Chemical Corp. v. Daiflon,
Inc., 449 U.S. 33, 35 (1980), and b) the trial court must have
I further agree and attest to my
understanding that my obligation to
honor the confidentiality of such in-
formation or documents will con-
tinue even after termination of that
legal proceeding. I further agree and
attest to my understanding that, in
the event that I fail to abide by the
terms of the Protective Order, I may
be subject to sanctions, including
sanctions by way of contempt of
court, imposed by the Court, for
such a failure.
Copies of this attestation shall be
served upon all counsel prior to such
disclosure; in lieu of such service,
copies of the attestation signed by
medical experts may be filed under
seal with the court, for the period
prior to the identification of such ex-
perts in pretrial discovery.
13. Within forty-five (45) days after
the final adjudication or settlement
of all claims in this case, counsel for
the parties either shall return all
documents produced, if so requested
by the producing party, or shall
destroy all such documents. All
copies of documents, and all infor-
mation and notes derived from them,
I further agree and attest to my
understanding that my obligation to
honor the confidentiality of such in-
formation or documents will con-
tinue even after the termination of
that legal proceeding. I further agree
and attest to my understanding that,
in the event that I fail to abide by the
terms of the Protective Order, I may
be subject to sanctions, including
sanctions by way of contempt of
Court, imposed by the Court, for
such a failure. Copies of this attesta-
tion shall be filed under seal with the
court.
14a. Within forty-tive (45) days after
the final adjudication or settlement
of all claims in this case, counsel for
the parties either shal] return all con-
fidential documents produced, if so
requested by the producing party, or
shall destroy all such documents. All
copies of confidential documents,
(footnote continued)
_
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committed a clear error of law. As we stated in Cipollone, 785
F.2d at 1118, “[m]andamus is not available for abuse of discre-
tion.” The Supreme Court has stated that a writ of mandamus
is not readily issued:
shall be destroyed. Compliance with
this provision shall be certified to by
all counsel for the obtaining party or
parties.
17. This Order shall be binding upon
any future party to this litigation.
and all information and notes deriv-
ed from them, also shall be
destroyed. Compliance with this
provision shall be certified to by all
counsel for the obtaining party or
parties.
17. This order shall be binding upon
any future party to this litigation and
any other party utilizing such
discovery pursuant to the authority
of any other court, and all pro-
ceedings arising under it are referred
to the magistrate for disposition.
18. Anything to the contrary not-
withstanding, confidential informa-
tion may be delivered to counsel in
other related or similar actions pro-
vided the court in such action per-
mits same and provided further that
the conditions of confidentiality im-
posed herein are imposed in said
action.
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Extraordinary writs are “reserved for really extraor-
dinary causes”. .., and then only “to confine an in-
ferior court to a lawful exercise of its prescribed
jurisdiction or to compel it to exercise its authority
when it is its duty to do so... .”
Platt v. Minnesota Mining & Mfg. Co., 376 U.S. 240, 245 (1964)
(citations omitted). “[T]he moving party [must] satisfy ‘the
burden of showing that its right to issuance of the writ is “clear
and indisputable” ’.” Will v. Calvert Fire Ins. Co., 437 U.S.
655, 662 (1978) (citation omitted). The respondents do not
dispute that errors with respect to the scope of a protective order
probably cannot be corrected by a post-trial appeal. They
dispute only whether the second requisite for mandamus has
been met —that is, whether the trial court committed a clear
error of law.
Il.
Discussion
The gravamen of the petitioners’ argument in the instant peti-
tion for mandamus is their disagreement with Judge Sarokin’s
refusal, on remand, to uphold paragraph 2 of the magistrate’s
protective order. Paragraph 2 of the magistrate’s order states
that “[aJll information pre uced or exchanged in the course of
this civil action or any appeal arising therefrom (the “litigation”)
shall be used solely for the purpose of this case.” Judge Sarokin,
in his protective order of December 18, 1986, replaced that
paragraph with paragraphs 2 and 3 which state:
2. All “confidential” information produced by defend-
ants in the course of this civil action or any appeal
arising therefrom (the “litigation”) may be used in all
related or similar cases subject to the terms and con-
ditions of this order.
3. Any plaintiff seeking to use “confidential or non-
confidential” information from this matter shall seek
leave of the court before whom that matter is pending.
(changes italicized).
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A. District Court’s Scope of Review Under Section 636
Petitioners’ first argument is that the district court erred again
by engaging, on remand, in an impermissible plenary review
of the magistrate’s orders rather than applying the “clearly er-
roneous or contrary to law” standard. Under 28 U.S.C. § 636,
a magistrate may hear and determine pre-trial matters, which
are subject to reconsideration by the district court “where it has
been shown that the magistrate’s order is clearly erroneous or
contrary to law.” Id. at § 636(b)(1)(A). Petitioners make two
contentions to substantiate this argument.
First, petitioners argue that the district court’s “good cause”
determinations continued to be based improperly on a concern
for the public interest rather than on the interest of the litigants
or case management. In support, the petitioners contend that
the magistrate’s paragraph 2 imposed no burdens on the respon-
dent and that respondent never complained that the paragraph
impeded her ability to go forward with her case. The provi-
sions, the petitioners argue, merely prevented injury to them
and expedited discovery. Citing to a passage in the district court’s
opinion, the petitioners insist it proves that the court had a “con-
tinuing conception that the public has some legitimate interest
in the pretrial disclosure of cigarette company documents,” Peti-
tioners’ Brief at 17 (emphasis in original).
The district court stated:
... It is inconceivable to this court that under [the]
circumstances the public interest is not a vital factor
to be considered in determining whether to further
conceal that information and whether a court should
be a party to that concealment.
However, even ignoring the public interest, defen-
dants have failed to demonstrate any good cause for
the concealment of otherwise non-confidential
materials from the public in general.
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Cipollone, 113 F.R.D. at 87. Petitioners have taken this state-
ment out of context. Judge Sarokin clearly stated that “(t]he
Third Circuit has made it clear that first amendment considera-
tions are not implicated in this analysis. It is thus this court’s
duty to abide by that mandate.” Jd. After that statement, Judge
Sarokin went on to express his concern about that ruling, by
stating: “However, the court expresses its concern if the public
interest is eliminated as a factor in determining whether
discovery should be protected from disclosure.” Id. The passage
relied on by petitioners followed, and served as an explanation
of Judge Sarokin’s concern. Furthermore, there is no indica-
tion in the opinion that Judge Sarokin, in making “good cause”
determinations, considered the public interest in the documents.
The second contention the petitioners raise in support of their
section 636 argument is that, on remand, the district court failed
to apply the “clearly erroneous or contrary to law” standard
but rather continued to substitute its own judgment for that
of the magistrate. The petitioners argue that the district court
did not attempt to identify the grounds upon which the
magistrate’s general finding of good cause was based. As proof
that the district court did not apply the proper standard of
review, the petitioners quote from the first district court opin-
ion vacating the magistrate’s order, which stated:
In the usual private litigation not involving the public
interest, it would not be appropriate to permit the
release of private materials whose existence and con-
tent were disclosed only as the result of the litigation.
Cipollone, 106 F.R.D. at 576. From all of this, the petitioners
conclude that “[i]f the district court had in fact abandoned its
special public interest test, it could not possibly have found clear
error in the entry of the magistrate’s orders.” Petitioners’ Brief
at 19 (emphasis in original).
Contrary to the petitioners’ assertions, however, the district
court made specific findings that the magistrate’s determina-
tion of “good cause” was “clearly erroneous and contrary to law.”
The court stated:
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In summary, the magistrate’s finding that de-
fendants had shown good cause to support an order
that nonconfidential discovery “shall be used solely
for the purpose of this case” is clearly erroneous and
contrary to law. To the extent that the magistrate
found good cause based on embarrassment to de-
fendants, the effect of dissemination on the fairness
of trial, or the prior conduct of plaintiffs’ attorney,
the finding is clearly erroneous. To the extent that
the magistrate found good cause based on a desire to
facilitate discovery or to prevent an abuse of the
discovery process, the finding is contrary to law.
Cipollone, 113 F.R.D. at 93. In fact, Judge Sarokin correctly
noted in his opinion that “(t]he magistrate’s protective order
did not contain specific written findings that good cause existed
for prohibiting plaintiffs either from disseminating the fruits
of nonconfidential discovery to the public or from utilizing
discovery in other litigation.” Jd. at 89.
Although Magistrate Cowen mentioned good cause in the
March 25, 1985 protective order, the only stated reason for that
order was his desire to streamline the discovery process. See
Transcript of Proceedings of March 25, 1985 Before Magistrate
Cowen at 56. Thus, it was completely logical for Judge Sarokin
not to “attempt to identify the grounds upon which the
miagistrate’s general finding of good cause was based.”
Cipollone, 113 F.R.D. at 89 n:2. Instead, Judge Sarokin review-
ed “the order itself, the transcript of the proceedings before the
magistrate and defendants’ briefs and oral arguments,” id. at
89, and found five specific arguments for “good cause” under
Rule 26(c). They were that (1) the defendants would suffer
financial and other embarrassment; (2) fairness at trial would
be compromised; (3) the plaintiffs were estopped from
disseminating this material by plaintiffs’ counsel’s prior agree-
ment; (4) discovery in this case would be facilitated; and (5)
dissemination would constitute an abuse of the discovery pro-
cess. The district court then examined the record with respect
to each argument and concluded that none of the arguments
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supported a finding of good cause for an order limiting the use
of nonconfidential documents solely to this case. The court
specifically ruled that to the extent that the magistrate found
good cause based on them, those findings were “clearly er-
roneous” or “contrary to law.” Cipollone, 113 F.R.D. at 93.
B. Concerns of Case Management
Additionally, petitioners urge that the district court acted in-
consistently with this court’s mandate and contrary to law in
rejecting the magistrate’s concern about case management as
an important basis for the entry of his protective order. That
concern appears, however, to have been, not an important basis,
but rather the sole basis for the magistrate’s protective order,
for in entering it Magistrate Cowen stated:
In the event this decision is appealed or reviewed by
higher authority, I want the record to reflect that it’s
my opinion, it’s my judgment that having this order
in place will facilitate the efficacious production of
documents and discovery of the defendants to some
extent and that it will streamline the litigation to the
point where the discovery sought and had in this case
will be for this case and this case alone, and that at
the time this case is tried that, of course, anything
that goes into the record at that time will be of a
public matter and public information.
Transcript of Proceedings of March 25, 1985 Befpre Magistrate
Cowen at 56. No other reason for entry of the order was men-
tioned. Cipollone argues that the district court did not reject
concerns of case management as “a” basis for a protective order
but merely rejected it as the sole basis, where the court does
not make specific and particularized findings of good cause
under Rule 26(c).
Cipollone is correct in this respect. The district court held:
The magistrate’s reasoning, though based on com-
mendable motives, misconstrues the nature of the
A-16
“good cause” requirement of Rule 26(c). The
magistrate apparently felt that limiting the use of
discovery to this case alone would “secure the just,
speedy and inexpensive determination” of this action,
consistent with the intent expressed in Rule 1 of the
Federal Rules. Rule 26(c), however, does not em-
power individual courts to make such policy decisions.
The Rule allows a court to “protect a party or per-
son” — the focus is on injury to a specific individual,
not on general concerns of case administration. Rule
26(c), understood as a piece of a larger framework,
reflects a policy decision that the “just, speedy and
inexpensive” determination of actions is best furthered
by permitting the entry of protective orders only to
prevent injury to individuals.
The Third Circuit explanation of “good cause”
recognizes that the Rule 26(c) inquiry must focus on
the harm defendants will allegedly suffer from
dissemination of discovery material. The Third Cir-
cuit directed this court to test defendants’ allegations
of harm against the legal standards they provided.
Nowhere in the Third Circuit’s directive is this court
told that the “good cause” supporting a protective
order may be general concerns of trial administration.
The magistrate’s rationale that entry of the protec-
tive order would facilitate and streamline this litiga-
tion is not sufficient “good cause” under Rule 26(c).
Cipollone, 113 F.R.D. at 92-93.
The district court’s summary of the Third Circuit’s mandate
in this respect is quite accurate. Judge Becker stated:
...the party seeking the protective order must show
good cause by demonstrating a particular need for
protection. Broad allegations of harm, unsubstan-
tiated by specific examples or articulated reasoning,
A-17
do not satisfy the Rule 26(c) test. ... Moreover, the
harm must be significant, not a mere trifle... .
Although there appears to be a lurking dispute as
to what may constitute good cause for a protective
order, see discussion, supra at pp. 1114-15, we are
satisfied that the district court understood and will
apply on remand the principle that Rule 26(c) pro-
tects parties from embarrassment as well as from
disclosure of trade secrets. We add to the district
court’s comments only our own understanding that,
because release [of] information not intended by the
writer to be for public consumption will almost always
have some tendency to embarrass, an applicant for
a protective order whose chief concern is embarrass-
ment must demonstrate that the embarrassment will
be particularly serious. As embarrassment is usually
thought of as a nonmonetizable harm to individuals,
it may be especially difficult for a business enterprise,
whose primary measure of well-being is presumably
monetizable, to argue for a protective order on this
ground. Cf. Joy v. North, supra (a protective order
will not issue upon the broad allegation that disclosure
will result in injury to reputation); to succeed, a
business will have to show with some specificity that
the embarrassment resulting from dissemination of the
information would cause a significant harm to its
competitive and financial position.
Cipollone, 785 F.2d at 1121 (citations omitted). Judge Becker
clearly focused upon the issue of particular need for party pro-
tection, not upon general concerns of trial efficiency. Therefore,
the district court’s ruling is not inconsistent with our mandate.
The petitioners further argue, however, that the district
court’s rejection of concerns of case management conflicts with
our recommendation of the use of umbrella protective orders
as “a useful method of dealing with large-scale discovery.” Id.
at 1123 (footnote omitted). This is a disingenuous argument and
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the quote is taken out of context. The quote came at the end
of a discussion about an umbrella order approach versus a
document-by-document approach to determine confidentiali-
ty. See id. at 1122-23. Judge Becker stated:
Under this approach, the umbrella order would in-
itially protect all documents that the producing par-
ty designated in good faith as confidential. After the
documents delivered under this umbrella order, the
opposing party could indicate precisely which
documents it believed to be not confidential, and the
movant would have the burden of proof in justifying
the protective order with respect to those documents.
The burden of proof would be at all times on the
movant; only the burden of raising the issue with
respect to certain documents would shift to the other
party.
Id. at 1122 (footnote omitted). In response, the district court
abandoned its document-by-document approach and instead
adopted in paragraph 4 of its modified protective order, exact-
ly what we advocated.
Perhaps because they are on such unsure ground in relying
on claimed inconsistency with our mandate, petitioners next
argue that the district court’s holding conflicts with various cases
that have recognized that “expedition of discovery and the
avoidance of undue burden and expense are sufficient justifica-
tions for the entry of protective order provisions like paragraph
2.” Petitioners’ Brief at 22. We question whether, absent in-
consistency with our mar-date, this contention is appropriately
considered in support cf a mandamus petition. Assuming
arguendo that it is, the contention is without merit. In support,
petitioners string cite five cases which in fact do not stand for
such a proposition. Jn re Consumers Power Co. Securities Litiga-
tion, 109 F.R.D. 45 (E.D. Mich. 1985), involved a protective
order entered by the court on stipulation of the attorneys which
was challenged by a non-party newspaper. Applying a first
amendment analysis, the court upheld the validity of the order
A-19
vis-a-vis the non-party. Chambers Development Co. v.
Browning-Ferris Industries, 104 F.R.D. 133 (W.D. Pa. 1985),
a memorandum opinion outlining the terms of a protective
order, merely states that the defendants established good cause
under Rule 26(c) but does not discuss how they did so. In re
“Agent Orange” Product Liability Litigation, 96 F.R.D. 582
(E.D.N.Y. 1983), did not reach the issue of good cause. Rather,
a media non-party who had filed a motion to obtain access to
non-confidential documents produced by the government was
held not to have standing where the party itself had agreed to
the order and did not itself assert its right to disseminate
discovery documents. In re Korean Airlines Disaster, 597 F.
Supp. 621 (D.D.C. 1984), involved the same facts as the Agent
Orange case—a consensual protective order which was later
challenged by a non-party newspaper — and did not discuss good
cause for entry of a protective order. Similarly, Quinter v.
Volkswagen of America, 676 F.2d 969 (3d Cir. 1982), did not
address the issue of good cause but rather involved whether the
protective order concerning trade secrets applied to plaintiff's
expert witness and whether the witness had violated the order.
Thus, Judge Sarokin’s holding is not contrary to any law to
which we have been referred. We note also that the district court
did not attack the appropriateness of protective orders in general
as promoting the efficient management of cases. In fact, Judge
Sarokin upheld most provisions of the magistrate’s order. He
simply vacated certain of its overbroad provisions.
The petitioners further argue that the district court’s conclu-
sion that courts may not enter protective orders without a
specific showing of injury to a specific individual is clear error
because 1) it ignores the court’s inherent equitable power over
its own process, and 2) it is an overly restrictive reading of Rule
26(c). Citing to International Products Corp. v. Koons. 325 F.2d
403 (2d Cir. 1963), in which Judge Friendly held that courts,
under their inherent equitable power to control their own pro-
cess, may enter protective orders against the dissemination of
discovery materials, the petitioners urge that, because the district
court here did not choose to exercise its inherent equitable |
power, it committed “clear error.” This argument is without
merit. Courts are not required to exercise their inherent
A-20
equitable powers where there are applicable procedural rules.
The district court here complied with the mandate of this court
to look for a specific showing of need for protection, while per-
forming a Rule 26(c) analysis. The magistrate did not purport
to exercise inherent equitable power.
In addition, petitioners urge that it would be unfair to change
the protective order because they relied on it in producing
documents up to that point. In support, they cite Jn re Coor-
dinated Pretrial Proceedings in Western Liquid Asphalt Cases,
18 Fed. R. Serv.2d 1251, 1252 (N.D. Cal. 1974), which found
that changing a protective order when the parties have relied
on it is a “breach of faith,” and to other cases in which courts
have refused to vacate protective orders when parties have
justifiably relied on them. See, e.g., Martindell v. IT&T Corp.,
594 F.2d 291, 296 (2d Cir. 1979); GAF Corp. v. Eastman Kodak
Co., 415 F. Supp. 129, 132 (S.D.N.Y. 1976); Tavoulareas v.
Washington Post Co., III F.R.D. 653, 658 (D.D.C. 1986); H.L.
Hayden Co. v. Siemens Medical Systems, Inc., 106 F.R.D. 551,
555 (S.D.N.Y. 1985); Data Digests. Inc. v. Standard & Poor's
Corp., 57 F.R.D. 42 (S.D.N.Y.1972).
While this argument at first blush has appeal, these cases are
persuasive only if, in producing documents, the petitioners
justifiably relied on the protective order. As Cipollone correct-
ly points out, however, hundreds of thousands of documents
were produced in the instant case before the magistrate’s pro-
tective order of March 25, 1985. After a long discovery dispute,
on May 2, 1984, Magistrate Cowen issued a discovery order
allowing plaintiffs narrow discovery. So far as the record
discloses, prior to that no discussions or negotiations had taken
place regarding a protective order. Subsequently, petitioners
approached Cipollone about a protective order. Cipollone
agreed that truly confidential documents should not be disclosed
but never agreed to a broad sweeping umbrella protective order
including non-confidential documents or to limiting the use of
the documents in other cases. Apparently, Cipollone agreed tem-
porarily not to disseminate any documents “until [they] had an
opportunity to attempt to agree upon a Protective Order regar-
ding the documents or, if that [was] not possible to make a
’ a
A-21
request for such a Protective Order to the Court.” Letters be-
tween counsel dated May 3 and 4, 1984. Thus, reliance cannot
be justifiably based on this interim agreement. Further, once
the protective order was issued over Cipollone’s objection, an
appeal by Cipollone was filed within 10 days. See Notice of Mo-
tion to Vacate Magistrate’s Protective Order filed April 4, 1985.
Clearly respondent never agreed with the protective order and
no order was in place when most of the documents were pro-
duced. Thus, reliance under these facts cannot fairly be found,
and was properly rejected.
Finally, petitioners quarrel with Judge Sarokin’s application
of Rule 1, maintaining that he inconsistently applied the rule
in two different parts of his opinion. Again, petitioners’ argu-
ment is without merit. The district court observed that the Rule
1 consideration that federal rules “be construed to secure the
just, speedy and inexpensive determination of every action,”
Fed. R. Civ. P. 1, militates against limiting the use of discovery
material in other litigation. See Cipollone, 113 F.R.D. at 91.
Later in the opinion, Judge Sarokin ruled that the magistrate’s
limitation on the use of documents, apparently pursuant to Rule
1, was inconsistent with the good cause requirement of Fed.
R. Civ. P. 26(c). He reasoned that “Rule 26(c), understood as
a piece of a larger framework, reflects a policy decision that
the ‘just, speedy and inexpensive’ determination of actions is
best furthered by permitting the entry of protective orders on-
ly to prevent injury to individuals.” Cipollone, 113 F.R.D. at
92-93. There is nothing inconsistent in the court’s analysis.
C. Evidence of Potential Financial Harm
The petitioners contend that the district court erred in con-
cluding that their submissions on potential financial harm were
inadequate. They believe that the magistrate’s protective order
should have been upheld on this basis. This court, in issuing
our writ of mandamus, instructed the district court that to show
good cause “a business will have to show with some specificity
that the embarrassment resulting from dissemination of the in-
formation would cause a significant harm to its competitive and
financial position.” Cipollone, 785 F.2d at 1121. We also stated
| A-22
that “[b]road allegations of harm, unsubstantiated by specific
examples or articulated reasoning, do not satisfy the Rule 26(c)
test.” Cipollone, 785 F.2d at 1121.
According to the petitioners, they submitted the following
proofs:
(1) that counsel for plaintiffs intended to
disseminate to the general public selected portions of
the material received by them in discovery;
| (2) that counsel for plaintiffs intended to accom-
| pany such dissemination with slanted “explanations”
of the significance of particular documents;
(3) that counsel for plaintiffs have regularly attend-
ed and participated in symposia and seminars con-
cerning the smoking and health litigation, including
those sponsored by securities analysts;
(4) that securities analysts closely follow the smok-
ing and health litigation, and have rendered opinions
and issued investment advice, including a decision to
downgrade their investment opinions concerning
tobacco stocks such as those of defendants Reynolds
and Philip Morris, based directly upon developments
in this litigation;
(5) that major institutional investors in tobacco
stocks independently monitor such developments and
make decisions to invest in or disinvest of tobacco
stocks, including stocks of defendant R. J. Reynolds,
hased upon these developments:
(6) that the market in tobacco company stocks has
been sensitive to developments in this litigation;
(7) a market analysis distributed by the investment
firm of Drexel Burnham Lambert which referred to
the “obvious volatility” of tobacco stocks in relation
to events arising out of the smoking and health
litigation;
A-23
(8) evidence that the firm of E.F. Hutton has noted
that the viability of tobacco stocks was “directly
related” to product liability litigation.
Petitioners contend that Judge Sarokin mischaracterized and
ignored their submissions. He did not. Rather, he made a careful
analysis of petitioners’ submissions concerning potential finan-
cial harm. See Cipollone, 113 F.R.D. at 89-91. He considered
the contention that the market price of defendants’ stock will
be adversely affected but found that “[s]uch a sweeping allega-
tion” does not rise to the level of specificity required by Rule
26(c). See Cipollone, 113 F.R.D. at 90. Noting the “only specific
‘example’ cited by defendants” —“that Philip Morris stock in-
creased in value ten points after the Third Circuit’s issuance
of their writ of mandamus” — the court found that the petitioners
here, unlike the petitioners in Tavoulareas,’ never specifically
demonstrated how dissemination would hurt their business. See
Cipollone, 113 F.R.D. at 90. Failing to provide the district court
with a single document as a concrete example of the type of
harm they would suffer, petitioners made only broad allega-
tions of harm. Although the petitioners claim that “[t]he district
court’s opinion indicates that nothing will do but a showing,
document-by-document and deposition-by-deposition, that
each, separately released, would in fact cause a fall in the market
for defendants’ securities,” Petitioners’ Brief at 31, there is
nothing in the opinion which substantiates such a proposition.
The district court stated:
/
Defendants have shown that their financial standing
has been affected by this and related litigation. Defen-
dants have not substantiated, however, how preven-
ting the release of all discovery materials is needed
* In Tavoulareas v. Washington Post Co., III F.R.D. 653 (D.D.C. 1986), Mobil
Oil Co. produced certain documents concerning business arrangements in the
Middle East and argued that disclosure of those documents might interfere
with its business dealings in Saudi Arabia. Mobil reviewed specific documents
and provided the court with concrete examples of how their disclosure would
harm its business operations.
A-24
to prevent particularized, significant injury to their
financial and competitive position. Defendants have
not identified a single document which they contend
will or might have such an effect.
Id. Obviously, the district court did not require a document-
by-document showing. It was merely looking for concrete
examples.’
IV.-
Remand to a Magistrate
We note that the petitioners did not assert in the district court,
or in the petition here, that our mandate required the district
court to do anything more than reconsider the previous ruling
in light of the two legal errors which this court found. Indeed,
the district court undertook exactly such a reconsideration and
so it is not surprising that the petitioners have not urged either
a new hearing or new factfinding. We find no basis, therefore,
in the petition or in the representations made by petitioners for
considering a contention that the district court should have per-
mitted either the creation of a new record or a new opportuni-
ty for factfinding by a different magistrate.
os
Reassignment
Petitioners contend that the case should be reassigned to a
different judge because of Judge Sarokin’s bias, which, they in-
sist, is demonstrated because: 1) he did not follow our prior
' Solely in connection with III C, Judge Seitz would note that the writ of
mandamus issued by this court in Cipollone v. Liggett Group, Inc., 785 F.2d
1108 (3d Cir. 1986), required the district court to adhere to the “good cause”
standard in Fed R. Civ. P. 26(c) as there interpreted. Considering our
necessarily amorphous direction with respect to the duty of the district court.
Judge Seitz is satisfied that the district court fairly attempted to comply. Under
these circumstances, he believes that it is not our function in this mandamus
context to inquire further.
<<< ,~-
A-25
mandate; 2) his rulings indicate hostility to the tobacco industry;
and 3) he has prejudged critical factual disputes. Each of these
bases for suggesting bias lacks merit.
As we conclude in Part III above, Judge Sarokin did follow
our mandate. Additionally, even if he had not, that alone,
despite the petitioners’ insistence to the contrary, is not a suffi-
cient basis to remand to a different district court judge. It does
not establish bias. In this area, we may take instruction from
cases arising under 28 U.S.C. § 144 (1982), and its predecessor,
section 21 of the Judicial Code (1911), ch. 231, § 21, 36 Stat.
1087, 1090 (1911). See Berger v. United States, 255 U.S. 22,
31 (1921) (“bias or prejudice which can be urged against a judge
must be based upon something other than rulings in the case”
and the disqualification statute “was never intended. . . to enable
a discontented litigant to oust a judge because of adverse rul-
ings”); accord Hanger v. United States, 398 F.2d 91, 101 (8th
Cir. 1968), cert. denied, 393 U.S. 1119 (1969).
In support of their contention that Judge Sarokin’s ruling
demonstrates hostility to the tobacco industry, petitioners point
to the district court’s first decision on the protective order, in
which the court entered an order requiring petitioners to file
briefs with the magistrate to justify the claim of confidentiali-
ty for each document so designated. This, they correctly state,
was more relief than Cipollone requested. That order, however,
has been rescinded and the district court’s modified protective
order is in compliance with cur siandate. An error of law, cor-
rected by a reviewing court, does not establish bias.
Finally, the petitioners accuse Judge Sarokin of prejudging
critical fact issues that have not been yet heard. These issues
are: “(1) whether consumers have been adequately informed
of the dangers of smoking; (2) whether smokers are properly
viewed as ‘victims’ of their smoking; and (3) whether cigaret-
tes are addicting.” Petitioners’ Brief at 46-47. In support, peti-
tioners quote various sentences in 649 F. Supp. 664 (D.N.]J.
1986), 593 F. Supp. 1146 (D.N.J. 1984) and slip op. (D.N.J.
Dec. 7, 1984), which, they say, show that the district court has
already decided these issues. See Petitioners’ Brief at 47-56. All
A-26
are taken out of context and exaggerated. They are not worth
setting forth here.
The petition that we remove Judge Sarokin from the case by
exercising our authority under 28 U.S.C. § 1651 to protect peti-
tioners from bias is entirely without merit, and a thinly disguised
effort at judge shopping.
VI.
Conclusion
The district court on remand following the previous decision
in this case complied in good faith with our mandate. The court
committed no clear error of law in modifying the magistrate’s
protective order. The petitioners’ suggestion of bias is entirely
without merit. The petition for mandamus will therefore be
denied.
GARTH, Circuit Judge, dissenting:
My quarrel with the majority opinion stems from the ma-
jority’s failure to recognize that the district court did not com-
ply with the mandate we prescribed in our first review of this
issue. Cipollone v. Liggett Group, Inc., 785 F.2d 1108 (3d Cir.
1986). As I understand our mandate, we directed the district
court to review the magistrate’s good cause determination under
the clearly erroneous and contrary to law standard prescribed
by 28 U.S.C. § 636(b)(1)(A). Instead, the district court, when
faced with this directive and a record barren of any facts found
by the magistrate, redrew the protective order with no regard
to our remand for further factfinding.
After concluding that the district court had reviewed the
magistrate’s original decision under an erroneous standard of
review, the prior panel of this court set out its mandate. That
panel, noting that “no specific good cause findings have been
made,” Cipollone, 785 F.2d at 1120, directed the district court
to “take second looks at the good cause issue...and at the
magistrate’s protective order.” Jd. Moreover, the panel observed
that a court of appeals review of the order would be “unwise.”
Id. Such a review would entail “detailed consideration of the
A-27
defendants’ assertion of good cause,” and therefore would be
“exceedingly difficult” without a remand to the district court
for its reconsideration under appropriate standards. Id. The
panel then predicted that the district court’s “good cause hear-
ing will likely reveal the appropriate shape that the protective
order should take and it is thus better that any delineation of
specifics await that hearing.” /d.
To comply with that instruction, Judge Sarokin should have
reviewed the magistrate’s opinion and order using the “clearly
erroneous and contrary to law” standard prescribed by 28
U.S.C. § 636(b)(1)(A). As explained in the statute’s legislative
history, the magistrate’s “determination set forth in an ap-
propriate order shall be ‘final’ subject only to the ultimate right
of review by a judge of the [district] court.” See H.R. Report
No. 1609, 94th Cong., 2nd Sess. 9-11, reprinted in 1976 U.S.
Code Cong. & Ad. News 6162, 6170. Therefore, a district court
judge first would determine whether the facts found by the
magistrate to support the good cause determination were clearly
erroneous and whether the conclusions of law supporting the
finding were contrary to law. If the district court held that facts
found by the magistrate were clearly erroneous or that conclu-
sions of law were incorrect, then the district court must recon-
sider the magistrate’s decision. '
' The legislative history for 28 U.S.C. § 636(b)(A)(1) sets out the circumstances
in which a judge “may reconsider” the matter before the magistrate:
Use of the words “may reconsider” in subparagraph (A) is in-
tended to convey the congressional intent that a matter “heard
and determined” by the magistrate need not in every instance be
heard a second time by the judge. However, if a party requests
reconsideration based upon a showing that the magistrate’s order
is clearly erroneous or contrary to law then the judge must recon-
sider the matter. Of.course, the judge has the inherent power to
rehear or reconsider a matter sua sponte.
See H.R. Report No. 1609, 94th Cong., 2nd Sess. 9-11, reprinted in 1976 U.S.
Code Cong. & Ad. News 6162, 6170.
A-28
Unfortunately, in this case, the magistrate failed to make
specific findings on the good cause “issue,” and thus the district
court, while told to review good cause findings, was faced with
no findings to review. Indeed, the district court itself observed
that “[t]he magistrate’s protective order did not contain specific
written findings that good cause existed for prohibiting plain-
tiffs either from disseminating the fruits of nonconfidential
discovery to the public or from utilizing discovery in other litiga-
tion.” Cipollone v. Liggett Group, 113 F.R.D. 86, 89 (D.N.]J.
1986).
Yet, although our court’s mandate required that specific writ-
ten findings be made, the district court did not remand the issue
to the magistrate for factfinding, nor did it perform such fact-
finding itself. Rather, the district court took it upon itself to
formulate and examine five separate “arguments” to determine
whether the “arguments” were “clearly erroneous or contrary
to law.” As if in anticipation of my concern, the district court
protested that it “[did] not attempt to identify the grounds upon
which the magistrate’s general finding of good cause was bas-
ed,” but only “analyze[d] whether any of these arguments could
support the magistrate’s finding.” Id. at 89 n.2.
Following this “review” of the magistrate’s order, the district
court held, in part, that “[t]o the extent that the magistrate
found good cause based upon embarrassment to defendants, the
effect of dissemination [of discovery to the press and third par-
ties] on the fairness of trial, or the prior conduct of plaintiffs’
attorney, the finding is clearly erroneous.” Jd. at 93. The district
court also held that “[t]o the extent that the magistrate found
* The district court identified “upon analysis of the order itself, the transcript
of the proceedings before the magistrate. and defendants’ briefs and oral
arguments. . . five specific arguments for ‘good cause’ under Rule 26(c): 1) that
defendants will suffer financial and other embarrassment; 2) that fairness at
trial will be compromised; 3) that plaintiffs are estopped from disseminating
this material by a prior agreement of plaintiffs’ counsel; 4) that discovery in
this case will be facilitated; 5) that dissemination constitutes an abuse of the
discovery process.” Cipollone v. Liggett Group, Inc., 113 F.R.D. 86, 89
(D.N.J. 1986).
A-29
good cause based upon a desire to facilitate discovery or to pre-
vent an abuse of the discovery process, the finding is contrary
to law.” Id. In effect, without the benefit of any findings of
fact, the district court constructed and then “reviewed” three
of the five arguments, all of which required factual support.
The arguments so reviewed were: the possibility of embarrass-
ment to the defendant cigarette companies, the possibility of
financial harm due to the pretrial dissemination of discovery
materials, and a claim cf estoppel based upon the conduct of
plaintiffs’ attorney. It was on this basis that the district court
concluded that good cause had not been demonstrated: a con-
clusion reached without the review of, or the finding of, a single
fact.
At no point does the majority opinion claim that findings of
fact appear in the record. Indeed, while the majority opinion
notes that the magistrate made no findings, it curiously fails
to mention that the district court’s decision and order is similarly
flawed. Characterizing the district court’s opinion as a review
of “five specific arguments” is no substitute for the absence of
findings at both the district court and magisterial level.
As a reviewing court we must be sensitive to the factfinding
functions of the courts we review, and to this date no findings
on the issue of good cause have ever been made. The district
court should have ensured that findings were made, not only
to comport with the review process envisioned by 28 U.S.C.
§ 636(b)(1)(A), but also to obey the mandate handed down by
the prior panel of this court.
My decision that the writ should issue to enforce our man-
date is compelled by the fact that this panel is bound by the
earlier mandate, just as Judge Sarokin was bound. See Taylor
v. United States, 815 F.2d 249, 252 (3d Cir. 1987)(“It is well-
established that a district court must adhere to the mandate’);
Bankers Trust Co. v. Bethlehem Steel Corp. , 761 F.2d 943, 949
(3d Cir. 1985)(“It is axiomatic that on remand for further pro-
ceedings after decision by an appellate court, the trial court must
proceed in accordance with the mandate”). The district court,
bv refusing to remand for factfinding or by failing to find the
A-30
essential facts itself, did not satisfy the mandate of our court.
Nothing that appears in the majority opinion excuses that
failure. Because no compliance was had without mandate I
would issue the writ of rmandamus.
While I of course agree with the majority's disposition of the
reassignment request, I am obliged to dissent from the majori-
ty’s disposition for the reason I have set out above.
B-l
Opinion of the District Court
dated November 12, 1986
ANTONIO CIPOLLONE,
Individually and as Executor of the
Estate of Rose D. Cipollone,
Plaintiff,
me | oe
LIGSETT GROUP INC.,
PHILIP MORRIS INCORPORATED,
and LOEW’S THEATRES INC.,
Defendants.
SUSAN HAINES, as
Administratrix ad Prosequendum and
Executrix of the Estate of Peter F. Rossi,
Plaintiff,
—-vV—
LIGGETT GROUP INC.,
LOEW’S THEATRES, INC.,
R.J. REYNOLDS TOBACCO CO.,
PHILIP MORRIS INCORPORATED,
and THE TOBACCO INSTITUTE,
Defendants.
Nos. 83-2864 and 84-678
United States District Court,
District of New Jersey
Decided November 12, 1986
SAROKIN, District Judge
This matter is now before the court pursuant to defendants’
receipt of a writ of mandamus from the Third Circuit. Specifically,
the Third Circuit’s opinion directed this court to (1) reconsider
B-2
its prior decision reversing various aspects of a magistrate’s pro-
tective order in light of the “good cause” standard of Rule 26(c)
of the Federal Rules of Civil Procedure, and (2) to reconsider
its reversal of that aspect of the magistrate’s protective order
which permits the party seeking protection from dissemination
to designate documents confidential without first establishing
good cause to do so on a document-by-document basis. The court
proceeds to do so.
The order heretofore entered in this matter prohibited all
discovery of defendants from being disclosed either to the public
in general or plaintiffs in other similar litigation. Before defen-
dants are entitled to such a protective order they are required to
establish that there is “good cause” for its entry and continuance.
The general focus of discovery in this matter has been the
knowledge of the defendant tobacco companies regarding the risks
of cigarette smoking and what action was taken to conceal or
minimize these risks and neutralize the required warnings.
The Third Circuit has made it clear that first amendment con-
siderations are not implicated in this analysis. It is thus this court’s
duty to abide by that mandate. However, the court expresses its
concern if the public interest is eliminated as a factor in deter-
mining whether discovery should be protected from disclosure.
Discovery may well reveal that a product is defective and its
continued use dangerous to the consuming public. The public
disclosure of that information will certainly embarrass that party
and cause it financial loss. It is inconceivable to this court that
under such circumstances the public interest is not a vital fac-
tor to be considered in determining whether to further conceal
that information and whether a court should be a party to that
concealment.
However, even ignoring the public interest, defendants have
failed to demonstrate any good cause for the concealment of
otherwise non-confidential materials from the public in general.
Defendants’ arguments are even less persuasive with respect to
related litigation. By requiring,each plaintiff in every similar
action to run the same gauntlet over and over again serves no
B-3
useful purpose other than to create barriers and discourage litiga-
tion against the defendants. Good cause as contemplated under
Rule 26 was never intended to make other litigation more dif-
ficult, costly and less efficient.
BACKGROUND
The protective order at issw¢ here was entered on March 25,
1985 by the Honorable Robert E. Cowen, United States
Magistrate. As noted by this court in its prior opinion in this
matter, the order limits the extent to which one party may
disclose certain confidential information made available by its
opponents during discovery proceedings. Specifically, the order
provides that “[al]ll information produced or exchanged in the
course of this civil action or any appeal arising
therefrom . . . shall be used solely for the purpose of this case,”
(para. 2), and shall be returned or destroyed after trial. (para.
13.) More complex limitations are imposed upon “confidentia!
information”. If a party has a “good-faith belief that the infor-
mation falls within the scope of confidential information under
the Federal Rules of Civil Procedure,” (para. 3) it may label such
information accordingly, and it is then to be filed, or otherwise
utilized, under seal (para. 11-12).
Once labelled, confidential information is, under the order,
open for inspection only by counsel or their associates or
employees (para. 6(a)), or by experts retained for the purposes
of the litigation (para. 6(b)), but the latter are required to sign
an oath attesting to their understanding that they are bound
by the terms of the order (para. 7). In the event of any disclosure,
counsel and the court, shall be advised, in writing, of the name,
address and occupation of the person to whom counsel propose
to disclose, for the purposes of this litigation, said confidential
information. Jd. Additional protections or other modifications
of the order may also be sought.
Plaintiffs appealed this order, arguing that it constituted an
abuse of discretion and a violation of both the first amendment
and of basic discovery principles. By opinion dated July 17, 1986,
this court found merit in a number of plaintiff's contentions,
B-4
concluding (1) that the court should engage in a de novo stan-
dard of review because first amendment rights were implicated
by the protective order; (2) that according to Seattle Times Co.
v. Rhinehart, 467 U.S. 20, 32 (1984), protective orders such as
the one here at issue limit first amendment freedoms unless they
are no broader than necessary to protect the governmental in-
terests furthered by Rule 26(c), see Procunier v. Martinez, 416
U.S. 396, 413 (“First, the regulation or practice in question must
further an important or substantial governmental interest
unrelated to the suppression of expression . . . . Second, the
limitation of First Amendment freedoms must be no greater than
is necessary or essential to the protection of the particular govern-
mental interest involved.”); (3) that the order violated Rule 26(c)
and also the first amendment by shifting the burden with regard
to confidentiality designations from the party desiring such
designation to the protesting party; (4) that the order improperly
restricted the use of non-confidential discovered materials to use
in this case; and (5) that the order likewise improperly prohibited
plaintiffs’ attorneys from using confidential material in other
litigation in which they are participants. Cipollone v. Liggett
Group, 106 F.R.D. 573 (D.N.J. 1985).
Defendants appealed, and in the alternative sought man-
damus. The Third Circuit found this court’s order to be non-
appealable, Cipollone v. Liggett Group, 765 F.2d 1108, L117 (3d
Cir. 1986), but concluded that it did have mandamus jurisdic-
tion pursuant to 28 U.S.C. §1651, because the matter at issue
involved the disclosure of confidential materials, 765 F.2d at 1118.
The Third Circuit thereupon determined that this court had
erred in two ways. First, it had misread Seattle Times when it
concluded that an order prohibiting the disclosure of informa-
tion obtained under the discovery rules violates the first amend-
ment unless it meets the “least restrictive means” test. Rather
the Third Circuit explained, the Supreme Court’s first amend-
ment language in Seattle Times was mere dictum, and as such
was outweighed by those portions of the opinion that emphasized
that the discovery process is not a forum traditionally open to
the public, and that held that “a protective order . . . entered
B-5
on a showing of good cause does not offend the First Amend-
ment.” 467 U.S. at 37; see New York v. United States Metal Refin-
ing Co., 771 F.2d 796, 802 (3d Cir. 1955). The Third Circuit
then stated as follows:
We may summarize thus. Seattle Times required the
district court merely to inquire whether the defen-
dants had demonstrated good cause for the protec-
tive order; the district court instead applied a least
restrictive means test. The good cause standard is
significantly less demanding than the least restrictive
means test; the court’s error, therefore, may have
worked a serious detriment to the defendants.
Second, the Third Circuit determined that this court had im-
properly exercised de novo review, as such review was premised
on the perceived constitutional question at issue, which issue
did not actually exist under a proper reading of Seattle Times.
This court was therefore instructed on remand to review the
magistrate’s order to determine whether it is “clearly erroneous
or contrary to law,” 28 U.S.C. § 636(b)(1)(A), particularly with
regard to whether that order was based on a sufficient showing
of “good cause.” The Third Circuit added that this court had
erred in concluding that Rule 26(c) obliged it to require defen-
dants to show good cause for protected status on a document-
by-document basis, as an umbrella order is appropriate for com-
plex litigation such as this. Having been so instructed, the court
turns once again to the task of evaluating the appropriateness
of the magistrate’s protective order.
DISCUSSION
I. The Question of Good Cause
Plaintiffs contend that Paragraph 2 of the protective order,
limiting use of non-confidential discovery materials to litiga-
tion in this case! is not supported by “good cause” as required
under Rule 26(c).
‘ Paragraph 2 applies to all discovery materials. Plaintiffs do ©: challenge
the paragraph’s limitation as it applies to “confidential” materiai.
B-6
Rule 26(c) states:
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 order which justice requires to protect a party
or person from annoyance, embarrassment, oppres-
sion, or undue burden or expense . .
The Third Circuit opinion above explicitly guides the court
in its application of this language to the case at hand. The opi-
nion stressed that defendants have the burden of “demenstrating
a particular need for protection.” Cipollone v. Liggett Croup,
Inc., 785 F. 2d 1108, 1121 (3d Cir. 1986). The opinion coun-
seled, “Broad allegations of harm, unsubstantiated by specific
examples or articulated reasoning, do not satisfy the Rule 26(c}
test .. . . Moreover, the harm must be significant, not a mere
trifle.” Id. The Third Circuit, as an example of an argument
that failed to establish good cause, cited a Second Circuit opi-
nion finding insufficient to support a protective order the par-
ty’s broad allegations that disclosure would injure them in the
industry and community. Id., citing Joy v. North, 692 F. 2d
880, 894 (2d Cir. 1982), cert. denied, 460 U.S. 1051 (1983).
The Third Circuit summarized as follows:
We add to the district court’s comments only our own
understanding that, because release of information
not intended by the writer to be for public consump-
tion will almost always have some tendency to em-
barrass, an applicant for a protective order whose
chief concern is embarrassment must demonstrate tiat
the embarrassment is particularly serious. As embar-
rassment is usually thought of as nonmonetizable
harm to individuals, it may be especially difficult for
a business enterprise, whose primary measure of well-
being is presumably monetizable, to argue for a pro-
tective order on this ground. . . . [T]o succeed, a
business will have to show with some specificity that
B-7
the embarrassment resulting from dissemination of the
information would cause a significant harm to its com-
petitive and financial position.
id.
The magistrate’s protective order did not contain specific writ-
ten findings that good cause existed for prohibiting plaintiffs
either from disseminating the fruits of non-confidential discovery
to the public or from utilizing discovery in other litigation. The
court, upon analysis of the order itself, the transcript of the pro-
ceedings before the magistrate, and defendants’ briefs and oral
arguments, identifies five specific arguments for “good cause”
under Rule 26(c): 1) that defendants will suffer financial and
other embarrassment; 2) that fairness at trial will be compromis-
ed; 3) that plaintiffs are estopped from disseminating this
material by a prior agreement of plaintiffs’ counsel; 4) that
discovery in this case will be facilitated; 5) that dissemination
constitutes an abuse of the discovery process. The court examines
whether any of these arguments constitutes “good cause” for
limiting use of discovery solely to this case.’
(1) Financial and other embarrassment
The order signed by Judge Cowen, submitted by defendants,
contained the following general language in its preamble:
And it further appearing that the confidential business
records and private information of the parties should
be given the protection of an order of this Court to
prevent injury to and invasion of the confidential pro-
perty of the parties by reason of any disclosure not
otherwise necessitated by the parties’ lawful interests
in this litigation only, and good cause appearing .. .
* The court does not attempt to identify the grounds upon which the
magistrate’s general finding of good cause was based. The court analyzes
whether any of these arguments could support the magistrate’s finding.
}
B-8
The order does not specify or elaborate on the “injury” which
the order is designed to prevent. Defendants, in their brief,
elaborate on the nature of this “injury.”
The likelihood of financial and other forms of embar-
rassment from dissemination was obvious when the
protective orders were entered, and they remain
so... . This litigation, which has been closely follow-
ed by the financial community and the press, has
resulted in wide gyrations in the values of the defen-
dants’ stock, and plaintiffs’ counsel have met with in-
vestment advisers to discuss this litigation in an at-
tempt to affect the market price of the defendants’
stock.
Defendants’ Memorandum of Law in Support of Protective
Order of March 25, 1985, at 12.
In essence, defendants now argue that if the truth be known
and discovery disclosed it might prove embarrassing and affect
the market price of defendants’ stock. Such a sweeping allega-
tion, however, does not reach the level of specificity that the
Third Circuit has emphasized is required by Rule 26(c). Defen-
dants have shown that their financial standing has been affected
by this and related litigation. Defendants have not substantiated,
however, how preventing the release of all discovery materials
is needed to prevent particularized, significant injury to their
financial and competitive position. Defendants have not iden-
tified a single document which they contend will or might have
such an effect.
The inadequacy of defendant’s showing is illustrated by con-
trasting a recent case in which a corporation made a sufficiently
particularized showing to justify a finding of “good cause” to
retain a protective order. See Tavoulareas v. Washington Post
Co., slip op., Nos. 80-3032, 80-2387 (D.D.C. Aug. 11, 1986). In
Tavoulareas, Mobil Corporation presented a statement explain-
ing how release of discovered materials would significantly im-
pair specific business relationships of Mobil in Saudi Arabia.
B-9
The evidence presented explained how release of these
documents would destroy the confidentiality necessary to main-
tain those ongoing relationships. The court found this to be a
sufficient showing under Rule 26(c) both to justify the initial
entry of the order and to justify the order’s retention after
litigation.
Defendants, in contrast, allege only that release of discovery
materials will cause their general business standing to decline.
The only specific “example” cited by defendants is the fact that
Philip Morris stock increased in value ten points after the Third
Circuit’s issuance of their writ of mandamus. Defendants’
Memorandum, at 17; Defendants’ Reply Memorandum, at 7.
The probative value of this event is uncertain.’ More fundament-
ally, this isolated incident does not constitute a showing of par-
ticularized and significant injury required by Rule 26(c). Defen-
dants never identify specifically how dissemination will injure
their business, as did Mobil in Tavoulareas; instead, defendants
offer only the broad allegation that release will harm their
overall standing. Rule 26(c), as made plain by the Third Cir-
cuit, requires more for a showing of good cause.
Defendants’ arguments are even less persuasive with regard
to limiting use of discovery material in other litigation. The
causal chain behind their position is as follows. Defendant’s
financial and competitive position may be harmed by this type
of litigation; prohibiting use of Cipollone/Haines discovery in
other litigation makes such litigation more difficult to sustain;
consequently, defendant will suffer significant injury if discovery
is not confined to this litigation. Defendants’ argument not on-
ly fails to substantiate a particularized and significant injury
as required by Rule 26(c). The argument also runs counter to
a fundamental purpose of discovery under the Federal Rules.
' Defendants do not explain the surrounding market context of this rise: thus.
the court cannot know if the Third Circuit’s opinion was the critical or even
an important factor in the price change. Additionally, defendants offer no
evidence that stock prices fell due to this court’s reversal of the entry of the
order.
B-10
All of the Federal Rules are informed by the admonition of Rule
1 that they “be construed to secure the just, speedy, and inex-
pensive determination of every action.” Acting consistent with
this purpose, a number of courts have rejected requests to limit
the use of discovery to the litigation in which it is initially ob-
tained. Their reasoning is best summarized by the opinion of
Judge Wisdom in Wilk v. American Medical Ass'n, 635 F.2d
1295, 1299 (7th Cir. 1980), which states that the presumption
of open discovery
should operate with all the more force when litigants
seek to use discovery in aid of collateral litigation on
similar issues, for . . . access in such cases materially
eases the tasks of courts and litigants and speeds up
what may otherwise be a lengthy process. Particularly
in litigation of this magnitude, we, like the
Multidistrict Panel, are impressed with the
wastefulness of requiring the [collateral party] to
duplicate discovery already made . . . . We therefore
agree with the result reached by every other appellate
court which has considered the issue, and hold that
where an appropriate modification of a protective
order can place private litigants in a position they
would otherwise reach only after repetition of
another’s discovery, such modification can be denied
only where it would tangibly prejudice substantial
rights of the party opposing modification.
See Marcus, Myth and Reality in Protective Order_Litigation,
69 Cornell L. Rev. 1, 41 (1983); see also Cipollone v. Liggett
Group, Inc., 106 F.R.D. at 585-586 (citing several cases stan-
ding for this proposition). Here, defendants’ showings simply
do not establish that substantial rights will be so tangibly pre-
judiced that injustice will result unless the discovery obtained
in this litigation is limited to it. Indeed, no direct purpose can
be discerned from their position except to discourage future iden-
tical actions against them by maintaining the costliness of the
discovery involved to other plaintiffs. As noted by this court in
its previous opinion herein,
B-11
The court cannot ignore the might and power of the
tobacco industry and its ability to resist the individual
claims asserted against it and its individual members.
There may be some claimants who do not have the
resources or such able and dedicated counsel as in this
case to pursue the thorough investigation which these
cases require. To require that each and every plain-
tiff go through the identical long and expensive pro-
cess would be ludicrous. Even from the point of view
of the defendants (though they resist), it would seem
that they would benefit by avoiding repetition of the
same discovery in each and every case.” Cipollone, 106
F.R.D. at 577.
So long as the initial litigation has not itself been instituted in
bad faith for the purpose of obtaining documents for other ac-
tions, and so long as the interests of those represented in the
initial litigation are being fully and ethically prosecuted, the
Federal Rules do not foreclose the collaborative use of discovery.
See American Telephone & Telegraph Co. v. Grady, 594 F.2d
594, 597 (7th Cir. 1978); Johnson Foils, Inc. v. Huyck Corp.,
61 F.R.D. 405, 410 (N.D.N.Y. 1973).
Defendants expressed concern at oral argument that each
court should have the right to control discovery in the particular
matter before it, and that making the discovery in this matter
available in others will defeat that control. That concern is
susceptible to easy resolution. Any plaintiff seeking to utilize
the discovery in this matter for his or her own purposes shall
be required to seek leave of the court before whom the matter
is pending. That court can resolve any objections based upon
relevance or otherwise.
Defendants have not made a showing that they will suffer
“embarrassment” or injury sufficient to support the magistrate’s
finding of good cause under Rule 26(c).
2) Fairness at trial
Defendants in their brief on this motion assert that the good
cause supporting the order lies also in the preservation of a fair
B-12
trial. Defendants claim that “extra-judicial use of the documents
covered by the protective order could affect the fairness of the
trials themselves, and would be in conflict with the purpose of
discovery.” Defendants’ Memorandum, at 12. At oral argument,
counsel for defendants referred to news coverage, including a
New York Times article in which plaintiffs’ counsel was quoted.
Transcript of Proceedings, September 25, 1986, at 25. Accor-
ding to defendants’ counsel, plaintiffs’ counsel inaccurately
characterized certain documents to the prejudice of defendants.
Id. Defendants argue that “one has to assume that the judge
was aware of these facts and took them into account when he
decided to enter this order.” Jd. at 26.*
The court is satisfied that appropriate precautions can be
taken in the jury selection process to guard against the possibility
that the publication of such material might affect the outcome
of the trial. This argument does not support the magistrate’s
finding of good cause.
(3) Estoppel
Defendants, in their brief, claim that they initially agreed
to comply with broad discovery requests on plaintiffs’ assurances
that the discovered documents would be used only for this litiga-
tion, and that it would be “grossly inequitable” for these
documents to be “let loose for the purposes of harming the defen-
dants.” Defendants’ Memorandum, at 12.
The court finds the claim to be totally without support. The
agreement which plaintiff's counsel reached was one made pen-
ding entry of a protective order and was scrupulously honored
by a plaintiffs’ counsel. Therefore, restriction on the use of
discovery materials as to this litigation only cannot be predicated
upon any agreement or representation by plaintiffs counsel.
The magistrate stated at the proceeding, however. that he read nothing
in the New York Times article that was “improper at ai!” Transcript of Pro-
ceedings, March 25, 1985, at 39.
B-13
(4) Facilitation of discovery in this case
The magistrate, at the March 25, 1985 hearing at which he
issued the protective order, explained the rationale behind his
decision.
[T]he Court has decided that I’m going to go with
the protective order that has been propounded -- pro-
posed by the defendant Reynolds in both the Haines
and Cipollone case. In the event this decision is ap-
pealed or reviewed by higher authority, I want the
record to reflect that it’s my opinion, it’s my judgment
that having this order in place will facilitate the ef-
ficacious production of documents and discovery of
the defendants to some extent and that it will
streamline the litigation to the point where the
discovery sought and had in this case will be for this
case and this case alone, and that at the time this case
is tried that, of course, anything that goes into the
record at that time will be a public matter and public
information.
Transcript of Proceedings, March 25, 1985, at 56. Thus, in the
magistrate’s own words, the good cause behind the order was
his belief that the order would “facilitate” and “streamline” the
litigation.
The magistrate’s reasoning, though based on commendable
motives, misconstrues the nature of the “good cause” require-
ment of Rule 26(c). The magistrate apparently felt that limiting
the use of discovery to this case alone would “secure the just,
speedy and inexpensive determination” of this action, consis-
tent with the intent expressed in Rule 1 of the Federal Rules.
Rule 26(c), however, does not empower individual courts to make
such policy decisions. The Rule allows a court to “protect a party
or person” -- the focus is on injury to a specific individual, not
on general concerns of case administration. Rule 26(c),
understood as a piece of a larger framework, reflects a policy
decision that the “just, speedy and inexpensive” determination
of actions is best furthered by permitting the entry of protec-
tive orders only to prevent injury to individuals.
B-14
The Third Circuit explanation of “good cause” recognizes that
the Rule 26(c) inquiry must focus on the harm defendants will
allegedly suffer from dissemination of discovery material. The
Third Circuit directed this court to test defendants’ allegations
of harm against the legal standards they provided. Nowhere in
the Third Circuit’s directive is this court told that the “good
cause” supporting a protective order may be general concerns
of trial administration.
The magistrate’s rationale that entry of the protective order
would facilitate and streamline this litigation is not sufficient
“good cause” under Rule 26(c).
(5) Abuse of the discovery process
|
Defendants’ counsel at oral argument contended that good
cause may be established by a showing that a protective order
is needed “to prevent an abuse of the discovery process.” Jd. at
20. Defendants’ counsel explains that the sole purpose of the
discovery process is to help the parties prepare for litigation.
Anything that goes beyond that constitutes an abuse of the
discovery process . . . .” Id. Because dissemination to the public
and use in other litigation goes beyond the “sole purpose” of
discovery, the magistrate had “good cause” to enter this order
to protect from that abuse.”
This argument, like that concerning facilitation of discovery,
ignores the language and misconstrues the purpose of Rule 26(c).
The Supreme Court has stated that Rule 26(c) protective orders
are designed to prevent abuse of discovery, but abuse in the sense
of causing injury to particular individuals.
* The magistrates’ order contains no specific finding that plaintiffs’ proposed
use is an abuse of the discovery process. Furthermore, Judge Cowen’s remarks
at the proceeding contain no such reference. Defendant's counsel suggests,
though, that “we have to assume” that Judge Cowen had the fundamental
principles of discovery in mind when he entered the order.
, B-15
There is an opportunity, therefore, for litigants to ob-
tain -- incidentally or purposefully -- information that
not only is irrelevant but if publicly released could
be damaging to reputation and privacy. The govern-
ment clearly has a substantial interest in preventing
this sort of abuse of its processes.
Seattle Times Co. v. Rhinehart, 467 U.S. 20, 35 (1984). Again,
the Third Circuit’s discussion of “good cause” shows that pro-
tection from injury to individuals must be the focus of a Rule
26(c) protective order. Thus, the mere fact that plaintiffs in-
tend to use these materials outside of this litigation is not “good
cause” to support the protective order, unless defendants can
establish that the discovery was not procured in good faith for
the purposes of this litigation. No such showing is made or
claimed. Absent a showing that plaintiffs use will sufficiently
injure the defendants, the magistrate had no good cause to limit
use of the discovery to this case alone.
In summary, the magistrate’s finding that defendants had
shown good cause to support an order that nonconfidential
discovery “shall be used solely for the purpose of this case” is
clearly erroneous and contrary to law. To the extent that the
magistrate found good cause based on embarrassment to defen-
dants, the effect of dissemination on the fairness of trial, or the
prior conduct of plaintiffs’ attorney, the finding is clearly er-
roneous. To the extent that the magistrate found good cause
based on a desire to facilitate discovery or to prevent an abuse
of the discovery process, the finding is contrary to law.
II. The Propriety of an Umbrella Order
Finally, the Court of Appeals pointed out that this court
reasoned improperly when it vacated that aspect of the
magistrates order that permitted defendants to designate
documents “confidential,” with plaintiffs bearing the respon-
sibility of contesting such designation. 765 F.2d at 1122.
This court expressed its concern then and repeats it now. The
wholesale designation of confidentiality by defendants places
B-16
an undue and unnecessary burden upon plaintiff. The poten-
tial of an ultimate award of sanctions does not relieve plain-
tiffs counsel of the need to expend time and money in the first
instance to set aside that designation. The fact that they may
be ultimately reimbursed after the expenditure of further time
and money seeking such reimbursement is insufficient and fails
to recognize the inequality of the parties before the court in
reference to their economic positions and their relative abilities
to pursue or resist discovery.
According to the Third Circuit, this court erred when it con-
cluded that such order shifted the burden of proof to plaintiffs
in violation of Rule 26(c). Rather, the Third Circuit noted, it
is appropriate and in keeping with the Manual for Complex
Litigation to utilize an “umbrella order” for confidentiality
designations, in which groups of documents may be marked con-
fidential subject to the good faith requirement that defendants
invoke such protection only for documents that are truly con-
fidential. Having been so instructed, the court concludes that
the magistrate’s determination was not clearly erroneous or con-
trary to law in this regard, and therefore upholds the aspect of
the magistrate’s order that permits defendants to make an in-
itial designation of confidentiality, subject to their determina-
tion that such designation is warranted in good faith, and sub-
ject to plaintiff's later opportunity to challenge such designa-
tion and request sanctions pursuant to Fed. R. Civ. P. 26(g).
CONCLUSION
The court abides by its previous reversal of Paragraph 2 of
the magistrate’s order as it applies to nonconfidential materials.
The court orders that any other plaintiff seeking to utilize
discovery from this matter comply with the procedures described
in the opinion. The court abides by its previous modification
of Paragraph 7 of the order. The court affirms the propriety of
the “umbrella order” entered by the magistrate. The court directs
plaintiffs’ counsel to submit an appropriate order.
S/ H. LEE SAROKIN
H. LEE SAROKIN, U.S.D.]J.
C-1
Opinion of the Court of Appeals
Dated March 12, 1986
ANTONIO CIPOLLONE,
Individually and as the Executor of
the Estate of Rose D. Cipollone,
Plaintiff-Respondent,
LIGGETT GROUP INC.,
PHILIP MORRIS INCORPORATED,
and LOEW’S THEATRES, INC.,
Defendants-Petitioners.
LIGGETT GROUP INC.,
PHILIP MORRIS INCORPORATED,
and LOEW’S THEATRES, INC.,
Petitioners,
HONORABLE H. LEE SAROKIN,
United States District Judge,
District of New Jersey,
Nominal Respondent.
C.2
SUSAN HAINES,
as Administratrix ad Prosequendum
and Executrix of the Estate of Peter F. Rossi.
Plaintiff-Respondent,
LIGGETT GROUP INC.,
LOEW’S THEATRES, INC..,
R.J. REYNOLDS TOBACCO Co..
PHILIP MORRIS INCORPORATED,
and THE TOBACCO INSTITUTE,
Defendants-Petitioners.
LIGGETT GROUP INC..,
LOEW’S THEATRES, INC.,
R.J. REYNOLDS TOBACCO CO.,
PHILIP MORRIS INCORPORATED.
and LOEW’S CORPORATION.
Petitioners.
HONORABLE H. LEE SAROKIN.
United States District Judge,
District of New Jersey,
Nominal Respondent.
C-3
Nos. 85-3423, 85-3424, 85-5529
and 85-5530
United States Court of Appeals,
Third Circuit
Decided March 12, 1986
OPINION OF THE COURT
BECKER, Circuit Judge.
These appeals require us to apply the principles and case law
pertaining to Fed.R.Civ.P. 26(c) to a claim that certain
materials obtained in civil discovery but alleged by the produc-
ing party to be confidential may be disclosed by the discover-
ing party to the public. We must also consider whether we have
appellate jurisdiction over the district court’s interlocutory order
permitting disclosure of the materials.
The appeal arises from two of the several cases nationwide
in which cigarette smokers or their personal representatives have
instituted product liability suits against tobacco companies. In
both cases, the parties had already engaged in extensive
discovery, including production of a very large number of
documents by defendants, when the defendants sought protec-
tive orders that would prevent the dissemination, either to the
public or to counsel in other similar cases, of any documents
they had produced or would produce during discovery.' A
federal magistrate entered identical protective orders in both
cases along the lines requested by thre defendants.
On appeal fre the mayistrate’s orders, the district court
substantially revise. them. The court altered the procedure that
' Although the record is unclear on the poiat, it appears from representations
made at oral argument that confidentiality was maintained during the in-
itial phase of the litigation by tacit mutual understanding and that it was
only when plaintiffs’ counsel evinced an intention to use the material beyond
the confines of the litigation that the protective order phase of the litigation
began.
———————— oS —_
C-4
the magistrate’s orders had established for deciding disputed
claims of confidentiality, and restricted the orders’ scope so that
release of the documents to the press and public would have
followed almost as of course but for this appeal. The revised
orders also permitted the documents to be used in other cases
in which plaintiffs’ counsel was the counsel of record.
The defendants thereupon appealed to this Court and peti-
tioned for mandamus, asserting that the revised orders violated
Fed.R.Civ.P. 26(c) and reflected a skewed reading of Seattle
Times Co. v. Rhinehart, 467 U.S. 20, 104 S.Ct. 2199, 81
L.Ed.2d 17 (1984). The defendants also moved for an expedited
appeal and a stay of the district court’s orders, as well as
reinstatement of the magistrate’s orders pending appeal. We
granted those motions. The plaintiffs moved to dismiss the ap-
peals for want of appellate jurisdiction, and also moved to
dismiss the petition for mandamus.
We hold that: (1) we do not have jurisdiction to review the
order pursuant to the collateral order doctrine as enunciated
in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541,
69 S.Ct. 1221, 93 L.Ed. 1528 (1949); (2) we do have mandamus
jurisdiction to review the order pursuant to 28 U.S.C. § 1651
(1982); (3) because the district court’s reading of Seattle Times
constituted a clear error of law, the ruling on the defendants’
motion for protective orders was incorrect; and (4) the district
court also clearly erred in relying on Bose Corp. v. Consumers
Union of United States, Inc., 466 U.S. 485, 104 S.Ct. 1949, 80
L.Ed.2d 502 (1984) to exercise plenary review of the magistrate’s
protective order, for the court was bound to apply a “clearly
erroneous” standard. We therefore grant the writ of mandamus.
To assist the district court in future proceedings, we discuss two
additional points relevant to this case: the definition of “good
cause,” and the administration of protective order proceedings.
C-5
1, PROCEDURAL HISTORY
A. The Institution of the Suits
Rose Cipollone and her husband Antonio filed a complaint
against Liggett Group, Inc., Philip Morris, Inc., and Loew’s
Theaters, Inc., all manufacturers of cigarettes,” in the district
court for the District of New Jersey on August 1, 1983. Jurisdic-
tion was based on diversity of citizenship. 28 U.S.C. § 1332
(1982). The complaint alleged that defendants manufactured
or sold cigarettes and that Rose Cipollone had smoked defen-
dants’ cigarettes for almost forty years. As a result of her smok-
ing, the complaint alleged, she acquired bronchogenic car-
cinoma and other personal injuries; it further alleged that she
had experienced severe pain and suffering and that her illness
had caused her — and would continue to cause her — great ex-
pense. Plaintiffs sought compensation for Rose Cipollone’s in-
juries, suing under theories of negligence and strict liability.
Central to plaintiffs’ case was their allegation that defendants
had withheld scientific evidence from the public and had
misrepresented the effects upon health of smoking cigarettes.
They also sought compensation for Antonio Cipollone’s loss of
consortium.
Shortly thereafter, Susan Haines as administratrix ad prose-
quendum and executrix of the Estate of Peter F. Rossi brought
suit in the same court against the same three defendants as well
as R.J. Reynolds Tobacco Co. and the Tobacco Institute, Inc.
Haines was represented by the same attorney who represented
the Cipollones. Jurisdiction was based on diversity, and once
again the complaint alleged tortious conduct sounding in strict
liability and negligence. The complaint also included an allega-
tion of misrepresentation. The plaintiff sought compensation
for the decedent’s pain and suffering and for his death, which
she alleged was the result of his smoking defendants’ cigarettes.
* Liggett and Philip Morris are well-known tobacco companies. Loews,
originally an entertainment company but now a conglomerate, manufactures
True Cigarettes.
C-6
B. The Initial Protective Order
The district court ordered discovery in both cases under the
supervision of a federal magistrate. 28 U.S.C. § 636(b)(1)(A)
(1982). Discovery proceeded until March 1985, and a large
number of documents were produced by the defendants for in-
spection pursuant to Fed.R.Civ.P. 34. On that date, the defen-
dants moved for an “umbrella” protective order. The defendants
argued that such an order would facilitate the discovery pro-
cess by reducing the r-imber of occasions for lawyers’ con-
ferences and discussions about the confidentiality of particular
documents. Defendants also argued that they had good cause
for the protective order under Fed.R.Civ.P. 26(c)* and that the
closely analogous Seattle Times Co. v. Rhinehart, 467 U.S. 20,
104 S.Ct. 2199, 81 L.Ed.2d 17 (1984), permitted a protective
order in this case. Plaintiffs objected to the defendants’ proposal,
countering that the defendants’ real purpose was to make it im-
possible for plaintiffs in other suits against the cigarette com-
panies to share information gathered from the defendants. The
defendants’ strategy, said plaintiffs, was to raise the expense
of litigation for future plaintiffs, thus making the cost of suits
prohibitive.
’ The rule reads: 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 or alternatively, on matters relating to a deposition, the court in
the district where the deposition is to be taken may make any order which
justice requires to protect a party or person from annoyance, embarrassment,
oppression, or undue burden or expense, including one or more of the follow-
ing: (1) that discovery not be had; (2) that the discovery may be had only
on specified terms and conditions, including a designation of the time or place;
(3) that the discovery may be had only by a method of discovery other than
that selected by the party seeking discovery; (4) that certain matters not be
inquired into, or that the scope of the discovery be limited to certain mat-
ters: (5) that discovery be conducted with no one present except persons
designated by the court; (6) that a deposition after being sealed be opened
only by order of the court; (7) that a trade secret or other confidential research,
development, or commercial information not be disclosed or be disclosed on-
ly in a designated way; (8) that the parties simultaneously file specified
documents or information enclosed in sealed envelopes to be opened as directed
by the court....
C-7
After hearing the matter, the magistrate found for defendants.
On March 25, 1985, he entered identical protective orders in
both cases. The crucial aspects of the protective orders may be
summarized as follows: (a) “all information” produced in
discovery, presumably confidential and non-confidential alike,
could be used only for the instant cases and not for other cases
or other purposes; (b) the defendants had the responsibility in
the first instance of deciding in good faith which of their
documents were confidential and marking them accordingly;
(c) information marked confidential could be examined as a mat-
ter of course by plaintiffs’ lawyer, his associates, and experts
retained by plaintiffs or their lawyer for the cases; (d) if plain-
tiffs wished to disclose the information to anyone else, they had
to inform defendants’ counsel, who then had opportunity to app-
ly to the court to prevent that disclosure; and (e) all documents
and copies thereof had to be destroyed or returned at the con-
clusion of the litigation.*
* The relevant portions of the Magistrate’s protective order read as follows:
2. All information produced or exchanged in the course of this civil
action or any appeal arising therefrom (the “litigation”) shall be used
solely for the purpose of this case.
3. “Confidential information” as used herein means any information
which is designated as “confidential” . . . . Information shall be designated
as confidential only upon a good-faith belief that the information falls
within the scope of confidential information under the Federal Rules
of Civil Procedure and the precedents thereto.
6. Confidential information may be inspected only by the following
persons:
(a) Counsel of record for plaintiff and defendants [and other lawyers
employed by plaintiff and defendants for this case];
(b) Experts retained by or on behalf of any party. ...
10. Prior to the disclosure of any confidential information to any per-
son, other than outside counsel and their employees or medical experts,
the party seeking disclosure shall advise counsel and the Court, in
writing, of the name, address and occupation of the person to whom
counsel proposes to disclose. . .. Within twenty (20) days after such ad-
vice, counsel to whom notice is given may... give written notice to
adverse counsel of an application to this Court for an order prohibiting
(footnote continued)
C-8
C. Plaintiffs’ Appeal to the District Court
Plaintiffs appealed the protective order to the district court,
arguing that the order violated plaintiffs’ first amendment rights
to disseminate the information that they had received through
discovery. Plaintiffs relied on Seattle Times, supra, arguing that
the defendants and the magistrate had misconstrued the
Supreme Court’s holding in that case. They also argued that
the defendants had failed to demonstrate good cause as required
for a protective order by Fed.R.Civ.P. 26(c).
The district court filed a lengthy opinion, covering its scope
of review of the magistrate’s decision, the meaning and relevance
of Seattle Times, the notion of “good cause” in Fed.R.Civ.P.
26(c), and the proper scope of the protective order. Disposi-
tion of the appeal requires that we describe each part of the
district court’s opinion in some detail.
1. The District Court’s Scope of Review of the Magistrate's
Protective Order
Although 28 U.S.C. § 636(b)(1)(A) states that a magistrate’s
order is not to be reconsidered unless it is “clearly erroneous
or contrary to law,”’ the district court ruled that its standard
of review was plenary, relying on Bose Corp. v. Consumers
Union of the United States, Inc., 466 U.S. 485, 104 S.Ct. 1949,
the proposed disclosure. No such disclosure shall take place until the
Court has acted upoi such application.
13. Within forty-five (45) days after the final adjudication or settle-
ment of all claims in this case, counsel for the parties shall either return
all documents produced, if so requested by the producing party, or shall
destroy such documents.
App. at 52-56, 59-63.
>’ See also Fed. R.Civ.P. 72(a); General Rule 40 D(4) of the U.S. Dist. Ct. for
the Dist. of N.J. See generally United States v. Raddatz, 447 U.S. 667, 673,
100 S.Ct. 2406, 2411, 65 L.Ed.2d 424 (1980); Merritt v. International
Brotherhood of Boilermakers, 649 F.2d 1013, 1016-17 (5th Cir. 1981).
C-9
80 L.Ed.2d 502 (1984), which held that an appellate court has
plenary review over the finding of actual malice in libel cases.
See Dist.Ct.Op. at Al7-A18.°
2. The District Court’s Analysis of Seattle Times
The district court next engaged in a lengthy first anmendment
analysis of protective orders in discovery. It reviewed the con-
flicting approaches of the circuit courts prior to Seattle Times’
and then observed that Seattle Times had resolved the issue.
The court quoted what it believed to be the relevant analysis
from that case:
The critical question that this case presents is whether
a litigant’s freedom comprehends the right to
disseminate information that he has obtained pur-
suant to a court order that both granted him access
to that information and placed restraints on the way
in which the information might be used. In address-
ing that question it is necessary to consider whether
the “practice in question [furthers] an important or
substantial governmental interest” and whether “the
limitation of First Amendment freedoms [is] no
greater than is necessary to the protection of the
*28 U.S.C. § 636(b)(1)(B) also allows a district judge to designate a magistrate
to submit to the court a report containing proposed findings of fact and recom-
mendations for disposition. The court reviews de novo any portions of the
report to which parties object. Jd. The parties in this case agree that the
magistrate was acting pursuant to § 636(b)(1)(A).
’ One court required a showing of serious harm in the absence of a protective
order and a demonstration that the proposed protective order would be the
least restrictive means possible for avoiding the harm. See In re Halkin, 598
F.2d 176, 191-96 (D.C.Cir.1979). Another court held that the first amend-
ment did not affect a court’s authority to issue a protective order. See Inter-
national Products Corp. v. Koons, 325 F.2d 403, 407-08 (2d Cir.1963). A
third court took a middle course, applying a balancing test that includes the
magnitude of the threatened harm in the absence of a protective order, the
breadth of the order, and the order’s probable effectiveness. See In re San
Juan Star Co., 662 F.2d 108 (1st Cir.1981).
C-10
particular governmental interest involved.” Procunier
v. Martinez, 416 U.S. 396, 413, 94 S.Ct. 1800, 1811,
40 L.Ed.2d 224 (1974).
104 S.Ct. at 2207 (quoted in Dist.Ct.Op. at A21-A22).
The district court believed the passage established that, when
a case involves matters of substantial public interest, a protec-
tive order implicates first amendment concerns and some con-
stitutional analysis is required. Dist.Ct.Op. at A24-A25. The
district court went further, explicitly analogizing the case before
it to Seattle Times and holding that the same constitutional in-
quiry was appropriate in both cases: “It therefore remained
there, and remains here, to decide only whether the protective
orders at issue limited first amendment freedoms more than
necessary or essential to protect the governmental interests fur-
thered by Rule 26(c).” Dist.Ct.Op. at A22.
The court did note one point of confusion about Seattle Times
that is relevant to our discussion below. Despite the Supreme
Court’s apparent endorsement in the above passage of a least
restrictive means analysis, its holding subsumes a different
analysis entirely. The district court quoted that holding in full:
We therefore hold that where, as in this case, a pro-
tective order is entered on a showing of good cause
as required by Rule 26(c), is limited to the context
of pretrial civil discovery, and does not restrict the
dissemination of the information if gained from other
sources, it does not offend the First Amendment.
104 S.Ct. at 2209-10 (footnote omitted) (quoted in Dist.Ct.Op.
at A22-A23). As the district court noted, this explicit holding
appears to exclude any first amendment analysis from the deci-
sion about whether a court should issue a protective order; that
is, it implies that “if a protective order passes muster under Rule
26(c), it must, of necessity, be constitutional.” Dist.Ct.Op. at
A24. However, the analytical passage quoted earlier, see supra
pp. 1113-14, implies that a court must apply a least restrictive
alternative test to all proposed protective orders. Although it
noted this apparent contradiction, the district court did not
C-11
resolve it explicitly, apparently assuming that Seattle Times im-
posed a least restrictive alternative test and that the test had
to be read into the holding. See Dist.Ct.Op. at 24-25; see
generally infra part IV (discussing the district court’s first
amendment analysis).°
3. The District Court’s Findings on Good Cause
The district court noted that the party seeking the protec-
tive order bore the burden of proving that there was good cause
for such an order. It also observed that a protective order could
issue only upon a showing that disclosure would result in “clearly
defined and serious injury.” Dist. Ct.Op. at A26. Although early
in its opinion the court suggested that there could be good cause
only for revelation of technical information that might hurt one
of the defendants’ competitive positions,® the court later made
it clear, as the caselaw has established, that lesser concerns, in-
cluding “embarrassment,” might constitute good cause for a pro-
tective order. Dist.Ct.Op. at A32 n. 8."
* The district court may have been motivated to make this assumption by its
perception that a protective order would favor the economically powerful
defendants and prevent the public and the relatively impecunious plaintiffs
from gaining access to material in which there was an enormous public in-
terest. See id. at All (“The court cannot ignore the might and power of the
tobacco industry and its ability to resist the individual claims asserted against
it and its individual members.”)
* The court wrote that
{djefendants [are] entitled to protection from the disclosure of matters
which are truly secret, where disclosure thereof will affect the opera-
tion of their business, but not their potential liability. Formulae,
marketing strategy, and other matters whose disclosure would affect
defendants with their respective competitors or in conjunction with the
day-to-day operation of their business are entitled to protection.
Al0-Al1l1.
© Rule 26(c) protects parties from a broad range of troubles: “annoyance,
embarrassment, oppression, or undue burden or expense.” Consistent with
the spirit of the Rule, courts have he!d that a showing of harm to nonbusiness
interests may constitute a good cause. See, e.g., Krause v. Rhodes, 671
(footnote continued)
C-12
After discussing these broad legal issues, the court turned to
the particular facts before it, and found that neither the
magistrate’s opinion nor the submissions of the defendants sus-
tained the burden of justifying the protective order. It found
that “the reasons asserted are quite conclusory,” id. at A28, and
that defendants’ suggestion that the magistrate’s protective order
would ‘streamline the litigation’ was not sufficient to carry the
evidentiary burden. Id.
4. The Scope of Confidentiality
As noted above, the magistrate’s order applied to all infor-
mation produced during discovery. See supra p. 11; Magistrate's
Order 42, supra note 4. The district court criticized this ap-
proach, stating that non-confidential maierial was, by defini-
tion, information for which no Rule 26(c) good cause had been
shown and that therefore no protective order should protect such
material. Dist.Ct.Op. at A29.
The district court also criticized the portion of the magistrate’s
order that had prohibited the use in any other case of the
materials produced in this case’s discovery. The district court
said that the prohibition “undermine[d] the purpose of the
Federal Rules of Civil Procedure ‘to secure the just, speedy, and
inexpensive determination of every action.”” Dist.Ct.Op. at A34
(quoting Fed.R.Civ.P. 1)(footnote omitted). Additionally, the
court noted that prohibiting the use of materials from one case
in other cases would burden both the plaintiffs and the
defendant:
There may be some claimants who do not have the
resources. ..to pursue the thorough investigation
which these cases require. To require that each and
F.2d 212 (6th Cir.) (government's interest in conducting thorough and con-
fidential investigations is ground for a protective order), cert. denied, 459
U.S. 823, 103 S.Ct. 54, 74 L.Ed.2d 59 (1982) Galella v. Onassis, 487 F.2d
986 (2d Cir.1973)(protection of public figure from physical and emotional
harassment). The Supreme Court has expressly stated that Rule 26(c) pro-
tects privacy interests. Seattle Times, supra, 104 S.Ct. at 2208 n. 21.
C-13
every plaintiff go through the identical, lone [sic] and
expensive process would be ludicrous. Even from the
point of view of the defendants (though they resist),
it would seem that they would benefit by avoiding
repetition of the same discovery in each and every
case.
Id. at All.
5. The District Court’s Amendment to the Protective Order
The district court amended the magistrate’s protective order
in light of its conclusions as outlined above. The court’s amend-
ments were as follows: (a) whereas the magistrate’s protective
order had limited the use of all materials produced in discovery,
the amended protective order would apply only to confiden-
tial materials and would not restrict the use of nonconfidential
materials; (b) rather than making defendants’ good faith the
only limitation on their freedom to designate documents con-
fidential, and forcing the plaintiffs to challenge the designa-
tion subject thereafter to rulings by the Court, the amended
order required the defendants to demonstrate in a document-
by-document showing to the court that each document they
believed to be confidential was so in fact; the advantage of this
system, the court explained, was that it “does not allow misuse
of the confidentiality designation and places the burden of pro-
ving such confidentiality squarely upon defendants, as required
by Rule 26(c) and the first amendment,” id. at A29-A30; (c)
although the court agreed that confidential information could
not be released to the public, its order differed from the
magistrate’s in that the court’s order allowed plaintiffs’ counsel
to use any and all confidential materials in cases in which he
was a participant, id. at A32; and (d) the amended order
eliminated entirely the provision requiring counsel to return or
destroy all documents produced in discovery; this was done vir-
tually without discussion, because defendants had not opposed
plaintiffs’ motion to eliminate the provision."
'' The relevant portions of the district court’s protective order read as follows .
(all parts of the district court’s order that were not part of the magistrate’s
(footnote continued)
C-14
The defendants immediately moved the district court for a
stay of its own protective order. The district court granted a
stay conditioned on defendants’ instituting proceedings in the
court of appeals, which they did promptly. We granted a fur-
ther stay pending disposition of the appeal, having been inform-
ed that apnellees had scheduled a press conference for the mor-
ning following expiration of the stay and that they would, at
that time, release to the public all the documents obtained in
discovery.
Il. COLLATERAL APPEALABILITY
[1] Discovery orders, being interlocutory, are not normally
appealable. See Borden Co. v. Sylk, 410 F.2d 843, 845 (3d
Cir.1969); 8 C. Wright & A. Miller, Federal Practice and Pro-
cedure: Civil § 2006 at 29 (1970 & Supp. 1985). The first issue
before us, therefore, is whether we have appellate jurisdiction.
The defendants make two arguments in favor of appellate
jurisdiction. First, they assert that the district court's protec-
tive order is a collateral order appealable under the rule of
order are italicized; all parts of the magistrate’s order that the district court
omitted are i square brackets; unchanged portions are unmarked):
2. All “confidential” information produced by defendants (or
exchanged] in the course of this civil action or any appeal arising
therefrom (the “ligitation”) may be used in all cases in which plain-
tiffs’ counsel in this action are counsel of record {shall be used
for the purpose of this case].
3. “Confidential information” as used herein means any docu-
ment [information] which is found by the court or agreed by the
parties to be [designated] “confidential”. . . . Information shall be
designated as “claimed confidential” only upon the good faith
belief that the information falls within the scope of confidential
information under the Federal Rules of Civil Procedure and the
precedents thereto. If defendants claim that a particular docu-
ment is confidential, it shall be the defendants’ burden to bring
a motion before the court to determine whether the document
in question is a confidential document under the Federal Rules
of Civil Procedure and the precedents thereto. Failure of defen-
dants to bring such a motion within ten days of advising plaintiffs’
(footnote continued)
C-15
Cohen v. Beneficial Industrial Loan Corp. , 337 U.S. 541 (1949).
In the alternative, they argue that this court should exercise its
statutory power of mandamus, 28 U.S.C. § 1651 (1982), to
review the order. We consider collateral appealability here and
the mandamus argument in part III infra."
Title 28 U.S.C. § 1291 (1982) provides that courts of appeals
may review only “final” decisions of the district courts. In Cohen
v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct.
1221, 93 L.Ed. 1528 (1949), however, the Supreme Court
established a narrow exception to the rule of finality. Cohen
counsel of any claim of confidentiality shall constitute a waiver of any
claim of confidentiality as to the document in question and permit
removal of the claim of confidentiality. Should the court determine that
the defendants have misused the “claimed confidential” designation,
it will consider awards of costs including counsel fees incurred as a result
of the misuse of said designation.
5. Confidential information may be inspected only by the following
persons:
(a) Counsel of record for the plaintiff and defendants in this or other
litigation, any lawyers specifically employed by them in connection with
this or other litigation and any employee of such counsel assisting with
this or other litigation:
(b) Experts retained by or on behalf of any party to provide assistance
or testimony in connection with this litigation.
9. Prior to the disclosure of any confidential information to any per-
son, other than counsel and their employees or experts, the party seek-
ing disclosure shall advise the court and counsel, in writing, of the name,
address and occupation of the person to whom counsel proposes to
disclose said confidential information. Within twenty days after such
advice, counsel to whom notice is given may. . . give written notice to
adverse counsel on an application to this court for an order prohibiting
such disclosure. No such disclosure shall take place until the court has
acted on such application.
(13. Within forty-five (45) days after the final adjudication or settle-
ment of all claims in this case, counsel for the parties either shall return
all documents produced, if so requested by the producing party, or shall
destroy such documents. ]
* Although we took this appeal before any documents had been challenged
under the district couri’s protective order, the appeal is ripe. It is clear that
Wek
held that a prejudgment order of a district court can be reviewed
if it falls within
that small class [of prejudgment orders] which final-
ly determine claims of right separable from and col-
lateral to, rights asserted in the action, too important
to be denied review, and too independent of the cause
itself to require that appellate consideration be defer-
red until the whole case is adjudicated.
Id. at 546. 69 S.Ct. at 1225. See also Mitchell v. Forsyth, — —
U.S. ——, ——, 105 S.Ct. 2806, 2815, 86 L.Ed.2d 411 (1985);
Richardson-Merrell, Inc. v. Koller, — — U.S. — —, — —, 105
S.Ct. 2757, 2761, 86 L.Ed.2d 340 (1985).
[2] Cohen’s progeny have established three requirements for
the review of non-final orders: to be reviewed the order must
“{1] conclusively determine the disputed question, [2] resolve
an important issue completely separate from the merits of the
action, and [3] be effectively unreviewable on appeal from final
judgment.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 468,
98 S.Ct. 2454. 2457, 57 L.Ed.2d 351 (1978). We have made
clear that each of the three requirements must be met before
appellate review is permitted. Eavenson, Auchmuty & Green-
wald v. Holtzman, 775 F.2d 535, 537 (3d Cir.1985); Metex
Corp. v. ACS Industries, Inc. , 748 F.2d 150, 153 (3d Cir. 1984);
Lusardi v. Xerox Corp., 747 F.2d 174, 177 (3d Cir. 1984); Gross
». G.D. Searle & Co., 738 F.2d 600, 602 (3d Cir. 1984). This
approach furthers the important goal of avoiding piecemeal
litigation.
we are not deciding mere hypothetical questions that we might avoid by refus-
ing jurisdiction at this time, for the parties have indicated to us that they dif-
fer sharply over the propriety of disseminating several documents. It is also
clear that. as the district court’s alleged errors are purely legal, see infra parts
IV and V. the issues before us are sufficiently concrete to allow for judicial
determination and will not be better defined by waiting. Thus, nothing would
be gained by waiting for a particular dispute to exercise appellate jurisdic-
tion. Moreover, there is danger that, if we did not take this appeal, some
documents would be released before we had the opportunity for review. That
potential harm, once done, could not be undone. See infra II1.A. Thus, this
may be the only opportunity for meaningful appellate review.
C-17
[3] The second prong is not met here because defendants’
claim touches on the merits of the underlying action. The
underlying action raises issues concerning whether and when
the defendants knew of the health hazards associated with smok-
ing cigarettes and what steps the defendants allegedly took to
mislead the public about those hazards. Defendants contend
that the materials should not be disseminated because they
would present a distorted and unfair picture about what the
defendants knew about the effects of cigarettes on health. Our
evaluation of defendants’ argument would take us into the merits
of the underlying action because we would have to make a judg-
ment about what defendants knew and what steps they may
have taken to mislead the public— precisely the issues at the
heart of the underlying action. See supra pp. 1111-12." Because
the second prong is not satisfied, we do not have jurisdiction
under the Cohen doctrine.
itl. MANDAMUS
[4] The All Writs Act, 28 U.S.C. § 1651(a) (1982), provides
that “[t]he Supreme Court and all courts established by Act of
Congress may issue all writs necessary or appropriate in aid of
their respective jurisdictions.” Although writs of mandamus are
extraordinary devices and we have read § 1651(a) narrowly,
mandamus has been held to be appropriate when a failure to
issue the writ would lead to the disclosure of confidential
materials. See, e.g., Bogosian v. Gulf Oil Corp., 738 F.2d 587
(3d Cir.1984); Jowa Beef Processors, Inc. v. Bagley, 601 F.2d
949 (8th Cir.1979); In re Halkin, 598 F.2d 176 (D.C.Cir. 1979).
In Sporck v. Peil, 759 F.2d 312, 314 (3d Cir.1985), we held
that a writ of mandamus should issue when (A) the party seek-
ing the writ has “‘no other adequate means to attain the relief
he desires,”” (quoting Allied Chemical Corp. v. Daiflon, Inc.,
449 U.S. 33, 35, 101 S.Ct. 188, 190, 66 L.Ed.2d 193 (1980)),
and (B) the court below has committed a clear error of law.
We consider these requisites in turn.
* This case is thus similar to State of New York v. United States Metal Refin-
ing Co., 771 F.2d 796 (3d Cir. 1985), in which a panel of this court held that
(footnote continued)
C-18
A. Other Avenues of Redress
No other paths to appellate review are available to defen-
dants. First, if defendants are required to wait until the final
order of the litigation, their appeal on this issue would be
valueless. The harms defendants seek to avoid are embarrass-
ment and prejudice in the community at large. Defendants thus
require injunctive relief, for compensatory damages would be
virtually impossible te assign. Unless the district court’s order
is vacated, the materials will be released; thereafter, it will be
impossible, practically speaking, to rectify the harm. See C &
C Products, Inc. v. Messick, 700 F.2d 635, 637-38 (11th
Cir. 1983) (appeal from district court’s modification of a pro-
tective order dismissed as moot because the materials had
already been released and “no order from this court can undo
that situation.”). Second, as we have already seen supra II.,
the district court’s order is not appealable under the collateral
order doctrine of Cohen v. Beneficial Industrial Loan Corp."*
B. Clear Error of Law
[5] Mandamu is not available tor abuse of discretion. Rather,
we exercise mandamus jurisdiction only if we find that the
district court committed a clear error of law. Sporck, 759 F.2d
at 314. This requirement is satisfied because the district court
made two clear errors of law. First, it misread Seattle Times
vu. Rhinehart and imposed under Fed.R.Civ.P. 26(c) a more
it did not have Cohen jurisdiction to review an order prohibiting dissemina-
tion of a report prepared by the State of New York about the pollution prac-
tices of United States Metal Refining Company (USMR). USMR’s argument
against dissemination was that the report was biased and inaccurate. We held
that because an evaluation of that argument would involve an inquiry into
the actual environmental practices of USMR, a decision on the protective order
would necessarily involve it with the merits of the underlying action. /d. at 800.
'* Neither can defendants obtain immediate appellate review by certification
pursuant to 28 U.S.C. § 1292(b) (1982), for the district court made no such
certification nor could it have, since that provision limits review by certifica-
tion to orders “an immediate appeal from [which] may materially advance
the ultimate termination of the litigation.” The protective order at issue here.
(footnote continued )
C-19
stringent good cause standard than was necessary or ap-
propriate. Second, on account of its misreading of Seattle Times,
it exercised plenary review over the magistrate’s order when the
“clearly erroneous” standard was required. As both of these er-
rors were germane to its decision, see discussion infra, they are
independent grounds for reversal. We take these matters up in
turn.
IV. THE DISTRICT COURT’S MISREADING OF
SEATTLE TIMES
As we have noted, the district court identified an ambiguity
in the Seattle Times opinion: it was unclear whether Seattle
Times mandated a Rule 26(c) analysis without regard to the
first amendment, or whether it required an analysis that in-
cluded a strict least restrictive means test. See discussion supra
pp. 1114-15. See also Post, The Management of Speech: Discre-
tion and Right, 1984 Sup.Ct. Rev. 169, 181-82 (noting the same
point). This ambiguity may be significant because the good cause
analysis, although by no means toothless, see infra part VI.A.
is significantly less stringent than the least restrictive means test.
The district court chose the latter alternative without explana-
tion and analyzed the case in first amendment terms, applying
the least restrictive means test. See Dist.Ct.Op. at A22. While
we recognize the ambiguity in Seattle Times, we believe for
several reasons that the district court misinterpreted Seattle
Times and that Seattle Times prohibits a court considering a
protective order from concerning itself with first amendment
considerations.
We recently had opportunity in a case very similar to this
one, State of New York v. United States Metal Refining Co..,
although not completely separate from the substantive issues of the case, supra
p. :118, is substantially collateral to them and is certainly not of the pivotal
nature required for certification. Cf. Evanson v. Union Oil Co. of Califor-
nia, 619 F.2d 72, 74 (Em.App. 1980); C. Wright & A. Miller, Federal Prac-
tice and Procedure: Civil § 2006 at 31 (1970 & Supp. 1985) (“Ordinarily it
is difficult to believe that a discovery order will present a controlling ques-
tion of law or that an immediate appeal will materially advance the termina-
tion of the litigation.”).
C-20
771 F.2d 796 (3d Cir.1985) to interpret Seattle Times. We found
there that Seattle Times confirmed our previous suspicion that
protective orders in civil discovery did not require first amend-
ment analysis:
This court has noted that an order prohibiting the
disclosure of information obtained under the rules of
discovery probably does not run afoul of the first
amendment. Rodgers v. United States Steel Corp.,
536 F.2d 1001, 1006 (3d Cir. 1976)... . The Supreme
Court confirmed our point of view in the Seattle
Times case. 104 S.Ct. at 2009-10.
New York v. United States Metal Refining Co., 771 F.2d at 802.
Thus, United States Metal Refining Co. is clear precedent for
the interpretation eschewed by the district court.”
This holding would appear to end our inquiry. However,
because the district court’s interpretation of Seattle Times raises
questions not considered in United States Metal Refining Co..
it is appropriate and useful to review the Seattle Times opinion
in the light of these questions. That review confirms the sound-
ness of United States Metal Refining Co.’s reading of Seattle
Times. In the first place, the Supreme Court’s holding in Seat-
tle Times was peremptory: “a protective order. . .entered on
a showing of good cause as required by Rule 26(c). . . does not
offend the First Amendment.” 104 S.Ct. at 2209-10. This state-
ment leaves no room for lower courts to consider first amend-
ment factors in fashioning or reviewing Rule 26(c) orders. The
unequivocal nature of the Court’s holding supersedes any am-
biguity in its earlier discussion.
Second, the rest of the Supreme Court’s opinion, which em-
phasized that the discovery process was not a forum traditionally
open to the public, 104 S.Ct. at 2208, and that the process was
“a matter of legislative grace,” id. at 2207, to which no
'S We note that United States Metal Refining Co. was decided about two
months after the district court’s order in this case, and therefore the district
court did not have the benefit of it at the time of its decision.
C-21
first amendment rights attached, is consistent with the position
that the first amendment is simply irrelevant to protective orders
in civii discovery; it does not comport with the district court’s
insistence on a less restrictive means test in protective order
determinations. Although the Supreme Court’s dictum about
less restrictive means analysis is to the contrary, see 104 S.Ct.
at 2207, this dictum is insufficient to overcome the weight of
the Court’s holding and the evident direction of the Court's
reasoning.
Finally, we note that the overwhelming number of courts that
have considered this issue have reached the same conclusion.
See Worrell Newspapers of Indiana, Inc. v. Westhafer, 739 F.2d
1219, 1223-24 n. 4 (7th Cir.1984) (in light of Seattle Times, court
need only undertake a Rule 26(c) good cause analysis without
consideration of First Amendment); Tavoulareas v. Washington
Post Co., 737 F.2d 1170, 1172-73 (D.C.Cir.1984) (en banc)
(same); In re Agent Orange Product Liability Litigation, 104
F.R.D. 559, 566 (E.D.N.Y.1985) (same). But see Michelson v.
Daly, 590 F.Supp. 261, 266 (N.D.N.Y.1984) (Seattle Times
demands a least restrictive alternative test for protective orders
in civil discovery). This precedent gives us further confidence
in our analysis.
We may summarize thus. Seattle Times required the district
court merely to inquire whether the defendants had
demonstrated good cause for the protective order: the district
court instead applied a least restrictive means test. The good
cause standard is significantly less demanding than the least
restrictive means test; the court’s error, therefore. may have
worked a serious detriment to the defendants. The court's er-
ror thus constitutes a clear error of law sufficient for our exer-
cise of mandamus jurisdiction.
V. THE DISTRICT COURT’S
STANDARD OF REVIEW
The district court also erred because it reviewed the
magistrate’s order under an incorrect standard. Title 28 U.S.C.
§ 636(b)(1)(A) (1982) explicitly states that the district court may
modify the magistrate’s order only if the district court finds that
C-22
the magistrate’s ruling was clearly erroneous or contrary to law.
The district court in the instant case, however, held that Bose
Corp. v. Consumers Union of United States, Inc., 466 U.S.
485,104 S.Ct. 1949, 80 L.Ed.2d 502 (1984), mandated plenary
review regardless of the statutory standard of review. Bose held
that when questions of constitutional fact arise in the first
amendment context — questions like whether a speaker had “ac-
tual malice”; whether speech was libelous or an incitement to
riot; whether pictures appeal to “prurient interests” or are
“patently offensive” — an appellate court is bound to exercise
plenary review on account of the crucial values at stake. Id.
104 §.Ct. at 1961-65. The district court reasoned that because
it was acting as an appellate court in reviewing the magistrate’s
order, Bose should control. Dist.Ct.Op. at Al7-A18.
The flaw in this logic stems from the same error discussed
above, the district court’s misreading of Seattle Times. Believ-
ing that Seattle Times made first amendment analysis an im-
portant part of its Rule 26(c) inquiry, the district court found
that Bose applied. As we have seen, however, Seattle Times says
exactly the opposite: that first amendment considerations are
irrelevant to Rule 26(c) protective orders. Because the first
amendment is irrelevant to the analysis, there are no grounds
for extending Bose to this situation. The “clearly erroneous” stan-
dard obviously would have been less onerous for the defendants
than was the district court’s plenary review standard. Thus, the
court’s error may have harmed the defendants, and this error
also constitutes a clear error of law sufficient for our exercise
of mandamus jurisdiction.
These errors require that we reverse the district court's judg-
ment and remand for reconsideration of good cause. Although
it might be possible for us to review the magistrate’s protective
order ourselves, we feel it would be unwise to do so. Review
of the order will require detailed consideration of the defen-
dants’ assertion of good cause. Such consideration would be ex-
ceedingly difficult without the district court’s prior analysis of
the matter under appropriate constitutional standards. Cf.
Tavoulareas v. Washington Post, 737 F.2d 1170, 1172
C-23
(D.C.Cir.1984)(en banc) (“It would seem strange for the ap-
pellate court. . .to decide the ‘good cause’ question initially —
especially when, as here, the District Court, has had no oppor-
tunity to decide it free from erroneously imposed constitutional
restraints.”). It would be equally unwise for us to “tailor” or
adjust the order, for the good cause hearing will likely reveal
the appropriate shape that the protective order should take and
it is thus better that any delineation of specifics await that hear-
ing. We accordingly shall grant the writ, and allow the district
court to reconsider the magistrate’s protective order in a man-
ner consistent with this opinion.
VI. TWO REMAINING ISSUES
In view of our holding, the district court will perforce be
obliged to take second looks at the good cause issue (no specific
good cause findings have been made), and at the magistrate’s
protective order. With respect to the later issue, we note that
our holding has not resolved a critical aspect of the protective
order litigation that the record reveals to be still festering:
whether the district court was justified in 1ts use of the
document-by-document approach as opposed to a broader ap-
proach in its reformulation of the magistrate’s protective order.
These two issues were contested in the district court, and col-
loquy at oral argument revealed that they are still at issue and
will likely arise again. Therefore, we address them for the
guidance of the district court."*
A. Embarrassment and Good Cause
Whether defendants have shown good cause for a protective
order has been the issue at the heart of this case, and will likely
° Discussion of these issues comports with the “instructional goals” of man-
damus, see Bogosian v. Gulf Oil Corp., 738 F.2d 587, 592 (3d Cir. 1984)
(“review would comport with the instructional goals of mandamus,” quoting
United States v. Christian, 660 F.2d 892, 897 (3d Cir.1981)): see also Will
v. United States, 389 U.S. 90, 107, 88 S.Ct. 269, 280, 19 L.Ed.2d 305 (1967)
(mandamus review has a “vital corrective and didactic function”).
remain so. The defendants assert that although the material they
have turned over does not contain trade secrets, it does include
materials the dissemination of which would cause them an-
noyance and embarrassment sufficient to justify a broad pro-
tective order. The plaintiffs contend that the defendants have
not made a sufficiently convincing showing of the harm they
would suffer from dissemination and that their allegations of
harm are merely ccnclusory.
[6] As the district court explained, Rule 26(c) places the
burden of persuasion on the party seeking the protective order.
To overcome the presumption, the party seeking the protective
order must show good cause by demonstrating a particular need
for protection. Broad allegations of harm, unsubstantiated by
specific examples or articulated reasoning, do not satisfy the
Rule 26(c) test. See United States v. Garrett, 571 F.2d 1323,
1326, n. 3 (5th Cir.1978) (requiring “a particular and specific
demonstration of fact as distinguished from stereotyped and con-
clusory statements”); General Dynamics Corp. v. Selb Mfg.
Corp., 481 F.2d 1204, 1212 (8th Cir.1973), cert. denied, 414
U.S. 1162, 94 S.Ct. 926, 39 L.Ed.2d 116 (1974); 8 C. Wright
& A. Miller, Federal Practice and Procedure § 2035 (1970 &
Supp. 1985). Moreover, the harm must be significant, not a mere
trifle. See e.g., Joy v. North, 692 F.2d 880, 894 (2d Cir.1982)
(refusing protective order where proponent’s only argument in
its favor was the broad allegations that the disclosure of cer-
tain information would “injure the bank in the industry and
local community”), cert. denied sub nom. City-trust v. Joy, 460
U.S. 1051, 103 S.Ct. 1498, 75 L.Ed.2d 930 (1983).
[7] Although there appears to be a lurking dispute as to what
may constitute good cause for a protective order, see discus-
sion supra at pp. 1114-15, we are satisfied that the district court
understood and will apply on remand the principle that Rule
26(c) protects parties from embarrassment as well as from
disclosure of trade secrets. We add to the district court’s com-
ments only our own understanding that, because release of in-
formation not intended by the writer to be for public consump-
tion will almost always have some tendency to embarrass, an
C-25
applicant for a protective order whose chief concern is embar-
rassment must demonstrate that the embarrassment will be par-
ticularly serious. As embarrassment is usually thought of as a
nonmonetizable harm to individuals, it may be especially dif-
ficult for a business enterprise, whose primary measure of well-
being is presumably monetizable, to argue for a protective order
on this ground. Cf. Joy v. North, supra (a protective order will
not issue upon the broad allegation that disclosure will result
in injury to reputation); to succeed, a business will have to show
with some specificity that the embarrassment resulting from
dissemination of the information would cause a significant harm
to its competitive and financial position.
B. Administration of the Protective Order
Under the district court’s order, the defendants would be forc-
ed to demonstrate to the Court on a document-by-document
basis which documents should be protected and not disseminated
before they could even be marked “confidential.” The district
court felt compelled to adopt this solution because it recogniz-
ed that the burden of persuasion fell on the party seeking the
protective order, and it believed that allowing defendants to
mark documents confidential in the first instance — bound on-
ly by their good faith—and requiring plaintiffs to oppose the
confidentiality designation would impermissibly shift the burden
of proof to the plaintiffs. Dist.Ct.Op. at A29-30. The defen-
dants object that the district court’s order is unduly restrictive
and burdensome.
[8] It is correct that the burden of justifying the confiden-
tiality of each and every document sought to be covered by a
protective order remains on the party seeking the protective
order; any other conclusion would turn Rule 26(c) on its head.
That does not mean, however, that the party seeking the pro-
tective order must necessarily demonstrate to the court in the
first instance on a document-by-document basis that each item
should be protected. It is equally consistent with the proper
allocation of evidentiary burdens for the court to construct a
broad “umbrella” protective order upon a threshold showing
by one party (the movant) of good cause. Under this approach,
the umbrella order would initially protect all documents that
C-26
the producing party designated in good faith as confidential."’
After the documents delivered under this umbrella order, the
opposing party could indicate precisely which documents it
believed to be not confidential, and the movant would have
the burden of proof in justifying the protective order with respect
to those documents. The burden of proof would be at all times
on the movant; only the burden of raising the issue with respect
to certain documents would shift to the other party.
As the commentary in the Manual for Complex Litigation
Second (MCL 2d) (1985) makes clear, the umbrella order ap-
proach has several advantages over the document-by-document
method adopted by the district court in a complex case,'* and
‘7 Admittedly, there is a danger here that counsel will err on the side of cau-
tion by designating confidential any potentially sensitive document. The judge
must require that counsel not mark documents as protected under the order
unless they are at least arguably subject to protection. Manual for Complex
Litigation Second, (MCL 2d) § 21.431 (1985). MCL 2d provides that “[t]he
designation of a document as confidential may be viewed as equivalent to
a motion for protective order and subject to the sanctions of Fed.R.Civ.P.
26(g).” Id. We agree.
's First, because in any large-scale litigation the movant will likely have far
more documents that it wants to designate as confidential than the respon-
dent will object to being so designated, the umbrella order approach is less
time-consuming and burdensome to the parties and the court than the
document-by-document method. In a very large case, the document-by-
document approach may be so costly that it may make large-scale litigation
too expensive for all but the most affluent parties. Moreover, the time that
it would take a judicial officer to rule on the protectability of thousands of
documents could cripple the court. By contrast, the umbrella order will en-
courage efficiency and allow litigation to proceed more quickly. See MCL
2d § 21.431 at 51-54.
Second, although a smooth, largely self-regulating discovery process should
be the court's goal, id. at § 21.423 at 49, the document-by-document approach
guarantees extensive involvement by the court in the discovery process, deter-
ring the parties from themselves conducting discovery to a signficant extent.
The umbrella order approach we have described encourages parties to work
problems out between and among themselves.
Finally, the document-by-document approach may prevent the parties and
the magistrate or judge from getting a broad overview of the documents. The
(footnote continued)
C-27
MCL 2d recommends the use of umbrella orders in complex
cases.'* The caselaw also supports the view that the use of um-
brella orders in the district court is a useful method of dealing
with large-scale discovery.”
There may be cases in which the document-by-document ap-
proach adopted by the district court, which deters over-
designation of confidentiality and imposes heavier costs on par-
ties making the confidentiality designation, will be preferable.
A case in which the district court has reason to believe that vir-
tually all confidentiality designations will be spurious may be
magistrate or judge may be so burdened by the argument over each docu-
ment that she or he will “lose the forest for the trees.” This confusion is not
a problem under the umbrella order solution proposed here. In In re “Agent
Orange” Product Liability Litigation, 96 F.R.D. 582, 585 (E.D.N.Y.1983),
Judge Pratt, sitting by designation, summarized the reasons underlying the
umbrella order approach:
The interest of preserving the efficient and effective functioning of the
discovery process weighs substantially in favor of a protective order,
In re Halkin, supra, 598 F.2d at 192, and there is no question that this
interest would be significantly impaired were there no protective order
in this case.
The special master’s protective order shifts the very slight burden of
going forward to the proponents of dissemination. Those wishing to
disseminate merely need to indicate which documents they wish to
disseminate, and the burden is then upon those opposing dissemina-
tion to show “good cause” pursuant to FRCP 26(c) why the protective
order should be continued. It is hoped that this procedure will result
in the court’s having to review only those particular documents a party
wishes to disseminate, rather than having to review every document
that some party wants covered by a protective order.
‘* “*Umbrella’ protective orders, carefully drafted to suit the circumstances
of the case, greatly expedite the flow of discovery material while affording
protection against unwarranted disclosures.” Jd. at § 21.431 at 53 (footnote
omitted); see also id. at § 41.36 at 379-83 (sample confidentiality order in-
cluding umbrella provision).
*See, e.g., Chambers Development Co., Inc. v. Browning-Ferris Industries,
104 F.R.D. 133, 135 (W.D.Pa.1985); In re Korean Airlines Disaster of
(footnote continued)
C-28
such a case. Our purpose in extending the discussion is to ex-
plain that the district court erred to the extent that it felt obliged
to utilize the document-by-document approach to avoid shift-
ing the burden of proof of confidentiality, and to commend the
umbrella approach for consideration of the district courts in this
circuit in complex cases.
VII. CONCLUSION
Because of the district court’s misinterpretation of Seattle-
Times v. Rhinehart and its consequent errors in defining the
appropriate good cause standard and its own scope of review
of the magistrate’s findings, we will grant the writ.
September 1, 1983, 597 F.Supp. 621, 622-23 (D.D.C.1984); In re “Agent
Orange” Product Liability Litigation, 96 F.R.D. 582, 583 (E.D.N.Y. 1983):
Tavoulareas v. Piro, 93 F.R.D.. 24, 29-30 (D.D.C.1981); see generally Mar-
cus, Myth and Reality in Protective Order Litigation, 69 Cornell L. Rev. |,
8 (1983) (noting “(t]he tendency of courts to enter protective orders, sometimes
sua sponte, limiting the use of all information produced through discovery’)
(footnotes omitted). This method was used by the court in Palmer v. Liggett
Group, Inc., Civ.Action No. 83-2445-MA (D. Mass. Feb. 25, 1985), a cigarette
products liability suit very similar to the one here. It was, of course, used
by the magistrate in this case. See supra at n. 4.
D-1
Opinion of the District Court
Dated July 17, 1985
ROSE D. CIPOLLONE and
ANTONIO CIPOLLONE,
Plaintiffs,
-_—V—
LIGGETT GROUP INC..,
PHILIP MORRIS INCORPORATED
and LOEW’S THEATRES, INC..
Defendants.
No. 83-2864
United States District Court,
District Court of New Jersey
Decided July 17, 1985
OPINION
SAROKIN, District Judge:
This is an appeal from an order of the magistrate prohibiting
the plaintiff from disseminating or publicizing documents,
testimony and other matters obtained through the discovery pro-
cess. In reviewing an order of this nature, certain fundamental
principles must be considered before addressing the specific
terms and conditions of the order on appeal.
Materials obtained through the discovery process are the result
of a form of judicial compulsion. Were it not for the existence
of the ongoing litigation, the parties would not have access to
most of the information so produced. Such production has been
mandated under the rules so as to assure the full exchange of
information and ultimately a fair determination on the merits
after complete exploration of all of the relevant facts.
D-2
[1] The extensive discovery allowed under the Federal Rules
of Civil Procedure was never intended as a device to procure
information for a purpose unrelated to the pending litigation.
However, having once obtained information which is properly
within the ambit of the Rules, the question arises as to what
other use, if any, can be made of the fruits of such discovery.
Generally speaking, discovery materials fall into three categories:
1) that which is already public knowledge; 2) that which is
private, i.e., something that would not be known publicly but
for the discovery; and 3) that which is truly secret, the revelation
of which would substantially injure the custodian or another.
[2] Obviously in this case we are not concerned with the first
category, since there is no reason to protect matters already in
the public domain. It is the second category which creates the
greatest difficulty. In the usual private litigation not involving
the public interest, it would not be appropriate to permit the
release of private materials whose existence and content were
disclosed only as the result of the litigation. However, that right
of privacy must be balanced against the first amendment and
consideration of whether the information so obtained is of such
great interest as to permit its publication beyond the litigation itself.
It would be difficult to envision a case involving a greater
or more widespread interest. Other than food and water, there
is probably no substance more utilized than tobacco. Its use af-
fects hundreds of millions of people throughout the world. Its
effects have been debated and reported in the press extensively.
It has been the repeated subject of legislation, medical investiga-
tion and now litigation.
[3] Plaintiffs contend that the discovery in this matter reveals
the knowledge of the tobacco industry regarding the effects of
smoking, the steps taken to conceal and offset that knowledge,
the efforts to enlist the aid of legislators and the medical pro-
fession to support the industry and mislead the public, and an
alleged conspiracy of silence and chicanery within the industry
itself, The court makes no finding at this juncture as to the validi-
ty of any of those charges, but it cannot be a party to their sup-
pression if they are true. In the court's view, none of the
D-3
foregoing appear to come within the third category mentioned
above. These matters may be private and their disclosure may
prove embarrassing and incriminating, but that alone would
not be sufficient to bar them from the public and the press.
[4] Defendants continue to be entitled to protection from the
disclosure of matters which are truly secret, where disclosure
thereof will affect the operation of their business, but not their
potential liability. Formulae, marketing strategy and other mat-
ters whose disclosure would affect defendants with their
respective competitors or in conjunction with the day-to-day
operation of their business are entitled to protection. But their
part, if any, in concealing or misrepresenting information re-
garding the risks of smoking is not entitled to such protection.
There is a further reason for permitting the disclosure of such
information and that is the existence of numerous other similar
suits, particularly those in which the same counsel are represen-
ting plaintiffs. The court cannot ignore the might and power
of the tobacco industry and its ability to resist the individual
claims asserted against it and its individual members. There may
be some claimants who do not have the resources or such able
and dedicated counsel as in this case to pursue the thorough
investigation which these cases require. To require that each and
every plaintiff go through the identical, long and expensive pro-
cess would be ludicrous. Even from the point of view of the
defendants (though they resist), it would seem that they would
benefit by avoiding repetition of the same discovery in each and
every case. There can be no justification for defendants’ posi-
tion other than to discourage other claimants and deprive them:
of evidence already known and produced to others similarly
situated.
For these reasons, the court is compelled to reverse in part
and affirm in part the protective order entered by the magistrate
in this matter. Under the first amendment the public has a right
to know what the tobacco industry knew and knows about the
risks of cigarette smoking and what it did or did not do with
regard to that knowledge.
D-4
[5] The order in its present form interferes with the first
amendment in that it extends protection to all discovered
materials and imposes upon plaintiffs the obligation to move
for their release from the prohibitions of the order. To impose
such a threshold requirement upon a single plaintiff against a
giant industry diminishes the first amendment rights of others
who should have access to such information, namely the general
public and other similarly situated claimants. The obligation
to move for such protection and justify its need should be upon
defendants, rather than upon plaintiffs. The presumption should
be one of freedom to publish rather than one of restraint. To
impose such burden upon plaintiffs and require them to remove
barriers unilaterally imposed by defendants would result in an
expenditure of time and money which alone could destroy the
first amendment rights here implicated.
THE ORDER
The Protective Order here appealed from was entered on
March 25, 1985 by the Honorable Robert E. Cowen, United
States Magistrate, who has been ably supervising discovery in
these complex cases. The Order limits the extent to which plain-
tiffs may disclose certain confidential information made
available by defendants in discovery proceedings regarding these
matters. To that end, the Order provides that “[aJll informa-
tion produced or exchanged in the course of this civil action or
any appeal arising therefrom ... shall be used solely for the pur-
pose of this case,” 42, and shall be returned or destroyed after
trial. €13. More complex limitations are imposed upon “confiden-
tial information.” Based upon a “good-faith belief that the in-
formation falls within the scope of confidential information
under the Federal Rules of Civil Procedure,” 43, such informa-
tion, which may be documentary, oral, or even in the nature
of summaries. 48. is to be labelled accordingly, €4, and filed,
or otherwise utilized, under seal. 4411-12. See also {5 (deposi-
tion testimony). Nor may claims of confidentiality be in-
advertently waived. 49.
Once labelled, confidential information is, under the order,
open for inspection only by counsel or their associates or
D-5
employees, {6(a), or by experts retained for the purposes of the
litigation, 46(b), but the latter are required
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