# Appendix — Union Pacific Railroad v. Energy Transportation Systems, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_1082%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1988 - **Citation:** 484 U.S. 1007 ## Text mie Us 87-7 05, © 43 rz =) 2) 3 IN THE Supreme Court of the United States OCTOBER TERM, 1987 UNION PACIFIC RAILROAD COMPANY, UNION PACIFIC CORPORATION, MISSOURI PACIFIC RAILROAD COMPANY, KANSAS CITY SOUTHERN INDUSTRIES, INC., KANSAS CITY SOUTHERN RAILWAY COMPANY, BURLINGTON NORTHERN, INC., BURLINGTON NORTHERN RAILROAD COMPANY, AND CHICAGO AND NORTH WESTERN TRANSPORTATION COMPANY, . Petitioners, ENERGY TRANSPORTATION SYSTEMS, INC., AND ETSI PIPELINE PROJECT, A JOINT VENTURE, et al., Respondents. APPENDIX TO PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT B.J. BRADSHAW RICHARD N. CARRELL LAYNE E. KRUSE HENRY P. SAILER GREGG H. Levy * MITCHELL F. DOLIN FULBRIGHT & JAWORSKI 1301 McKinney Street Houston, TX 77010 (713) 651-5151 COVINGTON & BURLING 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20004 (202) 662-6000 JOHN G. BISSELL STRONG, PIPKIN, NELSON & BISSELL 595 Orleans Street Beaumont, TX 77701 (409) 835-4581 Attorneys for Petitioners Union Pacific Railroad Company, Union Pacific Corporation and Missouri Pacific Railroad Company 7 [Counsel for other petitioners are identified on the inside cover] October 1987 * Counsel of Record WILSON - EPEes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 9g? O. J. WEBER, JR. MEHAFFY, WEBER, KEITH & GONSOULIN P.O. Box 16 Beaumont, TX 77704 (409) 835-5011 JOHN H. SHENEFIELD * PETER E. HALLE MORGAN, LEWIS & BOCKIUS 1800 M Street, N.W. Washington, D.C. 20036 (202) 872-5000 Attorneys for Petitioners Kansas City Southern Industries, Inc. and Kansas City Southern Railway Company LOUIS B. PAINE, JR. BUTLER & BINION 1600 Allied Bank Plaza Houston, TX 77002 (713) 237-3111 JOHN R. LABOVITZ MARK F. HORNING * STEPTOE & JOHNSON 1330 Connecticut Avenue, N.W. Washington, D.C. 20036 (202) 429-3000 Attorneys for Petitioners Burlington Northern, Inc. and Burlington Northern Railroad Company WALTER J. CRAWFORD, JR. WELLS, PEYTON, BEARD, GREENBERG, HUNT & CRAWFORD 624 Petroleum Building 550 Fannin Street Beaumont, TX 77704 (409) 838-2644 GARY SENNER * STEVEN H. FRANKEL SONNENSCHEIN CARLIN NATH & ROSENTHAL 233 S. Wacker Drive 8000 Sears Tower Chicago, IL 60606 (312) 876-8059 Attorneys for Petitioner Chicago and North Western Transportation Company * Counsel of Record TABLE OF CONTENTS % Page Appendix A—Opinion of the Court of Appeals (822 ae SEE ce titan eeniabadneanad la Appendix B—Memorandum Opinion and Order of the District Court (February 13, 1987)_. 34a Appendix C—Recommended Memorandum Opinion and Order of Special Master (December 31, SID idein Riscck nbd Dia atic cabins apie dae 59a Appendix D—Order of the Court of Appeals Denying Petition for Rehearing (August 12, EES heiniad Sicha dita tae dacalaahaetacd tecaan iain 84a Appendix E—Order of the District Court Setting Aside Previous Order of February 13, ROE SEE Gy EEE) cowinnecnnemcsancn 86a Appendix F—Findings of Fact, Conclusions of Law, and Order of District Court (October 2, EE ah kh Nata umknennesee seeks 87a Appendix G—Order of_ the District Court Staying Previous Order of October 2, 1987 (Oc- NS NS ore Gaetan nace ae 104a Appendix H—Order of the District Court Denying Defendants’ Motion for Partial Sum- mary Judgment (February 13, 1987)__ 106a Appendix I —Handler & DeSevo, The Noerr Doctrine and its Sham Exception, 6 Cardozo L. Wl, 2 SEE Savelencmaduknaeens eee 107a Appendix J —Constitutional Provisions and Statute TE... cemnwwentrawWt Sao seca ema 212a la APPENDIX A IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 87-2177 IN RE: BURLINGTON NORTHERN, INC., BURLINGTON NORTHERN RAILROAD Co., UNION PACIFIC CORP., UNION PACIFIC RAILROAD Co., MISSOURI PACIFIC RAIL- ROAD CO., KANSAS CITY SOUTHERN INDUSTRIES, INC., KANSAS CITY SOUTHERN RAILWAY Co. & CHICAGO & NORTH WESTERN TRANSPORTATION Co., Petitioners. Petition For A Writ of Mandamus to The United States District Court for the Eastern District of Texas (July 14, 1987) Before BROWN, REAVLEY and JOLLY, Circuit Judges. REAVLEY, Circuit Judge: The plaintiffs in this antitrust suit claim that the de- fendant railroads conspired to prevent construction of a coal slurry pipeline. Contending, among other things, that the railroads accomplished their anticompetitive goal through filing and defending certain lawsuits, the plain- 7 ———— 2a tiffs seek discovery of documents relating to those law- suits. The railroads resist discovery on the grounds of attorney/client privilege and work product immunity. The district court rejected this claim of privilege, holding that because the documents were prepared in furtherance of an illegal conspiracy they fall within the crime/fraud exception to the privilege. The railroads claim the pro- tection of Noerr-Pennington for their litigation activities and seek a writ of mandamus. We conclude that the dis- trict court erred in allowing discovery without consider- ing whether the litigation activities themselves were sig- nificantly motivated by a genuine desire for judicial re- lief. We reject, however, the railroads’ contention that the district court is precluded from finding sham by the railroads’ partial success in one of the lawsuits and their defensive posture in the other lawsuits. I Background The underlying antitrust claim here arises from Energy Transportation Systems, Inc., and ETSI Pipeline Project’s (collectively ETSI) unsuccessful attempt to build a coal slurry pipeline from Wyoming to Arkansas.’ ETSI claims the defendant railroads, afraid of losing business to the pipeline, unlawfully conspired to prevent, or at least delay and make more expensive, the pipeline’s construction by denying permission for it to cross their rights-of-way and by engaging in sham administrative and judicial challenges to ETSI attempts to secure cross- ing rights, water rights, and administrative permits. After more than ten years of trying to obtain all of the necessary rights, permits, and financing, ETSI aban- doned the project in 1984. It now alleges that the proj- 1 According to the parties, coal slurry is a mixture of ground coal and water. The slurry is pumped through the pipeline and then dried to be used as fuel. The proposed pipeline was later expanded to include delivery to utilities in Texas. 3a ect’s failure was caused by the railroads’ illegal con- spiracy and seeks a judgment against the railroads of $4.2 billion in damages after trebling. This mandamus petition arises from ETSI’s desire to obtain documents prepared in connection with the railroads’ allegedly sham litigation activities. Specifically at issue here are docu- _ ments from two groups of lawsuits. A. The Andrews Litigation The first group consists of consolidated lawsuits that the parties refer to as the Andrews litigation. The An- drews lawsuits were brought to invalidate a water con- tract between ETSI and the United States Department of the Interior that would allow ETSI to purchase water from the federal Oahe Reservoir in South Dakota for use in its pipeline. The plaintiffs in the lawsuits included three states—Missouri, Iowa, and Nebraska—several en- vironmental and farmers’ groups, and one of the defend- ant railroads—Kansas City Southern. Another rail- road—Union Pacifie—provided legal assistance through its attorneys to the state of Nebraska. The Andrews plaintiffs asserted numerous grounds for invalidating the contract; they have thus far been successful in their position that the Secretary of the Interior did not have statutory authority to execute the contract without the participation of the Army Corps of Engineers. See Mis- souri v. Andrews, 586 F.Supp. 1268 (D. Neb. 1984), aff'd, 787 F.2d 270 (8th Cir. 1986), cert. granted, 107 S.Ct. 1846 (1987). B. The Window Litigation The second group of lawsuits from which ETSI seeks documents consists of a series of suits ETSI brought to establish rights to cross the raiiroads’ rights of way. In the very early stages of the pipeline project, ETSI at- tempted to negotiate the purchase of these crossing rights. When these efforts proved unavailing, allegedly 4a because of an unlawful agreement between the railroads to jointly withhold crossing rights, ETSI began locating places along the railroads’ property where the railroads owned only an easement rather than a fee title. It then purchased easements from the underlying landowner and brought suit to establish that these easements were suf- ficient to allow it to cross under the railroads’ tracks without the railroads’ consent. The parties refer to these easements as windows and to ETSI’s lawsuits as the window litigation. Apparently, ETSI was essentially suc- cessful in every one of these window suits, all of which involved virtually identical issues. The railroads have refused to turn over many of the documents ETSI seeks on the ground of attorney/client privilege or attorney work product immunity. ETSI filed a motion to compel production of these withheld docu- ments on the ground they were prepared in connection with a violation of the antitrust laws. The railroads argued in response that to obtain discovery ETSI had to show that their litigation activities were sham activities and thus not protected by the Noerr-Pennington doc- trine.* A special master agreed with the railroads and concluded that ETSI had not made the requisite showing. The district court, however, disagreed and granted ETSI’s motion. The railroads filed this petition for a writ of mandamus. I] Justification For Mandamus Relief Before reaching the merits, we must address ETSI’s contention that a writ of mandamus is not an appro- priate mechanism to review this discovery ruling. ETSI * This doctrine, described in detail below, derives from the deci- sions in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 5283, 5 L.Ed.2d 464 (1961), and United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). 5a correctly points out that “mandamus has historically been a drastic remedy generally reserved for really ‘extraordinary’ cases.” In re Equal Employment Oppor- tunity Commission, 709 F.2d 392, 394 (5th Cir. 1983) (citing Kerr v. United States District Court, 426 U.S. 394, 402, 96 S.Ct. 2119, 2123, 48 L.Ed.2d 725 (1976). It argues that because the district court’s ruling was neither a “usurpation of judicial power” nor a “clear abuse of discretion,” see Bankers Life & Casualty Co. v. Holland, 346 U.S. 379, 383, 74 S.Ct. 145, 148, 98 L.Ed. 106 (1953), we should dismiss the petition with- out reaching the merits. In recent years, several courts have concluded that mandamus is an appropriate method of review of orders compelling discovery against a claim of privilege. See United States Department of Energy v. Brimmer, 776 F.2d 1554, 1559 (Temp. Emer. Ct. App. 1985), cert. denied, 106 S.Ct. 1261 (1986); Sporck v. Peil, 759 F.2d 312, 314-15 (3d Cir.), cert. denied, 106 S.Ct. 232 (1985); Bogosian v. Gulf Oil Corp., 738 F.2d 587, 591- 92 (3d Cir. 1984); Diversified Industries, Inc. v. Mere- dith, 572 F.2d 596, 599 (8th Cir. 1977); Heathman v. United States District Court, 503 F.2d 1032, 1033 (9th Cir. 1974); Pfizer Inc. v. Lord, 456 F.2d 545, 547-48 (8th Cir. 1972); Harper & Row Publishers v. Decker, 423 F.2d 487, 492 (7th Cir. 1970), aff'd by an equally divided court, 400 U.S. 348, 91 S.Ct. 479, 27 L.Ed.2d 433 (1971); see also 16 C. Wright, A. Miller, E. Cooper & E. Gressman, Federal Practice and Procedure § 3935, at 247-48 (1977). These cases have recognized the impor- tance of the asserted privilege and the absence of an adequate alternative method of obtaining review. They also have relied on the seriousness and novelty ef the privilege issue in the particular case. Respected com- mentators have similarly noted that the difficulty of ob- taining effective review of discovery orders, the serious injury that sometimes results from such orders, and the 6a often recurring nature of discovery issues support use of mandamus in exceptional cases. 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3914, at 576-77 (1976); 9 J. Moore, B. Ward & J, Lucas, Moore’s Federal Practice § 110.28, at 313 (2d ed. 1987). We believe this case presents the exceptional circum- stances making mandamus review appropriate. The dis- trict court’s order directs production of several thousand documents for which attorney/client privilege and work product immunity have been asserted. These documents go to the heart of the controversy between the parties, and disposition of this petition, not only implicates the important policies protecting privileged documents but will likely have a determinative impact on the course of the case. Erroneous disclosure of these documents could be irreparable. It is also significant that, unlike the typical discovery order, the district court’s order was not a mere discretionary one but rather turns on legal ques- tions appropriate for appellate review. The issues here also have importance beyond the immediate lawsuit. The interrelationship of the attorney /client privilege’s crime/ fraud exception and the Noerr-Pennington doctrine with its sham limitation is a question which we do not find addressed in the decisions but which is likely to recur in future cases. Given the nature of the analysis re- quired in an antitrust case in which a Noerr-Pennington defense is asserted and a question of sham is raised, communication between the attorney directing the peti- tioning activity and his client will be highly relevant. Under the district court’s ruling, such communications could be discovered upon a showing that the petitioning was part of a larger conspiracy even though the petition itself might be protected from antitrust scrutiny. Such an important and potentially far-reaching decision, which we hold below to be erroneous, is an appropriate one for our immediate review. 7a Ill Litigation That Serves A Larger Conspiracy Turning to the merits, we first address the primary ground on which the district court concluded that dis- covery of the documents was proper. Although recog- nizing that Noerr-Pennington might ultimately immunize the railroads’ petitioning activities from antitrust liabil- ity, the district court determined that documents relating to such activity are nonetheless not immune from dis- covery when they relate to a larger conspiracy that is actionable. The court found that ETSI’s evidence estab- lished a prima facie case that such a larger conspiracy in fact existed—a conspiracy to defeat the pipeline by a strategy of delaying and interfering with its construc- tion—and that the railroads had consulted and used their attorneys to further this conspiracy. In particular, the court found that the railroads’ administrative and judi- cial challenges to ETSI permits and contracts and their defense of the window lawsuits were in furtherance of this conspiracy. Based on these findings alone, the court concluded that it could order discovery of the documents relating to the litigation. The court was thus able to order discovery without ever reaching the question whether the Andrews litigation and the defense of the window lawsuits were sham. In making this ruling, the district court relied on cases from other circuits holding that Noerr-Pennington is not a bar to discovery. See, e.g., Associated Container Transportation (Australia) Ltd. v. United States, 705 F.2d 53 (2d Cir. 1983) ; North Carolina Electric Membership Corp. v. Carolina Power & Light Co., 666 F.2d 50 (4th Cir. 1981). In those cases, however, no claim of attorney/client privilege was as- serted and the sole question was whether Noerr-Penning- ton alone barred discovery. The issue here is whether the attorney/client privilege bars discovery in the face of a claim that the communications relate to a crime or fraud. Noerr-Pennington is relevant only to the extent it determines whether a crime or fraud has been shown. 8a The broad-brush approach of the district court gives too little attention to the policies behind both the Noerr- Pennington doctrine and the privileges at stake here.* The basis for Noerr-Pennington immunity has been well documented. In Noerr, the Supreme Court was presented with a claim that an association of railroads had violated the antitrust laws by engaging in a massive publicity campaign designed to influence legislative and executive action against the trucking industry. The Court deter- mined that the railroads’ activity did not fall within the ambit of the antitrust laws. It stressed the importance in a representative democracy of the right of persons to “freely inform the government of their wishes.” 365 U.S. at 137, 81 S.Ct. at 529. The Court also felt that construing the antitrust laws to reach the railroads’ activity would raise “important constitutional questions” regarding the right to petition government and that it could not “lightly impute to Congress an intent to in- vade these freedoms.” Jd. at 138, 81 S.Ct. at 530. Pennington reaffirmed Noerr, holding that “[jjoint ef- forts to influence public officials do not violate the anti- trust laws even though intended to eliminate competition. Such conduct is not illegal, either standing alone or as %The remainder of this opinion demonstrates that the parties dispute several points in this petition. A few things, however, are not in dispute. For the purposes of its ruling, the district court assumed that the railroads had an otherwise valid claim of privi- lege or immunity and that the documents would not be discover- able absent the crime ‘fraud exception. Thus we are not presented with any question about the initial existence of privilege or im- munity. The parties also do not challenge the district court’s con- clusion that a civil violation of the antitrust laws is a “crime” or “fraud” for purposes of abrogating the attorney /client privilege. See Pfizer Inc. v. Lord, 456 F.2d 545 (8th Cir. 1972). Finally, there is no dispute over the district court’s ruling that ETSI’s burden in seeking discovery is to make out a prima facie case that the documents were prepared in furtherance of a crime or fraud. In re International Systems & Controls Corporation Securities Litigation, 693 F.2d 1235, 1242 (5th Cir. 1982). 9a part of a broader scheme itself violative of the Sherman Act.” 381 U.S. at 670, 85 S.Ct. at 1593. The Court in Noerr acknowledged, in a statement that is the genesis of the current “sham” doctrine, that some petitions, “ostensibly directed toward influencing govern- mental action, [may be]-a mere sham to cover what is actually nothing more than an attempt to interfere di- rectly with the business relationships of a competitor and the application of the Sherman Act would be justified.” Id. at 144, 81 S.Ct. at 533. The railroads were protected, however, because they “were making a genuine effort to influence legislation.” Jd. The principle thus emerging from these decisions is that genuine efforts to influence governmental decisionmaking are to be encouraged, not penalized through application of the antitrust laws. Pro- tection exists even though the petitioner’s avowed pur- pose is to eliminate a competitor and even though the petitioner may be engaged in a larger unprotected scheme designed to do just that. Drspite the potential anti-competitive effects of petitioning so motivated and occurring in such a context, the Supreme Court has made the policy choice to “assure ‘uninhibited access to govern- ment policy makers.’” Coastal States Marketing, Inc. v. Hunt, 694 F.2d 1358, 1363 (5th Cir. 1983) (quoting George R. Whitten Jr., Inc. v. Paddock Pool Builders, Inc., 424 F.2d 25, 32 (1st Cir.), cert. denied, 400 U.S. 850, 91 S.Ct. 54, 27 L.Ed.2d 88 (1967) ). A similar policy choice underlies the attorney/client privilege and work product immunity. The attorney/ client privilege rests on the need to “encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the ob- servance of law and administration of justice.” Upjohn Co. v. United States, 449 U.S. 388, 389, 101 S.Ct. 677, 682, 66 L.Ed.2d 584 (1981). The privilege’s ‘benefits are all indir ct and speculative; its obstruction is plain 10a and concrete.” 8 J. Wigmore, Evidence § 2291 (Mc- Naughton rev. 1961). Yet the privilege survives, based on the recognition that “sound legal advice or advocacy serves public ends and that such advice or advocacy de- pends upon the lawyer’s -being fully informed by the client.” Upjohn, 449 U.S. -at 889,101 S.Ct. at 682. The privilege, of course, is subject to several exceptions, notably the crime/fraud exception asserted here. The crime/fraud exception recognizes that because the “client has no legitimate interest in seeking legal advice in planning future criminal activities,’ Jn re International Systems & Controls Corporation Securities Litigation, 693 F.2d 1235, 1242 (5th Cir. 1982), society has no in- terest in facilitating such communications. Thus the ex- ception demonstrates the policy: persons should be free to consult their attorney for legitimate purposes. Work product immunity similarly derives from the de- sire to facilitate effective advocacy. Despite a broad policy in favor of liberal discovery, immunity exists for a lawyer’s work product to protect the lawyer’s ability to “‘work for the advancement of justice while faithfully protecting the rightful interests of his clients.” Hickman v. Taylor, 329 U.S. 495, 510, 67 S.Ct. 385, 393, 91 L.Ed. 451 (1947). Just as with disclosure of communications between attorney and client, discovery of the attorney’s “written statements, private memoranda and personal recollections,” id., would inhibit the attorney’s effort to fully explore and develop the position he has been asked to advocate. Indeed, recognition of this degree of simi- larity between the attorney/client privilege and work product immunity has led this court and ot] ers to hold that both are subject to the same crime/fraud exception. International Systems, 693 F.2d at 1242: In re Antitrust Grand Jury, 805 F.2d 155, 164 (6th Cir. 1986); In re Sealed Case, 676 F.2d 793, 812 (D.C. Cir. 1982); In re John Doe Corp., 675 F.2d 482, 492 (2d Cir. 1982); lla In re Grand Jury Proceedings, 604 F.2d 798, 803 (3d Cir. 1979) .* The district court erred in ordering discovery without considering whether the specific litigation activities were illegitimate. The attorney/client privilege and work product immunity protect communications and papers generated when a client engages his attorney for legiti- mate purposes. To the extent the railroads sought out their attorneys to bring lawful suits and consulted with them in connection with such suits, they were within the scope of this protection. That the railroads might also have consulted and received the help of their attorneys in connection with other activities that are not lawful does not change this conclusion. The focus must be nar- rowed to the specific purpose of the particular communi- cation or document. To the extent the document deals with a protected activity, it is immur» from discovery. To hold otherwise would unduly infringe on the protec- tion Noerr-Pennington extends to petitioning activities genuinely intended to influence governmental action, even though part of a larger scheme of anticompetitive con- duct. The Supreme Court has recognized that such ac- tivities are desirable, and the attorney/client privilege and work product immunity further the policy behind this recognition by facilitating petitioning activity that, as in this case, requires the assistance of attorneys. To permit discovery of the documents withheld in this case on the basis of a larger conspiracy by the railroads would undermine the effectiveness of the very type of petitioning the Supreme Court’s decisions have protected. Therefore to the extent ETSI seeks material directly con- nected with the railroads’ litigation activities, the dis- 4 Work product material, unlike attorney/client communications, is subject to discovery under the provisions of Fed. R. Civ. P. 26(b) (3). Although ETSI has sought discovery under Rule 26 in the district court, this issue is not before us on this petition for mandamus. 12a ‘ trict court cannot order discovery without first deter- mining that the litigation activity was itself in violation of the antitrust laws. In the context of this case, that determination will require resolution of the question whether the litigation was a sham.° We now turn to that question. IV District Court’s Failure to Find Sham ETSI argues that the district court, aside from its reasoning discussed in the preceding section of this opin- ion, made a factual determination that the railroads’ litigation activities were sham. It attempts to show that this determination was correct and urges this court to deny the writ of mandamus on this basis. The railroads deny that the district court made any factual determina- tion of sham. We agree with the railroads that the district court failed to make an adequate finding that the railroads’ litigation activities were sham. It is true, as ETSI con- tends, that the district court’s memorandum opinion states that the railroads “were not engaged in a bona fide effort to secure governmental action.” As we dis- cuss below, this is essentially the conclusion that must be 5 Our direction here that the court must focus on the specific relationship of the communication to a protected activity is con- sistent with our earlier holding that piercing a claim of privilege through the crime/fraud exception requires a showing that the material “reasonably relate[s] to the fraudulent activity.” JInter- national Systems, 693 F.2d at 1248. As the court from which we adopted this test stated, “[t]he exact formulation of a ‘test’ for relatedness is less important than an understanding of what the test must accomplish: easy differentiation between material for which the law should not furnish the protections of a privilege and material for which a privilege should be respected.” In re Sealed Case, 676 F.2d 793, 815 n.91 (D.C. Cir. 1982). In this case, we have determined that the policies behind Noerr-Pennington require protection for material that is directly in furtherance of lawful litigation activity. 13a reached to decide that petitioning activities are not pro- tected by Noerr-Pennington. Reading the opinion as a whole, however, it is apparent that the district court did not make the detailed factual inquiry -necessary to sup- port this conclusion. Instead, the district court relied on its conclusion that ETSI had made a prima facie show- ing that the railroads had engaged in an overall con- spiracy to defeat the pipeline and that the petitioning was connected with this conspiracy. The court concluded that “[t]his connection . . . taints the entire petitioning process with sham.” We have already rejected the district court’s attempt to rely on the alleged overall conspiracy to directly abrogate the railroads’ privilege. For similar reasons, we now reject reliance on the overall scheme in connec- tion with finding sham. As we discussed earlier, the Supreme Court held in Pennington that genuine petition- ing activities are “not illegal, either standing alone or as part of a broader scheme itself violative of the Sher- man Act.” 381 U.S. at 670, 85 S.Ct. at 1593. Based on this language, this court has held that antitrust liability cannot be predicated on otherwise protected litigation activity merely because the activity was part of a broader conspiracy. Feminist Women’s Health Center, Inc. v. Mohammad, 586 F.2d 530, 543 (5th Cir. 1978), cert. denied, 444 U.S. 924, 100 S.Ct. 262, 62 L.Ed.2d 180 (1979); see also Hospital Building Co. v. Trustees of Rex Hospital, 691 F.2d 678, 688 (4th Cir. 1982), cert. denied, 464 U.S. 890, 104 S.Ct. 281, 78 L.Ed.2d 224 (1983); Alexander v. National Farmers Organization, 687 F.2d 1173, 1195 (8th Cir. 1982). The holding in Pennington requires attention to the narrow petitioning activity at issue. The fact finder must determine, as to the particular petition, whether the petitioner was en- gaged in a genuine effort to influence governmental decisionmaking. If so, then antitrust liability cannot be based on that activity and the attorney/client privilege l4a and work product immunity for documents directly related to the activity remain intact. In relying on the overall scheme theory to find sham, the district court relied primarily on the Ninth Circuit’s decision in Clipper Exxpress v. Rocky Mountain Motor Tariff Bureau, Inc., 690 F.2d 1240 (9th Cir. 1982), cert. denied, 459 U.S. 1227, 108 S.Ct. 1234, 75 L.Ed.2d 468 (1983). That decision, however, does not support the district court’s ruling. The court there reversed a grant of summary judgment to the defendants in an anti- trust case in which the alleged anticompetitive conduct consisted of petitioning and other unlawful activity. The Ninth Circuit held that summary judgment was improper even if Noerr-Pennington protected the petitioning be- - cause if “Clipper can prove that the defendants engaged in activities which violated the-antitrust laws, those vio- lations do not become immune simply because the defend- ants used legal means—protests before the ICC—as a means to enforce the violations.” Jd. at 1264. The court’s holding was that Noerr-Pennington “provides immunity only for the narrow petitioning activity,” id. at 1265, and that this immunity does not provide “overall immunity” to other violations, id. at 1263. The court did not hold, and could not hold consistently with Pennington, that the overall scheme makes the otherwise protected petitioning a sham. V Sham Petitioning In their petition for mandamus, the railroads ask that we direct the district court to adopt the special master’s tentative ruling that the railroads’ litigation activities were not sham as a matter of law. The railroads assert that the Andrews lawsuits cannot be found to be a sham because the railroads were successful. As to the window lawsuits, they assert no sham can be found because of the railroads’ defensive posture. We disagree. 15a A. Suecessful Lawsuits as Sham The argument that successful petitioning can never be a sham and thus subject to antitrust scrutiny is an ap- pealing one. As this court has recognized, it is “difficult to conclude that the filing of a complaint constitutes a sham where the party seeking relief actually prevails.” -Mid-Texas Communications Systems, Inc. v. AT&T, 615 F.2d 1872, 13883 (5th Cir.), cert. denied, 449 U.S. 912, 101 S.Ct. 286, 66 L.Ed.2d 140 (1980); see also Coca- Cola Co. v. Overland, Inc., 692 F.2d 1250, 1257 & n.17 (9th Cir. 1982). As we discuss below, this is because success on the merits is forceful evidence that the peti- tioner did in fact wish to influence the governmental de- cision and obtain the relief prayed for. We cannot, however, lay down a categorical rule that successful petitioning can never be a sham.® In Coastal 6The commentators take varying positions on the question whether a successful suit can be considered a sham. Areeda and Hovenkamp state generally that “successful judicial action is not a ‘sham,’” but add the caveat that this is “merely a strong pre- sumption, rather than a categorical rule.” P. Areeda & H. Hoven- kamp, Antitrust Law 11, 13 (Supp. 1986). They also refer ap- provingly to our decision in Coastal States Marketing, Inc. v. Hunt, 694 F.2d 1358 (5th Cir. 1983), the decision upon which we now rely to hold that some successful petitioning may be found to be sham. Areeda, at 16 (“Perhaps we cannot hope to be more precise than to say with the Fifth Circuit’s Coastal States decision that a litigant ‘should enjoy petitioning immunity from the antitrust laws so long as a genuine desire for judicial relief is a significant motivating factor underlying the suit.’ ”’). Kinter and Bauer note that success is strong evidence of a legitimate petition, but state that even successful claims may be considered to be sham. Kinter & Bauer, Antitrust Exemptions for Private Requests for Governmental Action: A Critical Analysis of the Noerr-Pennington Doctrine, 17 U.C. Davis L. Rev. 549, 576 (1984). Handler and DeSevo assert that success on the merits absolutely precludes a finding of sham. Handler & DeSevo, The Noerr Doc- l6a States Marketing, Inc v. Hunt, 694 F.2d 1358 (5th Cir. 1983), we considered the circumstances under which liti- gation activities can be held to be a sham. We held that a “litigant should enjoy immunity from the antitrust laws so long as a genuine desire for judicial relief is a significant motivating factor underlying the suit.” Jd. at 1372. Our statement of this test flowed from Noerr’s teaching that sham petitioning is that which, although “ostensibly directed toward influencing governmental ac- tion, is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the busi- ness relationships of a competitor.” 365 U.S. at 144, 81 S.Ct. at 533. Coastal States recognized that the key to extending Noerr-Pennington protection is whether the antitrust defendant genuinely was attempting to influ- ence governmental decisionmaking. If the defendant’s intent was not to influence the government and obtain relief, but rather to harm a competitor through the mere invocation and maintenance of the process, he is not en- titled to protection because he is not exercising the right of petition that formed the basis for the decision in Noerr. See Clipper Exxpress, 690 F.2d at 1255; see also Litton Systems, inc. v. AT&T, 700 F.2d 785, 810 (2d Cir. 1983), cert. denied, 464 U.S. 10738, 104 S.Ct. 984, 79 L.Ed 2d 220 (1984); Grip-Pak, Inc. v. Illinois Tool Works, Inc., 694 F.2d 466, 472 (7th Cir. 1982), cert. denied, 461 U.S. 958, 103 S.Ct. 2430, 77 L.Ed.2d 1317 (1983); City of Gainesviile v. Florida Power & Light Co., 488 F.Supp. 1258, 1265-66 (S.D. Fla. 1980); P. Areeda & H. Hoven- kamp, Antitrust Law 7 (Supp. 1986) (hereinafter trine and Its Sham Exception, 6 Cardozo L. Rev. 1, 30-31 (1984). This view is based on their reading of Noerr and Pennington to preclude any examination of the petitioner’s intent for any pur- pose. As we discuss below, we read Noerr’s statement that sham petitioning is that which is not genuinely intended to influence governmental decisionmaking to require an examination of the litigant’s intent to the extent of asking whether the petition was motivated by a desire for the relief sought. : 17a Areeda) (“When the antitrust defendant had not truly sought to influence a governmental decision, his invoca- tion of governmental machinery is a sham.”). The Coastal States test for determining when petition- ing activities are a sham recognizes that the “usual liti- gant will base its decision to sue on a number of fac- tors.” Coastal States, 694 F.2d at 1871. It focuses at- tention on the factors motivating the initiation and pros- ecution of the suit. Thus, it is not dispositive that the ultimate relief will be beneficial to the petitioner and will serve his purposes. It must be shown that the desire for relief was a significant factor underlying the actual bringing and prosecution of the suit. This requires an examination of the litigant’s intent. Cf. Greenwood Util- ities Commission v. Mississippi Power Co., 751 F.2d 1484, 1498 n.9 (5th Cir. 1985) (“[D]Jetermining whether the petitioning conduct was a sham often involves questions of motive or subjective intent.”). It is important to note, however, that this inquiry is limited to the immediate pur- pose for the litigation. Noerr and Pennington hold that anticompetitive intent does not make petitioning a sham. Noerr, 365 U.S. at 138-40, 81 S.Ct. at 530-31; Penning- ton, 381 U.S. at 669-70, 85 S.Ct. at 1593. Thus, the en- tire effort may be part of an antitrust conspiracy, with- out which there would have been no litigation. The issue of intent that controls is whether the litigant wished to obtain his anticompetitive end through obtaining court- ordered relief or simply through the filing and mainte- nance of the lawsuits. Our interpretation of the sham doctrine in Coastal States makes clear that success on the merits does not necessarily preclude an antitrust plaintiff from proving that the defendant’s earlier litigation activities were sham. The determinative inquiry is not whether the suit was won or lost, but whether it was significantly moti- vated by a genuine desire for judicial relief. Of course, the success of the claim presented is persuasive evidence 18a that the litigant in fact wanted the relief. It is highly unlikely that a party with a meritorious claim will not be significantly motivated by a desire to obtain relief on that claim. Thus, an antitrust plaintiff attempting to base liability on successful petitioning must overcome a strong inference that Noerr-Pennington applies and in many cases may be unable to do so. But reliance on the success of the earlier claim cannot substitute for proper consideration of any evidence the plaintiff might provide of the petitioner’s motivation. To be sure, “[d]etermining what efforts are not bona fide petitions to the government... is a difficult task.” Greenwood Utilities, 751 F.2d at 1498. Drawing the line at successful petitions—or at petitions that had a rea- sonable basis—would simplify this task somewhat. But we cannot say that important cases will not exist in which the evidence establishes that, despite having a meritorious claim, a party was motivated not by a desire to obtain relief but to harass and interfere with the ac- tivities of a competitor through the process itself. Ac- cord Grip-Pak, 694 F.2d at 472. In this case, for exam- ple, ETSI claims the railroads were not interested in ob- taining relief from the court in Andrews because the rail- roads realized their goal of defeating the pipeline de- pended primarily on delaying the project to the point it became so expensive to be infeasible as a competitive en- terprise. It presents evidence that railroads made the decision to participate in the litigation without considera- tion of the possible merit of the suit. Of course, that the railroads realized that the delaying value of their law- suit would aid their goal does not necessarily mean they did not in fact want relief from the court. But if ETSI can sustain its burden to show that the railroads were not significantly motivated by a “genuine desire for judi- cial relief,” Coastal States, 694 F.2d at 1372, the rail- roads should not be able to invoke Noerr-Pennington as 19a a shield to discovery of documents relating to that litiga- tion.’ The preceding discussion should not be taken as a sug- gestion that the reasonableness of a suit is irrelevant for all purposes. We have concluded that objective reason- ableness—as manifested by the court’s grant of relief on the claim—should not protect a person who was not genuinely exercising his right to petition. However, as our discussion below of standing indicates, we believe that a complete lack of reasonableness necessarily must deprive a person of protection. A party who invokes the governmental decisionmaking process must have a reason- able basis for believing his claim might prevail. In other words, the requirement in Noerr and Coastal States that petitioning be motivated by a genuine desire for relief means that the desire for relief must be both honest and T Judge Jolly disagrees at this point and argues that Bill John- son’s Restaurants, Inc. v. NLRB, 461 U.S. 731, 103 S.Ct. 2161, 76 L.Ed.2d 277 (1983), dictates that Noerr-Pennington protection be extended to any case that has a reasonable legal and factual basis. The question in that case was whether the NLRB could enjoin a state court proceeding that had a reasonable basis on the ground that it was motivated by a desire to retaliate against striking employees. The Court held that it could not. The Court did not, however, state a constitutional rule that all lawsuits with a reason- able basis are immune from the application of otherwise valid regulation. Rather, it construed congressional intent behind the NLRA in light of the constitutional right to petition and earlier Supreme Court cases that have held that the NLRA does not preempt states from providing a civil remedy for tortious conduct occurring during a labor dispute. Jd. at 740-44, 103 S.Ct. at 2168- 70. Given the constitutional implications and the lack of preemp- tion, the Court concluded that the NLRA does not empower the Board to enjoin lawsuits solely on the basis of retaliatory motive. The Court did not define sham for purposes of the antitrust laws, nor did it consider the situation in which the litigant, in addition to having a motive generally proscribed by the regulation at issue, also has no significant desire to obtain the relief prayed for. We therefore find no inconsistency between Bill Johnson’s and our reading of Fifth Circuit controlling precedent in the antitrust area. 20a reasonable. This requirement serves the purpose of with- holding protection from those persons who are not entitled to it, while at the same time recognizing the “wise policy [of] hold[{ing] business actors to a standard of reason- able care in using governmental machinery.” Areeda, at 11; see also id. at 7 (“To be sure, [a petitioner] would always be pleased to obtain a governmental decision against his rival. But where he had no reasonable expec- tation of obtaining the favorable ruling, his effort to do so was a sham.”); Litton Systems, Inc. v. AT&T, 700 F.2d 785, 811-12 (2d Cir. 1983), cert. denied, 464 U.S. 1073, 104 S.Ct. 984, 79 L.Ed.2d 220 (1984).° 8 Professors Areeda and Hovenkamp also state that they would not withhold protection from a person who “had a reasonable claim in the other forum but did not subjectively know it.” Areeda, at 10. They point to “[d]joubt about the wisdom of punishing such a person” and “the difficulty of properly proving subjective intent in the first place.” Jd. This statement seems to adopt a purely objec- tive approach to determining sham. We disagree. As our discussion of successful petitioning demonstrates, the Supreme Court’s de- cisions, as interpreted by this court and others, necessarily entail an examination of the petitioner’s subjective motivations. More- over, aside from the binding force of this precedent, we are not persuaded by the reasoning against subjecting some persons with objectively reasonable claims to antitrust scrutiny. Rather than punishing a person for simply not knowing the reasonableness of his claim, our ruling withholds Noerr-Pennington protection from persons who do not care about the reasonableness of their claim and who bring claims for the improper purpose of harming a com- petitor through the mere invocation of governmental decisionmak- ing processes. We do not believe the difficulty of inquiring into intent justifies a different rule; if a plaintiff can adduce sufficient evidence to overcome the strong inference that persons with meritorious claims wish to obtain relief upon them we believe he should prevail. We cannot endorse a rule that would require a court to blindly extend protection in the face of evidence that the party was in fact not exercising the protected right to petition. We also note that Areeda and Hovenkamp themselves would not preclude applying the antitrust laws to all petitions that had a reasonable basis. As noted earlier, supra note 9, they leave open the possibility of holding some successful petitions to be sham. a | Zla B. Lack of Standing as Sham The requirement of reasonableness raises a second, albeit related, reason why we decline to adopt the rail- roads’ argument that the result in the Andrews lawsuits precludes finding a sham. The one railroad who joined the Andrews litigation as a party—Kansas City South- ern (KCS)—was initially dismissed for lack of stand- ing. The court later vacated that ruling as to some of KCS’s claims when KCS filed an amended complaint and additional affidavits as to its interest in the case. How- ever, because the court had already ruled on the merits and granted an injunction in favor of the plaintiffs who had standing, it declined to finally resolve KCS’s stand- ing. On appeal, the Eighth Circuit also found it unnec- essary to resolve KCS’s standing, as it agreed with the district court’s ruling that the state plaintiffs had stand- ing and affirmed the injunction on that basis. Missouri v. Andrews, 787 F.2d 270, 274 (8th Cir. 1986), cert. granted, 107 S.Ct. 1846 (1987). We do not believe Noerr-Pennington extends to a liti- gant who has not properly invoked a court’s power to act in a case, even though the petitioner may otherwise genuinely desire relief on a meritorious claim. Unlike the legislative arena, substantial limits exist on the ability of persons to pursue claims in the courts. In particular, a person whose interest in a controversy is not sufficient to confer standing has no right to petition the court as a party and obtain relief. Thus, a person cannot reason- ably claim that his participation in a lawsuit in which he has no standing is a genuine attempt to influence gov- ernmental decisionmaking. Of course, a person has a right to assert his claim of standing along with his claim on the merits and seek to influence the court to recognize his interest in the controversy. Thus, to the extent the litigant has a reasonable basis for believing that his claim of standing might be accepted by the court, and thus that he will have the right to participate in the litigation proc- 22a ess and obtain relief, he will be protected by Noerr- Pennington even though he ultimately loses.° But a by- stander to a controversy who either knows he has no standing or who has no reasonable basis for asserting standing but who nonetheless files or joins in a lawsuit cannot claim the protection Noerr-Pennington extends to genuine attempts to influence judicial decisionmaking. See Landmarks Holding Corp. v. Bermant, 664 F.2d 891, 896 (2d Cir. 1981) (defendants appealed from zoning commission decisions “knowing that they lacked stand- ing to do so”); cf. MCI Communications Corp. v. AT&T, 708 F.2d 1081, 1156 (7th Cir. 1988) (“There can be no genuine attempt to petition the government when the petitioners know in advance that the governmental body lacks the authority to take the action desired.’”), cert. denied, 464 U.S. 891, 104 S.Ct. 2384, 78 L.Ed.2d 226 (1983) .*° ® ETSI devotes considerable argument in its brief to their claim that the railroads had no “legitimate interest in the outcome” of the Andrews litigation. To the extent this argument goes to the point we have just made in the text that parties without a reason- able basis for asserting standing are not protected by Noerr- Pennington, we agree. We disagree, however, if ETSI’s claim goes beyond that to suggest that the railroads are not protected because they may have had no interest in the substantive law upon which the Andrews’ court granted its relief. If the railroads’ interest is such that they had a reasonable claim of standing, then their in- terest was sufficient to allow them the protected right to seek to influence the court’s decision and obtain relief. That their motiva- tion may have been to harm E7 |; rather than to promote proper exercise of authority between the Department of Interior and the Army Corps of Engineers is irrelevant. See Noerr, 365 U.S. at 139-40, 81 S.Ct. at 531 (“[I]nsofar as the railroads’ campaign was directed toward obtaining governmental action, its legality was not at all affected by any anticompetitive purpose it may have had.”’). 10 The Andrews district court did sustain the railroads’ claim of standing as to some claims (none of which formed the basis for the ruling in that case), but we do not believe this to be disposi- tive. If the railroads did not actually and reasonably expect to prevail on the claims for which they had standing, or if that ex- 23a The participation of the only other railroad actively involved in the Andrews litigation—Union Pacific— raises similar difficulties. Unlike KCS, Union Pacific never attempted to join the litigation as a party. In- stead, it provided legal assistance through its attorneys to the state of Nebraska, a named plaintiff in one of the suits. Union Pacific paid the fees of its attorneys for this assistance, which apparently involved extensive research assistance and document drafting. The parties dispute the precise role Union Pacific played in Nebraska’s deci- sion to seek its assistance and to file suit. The parties also dispute the degree to which others in the litigation were aware of Union Pacific’s involvement, but it ap- pears to be largely agreed that most parties, as well as the district court itself, were unaware that Nebraska was being assisted. Union Pacific’s activity presents difficult questions re- garding the scope of Noerr-Pennington’s protection and the constitutional right to petition. The railroads have argued that Noerr itself answers these questions in favor of protecting Union Pacific’s activities. In Noerr, the railroad industry hired a public relations firm to con- duct their publicity campaign against the trucking in- dustry. Much of the campaign was carried out through a “third-party technique, that is, the publicity matter circulated in the campaign was made to appear as spon- taneously expressed views of independent persons and civic groups, when, in fact, it was largely prepared and produced by [the public relations firm] and paid for by the railroads.” 365 U.S. at 180, 81 S.Ct. at 525. The Supreme Court rejected the lower court’s view that this aspect of the railroads’ activity justified application of the antitrust laws. pectation was not a significant motivating factor underlying their decision to bring the suit, the existence of those claims should not protect them. 24a The railroads here argue that the holding in Noerr dictates that Union Pacific’s assistance to Nebraska, which they assert was more benign than the misleading conduct in Noerr, be protected. We disagree. As the Court’s subsequent decision in California Motor Tran- sport Co. v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972), makes clear, significant dif- ferences exist between attempts to influence legislative decisionmaking and attempts to influence the judiciary. Noerr emphasized the highly political nature of the rail- roads’ petitioning aetivities and Congress’s traditional caution “in legislating with respect to problems relating to the conduct of political activities.” Noerr, 365 U.S. at 141, 81 S.Ct. at 531. In contrast, as we noted above, the right to petition the courts and the methods that properly may be used in such petitioning have been care- fully circumscribed. Cf. 1 P. Areeda & D. Turner, Anti- trust Law 48 (1978) (“[T]he legislative and judicial reluctance to regulate political activities has never af- fected litigation.”). We do not believe that Noer’s ex- tension of protection to the railroads’ publicity campaign controls the disposition of the issue of protection for Union Pacific’s activities. Indeed, we believe it would be an unwarranted exten- sion of Noerr-Pennington’s protection to hold that a party without an interest in a case sufficient to allow it to directly petition the courts may nonetheless indirectly seek its anticompetitive goals through encouraging and assisting the lawsuits of others."' Noerr was _ based largely on the principle that government relies to a large degree on the “ability of persons to make their wishes known to government.” 365 U.S. at 137, 81 S.Ct. at 529. 11Qur discussion here assumes, without deciding, that Union Pacific had no reasonable claim of standing to participate in Andrews. Should the district court determine that Union Pacific had such a claim, the mere fact that Union Pacific did not actually formally join the litigation does not deprive it of protection. 25a It further recognized that prohibiting those with a com- petitive interest in governmental action from petitioning the government as to that action would “deprive the gov- ernment of a valuable source of information and, at the same time, deprive the people of their right to petition in the very instances in which that right may be of the most importance to them.” Jd. at 139, 81 S.Ct. at 531. In this case, however, our holding subjects to antitrust scrutiny only those persons whose interests are such that Congress or the courts have independently determined not to be the proper parties to assert the claim in court. To the extent a party has an interest in a case sufficient - to support a reasonable claim of standing, his efforts to directly or indirectly participate in the litigation are protected. We do not believe that the policies behind Noerr-Pennington dictate any greater protection than this. We recognize the constitutional underpinnings of the Noerr-Pennington doctrine and that Union Pacific’s ac- tivities to some degree implicate constitutional protec- - tions. See NAACP v. Button, 371 U.S. 415, 88 S.Ct. 328, 9 L.Ed.2d 405 (1963) (protecting the NAACP’s right to advise persons of their legal rights and solicit their involvement in racial discrimination suits); Jn re Primus, 436 U.S. 412, 98 S.Ct. 1893, 56 L.Ed.2d 417 (1978) (protecting the ACLU’s right to give legal ad- vice and solicit involvements in lawsuits). The First Amendment, however, does not extend blanket protection to all activities involving association together to pursue goals through litigation. In Ohralik v. Ohio State Bar Association, 436 U.S. 447, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978), for example, the Court held that a state may prohibit lawyer solicitation in circumstances that are conducive to fraud, undue influence, and other forms of vexatious conduct. The Court has also “recognized the strong governmental interest in certain forms of eco- nomic regulation, even though such regulation may have 26a an incidental effect on rights of speech and association.” NAACP v. Claiborne Hardware Co., 458 U.S. 886, 912, 102 S.Ct. 3409, 3425, 73 L.Ed.2d 1215 (1982). We believe that the interests supporting application of the antitrust laws to prohibit and penalize anticompeti- tive conduct are sufficiently strong to dispel any constitu- tional difficulties in withholding Noerr-Pennington pro- tection from persons who, without the right to petition the courts directly, seek to further their anticompetitive goals through funding, encouraging, and assisting the lawsuits of others.'? We do not believe the First Amend- ment protects a competitor’s right to accomplish eco- nomic predation through such means. Unlike the regula- tions struck down in Button and Primus, which broadly prohibited all solicitation activities of the NAACP and ACLU without a showing of any substantive evil flowing from such activity, withholding Noerr-Pennington pro- tection here simply opens the door for ETSI to show that Union Pacific’s activity was harmful anticompetitive con- * duct. The governmental interest in allowing this show- ing to be made, coupled with the weak claim to protec- tion for such activity, amply justifies our holding here. 12 Qur conclusion here results in the possible piercing of Union Pacific’s claim of privilege for documents prepared in connection with the Andrews litigation. We do not address the extent to which these documents, or documents prepared in connection with KCS’s participation in the litigation, might still be immune from dis- covery because of a privilege held by the state of Nebraska or other parties involved in that litigation. Indeed, after the district court’s ruling granting ETSI’s motion to compel discovery, Ne- braska and others involved in the Andrews litigation sought a protective order from the district court against disclosure of docu- ments as to which they hold a privilege. The district court did not rule on that motion because of the pendency of the present peti- tion. These parties have filed amicus briefs in this court urging that we recognize their claims of privilege, especially in light of the pendency of the Andrews case before the Supreme Court. We are confident the district court in any further rulings on ETSI’s discovery motions will act to safeguard any viable privilege these parties hold. 27a C. Defending Lawsuits as Sham The railroads also argue that their participation in the window lawsuits cannot be a sham as a matter of law because they were defendants in those lawsuits. This point need not detain us long. We certainly agree with the Seventh Circuit’s observation that one “cannot start a suit... and then sue the defendant for refusing to default.” Brunswick Corp. v. Riegel Textile Corp., 752 F.2d 261, 272 (7th Cir. 1984), cert. denied, 472 U.S. 1018, 105 S.Ct. 3480, 87 L.Ed.2d 615 (1985). But the allegations made and evidence presented by ETSI go beyond that. ETSI claims the railroads knew that they had no viable defense in those suits but that they none- theless filed defensive pleadings and sought discovery for the purpose of further delaying the pipeline project and obtaining information that could be used in other forums to hinder the project. ETSI points out that it was suc- cessful in obtaining the relief it sought in each of the window lawsuits it filed and that the railroads continued to litigate each case long after their arguments had been repeatedly rejected by the courts. We believe that ETSI’s claims, if found by the district court to be supported by prima facie evidence, are suf- ficient to deprive the railroads’ defense of the window litigation of Noerr-Pennington protection. We perceive no reason to apply any different standard to defending lawsuits than to initiating them. Therefore, to the ex- tent the railroads’ activities in the window lawsuits were not significantly motivated by an honest and reasonable desire to influence the court’s decision and affect the out- come of the case they are not entitled to protections from antitrust scrutiny. 13 The railroads also claim that the district court cannot conclude the window lawsuits defense was a sham because the special master made factual findings to the contrary that were not clearly errone- ous. See Fed. R. Civ. P. 53(e). We do not agree that the district court was obligated to give any deference to the special master’s 28a VI Waiver of Privilege The final issue we must address is ETSI’s contention that an independent ground exists for leaving un- disturbed the district court’s ruling. ETSI claims that the railroads waived their asserted privileges by relying on a defense that puts their attorney/client communica- tions and work product at issue. It argues that an anti- trust defendant who relies on Noerr-Pennington bears the burden of proving the genuineness of his petitioning ac- tivities, and, having thus injected his good faith into the case, waives any privilege to documents bearing on that issue. We disagree. We cannot accept the proposition that a defendant in an antitrust suit who relies on the protection afforded by Noerr-Pennington necessarily gives up the right to keep his communications with his attorney confidential. Such a rule certainly cannot be justified on the basis of waiver. This is not a case in which a party has asserted a claim or defense that explicitly relies on the existence or absence of the very communications for which he claims a privilege. See, e.g., United States v. Woodall, 438 F.2d 1317, 1324-26 (5th Cir. 1970), cert. denied, 403 U.S. 938, 91 S.Ct. 2262, 29 L.Ed.2d 712 (1971). A defendant who relies on Noerr-Pennington merely denies the existence of an antitrust violation. Cf. Areeda, at 4 (The “doctrine is in part an ‘exception’ or ‘immu- nity’ from normal antitrust principles .. . but it prin- cipally reflects the absence of any antitrust violation to start with.”). Accordingly, a plaintiff attempting to make an antitrust case based on conduct that involves findings in the case. At the time he submitted his report, the special master indicated his desire to receive comments and objec- tions from the parties before preparing his final opinion. The parties submitted their objections but the master resigned his position before he could act on them. It appears, therefore, that the special master’s report was only a preliminary one. 29a lobbying or litigation bears the burden to show that such activity is not protected petitioning but a sham. Coastal States, 694 F.2d at 1872 n.46; Mohammad, 586 F.2d 543. We do not see how it can be said that the railroads waived their privilege when it is ETSI who filed this lawsuit and who seeks to rely on attorney/client com- munications and work product to prove its claim. Nor do we perceive any other basis for abrogating the railroads’ privilege. Noerr-Pennington is based on the principles that individuals have a right to petition gov- ernment and that government has a need for the infor- mation provided by such petitioning. As we noted earlier in this opinion, the protection afforded by the attorney/ client privilege furthers these principles. Under the rule ETSI suggests, whenever a competitor files a lawsuit alleging that some earlier petitioning was a sham and the defendant denies the allegation, the defendant would —lose his privilege. This result would be inconsistent with both Noerr-Pennington and the attorney/client privilege. Attorney/client documents may be quite helpful in mak- ing out a claim of sham, but this is not a sufficient basis for abrogating the privilege. Vil Conclusion To recapitulate, we hold: % Even if prior litigation was part of an overall conspiracy which itself violated antitrust law, Noerr-Pennington requires a prima facie finding that the particular litigation was a sham to war- rant discovery of documents initially protected by the attorney/client privilege or work product immunity. The litigation was a sham, and the documents subject to discovery, if the litigation was under- taken without a genuine desire for judicial relief 30a as a significant motivating factor, or if there was no reasonable expectation of judicial relief, or if there was no reasonable basis for party standing. 3. It is possible for litigation which ultimately suc- ceeds to have been sham. 4. Defensive litigation can be sham. The antitrust suit defendant who raises the Noerr-Pennington claim to protect its conduct in prior litigation does not thereby waive the attor- ney/client privilege or work product immunity. We conclude that the district court acted improperly in granting ETSI’s motion to compel discovery without making a proper factual determination that the individ- ual petitioning activities in which the railroads were en- gaged were sham. Should ETSI renew its motion to dis- cover the documents for which the railroads have as- serted privilege, and if the district court should then conclude that ETSI has made a prima facie showing that the litigation—affirmative or defensive—is or was a sham, then at that moment the attorney/client and work product privileges will evaporate so that all material in the litigation will be subject to discovery bearing on fur- ther proof or establishment that the litigation is sham. While the material is not available initially to establish a prima facie case, once that point is reached, there is nothing in Noerr-Pennington, much less in attorney/ client or work product, to shield such dramatic evidence from the finder of fact. Any different rule would permit one or all of the testimonial privileges to shield forever dramatic, perhaps even conclusive, proof of exactly what sets asiae those privileges under the law. Upon receipt of this opinion the district judge will, undoubtedly without order from us, promptly vacate his order. Writ Conditionally GRANTED. 3la E. GRADY JOLLY, Concurring in result: I am pleased to concur in the result reached by the majority in Judge Reavley’s very thoughtful opinion. I respectfully dissent to the extent that the majority holds that a lawsuit, reasonably based on fact and law, if improperly motivated, may constitute a sham under the Noerr-Pennington doctrine. When we speak of the right to file a lawsuit, we are speaking of rights guaran- teed by the Constitution. As is made clear by California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609 (1972), the Supreme Court’s holding that antitrust laws cannot punish the legitimate use of the courts is grounded upon the first amendment right to petition the government for redress of grievances. Id. at 510, 92 S.Ct. at 611. As a general rule, once the right is found to be protected, i.e., a reasonable legal and factual basis for the lawsuit, improper motivation for asserting the right will not defeat constitutional protec- tion, as is illustrated by the Supreme Court’s holding that motivation to violate antitrust laws does not vitiate the first amendment right to use the courts for that pur- pose; only when the assertion is a “sham” is constitu- tional protection lost. A successful lawsuit is not, and cannot be, constitutionally speaking, a sham upon the courts; neither can any lawsuit unless it baseless. For confirmation of this principle, we need only turn to the Supreme Court’s most recent pronouncement on the constitutional right to access to the courts. In Bill Johnson’s Restaurants, Inc. v. NLRB, 461 U.S. 731, 103 S.Ct. 2161 (1983), an employer used the state courts to sue his lawfully picketing employees for injunctive relief and monetary damages. The National Labor Relations Board issued a cease and desist order against the em- ployer on grounds that the sole purpose of using the courts was to retaliate against the employees for exer- cising their protected statutory rights, —_— ue a —— ee 32a Noting that baseless-litigation is not immunized by the first amendment right to petition, the Court stated that such considerations “led us in the antitrust context to adopt the ‘mere sham’ exception in California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609 (1972). We should follow a similar course -un- der the NLRA.” The Court then proceeded to make ab- solutely clear that the finding of a sham, in order to defeat constitutional protection to use the courts, is two- pronged: first, the lawsuit must be baseless, and, second, it must be prosecuted with the intent of retaliating against the employee. This specific two-pronged holding, requiring both improper motivation and a baseless law- suit, was reiterated throughout the opinion (“improperly motivated suit lacking a reasonable basis, . . . baseless lawsuit with intent of retaliating,” 461 U.S. at 744, 103 S.Ct. at 2170; “[rJetaliatory motive and lack of reason- able basis are both essential prerequisites,” id. at 748, 103 S.Ct. at 2173; “unmeritorious lawsuit for retaliatory purpose,” id. at 749, 103 §.Ct. at 2173). Addressing specifically whether a meritorious lawsuit can be a sham, the Court stated: “[I]f the employer’s case in the state court ultimately proves meritorious and he has a judgment against the employees, the employer should also prevail before the Board, for the filing of a meritorious lawsuit, even for retaliatory motive, is not an unfair labor practice.” /d. at 747, 103 S.Ct. at 2172. After a determination has been made that a lawsuit is baseless, the subjective intent of the parties will be- come relevant in determining whether the initial filing and prosecution of the lawsuit enjoys constitutional pro- tection. In Bill Johnson’s Restaurants, Inc., for example, Justice White observed that if the judgment went against the employer in that case, “[t]he employer’s suit having proved unmeritorious, the Board would be war- ranted in taking that fact into account in determining cient 33a whether the suit had been filed in retaliation for the exercise of the employees’ § 7 rights.” Jd. Therefore, because I believe that the issue of whether a lawsuit may constitute a sham is controlled by Bill Johnson’s Restaurants, Inc., | respectfully dissent from the majority’s holding that a lawsuit, grounded upon a reasonable basis in fact and law, may constitute a sham. 34a APPENDIX B IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS BEAUMONT DIVISION Cause No. B-84-979-CA ETSI PIPELINE PROJECT, A JOINT VENTURE, and ENERGY TRANSPORTATION SYSTEMS, INC. VS. BURLINGTON NORTHERN, INC., et al. MEMORANDUM OPINION & ORDER Plaintiff’s Second Motion to Compel Production of Doc- uments (identified as the “Crime-Fraud” Motion) seeks to compel production of certain allegedly privileged docu- ments." The Motion is Granted. I. INTRODUCTION The Court has carefully studied the recommendations of the Special Master’ relating to Plaintiff’s Crime 1 The documents number in the thousands. No argument has been made that the documents are not within the attorney-client privilege or the work product privilege (aside from the crime-fraud exception). The buik of the documents in question relate to the window litigation, the later administrative proceedings, and the Andrews lawsuits. 2 Special Master John F. Sutton, Jr., A.W. Walker, Jr. Centennial Chair in Law; Professor and Former Dean, The University of Texas School of Law. nen 85a Fraud Motion. Additionally, the Court has carefully re- viewed the briefs supplied to the Master and the Re- sponses of the parties to the Master’s recommendations. The Court notes that although it did not disagree with the Special Master in regards to the legal analysis, the Court finds that the facts surrounding this controversy force a different focus in light of the applicable case law. Specifically, the Court finds that the conduct of the De- fendants throughout the course of the attempted devel- opment of the ETSI project constituted prima facie anti- competitive conduct. This activity amounted to an over- all scheme involving a concerted effort by the defendant railroads to prevent ETSI from competing in the coal shipping business. The question, therefore, becomes whether the attorney/client privilege, reinforced by the exception to the Sherman Act found in Eastern Railroad Presidents Conference et al. v. Noerr Motor Freight, Inc., et al. (Noerr) and United Mine Workers of America ». Pennington, et al. (Pennington), should protect discov- ery of work product and attorney/client communications or whether the crime or fraud exception to the privileges should allow Plaintiff to discover material which was part of the furtherance of that crime or fraud.® Il, SUMMARY OF FACTS AND ISSUES ETSI, relying on the crime-fraud exception to the priv- ileges, contends that the Defendants used their attorneys to further activities that violated the antitrust laws: therefore, the materials should be discoverable Defend- ants counter that the alleged activities were “petitioning” activities and that the Noerr-Pennington doctrine shields $365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961). * 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). 5 The Court, throughout this Order, borrows heavily from the language in the Special Master’s Recommended Memorandum Opin- ion and Order. EE eEO-w 36a Defendants from liability; consequently, making the crime-fraud exception inapplicable. ETSI replies that the “sham” exception to the Noerr-Pennington doctrine ap- plies and, additionally, that in any event evidence of use of attorneys in Defendants’ governmental petitioning is admissible because the petitioning was part of an overall, broad conspiracy to violate the antitrust laws. ETSI also asserts that the Court must allow discovery based on an alternative doctrine. By placing the question of a good faith defense at issue by the assertion of the Noerr Pennington defense, Defendants waive the attorney/client privilege regarding whether their government petitioning was made in good faith.° _ Defendants agree* that ETSI’s burden, under the crime-fraud exception, is only to make a prima facie showing that Defendants consulted with their attorneys for the purpose of furthering a violation of the antitrust laws. “Prima facie” in this regard means sufficient evi- dence to raise an issue of fact. I.A. Background * ETSI wanted to build a coal slurry pipeline of some 1800 miles to carry coal from Wyoming to Arkansas. A project of this magnitude faced numerous obstacles in- 6 Plaintiff’s assertion that the Defendants waived the attorney/ client privilege when they asserted the Noerr-Pennington defense presents a novel issue of first impression in antitrust litigation in this Circuit. Because this Court holds that the motion to compel is granted on other grounds, the Court declines to apply the “at issue” doctrine to the instant case. 7See Defendants’ Response to Plaintiffs’ Supplemental Brief, at 5. 8In stating the general facts underlying this motion, the court has borrowed from a statement by Defendants, with some amplifica- tion. See Defendant’s Response to Plaintiffs’ Supplemental Brief, at 5-7. — 37a cluding marketing, financing, and right of way. For ex- ample, it needed to cross the property of a number of railroads as well as the land of ranchers and other in- terests. In the early days of its project, ETSI ap- proached all of the affected railroads on a coordinated basis to request numerous crossing permits and sought an immediate response to its crossing requests. All but one of the railroads denied the requests. The project also required a great supply of water to be secured from deep wells in Wyoming and the Oahe Reservoir in South Dakota. In the beginning, Arkansas Power & Light, now a party, was envisioned as the proj- ect’s customer, but others, including Houston Lighting and Power, were added.°® As a result of the railroads’ refusal to allow ETSI the requested crossing rights, ETSI was forced to turn. to another plan which it hoped would provide an alternative to the crossing rights. ETSI purchased easements from landowners which would allow it to construct pipelines at various points underneath existing railroad easements. These easements were called windows. ETSI initiated a litigation program which included over 60 suits filed against the railroads in the courts of several states. The litigation program resulted in state court findings that ETSI’s window easements gave it the right to build its pipeline under the railroads’ easements. By ETSI’s ad- mission, this litigation program was carefully planned to establish a network of precedents that could be used not only against the individual railroad defendant but against all other western railroads as well. This litiga- tion program was the direct result of the Defendants in- tentional and coordinated efforts to prevent the pipeline project from succeeding. But for the railroads’ bad faith actions, the litigation would not have occurred. ® Houston Lighting and Power has filed a motion to intervene in this litigation. 38a Simultaneously, ETSI was pursuing a major campaign to obtain legislation from state and federal governments giving coal slurry pipelines eminent domain power to con- demn private property that it proposed to cross, including property of railroads, ranchers and other interests. The affected railroads coordinated their defenses of the many lawsuits brought by ETSI, and they worked together in lobbying at the state and federal levels. As noted above, this activity which was part of a major, full scale, cam- paign was designed to block the coal slurry pipeline. This coordinated effort, which was initiated by the railroads at the early stages of the ETSI project, included efforts to deny ETSI rights of way easements, water rights, rights of condemnation; all of which were calculated to block the ETSI project. The railroads worked together and coordinated each phase of the campaign and devel- oped strategy on how to most effectively prevent the pipe- line from being constructed. Later, after ETSI had secured crossing rights from the railroads as a result of the litigation program, certain railroads participated in some administrative proceedings in which ETSI sought environmental and other authori- zations to construct its pipeline. Two of the railroads also were involved—one as a party but the second only indi- rectly through assistance given to the State of Nebraska —in the Andrews lawsuits in which the authorization granted ETSI by the Department of Interior for use of certain waters was found to be improper. ETSI later abandoned its coal slurry project, allegedly as a result of the antitrust actions of the railroads. ETSI instituted this litigation on September 9, 1984 against the defendant railroads.” 1” The Defendant railroads against whom this motion was filed are Burlington Northern Railroad, Union Pacific, Chicago & North Western, Kansas City Southern Railway, and Missouri Pacific Rail- road Company. Added as a party subsequent to this motion is the Atchison, Topeka and Santa Fe Railroad. 39a I.B. Issues The questions this Court must consider is (a) whether the attorney/client and work product privileges apply to the documents in question and (b) whether the crime or fraud privilege excepts those documents from the protec- tion of the attorney/client and work product privileges. The Court also must consider whether the Noerr-Penning- ton defense can operate as a shield to prevent discovery and, consequently, whether an exception to petitioning immunity such as the sham exception or the overall scheme exception removes the Noerr shield. The applicability of the work product and attorney/ client privileges is not at issue. The parties do not dis- pute that the privileges apply to the documents in ques- tion. Therefore, the relevant inquiry this Court must ex- plore is whether the crime fraud exception requires this Court to allow discovery and whether that exception is limited by the Noerr-Pennington antitrust defense. ETSI argues that it has presented prima facie evidence that the conduct of Defendants throughout the window litigation program, the Andrews cases and the permit- ting process was in furtherance of an overall scheme of crime or fraud to violate antitrust laws and prevent ETSI from succeeding in the development of the coal slurry pipeline program. In response, Defendants argue that the Noerr-Penning- ton doctrine provides immunity because the activities re- lated to the window suits, the Andrews litigation and the permitting process constituted -governmental petitioning and, consequently, the documents remain privileged. ETSI counters the Noerr-Pennington defense with the conten- tion that the petitioning activities of Defendants, both in court and before administrative bodies, in fact consti- tuted a “sham” within the meaning of the sham excep- tion to that defense. Defendants contest the “sham peti- tioning” position of ETSI on the basis that ETSI cannot 40a make a prima facie" showing of sham. Defendants aver that a sham exception could not be shown even if part of the motive had been to stop or delay the ETSI project, because at least a part of the motivation was to obtain a result from a tribunal or governmental unit. “As long as a ‘genuine desire for judicial relief’ is a motivating fac- tor for a litigation position, such action is immune from antitrust challenge.” ™ The Court, in a departure from the Special Master’s Recommendations, holds that the inquiry should focus on the core question of whether the crime or fraud exception applies. Plaintiff’s motion does not seek to test the strength or viability of Defendants’ Noerr-Pennington defense; nor does it provide an opportunity for Defend- ants to set the groundwork for a motion for summary judgment on their defense. Although the viability of the Noerr defense and the sham exception to that_defense are important to Plaintiff’s substantiating prima facie proof of a crime or fraud, the Court holds that based on a finding of a broad, overall scheme, the crime fraud ex- ception provides an independent ground to warrant dis- covery of the protected material. Additionally, the Court finds that if the Noerr doctrine does apply to shield a 11 ETSI has the burden of showing prima facie evidence of a sham; see Coastal States Marketing, Inc. v. Hunt 694 F.2d 1358, 1373 (5th Cir. 1983). 12 Defendants’ Response to Plaintiffs’ Supplemental Brief, at 13, citing Coastal States Marketing, Inc. v. Hunt, 694 F.2d 1358, 1372 (5th Cir. 1983). Defendants state that ETSI has not met its burden because the evidence shows that a desire for governmental relief is at least one of Defendants’ motives, even though additional motives may have been to delay or to make a governmental agency reconsider its work, citing Meyer, A Standard for Tailoring Noerr- Pennington Immunity More Closely to the First Amendment Man- date, 95 Yale L.J. 832, 837 (1986): “[I]t is impossible to char- acterize petitioning that is intended to produce these harmful re- sults as ‘sham’ activity when petitioners are also genuinely seeking a governmental response.” 4la limited portion of the overall conspiracy, the Plaintiffs have met its burden in showing an exception to Noerr through the sham exception and the overall scheme exception. The central issue to be determined, therefore, is whether the crime or fraud exception removes the shield of the privileges.’* The Court also considers whether the Noerr doctrine applies to prevent discovery and whether Plaintiff has presented sufficient proof to show an excep- tion to this doctrine of petitioning immunity. HI. EVIDENTIARY BURDENS Defendants, as claimants of the privilege, have the initial burden to show that each document in question falls within the attorney/client privilege or the work product privilege.'* ETSI, seeking to apply the crime- fraud exception, has the burden of showing prima facie that the services of Defendants’ lawyers were used by defendant railroads in furtherance of a crime or fraud *—namely an antitrust violation. Defendants then have the burden to show that the petitioning activities were not part of the overall scheme. In regards to the applicability of Noerr-Pennington, Defendants, having raised the Noerr-Pennington defense, must show that the activities complained of consisted of 13 The Special Master focused on the issue of Noerr-Pennington as a shield to the crime-fraud exception, exploring the substantive analysis of the Noerr doctrine. “(T)wo major issues of law are: first, the nature and scope of the Noerr-Pennington doctrine; and, second, the nature and scope of the “sham” exception to that doc- trine.”” Special Master’s Recommended Memorandum Opinion and Order at 4. 14 As the Court noted above, this issue is uncontroverted at this point. The Court notes, however, that ETSI is not precluded from asserting that the privilege does not apply to specific documents. 15 See n.22, infra. See also discussion at §IV., “Crime or Fraud” Exception, infra. eee 42a normal petitioning of governmental units.'® ETSI raises the ‘‘sham” and other exceptions to the Noerr-Pennington defense, and to sustain its contention must make a prima facie showing as to each defendant that a desire for re- lief was not a part of the defendant’s motivation in petitioning.” IV. THE “CRIME-FRAUD” EXCEPTION The crime-fraud exception '* to the attorney-client pri- vilege, simply stated, is that “communications between an attorney and his/her client in furtherance of the com- mission of a crime or fraud will not be protected from disclosure under the law.”’* McCormick states that “the privilege does not extend to communications between attorney and client where the client’s purpose is the fur- therance of a future intended crime or fraud.” *’ The crime or fraud exception applies to both the attorney client privilege as well as the work product privilege.*' 16 See § V., Noerr-Pennington Doctrine, infra. 17 See § VI., The “Sham” Exception, infra. 18 The ethical precepts regarding privileged communications are not controlling in determining the scope of the crime-fraud excep- tion to the evidentiary privilege, and thus we need not look to either the Texas Code of Professional Responsibility or the A.B.A Model Rules of Professional Conduct; see United States v. Ballard, 779 F.2d 287, 293 (5th Cir. 1986), cert. denied 106 S.Ct. 1518 (1986). 19 Coleman v. American Broadcasting Companies, Inc., 106 F.R.D. 201, 206 (D. D.C. 1985), citing Clark v. United States, 289 U.S. 1, 15, 53 S.Ct. 465, 469-70, 77 L.Ed. 993 (1933). See also In rx Grand Jury Proceedings, 604 F.2d 798 (3rd Cir. 1979). 20 McCormick, Evidence 229 (3d ed. 1984). 21 See In re Grand Jury Proceedings, 604 F.2d 798 (3rd Cir. 1985); Lamelson v. Bendix Corp., 104 F.R.D. 13 (D. Deleware, 1984); See also In re Sealed Case, 676 F.2d 793, 812 (D.C. Cir. 1982) (“Unless the blameless attorney is before the court with an independent claim of privilege, the client’s use of an attorney's 43a Before the privilege is defeated, “courts have held that a prima facie, or probable cause, showing that the commu- nications were made in the furtherance of a crime or 9 fraud must be made,” ~ and “mere allegations of wrong- doing or simply naming attorneys as Defendants in liti- gation is not enough to vitiate the attorney-client priv- ilege.” ** An antitrust violation is sufficient to invoke the crime-fraud exception.** The important intent is that of the client, not that of the lawyer, for the ‘admissibility of the evidence does not turn on the lawyer’s complicity in the wrongful transaction.” ** The parties disagree as to the specificity efforts in furtherance of crime or fraud negates the privilege.”). Cf. In re Special September 1979 Grand Jury (II), 640 F.2d 49 (7th Cir. 1980). See generally Annot., 64 ALR Fed. 470, Fraud Exception to Work Product Privilege in Federal Courts (1983). Where the crime-fraud exception is applicable, one need not show “substantial need” to secure production of the attorney’s work product; Jn re Sealed Case, 676 F.2d 793, 812 (D.C. Cir. 1982). 22 Coleman v. American Broadcasting Companies, Inc., supra, n.16 at 207. Accord: United States v. Ballard, supra n.18; In re Grand Jury Subpoenas Duces Tecum, 773 F.2d 204 (8th Cir. 1985) ; United States v. Harrelson, 754 F.2d 1153 (5th Cir. 1985), cert. denied 106 S.Ct. 277 (1985) ; Pritchard-Keang Nam Corp. v. Jawor- ski, 751 F.2d 27, 28 (8th Cir. 1984); United States v. Horvath, 731 F.2d-557 (8th Cir. 1984) ; United States v. King, 536 F. Supp. 253, 261 (C.D. Cal. 1982). Expansive definitions of “crime or fraud” have been used by some courts dealing with business related areas such as patent, antitrust or securities litigation. Coleman v. American Broadcast- ing Companies, Inc., 106 F.R.D. 201, at 208. 23 Td. at 209. 24 Pfizer, Inc. v. Lord, 456 F.2d 545 (8th Cir. 1972); United States v. AT&T, 86 F.R.D. 603 (D. D.C. 1979); see Westinghouse Electric Corp., 76 F.R.D. 47, 59 (W.D. Pa. 1977). 25 United States v. Ballard, supra n.18, at 292. Accord: United States v. Horvath, 731 F.2d 557 (8th Cir. 1984); In re Grand Jury Subpoena Duces Tecum Dated 9/15/83, 731 F.2d 1032 (2nd Cir. 1984) ; Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 90 F.R.D. 21 (N.D. Ill. 1980). 44a with which the intent of the client must be shown. Logically, a prima facie showing has been made if the evidence would support a finding that the client intended conduct which the client knew or reasonably should have known constituted a crime* and knowingly used the services of the attorneys in connection with that conduct. It is not necessary to show that the client directed the attorneys to take specific illegal or improper actions— indeed, it is the client’s role to determine the purposes of the representation and the lawyer’s role to determine the means by which such purposes are to be achieved.27 On the other hand, one must show more than the mere fact the client engaged in criminal or fraudulent conduct and consulted an attorney before doing so. The problem is an evidentiary problem rather than a mechanical problem susceptible to reduction to a formula. The true test is whether the logical inferences from the available evidence would justify a finding of fact that client’s purpose was to use the services of its lawyers in engaging in what the client knew or reasonably should have known to be crimi- nal or fraudulent conduct. Defendants argue that even if Plaintiff can present prima facie evidence of a crime or fraud, their assertion of the Noerr-Pennington defense should shield discovery because if the defense is successful, no crime or fraud will have been committed in regards to the specific acts of petitioning.** The Court disagrees with this argument. The crime-fraud exception relies on the requirement that 26 Rev. Unif.R.Evid. 502(d)(1) (1974) requires that the client knew or reasonably should have known the act to be a crime or fraud. 27 Rule 1.2 and Comment 1 to Rule 1.2, A.B.A. Model Rules of Professional Conduct. 28 The Court finds, however, that even under the Noerr doctrine. Plaintiffs have shown that the overall scheme constitutes prima facie evidence that the governmental petitioning was a sham. (See discussion below at § VI.). 45a the party seeking discovery must show that the opponent was engaged in some form of crime or fraud and that the documents sought were used in the furtherance of that conspiracy. To allow the Defendants to use the Noerr doctrine to shield a portion of the activities which were a part of the overall conspiracy would be to frustrate the purpose of the crime-fraud exception. The Defendants, as well as the Special Master, point to persuasive language in the Pennington opinion which states that “‘(s)uch conduct is not illegal, either standing alone or as part of a broader scheme to violate the Sher- man Act.” *® Defendants assert that based on this lan- guage, Defendants’ conduct throughout the course of the conspiracy which was related to litigation or other gov- ernment petitioning is specially protected by virtue of the Noerr doctrine. The Court does not agree with this view of the Pennington language. Although Pennington’s discussion regarding the overall conspiracy scheme could result in a favorable outcome on whether the Defendants are liable for any acts committed during the petition- ing,*° the language does not limit the Court’s ability to find that Defendants’ activity during the petitioning phase was part of an overall scheme of antitrust viola- tions and is therefore discoverable under the crime-fraud exception. The Supreme Court, in Pennington, specific- ally noted that evidence relating to the petitioning activ- ity could be admitted by the trial court judge under his power to show that the purpose and character of the 29 Pennington, 381 U.S. at 670. See also Feminist Women’s Health Center v. Mohammad, 586 F.2d 530 at 543 (5th Cir.) cert. denied, 444 U.S. 924 (1979). ‘Whether the action (of the Defendant) can be linked to the alleged conspiracy ... is irrele- vant, for petitioning activity according to Pennington “is not il- legal, either standing alone or as part of a broader scheme.. .’” 30 This question is not now before the Court, nor does the Court take this opportunity to decide on this issue at the present time. 46a particular transactions under scrutiny.*! The Fifth Cir- cuit, in Feminist Women’s Heath Center v. Mohammad, elaborated on the question of admissibility of evidence which could not be used to show that participation in an overall conspiracy is linked to government petitioning: “Admissability, we think, should be governed by a test that weighs the probativeness of and the Plaintiff’s need for the evidence against the danger that the admission of the evidence will prejudice the defendant’s first amend- ment rights.” *” The Antitrust Section of the ABA recently noted that “(e)ourts have generally held that the existence of the Noerr-Pennington defense is not a bar to discovery of information relating to attempts_to influence govern- mental action.” ** The Fourth Circuit, in N.C. Elec. Membership v. Carolina Power and Light,* stated that Noerr-Pennington does not apply to discovery. The Second Circuit, in Assoc. Container Transp/(Australia) Ltd. v. U.S.,* found that discovery should be allowed even though the party resisting discovery had claimed immunity under Noerr. The Court holds that a similar analysis should be em- ployed in the instant case. The issue this Court must decide, as noted earlier, is not whether the discovery materials will be admissible, but whether the Court should allow discovery of materials which were within 31 Pennington, 671 U.S. at 670-671. 32 586 F.2d at 543. In the Feminist case, the Circuit Court found that the evidence was cumulative and otherwise weak regarding the state of mind of another party, therefore the evidentiary value to the Plaintiffs in that litigation was outweighed by the Defend- ant’s first amendment rights. 33 ABA Antitrust Section, Antitrust Law Developments 2nd ed. 1984 at 619. 34 666 F.2d 50 at 52-53 (4th Cir. 1981). 35 705 F.2d 53 (2nd Cir. 1983). 47a the scope of the overall scheme of conspiracy. Whether the Defendants will succeed in preventing the admission of the evidence in regards to liability for petitioning conduct is not central to the issue, as the Pennington and Feminist Women’s Center courts noted. The issue of whether the evidence can be shown to prove a violation of antitrust laws does not mean that the evidence is inviolate and protected. The application of the Noerr doctrine to the crime-fraud analysis does not limit the Court’s ability to find that for the purposes of discovery, and discovery alone, that the prima facie evidence of an overall conspiracy justifies the discovery of materials related to petitioning activities.** In the 7th Circuit’s opinion in Loctite Corp. v. Fel-Pro Inc.,*" the Court discussed whether it should limit the at- torney/client and work product privileges to allow dis- covery. The-court noted: “. .. the privileges are not absolute. Where the benefit to the resolution of the suit outweighs the potential injury to the party from whom discovery is sought .. . discovery is required.” ** The Court holds that the policy of the crime-fraud rule is to allow discovery of documents were used in the further- ance of the crime or fraud, notwithstanding whether a portion of that crime or fraud is later found to be pro- tected by doctrine or fact.*® “Decisions regarding the 36 The Fifth Circuit, in U.S. v. Dyer, 722 F.2d 174 at 179 (5th Cir. 1983) noted that In passing that the issue of admissibility of evidence is different from the assertion of privilege, and the court’s ruling that material was not subject to the attorney-client privilege does not prevent the trial court from later ruling that it is not admissible. 87 667 F.2d 577 at 582 (7th Cir. 1981). 38 The Court holds that if it should err in this ruling, it is prefer- able to err on the side of full disclosure, allowing for all the facts to be available to insure a fair and complete resolution of this dispute. 39 The work product doctrine, for instance, is not based on the same policy principles underlying the petitioning immunity. Work 48a attorney/client privilege should not be based on a rigid analysis. Rather the focus is on whether the detriment to justice from foreclosing inquiry into pertinent facts is outweighed by the benefits to justice from a franker disclosure in the lawyer’s office.” *° The Court additionally notes that equity forces the Court to allow discovery. Defendants, who forced Plain- tiffs into bringing the window lawsuits by anti-competi- tive acts, should not be allowed to subsequently hide behind the Noerr doctrine to prevent discovery of mate- rial related to the lawsuits.* IV. A. Evidence of Crime or Fraud Based on the evidentiary standard discussed above, ETSI has made a prima facie showing that Defendant product protection is designed to assure that an opposing attorney will remain free from intrusion by his opposing counse!. Hand- guards v. Johnson and Johnson, 413 F. Supp. 926, 929 (N.D. Cal. 1976). The risk of imposition by opposing counsel] is non-existent in this case because the work product sought relates to work prod- uct in prior litigation which has been completed, therefore there is no danger that it will be used by opposing counsel to ‘piggy-back’ on the work of the attorney seeking to protect the materials. 40 Pritchard-Keang Nam Corp. v. Jaworski, 751 F.2d 277 at 284 (Eighth Cir. 1984), citing C. McCormick, McCormick on Evidence § 87, at 205 (E. Cleary 3rd ed. 1984). The Court did not allow discovery, finding that the »enefit from allowing discovery was not outweighed by the effect on attorney-client relations. This Court finds that in the instant case, the benefits of allowing full discovery outweigh any effects on attorney-client relations. 41 See also Handguards Inc. v. Johnson and Johnson, 69 F.R.D. 451 at 454 (N.D. Cal. 1975). Judge Orrick stated that he “believes that the less expansive view of the scope of the privilege expressed in the Zenith line of cases is more in keeping with the policy of full disclosure under the liberal discovery rules of the Federal Rules of Civil Procedure.” 42 The “use of attorney” test of In re International Systems & Controls Corp., 693 F.2d 1235 (5th Cir. 1982), if it differs from the standard just stated herein, has been met by ETSI’s prima facie evidence. 49a railroads used the services of their lawyers in engaging in what they knew or reasonably should have known to be anticompetitive conduct in violation of antitrust laws. In fact, the evidence shows prima facie extensive use by all railroads of the lawyers’ services in unified opposition to ETSI’s project. The evidence demonstrates that the attorneys frequently were consulted, were asked for opinions, participated in meetings, and were generally involved in or participated in efforts to delay or oppose ETSI’s coal slurry project. While the evidence is more directly related to Burlington Northern, Chicago & North Western, KCS, and Union Pacific, the circumstantial evidence, including patterns of distribution of copies of documents and other patterns, shows prima facie that all Defendant railroads knowingly used their attorneys suffi- ciently to invoke the crime-fraud exception to the pri- vilege. Plaintiff has produced prima facie evidence that each of the five railroads combined to engage in anticom- petitive activities or to participate with others to restrain competition by ETSI, including such activities as collec- tively denying crossing rights,‘* defending window liti- gation, opposing grants by administrative agencies of governmental permits, and using delaying tactics in ac- tivities allied with opposition to the governmental grants, all of which constitute a crime part of the overall crimi- nal and/or fraudulent conspiracy. These activities, unless protected by the Neerr-Pennington defense, constitute antitrust violations.** For example, there is a prima facie 43 See, e.g., Attachment 39, Plaintiffs’ Memorandum in Support. 44 See, for example, attachments 3, 4, 7, 8, 9, 13, 15, 16, 19, 20, 21, 22, 23, 25, 27, 28, 30, 31, 32, 34, 35, 37, 39, 40, 41, 51, 55, 56, | 60, 63, 64, 66, 67,°68, 69, 73, 77, 81, 83, 88, 97, 111, 116, 122, 123, 124, 125, 127, 128, 133, 134, 148, 155, 161, 162, 163, 169, 170, 172, 180, 182, 193, and 195, Plaintiffs’ Memorandum. Cf. Park v. El Paso Board of Realtors, 764 F.2d 1053 (5th Cir. 1985), cert. denied 106 S.Ct. 884 (1985); Belts Travel Service, Inc. v. International Air Transport Ass’n., 620 F.2d 1360 (9th Cir. 1980) ; Gainesville Utilities Dept. v. Florida Power & Lt. 573 F.2d 292 (5th Cir.), cert. denied 439 U.S. 966 (1978). 50a showing that Burlington Northern, Union Pacific, and Chicago & North Western conspired to deny crossing per- mits to ETSI,** wholly aside from the Defendants’ peti- tioning activities in defending against ETSI’s window lawsuits. The ETSI project, if completed, would have been a strong competitor in the transportation of coal. The prima facie evidence also shows that the Defend- ant railroads engaged in a coordinated effort which was calculated to delay and frustrate ETSI’s efforts by any means, including petitioning the Courts. The Court is persuaded that ETSI has presented ample evidence to show that this conspiracy was active throughout the en- tire period of the window lawsuits, the Andrews litiga- tion and the permitting requests. ETSI accurately stresses that a prima facie case of use of their attorneys by the railroads to further antitrust acivities has been shown by the “blind copies” used by the railroads among themselves, by the pattern of similar activities by the several railroads, and by other exhibits produced by ETSI. While the main activities in regard to administra- tive permits allegedly were carried out by Kansas City Southern (“KCS”) and by Brown & Roady (said by ETSI to have taken the lead in connection with environ- mental issues), the other railroads, ETSI alleges, cannot disassociate themselves from those activities because there was a conspiracy and because the other railroads were involved in the overall scheme. Viewing all of ETSI’s evidence as a whole, the Court finds that ETSI has met its burden and shown prima facie evidence of a combination or conspiracy to delay and obstruct ETSI and lessen its ability to compete and that the conduct of the Defendants in their defense of the window suits, the Andrews litigation and the per- 45 See, e.g., attachments 287 and 288, Plaintiffs’ Second Supple- mental Memorandum, and Attachment 30, ETSI Crime-Fraud Memo. a 5la mitting process were a part of and in furtherance of this conspiracy. V. NOERR-PENNINGTON DOCTRINE The Noerr-Pennington doctrine, derived from Eastern R. Conf. v. Noerr Motor Freight and United Mine Work- ers of America v. Pennington, et al provides antitrust immunity for all petitions seeking governmental action, even if the petitioning of the government injures com- petition. The doctrine fostered by Noerr essentially pro- vides that all activities within the normal scope of peti- tioning which represent attempts to secure anticompeti- tive governmental responses are exempt from antitrust liability.” *®° This immunity principle has been extended to petitioning of administrative agencies and courts.” The immunity applies to petitioning not only of federal but also of state and local officials.*® The only issue of fact under Noerr-Pennington is whether the activities in question were a normal form of petitioning. But what constitutes petitioning? This dis- tinction must be made. Joint efforts and activities either to prepare for or to engage in direct or formalized con- tact with a legislative body, an administrative agency, or a tribunal, constitutes “petitioning” if the efforts and activities involve only those who, in fact, do contact, appear before, or in a proper manner attempt directly 46 Meyer, A Standard for Tailoring Noerr-Pennington Immunity More Closely to the First Amendment Mandate, 95 Yale L.J. 832, 934 (1986). 47 California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 510, 92 S.Ct. 609, 611, 30 L.Ed.2d 642 (1972). See also Meyer, supra n.46 at 834. 48 Independent Taxicab Drivers’ Employees v. Greater Houston Transp. Co., 760 F.2d 607, cert. denied 106 S.Ct. 231 (1985) ; Interstate Properties v. Pyramid Co. of Utica, 586 F. Supp. 1160 (S.D. N.Y. 1984) ; United States Football League v. National Foot- ball League, 634 F. Supp. 1155 (S.D.N.Y. 1986). 52a to influence the agency. In contrast, similar efforts and activities to encourage other entities and individuals to attempt to influence the administrative agency or other governmental unit do not constitute “petitioning” when such other persons or organizations do not, in fact, con- tact, appear before, or directly attempt to influence the agency and, therefore, such actions are not entitled to immunity. VI. THE “SHAM” EXCEPTION The key to the sham exception is whether ‘a genuine desire for judicial [or other governmental] relief is a significant motivating factor underlying the suit lor other petitioning].” *® If no such genuine desire exists, or, as sometimes stated, if the only intent is to injure by beginning the petitioning, the petitioning is a sham.°° 49 See Coastal States Marketing, Inc. v. Hunt, 694 F.2d 1358, 1872 (5th Cir. 1983), which dealt only with judicial petitioning. The sham exception applies when it is shown that the motive was “the intent to harm one’s competition not by the result of the litigation but by the institution of litigation.” City of Gainesville v. Florida Power & Lt. Co., 1488 F. Supp. 1258, 1265-66 (S.D. Fla. 1980). 50 The authorities have not always clearly separated the elements of the Noerr-Pennington defense from the elements of the sham exception to that defense, even though the courts have recognized there is a separate burden of making a prima facie showing for each. The gist of the ETSI argument, although-not so stated ex- pressly, is that to make a Noerr-Pennington defense one must show that the petitioning was made with a “genuine desire” for govern- mental relief, and that the often recognized “sham exception” is not an exception at all but merely an inferential rebuttal of the Noerr-Pennington defense, with no burden of proof being placed on the party alleging that the petitioning was a sham. On balance, however, the decisions seem clearly to contemplate that the ‘sham exception” is actually an exception and not merely an inferential rebuttal to or an element encompassed within the Noerr-Pennington defense. Rather it is truly an exception to be alleged and shown in order to avoid the defense. Accordingly, the burden of making a prima facie showing of the elements of the sham exception neces- sarily falls on ETSI, the one asserting the sham exception, while 53a Whether a prima facie showing of sham has been made is a question of fact. VI. A. Sham Litigation Sham petitioning, insofar as litigation is concerned, requires an “intent to harm one’s competitors not by the result of the litigation, but by the institution of the liti- gation.” *' One court has said that a “sham pleading is one which is good in form, but false in fact.” ** Thus, a sham petition in litigation is akin to a knowing assertion of a frivolous claim or defense ** with the ulterior motive of harming one’s competitors. In short, petitioning is a sham if the petitioning is done for the purpose of hurt- the Defendants relying on the Noerr-Pennington defense do not have the burden of negativing the “sham exception.” Cf. Coastal States Marketing, Inc. v. Hunt, supra n.1l1, at 1373 stating that only after Defendant has met its burden of making the appropriate “showing would the burden shift back to the Plaintiff to show sham” (emphasis added); Feminist Women’s Health Center v. Mohammad, 586 F.2d 530, 543, cert. denied 444 U.S. 924 (1979) (“The Noerr doctrine presents no bar if the Plaintiff proves that the petitioning was not a genuine effort to influence public officials to take governmental action”’). 51 City of Gainesville v. Florida Power & Light Co., 488 F. Supp. 1258, 1265-66 (S.D. Fla. 1980). See also Greenwood Utilities v. Mississippi Power Co., 751 F.2d 1484, 1498 (5th Cir. 1985) (“vexa- tious litigation’’). 52 1.T.T. v. United Tel. Co. of Fla., 60 F.R.D. 177, 184 (M.D. Fla. 1973). 53 Compare DR 7-102 (A)(1), Texas Code of Professional Re- sponsibility (‘“C.P.R.”); cf. Rule 4.4, A.B.A. Model Rules of Pro- fessional Conduct. A claim or defense in a lawsuit is not neces- sarily baseless even if it does not prevail upon trial, because it is permissible to assert a claim or defense not warranted under exist- ing law if the claim or defense “can be supported by good faith argument for an extension, modification, or reversal of existing law.” DR 7-102(A)(2). See also EC 7-4, C.P.R. and EC 7-3, C.P.R. (“While serving as advocate, a lawyer should resolve in favor of his client doubts as to the bounds of the law’’). 54a ing the competitor by the very fact of initiation of the petitioning without a desire to prevail on the petition.™ Additionally, the sham exception may be substantiated through proof of baseless or repeated claims. “One claim, which a court or agency may think is baseless, may go unnoticed, but a pattern of baseless, repetitive claims may emerge which leads the factfinder to conclude that the administrative and judicial processes have been abused.” The Court finds, as noted above, that the overall scheme of conspiracy between the Defendant railroads pervaded throughout the conduct of the governmental petitioning. Plaintiff has presented sufficient prima facie proof to support its allegation that the governmental petitioning was an integral part of the concerted railroad effort to prevent ETSI from succeeding in its pipeline project. This connection, the Court finds, taints the entire peti- tioning process with sham. The Defendants’ participation in the litigation and administrative proceedings, even though partially suecessful,** was part of an all overall scheme which was in violation of antitrust laws and not in good faith. Therefore, the Defendants were not en- gaged in a bona fide effort to secure governmental action.*’ 54 Compare California Motor Transport v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609 (1972). 55 California Motor Transport, supra n.54 at 513, see also, Greenwood Utilities v. Mississippi Power Co., 751 F.2d at 1498: “While the precise contours of these exceptions are as yet ill- defined, there appears to be agreement that . . . vexatious litiga- tion.... (is a) sham activity... .” 56 The Railroads were successful in the Andrews litigation. 57 See generally, Greenwood Utilities. The Court also points, as noted above, that the nexus of the window suits was the result of the bad faith conduct of the Defendants; but for the bad faith actions of the Defendants, much of the petitioning never would have occurred. 55a The Court is not persuaded by Defendants’ assertion that the litigation was not part of an overall conspiracy. The exhibits noted above and the pattern of events pre- ceding the instigation of this lawsuit provide a clear indi- cation that the railroads very early realized the potential effect a coal transport competitor would have on the rail industry. This realization caused the railroads to join together in an illegal conspiracy and, in bad faith, to stop ETSI by whatever means, including through govern- mental actions. The sham exception, consequently, results in the docu- ments falling under the crime or fraud exception and, therefore, the attorney/client privilege does not apply. VII. OVERALL SCHEME EXCEPTION TO NOERR-PENNINGTON Various courts have also recognized other exceptions to the Noerr-Pennington petitioning immunity which provide a basis for allowing discovery under the crime or fraud standard. The recent decision in Clipper Exxpress v. Rocky Mountain Motor Tariff Bureau,** outlined an exception to petitioning immunity based on an ‘overall scheme’ concept: . (W)e hold that when there is a conspiracy pro- hibited by the antitrust laws, and the otherwise legal 58674 F.2d 1252 at 1273 (9th Cir.) cert. denied 459 U.S. 1227 (1983). Judge Posner, in Grip-Pak, Inc. v. Illinois Tool Works Inc., 694 F.2d 466 at 472 (7th Cir. 1982), stated that “the line is crossed (of petitioning immunity), when his purpose is not to win a favor- able judgment against a competitor but to harass him and deter others, but the process itself—regardless of the outcome—of litigat- ing.” The Court held that a non-malicious lawsuit can violate anti- trust law. 56a litigation is nothing but an act in furtherance of that conspiracy, general antitrust principles apply, notwithstanding the existence of the Noerr immu- nity. In so holding, we are acting consistently with the theoretical underpinnings of the Noerr doctrine. When .. . the petitioning activity is but a part of a larger overall scheme to restrain trade, there is no overall immunity. The line of cases beginning with Kobe v. Dempsey Pump Co. provides an alternative avenue for antitrust liability, the overall scheme exception. The Kobe decision has been implicitly recognized in this Circuit in Coastal States Marketing. The Court, in Coastal, described the doctrine: This exception from petitioning immunity (overall scheme) dates at least from Kobe, Inc... . The theory of these cases is that good faith, even success- ful, litigation brought in the furtherance of an “overall scheme” to violate the antitrust laws is not entitled to immunity. Each of the cases applying the “overall scheme” theory involved circumstances unlawful even apart from the litigation. The Court finds, based on the analysis of the evidence discussed above, that Defendants were engaged in an overall scheme to violate antitrust laws, consequently, the overall scheme of the conspiracy obviates the petitioning immunity. 59198 F.2d 416 (10th Cir.) cert. denied 344 U.S. 837, 73 S.Ct. 46, 97 L.Ed.2d 651 (1952). Rex Chainbelt, Inc. v. Harco Prods., Inc., 512 F.2d 993, 1004-07 (9th Cir. 1975), see also Handguards v. Ethicon, Inc., 601 F.2d 986 at 990 (9th Cir. 1979), Mach-Tronics, Incorporated v. Zirpoli, 316 F.2d 993 (9th Cir. 1975), Prelin In- dustries, Inc. v. G & G. Crafts, Inc., 357 F. Supp. 52 (W.D. Ok. 1975). 60 694 F.2d 1358,,1371 (5th Cir. 1983). The Court, in a footnote distinguished Coastal from Kobe. 57a VIII. ALTERNATIVE WORK PRODUCT REQUESTS ETSI seeks, wholly aside from the crime-fraud conten- tions, to discover certain documents for which the work product privilege is claimed. The position of ETSI that such documents are discoverable rests on two theories: (1) the work product privilege does not apply to docu- ments of a factual nature (as distinguished from docu- ments reflecting a lawyer’s mental impressions) in cases subsequent to the case in connection with which the docu- ment was prepared; (2) documents reflecting a lawyer’s mental impressions are discoverable under the “substan- tial need” rule when the legal advice is in issue in the lawsuit. In ordering discovery on other grounds, the Court finds no reason to pass on this ground. IX. SCOPE OF ORDER This Order relates, of course, only to the questions whether there has been a prima facie showing of a crime or fraud through conduct in violation of antitrust laws and whether there is prima facie proof of sham petition- ing sufficient for discovery of documents claimed to be privileged. The findings and decisions herein are not rulings upon admissibility of documents that may be dis- covered * and in no way impinge upon the determination of any issues of fact upon trial. X. IN CAMERA INSPECTION Defendants are not precluded from arguing that spe- cific documents are not discoverable in that they are not *1 The Court is inclined to agree with the Special Master that ETSI cannot show a substantial need at this stage of this litiga- tion, for much discovery—including that granted by this Order— remains to be done. 62 Compare United States v. Dyer, 722 F.2d 174, 178 (5th Cir. 1983) ; In re A.H. Robins Co., 107 F.R.D. 2 (D. Kan. 1985). 58a related to the crime or fraud which forms the basis of the exception to the privileges. Defendants, if they have a good faith basis for asserting such a claim, may pre- sent specific documents to the Court for in camera inspec- tion so that the Court may determine whether the docu- ments are related to the crime or fraud and are, there- fore, discoverable. ORDER The Motion to Compel Production of Documents (Crime-Fraud) is Granted in regards to the following documents: (1) Documents relating to Defendant railroads collec- tively denying or delaying crossing rights to ETSI in- cluding documents relating to the window litigation. (2) Documents relating to participation by KCS, other railroad Defendants, and Brown & Roady in peti- tioning federal, state, and local administrative agencies in regard to permits and authorizations sought by ETSI. (3) Documents relating to activities on the part of Burlington Northern, Union Pacific, KCS and other Rail- road Defendants in opposing the grant by federal, state, and local administrative agencies of permits and author- izations sought by ETSI. (4) Documents relating to the Andrews litigation. SIGNED and ENTERED on this the 13th day of February, 1987. s/ Robert M. Parker ROBERT M. PARKER United States District Judge 59a APPENDIX C IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS BEAUMONT DIVISION Civil Action No. B-84-979-CA ETSI PIPELINE PROJECT, A JOINT VENTURE, AND ENERGY TRANSPORTATION SYSTEMS, INC., Plaintiffs, VS. BURLINGTON NORTHERN, INC., et al., Defendants. MEMORANDUM OPINION & ORDER Plaintiffs’ Second Motion to Compel Production of Document (identified as the “Crime-Fraud” Motion) seeks to compel production of certain allegedly privileged documents' on the ground that Plaintiffs (“ETSI”) have made a prima facie showing, sufficient to invoke the crime-fraud exception, that defendant railroads consulted their attorneys in furtherance of violations of Section 1 of the Sherman Act The Motion is Denied in part and Granted in part. I. Summary of Facts and Issues ETSI, relying on the crime-fraud exception to the pri- vileges, contends that the defendants used their attorneys 1The documents number in the thousands. No argument has been made that the documents are not within the attorney-client privilege or the work product privilege (aside from the crime- fraud exception), and the documents are not being examined in- dividually or in camera at this time; ETSI is not precluded from raising such issue later on. 60a to further activities that violated the antitrust laws. Defendants counter that the alleged activities were “peti- tioning” activities and that the Noerr-Pennington doc- trine prevents such activities by defendants from being a violation of antitrust laws, thereby making the crime- fraud exception inapplicable. ETSI replies that the “sham” exception to the Noerr-Pennington doctrine ap- plies and, additionally, that in any event evidence of use of attorneys in defendants’ governmental petitioning is admissible because the petitioning was part of an over- all, broad conspiracy to violate the antitrust laws. Cer- tain other issues, including waiver, are joined by the parties. Defendant agrees? that ETSI’s burden under the crime-fraud exception is only to make a prima facie showing that defendants consulted with their attorneys for the purpose of furthering a violation of the antitrust laws; “prima facie” in this regard means sufficient evi- dence to raise an issue of fact. In stating the general facts underlying this motion, the court has borrowed heavily from but amplified a statement by defendants.* ETSI wanted to build a coal slurry pipeline of some 1800 miles to carry coal from Wyoming to Arkansas. A project of this magnitude faced numerous obstacles in- cluding marketing, financing, and right of way. For example, it needed to cross the property of a number of railroads as well as the land of ranchers and other inter- ests. In the early days of its project, ETSI approached all of the affected railroads on a coordinated basis to request numerous crossing permits (even though its pipe- line route had not been precisely determined) and sought 2 See Defendants’ Response to Plainti [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_1082%3A2. Public record. Not legal advice.