Martindell v. International Tel. and Tel. Corp.
594 F.2d 291 (1979)
Rule of Law:
Absent a showing of improvidence in the grant of a protective order or some extraordinary circumstance or compelling need, a witness is entitled to rely upon the enforceability of that order against third parties, including the government, seeking access for a criminal investigation.
Facts:
- Anne C. Martindell initiated a stockholders' derivative suit on behalf of International Telephone & Telegraph Corporation (ITT) against several of its officers and directors, including Harold S. Geneen.
- The lawsuit alleged that the defendants had wasted corporate assets by making expenditures to influence the 1970 presidential elections in Chile.
- During the discovery phase of the lawsuit, the parties agreed to a stipulation of confidentiality, which was approved by the court, making it a formal protective order.
- The protective order stated that deposition transcripts and other discovery materials would be used solely for the purpose of the private litigation and not disclosed to others.
- Several witnesses gave deposition testimony in reliance upon this protective order.
- Separately, the United States Department of Justice was conducting a criminal investigation into whether certain ITT personnel, including some deposed witnesses, committed perjury in earlier testimony before a U.S. Senate Subcommittee regarding ITT's activities in Chile.
- The Government sought access to the deposition transcripts from the private civil suit, believing they might be relevant to its criminal investigation.
Procedural Posture:
- Anne C. Martindell filed a stockholders' derivative suit against ITT and its officers in the U.S. District Court for the Southern District of New York.
- During pretrial proceedings, the District Court 'so ordered' a stipulation of confidentiality, creating a protective order over deposition transcripts.
- The case was ultimately terminated by a court-approved settlement and dismissal.
- While the action was pending, the United States Government, a non-party, made an informal request to the District Court for access to the sealed deposition transcripts.
- The defendant-appellees opposed the Government's request.
- The District Court denied the Government's request in a formal order.
- The United States of America, as appellant, appealed the District Court's denial to the U.S. Court of Appeals for the Second Circuit.
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Issue:
Does a district court abuse its discretion by denying the Government's request to modify a valid Rule 26(c) protective order to access deposition transcripts from a private civil action for use in a criminal investigation?
Opinions:
Majority - Judge Mansfield
No. A district court does not abuse its discretion by refusing to modify a protective order under these circumstances. The vital function of a Rule 26(c) protective order is to encourage full disclosure of relevant evidence, which is essential for the just and speedy determination of civil disputes. Witnesses who testify in reliance on such orders must be able to trust their enforceability; otherwise, they would be inhibited from testifying, thus undermining the civil justice system. While the public has an interest in law enforcement, the Government has its own 'awesome powers' for investigation, such as subpoenaing witnesses before a grand jury and offering immunity. Therefore, absent a showing that the protective order was improvidently granted or that there is an extraordinary circumstance or compelling need, the order should be enforced against third parties, including the Government.
Concurring - Judge Medina
No. A valid protective order, which represents a formal agreement approved by a judge, should be strictly honored without engaging in a balancing of interests. The order was a binding agreement that the deposition materials were for use only in the civil litigation. To disregard this agreement simply to aid a government investigation would be improper, especially since the government is an adversary litigant with its own broad investigatory powers. Allowing the government access would also permit it to unfairly benefit from the work product of the private attorneys who developed questioning strategies and conducted the depositions. A valid protective order should be enforced as written unless it was improperly or 'improvidently' granted from the outset.
Analysis:
This decision establishes a strong presumption in favor of upholding Rule 26(c) protective orders against third-party requests for access, particularly from the government for criminal investigation purposes. It prioritizes the integrity and efficiency of the civil discovery process over the government's convenience in obtaining evidence. By assuring litigants and witnesses that confidentiality orders will be respected, the court encourages candid and complete testimony, which facilitates settlements and the fair adjudication of civil disputes. While not an absolute bar, the case sets a high standard ('extraordinary circumstance or compelling need') for any party seeking to modify such an order, solidifying the protective order as a powerful tool for managing discovery.
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