Opinion
Civ 99-1061 JC/KBM ACE
July 19, 2000
PARTIAL RULING ON DISCOVERY ISSUES UNDER ADVISEMENT
On August 17, 2000 , this matter came before the court for argument on Plaintiffs Motion To Compel (Doc. 63). The Court, having reviewed the motion, the memoranda submitted by the parties and relevant authorities, took certain aspects under advisement. Plaintiff contends that the Defendants have violated the Newspaper Preservation Act and antitrust laws by operating a relatively new publication known as the Mountain View Journal (MVJ). Defendants contend that much of the financial information sought by Plaintiff, which publishes a competing newspaper, is relevant only if operation of the MVJ violates the Joint Operating Agreement between the Albuquerque Journal and the Albuquerque Tribune. Under this agreement, the Albuquerque Publishing Company receives all revenue from both the Albuquerque Journal and Albuquerque Tribune and distributes the profits between them in a defined ratio. Plaintiff believes that profits or losses from the MVJ are similarly distributed in violation of the Joint Operating Agreement.
Because of the extensive and possibly overly broad information sought as to the finances of all defendants, particularly with regard to the Tribune, I found that Plaintiff must make a prima facie showing that the flow of revenue and expenses of the Mountain View Journal may violate the Joint Operating Agreement. Until such a showing is made, I indicated that I will not permit discovery as to Defendant New Mexico State Tribune Company. To do this, Plaintiff will have the opportunity to engage in a limited deposition of certain of Defendants representatives (to be scheduled within two weeks of the August 17th hearing) to explore the financial arrangements surrounding operation of the MVJ. Following this limited discovery, Plaintiff will be given the opportunity to establish the relevancy of information it seeks from Defendant Tribune and of other cost and financial information sought from Defendants Journal and Albuquerque Publishing Company. At that time, I will also be better able to determine if the scope of certain requests is overly broad.
I further permitted Defendants leave to file a surreply in response to the experts affidavit attached to Plaintiffs Reply Brief. As to requests for production not requiring limited discovery or further briefing, I indicated that I would rule as soon as possible.
I. Entirely Moot Requests
At oral argument, I was advised Requests for Production Nos. 10, 11, 21, 22, 63, 64, and 80 are entirely moot, and they will be denied as such. Upon further review of the submissions, it appears to me that Request for Production No. 55 may also be moot based on Defendants response and the fact the Plaintiff did not refer to this request in its reply. Accordingly, it also will be denied as moot.
II. Information as to Contemplated Acquisitions (Requests For Production Nos. 9 and 37)
Request for Production No. 9 asks for:
all documents and electronic documents prepared within the last two (2) years relating to the purchase or establishment within the market area by any of the Defendants of any newspaper publication (whether daily or weekly) that was not owned or operated by any of the Defendants, as of September 1, 1999.
Part of Request for Production No. 37 asks for the same type of information (documents concerning any attempt by any Defendant to acquire . . . any other weekly newspaper within the market area within the last two (2) years).
Part of the controversy surrounding this request was mooted at the hearing. Pursuant to a consent tendered by Plaintiff, counsel for Defendants agreed to produce all documents that exist related to the Cantrell purchase (whether from the Cantrells to the Albuquerque Journal or from the Journal to the Cantrells). See Transcript at 80, 84.
Counsel for Defendants indicated that only one other event remains that would fall under this request: negotiations regarding the sale of a newspaper to the Journal Publishing Company or Albuquerque Journal during the relevant period. See Transcript at 81, 89.
Although counsel was referring to Request for Production No. 9, I assume his representation to the Court covers part of Request for Production 37 as well.
According to Defendants counsel, unnamed non-parties object to producing the information, although it is unclear whether their objection is merely on confidentiality grounds or whether they agreed with Mr. Esquivels assessment that the documents were irrelevant. See id. at 81, 89.
This issue is narrow and ripe for disposition. There is no question in my mind that the requested information is relevant because negotiations for the purchase of other newspapers either directly supports Plaintiffs antitrust claims of leveraging, attempted monopolization, etc. and/or is the kind of information its experts will need to consider in formulating their opinions. Yet Defendants cite United States v. Federation of Physicians Dentists, Inc., 63 F. Supp.2d 475 (D.Del. 1999) for the general proposition that non-party financial information is private and not routinely available for discovery. Id. at 479. I do not find the Federation decision persuasive of the matter at bar, however. Although it cited the general rule regarding non-party privacy, the opinion principally turned on the finding that the information sought was only remotely connected to an issue in the case. Id.
Moreover, there is a strict confidentiality order under which the parties are operating in this case only counsel and the experts can review confidential information.
Indeed, part of the pleadings for the motion to compel have not been filed with the Court because of this strict order; the parties are negotiating what should be filed under seal. See Transcript at 27-29; Letters from Plaintiffs Counsel dated 7/19/00 and 8/14/00.
Defendants nevertheless argue that the potential sale information was subject to a separate confidentiality agreement executed during negotiations and its agreement with non-parties should be honored regardless of the confidentiality order entered in this case. Under an early Tenth Circuit decision, Covey Oil Co. v. Continental Oil Co., 340 F.2d 993 (10th Cir. 1965), a non-partys interest in confidentiality can be outweighed in an antitrust case by the moving partys need and showing of relevancy. I am unpersuaded that Covey is distinguishable because it involved pricing as opposed to confidential information. Covey described the information as sensitive trade secret information, the revelation of which the non-parties claimed would cause them irreparable competitive injury. The Tenth Circuit held that there is no absolute privilege protecting that type of information from disclosure. Rather, it is for the Court to balance the need for the information against the claimed injury.
Defendants did not include the information regarding the proposed or contemplated acquisition among the other documents they wants the Court to review in camera before ruling (i.e., information pertaining the trade secrets, marketing plans and strategies, editorial information). Transcript at 81.
Covey affirmed the decision to enforce the subpoenas noting that the trial court, with great care, imposed conditions on disclosure to protect the non-parties. These conditions included: having the documents made available only to counsel and independent certified public accountants and only for the purposes of the case; forbidding the use of the material for business or competitive purposes; limiting who could attend depositions; having the documents filed under seal with the clerk with access thereto only upon order of the judge; and the right to further protective orders upon an appropriate showing.
The stringent confidentiality order operative in this case is more than sufficient to guard against disclosure in a way that would harm the litigants and non-parties, and I will specifically indicate in this order that the parties are permitted to file under seal. Accordingly, the motion is granted with respect to the remaining issue under Request for Production No. 9 and the partial issue under Request for Production No. 37.
IV. Partial Ruling on Advertising Data Requests
There is a dispute over what constitutes the relevant market in this case. With few exceptions, the Mountain View Journals readership is limited to what is known as the east mountain geographic region. In an antitrust case, however, both readership and advertising must be analyzed to determine the relevant market. Plaintiff contends that it is entitled to discovery of advertising information to establish that the relevant market area extends beyond the east mountain area.
Several of the Requests for Production, some relating to advertising data, drew responses asserting that the information sought was protected as confidential commercial or editorial information under Fed.R.Civ.P. 26(c)(7). Certain financial records and other documents therefore were withheld by Defendants as to Requests for Production Nos. 14, 15, 18, 27, 33-37, 41, 45, 47-48 and 54. Moreover, Defendants interposed attorney-client privilege as to Bates No. 00367. These objections will be resolved after Plaintiff provides a privilege log and the Court reviews the documents in camera.
As to the advertisers, Plaintiff agreed at the hearing to limit the requests to those which advertise in either the Tribune or Journal, and also in the Mountain View Journal or East Mountain telegraph. Transcript at 10. Defendants were willing to provide the information for advertisers that advertise in the Journal and Mountain View Journal and East Mountain Journal, but not those that advertise in the Tribune, and were not willing to submit any information showing how much those advertisers spend with the Journal. Id. at 72-73. As noted above, information will not be discovered from the Tribune at this time.
However, I do find that at the very least, the advertising data is relevant for Plaintiffs claim that the relevant market is beyond the east mountain geographical area. I also reject Defendants contention that the advertisers must be common to all three papers. Wherefore,
IT IS HEREBY ORDERED as to Plaintiffs Motion to Compel:
(1) Requests for Production Nos. 10, 11, 21, 22, 55, 63, 64, and 80 are denied as moot;
(2) As to Requests for Production No. 9 and 37, Defendant Albuquerque Journal shall produce all documents and electronic documents related to the two transactions identified by counsel involving purchase by the Albuquerque Journal of any newspaper publication not owed by any of the defendants as of September 1, 1999;
(3) Defendants shall provide Plaintiff with the total gross advertising revenue from each customer who advertised within the past two years in the Albuquerque Journal and also in either the Mountain View Journal and/or the East Mountain Telegraph. To the extent that Plaintiff seeks more advertising information in its requests, the motion to compel will be denied at this time; and
(4) The remaining issues are under advisement.
IT IS FURTHER ORDERED THAT the parties shall submit to the Court a stipulated amendment to the Protective Order in order to permitted filing of confidential material under seal as counsel deem appropriate.