|
Tech Law Journal |
 |
| News, records, and analysis of legislation, litigation, and regulation affecting the computer, internet, communications and information technology sectors | |
|
|
|
| |||||
|
IN THE UNITED STATES COURT OF APPEALS
MOTION OF THE NEW YORK TIMES COMPANY, THE SEATTLE TIMES, ZDTV L.L.C., ZDNET, BLOOMBERG NEWS AND REUTERS AMERICA INC. FOR LEAVE TO FILE RESPONSE TO MOTION OF APPELLANT MICROSOFT CORPORATION FOR A STAY PENDING APPEAL OF THE AUGUST 11, 1998 ORDER PErMITTING MEMBERS OF THE PUBLIC TO ATTEND ALL PRETRIAL DEPOSITIONS and RESPONSE OF THE NEW YORK TIMES COMPANY, THE SEATTLE TIMES, ZDTV L.L.C., ZDNET, BLOOMBERG NEWS AND REUTERS AMERICA INC. TO MOTION OF APPELLANT MICROSOFT CORPORATION FOR A STAY PENDING APPEAL OF THE AUGUST 11, 1998 ORDER PERMITTING MEMBERS OF THE PUBLIC TO ATTEND ALL PRETRIAL DEPOSITIONS [begin page 2] MOTION OF THE NEW YORK TIMES COMPANY, THE SEATTLE TIMES, ZDTV L.L.C., ZDNET, BLOOMBERG NEWS AND REUTERS AMERICA INC. FOR LEAVE TO FILE RESPONSE TO MOTION OF APPELLANT MICROSOFT CORPORATION FOR A STAY PENDING APPEAL OF THE AUGUST 11, 1998 ORDER PErMITTING MEMBERS OF THE PUBLIC TO ATTEND ALL PRETRIAL DEPOSITIONS The New York Times Company, The Seattle Times, ZDTV, L.L.C., ZDNet, Bloomberg News and Reuters America Inc. (together, the "Media Intervenors"), for their motion pursuant to D.C. Circuit Rule 47.1 and all other applicable rules for leave to file their response to the Motion of Microsoft Corporation for a Stay Pending Appeal of the August 11, 1998 Order Permitting Members of the Public to Attend All Pretrial Depositions (the "Motion for Stay"), respectfully state as follows: 1. Media Intervenors are advised by the Clerk of this Court that they have not been accorded status as parties – more particularly, as appellees – to this appeal by Microsoft Corporation ("Microsoft"), and that they are therefore required to move for leave to respond to Microsoft’s Motion for Stay.
2. Media Intervenors are real parties in interest in connection with this interlocutory appeal. Each of the Media Intervenors moved to intervene in the District Court, beginning with The New York Times Company, which filed its motion to intervene on May 21, 1998, three days after the Complaint in this action was filed. Thereafter, each of the Media Intervenors filed motions seeking access to various portions of the record and proceedings in this action./1 [begin page 3] 3. At a hearing in the District Court on August 6, 1998, the Media Intervenors and the public first learned that deposition discovery in these consolidated antitrust actions had commenced and, specifically, that the deposition of Microsoft’s founder, William Gates III, was scheduled to take place on August 11 or 12, 1998. On August 10, 1998, promptly after being advised by Microsoft that it would not voluntarily permit the press and public to attend Mr. Gates’ deposition or any other deposition in these actions, The New York Times Company, The Seattle Times, ZDTV, L.L.C., and ZDNet filed their Emergency Motion for an Order Enforcing 15 U.S.C. § 30, a statute which, by its plain terms, requires that all depositions in this action be open to the public. Bloomberg News and Reuters America Inc. thereafter joined in the Emergency Motion for an Order Enforcing 15 U.S.C. § 30. 4. By Order dated August 11, 1998 (the "August 11 Order") – the Order that is the subject of the present appeal – the District Court (a) granted in part Media Intervenors’ motions to intervene, and (b) granted Media Intervenors’ Emergency Motion for an Order Enforcing 15 U.S.C. § 30. See August 11 Order (copy attached hereto as Ex. A) at 2. By granting the motions to intervene in relevant "part," id., the District Court plainly intended to grant the Media Intervenors status as parties for purposes of their Emergency Motion for an Order Enforcing 15 U.S.C. § 30. Indeed, in connection with its Order dated August 12, 1998 (the "August 12 Order") (copy attached hereto as Ex. B) denying Microsoft’s motion for a stay of the August 11 Order, the District Court (a) accepted for filing the Media Intervenors’ memorandum in opposition to the motion for stay; (b) heard argument from Media Intervenors’ counsel, see August 12 Hearing Transcript (copy attached hereto as Ex. E); and (c) stated in its August 12 Order that it had, in its August 11 Order, "grant[ed], in part, the several motions of media organizations for leave to intervene to enforce a right of access, pursuant to 15 U.S.C. § 30." [begin page 4] Moreover, to the extent there was any ambiguity concerning the District Court’s intent in this regard, such ambiguity was removed by Order dated August 13, 1998 (copy attached hereto as Ex. C.), in which the District Court reiterated its decision to grant the Media Intervenors’ motions to intervene and specifically ordered the Clerk of the District Court to note the appearance of the Media Intervenors as parties in the District Court. WHEREFORE, the Media Intervenors respectfully submit that they are real parties in interest and that they are therefore entitled to be treated as parties – specifically, as appellees – in connection with this interlocutory appeal. In the alternative, Media Intervenors respectfully request leave, pursuant to D.C. Circuit Rule 47.1 and all other applicable rules, to file the following response to Microsoft’s Motion to Stay. Dated: August ___, 1998
[begin page 5] RESPONSE OF THE NEW YORK TIMES COMPANY, THE SEATTLE TIMES, ZDTV L.L.C., ZDNET, BLOOMBERG NEWS AND REUTERS AMERICA INC. TO MOTION OF APPELLANT MICROSOFT CORPORATION FOR A STAY PENDING APPEAL OF THE AUGUST 11, 1998 ORDER PERMITTING MEMBERS OF THE PUBLIC TO ATTEND ALL PRETRIAL DEPOSITIONS The New York Times Company, The Seattle Times, ZDTV, L.L.C., ZDNet, Bloomberg News and Reuters America Inc. (together, the "Media Intervenors") respectfully submit the following response to the Motion of Microsoft Corporation for a Stay Pending Appeal of the August 11, 1998 Order Permitting Members of the Public to Attend All Pretrial Depositions (the "Motion for Stay"): ARGUMENT
Microsoft has taken an interlocutory appeal from the District Court’s August 11 Order which, pursuant to the plain and unambiguous terms of 15 U.S.C. § 30, requires that the depositions taken in this civil antitrust action be open to the public. Microsoft asked the District Court to stay its August 11 Order pending appeal, so that it can proceed with secret depositions in contravention of the statute, but the District Court denied Microsoft’s application in its August 12 Order. Microsoft now asks this Court for identical relief based on the single contention that section 30 does not mean what it plainly says. Microsoft’s effort to rewrite an Act of Congress is without merit./2 [begin page 6] To obtain a stay of the District Court’s August 11 Order granting Media Intervenors’ Emergency Motion for Order Enforcing 15 U.S.C. § 30, Microsoft must demonstrate: (1) that, absent a stay, "it will be irreparably injured;" (2) that the issuance of the requested stay will not "substantially harm other parties interested in the proceedings;" (3) that the "public interest" would be served by a stay; and (4), even where all three of these factors "strongly favor" a stay, Microsoft must also demonstrate that it "has made a substantial case on the merits." Washington Metropolitan Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C. Cir. 1977). As set forth below, each of the first three factors favors the Media Intervenors, not Microsoft, and Microsoft cannot make a substantial case on the merits in any event. Indeed, a stay is justified only when a court is confronted with "an admittedly difficult legal question and when the equities of the case suggest that the status quo should be maintained." Id. at 844-45. The single legal [begin page 7] question presented by this appeal is not difficult, and a stay of the District Court’s August 11 Order will in fact disrupt the status quo by permitting depositions to proceed in secret./3 A. The District Court Correctly Applied 15 U.S.C. § 30 According To Its Plain Meaning And Microsoft Therefore Cannot Make A Substantial Case On The Merits Of Its Appeal Case No. 98-1232 in the District Court is a civil antitrust action brought by the United States pursuant to the Sherman Antitrust Act. The Publicity in Taking of Evidence Act (the "Act"), codified at 15 U.S.C. § 30, provides, in relevant part, as follows:
As the Supreme Court has observed, section 30 means precisely what it says: "[I]n these Sherman Act cases Congress has guarded against in camera proceedings by providing that ‘the taking of depositions . . . shall be open to the public’ and that no order excluding the public shall be valid." United States v. Procter & Gamble Co., 356 U.S. 677, 683 (1958) (quoting 15 U.S.C. § 30) (ellipses in original). In Procter & Gamble, the defendant complained that the United States was misusing a grand jury proceeding to obtain testimony secretly for use as evidence in a civil antitrust action. The Supreme Court observed that, "[i]f the prosecution were using that device, [begin page 8] it would be flouting the policy of the [Act]," a tactic that the Supreme Court would have "condemn[ed]." Id. The lower courts are unanimous in concluding that section 30 requires that all depositions in civil antitrust actions instituted by the United States be open to the public. E.g., United States v. United Fruit Co., 410 F.2d 553, 555-56 (5th Cir. 1969) (Act "requires generally that depositions and hearings be open to the public as freely as trials in open court"). In fact, the statute has been successfully invoked, without incident, in reported cases involving depositions virtually identical to those at issue here. See, e.g., United States v. International Business Machines Corp., 67 F.R.D. 40, 42 (S.D.N.Y. 1975) (Act "mandates that depositions taken in a[n antitrust action] brought by the United States . . . shall be open to the public as freely as are trials in open court"); United States v. International Business Machines Corp., 62 F.R.D. 526, 529 (S.D.N.Y. 1974) (in civil antitrust action involving 2,400 depositions, court ordered "that the locations chosen [for the depositions] be open to the public as mandated by the Publicity in Taking Evidence Act"); Washington v. American Pipe & Constr. Co., 41 F.R.D. 59, 62 (D. Cal. 1966) (under Act, "all depositions taken on behalf of the government in a private antitrust action are required to be open to the public"); see also Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 655 (1985) (Stevens, J., dissenting) (the "Act guarantee[s] public access to depositions in Government civil proceedings to enforce the Sherman Act") (emphasis added); Olympic Refining Co. v. Carter, 332 F.2d 260, 264 (9th Cir. 1964) (policy undergirding Act’s requirement that depositions be open to public also requires that interrogatory answers and documents produced be open to potential victims of anticompetitive conduct); Kimberlin v. Quinlan, 145 F.R.D. 1, 2 (D.D.C. 1992) (Greene, H., J.) (observing that only circumstance in which discovery depositions are required to be open to public is in civil antitrust actions brought [begin page 9] by the United States) (citing Times Newspapers, Ltd. v. McDonnell Douglas Corp., 387 F. Supp. 189, 196-97 (C.D. Cal. 1974)). In the face of this unbroken line of precedent, not to mention the plain language of the statute, Microsoft contends only that Congress did not intend, when it enacted section 30 in 1913, that the word "deposition" would be understood to reach discovery depositions taken pursuant to the Federal Rules of Civil Procedure. Microsoft’s contention is without merit. First, section 30 was enacted specifically to override the decision in United States v. United Shoe Mach. Co., 198 F. 870 (D. Mass. 1912). See Motion for Stay at 9, ¶ 17. Microsoft characterizes that case as involving "hearings" before an examiner acting as "‘a travelling court.’" Id.; see also id. at 7, ¶ 12. From this premise, Microsoft argues that section 30 was not intended by Congress to apply to modern discovery depositions "which (i) are not part of the trial record and (ii) frequently involve inquiries regarding matters that turn out to have no relevance." Id. at 8, ¶ 15. Even a cursory review of the court’s decision in United Shoe, however, reveals that Microsoft has fundamentally misconstrued both the underlying facts of that case and the court’s ruling. The question presented in United Shoe was whether "the public and the press should be afforded an opportunity to attend and to hear whatever may be said upon the examination before it has been reduced to writing and signed by the witness, and before the deposition is presented to the court." 198 F. at 871. Observing that there is an "essential difference between a trial or a judicial proceeding held by an officer with judicial authority, and the merely preliminary step of taking depositions," id., the court in United Shoe ruled that the public and press had no right to attend such "preliminary" proceedings. As the court explained, the examiner’s job was simply to make a written record of the deposition; an examiner "may note objections, but he ‘shall not have [begin page 10] the power to decide upon the competency, materiality or relevancy of the questions.’" Id. (citation omitted). Indeed, the court asserted that "[i]t is manifest from the nature of depositions, because they are not yet legal evidence and because the parties against whom they are taken have had no opportunity for a hearing, that the proper practice is . . . . for publication either upon order of a judge or by consent of parties, after return of the depositions by the examiners." Id. In short, the "examiner" was no more than a glorified court reporter, at least as respects the taking of depositions pursuant to the Equity rules, and such depositions and the use to be made of them were remarkably similar to discovery depositions taken today pursuant to the Federal Rules. The court in United Shoe held that the public would have to await trial to learn the contents of such deposition testimony. As the rationale for its refusal to recognize a public right of access to the live depositions, the court observed:
Id. at 872. This, of course, is precisely the argument Microsoft advances here. Motion for Stay at 13-15.
Congress enacted section 30 to overrule the decision in United Shoe and, in so doing, to ensure that – in this narrow category of cases instituted by the United States – the litigation of the public’s claims would be conducted in public. The plain language that Congress chose to accomplish that goal remains as applicable to discovery depositions today as it was to the analogous deposition procedures in place when the statute was first enacted./4 [begin page 11]
Indeed, Congress has since left no doubt that section 30 means exactly what it says and that it applies with full force to modern discovery depositions. In 1976, Congress amended 15 U.S.C. § 1312, which governs the taking of depositions by the United States prior to the commencement of antitrust litigation under the Federal Rules of Civil Procedure. Specifically, Congress expressly provided that section 30 would not apply to pre-litigation depositions taken pursuant to section 1312. 15 U.S.C. § 1312(i)(2) ("The provisions of section 30 of this title shall not apply to such examinations.") Plainly, there would have been no need to enact such legislation if, as Microsoft contends, section 30 would not otherwise apply. By the same token, Congress’ decision to exempt only pre-complaint depositions from the requirements of section 30 confirms the legislature’s ongoing understanding that the statute continues to apply to all depositions in civil antitrust actions brought by the United States in the federal courts./5 Only the narrow category of pre-complaint depositions authorized by section 1312 is exempt from the reach of section 30, and the depositions at issue here are not taken pursuant to section 1312./6 [begin page 12] Alternatively, Microsoft argues that, "even if" section 30 applies, the Stipulation and Protective Order entered by the District Court on May 27, 1998 (the "Protective Order") is sufficient to bar the public from attending the depositions. Motion to Stay at 11-12, ¶¶ 21-22. Microsoft is in error. Section 30 expressly provides that "no order excluding the public from attendance on [depositions] shall be valid or enforceable." Consequently, the Protective Order cannot diminish the public’s statutory right of access. Indeed, the Protective Order itself expressly provides that it is intended "to ensure that matters raised by these actions are open to the public to the greatest extent practicable." Protective Order, Preamble ¶ 1. In any event, the Protective Order provides no support for Microsoft’s contention that entire depositions may be closed to the public. The Protective Order itself expressly provides that, during deposition sessions, if counsel determines that "the answer to a question" will result in disclosure of a trade secret, persons not entitled to access to such information may be asked to leave the room "during the confidential portion of the deposition." Protective Order, § K, ¶ 1 (emphasis added). The provision of the Protective Order on which Microsoft relies, see Motion to Stay at 12, ¶ 22 (quoting Protective Order, § C(4)), applies only to the transcripts of depositions and provides only that, before a transcript of a deposition may be disseminated to the public, the deponent is entitled to redact that portion of his or her testimony properly received in closed session pursuant to section K of the Protective Order. Put simply, Microsoft’s contention that the Protective Order anticipates that the entirety of any deposition may properly be closed to the public because some questions posed to the [begin page 13] deponent may call for the disclosure of legitimate trade secrets is without foundation either in the terms of the Protective Order, or in light of the unambiguous mandate of section 30. See United States v. International Business Machines Corp., 82 F.R.D. 183, 185 (S.D.N.Y. 1979). Rather, as the District Court correctly recognized in its August 11 Order, deposition proceedings may properly be closed only to the limited extent necessary to protect against disclosure of actual trade secrets. See United States v. United Fruit, 410 F.2d at 556. The August 11 Order expressly stays all depositions until such a protocol is agreed upon by the parties and entered by the District Court. In light of all the foregoing, there is, if anything, a substantial likelihood that Microsoft will not prevail on the merits of its claim. There certainly is not a "substantial case on the merits" in Microsoft’s favor. B. Microsoft Cannot Demonstrate That It Will Suffer Irreparable Injury If A Stay Is Not Granted The District Court’s August 11 Order itself stays all further depositions in this action until the parties agree upon and present to the District Court a "protocol" sufficient to protect Microsoft’s interests "in preventing unnecessary disclosure of trade secrets or other confidential information." August 11 Order at 2-3. Accordingly, the only risk of injury cited by Microsoft – the disclosure of its trade secrets to the public during deposition – is expressly guarded against by the District Court’s August 11 Order. Thus, Microsoft faces no injury as a result of the August 11 Order, much less irreparable harm. In the absence of "specific evidence showing how release of [the material to which access is sought] would result in competitive harm," Microsoft has not made a sufficient showing "to warrant a stay." Republic of the Philippines v. Westinghouse Elec. Corp., 949 F.2d 653, 663 (3d Cir. 1991). [begin page 14]
Microsoft also contends that the August 11 Order and the public access it mandates will substantially delay the trial, prejudicing the parties. Yet, to date, the only delay has been occasioned by Microsoft itself, by virtue first of its Motion for Stay in the District Court, and now by its appeal and Motion for Stay in this Court. The parties – including Microsoft – are in the process of developing the "protocol" required by the District Court and no one – not even Microsoft – has suggested that this process cannot be concluded promptly. Accordingly, there is no reason to believe that further depositions or other proceedings in this case will be materially delayed./7 Similarly, the parties – including Microsoft – are in the process of working out arrangements that will minimize disruption in the context of the depositions themselves and there is no reason – other than sheer speculation by Microsoft in appellate papers drafted prior to commencement of discussions among the parties – to believe that public access as required by section 30 will interfere with the parties’ ability to complete discovery promptly. C. The Media Intervenors And The Public Will Suffer Irreparable Harm If The Stay Is Granted
Microsoft wrongly contends that Intervenors will suffer no prejudice if the "stay" it seeks is granted – that is, if Microsoft is permitted to proceed with depositions in secret. Motion to Stay at 14, ¶ 27. By its express terms, section 30 requires depositions in civil antitrust actions instituted by the United States to be open to the public to the same extent "as are trials in open court." 15 U.S.C. § 30./8 A stale record of deposition proceedings, to be made available, if at all, [begin page 15] at some uncertain future time, is no substitute for the contemporaneous access guaranteed by section 30. Indeed, the "critical importance of contemporaneous access" to court records has been expressly recognized by this Court, Washington Post v. Robinson, 935 F.2d 282, 287 (D.C. Cir. 1991), and by the Supreme Court, see, e.g., Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 592 (1980) (Brennan, J., concurring). It is well-recognized that "[n]ews is a constantly changing and dynamic quantity. Today’s news will often be tomorrow’s history." Matter of Providence Journal Co., 820 F.2d 1342, 1351 (1st Cir. 1986), modified on other grounds, 820 F.2d 1354 (1st Cir. 1987). This is especially true in the case of news concerning an "imminent event" such as the depositions in this action. Id. at 1351-52. The "[t]imeliness of publication is the hallmark of ‘news’ and the difference between ‘news’ and ‘history’ is merely a matter of hours." United States v. Dickinson, 465 F.2d 496, 512 (5th Cir. 1972). Each day that news cannot be reported, "[t]he suppressed information grows older. Other events crowd upon it." Nebraska Press Ass’n v. Stuart, 423 U.S. 1327, 1329 (1975) (Blackmun, Circuit Justice)./9 [begin page 16] As the courts have consistently recognized, every instance in which the public is denied access to a judicial proceeding required to be open constitutes a "separate and cognizable" violation of the First Amendment and, in this case, of a federal statute. Id.; see also CBS Inc. v. Davis, 510 U.S. 1315, 1318 (1994) (Blackmun, Circuit Justice). "The loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury." Elrod v. Burns, 427 U.S. 347, 373-74 (1976). CONCLUSION For the foregoing reasons, Microsoft is not entitled to the relief it seeks. The District Court’s order, by its very terms, provides a stay that ensures Microsoft will suffer no harm; conversely, Media Intervenors and the public will suffer irreparable harm if the depositions are permitted to proceed in secret as Microsoft requests; and, for that very reason, the public’s interest in open judicial proceedings and the vindication of the rights afforded to it by section 30 will be thwarted if the stay is granted. Most importantly, Microsoft cannot make the required showing that it is likely to prevail on the merits of its claim. Accordingly, its motion for a stay must be denied. Holiday Tours, Inc., 559 F.2d at 843. Dated: August ___, 1998
OF COUNSEL: Adam Liptak Roger R. Myers David P. Murray Niki Kuckes [begin page 19] Certificate of Service omitted.
|
|
