councilman thank you judge chamberlain and may it please i'm david frederick for fidelity this case raises important issues concerning the rights mr mr frederick before we get started how are we going to allocate time on both sides here well we assume we have twenty minutes because we're all right and then the other side has a total of twenty that's correct all right great then and i would like to reserve some time for fidelity is a non party to this action and seeks to protect the confidentiality of its business secrets even though the trial ended last year fidelity is here today because it is a repeat player it routinely received civil investigative demands from the government it has received six in the last year with one more believed to be eminent as a result the issues that are positive here today are capable of repetition yet evading review the fact that we've waited a year now since the end of the briefing to get an oral argument date and the trial has ended suggests that this kind of issue is difficult to get through the normal appellate process we did everything we could to get before this court we brought a petition for mandamus and emergency appeal all of those efforts were set back but isn't this case moot at this point no it is not for three reasons first the doctrine of capable of repetition yet evading review falls squarely within this type of circumstance where the normal means of obtaining appellate review would simply be too slow for the pace of the litigation as it is arisen all right is there any showing that there's something out there right now that would be effected by our interpreting this as not moot that was going to be my second point that is that these documents are still in oracle's possession they have not been destroyed or turned back to our knowledge pending the resolution of this appeal wherever this appeal may go those documents are still operating under the protective order that the judge entered in this case that permits oracle's inhouse counsel to have access to them if the documents have in fact been returned and are no longer in the possession of the counsel then it would be moot wouldn't it no my third argument judge goodwin is that the information that was permitted to be disclosed is still subject to disclosure standards that would give fidelity an opportunity to bring an action under the california uniform trade secrets act so if there was a declaration by this court that the blanket disclosure allowed by the judge and the access to inhouse counsel somehow did create an inadvertent disclosure we would have an opportunity under that statute to bring an action for wrongful abuse of this information the documents are disclosed to counsel under seal and are later returned to the custodian of the files wherever they came from then there's no case or controversy it's still alive and you get one of these we call them and wouldn't this be eligible for a if the documents or counsel had a peekaboo look at them but they they're still under seal they would be in contempt of court if they released them it certainly would be appropriate to issue a order in this circumstance and we would urge the court to do so for reasons of judicial administration we've cited a case in our reply brief a fourth circuit case called nra pruitt which is on page fourteen the citation of that case is on page fourteen of our reply brief and that case raised a very similar type of problem a discovery order had been issued by the district judge and when the government petition for a mandamus to have that order withdrawn the discovery demand was withdrawn a voluntary action if you will to try to moot the government's appeal and what the fourth circuit said and citing a number of cases from other circuits but no cases from this circuit said that when there are issues of judicial administration the reasons animating them the capable of repetition yet evading review doctrine should be dealt with in an appropriate manner so that the course of appeals have an opportunity to render decisions that would guide the conduct of the district courts there is no decision in any court of appeals under the antitrust civil process act the acpa and the reason we submit is because when parties like or nonparties like fidelity get wrapped up in the kinds of actions that the government brought here there's simply no time to be able to assert their rights and vindicate them on appeal what the district court did here was it sanctioned an expedient action on the part of the parties to turn over the entire civil investigative demand file that the government had accumulated in its month's long investigation without giving them the confidentiality protections that one thousand three hundred and thirteen c demands of the government it didn't even follow the rule 26a1 initial disclosure standards which would allow for initial disclosure only if the documents are to advance a claim or a defense of the disclosing parties were most of the key documents actually used in the prosecution of the trial to the contrary most of the documents that fidelity turned over there's no claim that there was any use at all wait wait i can understand if you're talking about the mass of documents but i thought there were seven particularly sensitive documents that you were most exercised about that's right and to clarify my question goes to those seven documents weren't they used to prepare witnesses for depositions given to expert witnesses as part of their work and used at the trial they were not used at the time the government launched its complaint there was no contemplation of use as to those documents my question this goes really to the mootness issue weren't those documents actually used not all of them all right how many of them we know that at least four were used by four out of the seven four out of the seven were used you're complaining about the three well no even as to those four judge tolman we have a claim under the att case which the government has set forth in its policy manual as guiding the definition of use and the att case set a standard that was not met here that is that the government determines before it intends to use them that there will be a use and that was not satisfied at the time the disclosure was made the fact that we had to turn over all these documents and provided a roadmap if you will for oracle doesn't a satisfy mootness concern because the cat had already been out of the bag at that time well it is a chicken and egg problem in order to conduct reasonable discovery the justice department issues it's civil investigative demands and it can't know at the beginning of the investigation where the documents are going to lead it i'm not sure what you're asking us to do in terms of guiding the district courts a protective order is the classic way that we ensure that no harm will befall the owner of the document from release of and it looked to me like judge walker entered a pretty comprehensive protective order we're asking for two things judge tolman number one we're asking this court to say that before cid materials can be disclosed by the government in an antitrust action it has to make a determination with particularity that it will use those documents that was not done here secondly if that use determination is made you say use those documents would it be sufficient under the test that you're trying to get us to adopt if in response to the rule sixteen pretrial order that the documents were listed as potential exhibits that might be used either on direct or cross examination of witnesses or would you require more well the att court went through this and i would direct the court's attention to that we cited it in both of our briefs but that's a comprehensive opinion in which it explains that uses are for things like pretrial exhibits for uses in depositions of witnesses for propounding interrogatories and discovery requests for backup to the complaint here none of that was done it was simply a blanket disclosure that went beyond even the normal initial discovery process of rule 26a and we object to that but secondly as to your point about the documents actually used in the litigation we would ask this court to follow the decision in the dentsply case or not to follow it but to make it the law of the ninth circuit and to opine that only in extraordinary circumstances if that dissemination of documents is going to be made would it be allowed to go to inhouse counsel here well but wasn't dentsply the case where there was only one general counsel here we've got fifty five we've got them divided up like a law firm with different departments and judge walker essentially approved you didn't use the term but he essentially approved a chinese wall between the two oracle inhouse lawyers and the rest of the general counsel judge tolman the problem here is that the people that were approved by judge walker were the very people who had approved and been working with oracle in the hartscottrodino premerger clearance process the judge said they aren't involved in competitive decisionmaking because they don't do the licensing for oracle or its software but these are the very people who are advising the executives in the company on what would be the relevant market how the department of what about the fact that judge walker found that there had recently been a change of counsel of outside counsel and that these two inhouse lawyers were needed in order to in essence represent the client's interests in getting the new outside counsel up to speed i think if you look at the documents themselves and we filed them under seal as volume three of the excerpts of record it will be clear to you why fidelity care so much about these documents and why the access to inhouse counsel is so sensitive those documents are forwardlooking business plans that contain the most sensitive kind of economic and commercial information the outside counsel judge tolman had absolutely no problem understanding the significance of those documents and why they were important to fidelity and in fact they will tell you now that throughout this process they kept their promise not to show it to inhouse counsel but they did that at a very high cost and that cost was the use of the access and the potential access to coerce further discovery from fidelity that it otherwise would not have been able to do and it knew what the documents were so under the threat that they would be turned over to inhouse counsel oracle repeatedly extracted discovery concessions you're not arguing are you counsel that the information cannot be compelled at all you're arguing that it must be if it has to be compelled because it's relevant to the subjects of the antitrust investigation it just needs to be better protected than it was we're saying two things it does need to be better protected but there also needs to be an extraordinary showing of need and what the dentsply court did was apply a threepart test which we think properly vindicates the interests of nonparties in these cid situations number one it said the court should make an extraordinary showing that these documents have to be disclosed to inhouse counsel number two that the filtering mechanisms between outside counsel and inhouse counsel have to be shown to be inadequate and number three that the representations made by outside counsel have to be shown to be insufficient to advance the interests of the client here none of those had been shown in fact what the court did was to apply the brown bag test which we think is perfectly appropriate when there's private litigation between two parties but doesn't take into account the interests of a non party that has provided sensitive information to facilitate the government's investigation why would it be any different why wouldn't brown bag cover the situation why would it be any different if we're talking about well brown bag concerned very sensitive information in which two litigants were fighting with each other and the question is how do you vindicate the interest of the litigants to advance their claims against the claim that there might be an inadvertent disclosure here fidelity is a complete innocent bystander to this we provided this yeah but fidelity has very articulately identified its concerns and that is in front of the george walker and judge walker aired by not taking into account the very high risk of inadvertent disclosure and not requiring oracle to make the extraordinary showing that would vindicate the confidentiality policies that congress enacted when it provided this mechanism for doj to get information didn't he include provisions in the protective order that say you can't even transmit these documents through an oracle server it has to be a completely separate dedicated mechanism that looked to me to be pretty extraordinary based on my experience with protected it certainly was an extraordinary measure but your honor when an inhouse counsel has the capacity to see the information which is in volume three and now we know through public sources that oracle is in fact seeking to acquire an entity that was a cid recipient in this very investigation it's pretty clear i think that you could be as wellmeaning and as ethical a lawyer as possible but still be affected by the information that you might glean that would be highly sensitive but the logical extension of your argument is to in essence impose a blanket rule that inhouse counsel must never be allowed to see this type of thing no what the dentsply court said is that there has to be an extraordinary showing and we think that there ought to be a presumption when you provide government compelled process to obtain information from nonparties who are facilitating the government's investigation so that those confidentiality interests can be vindicated because if you don't here's the consequence that as a recipient of a cid will think at the very beginning the government's promise of confidentiality is not worth the paper that it's written on i'm going to fight it from the getgo and that would have terrible policy consequences because the government issues about seven hundred of these cids per year and if you have district courts all around the country taking claims by cid recipients that are attempting to seek further protection or to narrow the scope of the cid then you're going to bring a very significant halt to the government's investigative efforts if i could reserve what is the standard of review with respect to what judge walker did under brown bag well the application of what we have our third issue would be abusive discretion whether or not he should have considered the policies of the acpa is a error of law that is subject to de nova review and our first issue is also de nova thank you thank you good morning good morning your honors my name is john fante i'm from the us department of justice representing the united states your honors the government believes that this mr fante before you get started how do you and mr yates propose to allocate the twenty minutes yes your honor this morning i will be using appellate's first ten minutes to address the acpa issue that fidelity has raised and mr yates who represents oracle will address the seven highly sensitive documents issue thank you the government believes that this case should be dismissed because fidelity waved its claim under the antitrust civil process act or the acpa and because fidelity's claim regarding its seven highly confidential documents is moot not only did fidelity fail to raise the acpa issue below but it repeatedly told both this court and the district court that it had no issue with production of its documents to outside counsel at the hearing fidelity expressly told the court that it was content it said with the protections that were in place with respect to outside counsel and then their mandamus reply in this court which was quoted on page fifteen of the united states brief fidelity explained why it was content with disclosure to the outside counsel it stated that most of the documents produced were contracts between fidelity and oracle and that because there was not going to be public disclosure of those documents under the protective order the documents themselves presented no concerns if disclosed to oracle's counsel including the internal counsel and they are adequately protected by the district court's order also in the district court fidelity suggested to the court that it employed the brown bag approach or have fidelity utilize the brown bag approach of having outside counsel review the seven highly sensitive documents to see if disclosure to inside counsel was essential under these circumstances fidelity's complete acquiescence in allowing outside counsel to review its entire cid production without any complaint whatsoever constitutes a total waiver of fesco's aspa claim but even if it is not waived fidelity is wrong with its acpa argument both the language of the statute and its legislative history confirm that although cid material is afforded complete confidentiality during the investigative phase excuse me when an investigation leads to a civil action the defendant is allowed full discovery of cid materials under the federal rules now this morning fidelity quoted fifteen usc one thousand three hundred and thirteen c and that does in fact apply to the document custodian during the investigation and that expressly states that while the documents are in the possession of the custodian no cid material shall be available for examination by any individual other than a duly authorized doj employee however fifteen usc one thousand three hundred and thirteen d which discusses and rules utilization of investigative material it states that the custodian may give a division attorney appearing in a litigation cid material for official use as that attorney determines to be required the statute therefore gives the attorney appearing in the case broad discretion on how to use cid material and certainly complying with valid cid requests i'm sorry valid discovery requests is official use within that discretion in fact nothing in the statute suggests that it alters in any way the government's discovery obligations under the federal rules in fact the legislative history confirms that this interpretation is correct by drawing an unequivocal distinction between the investigation and any resulting litigation but would it be fair to say that that the acpa is essentially a mirror of the rule sixty grand jury material protection under criminal investigation that once the indictment or in this case the civil complaint is filed then to some extent the trout of secrecy has to be lifted because of the interests of the parties in having access to the information for trial yes your honor i think in the legislative history congress said that it is similar to that to the extent that once the civil action is commenced the defendant has to have access through the discovery process to relevant material in the possession of the united states that is relevant or likely to lead to relevant evidence to its defense and the committee stressed that nothing in the bill in any way altered the federal rules your honors congress enacted the acpa to assist in accomplishing its antitrust enforcement effort the division has a very strong incentive to encourage voluntary cooperation with our cid requests and while i do not want to dwell on the argument regarding the seven documents in terms of the voluntary cooperation and the brown bag test that the district court applied we agree with fidelity on that point as we stated in our brief that encouraging voluntary cooperation with the cid requests is very very important to the department's enforcement effort congress passed this act if you read the first few pages of the house report it explains that congress passed this act recognizing that the clayton antitrust act for example is an incipiencies statute and the department has to work very quickly on their hartscottrodino timeframes in order to decide whether or not to bring a pre merger enforcement action this case demonstrates that cid recipients are concerned about their competitor's lawyers seeing their confidential business information ten of those cid recipients filed objections to the district court's intention to allow inhouse counsel access to the most highly sensitive documents and five took the trouble to show up in the district court yet the district court we believe as does fidelity failed to take into consideration that it's just broad disclosure which at least with respect to the seven documents at issue here resulted that that the court's decision was wrong because it had a broad blanket decision that all of these materials have to be accessed by fidelity's inside counsel and yet we know now that they did not have to be and so in terms of reaching the brown bag decision if this court decides to do so we would urge the court to put a gloss as the dentsply case did on that brown bag standard so that it takes into consideration the importance of encouraging cid voluntary performance well are you suggesting that if we get to the merits and it's not moot that we would affirm on the basis of dentsply affirm the district court right no your honor we would ask you to say that the district court erred because it applied the wrong standard in excuse me in applying what would the practical result be of that if we were to follow your analysis and the analysis of mr frederick well i think that's a problem with this case your honor like i said earlier we do believe that that issue is moot the practical result in terms of fidelity here would be nothing i believe mr frederick said that there would be some possibility if they discover ultimately that there was some type of disclosure that resulted in harm but excuse me the district court not the district court but fidelity fidelity i'm sorry oracle has in fact given fidelity all the relief that they can possibly get i believe with respect to the seven documents thank you counsel that's all i have all right we'll hear from mr yates i believe may it please the court i'm christopher yates and i represent oracle corporation in my time i'd like to address three issues the first is the fact that this appeal is moot the second is the inequities of fidelity's construction of the acpa to an antitrust defendant in this case oracle the third is challenge to judge walker's brownbag balancing throughout though i think it's important as this court has recognized to keep in mind what is really at issue here we're talking not about unfettered disclosure of documents to a competitor or to the wall street journal what we're talking about here is disclosure of documents to outside counsel and some documents to inhouse counsel to two specified inhouse counsel who are litigators subject to the protections of a very strict protective order on the mootness point mootness is always a threshold issue of course the underlying case here has been over for more than a year no appeal was taken and oracle contrary to what mr frederick said has complied with the protective order by shredding fesco's documents and certifying destruction what that means is that under the protective order under paragraph twenty two of the protective order which is at er two hundred and ninety five that latham and watkins is permitted to retain copies of certain documents in its files for instance our file for this appeal has the document that was filed under seal however latham and watkins is under court order not to disclose such files to any person except pursuant to court order or agreement of fidelity there's nothing more for this court to do there's no order there's no relief that fidelity well now what about the argument mr frederick makes about capable of repetition but evading review your honor i don't think this is such a circumstance most cases involving cids last far longer than this case this case went from the complaint being filed to final judgment in a mere seven months most cases involving cids or price fixing in other cases that last for years i think more importantly there's nothing in the record that suggests that fidelity has been subject to other cids that have resulted in litigation most cids most investigations never result in litigation so there's nothing in the record that suggests that fidelity there's a reasonable expectation which i believe is the standard that fidelity will confront this issue again now turning to the acpa i'd like to provide the court with a defendant's perspective on the acpa sir i there anything imminent you heard my exchange with mr frederick is there something pending or about to happen that might give them some cause to be concerned there's nothing that i can imagine that would give them cause for concern especially when you have the protective order that was entered by judge walker which provides all the relief that they're entitled to it orders latham and watkins not to disclose the documents to any person turning to the acpa and briefly i'd like to discuss fidelity's construction of the acpa in the inequities that fidelity's construction would result for an antitrust defendant in this case the complaint was filed in february of two thousand and four the department of justice by that time had the cid power for over eight months and it used that cid power to amass a great volume of material to take dozens upon dozens of cid depositions and it used that it used that cid power to attempt to understand the market that was allegedly impacted by this proposed acquisition to formulate its theory of the case and ultimately to craft the complaint that it filed oracle in contrast when this complaint was filed had a mere four months to prepare for a month long bench trial but under fidelity's construction of the stature oracle was not entitled to one page of cid material until it was they say directly used at either a deposition or a trial that would permit the department of justice to cherry pick the helpful information and exclude the exculpatory information it's counter to all known principles of civil discovery and due process it just cannot be right it's not countered to the experience of practitioners in grand jury investigations who sit by helplessly while the government does what it's going to do and the grand jury's waiting for the hammer to fall and see what you get indicted or not but your honor once litigation i think as your honor pointed out once litigation commences i believe even under sixteen documents exactly as mr fante pointed out there's no support for the fidelity's position in either the statute or in the legislative history on the brownbag point i think what fidelity is asking this court to do is to second guess the issues that are fundamentally entrusted to the trial court and to second guess judge walker's management of a highly complex case and his findings you recall i asked mr frederick about our standard or review what's your analysis of that your honor i believe on the standard of review that this court looks at judge walker's factual findings for clear error and then when this court is reviewing judge walker's balancing under the brown bag test you look at that under an abusive discretion standard well what about the legal argument suggestion i think on the legal argument if there truly is a legal argument i'll get to that one second i believe you would review that under de novo review however i don't think there's a legal argument here i don't think this court needs to construct a new standard as fidelity suggests first of all i think it's important to note that fidelity told judge walker to apply brown bag below more importantly brown bag is a flexible standard it's an inherently flexible standard that's sufficient to account for any of the myriad of confidentiality concerns that can arise and here what we're talking about and the confidentiality policies that animate the acpa are simply that the department of justice does not want to permit confidential documents to be turned over to a competitor that's the same standard that this court applies when applying rule twenty six that competitors should not have access to highly confidential documents of another company now and this court should not start down the slippery slope of constructing modified brownbag tests for each new set of facts that arises that's just going to lead to error below in the district courts and utter confusion now fidelity then says that judge walker did not appropriately balance the competing interest under brown bag but i think it's important for this court to review what judge walker actually did in this case he required oracle to provide evidence substantiating its assertions that the two inhouse lawyers the two inhouse litigators at issue were not involved in competitive decision making he asked the parties to provide answers and oracle to provide answers to a variety of questions based upon this court's a brownbag opinion and also the us steel opinion which is the other leading opinion in this area out of the federal circuit in a response oracle provided detailed declarations from the two inhouse counsel and also from its lead trial counsel mr wall that evidence which was unrebutted established that the inhouse lawyers were not involved in competitive decision making and i submit that competitive decisionmaking is really the key thing in this balancing test and they also established why the involvement of the inhouse counsel was crucial to oracle's defense because as judge tolman recognized latham and watkins had only been recently engaged and the inhouse lawyers had been involved in the hartscottrodino process now judge walker then heard argument he actually reviewed one of the fidelity documents that's an issue in this appeal that's in er two hundred and sixty three where judge walker mentions that and then he made findings applying brownbag fidelity clearly disagrees with the findings that judge walker made but there's no abuse of discretion there's no clear error here there's no support for fidelity's suggestion that judge walker was required to conduct some kind of document by document review before he applied his brown bag balancing in practical terms that would have brought this case to a grinding halt and would essentially be a presumption in any case with any substantial number of documents that inhouse counsel are not going to be given access to any highly confidential documents now judge walker recognized and i think this court's brown bag opinion the us steel court recognized that inhouse counsel are not to be treated as secondhand citizens the dentsply case that mr frederick referred to is a completely different circumstance there you had a general counsel who was involved in merger and acquisition activity who was involved in contract negotiations obtaining access to competitor's information about marginal costs and the like would be highly relevant to his performance of his duties and the unrebutted evidence here is the inhouse counsel had no involvement whatsoever in competitive decisionmaking they're litigators they were members of the trial team and there was no abuse of discretion thank you thank you counsel mr frederick you have some reserve time thank you i'll start with the waiver at the hearing on march the 19th counsel for fidelity stated and this is on excerpts of record page two hundred and nine quote it was fidelity's express expectation that that information the cid would be afforded all of the protections available in the statute the acpa as judge green said in the att case to which i draw the court's attention the information that's supplied by third parties under cid is not to be produced wholesale as part of an investigation or ensuing litigation it requires much more careful consideration with respect to who gets what we weren't a party when the initial disclosure order was issued we were invited for the limited purpose of saying now that the disclosure has been made is there some further protection that you can get for that reason this court's decision in the united states versus carlson which says that there are exceptional circumstances an issue that wasn't expressly pressed below will be acceptable for review here we didn't have an opportunity to contest the blanket disclosure until all of the documents had already been turned over with respect to mootness mr yates himself in writing promised that he would not argue mootness the day before our appellate brief in this court was filed i direct the court to reply brief footnote six which explains exactly the kinds of discovery concessions mr yates himself was attempting to extract from fidelity and they strung out this process in a way that has made the mootness problem for that reason i think the court ought to take into account the fact that this issue is capable of repetition yet evading review fidelity now has a civil investigative demand and a merger case that it is considering how to respond to the government well what's your response to the claim that none of these other cids are on a fast track like this one was this is an unusual case in our experience we've cited the statistics that in these merger cases they tend to go much faster than the appellate process and i would simply note for the court that not withstanding the fact that there are these schisms between non parties in the department there's not a single report at appellate decision and that ought to speak for itself fidelity is here because the other courts found mootness well because no people haven't taken appeals because it is thought that is going to be difficult to do but because fidelity is a repeat player that's why we're here in the number of contexts in abortion in free speech in the education act this court has said that if capable of repetition yet evading review our addressability problem is not going to be an impediment to the court deciding the issue i direct the court to the board of education versus raleigh case which we've cited in our briefs there the school year had ended before the court of appeals had an opportunity to determine whether or not the person's rights over the handicapped act had been satisfied finally judge tolman with respect to your point about the grand jury information the cuisinart case which we cited in our brief directly addresses this and in footnote thirteen of that opinion judge cabranes who's a very respected judge explains why this cid information should be given the exact same kind of confidentiality concerns that grand jury material is i have more to say but my time has expired thank you counsel your time indeed has expired the case just argued will be submitted for a decision and we thank counsel for excellent argument in that case yeah thank you all that was very helpful