Case Name: FARNSWORTH CANNON, INC., Appellant, v. Alton B. GRIMES, Appellee
Court: United States Court of Appeals for the Fourth Circuit
Jurisdiction: United States
Decision Date: 1980-06-12
Citations: 635 F.2d 268
Docket Number: No. 79-1260
Parties: FARNSWORTH CANNON, INC., Appellant, v. Alton B. GRIMES, Appellee.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 635
Pages: 268–283

Head Matter:
FARNSWORTH CANNON, INC., Appellant, v. Alton B. GRIMES, Appellee.
No. 79-1260.
United States Court of Appeals, Fourth Circuit.
Argued Nov. 9, 1979.
Decided June 12, 1980.
Opinion on Rehearing En Banc Dec. 15, 1980.
Edmund L. Walton, Jr., McLean, Va. (Richard V. W. Adams, III, McLean, Va., on brief), for appellant.
R. John Seibert, Dept, of Justice, Washington, D. C. (Stuart E. Schiffer, Acting Asst. Atty. Gen., Washington, D. C., Justin W. Williams, U. S. Atty., Alexandria, Va., and Robert E. Kopp, Dept, of Justice, Washington, D. C., on brief), for appellee.
Before PHILLIPS and MURNAGHAN, Circuit Judges, and PERRY, District Judge.
The Honorable Matthew J. Perry, United States District Judge for the District of South Carolina, sitting by designation.

Opinion:
MURNAGHAN, Circuit Judge:
The central question presented is whether, in litigation between private parties, the successful assertion of a state secrets privilege by the United States government results not only in the exclusion of the privileged information but also in an alteration in the usual rules by which courts allocate burdens of production and persuasion and according to which they order dismissal or summary judgment. With respect to evidence which might, if available, be disposi-tive of this case, the Department of the Navy has invoked the privilege shielding military and state secrets.
I.
A. Farnsworth Cannon, Inc. brought an action in the Circuit Court of Fairfax County, Virginia, against Alton B. Grimes for wrongful interference with prospective contractual relations between Farnsworth Cannon and the United States Navy. Asserting that he was being sued for actions performed under color of his office as an employee of the Department of the Navy, Grimes removed the case to the United States District Court for the Eastern District of Virginia. See 28 U.S.C. § 1442 (1976).
Once in federal court, Grimes, who was represented by attorneys from the United States Department of Justice, moved to dismiss the action under Fed.R.Civ.P. 12(b)(6). He contended that proof of essential elements of the plaintiff's case and of essential elements of certain defenses would involve invasion of military and state secrets of the United States government. In support of the motion, Grimes' attorneys supplied in camera to the district judge a classified affidavit of the Secretary of the Navy outlining generally the secrecy areas involved and invoking a claim of military and state secret privilege with respect to the subject matter of four contracts involving Farns-worth Cannon and the Navy, with respect to the organizational structure of the Navy component for which Grimes works, and with respect to the nature and scope of Grimes' job responsibilities. At the hearing on Grimes' motion to dismiss, Farns-worth Cannon filed an affidavit by its president.
By its president's affidavit, Farnsworth Cannon sufficiently established for purposes of Fed.R.Civ.P. 12(b)(6):
1. Grimes was employed by the Department of the Navy in a responsible executive position.
2. On December 12, 1976, there were contractual relations between Farnsworth Cannon and the Department of the Navy consisting of three then extant agreements. Farnsworth Cannon was also a subcontractor under an agreement between the Navy and a third party. The contracts on which Farnsworth Cannon was the primary contractor had been entered with the Navy Regional Procurement Office at the Navy Supply Center in Oakland, California. The contracting officer with authority to issue, renew, or cancel the contracts and his designated subordinates were all persons other than Grimes.
3. Prior to December 12,1976, Robert F. Doss, president of Farnsworth Cannon, and Grimes were personal friends and confidants. Robert Doss' wife, Frances, was a vice president of Farnsworth Cannon, very much involved in day-to-day business operations. On or about December 4, 1976, Frances Doss informed Robert Doss that she wished a marital separation.
4. Between December 4 and December 12, 1976, Grimes gave substantial continuing counsel to Robert Doss, including advice that Robert Doss physically remove himself from the marital domicile. When the advice was taken, Grimes assisted Robert Doss in the removal of his personal effects from the marital domicile.
5. On December 12, 1976, Robert Doss discovered facts and circumstances sufficient to establish that Grimes and Frances Doss had been having and were continuing to have an affair. The fact that such matters had come to the attention of Robert Doss was also learned by Grimes on that day. Immediately, on December 12, 1976, Grimes telephoned the contracting officer at the Navy Regional Procurement Office in Oakland, California, who had supervised entry into the extant contracts between Farnsworth Cannon and the Navy. In the ensuing telephone conversation, Grimes directed that all contracts between Farns-worth Cannon and the Navy be cancelled or not renewed.
6. All contracts extant on December 12, 1976, between Farnsworth Cannon and the Navy subsequently expired in accordance with their terms. None has been renewed, and Farnsworth Cannon has been given no opportunity to bid or to make a proposal for the continuation or renewal of such contracts.
7. Under existing procedure, renewal of the contracts would normally have followed as a matter of course. Farnsworth Cannon has been advised by the Navy on June 29, 1978, that its work for the Navy had been satisfactory and that the Navy was sincerely interested in the continued viability of Farnsworth Cannon as a government contractor.
8. Shortly after December 12, 1976, Frances Doss left the employ of Farnsworth Cannon and became an executive with a newly formed corporation. The president of Farnsworth Cannon believed that, upon expiration of the contracts between Farns-worth Cannon and the Navy, the newly formed corporation received follow-on contracts which otherwise would have been routinely renewed and awarded to Farns-worth Cannon.
Subsequent to the filing in the district court of the affidavit of Farnsworth Cannon's president, Frances Doss married Grimes.
B. Granting defendant's motion to dismiss, the district court stated, "I don't see how the plaintiff's case can possibly go forward without going into those matters covered by the military and state secrets privilege." Defendant urges affirmance on three grounds:
1. Assuming that nonsecret evidence available to plaintiff would be sufficient to enable a factfinder to decide in plaintiff's favor, the case must nevertheless be dismissed because secret information, if available, would be central to plaintiff's case.
2. Assuming again that plaintiff has sufficient nonprivileged evidence for the case to go to the factfinder, dismissal is required because secret information, if available, would be central to defendant's proof of a defense.
3. The nonsecret information which plaintiff is able to introduce is not sufficient to justify a verdict in plaintiff's favor.
We reject all three contentions and reverse.
II.
The district court's decision allowing the government's claim of privilege is not contested by plaintiff; the privileged information is, therefore, acknowledged not to be available; and the only question before us is whether the existence of that privilege alters usual rules for dealing with nonad-missible material.
The settled law in this area denies such an alteration. "When the government is not a party and successfully resists disclosure sought by a party, the result is simply that the evidence is unavailable, as though a witness had died, and the case will proceed accordingly, with no consequences save those resulting from the loss of the evidence." McCormick's Handbook of the Law of Evidence § 109, at 233 (E. Cleary ed. 1972). Accord, 2 J. Weinstein & M. Berger, Weinstein's Evidence H 509[10] at 509-65 (1979) (quoting the passage from McCormick). Judge Weinstein continues, "In such a case, sanctions against a party are inappropriate because neither party is responsible for the suppression of the evidence." The Advisory Committee's Notes to the proposed federal rule of evidence concerning the privilege for state secrets took a similar position. "If privilege is successfully claimed by the government in litigation to which it is not a party, the effect is simply to make the evidence unavailable, as though a witness had died or claimed the privilege against self-incrimination, and no specification of the consequences is necessary." Proposed Fed.R.Evid. 509(e), Advisory Committee's Note, 56 F.R.D. 183, 254 (1973). Accord, 11 J. Moore & H. Bendix, Moore's Federal Practice at App. 1-78 (2d ed. 1976).
Defendant's strongest argument is based on language from Totten v. United States, 92 U.S. (2 Otto) 105, 107, 23 L.Ed. 605 (1875):
It may be stated as a general principle, that public policy forbids the maintenance of any suit in a court of justice, the trial of which would inevitably lead to the disclosure of matters which the law itself regards as confidential, and respecting which it will not allow the confidence to be violated.
But the very next sentence of the opinion shows that the Court had in mind not a special rule of dismissal for state-secrets cases but rather the usual impact of the burdens of production and persuasion when potentially valuable evidence is unavailable.
On this [general] principle [stated above], suits cannot be maintained which would require a disclosure of the confidences of the confessional, or those between husband and wife, or of communications by a client to his counsel for professional advice, or of a patient to his physician for a similar purpose. Much greater reason exists for the application of the principle to cases of contract for secret services with the government, as the existence of a contract of that kind is itself a fact not to be disclosed.
Accordingly, we reject defendant's first contention and hold that, if plaintiff has sufficient admissible evidence to enable a factfinder to decide in its favor without resort to the privileged material, then the potential helpfulness to plaintiff's case of other secret, inadmissible information is not grounds for dismissal.
III.
Defendant further urges that, when the government asserts a privilege which deprives a defendant of the evidence needed to establish a valid defense, the court should shield the defendant from the effect of the deprivation by dismissing the action. (Understandably, but inconsistently, defendant does not suggest analogous protection for plaintiffs whom an assertion of privilege may deprive of valid causes of action.)
The defendant's position is untenable. The unavailability of the evidence is a neutral consideration, and, whenever it falls upon a party, that party must accept the unhappy consequences. If the assertion of the privilege leaves plaintiff without sufficient evidence to satisfy a burden of persuasion, plaintiff will lose. See, e. g., Halkin v. Helms, 598 F.2d 1, 11 (D.C.Cir.l978). If plaintiff's case might be established without the privileged information, dismissal is not appropriate. See, e. g., Clift v. United States, 597 F.2d 826, 830 (2d Cir. 1979) (reversing dismissal where plaintiff had "not conceded that without the requested documents he would be unable to proceed, however difficult it might be to do so"). The same standards apply to defendants. See Spock v. United States, 464 F.Supp. 510, 519 (S.D.N.Y.1978) (ruling that the state secrets privilege applied but denying defendant's motion to dismiss the complaint, notwithstanding the government's contention that defendants could neither admit nor deny the allegations of the complaint without disclosing state secrets) ("[T]he state secrets privilege is only an evidentiary privilege . . . "); Ticon Corp. v. Emerson Radio & Phonograph Corp., 206 Misc. 727, 732, 134 N.Y.S.2d 716, 721 (Sup.Ct.1954) (in a case involving alleged breaches of a "confidential" agreement between an army contractor and subcontractor, assuming that the contracts and their subject matter were privileged but denying, without prejudice to renewal, defendant's motions to dismiss) ("I conceive the problem here, therefore, to be not one of substantive law at all-compelling or justifying dismissal of the suit-but one of procedure and evidence only . ."); cf. United States v. Coplon, 185 F.2d 629, 638 (2d Cir. 1950) (dictum) (L. Hand, J.) ("This privilege will often impose a grievous hardship, for it may deprive parties . of power to assert their rights or to defend themselves. That is a consequence of any evidentiary privilege."), cert. denied, 342 U.S. 920, 72 S.Ct. 362, 96 L.Ed. 688 (1952).
We wholeheartedly agree with the arguments so elegantly and persuasively mar-shalled by the dissent-that the technicality of who is plaintiff and who is defendant should not matter, that resolution should not relate to who has won the race to the courthouse. The arguments compellingly support our position. The burden of going forward on the evidentiary points depends on a party's posture, on what would be the customary assumption in the absence of proof to the contrary, and on usual accessibility, not on the extraneous accident of who is named plaintiff or defendant. Hence, in order that the parties may be treated evenhandedly it is crucial that neither party be preferred, that neither be given an advantage because of inaccessibility of evidence on privilege grounds. Both must proceed as if the evidence did not exist.
If the deletions through privilege were so severe that a prima facie case could not be made out, Farnsworth Cannon would lose. Its claim would be dismissed not because it was plaintiff but because, plaintiff or defendant, it could not establish a vital point. However, as this majority opinion elsewhere demonstrates, a prima facie case can be made out by Farnsworth Cannon, even though the privileged material is altogether inaccessible, and so it should be allowed to proceed. Grimes will be accorded exactly equal treatment, regardless of who got to the courthouse first. If he can make a defense without resort to the privileged information, he shall be free to do so. Under our rule, he would have been equally free to press his allegations had he been the nominal plaintiff, presenting his assertion to the court as a claim for declaratory judgment. If lack of admissible evidence eventually required dismissal of such a claim, the neutral rule which we reaffirm would still allow the nominal defendant to press a counterclaim so long as it had sufficient admissible evidence to make out a prima facie case. Thus the majority opinion, rather than the dissent effects an equality of treatment which will ensure a fairer, more equable result.
In this case we are not at all confronted with a race to the courthouse. Grimes, the present defendant, would not have improved his posture by taking the litigation initiative. But, if the situation were otherwise and if the usual burden of going forward, of proof, or of persuasion were consequently shifted, the shift would have nothing to do with the state secrets privilege. The shift would occur because of rules associated with other aspects of the case, rules which would be equally applicable were the case one in which no state secrets privilege arose at all. Hence the position of the majority remains a neutral one with respect to the effects of the state secrets privilege, according it no advantage or disadvantage, limiting its applicability to making the evidence unavailable without regard to which party would be hurt by the unavailability.
It appears that, to some extent at least, the dissent proceeds on the assumption that Farnsworth Cannon cannot, without the privileged material, make out a prima facie case. If that be so, we have no difference of law-only a relatively narrow one of fact. The majority opinion in Part IV takes pains to show that, even without the privileged material, Farnsworth Cannon could make out a prima facie case. The majority opinion has further emphasized that, if it could not, Farnsworth Cannon would suffer dismissal.
As we suggest in Part V, defendant may not be as totally handicapped as he fears.
IV.
In determining whether the affidavit of plaintiff's president, in light of the assertion of privilege, is sufficient to enable plaintiff's action to survive a motion for summary judgment, we note that there is a virtually complete absence of Virginia authority relating to the tort of interference with existing or prospective contractual relations. Zoby v. American Fidelity Co., 242 F.2d 76 (4th Cir. 1957), aff'g, 143 F.Supp. 763 (E.D.Va.1956), presented circumstances in which both this court and the district court assumed, for purposes of a summary judgment motion, that the plaintiff would have been awarded a contract except for actions by the defendant and that, consequently, the ingredients of the tort had been made out. But in Zoby our predeces sors disposed of the matter on the grounds that the defendant in that case had been privileged to engage in the conduct complained of. McDonough v. Kellogg, 295 F.Supp. 594 (W.D.Va.1969), which was cited by defendant, concerns Ohio law.
In the absence of other sources from which to determine Virginia law, we repair to Restatement (Second) of Torts § 766B (1979):
§ 766B. Intentional Interference with Prospective Contractual Relation
One who intentionally and improperly interferes with another's prospective contractual relation (except a contract to marry) is subject to liability to the other for the pecuniary harm resulting from loss of the benefits of the relation, whether the interference consists of
(a) inducing or otherwise causing a third person not to enter into or continue the prospective relation or
(b) preventing the other from acquiring or continuing the prospective relation.
The proof which at this posture of the case we must assume Farnsworth Cannon can supply from nonprivileged sources would suffice to make out the tort under § 766B. The existence of the contracts on December 12, 1976, is not in dispute. It is the existence of the contracts, not their precise contents nor the operations under them, which is the critical component of plaintiff's case.
Plaintiff can additionally adduce, without invading the Navy's secrets, proof that, in circumstances highly suggestive of personal motive and malice, defendant sought abrogation or nonrenewal by the Navy of the extant contracts. Plaintiff's assertion that renewal would normally have been a matter of course can by established by evidence of past practice and without inquiry as to the specific terms of and conduct under the contracts between Farnsworth Cannon and the Navy. Such evidence would be sufficient, in a prima facie way at least, to create a disputed question of fact over the elements of the tort, including proximate cause.
Defendant asserts that proof of proximate cause necessarily involves the introduction of evidence about the mental processes of decisionmakers in the Department of the Navy and that such evidence is privileged. Although that evidence is indeed privileged, the existence of the privilege does not bar a factfinder from reaching a decision based on reasonable inferences about what those processes probably were, so long as the inferences are adequately grounded on nonprivileged information which is in evidence. The superiority of more direct, but unavailable proof does not invalidate findings of fact rationally based on the circumstantial evidence which is before the factfinder.
As for plaintiff's capability to prove the amount of its damages, in the first instance, at least nominal damages would be recoverable if there was some harm. Moreover, it is reasonable to assume that compensatory damages could be shown through the testimony of Robert Doss or the tax returns and books and records of Farnsworth Can non. They should disclose what profit, if any, was made under contracts between Farnsworth Cannon and the Navy. In the normal situation, it might have been incumbent on Farnsworth Cannon to supply, for purposes of the motion for summary judgment, material indicative that it would prove damages compensatory in nature, especially in light of the claim for punitive damages which could only be sustained through proof of compensatory damages. However, at the time the record was made for the purposes of the motion to dismiss and Farnsworth Cannon submitted the affidavit of its president, all its records, documents and files relating to the Navy contracts had been turned over to the Director of Naval Intelligence and not returned, despite a request by Farnsworth Cannon. In such circumstances, at so preliminary a stage in the proceeding, it would not be appropriate to penalize Farnsworth Cannon for an inability to be specific about compensatory damages it would expect to prove.
V.
Just as plaintiff appears able to make out the elements of the tort from circumstantial evidence, even without recourse to the materials as to which privilege has been asserted, Grimes may be able similarly to make out the existence of his defenses. No effort of this kind was made below. On remand, the district judge should afford Grimes an opportunity to seek to establish, by affidavit or otherwise, the existence of testimony or documents not subject to the asserted secrecy privilege which would establish the uncontroverted existence of a defense or defenses. Such an opportunity will substantially minimize the tensions necessarily produced by this ease between the accepted doctrine that every litigant is entitled to his day in court and the assertion of the secrecy privilege essential to the common welfare. Cf. Heine v. Raus, 305 F.Supp. 816 (D.Md.1969) (granting summary judgment for a defendant pursuant to Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959), where defendant established his instructions and authorization for them by means of sworn, written responses by the Director of Central Intelligence to questions which had been submitted by the plaintiff), aff'd, 432 F.2d 1007 (4th Cir. 1970), cert. denied, 402 U.S. 914, 91 S.Ct. 1368, 28 L.Ed.2d 658 (1971).
VI.
If such an approach does not result in summary judgment and the case must go forward to trial, the district court will undoubtedly cooperate with counsel for the parties in exploring techniques to reduce those tensions. Without in any way intending to direct one approach or another, we suggest examination of the possibility of a waiver by the parties of jury trial, with an in camera disposition by the court. In this connection, the Secretary of the Navy has already displayed an admirable willingness to make the classified information involved available for purposes of forwarding disposition of the case.
Should there be difficulties about securing clearance for counsel presently representing plaintiff, thought might be given to identification of other counsel to represent plaintiff, to whom clearance might be afforded. By making his affidavit available to the district court and to this panel, the Secretary of the Navy has acknowledged that just resolution of eases sometimes creates a limited "need to know" in judicial personnel. If it is necessary for this case to go to trial, then counsel for plaintiff, as an officer of the court, would have a comparable need to know. If plaintiff is represented at trial by counsel who is eligible for clearance, we assume that the Secretary would respond appropriately to that need.
Insofar as court personnel necessary to conduct of the trial are concerned, we suggest that, if the official court stenographer cannot be granted clearance, the Navy Department in all probability has competent stenographic personnel qualified to record the proceedings and cleared to do so. If no arrangement for clearance of a courtroom clerk can be worked out, perhaps the district judge, in the extraordinary circumstances produced by the case, would conduct the trial without the assistance of a clerk.
Such arrangements may not be feasible. They will by their nature place a strain on the smooth functioning of the judicial process. It is better, however, for the process to function under such a strain than not to function at all to resolve a bona fide dispute of some significance.
We, therefore, reverse and remand, with instructions that the case be allowed to proceed in light of the observations contained in this opinion.
REVERSED AND REMANDED.
. The affidavit, the contents of which have not been divulged to Farnsworth Cannon or its counsel, was also made available to this court for inspection.
. And for Fed.R.Civ.P. 56 as well. The two affidavits had been presented to the court and had not been excluded by it. Thus, pursuant to Fed.R.Civ.P. 12(b), the motion for dismissal became a motion for summary judgment, and the order granting the dismissal constituted an order granting summary judgment.
. See 32 C.F.R. § 1-402 (1979).
. Such was the situation at the time Farns-worth Cannon submitted its affidavit and the district court considered it. In its brief, however, Farnsworth Cannon acknowledges that thereafter it was invited to submit proposals to the Navy. Such proposals presumably relate to new arrangements, not to extension or other continuation of agreements in existence on December 12, 1976.
. While the marriage of Frances Doss and Grimes was not established by affidavit, it was asserted in the brief of Farnsworth Cannon and was not contradicted in Grimes' brief.
. Grimes wishes to assert immunity as a government official under Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959), and Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978). Alternatively, he claims that his conduct was not improper. Cf. Zoby v. American Fidelity Co., 143 F.Supp. 763 (E.D.Va.1956) (holding that the financial interest of the defendant, as surety for a defaulting contractor, in having the Navy negotiate a replacement contract at the lowest feasible amount gave defendant a privilege to recommend that the Navy make its agreement with another, lower bidding contractor, rather than with the plaintiff), aff'd, 242 F.2d 76 (4th Cir. 1957) ; Restatement (Second) of Torts § 767-774 (1979) (factors for determining whether interference is improper).
. Cf. United States v. Reynolds, 345 U.S. 1, 73 S.Ct. 528, 97 L.Ed. 727 (1953) (holding military and state secrets not subject to discovery in a civil suit against the government). But cf. Hal-pern v. United States, 258 F.2d 36, 44 (2d Cir. 1958) (reversing dismissal of complaint under the Invention Secrecy Act, 35 U.S.C. § 181-188 (1976), directing that on remand the state secretsr privilege be denied if, in the judgment of the district court, a trial in camera "can be carried out without substantial risk that secret information will be publicly divulged" and stating that "the privilege relating to state secrets is inapplicable when disclosure to court personnel in an in camera proceeding will not make the information public or endanger the national security").
. The failure of the proposed rule to gain adoption does not derogate from the authority of the Advisory Committee's observation. It was made in the course of an explanation of why, for existing common law reasons, it was not necessary for the proposed rule to cover cases between private parties where the state and military secrets privilege might be invoked: "The rule therefore deals only with the effect of a successful claim of privilege by the government in proceedings to which it is a party." 56 F.R.D. at 254.
. Given our disposition of the case, we need not consider whether some nominally private parties might be so closely identified with the government that justice would require that courts show additional solicitude to their opponents when the government asserts a claim of privilege. Cf. Proposed Fed.R.Evid. 509(e), 56 F.R.D. 183, 252 (1973):
(e) Effect of sustaining claim. If a claim of privilege is sustained in a proceeding to which the government is a party and it appears that another party is thereby deprived of material evidence, the judge shall make any further orders which the interests of justice require, including striking the testimony of a witness, declaring a mistrial, finding against the government upon an issue as to which the evidence is relevant, or dismissing the action.
It may be remarked, however, that the neutrality of the Navy's stance in the present action between two private parties is somewhat compromised through its having obtained attorneys from the Department of Justice to represent Grimes as well as to present the claim of state and military secret privilege and the supporting material to the court.
. Cf. Jabara v. Kelley, 476 F.Supp. 561, 575 (E.D.Mich.1979) ("It may well be that a public trial on the nature of the FBI's investigation will be impossible because of national security considerations. However, the Court cannot take such considerations into account when deciding a motion for summary judgment."); Republic of China v. National Union Fire Ins. Co., 142 F.Supp. 551 (D.Md.1956) (holding that the United States was not barred from maintaining a libel against ship insurers although it had invoked a state secrets privilege with respect to the answer to one interrogatory and the insurers contended that the answer might help them establish a defense of absence of due diligence and reasonable efforts to recover vessels whose masters, officers, and crews had defected in Singapore or Hong Kong with the ships to the government of the People's Republic of China); United States v. Haugen, 58 F.Supp. 436 (E.D.Wash.1944) (stating by way of dictum that, although certain contracts were subject to a state-secrets privilege, a criminal defendant could have been convicted if the government had introduced oral evidence concerning certain aspects of the contracts so long as the evidence was given by a person who had seen the original contracts and who was trained in the art of drawing and construing contracts), approved, Haugen v. United States, 153 F.2d 850 (9th Cir. 1946) (affirming criminal conviction where, after prosecution's case had been reopened, secondary evidence of the contents of secret contracts had been given by a lawyer who had possession of duplicate originals while testifying).
. When state law provides the rule for decision in a suit for declaratory judgment in federal court, whether or not the burden of proof should be shifted is determined according to the rule in the forum state for similar declaratory actions. See Fireman's Fund Ins. Co. v. Videfreeze Corp., 540 F.2d 1171, 1175 (3d Cir. 1976), cert. denied, 429 U.S. 1053, 97 S.Ct. 767, 50 L.Ed.2d 770 (1977).
. Our predecessors, in Zoby, resorted to the Restatement. See 242 F.2d at 80. Virginia courts tend to apply Restatement pronouncements in the absence of controlling precedents. See e. g., Featherall v. Firestone Tire & Rubber Co., 219 Va. 949, 962, 252 S.E.2d 358, 366 (1979) (citing for a particular point of law Restatement (Second) of Torts § 388 (1965)); Lee v. Southland Corp., 219 Va. 23, 27, 244 S.E.2d 756, 759 (1978) (citing for a particular point of law only non-Virginia authorities, including Restatement (Second) of Torts § 688 & Comment g (1977)). But cf., e.g., Watt v. McKelvie , 219 Va. 645, 248 S.E.2d 826 (1978) (rejecting Restatement (Second) of Torts § 576 (1977) and holding that the original publisher of a defamation is not subject to liability for a repetition which is itself absolutely privileged because made in the course of a judicial proceeding)-
. Any issue as to whether performance by Farnsworth Cannon had been satisfactory to the point of meriting consideration for renewal would be one as to which the defendant must go forward, especially in light of the Navy's letter of June 29, 1978. So would any assertion that the departure of Frances Doss from plaintiff corporation was the cause of the nonrenewal.
. See Restatement (Second) of Torts § 774A, Comment c (1979).
. See O'Brien v. Snow, 215 Va. 403, 210 S.E.2d 165 (1974); Zedd v. Jenkins, 194 Va. 704, 74 S.E.2d 791 (1953).
. Any such material would have to be introduced in a fashion in which the plaintiff has access to it. See Kinoy v. Mitchell, 67 F.R.D. 1, 15 (S.D.N.Y.1975) (denying a government motion for summary judgment for defendants which was based in part on materials submitted in camera in connection with an assertion of a state-secrets privilege):
Simultaneously, therefore, the Government presents the Court, in camera, with material which it asserts must be withheld from plaintiffs as privileged, yet which it requests the Court to consider in ascertaining material facts and drawing legal conclusions concerning dispositive issues in the case. In this Court's view such a course is wholly unacceptable. Our system of justice does not encompass ex parte determinations on the merits of cases in civil litigation. Either the documents are privileged, and the litigation must continue as best it can without them, or they should be disclosed at least to the parties, in which case the Court will rule after full argument on the merits.
But cf. Heine v. Raus, 399 F.2d 785 (4th Cir. 1968) (vacating summary judgment for defendant but suggesting in a dictum that if necessary the district court might consider, in camera, privileged material required for a defense).
. See generally, Haydock, Some Evidentiary Problems Posed by Atomic Energy Security Requirements, 61 Harv.L.Rev. 468, 478-91 (1948); Zagel, The State Secrets Privilege, 50 Minn.L. Rev. 875 (1966); Note, Keeping Secrets from the Jury: New Options for Safeguarding State Secrets, 47 Fordham L.Rev. 94, 109-13 (1978); Note, Military Secrets as an Evidentiary Problem in Civil Litigation, 4 J.Pub.L. 196, 200-02 (1955).
. See Loral Corp. v. McDonnell Douglas Corp., 558 F.2d 1130 (2d Cir. 1977) (holding that the parties to Air Force subcontracts had effectively waived their right to jury trial of issues involving the subcontracts and approving a district court order which had referred the case to a magistrate, in part better to protect the secrecy of the classified material which would be essential to trial of the issues); Halpern v. United States, 258 F.2d 36 (2d Cir. 1958).
During World War II a special provision was added to the admiralty rules allowing any wartime admiralty proceedings to be conducted "in private" and any papers in such proceedings to be "impounded" if the court had "reason to believe that disclosure of them may be contrary to the national interest." 316 U.S. 717 (1942), suspended, 328 U.S. 882 (1946).
. See Loral Corp. v. McDonnell Douglas Corp., 558 F.2d 1130, 1132 (2d Cir. 1977) ("The Department of Defense has cleared, or can and will clear, for access to the material the judge and magistrate assigned to the case, the lawyers and any supporting personnel whose access to the material is necessary.").