Opinion ID: 345561
Heading Depth: 3
Heading Rank: 2

Heading: The Bid Files

Text: 36 In addition to ruling that only proved reserve estimates need be produced, the district court specifically found that bid calculation data and bid calculation files were irrelevant to the investigation, and therefore need not be produced. 30 Like the district court's general relevance determination, this more specific ruling is also premised upon the court's erroneous delineation of the scope and purpose of the FTC's investigation, and therefore, it, too, cannot be sustained. 37 Bid files are collections of documents developed for and used in nominating and bidding for the right to lease tracts in the federal domain for oil and gas exploration. According to the producers, bid files typically contain speculative reserve estimates, back-up data for such estimates i. e., raw geological data and interpretation thereof, and documents reflecting the calculation of the producer's bid. 31 38 The producers maintain that bid files are not relevant to the determination of proved reserves, because bid files contain only speculative estimates which are of no further use once the company obtains a lease and begins exploratory drilling. The question, however, is not relevance to the calculation of proved reserves, but relevance to the FTC's investigative purpose. Admittedly, bid file estimates are quickly superseded by more accurate data, are not used to compute proved reserve figures, and may be completely erroneous predictions of the amount of natural gas eventually found. But any estimate of reserves however defined on which a company relies in the course of its business is relevant to the company's practices in estimating and reporting reserves. 39 We agree with the FTC that comparative information of this sort is reasonably relevant to its investigation. While, in response to the companies' arguments, the FTC has advanced several examples to demonstrate the relevance of bid files, 32 the Commission emphasized that this approach which requires, in effect, the delineation of a particular theory of violation is inappropriate in the pre-complaint stage; and here, too, we agree. While the FTC has not articulated the specific anti-competitive practices which may be present, it could not reasonably do so without access to the relevant documents. 33 Certainly a wide range of investigation is necessary and appropriate where, as here, multifaceted activities are involved, and the precise character of possible violations cannot be known in advance.