Court Opinion

ID: 9471742
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:39:56.113488+00
Date Added: 2024-06-11T17:42:33.228085
License: Public Domain

HARLINGTON WOOD, Jr., Circuit Judge,
with whom CUMMINGS, Chief Judge, and CUDAHY, Circuit Judge, join, dissenting.
Judge Posner’s opinion has eliminated some points which appeared in the two pri- or opinions in this case, now vacated, and has added some new points. In certain respects the changes make this latest version less objectionable, but I respectfully must dissent. Those two prior opinions created the impression that this court was trying the case on its antitrust merits before the case had much of a chance to get started in the trial court. That prejudgment pall still hangs heavy over Judge Pos-ner’s latest opinion. Judge Cudahy’s opinion, with which I fully agree, addresses the ■res judicata issue. I discuss the discovery and contempt issue in this dissent to the discovery portion of Judge Posner’s opinion. Perhaps we could have simply adopted Justice Stewart’s dissents from the vacated panel decisions, but as this latest opinion has developed, we believe some elaboration is necessary.
First, a review of some basis discovery principles is in order. A criminal contempt citation is a final judgment subject to full rights of appeal. United States v. Ryan, 402 U.S. 530, 532, 91 S.Ct. 1580, 1581, 29 L.Ed.2d 85 (1971); Union Tool Co. v. Wilson, 259 U.S. 107, 111, 42 S.Ct. 427, 428, 66 L.Ed. 848 (1922). Appellate review of a criminal contempt judgment for failure to comply with a discovery order may be used to test the propriety of the underlying discovery order, which is not otherwise appealable. Ryan, 402 U.S. at 532, 91 S.Ct. at 1581; Hanley v. James McHugh Construction Co., 419 F.2d 955, 957 (7th Cir.1969). The trial judge has wide discretion in shaping pretrial discovery. Matter of Rassi, 701 F.2d 627, 631 (7th Cir.1983). Reversal of a *1168discovery order is appropriate only upon a clear showing of abuse of discretion. Voegeli v. Lewis, 568 F.2d 89, 96 (8th Cir. 1977); Keyes v. Lenoir Rhyne College, 552 F.2d 579, 581 (4th Cir.1977), cert, denied, 434 U.S. 904, 98 S.Ct. 300, 54 L.Ed.2d 190 (1977) .
When a party objects to discovery of confidential information, the trial court must weigh the interests of the parties and of public policy to arrive at an appropriate discovery compromise. Memorial Hospital for McHenry County v. Shadur, 664 F.2d 1058, 1061-62 (7th Cir.1981) (per curiam); Keyes, 552 F.2d at 581. Generally, broad discovery is available under the Federal Rules of Civil Procedure. See Fed.R.Civ.P. 26(b)(1). Privileges excluding relevant evidence are construed narrowly because they constrict the fact-finding process. Ryan v. Commissioner of Internal Revenue, 568 F.2d 531, 542-43 (7th Cir.1977), cert, denied, 439 U.S. 820 (1978). Further, in the antitrust area, there is a strong public policy interest in open competition and private enforcement of the antitrust laws. Memorial Hospital, 664 F.2d at 1062. With these principles forming the backdrop, we now turn to analysis of the discovery order in this case.
The Academy claims that the confidentiality of its files is necessary to preserve asserted first amendment interests in the candid review of applicants for membership. I agree with Judge Posner’s opinion that a first amendment argument for complete immunity from discovery is untenable. The freedom of association is not a shield against antitrust regulation. See, e.g., NAACP v. Claiborne Hardware Co., 458 U.S. 886, 102 S.Ct. 3409, 3425, 73 L.Ed.2d 1215 (1982); National Society of Professional Engineers v. United States, 435 U.S. 679, 697, 98 S.Ct. 1355, 1368, 55 L.Ed.2d 637 (1978); American Medical Association v. FTC, 638 F.2d 443, 451-52 (2d Cir.1980), aff’d by an equally divided court, 455 U.S. 676, 102 S.Ct. 1744, 71 L.Ed.2d 546 (1982). This court recently acknowledged that a privilege against any discovery of even partially privileged materials might serve as a shield to hide evidence of illegal behavior and impair the truth-seeking process. EEOC v. University of Notre Dame Du Lac, 715 F.2d 331, 337 (7th Cir.1983).
In Notre Dame, which Judge Posner’s opinion also cites, EEOC sought discovery of the University’s tenure files to investigate an assistant professor’s charge that he was denied tenure due to racial discrimination. This court recognized a qualified privilege against disclosure of the sources of documents in the University’s tenure files, due to the critical role of confidential tenure review in the pursuit of academic excellence. Nevertheless, we sanctioned limited discovery using the technique of redaction of names and other identifying information. Judge Posner’s opinion in the present case seems to accord the Academy as much or more protection than we gave the University in Notre Dame. The opinion, however, admits that the exact nature of the Academy is unclear. When we recognized the qualified academic freedom privilege in Notre Dame, we knew what we were protecting. Adlai Stevenson long ago put it well:
For the university is the archive of the Western mind; it is the keeper of the Western culture and the foundation of Western culture is freedom. Men may be born free; they cannot be born wise, and it is the duty of the university to make the free wise. The university is the guardian of our heritage, the teacher of our teachers. It is the dwelling place of the free mind.
Stevenson (G. & D. Darling eds. 1977).
Nothing akin to the qualified academic freedom privilege applies to the Academy. The Academy, the only organization for this profession that counts as members nearly all the orthopaedic surgeons in the United States, does not claim to license, certify, or police the profession. Indeed, membership in the Academy appears to be most conspicuous by its mere absence. Yet the Academy itself fluctuates on the importance of membership. When an anti-competitive group boycott is the topic, the Academy gives the impression that exclu*1169sion from its ranks is of little professional consequence. In support of this characterization, the Academy argues that one of its principal functions is to sponsor educational seminars to which even non-members are welcome. However, when discovery of its admissions files is the issue, the Academy views itself as much too important to allow its confidentiality to be disturbed.
Judge Posner’s opinion, by bestowing on the Academy some new kind of privilege in the nature of a first amendment interest, seems to agree with the Academy that its files are almost sacrosanct. All variety of trade associations and other types of organizations, from civic clubs to country clubs, should rejoice in their improved status and newly-fashioned protection from troublesome inquiries. Individuals and agencies, however, who have legitimate antitrust, discrimination, and other claims against such organizations have little reason to rejoice.1
Rather than following the Notre Dame redaction model in a context not involving the academic freedom privilege, the district court chose to protect the confidentiality of Academy documents by ordering production of the unredacted files on rejected applicants for membership, but with restrictions on disclosure of the contents. Plaintiffs’ attorneys were to be permitted to discuss with their clients only the general contents, without identifying sources, of the files on other disappointed applicants. The files were to be used solely for purposes of this litigation. In reaching the discovery compromise, the district court followed the path approved by this court in Memorial Hospital for McHenry County v. Shadur, 664 F.2d 1058 (7th Cir.1981) (per curiam).
An asserted freedom of association does not raise a privilege against all discovery in the early stages of antitrust litigation, but requires a balance of the interests in confidentiality and disclosure- to reach a discovery compromise. The trial judge endeavored to achieve that balance by working with the parties. I believe that the discovery order reasonably protected the Academy’s confidentiality interests to at least a minimum extent while granting plaintiffs access to information without which, both Judge Posner’s opinion and the district court agree, they probably would be foreclosed from proving their case.
Judge Posner’s opinion now finds fault in the district court’s failure to incorporate other protective devices for resolving the discovery dispute, such as an in camera inspection of the Academy’s files or production of a redacted version of the files. I, too, believe that the trial judge could have improved on his discovery order. First, he could have been well-served by taking a look in camera at the Academy files on plaintiffs to see whether the files contained what plaintiffs claimed to need so badly, and whether the Academy had good reason to fight so desperately to keep the files out of sight.
The Supreme Court has commended an in camera, view of documents in a discovery dispute to insure the striking of a proper balance between the interests in confidentiality and disclosure. Kerr v. United States District Court, 426 U.S. 394, 405, 96 S.Ct. 2119, 2125, 48 L.Ed.2d 725 (1976). Failure to make an in camera inspection, however, is not in itself an abuse of discretion. While the district court did not view the Academy’s files, it apparently was aware that the state trial court had conducted an in camera inspection of the files in the earlier state court litigation between the same parties. After viewing the files, *1170the state court ordered production over the Academy’s objections. Treister v. American Academy of Orthopaedic Surgeons, 78 Ill.App.3d 746, 748, 33 Ill.Dec. 501, 503, 396 N.E.2d 1225,1226 (1st Dist.1979) (describing the trial court’s action). Thus, one judge had viewed these materials and determined that the contents were relevant and disclosure was appropriate. We should not ignore the state court’s first-hand determination. Further, the Academy has maintained that an in camera inspection would not improve the discovery order. In the Academy’s view, as I understand it, an in camera inspection could lead to a discovery order which, even if including redaction of the files, would be an abuse of discretion at this stage of the litigation.
The propriety of the district court’s order to produce the unredacted files also must be considered in light of the surrounding circumstances. In the early stages of this litigation, plaintiffs expressed their willingness to accept a redacted version of the Academy’s files, at least as the first phase of discovery. The Academy refused plaintiffs’ early offer to enter a redaction agreement, and plaintiffs later rescinded the offer. Both sides submitted proposed protective orders to the district court; apparently neither provided for redaction.
The Academy’s participation in later court proceedings suggested its general approval of the protective order as it was developing. However, the Academy meanwhile continued to press its effort to avoid any discovery of its files. At oral argument, counsel for Dr. Treister stated that his client now would accept a redaction order if this would not limit the right to seek sanctions against the Academy. The Academy’s position at oral argument was that any disclosure of its files, even after excision of names and other identifying information, would enable plaintiffs to determine the source of comments, thereby chilling participation in the Academy’s admissions process. The Academy steadfastly maintained that no modification of the district court’s protective order would be acceptable to it, and any forced disclosure of confidential information prior to the establishment of a jury issue on antitrust injury would be an abuse of discretion. Although the Academy’s stonewalling now has paid off, I do not find an abuse of discretion in the district court’s failure to order redaction under these circumstances.
Judge Posner’s opinion suggests that the district court should have used its Rule 26(d) powers to control the sequence of discovery in this case. Discovery usually may proceed in any sequence, but the court upon motion, for the convenience of parties and in the interests of justice, may schedule the order of discovery on different issues. Fed.R.Civ.P. 26(d). Judge Posner’s opinion correctly notes that the district court’s power to order sequential discovery may rise to a duty in some cases, citing Bruno & Stillman, Inc. v. Globe Newspaper Co., 633 F.2d 583 (1st Cir.1980), a reporter’s privilege case. The present case does not begin to fit into the Bruno & Stillman mold. The interests in the confidentiality of the Academy’s files do not require such delicate treatment as do those involved in the case of a reporter seeking to protect confidential news sources from discovery. The district court considered and rejected the Academy’s motion to bifurcate discovery. The court was satisfied that plaintiffs’ claim was not frivolous, having withstood a motion to dismiss once, and again upon reconsideration. The Academy’s proposal for sequential discovery would have required piecemeal discovery, which the district court found would burden plaintiffs unnecessarily since the Academy’s confidentiality interests could be preserved adequately through a protective order. I would hold that the district court did not abuse its discretion by refusing to order sequential discovery.
Judge Posner’s opinion discusses the misuse of discovery tools to coerce settlement, and apparently concludes that the district court’s discovery order failed to prevent plaintiffs from abusing the discovery process. The opinion finds two “hints” of predatory discovery here: first, that plaintiffs sought access to federal court — and its liberal discovery rules — only after losing in the state court; and further, that plaintiffs *1171planned to use information from the Academy’s files as the basis for further discovery. The first hint merely returns us to the res judicata issue in the context of a dual court system. The second hint, plaintiffs’ plan to follow up leads found in the files, is one of the conventional purposes of discovery.
Upon questioning at oral argument, counsel for the Academy labeled plaintiffs’ suit a “fishing expedition,” an attempt to gain access to otherwise unavailable information. Under the circumstances, however, plaintiffs’ pursuit of the files and plan to seek further discovery using leads from the files were within the bounds of appropriate discovery. The discovery record in this case evidences not the slightest abuse, harassment, or coercion to pressure a settlement. Judicial concern about discovery abuse is always legitimate, but such arguments are gratuitous in the context of this case. The abuse of discovery here instead is the Academy’s obstinate defiance of the trial court, which now is sanctioned by this court.
Although not condemning any one omission as an abuse of discretion, the discovery majority is left with the “firm conviction” that the district court’s discovery order was erroneous. I am not. The district court sought and received proposed protective orders from the parties, and mediated negotiations on this issue. Bifurcation of discovery was not mandatory in this case, and the court reasonably provided for the Academy’s confidentiality concerns through the protective order. The Academy should not now reap a windfall from reversal of the discovery order because the order did not incorporate certain provisions that the Academy still would refuse to accept. The Academy treated the trial judge’s reasonable discovery order with contempt and its contempt should be recognized by this court.
The Academy further objects to the contempt penalty. It argues that the $10,000 fine invoked the right to a jury trial, and the court erred in not granting a jury trial on the contempt adjudication. The Academy also challenges the fine as excessive in view of the nature of the offense.
The right to a jury trial for a charge of criminal contempt arises when the penalty imposed exceeds what would be considered a petty offense under the statutory definition of federal criminal offenses. Frank v. United States, 395 U.S. 147, 89 S.Ct. 1503, 23 L.Ed.2d 162 (1969); Cheff v. Schnacken-berg, 384 U.S. 373, 86 S.Ct. 1523,16 L.Ed.2d 629 (1966). A petty offense is any misdemeanor for which the penalty does not exceed six months’ imprisonment or a $500 fine. 18 U.S.C. § 1(3). .The $10,000 penalty against the Academy obviously exceeds the $500 limit for petty offenses, and was imposed without a jury trial. Plaintiffs argue, however, that the Academy waived its right to a jury trial. The development of the contempt citation in this case convinces me that such a waiver did take place and that the amount of the fine was not an abuse of discretion. See Shibley v. United States, 236 F.2d 238,240 (9th Cir.1956), cert, denied, 352 U.S. 873, 77 S.Ct. 94, 1 L.Ed.2d 77 (1956) (abuse of discretion standard of review); Jewel Tea Co. v. Kraus, 204 F.2d 549, 551 (7th Cir.1953) (same).
In the presence of all parties, the district court and the Academy discussed possible avenues for the Academy to procure appellate review of the discovery order, after this court had dismissed an earlier appeal attempt for lack of jurisdiction. The Academy suggested that the court hold it in criminal contempt with a fine of $500, and waived issuance of a rule to show cause. Plaintiffs, desiring to coerce production, proposed a civil contempt citation with a daily $5,000 fine. A few days before entering the contempt order, the district court informed the parties of its intention to impose, as a compromise, a criminal contempt citation with a one-time $10,000 fine. After the district court informed the Academy of its draft order, the Academy did not object or attempt to rescind its waiver of a rule to show cause; nor did it assert its right to a jury trial. Rather, the Academy appeared willing to accept the citation and fine as the basis for an appeal to this court, *1172and risk paying the price. It is now too late for the Academy to become parsimonious.
Judge Posner’s opinion declines review of the contempt citation under a belief that the citation falls with reversal of the district court either on res judicata grounds or for abuse of discretion in shaping the discovery order. The status of a contempt citation after reversal of the underlying order is an issue independent of the propriety of reviewing the underlying order on appeal of the contempt citation. On the latter issue, which I have discussed above, I agree with Judge Posner’s opinion that review of the underlying discovery order is appropriate here. On the former issue, however, the opinion cites yet overlooks precedent which supports sustaining the contempt order despite reversal of the district court order on other grounds.
As Judge Posner’s opinion notes, many decisions hold that a contempt citation remains intact even after invalidation of the underlying court order which was violated. See, e.g., Maness v. Meyers, 419 U.S. 449, 458, 95 S.Ct. 584, 590-91, 42 L.Ed.2d 574 (1975); United States v. United Mine Workers of America, 330 U.S. 258, 293, 67 S.Ct. 677, 695, 91 L.Ed. 884 (1947). See also Blocksom and Co. v. Marshall, 582 F.2d 1122, 1124 (7th Cir.1978) (“it is no defense to a charge of criminal contempt that the order disobeyed was invalid”). The Court in United Mine Workers concluded:
[W]e find impressive authority for the proposition that an order issued by a court with jurisdiction over the subject matter and person must be obeyed by the parties until it is reversed by orderly proceedings. This is true without regard for the constitutionality of the Act under which the order is issued.... Violations of an order are punishable as criminal contempt even though the order is set aside on appeal.
Id. 330 U.S. at 293-94, 67 S.Ct. at 696 (footnotes omitted).
The district court had both subject matter and personal jurisdiction in this action. Even if the action is barred by res judicata, this is not a jurisdictional deficiency; res judicata is an affirmative defense that may be pleaded and proved, or waived, by the party asserting it. See, e.g., Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 350, 91 S.Ct. 1434, 1453, 28 L.Ed.2d 788 (1971); Church of the New Song v. Establishment of Religion on Taxpayers’ Money in the Federal Bureau of Prisons, 620 F.2d 648, 651 (7th Cir.1980), cert, denied, 450 U.S. 929, 101 S.Ct. 1387, 67 L.Ed.2d 361 (1981); Fed. R.Civ.P. 8(c). See also 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 4405 (1981). The criminal contempt citation against the Academy remains very much alive. The district court’s jurisdiction was uncontested. The court entered a discovery order which the Academy chose to disobey. The Academy itself invited the contempt citation which has enabled it to perfect this appeal.
Although the discovery order could have been improved, the district court’s fashioning of the terms was not an abuse of discretion under the circumstances of this case. What the merits of this case would have turned out to be, we now will never know; but we must not let a prejudgment on the merits cloud our review of the discovery order. Plaintiffs, their case not barred by res judicata, deserve the opportunity within reasonable limits to develop their case, and then the opportunity to try it before a judge and jury. I would affirm the district court’s contempt holding, but on remand I would direct the court to. view the Academy’s files in camera and to consider possible redaction before actually enforcing the discovery order.2 This opportunity to reconsider the discovery order would be a fairer disposition of this case, giving the Academy another chance to review its posi*1173tion on discovery without depriving plaintiffs of their chance to see if they can make out a case.
Judge Posner’s opinion reaches the discovery issue despite its conclusion that the suit should be dismissed on res judicata grounds. The opinion directs that plaintiffs’ complaint be dismissed with prejudice. That is a hard blow to strike, particularly when paving new ground in the res judicata area. I have no reservations about joining Judge Cudahy’s opinion on the res judicata issue, and I respectfully dissent on the discovery and contempt issue.

. In response to this dissent, Judge Posner’s opinion has been revised in an attempt to narrow the reach of its holding on discovery of membership files by limiting it to professional associations, and not even all of those. A narrower holding may be some improvement, but the mere statement that the holding is so limited does not make it so.
Judge Posner’s opinion labels the Academy’s confidentiality concerns, “if not a First Amendment right, at least a First Amendment interest.” We now are left in considerable doubt about which associations may qualify as beneficiaries of this first amendment protection, and what criteria should be used to distinguish among them. As a result, we surely will see additional problems created. Therefore, the concerns expressed by this dissent remain valid.

. This is not to say that the trial judge abused his discretion in the manner in which he afforded protection to the Academy. I would affirm his discovery order. I suggest only that, in light of all the judicial discussion of the issue, the trial judge, before again attempting to enforce his discovery order, reconsider whether or not he could improve upon his original order after an in camera sampling of the files.