Court Opinion

ID: 9469926
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:52:14.034636+00
Date Added: 2024-06-11T17:41:38.040986
License: Public Domain

STEWART, Justice (Retired),
dissenting.
In this case our mission is no more than to review a criminal contempt citation for refusing to comply with a discovery order. Nonetheless, the majority opinion wrestles with difficult questions concerning, first, the doctrine of res judicata, and, second, the application of the Sherman Act to a denial of membership in a professional organization. It forges new ground, despite the absence of a factual record in this case and despite the existence of contrary precedent in other Circuits. Because I believe that neither of these questions is properly presented for review by this Court, that the substance of the discussion concerning the doctrine of res judicata is extremely dubious, and that the contempt citation was proper, I respectfully dissent.
In the course of litigating an antitrust suit against the defendant-appellant American Academy of Orthopaedic Surgeons, the plaintiffs-appellees Drs. Marrese and Treister sought discovery of the correspondence and other documents relating to the denial of their application for membership in the organization as well as to all previous denials of membership since 1970. The Academy refused to produce these documents. The District Court then issued a protective order limiting access to the documents to the plaintiffs and their counsel, and ordered the Academy to produce the requested material. Following the Academy’s refusal to comply with his order, the District Judge cited the Academy for contempt and imposed a $10,000 fine. The Academy then brought this appeal.
The majority opinion first addresses the question whether, on appeal from a criminal contempt judgment for failure to comply with a discovery order, the validity of the underlying order may be reviewed. The opinion correctly concludes that the validity of an underlying discovery order may be reviewed on appeal from a criminal contempt judgment. See United States v. Ryan, 402 U.S. 530, 532-3, 91 S.Ct. 1580, 1581-82, 29 L.Ed.2d 85 (1971).
*1097In reviewing a discovery order, however, an appellate court is limited by the principle that district judges have broad discretion in conducting pre-trial discovery and in framing protective orders. A trial judge’s discovery order may not be invalidated unless the order represents an abuse of discretion. Voegeli v. Lewis, 568 F.2d 89, 96 (8th Cir. 1977) (“[W]e are most unlikely to fault [the trial court’s] judgment unless, in the totality of the circumstances, its [discovery] rulings are seen to be a gross abuse of discretion resulting in fundamental unfairness in the trial of the case.”); Keyes v. Lenoir Rhyne College, 552 F.2d 579, 581 (4th Cir.), cert. denied, 434 U.S. 904, 98 S.Ct. 300, 54 L.Ed.2d 190 (1977); Swanner v. United States, 406 F.2d 716 (5th Cir.1969). An appellate court may not decide whether “it would, in the first instance, have permitted the discovery prayed for.” Tiedman v. American Pigment Corp., 253 F.2d 803 (4th Cir.1958).
In turn, in deciding whether to order discovery and whether to impose protective restrictions on such discovery, a trial judge must balance the interest of the party resisting discovery against the need of the party seeking discovery for the requested material. In the present case, the District Court in framing its protective order carefully assessed the interests of both the Academy and the two doctors. In attempting to resist discovery, the Academy had argued that production of the requested documents would infringe upon the First Amendment rights of Academy members. The Academy’s interest, however, which the District Court correctly identified, is essentially an interest in preserving the confidentiality of its application process in order to preserve the candor of future evaluations. As the majority opinion concludes, that interest is legitimate, but not protected by the First Amendment.
Matched against the Academy’s interest in confidentiality was the plaintiffs’ need for the requested material. The District Judge carefully assessed this need, noting: “Without access to the documents Drs. Marrese and Treister are effectively prevented from continuing this litigation.... Just disposition of plaintiffs’ claims ... would be rendered impossible should they be denied access to the requested information. Proof of the claimed group boycott would require demonstration of the real reasons for Academy’s denial of admission to candidates, information obtainable solely through the materials Academy seeks to protect.” Marrese v. American Academy of Orthopaedic Surgeons, No. 80 C 1405, slip op. at 6 (E.D.Ill. Mar. 5,1981). Ruling that the Academy’s interest in confidentiality was “not . .. insubstantial,” the District Court drafted a protective order imposing restrictive conditions under which, in the words of the District Court, “the confidentiality of Academy’s admissions process [was] largely preserved.” Id. at 5. In a later opinion, the District Court carefully considered the argument made on behalf of the Academy that the plaintiffs should be required to complete their discovery on the question of antitrust injury before obtaining access to the documents at issue. The District Court rejected the argument, finding that the possible prejudice to the Academy did not justify requiring the plaintiffs to undertake piecemeal discovery. App. at 138.
The analysis employed and the protective order formulated in this case were virtually identical to the analysis and order in a very similar, recent antitrust case decided by the same District Judge. In the previous case, a physician sued a group of physicians for excluding him from a hospital staff, and thereby allegedly destroying his practice. He sought discovery from the hospital of certain documents relating to other physicians who had applied for admission to its medical staff. The hospital resisted, even after the District Court issued a protective order, asserting its need for confidentiality to prevent the chilling of the evaluation process. The hospital sought issuance of a writ of mandamus from this Court to compel the District Court to vacate its discovery order. In a Per Curiam opinion denying the petition for mandamus, this Court explicitly declined to recognize hospital disciplinary proceedings as privileged from discovery in antitrust eases:
*1098“To recognize hospital disciplinary proceedings as privileged, regardless of the purpose for which disclosure is sought, would in effect grant such committees, their members and participants absolute immunity from prosecution for all statements made and actions taken in the context of such proceedings .... [We] decline to do so. The public interest in private enforcement of federal antitrust law in this context is simply too strong to permit the exclusion of relevant and possibly crucial- evidence by application of the Hospital’s privilege.”
Memorial Hospital for McHenry County v. Shadur, 664 F.2d 1058, 1063 (7th Cir.1981) (footnote omitted).
The District. Court’s restricted discovery order in this case was both consistent with precedent and sensitive to the needs of both parties. The order, therefore, in no way represented an abuse of discretion. Based on this limited inquiry and conclusion, the analysis of the validity of the contempt citation, in my opinion, should end and the District Court’s order should be affirmed.
The majority opinion, however, embarks on a lengthier course of analysis. The opinion correctly states that the District Court was required to compare the hardship to the party against whom discovery is sought, if discovery is allowed, with the need of the party seeking discovery for the requested material. The opinion correctly cites the Academy’s interest in preserving the confidentiality of the application process. In evaluating the other side of the balance, the plaintiffs’ need for discovery, the opinion then correctly notes that the “emphasis [of this inquiry] usually is on whether there are other, less burdensome means of getting the information that the party seeking discovery needs to prove his case.” At that point, however, the majority opinion includes a single sentence that changes the entire focus of the inquiry: “But another consideration, less frequently emphasized but no less legitimate, is whether his case has any possible merit.” Ante, at 1089. Based on this sentence, the majority opinion then proceeds to devote the rest of its lengthy text to an analysis of the merits of the plaintiffs’ antitrust suit in order, in its words, to determine “the benefit of discovery to the party seeking it.”
In holding that the merit of the underlying lawsuit is a fundamental consideration for an appellate court determining whether a district court abused its discretion in assessing the benefit of granting discovery, the majority opinion disregards long-settled principles of civil procedure. After the complaint was filed, the Academy had moved to dismiss the suit on the grounds that the action was barred by the doctrine of res judicata and that the complaint failed to state a claim under the Sherman Act. In a published opinion, the District Court denied the motion. Marrese v. American Academy of Orthopaedic Surgeons, 496 F.Supp. 236 (N.D.Ill.1980). Since this order was not a final one, the Academy could not then appeal the denial of the motion to dismiss unless the District Court certified its interlocutory order for immediate appeal under 28 U.S.C. § 1292(b). But the District Court declined to do so, and therefore the Academy could not seek appellate review of the merits of its case until after the entry of a final judgment. But the majority opinion today permits the Academy, and similarly situated parties in future cases, to secure immediate, appellate review of the merits of a lawsuit, prior to any discovery, trial, or judgment, simply by disobeying a discovery order and subjecting themselves to the fine imposed for violating the order.
The majority opinion seeks to justify its unprecedented approach by relying upon cases in which the District Court had denied discovery relating to claims which were found to be probably groundless. See Doe v. New York City Dept. of Social Services, 649 F.2d 134, 147 (2d Cir.1981); Spier v. Home Ins. Co., 404 F.2d 896, 899-900 (7th Cir.1968); Dionne v. Springfield School Comm., 340 F.Supp. 334, 335 (D.Mass.1972). Cf. 4 Moore’s Federal Practice ¶26.56[1], pp. 26-124 — 26-125, & n. 20 (Moore & Lucas eds. 1982) (“Ordinarily, the court will not determine whether the theory of the complaint is sound, or whether, if proved, *1099would support the relief requested, in ruling on a discovery motion.” (citing cases)) But, in the present case, the District Court did not determine that the suit was probably groundless. Rather, it denied the motion to dismiss and ordered discovery. Thus, in the guise of granting the District Court discretion to consider the merits of a suit in determining whether discovery is permissible, the majority opinion actually narrows the District Court’s discretion by permitting a party to relitigate the merits of an unsuccessful motion to dismiss in an appeal from a criminal contempt judgment for failing to comply with a discovery order. Such a result will interfere with the District Judge’s authority to control the discovery process and encourage the filing of interlocutory appeals in the heavily burdened federal appellate courts.
Because the District Court denied the motion to dismiss and did not certify its order for immediate review, this Court, as the majority ultimately acknowledges, ante, at 1096, lacks jurisdiction to review the order denying the motion to dismiss. As a result, the discussion in the majority opinion of the merits of the parties’ claims and defenses is purely advisory. Undaunted by this absence of jurisdiction, the majority opinion formulates a completely unprecedented expansion of the res judicata doctrine, inconsistent with existing law in several Circuits, including a previous decision of this Court. Res judicata bars the relitigation in a subsequent suit between two parties concerning a single cause of action of all claims actually decided in the first suit as well as claims that could have been decided, but were not raised, in the earlier litigation. Ante, at 1090. The plaintiffs in the present case earlier sued the Academy in an Illinois court claiming a right under Illinois law to a hearing on their application and to reasonable standards for membership. The Illinois court did not have before it a state or federal antitrust claim. Moreover, because, under long-settled precedents, the federal courts have exclusive jurisdiction over federal antitrust claims, see Blumenstoek Bros. Adv. Agency v. Curtis Publishing Co., 252 U.S. 436, 440, 40 S.Ct. 385, 386, 64 L.Ed. 649 (1920), no federal antitrust claim could have been decided by the Illinois courts.
Because of the federal courts’ exclusive jurisdiction over federal antitrust claims, several Circuits have stated that the doctrine of res judicata does not bar the litigation of a federal antitrust claim between parties who have participated in an earlier state court trial involving the same set of facts. Hayes v. Solomon, 597 F.2d 958, 984 (5th Cir.1979), cert. denied, 444 U.S. 1078, 100 S.Ct. 1028, 62 L.Ed.2d 761 (1980); Kurek v. Pleasure Driveway & Park District of Peoria, 583 F.2d 378, 379 (7th Cir.1978), cert. denied, 439 U.S. 1090, 99 S.Ct. 873, 59 L.Ed.2d 57 (1979); Clark v. Watchie, 513 F.2d 994, 997 (9th Cir.), cert. denied, 423 U.S. 841, 96 S.Ct. 72, 46 L.Ed.2d 60 (1975); Abramson v. Pennwood Investment Corp., 392 F.2d 759, 762 (2nd Cir.1968); see also, Restatement (Second) of Judgments 61.2(1) comment c, illustration 2 (1973) (“A. Co. brings an action against B. Co. in a state court under a state antitrust law and loses on the merits. It then commences an action in a federal court upon the same facts, charging violations of the federal antitrust laws, of which the federal courts have exclusive jurisdiction. The second action is not barred.”).
One court, however, has carved out an exception to the prevailing rule. In Nash County Bd. of Education v. Biltmore Co., 640 F.2d 484 (4th Cir.), cert. denied, 454 U.S. 878, 102 S.Ct. 359, 70 L.Ed.2d 188 (1981), the Court of Appeals for the Fourth Circuit held that a plaintiff who has maintained an action in state court under a state antitrust statute that was identical to the federal antitrust statute was barred from instituting a subsequent federal antitrust action. But Nash expressly distinguished the case in which the state statute did not authorize recovery of treble damages in the same manner as the federal statute. Id. at 490. Because the Illinois antitrust statute differs from the federal antitrust laws in that it does not provide for the mandatory trebling of damages, Nash, as the majority opinion ultimately concludes, “does not *1100speak directly to ... this case.” Ante, at 1091. Until today, therefore, no court has ever barred a plaintiff from litigating a federal antitrust claim on facts similar to those of the present case, and several decisions have stated that a plaintiff may not be so barred.
The majority opinion justified reaching this unprecedented result by arguing that the plaintiffs should have resolved their dispute by instituting a federal antitrust suit and litigating all of their state claims as pendent claims in the federal action. Ante, at 1092. According to the majority opinion, therefore, the doctrine of res judicata bars not only claims that were actually decided or could have been decided in the first suit, but also any claim that could have been decided had the plaintiffs chosen to bring their suit in a completely different forum. This expansion of the doctrine of res judicata contradicts the principle, fundamental to our legal system, that parties, not judges, choose the forum in which to resolve their differences and frame the claims advanced in their pleadings. Moreover, the majority opinion’s analysis is based on the errant premise that by merely instituting a federal suit, a plaintiff may insist that a federal court decide any related state claim under the doctrine of pendent jurisdiction. “[PJendent jurisdiction is a doctrine of discretion, not of plaintiff’s right.” United Mine Workers of America v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966).
The majority’s novel analysis of the validity of the contempt citation also enables the Court to reach and “express its view” on the merits of the antitrust question at issue in the case, although, once again, the Court lacks jurisdiction to dismiss the suit based on any such view. Because there has not yet been any discovery or a trial in this case, the majority opinion is obligated to conduct a “Rule of Reason” analysis of the defendant’s activities, though there is not a single fact in the record to show the nature of the defendant’s actions, the purposes of its conduct, the relevant geographic markets, or the effect of the defendant’s conduct on these markets. It does so by speculating as to the effect of the defendant’s conduct on the plaintiffs, ante, at 1095, and on the market, ante, at 1094-1095. Speculation should not replace factual analysis in evaluating the merits of any lawsuit; it is a particularly inappropriate tool with which to evaluate a “Rule of Reason” antitrust claim.
I think the discovery order and the subsequent contempt citation did not represent an abuse of the trial judge’s discretion. I disagree with the majority’s decision to reach the merits of the underlying lawsuit and believe that its expansion of the doctrine of res judicata is highly dubious. Accordingly, I respectfully dissent.