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April 1, 1948

BANK LINE, Limited,
UNITED STATES two cases . THE SHIRRABANK. THE P. C. 472 and others. THE WINSUM

The opinion of the court was delivered by: RIFKIND

This is an application by the Bank Line, Ltd., for the relief authorized by Supreme Court Admiralty Rule 32C, 28 U.S.C.A.following section 723, because of the failure of the United States to comply with the order of the District Court 'to submit to libelants' proctors for inspection and copying the record of said Naval Inquiry at Casablanca, except any portion of said record which deals solely with disciplinary action or proceedings, if any, directed, recommended or taken against naval personnel.' *fn1"

The nature of the litigation, the circumstances under which the order was made and the authorities bearing upon the enforcement of the order have all been stated in Bank Line v. United States, 2 Cir., 1947, 163 F.2d 133. Familiarity with that opinion will here be assumed. *fn2" It is not disputed that the order would be both proper and enforceable if made in a litigation between private parties. All that remains to be added is that the United States has persisted in its refusal to comply with the order of the district court; *fn3" and that the relief sought by the instant motion is intended to apply to the cross-libel as well as the two proceedings, in which the order was made

 In order to limit the scope of the pending question, as well as the decision, it may be useful to put the question in its proper category. Disclosure of papers in the possession of the government may be sought in cases in which the government is merely a witness *fn4" and in cases in which it is a party. This case is of the latter variety. The government may be the party complainant or the party defendant. In this case it occupies both roles. The information to be discovered may relate to the military or diplomatic activities of the government or to what the government's proctor calls its 'housekeeping.' *fn5" This case belongs in the latter classification. The government in its brief has disclaimed any considerations of military security as a reason for its unwillingness to disclose.

 The ground assigned by the government is as follows:

 'The Government maintains that such publicity would greatly hamper and impede orderly administration by requiring administrative agencies to adopt safeguards as to the type of evidence and inquiry permitted in its housekeeping investigation.'

 It seems to me that two public interests are here in conflict. The first is that justice shall be done between litigants. The conflicting interest is that asserted by the government in the secrecy of its housekeeping records. That the latter public interest exists the courts are not privileged to question. Which policy is to prevail?

 In criminal cases the choice has been left to the government. The government is given the option either to reveal all evidence within its control which bears upon the charges, or to let the offense go unpunished -- at least where the evidence is held by officials who are themselves charged with the administration of those laws for whose violation the accused has been indicted. United States v. Grayson, 2 Cir., 1948, 166 F.2d 863. *fn6" Thus the party charged with the maintenance of both policies must choose between them as each opportunity presents itself

 Heretofore I have expressed the view that a similar choice is presented to the government in proceedings upon a writ of habeas corpus initiated by an enemy alien held for removal. United States ex rel. Schlueter v. Watkins, D.C., S.D.N.Y., 1946, 67 F.Supp. 556, 560, 561, affirmed 2 Cir., 1946, 158 F.2d 853.

 In Bowles v. Ackerman, D.C., S.D.N.Y., 1945, 4 F.R.D. 260, Judge Bright held that the Price Administrator by institution an action disabled himself from urging the privilege in support of his refusal to disclose evidence in his possession.

 It seems to me but a short step, and a necessary one, from those premises to the argument that where the government is the complainant in a civil suit for damages it should likewise be required to make its own choice -- to resolve on its part which of two conflicting public interests it prefers in any particular instance. The argument advanced by the government that the privilege is that of the Navy Department whereas suit is prosecuted by the Department of Justice for the benefit of the Treasury Department, and that the Navy Department, not exercising any discretion as to institution of litigation, cannot be deemed to have waived its privilege, has already been frowned upon in United States v. Grayson, supra. The several departments are all agencies of one government, possessed, theoretically, at least, of a single will. When that will is exercised in favor of litigating its claims it is thereby exercised in favor of surrendering the conditional privilege of suppressing its housekeeping secrets when these are useful in the ascertainment of liability.

 It is a somewhat longer step to the conclusion that the privilege is surrendered when the government is a party defendant. The government cannot be made a party defendant without its consent; and I assume that the government could have annexed to its consent an absolute privilege of non-disclosure of information in its possession. To the extent that it would have made the assertion of some claims against the government futile, it would amount to a constriction of the scope of the government's consent.

 Congress has not here so circumscribed its consent to be used. 46 U.S.C.A. §§ 741, 742, 743, 781, 782. On the contrary, Sec. 743 directs that the principles of law and the rules of practice obtaining between private parties shall prevail. The consent, being general, amounts to an endorsement of the libel with the sovereign's command. 'Soit droit fait al partie'. (Let right be done to the party). *fn7" But right cannot be done if the government is allowed to suppress the facts in its possession

 Perhaps there is an area of military and diplomatic secrets where the national interest must prevail even at the expense of private justice. Such an instance is Duncan v. Cammell, Laird & Co. (1942) A.C. 624, which incidentally, did not involve the sovereign as a party. Only one case, Walling v. Comet Ca-riers, Inc., D.C., S.D.N.Y., 1944, 3 F.R.D. 442, has come to my attention, where the government's conditional privilege has been successfully asserted as a bar to disclosure of relevant evidence in its possession where the government, by its consent or initiative, was party to the litigation and the evidence did not involve military or diplomatic secrets. *fn8" Other cases have rejected the privilege in such a situation. *fn9"

 Nor is there any validity to the government's contention that in light of the fact that the party here seeking discovery is a British subject and seeks relief with respect to the king of government records which the British courts would refuse a United States citizen in a similar cause of action, the reciprocity provisions of the Public Vessels Act, 46 U.S.C.A. § 785, *fn10" should bar relief. The relief is sought by libelant in pursuance of a procedural right, after it had won ...

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