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VILLANI v. NEW YORK STOCK EXCH.
March 15, 1973
John J. VILLANI and Donald Eucker, Plaintiffs,
NEW YORK STOCK EXCHANGE, INC., Defendant. Fergus M. SLOAN, Jr., Plaintiff, v. NEW YORK STOCK EXCHANGE, INC., Defendant
Lasker, District Judge.
The opinion of the court was delivered by: LASKER
The New York Stock Exchange ("Exchange") seeks reargument of our order dated December 4, 1972, to the extent that it grants plaintiffs' motions for preliminary injunctions by allowing plaintiffs to inspect all documents within defendant's possession relating to defendant's disciplinary charges against plaintiffs. Upon consideration of the briefs submitted by all parties, our order of December 4, 1972 is modified to delete the second and third ordering paragraphs. The court's findings of fact and conclusions of law are modified accordingly.
In N.L.R.B. v. Interboro Contractors, Inc., 432 F.2d 854 (2d Cir. 1970), cert. denied, 402 U.S. 915, 91 S. Ct. 1375, 28 L. Ed. 2d 661 (1971), Chief Judge Lumbard, in rejecting respondent's objection that the Board's procedures denied him a fair hearing because he had no opportunity to depose the Board's witnesses or review its documents prior to introduction of the testimony and documents at the hearing, unequivocally stated:
"It is well settled that parties to judicial or quasi-judicial proceedings are not entitled to pre-trial discovery as a matter of constitutional right." (At pp. 857-858.)
Our attention is also drawn to the fact that the Securities and Exchange Commission, the federal agency which shares with the Exchange powers of sanction in the subject matter of this case, does not allow litigants the right to pre-hearing discovery in hearings before it. See 17 C.F.R. 201.11.1. The S.E.C. Regulations require it only to produce "Jencks Act material" after the direct testimony of the witness. 17 C.F.R. § 201.11.1, thus incorporating the substance of 18 U.S.C. § 3500, and we do not understand the plaintiffs to contend that the regulations are constitutionally invalid.
Were we to write on a clean slate, we might well adhere to our prior ruling since, as a matter of equity, we think a strong argument exists that a person subject to the possibly devastating result of disciplinary action, which may well cause loss of reputation and income, should be entitled to inspect the documents in the hands of his accuser -- subject, of course, to the protective conditions specified in our original determination. We find considerable merit in the proposition that "Probably no sound reason can be given for failure to extend to administrative adjudication the discovery procedures worked out for judicial proceedings." Davis, Administrative Law Treatise, p. 589 (1958 ed.) as quoted in Berger, 12 Ad. L. Rev. 28 ...
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