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Grand River Enterprises Six Nations, Ltd. v. King

February 9, 2009

GRAND RIVER ENTERPRISES SIX NATIONS, LTD., PLAINTIFF,
v.
TROY KING, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John F. Keenan, United States District Judge

MEMORANDUM OPINION AND ORDER

Before the Court is Plaintiff's objection to Magistrate Judge Douglas F. Eaton's July 14, 2008, discovery order. Plaintiff objects to the order to the extent that it permits Defendants to withhold from discovery certain data that the Original Participating Manufacturers ("OPMs") submitted to the Federal Trade Commission ("FTC") as well as certain computer programs and related files authored by Defendants' experts. For the reasons outlined below, the July 14 order is affirmed in its entirety.

I. BACKGROUND

The Court assumes familiarity with its earlier opinions in this case and discusses only those facts related to the current discovery dispute. For a detailed summary of the facts, see Grand River Enterprises Six Nations, Ltd. v. Pryor, No. 02 Civ. 5068, 2006 U.S. Dist. LEXIS 35614 (S.D.N.Y. May 31, 2006), and Grand River Enterprises Six Nations, Ltd. v. Pryor, No. 02 Civ. 5068, 2003 U.S. Dist. LEXIS 16995 (S.D.N.Y. Sept. 29, 2003).

In 2005, Defendants and the OPMs engaged in three arbitrations to determine whether to adjust payments made by the OPMs to Defendants under the Master Settlement Agreement. As part of the arbitrations, the OPMs provided a great deal of econometric data to Defendants' experts, including "[o]ver 10 years of disaggregated cost, profit and advertising information" that the OPMs had submitted to the FTC (the "FTC Data"). (Pl.'s Objection to Mem. and Order of Magistrate Judge Eaton ("Pl.'s Br.") Ex. O at 5.) Defendants' experts calculated net wholesale prices for the OPMs' products from the FTC Data using various computer programs (the "Computer Programs").

During discovery in the instant case, Plaintiff requested production of the FTC Data and the Computer Programs. Both the Defendants and the OPMs objected.*fn1

Plaintiff argued that the materials were highly relevant to analyses that its expert economists -- Dr. Jeremy Bulow and Dr. David Eisenstadt -- would conduct. Shortly after issuing a confidentiality order that covered the FTC Data and the Computer Programs, Magistrate Judge Eaton reviewed samples of the requested discovery in camera. On June 10, 2008, he ordered Defendants to produce unredacted copies of "[t]he data regarding wholesale list prices."*fn2 Grand River Enters. Six Nations, Ltd., v. Pryor, No. 02 Civ. 5068, at 3 (S.D.N.Y. June 10, 2008).

Plaintiff subsequently filed a motion for reconsideration, asking that Magistrate Judge Eaton also order the production of the FTC Data and the Computer Programs. Plaintiff particularly stressed that these materials were necessary to calculate the net wholesale prices of the OPMs' products. Notably, Plaintiff's expert Dr. Bulow had previously submitted an expert report in a related case in which he calculated (or roughly approximated) the net wholesale prices of the OPMs' products from 1995 to 2003. (Decl. of Christopher K. Leung in Supp. of Defs.' Opp'n to Pl.'s Objection to Magistrate Judge Eaton's July 14, 2008, Mem. and Order Ex. N at 25.)

Magistrate Judge Eaton denied Plaintiff's motion for reconsideration in the July 14 order. He cited as his rationale that "set forth in [R.J. Reynolds Tobacco Company's ("RJR")] letters [of June 19, June 25, and July 7], especially [RJR's] June 25 letter at pages 8-9 and 12-16." Grand River Enters. Six Nations, Ltd., v. Pryor, No. 02 Civ. 5068, at 2 (S.D.N.Y. July 14, 2008). In relevant part, RJR's June 25 letter reads as follows:

[The FTC Data] is extremely competitively sensitive and Plaintiff's alleged need for it (to recalculate net wholesale prices derived by the States' experts in the [arbitrations]) is outweighed by the risks to the OPMs of disclosure.

The States' experts in the [arbitrations] developed [the] [C]omputer [P]rograms using SAS software (software tools used to analyze and process data) which compiled the FTC [D]ata from each OPM, standardized the format of the data and then ran calculations on the data to derive estimates of net wholesale prices. These computer programs and related files run against the underlying FTC [D]ata. Therefore those data are necessary in order for the [C]omputer [P]rograms to work. One cannot be segregated from the other. (Pl.'s Br. Ex. O at 12.) In essence, Magistrate Judge Eaton found that the risks to the OPMs' of disclosure outweighed the benefit of the evidence to Plaintiff.

Plaintiff now objects to the July 14 order to the extent that it permits Defendants to withhold the FTC Data and the Computer Programs.

II. DISCUSSION

Plaintiff objects to the order because it (1) presumes that disclosure of the FTC Data and Computer Programs will harm the OPMs, (2) withholds the FTC Data and Computer Programs from even Plaintiff's counsel and experts, (3) considers Plaintiff's experts' failure to agree to onerous confidentiality requirements, (4) considers the costs incurred by the OPMs ...


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