Opinion
Civil Action No. 98-2458-RDR
March 11, 2000
MEMORANDUM AND ORDER
This matter is before the Court on Plaintiffs' Motion to Compel Discovery (doc. 74). Plaintiffs seek to compel defendant Denny's, Inc. ("Denny's) to answer plaintiffs' First Requests for Production of Documents, Second Requests for Production of Documents, and First Interrogatories. Denny's has asserted objections to each request for production and interrogatory.
I. BACKGROUND INFORMATION
This is a race discrimination action brought by two African-American individuals pursuant to 42 U.S.C. § 2000a. That law prohibits discrimination and segregation in places of public accommodation. Plaintiffs were customers in a Denny's restaurant in Topeka, Kansas on February 21, 1997, when an incident occurred that plaintiffs allege was race discrimination in violation of 42 U.S.C. § 2000a.
Denny's objects to many of Plaintiffs' requests for production on the basis that they seek documents that Denny's has been ordered not to disclose under a consent decree entered by the United States District Court for the District of Maryland in Dyson v. Flagstar, et al., DKC-93-1053 ("Consent Decree"), and a Stipulation and Order Re: Clarification of Confidentiality Provisions of Consent Decree ("Stipulation"), which amends the Consent Decree. The Consent Decree was entered into by Denny's and other related entities in May 1994 to settle a class action race discrimination lawsuit brought by customers of Denny's under 42 U.S.C. § 2000a.
The stated purpose of the Consent Decree is to ensure that "all future customers of company-owned and franchise-owned Denny's Restaurants are accorded equal treatment and service regardless of race and/or color." Consent Decree, Sec. II.A. The Consent Decree is to remain in effect for seven years following May 24, 1994. Id., Sec. IV.C. In order for the Decree to be appropriately monitored, Denny's and the Monitor are required to maintain appropriate records. Id., Sec. X. The Consent Decree sets forth specific recordkeeping duties of the Monitor. The Monitor must "maintain" records of the following: (a) all race discrimination complaints made by any customer; (b) all training materials, including guidelines, policy statements and videos; (c) all advertisements and promotional materials; (d) all records relating to "tests;" and (e) all records "relating to the implementation of any provision of the Consent Decree." Id., Sec. XIV.B.3. In turn, Denny's has a duty to retain all documents that it "creates, generate, or receives from the Monitor that pertain to the Decree." Id., Sec. XIV.B.4. It also has the duty to "maintain all documents and records provided by the Monitor as well as all documents and records maintained and/or generated by Denny's that pertain to the Decree." Id., Sec. XIV.B.4.
The Monitor is an individual selected by the parties to the Consent Decree. The Monitor's duties include assisting the Maryland court and class counsel in monitoring the defendants' compliance with the Decree and ensuring that the Decree is implemented effectively. Consent Decree, Sec. XIV.A.1.
Section XIV.B. of the Consent Decree contains certain confidentiality provisions. Subsection 1 of that section was amended by the Stipulation, to provide in pertinent part:
Information of any kind, written or oral, that is generated, maintained, produced or preserved pursuant to the terms of the Decree ("Hereinafter "Confidential Information") shall be kept confidential and shall only be used by and/or disclosed to the Monitor, Denny's, Class Counsel, and their respective employees or agents who have a need to know or use such information, solely for purposes of enforcing, monitoring or administering this Decree. Only the Court, the parties, and the Monitor have the right under the Decree to enforce, monitor, or administer the Decree. The Monitor, Denny's and Class Counsel and their respective employees or agents shall not disclose Confidential Information to any person who is not a party to this Decree, including without limitation any person who seeks such Confidential Information in other litigation through discovery process in other courts, unless they are otherwise ordered to do so by this Court or unless all of the parties agree in writing that such disclosure will promote the enforcement, monitoring, or administration of the Decree. If a person not a party to this Decree seeks disclosure of Confidential Information from this Court, it is the intent of the parties that such information shall not be disclosed unless the person establishes that this confidentiality provision has been expressly waived in writing by all of the parties with respect to the particular information sought.
Stipulation, Sec. B. (emphasis added).
II. DISCUSSION
The Court is not persuaded by Denny's arguments that documents responsive to Plaintiffs' Requests for Production Nos. 1-4, 6, 9, and 11-13 are shielded from disclosure by the confidentiality provisions of the Consent Decree and Stipulation. The confidentiality provisions raise concerns with the Court about the extent to which the parties to a consent decree may use the decree to diminish the rights of non-parties to obtain evidence that would otherwise be accessible to them. Generally speaking, parties to a consent decree do not have the legal power to disregard otherwise valid laws or to "consent" to enlarge their own legal rights. See, e.g., Perkins v. City of Chicago Heights, 47 F.3d 212, 216 (7th Cir. 1995) ("While parties can settle their litigation with consent decrees, they cannot agree to `disregard valid state laws,' and cannot consent to do something together that they lack the power to do individually.") (citations omitted); People Who Care v. Rockford Bd. of Educ. School Dist. No. 205, 961 F.2d 1335, 1337 (7th Cir. 1992) ("When the parties to a decree seek to enlarge their legal entitlements — to grant themselves rights and powers that they could not achieve outside of court — their agreement is not enough."); Olympic Refining Co. v. Carter, 332 F.2d 260, 265 (9th Cir. 1964) (parties to a consent decree may not hold under seal existing evidence that would ordinarily be accessible to other litigants). See also Ex parte Uppercu, 239 U.S. 435, 440 (1915) (granting writ of mandamus to enforce petitioner's right of access to depositions and exhibits filed in another case sealed by order of the court).
The principle underlying the federal discovery rules, as pointed out by the Supreme Court in Hickman v. Taylor, 329 U.S. 495, 501 (1946), is to ensure that parties to a lawsuit "obtain the fullest possible knowledge of the issues and facts before trial." Allowing a consent decree to limit a party's rights to obtain that knowledge for use in litigation is in clear disregard of that principle. As noted by the Ninth Circuit in Olympic Refining, supra, no statute or rule provides any basis for a party who gains the benefit of settling a lawsuit under the terms of a consent decree to "gain the additional benefit of holding under seal, or stricture of nondisclosure, for an indefinite time, information which would otherwise be available to the public or at least to other litigants who had need of it." 332 F.2d at 265.
An exception to this general rule has been recognized where the documents or other information sought to be protected would never have come into existence but for the execution of the consent decree. See United States v. Bleznak, 153 F.3d.16, 19 (2d Cir. 1998). Bleznak was an antitrust suit brought by the United States against various stocktraders. The parties entered into a consent decree in which the defendant traders agreed that telephone conversations by their market makers could be tape-recorded and reviewed by a monitor to determine compliance with the consent decree and applicable securities laws. Id. The consent decree contained a provision that shielded the tape recordings from discovery and use as evidence in any proceeding or investigation except one brought by certain regulatory or governmental agencies. Id.
The Bleznak court distinguished the facts before it from those in People Who Care ( see supra) and similar cases in which the consent decree affected pre-existing rights of third parties. Id. Unlike those cases, the consent decree in Bleznak did not affect any rights of third parties that pre-existed the consent decree. Without the Bleznak consent decree, there would be no tapes to discover or use as evidence, while with the consent decree there would be tapes subject to the non-disclosure and non-use provisions. Id. Because the consent decree did not improperly affect any pre-existing rights of third parties, it was allowed to stand. Id.
The Court finds the reasoning of Bleznak to be sound and adopts its holding. Applying that holding to this case, any document that is subject to the confidentiality provisions of the Consent Decree and Stipulation and would not have come into existence but for the existence of the Consent Decree should be shielded from discovery, unless Plaintiffs obtain permission from the District Court in Maryland, as set forth in the Stipulation. Based on the present record, the Court is unable to determine which documents, if any, meet this standard. The Court will therefore direct the Parties to submit supplemental briefs addressing this issue. Denny's shall have until February 18, 2000 , to submit a supplemental brief. Plaintiffs shall have until February 25, 2000, to submit a brief in response to Denny's supplemental brief.
IT IS SO ORDERED.