MEMORANDUM AND ORDER
Plaintiff (“Grumman”), in this treble damage action arising out of alleged price fixing in the titanium industry, seeks enforcement of subpoenas duces tecum it served to obtain discovery of a report and other documents from nonparties. The latter are the United States Department of Defense (“DOD”) and Robert R. Nathan Associates, Inc. (“Nathan”), a consulting firm engaged by DOD to prepare the sought-after report.
Grumman manufactures airframes many of which are used in military aircraft it sells to DOD. RMI and TMCA produce various titanium mill products which are used in the manufacture of airframes and other aircraft products. RMI and others pleaded nolo contendere to a 1978 government price-fixing indictment for antitrust activities in the period 1970-1976, and also consented to injunctive relief in a companion civil action.
Sometime prior to the grand jury investigation and indictment, RMI and TMCA sought to defuse their customers’ potential disputes by instituting a settlement program. To facilitate acceptance within the aircraft industry, the program recognized that titanium mill products are often purchased, processed and resold, in turn, throughout various tiers of distribution before eventual end product sale. Hence, the program provided that portiоns of settlement amounts allocated to direct purchasers would be passed through to indirect purchasers. While many RMI and TMCA customers accepted settlement, some difficulty was experienced in obtaining the participation of all the airframe manufacturers, the so-called Tier IV companies, who had passed on to DOD the increased cost of their products attributable to the alleged price-fixing and risked liability to the government if they accepted settlement moneys. Others, like Grumman, declined to settle from dissatisfaction with the amount offered.
To avert derailment of the settlement program, RMI and TMCA proposed to DOD and any Tier IV company wishing to participate, that RMI or TMCA wоuld assume certain of the Tier IV company’s liabilities towards DOD while the Tier IV company’s claims against RMI and TMCA would be settled. Thus, it was contemplated that settlement between RMI and Rockwell International, for example, would entail settlement of DOD’s claims against Rockwell, as well as any claims DOD purported to assert against the titanium producers based directly or indirectly on the antitrust laws.
While DOD was apparently willing to consent to such an arrangement, it needed to know the extent of its damages arising from the alleged price-fixing. Accordingly, it contracted with Nathan — as “a neutral fact-finder from outside the government”— to produce an economic analysis of the impact upon DOD of price-fixing in the titani
The objectants advance two principal grounds to keep the Nathan report and other materials
By themselves, the confidentiаlity agreements entered into by Nathan, DOD, RMI and TMCA do not immunize the Nathan report or other materials from discovery. The principal cases relied on by objectants to support this contention, e. g., Martindell v. International Telephone & Telegraph Corp.,
In Martindell the district court denied the government access to deposition transcripts of witnesses who had testified pursuant to a stipulation of confidentiality “so ordered” by the court under Rule 26(c), the request having been made after the case had been settled. In affirming that denial, the Court of Appeals very plainly rested its decision on the “vital function” the protective order had played in the original litigation, “to ‘secure the just, speedy, and inexpensive determination’ of civil disputes, Rule 1, F.R. Civ.P., by encouraging full disclosure of all evidence that might conceivably be relevant.”
In GAF Corp. v. Eastman Kodak Co., supra, Judge Frankel denied disclosure of documents to the Antitrust Division. His reason for doing so, however, was not the existence of an agreed order of confidentiality, but rather the agreement of the parties “through discussions among counsel, that all documents produced in discovery, whether or not confidential, were to be used ‘solely for the purpose of [the] litigation.’ ”
Turning next to the closer question whether the Nathan report is protected by the immunity from discovery accorded attorney’s work product, we conclude that it is not.
Grumman argues that the Nathan report is not entitled to work product protection because (1) it was not prepared in an adversarial context, but by Nathan, as a “neutral fact-finder”; (2) DOD could never use the report for litigation purposes against RMI or TMCA, but only for settlement, while nothing restricted those defendants from using the report as they wished; and (3) the report was disclosed to RMI and TMCA, *who were DOD’s acknowledged “adversaries.”
To uphold their claim, objectants urge that the customary immunity for materials prepared “with an eye to litigation,” Hickman v. Taylor,
The work product doctrine unquestionably provides special protectiоn against disclosure of an attorney’s mental impressions, opinions or legal theories concerning specific litigation. See Hickman v. Taylor,
It bears emphasis, however, that the work product doctrine derives from the notion that “a common law trial is and always should be an adversary proceeding.” Hickman v. Taylor,
“The fact that litigation may still be a contingency at the timе the document is prepared has not been held to render the privilege inapplicable, if the prospect of litigation is identifiable because of specific claims that have already arisen. Sylgab Steel and Wire Corp. v. Imoco-Gateway Corp.,62 F.R.D. 454 (N.D.Ill.1974); Stix Products Inc. v. United Merchants & Manufacturers, Inc.,47 F.R.D. 334 (S.D. N.Y.1969). The test to be applied is whether, in light of the nature of the documents and the factual situation in [the] particular case, the document сan fairly be said to have been prepared or obtained because of the prospect of litigation. 8 Wright & Miller, Federal Practice and Procedure § 202[4 at 198].”
Hercules Inc. v. Exxon Corp.,
Work product рrotection, however, may be waived by disclosure. Although there appears to be no per se waiver rule, if the disclosure of work product “substantially increases the possibility that an opposing party could obtain the information,” the work product loses its immunity. GAF Corp. v. Eastman Kodak Co.,
With these principles in mind, we now consider whether the Nathan report was prepared with such “an еye toward litigation” that it should be found immune from discovery. First, the very fact of settlement ordinarily presupposes the existence, and assertion of identifiable claims that adversary parties prefer to settle rather than litigate. Moreover, presentation of one’s position in settlement negotiation requires not a little of the “adversary preparation” the doctrine protects. Cf. American Optical Corp. v. Medtronic, Inc., supra,
The nature of the Nathan report, and the circumstances under which it was prepared, however, appear far more important to a resolution of this discovery сontroversy than the uncertain prospect of litigation against the producers. Nathan was retained as a “neutral fact-finder” to assess the effect upon DOD of price-fixing throughout the titanium industry. The report it produced unquestionably stands far from the core concerns of the work product doctrine. Unlike the economists’ report proteсted in Exxon v. FTC, supra, Nathan’s work for DOD was not intended to be an “in-depth evaluation of aspects of the theory of the case and the evidence supporting these aspects.” Neither is it like the “database” materials the court protected in United States v. ATT, supra. Those documents described the structure of a computerized database and explained how to entеr and retrieve information. They were entitled to protection because through them the defendant might “determine which documents a plaintiff’s counsel would consider important, why counsel might consider them to be important, and what portions of those documents counsel might think are most important for the issues in [the] suit.” 30 F.R.Serv.2d at 507. In contrast, the Na
The critical factor here is that the confidentiality agreement bars DOD from ever using the report in litigation against RMI or TMCA. This circumstance separates the present case from those relied on by objec-tants. Even though the materials in those cases were prepared for settlement purposes or to decide whether to litigate, no restriction barred later use of the subject matter if litigation ensued. The proposition objectants seek to uphold thus becomes, in effect, whether documents prepared for use in settlement alone, without prоspect for use in litigation, deserve protection from discovery. In the unique circumstances of this case, we hold that they do not, because they were not prepared in an adversary context. Indeed, the very community of interest in settlement which objectants argue precludes a finding of waiver, see infra, underscores how far from an adversarial context this report was prepared. The report was intended to be the common foundation for settlement of the claims of three sets of adversaries, the titanium producers, the Tier IV companies and DOD. It did not embody an adversary’s competing view of the effects of asserted antitrust violations.
Moreover, even apart from any uncеrtainty whether the report may be considered work product, the disclosure to RMI and TMCA constituted a waiver of work product protection. The agreements under which the report was produced contemplated that RMI and TMCA were DOD’s potential adversaries. Disclosure to an adversary waives the work product protection as to items actually disclosed, even where disclosure occurs in settlement. See Burlington Industries, Inc. v. Exxon Corp.,
The remaining grounds for denying discovery are equally unavailing. By its terms, Rule 26(b)(4) concerns discovery from experts retained by the parties to the litigation in which the discovery request is made. DOD is not a party to the present action. Furthermore, there is no “expert’s privilege” which shelters Nathan from fact discovery of the nature Grumman seeks. See Kaufman v. Edelstein,
By itself the commendable desire of RMI, TMCA and DOD to achiеve settlement would not immunize documents exchanged in the course of negotiating that settlement. See County of Madison, New York v. Department of Justice,
SO ORDERED.
The Clerk of the Court is directed to forward a copy of this memorandum and order to counsel for the parties.
Notes
. Grumman’s motion and the objections of DOD and Nathan were originally filed in the United States District Court for the District of Columbia. In view of the pendency of this action, that Court transferred the motions to this district for determination.
. More specifically, the subpoena to Nathan sought
“all books, records, documents and correspondence regarding any report commissioned by the Department of Defense ... and prepared by Nathan, regarding prices or price-fixing practices in the titanium industry.”
This would embrace the report itself, comments on the report submittеd by TMCA and RMI, other original materials submitted by them, and materials prepared by Nathan but not submitted to DOD.
. Aluminum Company of America v. United States,
. While Nathan has requested that the Court order Grumman to reimburse it for fees and expenses incurred in responding to these discovery demands, we note that Grumman has undertaken to pay Nathan fees for such time as a witness for Nathan spends in deposition in this matter, at the hourly rate specified in DOD’s contract with Nathan. In this circumstance it is unnecessary to determine if Nathan is entitled to the order it seeks.
. One argument not advanced by DOD or Nathan is RMI’s contention that Grumman is es-topped from seeking discovery because Grumman at an early settlement meeting allegedly indicated approval of the plan to have an economist’s report made for DOD from the producers’ documents. While Grumman presses its view that RMI lacks standing to contest these non-party subpoenas, see 9 Wright and Miller, Federal Practice and Procedure, § 2457 at 431; Brown v. Braddick,