United States Court of Appeals
For the First Circuit
No. 04-1944
MICHAEL J. GILL,
Plaintiff, Appellee,
v.
GULFSTREAM PARK RACING ASSOCIATION, INC.; SCOTT SAVIN,
Defendants,
ANTHONY F. OTERO; THOROUGHBRED RACING PROTECTIVE BUREAU,
Interested Parties, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Joseph A. DiClerico, Jr., U.S. District Judge]
Before
Boudin, Chief Judge,
Selya and Lynch, Circuit Judges.
Alan R. Hoffman, with whom Dale C. Kerester, Lynch, Brewer,
Hoffman & Fink LLP, Peter S. Cowan, and Sheehan Phinney Bass +
Green, Professional Association, were on brief, for appellants.
Steven M. Gordon, with whom Arpiar G. Saunders, Jr., James D.
Rosenberg, and Shaheen & Gordon, P.A., were on brief, for appellee.
Michael J. Liston, Norman I. Barron, and Barron Peck Bennie &
Schlemmer on brief for Association of Racing Commissioners
International, amicus curiae.
March 7, 2005
LYNCH, Circuit Judge. This case raises the question of
recognition of an informant's privilege and the associated public
interests which underlie the privilege. The issue comes to us on
arguments from a third-party investigative arm of an association of
private race tracks, that the district court, under Fed. R. Civ. R.
26, erred in failing to recognize those interests when it ordered
disclosure of the identities of informants who told of illegal
activities by the plaintiff. We vacate the order and remand.
I.
Michael J. Gill, an owner of thoroughbred race horses,
filed a false light defamation action against a Florida race track,
Gulfstream Park, and the race track's president, Scott Savin, in
New Hampshire federal court, based on diversity jurisdiction.
The case alleged defamation from statements by the
Gulfstream defendants to reporters for Sports Illustrated magazine,
which published an article about allegations that Gill had engaged
in illegal horse racing practices. The relevant state racing
agency, the Florida Division of Pari-Mutuel Wagering (FDPMW), in
fact had investigated Gill. Gill claims that the defendants
misrepresented the status of the investigation.
Gill learned during discovery about an Investigative
Report on his horse racing practices which had been prepared by the
appellants, the Thoroughbred Racing Protective Bureau (TRPB) and
-2-
one of its investigators, Anthony Otero. Neither are parties to
the defamation case.
Gill then amended the complaint to assert that TRPB acted
as the Gulfstream defendants' agent in preparing this defamatory
Report. Gill did not seek then to add Otero or TRPB as parties.
Gill subpoenaed TRPB's files concerning the investigation. TRPB's
counsel declined to produce certain documents containing the names
of the informants on grounds of privilege and confidentiality, but
then inadvertently disclosed the documents with the names of these
informants to Gill's counsel. Gill's then-counsel revealed the
informants' names to his client, filed the documents containing the
names under seal with the district court, and withdrew from the
case.
Gill's successor counsel filed a motion to unseal and to
use the inadvertently disclosed names, which was opposed by TRPB.
TRPB sought a protective order, arguing that the names of the
tipsters were protected from disclosure, under Fed. R. Civ. P.
26(c), by the informant's privilege under state law, and by other
interests. The district court granted the motion to unseal and
denied TRPB's request for a protective order. It did not reach the
question of waiver of privilege through inadvertent disclosure.
TRPB filed an interlocutory appeal, arguing that the
informant's privilege does attach and in any event the district
court erred in not considering, for Rule 26 purposes, the public
-3-
interest in encouraging informants to divulge information about
horse racing corruption to the industry watch dog group and the
corresponding interests of the informants in confidentiality and
privacy.1
II.
TRPB, one of the third-party appellants in this case,
describes itself as "the self-regulatory arm of the Thoroughbred
Racing Associations of North America, Inc. ('TRA'), a non-profit
trade association of the major thoroughbred race tracks in the
United States and Canada." The stated mission of TRPB is to
"assure the security of thoroughbred racing participants and
spectators and the integrity of thoroughbred races by working in
close conjunction with civil and criminal enforcement authorities
at every level of government, federal, state and local, to
investigate allegations of wrongdoing at TRA member tracks,
including criminal law violations."
1
TRPB's appeal is supported by a brief from the Association of
Racing Commissioners International (ARCI) as amicus curiae. The
regular members of ARCI are the racing commissioners from twenty
states and six territories or countries. State racing commissions,
according to ARCI, are "established under the laws of the various
States which conduct pari-mutuel racing to supervise and regulate
pari-mutuel enterprises in the State. The U.S. based Commissioners
whom ARCI represents are State appointees and/or employees." ARCI
also has associate members, who are industry-related groups and
regulatory groups from foreign countries. TRPB is an associate
member. The ARCI's purpose is to "encourage a forceful regulation
of North American (and international) racing and wagering for the
protection of the sport, the contestants and the public."
-4-
In January 2003, TRPB began to investigate plaintiff
Michael J. Gill, an owner of thoroughbred race horses, and Gill's
horse trainer and veterinarians. At that time, Gill's horses were
winning a high percentage of races at Gulfstream Park in Hallandale
Beach, Florida, owned by Gulfstream Park Racing Association, Inc.
In early January, an unnamed, confidential tipster had alerted
Anthony Otero, an investigator with TRPB, of "suspicious" activity
at the barn of Gill's trainer, specifically that "stable employees
were being posted at the barn as lookouts during pre-race
medication time." Otero also spoke with other unnamed,
confidential tipsters (Gill claims that there were in total three
separate tipsters), who told of other suspicious activities
involving Gill's horses at Gulfstream and its satellite training
facility. For example, the tipsters told TRPB that Gill's horses
were being shipped to a nearby trotting center where they received
"Extracorporeal Shock Wave Therapy" (ESWT) "four days out" from a
race; Gulfstream's 2003 rules made a horse receiving ESWT treatment
ineligible to start in a race until more than seven days post-
treatment have elapsed. The tipsters also said that one of Gill's
veterinarians was "blocking the joints" of Gill's horses on race
day with a pain killer.2 Further, the tipsters told Otero that on
race days, Gill's trainer administered to the horses a "hormone
2
"Blocking the joints" means injecting (illegal) pain killer
medication into the horses' leg joints to enable them to run
faster.
-5-
that stimulates and regulates red blood cell production thus
infusing a system with a richer supply of oxygen." After receiving
this information, Gulfstream's track veterinarian decided that if
any of Gill's horses had to be euthanized following injury, fluids
should be drawn from the joints for testing and a necropsy
performed.
On February 3, 2003, one of Gill's horses, "Casual
Conflict," injured its right front leg during a race and had to be
euthanized. The injured part of the horse's right front leg was
amputated and was oddly missing by the time Gulfstream's track
veterinarian arrived to draw fluids from it for testing. The
missing right front leg was later retrieved from one of Gill's
veterinarians, who admitted to having removed it without
permission.
On February 5, the FDPMW chief investigator contacted
Otero and other TRPB personnel to advise them that the agency was
taking over the investigation into the horse's death. The FDPMW
taped interviews of Gill, his trainer, and veterinarians. Otero
was present during most of these interviews. At least three
conflicting explanations were given by the interviewees for why the
leg of the horse was removed. FDPMW investigators then took some
leg tissue from the horse for testing. The testers could not draw
joint fluid for testing, but the other tests revealed no banned
substances.
-6-
It was not uncommon for TRPB and the FDPMW to cooperate
in investigations, and Otero and the FDPMW's investigators stayed
in contact during the subsequent investigations. TRPB continued to
investigate, presumably in cooperation with the FDPMW, and to watch
for suspicious activity as to Gill's other horses. TRPB also
conducted searches of the veterinarians' vehicles, which FDPMW
investigators witnessed. One of Gill's veterinarians was then
excluded from Gulfstream for failing to comply with DEA
regulations, and another veterinarian was not allowed to practice
medicine there for failing to sign the Gulfstream waiver of
liability agreement.
On March 4, 2003, TRPB issued an Investigative Report on
the Gill investigation to TRPB personnel, to some race track
members of the TRA (including Gulfstream and Savin), and to the
FDPMW. It is not clear how it was determined who would be on the
distribution list. The Report included the allegations provided by
the unnamed, confidential informants that Gill and his staff
engaged in illegal or improper pre-race treatments of the horses.
As Gill reads the Report, the investigation did not uncover
evidence to confirm these alleged illegal or improper activities.
But there was some evidence of improper activity in the Report.3
3
The Investigative Report did contain evidence that Gill's
barn was involved in administering an illegal "milkshake" to one of
Gill's horses. An illegal "milkshake" "masks the buildup of lactic
acids in a horse causing the animal to run even though it is very
tired." The Report also concluded that Gill's grooms acted as
-7-
The state agency's investigation into Casual Conflict's
death ultimately closed without producing any administrative
charges against Gill's trainer. However, the FDPMW did refer the
cases regarding Gill's veterinarians to the Florida agency
overseeing veterinarian licenses and the FDA.
On March 10, 2003, Sports Illustrated magazine published
an article titled "Nagging Questions" about Gill's "unprecedented
success" at Gulfstream and the suspicions surrounding that success.
Savin, the president of Gulfstream, was quoted in the article,
commenting on Gill's success: "[I]t's like Mark McGwire. People
thought, He must be on steroids. Anytime somebody's doing
something that's never been done before, it's a source of
conspiracy theories."
III.
The procedural history was given earlier. We turn to the
arguments made to the district court on the discovery motions.
lookouts and tried to misdirect the investigator away from the
scene of possible illegal activity. The Report further observed
that the equine clinic close to the training facility for Gill's
horses offered ESWT among other therapeutic treatments, and that
the veterinarian who administered these treatments was not licensed
by FDPMW and was not under regulatory oversight; however, the
Report did not contain any confirmed instance of Gill's horses
being transported to the clinic to receive ESWT during the
surveillance period from February 5 to February 17, 2003. The
Report noted that Gill's trainer and veterinarians had previously
been the subjects of other TRPB investigations and had been fined
or suspended for periods of time for illegal horse racing
practices.
-8-
TRPB made a number of arguments. First, TRPB argued that
it had good reason to keep the identities of the tipsters
confidential. TRPB's investigations supported the public interest
in law enforcement and the fairness and integrity of the
thoroughbred racing industry, and confidentiality of the
informants' identities was necessary for TRPB's work. TRPB
investigators often rely upon information provided by tipsters
whose identities are kept confidential. "In order to protect the
privacy rights of such individuals and to further the public
interest in law enforcement by facilitating communications from
such individuals, TRPB's notes and file information underlying its
reports are never released to any party. Absent the protection of
such confidentiality, TRPB would be unable to conduct meaningful
investigations."
Second, TRPB argued it was entitled to a protective order
under Fed. R. Civ. P. 26. TRPB maintained that the balancing of
interests required by the Rule favored the protective order because
Gill's asserted interests in the identities of the confidential
tipsters were outweighed by the public interest in the fairness and
integrity of the races, TRPB's interest in its ability to protect
that public interest by maintaining the confidential identities of
its informants (characterized as an "informer's privilege" or
"informant's privilege"), and the privacy interests of the
informants themselves. On the matter of the existence of a
-9-
privilege, TRPB argued that Florida privilege law, rather than New
Hampshire's, should govern the privilege analysis and whether the
privilege was waived in this case. Under that analysis, the
privilege was not waived and the sealed documents should not be
disclosed. But even if New Hampshire law or "federal common law"
were to apply, TRPB argued that the result would be the same.
Gill, in turn, argued that the documents should be
unsealed because TRPB could not meet the burden of showing that an
"informant's privilege" applied to the documents at issue. Gill
argued that the applicable law was New Hampshire law, which affords
no such privilege to a private entity such as TRPB. Even assuming
that a privilege existed, TRPB waived it through the disclosure to
Gill's former counsel. Disclosure of the identities of the
tipsters, Gill argued, was "central to [his] defamation claim"
because the information would help to resolve the questions of (1)
"whether the tipsters [sic] statements were motivated by ill-will,"
(2) "whether the tipsters were agents of the defendants," and (3)
"whether the tipsters had a business relationship with the
defendants sufficient to motivate them to publish their defamatory
statements to a private person knowing that publication of the
statements would adversely affect plaintiff's business."
On June 21, 2004, the district court allowed Gill's
motion to unseal and denied TRPB's motion for a protective order.
The district court found it unnecessary to resolve the choice of
-10-
law question because both New Hampshire and Florida law "recognize
an informant's privilege in circumstances in which confidential
information is provided to government entities in criminal and
civil litigation." However, the privilege did not apply to the
context of "confidential information being provided to a non-
governmental entity such as the TRPB," and "if the informant might
be able to give information that would be relevant to a fair
determination of a material issue in the case, the court may
require disclosure."
The district court found the identities of the tipsters
relevant because "the confidential informants would likely have
information that would be relevant to a fair determination of
whether [Gulfstream and Savin] used reasonable care in publishing
the information about Gill that he claims was false and
defamatory." The district court then concluded: "No other
privilege or reason to protect those documents from disclosure has
been asserted. . . ." Therefore, Gill's counsel "may use those
documents in any appropriate manner."
TRPB timely filed a notice to appeal and moved to stay
the June 21, 2004 order. The district court stayed the order
pending appeal. This court initially required TRPB to show cause
for why the appeal should not be dismissed for lack of
jurisdiction. After TRPB's response, this court allowed the appeal
-11-
to proceed and directed the parties to address appellate
jurisdiction along with the merits in their briefs.
IV.
Interlocutory Appeal
Ordinarily, litigants may not seek immediate appeal of
discovery orders because they are not final decisions and orders of
the district court. See FDIC v. Ogden Corp., 202 F.3d 454, 458
(1st Cir. 2000). But, by refusing to comply with the discovery
order, "the party resisting [it] 'can gain the right of appeal . .
. by defying it, being held in contempt, and then appealing from
the contempt order, which would be a final judgment as to [him].'"
Id. at 459 (quoting Corporacion Insular de Seguros v. Garcia, 876
F.2d 254, 257 (1st Cir. 1989)) (alterations in FDIC). The
requirement that appellants gain the right to appeal by
disobedience followed by contempt "serves efficiency interests
because it encourages reflection both by the party seeking
discovery and by the party resisting it." Id.
One exception to the rule that an appellant must be held
in contempt before appealing a discovery order exists where, as
here, the documents being sought are not in the hands of the
appellants (TRPB), but in the hands of a third party (sealed and
filed with the district court). See, e.g., Perlman v. United
States, 247 U.S. 7, 13 (1918). An exception in such circumstances
is necessary because disobedience followed by contempt is not an
-12-
option for the would-be appellant when the discovery order is not
directed at him, but at the third party, who "presumably lacks a
sufficient stake in the proceeding to risk contempt by refusing
compliance." Church of Scientology v. United States, 506 U.S. 9,
18 n.11 (1992).
Not all such discovery orders are immediately appealable,
however, and "[s]ome tension exists in our precedents as to whether
the availability of immediate review in cases such as this should
be gauged by the Perlman rule or by the more encompassing Cohen
collateral order doctrine." FDIC, 202 F.3d at 459; see Cohen v.
Beneficial Indus. Loan Corp., 337 U.S. 541, 546-47 (1949); Perlman,
247 U.S. at 13. Briefly stated, in this circuit, for a discovery
ruling to be immediately appealable under the Cohen collateral
order doctrine, an order must:
(1) concern a collateral issue so conceptually
distinct from other issues being litigated in
the underlying action that an immediate appeal
would neither disrupt the main action, nor
threaten to deprive the appellate court of
useful context which might be derived from
subsequent developments in the litigation;
(2) completely and conclusively resolve the
collateral issue;
(3) infringe rights which appellant could not
effectively vindicate in an appeal after final
judgment in the case; and
(4) involve an important or unsettled legal
issue, rather than merely challenge
discretionary trial court rulings.
United States v. Quintana-Aguayo, 235 F.3d 682, 684 (1st Cir. 2000)
(quoting United States v. Kouri-Perez, 187 F.3d 1, 5 (1st Cir.
-13-
1999)). These requirements have been interpreted to be narrower
than the broad statement of the Perlman rule that "a discovery
order addressed to a non-party sometimes may be treated as an
immediately appealable final order vis-à-vis a party who claims to
hold an applicable privilege." FDIC, 202 F.3d at 459.4
TRPB argues that appellate jurisdiction is appropriate
under either the collateral order test or the Perlman rule. We
agree. Despite the tension in the case law over whether (and the
degree to which) the Perlman rule has been absorbed into or limited
by the collateral order doctrine, this case qualifies for appellate
review under both doctrines.
First, this appeal fits the classic Perlman mold:
appellants are third parties; the district court is in possession
of the documents and has ordered that the documents in question be
unsealed and turned over to the plaintiff and his new counsel, who
may "use those documents in any appropriate manner"; the appellants
have no control over the documents, which have been filed with the
court, and thus are "powerless to avert the mischief of the order,"
Perlman, 247 U.S. at 13; and unless immediate appeal is granted,
4
The difference between Perlman and Cohen may be relevant in
some cases because "the Perlman rule arguably contains no
limitation on the scope of review, while review under the
collateral order doctrine arguably is limited to 'clear-cut legal
error' as opposed to challenges that seek to test either factual
determinations or the application of a settled legal rule to the
particular facts." FDIC, 202 F.3d at 459 n.3.
-14-
the identities of the informants would become public knowledge,
"rendering an end-of-case appeal nugatory," FDIC, 202 F.3d at 459.
Second, this appeal satisfies the four-prong test for the
Cohen collateral order doctrine used in this circuit. The issue of
whether the identities of the tipsters should remain protected is
"conceptually distinct" from the invasion of privacy, defamation,
and tortious inference claims. There is thus no danger that
immediate appeal in this case would "engender repetitive review,"
the avoidance of which is the rationale for the "conceptually
distinct" requirement. See Quintana-Aguayo, 235 F.3d at 685. The
district court's order completely resolves the issue of whether the
identities of the tipsters will be protected. As well, once the
documents are turned over to Gill with no clear limitation on what
he may do with them, the cat is out of the bag, and there will be
no effective means by which TRPB can vindicate its asserted rights
after final judgment. Finally, TRPB's argument is that the
district court committed "clear-cut legal error." FDIC, 202 F.3d
at 459 n.3 (quoting United States v. Billmyer, 57 F.3d 31, 35 (1st
Cir. 1995)).
Gill, citing FDIC, 202 F.3d at 459-60, argues that
circuit law requires that TRPB in this case raise a "substantial
privilege claim" (emphasis added by Gill) to obtain immediate
review under either Perlman or the Cohen collateral order doctrine.
Since TRPB cannot point to any case law justifying the extension of
-15-
the government informant's privilege to private parties except for
two cases, Apex Oil Co. v. DiMauro, 110 F.R.D. 490 (S.D.N.Y. 1985)
and Ross v. Bolton, 106 F.R.D. 22 (S.D.N.Y. 1985), the argument
goes, its appeal from the district court's order does not involve
a substantial privilege claim, and this court has no jurisdiction.
Under Gill's view, we must resolve the merits question in order to
decide the appellate jurisdictional question.
This argument misreads FDIC. FDIC involved a subpoena
duces tecum directed at a law firm, a non-party to the underlying
contract dispute who had represented the interests of the
defendant. FDIC, 202 F.3d at 457-58. The subpoena ordered the law
firm to produce documents that the defendant asserted were
protected by the attorney-client privilege. Id. at 458. After
acknowledging that it was unclear under circuit law whether
appealability should be measured by the Perlman rule or the
collateral order doctrine, the FDIC court concluded that it was not
necessary to answer that question in order to resolve jurisdiction:
"Under either approach, a substantial privilege claim that cannot
effectively be tested by the privilege-holder through a
contemptuous refusal ordinarily will qualify for immediate review
if the claim otherwise would be lost." Id. at 459-60. Read in
context, the language Gill relies on makes a "substantial privilege
claim" a sufficient but not a necessary condition for appealability
under either the collateral order doctrine or the Perlman rule.
-16-
FDIC delineates one set of cases which may be immediately appealed
under either approach but does not define all such cases.
It is not a requirement for interlocutory appeal of
discovery orders conclusively determining third-party rights that
the appellant assert a substantial, well-recognized claim of
privilege. The Perlman doctrine requires only that the appellant
have "a significant interest in the matters involved in the
discovery order . . . . Claims of privilege are by far the most
common, but a proprietary interest also may suffice." 15B Charles
Alan Wright et al., Federal Practice and Procedure § 3914.23, at
156 (2d ed. 1991) (emphasis added).
Indeed, were Gill's argument correct, it would read out
the fourth prong of the collateral order doctrine: that "important
or unsettled legal issues" in discovery orders can qualify for
review. In our view, the claims asserted here are both important
and unsettled. The Supreme Court has explained that "important" in
the Cohen collateral order doctrine sense means "being weightier
than the societal interests advanced by the ordinary operation of
final judgment principles." Digital Equip. Corp. v. Desktop
Direct, Inc., 511 U.S. 863, 879 (1994).
The appellants here, supported by an amicus brief from
the Association of Racing Commissioners International, contend that
an important public interest which may be irretrievably lost weighs
against the disclosure contemplated by the district court's order.
-17-
This is just the sort of "important" legal question that immediate
appeal under the collateral order doctrine is supposed to resolve.
See FDIC, 202 F.3d at 460; see also In re Sealed Case (Medical
Records), 381 F.3d 1205, 1210, 1216-17 (D.C. Cir. 2004) (noting
that discovery order was appealable under either collateral order
doctrine or Perlman and holding that district court erred by not
engaging in Rule 26 balancing of the probative value of discovery
order against privacy interests of the appellants); Montgomery Ward
& Co. v. Zenith Radio Corp., 673 F.2d 1254, 1258 & n.6, 1259
(C.C.P.A. 1981) (asserting appellate jurisdiction under both the
collateral order and Perlman doctrines over non-party corporation's
appeal of trial court's order compelling government to disclose an
investigative report containing confidential business information
of the appellant; court expressly did not reach the
"confidentiality of the . . . file or any applicable privilege" and
stated that "the courts have not limited interlocutory appeals of
discovery orders to those involving assertions of absolute or
constitutional privileges"). We are satisfied that the minimum
threshold for appellate jurisdiction has been met, and we turn to
the merits.
V.
There are two orders at issue: the district court's
allowance of the order to unseal and its denial of TRPB's request
for a protective order. TRPB argues that the district court erred
-18-
in the protective order analysis because it was obligated to, and
failed to, engage in balancing of Gill's interest in the identities
of the confidential tipsters against TRPB's claims of informer's
privilege, public interest privilege, and privacy rights. It
follows that if the protective order analysis was flawed, then the
order to unseal must also fall.
Fed. R. Civ. P. 26(b)(1) provides, "Parties may obtain
discovery regarding any matter, not privileged, that is relevant to
the claim or defense of any party . . . . All discovery is subject
to the limitations imposed by Rule 26(b)(2)(i), (ii), and (iii)."
Id. (emphasis added). Discovery of both privileged and
unprivileged information may be limited by Rule 26(b)(2).5
5
The final sentence in Fed. R. Civ. P. 26(b)(1) was added by
the 2000 amendments to the rules to "emphasize the need for active
judicial use of subdivision (b)(2) to control excessive discovery."
Id. advisory committee note. Rule 26(b)(2), in turn, provides:
The frequency or extent of use of the
discovery methods otherwise permitted under
these rules and by any local rule shall be
limited by the court if it determines that: .
. . (iii) the burden or expense of the
proposed discovery outweighs its likely
benefit, taking into account the needs of the
case, the amount in controversy, the parties'
resources, the importance of the issues at
stake in the litigation, and the importance of
the proposed discovery in resolving the
issues. The court may act upon its own
initiative after reasonable notice or pursuant
to a motion under Rule 26(c).
Fed. R. Civ. P. 26(b)(2). The appellants filed their motion for a
protective order under Fed. R. Civ. P. 26(c), which allows the
district court, "for good cause shown, . . . [to] make any order
-19-
Under Rule 26, the trial court is required to balance the
burden of proposed discovery against the likely benefit. See In re
Sealed Case (Medical Records), 381 F.3d at 1214-17; Farnsworth v.
Procter & Gamble Co., 758 F.2d 1545, 1547 (11th Cir. 1985); Bruno
& Stillman, Inc. v. Globe Newspaper Co., 633 F.2d 583, 596-97, 599
(1st Cir. 1980). The district court abuses its discretion in
balancing the conflicting interests in discovery of confidential
information "'when a relevant factor that should have been given
significant weight is not considered, when an irrelevant or
improper factor is considered and given significant weight, or when
all proper and no improper factors are considered, but the court in
weighing those factors commits a clear error of judgment.'" In re
San Juan Dupont Plaza Hotel Fire Litig., 859 F.2d 1007, 1019 (1st
Cir. 1988) (quoting United States v. Hastings, 847 F.2d 920, 924
(1st Cir. 1988)).
As we read the district court's order, it ruled that once
it had decided there was no informant's privilege, it had no need
to engage in any balancing of any other interests on the part of
TRPB. Also, as we read the order, the court thought that the only
interest asserted was a formal informant's privilege. We have
which justice requires to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense, including .
. . that certain matters not be inquired into, or that the scope of
the disclosure or discovery be limited to certain matters." Fed.
R. Civ. P. 26(c).
-20-
carefully reviewed the record and understand TRPB's arguments
differently.
TRPB in fact struck at least three distinct themes: (1)
the informant's privilege is applicable to TRPB; (2) maintaining
the confidentiality of the tipster's identities is, in any event,
in the public interest and implicates concerns of a much larger
group of people than the parties to this suit; and (3) the
confidentiality and privacy rights of the tipsters and the
appellants weigh against disclosure. The district court's order
addressed only the first argument and not the others, and so did
not consider significant relevant factors.
A. The Informant's Privilege
Since this case is a diversity suit involving only state-
law claims, TRPB's claim that the documents here are protected by
an evidentiary privilege is governed by state law under Fed. R.
Evid. 501.6 See 8 Charles Alan Wright et al., Federal Practice and
Procedure § 2016, at 224 (2d. ed. 1994). The parties disagree over
whether the privilege law of Florida or New Hampshire should govern
6
"[T]he privilege of a witness, person, government, State, or
political subdivision thereof shall be governed by the principles
of the common law as they may be interpreted by the courts of the
United States in the light of reason and experience. However, in
civil actions and proceedings, with respect to an element of a
claim or defense as to which State law supplies the rule of
decision, the privilege of a witness, person, government, State, or
political subdivision thereof shall be determined in accordance
with State law." Fed. R. Evid. 501.
-21-
the existence and scope of the privilege. Like the district court,
we conclude that New Hampshire and Florida law are so similar on
this point that there is no need to make a choice.
Both New Hampshire and Florida allow a government entity
to assert a privilege not to disclose the identities of informers
who provided information relating to violations of the law. See
N.H. R. Evid. 509; Foster v. State, 816 So.2d 1177, 1178-79 (Fla.
Dist. Ct. App. 2002); see also Roviaro v. United States, 353 U.S.
53, 59-60 (1957) (recognizing privilege under federal law). The
privilege is applicable in both criminal and civil proceedings.
See N.H. R. Evid. 509; In re Forfeiture of 1985 Dodge No.
JB3BA24KOFU124494, 529 So.2d 767 (Fla. Dist. Ct. App. 1988).
Usually, the privilege is limited to government officials. See
generally Edward J. Imwinkelried, The New Wigmore: A Treatise on
Evidence § 7.3.1, at 1051 (2002); 8 Wigmore on Evidence § 2374
(McNaughton Rev. 1961 & Supp. 2004). Neither New Hampshire nor
Florida has ruled on whether a private entity in the position of
TRPB may assert the privilege.7
7
The appellants cite to two Southern District of New York
cases, Apex Oil Co. v. DiMauro, 110 F.R.D. 490 (S.D.N.Y. 1985) and
Ross v. Bolton, 106 F.R.D. 22 (S.D.N.Y. 1985), to support their
argument that the informant's privilege should be extended to non-
government entities. The parties resisting discovery in those two
cases were organizations that were "statutorily assigned a
significant responsibility, under the supervision of a federal
agency, for policing industry practices and investigating possible
illegal activity by its members." Apex Oil Co., 110 F.R.D. at 497;
see Ross, 106 F.R.D. at 24 & n.1. TRPB does not claim that it has
statutorily assigned duties.
-22-
We note that the private/public investigative agency
distinction is not perfect. It appears from the record that TRPB
shared its investigation with the appropriate state investigative
agency and that agency relied on the information in its
investigation. It seems clear that if the tipsters had gone
directly to the state agency, rather than through the private watch
dog group first, the informant's privilege would apply.
In fact, Florida law explicitly provides that FDPMW may
keep secret from the public "active criminal intelligence or
criminal investigative information . . . and any other information
that, if disclosed, would jeopardize the safety of an individual."
Fla. Stat. § 550.0251(9). "Criminal investigative information"
includes "information derived from laboratory tests, reports of
investigators or informants, or any type of surveillance" during
the course of a criminal investigation. Id. § 119.011 (emphasis
added).
Neither Florida nor New Hampshire has to date addressed
the question we face: application of the informant's privilege to
an industry self-regulatory investigative agency which cooperates
with a state investigative agency. As such, appellants have failed
to show that the documents are covered by the formal informant's
privilege under state law. A federal court sitting in diversity
cannot be expected to create new doctrines expanding state law.
See A. Johnson & Co. v. Aetna Cas. and Sur. Co., 933 F.2d 66, 73
-23-
n.10 (1st Cir. 1991). But the Rule 26 inquiry does not end there.
That there is no informant's privilege does not mean there are no
interests of the public or other persons involved in the balance.
B. TRPB's Other Arguments for a Protective Order
Evidentiary privileges formally recognized by state law
are not the only relevant factors in the Rule 26 balancing act.
"Rule 26(c) is highly flexible, having been designed to accommodate
all relevant interests as they arise. . . . [T]he 'good cause'
standard in the Rule is a flexible one that requires an
individualized balancing of the many interests that may be present
in a particular case." United States v. Microsoft Corp., 165 F.3d
952, 959-60 (D.C. Cir. 1999).
In particular, considerations of the public interest, the
need for confidentiality, and privacy interests are relevant
factors to be balanced. See, e.g., Seattle Times Co. v. Rhinehart,
467 U.S. 20, 35 n.21 (1984) ("Although . . . Rule [26(c)] contains
no specific reference to privacy or to other rights or interests
that may be implicated, such matters are implicit in the broad
purpose and language of the Rule."); In re Sealed Case (Medical
Records), 381 F.3d at 1215 (interests in privacy should be taken
into account in the Rule 26 analysis, even when "the information
sought is not privileged"); Ellison v. Am. Nat'l Red Cross, 151
F.R.D. 8, 11 (D.N.H. 1993) (balancing public interest in protecting
-24-
the nation's blood supply against litigant's interest in
discovering the identity of blood donors).
The district court has already recognized that Gill has
some interest in discovering the identities of the informants,
having accepted Gill's argument that the informants would likely
have information relevant to whether defendants were reckless in
their publication. Gill relied on Downing v. Monitor Publishing
Co., 415 A.2d 683 (N.H. 1980). The appellants reply that they were
not agents of the defendants.
It is not our province to weigh Gill's interests
(including ones he has argued for the first time on appeal), much
less to balance these interests against the appellants' asserted
interest, shared by the public, in protecting the integrity of
racing and, as well, the privacy interests of the informants. It
is enough that the law is clear that the latter two interests are
recognized and must be weighed, in the first instance, by the
district court.
In short, we think the district court should have a fresh
opportunity to evaluate the competing interests, as contemplated by
Rule 26. We recognize that the district court has the best vantage
point from which to perform this balancing, and we intimate no view
as to the outcome. We vacate its orders and remand for proceedings
consistent with this opinion. No costs are awarded.
-25-