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HANOVER SHOE, INC. v. UNITED SHOE MACH. CORP.

August 3, 1962

The HANOVER SHOE, INC., Plaintiff,
v.
UNITED SHOE MACHINERY CORPORATION, Defendant



The opinion of the court was delivered by: SHERIDAN

This is a motion by plaintiff for the production and inspection of documents under Rule 34 of the Federal Rules of Civil Procedure, 28 U.S.C.A.

For many years, defendant, a manufacturer of machinery used in the production of shoes, made available to shoe manufacturers its more important machinery on a 'lease only' basis. In 1947, the Government filed a complaint against defendant under § 4 of the Sherman Act, Act of July 2, 1890, c. 647, 26 Stat. 209, 15 U.S.C.A. 4, to restrain certain alleged monopolistic practices. The defendant was found to have violated the Act. By final decree, dated February 18, 1953, defendant, among other things, was ordered not to offer for lease any machine unless it also offered the machine for sale; and the terms of any lease were to be such that it would not be substantially more advantageous for a user to lease than to buy. United States v. United Shoe Machinery Corp., D.Mass.1953, 110 F.Supp. 295; affirmed 1954, 347 U.S. 521, 74 S. Ct. 699, 98 L. Ed. 910.

 The present suit is a private treble damage action filed on September 21, 1955. One of the issues is whether the defendant's leasing policy resulted in injury to plaintiff. Defendant contends plaintiff could have procured comparable machines from other manufacturers, and, therefore, was not compelled to lease from defendant. In January, 1962, defendant furnished plaintiff with a list of these machines. It is identified as Exhibit 8 to the deposition of Lewis B. Walker.

 In its motion plaintiff requests that defendant be required to produce (1) any and all reports or memoranda prepared by and for defendant's Program Committee and Research Division during the period July 1, 1939 through September 21, 1955, which refer in any way to the non-United machines listed in plaintiff's Exhibit 8 to the deposition of Lewis B. Walker; (2) a memorandum prepared by a Mr. Ward, a former associate lawyer with the law firm representing defendant, summarizing a meeting in June, 1950, attended by Lawrence P. Sheppard, President of plaintiff, Mr. Walker of defendant, and Messrs. Ward and Kiendl, defendant's counsel. *fn1"

 REPORTS PREPARED BY DEFENDANT'S PROGRAM COMMITTEE

 The defendant has followed the practice of having its branch personnel and roadmen throughout the United States report on the installation and removal of non-United machines in the plants of shoe manufacturers. These reports were made on a weekly basis on a form labelled, 'Outside Machine Report' (O.M.R.).

 The O.M.R.'s recorded the machine's date, serial number and title, the user, the manufacturer of the machine, the company installing it, the terms, the shoe upon which it was used, its function, and any other information available to the roadman. They were forwarded to defendant's Program Committee and Research Division. The information on the O.M.R.'s was supplemented by information and data available to defendant from other sources. The Program Committee and Research Division prepared reports or memoranda which evalulated all the information and data, including the O.M.R.'s. Plaintiff requests copies of these reports.

 Defendant points to the burdensome task in locating these reports in view of the broad wording of the request and the period of time covered by it. Defendant argues that good cause has not been shown because there has been no showing that the reports contain information with respect to the machines listed in the exhibit, and that plaintiff has already had inspection of all the O.M.R.'s which form the basis for the reports.

 Defendant admits that it prepared such reports. It has agreed to furnish plaintiff those reports which were included as exhibits in the Government's case against defendant. Defendant has not denied that these reports may contain comments on non-United machinery.

 Since one of the defenses is that non-United machinery was available to plaintiff, defendant's evaluation of this machinery is relevant and material. The O.M.R.'s do not contain the information the plaintiff seeks. If it is reasonably probable that documents will be material at the trial, their production and inspection should be allowed. Jacobs et al. v. Kennedy Van Saun Mfg. & Eng. Corp., M.D.Pa.1952, 12 F.R.D. 523.

 A party seeking discovery is not required to prove that documents contain material evidence, but it is sufficient if it is reasonably probable that they do. Radio Corporation of America v. Rauland Corporation, N.D.Ill.E.D.1955, 18 F.R.D. 440; Jacobs et al. v. Kennedy Van Saun Mfg. & Eng. Corp., supra. Documents should be produced under F.R.Civ.P. Rule 34, 28 U.S.C.A. if they are necessary to enable a party to prepare his case, or facilitate proof at the trial or progress of the trial even though there will be an inconvenience or a burden to the party producing them. 4 Moore, Federal Practice, par. 34.19(2), at 2476; Frasier v. Twentieth Century-Fox Film Corp. et al., D.Neb. Lincoln Division 1954, 119 F.Supp. 495.

 WARD MEMORANDUM

 In June, 1950, as part of the preparation of the defense of the Government's case against United, there was a meeting at which the following were present: Mr. Ward and Mr. Kiendl of the law firm representing defendant, Mr. Walker of United (defendant), and Mr. Sheppard, President of Hanover (plaintiff). The purpose of the meeting was to interview Mr. Sheppard. Mr. Ward prepared a memorandum summarizing the discussions in that meeting.

 In the deposition of Mr. Sheppard taken in this action, defendant questioned him concerning the 1950 meeting. Mr. Sheppard testified that, except for the fact of the meeting, he had no recollection of the discussions. He was unable to recollect ...


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