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Contentious discovery fights are common in suits with many millions of dollars at stake. But rarely does a fight get so rancorous that it threatens to create new precedent — in a court thousands of miles from where the actual case was filed. Yet the U.S. Court of Appeals for the D.C. Circuit is now looking at a case with origins in Fresno, Calif. — and with California’s 2000-01 energy crisis — that is expected to decide whether companies negotiating with federal regulators can keep damning documents out of the public eye. In the California case, defense attorneys for Canadian energy company EnCana Corp. say they gave documents to federal regulators in a price-fixing investigation with the understanding that they would remain confidential. Now that plaintiffs in a private suit have requested that information, EnCana says it should be kept private due to a “settlement privilege.” Whether such a privilege exists is a hot issue for plaintiff and defense lawyers, and the D.C. Circuit’s decision could affect how lawyers pursue — and defend — antitrust cases, say lawyers monitoring the case. The privilege question is the widest-ranging of a series of discovery spats that have arisen in the EnCana litigation. In that suit, the E.&J. Gallo Winery sued EnCana in U.S. District Court for the Eastern District of California for allegedly inflating natural gas prices. Gallo sought documents from EnCana that the gas company — with the Fresno judge’s support — refused to turn over. Because documents had been provided to the federal Commodities Futures Trading Commission, Gallo subpoenaed the commission through the federal district court in Washington, D.C. The D.C. court issued the subpoena and the commission turned over the documents. Now EnCana’s law firm, Gibson, Dunn & Cructcher, is fighting to force the plaintiffs lawyers to give the papers back. Gallo’s lawyers, from Cotchett, Pitre, Simon & McCarthy — who represent Gallo — are fighting to keep the papers, resisting Gibson, Dunn’s argument that the documents should be protected. Gibson, Dunn lawyers, who would not comment publicly on the case, say in court filings that the regulators should not have provided the records because they are subject to a settlement privilege. The question of whether such a privilege exists is of keen interest to the plaintiff bar, which frequently obtains documents from the government, as well as defense firms that try to keep such information from getting out. With the question of whether there is such a privilege still unsettled, lawyers are closely watching the D.C. Circuit. “I think it’s an extremely important decision that the D.C. Circuit court is going to make here,” said Donn Pickett, a partner at Bingham McCutchen who defends companies in antitrust suits. Not having such material under privilege, he said, “provides a seemingly endless opportunity for plaintiffs lawyers to get these kinds of documents.” Robert Van Nest, a defense lawyer and partner at Keker & Van Nest, agreed, and said that an appeals court decision saying there is no such privilege would have a chilling effect on companies that want to settle with regulators. “In any kind of a government investigation, if you don’t protect that kind of information, people aren’t going to be willing to talk,” he said. Steven Williams, one of the Cotchett partners working on the case, disagrees vehemently. He says material provided to the government is inherently public, and its accessibility is particularly important for parties seeking recourse in the civil courts. A privilege “would be absolutely terrible. It would hide things in the public domain,” he said. “These are public documents, and this is the U.S. government we’re talking about.” Williams says such a rule would let companies keep vast amounts of information secret. “They could say, ‘We wanted to settle the case. Therefore it’s private,’” he said. “It would keep a lot of valuable public information out of the public’s hands.” More to the point in the EnCana case, Williams said, is that — despite the spirited arguments about settlement privilege — the information at issue in the case was not provided to the government as part of settlement negotiations. “It’s a joke because there weren’t settlement talks,” Williams said. And in a brief filed with the U.S. Supreme Court in an unsuccessful attempt to stay the subpoena, the government agency in question — the Commodities Futures Trading Commission — agreed. Some documents, wrote government lawyers, “were submitted to the commission pursuant to a subpoena.” And most were produced during an investigation that pre-dated settlement talks. The Gibson, Dunn lawyers, though, argue that much of the information came out through such discussions. They are now trying to persuade the D.C. Circuit to force the plaintiff lawyers to give up all the documents and destroy all copies. Williams says that is unlikely and adds that he is confident that the plaintiffs will be allowed to use the material. But, he adds, the defendants have succeeded in delaying the case, especially since the D.C. Circuit is unlikely to issue an opinion for many months. “They’re just using it to hide documents, as always,” he said. The D.C. Circuit case is In re Subpoena Issued to Commodity Futures Trading Commission, 1:04-mc-00564. The Eastern District of California case is E.&J. Gallo Winery v. EnCana Energy, 1:03-cv-05412.

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