Chapter VI. Confidentiality Issues

• Pages: 169-198

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CHAPTER VI

CONFIDENTIALITY ISSUES

A. Introduction: The Right to and Need for Confidentiality

An inherent part of antitrust practice is the exchange of massive

amounts of information in a wide array of forms, including documentary,

testimonial, and electronic materials. In most cases, this information is

closely guarded by the party asked to produce it, for a variety of reasons.

The materials might be competitively sensitive. They might include

trade secrets and sensitive financial or other information.

The participation of a state attorney general in an antitrust case or

investigation often intensifies the defendant’s or subpoena recipient’s

need and desire for confidential treatment of materials or other

information demanded by compulsory process. As the range of materials

subject to compulsory process expands, so does the concern over

confidentiality. Unlike a private antitrust plaintiff, a state attorney

general might have criminal as well as civil enforcement authority, thus

raising the defendant’s or investigative target’s potential exposure from

producing materials. Further, most state attorneys general have

extensive precomplaint subpoena power, generally in the form of civil

investigative demands, which can af ford access to a broader range of

materials and information than is available through discovery in

litigation. State attorneys general, moreover, sometimes wish to

communicate the scope and nature of their investigations to their

constituent public, notwithstanding the desire or need for confidentiality

of the private defendant or subpoena recipient. Finally, there is also a

concern that documents might prompt investigations by other state

agencies or federal agencies on unrelated non-antitrust issues.

The efficiencies gained through joint investigations by multiple

jurisdictions often make the sharing of confidential materials beneficial

for enforcers and companies alike. Possible communications and

cooperation among state and federal antitrust enforcement agencies,

however, further heighten confidentiality concerns among those who

receive requests for information from state attorneys general. To make

joint investigations more efficient and effective, the states have

developed mechanisms to share investigative materials on a confidential

basis.

This increased level of concern over confidentiality adds to the

complexity of antitrust cases and investigations that involve antitrust

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enforcers in multiple states. Differences, even subtle ones, among the

states’ statutory schemes and case law can complicate the task of

protecting the confidentiality of materials produced in a multistate

antitrust case or investigation. The differences among state laws and

practices on confidentiality drew comment in the 2007 report of the U.S.

Antitrust Modernization Commission. The Commission recommended

that the states “work to adopt a model confidentiality statute with the

goal of eliminating inconsistencies among state confidentiality

agreements.”1 As a leading state enforcer has pointed out, however,

“state confidentiality statutes raise significant issues beyond antitrust

investigations that make passing a model or uniform state statute

unlikely.”2

This chapter discusses the challenges inherent in the production of

confidential materials to state antitrust enforcers, the mechanisms

available to safeguard these materials, and the limitations of those

mechanisms.

B. What Qualifies for Confidential Treatment?

A necessary precursor to any discussion of how to protect the

confidentiality of materials in an antitrust investigation is a determination

of which materials are eligible for confidential treatment. This question

has no easy answer. Different types of materials might qualify for

different levels of confidential treatment at different stages of an

investigation or litigation. For example, many state attorneys general

have the authority to issue precomplaint subpoenas, often called civil

investigative demands (CIDs), during the investigatory stage of an

antitrust case.3 Most CID statutes require that the investigating state treat

1. U.S. ANTITRUST MODERNIZATION COMM’N, REPORT AND

RECOMMENDATIONS 203 (2007) (Recommendation 36c).

2 Robert L. Hubbard, The Antitrust Modernization Commission and the

States, ANTITRUST, Summer 2007, at 33, 34.

3. See ALA. CODE § 8-19-9; ALASKA STAT. § 45.50.592; ARIZ. REV. STAT.

§ 44-1406; ARK. CODE ANN. § 4-88-111; CAL. GOV’T CODE § 11181(e);

COLO. REV. STAT. § 6-4-110; CONN. GEN. STAT. § 35-42; DEL. CODE

ANN. tit. 6, § 2106 ; D.C. CODE ANN. § 28-4505; FLA. STAT. § 542.28;

GA. CODE ANN. § 10-1-403; HAW. REV. STAT. § 480-18; IDAHO CODE

ANN. § 48-109; 740 ILL. COMP. STAT. 10/7.2; IND. CODE ANN. § 4-6-3-3;

IOWA CODE § 553.9; KAN. STAT. ANN. § 50-153; KY. REV. STAT. ANN.

§ 367.240; LA. REV. STAT. ANN. § 51.1411; ME. REV. STAT. ANN. tit. 10,

§ 1107; MD. CODE ANN., COM. LAW § 11-205; MASS. ANN. LAWS ch. 93,