In a victory for the House Committee on Small Business, a federal appeals court has found "no basis" to compel it to return copies of sensitive papers subpoenaed from the world's largest meat packing company for an inquiry into pricing practices in the meat industry.
The 8th U.S. Circuit Court of Appeals in St. Louis handed down the ruling Wednesday in a case involving the Iowa Beef Processors, Inc., and Hughes A. Bagley, the vice president fired by the $3 billion-a-year enterprise in 1975.
Bagley departed IBP headquarters in Dakota City, Neb., with seven boxes of company documents, some involving confidential cost and pricing information.
After a judge in Texas issued a so-called protective order to prevent release of the 3,000 pages of so-called "Bagley documents," the committee tried to get them with a subpoena to Bagley, who apparently was anxious to comply.
But he was hamstrung by another protective order -- this one having been issued in Des Moines in connection with an IBP lawsuit against him and two lawyers who are suing the cpmpany for alleged antitrust violations.
Last November, Chief U.S. District Court Judge Edward J. McManus granted a request by Bagley to modify the order so that he could comply with the committee subpoena. Immediately, a committee investigator obtained the papers, returned to Washington, had them copied, kept the duplicates, and sent back the originals to Bagley's lawyer.
The company then asked the appeals court to direct the committee to yield the copies and, if it refused, to require Rep. Neal Smith (D-Iowa), the committee chairman, the committee counsel and the investigator all to show cause why they should not be held in contempt.
The appeals court held that Judge McManus's modification of his protective order was "a clear abuse of discretion." But, it said, the committee hadn't been a party to the litigation that gave rise to the order, hadn't violated it, and cannot be compelled to return the papers. IBP's lawyer declined to say if he would appeal the ruling.
Rep. Smith said he will release the papers to the extent necessary for the committee hearings, which probably will be held in April.