[Congressional Record Volume 140, Number 133 (Wednesday, September 21, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 21, 1994]



                 THE SUNSHINE IN LITIGATION ACT OF 1994

  Mr. GRASSLEY. Mr. President, back in June of this year, we were 
debating a bill called the product liability law. We did not pass that 
bill because we did not have enough time or enough votes to stop the 
filibuster. The distinguished Senator from Wisconsin offered an 
amendment to that bill entitled ``The Sunshine in Litigation Act of 
1994.''
  The purpose of that amendment was to alter the requirements of rule 
26(c) of the Federal Rules of Civil Procedure, with regard to the 
issuance of protective orders and the sealing of court records.
  The effect of the amendment by Senator Kohl, in my opinion, was to 
severely limit the Federal courts' authority to issue protective 
orders, or limit access to court records. The courts would be required 
to make particularized findings that such orders would not restrict the 
disclosure of information relevant to the protection of public health 
and safety.
  There were other limitations on the powers of the courts. But, 
suffice it to say, the amendment, in my judgment, constituted a major 
change in the Federal Rules. Most significantly, it circumvented the 
established process contained in the Rules Enabling Act.
  My remarks today are geared more toward the way that Senator Kohl's 
amendment circumvents a process, rather than the substance of his 
amendment.
  As part of that process, Congress delegated to the judiciary the 
drafting of proposed changes to the Federal Rules. The U.S. Judicial 
Conference first issues its proposed change--that is the way the 
process normally works--and then the Supreme Court either approves or 
rejects the proposal to amend the rule. Eventually, the proposed rules 
come to the Congress subject to our veto.
  During the debate on Senator Kohl's amendment, I and several of my 
colleagues pointed out that we should not lightly disregard the process 
that has served us well. We emphasized in that debate that the Judicial 
Conference was in the process of studying the effects of protective 
orders to determine what if any changes needed to be made in rule 
26(c).
  In response to our argument, Senator Kohl stated that the Judicial 
Conference had been considering this matter for 4 years and had not 
recommended any change. And then he likened it to, in his words, 
``waiting for Godot.'' I am here to announce that Godot will soon 
arrive. I predicted that back during the June debate.
  In a letter to Senator Kohl and other members of the Judiciary 
Committee dated August 25 of this year, Judge Patrick Higginbotham 
noted that the Advisory Committee on Civil Rules will meet on October 
20-22 this year. At that meeting, they will reconsider amendments to 
rule 26(c) of the Federal Rules of Civil Procedure.
  Judge Higginbotham stated: ``It is expected that the committee will 
complete its work and approve amendments to rule 26(c) at its October 
meeting.''
  I ask unanimous consent that Judge Higginbotham's letter be printed 
in the Record following my statement.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (See exhibit 1.)
  Mr. GRASSLEY. Mr. President, I raise this subject today because we 
did discuss this in June. Senator Kohl's amendment did not go through 
and even the bill did not go through. But tomorrow the Subcommittee on 
Courts and Administrative Practices has scheduled a markup of Senator 
Kohl's bill to amend rule 26(c). I am ranking Republican on that 
subcommittee. Senator Heflin is the Democrat chair.
  I remind my colleagues that in the 60 years since the Rules Enabling 
Act, Congress has never bypassed the process it set up for amending the 
Federal rules. That process is now almost complete. I urge my 
colleagues on the subcommittee, and Congress as a whole, to allow the 
process to continue. I think unless we do that, we set a very dangerous 
precedent for future amendments to the rules, and we are going to 
politicize the whole process needlessly. Congress does have a bite at 
the apple through the veto process.
  I ask unanimous consent to have printed at the end of my statement a 
letter that I received the other day from Prof. Arthur Miller of 
Harvard Law School.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (See exhibit 2.)
  Mr. GRASSLEY. Mr. President, I asked Professor Miller to review the 
proposed amendments to 26(c), and he was kind enough to respond. I will 
summarize his conclusions:
  He strongly urges Congress to adhere to the established process of 
allowing the Judicial Conference to study, analyze, and ultimately 
recommend changes to the Federal rules.
  With respect to the substance of the proposed changes to rule 26(c) 
offered by the Senator from Wisconsin, the professor believes that they 
are unnecessary, that they are counterproductive, and that they will 
only hinder the Federal courts in the expeditious handling of the cases 
that it has before them.
  As one of our country's foremost scholars on civil procedure, Harvard 
Professor Miller's analysis merits close consideration by Members of 
the Senate.

                               Exhibit 1

         Committee on Rules of Practice and Procedure of the 
           Judicial Conference of the United States,
                                  Washington, DC, August 25, 1994.
     Hon. Herb Kohl,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Kohl: Thank you for your letter of August 11, 
     1994, containing revisions to and additional information on 
     S. 1404, your bill on the disclosure of litigation materials. 
     The Advisory Committee on Civil Rules will meet in Tucson, 
     Arizona on October 20-22, 1994, and will reconsider proposed 
     amendments to Rule 26(c) of the Federal Rules of Civil 
     Procedure. The committee will have before it your letter and 
     enclosed materials.
       The preliminary draft of proposed amendments to Rule 26(c), 
     which was published for public comment for six months in 
     October 1993, was deferred for further study by the committee 
     at its April 1994 meeting. Potential problems were identified 
     and improvements were suggested from the public and bar. The 
     committee also believed that the results of a pending Federal 
     Judicial Center survey of several district courts on the use 
     of protective orders would provide helpful empirical data on 
     current practices. We are assured that this study will be 
     completed in September in time for the committee's 
     consideration in October.
       I emphasize that the advisory committee continues to refine 
     the proposed amendments to address the concerns raised by the 
     public comments and by your bill. We are studying several 
     alternatives. It is expected that the committee will complete 
     its work and approve amendments to Rule 26(c) at its October 
     meeting. The Judicial Conference's Standing Committee on the 
     Rules of Practice and Procedure is meeting on January 12-15, 
     1995, and we hope it will in turn send the rule on its way.
       This meticulous drafting process assures the best possible 
     rule amendment and fulfills the Congressional purpose and 
     intent underlying the Rules Enabling Act. It ensures that all 
     persons affected by the proposed amendments have been 
     provided ample opportunity to express their views for the 
     consideration of the rules committees, the Judicial 
     Conference, and the Supreme Court. Congress will then have 
     the benefit of the cumulative experiences of these bodies and 
     the knowledge derived from public comments when it reviews 
     rules amendments that have been submitted to it in accordance 
     with the Act.
       The committee is keenly interested in your views and in 
     continuing our productive interchange. I will keep you 
     apprised of the committee's work on this rule.
           Sincerely yours,
                                          Patrick E. Higginbotham.
                                  ____


                               Exhibit 2


                                           Harvard Law School,

                                Cambridge, MA, September 16, 1994.
     Senator Charles E. Grassley,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Grassley: Thank you for requesting my views on 
     proposed legislation S. 1404 and Amendment No. 1930 to S. 
     687, introduced by Senator Kohl specifically to limit the use 
     of protective orders, under Rule 26(c) of the Federal Rules 
     of Civil Procedure, and confidentiality agreements in the 
     federal courts. These bills touch on important societal 
     interests, such as public access to the courts and promoting 
     public health and safety, issues that I have studied and 
     written on extensively in recent years.\1\ However, the 
     legislation is not likely to promote either of these laudable 
     goals because it proceeds from an erroneous premise, which 
     is, that protective order practice is having a deleterious 
     effect on public welfare. In my experience, it is not.
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     Footnotes at the end of article.
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       Let me start, however, by discussing one transcendent issue 
     that obscures all others I could discuss concerning these 
     bills: in my view, pursuit of Senator Kohl's legislation does 
     violence to the federal court rulemaking process that 
     Congress itself created in Section 2072 of Title 28 of the 
     United States Code. Under that process, Congress deferred its 
     participation until after all of the pertinent research, 
     analysis, and deliberation had been completed by the United 
     States Judicial Conference, and until after the United States 
     Supreme Court had placed its imprimatur on, or rejected, a 
     proposal to amend a federal rule. Senator Kohl's request for 
     congressional action now, without the benefits that flow from 
     adhering to the process, could compromise the quality and 
     reliability of congressional deliberations, in addition to 
     undermining the integrity of the rulemaking process.
       One such important benefit would be the availability of 
     hard data that will better inform the rulemaking and 
     legislative process on this important subject. Right now the 
     Federal Judicial Center is conducting the only empirical 
     study undertaken to date dealing with protective orders. I 
     understand that the results of the study, which examines 
     actual practice in five federal district courts, will be 
     submitted to the Advisory Committee on Civil Rules of the 
     United States Judicial Conference by the end of this month. 
     The Advisory Committee then will make a recommendation for 
     action in this area at its October 20-21 meeting.
       Respect for the rulemaking process and the potential value 
     of having the results of the professional and meticulous 
     research that will be available in a few short weeks argues 
     persuasively in favor of deferring congressional action, at a 
     minimum, until the Advisory Committee puts forth its final 
     recommendation, or, more appropriately, until any proposed 
     rule reaches Congress for review as part of the regular 
     rulemaking process prescribed in the Rules Enabling Act.
       Yet even at that juncture I would not endorse enactment of 
     either form of the presently proposed legislation, for a 
     variety of reasons. The promise of confidentiality is an 
     essential tool for encouraging full disclosure and 
     encouraging settlement in civil litigation. Its use should be 
     left to the discretion of the federal district judges, 
     subject to review by the federal appellate courts.
       My own research, discussions with federal judges, and a 
     review of the recent cases satisfy me that, under the current 
     rules, if a court believes certain information should be made 
     public, the court will deny or set aside a protective 
     order.\2\ Thus, the current rule formulation accomplishes the 
     very result the proponents of the legislation purportedly 
     want. Consequently, in my view, no legislation or amendment 
     of Rule 26(c), is desirable or necessary.


       i. respect for the process counsels congressional caution

       Over time, the statutorily prescribed procedure for 
     amending the Federal Rules of Civil Procedure, set forth 
     in the Rules Enabling Act, has been carefully crafted and 
     refined under the painstaking direction of this very 
     Subcommittee. Indeed, some very substantial changes were 
     made to the rulemaking process during the last decade, 
     increasing public participation and imposing greater 
     structure on the deliberative process.\3\ Congress also 
     has given the Judicial Conference and its research arm, 
     the Federal Judicial Center, the necessary resources to 
     supplement existing expertise about the courts, all in 
     order to study the need for possible rule changes, and to 
     craft the delicate balance essential to fairness and 
     effectiveness. Once developed in the Advisory Committee, 
     the proposed civil rules and rule amendments are acted on 
     by the Judicial Conference, promulgated by the Supreme 
     Court, and come before the House and the Senate for 
     acceptance, amendment, or rejection.
       The Rules Enabling Act vests authority in the Chief Justice 
     of the United States to appoint members to the rulemaking 
     committees of the Judicial Conference, specifying that 
     members shall include sitting judges, academics, and 
     practitioners. Over the years, the membership rosters have 
     included distinguished jurists, noted scholars, and highly 
     skilled senior trial attorneys, in recognition of the fact 
     that these types of individuals are in the best position to 
     determine whether any rule changes are appropriate, and if 
     so, what those changes should be and whether they will work. 
     The Committee's work is aided by the work of a Reporter, 
     usually a recognized and respected academic who has 
     specialized in the procedure of the federal courts.\4\
       Moreover, while the public has ample opportunity to 
     participate in the rulemaking process, in the end, an 
     Advisory Committee decision about the content of the rules is 
     not subject to political dynamics. The absence of special 
     interest group pressures is of great import here, precisely 
     because of the partisan rhetoric that has so heated the 
     public debate on protective orders. Therefore it is of the 
     greatest significance that the Judicial Conference, through 
     the Advisory Committee, is taking action on the very issue 
     that S. 1404 and Amendment No. 1930 concern. Since neutrality 
     is a paramount attribute of the civil rules, the objective, 
     dispassionate decisions made by the Advisory Committee should 
     be sought and then given the greatest possible deference.
       Also emphasizing the importance of following the Rules 
     Enabling Act process are requests from both the Department of 
     Justice and the Chairman of the Rules Advisory Committee to 
     defer action on this legislation. The Department requested 
     deferral to allow it to conclude its own study of the civil 
     justice system.\5\ The Chairman of the Advisory Committee 
     suggested that Senator Kohl defer to the rulemaking process 
     and await the availability of the empirical data from the 
     Federal Judicial Center study before considering what, if 
     any, action might be appropriate,\6\ reiterating that view 
     only last month.\7\ Action in the face of these expressions 
     of restraint, and without reference to empirical data that 
     will soon be available to inform the legislative process, 
     faces a significant risk of producing legislation 
     inconsistent with any rule that might be, or might have been, 
     crafted through the rulemaking process. Consequently, it 
     would be prudent to defer legislative action until the 
     legislation process also can be informed by the facts.


 ii. the likely adverse effect of the legislation on the federal courts

       Civil dispute resolution traditionally has been a private 
     process, although admittedly conducted through public 
     resources. It would be well to remember that until the 
     Federal Rules of Civil procedure there was virtually no 
     discovery in civil litigation--no discovery at all. Thus, any 
     notion of public access to the private elements of civil 
     litigation, such as discovery, is a myth. It was not even a 
     possibility prior to the Federal Rules. As then-Judge Scalia 
     once wrote, to accept a tradition of access to prejudgment or 
     discovery records, ``one would have to accept that the court, 
     writing in the days before photostatic copying, envisioned 
     the passing around of documentary exhibits . . . or the 
     manual copying of all of them.'' In re Reporters Comm. for 
     Freedom of the Press, 773 F.2d 1325, 1334-35 n.7 (D.C. 
     Cir. 1985). Indeed, even as recently as 1970, litigants 
     were required to show ``good cause'' in order to obtain 
     documentary discovery from an opponent.
       In the process of creating the Federal Rules; it was 
     decided that in order to maximize the probability of 
     resolving disputes on their merits, to reach truth and 
     justice to avoid trial by surprise, we should give all 
     litigants access to all relevant data. That is what discovery 
     is--giving all litigants the ability to find out that which 
     relates to their disputes. The writers of the rule made that 
     process wide open to assure equal and full access to the 
     data. However, the intended beneficiaries of those access 
     rights were the litigants and the litigants only; the 
     drafters of the discovery rules had no plans for increasing 
     general public access rights, particularly as to private 
     information.
       Thus, the writers of the rules recognized that there must 
     be a counter-balancing element to broad disclosure. If we are 
     going to allow wide open discovery, we must protect people 
     against abuse, against harassment, against intrusion, against 
     loss of valuable commercial and proprietary data that may 
     result from that process. That is what rule 26(c) is all 
     about. The so-called secrecy order, much maligned by some, is 
     really a privacy order.
       Alteration of the protective order structure under Rule 
     26(c), may, in accord with the law of unintended 
     consequences, dramatically shift the role of the federal 
     courts in our society in a way that may not be desirable. If 
     we alter the balance and reduce the ability of people to 
     protect their privacy and confidentiality in civil 
     litigation, we run the risk of very deleterious side effects 
     in our civil justice system.
       A victim of sexual harassment may forego a legitimate claim 
     rather than face unlimited public intrusion into highly 
     intimate aspects of her life. Corporate litigants forced to 
     produce confidential proprietary information may resist 
     discovery entirely, stymieing quick resolution of a dispute 
     or an attempt to vindicate an important national policy--for 
     example, under the antitrust or securities laws--and raising 
     costs for all involved, including taxpayers, rather than risk 
     disclosure of trade secrets to competitors through open court 
     files. The courts, already strained by criminal dockets and 
     decades-long discovery processes, would be forced to delay 
     new, meritorious cases clamoring for resolution.
       Further, this grand discovery regime operates largely on a 
     voluntary basis, extra-judicially, so that busy federal 
     judges can adjudicate the merits and not arbitrate petty 
     discovery fracases. Without the voluntary aspect of 
     discovery, we would produce enormous confrontation, 
     protraction, and expense in the discovery process. If 
     people could not voluntarily agree on confidentiality 
     during discovery, which is what most protective orders 
     are--agreements between the parties to disclose 
     voluntarily under the assumption that the data disclosed 
     is to be used for this case and no case or purpose other 
     than this one--litigants would be given an incentive to 
     engage in trench warfare not to reveal the proprietary, 
     the important, or the private.
       Both of Senator Kohl's legislative provisions would undo 
     the voluntary nature of the current discovery system, 
     requiring significant judicial involvement whenever privacy 
     and confidentiality concerns arose. In S. 1404, subsection 
     (a)(1) of proposed section 1659 would require particularized 
     findings of fact by the judge before any protective order 
     could issue under Rule 26(c) to keep information 
     confidential. Amendment No. 1930, Section (b), would impose a 
     similar requirement for particularized findings, but it also 
     would establish a multi-step analysis and balancing process 
     that is likely to require an evidentiary hearing to resolve. 
     Private ordering of the discovery process, and thereby the 
     expedited exchange of information, would be impossible under 
     either provision.
       It always must be remembered that during discovery, the 
     lawsuit, the claims of injury, and the various defenses are 
     remarkably fluid. As discovery progresses, claims will be 
     refined and narrowed, defenses will be winnowed or dropped 
     altogether, and the overall lawsuit will acquire a shape that 
     often is very different from that with which it began. During 
     discovery there is no objective, knowable truth with regard 
     to the ultimate merits of either side of the case. Each side 
     relies and proceeds entirely on the basis of its allegations, 
     which are not yet proved. Thus, it defies logic and basic 
     fairness to penalize a litigant during this phase of 
     litigation by mandating public disclosure of potentially 
     irrelevant information in which a litigant may have a privacy 
     or property interest based solely on bald, unsupported 
     allegations. Cowley v. Pulsifer, 137 Mass. 392, 394 (1884) 
     (Holmes, J.). Yet, that is what the proposed legislation 
     apparently would require.
       Both S. 1404 and Amendment No. 1930 have the potential to 
     retard the rate of settlement of civil cases by requiring 
     renewed findings by the judge, at the time of final judgment, 
     in order to maintain confidentiality once the litigation has 
     concluded. Many litigants would prefer, if they could not 
     assure themselves of the return of their proprietary data and 
     their private information, to fight it out rather than 
     abandon what they believe to be very important data or to 
     have the opportunity to tell their story in context. If we 
     undermine the availability and effectiveness of consensual 
     protective orders, and consequently reduce the likelihood 
     of settlement agreements, the federal judiciary, faced 
     with cases of enormous complexity and a criminal docket 
     that boggles the mind, would be additionally burdened in 
     an unacceptable way.


     iii. restrictions on protective order practice are unnecessary

       As I suggested earlier, Senator Kohl's legislation is based 
     on at least two entirely undemonstrated and probably 
     erroneous beliefs. The first is that protective orders are 
     concealing vital information from the public about defective 
     products or environmental hazards. The second is that 
     restricting the use of protective orders and other 
     confidentiality devices in litigation will make information 
     about defective products and hazards more readily available 
     to the public. Both have been rejected repeatedly and 
     convincingly by a number of sources over the last few years.
       As for the first, there simply does not appear to be any 
     difficulty with protective order practice in the federal 
     courts that requires legislative intervention into a 
     rulemaking tradition--courts are not concealing information 
     about defective products and environmental hazards in 
     situations in which there is no other source of information 
     available to the public. In the individual anecdotal 
     incidents I have reviewed, information about alleged defects 
     or hazards invariably was available to the public from a 
     variety of sources. Often the public information, usually in 
     the form of media stories, was available long before any 
     litigation was even commenced.\8\
       Not surprisingly, the same holds true even for the 
     anecdotes Senator Kohl used to claim that this legislation 
     was needed. An elderly couple, the Schmidts, testified about 
     the tragic loss of their son in 1985, which allegedly 
     occurred because protective orders kept them from learning 
     about a vehicle defect. According to a letter from the 
     vehicle manufacturer to Senator Kohl, however, starting as 
     early as 1977 there was a ``mailing to more than 20 million 
     owners . . ., a three-day public meeting . . ., a report by 
     the General Accounting Office, a certified class action, 
     eleven reported appellate court decisions, . . . two 
     Congressional hearings, . . . 25 public trials,'' and 
     literally hundreds of stories in the electronic and printed 
     media.\9\ Given this deluge of information, it strikes me 
     as highly unlikely that the Schmidts' failure to learn 
     about the alleged defect resulted from the use of 
     protective orders.
       But even if it did, restricting the use of protective 
     orders in litigation does not necessarily mean that more or 
     better information will be made available to the public. 
     Courts are not equipped to disseminate information publicly, 
     nor are they qualified to determine what information would be 
     most helpful if disseminated. More to the point, however, a 
     litigant intent on concealing proof of liability or civil 
     wrongdoing can withhold ``smoking gun'' documents just as 
     easily with or without protective orders. In fact, protective 
     orders are entirely irrelevant to whether essential 
     information will be produced in discovery in the first place.
       In the routine case, information about an alleged harmful 
     product or dangerous situation becomes public as soon as a 
     lawsuit is filed, if not earlier. Initial pleadings 
     invariably are open to the public, and when an issue of 
     public import is involved, the plaintiff's lawyer often 
     issues a press release describing the litigation. But 
     focusing on the courts as a primary source of public 
     information about matters of public health or safety ignores 
     more appropriate sources of such information, such as 
     administrative and executive agencies that are responsible 
     for protecting the consuming public. If there is a dearth of 
     public information, efforts to eliminate it would be better 
     directed toward improving the functioning of regulatory 
     agencies than toward the courts and protective orders.
       In conclusion, in my view, the Senate should take no 
     independent, further action on Senator Kohl's legislation at 
     this time. Instead, deference should be given to the 
     rulemaking process, with respect for the scholarship, legal 
     experience, and dedication of those who make it work. The 
     Advisory Committee's work on the protective order rule, 
     informed by a lengthy period of public comment and empirical 
     research data, deserves serious consideration by Congress 
     before Congress intervenes with alternatives of its own. If I 
     may be of further service, please do not hesitate to contact 
     me.
       Pursuant to your suggestion, I am sending a copy of this 
     letter to Senator Howell Heflin, the Chairman of the 
     Subcommittee.
           Sincerely yours,
                                                 Arthur R. Miller,
                                  Bruce Bromley, Professor of Law.


                               footnotes

     \1\See, e.g., Arthur R. Miller, Confidentiality, Protective 
     Orders, and Public Access to the Courts, 105 Harv. L. Rev.
     \2\See e.g., Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d 
     Cir. 1994); Laucadia, Inc. V. Applied Extrusion Technologies, 
     Inc., 998 F.2d 157 (3d Cir. 1993); S.E.C. V. Van 
     Waeyenberghe, 990 F.2d 845 (5th Cir. 1993); Pocono Artesian 
     Waters Co. V. Leffler Systgems, 1994 WL 26281 (E.D. Pas. 
     1994).
     \3\See, e.g., Judicial Improvements and Access to Justice 
     Act, Pub. L. No. 100-702, Sec. 403, 102 Stat. 4642 (1988); 
     David D. Siegel, Commentary on 1988 Revision, Annotation to 
     28 U.S.C.A. Sec. 2073 (West Supp. 1994); H.R. Rep. No. 422, 
     99th Cong., 1st Sess. (1985).
     \4\I have had the honor of having served at the request of 
     Chief Justices Burger and Rehnquist as the Reporter and as a 
     member of the Advisory Committee.
     \5\See April 18, 1994, Letter to the Honorable Howell Heflin 
     from Assistant Attorney General Sheila F. Anthony, Office of 
     Legislative Affairs, Department of Justice.
     \6\May 12, 1994, Letter to Senator Herb Kohl from Judge 
     Patrick E. Higginbotham, Chair, Advisory Committee on Civil 
     Rules, Committee on Rules of Practice and Procedure of the 
     Judicial Conference of the United States.
     \7\August 25, 1994, Letter to Senator Herb Kohl from Judge 
     Patrick E. Higginbotham, Chair, Advisory Committee on Civil 
     Rules, Committee on Rules of Practice and Procedure of the 
     Judicial Conference of the United States.
     \8\See, e.g., Miller, supra note 1, at 480-82 (discussing 
     facts behind most common anecdotes).
     \9\May 6, 1994, Letter to the Honorable Herb Kohl from 
     Richard L. Manetta, Assistant General Counsel, Ford Motor 
     Company.

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