Stay of Discovery Doesn’t Block Public Records Requests

American Bank v. City of Menasha (7th Cir. Nov. 29) (Posner, J.), holds that a federal stay of discovery under the Securities Litigation Uniform Standards Act doesn’t block public records requests under state public records statutes. This strikes me as sound, for the reasons the court gave: The legal term “discovery” generally refers to fact investigation that uses the special rules connected to the litigation process (such as interrogatories, depositions, requests for admission, and the like), and not to other fact investigation, such as interviewing witnesses, researching court records, or filing public records requests of a sort that anyone (litigant or not) could file. Moreover, this is functionally sensible, since public records requests don’t impose the litigation-related burdens that other discovery poses (given that the government agency may charge money to recoup the costs of the requests).

Finally, note this interesting passage:

The City acknowledges that it couldn’t refuse a newspaper’s request for the records, and the newspaper would be free to publish them. Yet it claims a right to an even broader stay than the district court granted it — to a stay that would forbid American Bank to suggest to a newspaper that it request and publish the records, or even hint at such a suggestion by telling a reporter that there might be some interesting stuff in the public-records office about the City’s misbegotten power-plant conversion project. And so another objection to the City’s position in this case is that it would invite satellite litigation over efforts to circumvent a stay and even raise questions under the First Amendment.

It would also create a precedent of unmanageable scope. Suppose a newspaper reporter had requested and obtained records of the City’s conversion fiasco but had not published anything. Could American Bank’s lawyers ask him about what he had found in his search? Or would that be “discovery” too? What if the lawyers search Google under “City of Menasha securities litigation.” Is that “discovery” — for if they do that, they will find articles that contain information about the litigation that they might find useful. See, e.g., [examples omitted]. In rejecting an attempt to “exempt private and citizen litigants from the right to disclosure of public records if the materials sought potentially relate to a matter under litigation between the parties,” State ex rel. Lank v. Rzentkowski, supra, 416 N.W.2d at 637-38, explained that “circumvention of the statute under such an interpretation could be accomplished with ease and impunity. Nothing in [the] argument would preclude a person, not a party to the underlying litigation, from rightfully demanding the materials and then turning them over to the litigants who otherwise would be denied them. The interpretation … would encourage surreptitious circumventing of the statute. We are hesitant to adopt an interpretation which reduces a law to such unenforceable stature and holds it out to ridicule rather than respect.”