## Facts

- Melea Limited was a Gibraltar corporation with a business address in Geneva, Switzerland.
- The Commissioner asserted U.S. tax consequences tied to Melea’s relationship with U.S. corporations associated with a U.S. citizen, including whether those U.S. entities acted as Melea’s dependent agents for purposes of business activities in the United States.
- In earlier Florida federal patent litigation (closed in 1998), Melea was a defendant and discovery included depositions concerning the relationship between Melea and the related U.S. corporations.
- The Florida district court entered a stipulated protective order allowing parties to designate materials as confidential and limiting use of protected materials to that litigation; the order survived termination of the case.
- In Tax Court discovery, the Commissioner requested deposition transcripts from the Florida case.
- Melea produced only redacted versions, withholding portions it claimed were protected by the Florida protective order.
- The Commissioner moved to compel unredacted production; Melea opposed, arguing the Commissioner must seek relief from the Florida district court and that disclosure could violate confidentiality protections.

## Issues

1. Whether the Tax Court may compel production of unredacted deposition transcripts that are subject to a protective order issued in prior, now-closed federal district court litigation.
2. Whether principles of comity require the Commissioner to seek modification or relief from the issuing district court before the Tax Court may order production.
3. Whether the Tax Court can order production while preserving confidentiality by imposing protections equivalent to those in the earlier protective order.

## Decision

- The Tax Court granted the Commissioner’s motion to compel.
- Melea was ordered to produce the deposition transcripts in unredacted form.
- The Tax Court’s compulsion order incorporated the requirements of the district court protective order to maintain confidentiality protections for proprietary business information.

## Legal Principles

- Materials that are otherwise relevant and discoverable in Tax Court discovery may be compelled even if subject to a protective order from prior litigation, particularly where the earlier case is closed.
- Comity counsels respect for another court’s protective order, but it does not bar discovery when the compelled court can preserve confidentiality through equivalent protective restrictions.
- A stipulated protective order that functions primarily as a confidentiality and case-management device can be accommodated in later proceedings by continuing the same limits on disclosure and use, rather than requiring the requesting party to reopen the earlier case.

## Conclusion

The Tax Court held it could compel unredacted production of deposition transcripts from prior district court litigation despite a surviving protective order, so long as the Tax Court maintained comparable confidentiality restrictions by incorporating the earlier protective order’s terms.


Melea Ltd. v. Comm'r, 118 T.C. 218 (2002)