Opposition — Velsicol Chemical Corp. v. United States

FILED

MAR 16 1978

a JR., CLERK

Iu the Supreme Court of the Wunited States

OCTOBER TERM, 1977

No. 77-900

(~ Supreme Court, U. 77

|

VELSICOL CHEMICAL CORPORATION, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

Wapve H. McCres, Jr.,

Solicitor General, —

BENJAMIN R. CIVILETTI,

Assistant Attorney General,

JEROME M. FEIT,

JosePH S. DAviEs, JR.,

Attorneys,

Department of Justice,

Washington, D.C. 20530.

INDEX

Page

SD GOOD enccinnccnsecsccssessnnisianunmmenvenienmeemenemnenins l

DIE cinicsntinnsststinecinsarnseinenionicnsineninminennieines l

SE IIIT ccncccncncscncsnsonssmicsnnndenmtinsenaniunenmnenente l

IEE cincinnsiestnensaicsiiemenmesinierennssaianiaguiinmanennies 2

I scnsnccicenetnctcnnianisnitarniminnenanatnmassteniamemiennne 4

TEED cccccsssutinintencssonedateisnnenssitnbiadanntninbentenaninnnneiiieniiis 11

CITATIONS

Cases:

Blair v. United States, 250 U.S. 273 .......cccccceeeeee 10

Board of School Commissioners of the City

of Indianapolis v. Jacobs, 420 U.S. 128 ........... 5

Branzburg v. Hayes, 408 U.S. 665. .................0008 10

Dove v. United States, 423 U.S. 325 .......ccccceeeeeee 5

Duplan Corp. v. Moulinage et Retorderie

de Chavanoz, 487 F. 2d 480 ..........ccccccceeeeeeeeees 10

Grand Jury Proceedings, In re,

rh ee UN” Siteldadalicensnepninenicmnsoeninnndeseneaennens 10

Grand Jury Proceedings, In re,

aF SERN GUE dicuntitateindtcinenctncesececssnnsninnensenmonel 10

Hickman v. Taylor, 329 U.S. 495 ......ccccccccccseeeeees 9

Perlman v. United States, 247 U.S. 7 ............00008 3

Preiser v. Newkirk, 422 U.S. 395 woeccccccccccccceeeeeeees 5

Terkeltoub, In re, 256 F. Supp. 683 ...............00 10

United States v. Friedman, 532 F. 2d 928 ........... 7

United States v. Lyons, 442 F. 2d 1144 .............. 7

Cases—(continued):

United States v. McKay, 372 F. 2d 174 wu... 10

United States v. Mitchell, 372 F. Supp. 12339 ..... 10

United States v. Munsingwear, Inc.,

See Te Ue sedendidiineiieinmeuial pevesesenoneonesessossooes 5

United States v. Nobles, 422 U.S. 225 wo... 9

Weinstein v. Bradford, 423 U.S. 147 wo... 5

Rule:

Rule 19(1) of the United States

CII iichlancrnticibliden lint caiansiaiarnpiareneicaneainnicisaiel 5

Miscellaneous:

Developments in the Law— Discovery,

ee | Ee 9

In the Supreme Court of the Hnited States

OCTOBER TERM, 1977

No. 77-900

VELSICOL CHEMICAL CORPORATION, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

‘ The opinion of the court of appeals (Pet. App. 3a-13a)

is reported at 561 F. 2d 671.

JURISDICTION

The judgment of the court of appeals (Pet. App. la-2a)

was entered on July 29, 1977, and a petition for rehearing

was denied on September 26, 1977 (Pet. App. 14a-16a).

The petition for a writ of certiorari was filed on December

23, 1977. The jurisdiction of this Court is invoked under

28 U.S.C. 1254(1).

QUESTIONS PRESENTED

1. Whether the judgment of the court of appeals should

be vacated as moot.

(1)

2

2. Whether documents subpoenaed by the grand jury

were protected from disclosure by the work-product

privilege.

3. Whether petitioner waived any attorney-client

privilege it had with respect to documents and testimony

sought by the grand jury.

STATEMENT

This case arises from a grand jury investigation in the

United States District Court for the Northern District of

Illinois to determine whether petitioner, Velsicol Chemical

Corporation, or any of its officers or employees

committed criminal violations by withholding information

from the Environmental Protection Agency (E.P.A.) that

would tend to show that pesticides manufactured by

petitioner were carcinogenic. On February 9, 1977, the

grand jury issued a subpoena directing three attorneys of

the law firm of Sellers, Connor and Cuneo, petitioner’s

counsel in the proceedings before the E.P.A., to testify

and produce documents concerning whether all informa-

tion petitioner possessed regarding the carcinogenicity of

the pesticides had been transmitted to the E.P.A.!

One of petitioner’s attorneys, Robert Ackerly, appeared

before the grand jury but refused to answer questions on

the ground that the subject of the inquiries was protected

by the attorney-client privilege. He also refused to

produce some of the subpoenaed documents, claiming

'The subpoena duces tecum called for three limited categories of

documents of the Sellers firm: (1) an allegedly false legal memoran-

dum and affidavit, and carcinogenicity studies commissioned by

petitioner and conducted by an outside laboratory, (2) the final

reports of those studies, and (3) reports relating to those studies

authorized by independent pathologists or toxicologists com-

missioned. by petitioner.

3

they were protected by the work-product privilege. The

government then moved to compel Ackerly to testify and

to produce the documents, and petitioner moved to

intervene and to quash the subpoena. The district court

granted petitioner’s motion to intervene but denied its

motion to quash. The court ruled that any attorney-client

privilege that may have attached to the documents and

testimony had been waived by Neil Mitchell, petitioner’s

“Vice-President-Legal,” or house counsel, and Bernard

Lorant, an attorney who had represented petitioner before

the E.P.A., when they testified before the grand jury

about the allegedly false memorandum and affidavit filed

with the E.P.A. and about matters relating to petitioner’s

failure to submit the carcinogenicity data to the E.P.A.

The court also held that the work-product privilege was

unavailable as a basis for resisting production of the

documents for the grand jury, since they had not been

prepared by counsel representing petitioner before the

grand jury or in anticipation of the grand jury proceeding.

Petitioner took an interlocutory appeal under Per/man

v. United States, 247 U.S. 7, and the court of appeals

affirmed (Pet. App. la-13a). On September 29, 1977,

three days after denying a petition for rehearing, the court

of appeals refused to grant petitioner’s motion to stay its

mandate pending the filing of a petition for a writ of

certiorari.2 At the same time, the district court ordered

Ackerly to testify and produce the subpoenaed documents

for the grand jury on October 5, 1977. Ackerly then

complied with the court’s order. On December 12, 1977,

the grand jury indicted petitioner and six of its former

2Mr. Justice Stevens, acting as Circuit Justice, also denied

petitioner’s application to stay the court of appeals’ mandate on

October 3, 1977 (No. A-307).

4

and present employees for conspiracy to conceal material

facts and make false statements to the E.P.A., in violation

of 18 U.S.C. 371, 1001, and 1341.

ARGUMENT

1. Although petitioner has not raised the issue of

mootness in its “Questions Presented” (Pet. 2), it

nevertheless contends that the judgment of the court of

appeals must be vacated as moot because of Ackerly’s

“disclosure [before the grand jury] and the subsequent

events,” which show that “there is no longer a case or

controversy for this Court to adjudicate” (Pet. 5).

Granting arguendo petitioner’s premise that the con-

troversy regarding Ackerly’s testimony and the produc-

tion of documents to the grand jury has become moot,

petitioner is not thereby entitled to vacation of the court

of appeals’ judgment under the circumstances of this case.

Petitioner was afforded a full opportunity to litigate its

legal claims in the district court and in the court of

appeals. Both courts concluded without dissent that

neither the attorney-client privilege nor the work-product

privilege was available to Ackerly to justify his refusal to

divulge the testimony and documents sought by the grand

jury in connection with its criminal investigation. These

determinations are essentially fact-bound—depending, for

example, on an assessment of Mitchell’s status before the

grand jury and the grand jury’s need for the subpoenaed

information claimed to be clothed with a qualified

privilege—and, as we show at pp. 8-10, infra, plainly

would not warrant the exercise of this Court’s power of

discretionary review in the absence of a suggestion of

mootness.’ If this Court would not grant review in this

‘The denial of a stay by the court of appeals and the Circuit Justice

also suggests that the issues raised by petitioner are not worthy of

review by this Court.

5

case otherwise, it is neither necessary nor appropriate for

the Court to disturb the judgment of the court of appeals

merely because petitioner asserts that the controversy has

subsequently become moot. See Dove v. United States,

423 U.S. 325.

The cases relied on by petitioner are not to the

contrary. In Weinstein v. Bradford, 423 U.S. 147, Preiser

v. Newkirk, 422 U.S. 395, and Board of School

Commissioners of the City of Indianapolis v. Jacobs, 420

U.S. 128, it was only after the Court had granted

certiorari to review the substantive legal question

presented that it was determined that the controversy had

become moot. Hence, because the Court had been

deprived of jurisdiction to decide a legal issue thought

worthy of review, the appropriate disposition was to

vacate the judgment of the court of appeals and to

remand with directions to dismiss the complaint. Nothing

in those decisions suggests that the Court must

automatically grant certiorari and vacate the court of

appeals’ judgment in cases not posing issues of sufficient

importance to warrant review, solely because a party

asserts that the case may have been mooted while its

petition was pending or, as here, months before the

petition was filed.‘

Petitione: asserts, however, that the course it urges

“must be followed in order to avoid any possible

collateral estoppel effects that might otherwise unfairly

ensue from the judgment below” (Pet. 6). But such

unfairness is possible only in a case in which this Court

would have granted review but was foreclosed from doing

4A different rule should apply where a case has become moot while

on appeal, since in such instances the appellant has been deprived of

his right to an appellate resolution of the controversy. See United

States v. Munsingwear, Inc., 340 U.S. 36. By contrast, “[a] review on

writ of certiorari is not a matter of right * * *.” Supreme Court Rule

19(1).

6

so by mootness intervening between the judgment of the

court of appeals and this Court’s consideration of the

certiorari petition. Where, on the other hand, the issues

presented do not independently warrant review, the action

of this Court in denying certiorari itself stands as proof

that there has been no unfairness to the petitioner.

Indeed, action by this Court vacating a judgment of the

court of appeals on account of subsequent mootness,

although that judgment would not otherwise have been

reviewed, is unfair to the party that prevailed in the court

of appeals. Such a result needlessly deprives the

respondent of any collatera! benefits that might inure to it

from the judgment, while at the same time conferring

upon the petitioner an undeserved windfall that it could

not have secured if the controversy had remained alive

until such time as this Court passed upon the certiorari

petition.

In sum, we submit that cases in which there is a

Suggestion of mootness arising subsequent to the

judgment of the court of appeals should be disposed of in

the following manner. If the Court would have denied the

petition had there continued to be a live controversy, it

should deny it even though there has been a suggestion of

mootness. If, on the other hand, the Court might have

granted the petition but for the problem of mootness, it

should vacate the judgment of the court of appeals where

the mootness is clear and undisputed; where the mootness

is uncertain or disputed, the Court should remand the

case to the lower court in order for that court to resolve

the jurisdictional question. Such an approach, in addition

to eliminating the possibility that either party will suffer

unfairness en account of post-judgment events, would

have the benefit of avoiding the need, in cases where the

question of mootness is debatable, for this Court or the

lower courts to wrestle with mootness problems relating

—"

;

to decisions that would otherwise have become final.

Consideration of disputed questions of mootness, which

often present difficult legal and factual determinations,

would be limited to that relatively small percentage of

cases raising issues worthy of this Court’s review.°

It might appear at first blush that the approach we

suggest, because it requires the Court to consider the

“merits” of what may be a moot case, conflicts with the

principle that the federal courts are empowered to decide

only real controversies. But this objection is incorrect.

While this Court may now lack jurisdiction to decide the

validity of the claims of privilege advanced by petitioner

in its attempt to defeat the subpoena, the Court

unquestionably has jurisdiction to rule on the certiorari

petition. And while there may no longer be a live

SWe recognize that the authorities cited by petitioner (Pet. 6 n. 2)

suggest that this Court will consider and dispose of any case on

grounds of mootness without regard to the importance of the

underlying questions presented for discretionary review. We do not

agree, for the reasons indicated above, that this is either a just or a

practical course of action in the overwhelming majority of cases.

Here, for example, petitioner undoubtedly desires to secure vacation

of the judgment of the court of appeals so that it may be’ free, should

the i:sue arise in the criminal prosecution, to relitigate the questions

of evidentiary privilege decided adversely to it after one full and fair

litigation. The policies underlying the doctrine of collateral estoppel

suggest that such burdensome relitigation should not be encouraged.

Moreover, given the realistic possibility that the collateral conse-

quences of the judgment below may prove significant in subsequent

litigation between the parties, the question arises whether this case

should in fact be considered moot. Compare United States v.

Friedman, 532 F. 2d 928, 931 (C.A. 3), with United States v. Lyons,

442 F. 2d 1144, 1145-1146 (C.A. 1). The sole virtue of the practice

urged by petitioner is administrative convenience. However, it would

be equally administratively convenient, and would cause unfair

results in a far smaller proportion of cases, to deny or dismiss the

certiorari petition whenever a case has become moot pending review

in this Court.

8

controversy between the parties as to whether Ackerly

must testify and produce documents before the grand

jury, there is a real and substantial controversy regarding

the proper disposition of the instant petition; the

resolution of which may determine petitioner’s right to

litigate the privilege issues a second time.

The problem thus presented for this Court’s decision is

whether petitioner should be relieved of the effects of a

judgment it can no longer have overturned, at the cost of

depriving the respondent of a judgment in its favor. The

correct resolution of this dilemma, we submit, should

depend on an analysis of the relative fairness to the

petitioner and the respondent from either denying

certiorari or vacating the judgment of the court of appeals.

That analysis, in turn, depends upon a consideration of

whether the issues presented by petitioner might have

merited review if the case had remained alive pending this

Court’s disposition of the certiorari petition. Hence, the

Court’s incidental consideration of the substantive claims

raised in the petition is necessary to the resolution of a

live, rather than a hypothetical, controversy, and is in no

sense an advisory opinion.

2. Petitioner’s claims, as previously noted, do not

warrant review. Petitioner first contends (Pet. 6-11) that

papers subpoenaed from the law firm that represented it

before the E.P.A. were immune from discovery because

they were protected by the work-product privilege. The

court below properly rejected this contention (Pet. App.

lla-12a), since the result petitioner seeks would serve

none of the purposes underlying the work-product

doctrine. That doctrine is basically designed to protect the

privacy of a lawyer’s mental processes, to immunize his

9

trial strategy from discovery, and to preserve the efficacy

of the adversary system by preventing counsel from

depending on opposing counsel to coliect the informa-

tion needed to prepare his case. See Hickman v. Taylor,

329 U.S. 495, 508; United States v. Nobles, 422 U.S. 225,

236-238; Developments in the Law— Discovery, 74 Harv.

L. Rev. 940, 1027-1029 (1961).

These interests would not be materially advanced by

applying the qualified privilege to the papers subpoenaed

by the grand jury in this case. Those documents were

prepared in connection with separate administrative

proceedings before the E.P.A., rather than for any matter

before the grand jury, and were prepared by counsel other

than those who represented petitioner in the grand jury

inquiry. Moreover, the court of appeals observed (Pet.

App. 12a) that the focus of the grand jury’s inquiry was

“to determine if [the papers’) preparation was attended by

misconduct.” As this Court remarked in Hickman vy.

Taylor, supra, 329 U.S. at 511:

We do not mean to say that all written materials

obtained or prepared by an adversary’s counsel with

an eye toward litigation are necessarily free from

discovery in all cases. Where relevant and non-

privileged facts remain hidden in an attorney’s file

and where production of those facts is essential to the

preparation of one’s case, discovery may properly be

had.

See also United States v. Nobles, supra, 422 U.S. at 238-

239. The documents relating to petitioner’s denial that it

had withheld carcinogenicity data from the E.P.A. were

essential to the grand jury’s investigation. Thus, even

assuming that a work-product privilege might attach to

the papers in the context of the grand jury proceeding,

that privilege was outweighed by the grand jury’s urgent

10

need for all relevant information in the interest of public

justice. See United States v. McKay, 372 F. 2d 174(C.A.

5); In re Grand Jury Proceedings, 73 F.R.D. 647 (M.D.

Fla.). Cf. Branzburg v. Hayes, 408 U.S. 665; Blair v.

United States, 250 U.S. 273, 282.°

3. Finally, the court below correctly determined that

petitioner, acting through Neil Mitchell, its house counsel

and one of its senior officers, waived any attorney-client

privilege it possessed with respect to its communications

to Ackerly about the filing of the allegedly false

memorandum and affidavit and the concealment of the

carcinogenicity data (Pet. App. 7a-10a).’ We rely upon

the court of appeals’ thorough analysis of that factual

question.

6In re Terkeltoub, 256 F. Supp. 683 (S.D. N.Y.), involved requests

for disclosures constituting “the lawyer's work in investigating and

preparing the defense of a criminal charge.” /d. at 684. In re Grand

Jury Proceedings, 473 F. 2d 840 (C.A. 8), involved corporate

counsel's investigation in anticipation of the very corporate bribery

inquiry that the grand jury was conducting. In United States v.

Mitchell, 372 F. Supp. 1239 (S.D. N.Y.), not only did the district

court not address the issue whether the work-product privilege is

limited as petitioner contends, but also it appears that the attorney

from whom the documents were obtained by the grand jury had

represented his client before the grand jury as well as in earlier civil

litigation. /d. at 1244. Finally, as the court below noted (Pet. App.

| la-12a), Duplan Corp. v. Moulinage et Retorderie de Chavanoz, 487

F. 2d 480, 483 (C.A. 4), involved the issue whether documents

generated by patent infringement suits automatically lose their work-

product immunity on termination of those proceedings and become

generally available to discovery in subsequent civil litigation.

Although the Fourth Circuit concluded that the documents retained

their privilege, it observed that the privilege was a qualified one and

could be overborne by a showing of need. /d. at 485. The court below

correctly concluded that this case was distinguishable because it

involved a subsequent grand jury criminal investigation, not a civil

sult.

Petitioner asserts (Pet. 11) that the court of appeals misap-

prehended the record when it observed (Pet. App. 9a) that Mitchell

was conferring with Vincent Fuller of Williams & Connolly during

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

WADE H. MrCRreE, Jr.,

Solicitor General.

BENJAMIN R. CIVILETTI,

Assistant Attorney General.

JEROME M. Felt,

JosePH S. DAvies, JR.,

Attorneys.

MARCH 1978.

the course of the grand jury testimony that was held to constitute a

waiver. The record that the court of appeals cited (C.A. App. E 42)

and that we are lodging with the Clerk of this Court fully supports

the court of appeals’ conclusion. Additionally, contrary to petitioner's

present allegations (Pet. 11-12), petitioner failed to adduce any

evidence below to show that Mitchell’s waiver was contrary to its

instructions.

DOJ-1978-03