Opposition Brief — Van Zandt v. Commissioner

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CITATIONS

~ ,Allis-Chalmers Mfg. Co. v. City of Fort Pines

Fae Be ARE accshietisiv nie eoer meee aime

Consolidated Edison Co. of New York v. Allis-

Chalmers Mfg. Co., 217 F. Supp. SGM

Grand Jury Proceedings, In re, 309.F. 2d 440. -

Herman Schwabe, .Ine. v. United Shoe Ma-

‘ chinery Corp., 194 F. Supp. 763_____- eiieie

- . Herzog v. United States, 226 F. 2d 561__...--

Olympic Refining Company v. Carter, 382 F.2d —

260, certiorari denied, 379 U.S. 900______- |

Petroleum Industry Investigation, In re, 152 F.

TODD. OGD. 3% onic cansedaisecanedndisncei

Pittsburgh Plate Glass Company v. United

| * Cases:

States, 360 U.S: 305.-.__-._- ahs catia candace

Sellers, In #e, 32 F.R.D. 478... _--...------

United States’ v. General Electric Company, 209

F. Supp. Wl ced ee

| Unilted States v. Procter & Gamble Compaiiy,

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.. United States v. Socony:V acum Oil Company,

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oy pieition FOR A WRIT OF CBRTIORARI THR UNITED

; colsesees court OF APPEALS FOR THe —imairiaes OIRCUIT ¥

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“The a penta! 6f the court of sive 5 (Pet App. 1-9;

i #201) is not. yet reported. “The district court'did not

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: file “a e Written opinion; its order Loe 120)" is unre-

Ported. SSESEIO'G Wd PMuod OF WH POTTS

Di cir tnsbusted

“The: bndeuiiot Aha! abut’ af, ical -was entered on

April 7, 1965. :'The: petition for a writ-of certiorari

. was filed ‘on’ May 6,'1965. ‘The ‘jurisdiction ‘of this .

Court is invoked aged esis ent Sait ee

QUESTION PRESENTED

Tn;connection. with, certain, criminal antitrust cages,

the government Ale, and, the; district court. ordered

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sealed, a pre-sentencing memorandum which contained

material protected by grand jury secrecy. The ques-

tion eA is whether the: gourts below properly

telensed the “to! plaintiffs’ in

: treble-damage suits egainst the sanie defendants when

the memorandum had already been disclosed to defense

counsel in the course of sentencing, the criminal cases

had been completed, and the court of appeals deleted,

“ the portions ‘of the memorandum whose disclosure

would reveal the identity of grand jury witnesses. |

cn RULE INVOLVED

he (ey of the Federal Rules of Criminal Pro

cedure rEreraten, 2 in part:

. Seereay of Proceedings and pL Die-

ee ‘dosure of matters occurring before the grand

jury, other than its deliberations and the vote.

of any juror may be made to the attorneys for

the government for use in the performance of

their duties. Otherwise a: juror, attorney, in- ‘

| » terpreter or stenographer may disclose matters

- occurring before the grand jury only when so

directed by the court preliminarily to or in con-.

nection with a‘ judicial proceeding or when

permitted by the court at the request of the

. defendant upon a showing that grounds may

“:. °° exist for a motion to dismiss the indictnient

havea feserege of matters occurring before the grand

eid Y ‘No, obligation of secrecy may be imposed

ata any parson except in aecordanice with this

Tule. * 2 ne

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; - Petitioners are corporations and coieyionente’ officers, .

who ‘were convicted of violations of Section 1 of the

3

Sherman Act (15: U.S.C. 1), upoit-their pled of hole

contendere; and individuals who allege that they’ tes-

. tified before the grand jury whieh returned the’ five

indictments resulting in such convictions! (Pet. App.

1). The indictments charged conspiracies to allo-

. cate orders and: to rig bids for products: ‘of the con-"

erete and coated-stee steel-pipe industry (Pet. 4).

‘In connection with sentencing, the government pre~

pared a “‘Memorandum of Government Relating to the —

Imposition of Sentences and Fines,” which was at-

_ tached to the pre-sentencing report of the probation

office (Pet. 5-6). The memorandum, although ‘not a -

grand jury document, contained information pro-

tected by the policy of grand jury secrecy under Rule

_ 6(e) of: the Federal Rules of Criminal Procedure. It

was made available to and read by the attorneys for

the defendants in the criminal _— and was filed

under seal (Pet. App. 2, 7). : : ,

| In the meantime, six treble-damage suits had been

' filed against defendants who were.also defendants in

the. criminal cases, alleging injuries from violations

of the Sherman Act involving aetivities encompassed

within the criminal indictments.. -After conclusion of |

thé criminal cases, the plaintiffs in these treble-dan- —

age suits sought. acces to the government, pre-sentene- |

_ ing memorandum by subpoenas addressed to. govern:

‘ment counsel..." Judge Stephens transferred the-matter

to J udge Harry C. Westover before whom the civil |

- antitrust cases were pending. Judge Westover ruled

that the order sealing the government memorandum

should be vacated arid the subpoeria quashed (R. 186-*

, — and on fee 6, 1964, an order was entered

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| to.that.effest (R,120),:,, The Court of; Appeals for the

‘Ninth Circuit affirmed: the district court. order after

' deleting :parts:.of the memorandum, ‘denying peti-

tioners’ . spplcasen for . wate of: ‘prohibition and

mandamus. |

“While the Ninth: Cinenit, sedated that dinclooune i

of grand jury:material should be permitted only upon

a showing of “particularized and compelling need,”

it also noted that the justification for disclosure must

be assessed. in light of the particular | facts of the case

and their relation to the reasons for grand jury se-

erecy. Since the criminal case was over, the only*

‘particular “‘eompelling reason” for secrecy was to

_ encourage untrammeled testimony of future grand

jury witnesses (Pet. App. 5-7 ), Supporting dis-—

- closure was the fact that. the defendants had, already

‘enjoyed the opportunity to inspect. the memorandum,

and it would be “highly inequitable and adverse to

the principles of federal discovery to allow one party

aecess to. a government Gnemment and not the other”

appeals _ held that the district court . could properly

The proceedings below followed the course ‘used in’ Olympic

Refniny Company vy. Carter, 332 F. 2d 260 (C.A. 9), certiorari

denied, 379 U.S. 900. The private plaintiffs served a. deposi-

subpoena duces tecum on Stanley E. Disney, Chief of the

Angeles Office of the Antitrust Division, and the govern-

Mt On aatce ee teal ie ee

iOS ssc to Cette miemnbeiduls inf 00 goal

“duces ‘tecum (R. 44," Pet: App. 2-8). The’ pri-

joined in the goverhment’s ‘motion! to ‘permit dis+

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the government memorandum and to quash a

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" grant, disclosure of, the contents of ‘the. iieeaiaianaine

‘memorandum, ‘so long» as it’ took ‘steps, : by deleting

witnesses’ names or by other means which would, mainy -

tain. their anonymity,:to protect the policy. of, grand

_. jury secrecy. In this matter of first impression,.the

—~~-court, of appeals took the appropriate action itself,

deleting portions of the government memorandum and

returning excised copies to the. district. court for fil-

ing, without seal, after retaining one .copy of the

original document in. its own files Pet App. 9): oa

Disclosure of: excised copies of the government pre- :

sentencing memorandum to treble-damage plaintiffs —

was a proper exercise of judicial discretion on the :

particular. facts of the case where the memorandum

had already been disclosed to the defendants’ counsel. :

- Farther review is not warranted. p

"1. Rule 6(e) of the Federal Rules of Criminal Pro:

_ eedure, which embodies the rule that grand: jury testi-

‘mony is confidential (United States v. Procter &

Gamble Company, 396 U. Ss. 677; Pittsburgh Plate

"Glass Company v. United States, 360 U.S. 395), al-

lows. disclosure “when so directed by. ‘the court pre-

liminarily to or in connection with a judicial a

ing.’’* For “after. the grand ere a are

&

, ended, disclosure is- wholly proper when the ends of

justice require it.”’ United States v. Socony-Vasuum -

Ou Company, 310 U.S. 150, 283-234. But such dis-

closure requires a showing of pArticularized, eompel-

ling need.. United States v. Procter & Gamble Com-

pany, supra; ‘Pittsburgh Plate Glass Company v.

United States, supra. While most cases deal with

disclosures sought by eriminal defendants, the same .

standard must be met when disclosure is sought by pri-

vaté parties seeking to use the material in civil suits

- against the criminal defendants.‘

2. Here private plaintiffs asserted a need based upon

prior disclosure of the same material to the counsel for

ik rninal defendants in the course of the criminal

A number of these defendants are subject to

ne civil suits, arising from the. same conduct

which was the basis for the criminal convictions. As

the court below pointed out, it would be “highly in-

equitable” not to grant private adversaries equal ac- - ;

cess to the government document (Pet. App. 9). We

believe that “‘the ends of justice” (United States v.

‘Socony-Vacuum Oil Company, 310 U. S.: at 234). sup- ©

| * See Pittsburgh Plate Glass Coinpany v. United States, 360

US. at 399; Jn re Grand Jury Proceedings, 309 F. 2d 440, 444

(C.A. 8); Herzog v. United States, 226 F. 2d 561, 566 (C.A. 9).

See also Wigmore, On Evidence, McNaughton Revision, Vol:

VIII, Sec. 2362, p. 737.

* Allis-Ohalmers Mfg. Co. v. City of Fort Pierce, 323 F. 2d

. 988 (C.A. 5); In ve Sellers, 32 F.R.D. 473 (ND. Il.) ; Consoli-.

dated Edison Oo. of New York ». Allis-Ohalmers Mfg. Oo., 217

¥. Supp. 36 (S.D.N.Y.}; Herman Schwabe, Ine. v. United Shoe

eenengit Corp., 194 F. ‘Bupp. 763 (D. Mass). ach SES

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petted: dibolonate to, ii: plndlilia thesis:

eat equal access.to necessary information’. © ..-.)°

Petitioners rely: on. United States: v.: Procter &

Gamble Company, supra, as conttary to tlie view that

‘Hisclosure of grand jury material to one party in.a case

: may warrant disclosure to the other: party,.: In that

ease, the Court rejected the argument that. the govern-

ment’s use of a grand jury-transeript in. the prepara-

tion of aytivil case of itself entitled-the civil defendant

to disclosure. The point is, however, that the initial

disclosure in Prodler & Gamble was to the government ,

pursuant to the first, sentence of Rule. 6(e) which pro-

vides for disclosure, without leave of court, “to. the

attorneys for the dieemaets for use in the perform-

ance of their duties’”’,.an authority which extends to

@ government civil suits\as well as criminal prosecu-

_ tions. United States v. General Electric Company,

209 F. Supp. 197, 199 (E.D, Pa.) In re Petroleum In-

dustry Investigation, 152 F. Supp. 646 (E.D. Ve.).

_ Government counsel’s knowledge of grand jury -pro-

cs ceedings is inherent in the grand jury system and is —

* The claims of the treble-damage plaintiffs could have been

Er ee ees eee

unsealing order. We believe that the general release

“document; was justified, first, tby the a that the |

closure to defense counsel had not been ‘limited by any eondi-

tion, (see Pet. App. 9, fn,1) and, second, by the

number of dimage suits which gre er Danes ais

against the corporate petitioners. In :

below, actioris have been instituted by

local ‘governmental bodies, Bh tepsmeryiient tooth it

ony ta. private, piri a made it reasonable to vacete the seflin

2

8

tl tice sist tr Uh Bioline i th nj But

further diseldeure'to! a ‘private party is ‘considered -

_ dn ‘triitial\ public ‘diseldsure and must mest the ‘fest

" @isdussed by thisCdurt in Procter. &: Gamble: ‘In

this case; however, : seerecy’ had already been breached

by’ ‘the’ initia) disclésure to petitioners” dounsel’ ‘The

farther ‘disdlosire°to the civil plaintiffs of the ,sub-

stance ofthe ‘specific and identified material “which ©

hind ‘beer Uisclowed!'tb ‘the ‘defendants’ was ‘therefore

within the’: ae meet of the: trial: burt

: tudes Rule 6(6): Sta y

»8i This’ result ‘is itisanaty shipparted)' as 1 the court

below noted, by the limited force’ of the policy of

grand jury secreey in ‘the eiroumstancés' of this caie.

‘A number ‘of the’ reasons for ‘secrecy expired with

the ‘close of ‘the criminal cases agaihst’ ‘petitioners.

_ , fhe’ primary ‘remaining réasonsthe encouragement

| of testimony: ‘by: future ‘grand’ ju) witnesses and the —

protection of innocent’ persons mentioned in the grand

jury ‘testimony—have’ peculiarly’ ‘little ‘force: on the

7 facts ‘of ‘this’ case. While it’ is true that future’ wit-

- nesses,..would be, deterred. by;. knowledge ..that. their

restiniony might be disclosed; this ‘policy: is ‘particu-

Tarly éoncernéd ‘with’ ‘disclosure’ to the criminal de-

fendants themselves. \ Pittsburgh. Glass Company v.

amg ee tl “\Sinee the defendants _

in ‘the present case eady én a ‘3

pal charged ala bears Ei for secrecy was -

‘of limited significance: ' Moreover, the Ninth Cireuit:

9 é

alia from the ‘government memorandum. As the

court stated, this gave effect to “the Policy. consid: : AS

erations behind ‘the rule of secrecy of grand jary in-

vestigations,” “while permitting disclosure of the —

document’s substance (Pet. App. 8). Nor is there

merit to petitioners’ contention that the court ignored

’ the rights of. innocent persons who were mentioned in

_the grand jury testimony but exonerated in the investi-

gation. The government memorandum was drafted for _

_ the: purpose(of advising the court on the sentencing *

=a those persons and) corporations which had been i

dicted. and convicted. .There is no reason whatever Pla

believe that persons exonerated are identified in the

document, especially after the — iiade by the

se court of —— :

$ CONCLUSION .

For the foregoing reasons, the petition fora writ of

certiorari should be denied. :

Respectfillly submitted. _

AROHIBALD Cox.

- Solicitor General.

Wim H. Orrick, Jr,

Assistant Attorney General.

LIONEL KESTENBAUM,

Exuiorr Moyer, . :

| oe . Attorneys. .

. JUNE 1965. Raideees

0 8. coveaument pariae Opmes 1988