The opinion of the court was delivered by: KRAFT
Following a grand jury investigation of the electrical equipment industry, the Government instituted these civil actions for damages under the Clayton Act, 15 U.S.C.A. § 12 et seq. and the False Claims Act, 31 U.S.C.A. § 231 et seq.
Tennessee Valley Authority is co-plaintiff in five of the suits.
The cases are now before us on three motions by defendants, all of which will be considered and disposed of in one opinion.
Defendants' first motion is to impound grand jury minutes and documents and for allied relief. We are called upon to determine the validity of the Government's claim that testimony and documents developed and produced in a Federal grand jury investigation are available for its use in the preparation and trial of its civil damage suits. The basic consideration involved is, of course, the traditional secrecy of grand jury proceedings. The reasons for secrecy are many and varied, and we need not stop at this point to discuss them in detail. See, e.g., Pittsburgh Plate Glass Company v. United States, 360 U.S. 395, 79 S. Ct. 1237, 3 L. Ed. 2d 1323 (1959); United States v. Procter & Gamble Company, 356 U.S. 677, 7 S. Ct. 983, 2 L. Ed. 2d 1077 (1958); United States v. Rose, 215 F.2d 617 (3rd Cir. 1954); In re April 1956 Term Grand Jury, 239 F.2d 263 (7th Cir. 1956); 8 Wigmore, Evidence (3d ed. 1940), 2360.
For present purposes, at least, the traditional policy of grand jury secrecy is embodied in F.R.Cr.P. 6(e), 18 U.S.C.:
F.R.Cr.P. 54(c) defines 'Attorney for the government' as '* * * the Attorney General, an authorized assistant of the Attorney General, a United States Attorney, an authorized assistant of a United States Attorney * * *.'
Manifestly, the second sentence of Rule 6(e) is not directly involved here, since there has been no application to the Court in connection with the Government's use of grand jury materials.
The gist of defendants' contention, as we understand it, is that the first sentence, declaring the right of attorneys for the Government to have disclosure of the grand jury transcript 'for use in the performance of their duties,' refers only to their duties in an 'enforcement proceeding,' to wit, a criminal prosecution or a civil equity action under section 4 of the Sherman Act, 15 U.S.C.A. § 4. This seems to us an unduly narrow construction of the Rule.
Passing the question whether a civil damage suit by the Government is not itself a form of enforcement action, -- as to which, see United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S. Ct. 379, 87 L. Ed. 443 (1943) -- the duties of Government attorneys are by no means limited to enforcement proceedings. The attorneys for the Government in these actions are authorized by statute to conduct 'any kind of legal proceeding, civil or criminal,' in which the United States is a party in interest. 5 U.S.C.A. § 310. On principle, it would seem that the United States is no less interested in recouping losses suffered from violations of its laws than in the enforcement of the same laws.
Moreover, we are not persuaded that defendants' construction of Rule 6(e) is required, as defendants assert, by the context 'in which it appears, namely, as part of the criminal rule relating to a body convened for the sole purpose of investigating possible violations of criminal statutes.' Courts, on more than one occasion, have construed the first part of the second sentence of the Rule as applying to civil damage suits. In Herman Schwabe, Inc. v. United Shoe Machinery Corp., 194 F.Supp. 763 (D.Mass.1958), a private treble damage action under the antitrust laws, defendant was granted access to plaintiff's testimony before a grand jury investigating the defendant. Similarly, in a recent case in this District, Judge Lord -- 'solely on the strength of the particular and peculiar situation here presented' -- allowed the defendant in a private civil action to inspect the transcript of the grand jury testimony of one of the plaintiffs. In the Matter of Special 1952 Grand Jury, 22 F.R.D. 102 (E.D.Pa.1958). To the same effect, see United States v. Ben Grunstein & Sons Company, 137 F.Supp. 197 (D.N.J.1955), infra.
We believe that it would be illogical to construe the second sentence of Rule 6(e) to permit disclosure of grand jury matters in civil damage actions, but to interpret the first sentence of the same Rule to mean that disclosure of grand jury matters to Government attorneys is limited to use only in criminal or quasi-criminal proceedings.
Counsel have not cited and our own extensive research has failed to disclose a single case in which the precise question before us has been expressly raised or adjudicated. However, in at least two cases it has been assumed, without discussion of the point, that the Government was within its rights in using grand jury materials in a civil damage suit based on the very matters which were before the grand jury. In United States v. General Motors Corp., 15 F.R.D. 486 (D.Del.1954), the Government sued for treble damages under the Elkins Act, 49 U.S.C.A. 41, contending that the defendant received from the Baltimore & Ohio Railroad an unlawful rebate against regular transportation charges. The rebate transaction had been presented to two Federal grand juries under the criminal provisions of the Elkins Act. In preparing for trial of the civil action, defendant filed a motion under F.R.Civ.P. 34, 28 U.S.C.A. for an order directing the United States to produce the transcripts of the grand jury hearings. In denying the motion, the Court stated (p. 488):
'I do not find in the present action for civil penalties any justification for ordering production for inspection and copying the transcripts of the Grand Jury's meetings. It is argued the Department of Justice will have the transcripts of the Grand Jury available and may use them, and such, it is suggested, will be a tactical advantage the discovery rules were designed to eliminate. But defendant, here, has other discovery techniques at its disposal through which most of the information sought and clues to other possible sources may be obtained.' (Emphasis supplied.)
United States v. Ben Grunstein & Sons Company, 137 F.Supp. 197 (D.N.J.1955), was a civil proceeding by the United States for damages under the False Claims Act. A grand jury investigation had resulted in the indictment and conviction, under the criminal provisions of the Act, of two of the defendants in the civil action. In granting limited disclosure of grand jury minutes on defendants' motions, the Court noted (p. 199):
'Defendants allege, as the necessary 'good cause' for such application, the fact that plaintiff has present access to these entire minutes, thus giving plaintiff a great tactical advantage over defendants, who lack same.' (Emphasis supplied.)
Defendants place special reliance on In re April 1956 Term Grand Jury, 239 F.2d 263 (7th Cir. 1956). While certain language of that opinion, viewed in isolation, seems to lend some support to defendants' position, the case must be read in the light of the particular situation there presented. Indeed, that part of the opinion quoted on page 18 of defendants' brief is preceded in the report by the caveat: 'Therefore, in the situation presented to us in the case at bar. * * *' In that case the uncontradicted facts were that the Treasury Department had, by various administrative subpoenas, endeavored to gain access to certain documents and records and, having failed in that effort, made no attempt to compel compliance with the administrative subpoenas, apparently abandoning all available civil procedures. Upon the recommendation of the Treasury Department, to which the Department of Justice acceded, the grand jury began an investigation into the income tax returns and alleged related matters of the persons in question. Resort was then had to grand jury subpoenas which brought before the grand jury the documents and records previously sought by administrative subpoena. This material, with the grand jury's assent, was then turned over to Treasury agents who examined it for the purported purpose of assisting the grand jury, which had, meanwhile, temporarily recessed. Under these facts the Court said, (239 F.2d p. 272):
'While we hold that the district court cannot properly interfere with the action of the grand jury in turning over to third persons, including treasury agents, voluminous records and accounts for the sole purpose of examination and report to the grand jury, as an assistance to it, we also hold that persons, nonmembers of the grand jury, thus having access to said records and documents, have no right to use them for any purpose whatsoever except to assist the grand jury in its work. Such persons may not in any manner use these records and documents, or any information acquired therefrom, for any other purpose, and specifically for any civil purpose, such as tax collection or otherwise.'
No construction of the first sentence of F.R.Cr.P. 6(e) was involved, since the disclosure complained of was to Treasury agents, not Government attorneys. So far as is here material, the Court's ruling really condemned the perversion of grand jury proceedings to procure for use in a civil case evidence which had been otherwise unobtainable.
Defendants also place great stress on a passage in the opinion in In re Petroleum Industry Investigation, 152 F.Supp. 646, (E.D.Va.1957), in which the Court refused to limit the United States' use of documents subpoenaed for the grand jury to 'this proceeding only.' Pointing out that the use of such documents by Government counsel in other proceedings would be proper and even mandatory in light of their duty to enforce the law, the Court continued (p. 647):
'Akin is the anticipated use by the Government of the documents, or the knowledge derived from them, in a civil action should the grand jury not indict. A civil suit predicated on antitrust or similar legislation, when brought by the Government, is in fact and in law a prosecution. Its aim is not compensation but correction. The obligation of the Justice Department to invoke civil remedies in an appropriate situation is just as bounden as its duty to institute requisite criminal proceedings. Consequently, if books and papers coming to the knowledge of the Government's attorneys in a grand jury investigation develop a demand, and an adequacy of proof, for resort to civil litigation in the public interest, it is certainly proper, indeed incumbent upon them, to use for that purpose the information in their hands. This is nonetheless true though no process available in a civil action has the competency to discover this data before hand.' (Emphasis supplied.)
Defendants would have us interpret the emphasized language to mean that the Government's use of such materials is limited to corrective rather than compensatory actions, and that their use in a civil damage action would therefore be improper. We do not so understand it. That precise question was not before the Court. Moreover, the Court's later expression 'develop a demand, and an adequacy of proof, for resort to civil litigation in the public interest' could apply with equal force to civil actions for damages and for injunction.
Finally, defendants rely on some of the language in United States v. Procter & Gamble Company, 180 F.Supp. 195, at pp. 203-204, (D.N.J.1959) the antecedent appellate history of which need not be related here. Before the Court was defendants' motion which sought, inter alia, to prevent, in the Government's civil injunction action, its use of the transcript of the proceedings before the grand jury and 'any leads therefrom which the Government may have obtained.' The motion was denied by the Court which cited United States v. Wallace & Tierman Co., 336 U.S. 793, 69 S. Ct. 824, 93 L. Ed. 1042 (1949), and United States v. Procter & Gamble Co., 356 U.S. 677, 684, 78 S. Ct. 983, 2 L. Ed. 2d 1077 (1957), and held that F.R.Cr.P. 6(e) does not limit to use only in 'criminal proceedings' the grand jury material disclosed to Government attorneys.
This argument overlooks the plain language of 15 U.S.C.A. § 15a which provides that the United States may sue and recover actual damages whenever it has been injured in its business or property 'by reason of anything forbidden in the antitrust laws.' If disclosure to Government attorneys is permissible for use in prosecutions upon indictments for violations of the penal provisions of the Sherman Act, and in civil proceedings for injunctive relief against like violations, it would appear contrary to reason to hold that such disclosure is forbidden for use in the Government's actions for damages, when, as in these cases, the Government's damage suits allege as their bases the very violations of penal provisions of the Sherman Act for which the Government prosecuted the defendants by indictment and, as well, brought actions for injunction.
We are persuaded that F.R.Cr.P. 6(e), reasonably construed, authorizes the use by the Government attorneys of the grand jury material in these actions for damages. It may be as the Government contends, that the language of the Rule is too clear to require construction. In any event, any question of the meaning of the provision must be resolved by reference to the time-honored policy of grand jury secrecy and the philosophy behind it. All roads of inquiry seem to lead back to United States v. Amazon Industrial Chemical Corporation, 55 F.2d 254, 261 (D.Md.1931):
'The reasons which lie behind the requirement of secrecy may be summarized as follows: (1) To prevent the escape of those whose indictment may be contemplated; (2) to insure the utmost freedom to the grand jury in its deliberations, and to prevent persons subject to indictment or their friends from importuning the grand jurors; (3) to prevent subornation of perjury or tampering with the witnesses who may testify before the grand jury and later appear at the trial of those indicted by it; (4) to encourage free and untrammeled disclosures by persons who have information with respect to the commission of crimes; (5) to protect the innocent accused who is exonerated from disclosure of the fact that he has been under investigation, and from the expense of standing trial where there was no probability of guilt.'
We think none of these reasons and none advanced by defendants dictates that the grand jury materials should be kept secret from the Government's attorneys in these cases. Defendants have favored us with able, comprehensive and extensive arguments, but have failed to convince us that denial of these materials to the attorneys for the Government would serve any of the purposes justifying secrecy.
The attorneys for Tennessee Valley Authority obviously do not fall within the purview of the first sentence of F.R.Cr.P. 6(e), and may not avail themselves of these grand jury materials.
We conclude, therefore, that defendants' motion to impound, etc., must be denied with respect to the United States of America, and granted as to Tennessee Valley Authority.
We turn now to consideration of the second motion. In Count 1 of each of the complaints in which it appears as co-plaintiff, Tennessee Valley Authority (TVA) claims treble damages, costs of suit and attorney's fees, under § 4 of the Clayton Act, 15 U.S.C.A. 15. Defendants in those actions have moved for partial summary judgment on Count 1 of each complaint, on the ground that TVA is not a person entitled to sue within the meaning of 4.
'Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee.'
Section 1 of the Clayton Act, 15 U.S.C.A. § 12, defines 'person' to include, inter alia, 'corporations and associations existing under or authorized by the laws of * * * the United States * * *.'
In the landmark case of United States v. Cooper Corp., 312 U.S. 600, 61 S. Ct. 742, 85 L. Ed. 1071 (1941), it was held that the term 'person,' as used in § 7 of the Sherman Act, did not include the United States. (The definition of 'person' in § 8 of the Sherman Act was identical with that in § 1 of the Clayton Act.) In that case, the Court laid down the guidelines ...