The opinion of the court was delivered by: HIGGINBOTHAM
The instant matter is before this Court on a motion by the defendants to compel answers to interrogatories propounded by them to the plaintiff, the United States of America.
This is a civil antitrust suit which was commenced on December 24, 1964.
The suit arose as a result of an extended investigation by the Department of Justice of the defendant corporations and others, relative to the sale and distribution of chlorine, soda ash and caustic soda. That investigation began some four and a half years ago, and during that period two grand juries were impanelled.
Neither grand jury returned an indictment against any of the defendants.
The defendants are charged with unlawfully conspiring to eliminate price competition in the sale of chlor-alkali products in violation of section one of the Sherman Act.
The defendants wish to discover by the interrogatories, to which the government objects, whether the grand juries were impanelled, not for the purpose of prosecuting them criminally, but rather for the sole purpose of preparing for a civil suit. Alternatively, they wish to discover whether the grand jury investigation was continued after a decision was made not to proceed with a criminal action.
This issue is a crucial one, for the United States Supreme Court has ruled that where a grand jury has been utilized as a means of procuring information with the sole purpose of preparing a civil action against those being investigated, the individuals concerned are entitled to the discovery of some, or all, of the records of those proceedings. In United States v. Procter and Gamble Co., 356 U.S. 677, 78 S. Ct. 983, 2 L. Ed. 2d 1077 (1958), the Court said:
If the prosecution were using that device [the use of a grand jury to uncover evidence to be used in a civil suit where no criminal prosecution is intended], it would be flouting the policy of the law.
In essence, the defendants argue that since the grand juries failed to return an indictment against them, they are entitled to ascertain whether the Government obtained information in violation of the doctrine of Procter, supra. They contend that the only means available to them by which this fact can be established, is by propounding interrogatories to the government under Rule 33 of the Federal Rules of Civil Procedure. They argue that under Rule 33 they are entitled to have these interrogatories answered as a matter of right. In short, they deny that they must make any showing of "good cause" as the government contends.
If the defendants can establish any subversion of the grand jury, they intend, at the very least, to seek discovery of all or part of the transcripts of the grand jury proceedings. At oral argument, counsel for the defendants made it clear that, in addition to the transcripts, they would seek to have this Court rule that:
Thus it is clear that much is at stake, and that any decision made by this Court will have serious implications for the conduct of discovery in cases such as this where a grand jury has been impanelled fails to return an indictment, and a civil suit is subsequently brought against the parties investigated.
After carefully examining the numerous authorities cited by the parties, I have concluded that neither the government nor the defendants are entitled to a total endorsement of the positions they assert. That is, I find that the plaintiff cannot be sustained in its assertion that it need not answer any interrogatories, and similarly, the defendants cannot receive sanction for the wholesale probe which they seek through the interrogatories in issue. Rather, I hold that certain interrogatories must be answered on the public record, and that documentation of these answers must be submitted to this Court alone, in camera.
If, upon receipt of the documents, the Court concludes that they support the answers noted on the public record, they will be returned to the government without inspection by the defendants. Should I conclude that these documents must be turned over to the defendants, the government will receive prior notice of my intention. Thus it will have an opportunity to decide whether it will test separately such a ruling.
The Relevance of the Procter & Gamble and Carter Decisions.
The defendants rely on the decisions in Procter, both in the Supreme Court and in the District Court on remand, and also on the ruling in United States v. Carter Products, Inc., 27 F.R.D. 243 (S.D.N.Y. 1961). They argue that those cases support the relief which they seek in the instant matter. Thus, I cannot proceed to a disposition of this case without an analysis of the factors which contributed to the holding in those cases.
The Procter case came before the Supreme Court in a different posture than that in which the matter before us now rests. There the District Court had dismissed the government's suit for failing to provide the defendants with a grand jury transcript. The reasons for the trial court's action in granting discovery were stated by the Supreme Court at pages 678-79 of its opinion:
. . . The District Court granted the motion, ruling that appellees had shown 'good cause ' as required by Rule 34. It rested on the ground that the Government was using the transcript in preparation for trial, that it would be useful to appellees in their preparation, that only in this way could appellees get the information. These reasons, the court held, outweighed the reasons behind the policy for maintaining secrecy of the grand jury proceedings.
We cannot condemn the Government for any such practice in this case. There is no finding that the grand jury proceeding was used as a shortcut to goals otherwise barred or more difficult to reach. It is true that no indictment was returned in the present case. But that is no reflection on the integrity of the prosecution. For all we know, the trails that looked fresh at the start faded along the way. What seemed at the beginning to be a case with a criminal cast apparently took on a different character as the events and transactions were disclosed. The fact that a criminal case failed does not mean that the evidence could not be used in a civil case. It is only when the criminal procedure is subverted that "good cause" for wholesale discovery and production of a grand jury transcript would be warranted. No such showing was made here.
It is crucial at this juncture to make clear what issues were actually resolved by the Supreme Court in Procter. The Court decided that (1) the mere fact that the government had used a grand jury transcript to prepare for a civil antitrust suit was not sufficient grounds for its production, even though the use of that transcript would circumvent the delay and expense involved in discovery, and (2) that only when the grand jury processes had been "subverted" by the use of this device to obtain evidence solely for a civil suit, was the "wholesale discovery" and "production" of that transcript warranted. As to this type of proceeding, the Court did not determine then, and has not subsequently enunciated the rules governing, and the circumstances under which defendants will be allowed to delve into government files in order to lay the foundation for discovery of grand jury records. Thus we have at stake not only the crucial issue of the reasons behind the traditional secrecy of grand jury proceedings and matters relating thereto, but also important questions of policy as to the separate responsibility of the judicial and executive branches, and even more crucial the integrity of the executive decision making process. These questions were left unresolved by the Supreme Court in Procter and greatly ...