The opinion of the court was delivered by: HANNUM
On February 28, 1980, the Grand Jury handed down an indictment charging five (5) corporations and eight (8) individuals
with a combination and conspiracy to raise, fix, maintain and stabilize the prices and terms and conditions of sale of glassine and greaseproof paper. The indictment charges that the conspiracy and combination began at least as early as January, 1973 and continued until at least August, 1976. In the prosecution of this case, numerous pre-trial motions have been filed both by the Government and the defendants, jointly and individually. The following discussion and resolution will pertain to these aforementioned motions.
I. Motion To Dismiss Indictment.
A. Immunity. The defendant Hollis P. Fowler contends that he is entitled to a dismissal of the indictment because it was obtained directly or derivatively from information he provided to the government while he was under an informal grant of immunity.
The defendant asserts that an indictment presented on the basis of evidence obtained through a grant of immunity is tainted and must be dismissed. Of course, if the defendant can establish the validity of his allegations, he will be entitled to the relief requested. See, e.g., United States v. Paiva, 294 F. Supp. 742 (D.D.C.1969).
In support of his contention that an agreement had been reached, the defendant has proffered a letter written on February 22, 1979, by Norma B. Carter, Esquire, an Assistant United States Attorney associated with the Department of Justice, Antitrust Division, Middle Atlantic Office, and which was addressed to the defendant. The letter apparently was a memorialization of a previous phone call and reads as follows:
This is to confirm our appointment for February 28 at 12 o'clock. As we discussed, based upon your representation of your medical history and your offer of cooperation with the Government, the Antitrust Division does not intend to prosecute you for any violation of the antitrust laws based on information or testimony you may give in connection with this matter.
If you have any questions, please call me collect at (215) 597-7413.
(Emphasis added). The government contends that this letter in no way constituted an informal grant of immunity (or an agreement not to prosecute) but rather was merely an invitation for a proffer. According to the government, "Fowler was never told, either on the telephone, by letter, or during the interview, that he would never be subject to prosecution." Government's Memorandum In Opposition To Motion Of Hollis P. Fowler To Dismiss The Indictment, Docket Entry No. 6 at p. 7. For the reasons that follow, the Court finds the government's position unpersuasive and concludes that some type of bargain had been struck.
A review of the language contained in the letter reveals that some type of bargain had been reached by the government and the defendant. In essence, the government promised that it would not prosecute the defendant for violations of the antitrust laws so long as the defendant fulfilled its promise of cooperation. Preliminarily, however, the Court does note that the language of the letter suggests an agreement not to prosecute rather than a blind grant of informal immunity.
The language contained in the letter existing in the present case bears a marked similarity to the letter subject to controversy in the case of United States v. Quatermain, 467 F. Supp. 782 (E.D.Pa.1979), rev'd on other grounds, 613 F.2d 38 (3d Cir. 1980). The letter in Quatermain was set forth as follows:
The Government represents that it has contacted the appropriate officials of the Pennsylvania Department of Parole and has received approval for your assistance in this investigation.
United States v. Quatermain, supra at 38. (Emphasis added). Although the district court concluded that an informal grant of immunity was provided, without considering the possibility of it being merely an agreement not to prosecute,
opinions differed in the United States Court of Appeals for the Third Circuit as evidenced, primarily, by Judge Aldisert's dissent. Regardless, for purposes of deciding what is immediately before the Court, Quatermain lends support in a near conclusory fashion that a bargain indeed had been struck. See also United States v. Pellon, 475 F. Supp. 467 (S.D.N.Y.1979).
Whether the pertinent letter memorialized an informal grant of immunity or an agreement not to prosecute, it is axiomatic that either are enforceable. See, e.g., United States v. DeSena, 490 F.2d 692, 694 (2d Cir. 1973); United States v. Levy, 153 F.2d 995, 997 (3d Cir. 1946); United States v. Paiva, supra. "Ordinarily immunity in the federal system may be granted only with the approval of the court pursuant to express statutory authorization." United States v. Carter, 454 F.2d 426, 427 (4th Cir. 1972). Falling short of such formal grants, however, grants or agreements not authorized by statute have been upheld and enforced. See generally Working Papers of the National Commission on Reform of Federal Criminal Laws, Vol. II, 1419-20 (1970).
In light of the Court's decision that indeed a bargain had been struck between the government and the defendant Hollis P. Fowler, the inquiry turns to the manner and method of considering the defendant's allegations and, if proven, their effects. As earlier noted, a characterization whether the bargain constitutes a grant of immunity or an agreement not to prosecute dictates the nature of the procedure eventually utilized. If the bargain is determined to constitute a grant of immunity, the procedure adopted to test the defendant's allegations will be of a nature prescribed in Kastigar v. United States, 406 U.S. 441, 92 S. Ct. 1653, 32 L. Ed. 2d 212 (1972) wherein the government bears the burden of establishing that information supportive of the indictment was derived from a source or sources independent of the defendant. If the bargain is determined to constitute merely an agreement not to prosecute, a procedural device similar to a Kastigar hearing may be utilized wherein the government bears the burden of establishing that the defendant has breached the agreement.
Notwithstanding this cursory dissertation, the Court deems it desirable and, in fact, necessary to defer characterization of the pact, and the conduct of a hearing concomittantly required, until a time post trial.
In short, the Court is of the opinion, and so rules, that the conduct of a Kastigar or other type hearing going to the matters described above should be deferred until the completion of trial. This ruling is made notwithstanding the suggestion made in Kastigar that such matters should be considered on a pretrial basis.
A person accorded this immunity under 18 U.S.C. § 6002, and subsequently prosecuted, is not dependent for the preservation of his rights upon the integrity and good faith in the prosecuting authorities. As stated in Murphy :
"Once a defendant demonstrates that he has testified, under a state grant of immunity, to matters related to the federal prosecution, the federal authorities have the burden of showing that their evidence is not tainted by establishing that they had an independent, legitimate source for the disputed evidence." 378 U.S., at 79 n. 18, 84 S. Ct., at 1609. This burden of proof, which we reaffirm as appropriate, is not limited to a negation of taint; rather, it imposes on the prosecution the affirmative duty to prove that the evidence it proposes to use is derived from a legitimate source wholly independent of the compelled testimony.
Kastigar v. United States, supra at 461, 92 S. Ct. at 1665. (Emphasis added). See also United States v. McDaniel, 482 F.2d 305, 311 (8th Cir. 1973). Since the advent of Kastigar, courts have considered it a matter of discretion whether to resolve issues as presented in the instant case at a pretrial hearing, during trial or at a post trial hearing. See United States v. DeDiego, 167 U.S. App D.C. 252 511 F.2d 818, 823-24 (D.C.Cir.1975). Elements guiding the Court's discretionary determination at which stage the hearing should be held are whether the government will have to expose its entire case, whether a fragmentation of the trial will occur, whether a delay in trial will be required and whether and to what degree prejudice will accrue. See, e.g., United States v. Jones, 542 F.2d 186 (4th Cir. 1976); United States v. First Western State Bank of Minot, North Dakota, 491 F.2d 780 (8th Cir. 1974).
In the present case, the Court finds that the conduct of a Kastigar or other type hearing will cause virtually the complete exposure of the government's case. Moreover, and as a result, the trial process will become extremely fragmented. The Court is mindful of the considerable amount of time and money that the defendant will expend in his defense but views the government's prejudice resultant from exposure of its case and fragmentation of the process as at the minimum, countervailing. Accordingly, the hearing to determine the characterization of the agreement and the merits of the defendant's contentions will be delayed pending the completion of trial. The parties are cautioned that no other ruling is provided by the foregoing as respects this issue and that opportunities for additional memoranda and argument as well as a hearing will be provided at the appropriate time.
B. Exculpatory Evidence. The defendant Hollis P. Fowler has asserted that the government's failure to present evidence which it knew to be exculpatory also constitutes a ground for dismissal of the indictment. The evidence originally referred to would have been in the form of testimony provided by the defendant, himself, and a former employee of the defendant Westfield River Paper Company and associate of the defendant, Dudley Ross. The defendant Westfield River Paper Company joined in this motion on May 8, 1980. Essentially, the defendant Westfield River Paper Company contends that since the defendant Hollis P. Fowler was its past president and chief executive officer during the pertinent times and the only one through whom it allegedly engaged in the activities charged in the indictment, a dismissal of the defendant Hollis P. Fowler mandates its dismissal as well. On July 30, 1980, the Memorandum Of Defendant Westfield River Paper Company, Inc., In Reply To The Government's Memorandum In Opposition To Motion To Dismiss, Docket Entry No. 7, was filed and in which arose an additional issue concerning the government's alleged failure to present exculpatory evidence to the Grand Jury. This additional issue concerns the government's allegedly selective interrogation before the Grand Jury of the defendant Robert R. Ackley, who has since entered a plea of nolo contendere.
The remaining defendants joined in the defendant Hollis P. Fowler's motion on the limited basis of this issue on August 27, 1980. See Docket Entry No. 40.
The issue now before the Court is thus postured simply as whether and to what extent the government in its presentation to the Grand Jury was required to present exculpatory information, if such information existed. The inquiries pertaining to the particular testimony which is allegedly exculpatory and which the government failed to either present or elicit may be dealt with collectively and summarily.
As a general proposition by which the Court is guided, case law dictates that a prosecutor is not obligated to submit exculpatory evidence to a Grand Jury. See, e.g., United States v. Y. Hata & Co., Ltd., 535 F.2d 508, 512 (9th Cir.), cert. denied, 429 U.S. 828, 97 S. Ct. 87, 50 L. Ed. 2d 92 (1976); United States v. Ruyle, 524 F.2d 1133, 1135-36 (6th Cir. 1975), cert. denied, 425 U.S. 934, 96 S. Ct. 1664, 48 L. Ed. 2d 175 (1976).
This rule reflects the philosophy that to convert a grand jury proceeding from an investigative one into a mini-trial of the merits would be unnecessarily burdensome and wasteful, since, even if an indictment should be filed, the defendant could be found guilty only after a guilty plea or criminal jury trial in which guilt was established beyond a reasonable doubt.
United States v. Ciambrone, 601 F.2d 616, 622 (2nd Cir. 1979). It is recognized, however,
that where a prosecutor is aware of any substantial evidence negating guilt he should, in the interest of justice, make it known to the grand jury, at least where it might reasonably be expected to lead the jury not to indict.
Initially, the Court notes that the defendant Hollis P. Fowler's representations are essentially that none of his statements were inculpatory but merely provided the government with general information of the glassine paper industry. The defendant also apparently offered statements negating any participation on his part in the alleged conspiracy in restraint of trade. Moreover, it is noted that the defendants represent that had Dudley Ross and Robert R. Ackley been permitted to testify at all or in full, respectively, that exculpatory information would have forthcome for consideration by the Grand Jury. The defendants contend by reference to these witnesses that had their testimony been presented to the Grand Jury a version opposite to that presented by the government may have been considered and may have precluded a return of an indictment.
"An indictment is not defective because the defendant did not have an opportunity to present his version of the facts before the grand jury." United States v. Ciambrone, supra at 623. While the articulation of the general rule as set forth above has been more often presented in a context where a defendant has not been permitted to appear before a grand jury, see e.g., United States v. Salsedo, 607 F.2d 318 (9th Cir. 1979), the philosophy and intent of the rule itself is equally appropriate in cases such as exists here. See generally United States v. Kennedy, 564 F.2d 1329 (9th Cir. 1977); United States v. Y. Hata & Co., Ltd., supra; United States v. Addonizio, 313 F. Supp. 486 (D.N.J.1970), aff'd, 451 F.2d 49 (3d Cir. 1971). Essentially, the grand jury tool is used to ascertain whether probable cause exists to believe that a crime has been committed and is not an adversary proceeding in which guilt or innocence is adjudged. United States v. Calandra, 414 U.S. 338, 94 S. Ct. 613, 38 L. Ed. 2d 561 (1974). There exists "no right of cross-examination or of introducing evidence to rebut a prosecutor's presentation." United States v. Y. Hata & Co., Ltd., supra at 512.
The nature of the proposed testimony viewed in accordance with the defendants' representations, if offered, would amount to a rebuttal of the government's case. This testimony, in most instances, would merely present issues of credibility which could not reasonably be expected to lead the Grand Jury to a conclusion not to indict. United States v. Ciambrone, supra. To require the submission of this testimony would amount to a preliminary or miniature trial before the Grand Jury. Moreover, acceptance of what the defendants propose would require the government to accomplish for the defendants indirectly what the defendants would have been specifically proscribed from doing directly. This would surely infringe upon the role of the prosecutor and the utility of the grand jury device as well as contravene the role provided the grand jury in our constitutional scheme.
See generally Costello v. United States, 350 U.S. 359, 363, 76 S. Ct. 406, 408-409, 100 L. Ed. 397 (1956).
While the government's argument that the law imposes no duty upon it to present evidence favorable to the accused to the Grand Jury is absolutely accurate, an indictment may nevertheless be dismissed "in a flagrant case, and perhaps only where knowing perjury, relating to a material matter, has been presented to a grand jury ...." United States v. Lasky, 600 F.2d 765, 768 (9th Cir. 1979), citing Costello v. United States, supra. See also United States v. Thompson, 576 F.2d 784 (9th Cir. 1978).
A determination of what may constitute a "flagrant case" in which a grand jury has been overreached or deceived in some particular way has been expanded by some courts to include indiscretions such as occurred in United States v. Roberts, 481 F. Supp. 1385, 1389 (C.D.Cal.1980):
(1) the prosecutor's failure to abide by her promise to Judge Pregerson on September 27, 1979 that she would present to the Grand Jury all exculpatory evidence made available to her; (2) the failure to present to the Grand Jury the affidavit of Bert Cohen which tended to corroborate the version given by defendant Schneider in his testimony before both the Kadashaw and Churchwell Grand Juries; (3) the "gratuitous" irrelevant remarks of the prosecutor in attempting to discredit and slant the testimony of Schneider's exculpatory witness Roland Pagan; and (4) the failure to provide the polygraph evidence to the Grand Jury despite the prosecutor's guarantee to Judge Pregerson that all exculpatory evidence would be presented to the Grand Jury, and compounding this indiscretion by erroneously but unequivocally telling the Grand Jury that the polygraph evidence was inadmissible.
In United States v. Gold, 470 F. Supp. 1336 (N.D.Ill.1979), an indictment was dismissed because the prosecutor labored under a conflict of interest, the prosecutor testified before the Grand Jury as the government's chief witness, adverse and incriminatory inferences were made by prosecutors in response to certain elicited testimony of various witnesses and, finally, the prosecutors selectively questioned witnesses in order to keep exculpatory information from the Grand Jury. Finally, for purposes of this case although the list is by no means exhausted, an indictment was dismissed in United States v. Phillips Petroleum Co., 435 F. Supp. 610 (N.D.Okl.1977) for reasons that there were unauthorized persons present during grand jury proceedings, questioning of a witness continued after the grand jury had recessed for the day, presentation of exculpatory testimony from the same witness improperly questioned was not accomplished and the prosecution failed to present other exculpatory information. The Court's inquiry now is to evaluate the substance of the alleged transgression(s) of the government prosecutors and ascertain whether they or it could constitute a "flagrant case" warranting a dismissal of the indictment.
The Court finds that the defendants' contentions are unpersuasive. United States v. Gold, supra and United States v. Phillips Petroleum Co., supra involve a cumulation of established indiscretions attributable to the government prosecutors and thus these cases are distinguishable from the present case. Moreover, the effect of the indiscretions in the cited cases was of an established, substantial nature. The Court is unwilling to afford such stature to the allegedly selectively controlled and withheld testimony of the defendant Robert R. Ackley. In the absence of additional substantial transgressions, the Court rules that the alleged selective interrogation of the defendant Robert R. Ackley, even if proven or asserted as well-founded, does not arise to the proportions requiring dismissal of the indictment.
Cf. United States v. Lasky, supra (the dismissal of an administrative complaint by an administrative law judge, although constituting evidence negating guilt, need not be presented to a grand jury). In essence, selective interrogation of a grand jury witness, as it may have existed in the present case, may not warrant a "flagrant case" characterization requiring the dismissal of an indictment.
II. Motions For Bills Of Particulars.
(1) State the date, place and time of any gathering of two (2) or more persons at which there were any acts committed in the furtherance of the conspiracy which has been alleged in the Indictment. With respect to each such gathering, identify:
(a) All persons who were present;
(b) What was the nature of the ...