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UNITED STATES v. P&G

June 11, 1959

UNITED STATES of America, Plaintiff,
v.
PROCTER & GAMBLE COMPANY et al., Defendants



The opinion of the court was delivered by: HARTSHORNE

The various defendants herein have filed a series of motions and interrogatory proceedings directed to the use, or prohibition against the use, by all parties, of the transcript of the Grand Jury proceedings herein. The defendants claim reliance upon the principles, some of them of novel import, recently enunciated by our highest court in this very case, United States v. Procter & Gamble Co., 1958, 356 U.S. 677, 78 S. Ct. 983, 2 L. Ed. 2d 1077. It should be noted that these Grand Jury proceedings, in which the testimony of some thirty persons was taken over the course of many months, all terminated more than six years ago, on November 25, 1952, without an indictment, and but a short time before the complaint in this civil antitrust suit was filed by the Government on December 11, 1952.

The first of such defense motions to be filed asks this Court to impound from all concerned not only this entire Grand Jury transcript now in the hands of the Government, but all data obtained by the Government therefrom. If this motion were granted, then, barring later application to this Court on cause shown, the Government might be compelled to divest itself of all data and knowledge obtained in its lengthy discovery proceedings herein during the past six years, including literally hundreds of thousands of defendants' documents, if indeed the complaint itself could still stand, since all are doubtless based on the information obtained through the Grand Jury proceedings. The second defense motion is one asking this Court to make available to the defendants certain testimony before the Grand Jury, or special cause shown, including the testimony, on the one hand, of a deceased witness, and, on the other hand, of an important Government Defense official. The third of such proceedings is in the form of a long series of interrogatories which the defendants ask the Government to answer, in order to ascertain with respect to such Grand Jury proceedings whether and, if so, when, the Government decided to pursue only civil antitrust proceedings against the present defendants. This determination apparently occurred at some time, since the present civil complaint was filed, shortly after the Grand Jury proceedings terminated, but no indictment was ever sought from the Grand Jury, United States v. Procter & Gamble Co., supra, 356 U.S. at page 687, note 2, 78 S. Ct. at page 989. The defendants' theory here is that, if any Grand Jury proceedings were taken subsequent to the Government's determination not to seek an indictment, such subsequent proceedings were a subversion of such Grand Jury proceedings, under the above decision of the Supreme Court, which would entitle the defendants to receive the transcript of the Grand Jury proceedings, to that extent. The final motion by the defendants, upon the basis of similar interrogatories, and assuming that such a subversion as the above has occurred, asks that the transcript of such Grand Jury proceedings and all data obtained therefrom by the Government, apparently including the complaint itself, be suppressed from any use by the Government.

 To consider this final motion now would be premature, since such motion is sought only if it has been previously established that there has been a subversion of the Grand Jury process, as stated in Procter & Gamble, by the use of the Grand Jury process solely for civil purposes. Moreover, the first of such motions -- that to impound the Grand Jury transcript from all parties -- is one as to which the Supreme Court itself, as differentiated from a distinguished member of the Court, has not yet laid down the controlling principle. Since the second of the above motions concerns only a relatively small portion of the Grand Jury transcript, while the third proceeding -- that on the defense interrogatories -- covers not only this portion, but the entire Grand Jury proceedings, in which all parties are actually interested, including this important question as to a possible subversion of the Grand Jury process, this Court will deal now with this third motion.

 The issue between the parties on this motion falls within small compass. The Government admitted, both in its brief and on the argument, that if, at the outset of the Grand Jury investigation, the Government intended to bring a civil case only, then under Procter & Gamble there would have been such an abuse of the Grand Jury process that wholesale discovery of the Grand Jury transcript to the defendants would be warranted. The parties are at issue only on the point as to whether the same result follows, if the Government's determination to proceed with a civil case only is made, not before the Grand Jury is summoned, but thereafter, during the course of its proceedings, and thus might constitute a subversion of so much of the Grand Jury proceedings as occurs after the Government has determined not to proceed criminally at all.

 As the Government well says, the decision of the United States Supreme Court in Procter & Gamble, supra, 'is not only the law of the land; it is the law of this case.' Accordingly, we turn to the statement of our highest court as to the law of the land and of this case in the above regard.

 In Procter & Gamble, supra, in referring to the opinion of another branch of this Court, which it reverses, out highest court says:

 'It (the lower court) also seemed to have been influenced by the fact that the prosecution was using criminal procedures to elicit evidence in a civil case. If the prosecution were using that device, it would be flouting the policy of the law. * * *

 '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 short cut 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 obtained 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.' 356 U.S. at pages 683-684, 78 S. Ct. at page 987.

 Clearly, our highest court has thus held that to use 'criminal procedures to elicit evidence in a civil case * * * would be flouting the policy of the law' and that, under such circumstances, 'when the criminal procedure is subverted that 'good cause' for wholesale discovery and production of a grand jury transcript would be warranted.'

 The sole reason for bringing this motion at this time is because our highest court, in the absence of evidence such as is sought by the present interrogatories, was compelled to say that at the time the case was laid before it 'there is no finding that the grand jury proceeding was used as a short cut to goals otherwise barred or more difficult to reach.' Of course, as the Court says, where 'the trails that looked fresh at the start' for a criminal prosecution 'faded along the way,' so that '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,' even so, that does not mean that the evidence obtained could not be used 'in a civil case,' if, when that evidence was obtained, it had not already been decided to abandon the criminal proceedings. If such criminal proceedings were still in contemplation, the criminal procedure by the Grand Jury was being properly used, and there was no subversion. If, on the contrary, for instance, before the last witness had testified before the Grand Jury, the Government had determined authoritatively not to proceed by indictment, then as to that last witness, the law ha been flouted, and since the Grand Jury process had been subverted, the testimony of that witness should be discovered and produced to the other side.

 Furthermore, if the Government's argument were correct, that the existence at the inception of the Grand Jury proceeding of an intent to seek an indictment rendered these entire proceedings valid, despite the fact that almost immediately thereafter the Government abandoned any such criminal proceedings, it is easy to see to what abuses it would give rise. Indeed, the situation then would approach that in the recent past when, before the above decision in Procter & Gamble, the Government admittedly used Grand Jury proceedings freely, at its discretion, for civil purposes only. *fn1"

 The Government, in answer to the above, argues that the mere decision by the Government to pursue a civil remedy only does not finally prevent the Grand Jury proceedings from being used for indictment purposes, since the Grand Jury itself might decide to seek an indictment, despite such decision of the Government, i.e., to become a 'runaway' Grand Jury. Of course, if any such unusual situation as this did occur, then, upon its proof, the Grand Jury would continue to be one pursuing a criminal investigation, and there would be no subversion. But, in the absence of such proof, it would follow that the determination of the Government not to obtain an indictment would be controlling and decisive, particularly in an antitrust case, the complexity of which virtually requires the careful, long-continued control of the Grand Jury proceedings by the Government itself, in order to make out a case.

 Nor is the Government correct in its argument that the dissenting opinion in Procter & Gamble, 356 U.S. at page 689, 78 S. Ct. at page 990, indicates that Procter & Gamble holds that the only subversion of the Grand Jury process occurs when the Grand Jury investigation had been 'instituted solely in aid of a civil suit.' In the first place, the majority opinion is not so limited. Indeed, the language of the Court that 'For all we know, the trails that looked fresh at the start faded along the way,' 356 U.S. at page 684, 78 S. Ct. at page 987, would seem to infer the contrary possibility. In addition, the basis of the dissent is that it is 'unable to see why the case where a grand jury investigation has aborted, and the Government thereafter uses the transcript solely in aid of its civil case should be treated differently' from the situation where the Grand Jury proceedings were from the beginning instituted solely in aid of a civil suit. This abortion, alluded to by the dissent, apparently connotes a proper conception -- of a Grand Jury proceeding in the first place, i.e., for the purpose of an indictment, either alone or conjoined with civil proceedings -- with the outcome of such proceedings thereafter unexpectedly showing that no such criminal proceedings will lie, i.e., an abortion. The refusal of the Court to hold that such a situation would not prevent the use of the Grand Jury transcript for civil purposes, in nowise indicates that the Court would permit the use, for civil purposes only, of evidence taken before the Grand Jury, after the Government had finally decided not to use the Grand Jury process for any criminally investigative purpose at all, but for civil purposes only. These situations are widely different. In the first, the Grand Jury procedure -- a criminal procedure -- is, in addition to a possible civil purpose, in fact used for an actual, intended, criminal purpose, and, as Procter & Gamble holds, is therefore lawful, and there has been no subversion. In the second, the testimony before the Grand Jury, after the finding of an ...


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