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UNITED STATES v. P&G

December 10, 1959

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



The opinion of the court was delivered by: HARTSHORNE

In seeking to implement the opinion of our highest Court in this very case, United States v. Procter & Gamble Co., 1957, 356 U.S. 677, 78 S. Ct. 983, 2 L. Ed. 2d 1077, this Court held, in its opinion filed herein on June 9, 1959, 174 F.Supp. 233, 235 (D.C.N.J.):

'The critical question thus is, when this case first became only 'a civil case.' From that time on, our highest court has said that using the Grand Jury to elicit evidence in the case * * * would require that nay advantage thus obtained improperly by the Government be wiped out, by giving the opposing party the use of so much of the Grand Jury transcript as was thus obtained by a criminal procedure in a purely civil case.'

 Following this defendants ascertained that while, according to the written instructions given those in charge of the Grand Jury proceedings herein, same were originally to be conducted both for criminal and civil purposes thereafter, as stated by this Court, 'on November 14, 1952, the then Attorney General decided not to ask for the return of an indictment by the Grand Jury, upon the basis of the evidence previously taken before that body, ' United States v. Proctor & Gamble Co., D.C.N.J., 175 F.Supp. 198, 199. Accordingly, defendants asked for, and have received, the transcript of the proceedings of the Grand Jury on and after that date until the termination of such proceedings on November 25, 1952.

 However, our highest Court, in its above decision, which reversed the order for complete discovery of the Grand Jury proceedings herein by another branch of this Court, held (1) that such discovery would lie only where the plaintiff Government had used the criminal process of a Grand Jury in a purely civil proceeding; (2) as to particular Grand Jury testimony, that 'a much more particularized, more discrete showing of need is necessary to establish 'good cause" for its discovery in order to overcome the 'indispensable secrecy of grand jury proceedings'; and (3) that the 'delay and substantial costs' caused defendants by taking depositions 'fall short of proof that without the transcript a defense would be greatly prejudiced or that without reference to it an injustice would be done.' Procter & Gamble, supra, 356 U.S. at page 682, 78 S. Ct. pages 986, 987.

 Thus, so far as defendants may desire any additional transcript of such Grand Jury proceedings, they must show additional particularized good cause. In certain aspects this has apparently been done. Defendants have moved to be shown the transcript of the testimony of one Reilly, a witness since deceased, whose testimony is therefore unavailable to them on deposition. Barring the fact that this witness has made available to defendants a really complete memorandum of all his Grand Jury testimony, which, if subject to question, must be decided impartially, his Grand Jury testimony should therefore be made available to the defendants who desire it, in order that they be placed on a substantial parity with plaintiff.

 Not content with the above aid obtained from this Court, defendants further move that (1) the entire Grand Jury transcript should be suppressed from use by plaintiff Government, not only per se, but as to any leads therefrom which the Government may have obtained; (2) all the testimony before the Grand Jury should be turned over to it; and (3) all such testimony should be impounded, including any leads which plaintiff Government might have obtained therefrom, permitting disclosure only on special cause shown.

 In deciding if any of this additional relief is to be granted to the defendants, the prime requisite is to determine, bearing in mind the normal secrecy of Grand Jury proceedings, what will do justice to both parties -- to the defendants, on the one hand, and, on the other, to the plaintiff Government, representing the public in carrying out the Congressional mandate of enforcing the antitrust acts. The fact is that over seven years ago a Grand jury sat for a year and a half in this matter and heard some thirty witnesses, who produced literally hundreds of thousands of documents. Such evidence obviously constitutes the essential basis of the case of the plaintiff Government. Either the suppression of all this information and the leads obtained by the Government therefrom, or the impounding of all that information and those leads from the Government, will practically put an end to the Government's case, and will make it impossible for the Department of Justice to attempt to carry out the Congressional will in that regard. The only way conceivable to this Court by which such impounding could fail to prevent the Government from carrying out its duty under Section 4 of the Sherman Act, would be to have plaintiff Government again seek, on deposition, to obtain these same thirty witnesses and these same hundreds of thousands of documents. Since the Government called its first Grand Jury witness upon the basis of a lead obtained other than through the Grand Jury, it is possible that it could take the deposition of such witness and thereafter, step by step, pursue this procedure to the bitter end. But this procedure would obviously take much longer than the year and a half it took the Grand Jury over seven years ago. At each step the Government would have to prove, under the proposed impoundment procedure, that its leads as to such step did not come from its Grand Jury information but from other sources. Then, after all this, the utmost that could be expected would be that the Government would be in exactly the same position as it is now. Surely another remedy should be sought rather than any such impracticable technique. That another just remedy is available has been indicated by the Supreme Court itself in Procter & Gamble, supra, in holding that disclosure to the defendants, as above indicated, would meet the needs of justice, either partially, on the showing of 'particularized * * * good cause' or 'wholesale' to the extent that 'the criminal procedure is subverted.' Thereby the plaintiff, without preventing it from doing its official duty, will have been deprived of any undue advantage it has gained by taking this limited amount of evidence of evidence for a purely civil purpose before the Grand Jury rather than in public, 15 U.S.C.A. § 30, and be compelled to place the defendants on a substantial equality with it.

 Surely this is a wiser method of placing the parties on an equal basis -- by making the evidence in question available to both sides -- rather then by making the evidence basic to the cause unavailable to either side by its suppression or impounding, and thereby defeating the national policy as to the enforcement of the antitrust laws. There are, moreover, additional reasons why either suppression or impounding is not an appropriate remedy.

 Suppression

 Suppression is generally confined as a remedy to punish the Government's violation of the Fourth Amendment to the United States Constitution, of such basic importance to the public in safeguarding it from unreasonable searches and seizures, or its equivalent in wire tapping. Silverthorne Lumber Company v. United States, 1920, 251 U.S. 385, 40 S. Ct. 182, 64 L. Ed. 319; Nardone v. United States, 1939, 308 U.S. 338, 60 S. Ct. 266, 84 L. Ed. 307; United States v. Wallace & Tiernan Co., 1949, 336 U.S. 793, 794, 69 S. Ct. 824, 93 L. Ed. 1042; United States v. Coplon, 2 Cir., 185 F.2d 629, 636, 28 A.L.R.2d 1041, certiorari denied 342 U.S. 920, 72 S. Ct. 362, 96 L. Ed. 688; United States v. Goldstein, 2 Cir., 120 F.2d 485, 488, affirmed 316 U.S. 114, 120, 62 S. Ct. 100, 86 L. Ed. 1312; Rogers v. United States, 1 Cir., 1938, 97 F.2d 691; Schenck ex rel. Chow Fook Hong v. Ward, D.C.Mass. 1938, 24 F.Supp. 776; Ex parte Jackson, D.C.Mont.1920, 263 F. 110.

 As is stated in Wallace, supra (336 U.S. 794, 69 S. Ct. 827):

 'The Silverthorne exclusionary rule as explained in that case and others is designed to safeguard the privacy of people, and to prevent seizure of their papers and property except in compliance with valid judicial process. As tersely stated in the Silverthorne case the rule's purpose is to prevent the Fourth Amendment from being reduced to 'a form of words'.'

 But here there was neither a 'search and seizure', a violation of the Fourth Amendment, nor a wire tapping. Everything that was done by the Government was done under judicial process, the very subpoenas used in these Grand Jury proceedings having been carefully delimited by Judge Forman, sitting in general charge of the Grand Jury. Hence these subpoenas, under Oklahoma Press Pub. Co. v. Walling, 1946, 327 U.S. 186, 66 S. Ct. 494, 90 L. Ed. 614, do not constitute even 'a constructive search and seizure' making the Fourth Amendment applicable. Moreover, in Wallace, supra, where the Grand Jury itself was held invalid, our highest Court held that the plaintiff Government could use, in a civil suit, as here, the documents previously produced before this illegally constituted Grand Jury. If such evidence, though used before an illegally constituted Grand Jury, is later usable in a civil suit, a fortiori it should be available in this civil suit when used before a legally constituted Grand Jury.

 Again, suppression is a peculiarly appropriate remedy in an unlawful search and seizure case, where disclosure of such evidence to defendants in a criminal case would do them no good at all. Here, on the other hand, the remedy of disclosure to the defendants, if due at all, would aid them in this civil suit by placing the parties on the relative equality which civil procedure requires. Thus the defendants' search and seizure argument does not suffice to require a change in the remedy already given them, to put them on a substantial equality with plaintiff.

 Nor is the defendants' argument by analogy as to the suppression of depositions any more convincing. Of course, since a deposition may itself be used as substantive evidence in a trial, it is necessary that such deposition be taken on notice to the adversary, giving him the right to be heard and to cross-examine thereon. Thus, if such rights are not given, such deposition may be suppressed to prevent its use as such evidence at the trial. F.R.Civ.P. 32, 28 U.S.C. However, the testimony of a witness before a Grand Jury can never be used as substantive evidence at the trial. It is there usable only to affect the credibility of a witness. The above analogy is thus a false one. In addition, the suppression sought here -- to prevent the Government from any access whatever not only to that evidence but to any leads obtained therefrom -- is far different and more stringent than the suppression of a deposition from use at the trial as substantive evidence, as referred to in the above Rule. This distinction is alluded to in Palmer v. Fisher, 7 Cir., 1955, 228 F.2d 603, certiorari denied Fisher v. Pierce, 1956, 351 U.S. 965, 76 S. Ct. 1030, 100 L. Ed. 1485, where the Court held that the deposition would be suppressed from use as substantive evidence at the trial, but would not be destroyed, since it might thereafter become usable to impeach a trial witness, just as would testimony before a Grand Jury.

 In short, the reasons advanced by the defendants for granting the additional relief requested, of suppression of the Grand Jury testimony and all leads obtained by the Government therefrom, would seem unsound, and such suppression, if it occurred, would here render it practically impossible for the plaintiff Government to carry out the Congressional will of effectuating the policy of the antitrust acts. To order such suppression thus would not seem to be the exercise of sound discretion on the part of the trial court, particularly in the light of the fact that the defendants have already received the aid of ...


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