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UNITED STATES v. CUTHBERTSON

March 24, 1981

UNITED STATES of America
v.
Gerald M. CUTHBERTSON, Allan G. Gorrin, John Klemans, Paul L. Gorrin, Richard Vickers Day, III, Samuel Bauman, and Thomas P. De Vita



The opinion of the court was delivered by: STERN

The following opinion was delivered orally on March 23, 1981, and revised pursuant to Rule 28 of the Rules of this Court.

This Court has in its possession three edited audio tapes and accompanying edited transcripts of interviews with prospective witnesses in this pending criminal case conducted by the staff of the CBS television program, "60 Minutes." These materials were originally subpoenaed by the defendants in this case, and were submitted to the Court for in camera review pursuant to this Court's order of March 6, 1980, insofar as it was affirmed by the United States Court of Appeals for the Third Circuit on July 23, 1980. One week prior to trial, we must now address two questions: first, whether CBS must produce for in camera inspection those portions of the interviews which the network has deleted from the materials already submitted; and second, whether the materials now in the Court's possession should be turned over to the defendants because they are exculpatory and regardless of whether they prove to be admissible as prior inconsistent statements.

 I. BACKGROUND.

 On September 5, 1979, a federal grand jury in Newark, New Jersey, returned a twenty-count indictment charging the principals of a fast-food franchising operation known as "Wild Bill's Family Restaurants" ("Wild Bill's") and two of their associates with conspiracy to defraud and fraud, in violation of 18 U.S.C. ยงยง 2, 371, 1341, 1343, and 2314. On February 14, 1980, about a month before the scheduled commencement of trial, defendants served on CBS a subpoena duces tecum for the production of all tapes, notes, and other documents of any kind pertaining to the preparation of a "60 Minutes" segment entitled "From Burgers to Bankruptcy" broadcast on December 3, 1978. The segment focused on the activities of Wild Bill's operators and included interviews with a number of investors in the franchise organization. It suggested that these franchisees and other potential franchisees may have been defrauded, and concluded with a statement by correspondent Mike Wallace that the United States Attorney's Office in Newark was investigating the matter and was expected to present evidence to a grand jury in the near future.

 CBS moved to quash the subpoena, and following a hearing on March 4, 1980, this Court ruled that the subpoena was overbroad and not enforceable under Rule 17(c), Fed.R.Crim.P. For example, the Court found no basis to require the production of any notes or other internal memoranda. We did, however, find a basis for the production of statements by individuals whom the government expected to call as witnesses, and in order to avoid potential disruptions of the trial, the Court ordered CBS to:

 
give over to this Court forthwith for in camera inspection all film and audio tapes or written transcripts which reproduce verbatim or substantially verbatim any conversations by individuals names in (a witness list supplied by the government).

 Following the March 4 hearing, defendants served CBS with a second subpoena seeking production of verbatim or substantially verbatim statements made by anyone on a long list of franchisees or potential franchisees and former employees of Wild Bill's. At a March 6 hearing, the Court modified this subpoena to provide that only statements by franchisees and potential franchisees be compiled, and that those statements be turned over to the Court for in camera inspection along with the statements of the individuals on the witness list.

 CBS informed the Court that it would not comply with the order, and the Court held CBS in civil contempt and imposed a fine of one dollar per day for every day that CBS refused to comply. The Court of Appeals stayed the contempt order pending an appeal by CBS.

 On July 23, 1980, the Court of Appeals filed its opinion in United States v. Cuthbertson, 630 F.2d 139 (3rd Cir. 1980). It held that CBS would not be required to turn over statements in its possession prior to trial for in camera review unless defendants were able to make an initial showing (1) that the documents are likely to be evidentiary and relevant at trial and (2) that the application is made in good faith and not as a general "fishing expedition." The Court of Appeals found that such a showing had been made as to the subpoena covering those persons on the government's witness list because their statements might be admissible at trial as prior inconsistent statements. With respect to the second subpoena, which called for statements by individuals whom the government did not intend to call as witnesses, the Court of Appeals held that defendants had failed to meet their burden:

 Id. at 146. Therefore, this Court's order enforcing the first subpoena, as modified, was upheld; the order enforcing the second subpoena, as modified, was reversed.

 Finally, the Court of Appeals addressed CBS's contention that it enjoyed a qualified privilege, based on the First Amendment, that precluded submission of the statements even for in camera review. The court confirmed the existence of such a qualified privilege, but held that its applicability to the statements in CBS's possession required a weighing of the privilege against the defendants' interest in obtaining the material, an exercise which could only be performed after the district court had reviewed the material in camera.

 On October 21, 1980, defendants filed a petition for certiorari with the Supreme Court, which was denied on January 26, 1981. 449 U.S. 1126, 101 S. Ct. 945, 67 L. Ed. 2d 113 (1981).

 This Court conducted a status conference on February 5, 1981, to determine whether CBS intended to comply with the rulings of this Court and the Court of Appeals. CBS agreed to turn over the required material no later than March 15, and the Court, noting CBS's willingness to comply, continued the stay of the contempt order. On March 3, 1981, CBS supplied the Court with edited audio tapes and transcripts of three interviews by "60 Minutes" correspondent Mike Wallace with two individuals on the government's witness list. CBS represents that these are the only verbatim or substantially verbatim statements by persons on that list. *fn1"

 The tapes and transcripts submitted for in camera review reflect interviews between Wallace, the prospective witness or witnesses, and other unidentified individuals. The statements of these other unidentified individuals, however, have been deleted by CBS from the tapes and transcripts, because, according to the network, the statements are beyond the scope of the material covered by the Court's order.

 A second status conference was conducted on March 19, at which time the Court indicated its tentative view: (1) that the conversations contained in the tapes and transcripts in the Court's possession are impossible to understand completely because CBS's excision of statements by non-witnesses removes from context the statements of the witnesses; (2) that the material in the Court's possession may contain statements material to the preparation of the defense; and (3) that the Court may be under an obligation to turn over these exculpatory statements to the defense at trial, regardless of whether or not they would be admissible as prior inconsistent statements.

 CBS denies that the Court can order production of the remainder of the conversations, even if the transcripts as submitted are not in all cases comprehensible. Further, it denies that the Court may turn over to the defendants at trial the materials already submitted, even if they contain exculpatory evidence. CBS concedes that the materials may contain exculpatory evidence. Tr. of Mar. 19, 1981, at 36-37. Nonetheless, it admits only that the statements might be turned over, following a strict balancing of interests, after the witnesses on the tapes have testified, and only then if they testify contrary to what the statements in the Court's possession indicate. Even under those conditions, CBS insists upon an opportunity to appeal at that time, that is, in the middle of trial, any unfavorable decision. Thus, on the one hand, CBS seeks to preclude any pretrial adjudication, but on the ...


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