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State v. Arace Brothers

Decided: January 13, 1989.

STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
ARACE BROTHERS, ET AL., DEFENDANTS-RESPONDENTS



On appeal from Superior Court of New Jersey, Law Division, Mercer County.

J. H. Coleman, Deighan and Baime. The opinion of the court was delivered by Baime, J.A.D.

Baime

[230 NJSuper Page 25] This case presents novel questions of public concern. In State v. Doliner, 96 N.J. 236 (1984), our Supreme Court held that attorneys in the Department of Law and Public Safety assigned to represent other governmental agencies may not automatically obtain disclosure of State Grand Jury materials for use in a civil suit, but instead must seek a court order predicated upon a strong showing of "particularized need." Id. at 241. The Court did not address the issue concerning the use of such materials, in the civil phase of a dispute, by a deputy attorney general who himself assisted in the presentation of the

matter to the grand jury. Today, we decide that open question. Additionally, we consider whether a deputy attorney general may actively engage in civil litigation while simultaneously participating in the parallel presentation of the criminal aspects of the case to the grand jury.

I.

The salient facts are not in dispute. This appeal arises from a civil antitrust suit instituted by the State against 105 named corporate and individual defendants. The gist of the complaint is that the defendants and their co-conspirators, over the course of 25 years, engaged in a massive combination in restraint of trade, by establishing and allocating among themselves what can loosely be characterized as "property rights" in the bidding for municipal and other public contracts involving commercial, industrial and residential customers in derogation of the public policy of promoting competition. In various related counts, the State contends that defendants' conspiratorial conduct violated the New Jersey Antitrust Act (N.J.S.A. 56:9-1 et seq.). Among other remedies, the State seeks the assessment of treble damages, the imposition of fines and civil penalties and injunctive relief.

It is undisputed that Gerard C. Sims, Jr., a deputy attorney general in the Division of Criminal Justice assigned to the antitrust section, prepared and signed the civil complaint.*fn1

Sims also participated in a State Grand Jury investigation which focused upon the criminal aspects of the same subject matter. Although the precise chronology of events is not altogether clear, it would appear that the parallel civil and grand jury investigations were conducted simultaneously, with some personnel assigned to both. While it is plain that the civil investigation was far more extensive, the grand jury probe ultimately resulted in the indictment of five defendants named in the civil complaint.*fn2 As a result of this civil investigation, another individual, a former public official, entered a plea of guilty to a criminal accusation.

In any event, the civil complaint was filed on October 18, 1984. Shortly thereafter, defendants moved to dismiss the complaint for failure to state a claim (R. 4:6-2(e)) and for abuse of the grand jury process. We need not concern ourselves with the former ground, which was summarily rejected by the trial court and forms no part of the present appeal. The issues raised here center upon defendants' contention that the State manipulated the grand jury's powerful investigative tools to root out additional evidence useful in the civil dispute and that Sims, by simultaneously participating in both investigations, had unfettered access to materials which should have been shrouded by the veil of secrecy historically attendant to such criminal proceedings. Following the submission of voluminous affidavits and oral argument, the trial court found that there had been no abuse of the grand jury process. Although the court determined that the assignment of Sims to both the civil and grand jury investigations was improper, it concluded that the complaint was not tainted by this impropriety. In order to guard against possible future derelictions, the court ordered that none of the parties was to have access to any of the

materials, documents or exhibits presented to the grand jury except upon motion and a strong showing of particularized need. We thereafter denied defendants' motion for leave to appeal. Defendants' subsequent applications to the New Jersey Supreme Court and the United States Supreme Court, 480 U.S. 906, 107 S. Ct. 1348, 94 L. Ed. 2d 519 (1987), were similarly rejected.

On April 21, 1987, the United States Supreme Court rendered its decision in United States v. John Doe, Inc. I, 481 U.S. 102, 107 S. Ct. 1656, 95 L. Ed. 2d 94 (1987). We will discuss that decision at some length later in our opinion. It is enough to say at this point, the Supreme Court held that Rule 6(e) of the Federal Rules of Criminal Procedure did not require a government attorney involved in a grand jury investigation to obtain a court order before making continued use of grand jury materials in a civil proceeding. 481 U.S. at 115, 107 S. Ct. at 1664, 95 L. Ed. 2d at 110. Based upon the Supreme Court's holding, the State sought reconsideration of the trial judge's decision, barring Sims from having access to the grand jury exhibits and materials. Following argument, the trial court rendered an oral opinion in which it determined that United States v. John Doe, Inc. I, supra, was inapplicable because it pertained solely to the construction of a federal procedural rule.

We, thereafter, granted the State's motion for leave to appeal and scheduled the matter for argument on an expedited basis. We are in complete accord with the trial court's conclusion that a deputy attorney general who presents a matter to the grand jury may not have continued access to grand jury materials without first obtaining a court order upon a showing of particularized need. Although not absolutely essential to our precise holding, we find no impropriety in the assignment of a deputy attorney general to conduct both the civil and criminal investigation of suspected antitrust violations. However, before using the grand jury materials in the parallel civil investigation or litigation, the deputy attorney general must obtain a "turnover" order. We consider these questions seriatim.

II.

We first address the State's argument that a deputy attorney general who presents a matter to the grand jury may have continued access to all grand jury materials for use in a parallel civil proceeding without obtaining a court order. The State's contention is grounded upon the thesis that the public policy considerations favoring grand jury secrecy are not subverted when the same attorney is engaged in parallel civil and criminal investigations. It is argued that R. 3:6-7, which mandates the "secrecy of proceedings of the grand jury," does not contain a prohibition against the continued use of information by attorneys who legitimately obtained access to such materials through the grand jury investigation.

We begin with the well-settled principle that disclosure of grand jury minutes may be ordered for use in a civil suit only "when there is a showing of special and compelling circumstances" sufficient to overcome the public policy considerations which undergird the principle of grand jury secrecy. Doe v. Klein, 143 N.J. Super. 134, 141 (App.Div.1976). Although this rule is of fairly recent vintage in New Jersey, see River Edge Savings & Loan Ass'n v. Hyland, 165 N.J. Super. 540 (App.Div.1979), certif. den. 81 N.J. 58 (1979); Doe v. Klein, supra, it has its genesis in a long line of United States Supreme Court decisions. See, e.g., Illinois v. Abbott & Associates, Inc., 460 U.S. 557, 566-567, 103 S. Ct. 1356, 1360-1361, 75 L. Ed. 2d 281, 289-290 (1983); Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 223, 99 S. Ct. 1667, 1675, 60 L. Ed. 2d 156, 167 (1979); Pittsburgh Plate Glass Co. v. United States, 360 U.S. 395, 400, 79 S. Ct. 1237, 1241, 3 L. Ed. 2d 1323, 1326 (1959); United States v. Procter & Gamble Co., 356 U.S. 677, 682, 78 S. Ct. 983, 986, 2 L. Ed. 2d 1077, 1081 (1958). See also Illinois v. Sarbaugh, 552 F.2d 768, 774 (7th ...


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