1975-2 Grand Jury Investigation of Associated Milk Producers, Inc., In re

• Decision Date: 06 February 1978
• Docket Number: No. 76-4094,76-4094
• Citation: 566 F.2d 1293
• Parties: 1978-1 Trade Cases 61,856 In re 1975-2 GRAND JURY INVESTIGATION OF ASSOCIATED MILK PRODUCERS, INC. Appeal of ASSOCIATED MILK PRODUCERS, INC.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1293

566 F.2d 1293

1978-1 Trade Cases 61,856

In re 1975-2 GRAND JURY INVESTIGATION OF ASSOCIATED MILK

PRODUCERS, INC.

Appeal of ASSOCIATED MILK PRODUCERS, INC.

No. 76-4094.

United States Court of Appeals,

Fifth Circuit.

Feb. 6, 1978.

Sidney Harris, Washington, D. C., Craig L. Austin, San Antonio, Tex., Rick A. Harrington, Fred B. Klein, Washington, D. C., for appellant.

Adrian A. Spears, U. S. Dist. Judge, Leroy M. Jahn, Asst. U. S. Atty., San Antonio, Tex., Richard A. Ringhofer, Atty., Dept. of Justice, Chicago, Ill., Carl D. Lawson, Atty., Dept. of Justice, Peter L. De La Cruz, Richard A. Green, Washington, D. C., for National Farmers.

Appeal from the United States District Court for the Western District of Texas.

Before AINSWORTH, SIMPSON and MORGAN, Circuit Judges.

AINSWORTH, Circuit Judge:

Associated Milk Producers, Inc. ("AMPI") appeals from four orders by Chief Judge Adrian A. Spears of the United States District Court for the Western District of Texas. In the first order, issued February 19, 1975, the district court denied AMPI's motions to stay grand jury proceedings brought against it by the Government and to quash or modify a grand jury subpoena arising out of those proceedings. The court also denied AMPI's motions for an evidentiary hearing and for an in camera inspection of certain government documents. ¹ In the second order, issued May 6, 1975, the district court denied reconsideration of the motion to stay the grand jury proceedings. ² In the third order, issued October 1, 1976, the district court, pursuant to Fed.R.Crim.P. 6(e), directed that an inventory of the materials compiled during the grand jury proceedings be sent to the United States District Court for the Western District of Missouri so that it could determine if a "compelling need" existed for the materials in related litigation before that court and, if so, request their transfer. ³ In the fourth order, issued November 4, 1976, the district court, pursuant to Fed.R.Civ.P. 24(a)(2), granted the motion of The National Farmers' Organization, Inc. to intervene as of right in these proceedings relating to transfer of the grand jury materials. ⁴

I. The Facts

The genesis of this lengthy and bitterly contested dispute between the Government and AMPI lies in an extensive government investigation of alleged monopolization in the milk industry. This investigation prompted the United States on February 1, 1972 to file a civil antitrust action against AMPI in the United States District Court for the Western District of Texas, Chief Judge Spears presiding. The Government charged AMPI with violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and sought injunctive relief. Fifteen private treble damage antitrust suits were also filed against AMPI in various federal courts during 1971 and 1972. The Judicial Panel on Multidistrict Litigation, pursuant to 28 U.S.C. § 1407, transferred the private suits for pretrial proceedings to Chief Judge John W. Oliver of the United States District Court for the Western District of Missouri. The cases were designated JPML Docket No. 83, sometimes referred to by the Government as the Midwest Milk Monopolization Litigation. On February 20, 1974, Chief Judge Spears transferred the Government's suit against AMPI to Chief Judge Oliver to coordinate discovery with that in JPML Docket No. 83. The Government's suit was not consolidated with the private actions, however.

In January of 1974 the plaintiffs (one of whom was The National Farmers' Organization, Inc.) in two of the private suits moved pursuant to Fed.R.Civ.P. 37(b), which pertains to failure to comply with a discovery order, for sanctions against AMPI for allegedly frustrating discovery by refusing to produce material documents. The United States chose not to file a similar Rule 37(b) motion, electing instead to participate only in civil discovery relating to the private plaintiffs' motions, which are still pending before Chief Judge Oliver. On August 13, 1974, the United States and AMPI filed a proposed consent decree in the Government's suit. Chief Judge Oliver approved the decree on April 30, 1975. See United States v. Associated Milk Producers, Inc., W.D.Mo., 1975, 394 F.Supp. 29, aff'd, 8 Cir., 534 F.2d 113, cert. denied sub nom., 429 U.S. 940, 97 S.Ct. 355, 50 L.Ed.2d 309 (1976). This settlement notwithstanding, attorneys from the Antitrust Division of the United States Department of Justice initiated the instant grand jury investigation of AMPI on February 10, 1975 in the United States District Court for the Western District of Texas. Chief Judge Spears supervised the grand jury. The Government directed its investigation to alleged obstruction of justice by AMPI in the discovery stages of the various civil antitrust suits. The Government served AMPI with a subpoena duces tecum, directing it to appear before the grand jury and produce thirteen different categories of documents. AMPI countered by filing motions to quash or modify the subpoena and to stay the grand jury investigation, as well as motions for an evidentiary hearing and an in camera inspection of documents purporting to grant authority to the Antitrust Division attorneys to conduct the grand jury investigation. Chief Judge Spears denied the motions on February 19, 1975 and denied reconsideration of the motion to stay on May 6, 1975.

The grand jury was discharged on August 6, 1976. It did not return an indictment. However, in a letter to the district court, it recommended that the court retain custody of the transcripts of the grand jury proceedings and those personal records of individuals, such as tax returns and calendars, received by the grand jury. It recommended further that the business files and records of AMPI received by the grand jury "be made available to other courts pursuant to an appropriate Rule 6(e) motion." ⁵ The Government filed a statement indicating it had "no objection to the entry of such order as the Court deems appropriate to make the grand jury subpoenas, transcripts and documents available to Chief Judge Oliver for such use as he deems appropriate in connection with the (private plaintiffs') Rule 37 motions and the trial of the JPML 83 cases." Accordingly, the district court on August 25, 1976 ordered that the "grand jury subpoenas, transcripts and documents . . . be disclosed to the United States District Court for the Western District of Missouri for such use in pending proceedings as that Court deems appropriate." AMPI moved the court to reconsider and it did. On October 1, 1976, Chief Judge Spears modified his order of August 25 and directed the clerk to send Chief Judge Oliver only an inventory of the grand jury materials for his in camera inspection and to forward to him any materials for which he found a "compelling need." The district court stayed its order, however, pending this appeal. Meanwhile, The National Farmers' Organization, Inc., one of the private plaintiffs in JPML Docket No. 83, moved the district court to intervene as of right in this controversy pursuant to Fed.R.Civ.P. 24(a)(2). ⁶ The district court granted its motion on November 4, 1976.

On appeal AMPI raises numerous objections to the district court's orders of February 19, May 6, October 1, and November 11. AMPI contends that the district court erred in issuing its first two orders because the Department of Justice initiated the grand jury investigation in bad faith "for improper purposes" and because the Assistant Attorney General in charge of the Antitrust Division was without authority to appoint attorneys to conduct a grand jury investigation relating to obstruction of justice allegations. With respect to the third order, AMPI contends that Chief Judge Spears committed numerous procedural and substantive errors of law in transferring an inventory of the grand jury materials to Chief Judge Oliver. ⁷ Finally, AMPI contends that the fourth order was erroneous because The National Farmers' Organization, Inc. is not a proper candidate for intervention under Fed.R.Civ.P. 24(a)(2).

II. The Question of Appealability

We first consider whether AMPI's appeal is properly before this Court in light of the final judgment requirement of 28 U.S.C. § 1291. Section 1291 provides:

The courts of appeals shall have jurisdiction of appeals from all final decisions of the district courts of the United States, the United States District Court for the District of the Canal Zone, the District Court of Guam, and the District Court of the Virgin Islands, except where a direct review may be had in the Supreme Court.

The final judgment rule has been a part of federal appellate review since the First Judiciary Act, which limited appellate review to "final judgments and decrees." Act of Sept. 24, 1789, §§ 21, 22, 25, 1 Stat. 73, 83-85. But for one temporary exception, ⁸ finality continued to be a prerequisite to appealability until Congress passed the Evarts Act in 1891, which provided for review of interlocutory orders "granting or continuing" injunctions. Act of March 3, 1891, § 7, 26 Stat. 826, 828. From that initial grant has evolved 28 U.S.C. § 1292, presently the principal statutory authority for appeals from interlocutory orders. ⁹ Nonetheless, the final judgment requirement continues in 28 U.S.C. § 1291 as the dominant rule of federal appellate practice. Justice Frankfurter articulated this fact in Cobbledick v. United States, 309 U.S. 323, 324-25, 60 S.Ct. 540, 541, 84 L.Ed. 783 (1940):

Finality as a condition of review is an historic characteristic of federal appellate procedure. It was written into the first Judiciary Act and has been departed from only when observance of it would practically defeat the right to any review at all. Since the right to a judgment from more than one court is a matter of grace and not a necessary ingredient of justice, Congress from the very beginning has, by forbidding piecemeal disposition on appeal of what for practical purposes...